Earnings release
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. CHINA ZHESHANG BANK CO., LTD. ʮ̡ (A joint-stock company incorporated in the People ’s Republic of China with limited liability) (Stock Code: 2016) 2026 INTERIM RESULTS ANNOUNCEMENT The board of directors (the “Board”) of China Zheshang Bank Co., Ltd. (the “Bank”) hereby announces the unaudited interim results of the Bank for the six months ended June 30, 2026. This announcement, containing the full text of the 2026 interim report of the Bank, complies with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange ”) in relation to information to accompany preliminary announcements of interim results. PUBLICATION OF INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT Both the Chinese and English versions of this results announcement are available on the websites of the Bank (www.czbank.com) and the Stock Exchange (www.hkex.com.hk). In the event of any discrepancies in interpretations between the English and Chinese text, the Chinese version shall prevail. The 2026 interim report of the Bank will in due course be delivered to the H shareholders of the Bank (if requested) and available for viewing on the websites of the Bank (www.czbank.com) and the Stock Exchange (www.hkex.com.hk). By order of the Board China Zheshang Bank Co., Ltd. Chen Haiqiang Chairman Hangzhou, the PRC August 26, 2026 As at the date of this announcement, the executive directors of the Bank are Mr. Chen Haiqiang, Mr. Lyu Linhua and Ms. Ma Hong; the non-executive directors are Mr. Hou Xingchuan, Mr. Ren Zhixiang, Mr. Hu Tiangao and Mr. Ying Yuxiang; the independent non-executive directors are Mr. Wang Wei, Mr. Xu Yongbin, Mr. Fu Tingmei, Mr. Shi Hao and Mr. Lou Weizhong.
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IMPORTANT NOTICE 1. The Board of Directors, Directors and Senior Management of the Company warrant that the contents in this report are true, accurate and complete and contain no false records, misleading statements, or material omissions, and they jointly and severally accept full legal responsibility for the report. 2. This report was approved at the ninth meeting of the seventh session of the Board of the Company on August 26, 2026. The Company has 12 Directors, among which 11 Directors attended the meeting in person, and Lyu Linhua (Director) appointed Chen Haiqiang (Director) as a proxy to attend the meeting on his behalf, which is in compliance with the requirements of the Company Law of the People ’s Republic of China and the Articles of Association of the Company. 3. As of the disclosure date of this report, the Company had no plans for interim profit distribution or transfer from reserves to share capital. 4. Unless otherwise illustrated in this report, the currency for any amount herein is RMB. Certain amounts and percentage numbers in this report have been rounded. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. 5. The interim financial report for 2026 of the Company is unaudited. 6. Chen Haiqiang ( ऎ੶), Chairman of the Board of the Company, Lyu Linhua ( ѐᑗശ), President, Jing Feng (ࢤPrincipal in charge of Finance, and Zhang Jian ( ੵᔊ), Director of the Financial Department warrant that the financial report in this report is true, accurate and complete. SIGNIFICANT RISK WARNING Please refer to the section headed “Management Discussion and Analysis – Risk Management ” of this report for information about major risks faced and measures to be taken by the Company. The forward-looking statements about matters like future plans of the Company in this report do not constitute substantive commitments of the Company to the investors, and the investors and related persons shall maintain sufficient risk awareness in this regard, and shall understand the difference among plans, forecasts and commitments.
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2 CHINA ZHESHANG BANK CO., LTD. DEFINITIONS “Company ”, “Bank”, “our Bank ”, “China Zheshang Bank ” or “CZBank ”: China Zheshang Bank Co., Ltd. “Former CBIRC ”: the Former China Banking and Insurance Regulatory Commission “CSRC”: China Securities Regulatory Commission “Hong Kong Stock Exchange ”: The Stock Exchange of Hong Kong Limited “SFO”: Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Hong Kong Listing Rules ”: The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Model Code ”: The Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 to Hong Kong Listing Rules “Zheyin Financial Leasing ”: Zhejiang Zheyin Financial Leasing Co., Ltd., a holding subsidiary of the Company “CZB Wealth Management ”: CZB Wealth Management Co., Ltd., a wholly-owned subsidiary of the Company “Group”: the Company and its subsidiaries
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3 INTERIM REPORT 2026 COMPANY PROFILE 1. Company name in Chinese:ʮ̡ (Abbreviation in Chinese: एਠვБ ) Company name in English: CHINA ZHESHANG BANK CO., LTD. (Abbreviation in English: CZBANK) 2. Legal Representative: Chen Haiqiang 3. Registered address: No. 1788, Hongning Road, Xiaoshan District, Hangzhou, Zhejiang Province, the PRC Postcode: 311200 Principal office address: No. 1 Minxin Road, Shangcheng District, Hangzhou, Zhejiang Province, the PRC Postcode: 310020 E-mail: ir@czbank.com Website: www.czbank.com Customer service and complaint hotline: 95527 Tel for investor relations management: 86-571-88268966 Fax: 86-571-87659826 4. Principal place of business in Hong Kong: 15/F, Three Exchange Square, No. 8 Connaught Place, Central, Hong Kong, the PRC 5. Authorized representatives: Chen Haiqiang, Luo Feng 6. Secretary to the Board: Luo Feng Joint Company Secretaries: Luo Feng, Chan Yin Wah Representative of securities affairs: Chen Ning 7. A Shares Stock exchange where the securities are listed: Shanghai Stock Exchange Stock abbreviation: CZBANK Stock code: 601916 H Shares Stock exchange where the securities are listed: Hong Kong Stock Exchange Stock abbreviation: CZBANK Stock code: 2016
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4 CHINA ZHESHANG BANK CO., LTD. COMPANY PROFILE 8. Share registrar: A Shares: China Securities Depository and Clearing Corporation Limited Shanghai Branch No. 188 South Yanggao Road, Pudong New Area, Shanghai, the PRC H Shares: Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17/F, Hopewell Center, 183 Queen ’s Road East, Wanchai, Hong Kong, the PRC 9. Legal advisers: As to Mainland China Laws: Zhejiang T&C Law Firm As to Hong Kong, the PRC Laws: Freshfields 10. Accounting firms engaged by the Company: Domestic auditor: KPMG Huazhen LLP Office address: 8/F, Tower E2, Oriental Plaza, 1 East Chang’an Avenue, Dongcheng District, Beijing, PRC Signing certified accountants: Pan Sheng, Jin Rui International auditor: KPMG Office address: 8/F, Prince ’s Building, 10 Chater Road, Central, Hong Kong, the PRC 11. Newspapers and websites designated for information disclosure: Mainland China: China Securities Journal, Shanghai Securities News, Securities Times and Securities Daily Website of the Shanghai Stock Exchange (www.sse.com.cn) Website of the Company (www.czbank.com) Hong Kong: Website of the Hong Kong Stock Exchange (www.hkex.com.hk) Website of the Company (www.czbank.com) Place for inspection of this report: Office of the Board of the Company (No. 1 Minxin Road, Shangcheng District, Hangzhou, Zhejiang Province, the PRC) 12. Other information about the Company: Uniform social credit code: 91330000761336668H Financial institution license serial number: B0010H133010001 Registration date: July 26, 2004
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5 INTERIM REPORT 2026 CORPORATE OVERVIEW As one of the twelve nationwide joint-stock commercial banks, CZBank officially commenced business on August 18, 2004, with its head office in Hangzhou, Zhejiang Province. CZBank is an “A+H” listed bank and a domestic systemically important bank in China. Since its establishment, CZBank has maintained a foothold in Zhejiang while adopting a global vision. The bank has been committed to serving national strategies, providing high-quality and efficient financial services to society, and has grown into a sound commercial bank with solid fundamentals, strong profitability and prudent risk management. Anchoring the development vision of being “a first-class commercial bank ”, CZBank has always adhered to taking the comprehensive strengthening of the Party ’s leadership as the fundamental guarantee, taking Deepening the Development in Zhejiang and serving the real economy as the foothold, taking reform and innovation and refining governance as the basic path, and taking risk prevention and safe development as the bottom-line requirement. We thoroughly practice the four strategic paths, focus on promoting the “1155” operation strategy, continuously build distinctive competitive advantages, systematically consolidate the foundation for steady development, and embark on a new journey of high-quality development in all respects. In the first half of 2026, CZBank ’s operating income was RMB33.516 billion, representing a period-on-period increase of 0.75%; net profit attributable to shareholders of the Bank was RMB7.824 billion, representing a period-on-period increase of 2.05%. As at the end of the reporting period, total assets were RMB3.70 trillion, representing an increase of 6.17% compared with the end of last year, of which: total loans and advances to customers were RMB2.01 trillion, representing an increase of 4.55% compared with the end of last year; total liabilities were RMB3.48 trillion, representing an increase of 6.43% compared with the end of last year, of which: the balance of customer deposits was RMB2.18 trillion, representing an increase of 6.55% compared with the end of last year. The non-performing loan ratio was 1.36%, and allowance to non-performing loans was 155.85%. As at the end of the reporting period, CZBank has established 377 branch outlets in 22 provinces (autonomous regions or municipalities directly under the Central Government) and the Hong Kong Special Administrative Region, effectively covering key areas such as Zhejiang, where its headquarters are located, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. It controls two subsidiaries, namely Zheyin Financial Leasing and CZB Wealth Management. In the “Top 1000 World Banks 2026 ” ranking by The Banker, U.K., CZBank ranked 85th in terms of tier-one capital. China Chengxin International granted CZBank the highest AAA corporate credit rating among financial institutions, while S&P and Moody ’s granted CZBank an “investment grade ” in the international rating.
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6 CHINA ZHESHANG BANK CO., LTD. DEVELOPMENT STRATEGIES AND CORE COMPETITIVENESS 1. VISION, MISSION AND CULTURE Vision: To build a first-class commercial bank Mission: Strive to provide high-quality and efficient financial services to society Culture: Feel hearts, see deeds, envision the future 2. GUIDING PRINCIPLES Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we deeply implement the spirit of the 20th CPC National Congress and all plenary sessions of the 20th CPC Central Committee, fully implement General Secretary Xi Jinping ’s important expositions on financial work, and earnestly implement the decisions and deployments made at the financial work conferences of the Central Committee and the Provincial Party Committee. We establish and implement a correct view on political achievements, remain committed to the fundamental purpose of serving the real economy, adhere to the general principle of seeking progress while maintaining stability, adhere to the strengthening of the Party ’s leadership as the fundamental guarantee, take “Deepening the Development in Zhejiang ” and serving the real economy as our starting point and ultimate goal, take reform and innovation and improving governance as the fundamental path, and regard risk prevention and safe development as bottom-line requirements. We adhere to the principles of “developing the bank through quality service, upgrading the bank through refined management, invigorating the bank through technological innovation, and strengthening the bank through talent cultivation ”. As a committed long-termist, we will continuously enhance CZBank ’s core competitiveness and brand influence, better play a strategic supporting role in the construction of a strong financial province, and make important contributions to achieving decisive progress in the high-quality development and construction of the demonstration zone for common prosperity and taking the lead in presenting a vivid picture of basically realizing socialist modernization. 3. STRATEGIC GOALS To build a high-quality commercial bank with sound governance, adequate capital, standard management, controllable risks, outstanding core competitiveness, and significant brand influence. 4. STRATEGIC PATH To strive to achieve our vision, mission, and strategic goals, we will unswervingly follow the strategic paths of “developing the bank through quality service, upgrading the bank through refined management, invigorating the bank through technological innovation, and strengthening the bank through talent cultivation ” over the next five years, comprehensively opening up a new situation of high-quality development.
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7 INTERIM REPORT 2026 DEVELOPMENT STRATEGIES AND CORE COMPETITIVENESS Developing the bank through quality service – Deepening comprehensive services. Adhere to the service positioning of Deepening the Development in Zhejiang and serving the modern industrial system, as well as the direction toward a low-capital transformation. Retail banking will remain a priority, corporate banking will solidify its role as the backbone and financial markets will establish itself as a distinctive benchmark, ultimately forming a development model where three growth drivers of corporate banking, retail banking and financial markets advance in unison. Centering on customer needs to build a “three-in-one ” service system of customers, products and teams, carry out comprehensive customer operations, and create six distinctive business matrices of CZBank supply chain, Zheyin Financial Leasing, CZBank science and technology innovation, financial market of CZBank, CZBank cross-border, CZBank wealth as well as differentiated and characteristic service brands such as CZBank value-added services. Deeply cultivate the service orientation of “the head office serving branches, the middle and back offices serving the front office, the organization serving employees, and the whole bank serving development ”, and build the comprehensive service capabilities of being “customer-centric ”. Upgrading the bank through refined management – Strengthening systematic management. Comprehensively build a “standardized, refined, empowered, systematic, and scientific ” management system, and enhance the foresight, effectiveness and synergy of policies. Improve a system of organizations, institutions and processes that is comprehensive in coverage, clear in authority and responsibility, standardized and efficient, and robust in execution, and build a dynamic updating mechanism of “establishing, modifying and abolishing ”. Strengthen the head office ’s capabilities in leadership, empowerment, and oversight, implement the main responsibilities of branches for operational development such as customers, business, efficiency, and quality, promote sub-branches to consolidate basic management and strengthen execution, and achieve the integrated development of “building a strong head office, optimizing branches, and consolidating sub-branches ”. Establish correct perspectives on business operations, performance and risk, adhere to connotative development, promote the coordinated efforts of cost reduction, quality improvement and efficiency enhancement, and continue to improve operational efficiency and value creation capabilities. Coordinate and improve resource allocation and assessment and incentive mechanisms, and stimulate market competition vitality from long-term value and systems perspectives. Invigorating the bank through technological innovation – Maintaining a relatively leading position in key areas. Focus on the goal of high-quality business development, adopt a bank-wide integrated development perspective, and strengthen the comprehensive empowerment and efficient support of technology on operation and management. Systematically enhance bank-wide technological capabilities, reinforce digital and intelligent foundation and technical capacity building, and establish an advanced and resilient fintech system as well as a streamlined and efficient financial information infrastructure. Systematically advance the secure development and application of artificial intelligence (AI), and strengthen the effective implementation of AI applications. Improve the data governance system to fully unlock the value of data elements. Strengthen security measures for technology operations and improve the system for technology risk prevention, control and governance. Enhance the technological literacy of all employees, intensify training in technologies such as AI, and build a high-quality technology talent team. Strengthening the bank through talent cultivation – Strengthening expert governance. Uphold the principles of “placing cadres and talents under Party ’s supervision ”, implement the Provincial Party Committee ’s requirements of “Three Looks ”, “Three Breaks ” and “Three Arrivals ”, and foster a sound political environment of a “striver-oriented philosophy ” based on the employment principles of “having both ability and political integrity, being recognized by the masses, focusing on actual performance, matching people with positions, and tiered training ”. Establish a distinct orientation giving priority to internal training, strengthen the reserve and selection of excellent young cadres and talents, establish tiered and classified systematic training mechanism, enhance bank-wide professional competence and expertise, and forge a cadre and talent team that is politically strong, capable and disciplined. Implement the bank-wide industry research “132N Five Policies in One ” working mechanism, to provide professional support for the operation. Select and appoint the best candidates to leadership teams at all levels, enhance their professional capabilities, optimize their overall composition, and systematically strengthen the supervision and management of leading cadres, particularly “top leaders ”.
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8 CHINA ZHESHANG BANK CO., LTD. FINANCIAL SUMMARY (The financial data and indicators set forth in this report are prepared in accordance with the International Financial Reporting Accounting Standards, are consolidated data of the Bank and its subsidiaries and presented in RMB, unless otherwise specified.) KEY FINANCIAL DATA AND INDICATORS Operating results (RMB million) January to June 2026 January to June 2025 Increase (decrease) (%) January to June 2024 Operating income 33,516 33,265 0.75 35,295 Profit before taxation 10,047 9,695 3.63 9,741 Net profit attributable to shareholders of the Bank 7,824 7,667 2.05 7,999 Per share (RMB) January to June 2026 January to June 2025 Increase (decrease) (%) January to June 2024 Basic earnings per share attributable to shareholders of the Bank (1) 0.28 0.28 Flat 0.29 Diluted earnings per share attributable to shareholders of the Bank (1) 0.28 0.28 Flat 0.29 Profitability indicators (%) January to June 2026 January to June 2025 Increase/ decrease January to June 2024 Return on average total assets *(2) 0.45 0.48 Decrease by 0.03 percentage point 0.52 Weighted average return on net assets *(3) 8.62 8.68 Decrease by 0.06 percentage point 9.65 Net interest margin * 1.56 1.69 Decrease by 0.13 percentage point 1.82 Net interest spread * 1.41 1.52 Decrease by 0.11 percentage point 1.61 Cost-to-income ratio (4) 29.24 29.77 Decrease by 0.53 percentage point 28.91 Scale indicators (RMB million) June 30, 2026 December 31, 2025 Increase (decrease) (%) December 31, 2024 Total assets 3,695,800 3,481,092 6.17 3,325,539 Total loans and advances to customers 2,010,115 1,922,711 4.55 1,857,116 Total liabilities 3,484,355 3,273,757 6.43 3,122,796 Customer deposits 2,177,297 2,043,466 6.55 1,922,289 Equity attributable to shareholders of the Bank 206,655 202,868 1.87 198,903 Net assets per share at the end of the period attributable to shareholders of the Bank (5) (RMB) 6.61 6.48 2.01 6.33 Asset quality indicators (%) June 30, 2026 December 31, 2025 Increase/ decrease December 31, 2024 Non-performing loan ratio (6) 1.36 1.36 Flat 1.38 Allowance to non-performing loans (7) 155.85 155.37 Increase by 0.48 percentage point 178.67 Allowance to total loans (7) 2.12 2.11 Increase by 0.01 percentage point 2.46
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9 INTERIM REPORT 2026 FINANCIAL SUMMARY Capital adequacy indicators (%) June 30, 2026 December 31, 2025 Increase/ decrease December 31, 2024 Core tier-one capital adequacy ratio 8.37 8.40 Decrease by 0.03 percentage point 8.38 Tier-one capital adequacy ratio 9.55 9.60 Decrease by 0.05 percentage point 9.61 Capital adequacy ratio 11.55 12.12 Decrease by 0.57 percentage point 12.61 Notes: * Annualized return rate. (1) Basic earnings per share attributable to shareholders of the Bank = Net profit attributable to shareholders of ordinary shares of the Bank (excluding net profit attributable to other equity instruments of the Bank) divided by weighted average number of ordinary shares outstanding. (2) Return on average total assets = Net profit divided by the average balance of total assets at the beginning and at the end of the period. (3) Calculated in accordance with the Rules for the Compilation and Submission of Information Disclosure by Companies that Offer Securities to the Public No. 9 – Calculation and Disclosure of Return on Equity and Earnings per Share (2010 Revision) issued by the CSRC. (4) Cost-to-income ratio = Operating expenses (excluding taxes and surcharges) divided by operating income. (5) Net assets per share attributable to shareholders of the Bank = (Equity attributable to shareholders of the Bank minus other equity instruments) divided by the total number of ordinary shares at the end of the period. (6) Since the 2023 annual report, the Bank has calculated the non-performing loan ratio and allowance to total loans in accordance with the Guidelines for the Calculation of Major Financial Indicators in China ’s Banking Industry (Yin Xie Fa [2023] No. 34) (ˏ(ვ೯[2023]34 )) issued by the China Banking Association, where: Non-performing loan ratio = Balance of non-performing loans divided by total loans and advances to customers (excluding interest accrued). (7) Allowance to non-performing loans = Balance of the allowance for ECLs of loans divided by balance of non-performing loans; allowance to total loans = Balance of the allowance for ECLs of loans divided by total loans and advances to customers (excluding interest accrued). There is no difference between the indicator for the Group and the Bank. According to the Notice on Adjusting the Regulatory Requirements for Loan Loss Provisions of Commercial Banks (Yin Jian Fa [2018] No. 7) ( (ვ္೯ [2018]7 )), a differentiated and dynamically adjusted provision regulatory policy is implemented for joint-stock banks. The regulatory standards for the allowance to non-performing loans and allowance to total loans applicable to the Group are 140% and 2.1%. EXPLANATION OF DIFFERENCES BETWEEN FINANCIAL STATEMENTS PREPARED UNDER DOMESTIC AND INTERNATIONAL ACCOUNTING STANDARDS The net profit attributable to shareholders of the Bank for the reporting period ended June 30, 2026 and the equity attributable to shareholders of the Bank as at the end of the reporting period presented in the financial statements prepared by the Group under the China Accounting Standards are the same with that presented in the financial statements prepared by the Group under the International Financial Reporting Accounting Standards.
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10 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (I) ANALYSIS OF OVERALL OPERATION PERFORMANCE During the reporting period, the Group anchored its vision of “a first-class commercial bank ”, adhered to the fundamental guarantee of strengthening the Party ’s leadership in an all-round way, and continued to deepen the establishment of a five-word political ecosystem, namely “integrity, simplicity, professionalism, cooperation and honesty ”. It thoroughly practiced the four strategic paths, focused on the “1155 ” development strategy, deepened its customer-oriented comprehensive operation and management, actively promoted the digital transformation, and consolidated the foundations of operation, science and technology, and talents, promoting the high-quality development and steady and sustainable progress of the whole bank. As at the end of the reporting period, total assets of the Group amounted to RMB3,695.800 billion, representing an increase of RMB214.708 billion or 6.17% compared with the end of last year. Of which total loans and advances to customers amounted to RMB2,010.115 billion, representing an increase of RMB87.404 billion or 4.55% compared with the end of last year. Total liabilities amounted to RMB3,484.355 billion, representing an increase of RMB210.598 billion or 6.43% compared with the end of last year. Of which: customer deposits amounted to RMB2,177.297 billion, representing an increase of RMB133.831 billion or 6.55% compared with the end of last year. During the reporting period, operating income of the Group amounted to RMB33.516 billion, representing a period-on-period increase of RMB251 million or 0.75%, of which net interest income amounted to RMB22.352 billion, representing a period-on-period decrease of RMB694 million or 3.01%, and net non-interest income amounted to RMB11.164 billion, representing a period-on-period increase of RMB945 million or 9.25%. Net profit attributable to shareholders of the Bank amounted to RMB7.824 billion, representing a period-on-period increase of RMB157 million or 2.05%. As at the end of the reporting period, the non-performing loan ratio was 1.36%, maintaining flat compared with the end of last year. Allowance to non-performing loans was 155.85%, representing an increase of 0.48 percentage point compared with the end of last year; allowance to total loans was 2.12%, representing an increase of 0.01 percentage point compared with the end of last year. As at the end of the reporting period, the capital adequacy ratio of the Group was 11.55%, representing a decrease of 0.57 percentage point compared with the end of last year; the tier-one capital adequacy ratio was 9.55%, representing a decrease of 0.05 percentage point compared with the end of last year; the core tier-one capital adequacy ratio was 8.37%, representing a decrease of 0.03 percentage point compared with the end of last year, all satisfying the regulatory requirements.
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11 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (II) ANALYSIS OF FINANCIAL STATEMENTS 1. Analysis of Consolidated Statement of Profit or Loss During the reporting period, the Group achieved a net profit attributable to shareholders of the Bank of RMB7.824 billion, representing an increase of 2.05% on a period-on-period basis; the return on average total assets was 0.45% and the weighted average return on net assets was 8.62%. Operating income was RMB33.516 billion, representing an increase of 0.75% on a period-on-period basis, including net interest income of RMB22.352 billion, representing a decrease of 3.01% on a period-on-period basis; net non-interest income of RMB11.164 billion, representing an increase of 9.25% on a period-on-period basis. Operating expenses were RMB10.376 billion, representing an increase of 1.03% on a period-on-period basis; the cost-to-income ratio was 29.24%, representing a decrease of 0.53 percentage point on a period-on-period basis. Provision for impairment losses was RMB13.093 billion, representing a decrease of 1.56% on a period-on-period basis. The income tax expense was RMB1.897 billion, representing an increase of 10.10% on a period-on-period basis. Changes in main items of the consolidated statement of profit or loss In RMB million, except percentages Item January to June 2026 January to June 2025 Amount of increase (decrease) Increase (decrease) (%) Net interest income 22,352 23,046 (694) (3.01) Net non-interest income 11,164 10,219 945 9.25 Operating income 33,516 33,265 251 0.75 Less: Operating expenses 10,376 10,270 106 1.03 Less: Impairment losses 13,093 13,300 (207) (1.56) Profit before taxation 10,047 9,695 352 3.63 Less: Income tax expenses 1,897 1,723 174 10.10 Net profit 8,150 7,972 178 2.23 Attributable to: Shareholders of the Bank 7,824 7,667 157 2.05 Non-controlling interests 326 305 21 6.89 (1) Net interest income During the reporting period, net interest income was RMB22.352 billion, representing a decrease of RMB694 million or 3.01% on a period-on-period basis, accounting for 66.69% of operating income. Interest income was RMB48.413 billion, representing a decrease of RMB4.239 billion or 8.05% on a period-on-period basis; interest expenses was RMB26.061 billion, representing a decrease of RMB3.545 billion or 11.97% on a period-on-period basis. During the reporting period, net interest margin was 1.56%, representing a decrease of 13 basis points on a period-on-period basis; net interest spread was 1.41%, representing a decrease of 11 basis points on a period-on-period basis. The main reasons for the period- on-period change in net interest margin were as follows: the Group implemented the policy guidance of benefiting the real economy and continued to promote the reduction of corporate financing costs, thus the yield on interest-earning assets decreased by 41 basis points on a period-on-period basis. On the liability side, the Group achieved a balanced development in both volume and price and continued to optimize the deposit structure, which led to a 30-basis-point decrease in the cost of interest-bearing liabilities on a period-on-period basis.
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12 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Average yield of interest-earning assets and average cost of interest-bearing liabilities In RMB million, except percentages January to June 2026 January to June 2025 Item Average balance Interest income Average yield (%) Average balance Interest income Average yield (%) Interest-earning assets Loans and advances to customers 1,995,458 34,127 3.45 1,885,033 37,611 4.02 Investments (1) 875,722 11,966 2.76 883,815 12,597 2.87 Due from banks and other financial institutions (2) 189,638 1,442 1.53 160,440 1,568 1.97 Balances with central bank (3) 124,555 878 1.42 127,456 876 1.39 Total interest-earning assets 3,185,373 48,413 3.06 3,056,744 52,652 3.47 Item Average balance Interest expenses Average cost (%) Average balance Interest expenses Average cost (%) Interest-bearing liabilities Customer deposits 2,053,428 15,740 1.55 1,932,000 17,964 1.88 Due to banks and other financial institutions (4) 564,271 4,781 1.71 455,493 4,641 2.05 Due to central bank 54,286 441 1.64 98,861 908 1.85 Debt securities issued (5) 519,863 5,099 1.98 577,643 6,042 2.11 Others – – – 2,976 51 3.46 Total interest-bearing liabilities 3,191,848 26,061 1.65 3,066,973 29,606 1.95 Net interest income 22,352 23,046 Net interest spread 1.41 1.52 Net interest margin (6) 1.56 1.69 Notes: (1) Including financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income and finance lease receivables. (2) Including deposits with banks and other financial institutions, placements with banks and other financial institutions, and financial assets purchased under resale agreements. (3) Including statutory deposit reserves, surplus deposit reserves, foreign exchange risk reserves and fiscal deposits. (4) Including deposits from banks and other financial institutions, placements from banks and other financial institutions, and financial assets sold under repurchase agreements. (5) Including issued inter-bank certificates of deposits, financial bonds and subordinated bonds, etc. (6) Net interest margin: the income generated from the business of financial assets measured at fair value through profit or loss was not classified as interest income categorized by accounting item, and its corresponding interest-bearing liabilities and interest expenses shall be adjusted accordingly.
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13 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Analysis of changes in interest income and expenses In RMB million Comparison between January to June 2026 and January to June 2025 Factors for increase (decrease) Net increase (decrease) (3)Item Volume (1) Interest rate (2) Interest-earning assets Loans and advances to customers 2,203 (5,687) (3,484) Investments (115) (516) (631) Due from banks and other financial institutions 285 (411) (126) Balances with central bank (20) 22 2 Changes in interest income 2,353 (6,592) (4,239) Interest-bearing liabilities Customer deposits 1,129 (3,353) (2,224) Due to banks and other financial institutions 1,108 (968) 140 Due to central bank (409) (58) (467) Debt securities issued (604) (339) (943) Others (51) – (51) Changes in interest expenses 1,173 (4,718) (3,545) Net changes in interest income 1,180 (1,874) (694) Notes: (1) Change in volume represents the average balance for the reporting period minus the average balance for the same period of last year, multiplied by the average yield or average interest-bearing rate for the same period of last year. (2) Change in interest rate represents the average yield or average interest-bearing rate for the reporting period minus the average yield or average interest-bearing rate for the same period of last year, multiplied by the average balance for the reporting period. (3) Net increase or decrease represents interest income (expenses) for the reporting period minus interest income (expenses) for the same period of last year. (2) Interest income Interest income from loans and advances to customers Interest income from loans and advances to customers was RMB34.127 billion, representing a decrease of RMB3.484 billion or 9.26% on a period-on-period basis, mainly due to that the Group, based on the political and people-oriented nature of financial work, took serving the real economy as the starting point of its operations to continuously improve the suitability of financial services and help to develop new-quality productive forces. During the reporting period, the daily average balance of loans and advances to customers was RMB2.00 trillion, representing an increase of 5.86% on a period-on-period basis.
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14 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Analysis of average income from loans and advances to customers by business type In RMB million, except percentages January to June 2026 January to June 2025 Average balance Interest income Average yield (%) Average balance Interest income Average yield (%) Corporate loans and advances 1,423,367 24,540 3.48 1,292,973 25,825 4.03 Personal loans and advances 444,876 8,493 3.85 469,711 10,523 4.52 Discounted bills 127,215 1,094 1.73 122,349 1,263 2.08 Total loans and advances to customers 1,995,458 34,127 3.45 1,885,033 37,611 4.02 Interest income from investments Interest income from investments was RMB11.966 billion, representing a decrease of RMB631 million or 5.01% on a period-on-period basis, mainly due to an 11-basis-point decrease in the investment yield on a period-on-period basis. (3) Interest expenses Interest expenses on customer deposits The Group coordinated the growth of total deposits with structural optimization, dynamically optimized deposit pricing management, deepened its focus on transaction and settlement scenarios to expand core low-cost funding sources, and further realized the benefits of refined liability management and control on the liability side. Interest expenses on customer deposits amounted to RMB15.740 billion, representing a decrease of RMB2.224 billion or 12.38%. As at the end of the reporting period, the daily average balance of customer deposits was RMB2.05 trillion, representing an increase of 6.29% on a period-on-period basis; the deposit interest payment rate in the first half of 2026 was 1.55%, representing a decrease of 33 basis points on a period-on-period basis. In RMB million, except percentages January to June 2026 January to June 2025 Average balance Interest expenses Average cost (%) Average balance Interest expenses Average cost (%) Corporate deposits and other deposits (1) Time 1,228,882 10,947 1.80 1,238,343 13,159 2.14 Demand 400,777 1,121 0.56 365,237 1,324 0.73 Subtotal 1,629,659 12,068 1.49 1,603,580 14,483 1.82 Personal deposits Time 339,384 3,651 2.17 264,197 3,458 2.64 Demand 84,385 21 0.05 64,223 23 0.07 Subtotal 423,769 3,672 1.75 328,420 3,481 2.14 Total 2,053,428 15,740 1.55 1,932,000 17,964 1.88 Note: (1) Other deposits include remittance payables, temporary deposits, and outward remittances, etc.
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15 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (4) Net non-interest income During the reporting period, net non-interest income amounted to RMB11.164 billion, representing an increase of RMB945 million or 9.25% on a period-on-period basis, of which net fee and commission income was RMB2.557 billion, representing an increase of RMB264 million; other net non-interest income was RMB8.607 billion, representing an increase of RMB681 million from the previous period. Net fee and commission income In RMB million, except percentages Item January to June 2026 January to June 2025 Amount of increase (decrease) Increase (decrease) (%) Agency and entrustment service 3,288 1,345 1,943 144.46 Settlement and clearing service 568 378 190 50.26 Commitment and guarantee service 407 485 (78) (16.08) Custodian and fiduciary service 375 366 9 2.46 Underwriting and consultation service 240 393 (153) (38.93) Fee from bank cards 114 85 29 34.12 Others 38 56 (18) (32.14) Total fee and commission income 5,030 3,108 1,922 61.84 Less: Fee and commission expense 2,473 815 1,658 203.44 Net fee and commission income 2,557 2,293 264 11.51 Net fee and commission income was RMB2.557 billion, representing an increase of RMB264 million or 11.51% on a period-on-period basis. Fee and commission income was RMB5.030 billion, representing an increase of RMB1.922 billion on a period-on-period basis. Among which, fee income from agency and entrustment service was RMB3.288 billion, representing an increase of RMB1.943 billion on a period-on-period basis, primarily due to the increased scale of the agency business; fee and commission expense was RMB2.473 billion, representing an increase of RMB1.658 billion on a period-on-period basis, primarily due to the increased expense of agency business.
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16 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Other net non-interest income In RMB million, except percentages Item January to June 2026 January to June 2025 Amount of increase (decrease) Increase (decrease) (%) Net trading gains 2,919 2,514 405 16.11 Net gains on financial investments 4,279 4,363 (84) (1.93) Other operating income 1,409 1,049 360 34.32 Total 8,607 7,926 681 8.59 Other net non-interest income was RMB8.607 billion, representing an increase of RMB681 million or 8.59% on a period-on-period basis, primarily due to the fluctuating downward trend of bond market yields during the reporting period, which led to a period-on-period increase in the income of financial assets measured at fair value through profit or loss. (5) Operating expenses In RMB million, except percentages Item January to June 2026 January to June 2025 Amount of increase (decrease) Increase (decrease) (%) Staff costs 6,110 6,324 (214) (3.38) General and administrative expenses 2,172 2,018 154 7.63 Depreciation and amortization 1,022 1,016 6 0.59 Tax and surcharges 576 367 209 56.95 Others 496 545 (49) (8.99) Total 10,376 10,270 106 1.03 The Group has established an input-output management system, continuously optimized its input-output structure, and carried out refined management of financial expenditures. Operating expenses amounted to RMB10.376 billion, representing an increase of RMB106 million or 1.03% on a period-on-period basis. (6) Impairment losses In RMB million, except percentages Item January to June 2026 January to June 2025 Deposits with banks and other financial institutions (3) 1 Placements with banks and other financial institutions 5 (3) Financial assets purchased under resale agreements (17) (11) Loans and advances to customers 14,457 10,779 Financial investments (2,125) 1,803 Finance lease receivables 392 449 Off-balance sheet items 169 33 Other assets 215 249 Total 13,093 13,300
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17 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Impairment losses amounted to RMB13.093 billion, representing a decrease of RMB207 million or 1.56% on a period-on-period basis, please see “Note III to Financial Statements – 7 Expected Credit Losses; 23 Impairment Allowance ”. (7) Income tax expenses Income tax expenses were RMB1.897 billion, representing an increase of RMB174 million or 10.10% on a period-on-period basis, and the effective tax rate was 18.88%. For the reconciliation statement of the income tax expense calculated at statutory tax rate and the actual income tax expense, please see “Note III to Financial Statements – 8 Income Tax Expense ”. (8) Segment information Segment operating results by business line In RMB million, except percentages January to June 2026 January to June 2025 Item Amount Proportion (%) Amount Proportion (%) Corporate banking 17,992 53.68 18,914 56.86 Retail banking 4,874 14.54 5,149 15.48 Treasury operations 8,237 24.58 7,297 21.93 Others 2,413 7.20 1,905 5.73 Total operating income 33,516 100.00 33,265 100.00 Segment operating results by geographic region In RMB million, except percentages January to June 2026 January to June 2025 Item Amount Proportion (%) Amount Proportion (%) Yangtze River Delta Region 22,278 66.47 19,946 59.96 Bohai Rim Region 3,764 11.23 4,438 13.34 Pearl River Delta and Economic Zone on the Western Coast of the Taiwan Straits 2,563 7.65 3,226 9.70 Midwestern China Region 4,911 14.65 5,655 17.00 Total operating income 33,516 100.00 33,265 100.00 For detailed information on business segments and geographical segments, please refer to “Note V to the Financial Statement – Segment Reporting ”.
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18 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 2. Analysis on Consolidated Statement of Financial Position (1) Assets As at the end of the reporting period, total assets of the Group amounted to RMB3,695.800 billion, representing an increase of RMB214.708 billion or 6.17% as compared to that at the end of last year, of which net loans and advances to customers amounted to RMB1,968.457 billion, representing an increase of RMB85.220 billion or 4.53% as compared to that at the end of last year. Financial investments amounted to RMB1,056.053 billion, representing an increase of RMB4.546 billion or 0.43% as compared to that at the end of last year. In terms of the structure, net loans and advances to customers accounted for 53.26% of total assets, decreasing by 0.84 percentage point as compared to that at the end of last year, and the financial investments accounted for 28.57% of total assets, decreasing by 1.64 percentage points as compared to that at the end of last year, due from banks and other financial institutions accounted for 5.83% of total assets, increasing by 0.94 percentage point as compared to that at the end of last year, and cash and balances with central bank accounted for 4.72% of total assets, increasing by 1.11 percentage points as compared to that at the end of last year. Assets utilization In RMB million, except percentages June 30, 2026 December 31, 2025 December 31, 2024 Item Amount Proportion (%) Amount Proportion (%) Amount Proportion (%) Total loans and advances to customers 2,010,115 1,922,711 1,857,116 Less: Allowance for ECLs of loans (1) 41,658 39,474 44,432 Net loans and advances to customers 1,968,457 53.26 1,883,237 54.10 1,812,684 54.51 Financial investments (2) 1,056,053 28.57 1,051,507 30.21 1,055,451 31.74 Cash and balances with central bank 174,395 4.72 125,704 3.61 129,691 3.90 Precious metals 114,593 3.10 80,929 2.32 16,956 0.51 Due from banks and other financial institutions (3) 215,375 5.83 170,134 4.89 137,692 4.14 Other assets 166,927 4.52 169,581 4.87 173,065 5.20 Total assets 3,695,800 100.00 3,481,092 100.00 3,325,539 100.00 Notes: (1) Allowance for ECLs of loans refers to the allowance made for the loss of loans and advances to customers measured at amortized cost. (2) Financial investments include financial assets measured at fair value through profit or loss, financial assets measured at amortized cost, and financial assets measured at fair value through other comprehensive income. (3) Due from banks and other financial institutions include deposits with banks and other financial institutions, placements with banks and other financial institutions and financial assets purchased under resale agreements.
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19 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Loans and advances to customers The Group fully implemented national and regulatory policy directives, staying focused on serving the real economy by improving the quality of new business and revitalizing existing assets. It upheld its primary strategy of “Deepening the Development in Zhejiang ” and drove the transformation towards “low risk and balanced returns ”, resulting in steady and healthy growth in its loan scale. As at the end of the reporting period, total loans and advances to customers of the Group amounted to RMB2,010.115 billion, representing an increase of RMB87.404 billion or 4.55% as compared to that at the end of last year. Loans and advances to customers structure by business type In RMB million, except percentages June 30, 2026 December 31, 2025 December 31, 2024 Item Amount Proportion (%) Amount Proportion (%) Amount Proportion (%) Corporate loans and advances 1,436,766 71.47 1,331,459 69.25 1,249,566 67.28 Personal loans and advances 433,189 21.55 464,408 24.15 478,631 25.77 Discounted bills 129,828 6.46 116,916 6.08 119,200 6.42 Changes in fair value through other comprehensive income 783 0.04 706 0.04 1,224 0.07 Interest accrued 9,549 0.48 9,222 0.48 8,495 0.46 Total 2,010,115 100.00 1,922,711 100.00 1,857,116 100.00 Corporate loans and advances Driven by bank-wide industry research, the Company ’s lending business has focused on the supply chain and technology innovation sectors, and addressed the full-cycle, multi-scenario needs of enterprises. By continuously iterating its distinctive business matrix, the business provides targeted services to core enterprises and their upstream and downstream partners within industrial chains. As a result, the Company ’s lending business has achieved steady growth in scale, and its comprehensive service capabilities have continued to strengthen. As at the end of the reporting period, total corporate loans and advances amounted to RMB1,436.766 billion, representing an increase of 7.91% from the end of last year. Personal loans and advances We implemented the strategy to expand domestic demand and the special initiative to boost consumption, and provided financial services to meet residents ’ basic and improvement housing needs. We continued to strengthen the foundation of our mortgage lending business with more supply of credit for consumer scenarios, and continuously optimized the structure of our personal loans to consolidate our retail customer base. As at the end of the reporting period, total personal loans and advances amounted to RMB433.189 billion, representing a decrease of 6.72% from the end of last year.
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20 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Discounted bills With a focus on the demand for bill financing across the entire industrial chain, and by leveraging digital technology for empowerment and the iterative upgrading of our specialized products as the foundation, we continued to deepen our financial offerings and comprehensively enhance the quality and efficiency of our services to the real economy. As at the end of the reporting period, total discounted bills amounted to RMB129.828 billion, representing an increase of 11.04% from the end of last year. Financial investments The Group continued to leverage the role of financial investments in serving the real economy through diversified channels. Meanwhile, it responded flexibly to bond market volatility by capitalizing on market movements, optimized portfolio management, and balanced liquidity security with returns. The overall scale of financial investments remained basically stable. As at the end of the reporting period, the balance of financial investments was RMB1,056.053 billion, an increase of 0.43% from the end of last year. Financial investment composition In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount Proportion (%) Amount Proportion (%) Fund investments 133,444 12.64 136,837 13.01 Bond investments 844,246 79.94 832,636 79.18 Trust schemes and asset management plans 85,299 8.08 91,449 8.70 Other financial investments 3,242 0.31 3,853 0.37 Interest accrued 10,264 0.97 11,758 1.12 Allowance for ECLs (20,442) (1.94) (25,026) (2.38) Total 1,056,053 100.00 1,051,507 100.00 Note: Other financial investments include equity investments, wealth management products, etc. (2) Liabilities The Group fully advanced its liability structure optimization initiative, strengthened proactive asset and liability management, and focused on the stability of funding sources and the appropriateness of funding costs, resulting in continuous improvement in liability quality. As at the end of the reporting period, the Group ’s total liabilities amounted to RMB3,484.355 billion, representing an increase of RMB210.598 billion or 6.43% from the end of last year.
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21 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Liabilities composition In RMB million, except percentages June 30, 2026 December 31, 2025 December 31, 2024 Item Amount Proportion (%) Amount Proportion (%) Amount Proportion (%) Due to Central Bank 39,614 1.14 102,206 3.12 77,821 2.49 Customer deposits 2,177,297 62.49 2,043,466 62.42 1,922,289 61.56 Due to banks and other financial institutions 573,527 16.46 515,042 15.73 498,068 15.95 Debt securities issued 474,003 13.60 512,953 15.67 541,533 17.34 Others 219,914 6.31 100,090 3.06 83,085 2.66 Total liabilities 3,484,355 100.00 3,273,757 100.00 3,122,796 100.00 Note: Due to banks and other financial institutions include deposits from banks and other financial institutions, placements from banks and other financial institutions, and financial assets sold under repurchase agreements. Customer deposits The Group persisted in developing its capability to attract low-interest high-quality deposits as a key operational focus, continuously optimizing deposit structure and enhancing quality. Having stabilized its deposit scale above the RMB2 trillion threshold, the Group achieved steady growth in deposits while effectively reducing its cost of deposits. As at the end of the reporting period, the Group ’s balance of customer deposits was RMB2,177.297 billion, an increase of RMB133.831 billion or 6.55% from the end of last year. In terms of customer structure, corporate deposits increased by RMB91.961 billion, or 5.72%; personal deposits increased by RMB46.179 billion or 11.67%. In terms of maturity structure, due to favourable results in stabilizing demand deposits and controlling duration, time deposits increased by RMB77.571 billion or 5.13%; demand deposits increased by RMB60.569 billion or 12.30%. Structure of our customer deposits by business type In RMB million, except percentages June 30, 2026 December 31, 2025 December 31, 2024 Item Amount Proportion (%) Amount Proportion (%) Amount Proportion (%) Corporate deposits Demand 467,522 21.47 417,299 20.42 434,291 22.59 Time 1,232,957 56.63 1,191,219 58.29 1,148,911 59.77 Sub-total 1,700,479 78.10 1,608,518 78.71 1,583,202 82.36 Personal deposits Demand 85,280 3.92 74,934 3.67 64,951 3.38 Time 356,671 16.38 320,838 15.70 239,681 12.47 Sub-total 441,951 20.30 395,772 19.37 304,632 15.85 Other deposits 1,994 0.09 2,019 0.10 372 0.02 Interest accrued 32,873 1.51 37,157 1.82 34,083 1.77 Total 2,177,297 100.00 2,043,466 100.00 1,922,289 100.00 (3) Shareholder ’s equity As at the end of the reporting period, equity attributable to shareholders of the Bank amounted to RMB206.655 billion in total, representing an increase of RMB3.787 billion or 1.87% from the end of last year. Please see “Financial Statements – Condensed Consolidated Statement of Changes in Shareholders ’ Equity ”.
