2012 Annual Report 152 theBoard hairmanof efromtheC Messag and nChina'sreformandopeningup leachievementshavebeenmadei In2012,remarkab omotedthestrategicimplementation,continuedtoactively Overthepastyear,wevigorouslypr hievedanetprofitof Inthepastyear,wewerefullycommittedtoimprovingprofitability,ac 186.055billionyuan, In2012,westrivedtoenhancetheoperationalstrength,totalassetsreached harvest. drop,LongjiangBankalsohasagood struction.Againstsuchfavorableback modernizationcon earnestly andfinancialsituation,theBank mesticandinternationaleconomic Facingcomplexdo uidelines lpolicies;adheredtotheoperatingg ationalmacroeconomicandfinancia implementedthen ilityandseekingbetterresultsinprogressing"underthescientific of"progressingwhilemaintainingstab ,andeffectivelyadheredtothedevelopmentstrategy,continued guidanceoftheregulatoryauthorities deeffortstoimprovetheoperationandmanagementlevel,and toimprovecorporategovernance,ma ssubmittingasatisfactoryanswersheettoinvestorsandclients successfullycompletedvarioustasks,thu withexcellentresults. nfinancemodelandprovidedastrongsupportfor"buildinga promotetheagriculturalsupplychai ustrialbank";thebankalsosteadilypushedconstructionof world-classmodernagriculturalind rganizationsandbuiltahighlyefficientsmallbusinessfinancial exemplarysmallbusinessfranchiseo efforttocreate"Xiaolongren"communitybankservicebrand, servicessystem;weinvestedallout vicesfunctions;andadhereddifferentiation,characterization, furtherenhancingthefinancialser havingenhancedthecore communitization,professionalizationandmeticulousdevelopmentroad, competitiveness. ieldwas1.00%,anincrease 1.708billionyuan,anincreaseby52.64%overthepreviousyear;assetsy as22.17%,anincreaseby by0.06percentagepointscomparedwithlastyear;thereturnoncapitalw inuingtoincrease. 0.59percentagepointscomparedwithlastyear,withshareholderreturnscont individualdepositsreached anincreaseby21.59%overthepreviousyear;thebalanceofcorporateand thebeginningoftheyear, 114.095billionyuan,representinganincreaseof20.722billionyuanover yuan,increasingby9.835 anincreaseof22.2%year-on-year;theloanbalancewas35.481billion MessagefromtheChairmanoftheBoard

billionyuan,anincreaseof38.35%,withthecreditscalecontrolledwithinthescopeapprovedbythe

People'sBank.

Overthepastyear,wewerecommittedtothepreventionandcontrolofalltypesofrisks,with non-performingloanratiodroppingby0.08percentagepointscomparedwithlastyear,downto

0.75%;thebankconductedthesuccessfulcompletionofthecapitalandshareincreaseandadjustment andincreaseinregisteredcapital,thecapitaladequacyratioandcorecapitaladequacyratioreached

14.18%and13.77%respectivelyattheendoftheyear,withcapitalstrengthfurtherenhancedandall majorregulatoryindicatorsincompliance.

In2012,westrivedtoenhancethemanagementlevel,withstandardizedandorderly"6S" management,moreperfectperformanceappraisalsystem,acceleratedpaceofITconstruction,and moreeffectiveroleoftechnologysystemprotection;meanwhile,teambuildingcontinuedtobe strengthened;theoverallqualityofcadresandemployeesaremoreresponsivetodevelopmentneeds; also,wemadenewachievementsintheintegrationofcorporateculture,withcorevaluesmoredeeply rootedatpeople'shearts.

Withthesupportfromallsectorsofthecommunityandthejointeffortsofallemployees,the

Bankhassuccessfullycompletedtheplannedtasksinthefirstthree-yearphaseandusheredinanew developmentsituation.Theyear2013isthefirstyearforChinatoconductacomprehensive implementationofthespiritofthe18thCPCNationalCongress,thekeylinkyearbetweenthepast andthefuturefortheimplementationof"TwelfthFive-YearPlan"period,andthestartingyearof oursecondthree-yearplanningperiod.Standingatthenewstartingpoint,weareconfidentin rewardingshareholders,customersandthecommunitywithbetterperformance!

ChairmanandSecretaryofthePartyCommitteeofLongjiangBank:

153 2012 Annual Report 154 antNote Import April26,2013 Corporation BoardofDirectorsofLongjiangBank ImportantNote: Disclo- elevantrequirementsof"Information ispreparedinaccordancewithther Thisannualreport lsystems sureallowedbytheexistingfinancia lBanks",whichisamaximumdisclo sureofCommercia ormation rsofourbankensuresthattheinf gementsystem.TheBoardofDirecto andbusinessmana notcontainanyfalserecord,misleadingstatementorsignificant containedinthisannualreportdoes isresponsiblefortheauthenticity,accuracyandcompletenessof omissionsofrequireddisclosures,and alfinancialstatementhasbeenauditedbyDeloitteTouche thecontent.Ourbank's2012annu containingunqualifiedopinionhasbeenissued.Thisannualre- Tohmatsu,andastandardauditreport Chineserespectively.Incaseofanydiscrepanciesbetweenthe portispreparedinbothEnglishand llprevail. twoversions,theChineseversionsha CompanyProfile

LegalChineseName

龙江银行股份有限公司(LongjiangBankCo.,Ltd.)

(Referredtoas"LongjiangBank"forshort,hereinafterreferredtoas"OurBank")

LegalEnglishName

LONGJIANGBANKCORPORATION

LegalRepresentative

YangJinxian

SecretaryoftheBoard

LiRuiwen

Tel:0451-85706153/85706863

Fax:0451-87117802

RegisteredandOfficeAddress:No.436YouyiRoad,DaoliDistrict,Harbin,HeilongjiangProvince

PostalCode:150018

InternetAddress:www.lj-bank.com

E-mail:[email protected]

Annualreportspreparedat:OfficeoftheBoardandmajorbusinessoutlets

TheCompany'sFirstRegistrationDate:December22,2009

TheRegistrationNumberofBusinessLicenseforEnterpriseasaLegalPerson:230000100069419

FinanceLicenseNo.:B1056H223010001

TaxRegistrationNumber:230103695223154

AccountingFirmEngagedbyOurBank:DeloitteToucheTohmatsu

155 2012 Annual Report 156 ructure anizationSt ngBankOrg Longjia SummaryofFinancialDataandBusinessData

1.Resultsofoperations (Unit:RMBthousand)

Item Yr2012 Yr2011 Increaseordecreaseyoy （%）

Operationincome 4,787,480 3,292,635 45.40

Profitbeforetax 1,707,766 1,119,223 52.58

ROA 1.00% 0.94% 6.36

ROE 22.17% 21.58% 2.73

BasicEPS(Yuan) 0.45 0.36 25.00

Netcashflowgeneratedfromoperatingactivities 23,253,795 18,295,695 27.10

Netcashgeneratedfromoperatingactivitiespershare(Yuan) 5.33 4.92 8.33

157 2012 Annual Report - ） % （ 21.59 28.97 13.86 19.62 20.60 40.95 22.20 44.44 23.08 22.20 18.08 36.00 38.35 32.04 68.33 72.75 37.64 -4.75 -8.53 158 459.87 -96.94 (Unit:RMBthousand) Increaseordecreaseyoy - 1.69 983,561 514,355 4,511,313 6,361,502 1,067,123 8,250,112 98,296,710 93,372,969 93,372,969 25,646,162 16,328,927 25,131,807 16,786,842 32,440,744 28,359,816 24,924,883 71,944,973 21,427,996 153,019,170 146,657,668 Yr2011 - 2.08 32,697 888,569 9,188,529 5,506,642 5,136,454 35,480,769 21,560,304 34,592,200 15,989,496 41,837,567 39,973,946 22,797,906 84,952,353 29,142,631 13,887,768 114,094,984 186,055,365 117,585,206 176,866,836 114,094,984 Yr2012 ta BusinessDa ialDataand aryofFinanc Summ Item Discount Retailloans Retaildeposits Depositsfrombanksandotherfinancialinstitutions Held-to-maturityinvestments Loansandreceivables Available-for-salefinancialassets Others Duetocustomers Others Ofwhich:Corporateloans oughprofitorloss Ofwhich:thefinancialliabilitiesandderivativefinancialliabilitiesatfairvaluethr etsatfairvaluethroughprofitorloss Ofwhich:thefinancialass Netassetspershare(Yuan) Ofwhich:Corporatedeposit Loanimpairmentprovision ator 2.Scaleindic SummaryofFinancialDataandBusinessData

3.Qualityindicatorofasset* (Unit:RMBthousand)

Item Yr2012 Yr2011 Increaseordecreaseyoy （%）

Normalloans 32,184,000 23,500,043 36.95

Special-mentionedloan 1,945,185 1,963,928 -0.95

Non-performingloans 265,440 212,075 25.16

Ofwhich:Subprime 179,453 62,977 184.95

Doubtful 79,648 141,316 -43.64

Loss 6,340 7,781 -18.52

Non-performingloanratio 0.77 0.85 -7.23

Provisioncoverage 338.57 256.63 31.93

Provisionadequacyratio 184.10 407.79 -54.85

4.Theadequacyindexforcapital (Unit:RMBthousand)

Item Yr2012 Yr2011 Increaseordecreaseyoy （%）

Netcapital 8,786,265 6,061,890 44.95

Ofwhich:Netcorecapital 8,529,088 5,886,681 44.89

Supplementarycapital 257,427 175,200 46.93

Netrisk-weightedassets 61,944,344 49,658,279 24.74

Capitaladequacyratio（%） 14.18 12.21 16.13

Corecapitaladequacyratio（%） 13.77 11.85 16.20

159 2012 Annual Report ） % 6.63 ： 38.75 36.82 48.98 36.84 27.50 43.67 160 318,555 845,407 139,881 Unit 4,360,000 1,709,283 1,815,403 9,188,529 （ (Unit:RMBthousand) Theendofperiod Attheendof2011 3.31 20.82 58.66 31.12 39.38 58.83 48,340 140.71 640,000 656,277 169,805 403,970 908,635 2,827,027 Attheendof2012 Increaseordecrease 35 60 35 35 35 15 100 ＞ ＜ ＜ ＞ ＞ ＜ ＜ 91,541 441,437 906,768 148,750 3,720,000 1,053,006 6,361,502 Standardindicators Thebeginningofperiod * ta BusinessDa ialDataand aryofFinanc Summ * borrower * * Item * Item Foreigncurrency Domesticandforeigncurrency Generalprovisions Undistributedprofits Capitalstock Capitalsurplus Surplusreserves Minorityinterest Liquidityratio:RMB Netcapitalratiooftoptenborrowers Loan-to-depositratio(includingdiscount) Netcapitalratioofsinglelargestgroup Costtoincomeratio(excludingsalestax) tcompanyandothersfrom Note:thedatawith*inabovetablecomesfromthestatementsoftheparen thoseofthegroup. alindicatorsasoftheendofreporting 6.Supplementaryfinanci period ringthereportingperiod shareholders'equitydu 5.Changesin DiscussionandAnalysisofStateofOperation

ⅠThemainbusinessscopeoftheBank

Publicdepositstaking;issuanceofshort-term,medium-termandlong-termloans;arranging settlementofbothdomesticandoverseasaccounts;handlingtheacceptanceanddiscountofnegotiable instruments;issuing,cashingandsellinggovernmentbondsasagents;Doinginter-banklendingand borrowing;buyingandsellingperseorasagentsforeignexchanges;engaginginbankcardbusinesses; providingL/Cserviceandguarantee;buyingandsellinggovernmentbondsandfinancialbonds; handlingreceiptsandpaymentsandinsurancebusinessesasagents;providingsafeboxes;and undertakingotherbusinessesapprovedbytheChinaBankingRegulatoryCommission.

