[Sponsored Article] In the first half of 2021, Postal Savings Bank of China (hereinafter referred to as “PSBC”; stock code: 601658.SH, 1658.HK) recorded an operating income of RMB157,778 million (IFRSs, same below), up by 7.71% year on year, and realized net profit of RMB41,244 million, up by 22.48% year on year, representing continuously improved profitability. Both the total assets and assets under management (AUM) for retail customers exceeded RMB12 trillion, hitting a record high in terms of business scale and consolidating the Bank’s market status as a major retail bank. Four “New Generation” systems were established, and the “finance plus service” ecosystem was continuously developed, in an effort to accelerate the digital transformation of the Bank. The NPL ratio dropped 0.05 percentage point to 0.83% and the ratio of allowance for loan impairment losses to NPLs increased 13.27 percentage points to 421.33% compared with the prior year-end, indicating an industry-leading position in terms of assets quality. Recently, PSBC released its 2021 Interim Report. As a major retail bank with unique resource endowment, PSBC seized the momentum to make breakthroughs, and delivered great achievements in its business performance while striding forward on the road of high-quality development. Maintaining the strategic focus of building a retail bank PSBC boasts a natural retail gene and resource endowment in retail banking. Its nearly 40,000 business outlets, which are deep in penetration, extensive in coverage and balanced in layout, cover 99% of China’s counties (cities) and currently serve 630 million individual customers, providing constant impetus for the development of the Bank’s retail banking business and serving as its future growth potential. The Interim Report revealed the Bank’s remarkable achievements in building a retail bank. The AUM of retail customers amounted to RMB12.03 trillion, representing an increase of RMB800 billion compared with the prior year-end. The operating income of personal banking business stood at RMB110,199 million, representing a year-on-year increase of 14.11%, and accounted for 69.84% of the Bank’s operating income, a year-on-year increase of 3.91 percentage points. The personal deposits amounted to RMB9.56 trillion, representing an increase of RMB460,023 million compared with the prior year-end; and the personal loans reached RMB3.56 trillion, representing an increase of RMB304,053 million compared with the prior year-end. Financial technology-empowered transformation of new retail banking Upholding the philosophy of invigorating the Bank through technology, the Bank continued to strengthen the application of financial technologies. Focusing on digital transformation, the Bank pursued the in-depth integration of business and technology, and employed financial technologies to empower the transformation of new retail banking. In terms of core business systems, PSBC simultaneously developed and built several new generation systems, which cover all kinds of products and services of the Bank. Among them, the four core new generation systems were the new generation distributed core system, the new generation credit business platform, the new generation treasury business platform, and the new generation intermediary business platform. In the first half of 2021, the Bank took the initiative to promote institutional reform. For example, it successfully established YOU+ BANK and set up the Digital Currency Department as a tier-1 department of the Head Office. The online ecological layout of “PSBC Canteen + postal service + life scenario” became increasingly mature, and steady progress was made in building an offline ecosystem of “outlets plus business circles”. The technological platform for the new generation distributed core system and the function module on AI application for service and management based on the machine learning platform “PSBC Brain” were successfully rolled out. And a total of 119 projects including the credit business platform for corporate customers were also successfully launched, injecting new momentum into the digital transformation of the Bank. Statistics show that as of the end of June 2021, the Bank recorded 314 million mobile banking customers, and transactions through mobile banking of the first half year amounted to RMB6.75 trillion, representing a year-on-year increase of 24.71%. The number of monthly active users (MAUs) on mobile banking exceeded 43 million. The percentage of micro loans disbursed online in its total micro loans was 94.53%. The balance of online loans to micro and small enterprises (MSEs) exceeded RMB600 billion, representing an increase of 33.12% compared with the prior year-end. Securing the leading position in the industry in terms of asset quality The asset quality of the banking industry is of great concern in the face of the COVID-19 pandemic. The NPL ratio of the Bank decreased 0.05 percentage point to 0.83% compared with the prior year-end, less than half of the industry average. The Bank was in a stronger position to withstand risks with an allowance to NPLs ratio of 421.33%, representing an increase of 13.27 percentage points compared with the prior year-end. A clean balance sheet and the superior asset quality have always been the investment value of PSBC, as well as a shining “business card” of the Bank. Professionals pointed out that the Bank’s excellent performance in each quarter since its listing has not only proved the effectiveness of the Bank’s credit strategy, but also verified the Bank’s forward-looking assessment and prudent classification in terms of asset quality, enabling the Bank to withstand the pressure posed by the pandemic. Recently, Fitch, Moody’s and S&P, the three international rating agencies, released their ratings for PSBC in 2021 as “A+”, “A1” and “A” respectively, all with a stable outlook.