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22 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (III) ANALYSIS OF LOAN QUALITY 1. Loans distribution by risk classification In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount Proportion (%) Amount Proportion (%) Pass 1,918,650 95.91 1,841,533 96.24 Special mention 53,923 2.69 45,213 2.36 Non-performing 27,210 1.36 26,037 1.36 Substandard 11,873 0.59 11,775 0.62 Doubtful 5,076 0.26 5,556 0.29 Loss 10,261 0.51 8,706 0.45 Changes in fair value through other comprehensive income 783 0.04 706 0.04 Subtotal 2,000,566 100.00 1,913,489 100.00 Interest accrued 9,549 N/A 9,222 N/A Total loans and advances to customers 2,010,115 N/A 1,922,711 N/A As at the end of the reporting period, pass loans amounted to RMB1,918.650 billion, an increase of RMB77.117 billion from the end of last year; special mention loans amounted to RMB53.923 billion, an increase of RMB8.710 billion from the end of last year; the special mention loan ratio was 2.69%, an increase of 0.33 percentage point from the end of last year; non-performing loans amounted to RMB27.210 billion, an increase of RMB1.173 billion from the end of last year; the non-performing loan ratio was 1.36%, remaining unchanged from the end of last year. 2. Distribution of loans and non-performing loans by business type In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Corporate loans 1,436,766 71.82 14,496 1.01 1,331,459 69.58 14,646 1.10 Personal loans 433,189 21.65 12,701 2.93 464,408 24.27 11,378 2.45 Discounted bills 129,828 6.49 13 0.01 116,916 6.11 13 0.01 Changes in fair value through other comprehensive income 783 0.04 N/A N/A 706 0.04 N/A N/A Subtotal 2,000,566 100.00 27,210 1.36 1,913,489 100.00 26,037 1.36 Interest accrued 9,549 N/A N/A N/A 9,222 N/A N/A N/A Total loans and advances to customers 2,010,115 N/A N/A N/A 1,922,711 N/A N/A N/A
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23 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS As at the end of the reporting period, corporate non-performing loans amounted to RMB14.496 billion, a decrease of RMB150 million from the end of last year; the non-performing loan ratio was 1.01%, a decrease of 0.09 percentage point from the end of last year. Personal non-performing loans amounted to RMB12.701 billion, an increase of RMB1.323 billion from the end of last year; the non-performing loan ratio was 2.93%, an increase of 0.48 percentage point from the end of last year. 3. Distribution of loans and non-performing loans by industry In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Corporate loans 1,436,766 71.82 14,496 1.01 1,331,459 69.58 14,646 1.10 Leasing and commercial services 417,400 20.86 2,346 0.56 339,725 17.75 1,346 0.40 Manufacturing 277,333 13.86 4,110 1.48 286,725 14.98 3,797 1.32 Wholesale and retail trade 180,722 9.03 2,962 1.64 185,808 9.71 4,251 2.29 Real estate 154,426 7.72 2,033 1.32 161,815 8.46 2,817 1.74 Administration of water conservancy, environment and public facilities 113,498 5.67 13 0.01 87,829 4.59 18 0.02 Construction 77,390 3.87 1,027 1.33 80,505 4.21 972 1.21 Financing 61,945 3.10 20 0.03 40,338 2.11 20 0.05 Transportation, storage and postal service 19,772 0.99 147 0.74 18,930 0.99 116 0.61 Electricity, heat, gas and water production and supply 17,618 0.88 111 0.63 17,525 0.92 195 1.11 Accommodation and catering 15,761 0.79 151 0.96 17,947 0.94 94 0.52 Mining 13,491 0.67 – – 12,832 0.67 – – Others (1) 87,410 4.38 1,576 1.80 81,480 4.25 1,020 1.25 Personal loans 433,189 21.65 12,701 2.93 464,408 24.27 11,378 2.45 Discounted bills 129,828 6.49 13 0.01 116,916 6.11 13 0.01 Changes in fair value through other comprehensive income 783 0.04 N/A N/A 706 0.04 N/A N/A Subtotal of loans and advances to customers 2,000,566 100.00 27,210 1.36 1,913,489 100.00 26,037 1.36 Interest accrued 9,549 N/A N/A N/A 9,222 N/A N/A N/A Total loans and advances to customers 2,010,115 N/A N/A N/A 1,922,711 N/A N/A N/A Note: (1) Others include public administration, social security and social organisations; culture, sports and entertainment; information transmission, computer service and software; agriculture, forestry, animal husbandry and fishery; household services and other services; scientific research, technology services and geological exploration; education; health, social security and social welfare. The Group adopted a “prudent and solid ” risk appetite, anchored its vision of becoming “a first- class commercial bank ”, and upheld the political and people-oriented nature of the financial work. With deepening the development in Zhejiang and serving the real economy as its foothold, the Group implemented the risk philosophy of “low risk and balanced returns ” and adhered to the principle of “risk first, compliance as the foundation ”. It established and improved a risk management system that is “independent, balanced, vertical and professional ”, building a solid bulwark for the steady and healthy development of the Bank.
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24 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 4. Distribution of loans and non-performing loans by geographic region In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Yangtze River Delta Region 1,157,943 57.88 15,478 1.34 1,067,571 55.79 17,856 1.67 Midwestern China Region 373,627 18.68 3,936 1.05 380,390 19.88 3,403 0.89 Bohai Rim Region 236,384 11.81 5,103 2.16 245,388 12.82 2,670 1.09 Pearl River Delta and Economic Zone on the Western Coast of the Taiwan Straits 231,829 11.59 2,693 1.16 219,434 11.47 2,108 0.96 Changes in fair value through other comprehensive income 783 0.04 N/A N/A 706 0.04 N/A N/A Subtotal 2,000,566 100.00 27,210 1.36 1,913,489 100.00 26,037 1.36 Interest accrued 9,549 N/A N/A N/A 9,222 N/A N/A N/A Total loans and advances to customers 2,010,115 N/A N/A N/A 1,922,711 N/A N/A N/A Based on a continuous tracking of the development trends in the macro economy and the industry, according to changes in the external operating environment, internal operating conditions and risk situations, and taking into account economic characteristics of various regions, the Group adjusted its credit policies in due course; focused on the primary strategy of “deepening the development in Zhejiang ”, enhanced the competitiveness of key regions, actively prevented regional risks, supported regional development requirements, and comprehensively optimized the structure of credit assets. 5. Distribution of loans and non-performing loans by security type In RMB million, except percentages June 30, 2026 December 31, 2025 Item Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Amount of loans Proportion (%) Amount of non- performing loans Non- performing loan ratio (%) Mortgage loans 763,805 38.18 14,808 1.94 800,607 41.84 13,782 1.72 Pledged loans 66,351 3.31 1,586 2.39 72,451 3.79 1,648 2.27 Guaranteed loans 570,908 28.54 2,958 0.52 490,627 25.64 3,341 0.68 Unsecured loans 468,891 23.44 7,845 1.67 432,182 22.58 7,253 1.68 Discounted bills 129,828 6.49 13 0.01 116,916 6.11 13 0.01 Changes in fair value through other comprehensive income 783 0.04 N/A N/A 706 0.04 N/A N/A Subtotal 2,000,566 100.00 27,210 1.36 1,913,489 100.00 26,037 1.36 Interest accrued 9,549 N/A N/A N/A 9,222 N/A N/A N/A Total loans and advances to customers 2,010,115 N/A N/A N/A 1,922,711 N/A N/A N/A
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25 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS The secured loan structure of the Group basically remained stable. As at the end of the reporting period, the mortgage loans had a relatively high percentage; the mortgage loans balance was RMB763.805 billion, representing a decrease of RMB36.802 billion compared with that at the end of last year; the balance of non-performing loans among mortgage loans was RMB14.808 billion, with the non-performing loan ratio of 1.94%, representing an increase of 0.22 percentage point compared with that at the end of last year. 6. Top ten borrowers In RMB million, except percentages Top ten borrowers Industry Amount Proportion (%) A Information transmission, software and information technology services 9,263 0.46 B Financing 7,033 0.35 C Real estate 6,268 0.31 D Real estate 4,194 0.21 E Real estate 3,928 0.20 F Leasing and commercial services 3,800 0.19 G Leasing and commercial services 3,420 0.17 H Financing 3,290 0.16 I Leasing and commercial services 3,124 0.16 J Real estate 3,089 0.15 Total 47,409 2.36 As at the end of the reporting period, the balance of loans to the single largest borrower of the Group was RMB9.263 billion, representing 3.71% of the Group ’s net capital. The total loans to our top ten single borrowers amounted to RMB47.409 billion, representing 19.00% of the net capital of the Group. 7. Overdue loans In RMB million, except percentages June 30, 2026 December 31, 2025 Overdue period Amount Proportion (%) Amount Proportion (%) Overdue by 1 day to 90 days 13,243 0.66 10,384 0.54 Overdue by 90 days to one year 13,403 0.67 15,869 0.83 Overdue by one year to three years 10,056 0.51 7,165 0.37 Overdue by more than three years 1,016 0.05 1,295 0.07 Total 37,718 1.89 34,713 1.81 As at the end of the reporting period, the balance of overdue loans amounted to RMB37.718 billion, representing an increase of RMB3.005 billion compared with the end of last year; specifically, loans overdue by more than 90 days amounted to RMB24.475 billion, representing an increase of RMB146 million compared with the end of last year.
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26 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 8. Renegotiated loans The Group conducted strict and prudent management over loan renegotiation. As at the end of the reporting period, the Group ’s total renegotiated loans and advances amounted to RMB19.142 billion, representing an increase of RMB3.611 billion compared with the end of last year, accounting for 0.96%, representing an increase of 0.15 percentage point as compared to that at the end of last year; among them, total renegotiated loans and advances that were overdue by more than 3 months amounted to RMB2.777 billion, representing a decrease of RMB131 million compared with the end of last year. 9. Repossessed assets and provision for impairment As at the end of the reporting period, the balance of the Group ’s repossessed assets (non-financial instruments) was RMB926 million and the net book value was RMB650 million after deducting the impairment provision of RMB276 million. 10. Movements in the expected credit loss ( “ECL”) allowance on loans In RMB million Item Amount Balance at the beginning of the period 40,454 Charge for the period 14,457 Write-offs (5,807) Transfer out (7,501) Others 805 Balance at the end of the period 42,408 Notes: (1) Includes provision made for the loss of loans and advances to customers measured at amortized cost and measured at fair value through other comprehensive income. (2) Others include the impacts of recoveries of loans and advances previously written off and exchange rate fluctuations. (IV) CAPITAL MANAGEMENT In accordance with the relevant provisions of the Administrative Measures for the Capital of Commercial Banks (No. 4 Order [2023] of National Financial Regulatory Administration) ( (ፄ္ຖ၍ଣᐼ҅˿ 2023 ϋୋ 4 )), the measurement range of the Group ’s capital adequacy ratio covers credit risk, market risk and operational risk. Among them, credit risk-weighted assets were measured by using weight method, and market risk– and operational risk-weighted assets were measured by using standardized approach. As at the end of the reporting period, capital adequacy ratio of the Group was 11.55%, tier-one capital adequacy ratio was 9.55%, core tier-one capital adequacy ratio was 8.37%, and leverage ratio was 4.76%, all of which met regulatory requirements.
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27 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Capital adequacy ratio (the Group) In RMB million, except percentages Item June 30, 2026 December 31, 2025 December 31, 2024 Net core tier-one capital 180,817 177,985 173,172 Other tier-one capital 25,427 25,411 25,364 Net tier-one capital 206,244 203,396 198,536 Tier-two capital 43,213 53,286 61,904 Net capital base 249,457 256,682 260,441 Risk-weighted assets 2,159,695 2,118,335 2,065,287 Among which: Credit risk-weighted assets 1,995,879 1,974,890 1,924,753 Market risk-weighted assets 43,723 23,353 22,553 Operational risk-weighted assets 120,093 120,093 117,981 Minimum capital requirement (%) 8.00 8.00 8.00 Reserve capital and countercyclical capital requirement (%) 2.50 2.50 2.50 Additional capital requirement (%) – – – Core tier-one capital adequacy ratio (%) 8.37 8.40 8.38 Tier-one capital adequacy ratio (%) 9.55 9.60 9.61 Capital adequacy ratio (%) 11.55 12.12 12.61 Leverage ratio (the Group) In RMB million, except percentages The Group June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 Net tier-one capital 206,244 210,064 203,396 201,871 Adjusted asset balance inside and outside the balance sheet 4,335,314 4,193,445 4,067,144 4,021,243 Leverage ratio (%) 4.76 5.01 5.00 5.02 Note: The Pillar 3 Information Disclosure Report for the Half Year of 2026 of China Zheshang Bank Co., Ltd. ( ए ʮ̡ 2026ᚣజѓ) is available for inspection on the website of the Bank (www.czbank.com). As at the end of the reporting period, the capital adequacy ratio of the Company was 11.34%, tier-one capital adequacy ratio was 9.41%, core tier-one capital adequacy ratio was 8.20%, and leverage ratio was 4.65%, all of which met regulatory requirements.
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28 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Capital adequacy ratio (the Company) In RMB million, except percentages Item June 30, 2026 December 31, 2025 December 31, 2024 Net core tier-one capital 169,877 167,766 166,402 Other tier-one capital 24,995 24,995 24,995 Net tier-one capital 194,872 192,761 191,397 Tier-two capital 40,000 50,904 59,865 Net capital base 234,872 243,664 251,262 Risk-weighted assets 2,071,209 2,034,760 1,992,742 Among which: Credit risk-weighted assets 1,911,179 1,894,995 1,855,223 Market risk-weighted assets 43,491 23,226 22,360 Operational risk-weighted assets 116,539 116,539 115,159 Minimum capital requirement (%) 8.00 8.00 8.00 Reserve capital and countercyclical capital requirement (%) 2.50 2.50 2.50 Additional capital requirement (%) – – – Core tier-one capital adequacy ratio (%) 8.20 8.24 8.35 Tier-one capital adequacy ratio (%) 9.41 9.47 9.60 Capital adequacy ratio (%) 11.34 11.98 12.61 Leverage ratio (the Company) In RMB million, except percentages Item June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 Net tier-one capital 194,872 197,813 192,761 191,272 Adjusted asset balance inside and outside the balance sheet 4,188,326 4,100,195 3,979,104 3,937,814 Leverage ratio (%) 4.65 4.82 4.84 4.86 (V) OTHER FINANCIAL INFORMATION DISCLOSED IN ACCORDANCE WITH REGULATORY REQUIREMENTS 1. Balance and status of off-balance sheet items that may have a significant impact on the financial position and operating results The Group ’s off-balance sheet items include commitments and contingencies and others. Specifically, commitments and contingencies include credit commitments and financial guarantee, capital expenditure commitments, bond underwriting and redemption commitments, outstanding litigations and disputes, etc., among which credit commitments and financial guarantee serve as the uppermost component. As at the end of the reporting period, balance of the Group ’s credit commitments and financial guarantee amounted to RMB856.067 billion. Please see “Note VI to Financial Statements – Commitments and Contingencies ”. 2. Status of overdue and unpaid debts As at the end of the reporting period, the Group had no overdue and unpaid debts.
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29 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (VI) RISK MANAGEMENT 1. Comprehensive risk management system The Company adopted a “prudent and solid ” risk appetite, anchored its vision of becoming “a first-class commercial bank ”, and upheld the political and people-oriented nature of the financial work. With deepening the development in Zhejiang and serving the real economy as its foothold, and with risk prevention and safe development as its bottom-line requirements, the Company implemented the risk philosophy of “low risk and balanced returns ” and adhered to the principle of “risk first, compliance as the foundation ”. It established and improved a risk management system that is “independent, balanced, vertical and professional ”, strictly managed authorization and credit extension, strengthened risk control and system capabilities, and built a solid bulwark for the steady and healthy development of the Bank. The Company adhered to systematic risk prevention and resolution, deepened risk governance in key areas, accelerated risk disposal and resolution, and strictly controlled access standards. The Board of Directors takes the ultimate responsibility for comprehensive risk management, and the Senior Management is responsible for implementing comprehensive risk management. The Company establishes the position of chief risk officer. The Board of Directors has established a Risk and Related Party Transaction Control Committee; the Senior Management has established special committees including the Risk Management Committee, Asset and Liability Management Committee, Information Technology Management Committee, Data Governance Committee, and Innovation Management Committee and other deliberative bodies. The Risk Management Department at our head office is the coordinating management department for comprehensive risk management and the leading management department for the credit risk, market risk (excluding interest rate risk of banking book), country risk, information technology risk, and ESG risk. The Asset and Liability Management Department at our head office is the leading management department for the interest rate risk of banking book and liquidity risk. The Internal Control and Compliance and Legal Affairs Department at our head office is the leading management department for operational risk, compliance risk and outsourced risk. The Party-Mass Work Department (Publicity Department of the Party Committee) at our head office is the leading management department for reputational risk. The Development and Planning Department at our head office is the leading management department for strategic risk. The Social Responsibility and Consumer Rights Protection Department at our head office is the leading management department for consumer rights protection. To meet its comprehensive risk management requirements, the Company appoints risk monitoring officers to relevant departments at its head office. These officers assist the management of the respective departments in overseeing comprehensive risk management, while maintaining independence in business judgment and risk reporting. The Company also uniformly deploys risk monitoring officers across all its branches. These officers support branch presidents in managing comprehensive risk management, and exercise independent business judgment and risk reporting. 2. Credit risk management Credit risk refers to the risk of the Company suffering from losses due to defaults of debtors or counterparties or a decline in their credit quality. The Company ’s credit risk primarily lies in on and off-balance sheet business, including loans, inter-bank lending, bond investments, bill acceptances, letters of credit, letters of guarantee, and special purpose vehicle investments.
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30 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS The objectives of our credit risk management are to control our credit risk within a reasonable range acceptable to us and maximize comprehensive benefits across the Bank denominated in local currency and adjusted with respect to risks. The Company ’s credit risk management system consists of the Board of Directors, the Senior Management, the Risk Management Committee, the Credit Review Committee of the head office, the Credit Review Committee of the branches, the Credit Review Teams of sub-branches, the Risk Management Department of the head office and other credit risk control departments, Business Operation and Management Departments, Technology Management Department, Audit Department, as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for implementing and organizing the credit risk management as well as the formulation and implementation of systems and policies relating to credit risk management. The Company formulates credit policies based on changes in external operating environment, internal operating and risk conditions. Such policies expressly set out guidance on certain aspects of our credit business, such as customer structure, industry structure, product structure, regional structure and key strategic areas. In addition, the Company adjusts its credit policies in due course based on a continuous tracking of the development trends in the macro economy and the industry. In the face of the complex and volatile economic environment at home and abroad, where opportunities and challenges coexist, the Company comprehensively advances the customer- centric comprehensive collaborative reform, adheres to the principle of taking the real economy as the focal point and the growth driver of its credit asset business, and continuously expands its customer base to consolidate the cornerstone of its credit business. Taking the primary strategy of “Deepening the Development in Zhejiang ”, we enhance the competitiveness of key regions, insist on intelligent risk control, highlight precise credit risk identification and forward-looking prevention and resolution, strictly control new non-performing assets, and comprehensively optimize the structure of credit assets. The Bank classifies its financial assets in accordance with the criteria set forth in the “Measures for Classification of Financial Assets Risks of Commercial Banks ” (ᎈʱᗳ፬ ), taking into account factors such as the debtor ’s ability to perform, willingness to repay, and repayment record; the risk classification process of the Company ’s financial assets implements a five-tiered procedure of “initial classification, review, examination, deliberation, and approval ”. (1) Credit risk management for corporate customers The Company conducts a unified credit management of corporate customers, and determines maximum comprehensive credit lines and business credit lines for customers based on comprehensive evaluation of customers and according to certain standards and procedures. The Company strictly complies with regulatory requirements and puts loans (including trade financing), bill acceptances and discounting, overdrafts, bond investments, special purpose vehicle investments, opening letters of credit, factoring, guarantees, loan commitments and other businesses where credit risks are essentially borne by the Company under our unified credit extension management. On the basis of comprehensive coverage of various types of credit businesses, the Company continues to improve the credit risk limit indicator system, and reasonably determines limit indicators of single corporate customers and group customers.
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31 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS The Company continuously strengthens its credit policy system, establishes unified credit limit management rules for corporate customers, intensifies the comprehensive management and unified control of overall corporate customer credit limits, improves standardized and compliant credit approval processes, authorization system and position risk accountability mechanism, and adjusts credit policies in time and takes effective measures to prevent credit risks. The Company further improves the concentration risk management, formulates the concentration risk management related systems, clarifies the responsibilities allocation and main methods of concentration risk management, and continues to promote the construction of concentration risk management. The Company continuously enhances the management of credit risks related to financing platforms of local governments, strictly complies with various policies and regulatory requirements of the State Council and financial regulatory authorities on financing platforms of local governments, makes dynamic adjustments to credit strategies, and further optimizes the credit business structure of financing platforms to prevent credit risks that may arise from local governments ’ financing platforms; steadily resolves the existing debts of financing platforms, strictly controls the debt increase of financing platforms, promotes the orderly exit of financing platforms in a standardized manner, and drives the implementation of local debt risk resolution. The Company continuously enhances the management of real estate loan risks. The Company engages in real estate related credit business prudently, and implements categorized management on the regions, clients and projects of real estate business in accordance with national policies and industry dynamics. It sets credit limits for loans we grant to the customers in the real estate industry and adopts the name list system management, and continuously adjusts and optimizes the asset structure, as well as strengthens the monitoring and management of risks relating to existing loans. (2) Credit risk management for small and micro enterprises The Company continues to optimize its credit policy system by refining the credit approval process for small business operations, and incorporating all types of credit businesses of small business customers and their related entities into unified credit management, thereby controlling risk exposure at the aggregate level. The Company embeds digital and intelligent risk control into the entire risk management process of micro and small business operations, strengthening the application of digital and intelligent tools at the pre-lending, in-lending, and post-lending stages. It continuously improves the pre-lending risk assessment mechanism, increases the application of external authoritative data, integrates multi-dimensional information for cross-verification, and reasonably sets differentiated customer group access standards. It strengthens the application of digital and intelligent risk control tools, dynamically monitors, timely identifies, and regularly adjusts risk signals, effectively achieving proactive risk control. It continuously optimizes the post-lending management system for small enterprises, configures differentiated post-lending system roles and personalized task triggering rules, and builds a precise post-lending safety net.
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32 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (3) Credit risk management for retail customers The Company continuously deepens the whole-process credit risk management for retail credit customers, and builds a comprehensive proactive risk management system. It clarifies business boundaries, standardizes operational procedures, unifies risk control standards, and strengthens tool empowerment at the pre-lending, in-lending, and post-lending stages. Leveraging the head office ’s centralized approval mechanism, it utilizes big data and intelligent risk control models, adopts a dynamic evaluation approach combining automated preliminary review with manual review, and continuously improves customer risk profiling. It strictly controls pre-lending access thresholds, strengthens in-lending credit monitoring, and implements differentiated risk early warning and disposal post-lending. Meanwhile, it dynamically optimizes risk strategies, strengthens asset quality control, and promotes the compliant, steady and sound development of the retail credit business on the basis of risk control. The Company has established a whole-process digital and intelligent risk management system for credit card (consumer finance) business, covering pre-lending access, in-lending monitoring and post-lending early warning. Leveraging core models including the “1+N” machine learning scoring and in-lending fusion scoring, it continuously improves the accuracy and forward- looking nature of risk identification. By taking into account the risk profiles of different regions, industries and customer segments, the Company has formulated and continuously updated differentiated risk control strategies, steadily elevating the risk management capacity of its credit card (consumer finance) business. (4) Credit risk management for financial institution customers The Company incorporates financial institution customers into its unified credit management framework. It has developed unified management measures and corresponding operating procedures for the unified credit limits of financial institution customers, and refined a full set of systems and processes for the due diligence, review and approval of unified credit granting to such customers. Businesses conducted with financial institution customers that involve customer credit risk are subject to the Company ’s unified credit granting management. In the course of business operations, the Company utilizes customers ’ credit lines in compliance with applicable policies. 3. Market risk management Market risk refers to the risk of losses of on and off-balance sheet business arising from unfavorable changes in market prices (including interest rates, exchange rates, stock prices and commodity prices). The term “market risk ” in this section does not include interest rate risk of banking book (for the interest rate risk of banking book, please refer to the relevant content of “7. Interest rate risk management of banking book ” below). The objectives of our market risk management are to effectively prevent market risks, control market risks within an acceptable range, and achieve a reasonable balance between risk and return.
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33 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS The Company ’s market risk management system consists of the Board of Directors, Senior Management, Risk Management Department, Capital Operation Center, Technology Management Department, Audit Department, other departments, as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for implementing and organizing the market risk management, overseeing the implementation of market risk appetite as well as formulating and regularly evaluating and monitoring the implementation of policies and procedures for market risk management, so as to ensure the Company can effectively identify, measure, monitor and control various types of market risks borne by various businesses. The market risk measurement methods adopted by the Company include duration analysis, foreign exchange exposure analysis, scenario analysis, sensitivity analysis, Value at Risk (VaR) measurement etc., and the measures taken by the Company to control market risks include, among others, limit management, hedging, reducing risk exposures etc. The Company has established a market risk management system pursuant to the relevant measures of the regulatory authority. The Company has formulated market risk management policies and procedures applicable to the nature, scale, complexity and risk features of its business and aligned such policies and procedures with its overall business development strategy, management capabilities, capital strength and overall risk level that can be borne by the Company. The Company regularly updates and improves its market risk appetite and limit management system, continues to improve the market risk management systems and market risk measurement systems. The Company conducts market risk measurement, monitoring and routine management by using the independent market risk management platform. The Company values positions of our trading book on a daily basis, continuously monitors non-stop-loss limits and stop-loss limits, and regularly evaluates market risks through stress testing and other methods. 4. Liquidity risk management Liquidity risk refers to the risk of failure to obtain adequate funds in time at reasonable costs to repay debts when they are due, perform other payment obligations and meet other capital needs in the ordinary course of business. Factors affecting liquidity risks are divided into external factors and internal factors. External factors include domestic and foreign financial conditions, macroeconomic regulation policies, depth and width of developments of financial markets and the competition status of the banking industry; internal factors include maturities of assets and liabilities, business structures, stability of deposits, and market financing capacity and various unexpected events, etc. The objectives of our liquidity risk management are to ensure our liquidity needs can be satisfied in time at reasonable costs and to control our liquidity risks within a reasonable range acceptable to us. The Company ’s liquidity risk management system consists of the Board of Directors, Senior Management, Risk Management Committee, Asset and Liability Management Committee, Risk Management Department, Planning and Finance Department, Asset and Liability Management Department, Capital Operation Center, Audit Department and other operation and management departments of the head office, as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for implementing and organizing the liquidity risk management as well as the formulation and implementation of relevant systems and policies for liquidity risk management.
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34 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS The Company managed the liquidity risk in a centralized manner. By establishing a scientific and complete liquidity risk management system, the Company can effectively identify, measure, monitor, control and report its liquidity risk, continuously strengthen liquidity risk management, and continue to improve the foresight and initiative of liquidity management. Specific measures for liquidity risk management include: paying close attention to both domestic and foreign macroeconomic situations and market liquidity changes, as well as adjusting our asset and liability management strategy in a timely manner; strengthening debt management, making flexible use of active debt instruments, broadening long-term sources of fund and continuously increasing the proportion of stable liabilities; driving the diversification of financing channels construction and actively expanding financing channels while maintaining good relations with major financing counterparts; strengthening the management of high quality liquid assets to ensure that the size of high quality liquid assets matches the potential financing needs of the whole bank, and enhance its ability to mitigate liquidity risk; strengthening the early-warning monitoring and management of liquidity, optimizing our emergency response program for liquidity risk and conducting emergency drills on a regular basis; conducting stress tests for liquidity risk on a quarterly basis, identifying weak links in the Company ’s liquidity risk management based on results of such tests, adjusting liquidity risk management strategies if necessary, and modifying our liquidity risk management measures in a timely manner to improve our liquidity risk management mechanism. The results of the stress test indicate that the Group ’s liquidity risk is within a manageable range under various scenario stress assumptions. As at the end of the reporting period, the Company ’s total liquidity ratio of the local currencies and foreign currencies was 92.55%. Our liquidity coverage ratio was 265.24%, among which, high quality liquid assets amounted to RMB355.532 billion, and the net cash outflows over the next 30 days were RMB134.040 billion. The Company ’s net stable fund ratio was 106.10%, among which, stable fund available was RMB1,977.711 billion and stable fund required was RMB1,864.041 billion. As at the end of the reporting period, the Group ’s total liquidity ratio of the local currencies and foreign currencies was 92.73%. Our liquidity coverage ratio was 259.85%, among which, the high- quality liquid assets amounted to RMB357.670 billion, and the net cash outflows over the next 30 days were RMB137.644 billion. The relevant information on the net stable fund ratio of the Group in the last two quarters was set out below: Currency: combined of domestic and foreign currency Net stable Stable fund Available Stable fund required Date fund ratio (%) (in 100 million of RMB) (in 100 million of RMB) As of March 31, 2026 110.41 20,762.70 18,804.86 As of June 30, 2026 103.68 20,121.09 19,406.38 5. Operational risk management Operational risk refers to the risk of losses that may be incurred due to problematic internal procedures, personnel and information technology systems, as well as external events, including legal risks but excluding strategic risks and reputational risks. Types of incidents of losses due to operational risks that the Company may expose to mainly include seven categories, i.e. internal fraud incidents, external fraud incidents, employment systems and workplace safety, incidents related to clients, products and business activities, damage to physical assets, incidents related to information technology system and incidents related to execution, delivery and procedure management.
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35 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS The Company ’s operational risk management system consists of the Board of Directors, Senior Management, Risk Management Department, Internal Control and Compliance and Legal Affairs Department, Asset and Liability Management Department, Audit Department, other departments of the head office, as well as branches, sub-branches and subsidiaries. The Company adopts a three-lines-of-defense based management framework for operational risk management under the leadership of the Board of Directors and Senior Management. The Board of Directors takes the ultimate responsibility for operational risk management. The Senior Management undertakes the responsibility of implementing operational risk management, and is responsible for organizing the formulation and implementation of all basic systems and relevant management measures for operational risk management, clarifying the duties of and requirements for all departments and institutions, setting operational risk preferences and their transmission mechanisms, and reasonably allocating sufficient resources, etc. The objectives of the Company ’s operational risk management are to effectively prevent operational risks, reduce losses, and enhance resilience to internal and external events, thereby ensuring the stability of business operations. The Company has established an operational risk management system aligned with the nature, scale, and complexity of its business to implement whole-process operational risk management. Recognizing that robust internal controls are effective means of operational risk management, the Company has formulated unified procedures for the identification, assessment, monitoring, measurement, and control/mitigation of such risks. During the reporting period, adhering to the operational risk management principles of prudence, comprehensiveness, proportionality and effectiveness, the Company adjusted its management strategies and priorities in a timely manner in line with its business strategy, management philosophy and changes in the external financial environment. It continuously implemented regulatory requirements on operational risk management and operational risk capital measurement; clarified its operational risk appetite; strengthened its capabilities in operational risk identification, assessment, control and mitigation; refined the outsourcing risk management system and consolidated the foundation for outsourcing risk management; strengthened information systems development to enhance digital and intelligent support; strengthened the management of cooperative institutions and advanced the implementation of regulatory requirements; effectively prevented and mitigated legal risks and conducted legal research on emerging hot topics; fostered a sound operational risk management culture and strengthened employee conduct management; and enhanced safety and security management, focused on key periods in safety and security work, and promptly eliminated potential risks. During the reporting period, the Company ’s operational risk management systems operated steadily, and operational risk was generally under control. 6. Country risk management Country risk refers to the risk incurred due to any economic, political or social change and incident in a country or region which results in the debtors in such country or region being unable or refusing to repay their debts or results in any losses to the business presence of the Company in such country or region or any other losses to the Company. The objectives of our country risk management are to control our country risk within a reasonable range acceptable to us and maximize comprehensive benefits across the Bank denominated in local currency and adjusted with respect to risks.
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36 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS The Company ’s country risk management system consists of the Board of Directors, Senior Management, Risk Management Department, Development and Planning Department, Planning and Finance Department and operation and management departments of the head office involved in overseas business, credit approval departments, Internal Control and Compliance and Legal Affairs Department, Technology Management Department and Audit Department, as well as branches, sub- branches and subsidiaries. The Senior Management is responsible for implementing and organizing the country risk management as well as the formulation and implementation of relevant systems and policies for country risk management. The Company continuously advances the country risk management work pursuant to the relevant measures of the regulatory authority. The Company has formulated basic country risk management measures, quota management measures and schemes, clarified the organizational structure and division of responsibilities, limit framework, management mechanism, etc., with respect to country risk limit management, and set the index and threshold of country risk limits; we regularly assess and monitor the country risks. 7. Interest rate risk management of banking book Interest rate risk in the banking book refers to the risk of losses in the economic value and overall gain of the banking book arising from adverse changes in interest rate levels and term structure etc., mainly including gap risk, benchmark risk and option risk. The objectives of our interest rate risk management of banking book are to control our interest rate risk of banking book within a reasonable range acceptable to us and reduce fluctuations in net interest income and economic value of banking book to maximize the comprehensive benefits across the Bank. The Company ’s interest rate risk management system of banking book consists of the Board of Directors, Senior Management, Risk Management Committee, Asset and Liability Management Committee, Risk Management Department, Planning and Finance Department, Asset and Liability Management Department, Capital Operation Center, Audit Department and other operation and management departments of the head office, as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for implementing the interest rate risk management of banking book, establishing the framework for interest rate risk management and the system for measurement of interest rate risk of banking book, and promoting the effective implementation of relevant systems and policies for interest rate risk management of banking book. The Company assesses interest rate risk in the banking book primarily through gap analysis, sensitivity analysis, and scenario simulation, as well as stress testing. Considering the Bank ’s risk appetite and profile, the macroeconomic environment, and market conditions, the Company formulates strategies for managing such risk. During the reporting period, based on the Group ’s interest rate risk appetite and internal management requirements, and in response to macroeconomic and monetary policy developments, the Company dynamically and flexibly adjusted the scale and maturity structure of assets and liabilities, and optimized its asset-liability repricing maturity management plan. As at the end of the reporting period, the Company ’s interest rate risk in the banking book remained well within management objectives and was generally under control.
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37 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS 8. Reputational risk management Reputational risk refers to the risk of negative evaluation of the Company by stakeholders, the public and the media as a result of the Company ’s behavior, the conduct of its employees or external events, thereby damaging the Company ’s brand value, adversely affecting the Company ’s normal operation and even affecting market stability and social stability. Reputational risk management refers to the establishment of a whole-process reputational risk management system covering various processes such as prior assessment, risk monitoring, classification and evaluation, response and disposal, information reporting, assessment and accountability, and evaluation and conclusion, in order to achieve the objectives of reputational risk management and build up a good social image of the Company, which enables the realization of a closed loop of reputational risk management, and also contributes to promoting the daily management of reputational risk from the aspects of risk identification and inspection, emergency drills, joint mechanism, social supervision, accumulation of reputation capital, internal audit, interbank collaboration, etc. The objectives of our reputational risk management are to correctly handle news and public opinions on us, public relations and our relationships with customers, actively and effectively prevent reputational risks and respond to reputational events, so as to minimize the losses and negative impacts caused by such events on the Company, interested parties and the public. The Company has included reputational risk management in its corporate governance and comprehensive risk management system. The Company ’s reputational risk management system consists of the Board of Directors, Senior Management, Risk Management Committee, Publicity Department of the Party Committee, General Executive Office, the Board Executive Office, Risk Management Department, other relevant departments of the head office, as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for managing and organizing the reputational risk management across the Bank as well as the formulation and improvement of relevant systems and policies for reputational risk management of the Company. During the reporting period, the Company strictly implemented regulatory requirements and systematically planned its reputational risk management work. It regards reputational risk prevention and control as a protective wall for financial value creation, emphasizes front-end research and screening, proactively prevents reputational risks at the source, and continuously optimizes emergency response procedures, constantly improving its level of reputational risk management. Meanwhile, it firmly practices the political and people-oriented nature of finance, adheres to the overarching guideline for publicity work of “stability+practicality ”, continuously strengthens the systematicity and guidance of positive publicity. Using four dimensions, namely national strategies, industry trends, local characteristics and the Bank ’s practices, as the precise entry-points, it further explores business highlights and typical cases, tells stories about the high-quality development of CZBank, and promotes the positive and upright brand image to take root in everyone ’s hearts. 9. Strategic risk management Strategic risk refers to the risk arising from any improper operational strategy or change in the external business environments, including improper strategic design, inappropriate strategic implementation and inapplicable stated strategy as a result of changes in the internal and external environments.
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38 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS The objective of our strategic risk management is to control our strategic risk within a reasonable range acceptable to us by continuously improving the strategic risk management system. The Company ’s strategic risk management system consists of the Board of Directors, Senior Management, Risk Management Committee, Risk Management Department, Development and Planning Department, Audit Department, Technology Management Department, other relevant departments of the head office, as well as domestic and foreign branches, sub-branches and subsidiaries. Adhering to the principle of “clear responsibilities, proactive prevention, overall evaluation and timely adjustment ”, the Company constantly improves and refines the strategic risk management system suitable for the scale and features of its business, and has realized effective management of strategic risks. Main management measures include: Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we fully implemented the spirit of the Fourth Plenary Session of the 20th CPC Central Committee and earlier plenary sessions of the 20th CPC Central Committee. In accordance with the arrangements of the Central Economic Work Conference and the Central Financial Work Conference, we earnestly upheld the political essence and people- centered nature of financial work, remained committed to the vision of building “a first-class commercial bank ” and comprehensively opened a new journey of high-quality development. 10. Compliance risk management Compliance risk refers to the risk that the Company or its employees may be subject to criminal, administrative and civil liabilities, suffer property losses and reputational losses, and face other adverse impacts arising from violations of compliance regulations in the course of the Company ’s business-management activities or employees ’ performance of their duties. The objectives of our compliance management are to ensure adherence to compliance regulations, effectively prevent and control compliance risks, and enhance the standard of the Company ’s lawful and compliant operation and management. In accordance with the requirement of “classified and graded data Management and level-by-level accountability ”, the Company clarifies compliance management responsibilities, and establishes and improves its compliance management system. The Company ’s compliance management system consists of the Board of Directors and its Risk and Related Party Transaction Control Committee, Senior Management, Chief Compliance Officer, Compliance Management Department, Internal Audit Department, other business and functional departments as well as subordinate institutions and subsidiaries. The Board of Directors is responsible for defining compliance management objectives and takes ultimate responsibility for the effectiveness of compliance management. The Senior Management is responsible for implementing such compliance management objectives and assumes leadership responsibility for the compliance of businesses in the areas under its charge or supervision. The Chief Compliance Officer assumes special leadership responsibility for the compliance management of the Company and its employees, organises and promotes the development of the compliance management system, and ensures the orderly operation of compliance management activities.
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39 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS During the reporting period, the Company closely monitored changes in the economic and financial landscape, earnestly implemented various national policies and regulatory requirements, promoted the effective implementation of compliance management measures, clarified its compliance management plan, established and improved the operating mechanisms for compliance management, steadily advanced the implementation of various internal control and compliance management initiatives, and continuously improved the quality and efficiency of its compliance management. It furthered the development of a compliance culture, continued to implement the compliance commitment system, strengthened the dissemination of typical cases, enhanced employee warning education, and promoted the construction of “Rule of Law in CZBank ”, firmly established the core tenets of our compliance culture of “uphold compliance as the foundation, take internal control as the priority, maintain risks under control, and pursue steady and long-term development ”. The Company improved its rules and regulations system, advanced the digitalization of system management, and strengthened system implementation, supervision and evaluation. Adopting a problem-oriented approach, it intensified internal supervision, inspections and rectification of identified issues, effectively managing and controlling compliance risks. It also adhered to technological empowerment, continuously implemented the “embedded ” compliance mechanism, and leveraged digital and intelligent tools to integrate compliance requirements and business control measures into business processes to the greatest extent possible, and raised the digital and intelligent level of compliance management. 11. Large exposure administration According to the Measures for the Administration of the Large Exposures of Commercial Banks (No.1 Order [2018] of Former CBIRC ((္ึ 2018 ϋୋ 1 ˿)), large exposure means the exposure of a commercial bank to a single client or a group of connected clients exceeding 2.5% of its net tier 1 capital. The Company has established a sound mechanism for the administration of large exposures, continued to improve the functions of the large exposure administration system, and commenced the measurement, monitoring and reporting of large exposures in an orderly manner. As of the end of the reporting period, all indicators of the Company ’s large exposures were in compliance with the regulatory limits. 12. Information technology risk management Information technology risk refers to any operational, legal and reputational risk arising from natural factors, human factors, technical bugs and management defects in connection with the application of information technologies by the Company. The objectives of our information technology risk management are to control our information technology risk within a reasonable range acceptable to us, promote business innovation, enhance application level of information technology, and intensify core competence and sustainable development capability.
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40 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS The Company ’s information technology risk management system consists of the Board of Directors, cyber and data security leadership team, digital reform promotion leadership group, Senior Management, Chief Information Officer (CIO), Risk Management Committee, information technology management committee, data governance committee, business continuity management committee, the Risk Management Department, Internal Control and Compliance and Legal Affairs Department, Audit Department, Technology Management Department, other relevant departments of the head office as well as branches, sub-branches and subsidiaries. The Senior Management is responsible for implementing and organizing the information technology risk management as well as organizing the formulation and implementation of relevant systems and policies for information technology risk management. The Company has established a relatively well-organized information technology risk management mechanism and process system, and in accordance with the ISO20000, ISO22301, ISO27001 and ISO27701 management system and regulatory requirements, comprehensively formulated relevant system processes and implementation rules; it has established relatively well-organized systems for business continuity management, information technology outsourcing risk management, network security management, data security management, information technology services management etc. and a relatively well-standardized information technology risk monitoring and assessment mechanism. During the reporting period, the Company adhered to the strategy of “invigorating the bank through technological innovation ”, coordinated the advancement of digital transformation, and actively explored artificial intelligence technologies to drive improvements in the quality and efficiency of financial services. It continuously promoted the refined iteration of cyber security defense, data security control and personal information protection systems, and established an integrated security prevention and control mechanism featuring proactive early-warning and intelligent identification. It focused on risk monitoring, assessment, measurement, control and reporting regarding the operation of important information systems, and optimized and upgraded digital operation and maintenance. It continuously strengthened the development of the disaster recovery system, put into service a new intra-city multi-active data center, and enhanced the high-availability level of disaster recovery resources. It also improved the standardized emergency management system, conducted multi-scenario practical drills to enhance the resilience of business continuity assurance. During the reporting period, the information systems operated stably, and no material information technology risk incidents occurred. 13. Anti-money laundering management The Company has improved the money laundering risk management mechanism under the comprehensive risk management framework in accordance with the anti-money laundering laws and regulations, including the Anti-money Laundering Law of the People ’s Republic of China ( ʕ ), the Administrative Measures for Anti-money Laundering and Counter- terrorist Financing of Financial Institutions in the Banking Sector (ࢵ ), the Guidelines for the Management of Money Laundering and Terrorist Financing Risks for Corporate Financial Institutions (for Trial Implementation) (ࠬ ˏ (༊Б)) and the Administrative Measures on Customer Due Diligence and Preservation of Customer Identity Information and Transaction Records of Financial Institutions (˒းᔖ ), so as to further solidify the foundation of anti-money laundering works and continuously improve the accuracy and effectiveness of money-laundering risk prevention and control.
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41 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS During the reporting period, the Company strictly complied with the laws and regulations on anti-money laundering, and seriously fulfilled its legal obligations and social responsibilities in anti-money laundering. It continued to improve the anti-money laundering system framework and implemented legal, regulatory and supervisory requirements; it strengthened customer money laundering risk management and improved the effectiveness of customer due diligence; it prepared monitoring reports for large-value and suspicious transactions, deepened AI applications, and continuously optimized the suspicious transaction monitoring model; it deepened anti-money laundering data governance and improved data quality; it intensified anti-money laundering supervision, inspection and risk screening, and provided business risk warnings to relevant departments; it organised money laundering risk self-assessment and strengthened the management of high-risk businesses and customers; it organized anti-money laundering publicity and training to improve the anti-money laundering competence of all staff; it actively cooperated with anti-money laundering investigations, strictly implemented various anti-money laundering regulatory requirements, and continuously improved the quality and efficiency of anti-money-laundering management. (VII) BUSINESS SUMMARY 1. Corporate Business Customer-oriented, realizing dual-wheel drive of customer base and scale. In the first half of 2026, the Company conducted in-depth bank-wide industry research, set up a peer competitor response mechanism, built a professional account manager team, and strengthened capacity building for digital-intelligent systems to comprehensively build its comprehensive customer operations system. Meanwhile, the Company continued to refine its tiered and classified service mechanism for corporate customers, deepened exchange and cooperation with key clients, and matched differentiated service teams and solutions to effectively meet customer needs. It adopted a package of measures to realise improvement in clients ’ comprehensive value and business scale expansion. As of the end of the reporting period, the Company served more than 48,000 valued clients, representing an increase of 7.7% over the beginning of the year. The balance of RMB-denominated on-balance-sheet assets for corporate clients stood at RMB1,197.378 billion, an increase of RMB111.345 billion or 10.25% over the beginning of the year. Serving the real customer base, assisting the transformation and development of the manufacturing industry. The Company persisted in serving the real economy, strengthened policy guarantees, promoted product innovation, and assisted manufacturing enterprises in developing towards high-end, intelligent, and green orientations. Focusing on the perspective of advanced manufacturing industrial clusters, it helped the rapid development of the advanced manufacturing industry by introducing special empowerment measures. As of the end of the reporting period, the balance of loans invested in the manufacturing industry across the Bank was RMB277.333 billion. Moving forward, the Bank will focus on advanced manufacturing and strategic emerging industries, strengthen comprehensive services for manufacturing enterprises, support enterprises in transformation and upgrading, and drive a steady recovery in the balance of manufacturing loans.