Ⅱ Businesschannels

Duringthereportingperiod,thebankcontinuestovigorouslypromotetheconstructionof intra-provinceoutletsandhasnewestablished45businessestablishments,withthetotalnumberof outletsofthebankamountingto200;bycarryingouttheconstructionof"hundredsofbanks, thousandsofstationsandtenthousandsofoutlets"andfurtherstrengtheningcommunity-based financialservices,theBankhasestablished133community-basedbanks,800"Xiaolongren" communityservicestationsand1,461"Xiaolongren"communityservicepointsasattheendofthe reportingperiod;theBankhasmadenewprogressinthemanagementstructureandexclusivechannel ofsmallbusinesscreditcenter,completingthechannelbuildingfor4directly-managedcenters,12 sub-centersand30branchcenters,withaspecializedserviceteamcomposedof268persons;the electronicchannelconstructionhasbeencontinuouslypushedforward,themobilephonebankingand corporatebankingsystemhavebeenlaunchedsuccessfullyandtheservicefunctionsoftheelectronic bankinghavebeenimproved;6villageandtownshipbanks(VTB)controlledbytheBankhavebeen

161 2012 Annual Report 162 ofOperation lysisofState ionandAna Discuss gperiod ationduringthereportin Overalloper Ⅲ 3.Assetquality ngcompliance,focus- Duringthereportingperiod,withaviewto"strengtheningsystem,promoti 1.Overalloperation khasattachedequalimportancetobusinessesandnormal Duringthereportingperiod,theBan 2.Profitability theBankhasrealizednetincomeofRMB1.698billion,an Asattheendofthereportingperiod, breakthroughsinvariousworksandachievedsustainedandstable development,thushavingmadenew portingperiod,thetotalassetsincreasebyRMB32.102billionto development.Asattheendofthere nyear. RMB184.258billion,up21.1%yearo %yearonyear.Theratioofcosttoincomeis38.58%,down increasebyRMB597millionor54.22 are1.01%and22.2%respectively,up0.07%and0.77%. 4.91%yearonyear;ROAandROE banksin rganized11townandvillage-based inotherprovinces.TheBankhaso openedsuccessfully total. DiscussionandAnalysisofStateofOperation

ingoncaseprevention,controllingnon-performingloans,maintainingthestrategies,adjustmentof structure,reservingcustomersandbuildingteams",theBankhasstrengthedtop-downdesignandim- plementedfinemanagement,andhastakenarangeofnormative,innovativecountermeasuresandspe- cificmeasuresforcontrollingcreditrisk,therebymaintainingagoodmomentuminqualityofcreditas- sets.Asattheendoftheperiod,thenon-performanceloanisRMB265million,ayoyincreaseof

RMB54milion;andthefive-categorynon-performingloanratiois0.77%,down0.08%yearonyear.

4.Layoutofoutlets

SN Name Address BusinessAcceptance Tel. Post Code

1 GeneralBankingDepartment No.436,YouyiRoad,DaoliDistrict,Harbin 0451-87117888 150018

2 HarbinGogolBranch No.281,GogolStreet,NangangDistrict,Harbin 0451-87117870 150000

3 HarbinLongfuBranch No.171,HepingRoad,XiangfangDistrict,Harbin 0451-83330803 150040

4 HarbinLongfuBranch No.116,ZhongshanRoad,XiangfangDistrict,Harbin 0451-87970716 150030

5 HarbinLongyuanBranch No.301,HuayuanStreet,NangangDistrict,Harbin 0451-87580326 150001

6 HarbinLongxinBranch No.378,ZhengyiRoad,NangangDistrict,Harbin 0451-87508512 150086

7 HarbinZhongyangBranch No.16,HongxiaStreet,DaoliDistrict,Harbin 0451-87655310 150010

8 HarbinDayueBranch No.200,HuayuanStreet,NangangDistrict,Harbin 0451-87529508 150001

9 HarbinDaoliBranch No.198,ShangzhiStreet,DaoliDistrict,Harbin 0451-87655126 150010

10 HarbinTongdaBranch No.403,TongdaStreet,DaoliDistrict,Harbin 0451-87393008 150076

11 HarbinXianfengBranch No.111,XianfengRoad,DaoliDistrict,Harbin 0451-51959906 150056

12 HarbinNanyangBranch No.88,NanjiIRoad,DaoliDistrict,Harbin 0451-51959881 150020

13 HarbinLujiaBranch No.92,LujiaStreet,NangangDistrict,Harbin 0451-51959800 150009

14 HarbinDevelopmentZones Branch No.389,HanshuiRoad,NangangDistrict,Harbin 0451-87117863 150009

15 HarbinLongtengBranch No.118,DongdazhiStreet,NangangDistrict,Harbin 0451-51983055 150001

16 HarbinEdmontonBranch No.59,EdmontonRoad,DaoliDistrict,Harbin 0451-87776700 150070

17 HarbinBinjiangBranch No.84-7,No.84-8andNo.84-9,ShimaoRoad,Songbei District,Harbin 0451-51983086 150028

18 HarbinAchengBranch NO,23BuildingofGaomingCommunity,PailuStreet,Acheng District,Harbin 0451-51725009 150300

19 HarbinHuashuBranch HuashuCommunity,DaowaiDistrict,Harbin 0451-51983099 150056

20 HarbinPingfangBranch FuNo.147andNo.149,XinjiangStreet,PingfangDistrict,Harbin 0451-51787808 150060

163 2012 Annual Report Code 164 Post 150600 150800 151800 150700 161006 161041 150500 150500 150000 150000 150000 150000 150000 150000 150100 154800 161006 150000 150000 150200 150400 161000 161005 161006 161005 161005 161006 161005 161000 161006 Tel. 0452-2581176 0452-6710677 0452-2183566 0452-2539918 0452-2400339 0452-2716144 0452-2216581 0452-2400355 0452-2557794 0452-2735488 0452-2180233 0452-2400375 0451-57160098 0451-53492111 0451-56911002 0451-85706556 0451-57188565 0451-51785500 0451-51788559 0451-87065793 0451-58774275 0451-87706157 0451-85706556 0451-85706556 0451-81735004 0451-56024222 0451-85706556 0451-85872611 0451-56666070 0451-57998716 BusinessAcceptance Harbin Harbin Harbin Harbin trict,Harbin ShangzhiCity ShuangchengCity NangangDistrict,Harbin ,XizhiRoad,BayanCounty DevelopmentZone,Harbin Ⅲ YanshouTown,YanshouCounty Office,FularjiDistrict,QiqiharCity qu,FangzhengTown,FangzhengCounty Mingyuan"Phase Address ofOperation lysisofState ionandAna Discuss CommercialServiceBuilding,No.10"Guangchang CommercialServiceBuilding,No.1Committee,TuanjieStreet, No.350,ZhonghuaRoad,JianhuaDistrict,Qiqihar GardenResidenceCommunity,GuobaoNewVillage,Hongbaoshi istrict, XinfaResidenceCommunity,65DachengStreet,NangangD No.4Building,XianggeGardenCommunity,DongzhiRoad, AnyangKangfuCenter,FangzhengXieheHospital,ChengbeiXin No.9Store,1/F,Bldg.1ofShibofudi,HongxingCommunity, westofLiminAvenue,Limin 241meterssouthofNanjingRoadand ty,QunyingStreet,HulanDistrict, XueyanResidenceCommuni ngdazhiBranch,NangangDistrict, RunfaZhiyeBuilding,222Do uihuaRoad,HaxiNewZone, IntersectionofHashuangRoadandS trict, 2TaihangRoad,JizhongArea,YingbinRoad,DaoliDis is High-techMansion,High-techandInnovationTown,SongbeiD No.429,TongjiangRoad,YilanTown,YilanCounty No.548,JiansheStreet,JianhuaDistrict,Qiqihar 252ZhongshanRoad,NangangDistrict,Harbin 296XinyangRoad,DaoliDistrict,Harbin 105-1YouzhengStreet,NangangDistrict,Harbin 215DevelopmentStreet,WuchangCity ty No.5,YingbinEastRoad,BinzhonTown,BinCoun No.336,EastZhonghuaRoad,TiefengDistrict,Qiqihar No.21,MinyiRoad,LongshaDistrict,Qiqihar No.86,WestZhonghuaRoad,JianhuaDistrict,Qiqihar No.142,BukuiSouthStreet,LongshaDistrict,Qiqihar No.74,QingyunStreet,LongshaDistrict,Qiqihar No.203,BukuiStreet,JianhuaDistrict,Qiqihar No.69,WenhuaStreet,LongshaDistrict,Qiqihar No.226,LonghuaRoad,TiefengDistrict,Qiqihar No.97,MiddleSection,BukuiStreet,JianhuaDistrict,Qiqihar ment Name QiqiharBranchBankingDepart HarbinShuangchengBranch HarbinFangzhengBranch HarbinYilanBranch HarbinBayanBranch QiqiharTiexiBranch QiqiharYonganBranch HarbinLiminBranch HarbinNangangBranch HarbinXueyuanBranch HarbinDongdazhiBranch HarbinXinyangBranch HarbinYingbinBranch HarbinHigh-techBranch HarbinJinjieBranch HarbinWuchangBranch HarbinBinXianBranch QiqiharTiedongBranch HarbinYanshouBranch HarbinHaxiBranch HarbinXinjiBranch HarbinShangzhiBranch QiqiharLaodongBranch QiqiharGuangxinBranch QiqiharLongshaBranch QiqiharJinyuanBranch QiqiharJianhuaBranch QiqiharWenhuaBranch QiqiharTiefengBranch QiqiharBukuiBranch 32 33 36 37 40 47 21 27 39 22 23 25 26 28 29 31 35 46 38 24 30 34 45 44 43 42 41 48 50 49 SN DiscussionandAnalysisofStateofOperation

SN Name Address BusinessAcceptance Tel. Post Code

51 QiqiharXinghaiBranch No.25-15,XinmingStreet,JianhuaDistrict,Qiqihar 0452-2739311 161006

52 QiqiharJianxingBranch No.158-2,LonghuaRoad,TiefengDistrict,Qiqihar 0452-2148675 161000

53 QiqiharNanmaluBranch No.50,Nanmalu,TiefengDistrict,Qiqihar 0452-2212223 161000

54 QiqiharAnxinBranch No.47,BukuiStreet,LongshaDistrict,Qiqihar 0452-2400393 161005

55 QiqiharZhonghuanBranch No.39,CentralPlaza,LongshaDistrict,Qiqihar 0452-2400500 161005

56 QiqiharGuomaoBranch No.98,BukuiSouthStreet,LongshaDistrict,Qiqihar 0452-2321961 161005

57 QiqiharCaixinBranch No.37,FenghengRoad,LongshaDistrict,Qiqihar 0452-2400348 161005

58 QiqiharChengxinBranch No.29,XinmingStreet,JianhuaDistrict,Qiqihar 0452-2793301 161006

59 QiqiharHuaqiaoBranch No.290,JiansheStreet,JianhuaDistrict,Qiqihar 0452-2180579 161006

60 QiqiharLonghuaBranch No.77,LonghuaRoad,LonghuaDistrict,Qiqihar 0452-2400386 161000

61 QiqiharFularjiBranch No.154,HepingRoad,FularjiDistrict,Qiqihar 0452-6881684 161041

62 QiqiharXingongdiBranch 118MuhaiStreet,TiefengDistrict,Qiqihar 0452-6185002 161000

63 QiqiharFuyuBranch ShuguangBldg.2,XinhuaStreet,FuyuTown,FuyuCounty,Qiqihar 0452-3122959 161200

64 QiqiharLongjiangBranch JindiYageComplexBuliding,WestofZhengyangRoad,Southof AnweiStreet,LongjiangCounty,Qiqihar 0452-5831083 161100

