Annual Report 2020 Contents Important Notes Important Notes 01 1.The Board of Directors (hereinafter referred to as the “Board”), the Supervisory Committee, the directors, the supervisors and senior management of the Bank guarantee the authenticity, accuracy and completeness of the contents of the 2020 Annual Report, in which there are no false representations, misleading statements or material omissions, and are severally Chairman’s Statement 02 and jointly take responsibilities for its contents. Chapter 1 Company Profile 06 2.The 16th meeting of the 11th session of the Board of the Bank deliberated the 2020 Annual Report together with its summary. The meeting required 15 directors to attend, and 15 directors attended the meeting. The Annual Report was approved unanimously at the meeting. Chapter 2 Accounting Data and Financial Indicators 20 3. The 2020 annual financial report prepared by the Bank was audited by PricewaterhouseCoopers Zhong Tian LLP (hereinafter referred to as “PwC”) according to the China Standards on Auditing and PwC issued a standard unqualified auditors’ report. Chapter 3 Discussion and Analysis of Operations 31 4.Xie Yonglin (the Bank’s Chairman), Hu Yuefei (the President), Xiang Youzhi (the Vice President and the CFO) and Zhu Chapter 4 Significant Matters 102 Peiqing (the head of the Finance Department) guarantee the authenticity, accuracy and completeness of the financial reports included in the 2020 Annual Report. Chapter 5 Changes in Shares and Shareholders 118 5.The forward-looking statements such as plans for the future involved in the Report do not constitute a substantial commitment for investors. Investors and stakeholders shall be aware of risks therein and appreciate the distinctions between Chapter 6 Preference Shares 126 plans, forecasts and commitments. 6.The Bank advises investors to read the full text of the Annual Report with particular attention to the following risk factors: Chapter 7 Information on the Directors, Supervisors, Senior Management, 130 the risks the Bank is exposed to during its business activities mainly include credit risk, market risk, liquidity risk, operational risk, country risk, interest rate risk on its banking account, reputation risk, strategic risk, information technology risk and legal Employees and Organisations and compliance risk, and the Bank has taken various measures to effectively manage and control these business risks, as discussed in detail under Section III 3.6 Risk Management. Chapter 8 Corporate Governance 154 7. The Bank’s proposal for profit distribution of ordinary shares deliberated by the Board: cash dividend distribution of RMB1.80 per 10 shares (tax inclusive) to all shareholders based on the total share capital of the Bank of 19,405,918,198 Chapter 9 Corporate Bonds 163 shares as at 31 December 2020. There was no proposal to issue bonus shares or to convert public reserve to share capital. Chapter 10 Financial Report 164 Interpretations Chapter 11 Consolidated Balance Sheet 170 Item refer(s) to Interpretations the bank formed and so renamed following the integration Chapter 12 Bank Balance Sheet 172 of Shenzhen Development Bank Co., Ltd. (“Shenzhen Development Bank” or “Shenzhen Development”) and the Ping An Bank, the Bank refer to former Ping An Bank Co., Ltd. (the “Former Ping An Bank”) Chapter 13 Consolidated Income Statement 174 in 2012 through the acquisition of the Former Ping An Bank by Shenzhen Development Chapter 14 Bank Income Statement 176 Ping An Bank Co., Ltd. and its wholly-owned subsidiary The Group refers to Ping An Wealth Management Co., Ltd. Chapter 15 Consolidated And Bank Statement Of Changes In Shareholders’ Equity 178 the national joint-stock commercial bank established on Shenzhen Development Bank or Shenzhen refers to 22 December 1987 and renamed to Ping An Bank after its Development Chapter 16 Consolidated Cash Flow Statement 181 acquisition of the Former Ping An Bank the joint-stock commercial bank established in June 1995 Former Ping An Bank refers to Chapter 17 Bank Cash Flow Statement 184 and deregistered on 12 June 2012 China Ping An and Ping An Group refer to Ping An Insurance (Group) Company of China, Ltd. Chapter 18 Notes to the Financial Statements 187 Ping An Wealth Management refers to Ping An Wealth Management Co., Ltd. Chapter 19 Documents Available for Inspection Catalogue 342 Ping An Life Insurance refers to Ping An Life Insurance Company of China, Ltd. PBOC refers to The People's Bank of China CSRC refers to China Securities Regulatory Commission CBIRC refers to China Banking and Insurance Regulatory Commission 2 Annual Report 2020 PING AN BANK CO., LTD. Annual Report 2020 PING AN BANK CO., LTD. 1 Chairman’s Statement Remaining True to Our Original Aspiration, Getting Back to the Basics, and Seizing the Momentum 2020 was a bumpy year - the complicated international situation was compounded by the outbreak of COVID-19, reshaping the workings of economy and society. But behind such drastic changes are new order and opportunities. It was also the first year since Ping An Bank had started to deepen