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42 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Serving the construction of the Zhejiang headquarter, effectively carrying out work in financial guarantees within the province. The Company steadily advanced the strategy of “Deepening the Development in Zhejiang ”, continuously strengthened government-bank and bank-enterprise cooperation, enhanced service capabilities with financial advisors as the bond, fully guaranteed financing support for key regions, key projects, and key customers within the province, and accurately assisted the high-quality development of Zhejiang Province. As of the end of the reporting period, the Company ’s corporate loan balance within Zhejiang Province was RMB449.117 billion, an increase of RMB53.917 billion over the beginning of the year. Pursuing the innovation driven development strategy, solidly make great efforts in technology finance. The Company continues to enhance its technology finance services, advance product and service optimization, in-depth cultivation of key industries, professional team building and collaboration within the innovation ecosystem, and endeavor to establish a specialized service mechanism for technology finance to refine companion-style financial services for technology-based enterprises. As of the end of the reporting period, the balance of sci-tech loan stood at RMB282.994 billion, representing an increase of RMB12.187 billion over the beginning of the year. Continuously improving the digital and intelligent capabilities of supply chain finance, creating differentiated service advantages. The Company takes digital transformation as its core driving force, closely aligns with the national strategy of building a modern industrial system, and deepens the digital reform of supply chain finance. We strive to elevate the quality of our digital and intelligent services, accelerate the shift from a “capital provider ” to a “value co-creator ”, and build a new financial service paradigm that covers the entire transaction chain and full life cycle of real-economy enterprises. Through developing four featured highlights of “industry penetration, product enhancement, digital risk control, technology empowerment ”, the Company has iterated its customer service platform and integrated its product management middle platform, forming a full-chain, full-scenario and full-product supply chain financial service solution. We have focused on developing distinctive service advantages in new-quality productive forces sectors such as power, energy and new energy vehicles. As of the end of the reporting period, we served more than 4,100 digital supply chain projects, with cumulative financing exceeding RMB1.2 trillion, and served over 100,000 upstream and downstream customers. 2. International Business During the reporting period, the Company continued to build the service brand of “CZBank Cross-border ”. Relying on the dual-linkage platform of the Free Trade Zone sub-accounting unit and the Hong Kong Branch, we established five major service systems of cross-border payment and settlement, foreign exchange hedging, liquidity placement, cross-border investment and financing, and new foreign trade models, which fully covered the cross-border operational needs of enterprises, striving to become the preferred bank for multi-currency settlement services and foreign exchange hedging services. During the reporting period, we served over 22,000 export-oriented enterprises.
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43 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS In terms of cross-border settlement, the Company deepened cooperation with domestic and overseas banks to build a global account system and settlement services, supporting cross-border receipts in nearly 50 currencies and cross-border payments in more than 100 currencies. Meanwhile, we thoroughly implemented the RMB internationalization strategy and actively expanded application scenarios for cross-border RMB business. During the reporting period, the amount of cross-border RMB business reached RMB182.8 billion. In terms of foreign exchange hedging, leveraging its abundant and flexible portfolio of foreign exchange transaction products and the online service channel of “CZB Global Trading Treasure ”, the Company provided enterprises with a diverse set of foreign exchange risk management tools. During the reporting period, we provided foreign exchange trading services of USD96.6 billion, among which USD33.0 billion was generated via “CZB Global Trading Treasure ”. In terms of cross-border financing, the Company precisely matched enterprises ’ liquidity needs through products including export pool, cross-border asset pool and export credit insurance financing. Meanwhile, it provided flexible and diversified comprehensive service solutions for enterprises via products such as international syndicated loans and cross-border M&A. During the reporting period, investment in cross-border financial assets was RMB137.2 billion. 3. Bill Business During the reporting period, the Company built a customer-centered 2.0 service system for full life-cycle circular operation of bills for bill business, and continuously improved the quality and effectiveness of bill business in serving the real economy. We continuously iterated and upgraded the functions of “Intelligent Bill Steward ” (realized online processing of the whole business chain, and effectively helped enterprises efficiently revitalize stock assets and optimize the precision of bill management; accelerated the promotion of supply chain bills to reshape the settlement ecosystem of core enterprises; and by integrating multiple financing modes including bill guarantee, guarantee and supply chain bills ABN issuance, we facilitated financing for upstream and downstream enterprises. As of the end of the reporting period, the number of bill service customers across the Bank reached 25,000, among which, medium, small and micro enterprises accounted for more than 90%, practically fulfilling the inclusiveness and social responsibility of financial services. 4. Retail Business During the reporting period, under the guidance of the “6+1” system of “customers, products, teams, channels, assessment, services, and risk compliance ”, the Company ’s retail business focused on eight major customer bases to consolidate the development foundation, expanded new models of scenario-based operations, continued to strengthen the construction of digital channels, and achieved relatively fast development.
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44 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (1) Individual customers and financial assets under management for individual customers During the reporting period, the Company focused on eight major customer groups, including payroll customers, silver-haired customers, retail credit customers, diamond-class customers, platform customers, new generation customers, co-branded card customers and online peripheral customers, achieving diversified customer acquisition and a significant expansion in customer base. It continuously implemented tiered and classified customer management and deepened customer operation. Adopting a customer-centric approach, the Company conducted effective cross-selling and asset allocation to continuously create value for customers. As of the end of the reporting period, the Company had 26.2079 million individual customers (including debit and credit card customers) 1, representing an increase of 40.84% over the beginning of the year. In particular, the Company focused on middle-class customers and intensified the development of high-net-worth ( ͗∑) customer base, with more than 6.978 million customers acquired cumulatively during the reporting period; customers with an average monthly/daily AUM of RMB200,000 and above reached 818,500, representing an increase of 30.38% over the beginning of the year; the balance of financial assets under management (AUM) for individual customers was RMB941.707 billion, representing an increase of 22.24% over the beginning of the year. (2) Individual Deposits and Loans During the reporting period, the Company consistently adhered to the business strategy of pursuing a balance between business volume and pricing, and proactively adapted to market changes, focusing on the increase of settlement deposits and comprehensive service deposits, establishing pathways for converting scenario-based ecosystem traffic into financial value, and further strengthening the development trend of loan business with increased volume, optimized structure and reduced cost. As of the end of the reporting period, the Company had individual deposit balance of RMB441.951 billion, representing an increase of 11.67% over the beginning of the year. The proportion of individual deposits balance in total deposits increased by 0.93 percentage point over the beginning of the year. The average daily balance of low-cost deposits, including individual current deposits and call deposits was RMB90.087 billion, representing an increase of 21.76%. The interest payment level of individual deposits showed a significant downward trend from the beginning of the year. During the reporting period, the Company actively implemented the policy requirements of the state and regulatory departments, solidly made great efforts in the “Five Finances ”, supported the stable development of the real estate market with the concerted efforts of its relevant business lines, vigorously promoted mortgage loan business and increased the allocation of loans for green and low-carbon buildings, aiming to meet residents ’ reasonable financial needs for housing as a fulfillment of its social responsibilities. Meanwhile, the Company thoroughly implemented the decisions and deployments on boosting consumption and expanding domestic demand, implemented the fiscal discount policy for personal consumer loans, increased the issuance of consumer loans and continued to expand customer acquisition through scenario-based operations, and continuously improved the quality and efficiency of retail loan services. As of the end of the reporting period, the Company ’s retail loans balance (including personal housing loans and personal consumer loans) amounted to RMB287.541 billion. Among which, the Company ’s personal housing loans balance was RMB187.521 billion, representing an increase of 0.63% over the beginning of the year. Note 1 This figure does not include online loan customers. As at the end of the reporting period, the Company had a total of 38.0562 million retail customers (including online loan customers).
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45 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (3) Wealth Management During the reporting period, focused on customer value, supported by professional capabilities and driven by digital and intelligent empowerment, the Company systematically advanced its wealth management business to new heights. As of the end of the reporting period, the retained scale of the retail distribution business was RMB499.693 billion, representing an increase of 33.37% over the beginning of the year. During the reporting period, adapting to the recovery trend of the equity market, the Company systematically established a diversified product supply system featuring “stability-oriented foundation, progress-driven returns, feature-enriched supplementary ”, and continuously improved the standard of asset allocation services and customers ’ return experience. First, centering on customers ’ demand for stable-return allocation, it increased the supply of fixed-income and “fixed income+ ” products. As of the end of the first half of the year, asset management and trust products of the “fixed income+ ” category increased by 50.67% year-on-year. Second, seizing capital market opportunities, the Company steadily enhanced its professional capabilities in distributing public and private funds. Sales of non-monetary public funds in the first half of the year increased by 183.40% year-on-year, and revenue from distribution of full-category public funds increased by 122.41% year-on-year. It innovatively launched senior-tranche sunshine private equity products and continued to issue flat-strategy products, achieving rapid breakthroughs in private equity strategies. Third, in thoroughly implementation of the national strategic deployment of the “Five Finances ”, the Company laid out key strategic scenarios across the Bank and continuously enriched its customized product matrix. During the reporting period, the Company launched a total of 346 customized products around featured customer group scenarios including “Wuyue Cup ” (؎Deepening the Development in Zhejiang ”, “Jin Gui Ren Sheng ” (ɛ͛ ) and “Dedicated Private Banking ” (ӷБਖ਼᙮ ). Fourth, it deepened the application of AI large-model technology to improve the quality and efficiency through digital empowerment. During the reporting period, the Company deepened the application of AI large models in the wealth management sector, deployed, launched and systematically promoted module functions such as the AI Investment Research Assistant, AI Wealth Manager Assistant and AI Intelligent Training Assistant. It continuously iterated its digital and intelligent wealth platform to boost the empowerment efficiency of the middle platform. During the reporting period, the number of issued asset allocation proposals increased by 87.40% year-on-year, with the converted amount increased by 42.33% year-on-year. (4) Private Banking During the reporting period, adhering to the philosophy of “passing of wealth and wisdom for sustainable development ”, the Private Banking of the Company focused on the needs of high-net-worth customers, and provided comprehensive financial services, personalized value-added services and one-stop cross-border services, committed to helping customers preserve and increase their wealth and achieve the sustainable development of family businesses. As of the end of the reporting period, the Company had 19,330 private banking clients, representing an increase of 9.72% over the beginning of the year; the balance of financial assets of private banking clients was RMB263.9 billion, representing an increase of 8.51% over the beginning of the year.
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46 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS During the reporting period, anchoring the main line of serving the real economy and focusing on livelihood areas such as pension services and charity, the Company established a full life-cycle service system for private banking clients to help entrepreneurs and other groups fulfill social responsibilities. First, it deepened tiered customer operation and improved the full life-cycle exclusive service model. Relying on dedicated account managers and investment advisor teams, it built a client service system that is caring and professional. Second, it built a distinctive, customer-recognized, tiered, and classified private banking customer rights system to accurately match clients ’ diversified needs. Third, focusing on clients ’ diversified asset allocation needs, it created a multi-strategy, full-category private banking product matrix to continuously enhance client experience. Fourth, closely following national strategies and livelihood needs, it rolled out customized pension wealth planning services and built a professional charitable trust service platform. Fifth, based on systematic construction, supported by institutionalized operation and driven by digital intelligence, it devoted itself to shaping a private banking service brand with market influence. (5) Credit Card (Consumer Finance) Business During the reporting period, responding proactively to national policy orientations aimed at expanding domestic demand and boosting consumption, the Company focused on key consumption sectors such as cultural tourism and automobiles, and further advanced the featured and differentiated operation of its credit card (consumer finance) business. As of the end of the reporting period, the Company cumulatively issued 4.7711 million credit cards, representing an increase of 129,400 cards over the beginning of the year; affected by the Company ’s proactive optimization of asset structure, the balance of credit card (consumer finance) loans was RMB32.275 billion, representing a decrease of RMB1.402 billion over the beginning of the year. During the reporting period, the Company made various efforts to optimize service supply and consolidate operational capabilities, striving to improve the quality and efficiency of consumer finance services. First, it proactively implemented the “Deepening the Development in Zhejiang ” strategy, further promoted the CZBank•Picturesque Zhejiang Cultural Tourism Co-branded Credit Card ( एਠვБ•̔͜ ), continuously iterated the rights and interests system and expanded scenario touch points, accurately embedding financial services into the cultural tourism consumption chain to help unleash regional consumption vitality. Second, it strengthened full life-cycle management of credit-card customers, focusing on the five phases of customer acquisition, growth, maturity, decline and churn, and rolled out special business activities including new customer cultivation, dormant customer activation, value customer enhancement and churn customer retention, continuously lifting customer value contribution. Third, it deepened cooperation with leading payment platforms, focused on high-frequency payment life scenarios covering “clothing, food, housing, transportation and entertainment ”, and continuously carried out consumption rebate and discount campaigns to further enhance customer stickiness. Fourth, it accelerated digital transformation and actively piloted AI outbound calls in scenarios such as activation prompting, card-binding prompting and event notification, so as to effectively boost operational efficiency. Fifth, it vigorously expanded into the automobile consumer finance sector, strived to optimize the full-process experience of the vehicle purchase installment business, and drove steady growth in business scale.
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47 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS 5. Small Enterprises Business During the reporting period, the Company always upheld the original aspiration of inclusive finance. In strict compliance with the overall requirements of “stabilize issuance, optimize structure, improve quality, pursue sustainability ” for small and micro enterprise financial services issued by the National Financial Regulatory Administration, the Company proactively advanced special initiatives for business transformation and development, intensified risk resolution and disposal efforts, and strived to improve the quality and efficiency of financial services for small and micro enterprises. As of the end of the reporting period, all domestic branches of the Company had launched small and micro enterprise loan businesses. The balance of inclusive small and micro enterprise loans 1 was RMB330.436 billion, accounting for 17.95% of total loans, 4.25 percentage points above the industry average. The interest rate of newly issued inclusive small and micro enterprise loans decreased by 63 BPs year-on-year. (1) Making targeted efforts, promoted the in-depth and practical implementation of the financing coordination mechanism Relying on the Company ’s three-level linkage system covering head-office, branches and sub-branches, and collaborating with district and county work groups, market regulation authorities, departments of economics and information technology as well as other relevant bodies, it regularly rolled out the “1,000-10,000 Visits ” ( ɷΆຬ˒ɽԐஞ ) campaign. Through field visits, online questionnaires, symposium discussions and other channels, it precisely matched financing demands of small and micro enterprises, and prepared comprehensive financial service plans tailored to each enterprise. As of the end of the reporting period, more than 68,000 small and micro enterprises obtained credit facilities from the Company via the coordination mechanism for financing of RMB268.650 billion. (2) Deepening the development in Zhejiang, spared no efforts in serving the construction of a demonstration zone for common prosperity First, it actively advanced the development of a county-level comprehensive financial ecosystem. Focusing on industrial bottlenecks in mountainous and island counties across Zhejiang, it fully explored characteristic scenarios with market potential tailored to local conditions and developed customized service solutions through the “one county, one policy ” approach to support the growth of inclusive market entities such as local farmers, new rural businesses and micro enterprises, thus helping boost the local ability to support economic growth, narrow regional gaps, and effectively activate the common-prosperity of mountainous and island counties. Second, it continuously organized the “Lecture for Merchants in Zhejiang ”, covering economic situation analysis, policy interpretation and financial product promotion, etc. By deploying the integrated approach of “integrating intelligence, finance and services ”, it empowered front line market entities that are “genuine small and micro enterprises and genuinely inclusive financial services ”, and helped individual workers within the province consolidate development capacity and improve employment quality. As of the end of the reporting period, the inclusive loans to small and micro enterprises granted within the province during the year exceeded RMB80 billion, accounting for 51.84%, representing an increase of 3.49 percentage points as compared to that at the end of 2025. The “Lecture for Merchants in Zhejiang ” had been held for nearly 200 sessions, benefiting over 12,000 individual business operators. Note 1 According to the regulatory assessment criteria of the National Financial Regulatory Administration for inclusive small and micro enterprise loans, both “inclusive small and micro enterprise loans ” and “total loans ” exclude data related to bill discounting and rediscounting.
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48 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (3) Advancing systematic plans, assist the transformation and development, the accumulation and improvement of small enterprise First, it formulated an integrated operation and implementation plan for customer base in small enterprise. Adhering to the “customer-centric and market-oriented ” philosophy, it accelerated the transition toward a new comprehensive financial service model centered on settlement services, scenario establishment and customer group cultivation, with selected pilot branches rolling out relevant practices on a trial basis. Second, it refined the comprehensive operation service model. Taking comprehensive credit granting as the starting point and supplementing with diverse liquidity support tools to satisfy customers ’ financing demands, it promoted cross-line product portfolio application to enhance small enterprise customer group stickiness and consolidate the customer base. Third, it established a tiered management system for small enterprise customers and implemented differentiated tiered marketing and service strategies. (4) Strengthening industry research guidance, empower the iteration and upgrading of small and micro enterprises customer acquisition channels First, it strengthened industrial research guidance, improved the top-down industrial research driven and scenario based bulk customer acquisition mechanism of “industrial research – customer group solution – on-ground implementation ”. It built a target customer outreach path featuring “industrial customer group research + list driven + key person marketing ”. Second, it conducted in-depth investigations into distinctive local industries in each region, identified small enterprise customer group within segmented industries with dense customer concentration, sound growth potential and controllable risks, so as to lift the efficiency of bulk customer expansion. Third, it boosted the application of investment and research outputs, and endeavoured to deliver full-chain empowerment ranging from research and development support, solution optimization to marketing promotion, thus enhancing the regional market adaptability of financial services. 6. Investment Banking Business The investment banking business of the Company focused on the main line of industrial transformation and development. It built a three-in-one comprehensive service system featuring “debt + equity + match ”, actively deployed diversified investment banking tools to serve high-quality customers, and continuously advanced the high-quality development of its investment banking business. During the reporting period, the Bank utilized investment banking products to serve 1,182 clients such as central state-owned enterprises and private enterprises, an increase of 24.29% over the same period last year. The investment banking realized an FPA of RMB304.888 billion, among which, a full life-cycle bond business system was developed for bond underwriting service, we underwrote debt financing tools from non-financial enterprises worth RMB60.761 billion, with outstanding performance in characteristic segments including the underwriting of first-time issuers, private corporate bonds, and sci-tech innovation bonds, and we underwrote sci-tech innovation bonds worth RMB9.220 billion, an increase of 29.52% year-on-year; the credit enhancement business focused on professional services for first-time issuers and industrial customers, retaining its leading position in the market in terms of the amounts created; it participated in key project construction by way of syndicated loans, continuously expanded the cooperation ecosystem and further optimized its business structure; it realised the normalized issuance of credit asset securitization projects, achieved a circulation of various credit assets of RMB3.131 billion.
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49 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS Focusing on major national strategies and services for key areas, the Bank participated in capital market development through multiple approaches including M&A financing and transaction match. It continuously consolidated the development of its equity ecosystem, served local entities and empowered industries. Positioned as an ecosystem connector and industry enabler, it provided integrated comprehensive investment and financing services for high-quality market entities such as central state-owned enterprises, listed companies and sci-tech enterprises, and steadily improved the quality and efficiency of its comprehensive financial services. 7. Financial Market Business The financial market business of the Company consistently implemented national strategies and policy orientations and kept abreast of developments in financial markets. The Company has continuously strengthened market research, judgment and trading strategy execution, adopted flexible asset and liability management measures to proactively response to market changes. During the reporting period, the Company leveraged its market-making strengths and characteristics in fixed income, foreign exchange, precious metals and other businesses. It has steadily enhanced its capabilities in investment research, customer service, risk compliance and digital operation, actively served the real economy, and promoted the high-quality development of financial market business. In terms of the domestic currency market, the Company continuously strengthened macroeconomic research and market judgment, optimized its investment research analysis framework and investment portfolio structure, and made flexible use of hedging tools. While achieving steady investment returns, it actively fulfilled its market-making responsibilities and served national strategic priorities. During the reporting period, the Company participated in market-making for the standard sci-tech innovation bond basket organized by the National Interbank Funding Center and was awarded “Active Quoting Institution for Sci-Tech Innovation Bond Basket ”, and actively engaged in the development of the floating rate bond market and was awarded “Active Institution for Floating-Rate Bond Transactions and Settlement ” by China Central Depository & Clearing Co., Ltd.. In terms of the foreign currency market, the Company continuously optimized its product portfolio and service models, actively supported the development of Shanghai offshore financial center, served the real economy, earned market recognition across multiple business lines, and received several awards from the National Interbank Funding Center. These included the Excellent Participating Institution for Bank and Enterprise Platform, Excellent Offshore RMB Foreign Exchange Trading Member, Post Trade Service Support Institution, Excellent Data and Information Service Support Institution, Excellent Foreign Currency Repurchase Member, Excellent Foreign Currency Borrowing Member, and Excellent Foreign Currency Borrowing Quotation Bank. In terms of the precious metals market, adhering to the service positioning of deepening its presence in the precious metals segment, the Company was committed to building a professional proprietary trading brand, continuously optimized market-adapted trading strategies, continuously improved its multi-level comprehensive service system, and achieved sound progress in market-making, product innovation and customer services. During the reporting period, the Company received several awards from the Shanghai Gold Exchange and the Shanghai Futures Exchange. These included the “Second Prize of Excellent Financial Member ”, “Best Bidding Trading Member ”, “Best Self-operating Member in Auction Trading ”, “Best Auction Liquidity Providing Member ”, “Best Request-for-Quote Market Maker ”, “Best Participating Member for Lending and Borrowing Business ”, and “Special Contribution Member in International Business ”. Leveraging its diversified channel layout, the precious metals business achieved steady improvement in both the scale of customer group and the quality and efficiency of services.
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50 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS In terms of digital development, the Company continued to deepen digital transformation with the goal of enhancing the core competitiveness of its financial market business. It focused on building an intelligent market-making trading system covering multiple products including fixed income, foreign exchange and precious metals, actively explored the practical application of artificial intelligence in scenarios such as quotation decision-making, strategy optimization and risk early-warning, and built an integrated digital platform spanning the core links of “investment, research, trading and sales ”, and drove the digital transformation of the entire trading lifecycle, with the support of risk compliance and business management. 8. Financial Institution Business In its financial institution business, the Company adheres to a customer-centric approach guided by client demands and underpinned by professional expertise. It continuously expands cooperation scenarios, deepens synergies, steadily enhances the comprehensive client management capacity, boosts client stickiness and value contribution, and fosters long-term win-win partnerships. As of the end of the reporting period, the Bank provided services to more than 2,000 financial institution clients. The Bank continues to deepen the development of its financial institution client base. It optimizes the tiered and categorized client management mechanism and builds a client service framework featuring “tiered client value, categorized client industries, and graded client management ”. Leveraging the digital platform “Tongyouyi ”, the Bank offers integrated financial services including capital financing, interbank consignment sales, over-the-counter bonds and asset supermarkets, facilitating the development of an interbank cooperation ecosystem. As of the end of the reporting period, the platform recorded 2,205 registered clients, representing an increase of 452 clients from the end of the previous year. The Bank strives to optimize its interbank liability structure. It consistently consolidates its client base and vigorously expands low-cost liability sources. The proportion of interbank demand deposits to total interbank deposits rose further compared with the end of last year, while the interest payment rate on domestic and foreign currency interbank deposits fell by 25 basis points compared with the end of last year. The Bank actively drives the growth of interbank asset businesses. Seizing opportunities brought by global development, it supports RMB internationalization and deepens interbank cooperation with foreign-funded banks. It strengthens market research and judgment, improves investment and research capabilities for standardized asset investments, and delivers effective services to the Bank’s high-quality real economy corporate clients.
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51 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS 9. Asset Custodian Business Upholding the sustainable development philosophy, the Company ’s priorities in its asset custodian business are breakthroughs in client-oriented product development and the upgrading of service support, fully advancing the steady and high-quality growth of the segment. First, the asset custodian business delivered growth in both scale and revenue. As of the end of the reporting period, the Bank had total assets under custody of RMB2.78 trillion, representing an increase of RMB55.993 billion or 2.06% from the beginning of the year. During the reporting period, revenue generated from the custodian business reached RMB375 million, representing a year-on-year increase of 2.46%. The Bank had assets under custody for asset management products of RMB2.02 trillion, representing an increase of 0.87% from the beginning of the year and accounting for 72.77% of total assets under custody, 7.9 percentage points higher than the average level for joint-stock commercial banks, reflecting a sound asset custody structure. Second, the public offering fund custody business maintained stable expansion. At the end of the reporting period, the Bank had assets under custody for public offering funds of RMB587.953 billion, growing by 1.04% from the beginning of the year and accounting for 21.16% of total assets under custody, maintaining its leading market ranking. During the reporting period, revenue generated from public offering funds hit RMB206 million, increasing by 8.01% year-on-year. Third, multiple measures were implemented to improve operational quality and efficiency. Digital transformation of custody operations moved forward consistently with the successful launch of the intelligent custody operation platform. The Bank accelerated the development of centralized custody operations, standardized and optimized contract review workflows, and established a regularly updated library of standard custody contracts, which significantly lifted contract review efficiency. A standardized performance appraisal system was set up, with quantitative metrics defining responsibilities and efficiency benchmarks for all operational processes. This delivered coordinated progress in efficiency improvement and stable operation, sustaining smooth and secure business performance with zero risk incidents throughout the reporting period. (VIII) FINANCIAL TECHNOLOGY Guided by the vision of being “a first-class commercial bank ”, the Company adheres to the strategy of “invigorating the bank through technological innovation ”, vigorously advancing its digital transformation, steadily strengthening its digital infrastructure, and building a robust security line for safe operation. Meanwhile, the Company is accelerating the deep integration of digital technologies, data elements and financial operations, effectively enhancing its digital operation and management capabilities, and comprehensively improving the quality and efficiency of its digital financial services, so as to inject strong momentum into the high-quality development of the Bank.
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52 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 1. Continuously Consolidating the Foundation of Technological Capabilities to Lay a Solid Groundwork for Digital and Intelligent Development The Company firmly seized the opportunities presented by the development of artificial intelligence and advanced the “core reconstruction and foundation enhancement ” project, data governance and AI-empowered construction in a coordinated manner, and to focus on building a new-generation digital infrastructure system that is secure, reliable, agile, efficient and intelligence-driven, thereby providing solid technological support for the Bank ’s high-quality development. Firstly, the Company is steadily implementing the “core reconstruction and foundation enhancement ” project. By now, development of all functionality for the next-generation core system has been completed, and multiple rounds of system testing, data migration and upgrades to peripheral systems have been advanced methodically, with overall progress being in line with the established schedule. The system is expected to be put into trial operations by the end of 2026. At the same time, the Company is continuing to strengthen its cloud-native and distributed technology foundation, and steadily advancing the transition to cloud-based and service-oriented applications. Secondly, the Company has deepened its data governance initiatives and continued to strengthen its data foundation. To this end, the Company has launched and rolled out a data model design and standards compliance management platform, establishing a bank-wide unified mechanism for managing data standards compliance. The Company has also continued to enhance data quality monitoring, with data quality check rules totaling 28,000. The Company deepened the development of data assets by further enriching data marts across eight major domains including retail, corporate, interbank, operations and audit, with more than 3,300 indicators and tags accumulated, thereby driving the transformation of data resources into data assets. Besides, the Company focused on bridging the “last mile ” of data utilization and has basically completed the elimination of all manual reports at the grassroots and regional levels across the Bank. Thirdly, the Company actively implemented the national strategic deployment of “artificial intelligence + ” by systematically advancing AI-empowered construction, as well as improving AI infrastructure including computing clusters and enterprise-level agent platforms. Specifically, it identified the first batch of key AI construction scenarios, and promoted pilot implementations of retail AI assistants, corporate AI assistants and intelligent credit risk control, while actively advancing intelligent R&D. The Company has routinely conducted the specialized training of “artificial intelligence + finance ” to accelerate the enhancement of AI competencies and literacy of all employees.
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53 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS 2. Comprehensively Deepening Digital Technology Applications to Empower Business Operations and Management by Improving Quality and Efficiency Driven by data elements and intelligent technologies, the Company is accelerating the comprehensive intelligent upgrading of service channels, marketing and operations, risk management and internal management. Firstly, the Company continues to enhance the user experience of online services such as mobile banking, strengthen age-friendly renovation, and upgrade and promote a digital and intelligent operations management platform to drive a leap forward in operations management toward digitization, process standardization, and traceability. Adhering to a customer-centric approach, the Company iteratively upgrades systems such as CRM and big data marketing platforms, continuously refines the customer tagging system and customer 360-degree view, promotes tiered and categorized customer management, and consistently improves the precision of customer marketing as well as the efficiency of customer engagement and conversion. Secondly, the Company leverages technology to strengthen full-chain risk control system by enriching and refining risk control models for both general and specialized scenarios, vigorously advancing the construction of digital and intelligent credit systems, and iteratively upgrading enterprise-level risk management platforms such as big data risk control and digital and intelligent anti-money laundering systems. Meanwhile, the Company introduces new capabilities, including monitoring of high-risk customers and tracking of money laundering-related risks and public sentiment, to continuously improve the accuracy of risk identification, the timeliness of early warnings, and the rationality of intervention measures. Thirdly, the Company enhances the digitalization of internal management by building a robust, integrated management platform that consolidates data from human resources, finance, credit approval and retail operations to enable risk early warning tracking and the intelligent push of operational data. Focusing on the three major areas of risk management, financial expenses, and talent selection and appointment, the Company implements a smart authority supervision dashboard to achieve visual display of pilot programs for authorization, exercise of authority and authority control, thereby empowering refined management by digital means. 3. Accelerating Innovation in Digital Products and Services to Create Further Competitive Advantages in Digital and Intelligent Financial Services The Company continues to deepen the comprehensive support and empowerment of scientific and technological innovation for business development by embedding digital and intelligent capabilities into the core of our products and platforms, so as to provide customers with more convenient, efficient, and intelligent comprehensive financial services. On the one hand, the Company optimizes smart retail and strengthens inclusive financial services. Leveraging the online channels of our mobile banking App, the Company newly introduces wealth management sections such as “Yucong ” (͗∑) and “Payroll Disbursement ” ( ˾೯) to enable precise customer identification, intelligent product allocation, and integrated service delivery. Besides, the Company further refines our inclusive financial product and service system for small and micro enterprises, optimizes digital tools such as tax invoice authorization and intelligent transaction history analysis and empowers frontline business processing and risk management, thus comprehensively enhancing the efficiency and service experience of online financing for small and micro enterprises. On the other hand, the Company strengthens industrial finance to empower the real economy. The Company iteratively upgrades the digital platform for technology finance by building intelligent profiling and scoring models, empowering refined, tiered and categorized management of tech finance customer base. Moreover, the Company develops the “Lingke ” (܄supply chain finance platform to comprehensively integrate capabilities such as graph analysis and chain-based customer acquisition, in order to achieve precise penetration in supply chain marketing. The Company steps up its efforts in the innovation and promotion of the supply chain bill business. By fully leveraging digital products and tools such as straight-through bill issuance and “Yintietong ” ( ვ൨ஷ), the Company has achieved large-scale application in scenarios such as procurement and sales across the upstream and downstream of industrial chains, as well as public utility bill payments.
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54 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 4. Continuously Strengthening Risk Management to Ensure Steady and Sustainable High-Quality Development The Company continuously strengthens our “bottom-line ” mindset, strictly controls technical risks and effectively ensures safe production and operations across the entire bank, in order to steadily enhance our capabilities to ensure business continuity. Firstly, the Company solidifies the foundation for safe production and operations by iteratively upgrading platforms such as centralized monitoring and operations and maintenance (O&M) management, and by deeply advancing O&M capabilities toward automation and intelligence. Specifically, the Company has improved the emergency management system, routinely conducted realistic emergency drills, and successfully completed the People ’s Bank of China ’s 2026 extreme stress test for core business systems and the special surprise drill simulating a power outage. In addition, the Company has persistently advanced the construction of a “dual-site, multi-center, multi-active ” disaster recovery system, and commissioned a new intra-city multi-active data center, effectively increasing the load capacity of server room, thus ensuring the secure and stable operation of systems. Secondly, the Company deepens the integrated management of cybersecurity and data security by implementing special campaigns for cybersecurity and data security, comprehensively carrying out targeted inspections and rectifications of security risks, and iteratively optimizing the technical protection system for cybersecurity and data security. Through these efforts, the Company has effectively enhanced the Bank ’s overall protection capabilities in cybersecurity and data security, enabling the Bank to successfully complete all major cybersecurity support tasks with “zero incidents ”. (IX) E-FINANCE SERVICES During the reporting period, the Company established a complete E-finance service system covering online banking, mobile banking, remote banking, WeChat banking, bank-enterprise direct connection, Yongjin Treasury Cloud (ৌ༟ථ ), and online settlement services. The replacement rate of transactions via electronic channels reached 99.93%, taking a leading position in the industry. During the reporting period, the Company vigorously promoted the construction of E-finance channels, enhanced customer experience building and improved risk control measures, resulting in steady growth in channel customers, further improvement in the quality and efficiency of business scale and sustained enhancement of channel service capacity. Online Banking During the reporting period, being customer-oriented, the Company continuously optimized personal online banking experience, simplified the operations of frequently used functions, enriched channel service scenarios and extended customer channel services. As at the end of the reporting period, the Company had 2.4919 million customers of personal online banking, representing an increase of 0.34% over the beginning of the year.
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55 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS During the reporting period, based on the actual needs of enterprises, the Company newly launched eight versions of online banking app; it continued to iterate and optimize frequently used functions such as fund transfers and remittances, payroll disbursements, and certificate renewals, implemented special initiatives related to anti-money laundering, anti-fraud, and data governance; and it continuously simplified the operation of frequently used functions to further reduce customer steps and enhance customer experience. As at the end of the reporting period, the Company had 332,600 customers with corporate online banking certificates, representing an increase of 2.14% over the beginning of the year. Mobile Banking During the reporting period, the Company ’s personal mobile banking focused on the digital transformation of wealth management to optimize customer experience. Besides, it has newly launched online trading of savings bonds, optimized the wealth dashboard and dedicated sales sections for specific customer base, upgraded the accumulated gold transaction service, and implemented age- friendly risk controls and interface improvements. As at the end of the reporting period, the Company had 8.9820 million personal mobile banking customers, an increase of 7.38% from the beginning of the year. Remote Banking The Company ’s remote banking consistently sticks to the service philosophy of “Customer-Centric, Beyond Expectation ”. With the integration of digital and intelligent technologies as our core focus, the Company continuously enhances our multi-channel service system, including intelligent voice customer service, intelligent online chatbots, telephone agent services, online agent services, WeChat and email, to provide customers with efficient, comprehensive, and professional high-quality service. Focusing on the three-core strategic positioning of 24-hour intelligent customer service, digital and intelligent customer marketing, and smart operations management, it has built a 7 ×24-hour remote banking service platform. During the reporting period, the remote banking handled an accumulation of 2.6988 million customer inquiries, up 28.51% year on year, with an overall connection rate of 95.66%. Among these, 1.7488 million inquiries were handled via telephone, with a manual telephone connection rate of 87.79% and a customer satisfaction rate of 99.71%. Online services were provided 0.9500 million times, with an online connection rate of 99.51%. The Bank continued to improve age-friendly and caring services. During the reporting period, the remote banking served elderly customers for an accumulation of 39,100 person- times, up 5.11% year on year, effectively improving the age-friendliness of financial services. Leveraging diversified outreach channels including intelligent AI outbound calls, manual outbound calls, SMS and Enterprise WeChat private domain operations, the Company continues to deepen its “human + AI, online + offline ” collaborative operating model to advance refined customer management. During the reporting period, remote banking carried out 4.6000 million telephone outbound operations, up 40.75% year on year, effectively supporting business expansion and enhancing customer value. WeChat Banking During the reporting period, the Company was committed to developing WeChat Banking into a key platform for innovative financial services and brand promotion. The Company ’s WeChat Banking includes the CZBank WeChat Official Account and the CZBank Cloud Branch WeChat Mini Program. The CZBank WeChat Official Account includes function modules such as “Credit Card & Personal ”, “Small & Micro Enterprises & Corporate ”, and “Recruitment & Services ”. The CZBank Cloud Branch WeChat Mini Program offers features such as branch appointments, personal loans, and special promotions.
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56 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS Bank-Enterprise Direct Connection and Yongjin Treasury Cloud During the reporting period, the Company took “financial technology + professional services ” as the core, and adhered to the principles of digital and intelligent empowerment, business-finance integration, and open interconnection. It continuously enhanced bank-enterprise direct connection and Yongjin Treasury Cloud services. As at the end of the reporting period, the Company had 3,148 core clients of bank-enterprise direct connection and 233 contracted clients of Yongjin Treasury Cloud. Online Settlement Business During the reporting period, the Company conducted a comprehensive review of its corporate payment and settlement product portfolio. Guided by the needs of government agencies and real enterprises and institutions, it focused on major scenarios such as bidding, fund management, and acquiring, and increased the support and application promotion of online settlement services, with the adoption rate of collection and payment separation products increasing significantly, batch-landing a group of central and state-owned enterprise clients. (X) OVERSEAS BRANCH BUSINESS Established in 2018, the Company ’s Hong Kong Branch is its first overseas branch. It has continued to implement the Company ’s development strategy, fully leveraged strategic synergies, proactively captured cross-border business opportunities, and comprehensively strengthened its cross-border financial service capabilities. Through these efforts, its major business lines, including corporate banking, institutional banking, financial markets, investment banking and private banking, have achieved steady, high-quality development. As the Group ’s international development hub, the Hong Kong Branch has actively pursued an asset-light business model, focusing on acquiring high-quality “going global ” enterprises and high-net-worth individual customers, and systematically enhanced its comprehensive capabilities and market competitiveness in serving “going global ” clients. It takes the overseas platforms of central state-owned enterprises, listed companies, internet technology enterprises and overseas capacity transfer platforms of manufacturing enterprises as its core customer groups. It has formulated differentiated service strategies focusing on key regions including the Guangdong-Hong Kong-Macao Greater Bay Area, Southeast Asia and the six Gulf Cooperation Council countries to deepen cross- border business linkage. It has strengthened collaboration with the Head Office and domestic branches, expanded the global reach and depth of CZBank ’s international services, and taken a new step forward in building its distinctive international business. As at the end of the reporting period, the Hong Kong Branch of the Company realized an operating income of HK$565 million and a net profit of HK$347 million.
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57 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (XI) MAJOR SUBSIDIARIES AND EQUITY PARTICIPATION COMPANIES 1. Major subsidiaries (1) Zheyin Financial Leasing Zheyin Financial Leasing is a holding subsidiary of the Bank with a paid-in capital of RMB4.0 billion, and the Bank holds 51% of its shares. It is a national non-banking financial institution approved for establishment and regulated by the former CBIRC. Established on January 18, 2017, the principal business scope of Zheyin Financial Leasing includes financial leasing business, transfer and acquisition of financial leasing assets, borrowing from non- bank shareholders with a term of three months or above, inter-bank lending, borrowing from financial institutions, issuing non-capital bonds, accepting lease deposits, sale and disposal of leased properties, fixed-income investment, asset securitization business, providing consultation services relating to financial leasing and other businesses as prescribed by laws and regulations or approved by the national financial regulatory authorities. Since its establishment, Zheyin Financial Leasing has always upheld the mission of serving the real economy and the concept of prudent operation, comprehensively implemented a specialized transformation strategy, actively embraced financial technology, continuously innovated financial services, and formed a specialized business segment focusing primarily on the three capabilities of electricity, computing power and transportation capacity. At present, its corporate governance structure and management system are increasingly perfect, its innovation capabilities and research strength are steadily enhanced, its profitability and development quality have been improving year after year, and a team of talents with high comprehensive qualities and strong high-performance has been cultivated. It has embarked on a development path of specialized services and characteristic operations, gradually growing into a key player in China ’s financial leasing industry. It has been rated as an “Advanced Unit in Supporting the Economic and Social Development of Zhejiang ” (ආఊ З) for consecutive years, and has won important awards such as the “National May Day Labor Certificate ” (ًthe “May Day Labor Certificate of Zhejiang Province ” ( ًthe “Leading Player in the Service Industry of Zhejiang Province ” (ਕุ Άุ ), the “Special Contributing Enterprise for the 10th Anniversary of the Construction of the New Area of Zhoushan Islands in Zhejiang Province ” (ண 10 մϋतй্ᘠ Άุ), the “Outstanding Contributing Enterprise for the 5th Anniversary of the Construction of the Zhejiang Pilot Free Trade Zone ” (্̈ᘠΆุ ), the “Outstanding Contributing Enterprise of Yangtze River Delta Financial Leasing ” (্̈ᘠΆุ ) and other important awards, highly recognized by all sectors of the society. As at the end of the reporting period, Zheyin Financial Leasing had total assets of RMB94.916 billion and net assets of RMB9.777 billion. It realized a net profit of RMB664 million during the reporting period.
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58 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS (2) CZB Wealth Management CZB Wealth Management was established in January 2025, with a paid-in capital of RMB2.0 billion, and the Bank holds 100% of its equity. The business scope of CZB Wealth Management includes the issuance of wealth management products, investment and management of investors ’ entrusted property, and provision of wealth management advisory and consulting services. Since its establishment, CZB Wealth Management deeply embodied the political responsibility and people-centered nature of finance, remained committed to its original aspiration of “managing wealth on behalf of customers ”, and adhered to the business philosophy of “integrity, prudence, compliance, and professionalism ”. Adhering to a long- term perspective and guided by the principles of stability, low volatility, and long-term returns, it is committed to providing “stable, inclusive and diversified ” asset management products and wealth management services to clients across the entire market, while attracting top-tier professional talent through market-oriented, autonomous operations, striving to develop the Company into a “first-class wealth management company ”. As at the end of the reporting period, the scale of wealth management products managed by CZB Wealth Management amounted to RMB184.717 billion, with total assets of RMB2.655 billion and net assets of RMB2.522 billion, and it realized a net profit of RMB42 million during the reporting period. 2. Equity Participation Companies Equity Participation Companies Place of Incorporation Date of Incorporation Number of Shares Investment Amount China UnionPay Co., Ltd. Shanghai 2002-3-26 34 million RMB25 million National Financing Guarantee Fund Co., Ltd. Beijing 2018-7-26 1 billion RMB1 billion (XII) EVALUATION OF PROGRESS ON QUALITY IMPROVEMENT, EFFICIENCY ENHANCEMENT AND RETURN FOCUS To effectively advance the Company ’s high-quality development and investment value enhancement, and protect the legitimate rights and interests of investors, especially small and medium-sized investors, the Company actively acted in response to relevant initiatives of the Shanghai Stock Exchange. Following the deliberation and approval at the second extraordinary meeting of the Seventh Session of the Board of Directors of the Company for 2026, the Company issued the “2026 ‘Improving Quality, Increasing Efficiency, and Emphasizing Returns ’ Action Plan of China Zheshang Bank Co., Ltd. ” on April 29, 2026. The action plan specifies systematic measures focusing on improving operational quality, supporting the development of new-quality productive forces, enhancing corporate governance, strengthening the accountability of the “critical minority ” and increasing returns to investors. During the reporting period, the Company coordinated the implementation of various measures to improve quality and enhance efficiency, and the implementation status is hereby reported as follows: 1. Operating quality and efficiency showed steady improvement During the reporting period, the Company consistently upheld the comprehensive strengthening of the Party ’s leadership as the fundamental guarantee, focused on deepening the development in Zhejiang and serving the real economy, and maintained a stable and positive operating trend, with all indicators meeting expectations. Operating income and net profit attributable to shareholders of the Bank continued to grow steadily, while the volumes of total deposits and total loans maintained reasonable growth rates, and asset quality remained stable. For details of the development strategies and overall operating status of the Company, please refer to: “Development Strategies and Core Competitiveness ” and “Management Discussion and Analysis – (I) Analysis of Overall Operation Performance ”.
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59 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS 2. Financial enablement for new-quality productive forces was strengthened During the reporting period, the Company continued to increase its financial support for the field of scientific and technological innovation to foster the development of new-quality productive forces. Firstly, credit support for scientific and technological innovation continued to expand, serving more than 4,300 high-level talents. Secondly, the Company focused on empowering key strategic emerging industries by deepening our engagement in sectors such as biopharmaceuticals, integrated circuits, aerospace, and artificial intelligence, while increasing resource allocation to support a group of hard-tech enterprises with promising prospects. Thirdly, the Company advanced the building of a professional sci-tech finance team. To this end, all 15 key branches dedicated to sci-tech innovation have established sci-tech innovation finance departments, actively building sci-tech finance teams to enhance professional service capabilities in this area. Fourthly, the integration of product innovation and ecosystem development has gained momentum. The Bank has innovatively launched products such as the Sci-Tech Innovation Bank-Investment Loan 2.0 (௴ვҳ൲ 2.0) and Stock Option Loan (፯ᛆ൲ಛ ) and has collaborated with investment institutions and research institutes to build ecosystems. It has deepened cooperation in areas such as investment-lending linkage, sci-tech innovation bonds, and commercialization services for sci-tech achievements to support the development of the innovation ecosystem. 3. Quality improvement and efficiency enhancement in corporate governance were promoted During the reporting period, the Company took the revision of the Articles of Association as an opportunity to refine the provisions on Party building and continue to consolidate the leading role of the Party organization within the corporate governance structure. Specifically, the Company comprehensively standardized the operation and management of the shareholders ’ meeting, smoothed communication channels with investors, and effectively safeguarded the legitimate rights and interests of all shareholders. Besides, the Company completed revisions to The Rules of Procedures for the Audit Committee of the Board of Directors, The Rules of Procedures for the Risk and Related Party Transaction Control Committee of the Board of Directors, and The Rules of Procedures for the Nomination and Remuneration Committee of the Board of Directors, thereby strengthening the institutional foundation for standardized operations and completing the reform of the governance structure. The Audit Committee of the Board of Directors has successfully assumed the statutory duties and powers of the Supervisory Committee. During the reporting period, the Company issued the “Action Plan for Further Standardizing Corporate Governance and Enhancing Governance Effectiveness ” (ଣe ), which proposed specific measures to tangibly improve the operational efficiency of governance and continuously strengthen coordination and collaboration among corporate governance entities. By optimizing the composition of the special committees under the Board of Directors, organizing Board members to conduct thematic research visits to branches, and coordinating the participation of directors in various specialized training programs, the Company intends to strengthen safeguards for directors ’ performance of their duties, thus enhancing the quality and efficiency of directors ’ performance of their duties. During the reporting period, the Company organized special meetings and symposiums for independent directors to promote alignment among all corporate governance bodies regarding development strategies and business approaches, thereby effectively safeguarding the fundamental interests of the shareholders of the Bank.