65 QiqiharNeheBranch No.13-15,Fool01,Unit00,ComprehensiveBuilding,ShengshiNewCityCommunity,NorthwestStreet,NeheCity 0452-3376005 161300

66 QiqiharKedongBranch MinzhengBuilding,Bao'anStreet,KedongTown,KedongCounty 0452-4281789 164800

67 QiqiharBaiquanBranch XianzhiDongfanghongStreet,BaiquanCounty(formerSibaiBuilding) 0452-7339096 164700

68 QiqiharTailaiBranch No.102,BayiRoad,TailaiCounty 0452-8858000 162400

69 QiqiharGannanBranch NorthsideofJianhuaRoad,DongfanghongStreet,GannanCounty (CourtBldg.2) 0452-5753006 162100

70 MudanjiangBranchBankingDepartment No.106,AiminStreet,Xi'anDistrict,Mudanjiang 0453-6319088 157000

71 MudanjiangFuqiangBranch No.179,QixingStreet,Dong'anDistrict,Mudanjiang 0453-6955843 157000

72 MudanjiangZhendongBranch No.2,Chang'anStreet,Dong'anDistrict,Mudanjiang 0453-6951129 157000

73 MudanjiangAiminBranch No.25,WestChang'anStreet,Xi'anDistrict,Mudanjiang 0453-6285053 157000

74 MudanjiangJiansheBranch No.5-A,WestPing'anStreet,Xi'anDistrict,Mudanjiang 0453-6266354 157000

75 MudanjiangDongshengBranch No.97,EastXin'anStreet,Dong'anDistrict,Mudanjiang 0453-6926343 157000

76 MudanjiangYangmingBranch No.119-C,EastPing'anStreet,YangmingDistrict,Mudanjiang 0453-6680738 157000

77 MudanjiangZhigongBranch No.12,TaoyuanCommunity,WolongStreet,Dong'anDistrict,Mudanjiang 0453-6481289 157000

78 MudanjiangXinhuaBranch 2ShenglinStreet,WestofXinhuaRoad,AiminDistrict,Mudanjiang 0453-6526983 157009

79 MudanjiangXinquBranch WestZone,Farmers'Market,MieheVillage,NorthofXinglong Square,Mudanjiang 0453-6481108 157000

80 MudanjiangFuminBranch Junchengmingyu,TaipingRoad,GuanghuaStreet,Mudanjiang 0453-6226441 157000

165 2012 Annual Report Code 166 157400 157300 157199 157131 154002 154002 154002 156300 156100 154400 163311 163714 163311 163318 163001 163316 163311 163311 163453 163712 Post 157000 157000 157009 157000 157400 157699 157300 157199 157500 157200 Tel. 0453-7625218 0453-3921129 0453-7220855 0453-7529377 0454-6045199 0454-6016207 0454-6010396 0454-6194666 0454-6028789 0454-6031001 0459-6362059 0459-6562279 0459-4681053 0459-6500807 0459-6655917 0459-8101599 0459-4608126 0459-6366960 0459-5109101 0459-5599654 0453-6924475 0453-6573199 0453-3522238 0453-3621004 0453-6286492 0453-6319052 0453-7688637 0453-3921133 0453-7223517 0453-3122892 BusinessAcceptance City danjiang Province danjiang longjiangProvince mentZone,Daqing ManagementBureau Street,LinkouCounty LongfengDistrict,Daqing County,JiamusiCity,HeilongjiangProvince DongfengNewVillage,SartuDistrict,Daqing Address ofOperation lysisofState ionandAna Discuss No.13,XinghuaStreet,HighandNewTechIndustrialDevelop No.81,WeierRoad,DongfengNewVillage,SartuDistrict,Daqing DongjingchengForestryBureau,Ning'an No.97,1/F,SquareBuilding,SuifenheCity No.37,LinhaiRoad,HailinCity ang No.266,XilinStreet,XiangyangDistrict,JiamusiCity,Heilongji MiddleSegment,YingbinRoad,LandreclamationJiansanjiang HuayuanApartment,middlesectionofXinxingRoad,Huanan No.26,WestShangmaoStreet,High-techZone,Daqing No.109,110,BuildingB,YixiGoldenCenturyCommercialPlaza, No.35,JiansheRoad,SartuDistrict,Daqing No.79,BusinessService,XueyuanCommunity,PetroleumInstitute, No.18,HuizhanStreet,SartuDistrict,Daqing No.102,JingwuStreet,SartuDistrict,Daqing No.454,XibinRoad,RanghuluDistrict,Daqing No.12,XijingRoad,RanghuluDistrict,Daqing ningCounty No.29,ZhonghuaNorthRoad,DongningTwon,Dong ,Hailin LinmaoBldg.,XueziStreet,LinxingRoad,ChaiheTown No.906,Chang'anRoad,QianjinDistrict,Jiamusi No.850,HongqiStreet,XiangyangDistrict,JiamusiCity,Hei anshiStreet,Dong'anDistrict,Mu No.0117,DongsantiaoRoad,N ingpingRoad,AiminDistrict,Mu Bldg.4,ZhongshanJiayuan,X NewHongjiYutingParkCommunity,MiddleSection,Wenzheng EastofCentralStreet,FujinCity,HeilongjiangProvince i'anDistrict,Mudanjiang No.222,XisantiaoRoad,X iqiRoad,Xi'anDistrict,Mudanjiang BetweenXiliuRoadandX No.62,TongjiangRoad,Ning'anCity No.243,TongtianRoad,SuifenheCity BusinessServiceBldg.,LinhaiCityGardon,Hailin No.139,ChangzhengRoad,MulingCity ment ment Branch Name DaqingDevelopmentZone MudanjiangDongningBranch MudanjiangMudanBranch MudanjiangXingsuiBranch MudanjiangChangqingBranch MudanjiangChaiheBranch JiamusiHongqiBranch JiamusiXilinBranch JiamusiHuananBranch DaqingBranchBankingDepart DaqingQinghuaBranch DaqingLaodongBranch DaqingXuefuBranch DaqingXingshengBranch DaqingHuaqiaoBranch DaqingYinheBranch DaqingLongnanBranch DaqingRanghuluBranch JiamusiBranchBankingDepart JiamusiJiansanjiangBranch JiamusiFujinBranch ch MudanjiangDong'anBran MudanjiangXin'anBranch anch MudanjiangZhongshanBr ch MudanjiangPing'anBran MudanjiangNing'anBranch MudanjiangLinkouBranch MudanjiangSuifenheBranch MudanjiangHailinBranch MudanjiangMulingBranch 90 91 92 93 94 95 96 97 98 99 81 82 83 84 85 86 87 88 89 SN 100 101 102 103 104 105 106 107 108 109 110 DiscussionandAnalysisofStateofOperation

SN Name Address BusinessAcceptance Tel. Post Code

111 DaqingChengfengBranch No.77,ChengfengStreet,RanghuluDistrict,Daqing 0459-5796477 163411

112 DaqingLongfengBranch Buliding9,NanMeiGarden,LongfengDistrict,Daqing 0459-6249134 163711

113 DaqingDonghuBranch No.57,Donghu3rdStreet,RanghuluDistrict,Daqing 0459-5767798 163416

114 DaqingWangbaoBranch No.90,WanxingRoad,WanbaoCommunity,SartuDistrict,Daqing 0459-4624197 163311

115 DaqingXingchaoBranch No.58,AiguoRoad,RanghuluDistrict,Daqing 0459-5169727 163453

116 DaqingDatongBranch No.58,TongyangRoad,DatongDistrict,Daqing 0459-6171013 163515

117 DaqingHonggangBranch No.28,SouthtoSadaRoad,HonggangDistrict,Daqing 0459-4193256 163511

118 DaqingZhenxingBranch E41-1andE41-2,HubinTeachers'Garden,High-techZone, Daqing 0459-4322112 163300

119 DaqingLishuiBranch S-3-8LishuiMo'erStreet,LishuiHuachengResidenceCommunity,RanghuluDistrict,Daqing 0459-5912075 163453

120 DaqingHongyuanBranch Gate2andGate3oftheBusinessServiceBldg.,NoB57,YinyiSunnyCity,RanghuluDistrict,Daqing 0459-5921772 163453

121 DaqingHongtuBranch 1/F,GovernmentAdministrativeServiceHall,SaertuDistrict,Daqing 0459-6181291 163311

122 DaqingYoushuiBranch F06-1,GreenHometown,DongfengNewVillage,SartuDistrict,Daqing 0459-2678761 163311

123 DaqingXianggeBranch BusinessServicebldg.4,C2-7,XianggeGarden,High-techZone, Daqing 0459-6500670 163318

124 DaqingAolongBranch No.24,AolongCommunityB,LongfengDistrict，Daqing 0459-8171313 163711

125 DaqingChangqingBranch No.23,SunnyJiayuanPhaseII,RanghuluDistrict,Daqing 0459-5977131 163453

126 DaqingYuanwangBranch No.22,XihuRoad,RanghuluDistrict,Daqing 0459-5996277 163458

127 DaqingRunfengBranch BusinessService,No.19andNo.20,YitengShangduDistrict2, SartuDistrict,Daqing 0459-6150152 163311

128 DaqingYinlangBranch No.1,YinlangNewCity,RanghuluDistrict,Daqing 0459-4815512 163412

129 DaqingYueyuanBranch No.16,JiangshuStreet,RanghuluDistrict,Daqing 0459-5166132 163458

130 DaqingJingyuanBranch No.24andNo.26,QiushiRoad,RanghuluDistrict,Daqing 0459-5085789 163453

131 DaqingXinyuanBranch SunnyXinyuanCommunity,No.136,KunlunStreet,Ranghulu District,Daqing 0459-5086515 163453

132 DaqingLongshengBranch JinxiuYuan,DongchengLeaderResidenceCommunity,Longfeng District,Daqing 0459-6408000 163711

133 DaqingLongxiangBranch No.9,JingsanStreet,DevelopmentCenterofSportsIndustry,Sartu District,Daqing 0459-4689839 163000

134 DaqingMinghuBranch No.05and06BusinessService,Bldg.E22,YinyiSunnyCity, RanghuluDistrict,Daqing 0459-5931817 163453

135 DaqingAolinBranch No.62,XinzeRoad,RanghuluDistrict,Daqing 0459-5158038 163453

136 DaqingJiachengBranch BusinessServiceBldg.BS-3,YangguangJiachengResidence Community,RanghuluDistrict,Daqing 0459-5509303 163453

137 DaqingLandeBranch BusinessServiceBldg.1,TangningjiezuoResidenceCommunity, DongfengNewVillage,SaertuDistrict,Daqing 0459-5870393 163311

