AGRICULTURAL BANK of CHINA LIMITED 中國農業銀行股份有限公司 (A Joint Stock Company Incorporated in the People’S Republic of China with Limited Liability) (Stock Code: 1288)
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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. AGRICULTURAL BANK OF CHINA LIMITED 中國農業銀行股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1288) 2018 ANNUAL RESULTS ANNOUNCEMENT The board of directors (the “Board of Directors”) of Agricultural Bank of China Limited (the “Bank”) is pleased to announce the audited results of the Bank and its subsidiaries (the “Group”) for the year ended 31 December 2018, which was prepared in accordance with the International Financial Reporting Standards promulgated by the International Accounting Standards Board, and the proposed cash dividend for the year of 2018. The annual results have been reviewed by the Audit and Compliance Committee of the Board of Directors. This announcement contains the information required under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to the preliminary announcements of annual results. The printed version of the 2018 annual report of the Bank will be despatched to the holders of H Shares of the Bank, and will also be available on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Bank (www.abchina.com) in April 2019. By Order of the Board of Directors Agricultural Bank of China Limited ZHOU Wanfu Company Secretary Beijing, the PRC 29 March 2019 As at the date of this announcement, the executive directors are Mr. ZHOU Mubing and Mr. WANG Wei; the non-executive directors are Mr. XU Jiandong, Mr. CHEN Jianbo, Mr. LIAO Luming and Mr. LI Qiyun and the independent non-executive directors are Mr. WEN Tiejun, Mr. Francis YUEN Tin-fan, Ms. XIAO Xing, Mr. WANG Xinxin and Mr. HUANG Zhenzhong. 1 PROFILE The predecessor of the Bank was Agricultural Cooperative Bank established in 1951. Since the resumption of establishment in February 1979, the Bank has evolved from a state-owned specialized bank to a wholly state-owned commercial bank and subsequently a state-controlled commercial bank. The Bank was restructured into a joint stock limited liability company in January 2009. In July 2010, the Bank was listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange. As one of the major integrated financial service providers in China, the Bank is committed to building an international first-class commercial banking group with featured operations, efficient and convenient services, diversified functions, and demonstrated value-creation capability. Capitalizing on its comprehensive business portfolio, extensive distribution network and advanced IT platform, the Bank provides a diverse portfolio of corporate and retail banking products and services for a broad range of customers, and conducts treasury operations and asset management. Our business scope also includes, among other things, investment banking, fund management, financial leasing and life insurance. At the end of 2018, the Bank had total assets of RMB22,609,471 million, loans and advances to customers of RMB11,940,685 million and deposits from customers of RMB17,346,290 million. Our capital adequacy ratio was 15.12%. The Bank achieved a net profit of RMB202,631 million in 2018. The Bank had a total of 23,381 domestic branch outlets at the end of 2018, including the Head Office, Business Department, three specialized institutions managed by the Head Office, four training institutes, 37 tier-1 branches, 386 tier-2 branches, 3,455 tier-1 sub-branches, 19,442 foundation-level branch outlets and 52 other establishments. Our overseas branch outlets consisted of thirteen overseas branches and four overseas representative offices. The Bank had fifteen major subsidiaries, including ten domestic subsidiaries and five overseas subsidiaries. The Financial Stability Board has included the Bank into the list of Global Systemically Important Banks for five consecutive years since 2014. In 2018, the Bank ranked No. 40 in Fortune’s Global 500, and ranked No. 4 in The Banker’s “Top 1000 World Banks” list in terms of tier 1 capital. As at the date of this announcement, Standard & Poor’s affirmed long-/short-term issuer credit ratings of the Bank at A/A-1 with stable outlook. Moody’s affirmed long-/short-term bank deposit ratings of the Bank at A1/P-1 with stable outlook and Fitch Ratings affirmed long-/short-term issuer default ratings of the Bank at A/ F1 with stable outlook. 2 CONTENTS Definitions .................................................................. 4 Basic Corporate Information and Major Financial Indicators......................... 6 Chairman’s Statement......................................................... 13 Discussion and Analysis ....................................................... 16 Environment and Prospects .................................................... 16 Implementation of Our Development Strategy ...................................... 19 Financial Statement Analysis................................................... 22 Business Review ............................................................ 44 County Area Banking Business ................................................. 70 Risk Management and Internal Control ........................................... 80 Capital Management ......................................................... 104 Corporate Social Responsibility ................................................. 106 Changes in Share Capital and Shareholdings of Substantial Shareholders ............... 108 Details of Preference Shares .................................................... 116 Directors, Supervisors and Senior Management .................................... 120 Corporate Governance ........................................................ 134 Report of the Board of Directors ................................................ 151 Report of the Board of Supervisors .............................................. 159 Significant Events ............................................................ 165 Honors and Awards ........................................................... 169 Organizational Chart ......................................................... 171 List of Branches and Institutions ................................................ 172 APPENDIX I Liquidity Coverage Ratio Information APPENDIX II Leverage Ratio Information APPENDIX III The Indicators for Assessing Global Systemic Importance of Commercial Banks APPENDIX IV Auditor’s Report and Consolidated Financial Statements APPENDIX V Unaudited Supplementary Information 3 DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the meanings set out below: 1. A Share(s) Ordinary shares listed domestically which are subscribed and traded in Renminbi 2. ABC/Agricultural Bank of Agricultural Bank of China Limited, or Agricultural Bank of China/the Bank/the Group/We China Limited and its subsidiaries 3. Articles of Association The Articles of Association of Agricultural Bank of China Limited amended pursuant to the Approval on Change of the Registered Capital of Agricultural Bank of China Limited (Yin Bao Jian Fu) [2018] No.199 issued by the China Banking and Insurance Regulatory Commission on 25 September 2018 4. CASs/PRC GAAP The Accounting Standards for Enterprises promulgated on 15 February 2006 by the Ministry of Finance of the People’s Republic of China and other related rules and regulations subsequently issued 5. CBIRC China Banking and Insurance Regulatory Commission, or its predecessors, the former China Banking Regulatory Commission and/or the former China Insurance Regulatory Commission, where the context requires 6. County Area(s) The county-level regions (excluding the district-level areas in the cities) in the People’s Republic of China and the areas under their administration, including counties and county-level cities 7. County Area Banking Business We provide customers in the County Areas with a broad range of financial services through our branch outlets located in counties and county-level cities in the People’s Republic of China. We refer to such banking business as the “County Area Banking Business” or “Sannong Banking Business” 8. County Area Banking Division An internal division with management mechanism adopted by us for specialized operation of financial services provided to Sannong and the County Areas, as required under our restructuring into a joint stock limited liability company, which focuses on the County Area Banking Business with independence in aspects such as governance mechanism, operational decision making, financial accounting as well as incentive and constraint mechanism to a certain extent 9. CSRC China Securities Regulatory Commission 10. Global Systemically Banks recognized as key players in the financial market with Important Banks global features as announced by the Financial Stability Board 4 11. H Share(s) Shares listed on The Stock Exchange of Hong Kong Limited and subscribed and traded in Hong Kong Dollars, the nominal value of which are denominated in Renminbi 12. Hong Kong Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited 13. Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited 14. Huijin