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60 CHINA ZHESHANG BANK CO., LTD. MANAGEMENT DISCUSSION AND ANALYSIS 4. Long-term constraints on the key minority were refined During the reporting period, the Company constantly refined its clawback mechanism for performance-based remuneration. It completed the revision of the Measures for the Management of Claw-back of Performance-Based Remuneration of China Zheshang Bank (2026 Edition), clarifying the circumstances and percentages under which performance-based remuneration is subject to clawback when responsible individuals receive Party disciplinary sanctions, administrative sanctions, or other disciplinary actions, thereby further refining the long-term constraint mechanism. 5. Cash dividends were scientifically and steadily implemented During the reporting period, the Company strictly followed the established dividend policy, fully considered the Company ’s profitability status and capital needs, and scientifically formulated the 2025 dividend plan. As approved by the Board of Directors and the shareholders ’ meeting, a cash dividend of RMB0.131 per share (tax inclusive) was distributed to all shareholders, totaling a cash dividend of RMB3.598 billion (tax inclusive), which accounted for 30.06% of the net profit attributable to the Bank ’s ordinary shareholders for the year. The Company completed the 2025 A-share dividend distribution on June 26, 2026, and the H-share dividend distribution on July 16, 2026. Our Company has always attached great importance to investor returns, so as to effectively enhance the shareholders ’ sense of gain. 6. Quality and effectiveness of information disclosure were continuously improved During the reporting period, the Company faithfully performed its information disclosure obligations. By strictly adhering to the relevant laws and regulations for information disclosure in both domestic and overseas jurisdictions, it conducted information disclosure work in a true, accurate, complete, timely and fair manner, continuously improved the disclosure content of its periodic reports and enhanced the proactiveness and timeliness of the disclosure of temporary announcements. Thus, the effectiveness and transparency of its information disclosure was continuously improved. For details, please refer to relevant contents such as “Corporate Governance – V. Implementation of Information Disclosure ”. 7. Investor relations management was continuously enhanced During the reporting period, the Company continuously intensified its investor relations management. By consistently diversifying its communication methods, and expanding its communication channels, the Company conveys its intrinsic value to the market in a multi-layered and multi-dimensional manner. In addition, it attentively listened to the concerns of various types of investors, and pragmatically engaged in targeted communication and responses, in order to foster a positive interactive relationship between the Company and its investors. Furthermore, it also innovated its form of publicity for investor education and earnestly fulfilled its primary responsibility as a listed company to protect investors. For details, please refer to relevant contents such as “Corporate Governance – VI. Investor Relations Management ”.
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61 INTERIM REPORT 2026 MANAGEMENT DISCUSSION AND ANALYSIS (XIII) OUTLOOK Looking ahead to the second half of 2026, external uncertainties remain numerous, the domestic imbalance between strong supply and weak demand remains prominent, economic development continues to exhibit a K-shaped divergence, and the transition from old to new growth drivers continues to deepen. As the new growth drivers gain robust momentum in providing support for and leading the economy, the pace of transformation and upgrading in traditional industries gradually accelerates, and the effects of policies steadily take hold, there remain solid conditions and support for achieving the expected main annual targets, particularly the expected economic growth target. It is expected that in the coming period, macroeconomic policies will continue to take effect. By focusing on expanding domestic demand and improving supply, promoting a smooth transition from old to new growth drivers, unleashing the growth potential of investment and consumption, and improving the supply-demand balance in the real estate sector through city-specific measures, the Company expects to provide an effective support for achieving a good start for the “15th Five-Year Plan ”. In the second half of 2026, the Company will earnestly implement the decisions and deployments of the CPC Central Committee, the State Council, and the Zhejiang Provincial Party Committee and Provincial Government, while adhering to a long-term perspective, in order to effectively carry out all strategic tasks for the next stage. In the second half of the year, the Company will focus on the operational principle of “profit first, appropriate scale ”. On the condition that risks remain under control, the Company will prioritize generating profitable revenue while achieving reasonable growth in scale, so as to drive the full achievement of our business objectives with high-efficiency execution.
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62 CHINA ZHESHANG BANK CO., LTD. CORPORATE GOVERNANCE I. OVERVIEW OF CORPORATE GOVERNANCE The Company always makes unremitted efforts to pursue standardized business operation and extraordinary corporate governance since improving corporate governance is the top priority of achieving high-quality development. The Company continuously improves corporate governance structure consisting of the general meeting, the Board of Directors and the Senior Management according to the relevant laws, regulations and regulatory requirements. Each corporate governance body operates independently, with effective checks and balances, cooperating with each other and functioning in a coordinated manner. The Board of Directors of the Company takes corporate governance legality and compliance as the bottom line, draws on the best practices of outstanding companies as the direction, improves the system of corporate governance mechanism as the basis, and gives full play to the decision-making role of the Board of Directors as the core. It strives to build a corporate governance mechanism with clear boundaries of responsibilities, orderly checks and balances and collaboration, democratic and scientific decision-making, and standardized and efficient operation. In the first half of 2026, the Company ’s new amendments to the Articles of Association were approved by the National Financial Regulatory Administration. By refining the provisions on Party building, the Company further consolidated the leading position of the Party organisation within its corporate governance structure, promoted the development of a new corporate governance mechanism characterized by clear delineation of powers and responsibilities, distinct roles, and collaborative coordination, and ensured that the Party ’s leadership and Party building are integrated into all aspects and processes of corporate governance and business management. At the same time, we optimized the Rules of Procedures for the Shareholders ’ General Meeting, the Rules of Procedures for the Board of Directors, the Rules of Procedures for the Board Audit Committee, the Rules of Procedures for the Board Risk and Related Party Transaction Control Committee, and the Rules of Procedures for the Nomination and Remuneration Committee of the Board of Directors. The Company successfully completed the reform of its governance structure, with the Board Audit Committee smoothly taking over the statutory supervisory powers of the Supervisory Committee, thereby achieving a comprehensive upgrade of its governance system. II. SHAREHOLDERS ’ MEETING Pursuant to the Articles of Association, the shareholders ’ meeting is the supreme authority of the Company, and the Board of Directors is accountable to the shareholders ’ meeting. The Company raised an independent resolution for each actually independent matter at the shareholders ’ meeting, and voted by ballot to ensure that all shareholders fully and equally enjoy the right to know, the right to speak, the right to raise questions, the right to vote and other rights. During the reporting period, the Company held the 2026 first extraordinary general meeting on January 26, 2026, and the 2025 Annual General Meeting on June 8, 2026. For details of relevant proposals and relevant announcements on resolutions adopted at the meeting, please refer to the relevant announcements published by the Company on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company. The convening, notifying, holding and voting procedures for the above-mentioned meetings are in compliance with the relevant provisions of the Company Law, the listing rules of both the domestic and overseas listing venues of the Company and the Articles of Association. The Chairman of the meetings has explained the detailed procedures for voting by poll to the Shareholders at the shareholders ’ meeting. Lawyers were invited to witness onsite and provide legal opinions for the meetings.
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63 INTERIM REPORT 2026 CORPORATE GOVERNANCE III. MEETINGS OF THE BOARD AND ITS SPECIAL COMMITTEES During the reporting period, the Board of the Company organized and convened 4 Board meetings, at which 60 resolutions were considered and approved and reports on related matters were heard. During the reporting period, the special committees under the Board of the Company organized and convened a total of 16 meetings, including 2 meetings by the Strategic and Sustainable Development Committee, 4 meetings by the Audit Committee, 4 meetings by the Risk and Related Party Transaction Control Committee, 4 meetings by the Nomination and Remuneration Committee, 1 meeting by the Consumer Rights Protection Committee, and 1 meeting by the Inclusive Finance Development Committee. At these meetings, 56 resolutions were considered and approved and reports on related matters were heard. The Company convened 1 special meeting of the independent directors, at which 7 resolutions were considered and approved. IV. BOARD DIVERSITY POLICY The Company considers the diversity of the members of the Board of Directors as an important impetus to support the Company in enhancing the corporate governance level and achieving sustainable development. The Company has formulated the Board Diversity Policy of China Zheshang Bank Co., Ltd. according to the relevant provisions of the Hong Kong Listing Rules. It is expressly provided in the Policy that the Board of Directors shall consider various aspects and diversified factors when determining the composition of the Board, including but not limited to gender, age, cultural and educational background, professional experience, skills, knowledge and/or service period, thus ensuring the Board of Directors has diversified viewpoints and angles in performing their duties, and forming into a composition model of the Board matched with the Company ’s development model. The Board Diversity Policy of the Company comprises chapters such as purpose, philosophy, policy statement, expected objective, supervision and reporting, with the main purpose of recognizing and accepting the philosophy of building a diversified Board to strengthen the execution of the Board, and affirming the importance of diversity of the Board to achieve strategic objectives. During the reporting period, the geographical distribution, educational background and professional experience of members of the Board are relatively diversified. Among the current 12 directors, 1 of them is female, and 12 are with post graduate diploma or master degree or above, including 4 with doctoral diploma. The diversified composition of the Board brings a broad vision and a high level of professional experience to the Board and maintains an independent element within the Board to ensure that the Board is able to effectively make independent judgments and scientific decision when studying and considering material issues. V. IMPLEMENTATION OF INFORMATION DISCLOSURE During the reporting period, the Company faithfully performed the obligation of information disclosure, constantly improved regular reporting disclosures, and disclosed temporary announcements in a more active and timely manner, with continuous improvement of the effectiveness and transparency of information disclosure.
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64 CHINA ZHESHANG BANK CO., LTD. CORPORATE GOVERNANCE The Company prohibits its staff from trading or recommending others to trade by making use of inside information. The Company established information disclosure management system, which has identified the department responsible for inside information disclosures, to disclose information in a timely and compliant manner according to the requirements and procedures of Rules Governing the Listing of Stocks on Shanghai Stock Exchange and the Hong Kong Listing Rules. The Company truly, accurately and completely carried out information disclosure work in a timely manner, strictly in accordance with the requirements of relevant information disclosure laws and regulations. During the reporting period, the Company disclosed a total of 58 various announcements for A Shares on the newspapers designated by the CSRC, including China Securities Journal, Shanghai Securities News, Securities Times and Securities Daily, the websites of the Shanghai Stock Exchange and the Company, and disclosed a total of 71 various announcements for H Shares on the websites of the Hong Kong Stock Exchange and the Company, which ensured that all shareholders had equal opportunity to get relevant information of the Company. VI. INVESTOR RELATIONS MANAGEMENT During the reporting period, the Company attached great importance to communication and exchanges with investors, continuously strengthened its investor relations management capabilities, built multi-level and diversified communication bridges with all types of investors, and continuously optimized its value presentation and communication, thereby effectively deepening the market ’s recognition of the Company. First, the Company held a high-quality results presentation to effectively convey its operational confidence. On March 31, 2026, the Company held its 2025 annual results presentation in Hangzhou, in a hybrid format of “on-site meeting + online live broadcast ”. This results presentation marked the first public exchange between the Company ’s new management team and the market. The Chairman and senior management gave sincere and comprehensive responses to questions raised by investors, analysts, and the media, and offered thorough and in-depth explanations on key issues such as the Company ’s strategic direction and implementation arrangements, the progress of the strategy of “Deepening the Development in Zhejiang ” and future plans, thereby effectively conveying the Company ’s operational performance and efficiency as well as its confidence in future development. Second, the Company regularly conducted diverse promotion and exchange activities to strengthen the foundation of its investor relations. During the reporting period, the Company continued to carry out various exchange activities by receiving institutional investor site visits, participating in brokerage strategy meetings and conducting specialized roadshows, covering over 50 brokerages, funds and key institutional investors, effectively consolidating the investor base; it held exchange meetings with overseas investors, effectively expanding the dimensions of its capital-market outreach and further bolstering overseas investors ’ confidence; focusing on the Company ’s distinctive businesses and featured branches, the Company continued to host the “Zhe-Enjoy Value ” (࠽series of Investor Open Day events, fully demonstrating to investors the results of the Company ’s strategic execution and highlights of its business development. Third, the Company innovated the investor education and publicity formats and actively fulfilled its principal responsibility for investor protection. Capitalizing on key events such as “March 15 International Consumer Rights Day ”, “May 15 National Investor Protection Publicity Day ” and the Anti-Illegal Finance and Anti-Fraud Publicity Month, and leveraging the “Wuyue Cup ” competition platform, the Company publicised its investor protection initiatives and disseminated knowledge on investor education, protection and rational investment. This series of activities effectively reached over 2,000,000 people, significantly improving the coverage and effectiveness of its investor services.
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65 INTERIM REPORT 2026 CORPORATE GOVERNANCE Fourth, the Company consistently prioritized safeguarding investors ’ rights and interests and ensuring that all shareholders could fully exercise their rights. During the reporting period, the Company strictly adhered to regulatory requirements in convening shareholders ’ meetings. In particular, the Company implemented various measures to facilitate participation by small and medium-sized shareholders, including offering diversified registration channels and assigning dedicated staff to handle registration and attendance matters. At the same time, the Company maintained sound communication with small and medium-sized investors, regularly responded to investors ’ questions on SSE e-interaction, handled IR mailbox emails, answered investor hotline calls, and standardized the recording and feedback of investor exchanges. VII. SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted a code of conduct for securities transactions by Directors, which is not less rigorous than the Model Code set out in Appendix C3 of the Hong Kong Listing Rules. The Company has confirmed with all Directors and hereby acknowledged that they had complied with the aforesaid code during the period from January 1, 2026 to June 30, 2026. VIII. STATEMENT OF COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE AS SET OUT IN THE HONG KONG LISTING RULES The Company agrees to the principles as set out in Corporate Governance Code (Appendix C1 to the Hong Kong Listing Rules). From January 1, 2026 to June 30, 2026, the Company has been in full compliance with the code provisions under such Code, except for the following: According to code provision C.1.5 of the Corporate Governance Code, independent non-executive directors and other non-executive directors should attend the general meetings. During the reporting period, one non-executive Director of the Company was unable to attend the annual general meeting of 2025 of the Company held on June 8, 2026 due to business engagement. However, there were sufficient Directors (including executive Directors, non-executive Directors and independent non-executive Directors) present at the annual general meeting of 2025 to ensure that the Board had a full and fair understanding of the views of the shareholders of the Company and that any Director absent from the annual general meeting of 2025 was able to obtain an understanding of the views of the shareholders of the Company expressed at the annual general meeting of 2025, if any, from the Directors present at the meetings.
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66 CHINA ZHESHANG BANK CO., LTD. CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS I. CHANGES IN ORDINARY SHARES (I) Table of Changes in Ordinary Shares Unit: Share December 31, 2025 During the reporting period June 30, 2026 Number Proportion (%) Number of Changes (shares) Number Proportion (%) I. Restricted shares – – – – – II. Unrestricted shares outstanding 27,464,635,963 100.00 – 27,464,635,963 100.00 1. RMB ordinary shares 21,544,435,963 78.44 – 21,544,435,963 78.44 2. Domestically listed foreign shares – – – – – 3. Foreign shares listed abroad 5,920,200,000 21.56 – 5,920,200,000 21.56 4. Other – – – – – III. Total number of ordinary shares 27,464,635,963 100.00 – 27,464,635,963 100.00 As of the end of the reporting period, the issued shares of the Company were 27,464,635,963 ordinary shares, including 21,544,435,963 A Shares and 5,920,200,000 H Shares. (II) Description on Change in Ordinary Shares There were no changes in the Company ’s ordinary shares during the reporting period.
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67 INTERIM REPORT 2026 CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS II. INFORMATION ON SHAREHOLDERS OF ORDINARY SHARES Number of Shareholders of Ordinary Shares and Their Shareholdings As of the end of the reporting period, the Company had 196,200 shareholders of ordinary shares in total, including 196,093 shareholders of A Shares and 107 shareholders of H Shares. As of the end of the reporting period, the table of shareholdings of the top ten shareholders and top ten shareholders of circulating shares (excluding shares lent through the transfer facility) was as follows: Unit: Share Name of shareholders (Full Name) Increase/ decrease during the reporting period Number of shares held at the end of the Period Proportion (%) Class of shares Pledge or freezing Nature of shareholders Status of shares Number HKSCC Nominees Limited -51,910 5,919,834,709 21.55 H Share without selling restrictions unknown – – Zhejiang Provincial Innovation Investment Group Co., Ltd. – 3,452,076,906 12.57 A Share without selling restrictions – – State-owned Legal Person Hengdian Group Holdings Limited – 1,373,231,727 4.99 A Share without selling restrictions – – Domestic Non state- owned Legal Person Shandong International Trust Co., Ltd. +506,028,231 1,098,595,434 4.00 A Share without selling restrictions – – State-owned Legal Person Zhejiang Provincial Energy Group Co., Ltd. – 1,093,531,078 3.98 A Share without selling restrictions – – State-owned Legal Person Xintai Life Insurance Co., Ltd. – self owned capital – 996,325,468 3.63 A Share without selling restrictions – – State-owned Legal Person Taiping Life Insurance Co., Ltd. – 921,538,465 3.36 A Share without selling restrictions – – State-owned Legal Person Minsheng Life Insurance Co., Ltd. – self owned capital -90,000,060 678,593,787 2.47 A Share without selling restrictions – – Domestic Non state- owned Legal Person Zhejiang Hengyi High-tech Materials Co., Ltd. – 660,490,068 2.40 A Share without selling restrictions pledged 508,069,283 Domestic Non state- owned Legal Person Zhejiang Hengyi Group Co., Ltd. – 643,052,319 2.34 A Share without selling restrictions pledged 643,052,319 Domestic Non state- owned Legal Person
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68 CHINA ZHESHANG BANK CO., LTD. CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS Notes: 1. The number of shares held by HKSCC Nominees Limited was the sum of shares of the Company ’s holders of H-shares which were trading in its transaction system. 2. As of the end of the reporting period, among the top ten shareholders mentioned above, Zhejiang Hengyi High- tech Materials Co., Ltd. and Zhejiang Hengyi Group Co., Ltd. have a connected relationship. Apart from that, the Company is not aware of other connected relationship between the above shareholders or whether they are parties acting in concert. 3. To the knowledge of the Company, as of the end of the reporting period, none of the shareholders listed in the table was involved in participating in securities lending business. III. PLEDGE AND FREEZING OF ORDINARY SHARES As at the end of the reporting period, to the best knowledge of the Company, 2,241,053,446 shares of the Company (representing 8.16% of the total ordinary shares in issue) were pledged, and 29,657,253 shares were subject to judicial freezing (including judicial tagging).
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69 INTERIM REPORT 2026 CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS IV. INTERESTS IN SHARES AND SHORT POSITIONS IN ACCORDANCE WITH THE HONG KONG SECURITIES AND FUTURES ORDINANCE As of June 30, 2026, in accordance with the register kept by the Company under section 336 of the SFO and so far as the Company is aware, the following persons (excluding the Company ’s Directors and chief executive (as defined in the Hong Kong Listing Rules)) had an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or directly or indirectly held 5% or more of any class of share capital of the Company: Name of shareholders Nature of interests and capacity Class Long/short position Number of shares (Shares) Approximate percentage of interests (%) Approximate percentage of the relevant class of shares (%) Zhejiang Innovation Investment Group Co., Ltd. Beneficial owner A Share Long position 3,452,076,906 12.57 16.02 Zhejiang Hengyi Group Co., Ltd. Beneficial owner and Interest of controlled corporation A Share Long position 1,615,542,387 5.88 7.50 Qiu Jianlin Interest of controlled corporation A Share Long position 1,615,542,387 5.88 7.50 Hengdian Group Holdings Limited Beneficial owner A Share Long position 1,373,231,727 4.99 6.37 Hengdian Association for Economics Corporation Interest of controlled corporation A Share Long position 1,373,231,727 4.99 6.37 Shandong International Trust Co., Ltd. Beneficial owner A Share Long position 1,098,595,434 4.00 5.10 Zhejiang Provincial Energy Group Co., Ltd. Beneficial owner A Share Long position 1,093,531,078 3.98 5.08 Zhejiang Provincial Energy Group Co., Ltd. Interest of controlled corporation H Share Long position 755,397,900 2.75 12.76 Zhejiang Energy Capital Holdings Co., Ltd. Interest of controlled corporation H Share Long position 755,397,900 2.75 12.76 Zheneng Capital Investment (Hong Kong) Limited Beneficial owner H Share Long position 475,322,900 1.73 8.03 Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. Beneficial owner and Interest of controlled corporation H Share Long position 1,379,300,000 5.02 23.30 Zhejiang Seaport (Hong Kong) Co., Limited Beneficial owner H Share Long position 1,203,410,000 4.38 20.33 Zhejiang Seaport Asset Management Co., Limited Interest of controlled corporation H Share Long position 1,203,410,000 4.38 20.33 Yancoal International (Holding) Company Limited Beneficial owner H Share Long position 933,897,000 3.40 15.77 Yanzhou Coal Mining Company Limited Interest of controlled corporation H Share Long position 933,897,000 3.40 15.77 Yankuang Group Company Limited Interest of controlled corporation H Share Long position 933,897,000 3.40 15.77 Xintai Life Insurance Co., Ltd. Beneficial owner H Share Long position 373,691,000 1.36 6.31 Minsheng Life Insurance Co., Ltd. Beneficial owner H Share Long position 356,948,000 1.30 6.03 China Wanxiang Holding Co., Ltd. Interest of controlled corporation H Share Long position 356,948,000 1.30 6.03 Aeon Life Insurance Co. Ltd. Beneficial owner H Share Long position 349,611,600 1.27 5.91
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70 CHINA ZHESHANG BANK CO., LTD. CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS Save as disclosed above, the Company was unaware of any other person (excluding the Company ’s Directors and chief executive (as defined in the Hong Kong Listing Rules)) who had an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or any interest or short position as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO on June 30, 2026. V. INFORMATION ON THE CONTROLLING SHAREHOLDERS AND DE FACTO CONTROLLERS As of the end of the reporting period, the Company had no controlling shareholders and de facto controllers. VI. INFORMATION ON THE COMPANY ’S LARGEST SHAREHOLDER OF ORDINARY SHARES As of the end of the reporting period, Zhejiang Innovation Investment Group Co., Ltd. held 12.57% of the shares of the Company and was the Company ’s largest shareholder. Zhejiang Provincial Innovation Investment Group Co., Ltd. was established on September 6, 2012 with the uniform social credit code of 913300000542040763 and its legal representative was Yang Qiangmin. With a registered capital of RMB12.0 billion, it is registered in Hangzhou, Zhejiang Province. Focusing on the mission to build a first-class investment group and jointly cultivate a first-class innovation ecosystem, the Company is committed to developing a dual-driving framework underpinned by a RMB100 billion fund cluster and an innovation ecosystem. It strives to give full play to its three core functions of leveraging and leadership, innovation-sourced incubation, and investment empowerment. The Company is comprehensively making decisive efforts to combat eight major campaigns, namely capital aggregation, sci-tech incubation, industrial investment, financial facilitation, digital-intelligent empowerment, ecosystem development, integrated investment and research, and post-investment management, and is fully committed to supporting scientific, technological and industrial innovation in Zhejiang Province. The controlling shareholder and de facto controller of Zhejiang Provincial Innovation Investment Group Co., Ltd. is Zhejiang Provincial Department of Finance, which holds 100% equity interest in Zhejiang Provincial Innovation Investment Group Co., Ltd.
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71 INTERIM REPORT 2026 CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS VII. INFORMATION ON SUBSTANTIAL SHAREHOLDERS OF ORDINARY SHARES As at June 30, 2026 Unit: Share, % Name of Shareholder Class of shares Number of shares held (share) Separately shareholding ratio Jointly shareholding ratio Reasons for being the Substantial Shareholders Number of pledged shares Controlling shareholders De facto controllers Other parties acting in concert Ultimate beneficial owners Zhejiang Provincial Innovation Investment Group Co., Ltd. A Share 3,452,076,906 12.57 12.57 Holding 5% or more of the Bank ’s shares and dispatch Directors to the Bank – Zhejiang Provincial Department of Finance Zhejiang Provincial Department of Finance Nil Zhejiang Provincial Innovation Investment Group Co., Ltd. Zhejiang Provincial Energy Group Co., Ltd. A Share 1,093,531,078 3.98 6.73 Holding 5% or more of the Bank ’s shares in total with the related parties and jointly dispatch Directors to the Bank – State-owned Assets Supervision and Administration Commission of the People ’s Government of Zhejiang Province State-owned Assets Supervision and Administration Commission of the People ’s Government of Zhejiang Province Nil Zhejiang Provincial Energy Group Co., Ltd. Zheneng Capital Investment (Hong Kong) Limited H Share 475,322,900 1.73 – Zheneng Capital Holdings Limited Zheneng Capital Holdings Limited Zhejiang Energy International Co., Ltd. H Share 280,075,000 1.02 – Zhejiang Provincial Energy Group Co., Ltd. Zhejiang Energy International Co., Ltd. Zhejiang Hengyi High-tech Materials Co., Ltd. A Share 660,490,068 2.40 5.88 Holding 5% or more of the Bank ’s shares in total with the related parties 508,069,283 Zhejiang Hengyi Petrochemical Co., Ltd. Qiu Jianlin Nil Zhejiang Hengyi High-tech Materials Co., Ltd. Zhejiang Hengyi Group Co., Ltd. A Share 643,052,319 2.34 643,052,319 Hangzhou Wan Yong Industrial Investment Co., Ltd. Zhejiang Hengyi Group Co., Ltd. Zhejiang Hengyi Petrochemical Co., Ltd. A Share 312,000,000 1.14 240,000,000 Hengyi Petrochemical Co., Ltd. Zhejiang Hengyi Petrochemical Co., Ltd.
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72 CHINA ZHESHANG BANK CO., LTD. CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS Name of Shareholder Class of shares Number of shares held (share) Separately shareholding ratio Jointly shareholding ratio Reasons for being the Substantial Shareholders Number of pledged shares Controlling shareholders De facto controllers Other parties acting in concert Ultimate beneficial owners Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. A Share 198,000,000 0.72 5.74 Holding 5% or more of the Bank ’s shares in total with the related parties – Ningbo Municipal People ’s Government State-owned Assets Supervision and Administration Commission State-owned Assets Supervision and Administration Commission of the People ’s Government of Zhejiang Province Nil Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. Zhejiang Seaport (Hong Kong) Co., Limited H Share 1,203,410,000 4.38 – Zhejiang Seaport Asset Management Co., Ltd. Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. H Share 175,890,000 0.64 – Ningbo Municipal People ’s Government State-owned Assets Supervision and Administration Commission Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. Hengdian Group Holdings Limited A Share 1,373,231,727 4.99 4.99 Dispatch Directors to the Bank – Dongyang Hengdian Association For Economics Corporation Dongyang Hengdian Association For Economics Corporation Nil Hengdian Group Holdings Limited Xintai Life Insurance Co., Ltd. - self owned capital A Share 996,325,468 3.63 4.99 Dispatch Supervisors to the Bank over the past twelve months – Nil Nil Nil Xintai Life Insurance Co., Ltd.Xintai Life Insurance Co., Ltd. H Share 373,691,000 1.36 Zhejiang China Light & Textile Industrial City Group Co., Ltd. A Share 587,298,906 2.14 3.57 Dispatch Supervisors to the Bank jointly with the related parties over the past twelve months – Shaoxing City Keqiao District Development and Operation Group Co., Ltd. Shaoxing City Keqiao District People ’s Government Nil Zhejiang China Light & Textile Industrial City Group Co., Ltd. Shaoxing City Keqiao District Development and Operation Group Co., Ltd. A Share 393,891,313 1.43 – Shaoxing Keqiao District State- owned Assets Investment Operation Co., Ltd. Shaoxing City Keqiao District Development and Operation Group Co., Ltd. Taiping Life Insurance Co., Ltd. A Share 921,538,465 3.36 3.36 Dispatch Directors to the Bank – China Taiping Insurance Holdings Ltd. Ministry of Finance of the People ’s Republic of China Nil Taiping Life Insurance Co., Ltd. Note: As of August 10, 2026, Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. holds 271.00 million A Shares in the Company and holds 175.89 million H Shares in the Company. Zhejiang Seaport (Hong Kong) Co., Limited holds 1,203.41 million H Shares in the Company. For details, please refer to the “Indicative Announcement Regarding Changes in Shareholders ’ Equity Triggering the 1% Threshold of China Zheshang Bank Co., Ltd. (ᛆूᜊਗᙃʿ 1%ʮѓ)” published by the Company on the Shanghai Stock Exchange and the Hong Kong Stock Exchange in August 2026.
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73 INTERIM REPORT 2026 CHANGES IN SHARES AND INFORMATION ON SHAREHOLDERS VIII. ISSUANCE AND LISTING OF SECURITIES During the reporting period, the Company did not issue any new ordinary shares nor sell any treasury shares (as defined in the Hong Kong Listing Rules) for cash. IX. INFORMATION ABOUT PREFERENCE SHARES As of the end of the reporting period, the Company had no surviving preference shares. X. INFORMATION ABOUT UNDATED CAPITAL BONDS As considered and approved at the sixth extraordinary meeting of the fifth session of the Board of the Company in 2020 and the Company ’s 2021 first extraordinary general meeting and with the approval from the former CBIRC and the People ’s Bank of China, the Company successfully issued undated capital bonds with a total issue amount of RMB25.0 billion on November 25, 2021 in China ’s national inter-bank bond market. The coupon rate is 3.85% during the first five years and will be adjusted every five years. The Company shall be entitled to redeem the bonds, in total or in partial, on every distribution payment date since the fifth distribution payment date (inclusive). All the proceeds will be used to replenish the Company ’s additional tier 1 capital. As considered and approved at the fifth meeting of the seventh session of the Board of the Company and the Company ’s 2025 first extraordinary general meeting and with the approval from the National Financial Regulatory Administration and the People ’s Bank of China, the Company successfully issued undated capital bonds with a total issue amount of RMB30.0 billion on August 5, 2026 in China ’s national inter-bank bond market. The coupon rate is 1.95% during the first five years and will be adjusted every five years. The Company shall be entitled to redeem the bonds, in total or in partial, on every distribution payment date since the fifth distribution payment date (inclusive). All the proceeds will be used to replenish the Company ’s additional tier 1 capital.
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74 CHINA ZHESHANG BANK CO., LTD. INFORMATION ON DIRECTORS, SENIOR MANAGEMENT, EMPLOYEES AND INSTITUTIONS I. BASIC INFORMATION ON DIRECTORS AND SENIOR MANAGEMENT As of the disclosure date of this report, the Board of the Company comprised 12 Directors, including 3 executive Directors, namely Mr. Chen Haiqiang, Mr. Lyu Linhua and Ms. Ma Hong; 4 non-executive Directors, namely Mr. Hou Xingchuan, Mr. Ren Zhixiang, Mr. Hu Tiangao and Mr. Ying Yuxiang; and 5 independent non-executive Directors, namely Mr. Wang Wei, Mr. Xu Yongbin, Mr. Fu Tingmei, Mr. Shi Hao and Mr. Lou Weizhong. As of the disclosure date of this report, the Company no longer maintains a Supervisory Committee. On June 4, 2026, the Company received the Reply of the National Financial Regulatory Administration on the Amendment to the Articles of Association of China Zheshang Bank (Jin Fu [2026] No. 305) (ፄ ҭᔧ (ᔧ[2026]305 )). The revised Articles of Association of China Zheshang Bank Co., Ltd. has been approved by the National Financial Regulatory Administration and has taken effect. With effect from June 4, 2026, pursuant to the Company ’s Articles of Association, the Company no longer maintains a Supervisory Committee, and the Audit Committee of the Board of Directors assumes the functions and powers of the Supervisory Committee as prescribed by laws and regulations. The Senior Management of the Company comprised 5 members, namely Mr. Lyu Linhua, Mr. Jing Feng, Mr. Luo Feng, Mr. Zhou Weixin and Mr. Pan Huafeng. II. INFORMATION ON THE APPOINTMENT AND RESIGNATION OF DIRECTORS AND SENIOR MANAGEMENT DIRECTORS In February 2026, Mr. Chen Haiqiang was appointed as the Chairman of the Company upon approval of his qualification by the National Financial Regulatory Administration. In April 2026, Mr. Lyu Linhua was appointed as a Director and the President of the Company upon approval of his qualification by the National Financial Regulatory Administration, and Mr. Lyu Linhua ’s appointment as the Chief Compliance Officer of the Company took effect simultaneously. SENIOR MANAGEMENT In June 2026, Mr. Zhou Weixin and Mr. Pan Huafeng were appointed as the Vice Presidents of the Company upon approval of their qualifications by the National Financial Regulatory Administration.
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75 INTERIM REPORT 2026 INFORMATION ON DIRECTORS, SENIOR MANAGEMENT, EMPLOYEES AND INSTITUTIONS III. CHANGE OF DIRECTORS In February 2026, Mr. Lyu Linhua steps down from his concurrent role as the director of the Self- discipline Professional Committee of Zhejiang Association of Banks. In June 2026, Mr. Lyu Linhua also serves as the Vice Chairman of the Zhejiang Society of Finance. In March 2026, Mr. Chen Haiqiang also serves as the Vice Chairman of the Zheshang General Association. In April 2026, Mr. Chen Haiqiang also serves as a member of the 8th Council of Zhejiang Association of Banks. In May 2026, Mr. Ren Zhixiang has ceased to serve as the secretary of the Party Branch and Chairman of Zhejiang Zheneng Financial Leasing Co., Ltd. In June 2026, Mr. Ren Zhixiang has ceased to serve as the secretary of the Party Branch and Chairman of Shanghai Puneng Financial Leasing Co., Ltd. IV. CHANGE IN SHAREHOLDING OF INCUMBENT DIRECTORS AND SENIOR MANAGEMENT AND THOSE RESIGNED DURING THE REPORTING PERIOD Unit: Share Name Position Number of shares held at the beginning of the period Number of shares held at the end of the period Changes in number of shares during the reporting period Reasons for changes Chen Haiqiang Chairman, Executive Director 918,200 918,200 – – Ma Hong Executive Director 180,970 180,970 – – Jing Feng Vice President 909,000 909,000 – – Luo Feng Vice President, Secretary to the Board 909,290 909,290 – – Zhou Weixin Vice President 165,400 165,400 – – Pan Huafeng Vice President, Chief Risk Officer 170,000 170,000 – – Total 3,252,860 3,252,860 – – Note: All shares held are A shares. V. EMPLOYEES As of the end of the reporting period, the Group had 24,886 employees (including dispatched employees, outsourced personnel and employees of the subsidiary of the Company), representing a decrease of 130 as compared with that at the end of last year. Divided by the position types, 10,568 employees of the Group were categorized as marketing personnel, 1,755 employees as counter personnel, and 12,563 employees as mid-office and back-office personnel; divided by the educational levels, 6,762 obtained post-graduate degree or above (including 109 with doctorate degree), 16,794 obtained bachelor degree, and 1,330 obtained college degree or below. All of our employees participate in basic social pension insurance, and as of the end of the reporting period, 530 employees had retired from the Group.
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76 CHINA ZHESHANG BANK CO., LTD. INFORMATION ON DIRECTORS, SENIOR MANAGEMENT, EMPLOYEES AND INSTITUTIONS VI. EMPLOYEE REMUNERATION POLICY The Company ’s remuneration policy is guided by its growth strategy and the people-oriented concept with unified and classified management by adhering to the principle of marketization and in accordance with the single-level legal person system. The Company continues to improve the linkage mechanism of remuneration level with performance capabilities of individual positions and personal operational performance, and strives to set up a remuneration management system that reflects internal fairness and external competitiveness, promotes the co-growth of employees and the Company, focuses equally on incentives and restraints, gives attention to both position value, contribution and long-term incentives, and matches the change in remuneration with the market rate and economic benefits. The Company ’s remuneration policy coordinates well with the risk management system, and is matched with its size as well as the nature and complexity degree of its business. Specifically, the total amount of remuneration allocated by the Company to its branches is linked with the realization status of overall benefits by such branches and the Company takes into account various kinds of risk factors so that the branch outlets would strive for risk-adjusted value creation and that long-term performance would be improved. Furthermore, the remuneration paid to employees is linked with the responsibilities and risk degree associated with the employee ’s post and different kinds of appraisal and performance allocation methods are applied to different types of employees, which appropriately tilted to the marketing position, and relevant mechanisms for the deferment payment and claw-back of performance-based remuneration have been established in accordance with the internal control principles of prudent operations and strengthened constraints. For employees in the risk and compliance departments, their remuneration is determined by taking into account their position value, abilities to perform duties and other factors, and such remuneration is not directly related to the matters under their regulation and remains independent of other business segments. VII. EMPLOYEES TRAINING Guided by “strengthening the bank through talent cultivation ” governance strategy, the Company integrates diverse models including political and Party spirit development and Party school training. It strengthened the training of serving officers and talent reserves, focusing on key groups such as sub-branch managers, team leaders, customer managers, product managers, and campus hires to implement tiered and categorized capability building, thereby enhancing the supporting role of training in developing the talent pool. During the reporting period, the Bank held 1,060 training programs in total.
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77 INTERIM REPORT 2026 INFORMATION ON DIRECTORS, SENIOR MANAGEMENT, EMPLOYEES AND INSTITUTIONS VIII. INFORMATION ON INSTITUTIONS As of June 30, 2026, the information on the Bank ’s institutions is as follows: Region Name of institutions Business address Number of institutions Number of employees Total assets (RMB million) Yangtze River Delta Region Head office No. 1, Minxin Road, Shangcheng District, Hangzhou, Zhejiang 1 5,067 1,200,634 Small Enterprise Credit Center No. 76, Huancheng West Road, Gongshu District, Hangzhou, Zhejiang 1 59 – Fund Operation Center 30/F & 31/F, No. 1, Lane 1500, Pudong Avenue, Pudong New Area, Shanghai 1 101 980,386 Hangzhou Branch No. 288, Qingchun Road, Gongshu District, Hangzhou, Zhejiang 64 3,102 489,866 Shanghai Branch 501, 6-10/F, 23/F, 27-29/F, 32-33/F, 35-36/F, No. 1, Lane 1500, Pudong Avenue, and Room 101, 1/F, No. 1558 Pudong Avenue, Pudong New Area, Shanghai 16 1,107 222,317 Nanjing Branch No. 9, Zhongshan North Road, Nanjing 34 1,566 184,669 Ningbo Branch No. 128, Wenkang Road, No. 555, Yangfan Road, Gaoxin District, Ningbo 20 847 102,234 Suzhou Branch No. 5, Xingdun Lane, Industrial Park Zone, Suzhou 11 592 70,092 Hefei Branch Block A16, Financial Harbour Center, No. 4872, Huizhou Avenue, Binhu New District, Hefei 6 401 40,308 Shaoxing Branch No. 1418, Jinkeqiao Avenue, Keqiao District, Shaoxing 10 569 79,061 Wenzhou Branch Zheshang Bank Building, No. 388, Wanghai Road, Binjiang Street, Lucheng District, Wenzhou, Zhejiang 14 597 68,807 Jinhua Branch Floors 1-13 and 21-22, Unit 1, Building 9, Jinhua Information Economy Industrial Park, No. 1313 Liyu Road, Xiguan Subdistrict, Wucheng District, Jinhua, Zhejiang 11 464 49,840 Zhoushan Branch No. 88, Lvdao Road, Qiandao Street, Dinghai District, Zhoushan, Zhejiang 4 124 13,705 Bohai Rim Region Beijing Branch Huajia Jinbao Complex, No. 269, Chaoyangmen South Street, Dongcheng District, Beijing 24 1,169 177,142 Jinan Branch No. 801, Caoshanling South Road, Lixia District, Jinan, Shandong 22 1,131 119,334 Tianjin Branch Overseas Chinese Building, Extension No. 1, No. 92, Nanjing Road, Heping District, Tianjin 13 477 36,344 Shenyang Branch No. 467, Shifu Road, Shenhe District, Shenyang 6 336 28,108 Pearl River Delta and Economic Zone on the Western Coast of the Taiwan Straits Guangzhou Branch No. 921, No. 933, Guangzhou South Avenue, Haizhu District, Guangzhou 18 1,040 105,740 Shenzhen Branch 101 (including partial areas of Floors 1-2), Floors 3-10, 12 and 14-21, Tower A, Building 1, Zhongzhou Binhai Commercial Center, No. 9285 Binhe Avenue, Shangsha Community, Shatou Subdistrict, Futian District, Shenzhen 16 889 102,538 Fuzhou Branch Huawei Building, No. 169, Binxi Avenue, Nanjiang, Cangshan District, Fuzhou, Fujian 2 206 23,961
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78 CHINA ZHESHANG BANK CO., LTD. INFORMATION ON DIRECTORS, SENIOR MANAGEMENT, EMPLOYEES AND INSTITUTIONS Region Name of institutions Business address Number of institutions Number of employees Total assets (RMB million) Midwestern China Region Chengdu Branch Building 1, Jinjiang Spring, No. 299, Yong’an Road, Jinjiang District, Chengdu 15 645 68,304 Xi’an Branch Building 3, Taihua Jinmao Guoji, No. 16, Fenghui South Road, Yanta District, Xi’an 15 680 59,507 Chongqing Branch Block 3, No. 67, Middle Section of Huangshan Avenue, Yubei District, Chongqing 10 581 49,461 Wuhan Branch Zheshang Bank Building (Pacific Finance Plaza), No. 548, 550, 552, 556, Jianshe Avenue, Jianghan District, Wuhan, Hubei 7 410 41,698 Zhengzhou Branch No. 8 Middle Ring Road, Finance Island, Zhengzhou Area (Zhengdong), Henan Pilot Free Trade Zone, Zhengzhou, Henan 9 440 42,676 Changsha Branch 18-23/F, Block C1, G/F, 1/F (Unit 141- 142), 2/F (Unit 248-249), Block C2, Fudi Binjiang Yuefu, No. 751, Section 3, Xiaoxiang North Road, Guanshaling Street, Hunan Xiangjiang New Area 7 362 34,919 Nanchang Branch 1-2/F, 14-20/F, Block 35, Alpha X, No. 1, Xuefu Road, Honggutan New District, Nanchang, Jiangxi 4 313 39,393 Lanzhou Branch No. 1888, Nanchang Road, Chengguan District, Lanzhou 8 361 23,377 Hohhot Branch No. 8, Chilechuan Street, Saihan District, Hohhot 3 269 25,848 Guiyang Branch No. 88, Yan ’an Road Central, Yunyan District, Guiyang 2 133 13,501 Taiyuan Branch Part of 1/F and 2-7/F, Block A, No. 163 Jinyang Street, Xiaodian District, Taiyuan, Shanxi 2 143 28,816 Nanning Branch 20-21/F, Block A, China Resources Building, No. 136-1 Minzu Avenue, and No. B1028-1031, -1/F, 136-6 Xingfu Lane, Qingxiu District, Nanning, Guangxi Zhuang Autonomous Region 1 144 15,014 Overseas Institution Hong Kong Branch 15/F, Three Exchange Square, No. 8 Connaught Place, Central, Hong Kong 1 116 71,726 Subsidiary Zheyin Financial Leasing No. 368, Yan ’an Road, Gongshu District, Hangzhou, Zhejiang 1 283 94,916 CZB Wealth Management 20-22/F, Block 2, Zhejiang Chamber of Commerce Building, No. 939, Minhe Road, Ningwei Street, Xiaoshan District, Hangzhou, Zhejiang 1 162 2,655 Offset balance and intra-group elimination -1,011,097 Total 380 24,886 3,695,800
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79 INTERIM REPORT 2026 SIGNIFICANT EVENTS I. PURCHASE AND SALE AND REDEMPTION OF SECURITIES During the reporting period, the Company and its subsidiary did not purchase, sell or redeem any of the Company ’s listing securities (including sale of treasury shares). As of the end of the reporting period, the Company did not hold treasury shares. II. USE OF PROCEEDS The use of the proceeds of the Company was consistent with the purposes as committed in the prospectus of the Company. III. MATERIAL LITIGATIONS AND ARBITRATIONS The Company was involved in certain legal litigations/arbitrations in the ordinary course of business, most of which were filed by the Company for the purpose of recovering non-performing loans, and also included those arising out of customer disputes. For information regarding the case of financial loan contract dispute between the Company and Shenzhen Sensenhai Industrial Co., Ltd. ( ଉέ̹ಌಌ ʮ̡ ), Wang Bang ( ӓᏍ), Shenzhen Gaoti Tiande Technology Co., Ltd. (Ҧ ʮ̡ ), and Li Jiantang (ಆ), please refer to the Announcement of China Zheshang Bank Co., Ltd. on Litigation Matters (Announcement No.: 2025-022) and the Announcement on the Progress of China Zheshang Bank Co., Ltd. on Litigation Matters (Announcement No.: 2026-012) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). As of the end of the reporting period, there were 92 pending litigation/arbitration cases where the Company was a defendant or respondent (excluding enforcement objections and third-party cases), involving an amount of RMB155.8626 million, which are not expected to have a material adverse impact on the Company ’s business, financial position or operating results. I V . MATERIAL CONNECTED TRANSACTIONS/RELATED PARTY TRANSACTIONS (I) Connected Transactions Related to Daily Operations The Company carried out the connected transactions in accordance with the relevant requirements of regulatory authorities at home and abroad, i.e. the Administrative Measures for Related Party Transactions of Banking and Insurance Institutions (), the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange, Self-regulatory Guidelines for Listed Companies on the Shanghai Stock Exchange No. 5 – Transaction and Related Party Transaction (ˏୋ 5 ) and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The connected transactions were conducted on normal commercial terms. The terms of transactions were fair and reasonable and in the benefits of the Company and the shareholders as a whole. During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Bank ’s Credit Plan to the Related Parties of Zhejiang Provincial Innovation Investment Group (ڦ ), approving to grant maximum comprehensive credit lines of RMB15.436 billion to Zhejiang Provincial Innovation Investment Group and related companies, of which RMB300 million was considered and approved at the meeting. For details, please refer to the Announcement on Related Party Transactions of China Zheshang Bank Co., Ltd. (Number: 2026-011) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn).