138 DaqingZhaozhouBranch No.209,BachangEastStreet,ZhaozhouCounty 0459-8523042 166400

139 DaqingLindianBranch SouthofXi'erSectionofHexiangRoad,LindianCounty 0459-3311614 166300

140 DaqingZhaoyuanBranch CentralStreet,ZhaoyuanCounty 0459-8227502 166500

167 2012 Annual Report Code 168 153025 153100 153000 153000 153500 152500 158100 155100 155100 155600 153000 154600 154600 154600 154600 154600 154600 154600 154600 154600 154600 Post 166516 166200 166400 158100 158100 158400 158300 155100 155811 Tel. 0458-6139901 0458-6139979 0458-3873622 0458-6175677 0458-6190077 0458-2879903 0464-8292134 0467-6230000 0469-6672618 0469-6672642 0469-5458106 0458-3029911 0464-8688515 0464-8253559 0464-8253162 0464-8688113 0464-8617777 0464-8280778 0464-8266646 0464-8278836 0464-8280742 0459-8413118 0459-3428837 0467-6158001 0469-5868500 0459-8512629 0467-6221006 0467-6221008 0467-6139001 0469-2686677 BusinessAcceptance Qitaihe Qitaihe HulinCity District,Qitaihe TaoshanDistrict,Qitaihe (oppositethetowngovernment) nity3,HongxinglongSubstation,YouyiCounty Address ofOperation lysisofState ionandAna Discuss XilinStreet,XilinDistrict,YichunCity 178ZhongweiStreet,NanchaDistrict,Yichun t,Yichun 1/F,theMunicipalBureauofFinance,NewDistric No.273-2ofZhengyangStreet,TieliCity 66XinxingWestRoad,YichunDistrict,Yinchun 182FanrongRoad,ChaoyangTown,JiamengCounty,Yichun BuildingNo.2,XuefuBuilding,TaodongStreet,TaoshanDistrict, 1/F,TaoshanTradeCity,DamingStreet,TaoshanDistrict,Qitaihe BuildingNo.6,HubinCommunity,XuefuRoad,TaoshanDistrict, BuildingNo.20,Yi'anCommunity,GuangmingStreet,Taoshan 1/F,MunicipalGovernmentServiceCenter,45DatongStreet, 411BaoqingRoad,BaoqingTown,BaoqingCounty No.361,DatongStreet,TaoshanDistrict,Qitaihe No.26,JingfengRoad,TaoshanDistrict,Qitaihe XuefuRoad,TaoshanDistrict,Qitaihe No.111,DatongStreet,TaoshanDistrict,Qitaihe No.24,DatongStreet,TaoshanDistrict,Qitaihe No.207,XinxingStreet,JianshanDistrict 206XinxingStreet,JianshanDistrict,Shuangyashan ZhongxingGarden,themiddlesectionofZhongxingRoad,Commu No.173,TongshanRoad,YichunDistrict,Yichun Town,ZhaoyuanCounty Community6,XinzhaoStreet,Xinzhan Street,TaikangTown,DumengCounty SouthoftheCourt,Alateng iguanDistrict,Jixi No.97,DongfengRoad,J n, NorthofthemiddlesectionofJiansheEastRoad,HulinTow d,ZhaozhouCounty No.160,YoutianSouthRoa 60&62XiangguangRoad,JiguanDistrict,JixiCity 20XinhuaStreet,JiguanDistrict,JixiCity 172Dong'anStreet,MishanTown,MishanCity shan 109-1XinxingStreet,JianshanDistrict,Shuangya ment ment Branch Department Name YichunXilinBranch YichunNanchaBranch YichunLinduBranch YichunTeiliBranch QitaiheHubinBranch YichunXinxingBranch YichunJiamengBranch DaqingDumengBranch ShuangyashanBaoqingBranch QitaiheBranchBankingDepart QitaiheJingfengBranch QitaiheYinjuBranch QitaiheYucaiBranch QitaiheXuefuBranch QitaiheTaoshanBranch QitaiheGuangmingBranch QitaiheDatongBranch QitaiheZhengwuBranch ShuangyashanBranchBanking ShuangyashanLongxingBranch ShuangyashanHongxinglong YichunBranchBankingDepart tment JixiBranchBankingDepar DaqingXinzhanBranch DaqingZhengyangBranch JixiGuangyiBranch JixiXinhuaBranch JixiHulinBranch JixiMishanBranch ShuangyashanJianshanBranch SN 154 155 156 157 160 167 158 159 142 152 153 161 162 163 164 165 166 168 169 170 141 143 144 145 146 147 148 149 150 151 DiscussionandAnalysisofStateofOperation

SN Name Address BusinessAcceptance Tel. Post Code

171 QitaiheTaibaiBranch XiaguangStreet,TaoshanDistrict,Qitaihe 0464-8280527 154600

172 QitaiheNew-MARTBranch 1/F,New-MARTTradingCenter,ShanhuRoad,TaoshanDistrict, Qitaihe 0464-8262997 154600

173 QitaiheGuangyiBranch No.136,YangyangStreet,QieziheDistrict,Qitaihe 0464-8813898 154600

174 QitaiheQieziheBranch DongfuRoad,QieziheDistrict,Qitaihe 0464-8814852 154600

175 QitaiheXinxingBranch No.23ZhengyangStreet,XinxingDistrict,Qitaihe 0464-8341897 154600

176 QitaiheBeishanBranch No.41,YuexiuRoad,XinxingDistrict,Qitaihe 0464-8335999 154600

177 QitaiheZhenxingBranch ZhengyangStreet,XinxingDistrict,Qitaihe(westoftheopenfair) 0464-8331583 154600

178 QitaiheLongxiangBranch Bldg.C,1/F，LongxiangTradingCenter,XinghuaStreet,Xinxing District,Qitaihe 0464-8334334 154600

179 QitaiheEconomicDevelopment ZoneBranch 1-5/F,comprehensiveofficebuildingoftheEconomicDevelopmentZone,themiddlesectionoftheEconomicDevelopmentZoneAvenue,Qitaihe 0464-8688525 154600

180 QitaiheYinxinBranch 57Chang'anStreet,BoliCounty 0464-6180811 154500

181 QitaiheBoliBranch No217,BeidazhiRoad,BoliCounty 0464-6180810 154500

182 QitaiheHuixinBranch No.20,XuefuRoad,BoliCounty 0464-6183211 154500

183 HegangBranchBankingDepartment ZhenxingGarden,18Wei,XiangyangDistrict,HegangCity 0468-6187770 154100

184 HegangGongnongBranch ResidentialBuilding,supplyandmarketingcooperatives,ChangshengRoad,GongnongDistrict,HegangCity 0468-6189111 154100

185 HegangJiefangRoadBranch Bldg.1,No.2FarmMachineryPlant,JiefangRoad,GongnongDistrict,HegangCity 0468-6189555 154100

186 HegangBaoquanlingBranch BaoshuiBldg.,Dongjian,BeiyanjunRoad,BaoquanStreet,BaoquanlingAdministration 0468-3797808 154211

187 HeheiBranchBankingDepartment No.131,ZhongyangEastStreet,Hehei 0456-6186186 164399

188 HeiheAihuiBranch 164WenhuaStreet,Heihe 0456-6186088 164399

189 HeiheJiusanBranch EastsectionofShanheRoad,JiusanSubstationofBureauofReclamation(formerbuildingofthePlanningandFinancialDepartment) 0456-7878787 161441

190 HeiheBei'anBranch DongbeiyaPhase Ⅱ,intersectionofLongjiangRoadandSandao Street,Bei'anCity 0456-6198818 164000

191 HeiheNenjiangBranch 436Mo'ergenStreet,Nenjiang 0456-6166969 161499

192 HeiheNong'anBranch No.10,Bldg.B,WenhuaResidenceCommunity,LongjiangRoad, Bei'an 0456-6198816 164000

193 SuihuaBranchBusinessDepartment 29ZhongzhiNorthRoad,Suihua 0455-8715051 152000

194 SuihuaHuangheRoadBranch 357HuangheNorthRoad,BeilinDistrict,Suihua 0455-8715859 152000

195 SuihuaAndaBranch RundaXuefuyuan,DaqingRoad,AndaCity 0455-7625003 151400

196 SuihuaZhaodongBranch 95ZhengyangJiudaoStreet,ZhaodongCity 0455-7966607 151100

197 SuihuaQing'anBranch 188CentralStreet,Qing'anCounty 0455-4453005 152400

198 DaHingganLingBranchBusinessDepartment 99XiyidaoStreet,JiagedaqiDistrict,DaHingganLingPrefecture 0457-6116956 165000

199 DaHingganLingChaoyangBranch WeidongXing'anResidenceCommunity,JiagedaqiDistrict,Da HingganLingPrefecture 0457-6116965 165000

200 DaHingganLingMoheBranch 097ZhenxingRoad,XilinjiTown,MoheCounty,DaHingganLing Prefecture 0457-2878802 165300

169 2012 Annual Report 170 1.59 8.25 3.86 5.70 3.44 9.96 7.67 8.10 5.47 6.50 39.30 10.05 -9.89 100.00 Proportionoftheincrease 0.81 2.73 1.51 2.05 2.13 3.11 2.88 6.84 2.76 23.83 16.26 11.57 23.50 100.00 Proportionofthebalance 7.14 7.54 9.35 5.09 6.04 1.48 7.68 3.59 5.30 3.20 9.27 36.56 93.04 -9.20 ncrease/decreaseoveryearbeginning 4.41 3.86 1.30 1.72 1.61 1.75 4.12 1.43 In100millionsYuan,% Asoftheendofthereportingperiod 48.76 32.23 71.42 32.70 45.36 250.67 ofOperation lysisofState ionandAna Discuss Beginningbal. gionalresources ceinthedateofestablishmentandre Duetothedifferen butionofLongjiangBank ScheduleofLoanGeographicalDistri 9.4 5.2 9.9 9.5 10.7 2.78 7.05 7.32 55.9 23.5 81.92 39.77 80.77 343.71 Balanceforcurrentperiod ement Assetsmanag n Ling Ⅳ stic eportingperiod,thebalanceofdome onassetsloan.Asattheendofther 1.Keyinformation Total Region Hegang Yichun Jixi Suihua Shuangyasha Jiamusi DaHinggan Harbin Qiqihar Mudanjiang Daqing Qitaihe Heihe nsaregrantedbyfivebranchesincludingHarbin,Qiqihar,Mu- ofdifferentbranches,mostoftheloa 82.01%.Judgingfromincrementalloan,theincrementalloanof danjiang,DaqingandQitaihe,upto ,accountingfor39.30%oftotalincrementalloanoftheBank; HarbinBranchisRMB3.656billion mentalloanofoverRMB500million,specially,RMB935mil- thereareother8brancheswithincre illionforShuangyashanBranch,RMB768millionforHegang lionforDaqingBranch,RMB927m iangBranchandRMB714millionforQiqiharBranch.Seethe Branch,RMB754millionforMudanj followingtablefordetails: %. increaseofRMB9.304billionor37.12 yloansisRMB34.371billion,ayoy andforeigncurrenc DiscussionandAnalysisofStateofOperation

Asattheendofthereportingperiod,thesixindustriestowhichthe

BankgrantedincrementalloansofmoreRMB500millionincludewholesaleandretail,agriculture, forestry,animalhusbandryandfishery,leasingandbusinessservices,transportation,storageandpostal services,manufacturing,andconstruction,withayoyincrementalloanofRMB3.032billion,RMB2.

612billion,RMB1.069billion,RMB746million,RMB689millionandRMB684million respectively,totalingRMB8.832billionandaccountingfor94.93%oftotalincrementalloan.The balanceoftheloanamountstoRMB23.762billion,accountingfor69.13%oftotalbalanceofthe loans.