its transformation. Three years into the endeavour, we entered a new stage, with stronger foundation, greater confidence, better strategies and more stable mechanism. Thanks to both external and internal factors, Ping An Bank did well in the market in 2020. Xie Yonglin PING AN BANK Chairman Encouraging results. The annual operating income increased by 11.3%, marking the third straight year of double-digit growth; the profit before provision increased by 12.0%; the asset under management (AUM) was close to RMB4.5 trillion, the average cost rate of liabilities was 2.32% with a year-on-year decrease of 32 basis points. The retail made up more than RMB2.6 trillion, an increase of 32.4%. Steady quality. The NPL ratio was 1.18%, a decrease of 0.47 percentage point as compared to the end of last year; and the provision coverage ratio was 201.40%, an increase of 18.28 percentage points as compared to the end of last year, making the foundation for performance growth more solid. Balanced structure. With in-depth breakthroughs in retail, the Bank’s AUM operating income per retail outlet increased by 41.5% year on year on average, and the AUM and the number of customers of private banking achieved rapid growth; the Bank reinvented its corporate banking services, focused on the five key sections, built a unified customer management platform, created a new supply chain, and optimised bills services and complex investment and financing, and advanced ecological comprehensive expansion; we improved our interbank capital business by integrating international vision and local wisdom and leveraging the industry's leading technology platform to promote coordination between the retail banking and corporate banking, making it the new growth pole of the Bank. In retrospect, we can see the business logic and management thought behind what we faced and achieved in the past four years. Only by remaining true to the original aspiration, getting back to the basics, and seizing the momentum, can we always “maintain strategic focus to avoid self-inflicted setbacks, clarify development priorities to avoid disorder and chaos, and accurately grasp the trend to keep abreast of the times.” As a financial institution, we are "real economy-oriented", which is our original aspiration. Under the current dual circulation development patten centred on the domestic economy and aimed at integrating the domestic and global economy, the banking industry should serve the real economy in a more comprehensive and innovative manner. The retail transformation is aimed at supporting entities from the consumer side. Four years ago, Ping An Bank initiated its retail transformation strategy, not only because Ping An Group, which backs the Bank, had strong retail gene, but also because consumption had become an increasingly important driver for the growth of the real economy in recent years. Under the current historical imperative of strengthening the domestic economic ecosystem, the intelligent inclusive retail service model created in the first phase of the transformation will have a greater role to play in promoting consumption, expanding domestic demand, and driving the prosperity of production. On the one hand, we help customers to allocate assets and achieve wealth preservation and appreciation. The average yield of the recommended funds among our preference funds offerings reached 52.5% in 2020, with a higher increase of 38.7 percentage points than that of Shanghai Stock Exchange Index for the same period; on the other hand, the Bank 2 Annual Report 2020 PING AN BANK CO., LTD. s Statement Chairman’s Statement ’ Chairman has embedded its financial services in the ecology and scenarios, and used online and intelligent methods to optimise In 2021, focusing on customer management, we have comprehensively upgraded our organisational structure, connected consumption experience and satisfy the people's pursuit of a better life. For example, we cooperated with a domestic oil data middle platform and risk middle platform, implemented labelling, profiling and modelling, and effectively matched company to co-brand a credit card, which not only offers discounts on gasoline prices, but also allows cardholders to enjoy services to the full cycle of the customer journey through the data-driven method. In this way, customer management various rights such as insurance, car service, and point exchange, providing customers with a one-stop solution for car life. becomes more intelligent, customised and cost-effective, which in turn promoted the Bank’s customer service management capabilities to a higher level. As the pioneer of reform, we embrace technology. Among our transformation strategies, being technology-driven is the top Aiming at the financial problems facing small and micro enterprises, we created a new type of supply chain financial priority, as well as the driving force behind our development. services. For a long time, the service model of traditional financial institutions presents many financing problems for small and micro enterprises, thus retarding their development.