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80 CHINA ZHESHANG BANK CO., LTD. SIGNIFICANT EVENTS During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Bank ’s Credit Plan to the Related Parties of Zhejiang Energy Group ( ), approving to grant maximum comprehensive credit lines of RMB12.1 billion to Zhejiang Energy Group and its related companies. For details, please refer to the Announcement on Related Party Transactions of China Zheshang Bank Co., Ltd. (Number: 2026-011) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Bank ’s Credit Plan to the Related Parties of Hengdian Group ( ), approving to grant maximum comprehensive credit lines of RMB5.67 billion to Hengdian Group and its related companies. For details, please refer to the Announcement on Related Party Transactions of China Zheshang Bank Co., Ltd. (Number: 2026-011) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Bank ’s Credit Plan to the Related Parties of Orient Securities Co., Ltd. ( ), approving to grant maximum comprehensive credit lines of RMB8.0 billion to Orient Securities Co., Ltd. (˙ᗇ ʮ̡ ). For details, please refer to the Announcement on Related Party Transactions of China Zheshang Bank Co., Ltd. (Number: 2026-011) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Bank ’s Credit Plan to the Related Parties of Zhejiang Seaport Group (), approving to grant maximum comprehensive credit lines of RMB8.19 billion to Zhejiang Seaport Group and its related companies. For details, please refer to the Announcement on Related Party Transactions of China Zheshang Bank Co., Ltd. (Number: 2026-011) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). During the reporting period, at the eighth meeting of the seventh session of the Board, the Company considered and passed the Proposal on the Pre-approval Limit of Non-Credit-type Related Party Transactions of China Zheshang Bank Co., Ltd. for 2026 (एਠვБ 2026 ϋ ), approving the pre-approval limit of deposits and other non-credit-type related party transactions for 2026 formulated by the Company. For details, please refer to the Announcement on the Pre-approval Limit of Non-Credit-type Related Party Transactions of China Zheshang Bank Co., Ltd. for 2026 (Number: 2026-010) published by the Company on the Shanghai Stock Exchange (www.sse.com.cn). The above connected transactions were entered into in the ordinary and usual course of business of the Company with connected persons on normal commercial terms or on terms more favorable to the Company. According to Rule 14A.87(1) of the Hong Kong Listing Rules, such connected transactions are fully exempt. Details of related party transactions entered into by the Company as of June 30, 2026 are set out in “Notes to Consolidated Financial Statements – Related Party Relationship and Transactions ”.
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81 INTERIM REPORT 2026 SIGNIFICANT EVENTS (II) Connected Transactions in Acquisition and Disposal of Assets or Equity During the reporting period, the Company did not conduct any connected transaction involving the acquisition and disposal of assets or equity. (III) Connected Transactions in relation to Joint External Investment During the reporting period, the Company did not conduct any connected transaction in relation to joint external investment. (IV) Connected Creditor ’s Rights and Liabilities During the reporting period, the Company did not have any non-operational connected creditor ’s rights and liabilities. V. MATERIAL CONTRACTS AND THEIR PERFORMANCE (I) Material custody, contracting and leasing During the reporting period, the Company did not have any material custody, contracting or leasing of assets of other companies that shall be disclosed, nor did there exist any custody, contracting or leasing of assets of the Company by other companies that shall be disclosed. (II) Significant guarantees Guarantee business is an ordinary business of the Company. During the reporting period, save for the financial guarantee business carried out by the Company within the business scope approved by regulatory authorities, there were no other significant guarantees that shall be disclosed. VI. MATERIAL PURCHASE, SALE OR DISPOSAL OF ASSETS AND CORPORATE MERGERS During the reporting period, there were no material purchase, sale or disposal of assets and corporate merger by the Company. VII. STOCK INCENTIVE PLAN The Company did not implement any stock incentive plan during the reporting period. VIII. EMPLOYEE STOCK OWNERSHIP SCHEME The Company did not implement an employee stock ownership scheme during the reporting period.
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82 CHINA ZHESHANG BANK CO., LTD. SIGNIFICANT EVENTS IX. INTERESTS OWNED BY THE DIRECTORS AND CHIEF EXECUTIVE IN THE COMPANY As at June 30, 2026, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (as defined in the SFO), which are required to be notified to the Company and Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, including the interests or short positions which the Directors and chief executives of the Company are taken or deemed to have under such provisions of the SFO, or which are required to be and are recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO or as otherwise required to be notified to the Company and Hong Kong Stock Exchange pursuant to the Model Code set out in Appendix C3 to the Hong Kong Listing Rules, were as follows: Name Position Class of shares Long/short position Capacity No. of Shares (shares) Percentage of the relevant class of shares in issue (%) Percentage of the total issued ordinary shares (%) Chen Haiqiang Chairman, Executive Director A Share Long position Beneficial Owner 918,200 0.0043 0.0033 Ma Hong Executive Director A Share Long position Beneficial Owner 180,970 0.0008 0.0007 X. DISCIPLINARY ACTIONS IMPOSED ON THE COMPANY OR ITS DIRECTORS, SENIOR MANAGEMENT AND SHAREHOLDERS HOLDING 5% OR MORE SHARES IN THE COMPANY No significant administrative penalty was imposed and no notice of criticism was circulated by any regulatory authority upon the Company or the Board of Directors and the Directors, Senior Management of the Company and Shareholders holding 5% or more shares during the reporting period. XI. DISCLOSURE OF UNDERTAKINGS ON THE DESIGNATED NEWSPAPERS OR WEBSITES BY THE COMPANY OR SHAREHOLDERS HOLDING 5% OR MORE SHARES Nil. XII. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY (I) Performance and Policies in relation to Environment Green is the bedrock of high-quality development. China Zheshang Bank attached great importance to green finance development, continuously refined the green finance system, strengthened the full- process management of ESG risks in credit granting, earnestly advanced green finance as a major undertaking, and contributed to green transformation and the building of a Beautiful China.
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83 INTERIM REPORT 2026 SIGNIFICANT EVENTS In terms of green finance, the Bank continued to strengthen policy guidance to direct financial resources towards green and low-carbon sectors. It enriched the Bank ’s “1+N” credit policy framework system, having cumulatively formulated special green finance policies for areas such as photovoltaics, wind power, hydropower, nuclear power, natural gas, power supply, power transmission and distribution equipment, sewage treatment and waste disposal. It innovated product and service offerings, building a diversified “Green+ ” product and service system covering green credit, green bonds, green bills, green leasing, green supply chain and green consumption, comprehensively meeting the differentiated financial needs of green industries and low-carbon transformation entities. As at the end of the reporting period, the Bank ’s green loans 1 balance was RMB249.535 billion, up 0.95%. From an industry perspective, the balance allocated to green upgrading of infrastructure accounted for 58.49%, the balance allocated to energy saving and carbon reduction industries accounted for 9.53%, the balance allocated to ecological conservation, restoration and utilization accounted for 7.15%, and the balance allocated to resource recycling industries accounted for 6.32%. The credit structure continued to improve. In terms of green operation, the Bank actively promoted its own green and low-carbon transformation. It continuously deepened the electronization of seals and vouchers, built the “Zhe e-Service ” ( एe፬) remote operation service system to reduce customers ’ travel-related carbon footprint, and advanced the in-depth implementation of energy-saving operation plans for office premises. It gave priority to purchasing energy-saving and environmentally friendly products, regularly conducted carbon inventory checks, promoted paperless office practices, encouraged green commuting among employees, and continued to improve the eco-efficiency of operations. During the reporting period, the Bank did not violate any environmental regulation. (II) Support for Rural Revitalization China Zheshang Bank actively responded to the rural revitalization strategy, and constantly explored new models of financial services for rural revitalization. It included industries related to rural revitalization among its priority-supported industries, and guided the increase of credit support for rural revitalization industries. As at the end of the reporting period, the Bank ’s balance of agriculture-related loans was RMB175.220 billion; the inclusive agriculture-related loans were RMB42.126 billion. It solidly advanced paired assistance under the Zhejiang-Sichuan east-west collaboration, helping cultivate characteristic industries and improve local livelihoods; further promoted the education assistance of “one bank for one school ”, and provided paired assistance to 34 schools in mountainous and island counties of Zhejiang, as well as in Guizhou, Sichuan and Gansu. It organized special activities such as short-term teaching support by employees and eye care and dental care campaigns, comprehensively improving the campus environment, teaching quality and students ’ mental outlook, benefiting over ten thousand students. Note 1 Green credit data was retrospectively adjusted at the beginning of 2026 in accordance with the People ’s Bank of China’s requirements on green credit balance carry-over.
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84 CHINA ZHESHANG BANK CO., LTD. SIGNIFICANT EVENTS (III) Protection of Consumer Rights During the reporting period, the Bank attached great importance to the protection of consumer rights, adhered to a customer-centric approach, and committed to enhancing customer experience and service quality and efficiency. It promoted the full integration of consumer protection culture and philosophy into corporate culture and strategic planning, and convened multiple thematic work meetings to reinforce the principal responsibility for consumer protection management; intensified the pre-emptive risk prevention and control of consumer protection reviews, conducting reviews on over 880 items, fully covering policies and systems, notices and announcements, and marketing materials related to products and services; optimized the complaint management mechanism, strengthened the development of supporting mechanisms for diversified dispute resolution, and handled complaints in a timely and appropriate manner; organized 5,332 online and offline education and publicity activities such as “3•15”, “5•15”, and “Financial Knowledge Popularization Month ”, and also leveraged the “Wuyue Cup ” to innovatively carry out “sports + consumer protection ” financial education and publicity, reaching nearly one million people offline and 33 million people through live streaming. For more information about social responsibility and sustainable development of the Bank, please refer to the 2025 Sustainable Development Report of CZBank and the Company Overview – Social Responsibility section on the official website of the Company (www.czbank.com). XIII. REVIEW OF THE INTERIM RESULTS The 2026 interim report of the Company prepared under the China Accounting Standards and the International Financial Reporting Standards has been reviewed by KPMG Huazhen LLP and KPMG in accordance with China Standards on Review Engagements and International Standard on Review Engagements, respectively. The Board of Directors and the Audit Committee of the Board of Directors of the Company have reviewed and approved the results and financial report of the Company for the period ended June 30, 2026. XIV. PUBLISHING THE INTERIM REPORT The English and Chinese version of the interim report prepared by the Company in accordance with the International Financial Reporting Standards and Hong Kong Listing Rules will be available on the website of Hong Kong Stock Exchange and the Company ’s website. For any inconsistency between the two versions, the Chinese version shall prevail. The Chinese version of the semi-annual report prepared by the Company in accordance with the China Accounting Standards and the Rules of the CSRC for the Preparation of Semi-annual Reports will be available on the website of the Shanghai Stock Exchange and the Company ’s website.
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China Zheshang Bank Co., Ltd. Interim Financial Report for the six months ended 30 June 2026 (Prepared under IFRS® Accounting Standards)
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Review Report To the board of directors of China Zheshang Bank Co., Ltd. (Incorporated in the People’s Republic of China with limited liability) Introduction We have reviewed the interim financial report, which comprise the condensed consolidated statement of financial position of China Zheshang Bank Co., Ltd. (“the Bank”) and its subsidiaries (“the Group”) as of 30 June 2026 and the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the six-month period then ended, and explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of an interim financial report to be in compliance with the relevant provisions thereof and the IAS 34, Interim Financial Reporting as issued by the International Accounting Standards Board . The directors are responsible for the preparation and presentation of this interim financial report in accordance with IAS 34, Interim Financial Reporting. Our responsibility is to express a conclusion, based on our review, on this interim financial report and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity as issued by the International Auditing and Assurance Standards Board . A review of interim financial report consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Stand ards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim financial report as at 30 June 2026 is not prepared, in all material respects, in accordance with IAS 34, Interim Financial Reporting. Certified Public Accountants 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong 26 August 2026 KPMG 8th Floor, Prince's Building Central, Hong Kong G P O Box 50, Hong Kong Telephone +852 2522 6022 Fax +852 2845 2588 Internet kpmg.com/cn KPMG, a Hong Kong (SAR) partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 1 - CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the six months ended 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) The six months ended 30 June Notes 2026 2025 (Unaudited) (Unaudited) Interest income 48,413 52,652 Interest expense (26,061) (29,606) NET INTEREST INCOME III.1 22,352 23,046 ------------------- ------------------- Fee and commission income 5,030 3,108 Fee and commission expense (2,473) (815) NET FEE AND COMMISSION INCOME III.2 2,557 2,293 ------------------- ------------------- Net trading gains III.3 2,919 2,514 Net gains on financial investments III.4 4,279 4,363 Other operating income III.5 1,409 1,049 ------------------- ------------------- OPERATING INCOME 33,516 33,265 ------------------- ------------------- Operating expenses III.6 (10,376) (10,270) Expected credit losses III.7 (13,013) (13,300) Impairment losses on other assets (80) - ------------------- ------------------- PROFIT BEFORE TAXATION 10,047 9,695 Income tax expense III.8 (1,897) (1,723) PROFIT FOR THE PERIOD 8,150 7,972 ------------------- ------------------- Attributable to: Shareholders of the Bank 7,824 7,667 Non-controlling interests 326 305 The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 2 - CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED) For the six months ended 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) The six months ended 30 June Notes 2026 2025 (Unaudited) (Unaudited) Other comprehensive income, net of tax Items that will not be reclassified to profit or loss: Changes in the fair value of financial investments designated to be measured at fair value through other comprehensive income 10 13 Items that may be reclassified to profit or loss: Changes in the fair value of financial assets measured at fair value through other comprehensive income 151 (1,411) Allowance for ECLs of financial assets measured at fair value through other comprehensive income (172) (306) Exchange difference from the translation of foreign operations (431) (345) Other comprehensive income, net of tax (442) (2,049) ------------------- ------------------- Total comprehensive income 7,708 5,923 Total comprehensive income attributable to: Shareholders of the Bank 7,385 5,619 Non-controlling interests 323 304 Earnings per share attributable to ordinary shareholders of the Bank: III.9 Basic (RMB yuan) 0.28 0.28 Diluted (RMB yuan) 0.28 0.28 The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 3 - CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) Notes 30 June 2026 31 December 2025 (Unaudited) (Audited) ASSETS Cash and balances with the central bank III.10 174,395 125,704 Precious metals 114,593 80,929 Deposits with banks and other financial institutions III.11 40,364 73,583 Placements with banks and other financial institutions III.12 9,264 5,952 Derivative financial assets III.13 22,160 27,551 Financial assets purchased under resale agreements III.14 165,747 90,599 Loans and advances to customers III.15 1,968,457 1,883,237 Financial investments III.16 - Financial assets measured at fair value through profit or loss 255,382 229,795 - Financial assets measured at amortised cost 487,879 454,851 - Financial assets measured at fair value through other comprehensive income 312,792 366,861 Fixed assets III.18 38,000 36,604 Right-of-use assets III.19 3,986 4,209 Intangible assets III.20 1,035 1,021 Deferred tax assets III.21 21,429 21,667 Other assets III.22 80,317 78,529 TOTAL ASSETS 3,695,800 3,481,092 LIABILITIES Due to the central bank III.24 39,614 102,206 Deposits from banks and other financial institutions III.25 400,643 344,374 Placements from banks and other financial institutions III.26 113,572 117,459 Financial liabilities at fair value through profit or loss III.27 163,867 55,960 Derivative financial liabilities III.13 31,558 20,769 Financial assets sold under repurchase agreements III.28 59,312 53,209 Customer deposits III.29 2,177,297 2,043,466 Employee benefits payable III.30 4,708 5,996 Taxes payable III.31 487 1,912 Provisions III.32 1,051 884 Debt securities issued III.33 474,003 512,953 Lease liabilities III.19 2,518 2,691 Other liabilities III.34 15,725 11,878 TOTAL LIABILITIES 3,484,355 3,273,757 ----- ------------------ ------------------ The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 4 - CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) At 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) Notes 30 June 2026 31 December 2025 (Unaudited) (Audited) EQUITY Share capital III.35 27,464 27,464 Other equity instruments III.36 24,995 24,995 - Perpetual bond 24,995 24,995 Capital reserve III.37 38,570 38,570 Other comprehensive income III.38 2,189 2,628 Surplus reserve III.39 15,231 15,231 Statutory general reserve III.40 39,494 37,919 Retained earnings III.41 58,712 56,061 Total equity attributable to shareholders of the Bank 206,655 202,868 Non-controlling interests 4,790 4,467 TOTAL EQUITY 211,445 207,335 ---------------------------- ------------------------ TOTAL LIABILITIES AND EQUITY 3,695,800 3,481,092 The interim financial report were approved by the board of directors on 26 August 2026: Chen Haiqiang Lyu Linhua Jing Feng Zhang Jian Chairman President Principal in-charge of Finance Director of the Financial Department The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 5 - CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) Attributable to shareholders of the Bank Notes Share capital Other equity instruments Capital reserve Other comprehensive income Surplus reserve Statutory general reserve Retained earnings Subtotal Non- Controlling interests Total equity Balance at 1 January 2026 27,464 24,995 38,570 2,628 15,231 37,919 56,061 202,868 4,467 207,335 Changes in equity for the period 1.Total comprehensive income - Profit for the period - - - - - - 7,824 7,824 326 8,150 - Other comprehensive income - - - (439) - - - (439) (3) (442) 2.Appropriation of profits - Appropriation to statutory general reserve III.40 - - - - - 1,575 (1,575) - - - - Distributions to ordinary shareholders III.41(1) - - - - - - (3,598) (3,598) - (3,598) Balance at 30 June 2026 27,464 24,995 38,570 2,189 15,231 39,494 58,712 206,655 4,790 211,445 The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 6 - CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the six months ended 30 June 2025 (Unaudited) (In RMB millions, unless otherwise stated) Attributable to shareholders of the Bank Notes Share capital Other equity instruments Capital reserve Other comprehensive income Surplus reserve Statutory general reserve Retained earnings Subtotal Non- Controlling interests Total equity Balance at 1 January 2025 27,464 24,995 38,570 6,347 14,012 35,119 52,396 198,903 3,840 202,743 Changes in equity for the period 1.Total comprehensive income - Profit for the period - - - - - - 7,667 7,667 305 7,972 - Other comprehensive income - - - (2,048) - - - (2,048) (1) (2,049) 2.Appropriation of profits - Appropriation to statutory general reserve - - - - - 2,342 (2,342) - - - - Distributions to ordinary shareholders III.41(1) - - - - - - (4,284) (4,284) - (4,284) Balance at 30 June 2025 27,464 24,995 38,570 4,299 14,012 37,461 53,437 200,238 4,144 204,382 The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 7 - CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the year ended 31 December 2025 (Audited) (In RMB millions, unless otherwise stated) Attributable to equity holders of the Bank Notes Share capital Other equity instruments Capital reserve Other comprehensive income Surplus reserve Statutory general reserve Retained earnings Subtotal Non- Controlling interests Total equity Balance at 1 January 2025 27,464 24,995 38,570 6,347 14,012 35,119 52,396 198,903 3,840 202,743 Changes in equity for the year 1.Total comprehensive income - Profit for the year - - - - - - 12,931 12,931 630 13,561 - Other comprehensive income - - - (3,719) - - - (3,719) (3) (3,722) 2.Appropriation of profits - Appropriation to surplus reserve III.39 - - - - 1,219 - (1,219) - - - - Appropriation to statutory general reserve III.40 - - - - - 2,800 (2,800) - - - - Distributions to ordinary shareholders III.41(1) - - - - - - (4,284) (4,284) - (4,284) - Distributions to perpetual bond holders III.41(2) - - - - - - (963) (963) - (963) Balance at 31 December 2025 27,464 24,995 38,570 2,628 15,231 37,919 56,061 202,868 4,467 207,335 The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 8 - CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) For the six months ended 30 June Note 2026 2025 (Unaudited) (Unaudited) Cash flows from operating activities: Profit before taxation 10,047 9,695 Adjustments for: - Expected credit losses 13,013 13,300 - Other assets impairment losses 80 - - Depreciation and amortisation 1,655 1,337 - Interest income from financial investments (10,294) (10,923) - Net investment income (4,430) (6,031) - Net (gains) / losses from changes in fair value (1,697) 615 - Net foreign exchange losses / (gains) 44 (154) - Net losses on disposal of fixed assets 2 - - Interest expense on debt securities issued 5,099 6,042 - Interest expense on lease liabilities 45 51 - Deferred tax expense 242 (588) Net changes in operating assets and operating liabilities: Net (increase) / decrease in balances with the central bank (2,443) 1,906 Net decrease / (increase) in deposits with banks and other financial institutions 29,472 (6,692) Net (increase) / decrease in placements with banks and other financial institutions (1,382) 898 Net (increase) / decrease in financial assets purchased under resale agreements (499) 1,496 Net increase in loans and advances to customers (99,433) (44,498) Net increase in financial assets held for trading (22,115) (40,763) Net decrease in other operating assets 3,116 7,305 Net decrease in due to the central bank (62,670) (5,696) Net increase / (decrease) in deposits from banks and other financial institutions 55,513 (87,414) Net increase / (decrease) in placements from banks and other financial institutions 3,154 (2,160) Net increase / (decrease) in financial assets sold under repurchase agreements 6,085 (9,486) Net increase in customer deposits 138,115 140,834 Net increase / (decrease) in other operating liabilities 63,977 (10,392) Net cash flows generated from / (used in) operating activities before taxation 124,696 (41,318) Income tax paid (2,374) (2,024) Net cash generated from / (used in) operating activities 122,322 (43,342) ------------------------- ------------------------- The notes on pages 10 to 119 form part of this interim financial report.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 - 9 - CONDENSED CONSOLIDATED CASH FLOW STATEMENT (CONTINUED) For the six months ended 30 June 2026 (Unaudited) (In RMB millions, unless otherwise stated) For the six months ended 30 June Note 2026 2025 (Unaudited) (Unaudited) Cash flows from investing activities: Proceeds from disposal of fixed assets 38 35 Payment for acquisition of fixed assets, intangible assets and other long-term assets (2,658) (6,750) Investment returns received 18,424 17,048 Proceeds from disposal of investments 1,279,615 1,266,439 Payment for acquisition of investments (1,250,874) (1,218,633) Net cash generated from investing activities 44,545 58,139 ----------------------- ----------------------- Cash flows from financing activities: Proceeds from issuance of debt securities 152,366 249,634 Repayments of principal on debt securities issued (190,737) (280,599) Repayments of interest on debt securities issued (5,678) (6,109) Payment for dividend distribution (2,822) (3,361) Repayments of principal element of lease liabilities (330) (364) Repayments of interest element of lease liabilities (45) (51) Net cash used in financing activities (47,246) (40,850) ------------------- ------------------- Effect of exchange rate changes on cash and cash equivalents (487) (217) ------------------- ------------------- Net increase / (decrease) in cash and cash equivalents 119,134 (26,270) Cash and cash equivalents at the beginning of the period 133,463 133,635 Cash and cash equivalents at the end of the period III.42 252,597 107,365 Net cash flows from operating activities include: Interest received 37,350 41,103 Interest paid (24,464) (20,795) The notes on pages 10 to 119 form part of this interim financial report.
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- 10 - NOTES TO THE INTERIM FINANCIAL REPORT (In RMB millions, unless otherwise stated) I General Information China Zheshang Bank Co., Ltd. (the “Bank”) is a national joint -stock commercial bank established on the basis of the original Zhejiang Commercial Bank with the approval from the original China Banking Regulatory Commission (hereinafter referred to as “the original CBRC”) and the original Zhejiang Commission of China Banking Regulatory Commission (Zhe Yin Jian Fu [2004] No. 48 ). The Bank obtained the Finance License (No. B0010H133010001) with the approval from the original CBRC. On 26 July 2004, the Bank completed the change of registration in Zhejiang Administration for Industry and Commerce and obtained the Business License (No. 330000000013295) in Zhejiang Province, the People’s Republic of China (the “PRC”). On 7 November 2016, the Bank obtained the Uniform Social Credit Code (No.91330000761336668H). The registered address is 1788 Hongning Road, Xiaoshan District, Hangzhou, Zhejiang Province. The Bank was listed on the Hong Kong Stock Exchange on 30 March 2016 with stock code of 2016, the Bank was listed on the Shanghai Stock Exchange on 26 November 2019 with stock code of 601916. At 30 June 2026, the Bank has established 377 branches in 22 provinces ( autonomous regions or municipalities) and Hong Kong in China, including 72 branches (30 of them are tier -one branches), 2 branch-level specialized institution and 303 sub-branches. The principal activities of the Bank include corporate and retail banking, treasury business, and other banking service. Zhejiang Zheyin Financial Leasing Co., Ltd. (“Zheyin Financial Leasing”) was established on 18 January 2017. At 30 June 2026, the registered capital of Zheyin Financial Leasing is RMB4 billion. Since the Bank has control over Zheyin Financial Leasing, the Bank has included it in the scope of the consolidated financial statements. Zheyin Wealth Management Co., Ltd. (“Zheyin Wealth Management”) was established on 27 January 2025. At 30 June 2026, the registered capital of Zheyin Wealth Management is RMB2 billion. Since the Bank has control over Zheyin Wealth Management, the Bank has included it in the scope of the consolidated financial statements. The Bank and its subsidiaries are collectively referred to as “the Group”.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 11 - II Basis of Preparation and Principal Accounting Policies The interim financial report has been prepared on a going concern basis. The interim financial report has been prepared in accordance with IAS 34, Interim Financial Reporting, and disclosure requirements of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and do not include all information and di sclosures disclosed in the annual financial statements. The interim financial report should be read in conjunction with the Group’s last annual consolidated financial statements at and for the year ended 31 December 2025. This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2025 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for a full set of financial statements prepared in accordance with IFRS Accounting Standards. The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates. The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied in the preparation of the consolidated financial statements for the year ended 31 December 2025. 1 Standards and Amendments that are Effective in the Current Accounting Period The following IFRS Accounting Standards and amendments issued by the IASB take effect for the current accounting period beginning on or after 1 January 2026: • Amendments to IFRS 9 and IFRS 7, Classification and Measurement of Financial Instruments • Annual Improvements to IFRS Accounting Standards , Annual Improvements to IFRS Accounting Standards —Volume 11 The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Impacts of the adoption of these IFRS Accounting Standards and amendments have no material impact on the consolidated financial statements. 2 Standards and Amendments that are not yet Effective in the Current Accounting Period Effective date IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027 IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027 The Group has not early adopted the above new and amendments in the consolidated financial statements. The Group anticipates that the adoption of these standards and amendments will have no material impact on the consolidated financial statements in the foreseeable future.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 12 - III Notes to the Consolidated Financial Statements 1 Net Interest Income For the six months ended 30 June 2026 2025 Interest income: Loans and advances to customers - Corporate loans and advances 24,540 25,825 - Personal loans and advances 8,493 10,523 - Discounted bills 1,094 1,263 Financial investments - Financial assets measured at amortised cost (“AC”) 5,439 5,889 - Financial assets measured at fair value through other comprehensive income (“FVOCI”) 4,855 5,034 Deposits and placements with banks and other financial institutions and financial assets purchased under resale agreements 1,442 1,568 Balances with the central bank 878 876 Finance lease receivables 1,672 1,674 Total 48,413 52,652 ------------------- ------------------- Interest expense: Customer deposits - Corporate customers (12,068) (14,483) - Personal customers (3,672) (3,481) Deposits and placements from banks and other financial institutions and financial assets sold under repurchase agreements (4,781) (4,641) Debt securities issued (5,099) (6,042) Due to the central bank (441) (908) Others - (51) Total (26,061) (29,606) ------------------- ------------------- Net interest income 22,352 23,046
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 13 - 2 Net Fee and Commission Income For the six months ended 30 June 2026 2025 Fee and commission income: Agency and entrustment service 3,288 1,345 Settlement and clearing business 568 378 Commitment and guarantee service 407 485 Custodian and other fiduciary service 375 366 Underwriting and consultation service 240 393 Fees from bank cards 114 85 Others 38 56 Total 5,030 3,108 Fee and commission expense (2,473) (815) Net fee and commission income 2,557 2,293 3 Net Trading Gains For the six months ended 30 June 2026 2025 Net gains arising from financial instruments measured at FVTPL 3,177 1,449 Exchange gains and related derivatives 55 979 Precious metals and related derivatives 13 359 Other derivatives and hedged items (326) (273) Total 2,919 2,514 4 Net Gains on Financial Investments For the six months ended 30 June 2026 2025 Net gains arising from financial assets measured at FVOCI 2,620 2,769 Net gains arising from financial assets measured at AC 1,621 1,637 Other investment gains / (losses) 38 (43) Total 4,279 4,363
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 14 - 5 Other Operating Income For the six months ended 30 June 2026 2025 Operating lease income 992 880 Government grants 59 75 Other miscellaneous income 358 94 Total 1,409 1,049 6 Operating Expense For the six months ended 30 June Notes 2026 2025 Staff costs (1) 6,110 6,324 General and administrative expenses 2,172 2,018 Depreciation and amortisation 1,022 1,016 Taxes and surcharges 576 367 Operating lease expenses 459 364 Donations 5 31 Others (2) 32 150 Total 10,376 10,270 (1) Staff costs For the six months ended 30 June 2026 2025 Salaries, bonuses and allowances 4,396 4,665 Other social insurance and benefit costs 463 483 Housing funds 359 329 Pension costs - defined contribution plans 798 743 Labor union fee and staff education fee 94 104 Total 6,110 6,324 (2) During reporting period, the expense relating to short-term leases and leases of low-value assets which were simplified processed by the Group are not significant.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 15 - 7 Expected Credit Losses (“ECL”s) For the six months ended 30 June 2026 2025 Deposits with banks and other financial institutions (3) 1 Placements with banks and other financial institutions 5 (3) Financial assets purchased under resale agreements (17) (11) Loans and advances to customers - measured at AC 14,508 10,476 - measured at FVOCI (51) 303 Financial investments - measured at AC (2,126) 1,708 - measured at FVOCI 1 95 Finance lease receivables 392 449 Other assets 135 249 Off-balance sheet items 169 33 Total 13,013 13,300 8 Income Tax Expense For the six months ended 30 June Note 2026 2025 Current income tax expense 1,655 2,311 Deferred tax expense III.21(2) 242 (588) Total 1,897 1,723 Current income tax is calculated based on the statutory rate of 25% of the taxable income of the Group in accordance with PRC income tax regulations.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 16 - The difference between the actual income tax charged in the profit or loss and the amounts which would result from applying the statutory tax rate to profit before taxation can be reconciled as follows: Notes For the six months ended 30 June 2026 2025 Profit before taxation 10,047 9,695 Tax calculated at statutory tax rate 2,512 2,424 Effects of non-taxable income (1) (1,033) (1,626) Effects of non-deductible expenses (2) 418 925 Income tax expense 1,897 1,723 (1) The non-taxable income mainly represents interest income arising from treasury bonds and municipal government bonds, and dividend income arising from fund investments, which are income tax free in accordance with the PRC tax regulations. (2) The non -deductible expenses mainly include the non -deductible write -off losses assessed and confirmed item by item, and certain expenses, which are not deductible before taxation according to PRC tax regulations. 9 Basic and Diluted Earnings Per Share Basic earnings per share are calculated by dividing the net profit attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding. During reporting period , the Group possesses no share with potential dilution effect hence there’s no difference between basic and diluted earnings per share. For the six months ended 30 June 2026 2025 Consolidated net profit attributable to shareholders of the Bank 7,824 7,667 Less: Net profit attributable to other equity instruments holders of the Bank - - Consolidated net profit attributable to ordinary shareholders of the Bank 7,824 7,667 Weighted average number of ordinary shares (in millions of shares) 27,464 27,464 Basic and diluted earnings per share (RMB yuan / share) 0.28 0.28
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 17 - 10 Cash and Balances with the Central Bank Notes 30 June 2026 31 December 2025 Cash 767 869 ------------------ ------------------ Balances with the central bank - Statutory deposit reserves (1) 112,453 108,579 - Surplus deposit reserves (2) 59,142 12,790 - Foreign exchange risk reserves (3) 482 3,410 - Fiscal deposits (4) 1,499 2 Subtotal 173,576 124,781 ------------------ ------------------ Interest accrued 52 54 ------------------- ------------------- Total 174,395 125,704 (1) The Group is required to place statutory deposit reserves with the People’s Bank of China (the “PBOC”). These statutory deposit reserves cannot be used for the daily business operation of the Group. At the balance sheet date, rates for statutory deposit reserves were as follows: 30 June 2026 31 December 2025 Statutory deposit reserves rate for deposits denominated in RMB 5.50% 5.50% Statutory deposit reserves rate for deposits denominated in foreign currencies 4.00% 4.00% The statutory deposit reserves ratios of the subsidiar ies of the Bank complied with the requirement of the PBOC. (2) Surplus deposit reserves includes the funds deposited in the People's Bank of China for the purpose of capital settlement and other non restrictive funds. (3) At 30 June 2026, the foreign exchange risk reserve ratio of the Bank is 0% (31 December 2025: 20%). (4) Financial deposits refer to the funds originated from financial institutions and deposited in the People's Bank of China according to regulations, which cannot be used for the daily business operation of the Group.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 18 - 11 Deposits with Banks and Other Financial Institutions Analyzed by location and type of counterparties 30 June 2026 31 December 2025 In Chinese Mainland - Banks 25,554 44,043 - Other financial institutions 10,364 26,766 Outside Chinese Mainland - Banks 4,338 2,550 - Other financial institutions 72 122 Interest accrued 36 105 Gross amount 40,364 73,586 Less: Allowance for ECLs (Note III.23) - (3) Carrying amount 40,364 73,583 At 3 0 June 2026, the Group and the Bank deposited RMB 10,399 million and RMB 10,365 million respectively in margin funds with banks in the PRC with restriction in use, respectively (At 31 December 2025, amounting to RMB26,848 million and RMB26,767 million, respectively). 12 Placements with Banks and Other Financial Institutions Analyzed by location and type of counterparties 30 June 2026 31 December 2025 In Chinese Mainland - Banks 1,009 - - Other financial institutions 2,130 877 Outside Chinese Mainland - Banks 2,717 1,572 - Other financial institutions 3,359 3,459 Interest accrued 63 53 Gross amount 9,278 5,961 Less: Allowance for ECLs (Note III.23) (14) (9) Carrying amount 9,264 5,952