Duringthereportingperiod,thestructureofloanguaranteeis furtheroptimized,representedbya3.82%lowerproportionofcreditandguaranteeloanswith relativelyhighriskanda5.34%higherproportionofthemortgageandpledgeloanswithrelativelylow risk.Seethefollowingtablefordetails:

ScheduleofGuaranteefortheLoansofLongjiangBank

AsoftheendofthereportingperiodIn100millionsYuan,%

Categoryofloan Balanceforcurrent period Beginningbal. Increase/decrease overyearbeginning Proportionofthe balance Proportionofthe increase

Creditloan 4.45 5.43 -0.98 1.29 -1.05

Mortgageloan 161.82 115.29 46.53 47.08 50.01

Pledgeloan 45.13 22.26 22.87 13.13 24.58

Securedloan 126.48 99.64 26.84 36.80 28.85

Discountandbankcard overdraft 5.83 8.05 -2.22 1.70 -2.39

Total 343.71 250.67 93.04 100.00 100.00

Asattheendofthereporting period,thebalanceofthenon-performingloanoftheBankincreasesbyRMB54millionandthe ratioofnon-performingloandropsby0.08%.Seethefollowingtablefordetails:

171 2012 Annual Report 172 yearbeginning(%) 37.46 40.74 25.47 37.35 -0.87 185.71 -43.97 -25.00 21% 3.31% 2.60% 2.25% 2.13% 2.01% 1.80% 1.77% 1.77% 1.77% 1.59% Increase/decreaseover Proportiontonetcapital yearbeginning 0.54 1.17 93.00 93.17 93.54 -0.17 -0.62 -0.02 Increase/decreaseover 15,000.00 15,000.00 15,000.00 13,500.00 28,000.00 22,000.00 19,000.00 18,000.00 17,000.00 15,257.00 177,757.00 theloan Asattheendofthereportingperiod, beginning 2.12 0.63 1.41 0.08 19.62 Creditbalanceforcurrentperiod 248.29 228.67 250.41 Loanbalanceatyear AsoftheendofthereportingperiodIn10thousandYuan sYuan,% tingperiod In100million Asoftheendoftherepor period ofOperation lysisofState ionandAna Discuss - xxCompany xxCompany xxCompany xxCompany xxCompany xxCompany xxCompany xxCompany xxCompany xxCompany 2.65 1.79 0.80 0.06 19.45 343.95 341.29 321.84 Nameofcreditclient Loanbalanceforcurrent Bank eCategoriesoftheLoansofLongjiang ScheduleoftheFiv editClientsofLongjiangBank ScheduleoftheLoansofTopTenCr loans 1 2 3 4 7 8 9 6 5 10 No. Total Total iesofloansarecalculatedatcarryingamountandothersare Note:Thetotalloanandfivecategor Categoryofloan Normalloans Subprimeloan Doubtfulloan Lossloan Special-mentioned Normalloans: Non-performingloans: ftheBankisRMB1.778billion,accountingfor21%ofthenet balanceofthetoptencreditclientso tablefordetails: capitaloftheBank.Seethefollowing measuredatfairvalue. DiscussionandAnalysisofStateofOperation

Asattheendofthereportingperiod,thecreditbalancetothe toptengroupclientsoftheBankisRMB1.76billion,adecreaseofRMB577millionyearonyear, accountingfor5.12%oftotalloanbalance.Seethefollowingtablefordetails:

ScheduleoftheCreditLoansofTopTenGroupClientsofLongjiangBank

AsoftheendofthereportingperiodIn10thousandYuan

No. Nameofcreditclient Creditbalanceforcurrentperiod Proportiontonetcapital

1 xxGroup 28,000.00 3.31%

2 xxGroup 22,000.00 2.60%

3 xxGroup 19,000.00 2.25%

4 xxGroup 18,000.00 2.13%

5 xxGroup 17,000.00 2.01%

6 xxGroup 15,257.00 1.80%

7 xxGroup 15,000.00 1.77%

8 xxGroup 15,000.00 1.77%

9 xxGroup 15,000.00 1.77%

10 xxGroup 13,250.00 1.57%

Total - 176,007.00 20.81%

Asattheendofthereportingperiod,theloanimpairmentprovision adequacyratiois184.1%,up219.2%overtheendoflastyear.

2.Bondinvestment

Duringthereportingperiod,theBankrealizesabondtradingvolumeofRMB1,226.355billion, andraisesfundofRMB417.589billionthroughbondrepurchase.Thegainoninvestmentprofilehas beengraduallyincreasingandtheprofitabilityandfinancingcapacityarefurtherenhanced.

173 2012 Annual Report 174 40.92% 30.80% 40.92% 376.05% 236.73% -11.40% -10.09% -27.90% In100millionYuan In100millionYuan Growthmargin Growthmargin 15.26 12.82 68.57 96.65 41.50 38.57 16.58 96.65 Atthebeginningofthereportingperiod Atthebeginningofthereportingperiod 48.21 39.55 11.88 39.25 39.55 -1.74 -6.92 -11.58 Increase/decrease Increase/decrease ofOperation lysisofState ionandAna Discuss reportingperiod reportingperiod 136.2 29.92 50.45 55.83 13.52 61.03 61.65 136.2 Bonds FormforAccountingClassificationof ofBondInvestmentVarieties FormforStructure Attheendofthe Attheendofthe assets Total Total Variety Classification Treasurybond withbanksandotherfinancialinstitutions 3.Balancesduefromandplacements withbanksandotherfinancialinstitutionsandthefinancial Theendingbalanceoftheplacements 4.Outwardinvestment banks,ofwhich,5are Asattheendofthereportingperiod,theBankhasestablished11rural Financialbond Corporatebond Held-to-maturity Available-for-sale Held-for-tradingfinancial heendoflastyear.Thenet investmentisRMB79.666billion,anincreaseofRMB12.505billionovert beengreatlyexpandedover interestincomeisRMB3.006billion.Theoverallscaleofinvestmenthas tyofbusinessinvestmentis thepreviousyear,thereturnonassetsisfurtherimprovedandthevarie beengraduallyincreasing, increasinglymoreabundant.Thenumberofcooperativeinstitutionshas creatingagoodsituationof thusgraduallyformingastablecooperationgroupofthesametradeand win-wincooperation. adeaninvestmentofRMB withinHeilongjiangand6areinotherprovinces.Sofar,theBankhasm equityinvestmentofRMB 176.4millionintotalinruralbanks.Inaddition,theBankhasmadean UrbanCommercialBanks 40.4millionandRMB0.5milliontoChinaUnionPayCo.,Ltd.andthe FundClearingCenterrespectively. DiscussionandAnalysisofStateofOperation

Name Dateofopening Registeredcapital CapitalcontributionbytheBank Share

DongningRunshengRuralBankofHeilongjiang Oct.10,2008 RMB20million RMB10.2million 51%

DorbodRunshengRuralBankof Heilongjiang Oct.28,2008 RMB50million RMB25.5million 51%

Yi'anRunshengRuralBankofHeilongjiang Jul.17,2009 RMB50million RMB25.5million 51%

JixianRunshengRuralBankofHeilongjiang Dec.11,2010 RMB30million RMB15.3million 51%

KeshanRunshengRuralBankof Heilongjiang Dec.23,2010 RMB20million RMB10.2million 51%

XingshanBenfuRuralBankofHubei Mar.28,2012 RMB20million RMB20million 100%

XiaochangBenfuRuralBankofHubei Mar.26,2012 RMB20million RMB20million 100%

WuyishanBenfuRuralBankofHubeiofFujian Mar.21,2012 RMB20million RMB12.2million 61%

HuaiyuanBenfuRuralBankofAnhui Mar.23,2012 RMB20million RMB12million 60%

LingbiBenfuRuralBankofAnhui Mar.28,2012 RMB20million RMB10.2million 51%

NingdongBenfuRuralBankofNingxia Mar.30,2012 RMB30million RMB15.3million 51%

Total - RMB300million RMB176.4million -

Asattheendofthereportingperiod,theruralbankscontrolledbytheBankhavetotalassetsof

RMB2521.75million,totalowner'sequityofRMB320.76million,depositbalanceofRMB1819.49 millionandloanbalanceofRMB1101.14million,andhaverealizedprofitofRMB7.2761million.

①ThefiveruralbankswithinHeilongjiangProvincehavetotalassetsofRMB1990.56million, totalowner'sequityofRMB217.65million,depositbalanceofRMB1500.52millionandloanbal- anceofRMB892.14million,andhaverealizedprofitofRMB34.1666millionintotal.

② Allthesixruralbanksinotherprovinceshavebeenformallyopenforbusinesssincetheendof

March2012.Asattheendofthereportingperiod,theyhavetotalassetsofRMB531.19million,total owner'sequityofRMB103.1million,depositbalanceofRMB318.96millionandloanbalanceof

RMB208.99million,andhavemadelossofRMB26.89millionintotal.

5.Fixedassets

Asattheendofthereportingperiod,thesumofthenetvalueoffixedassetsandtheworkin progressaccountsfor15.86%ofnetcapital,down5.28%yearonyear.

175 2012 Annual Report 176 6.94% 6.44% 2.00% 1.68% 1.66% 1.29% 1.22% 1.18% 1.16% 1.11% 41.49% 21.32% 12.50% 100.00% In100millionYuan Contributionmargin% 5.54% 2.72% 7.29% 5.79% 4.14% 2.09% 4.26% 3.28% 2.74% 1.41% 15.37% 20.87% 11.63% 100.00% Proportionoftheincrease 5.20 7.91 4.01 8.15 6.29 5.25 2.69 62.16 39.94 22.25 10.60 13.95 11.07 199.48 Increase(decrease) 243.99 1,309.40 3,699.51 4,173.41 50,783.59 15,853.70 Increase(decrease) Intenthousandyuan 8.59 7.86 5.60 6.95 7.81 9.82 67.48 67.18 10.76 10.54 925.08 404.40 199.78 118.30 DepositsbyRegion Beginningbal. 2,691.50 8,802.10 12,779.80 13,955.10 113,214.30 151,442.80 ofOperation lysisofState ionandAna Discuss Atthebeginningoftheperiod 78.08 72.38 22.54 18.94 18.67 14.55 13.24 13.06 12.51 13.76 239.72 140.55 466.56 1,124.56 Endingbal. 3,041.50 14,089.20 17,521.90 11,649.50 167,296.50 120,994.40 ents FixedAssetsStatem Currentperiod Jixi ment Total Heihe Suihua Harbin Branch Daqing Qitaihe Yichun Hegang Qiqihar Jiamusi structions Mudanjiang Shuangyashan DaXing'anLing electronicequipment abilities VKeyinformationonli Total Items 1.Deposits ,thedepositbalanceoftheBankisRMB112.456billion, Asattheendofthereportingperiod 1 2 3 4 5 6 7 8 9 10 11 12 13 Workinprogress No. Otherfixedassets: Electricalappliances, Transportationequip Buildingandcon r21.56%overtheendoflastyear;thedailyaveragedepositis anincreaseofRMB19.948billiono ailyincreaseofRMB27.411billionor38.17%. RMB99.219billion,representingad DiscussionandAnalysisofStateofOperation

DepositsbyTypeofCustomers

In100millionYuan

Items Currentperiod Atthebeginning Ascomparedtothebeginningoftheperiod

Savingsdeposits 284.04 211.58 72.46

Corporatedeposit 840.52 713.50 127.02

Total 1,124.56 925.08 199.48

Asattheendofthereportingperiod,theratioofthesavingsdeposittothetotaldepositsis25.26%, up2.39%overtheendoflastyear,indicatingthatthedepositsstructureisfurtheroptimized.

DepositsbyTerm

In100millionYuan

Items Currentperiod Atthebeginningoftheperiod Atthebeginningoftheperiod

Timedeposit 384.63 371.20 113.43

Currentdeposit 739.93 653.88 86.05

Total 1,124.56 925.08 199.48

Asattheendofthereportingperiod,theratioofthetimedeposittothetotaldepositsis34.2%, up4.9%overtheendoflastyearandtheratioofstablecurrentdeposittothecurrentdepositis,atthe sametime,increasinglyhigher,indicatingincreasinglygreaterstabilityofdeposits.

Asattheendofthereportingperiod,theratioofstablecurrentdeposittothecurrentdepositof theBankis66.15%,up4.59%yearonyear.

177 2012 Annual Report 178 In10thousandyuan 2,392.00 4,993.30 2,601.30 Ascomparedtothesameperiod 9,103.10 2,444.00 11,547.10 Thesameperiod 5,045.30 ofOperation lysisofState ionandAna Discuss 11,495.10 16,540.40 Currentperiod StatementofIncomefromIntermediaryBusinesses Items Off-balancesheetbusiness es VIIntermediarybusiness ① isRMB4.154billion, Asattheendofthereportingperiod,theBank'sacceptancebillbalance riod,theBank'sincomefromintermediarybusinessesis Asattheendofthereportingpe takingaccountsfor35.82%oftotalliabilities.Thereislittle Theliabilitiesotherthanthedeposits 2.Otherliabilities iodispresentedinthefigurebelow: sitionattheendofthereportingper Theliabilitycompo Servicechargesandcommissionexpenses Servicechargesandcommissionincome Netservicechargesandcommissionincome sisRMB2.068billionand theaccumulatedamountissuedisRMB8.476billion,themargindeposit diatebusinessincomefrom theservicechargeincomeisRMB4.1939million;thederivativeinterme RMB165million,anincreaseofRMB50millionoverlastyear. scomparedtotheendoflastyear,specially,theproportionof changeinthestructureofliabilitiesa eproportionoffinancialassetssoldforrepurchasefallsby3.95% interbankplacementrisesby3.34%,th risesby0.77%. andtheproportionofdepositstaking DiscussionandAnalysisofStateofOperation

capitalbusinessesandreceivablesinvestmentbusinessesisRMB23.4million.

② Personalfinancingbusiness

Duringthereportingperiod,thetotalsalesoffinancingproductsthroughouttheBankis

RMB35.042bilion,thebalanceoffinancingproductsisRMB12.79billionandtheaveragedailybal- anceisRMB7.043billion.Thebalanceofcustomers'propertymanagedbytheBankisRMB41.27 billion.ThecompanyhasrealizedintermediatebusinessincomeofRMB19.7008millionintotal.

Duringthereportingperiod,totaling266kindsofpersonalfinancingproductsareissued throughouttheBank,bywhichtheBankhasraisedRMB27.275billionintotal.

③ Creditcardbusinesses

Duringthereportingperiod,theBankhasrealizedbankcardbusinessincomeofRMB42.038 million,includingtheincomefrominterestonoverdraftofcreditcardofRMB7.3968million,the incomefromlatefeeoncreditcardofRMB1.1072million,andtheintermediarybusinessesincome ofbankcardofRMB33.534million.

④ Investmentbanking

Duringthereportingperiod,theBankhasdevelopedthe"toptenintellectual-attracting"and

"topfourinvestment-attracting"investmentbankingproducts,layingasolidfoundationforthede- velopmentofinvestmentbankingbusiness.TheBankmakesefforttoprovidecomprehensivefinancial servicesforitscustomersandhasrealizedinvestmentbankingincomeofRMB30.54million throughouttheyear.

179 2012 Annual Report 180 0.00 849.80 In10thousandyuan -4.90% -384.40 2,392.00 1,203.20 2,239.50 7,480.50 40,776.30 66,002.00 80,860.00 17,745.20 79,625.80 59,662.50 19,963.30 -2,546.10 146,862.00 143,573.40 Ascomparedtolastyear 0.00 52.40 Yr2011 43.49% -961.10 8,889.70 9,103.10 2,613.30 2,497.80 11,190.00 25,741.40 35,829.50 140,826.90 323,846.30 306,762.20 177,758.30 146,088.00 145,972.50 110,143.00 IncomeStatement 0.00 Yr2012 38.58% 1,278.40 6,343.60 1,255.60 3,463.10 2,113.40 11,495.10 18,670.50 43,486.60 55,792.80 181,603.20 470,708.30 450,335.60 243,760.30 226,948.00 225,598.30 169,805.50 ofOperation lysisofState ionandAna Discuss commissionincome Items is Profitanalys Ⅶ ,an ratingrevenueofRMB4.707bilion ngperiod,theBankhasrealizedope Duringthereporti Otheroperatingrevenue Netinterestincome Returnoninvestment Less:Non-operatingexpenses Businesstaxandsurcharges Plus:Non-operatingincome Assetsimpairmentloss Otheroperatingcost Less:Incometax Incomefromchangesinfairvalue Businessandmanagementexpense Netservicechargesand 6.Cost-to-incomeratio 1.Operatingrevenue 2.Operatingexpenses 3.Operatingincome 4.Grossmargin 5.Netincome increase ingexpenseisRMB2.438billion,an .469billionoverlastyear;theoperat increaseofRMB1 ofRMB eisRMB2.27billion,anincrease noverlastyear;theoperatingincom ofRMB660millio 809millionoverlastyear. DiscussionandAnalysisofStateofOperation

TheStructureofIncomeandExpenditureattheEndoftheReportingPeriod

Amongthestructureofincome,theproportionofloaninterestincomefallsby6.67%,the proportionofexpensesfromtransactionswithfinancialinstitutionsrisesby7.49%andtheproportion ofreturnoninvestmentdropsby4.65%;theproportionofbusinessandmanagementexpensetothe totalexpendituresfallsby3.04%. Ⅷ Theriskprofileduringthereportingperiodandcorresponding measures

1.Creditrisk

Attheendofthereportingperiod,theloanbalanceoftheBankisRMB34.374billion,andthe non-performingloanisRMB265million,anincreaseofRMB54millionoverlastyear;therateof non-performingloanis0.77%,downby0.08%yearonyear.

2.Liquidityrisk

Duringthereportingperiod,theBankhasfurtherstrengtheneditsliquiditymanagement.Allthe keyliquidityindicatorsmeettheregulatoryrequirements,andtheliquidityriskiscontrollable.The

Bankhasfurtherimprovedtheliquidityinformationsystemandpreparedrelevantplansandreports; completedtheverificationandacceptanceofexistingdatainthedatawarehouseinaccordancewith newrequirementsforvarioussubjects,modifiedtheexistingreportsinthedatawarehouse;and

181 2012 Annual Report ） % ： 182 Unit （ 3.38 3.50 3.53 21.99 AscomparedtoYr2011 8.65 36.84 27.07 41.22 Yr2011 58.83 12.03 30.58 44.76 Yr2012 ofOperation lysisofState ionandAna Discuss yRiskIndicators ScheduleofLiquidit 5 regulatoryrequirements 35 60 60 ＞ ＞ ＜ ＞ Criterionforfullscorefor Indicators Liquidityratio Provisionratio 3.Marketrisk fchangesininterestratemarketandformulatedthedetailed TheBankhasstrengthenedanalysiso 4.Operationalrisk erationalrisk,andhas TheBankattachesgreatimportancetothepreventionandcontrolofop Loan-to-depositRatio Relianceoncoreliabilities yhavingfurtherstrengthenedthecontrolandmanagementof rulesforinterestratepricing,thereb ropermarketriskmeasurementmethodfortheassetsintrading marketrisk.TheBankhasselectedp kbornebyit.Onaregularbasis,theBankrevaluesthebalance accountsandmeasuredthemarketris ationdataprovidedbyChinaGovernmentSecuritiesDepository ofitstradingbondsbasedonthevalu ethodagainstactualmarket Trust&ClearingCo.Ltd.,andcomparesthemarketriskmeasurementm maintenance.Duringthe conditions,andthenmakesadjustmentandimprovementthroughsystem emarketriskisrelatively reportingperiod,themarketriskexposureoftheBankisinsignificant,th controllableandthecapitalbusinessincomeisrelativelystable. anagementstrategy.Atthe givenprioritytoitsplanningandarrangementsasanimportantpartofm nedaresponsibilitywarrant beginningofthereportingperiod,allthepersonsinchargeofabranchsig implementedinrespectof forobjectiveachievement,stipulatingthataone-votevetosystemshallbe Bankrequiresthemanage- institutionsthatsuffermajorproblemsorincuranycases.Inaddition,the suresfor esystemssuchasManagementMea contruction,havingformulatedth strengthenedsystem ingency untInterestRateRiskandtheCont nagementMeasuresforBankAcco LiquidityRisk,Ma rigourofliquiditymanagement. Risktoimprovethescientificityand PlansforLiquidity DiscussionandAnalysisofStateofOperation

mentstoformulatescientific,practicabledetailedimplementationrulesoncaseprevention,incorporate thedivisionoflaborandaccountabilitymechanism,andinstructtheinteralauditingdepartmentto carryoutriskinvestigationonaregularbasis.TheBankhasproactivelyestablishedtheriskmanage- mentsystemtoensurethesmoothconductofriskpreventionandcontrolwitheffectiveorganization.

Bypromotingtheuseofriskmonitoringsystem,reviewingoperationsystems,identifyinghiddenall sidedly,mornitoringtheriskallsidedlyandeffectivelyregulatingthemanagement,theBankhas achievedtheobjectivesof"steadypreventionandcontrol,gradualtransistionofbusinessnormsandno accidentsthroughouttheyear"duringthereportingperiod..

5.ITrisk

Duringthereportingperiod,theBankhasformulatedacomprehensiveITriskmanagement strategy,andhasmadealotofeffortsininformationclassificationandprotection,informationsystem development,testingandmaintenance,accesscontrol,physicalsecurity,personnelsecurityandbusi- nesscontinuityandcontingencydisposaletc.Duringthereportingperiod,majorprojectssuchasthe asset-liabilitymanagementsystem,datawarehousephase Ⅱ ,ICcardsystemprojectconstruction, bank-enterpriseinterlink,the"centralizedmonitoringandmanagement"projectofthedatacenter, billmanagementsystemandthefinancingproductssellingsystemhavebeenlaunchedthroughoutthe bank.Atthesametime,keyprojectssuchasdatawarehousePhase Ⅰandcreditmanagementsystem phase Ⅱarecurrentlyintheirphase-outperiod.Sincethedatacenterisputintouse,theequipment hasbeenfunctioningnormally,allworkhasbeenconductedinanorderlymanneraccordingtothe plan,andtheITriskispreventedpracticallyfromtheperspectiveofhumandefenseandtechnology defense.Duringthereportingperiod,theBankhasconductedbackupandoff-sitestorageofimpor- tantproductiondata,sothatitstechnologyriskpreventioncapacityisfurtherenhanced.Inorderto guardagainstsystemicriskandimproveriskpreventioncapacity,theBankhas,inaccordancewiththe relevantrequirementsasmadeintheGuidelinesontheInformationTechnologyRiskManagementof

CommercialBanksissuedbyCBRC,conductedvulnerabilityscanningandsafetyassessmentforthe serverandnetworksystemofthedatacenteroftheBanktoidentifytheconfigurationdefectsandse-