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 19 - 13 Derivative Financial Instruments and hedge accounting The Group’s derivative financial instruments include interest rate derivatives, currency derivatives, precious metal and other derivatives. At the balance sheet date, the derivative financial instruments held by the Group are set out below: At 30 June 2026 Notional amount Fair value Derivative financial assets Derivative financial liabilities Interest rate derivatives 1,459,551 4,113 (4,192) Currency derivatives 1,320,036 11,513 (12,586) Precious metal and other derivatives 224,384 6,534 (14,780) Total 3,003,971 22,160 (31,558) Derivatives designated as hedging Instruments: - Interest rate derivatives 5,400 - - At 31 December 2025 Notional amount Fair value Derivative financial assets Derivative financial liabilities Interest rate derivatives 1,506,310 4,477 (4,525) Currency derivatives 1,767,804 11,788 (12,017) Precious metal and other derivatives 274,088 11,286 (4,227) Total 3,548,202 27,551 (20,769) Derivatives designated as hedging Instruments: - Interest rate derivatives 7,950 35 - Under the daily mark-to-market and settlement arrangement, any gains or losses of the Group’s position in interest rate swap contracts settled in the Shanghai Clearing House, precious metals futures, precious metals (T+D) and standard bond forward were set tled daily and the corresponding receipts and payments were included in the guaranteed deposits.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 20 - (1) Fair value hedges The Group uses interest rate swap instruments to hedge against changes in the fair value of fixed -rate RMB bonds measured at AC. By hedging its exposure to interest rate changes using derivative financial instruments, the Group also faces credit risk from derivative counterparties, which is not offset by the hedged items. The Group effectively controls the credit risk of derivative counterparties by transacting with counterparties with higher credit ratings. Prior to adopting fair value hedge accounting, the Group assesses, through qualitative or quantitative analysis, whether there is an economic relationship between the hedged items and the hedging instruments. In evaluating the existence of an economic rela tionship, the Group assesses whether the changes in the fair value of the hedged items and the hedging instruments, resulting from the hedged risks, are similar. Further, the Group uses sensitivity analysis to assess the correlation between the changes in the values of the hedging instruments and the hedged items to support this qualitative assessment. In these hedging relationships, the primary sources of hedge ineffectiveness are: - The impact of counterparties on the fair value of interest rate swaps, including the influence of counterparties' credit risk and the Group's own credit risks on the fair value of interest rate swaps, which is not reflected in the fair value of the hedged items due to interest rate changes. - The difference in maturity dates between the interest rate swaps and the bonds. During the reporting period, gains and losses arising from the hedge ineffectiveness recognized in the net income from trading activities were not significant.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 21 - 14 Financial Assets Purchased Under Resale Agreements (1) Analyzed by location and type of counterparties 30 June 2026 31 December 2025 In Chinese Mainland - Banks 15,688 3,879 - Other financial institutions 150,044 86,714 Interest accrued 36 44 Gross amount 165,768 90,637 Less: Allowance for ECLs (Note III.23) (21) (38) Carrying amount 165,747 90,599 (2) Analyzed by type of collateral 30 June 2026 31 December 2025 Bills 5,597 626 Bonds - Financial bonds 134,398 66,949 - Government bonds 25,737 23,018 Interest accrued 36 44 Gross amount 165,768 90,637 Less: Allowance for ECLs (Note III.23) (21) (38) Carrying amount 165,747 90,599
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 22 - 15 Loans and Advances to Customers 30 June 2026 31 December 2025 Loans and advances to customers measured at AC 1,649,620 1,575,832 Loans and advances to customers measured at FVOCI 318,837 307,405 Total 1,968,457 1,883,237 (1) Analyzed by classification and nature Note 30 June 2026 31 December 2025 Loans and advances to customers measured at AC Corporate loans and advances 1,250,187 1,143,579 ----------------- ----------------- Personal loans and advances - Residential mortgage loans 187,521 186,339 - Personal business loans 144,013 157,823 - Personal consumer loans 100,020 118,357 Personal loans and advances 431,554 462,519 --------------------- --------------------- Loans and advances to customers measured at FVOCI Corporate loans and advances 186,579 187,880 Discounted bills (a) 129,828 116,916 Personal loans and advances - Personal business loans 1,635 1,889 -------------------- --------------------- Subtotal 1,999,783 1,912,783 Fair value changes 783 706 Interest accrued 9,549 9,222 Gross amount 2,010,115 1,922,711 Less: Allowance for ECLs (Note III.23) (41,658) (39,474) Carrying amount 1,968,457 1,883,237 (a) At balance sheet date, part of discounted bills are pledged for secured liabilities, please refer to Note VIII.1.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 23 - (2) Analyzed by type of collateral 30 June 2026 31 December 2025 Amount Proportion Amount Proportion Unsecured loans 468,891 23.45% 432,182 22.59% Guaranteed loans 570,908 28.55% 490,627 25.65% Collateralized loans - Mortgage loans 763,805 38.19% 800,607 41.86% - Pledged loans 66,351 3.32% 72,451 3.79% Discounted bills 129,828 6.49% 116,916 6.11% Subtotal 1,999,783 100.00% 1,912,783 100.00% Fair value changes 783 706 Interest accrued 9,549 9,222 Gross amount 2,010,115 1,922,711 Less: Allowance for ECLs (Note III.23) (41,658) (39,474) Carrying amount 1,968,457 1,883,237
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 24 - (3) Overdue loans and advances to customers analyzed by overdue period (fair value changes and interest accrued excluded) 30 June 2026 Overdue within 3 months (inclusive) Overdue between 3 months and 1 year (inclusive) Overdue between 1 year and 3 years (inclusive) Overdue more than 3 years Total Unsecured loans 1,582 3,656 3,487 215 8,940 Guaranteed loans 2,038 1,522 917 377 4,854 Collateralized loans - Mortgage loans 9,046 8,038 4,523 308 21,915 - Pledged loans 577 187 1,129 116 2,009 Total overdue loans 13,243 13,403 10,056 1,016 37,718 31 December 2025 Overdue within 3 months (inclusive) Overdue between 3 months and 1 year (inclusive) Overdue between 1 year and 3 years (inclusive) Overdue more than 3 years Total Unsecured loans 2,527 5,016 1,487 322 9,352 Guaranteed loans 850 1,188 1,595 370 4,003 Collateralized loans - Mortgage loans 6,912 8,269 3,991 453 19,625 - Pledged loans 95 1,396 92 150 1,733 Total overdue loans 10,384 15,869 7,165 1,295 34,713 Overdue loans represent loans of which the whole or part of the principal or interest has been overdue for one day or more.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 25 - (4) Analyzed by assessment of allowance for ECLs (a) Allowance for ECLs of loans and advances to customers measured at AC (interest accrued excluded) 30 June 2026 Stage 1 Stage 2 Stage 3 Total Loans and advances to customers measured at AC - Corporate loans and advances 1,173,750 58,918 17,519 1,250,187 - Personal loans and advances 405,870 13,347 12,337 431,554 Gross amount 1,579,620 72,265 29,856 1,681,741 Less: Allowance for ECLs (Note III.23) (9,877) (13,232) (18,549) (41,658) Carrying amount 1,569,743 59,033 11,307 1,640,083 31 December 2025 Stage 1 Stage 2 Stage 3 Total Loans and advances to customers measured at AC - Corporate loans and advances 1,074,622 50,620 18,337 1,143,579 - Personal loans and advances 439,780 11,718 11,021 462,519 Gross amount 1,514,402 62,338 29,358 1,606,098 Less: Allowance for ECLs (Note III.23) (10,430) (11,601) (17,443) (39,474) Carrying amount 1,503,972 50,737 11,915 1,566,624
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 26 - (b) Allowance for ECLs of loans and advances to customers measured at FVOCI (fair value changes and interest accrued excluded) 30 June 2026 Stage 1 Stage 2 Stage 3 Total Loans and advances to customers measured at FVOCI - Corporate loans and advances 186,266 244 69 186,579 - Discounted bills 129,761 54 13 129,828 - Personal loans and advances 919 351 365 1,635 Total 316,946 649 447 318,042 Allowance for ECLs (Note III.23) (426) (66) (258) (750) 31 December 2025 Stage 1 Stage 2 Stage 3 Total Loans and advances to customers measured at FVOCI - Corporate loans and advances 187,537 113 230 187,880 - Discounted bills 116,886 17 13 116,916 - Personal loans and advances 1,195 335 359 1,889 Total 305,618 465 602 306,685 Allowance for ECLs (Note III.23) (590) (71) (319) (980)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 27 - (5) Movements of the allowance for ECLs of loans and advances to customers (a) Movements of the allowance for ECLs of loans and advances to customers measured at AC For the six months ended 30 June 2026 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2026 10,430 11,601 17,443 39,474 Transfer - to Stage 1 777 (681) (96) - - to Stage 2 (902) 1,000 (98) - - to Stage 3 (73) (2,214) 2,287 - (Reversal) / charge (Note III.7) (351) 3,526 11,333 14,508 Write-off and transfer out - - (13,074) (13,074) Recoveries of loans and advances previously written off - - 820 820 Other movements (4) - (66) (70) Balance at 30 June 2026 9,877 13,232 18,549 41,658 For the year ended 31 December 2025 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2025 12,076 14,972 17,384 44,432 Transfer - to Stage 1 468 (444) (24) - - to Stage 2 (476) 880 (404) - - to Stage 3 (351) (5,028) 5,379 - (Reversal) / charge (1,256) 1,221 20,805 20,770 Write-off and transfer out - - (27,812) (27,812) Recoveries of loans and advances previously written off - - 2,235 2,235 Other movements (31) - (120) (151) Balance at 31 December 2025 10,430 11,601 17,443 39,474
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 28 - (b) Movements of the allowance for ECLs of loans and advances to customers measured at FVOCI For the six months ended 30 June 2026 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2026 590 71 319 980 Transfer - to Stage 1 18 (9) (9) - - to Stage 2 (3) 5 (2) - - to Stage 3 (1) (13) 14 - (Reversal) / charge (Note III.7) (178) 12 115 (51) Write-off and transfer out - - (234) (234) Recoveries of loans and advances previously written off - - 55 55 Balance at 30 June 2026 426 66 258 750 For the year ended 31 December 2025 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2025 689 117 313 1,119 Transfer - to Stage 1 10 (9) (1) - - to Stage 2 (5) 8 (3) - - to Stage 3 (12) (77) 89 - (Reversal) / charge (92) 32 509 449 Write-off and transfer out - - (627) (627) Recoveries of loans and advances previously written off - - 39 39 Balance at 31 December 2025 590 71 319 980
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 29 - 16 Financial Investments Notes 30 June 2026 31 December 2025 Financial investments measured at FVTPL 16.1 255,382 229,795 Financial investments measured at AC 16.2 487,879 454,851 Financial investments measured at FVOCI 16.3 312,792 366,861 Total 1,056,053 1,051,507 16.1 Financial investments measured at FVTPL Note 30 June 2026 31 December 2025 Fund investments (1) 133,444 136,837 Bond and ABS investments - Government bonds 9,274 4,837 - Financial bonds 19,576 20,129 - Interbank certificates of deposit 55,754 21,432 - Asset-backed securities (“ABS”) (1) 31,997 41,571 - Other bonds 1,460 1,123 Trust schemes and asset management plans (1) 2,112 1,477 Equity investments 1,309 2,032 Wealth management products 456 357 Total 255,382 229,795 (1) Including investments that are included in the scope of consolidation in accordance with the definition of control set out in Note IV.2.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 30 - Analyzed by listing location: 30 June 2026 31 December 2025 Fund investments - Listed outside Hong Kong 133,444 136,837 Bond and ABS investments - Listed in Hong Kong 1,306 978 - Listed outside Hong Kong 116,755 88,114 Trust schemes and asset management plans - Unlisted 2,112 1,477 Equity investments - Listed outside Hong Kong 1,096 1,778 - Unlisted 213 254 Wealth management products - Unlisted 456 357 Total 255,382 229,795 Bond investments traded on the Mainland interbank bond market are included in the listed outside Hong Kong category. Analyzed by type of issuers: 30 June 2026 31 December 2025 Chinese Mainland issuers - Government 3,893 4,837 - Banking and other financial institutions 233,619 218,163 - Corporate entities 6,406 6,793 Issuers outside Chinese Mainland - Government 11,428 - - Corporate entities 36 2 Total 255,382 229,795
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 31 - 16.2 Financial investments measured at AC Notes 30 June 2026 31 December 2025 Bond and ABS investments (1) - Government bonds 226,510 240,356 - Financial bonds 182,283 134,199 - Debt financing plans 1,219 1,219 - Asset-backed securities (“ABS”) 4,031 164 - Other bonds 3,982 6,367 Trust schemes and asset management plans (2) 83,187 89,972 Interest accrued 7,109 7,600 Gross amount 508,321 479,877 Less: Allowance for ECLs (Note III.23) (20,442) (25,026) Carrying amount 487,879 454,851 (1) At balance sheet date, part of bond investments measured at amortised cost are pledged for secured liabilities, please refer to Note VIII.1. (2) Including investments that are included in the scope of consolidation in accordance with the definition of control set out in Note IV.2. Trust schemes and asset management plans, mainly invested in credit assets, ABS and equity investments under repurchase agreements, are managed and operated by third- party trustees or asset managers. Analyzed by listing location: 30 June 2026 31 December 2025 Bond and ABS investments - Listed in Hong Kong 1,294 2,538 - Listed outside Hong Kong 409,079 378,047 - Unlisted 7,652 1,720 Trust schemes and asset management plans - Unlisted 83,187 89,972 Interest accrued 7,109 7,600 Total 508,321 479,877
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 32 - Analyzed by type of issuers: 30 June 2026 31 December 2025 Chinese Mainland issuers - Government 212,052 230,468 - Banking and other financial institutions 171,343 134,801 - Corporate entities 87,076 95,324 Issuers outside Chinese Mainland - Government 18,338 9,888 - Banking and other financial institutions 11,091 - - Corporate entities 1,312 1,796 Interest accrued 7,109 7,600 Total 508,321 479,877 The gross amount and allowance for ECLs of financial investments measured at AC are analyzed as follows (interest accrued excluded): 30 June 2026 Stage1 Stage2 Stage3 Total Financial investments measured at AC 451,977 2,275 46,960 501,212 Less: Allowance for ECLs (Note III.23) (516) (527) (19,399) (20,442) Carrying amount 451,461 1,748 27,561 480,770 31 December 2025 Stage1 Stage2 Stage3 Total Financial investments measured at AC 419,076 3,253 49,948 472,277 Less: Allowance for ECLs (Note III.23) (413) (612) (24,001) (25,026) Carrying amount 418,663 2,641 25,947 447,251
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 33 - Movement of allowance for ECLs of financial investments measured at AC: For the six months ended 30 June 2026 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2026 413 612 24,001 25,026 Transfer - to Stage 1 - - - - - to Stage 2 - - - - - to Stage 3 - (5) 5 - Charge / (reversal) (Note III.7) 103 (80) (2,149) (2,126) Write-off - - (2,207) (2,207) Recoveries of financial investments previously written off - - 65 65 Other movements - - (316) (316) Balance at 30 June 2026 516 527 19,399 20,442 For the year ended 31 December 2025 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2025 651 1,058 23,688 25,397 Transfer - to Stage 1 - - - - - to Stage 2 - 420 (420) - - to Stage 3 - (626) 626 - (Reversal) / charge (237) (240) 2,621 2,144 Write-off - - (2,471) (2,471) Recoveries of financial investments previously written off - - 437 437 Other movements (1) - (480) (481) Balance at 31 December 2025 413 612 24,001 25,026
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 34 - 16.3 Financial investments measured at FVOCI Notes 30 June 2026 31 December 2025 Bond and ABS investments - Government bonds 79,616 81,664 - Financial bonds 122,999 159,389 - Interbank certificates of deposit 10,499 17,118 - Asset-backed securities (“ABS”) 11,539 14,228 - Other bonds 83,507 88,840 Interest accrued 3,155 4,158 Subtotal 311,315 365,397 Financial investments designated to be measured at FVOCI Equity investments (1) 1,477 1,464 Total 312,792 366,861 (1) Certain non-trading equity investments are designated by the Group as financial investments measured at FVOCI. For the six months ended 30 June 2026, the Group has not recognized dividend income on such equity investments (For the year ended 31 December 2025: RMB6 million). Analyzed by listing location: 30 June 2026 31 December 2025 Bond and ABS investments and other debt instruments - Listed in Hong Kong 31,731 33,225 - Listed outside Hong Kong 256,543 299,912 - Unlisted 19,886 28,102 Equity investments - Unlisted 1,477 1,464 Interest accrued 3,155 4,158 Total 312,792 366,861
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 35 - Analyzed by type of issuers: 30 June 2026 31 December 2025 Chinese Mainland issuers - Government 61,584 67,068 - Banking and other financial institutions 101,204 143,598 - Corporate entities 61,034 68,337 Issuers outside Chinese Mainland - Government 21,562 18,694 - Banking and other financial institutions 33,195 37,260 - Corporate entities 29,581 26,282 Interest accrued 3,155 4,158 Subtotal 311,315 365,397 Equity investments 1,477 1,464 Total 312,792 366,861 The gross amount and allowance for ECLs of debt instruments measured at FVOCI are analyzed as follows (fair value changes and interest accrued excluded): For the six months ended 30 June 2026 Stage1 Stage2 Stage3 Total Debt instruments measured at FVOCI 307,434 - 79 307,513 Allowance for ECLs (Note III.23) (367) - (26) (393) 31 December 2025 Stage1 Stage2 Stage3 Total Debt instruments measured at FVOCI 360,637 - 79 360,716 Allowance for ECLs (Note III.23) (367) - (26) (393)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 36 - Movement of allowance for ECLs of debt investments measured at FVOCI: For the six months ended 30 June 2026 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2026 367 - 26 393 Transfer - to Stage 1 - - - - - to Stage 2 - - - - - to Stage 3 - - - - Charge / (reversal) (Note III.7) 5 - (4) 1 Recoveries of financial investments - - 4 4 Other movements (5) - - (5) Balance at 30 June 2026 367 - 26 393 For the year ended 31 December 2025 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2025 345 8 325 678 Transfer - to Stage 1 - - - - - to Stage 2 - - - - - to Stage 3 - (8) 8 - Charge 22 - 96 118 Write-off - - (404) (404) Recoveries of financial investments - - 16 16 Other movements - - (15) (15) Balance at 31 December 2025 367 - 26 393 17 Investment in Subsidiaries The Bank 30 June 2026 31 December 2025 Zheyin Financial Leasing 2,040 2,040 Zheyin Wealth Management 2,393 2,393 Total 4,433 4,433 For details of the subsidiaries, please refer to Note IV.1.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 37 - 18 Fixed Assets Notes 30 June 2026 31 December 2025 Fixed assets (1) 32,964 32,654 Construction in progress (2) 5,036 3,950 Total 38,000 36,604 (1) Fixed assets Properties and buildings Office and electronic equipment Motor vehicles Fixed assets leased out under operating leases Total Cost At 1 January 2026 19,387 2,479 189 18,567 40,622 Additions - 94 1 1,221 1,316 Transfers from construction in Progress 9 - - - 9 Disposals and other changes - (36) (4) (162) (202) At 30 June 2026 19,396 2,537 186 19,626 41,745 ------------------ ------------------ ------------------ ------------------ ------------------ Less: Accumulated depreciation At 1 January 2026 (4,417) (1,964) (139) (1,388) (7,908) Charge (374) (83) (7) (396) (860) Disposals and other changes - 33 4 10 47 At 30 June 2026 (4,791) (2,014) (142) (1,774) (8,721) ------------------ ------------------ ------------------ ------------------ ------------------ Less: Depreciation reserves At 1 January 2026 - - - (60) (60) Charge - - - - - At 30 June 2026 - - - (60) (60) ------------- ------------- ------------- ------------- ------------- Carrying amount Balance at 30 June 2026 14,605 523 44 17,792 32,964 Balance at 1 January 2026 14,970 515 50 17,119 32,654
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 38 - Properties and buildings Office and electronic equipment Motor vehicles Fixed assets leased out under operating leases Total Cost At 1 January 2025 18,764 2,401 198 13,191 34,554 Additions 6 138 13 6,184 6,341 Transfers from construction in progress 617 - - - 617 Disposals and other changes - (60) (22) (808) (890) At 31 December 2025 19,387 2,479 189 18,567 40,622 ------------------ ------------------ ------------------ ------------------ ------------------ Less: Accumulated depreciation At 1 January 2025 (3,681) (1,846) (140) (809) (6,476) Charge (736) (176) (19) (690) (1,621) Disposals and other changes - 58 20 111 189 At 31 December 2025 (4,417) (1,964) (139) (1,388) (7,908) ------------------ ------------------ ------------------ ------------------ ------------------ Less: Depreciation reserves At 1 January 2025 - - - - - Charge - - - (60) (60) At 31 December 2025 - - - (60) (60) ------------- ------------- ------------- ------------- ------------- Carrying amount Balance at 31 December 2025 14,970 515 50 17,119 32,654 Balance at 1 January 2025 15,083 555 58 12,382 28,078 At balance sheet date, there is no significant idle assets held by the Group. At 30 June 2026, the Group’s properties and buildings with a net value of RMB458 million (31 December 2025: RMB471 million) were still in progress of obtaining the legal titles.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 39 - (2) Construction in progress Construction in progress Balance at 1 January 2026 3,950 Additions 1,101 Transfers to fixed assets (9) Transfers to long-term prepaid expenses (6) Balance at 30 June 2026 5,036 Construction in progress Balance at 1 January 2025 3,190 Additions for the year 1,520 Transfers to fixed assets (617) Transfers to long-term prepaid expenses (143) Balance at 31 December 2025 3,950 19 Lease (1) Right-of-use assets Land use rights Properties and buildings Others Total Cost At 1 January 2026 1,950 6,068 69 8,087 Additions - 186 4 190 Reductions - (365) (2) (367) At 30 June 2026 1,950 5,889 71 7,910 ----------------- ----------------- ----------------- ----------------- Less: Accumulated depreciation At 1 January 2026 (419) (3,419) (40) (3,878) Charge (24) (351) (4) (379) Reductions - 332 1 333 At 30 June 2026 (443) (3,438) (43) (3,924) ----------------- ----------------- ----------------- ----------------- Carrying amount Balance at 30 June 2026 1,507 2,451 28 3,986 Balance at 1 January 2026 1,531 2,649 29 4,209
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 40 - Land use rights Properties and buildings Others Total Cost At 1 January 2025 1,950 6,056 65 8,071 Additions - 422 6 428 Reductions - (410) (2) (412) At 31 December 2025 1,950 6,068 69 8,087 ----------------- ----------------- ----------------- ----------------- Less: Accumulated depreciation At 1 January 2025 (370) (2,984) (32) (3,386) Charge (49) (722) (8) (779) Reductions - 287 - 287 At 31 December 2025 (419) (3,419) (40) (3,878) ----------------- ----------------- ----------------- ----------------- Carrying amount Balance at 31 December 2025 1,531 2,649 29 4,209 Balance at 1 January 2025 1,580 3,072 33 4,685 At 30 June 202 6, there is no land use rights held by the Group for which the title certificate has not been issued. (31 December 2025: Nil). (2) Lease liabilities Analysis of undiscounted lease payments on the maturity date of lease liabilities: 30 June 2026 31 December 2025 Within 1 year (inclusive) 690 771 1 - 2 years (inclusive) 525 561 2 - 3 years (inclusive) 455 445 3 - 4 years (inclusive) 383 385 4 - 5 years (inclusive) 301 319 Above 5 years 405 471 The total amount of undiscounted lease payments 2,759 2,952 Carrying amount of lease liabilities at the end of the period / year 2,518 2,691
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 41 - 20 Intangible Assets Computer software Cost At 1 January 2026 1,795 Additions 87 Reductions (4) At 30 June 2026 1,878 -------------------- Less: Accumulated amortisation At 1 January 2026 (774) Charge (72) Reductions 3 At 30 June 2026 (843) -------------------- Carrying amount Balance at 30 June 2026 1,035 Balance at 1 January 2026 1,021 Computer software Cost At 1 January 2025 1,451 Additions 344 At 31 December 2025 1,795 -------------------- Less: Accumulated amortisation At 1 January 2025 (640) Charge (134) At 31 December 2025 (774) -------------------- Carrying amount Balance at 31 December 2025 1,021 Balance at 1 January 2025 811
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 42 - 21 Deferred Tax Assets and Liabilities (1) Deferred tax assets and liabilities before offsetting 30 June 2026 31 December 2025 Deductible / (taxable) temporary difference Deferred tax assets / (liabilities) Deductible / (taxable) temporary difference Deferred tax assets / (liabilities) Allowance for ECLs and provisions 93,253 23,313 92,399 23,100 Employee benefits payable 2,999 750 2,883 721 Unrealized losses of financial instruments measured at FVTPL and precious metals 58 15 58 15 Unrealized losses of derivative financial instruments 7,838 1,959 - - Others 3,463 864 3,699 924 Deferred tax assets before offsetting 107,611 26,901 99,039 24,760 -------------- --------------- -------------- --------------- Depreciation of fixed assets (455) (114) (468) (117) Unrealized gains of financial instruments measured at FVTPL and precious metals (17,076) (4,269) (110) (27) Unrealized gains of financial investments measured at FVOCI (1,884) (471) (1,668) (417) Unrealized gains of derivative financial instruments - - (7,451) (1,863) Others (2,471) (618) (2,674) (669) Deferred tax liabilities before offsetting (21,886) (5,472) (12,371) (3,093) -------------- -------------- -------------- -------------- Net amount after offsetting 85,725 21,429 86,668 21,667
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 43 - (2) Changes in deferred tax 30 June 2026 31 December 2025 Balance at the beginning of the period / year 21,667 20,482 Charge to loss or profit (242) 125 Charge to other comprehensive income 4 1,060 Balance at the end of the period / year 21,429 21,667 At the balance sheet date, the Group has no significant unrecognized deferred tax assets and liabilities. 22 Other Assets Notes 30 June 2026 31 December 2025 Finance lease receivables (1) 65,820 64,605 Settlement and clearing accounts 2,987 1,171 Long-term prepaid expenses (2) 2,479 2,446 Deductible input Value Added Tax (“VAT”) 1,696 1,789 Interest receivable 1,393 958 Non-financial repossessed assets (3) 650 745 Prepayment 604 640 Continuing involvement assets (Note III.43 (1)) 568 568 Fee receivables 545 538 Guaranteed deposits 313 2,182 Others 3,262 2,887 Total 80,317 78,529
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 44 - (1) Finance lease receivables Note 30 June 2026 31 December 2025 Finance lease receivables (a) 9,253 9,164 Less: Unrecognized finance income (1,648) (1,584) Balance of finance lease receivables 7,605 7,580 Finance leaseback receivables 60,048 58,776 Subtotal 67,653 66,356 Interest accrued 484 487 Less: Allowance for ECLs (Note III.23) (2,317) (2,238) Carrying amount 65,820 64,605 The undiscounted finance lease receivables to be received by the Group in each of the five consecutive accounting years after the balance sheet date are as follows (interest accrued excluded): 30 June 2026 31 December 2025 Amount Proportion Amount Proportion Within 1 year (inclusive) 2,449 26.47% 2,691 29.36% 1 - 2 years (inclusive) 1,606 17.35% 1,657 18.09% 2 - 3 years (inclusive) 977 10.56% 1,057 11.53% 3 - 4 years (inclusive) 679 7.34% 584 6.37% 4 - 5 years (inclusive) 653 7.06% 503 5.49% Above 5 years 2,889 31.22% 2,672 29.16% Total 9,253 100.00% 9,164 100.00%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 45 - Analyzed by assessment of allowance for ECLs of finance lease receivables (interest accrued excluded) 30 June 2026 Stage 1 Stage 2 Stage 3 Total Finance lease receivables 63,932 2,805 916 67,653 Less: Allowance for ECLs (Note III.23) (994) (686) (637) (2,317) Carrying amount 62,938 2,119 279 65,336 31 December 2025 Stage1 Stage2 Stage3 Total Finance lease receivables 63,090 2,435 831 66,356 Less: Allowance for ECLs (Note III.23) (1,054) (576) (608) (2,238) Carrying amount 62,036 1,859 223 64,118 Movements of the allowance for ECLs of finance lease receivables For the six months ended 30 June 2026 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2026 1,054 576 608 2,238 Transfer - to Stage 1 100 (100) - - - to Stage 2 (78) 78 - - - to Stage 3 (1) (35) 36 - (Reversal) / Charge (Note III.7) (81) 167 306 392 Write-off - - (371) (371) Recoveries of finance lease receivables previously written off - - 58 58 Balance at 30 June 2026 994 686 637 2,317
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 46 - For the year ended 31 December 2025 Stage 1 Stage 2 Stage 3 Total Balance at 1 January 2025 1,138 457 533 2,128 Transfer - to Stage 1 2 - (2) - - to Stage 2 (37) 89 (52) - - to Stage 3 (7) (99) 106 - (Reversal) / charge (42) 129 597 684 Write-off - - (663) (663) Recoveries of finance lease receivables previously written off - - 89 89 Balance at 31 December 2025 1,054 576 608 2,238 (a) At the balance sheet date, part of finance lease receivables are pledged for secured liabilities, please refer to Note VIII.1. (2) Long-term prepaid expense 30 June 2026 31 December 2025 Balance at the beginning of the period / year 2,446 1,435 Additions 371 1,419 Transfers from construction in progress 6 143 Less: Accumulated amortisation for the period / year (344) (551) Balance at the end of the period / year 2,479 2,446 (3) Non-financial repossessed assets 30 June 2026 31 December 2025 Properties and buildings 843 884 Others 83 122 Less: Impairment losses (276) (261) Carrying amount 650 745 The Group plans to dispose of non-financial repossessed assets through auction, bidding and transfer in a certain coming period.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 47 - 23 Impairment Allowance Notes 1 January 2026 (Reversal) / charge Write-off and transfer out Others (Note (1)) 30 June 2026 Deposits with banks and other financial institutions III.11 3 (3) - - - Placements with banks and other financial institutions III.12 9 5 - - 14 Financial assets purchased under resale agreements III.14 38 (17) - - 21 Loans and advances to customers III.15 - measured at AC 39,474 14,508 (13,074) 750 41,658 - measured at FVOCI 980 (51) (234) 55 750 Financial investments III.16 - measured at AC 25,026 (2,126) (2,207) (251) 20,442 - measured at FVOCI 393 1 - (1) 393 Finance lease receivables III.22(1) 2,238 392 (371) 58 2,317 Fixed assets III.18 60 - - - 60 Other assets 716 215 (173) 6 764 Off-balance sheet items III.32 884 169 - (2) 1,051 Total 69,821 13,093 (16,059) 615 67,470
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 48 - Notes 1 January 2025 Charge / (reversal) Write-off and Transfer out Others (Note (1)) 31 December 2025 Deposits with banks and other financial institutions III.11 2 1 - - 3 Placements with banks and other financial institutions III.12 4 5 - - 9 Financial assets purchased under resale agreements III.14 22 16 - - 38 Loans and advances to customers III.15 - measured at AC 44,432 20,770 (27,812) 2,084 39,474 - measured at FVOCI 1,119 449 (627) 39 980 Financial investments III.16 - measured at AC 25,397 2,144 (2,471) (44) 25,026 - measured at FVOCI 678 118 (404) 1 393 Finance lease receivables III.22(1) 2,128 684 (663) 89 2,238 Fixed assets III.18 - 60 - - 60 Other assets 607 328 (239) 20 716 Off-balance sheet items III.32 1,094 (195) (10) (5) 884 Total 75,483 24,380 (32,226) 2,184 69,821 (1) Others include the recoveries of financial assets previously written off and the effect of changes in exchange rates, etc.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 49 - 24 Due to the Central Bank 30 June 2026 31 December 2025 Bonds sold under repurchase agreements with the Central Bank 35,280 98,668 Bills sold under repurchase agreements with the Central Bank 3,962 3,244 Interest accrued 372 294 Total 39,614 102,206 25 Deposits from Banks and Other Financial Institutions Analyzed by location and type of counterparties 30 June 2026 31 December 2025 In Chinese Mainland - Banks 30,330 18,311 - Other financial institutions 353,144 311,983 Outside Chinese Mainland - Banks 23 27 - Other financial institutions 15,004 12,667 Interest accrued 2,142 1,386 Total 400,643 344,374
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 50 - 26 Placements from Banks and Other Financial Institutions Analyzed by accounting treatment, location and type of counterparties Note 30 June 2026 31 December 2025 Measured at amortised cost: In Chinese Mainland - Banks 84,978 89,042 - Other financial institutions 2,139 1,205 Outside Chinese Mainland - Banks 8,844 2,560 Interest accrued 477 536 Subtotal 96,438 93,343 --------------- --------------- Designated as at fair value through profit or loss: (1) In Chinese Mainland - Banks 17,134 24,116 Subtotal 17,134 24,116 --------------- --------------- Total 113,572 117,459 (1) There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of the financial liabilities designated as at fair value through profit or loss arising from changes in credit risk were not considered significant. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors. 27 Financial Liabilities at Fair Value through Profit or Loss Notes 30 June 2026 31 December 2025 Financial liabilities designated as at fair value through profit or loss (1) - Financial liabilities related to precious metals 139,929 40,422 - Others (2) 14,952 13,823 Financial liabilities at fair value through profit or loss - Short positions of trading bonds 8,986 1,715 Total 163,867 55,960 (1) The Group manages and evaluates the financial liability portfolio or financial assets and financial liability portfolio on the basis of fair value according to the enterprise risk management or investment strategy stated in the official written documents, and reports to key management personnel within the enterprise on this basis. There were no significant changes in the credit spread of the Group and therefore the amounts of changes in fair value of the financial liabilities designated as at fair value through profit or loss arising from changes in credit risk were not considered significant. The changes in fair value of the financial liabilities were mainly attributable to changes in other market factors .
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 51 - (2) Others mainly represent shares held by other parties rather than the Group and liabilities of consolidated structured entities. 28 Financial Assets Sold Under Repurchase Agreements Analyzed by type of collateral 30 June 2026 31 December 2025 Bonds sold under repurchase agreements 59,287 53,202 Interest accrued 25 7 Total 59,312 53,209 29 Customer Deposits 30 June 2026 31 December 2025 Demand deposits - Corporate customers 467,522 417,299 - Personal customers 85,280 74,934 Subtotal 552,802 492,233 --------------------- --------------------- Time deposits - Corporate customers 1,232,957 1,191,219 - Personal customers 356,671 320,838 Subtotal 1,589,628 1,512,057 --------------------- --------------------- Other deposits 1,994 2,019 --------------------- --------------------- Interest accrued 32,873 37,157 --------------------- --------------------- Total 2,177,297 2,043,466 Pledged deposits of customer deposits are listed as follows: 30 June 2026 31 December 2025 Letters of credit and guarantee deposits 48,178 40,398 Acceptances deposits 19,994 39,389 Other pledged deposits 48,954 46,985 Total 117,126 126,772
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 52 - 30 Employee Benefits Payable 1 January 2026 Accrual during the period Payments during the period 30 June 2026 Salaries, bonuses and allowances 5,839 4,396 (5,628) 4,607 Staff welfare - 224 (224) - Housing fund - 359 (359) - Social insurance - Medical insurance - 212 (212) - - Work-related injury insurance - 6 (6) - - Maternity insurance - 4 (4) - Commercial insurance - 17 (17) - Labour union fee and staff education fee 157 94 (150) 101 Basic pension insurance - 412 (412) - Unemployment insurance - 14 (14) - Annuity - 372 (372) - Total 5,996 6,110 (7,398) 4,708 1 January 2025 Accrual during the year Payments during the year 31 December 2025 Salaries, bonuses and allowances 6,162 9,346 (9,669) 5,839 Staff welfare - 629 (629) - Housing fund - 720 (720) - Social insurance - Medical insurance - 393 (393) - - Work-related injury insurance - 12 (12) - - Maternity insurance - 14 (14) - Commercial insurance - 155 (155) - Labour union fee and staff education fee 161 221 (225) 157 Basic pension insurance - 786 (786) - Unemployment insurance - 27 (27) - Annuity - 745 (745) - Total 6,323 13,048 (13,375) 5,996
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 53 - 31 Taxes Payable 30 June 2026 31 December 2025 Income tax payable 114 439 Value added tax (“VAT”) payable 180 1,252 Others 193 221 Total 487 1,912 32 Provisions 30 June 2026 31 December 2025 Allowance for ECLs of off-balance sheet items (Note III.23) 1,051 884
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 54 - 33 Debt Securities Issued Notes 30 June 2026 31 December 2025 Fixed-rate small and micro businesses financial bonds - 2026 (1) - 10,000 Fixed-rate small and micro businesses financial bonds - 2026 (2) 15,000 15,000 Fixed-rate small and micro businesses financial bonds - 2027 (3) 5,000 5,000 Fixed-rate small and micro businesses financial bonds - 2027 (4) 15,000 15,000 Fixed-rate small and micro businesses financial bonds - 2027 (5) 20,000 20,000 Fixed-rate small and micro businesses financial bonds - 2028 (6) 20,000 20,000 Fixed-rate small and micro businesses financial bonds - 2029 (7) 5,000 5,000 Fixed-rate financial bonds - 2026 (8) 30,000 30,000 Fixed-rate financial bonds - 2027 (9) 13,000 13,000 Fixed-rate financial bonds - 2028 (10) 15,000 15,000 Fixed-rate financial bonds - 2030 (11) 5,000 5,000 Fixed-rate green financial bonds - 2028 (12) 5,000 5,000 Fixed-rate science and technology innovation bonds-2028 (13) 5,000 5,000 Fixed-rate offering - tier 2 capital bond - 2033 (14) 20,000 20,000 Fixed-rate offering - tier 2 capital bond - 2033 (15) 10,000 10,000 Fixed-rate offering - tier 2 capital bond - 2034 (16) 10,000 10,000 Fixed-rate financial bonds - 2027 (17) 1,500 1,500 Fixed-rate financial bonds - 2029 (18) 1,500 - Fixed-rate financial bonds - 2029 (19) 2,000 - Fixed-rate asset-backed plan – 2045 (20) 473 500 Certificate of deposit (21) 1,857 - Interbank certificates of deposit (22) 271,570 305,274 Subtotal 471,900 510,274 Interest accrued 2,103 2,679 Total 474,003 512,953
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 55 - (1) Fixed-rate small and micro businesses financial bonds of RMB10 billion was issued on 24 April 2023, with a maturity of 3 years and a fixed coupon rate of 2.80%.The bond matured on 26 April 2026. (2) Fixed-rate small and micro businesses financial bonds of RMB15 billion was issued on 3 November 2023, with a maturity of 3 years and a fixed coupon rate of 2.82%. (3) Fixed-rate small and micro businesses financial bonds of RMB5 billion was issued on 18 October 2022, with a maturity of 5 years and a fixed coupon rate of 2.85%. (4) Fixed-rate small and micro businesses financial bonds of RMB15 billion was issued on 15 March 202 4, with a maturity of 3 years and a fixed coupon rate of 2.43%. (5) Fixed-rate small and micro businesses financial bonds of RMB20 billion was issued on 15 May 2024, with a maturity of 3 years and a fixed coupon rate of 2.23%. (6) Fixed-rate small and micro businesses financial bonds of RMB20 billion was issued on 3 April 2025, with a maturity of 3 years and a fixed coupon rate of 1.86%. (7) Fixed-rate small and micro businesses financial bonds of RMB5 billion was issued on 15 March 202 4, with a maturity of 5 years and a fixed coupon rate of 2.53%. (8) Fixed-rate financial bonds of RMB30 billion was issued on 24 July 2023, with a maturity of 3 years and a fixed coupon rate of 2.62%. (9) Fixed-rate financial bonds of RMB13 billion was issued on 5 September 2024, with a maturity of 3 years and a fixed coupon rate of 2.01%. (10) Fixed-rate financial bonds of RMB15 billion was issued on 13 February 2025, with a maturity of 3 years and a fixed coupon rate of 1.75%. (11) Fixed-rate financial bonds of RMB 5 billion was issued on 13 February 2025, with a maturity of 5 years and a fixed coupon rate of 1.81%. (12) Fixed-rate green financial bonds of RMB 5 billion was issued on 8 May 2025, with a maturity of 3 years and a fixed coupon rate of 1.69%. (13) Fixed-rate science and technology innovation bonds of RMB5 billion was issued on 19 May 2025, with a maturity of 3 years and a fixed coupon rate of 1.66%. (14) Fixed-rate offering - tier 2 capital bonds of RMB20 billion were issued on 25 May 2023, with a maturity of 10 years and a fixed coupon rate of 3.47%. The Bank has an option to redeem the bond at its par value in 2028. (15) Fixed-rate offering - tier 2 capital bonds of RMB10 billion were issued on 23 November 2023, with a maturity of 10 years and a fixed coupon rate of 3.50%. The Bank has an option to redeem the bond at its par value in 2028. (16) Fixed-rate offering - tier 2 capital bonds of RMB10 billion were issued on 17 April 2024, with a maturity of 10 years and a fixed coupon rate of 2.54%. The Bank has an option to redeem the bond at its par value in 2029. (17) Zheyin Financial Leasing issued fixed-rate financial bonds of RMB1.5 billion on 15 August 2024, with a maturity of 3 years and a fixed coupon rate of 2.09%. (18) Zheyin Financial Leasing issued fixed-rate financial bonds of RMB1.5 billion on 21 January 2026, with a maturity of 3 years and a fixed coupon rate of 1.93%.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 56 - (19) Zheyin Financial Leasing issued fixed -rate financial bonds of RMB 2 billion on 26 March 2026, with a maturity of 3 years and a fixed coupon rate of 1.76%. (20) Zheyin Financial Leasing established fixed rate asset -backed plan with lease receivables as the underlying assets on 26 December 2025. The plan was registered and custodied with China Insurance Asset Registration and trading System Co., Ltd. The asset-backed plan has a total issue size of RMB500 million, with interest paid quarterly and principal amortised on a pass -through basis. Z heyin Financial Leasing have the option to repurchase underlying assets in the asset poll in full upon the dates falling 3, 6, 9, 12, 15, 18 and 20 years from the establishment date of the asset-backed plan. (21) There were 6 unpaid certificates of deposit issued in RMB at Hong Kong Branch at 30 June 2026, which have total face value amounted RMB1, 890 million with maturity less than one year . Four of the certificates of deposit were issued in US D with a face value amounted RMB 1,357 million. One of the certificates of deposit were issued in HKD with a face value amounted RMB 433 million. One of the certificates of deposit were issued in offshore RMB with a face value amounted RMB1 00 million (At 31 December 2025, there was no unpaid certificate of deposit issued at Hong Kong Branch ). (22) At 30 June 2026, the Bank has issued a total of 109 interbank certificates of deposit in the interbank market but not yet due, with maximum maturity of one year (At 31 December 2025, the Bank has issued a total of 115 interbank certificates of deposit in the interbank market but not yet due, with maximum maturity of one year).