183 2012 Annual Report 184 ofOperation lysisofState ionandAna Discuss Assetsmanagement Ⅸ 1.Theobjectiveofassetmanagement entMeasuresofLongjiangBankCorporation(Trial)",the Accordingtothe"CapitalManagem capitalisnotlowerthan7.5%,aimingat8.5%orabove. (1)Theadequacyratioofcoretier-1 t9.5%orabove.The (2)Theadequacyratiooftier-1capitalisnotlowerthan8.5%,aiminga %orabove.Therisk (3)Theadequacyratioofcapitalisnotlowerthan10.5%,aimingat11.5 2.Assetmanagementstrategy esofLongjiangBank Takingtheopportunitiesprovidedbythe"CapitalManagementMeasur equacyandstability; (1)Strengtheningthecapitalplanningandmanagementtoensurecapitalad 6.Reputationrisk The gthenedreputationriskprevention. ngperiod,theBankhasfurtherstren Duringthereporti ntareasfollows: Bank'sobjectivesofcapitalmanageme etimepointwhenitreaches8%; Theriskwarninglinewillbesetatth riskwarninglinewillbesetatthetimepointwhenitreaches9%; warninglinewillbesetatthetimepointwhenitreaches11%. effectiveplaytothecon- Corporation(Trial)",theBankhasstrengthenedcapitalmanagement,given entthroughouttheBank, straintfunctionandpromotionfunctionofcapitalinthebusinessdevelopm lebank,therebytoachieve andensuredthesustainedfastandhealthybusinessdevelopmentofthewho theobjectiveofmaximizingshareholdervalue.Specially: ersonneltostrengthentheday-to-daymonitoring,information Bankhassetupaspecialpostsandp nion,carriedoutaweeklyandmonthlyreportsystemofpublic collectionandguidanceofpublicopi ingmechanismforearlywarningofpublicopinionandhold opinioninformation,establishedguid alysisworkshoptoanalyzeandsummarizethephasedtrendsof regularpublicopinioninformationan onreputationriskpreventionandcontrol. publicopinionandidentifythefocus security thesystemandeffectivelycontrolany ingoodtime,sothatitcanreinforce curityvulnerability s. mtoensurethecontinuityofbusines ychangeorvulnerabilityinthesyste risksarisingfroman DiscussionandAnalysisofStateofOperation

(2)Establishingscientificandreasonablecapitalsupplementmechanism;

(3)Continouslyoptimizingthecapitalstructure;

(4)Proactivelyimprovingbusinessstructure;

(5)Strengtheningeconomiccapitalmanagementandimprovingtheefficiencyofcapitaluse

(6)Givingproritytoefficiencyandincreasinginvestmentinsubsidiariesingoodtime.

3.Capitaladequacyratio

Asattheendofthereportingperiod,thecapitaladequacyratiois13.92%,netcapitalisRMB8.456 billionandtheriskweightedassetisRMB60.733billion,ascalculatedbythenewmethod. Ⅹ Socialresponsibility

TheBankhasalwaysattachedgreatimportancetoandactivelyfulfilltheirsocialresponsibilities and,inpractice,ithasactivelyservedthesociety,givenreturntoshareholdersandhelpedthestaff succeed.TheBankhasactivelyparticipatedinsocialwelfareactivitiessuchasmakingdonationto

RedCandleFundand"TheMostBeautifulRuralTeacher";continuedtostrengthenfarmer-benefit- ingengineeringchannelconstruction,solidlycarriedoutthe"Newruralsocialpensioninsuranceand urbanresidentspensioninsurance"serviceandsetup"greenpaymentchannel"forfarmersbycreating newinnovativeelectronic,informationizedservicechannelsandrealizingtheagencypaymentand contributionofsocialsecurityfundthroughPOSandmobilephonebank.TheBankhassetup1,094 servicecentersfornewruralsocialpensioninsuranceandurbanresidentspensioninsurance.Asofthe endofthereportingperiod,thetotalnumberofinsuranceparticipantsservedbytheBankhits1.086 million,andtheBankhasexemptedthefarmerinsuranceparticipantsfromthecostofproductionof bankcardofRMB5.5millionintotal.

Note:thedatainthissectioncomesfromthestatementsoftheparentcompanyoftheBank.

185 2012 Annual Report 186 100 3.86 75.25 20.89 Proportion In10thousandshares,% Attheendoftheperiod 436,000 Quantity 91,083.91 16,842.95 328,073.14 tock einCapitalS Chang 100 4.51 73.25 22.24 Proportion ChangeinCapitalStock Atthebeginningoftheperiod 372,000 Quantity 16,770.24 82,730.69 272,499.07 Items kin RegisteredCapitalofLongjiangBan uanceofNewSharesandIncreaseof TheMotiononIss theregisteredcapitaloftheBankhasincreasedfromRMB Asattheendofthereportingperiod, Totalcapitalstock Naturalpersonequity Non-state-ownedcorporateequity State-ownedandstate-ownedcorporateequity Bankin generalshareholders'meetingofthe edandadoptedatthefirstinterim 2012wasconsider ,having 12inaccordancewiththatmotion ccessfullyincreasedthecapitalin20 2012.TheBanksu billion. ateplacementforcapitalofRMB1.28 ewsharesthroughallotmentandpriv issued640millionn thefollowingtablefordetails: 3.72billiontoRMB4.36billion.See CorporateGovernance

Toptenshareholdersandtheirshareholdings

Nameofshareholder Numberofshares(10thousand shares) Proportionintotalshares(%)

HeilongjiangDazhengInvestmentGroupCo.,Ltd. 89,380.00 20.50

COFCOLimited 87,200.00 20.00

HeilongjiangTransportDevelopmentCo.,Ltd. 34,739.12 7.97

DaqingState-ownedAssetsManagementCo.,Ltd. 22,618.70 5.19

ShanghaiSIIC(Group)Co.,Ltd. 21,887.20 5.02

ShanghaiInternationalGroupAssetsManagementCo.,Ltd. 18,525.60 4.25

HeilongjiangGreatNorthernWildernessLandReclamationGroupCorporation 16,294.75 3.74

LiaoningHongchengPlasticProfileCo.,Ltd. 12,484.86 2.86

QiqiharMunicipalBureauofFinance 12,338.80 2.83

DaqingAolongRealEstateDevelopmentCo.,Ltd. 10,973.94 2.52

187 2012 Annual Report 188 ce ateGovernan Corpor ers ationofmajorsharehold Basicinform shares,accounting DaqingState-ownedAssetsManagementCo.,Ltd.holds226.187million hares,accountingfor20.00%ofthetotalsharecapital.It COFCOLimitedholds872millions ares,accountingfor HeilongjiangTransportDevelopmentCo.,Ltd.holds347.3912millionsh s893.80millionshares,accountingfor engInvestmentGroupCo.,Ltd.hold HeilongjiangDazh ● ● ● ● lelyfundedbytheState, for5.19%ofthetotalsharecapital.Thecompanyisanenterpriseso alfoftheDaqingmunicipal conductinginvestmentandassetmanagementofstate-ownedassetsonbeh veisJinHongda. government.Theregisteredcapitalis1.7billionyuan;thelegalrepresentati ompanymainlyengagedin 7.97%ofthetotalsharecapital.Thecompanyisastateholdinglistedc 213billionyuan;thelegal highwaytoll,management,andconservation.Theregisteredcapitalis1. representativeisSunYisong. rtandexportcompanyaswellasapowerfulfoodmanufacturer, isChina'slargestgrainandfoodimpo theinternationalgrain,oilandfoodmarket,withoutstanding enjoyinganoutstandingreputationin edtopeople'slife,suchastradeinagriculturalproducts,biomass achievementsinthefieldscloselyrelat andprocessing,realestate,property,hotel,financialservicesand energydevelopment,foodproduction nterprisesoftheworld.Thecompanyisacorporateenterprise soon.Itranksamongthetop500e stryandCommerceofthePeople'sRepublicofChina,The registeredinAdministrationforIndu C.Theregisteredcapitalis businesstypeisalargeenterprisesolelyfundedbytheStateundertheSASA 1.235billionyuan;thelegalrepresentativeisNingGaoning. ompany, vestedstate-ownedlimitedliabilityc lshares.Thecompanyisasolely-in 20.50%ofthetota ongjiangprovincialgovernment'sfinancialinvestment,themain servingasthemainbodyfortheHeil managementauthorizedbytheprovincialgovernmentanda bodyforstate-ownedfinancialasset tlocalfinancialinvestmentandfinancingbusiness,witha comprehensiveplatformtocarryou elegalrepresentative:Wanglijun. registeredcapitalof1billionyuan.Th CorporateGovernance

● ShanghaiSIIC(Group)Co.,Ltd.holds218.872millionshares,accountingfor5.02%ofthe totalsharecapital.ThecompanyisanenterprisesolelyfundedbyShanghaiSASAC,withthescopeof businessincludingindustrialinvestment,domestictrade,andstate-ownedassetsoperationand managementwithinthescopeofauthority.Theregisteredcapitalis1.859billionyuan;thelegal representativeisTengYilong.

● ShanghaiInternationalGroupAssetsManagementCo.,Ltd.holds185.256millionshares, accountingfor4.25%ofthetotalsharecapital.Thecompanyisanenterprisesolelyfundedbythe

State,ThecompanyisasubsidiaryofShanghaiInternationalGroup;themainbusinessscopeistocarry outavarietyofinvestmentservices,assetoperationandmanagementservices,financialadvisoryand investmentconsulting.Theregisteredcapitalis1.934billionyuan;thelegalrepresentativeisZhang

Xing.

● HeilongjiangGreatNorthernWildernessLandReclamationGroupCorporationholds

162.9475millionshares,accountingfor3.74%ofthetotalsharecapital.Thecompanyissubordinateto theLandReclamationBureauofHeilongjiangProvince,whichisthelargeststate-ownedfarm economicregionwiththehighestlevelofmechanizationandanimportantnationalcommoditygrain productionbaseandagriculturalandsidelineproductsprocessingbase.Theregisteredcapitalis6 billionyuan;thelegalrepresentativeisSuiFengfu.

189 2012 Annual Report holding holding 190 No No No No No No No No No No No No No No No No No No Yes Yes WithIndividualshare WithIndividualshare No No No No No No No No No No No No No Yes Yes Yes Yes Yes Yes Yes ce ateGovernan Corpor ReceivingSalary ReceivingSalary Director Director Director Director Director Director Director Chairman StaffSupervisor StaffSupervisor ViceSupervisor Director,President ExternalSupervisor ExternalSupervisor PositioninOurBank PositioninOurBank IndependentDirector IndependentDirector IndependentDirector ShareholderSupervisor ShareholderSupervisor Director,PresidentAssistant Male Male Male Male Male Male Male Male Male Male Male Male Male Male Male Male Female Female Female Female Gender Gender Supervisors Name Name XuJian LiZhuo ） ZhangLei XuZhihui LiJiuchun LuanFeng LiuYipeng JinHongda HouPeiyao II QuZhentao DaiGenyou JuChunyan WuXiaohui GuanXihua YangXiulin SunYanmin YangJinxian HuiXiaofeng WangGuanru ChenRuoqing (I)Directors （ tives rvisorsandSeniorExecu ationonDirectors,Supe BasicInform CorporateGovernance

(III)SeniorExecutives

Name Gender Position Workincharge

Presideoverthecomprehensiveworkofoperatingmanagement， inchargeofthecapitalandfinancedepartment,thebusiness GuanXihua Female President departmentofthecompany，thehumanresourcesdepartment, Smallbusinesscreditcenter&Individualbusiness

WangGuibin Male VicePresident Financialmarketdepartment,comprehensivedepartment

XuYonghui Male VicePresident OperationManagementDepartment,Science&TechnologyDepartment

YuLiyong Male VicePresident HarbinbranchofLongjiangbank

XuZhihui Male PresidentAssistant RiskManagementDepartment

ZengQingfu Male PresidentAssistant "Agriculture,ruralareasandfarmers"BusinessDepartment