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 57 - 34 Other Liabilities 30 June 2026 31 December 2025 Settlement and clearing accounts 6,214 3,563 Deposits related to finance lease 3,732 3,908 Deferred income 1,045 870 Dividends payable 794 18 Account payable 597 355 Continuing involvement liabilities (Note III.43 (1)) 568 568 Others 2,775 2,596 Total 15,725 11,878 35 Share Capital 30 June 2026 31 December 2025 Ordinary shares listed in Chinese Mainland (A share) 21,544 21,544 Ordinary shares listed outside Chinese Mainland (H share) 5,920 5,920 Total 27,464 27,464 36 Other Equity Instruments Note 30 June 2026 31 December 2025 Perpetual bonds (1) 24,995 24,995 (1) Perpetual bonds (a) List of perpetual bonds issued at the end of the period Equity instruments in issue Perpetual bond Issue date 25 November 2021 Accounting treatment Equity instrument Initial interest rate 3.85% Issuance price per share (RMB / share) 100 Number (In millions) 250 Amount 25,000 Issuance fee 5 Maturity date No maturity date Conversion condition None Conversion status None
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 58 - (b) Main terms of perpetual bonds The duration of the perpetual bonds is the same as the continuing operation of the Bank. The perpetual bonds issuance sets conditional redemption rights for the issuer. The Bank shall have the right to redeem all or part of the perpetual bonds on each annu al interest payment date (including the fifth interest payment date since the date of issuance) five years after the date of issuance. If, after the issuance of the perpetual bonds, unpredictable changes in regulations result in that the perpetual bonds is no longer classified in other tier -one capital, the Bank shall have the right to redeem all, but not part, of the perpetual bonds. The Bank shall exercise the right of redemption subject to the approval of the original China Banking and Insurance Regulatory Commission (“CBIRC”) and on the condition that the following conditions are satisfied: (1) replacing the redeemed instrument with a capital instrument of equal or higher quality, and such replacement shall only be carried out at conditions which are sustainable for the income capacity; (2) or the capital position of the Bank after the redemption right is exercised will remain significantly higher than the regulatory capital requirements stipulated by the original CBIRC. The claims in respect of the perpetual bonds will be subordinated to the claims of depositors, general creditors, and subordinated debts that rank senior to the perpetual bonds, and will rank in priority to all classes of shares held by the Bank’s shareholders and rank pari passu with the claims in respect of any other additional tier -one capital instruments of the Bank that rank pari passu with the bonds. If subsequent amendments to the PRC Enterprise Bankruptcy Law or relevant regulations are applicable, such relevant laws and regulations shall prevail. Upon the occurrence of a Non-Viability Trigger Event, the Bank has the right to write-down/write-off part or all of the principal of the perpetual bonds without the consent of the bondholders. The amount of the write-down/write-off shall be determined by the ratio of the outstanding principal amount of the Bonds to the aggregate principal amount of all additional tier 1 capital instruments with the identical Trigger Event. A Non-Viability Trigger Event refers to the earlier occurrence under the following circumstances: (1) the original CBIRC deems that the Bank would become non -viable without a write -down/write-off; (2) the relevant authorities deem that the Bank would become non -viable without a public sector injection of capital or equivalent support. The write-down/write-off will not be restored. The coupon rate of the perpetual bonds will be adjusted at defined intervals with a coupon rate adjustment period which is every 5 years since the payment settlement date. In any coupon rate adjusted period, the interest payments on the perpetual bonds will be made at a prescribed fixed coupon rate. The coupon rate at the time of issuance will be determined by book running and centralised allocation. The coupon rate is determined by a benchmark rate plus a fixed spread. The benchmark rate is the arithmetic average of the yields to maturity of the 5 -year bond yield curve published on www.ChinaBond.com.cn (or other websites recognized by the China Central Depository & Clearing Co., Ltd.) 5 trading days prior to the Announcement Date of the Subscription Agreement or the adjustment date of the benchmark interest rate (excluding the current day) (rounded up to 0.01%). The fixed spread is the difference between the coupon rate and the benchmark rate as determined at the time of issuance. The fixed spread will not be adjusted once determined.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 59 - The Bank shall have the right to cancel all or part of the interest distribution of the perpetual bonds and any such cancellation shall not constitute an event of default. When exercising such right, the Bank will take into full consideration the interest of the bondholders. The Bank may, at its sole discretion, use the proceeds from the cancelled distribution to meet other obligations as they fall due. The cancellation of all or part of interest distribution on the perpetual bonds will not impose any other restriction on the Bank, except in relation to dividend distributions to ordinary shareholders. Any cancellation of any all or part or interest distribution on the perpetual bonds will require the deliberation and approval of the general shareholders meet ing. The Bank shall give notice to the investors on such cancellation in a timely manner. In the case of cancelling all or part of interest distributions on the perpetual bonds, the Bank shall not make any distribution to the ordinary shareholders from the next day following the resolution being approved by the general shareholders meeting, unt il its decision to resume the interest distribution in whole to the holders of the perpetual bonds. The Dividend Stopper on ordinary shares will not compromise the Bank’s discretion to cancel distributions, and will not impede the Bank from replenishing its capital. The interest distributions on the perpetual bonds must come from distributable items, and will not be affected by the rating of the Bank, nor will be reset based on any change to such rating. The interest distribution on the perpetual bonds are non -cumulative, namely, upon cancellation, any amount of distribution unpaid to the bondholders in the applicable period will not accumulate or compound to the subsequent distribution period thereafter. The perpetual bonds do not have any step -up mechanism or any other incentive to redeem. Investors are not allowed to sell the perpetual bonds.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 60 - (c) Changes in perpetual bonds outstanding at the end of the period / year There was no change in the perpetual bonds outstanding at the end of the period / year during the period / year. (2) Information related to the holders of the equity instruments 30 June 2026 31 December 2025 Equity attributable to shareholders of the Bank - Ordinary shareholders of the Bank 181,660 177,873 - Other equity instruments holders of the Bank 24,995 24,995 Non-controlling interests - Ordinary shareholders of non-controlling interests 4,790 4,467 Total 211,445 207,335 (3) Changes in other equity instruments outstanding at the end of the period 31 December 2025 Increase Decrease 30 June 2026 Perpetual Bond Number of shares (In millions) 250 - - 250 Amount 24,995 - - 24,995 37 Capital Reserve 1 January 2026 Increase Decrease 30 June 2026 Share premium 38,570 - - 38,570 1 January 2025 Increase Decrease 31 December 2025 Share premium 38,570 - - 38,570
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 61 - 38 Other Comprehensive Income Other comprehensive income in the consolidated statement of financial position Other comprehensive income in the consolidated statement of profit or loss and other comprehensive income for the six months ended 30 June 2026 1 January 2026 Net-of-tax amount attributable to shareholders of the Bank 30 June 2026 Before-tax amount of the period Previously recognized amount transferred to profit or loss Income tax expense After-tax amount of the period Net-of-tax amount attributable to shareholders of the Bank Net-of-tax amount attributable to shareholders of the Non- Controlling interests Items that will not be reclassified to profit or loss - Changes in fair value of financial investments designated to be measured at FVOCI 330 10 340 13 - (3) 10 10 - Items that may be reclassified to profit or loss - Changes in fair value of financial assets measured at FVOCI 923 151 1,074 2,822 (2,620) (51) 151 151 - - Allowance for ECLs of financial assets measured at FVOCI 1,030 (172) 858 (230) - 58 (172) (172) - - Exchange differences from the translation of foreign operations 345 (428) (83) (431) - - (431) (428) (3) Total 2,628 (439) 2,189 2,174 (2,620) 4 (442) (439) (3)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 62 - Other comprehensive income in the consolidated statement of financial position Other comprehensive income in the consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2025 1 January 2025 Net-of-tax amount attributable to shareholders of the Bank 31 December 2025 Before-tax amount of the year Previously recognized amount transferred to profit or loss Income tax expense After-tax amount of the year Net-of-tax amount attributable to shareholders of the Bank Net-of-tax amount attributable to shareholders of the Non- Controlling interests Items that will not be reclassified to profit or loss - Changes in fair value of financial investments designated to be measured at FVOCI 297 33 330 44 - (11) 33 33 - Items that may be reclassified to profit or loss - Changes in fair value of financial assets measured at FVOCI 3,814 (2,891) 923 368 (4,223) 964 (2,891) (2,891) - - Allowance for ECLs of financial assets measured at FVOCI 1,349 (319) 1,030 (426) - 107 (319) (319) - - Exchange differences from the translation of foreign operations 887 (542) 345 (545) - - (545) (542) (3) Total 6,347 (3,719) 2,628 (559) (4,223) 1,060 (3,722) (3,719) (3)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 63 - 39 Surplus Reserve Statutory surplus reserve Balance at 1 January 2025 14,012 Appropriation (Note III.41) 1,219 Balance at 31 December 2025 15,231 Appropriation (Note III.41) - Balance at 30 June 2026 15,231 Pursuant to the Company Law of the PRC and the Articles , the Bank is required to appropriate 10% of its net profit to the statutory surplus reserve. 40 Statutory General Reserve Statutory general reserve Balance at 1 January 2025 35,119 Appropriation (Note III.41) 2,800 Balance at 31 December 2025 37,919 Appropriation (Note III.41) 1,575 Balance at 30 June 2026 39,494 Pursuant to the Administrative Measures on Accrual of Provisions by Financial Enterprises (Caijin [2012] No. 20) , financial enterprises establish a statutory general reserve within equity through the appropriation of profit to address unidentified potential impairment risks. The statutory general reserve of the Group and the Bank should not be less than 1.5% of the period-end balance of its risk assets. The Bank’s subsidiaries, if required by local regulation requirements, also need to make such general reserve.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 64 - 41 Profit appropriations Notes 30 June 2026 31 December 2025 Balance at the beginning of the period / year 56,061 52,396 Add: Net profit attributable to shareholders of the Bank 7,824 12,931 Less: Appropriation to surplus reserve - (1,219) Appropriation to statutory general reserve (1,575) (2,800) Distribution to ordinary shareholders (1) (3,598) (4,284) Distribution to perpetual bonds holders (2) - (963) Balance at the end of the period / year 58,712 56,061 (1) Approved and distributed dividends of ordinary shareholders As approved by shareholders in 20 25 Annual General Meeting on 8 June 2026, based on the Bank’s total ordinary shares amounting to 27,465 million shares on the record date of profit distribution, the Bank declared a cash dividend of RMB1.31 for each 10 ordinary shares, with total amount of RMB3,598 million. As approved by shareholders in 20 24 Annual General Meeting on 1 3 June 2025, based on the Bank’s total ordinary shares amounting to 27,465 million shares on the record date of profit distribution, the Bank declared a cash dividend of RMB1.56 for each 10 ordinary shares, with total amount of RMB4,284 million. (2) Announcement and distribution to perpetual bonds holders On 20 November 2025, the Bank announced the interest of perpetual bonds issued amounting to RMB963 million at the initial annual interest rate of 3.85% prior to the interest rate reset date determined by the terms of the bond. The distribution date was 26 November 2025.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 65 - 42 Notes to Consolidated Cash Flow Statements (1) Cash and cash equivalents 30 June 2026 30 June 2025 Cash 767 915 Surplus deposit reserves with the central bank 59,142 15,423 Deposits with banks and other financial institutions with original maturities of less than three months 25,530 25,277 Placements with banks and other financial institutions with original maturities of less than three months 1,925 2,655 Financial assets purchased under resale agreements with original maturities of less than three months 165,233 63,095 Total 252,597 107,365 (2) Reconciliation of liabilities arising from financing activities The table below details changes in the Group’s liabilities from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were classified in the Group’s consolidated cash flow statement as cash flows from financing activities. Debt securities issued Lease liabilities Dividend payable Total At 1 January 2026 512,953 2,691 18 515,662 Cash changes: Proceeds from issuance of debt securities 152,366 - - 152,366 Repayments of principal on debt securities issued (190,737) - - (190,737) Repayments of interest on debt securities issued (5,678) - - (5,678) Payment for dividend distribution - - (2,822) (2,822) Payment for principal element of lease liabilities - (330) - (330) Payment for interest element of lease liabilities - (45) - (45) Non-cash changes: Interest expense 5,099 45 - 5,144 Dividends declared (Note III.41(1)) - - 3,598 3,598 Net increase of lease liabilities - 157 - 157 At 30 June 2026 474,003 2,518 794 477,315
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 66 - Debt securities issued Lease liabilities Dividend payable Total At 1 January 2025 541,533 3,131 49 544,713 Cash changes: Proceeds from issuance of debt securities 249,634 - - 249,634 Repayments of principal on debt securities issued (280,599) - - (280,599) Repayments of interest on debt securities issued (6,109) - - (6,109) Payment for dividend distribution - - (3,361) (3,361) Payment for principal element of lease liabilities - (364) - (364) Payment for interest element of lease liabilities - (51) - (51) Non-cash changes: Interest expense (Note III.1) 6,042 51 - 6,093 Dividends declared (Note III.41(1)) - - 4,284 4,284 Net increase of lease liabilities - 67 - 67 At 30 June 2025 510,501 2,834 972 514,307 43 Transfer of Financial Assets The Group enters into transactions in the normal course of business by which it transfers recognized financial assets to third parties or to special purpose vehicles. In some cases where these transfers may give rise to full or partial derecognition of the financial assets concerned, the Group full y or partially derecognize the transferred financial assets. In other cases where these transferred assets do not qualify for derecognition as the Group has retained substantially all the risks and rewards of these financial assets, the Group continued to recognize the transferred financial assets. (1) Securitization transactions In the process of securitization of credit assets, the Group transfers credit assets to structured entities and issues asset -backed securities as issuers. The Group would determine whether or not to derecognize the associated credit assets by evaluating th e extent to which it retains the risks and rewards of the assets. With respect to the credit assets that were securitised and qualified for derecognition, the Group derecognised the transferred credit assets in their entirety. For the six months ended 30 June 2026, the Group has transferred the ownership of the loans principal amounting to RMB3,003 million (For the six months ended 30 June 2025: RMB8,888 million), as well as substantially all the risks and rewards of the loans have been transferred, the full amount of such securitised loans were derecognised.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 67 - For those in which the Group has neither transferred nor retained substantially all the risks and rewards of the transferred credit assets, and retained control of the credit assets, the Group recognised the assets on the statement of financial position in accordance with the Group’s continuing involvement and the rest is derecognised. The extent of the Group’s continuing involvement is the extent of risks and rewards undertaken by the Group with value changes of the transferred financial assets. For the six months ended 30 June 2026, there were no as of new securitised credit assets in which the Group retained the continuing involvement (For the six months ended 30 June 2025: Nil). At 30 June 2026, the carrying amount of the assets and liabilities that the Group continues to recognise on the statement of financial position was RMB 568 million (31 December 2025: RMB568 million), which are separately presented as other assets and other liabilities. (2) Non-performing assets transfer For the six months ended 30 June 2026, the Group transferred non -performing loans and restructured loans principal amounting to RMB 9,994 million (for the six months ended 30 June 2025: RMB10,060 million), the Group transferred non-performing financial investments amounting to RMB2 million (for the six months ended 30 June 2025: Nil). For the six months ended 30 June 2026, the Group has transferred the ownership of non-performing loans, the principal of which amounted to RMB3,003 million (for the six months ended 30 June 2025: RMB3,333 million) through securitization transactions. For the six months ended 30 June 2026, the Group has transferred the ownership of non -performing loans, there is no principal of which (for the six months ended 30 June 2025: RMB1,869 million) through divestiture of beneficial interest . As the Group transferred substantially all the risks and rewards of these non - performing loans, the Group derecognized these non-performing loans. (3) Repurchase and securities lending transactions Transferred financial assets that do not qualify for derecognition mainly include securities delivered as collateral in a repurchase transaction to a counterparty and debt securities lent to counterparties under securities lending agreements. The counterpa rties are allowed to sell or repledge those securities lent under agreements to repurchase in the absence of default by the Group, but have obligations to return the securities at the maturity of the contracts. In some cases, if the value of the relevant securities rises or falls, the Group may require the counterparty to pay additional cash as collateral or need to return part of the cash collateral to the counterparty. The Group determined that it retained substantially all the risks and rewards of these securities and therefore had not derecognized them. At 30 June 2026, the face value of debt securities lent to counterparties was RMB4,460 million (31 December 2025: Nil). IV Interests in Other Entities 1 Interests in subsidiaries (1) Composition of the Group At the balance sheet date, details of the subsidiaries included in the consolidated financial statements are as follows: Name Place of incorporation Registered address Business nature Registered capital Proportion of equity / voting rights Zheyin Financial Leasing Zhejiang Province Zhoushan Financial institution RMB 4 billion 51% Zheyin Wealth Management Zhejiang Province Hangzhou Financial institution RMB 2 billion 100%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 68 - (2) Important non wholly-owned subsidiaries and main financial information An important non wholly-owned subsidiary of the Group is Zheyin Financial Leasing. The following table lists the main financial information of Zheyin Financial Leasing. The main financial information of these subsidiaries is the amount before the Group's internal transactions are offset, but it has been adjusted by the unified accounting policy: 30 June 2026 31 December 2025 Total assets 94,916 90,395 Total liabilities 85,139 81,276 For the six months ended 30 June 2026 2025 Operating income 1,966 1,786 Net profit 664 622 Total comprehensive income 658 621 Net cash generated from operating activities 748 6,794 2 Interests in the structured entities The Group manages or invests in multiple structured entities, which include fund investments, trust schemes and asset management plans, asset-backed securities and wealth management products. To determine whether the Group controls such structured entities, the Group assesses the overall interests (including direct income and expected management fees) in the structured entities through it s participation in the decisions on the establishment of the structured entities, the extent of its participation and related contractual arrangements, as well as its decision-making power over the structured entities. (1) Consolidated structured entities directly held by the Group If the Group has power over structured entities through investment contracts and other arrangements, has variable interests through its involvement in the structured entities and has the ability to affect those interests through its power over the structured entities, the Group considers that it controls the structured entities and then consolidates them in the consolidated financial statements. (2) Unconsolidated structured entities sponsored by third-party institutions and directly held by the Group If the Group does not have substantive rights to the primary activities of the structured entities, or the Group only has insignificant proportion of the overall interests in the structured entities over which the Group has power, the Group does not consol idate the structured entities in the consolidated financial statements. The unconsolidated structured entities directly held by the Group include fund investments , trust schemes and asset management plans, asset -backed securities and wealth management products initiated and sponsored by third-party institutions. Considering the relevant agreements and the Group's investments in the structured entities, the Group does not consolidate the above structured entities in the consolidated financial statements. On the balance sheet date, the relevant balance sheet items, book value and maximum loss exposure of the Group's equity in the structured entity initiated and established by a third party institution through direct holding of investment in the Group's cons olidated statement of financial position are listed as follows:
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 69 - 30 June 2026 Financial investments measured at FVTPL Financial investments measured at AC Financial investments measured at FVOCI Total Fund investments 55,267 - - 55,267 Trust schemes and asset management plans 790 2,045 - 2,835 Asset-backed securities 31,427 152 15,484 47,063 Wealth management products 135 - - 135 Total 87,619 2,197 15,484 105,300 31 December 2025 Financial investments measured at FVTPL Financial investments measured at AC Financial investments measured at FVOCI Total Fund investments 60,565 - - 60,565 Trust schemes and asset management plans 111 1,498 - 1,609 Asset-backed securities 40,261 165 14,291 54,717 Wealth management products 162 - - 162 Total 101,099 1,663 14,291 117,053 The maximum exposure s to loss in the above unconsolidated structured entities directly held by the Group are the fair value or amortised cost of the assets held by the Group in the consolidated statement of financial position. (3) Structured entities which the Group is the sponsor, but which are not included in the consolidated financial statements The types of unconsolidated structured entities sponsored by the Group include non-principal-guarantee wealth management products. The nature and purpose of these structured entities are to generate fees from managing assets on behalf of investors. These s tructured entities are financed through the issue of wealth management products to investors. Interest held by the Group are fees charged by direct holding of investment or providing management services. At 30 June 2026, the amount of assets held by the unconsolidated non -principal-guaranteed wealth management products which are sponsored by the Group was RMB184,717 million (31 December 2025: RMB182,458 million). For the six months end ed 30 June 2026, the fee and commission income recognised by the Group for such financial products was RMB205 million (For the six months ended 30 June 2025: RMB246 million). At the balance sheet date, the balance of fee and commission receivables of the Group was not material.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 70 - Ⅴ Segment Reporting 1 Business segment For management purposes, the Group is organized into different operating segments, namely corporate banking, retail banking and treasury operations, based on internal organizational structure, management requirement and internal reporting system. Corporate banking The corporate banking segment covers the provision of financial products and services to corporations, government agencies and other institutions. The products and services include corporate loans and advances, trade financing, corporate deposit s, credit commitments and financial guarantee, underwriting of debt instruments and various types of corporate intermediary services, etc. Retail banking The retail banking segment covers the provision of financial products and services to individual customers. The products and services include personal loans and advances, personal deposits, wealth management businesses, card businesses and various types of retail banking services, etc. Treasury operations The treasury operations segment covers the Group’s treasury operations which include money market transactions, repurchase transactions, debt instruments investments, equity instruments investments, financial derivatives businesses for proprietary trading or on behalf of customers, as well as financial products and services provided to other financial institutions. The division also manages the liquidity level of the Group, including the issuance of debt securities. Other business Other business segments refer to other businesses not included in the above reporting segments and related businesses of the subsidiaries. The accounting policies adopted in the preparation of segment reports are consistent with those adopted in the preparation of the Group's consolidated financial statements. Transactions between segments mainly represent the provision of funding to and from individual segments. These transactions are conducted on terms determined with reference to the average cost of funding and have been reflected in the performance of each s egment. Net interest income and expense arising on internal fund transfer are referred to as internal net interest income / expense. Net interest income and expense relating to third parties are referred to as external net interest income / expense. Segment revenues, expenses, profits, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure refers to the total cash outflow of purchasing fixed assets, intangible assets and other long-term assets in the accounting period.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 71 - Business segment For the six months ended 30 June 2026 / 30 June 2026 Corporate banking Retail banking Treasury operations Others Total External net interest income 11,622 4,188 5,593 949 22,352 Inter-segment net interest income / (expenses) 4,502 (228) (4,274) - - Net interest income 16,124 3,960 1,319 949 22,352 Net fee and commission income / (expenses) 1,666 907 (142) 126 2,557 Net trading gains / (losses) - - 2,926 (7) 2,919 Net gains on financial investments 202 - 4,077 - 4,279 Other operating income - 7 57 1,345 1,409 Operating income 17,992 4,874 8,237 2,413 33,516 ---------------- ---------------- ---------------- ---------------- ---------------- Operating expenses (5,218) (2,235) (2,021) (902) (10,376) Expected credit losses (charge) / reversal (10,711) (4,048) 2,138 (392) (13,013) Impairment losses on other assets (80) - - - (80) Total operating expenses (16,009) (6,283) 117 (1,294) (23,469) ---------------- ---------------- ---------------- ---------------- ---------------- Profit / (losses) before taxation 1,983 (1,409) 8,354 1,119 10,047 Segment assets 1,698,828 461,804 1,403,509 110,230 3,674,371 Unallocated assets 21,429 Total assets 3,695,800 Segment liabilities (1,723,758) (450,950) (1,293,618) (16,029) (3,484,355) Other segment information: Credit commitments and financial guarantee 832,217 21,734 - 2,116 856,067 Depreciation and amortisation 546 257 190 29 1,022 Capital expenditure 386 105 319 1,848 2,658
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 72 - Business segment For the six months ended 30 June 2025 / 31 December 2025 Corporate banking Retail banking Treasury operations Others Total External net interest income 10,107 5,921 6,105 913 23,046 Inter-segment net interest income / (expenses) 6,659 (1,214) (5,445) - - Net interest income 16,766 4,707 660 913 23,046 Net fee and commission income / (expenses) 1,626 434 243 (10) 2,293 Net trading gains - - 2,514 - 2,514 Net gains on financial investments 522 - 3,841 - 4,363 Other operating income - 8 39 1,002 1,049 Operating income 18,914 5,149 7,297 1,905 33,265 ---------------- ---------------- ---------------- ---------------- ---------------- Operating expenses (5,005) (2,352) (1,954) (959) (10,270) Expected credit losses (5,355) (5,690) (1,806) (449) (13,300) Total operating expenses (10,360) (8,042) (3,760) (1,408) (23,570) ---------------- ---------------- ---------------- ---------------- ---------------- Profit / (losses) before taxation 8,554 (2,893) 3,537 497 9,695 Segment assets 1,532,618 483,211 1,324,188 119,408 3,459,425 Unallocated assets 21,667 Total assets 3,481,092 Segment liabilities (1,634,989) (404,769) (1,215,820) (18,179) (3,273,757) Other segment information: Credit commitments and financial guarantee 813,011 19,676 - - 832,687 Depreciation and amortisation 543 256 188 350 1,337 Capital expenditure 596 191 489 5,474 6,750
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 73 - 2 Regional division The Group operates principally in Chinese Mainland, and also has a branch in Hong Kong, China. Geographically, the Group mainly conducts its business in the four areas listed below in Chinese Mainland. “Yangtze River Delta Region” refers to the head office, Zheyin Financial Leasing , Zheyin Wealth Management and the following areas serviced by the tier-one branches of the Group: Hangzhou, Ningbo, Wenzhou, Shaoxing, Zhoushan, Shanghai, Nanjing, Suzhou, Hefei, Jinhua; “Bohai Rim Region” refers to the following areas serviced by the tier-one branches of the Group: Beijing, Tianjin, Jinan, Shenyang; “Pearl River Delta Region and Economic Zone on the Western Coast of the Taiwan Straits” refers to the following areas serviced by the tier -one branches of the Group: Shenzhen, Guangzhou, Hong Kong, Fuzhou; and “Midwestern China Region” refers to the following areas serviced by the tier-one branches of the Group: Chengdu, Guiyang, Xi’an, Lanzhou, Chongqing, Wuhan, Zhengzhou, Changsha, Hohhot, Nanchang, Nanning, Taiyuan.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 74 - Regional division For the six months ended 30 June 2026 / 30 June 2026 Yangtze River Delta Region Bohai Rim Region Pearl River Delta Region and Economic Zone on the Western Coast of the Taiwan Straits Midwestern China Region Elimination Total External net interest income 14,785 1,784 1,509 4,274 - 22,352 Inter-segment net interest (expenses) / income (1,705) 1,264 549 (108) - - Net interest income 13,080 3,048 2,058 4,166 - 22,352 Net fee and commission income 1,342 316 379 520 - 2,557 Net trading gains 2,527 111 131 150 - 2,919 Net gains / (losses) on financial investments 4,202 37 (7) 47 - 4,279 Other operating income 1,127 252 2 28 - 1,409 Operating income 22,278 3,764 2,563 4,911 - 33,516 --------------- --------------- --------------- --------------- --------------- --------------- Operating expenses (6,736) (1,235) (809) (1,596) - (10,376) Expected credit losses (7,111) (3,397) (1,252) (1,253) - (13,013) Impairment losses on other assets (80) - - - - (80) Total operating expenses (13,927) (4,632) (2,061) (2,849) - (23,469) --------------- --------------- --------------- --------------- --------------- --------------- Profit / (losses) before taxation 8,351 (868) 502 2,062 - 10,047 Segment assets 3,599,490 360,928 303,965 442,514 (1,032,526) 3,674,371 Unallocated assets 21,429 Total assets 3,695,800 Segment liabilities (3,412,860) (361,999) (301,700) (440,322) 1,032,526 (3,484,355) Other segment information: Credit commitments and financial guarantee 394,039 149,649 112,796 199,583 - 856,067 Depreciation and amortisation 563 153 140 166 - 1,022 Capital expenditure 2,634 4 11 9 - 2,658
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 75 - Regional division For the six months ended 30 June 2025 / 31 December 2025 Yangtze River Delta Region Bohai Rim Region Pearl River Delta Region and Economic Zone on the Western Coast of the Taiwan Straits Midwestern China Region Elimination Total External net interest income 14,317 2,244 1,870 4,615 - 23,046 Inter-segment net interest (expenses) / income (2,051) 1,425 608 18 - - Net interest income 12,266 3,669 2,478 4,633 - 23,046 Net fee and commission income 897 441 431 524 - 2,293 Net trading gains 2,004 167 198 145 - 2,514 Net gains on financial investments 3,827 125 111 300 - 4,363 Other operating income 952 36 8 53 - 1,049 Operating income 19,946 4,438 3,226 5,655 - 33,265 --------------- --------------- --------------- --------------- --------------- --------------- Operating expenses (6,339) (1,359) (878) (1,694) - (10,270) Expected credit losses (8,718) (2,180) (1,672) (730) - (13,300) Total operating expenses (15,057) (3,539) (2,550) (2,424) - (23,570) --------------- --------------- --------------- --------------- --------------- --------------- Profit before taxation 4,889 899 676 3,231 - 9,695 Segment assets 3,260,330 360,024 286,127 425,654 (872,710) 3,459,425 Unallocated assets 21,667 Total assets 3,481,092 Segment liabilities (3,086,578) (357,661) (282,697) (419,531) 872,710 (3,273,757) Other segment information: Credit commitments and financial guarantee 389,700 145,139 107,700 190,148 - 832,687 Depreciation and amortisation 897 161 100 179 - 1,337 Capital expenditure 6,095 132 132 391 - 6,750
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 76 - VI Commitments and Contingencies 1 Credit commitments and financial guarantee Bank acceptances refer to the Group's commitment to honor bills issued by customers. Letter of credit and financial guarantee refer to guarantee of customers’ performance the Group provides to third parties. Approved loan commitments, finance lease commitm ents and undrawn credit card limit refer to the Group’s credit commitments. Receivables confirmation refer to the Group’s commitment to receivables confirmation issued by customers. The amount of bank acceptances, letter of credit, letter of guarantee, receivables confirmation and other financial guarantee contracts disclosed is the maximum potential loss amount that the Group will recognize at the balance sheet date if the counterpar ties fail to oblige. The amount of Irrevocable loan commitments, finance lease commitment and undrawn credit line of credit card are the maximum cash flow assuming fully issued. The Group expects that bank acceptances, letter of credit, letter of guarantee and receivables confirmation will be settled at the same time as the payment of customers. Irrevocable loan commitments, finance lease commitments and undrawn credit card facility may not be used before maturity. Therefore, the contract amount mentioned below does not represent the expected cash outflow in the future. 30 June 2026 31 December 2025 Bank acceptances issued 393,139 405,624 Letters of credit issued - Sight letters of credit 7,606 6,827 - Usance letters of credit 313,782 272,411 Letters of guarantee issued - Financing letters of guarantee 22,352 23,834 - Non-financing letters of guarantee 22,350 19,459 Undrawn credit card facility 21,734 19,676 Loan commitments 4,194 2,936 Finance lease commitments 2,116 2,705 Receivables confirmation and other financial guarantee contracts 68,794 79,215 Total 856,067 832,687 2 Capital Expenditure Commitments At the balance sheet date, the Group's capital expenditure commitments are as follows: 30 June 2026 31 December 2025 Contracted but not yet incurred 9,312 5,504 Authorized but not contracted 370 493 Total 9,682 5,997
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 77 - 3 Bond underwriting and redemption commitments (1) At 30 June 2026, t he Group has outstanding bond underwriting commitment s with an amount of RMB1,180 million (31 December 2025: RMB1,000 million). (2) As a member of the saving bon ds underwriting syndicate of the Central Government, the Group is obliged to redeem these bonds at the discretion of the holders at any time prior to maturity. The redemption price for the bonds is based on the nominal value of the bonds deductin g commissions for early redeemed, plus any interest accrued up to the redemption date. The interest accrued shall be calculated in accordance with the relevant rules of the Ministry of Finance (the “MOF”) and the PBOC. At 30 June 2026, the Group had underwritten bonds with an accumulated amount of RMB894 million (31 December 2025: RMB925 million) to the general public, and these government bonds have not yet matured nor been redeemed. The Group expects that the amount of redemption of these government bonds through the Group prior to maturity will not be material. 4 Outstanding litigations and disputes At the balance sheet date, the Group was involved in certain legal proceedings in the ordinary course of business. Management expects that such pending litigations will not materially affect the Group’s financial position. 5 Future operating lease payments As the lessor, the Group mainly engages in leasing business through its subsidiary in leases. The undiscounted operating lease payments after the balance sheet date that the Group should receive are as follows: 30 June 2026 31 December 2025 Within 1 year (inclusive) 754 977 1 - 2 years (inclusive) 843 856 2 - 3 years (inclusive) 768 794 3 - 4 years (inclusive) 713 718 4 - 5 years (inclusive) 690 683 Above 5 years 4,264 4,489 Total 8,032 8,517 The operating lease income is recognized on a straight -line basis or another systematic and rational method during the lease term. The variable lease payments included in the lease payments at the commencement date are recognized by the Group as operating lease income when incurred . The disclosure of undiscounted operating lease payments after the balance sheet date exclude the variable lease payments not included in the lease payments at the commencement date.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 78 - VII Fiduciary Business 1 Entrusted loan business Entrusted loan business means that under the entrusted loan arrangement, the Group acts as an intermediary to provide loans to borrowers based on the instructions of the principal. The Group is responsible for assisting in supervising the use and the recovery of the loan, and charging commissions for the services provided. As the Group does not assume the economic risks and rewards arising from the entrusted loans, the entrusted loans will not be recognized as assets and liabilities of the Group. At the balance sheet dates, the entrusted business assets and liabilities of the Group are as follows: 30 June 2026 31 December 2025 Entrusted loans 13,082 13,172 Entrusted loan funds 13,082 13,172 2 Entrusted investments business Entrusted investment refers to the fact that the Group accepts the entrustment of a single or multiple clients based on the principal -agent relationship to engage in investment services such as asset operation, investment management, investment consultancy and so on. The investment risk of entrusted investment shall be borne by the client. At the balance sheet dates, the entrusted business assets of the Group are as follows: 30 June 2026 31 December 2025 Entrusted investments 423 436 3 Wealth management services The Group acts as a custodian, trustee and in other fiduciary capacities to safeguard assets for customers in accordance with agreements. The Group receives fee incomes, such as custodian fees, sale fees and investment management fees, in return for its services provided under the agreements and does not have any interest in the economic risks and rewards related to assets under custody. Therefore, assets under custody are not recognized in the Group’s balance sheet. At balance sheet date, please refer to Note IV.2 (3) for information about wealth management services.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 79 - VIII Collateral Information 1 Assets pledged as security The book value of the Group's secured liabilities related to the assets as collateral on the balance sheet dates are presented as due to the central bank, placements from banks and other financial institutions, financial assets sold under repurchase agreements and customer deposits. At the balance sheet date, the secured liabilities of the Group analyzed by collateral type were as follows: 30 June 2026 31 December 2025 Bond investments 224,504 259,327 Bills 3,962 3,244 Finance lease receivables 432 435 Fixed assets leased out under operating leases 414 438 Total 229,312 263,444 In addition, the Group provides collateral for the securities borrowed through the security lending and swap business. At 30 June 2026, the assets as collateral under the security lending and swap business of the Group were RMB5,105 million (31 December 2025: RMB1,671 million). 2 Assets received as collateral At 30 June 2026, the Group has no securities that could sell or repledge the collateral in the absence of default by the owner of the collateral (31 December 202 5: Nil). The Group has an obligation to return the collateral to the owner on the date of resale, at the balance sheet date, none of the collateral is re - sold or re -pledged. Details of collateral related inf ormation in loans and advances to customers and financial investments that are credit-impaired could be referred to in Note X.1(9).
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 80 - IX Related Parties and Related Party Transactions 1 Major shareholders At 30 June 2026, the shareholding of major shareholder units directly or indirectly holding more than 5% of the Bank's shares are as follows: Number of shares held (in million shares) Shareholding Percentage Zhejiang Provincial Innovation Investment Group Co., Ltd. (formerly known as Zhejiang Provincial Financial Holdings Co., Ltd.) 3,452 12.57% Zhejiang Provincial Energy Group Co., Ltd. and its group members, Zheneng Capital Investment (Hong Kong) Limited and Zhejiang Energy International Co., Ltd. 1,849 6.73% Zhejiang Hengyi Group Co., Ltd. and its group members Zhejiang Hengyi High-tech Material Co., Ltd. and Zhejiang Hengyi Petrochemical Co., Ltd. 1,616 5.88% Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. and its group members, Zhejiang Seaport (Hong Kong) Co., Ltd. 1,577 5.74% At 31 December 2025, the shareholding of major shareholder units directly or indirectly holding more than 5% of the Bank's shares are as follows: Number of shares held (In million shares) Shareholding Percentage Zhejiang Provincial Innovation Investment Group Co., Ltd. (formerly known as Zhejiang Provincial Financial Holdings Co., Ltd.) 3,452 12.57% Zhejiang Provincial Energy Group Co., Ltd. and its group members, Zheneng Capital Investment (Hong Kong) Limited and Zhejiang Energy International Co., Ltd. 1,849 6.73% Zhejiang Hengyi Group Co., Ltd. and its group members Zhejiang Hengyi High-tech Material Co., Ltd. and Zhejiang Hengyi Petrochemical Co., Ltd. 1,616 5.88% Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. and its group members, Zhejiang Seaport (Hong Kong) Co., Ltd. 1,379 5.02%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 81 - 2 Related party transactions The amount of major transactions between the Group and related parties and the balance of major current accounts at the balance sheet date are as follows: Zhejiang Provincial Innovation Investment Group Co., Ltd. and its subsidiaries Zhejiang Provincial Energy Group Co., Ltd. and its subsidiaries Zhejiang Hengyi Group Co., Ltd. and its subsidiaries Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. and its subsidiaries Others Total Proportion in the amount / balance of related similar transactions The amount of significant transactions from 1 January 2026 to 30 June 2026 is as follows: Interest income - 4 36 9 140 189 0.39% Interest expense (31) - - (4) (46) (81) 0.31% Fee and commission income - 1 4 - 7 12 0.24% Net trading gains 126 - - - 127 253 8.67% Operating expenses - - - (1) (3) (4) 0.04% At 30 June 2026, the balance of major current accounts is as follows: Derivative financial assets - - - - 568 568 2.56% Financial assets purchased under resale agreements 980 - - - - 980 0.59% Loans and advances to customers - 617 2,500 439 6,135 9,691 0.48% Financial investments measured at FVTPL 8,774 - - - 8,177 16,951 6.64% Financial investments measured at FVOCI - - - 101 80 181 0.06% Customer deposits (3,152) (91) (301) (190) (4,911) (8,645) 0.40% Derivative financial liabilities - - - - (511) (511) 1.62% The major off-balance sheet items at 30 June 2026 are as follows: Credit commitments and financial guarantee 38 551 2,000 13 159 2,761 0.32% Loan balance guaranteed by related parties 6,054 200 5,970 359 6,322 18,905 0.66%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 82 - Zhejiang Provincial Innovation Investment Group Co., Ltd. and its subsidiaries Zhejiang Provincial Energy Group Co., Ltd. and its subsidiaries Zhejiang Hengyi Group Co., Ltd. and its subsidiaries Zhejiang Provincial Seaport Investment & Operation Group Co., Ltd. and its subsidiaries Others Total Proportion in the amount / balance of related similar transactions The amount of significant transactions from 1 January 2025 to 30 June 2025 is as follows: Interest income - 1 35 4 67 107 0.20% Interest expense (40) - - (15) (60) (115) 0.39% Fee and commission income - 2 - - 3 5 0.17% Net trading gains 27 - - - 71 98 3.90% Operating expenses - - - (1) (2) (3) 0.03% At 31 December 2025, the balance of major current accounts is as follows: Derivative financial assets - - - - 280 280 1.02% Financial assets purchased under resale agreements 597 - - - - 597 0.66% Loans and advances to customers - 356 1,998 340 5,955 8,649 0.45% Financial investments measured at FVTPL 7,669 - - - 8,773 16,442 7.16% Financial investments measured at FVOCI - 20 - - 30 50 0.01% Customer deposits (4,151) (58) (100) (1,381) (5,438) (11,128) 0.55% Derivative financial liabilities - - - - (203) (203) 0.98% The major off-balance sheet items at 31 December 2025 are as follows: Credit commitments and financial guarantee 17 927 2,350 1 123 3,418 0.41% Loan balance guaranteed by related parties 6,689 239 5,666 261 5,782 18,637 0.68% The Bank disclosed related party transactions in accordance with Measures for the Administration of Affiliated Transactions of Banking and Insurance Institutions (Decree No.1 in the year of 2022 of the original CBIRC). For major related party transactions, please refer to the Bank's announcement on the Shanghai Stock Exchange, and for general related party transactions, please refer to the Investor Services column on the Bank's website.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 83 - 3 Key management personnel Key management personnel are those persons who have the authority and responsibility to plan, direct and control the activities of the Group. The Group enters into banking transactions with key management personnel in the normal course of business. For the reporting period, the Group had no material banking transactions and balances with key management personnel. The remuneration of directors and other members of key management during the period were as follows: For the six months ended 30 June 2026 2025 Fees 1 1 Salaries and allowances and benefits 2 5 Contribution to pension 1 1 Total 4 7 The total compensation packages (before tax) for directors and key management personnel have not been finalised. The total compensation packages will be further disclosed when determined. 4 Transactions between the Bank and the subsidiaries The transactions between the Bank and its subsidiar ies are mainly subject to general business terms and carried out in accordance with normal business procedures or in accordance with the contractual agreements of the Bank, and shall be approved by the corresponding decision -making authority depending on the nature and the amount of the transaction. The amount of major transactions between the Bank and its subsidiaries (consolidated structured entities directly held by the Group excluded) and the balance of major current accounts at the balance sheet date are as follows: For the six months ended 30 June 2026 2025 Interest income - 27 Interest expense (17) (16) Fee and commission income 1 3 Fee and commission expense - (90) Other operating income 14 11 Lease payment to subsidiaries 4 4 30 June 2026 31 December 2025 Other assets 1,010 1,019 Deposits from banks and other financial institutions (2,282) (3,937) Customer Deposits (207) - Other liabilities (9) (9)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 84 - 5 Plan and transaction of annuity Except for normal contributions, other related party transactions in the annuity funds established by the Group and the Bank during the reporting period are as follows: For the six months ended 30 June 2026 2025 Interest expense 3 5 30 June 2026 31 December 2025 Customer deposits 183 197 X Financial Risk Management The Group is exposed to a variety of financial risks arising from its operating activities. The Group analyzes, evaluates, accepts and manages those risks or risk portfolios of a certain degree. Managing those risks is critical to the financial industry, a nd risks are an inevitable consequence of being in business operation. The Group’s aim is therefore to achieve an appropriate balance between risk and return and minimize potential adverse effects on the Group’s financial performance. The Group’s risk management policies are designed to identify and analyze these risks, to set appropriate risk limits and control programs, and to monitor the risks and adherence to limits by means of reliable and up-to-date information systems. The board of directors takes the ultimate responsibility for comprehensive risk management, and the senior management is responsible for implementing comprehensive risk management. The position of chief risk officer has been established in place, the board of directors has established special committees including risk and related party transactions control committee; the senior management has established special committees including risk management and asset and liability management committee, information technology manangement committee, data governance committee and innovation management committee. The risk management department at the head office is the coordination department for comprehensive risk management and the leading department for management of credit risk, market risk (excluding interest rate risk of banking book), country risk and inform ation technology risk and ESG risk management. The asset and liability management department at the head office is the leading department for management of the interest rate risk of banking book and liquidity risk. The internal control, compliance and legal department at the head office is the leadin g department for management of operational risk, compliance risk and outsourcing risk. The work department of the party committee (the publicity department of the party committee) at the head office is the leading department for management of reputational risk. The development and planning department at the head office is the leading department for management of strategic risk. The social responsibility and consumer rights protection department at the head office is the leading department for management of consumer rights protection. The primary financial risks to which the Group is exposed to when using financial instruments are credit risk, market risk (including interest rate risk, foreign exchange risk) and liquidity risk.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 85 - 1 Credit Risk The Group is exposed to credit risk, which is the risk of loss arising from a client or counterparty’s failure to discharge its contractual obligations. Exposure to credit risk mainly arises from interbank transactions, corporate and retail loans, as well as loan commitments from lending activities. It can also be derived from credit enhancement provided by the Group, such as credit derivatives (credit default swaps), letters of credit, financial guarantees and acceptances. Management carefully manages its exposure to credit risks. The daily credit risk management and control are centralized in the risk management department at the head office and reported to the Bank’s senior management in a timely manner. (1) Credit risk measurement Loans and advances to customers, credit commitments and financial guarantee Based on changes in external business environment, internal business conditions and risk profile, the Group has formulated basic credit policies, and specified the policy orientation in respect of customer structure, industry structure, regional structure and key business areas of the Group’s credit business. In addition, the Group regularly adjusts its credit policy on the basis of continuous tracking of macro and industry economic development trends. The Group shall continue to improve the credit system construction, the unified credit extension management system for corporate and institutional customers, group customer identification and unified credit extension management, the overall management and unified control of the total credits of corporate and i nstitutional customers, and the standardized credit approval process, group customer management. The Bank shall also establish a differentiated authorization system, and timely adjust the credit policy and take effective measures to guard against credit risks. The Group has established the credit risk limit framework system, credit risk limit management plans and methods, and specified management mechanisms in respect of setting, adjusting, monitoring and processing quota indicators to effectively transmit risk preferences. Financial assets are written off when the Group is unable to recover the whole or a part of them even after taking necessary measures and implementing necessary procedures, and when the write -off conditions set by the Ministry of Finance and the Group are met. Bond investment The Group manages investment in bonds and other instruments based on the internal credit rating and credit rating of external rating agencies. Except for immediate approval to government bonds, local government debts, central bank bills and policy bank fin ancial bonds, all other bonds are subject to credit approval processes and credit rating requirements. At the same time, the Group continues to focus on the credit rating, business development and industry changes, to perform continuous evaluation and management of credit risk. Non-bond debt investment Non-bond debt investment includes trust schemes and asset management plans and debt financing plans. The Group implements rating assessment system for cooperative trust companies and securities companies, and sets credit lines for the ultimate financing party of the trust income and targeted asset management plans and debt financing plans, and conducts follow -up review of risk management on a regular basis. Interbank business Credit risk of financial institutions is reviewed and managed on a regularly basis. Credit lines are set for banks or other financial institutions that engage in financial transactions with the Group.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 86 - (2) Risk limits and mitigation measures The Group has established policies and procedures for credit risk limits management. Credit risk limits are set based on specific customers, industries and the quality of assets, and a working mechanism is established regarding credit risk limits managemen t, including limits setting, adjustment, monitoring, reporting and processing. The Group transfers or mitigates its credit risk exposure by way of guarantee, collateral (pledge), net settlement and credit derivatives. Other specific management and mitigation measures include: Collaterals and pledged assets The Group has formulated a series of policies to mitigate credit risks through various measures. The acquisition of collateral and margins and obtaining corporate or individual guarantees is an important means for the Group to control credit risk. The Group implements guidelines on the acceptability of specific classes of collateral. The principal types of collateral are as follows: • Residential properties • Business assets such as commercial properties, inventories and accounts receivables • Financial instruments such as debt securities and stocks The fair value of collaterals and pledges are assessed by professional valuation firms appointed by the Group. To reduce credit risk, the Group has set maximum loan-to-value ratio (ratio of loan amount to fair value of collateral and pledge) for different collaterals and pledges. The principal types of collateral and pledge and the maximum loan-to-value ratio for corporate and retail loans are as follows: Type of collaterals and pledged assets Maximum loan to value ratio Time deposits and PRC treasury bonds 100% Financial bonds 80% Residential properties and commercial properties 70% Land use rights 70% Vehicles 60% General equipment 50% For loans guaranteed by a third -party, the Group will assess the guarantor’s financial condition, credit history and ability to meet obligations. Derivative financial instruments The Group impose s strict restrictions on the trading of derivative financial instruments. The Group controls the credit risks associated with derivative financial instruments by collecting margins or grant credits from / to counterparties. Deposits of credit commitments and financial guarantee The main purpose of credit commitments and financial guarantee is to ensure that customers can receive the funds needed. The letter of guarantee and the letter of credit represent the Group’s irrevocable undertaking, that is, the Group will perform the pay ment obligations on behalf of its customers who fail to meet their payment obligations to third parties, and the Group bears the same credit risk as the case of loans. In the event that the amount of credit commitments and financial guarantee requested by the customer exceeds its original credit limit, the Group will collect deposit to reduce the credit risk involved in providing the service.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 87 - (3) Measurement of ECLs The ECL model is used for the measurement of the allowance for ECLs for financial assets measured at AC, financial assets measured at FVOCI and credit commitments and financial guarantee. The ECL model is developed in accordance with the accounting standards. Based on credit risk characteristics such as product type, customer type, customer industry, the Group has conducted a risk subgroup on financial assets and established different models for non-retail business, retail business, credit card business, etc. The Group has established a regression model of risk parameters and macroeconomic indicators such as GDP, etc. The Group applies the ECL model to calculate credit losses under multiple scenarios to regularly predict three macro scenarios, including optimistic, neutral a nd pessimistic. The Group uses judgements, assumptions and estimates in measuring the ECLs in accordance with the accounting standards, including: • Grouping of risks • Classification of stages • Models and parameters • Forward-looking information, other adjustments and sensitivity analysis Grouping of risks Credit exposures are grouped based on credit risk characteristics including type of product, type of customer, industry where the client operates and markets. The non-retail business exposure risk group covers manufacturing loans, real estate loans and who lesale and retail loans, etc. The retail business exposure risk group covers business loans, consumer loans, mortgage loans and credit card, etc. Classification of stages The Group classifies financial instruments into three stages and makes provisions for ECLs accordingly, depending on whether the credit risk of a financial instrument has increased significantly or whether the financial instrument is credit -impaired since initial recognition. The three risk stages are defined as follows: Stage 1: Credit risk has not increased significantly since initial recognition. A 12 -month ECL is recognized. Stage 2: Credit risk has increased significantly since initial recognition but there is no objective evidence of impairment of the financial instrument. A lifetime ECL is recognized. Stage 3: When there is objective evidence of impairment of the financial assets at the balance sheet date. A lifetime ECL is recognized. The Group’s staging criteria has taken into consideration the internal credit rating, probability of default, overdue days, credit risk rating, etc.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 88 - Definition of significant increase in credit risk At each balance sheet date, the Group assesses whether the credit risk of the relevant financial instruments has increased significantly since initial recognition. The Group fully considers all reasonable information with solid evidence, including forward -looking information that reflects significant changes in its credit risk. The main considerations are regulatory and operating environment, internal and external credit rating, solvency, operating capacity, loan contract terms, and repayment behavior. The Group determines the changes in credit risk over the expected lifetime of the financial instruments by comparing the credit risk of the financial instruments at the balance sheet date with that at the date of initial recognition. The Group determines whether the credit risk of financial instruments has changed significantly since initial recognition by setting quantitative and qualitative criteria. The judgement criteria mainly include more than 30 days overdue, special mention for five-category classification, changes in probability of default and other cases that indicate a significant change in credit risk. Definition of credit-impaired financial assets Generally, financial assets are considered to be credit-impaired if: • The borrower is more than 90 days overdue after the contractual payment date; • The internal credit rating of the borrower is default level; • For economic or contractual reasons related to the financial difficulties of the borrower, concessions which normally are not available are being made to the borrower; • The borrower is experiencing significant financial difficulties; • The borrower is likely to enter bankruptcy or other financial restructuring; and • The active market for the financial assets disappears as a result of the financial difficulties of the issuer or debtor. An impairment of financial assets may be caused by the combined effect of multiple events, and may not be the result of a separately identifiable events. The above criteria apply to all financial assets and credit commitments and financial guarantee of the Group. The definition of credit-impaired financial assets is consistently applied to the calculation of ECLs of the Group and when considering about historical statistics and forward-looking information. Models and parameters Except for the credit-impaired financial instruments, depending on whether there is a significant increase in credit risk and whether the assets are credit -impaired, the Group recognizes allowance for different financial instruments with expected credit lo sses over 12 months or the lifetime of the instrument, respectively. Allowance for ECLs is the result of multiplication of probability of default (PD), loss given default (LGD) and exposure at default (EAD) and discount factor. Related definitions are as follows: • Probability of default (PD) refers to the possibility that the debtor will not be able to fulfil its obligations in the next 12 months or throughout the life of the asset. The Group’s PD is calculated based on the results of the Internal Rating-Based Approach. The PD of the entire duration is calculated based on the 12-month probability of default; • Loss given default (LGD) is the percentage of risk exposure loss at the time of default. The default loss rate varies depending on the type of counterparty, the way of recourse and priority and the availability of collateral or other credit support. The LGD varies by financial assets; and • Exposure at default (EAD) refers to the amount that the Group should pay when the default occurs in the next 12 months or throughout the life of the asset. The Group’s exposure at default is determined by the expected repayment arrangements, and it varies depending on the types of products. For installments payment and lump sum repayment, the Group determines the exposure at default according to the repayment plan stipulated in the contract.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 89 - The Group determines the ECLs by forecasting the probability of default, loss given default and exposure at default of future individual debt. The Group multiplies the three parameters to calculate the ECLs for future periods, and then discount the results of each period to the report date in lump sum. The discount rate used in the calculation of expected credit loss is the initial effective interest rate or its approximate value. The measurement of ECL s for credit -impaired corporate loans and advances to customers and investments applied cash flow discount method, if there is objective evidence that an financial asset is credit-impaired, the amount of the ECL s is measured as the difference between the asset’s gross carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. In determining ECLs on an individual basis, the following factors are considered: • The sustainability of the borrower’s business plan; • The ability to improve performance once a financial difficulty has arisen; • The estimated recoverable cash flows from disposal of assets and liquidation; • The availability of other financial support and the realizable value of collaterals; and • The timing of the expected cash flows. Forward-looking information, other adjustments and sensitivity analysis The Group has established a forward -looking model and developed regression models for different macro-economic indicators such as Gross Domestic Product growth rate year -on-year (GDP). The Group uses forecasting results of macro-indicators to achieve “forward-looking” calculation of ECLs. The Group forecasts multiple macro indicators under three domestic macro scenarios: optimistic, neutral and pessimistic. The Group uses the weight scorecard model to determine the weight of the macroeconomic multi scenario indicator forecast value through quantitative analysis of the macroeconomic multi scenario forecast value. Neutral scenario is defined as the most probable situation, which will become benchmark for other scenarios. Optimistic and pessimistic scenarios are possible scenarios which are better and worse than neutral scenario respectively. It can also be used as one of the sources of sensitivity analysis. At 30 June 2026, the key macro-indicators the Group has applied include the GDP growth rate on year- on-year basis, the Per Capita Disposable Income of Urban Residents growth rate on year-on-year basis, M0 money supply growth rate on year-on-year basis, etc. Among all, the forecasts of high-weighted macro-indicators are listed as follows: Indicators Predictive range GDP growth rate on year-on-year basis From 4.16% to 5.23% Per Capita Disposable Income of Urban Residents growth rate on year-on-year basis From 3.70% to 4.40% M0 currency in circulation growth rate on year-on-year basis From 11.00% to 12.17% Through sensitivity analysis, when the weight of optimistic scenario increases by 10% and the weight of neutral scenario decreases by 10%, the allowance for ECLs will decrease by no more than 0.63%. When the weight of pessimistic scenario increases by 10% and the weight of neutral scenario decreases by 10%, the allowance for ECLs will increase by no more than 0.59%. When managing ECL model, the Bank fully considered the impact of the potential factors of local government debt on credit risk exposure and makes allowance for ECLs prudently , thereby enhancing the Group’s risk compensation capability.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 90 - (4) Maximum exposure to credit risk The following table provides an analysis of the exposure to credit risk of financial instruments applicable to the measurement of ECLs. The carrying amount of the following financial assets is the maximum exposure to credit risk of the Group: 30 June 2026 31 December 2025 Cash and balances with the central bank 174,395 125,704 Deposits with banks and other financial institutions 40,364 73,583 Placements with banks and other financial institutions 9,264 5,952 Financial assets purchased under resale agreements 165,747 90,599 Loans and advances to customers - measured at AC 1,649,620 1,575,832 - measured at FVOCI 318,837 307,405 Financial investments - measured at AC 487,879 454,851 - measured at FVOCI 311,315 365,397 Other financial assets 73,268 72,556 Total 3,230,689 3,071,879 Credit commitments and financial guarantee 855,023 831,809 (5) Risk concentration The credit risk usually increases if the counterparties are concentrated in a certain industry, region or based on certain economic characteristics. Meanwhile, the economic development is differentiated by the unique characteristics of industries and regio ns, so the credit risk varies from industry to industry and region to region. Geographical segments The gross amount of loans and advances to customers granted by the Group are listed as follows by region (fair value changes and interest accrued excluded): 30 June 2026 31 December 2025 Gross amount Proportion Gross amount Proportion Yangtze River Delta Region 1,157,943 57.91% 1,067,571 55.81% Midwestern China Region 373,627 18.68% 380,390 19.89% Bohai Rim Region 236,384 11.82% 245,388 12.83% Pearl River Delta Region and Economic Zone on the Western Coast of the Taiwan Straits 231,829 11.59% 219,434 11.47% Total 1,999,783 100.00% 1,912,783 100.00%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 91 - Industry segments The gross amount of loans and advances to customers granted by the Group are listed as follows by industry (fair value changes and interest accrued excluded): 30 June 2026 31 December 2025 Gross amount Proportion Gross amount Proportion Corporate loans and advances Leasing and commercial services 417,400 20.87% 339,725 17.76% Manufacturing 277,333 13.87% 286,725 14.99% Wholesale and retail trade 180,722 9.04% 185,808 9.72% Real estate 154,426 7.72% 161,815 8.46% Administration of water conservancy, environment and public facilities 113,498 5.68% 87,829 4.59% Construction 77,390 3.87% 80,505 4.21% Financing 61,945 3.10% 40,338 2.11% Scientific research, technology services and geological exploration 32,539 1.63% 28,695 1.50% Information transmission, computer services and software industry 26,104 1.31% 25,114 1.31% Transportation, storage and postal service 19,772 0.99% 18,930 0.99% Production and supply of electricity, heat, gas and water 17,618 0.88% 17,525 0.92% Accommodation and catering 15,761 0.79% 17,947 0.94% Agriculture, forestry, animal husbandry and fishery 13,818 0.69% 13,825 0.72% Mining 13,491 0.67% 12,832 0.67% Culture, sports and entertainment 6,780 0.34% 6,422 0.34% Education 4,211 0.21% 3,292 0.17% Household services and other services 2,024 0.10% 1,969 0.10% Health, social security and social welfare 1,894 0.09% 2,163 0.11% Public administration, social securit and social organization 40 0.00% - 0.00% Corporate loans and advances 1,436,766 71.85% 1,331,459 69.61% Personal loans and advances 433,189 21.66% 464,408 24.28% Discounted bills 129,828 6.49% 116,916 6.11% Total 1,999,783 100.00% 1,912,783 100.00%
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 92 - (6) Credit risk analysis of loans and advances to customers At the balance sheet date, the stage, overdue information and allowance for ECLs of loans and advances to customers (fair value changes and interest accrued excluded) of the Group are listed as follows: Notes 30 June 2026 31 December 2025 Credit-impaired 30,303 29,960 Less: Allowance for ECLs (a) (18,549) (17,443) Subtotal 11,754 12,517 --------------------- --------------------- Overdue but not credit-impaired 11,408 8,963 Less: Allowance for ECLs (b) (2,415) (2,666) Subtotal 8,993 6,297 --------------------- --------------------- Neither overdue nor credit-impaired 1,958,072 1,873,860 Less: Allowance for ECLs (c) (20,694) (19,365) Subtotal 1,937,378 1,854,495 --------------------- --------------------- Total 1,958,125 1,873,309 (a) At 30 June 2026, the allowance for ECLs of the loans and advances to customers measured at FVOCI which were credit-impaired were RMB258 million (31 December 2025: RMB319 million). The allowance for ECLs are recognized in other comprehensive income, without offsetting the carrying amount of these financial assets in the balance sheet. (b) At 30 June 2026, the allowance for ECLs of the loans and advances to customers measured at FVOCI which were overdue but not credit -impaired were RMB20 million (31 December 2025: RMB21 million). The allowance for ECLs are recognized in other comprehensive income, without offsetting the carrying amount of these financial assets in the balance sheet. (c) At 30 June 2026, the allowance for ECLs of the loans and advances to customers measured at FVOCI which were neither overdue nor credit -impaired were RMB 472 million (31 December 202 5: RMB640 million). The allowance for ECLs are recognized in other comprehensive income, without offsetting the carrying amount of these financial assets in the balance sheet.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 93 - (7) Credit risk analysis of the amounts due from banks and other financial institutions Amounts due from banks and other financial institutions include deposits with banks and other financial institutions, placements with banks and other financial institutions and financial assets purchased under resale agreements. At the balance sheet date, the book balance (interest accrued excluded) of the Group's due from banks and other financial institutions classified by stage, overdue information and counterparties are analyzed as follows: 30 June 2026 31 December 2025 Neither overdue nor credit-impaired - AAA1 to AAA6 59,356 54,628 - AA1 to AA6 17,299 31,305 - A1 to A3 129,845 72,892 - No rating 8,775 11,157 Less: Allowance for ECLs (35) (50) Total 215,240 169,932
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 94 - (8) Credit risk analysis of debt instrument investments The Group continuously monitors the credit risk profile of the debt instrument portfolio s held . At the balance sheet date, the carrying amount (fair value changes and interest accrued excluded) of the debt instruments which are subjected to the measurement of ECLs is listed as follows: Notes 30 June 2026 31 December 2025 Credit-impaired 47,039 50,027 Less: Allowance for ECLs (a) (19,399) (24,001) Subtotal 27,640 26,026 --------------------- --------------------- Overdue but not credit-impaired 1,280 123 Less: Allowance for ECLs (105) (2) Subtotal 1,175 121 --------------------- --------------------- Neither overdue nor credit-impaired - Government 313,774 326,267 - Policy banks 260,575 254,930 - Commercial banks 33,355 46,337 - Other financial institutions 22,282 13,973 - Others 130,420 141,336 Less: Allowance for ECLs (b) (938) (1,023) Subtotal 759,468 781,820 --------------------- --------------------- Total 788,283 807,967 (a) At 30 June 2026, the total allowance for ECLs of the debt investments measured at FVOCI which were credit-impaired, were RMB 26 million (31 December 202 5: RMB26 million). The ECL allowance are recognized in other comprehensive income, without offsetting the carrying amount of these financial assets in the balance sheet. (b) At 30 June 2026, the total allowance for ECLs of the debt investments measured at FVOCI which were neither overdue nor credit -impaired, were RMB367 million (31 December 202 5: RMB367 million). The ECL allowance are recognized in other comprehensive income, without offsetting the carrying amount of these financial assets in the balance sheet.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 95 - (9) Collaterals and other credit enhancement The Group closely monitors the collaterals corresponding to credit-impaired financial assets, as compared with other collaterals, the Group is more likely to confiscate these collateral s to reduce potential credit losses. At the balance sheet date, the Group's credit -impaired loans and advances to customers and financial investments (fair value changes and interest accrued excluded) and the corresponding exposures covered by collateral are listed as follows: 30 June 2026 Gross amount Allowance for ECLs Subtotal Exposures covered by collateral Credit-impaired financial assets Loans and advances to customers - measured at AC 29,856 (18,549) 11,307 20,362 - measured at FVOCI 447 (258) 189 386 Financial investments - measured at AC 46,960 (19,399) 27,561 40,483 - measured at FVOCI 79 (26) 53 - Total 77,342 (38,232) 39,110 61,231 31 December 2025 Gross amount Allowance for ECLs Subtotal Exposures covered by collateral Credit-impaired financial assets Loans and advances to customers - measured at AC 29,358 (17,443) 11,915 20,667 - measured at FVOCI 602 (319) 283 413 Financial investments - measured at AC 49,948 (24,001) 25,947 43,471 - measured at FVOCI 79 (26) 53 - Total 79,987 (41,789) 38,198 64,551
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 96 - 2 Market Risk Market risk refers to the risk of losses of on -balance sheet and off-balance sheet business arising from unfavorable changes in market prices including interest rates, exchange rates, stock prices and commodity prices. The Group's exposures to market risk arise from the trading and non -trading businesses. The Group’s market risk management system consists of the board of directors, senior management, risk management department, capital operation center , technology management department, audit department, other departments, as well as branches, subbranches and the subsidiar ies. Senior management is responsible for implementing and organizing the market risk management, overseeing the implementation of market risk appetite , as well as formulating, periodically evaluating and carrying out relevant policies and procedures for market risk management , so as to ensure the G roup can effectively identify, measure, monitor and control a series of market risks assumed by various businesses. The market risk measurement methods adopted by the Group include duration analysis, foreign exchange exposure analysis, scenario analysis, sensitivity analysis, Value at Risk (VaR) measurement etc., and the measures taken by the Group to control market risks include, among others, limit management, hedging, reducing risk exposures etc. The Group has established a market risk management system in accordance with the Administrative Measures for Market Risk Management of Commercial Banks (Decree No.15 in the year of 2025 of the National Financial Regulatory Administration). The Group has formulated market risk management policies and procedures applicable to the nature, scale, complexity and risk features of its business and aligned such policies and procedures with its overall business development strategy, management capabi lities, capital strength and overall risk level that can be assumed by the Group. The Group updates its market risk appetite and limit management system on a regular basis, further improves the market risk management systems and market risk measurement systems. The Group conducts market risk measurement, monitoring and routine managemen t by using the independent market risk management system. The Group performs daily valuation of trading book positions, continuously monitors non-stop-loss limits and stop-loss limits, and regularly evaluates market risks through stress testing and other methods.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 97 - (1) Interest rate risk Interest rate risk in the banking book refers to the risk of losses in the economic value and overall gains of the banking book arising from adverse changes in interest rate levels and term structure, mainly including gap risk, benchmark risk and optional risk. The objective of the Group’s interest rate risk management is to control the interest rate risk of banking book within an acceptable and reasonable range and reduce the fluctuation of net interest income of banking book as well as economic value thereby maximizing the comprehensive income bank-wide. The Group’s interest rate risk management system of banking book consists of the board of directors, senior management, risk management committee, asset and liability management committee, risk management department, asset and liability management departme nt, capital operation center, audit department and other operation and management departments at the head office, as well as branches, sub-branches and subsidiaries. Senior management is responsible for implementing the interest rate risk management of ban king book, establishing the framework for interest rate risk management and the system for measurement of interest rate risk of banking book, and promoting the effective implementation of relevant systems and policies for interest rate risk management of b anking book. The Group measures and evaluates the interest rate risk of banking book mainly through price resetting gap analysis, sensitivity analysis, scenario simulation analysis, stress test etc. During the reporting period, the Group paid close attention to macroeconomic environment, monetary policy adjustments, aligned with the Group’s strategic direction and b usiness development needs, dynamically adjusting repricing gaps, optimizing asset -liability structures, and proactively employing hedging instruments to manage interest rate risks. At the balance sheet date, the interest rate risk of banking book of the Group is within the target limit and the risk is under control as a whole. Due to fluctuations in market interest rates, the Group's interest margin may increase, or may decrease or even incur losses due to unexpected changes. The Group operates its business in accordance with the deposit and loan interest rate policies of the PBOC.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 98 - The following tables indicate the financial assets and financial liabilities of the Group at the balance sheet date by the ex pected next repricing date or by maturity date, whichever is earlier. 30 June 2026 Non- interest bearing Within 1 months After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial assets Cash and balances with the central bank 819 173,576 - - - - 174,395 Deposits with banks and other financial institutions 36 35,895 2,100 2,300 - 33 40,364 Placements with banks and other financial institutions 63 2,021 712 1,051 5,248 169 9,264 Derivative financial assets 22,160 - - - - - 22,160 Financial assets purchased under resale agreements 36 165,511 - 200 - - 165,747 Loans and advances to customers 9,549 267,528 203,093 1,093,642 339,444 55,201 1,968,457 Financial investments - measured at FVTPL 137,321 6,922 7,733 61,633 17,394 24,379 255,382 - measured at AC 7,109 27,721 12,247 38,434 244,887 157,481 487,879 - measured at FVOCI 4,632 3,341 9,103 37,389 140,970 117,357 312,792 Other financial assets 7,917 2,697 3,895 34,541 21,685 2,533 73,268 Total financial assets 189,642 685,212 238,883 1,269,190 769,628 357,153 3,509,708 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 99 - 30 June 2026 Non- interest bearing Within 1 months After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial liabilities Due to the central bank (372) (1,152) (15,424) (19,726) (2,940) - (39,614) Deposits from banks and other financial institutions (2,142) (130,644) (95,731) (172,126) - - (400,643) Placements from banks and other financial institutions (477) (20,441) (20,184) (70,916) (1,363) (191) (113,572) Financial liabilities at fair value through profit or loss (142,953) (20,470) - (444) - - (163,867) Derivative financial liabilities (31,558) - - - - - (31,558) Financial assets sold under repurchase agreements (25) (57,987) (679) (621) - - (59,312) Customer deposits (33,300) (780,770) (237,895) (618,707) (506,625) - (2,177,297) Debt securities issued (2,103) (73,029) (25,952) (254,446) (88,473) (30,000) (474,003) Lease liabilities - (50) (99) (526) (1,509) (334) (2,518) Other financial liabilities (14,474) - - - - - (14,474) Total financial liabilities (227,404) (1,084,543) (395,964) (1,137,512) (600,910) (30,525) (3,476,858) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Interest rate exposure (37,762) (399,331) (157,081) 131,678 168,718 326,628 32,850
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 100 - 31 December 2025 Non- interest bearing Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial assets Cash and balances with the central bank 923 124,781 - - - - 125,704 Deposits with banks and other financial institutions 105 55,531 14,414 3,500 17 16 73,583 Placements with banks and other financial institutions 53 4,949 174 676 100 - 5,952 Derivative financial assets 27,551 - - - - - 27,551 Financial assets purchased under resale agreements 44 90,555 - - - - 90,599 Loans and advances to customers 9,222 536,450 185,870 758,099 325,768 67,828 1,883,237 Financial investments - measured at FVTPL 140,703 18,465 4,335 28,933 28,715 8,644 229,795 - measured at AC 7,600 23,502 20,144 55,768 196,043 151,794 454,851 - measured at FVOCI 5,622 3,114 6,846 40,312 206,660 104,307 366,861 Other financial assets 8,427 1,995 9,851 28,074 21,856 2,353 72,556 Total financial assets 200,250 859,342 241,634 915,362 779,159 334,942 3,330,689 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 101 - 31 December 2025 Non- interest bearing Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial liabilities Due to the central bank (294) (41,578) (25,478) (34,856) - - (102,206) Deposits from banks and other financial institutions (1,386) (103,909) (56,154) (182,925) - - (344,374) Placements from banks and other financial institutions (536) (27,110) (19,335) (69,367) (904) (207) (117,459) Financial liabilities at fair value through profit or loss (42,204) (13,307) - (449) - - (55,960) Derivative financial liabilities (20,769) - - - - - (20,769) Financial assets sold under repurchase agreements (7) (53,202) - - - - (53,209) Customer deposits (37,454) (736,467) (217,614) (579,273) (472,658) - (2,043,466) Debt securities issued (2,679) (35,912) (38,760) (285,602) (120,000) (30,000) (512,953) Lease liabilities - (94) (127) (535) (1,547) (388) (2,691) Other financial liabilities (10,457) (59) (258) (38) - - (10,812) Total financial liabilities (115,786) (1,011,638) (357,726) (1,153,045) (595,109) (30,595) (3,263,899) ------------- ------------- ------------- ------------- ------------- ------------- ------------- Interest rate exposure 84,464 (152,296) (116,092) (237,683) 184,050 304,347 66,790
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 102 - The Group measures the potential effect of change in interest rates on the Group’s net interest income and other comprehensive income by the sensitivity analysis method. The following table sets forth the effect on the Group’s net interest income and other comprehensive income from possible and reasonable interest rate fluctuations with all other variables held constant. The effect on net interest income refers to the effect of certain interest rate changes on the net interest income generated by financial assets and liabilities that are held at the end of the year and whose interest rate are expected to be repriced within one year. The effect on other comprehensive income refers to the effect of certain interest rate changes on the fair value change generated by debt investments measured at FVOCI that are held at the end of the year. The following table sets forth the effect on the Group’s net interest income and other comprehensive income from interest rate fluctuations with other variables held constant (income tax expense included): 30 June 2026 31 December 2025 Net interest income Other comprehensive income Net interest income Other comprehensive income (Decrease) / Increase (Decrease) / Increase (Decrease) / Increase (Decrease) / Increase Change in interest rate Increase by 25 basis points (870) (2,791) (622) (2,590) Decrease by 25 basis points 870 2,809 622 2,610 For the purpose of the sensitivity analysis, the Group adopts the following assumptions in determining commercial conditions and financial parameters: (i) the analysis is based on the static gap at the balance sheet date, regardless of subsequent changes; (ii) all assets and liabilities that are repriced or due within one year are assumed to be repriced or due at the beginning of the respective periods; (iii) same fluctuations in interest rates of different interest -bearing assets and interest -bearing liabilities are the same; (iv) yield curves move in parallel with change in interest rates; (v) there are no other changes in the assets or liabilities portfolio; (vi) no consideration of impact on customer behavior, market price and off -balance sheet business resulting from interest rate changes; and (vii) no consideration of actions taken by the Group in response to interest rate changes. Therefore, the actual results on net interest income and other comprehensive income due to the increase or decrease in interest rates may differ from the analysis based on such assumptions. (2) Foreign exchange risk The Group’s business mainly operates in China and settles in RMB. The tables below show the Group’s exposure to currency risk at the balance sheet date with the book values of various financial assets and liabilities converted into RMB.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 103 - 30 June 2026 RMB USD (RMB equivalent) HKD (RMB equivalent) Others (RMB equivalent) Total Financial assets Cash and balances with the central bank 168,756 5,243 65 331 174,395 Deposits with banks and other financial institutions 32,432 6,093 316 1,523 40,364 Placement with banks and other financial institutions 2,820 5,797 415 232 9,264 Derivative financial assets 17,959 3,671 502 28 22,160 Financial assets purchased under resale agreements 165,747 - - - 165,747 Loans and advances to customers 1,930,214 16,854 9,483 11,906 1,968,457 Financial investments - measured at FVTPL 241,954 13,237 34 157 255,382 - measured at AC 456,547 22,554 - 8,778 487,879 - measured at FVOCI 222,266 64,282 1,541 24,703 312,792 Other financial assets 70,957 1,973 84 254 73,268 Total financial assets 3,309,652 139,704 12,440 47,912 3,509,708 ----------------- ----------------- ----------------- ----------------- ----------------- Financial liabilities Due to the central bank (39,614) - - - (39,614) Deposits from banks and other financial institutions (379,071) (14,241) (5,422) (1,909) (400,643) Placements from banks and other financial institutions (89,846) (18,720) (1,783) (3,223) (113,572) Financial liabilities at fair value through profit or loss (163,867) - - - (163,867) Derivative financial liabilities (27,692) (3,392) (453) (21) (31,558) Financial assets sold under repurchase agreements (57,378) (1,934) - - (59,312) Customer deposits (2,037,244) (105,314) (1,780) (32,959) (2,177,297) Debt securities issued (469,894) (3,686) (423) - (474,003) Lease liabilities (2,504) - (14) - (2,518) Other financial liabilities (14,262) (118) (6) (88) (14,474) Total financial liabilities (3,281,372) (147,405) (9,881) (38,200) (3,476,858) ----------------- ----------------- ---------------- ----------------- ----------------- Net amount 28,280 (7,701) 2,559 9,712 32,850 Credit commitments and financial guarantee 827,127 17,193 1,675 9,028 855,023
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 104 - 31 December 2025 RMB USD (RMB equivalent) HKD (RMB equivalent) Others (RMB equivalent) Total Financial assets Cash and balances with the central bank 117,638 7,763 55 248 125,704 Deposits with banks and other financial institutions 66,969 4,938 313 1,363 73,583 Placement with banks and other financial institutions 888 5,064 - - 5,952 Derivative financial assets 22,717 4,703 114 17 27,551 Financial assets purchased under resale agreements 90,599 - - - 90,599 Loans and advances to customers 1,844,694 14,319 10,464 13,760 1,883,237 Financial investments - measured at FVTPL 228,744 1,051 - - 229,795 - measured at AC 442,550 11,836 - 465 454,851 - measured at FVOCI 284,118 62,100 1,964 18,679 366,861 Other financial assets 68,441 3,525 140 450 72,556 Total financial assets 3,167,358 115,299 13,050 34,982 3,330,689 ----------------- ----------------- ----------------- ----------------- ----------------- Financial liabilities Due to the central bank (102,206) - - - (102,206) Deposits from banks and other financial institutions (318,462) (10,433) (4,828) (10,651) (344,374) Placements from banks and other financial institutions (103,942) (13,337) (180) - (117,459) Financial liabilities at fair value through profit or loss (55,960) - - - (55,960) Derivative financial liabilities (16,411) (4,237) (99) (22) (20,769) Financial assets sold under repurchase agreements (53,066) (143) - - (53,209) Customer deposits (1,915,353) (100,543) (1,853) (25,717) (2,043,466) Debt securities issued (512,953) - - - (512,953) Lease liabilities (2,683) - (8) - (2,691) Other financial liabilities (10,664) (128) (12) (8) (10,812) Total financial liabilities (3,091,700) (128,821) (6,980) (36,398) (3,263,899) ----------------- ----------------- ---------------- ----------------- ----------------- Net amount 75,658 (13,522) 6,070 (1,416) 66,790 Credit commitments and financial guarantee 804,826 16,160 1,396 9,427 831,809
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 105 - The Group measures the potential effect of changes in foreign exchange rates on the Group’s net profit and equity by the sensitivity analysis method. The following table sets forth the effect on the Group’s net profit and equity from possible foreign exchange rate fluctuations with other variables held constant (income tax expense included): Sensitivity of net profit and equity 30 June 2026 31 December 2025 (Decrease) / Increase (Decrease) / Increase Change in USD exchange rate Appreciation against RMB by 100 bps (58) (101) Depreciation against RMB by 100 bps 58 101 Change in HKD exchange rate Appreciation against RMB by 100 bps (15) (14) Depreciation against RMB by 100 bps 15 14 The sensitivity analysis is based on the following assumptions: (i) the analysis is based on the static gap at the balance sheet date, regardless of subsequent changes; (ii) the foreign exchange rate sensitivity is the gains or losses recognized as a result of a 100 -basis point fluctuation in the absolute value of foreign exchange rates against the closing price (middle price) of RMB at the balance sheet date; (iii) the fluctuation of exchange rates by 100 basis points at the balance sheet date is based on the assumption of exchange rates movement over the next 12 months; (iv) when calculating the foreign exchange exposure, spot and forward from foreign exchange exposure and swaps are included; (v) other variables (including interest rates) remain unchanged; (vi) no consideration of impact on customers’ behavior and market price resulting from exchange rate changes; and (vii) the assets and liabilities have a static exchange rate risk structure and no consideration is given to the measures that the Group may take to eliminate the adverse impact of foreign exchange exposure on net profit and equity. Therefore, the actual results of net profit and equity due to changes in foreign currency exchange rates may differ from the analysis based on such assumptions.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 106 - 3 Liquidity Risk Liquidity risk refers to the risk of failure to obtain adequate funds in time at reasonable costs to repay debts when they are due, perform other payment obligations and meet other capital needs in the ordinary course of business. Factors affecting liquidity risks are divided into external factors and internal factors. External factors include domestic and foreign financial situation, macroeconomic regulation policies, depth and width of developments of financial markets and the competition status of the banking industry. Internal factors include maturities of assets and liabilities, business structures, stability of deposits, and market financing capacity and various unexpected events, etc. The objective of the Group’s liquidity management is to ensure that the Group's liquidity needs can be met in a timely manner and at a reasonable cost thereby controlling the liquidity risk within an acceptable and reasonable range. The Group’s liquidity risk management system consists of the board of directors, senior management, risk management committee, asset and liability management committee, risk management department, asset and liability management department, capital operation center, audit department, other operation and management departments of the head office, as well as branches, subbranches and subsidiaries. Senior management is responsible for implementing and organizing the liquidity risk management as well as the form ulation and implementation of relevant systems and policies for liquidity risk management. The Group manages the liquidity risk in a centralized manner. By establishing a scientific and completed liquidity risk management system, the Group can effectively identify, measure, monitor, control and report its liquidity risk. The Group strengthens it s liquidity risk management ability by continuously improving the perspectiveness and initiative of liquidity risk management. Specific measures for liquidity risk management include: paying close attention to both domestic and foreign macroeconomic situations and market liquidity changes, as well as adjusting the asset and liability management strategies in a timely manner; strengthening debt management, making flexible use of active debt instruments, broadening long-term sources of fund, and continuously increasing the proportion of stable liabilities; promoting the construction of diversified of financing channels and actively expanding financing channels while maintaining good relationships with major financing counterparties; strengthening the management of high-quality liquid assets, ensuring the fitness of the retention scale of high-quality liquid assets and the potential financing needs to enhance the liquidity risk mitigation capability; strengthening the early-warning monitoring and management of liquidity, optimizing the emergency response program for liquidity risk and conducting emergency drills on a regular basis; conducting stress tests for liquidity risk on a quarterly basis, identifying weak points in respect of the Group’s liquidity risk man agement based on results of such tests, adjusting liquidity risk management strategies if necessary, and modifying the liquidity risk management measures in a timely manner to improve liquidity risk management mechanism. The results of stress tests indicate that under various stress scenarios, the liquidity risk of the Group is within a controllable range.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 107 - (1) Analysis of contractual undiscounted cash flows of non derivative financial assets and financial liabilities The tables below present the contractual undiscounted cash flows of non -derivative financial assets and financial liabilities by remaining contractual maturities from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows: 30 June 2026 Overdue On demand / indefinite Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial assets Cash and balances with the central bank - 174,395 - - - - - 174,395 Deposits with banks and other financial institutions - 35,395 501 2,117 2,342 - 39 40,394 Placements with banks and other financial institutions - - 2,042 720 1,273 5,653 179 9,867 Financial assets purchased under resale agreements - - 165,551 - 201 - - 165,752 Loans and advances to customers 17,028 - 90,723 182,751 865,186 554,162 374,579 2,084,429 Financial investments - measured at FVTPL 164 137,321 7,033 7,985 62,934 21,009 35,100 271,546 - measured at AC 23,531 - 4,578 15,087 46,716 273,676 186,314 549,902 - measured at FVOCI - 1,477 4,141 10,509 43,886 161,856 140,714 362,583 Other financial assets 2,393 6,055 2,693 4,370 18,907 40,267 5,168 79,853 Total financial assets 43,116 354,643 277,262 223,539 1,041,445 1,056,623 742,093 3,738,721 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 108 - 30 June 2026 Overdue On demand / indefinite Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial liabilities Due to the central bank - - (1,169) (15,678) (20,011) (2,950) - (39,808) Deposits from banks and other financial institutions - (112,033) (18,895) (97,014) (174,571) - - (402,513) Placements from banks and other financial institutions - - (20,620) (20,495) (71,825) (1,469) (268) (114,677) Financial liabilities at fair value through profit or loss - (141,728) (21,695) - (444) - - (163,867) Financial assets sold under repurchase agreements - - (58,010) (682) (639) - - (59,331) Customer deposits - (657,650) (159,807) (233,359) (665,552) (491,489) - (2,207,857) Debt securities issued - - (74,129) (26,433) (259,625) (94,938) (32,438) (487,563) Lease liabilities - - (52) (100) (538) (1,664) (405) (2,759) Other financial liabilities - (13,788) (90) (470) (126) - - (14,474) Total financial liabilities - (925,199) (354,467) (394,231) (1,193,331) (592,510) (33,111) (3,492,849) ------------------ ------------------ ------------------ ------------------ ------------------ ----------------- ------------------ ------------------ Net amount 43,116 (570,556) (77,205) (170,692) (151,886) 464,113 708,982 245,872
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 109 - 31 December 2025 Overdue On demand / indefinite Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial assets Cash and balances with the central bank - 125,704 - - - - - 125,704 Deposits with banks and other financial institutions - 50,279 5,273 14,500 3,562 19 19 73,652 Placements with banks and other financial institutions - - 109 18 887 5,555 - 6,569 Financial assets purchased under resale agreements - - 90,617 - - - - 90,617 Loans and advances to customers 11,575 - 121,646 181,593 780,110 517,395 388,785 2,001,104 Financial investments - measured at FVTPL 2 140,702 18,473 2,935 23,814 37,932 9,271 233,129 - measured at AC 19,885 - 4,160 21,230 57,357 224,647 183,000 510,279 - measured at FVOCI - 1,464 2,249 5,759 36,915 241,908 124,916 413,211 Other financial assets 1,805 6,993 2,454 4,386 18,420 39,937 5,109 79,104 Total financial assets 33,267 325,142 244,981 230,421 921,065 1,067,393 711,100 3,533,369 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 110 - 31 December 2025 Overdue On demand / indefinite Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Financial liabilities Due to the central bank - - (41,596) (25,720) (35,381) - - (102,697) Deposits from banks and other financial institutions - (88,508) (15,597) (56,785) (185,509) - - (346,399) Placements from banks and other financial institutions - (12,007) (28,082) (19,921) (64,392) (1,069) (208) (125,679) Financial liabilities at fair value through profit or loss - (42,204) (13,307) - (449) - - (55,960) Financial assets sold under repurchase agreements - - (53,212) - - - - (53,212) Customer deposits - (578,633) (172,310) (230,648) (604,875) (489,898) - (2,076,364) Debt securities issued - - (36,200) (39,914) (291,666) (128,555) (33,132) (529,467) Lease liabilities - - (94) (128) (549) (1,710) (471) (2,952) Other financial liabilities - (10,289) (66) (271) (186) - - (10,812) Total financial liabilities - (731,641) (360,464) (373,387) (1,183,007) (621,232) (33,811) (3,303,542) ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net amount 33,267 (406,499) (115,483) (142,966) (261,942) 446,161 677,289 229,827
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 111 - (2) Analysis of cash flows of derivative financial instruments The Group's derivative financial instruments are either settled on a net basis or a gross basis. The Group’s derivatives settled on a net basis mainly include interest rate derivatives. The table below analyzes the contractual undiscounted cash flows of the Group’s derivative financial instruments settled on a net basis by remaining contractual maturities from the balance sheet date to the contractual maturity date. 30 June 2026 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Cash inflow / (outflow) 16 (214) (3,731) (160) - (4,089) 31 December 2025 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Cash inflow / (outflow) 4,344 (190) 925 (122) - 4,957 The Group’s derivative settled on a gross basis mainly include foreign exchange derivatives. The following table analyzes the contractual undiscounted cash flows of the Group's derivative financial instruments settled on a gross basis by remaining contractual maturities from the balance sheet date to the contractual maturity date: 30 June 2026 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Cash outflow (149,291) (128,739) (311,481) (14,559) (70) (604,140) Cash inflow 144,663 127,600 311,013 14,664 31 597,971 Net (outflow) / inflow (4,628) (1,139) (468) 105 (39) (6,169) 31 December 2025 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Cash outflow (187,141) (106,197) (308,643) (13,221) (6) (615,208) Cash inflow 187,253 106,431 309,226 13,261 9 616,180 Net inflow 112 234 583 40 3 972
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 112 - (3) Liquidity risk analysis of off-balance sheet items The Group’s off-balance sheet items include bank acceptances, letters of credit, letters of guarantee, undrawn credit card limit, corporate loan commitments and finance lease commitments, receivables confirmation and other financial guarantee contracts. The table below shows the liquidity analysis of the Group’s off-balance sheet items: 30 June 2026 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Bank acceptances issued 50,979 89,314 252,705 - - 392,998 Letters of credit issued 207,211 29,996 83,811 53 - 321,071 Letters of guarantee issued 4,347 7,676 23,625 8,807 30 44,485 Undrawn credit card facility 21,676 - - - - 21,676 Loan commitments and finance lease commitments 3,735 - 38 831 1,629 6,233 Receivables confirmation and other financial guarantee contracts 8,376 16,883 37,751 5,550 - 68,560 Total 296,324 143,869 397,930 15,241 1,659 855,023 31 December 2025 Within 1 month After 1 month but within 3 months After 3 months but within 1 year After 1 year but within 5 years After 5 years Total Bank acceptances issued 100,777 120,660 184,071 - - 405,508 Letters of credit issued 192,396 29,391 57,219 34 - 279,040 Letters of guarantee issued 4,289 6,428 21,599 10,771 39 43,126 Undrawn credit card facility 19,634 - - - - 19,634 Loan commitments and finance lease commitments 2,741 194 663 1,219 721 5,538 Receivables confirmation and other financial guarantee contracts 11,145 13,974 47,703 6,141 - 78,963 Total 330,982 170,647 311,255 18,165 760 831,809
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 113 - XI Capital Management The core of the Group’s capital management is capital adequacy ratio and return on capital. The objective of capital management is to meet external regulatory requirements and shareholders’ return, protect the interests of creditors to the best effort, sti mulate expansion of assets and improve risk management. The Group prudently determines the objective of capital adequacy ratio which meets the regulatory requirements and coincides with its own risk exposure. By taking a variety of actions such as limit management, the Group ensures the realization of the management objectives. The Group’s business has maintained stable growth in recent years and the assets have become increasingly capital intensive. On 13 February 2026, the People’s Bank of China and the National Financial Regulatory Administration jointly released the list of Domestic Systemically Important Banks (“D-SIBs”), designating the Group as a Domestic Systemically Important Bank Therefore, t he Group is furtherly required to meet additional requirements , including the capital surcharge and the additional leverage ratio requirements. In order to ensure that the capital adequacy ratio meets the regulatory requirements and to maximize the returns to shareholders with the risks under control, the Group has actively expanded the capital replenishment channels from external sources, while c ontinuing to improve the self-generating function in operations, so as to replenish capital from internal sources. At 30 June 2026, the Group has calculated and disclosed capital adequacy ratio in accordance with the Administrative Measures for Capital of Commercial Banks (Decree No.4 in the year of 2023 of the National Financial Regulatory Administration), with credit risk-weighted assets measured using the risk- weighted approach, market risk-weighted assets and operational risk-weighted assets measured using the standardized approach. At 30 June 2026, the Group's core tier-one capital adequacy ratio, tier-one capital adequacy ratio, and capital adequacy ratio all met the requirements of the Administrative Measures for Capital of Commercial Banks and other relevant regulations. For more information on capital, please refer to the 2026 Interim Pillar 3 Information Disclosure Report disclosed on the Bank's website.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 114 - XII Fair Value of Financial Instruments 1 Fair values of financial assets and liabilities (1) Fair value hierarchy The level in which fair value measurement is categorized is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement. The levels are defined as follows: Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabilities; Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or liabilities; and Level 3 inputs: inputs that are unobservable for underlying assets or liabilities. The tables below analyzes financial instruments, measured at fair value at the balance sheet date, by the level in the fair value hierarchy into which the fair value measurement is categorized: 30 June 2026 Level 1 fair value measurement Level 2 fair value measurement Level 3 fair value measurement Total Derivative financial assets - 22,160 - 22,160 Loans and advances to customers - 317,159 1,678 318,837 Financial investments - measured at FVTPL 60,178 191,815 3,389 255,382 - measured at AC designated as hedged items in fair value hedge - 3,298 - 3,298 - measured at FVOCI - 311,315 1,477 312,792 Total assets measured at fair value on a recurring basis 60,178 845,747 6,544 912,469 Placements from banks and other financial institutions - (17,134) - (17,134) Financial liabilities at fair value through profit or loss (7,247) (156,620) - (163,867) Derivative financial liabilities - (31,558) - (31,558) Total liabilities measured at fair value on a recurring basis (7,247) (205,312) - (212,559)
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 115 - 31 December 2025 Level 1 fair value measurement Level 2 fair value measurement Level 3 fair value measurement Total Derivative financial assets - 27,551 - 27,551 Loans and advances to customers - 305,369 2,036 307,405 Financial investments - measured at FVTPL 51,374 175,655 2,766 229,795 - measured at AC designated as hedged items in fair value hedge - 4,870 - 4,870 - measured at FVOCI - 365,397 1,464 366,861 Total assets measured at fair value on a recurring basis 51,374 878,842 6,266 936,482 Placements from banks and other financial institutions - (24,116) - (24,116) Financial liabilities at fair value through profit or loss (1,619) (54,341) - (55,960) Derivative financial liabilities - (20,769) - (20,769) Total liabilities measured at fair value on a recurring basis (1,619) (99,226) - (100,845) (2) Level 1 fair value measurement For financial instruments with unadjusted quoted prices in active markets that are observable for identical assets or liabilities, the Group takes the unadjusted quoted price as the best evidence of fair value when determining the fair value of financial instruments. So as to determine its fair value, and divide it into the first level measured by fair value. The financial instruments defined as level 1 by the Group mainly include open-end funds, open-end wealth management products and unrestricted equity investments in listed companies. (3) Level 2 fair value measurement If the main parameters used in the valuation are observable and available from the active open market, the relevant financial instruments are defined as level 2 fair value measurement. The Group’s level 2 financial instruments mainly include bond and ABS i nvestments, term -ended funds, discounted bills, trade finance, restricted equity investments in listed companies, lease -in of precious metals in account caption of placements from banks and other financial institutions, financial liabilities related to precious metals in account caption of financial liabilities at fair value through profit or loss, interest rate derivatives, foreign exchange derivatives, precious metal and other derivatives.
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 116 - For the fair value of RMB bond and ABS investments measured at FVTPL and FVOCI, the Group adopts the valuation results issued by China Central Depository & Clearing Co., Ltd. or China Securities Depository and Clearing Co., Ltd. according to the bond marke t. For the fair value of foreign currency bonds, the Group adopts Bloomberg results. For the fair value of precious metal related liabilities, the Group adopts the valuation results issued by Shanghai Gold Exchange . For discounted bills, trade finance and RMB bonds designated as hedged items of fair value hedge, the Group adopts discounted cash flow model for valuation which based on SHIBOR and yield curves issued by Shanghai Commercial Paper Exchange Co., and China C entral Depository & Clearing Co., the Group constructs the interest rate curve by five -category loan classification and product type. For restricted equity investments in listed companies, liquidity discounts is considered based on the closing price. For non-derivative financial instruments and some derivative financial instruments including forwards and swaps of precious metal and foreign exchange and interest rate swaps, etc. that could not be quoted from the active market, the Group adopts discounte d cash flow analysis. The main parameters used include the recent transaction price, relevant yield curve, exchange rate and counterparty risk. For the valuation of option derivatives, the Group adopts Black-Scholes model with main parameters of relevant yield curve, exchange rate and volatility, etc. The fair value of shares held by other parties rather than the Group and liabilities of consolidated structured entities is measured based on the net asset values of the funds, determined with reference to observable (quoted) prices of underlying investment portfolio and adjustments of related expenses. (4) Level 3 fair value measurement The Group has developed relevant procedures to determine the appropriate valuation techniques and inputs for level 3 fair value measurement on a recurring basis, and regularly reviews the appropriateness of the relevant procedures and determination of the fair value. The qualitative information regarding the valuation techniques and important unobservable inputs used for level 3 fair value measurement is as follows: Fair value at 30 June 2026 Valuation technique Unobservable inputs Financial investments measured at FVTPL - Trust schemes and asset management plans 70 Discounted cash flow method Risk-adjusted discount rate - Trust schemes and asset management plans 2,042 Net assets analysis Net assets, Liquidity discount - Bonds and assets-backed securities 1,064 Discounted cash flow method Risk-adjusted discount rate - Equity investments 198 Net assets analysis Net assets - Equity investments 15 Market multiplier method Liquidity discount Financial investments measured at FVOCI - Equity investments 1,477 Net assets analysis Net assets, Liquidity discount - Loans and advances to customers 1,678 Discounted cash flow method Risk-adjusted discount rate
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 117 - Fair value at 31 December 2025 Valuation technique Unobservable inputs Financial investments measured at FVTPL - Trust schemes and asset management plans 71 Discounted cash flow method Risk-adjusted discount rate - Trust schemes and asset management plans 1,406 Net assets analysis Net assets, Liquidity discount - Bonds and assets-backed securities 1,044 Discounted cash flow method Risk-adjusted discount rate - Equity investments 195 Net assets analysis Net assets - Equity investments 50 Market multiplier method Liquidity discount Financial investments measured at FVOCI - Equity investments 1,464 Net assets analysis Net assets, Liquidity discount - Loans and advances to customers 2,036 Discounted cash flow method Risk-adjusted discount rate At the balance sheet date, replacing the original unobservable assumptions with other reasonable unobservable assumptions has no significant impact on the measurement results of fair value. The above assumptions and methods provide a unified basis for the c alculation of the fair value of the Group's assets and liabilities. However, due to the different methods and assumptions that may be used by other institutions, the fair values disclosed by different financial institutions may not be completely comparable. Reconciliation of the opening and closing balance for financial assets of level 3 fair value on a recurring basis is as follows: Financial investments measured at FVTPL Financial investments measured at FVOCI Loans and advances to customers Total At 1 January 2026 2,766 1,464 2,036 6,266 Total gains recognized in profit or loss 131 - 15 146 Total gains recognized in other comprehensive income - 13 (33) (20) Increase 727 - - 727 Disposals and settlements (235) - (340) (575) At 30 June 2026 3,389 1,477 1,678 6,544 Total unrealised gains and losses included in the consolidated statement of profit or loss for assets held at the end of the reporting period 125 - (22) 103
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 118 - Financial investments measured at FVTPL Financial investments measured at FVOCI Loans and advances to customers Total At 1 January 2025 5,133 1,420 11,474 18,027 Total gains recognized in profit or loss (581) 6 490 (85) Total gains recognized in other comprehensive income - 44 (314) (270) Increase 45 - - 45 Disposals and settlements (1,831) (6) (9,614) (11,451) At 31 December 2025 2,766 1,464 2,036 6,266 Total unrealised gains and losses included in the consolidated statement of profit or loss for assets held at the end of the reporting period (607) - 142 (465) 2 Transfers between items measured at different levels of fair value During the reporting period, there were no transfers, between Level 1, Level 2 and Level 3, of the Group’s above assets and liabilities which are measured at fair value. 3 Change in valuation techniques and the rationale During the reporting period, there were no changes in the valuation techniques adopted by the Group for fair value measurement. 4 Financial assets and liabilities not measured at fair value All financial instruments of the Group are carried at amounts not materially different from their fair value at the balance sheet date except as follows: 30 June 2026 Level 1 Level 2 Level 3 Fair Value Carrying amount Financial assets Financial investments measured at AC (excluding hedged items) - 422,091 68,360 490,451 484,581 Financial liabilities Debt securities issued - 476,451 - 476,451 474,003
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China Zheshang Bank Co., Ltd. Interim financial report for the six months ended 30 June 2026 (In RMB millions, unless otherwise stated) - 119 - 31 December 2025 Level 1 Level 2 Level 3 Fair Value Carrying amount Financial assets Financial investments measured at AC (excluding hedged items) - 384,405 70,578 454,983 449,981 Financial liabilities Debt securities issued - 515,182 - 515,182 512,953 For the above financial assets and liabilities not measured at fair value, the Group used the following methods to determine their fair value: The fair value of financial investments measured at AC and debt securities issued are quoted in the valuation system of relevant registration and settlement institutions that employs observable inputs that reflect the market in the formation of quotations. For those quotations not available in relevant institutions, the fair value shall be estimated by discounted cash flow method. XIII Subsequent Event 1 Issuance of Undated Additional Tier 1 Capital Bonds On 5 August 2026, the Bank issued a undated additional tier 1 capital bond of RMB30 billion with an initial interest rate rate of 1.95%. XIV Comparative Figures For the purpose of the presentation of these financial statements, the Group reclassified certain comparative figures.
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- 1 - CHINA ZHESHANG BANK CO., LTD. UNREVIEWED SUPPLEMENTARY FINANCIAL INFORMATION (In RMB millions, unless otherwise stated) I Illustration of Differences between the Consolidated Financial Statements Prepared Under IFRS Accounting Standards and Those Prepared in accordance with PRC GAAP There are no differences between the profit attributable to shareholders of the Bank under IFRS Accounting Standards and PRC GAAP for the six months ended 30 June 2026 (for the six months ended 30 June 2025: no differences). There are no differences between the equity attributable to shareholders of the Bank under IFRS Accounting Standards and PRC GAAP at 30 June 2026 (31 December 2025: no differences). II Liquidity Coverage Ratio 30 June 2026 31 December 2025 Liquidity Coverage Ratio 259.85% 174.01% The liquidity coverage ratio is calculated in accordance with the relevant requirements of the National Financial Regulatory Administration. III International Claims The Group is principally engaged in business operations within Chinese Mainland. International claims are local claims in foreign currencies and cross-border claims. International claims include balances with the central bank, due from banks and other financial institutions, loans and advances to customers, financial assets at fair value through profit or loss, financial assets measured at amortised cost and financial assets at fair value through other comprehensive income. International claims are disclosed based on different countries or regions. A country or region is reported where it constitutes 10% or more of the aggregate amount of international claims, after taking into account any risk transfers. Risk transfer is only made if the claims are guaranteed by a party in a country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose head office is located in another country. At 30 June 2026 Bank Official sector Non-bank private sector Total Local claims in foreign currencies 10,292 8,716 56,229 75,237 Asia Pacific excluding Chinese Mainland 9,537 10,900 22,578 43,015 - of which attributed to Hong Kong 6,036 1,123 19,954 27,113 Europe 8,304 7,987 7,862 24,153 North America 6,418 42,109 28,787 77,314 Oceania 909 4,918 - 5,827 Africa - 295 - 295 Total 35,460 74,925 115,456 225,841
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- 2 - At 31 December 2025 Bank Official sector Non-bank private sector Total Local claims in foreign currencies 8,769 12,385 65,341 86,495 Asia Pacific excluding Chinese Mainland 7,667 5,086 19,761 32,514 - of which attributed to Hong Kong 3,940 1,007 16,945 21,892 Europe 6,079 6,328 2,419 14,826 North America 2,492 20,084 24,812 47,388 Oceania 1,069 5,120 - 6,189 Total 26,076 49,003 112,333 187,412 IV Currency Concentrations RMB Equivalent USD HKD Others Total At 30 June 2026 Spot assets 136,033 11,938 47,884 195,855 Spot liabilities (144,013) (9,428) (38,179) (191,620) Forward purchases 447,093 1,268 63,482 511,843 Forward sales (428,706) (9,848) (74,550) (513,104) Net options position 2,901 (134) (102) 2,665 Net long /(short) position 13,308 (6,204) (1,465) 5,639 RMB Equivalent USD HKD Others Total At 31 December 2025 Spot assets 110,596 12,936 34,756 158,288 Spot liabilities (124,584) (6,881) (36,375) (167,840) Forward purchases 688,174 - 56,031 744,205 Forward sales (707,826) (7,746) (52,666) (768,238) Net options position (5,114) (439) (1,178) (6,731) Net (short) / long position (38,754) (2,130) 568 (40,316) V Non-bank Mainland China Exposure The Bank is a commercial bank incorporated in Chinese Mainland with its banking business conducted in Chinese Mainland. At 30 June 2026, the Group’s non-bank exposures are substantially arising from businesses with Chinese Mainland corporates and individuals.