LiRuiwen Male SecretaryofBoardofDirectors OfficeofBoardofDirectors

191 2012 Annual Report 192 ce ateGovernan Corpor ationonDirectors BasicInform de- CPC,borninMarch1957,master ,Hannationality,apartymemberof YangJinxian,male rtymemberofCPC,BorninSeptember1956,masterde- LiZhuo,male,Hannationality,apa y,apartymemberofCPC,borninJanuary1961,master WuXiaohui,female,Hannationalit ,masterdegree,senior GuanXihua,female,Manchu,apartymemberofCPC,borninMay1963 1961,bachelordegree. XuZhihui,male,Hannationality,apartymemberofCPC,borninMay entAs- ogrammeFinanceDepartment,Presid ist,servedasformerDirectorofPr gree,senioreconom tandGeneralManagerofSalesDepartment,ExecutiveVice sistant,VicePresident,VicePresiden ndustrialandCommercialBankofChina.Heisnowthechair- PresidentofHeilongjiangBranchofI manofLongjiangBank. ctoroftheWorldBankofProvincialFinanceBureau,Deputy gree,,servedasformerDeputyDire vision,ViceChairmanofHeilongjiangDazhengInvestment DirectorofInternationalFinanceDi fLongjiangBank. GroupCo.,Ltd.Heisnowdirectoro rmerFinanceDirectorofFinanceDivisionandchiefaccountant degree,senioraccountant,servedasfo essDivisionofCOFCOGroup.Sheisnowservedvice-presi- andgeneralmanagerofFinanceBusin ofLongjiangBank. dentofCOFCOGroupanddirector aqingBranch,memberof economist,servedasformerVicePresidentofBankofCommunicationsD cretaryofthePartyCom- thePartyCommittee,ChairmanandofDaqingCommercialBankandSe ommittee,SheisnowEx- mittee.RoutineVicePresidentofLongjiangBank,memberofthePartyC ecutiveDirectorandPresidentofLongjiangBank. ent"(TouZiZongHeng) Heeverservedasstandingdeputyeditor-in-chiefofthemagazine"Investm tofHeilongjiangBranch, oftheHeilongjiangBranch,ChinaConstructionBank,deputypresiden InvestmentBank,servedas ChianInvestmentBank,anddeputypresidentofHarbinBranch,China e,PresidentAssistant,Vice formerGeneralManagerofHarbinCommercialBankCorporateFinanc CorporateGovernance

PresidentofHeilongjiangDazhengInvestmentGroupCo.,Ltd..HeisnowDirectorandPresident

AssistantofLongjiangBank.

SunYanmin,male,Hannationality,apartymemberofCPC,borninJune1966,bachelorde- gree,servedasformerDeputyDirectorofFinanceDepartmentChinaNationalFoodstuffsGroupCo.

(CNFG)oftheHongKong,GeneralManagerofCOFCOInternationalFinanceDepartment,Cur- rent,HeisDirectorofFinanceDepartmentandGeneralManagerofCOFCOFinanceCompany

LimitedandDirectorofLongjiangBank.

JinHongda,male,Huinationality,apartymemberofCPC,borninJuly1962,bachelordegree, senioreconomist,servedasformerDeputyChiefoftheFinanceBureauofDaqing,Presidentof

DaqingCommercialBank,DirectorofDaqingFinancialInvestmentEvaluationCenter,Heisnow

ChairmanofDaqingState-ownedAssetsOperationCo.,Ltd.andDirectorofLongjiangBank.

ZhangLei,male,Hannationality,apartymemberofCPC,borninSeptember1968,doctorde- gree,senioreconomist,servedasformerdeputymanagerofCustomerAssetManagementDepartment ofShenyinWanguoSecuritiesCo.,Ltd.,headofbusinessgroupofwarrantsandderivatives,Heis nowDeputyGeneralManagerofPlanningandFinanceDepartmentofShanghaiIndustrialInvestment

(Group)Co.,Ltd.andDirectorofLongjiangBank.

LiuYipeng,male,Hannationality,apartymemberofCPC,borninSeptember1968,master degree,economist,servedasDeputyGeneralManagerofOperationCo.Ltd.ofShanghaiInterna- tionalGroup.HeisnowgeneralmanagerofOperationCo.Ltd.ofShanghaiInternationalGroup,

DirectorofLongjiangBank.

HouPeiyao,male,Hannationality,apartymemberofCPC,borninApril1958,bachelorde- gree,senioreconomist,servedasformerDirectorofAgricultureDevelopmentOfficeofHeilongjiang

LandReclamationBureau,DirectorofDevelopmentandReformCommission,DirectorGeneralof

MudanjiangBranchofBureauofLandReclamation,HeisnowGeneralManageroftheGreat

NorthernWildernessLandReclamationGroupCorporationandDirectorofLongjiangBank.

QuZhentao,male,Hannationality,apartymemberofCPC,borninJanuary1957,doctorde-

193 2012 Annual Report 194 ce ateGovernan Corpor de- PC,borninJanuary1950,bachelor Hannationality,apartymemberofC DaiGenyou,male, y,apartymemberofCPC,wasborninJune1951,master ChenRuoqing,male,Hannationalit erDirectorofMonetaryPolicyDivisionandSecretary-General gree,senioreconomist,servedasform ople'sBankofChina,DirectorGeneralofCreditAdministration ofMonetaryPolicyCommitteeofPe eisnowindependentdirectorofLongjiangBank. Bureau,DirectorofCreditCenter.H ssecretaryandgeneralmangeroftheShanghaiOfficeofChina degree,economist.Heeverserveda .,actedasdeputychairmanoftheboardofJiangnanShipbuild- HuarongAssetsManagementCo.,Ltd oup,thegeneralmanagerlevelinspectorofChinaHuarongAs- ingandShanghaiTextileHoldingGr orofthepreparationgroupofShanghaiInnovationCenterFund setsManagementCo.,Ltd.,thedirect ectorofLongjiangBank. Company.Heisnowindependentdir e,Heis HeilongjiangFinancialJuniorColleg vedasPartySecretary,Presidentof gree,professor,ser Director rsityofCommerce,anIndependent putyPartySecretaryofHarbinUnive nowPresident,De ofLongjiangBank. CorporateGovernance

BasicInformationonSupervisors

LiJiuchun,male,Hannationality,apartymemberofCPC,borninSeptember1952,bachelor degree,directoroftheHeilongjiangSystemReformOfficeIndustryandMarketSystem,assistantin- spector,directoroftheHeilongjiangFinancialWorkLeadingGroup,director-generalofHeilongjiang

RuralCreditCooperatives,andsecretaryofthePartyCommittee.Heisnowservedassupervisorof

LongjiangBank,isproposedtoactasthesupervisorgeneralofLoangjiangBank,withthequalifica- tionstobeverifiedbythesupervisiondepartment.

YangXiulin,male,Hannationality,apartymemberofCPC,borninFebruary1950,bachelor degree,economist,servedasformerDeputyChiefofFinancialManagementDepartment,Chiefof

ComprehensivePlanDepartmentofMudanjiangBranchofPeople'sBankofChina,ViceDirector,

DirectorandPartySecretaryofMudanjiangCreditCooperativeUnion,ChairmanandPartySecretary ofMudanjiangCommercialBank.HeisnowViceSupervisor-GeneralofLongjiangBank.

WangGuanru,male,Hannationality,apartymemberofCPC,borninApril1979,bachelorde- gree,servedasformerFinancialSupervisorofLiaoningHongchengPlasticCo.,Ltd.,Heisnow

DeputyGeneralManagerofLiaoningHongchengPlasticCo.,Ltd.,SupervisorofLongjiangBank.

XuJian,male,Hannationality,apartymemberofCPC,borninSeptember1970,bachelorde- gree,accountant,servedasformerDeputyDirector-GeneralofBudgetDivisionofQiqiharMunicipal

BureauofFinance,DirectorofFinanceCadreTrainingCenterandDirectorofBudgetDivision.Heis nowDeputyDirectorofQiqiharMunicipalBureauofFinance,SupervisorofLongjiangBank.

JuChunyan,female,Hannationality,apartymemberofCPC,borninJuly1972,bachelorde- gree,economist,servedasformerViceDirectorofDongjinCreditCooperativesofQitaiheCity,Vice

DirectorofHuixiangCityCreditCooperatives,ViceDirector,directorFinanceDepartmentofUrban

CreditCooperativesUnionofQitaihecity,ManagerofCapitalandFinanceDepartmentofCity

CreditCooperatives.SheisnowVicePresidentXiangjiangBranch,Harbin,ofLongjiangBank,and

195 2012 Annual Report 196 ce ateGovernan Corpor ctor fCPC,borninNovember1957,do e,Hannationality,apartymembero HuiXiaofeng,mal apartymemberofCPC,borninOctober1966,bachelor LuanFeng,female,Hannationality, LongjiangBank. StaffSupervisorof Institute YouthLeagueCommitteeofHarbin ervedasformerDeputySecretaryof degree,professor,s Foreign putyDirector,AssociateProfessorof turerofSchoolofManagement,De ofTechnology,lec HeisnowProfessor,DoctorTutorcollegeofmanagementof TradeTeaching&ResearchOffice, ternalSupervisorofLongjiangBank. HarbinInstituteofTechnology,anEx rvedasformerChiefofFacultyDivisionofOfficeofAcademic degree,AssociateProfessor,lawyer,se isnowAssociateProfessorinEducationofLawDepartmentof AffairsofMudanjiangUniversity,she upervisorofLongjiangBank. MudanjiangUniversityandExternalS CorporateGovernance

BasicInformationonSeniorExecutives

GuanXihua,withinformationprovidedintheabovebasicinformationondirectors,whichshall beomittedhere.SheisnowpresidentofLongjiangBank.

WangGuibin,male,Hannationality,apartymemberofCPC,borninSeptember1958,bachelor degree,senioraccountant,servedasformerChairmanofQiqiharCommercialBank,PartySecretary.

HeisnowVicePresidentofLongjiangBank.

XuYonghui,male,Hannationality,apartymemberofCPC,borninFebruary1965,masterde- gree,senioreconomist,servedasformerDirector-General,ofJiamusiBranchofHeilongjiangBank- ingSupervisionBureau.HeisnowVicePresidentofLongjiangBank.

YuLiyong,male,Hannationality,apartymemberofCPC,borninJuly1974,doctordegree,

AssociateProfessor,servedasformerPresidentofDaqingCityCommercialBank.HeisnowVice

PresidentofLongjiangBank.

XuZhihui,withinformationprovidedintheabovebasicinformationondirectors,whichshall beomittedhere.HeisnowPresidentAssistantofLongjiangBank.

ZengQingfu,male,Hannationality,borninAugust1967,masterdegree,servedasgeneralman- agerassistantofCOFCOFinanceAssistant,PresidentAssistantofDaqingCommercialBank.Heis nowPresidentAssistantofLongjiangBank.

LiRuiwen,male,Hannationality,apartymemberofCPC,borninNovember1959,bachelor degree,senioreconomist,servedasformerVicePresidentofQiqiharBranchofIndustrialandCom- mercialBank,OfficeDirector,GeneralManagerofCreditManagementDepartment,GeneralMan- agerofCreditApprovalDepartmentofHeilongjiangBranchofIndustrialandCommercialBankof

China.HeisnowSecretaryoftheBoardofLongjiangBank.

197 2012 Annual Report 198 ce ateGovernan Corpor ationonEmployees BasicInform totalof4,443people,withanaverage tingperiod,ouremployeesreacheda Astheendofrepor rabove, 7peoplewiththemaster'sdegreeo Amongallemployees,thereare19 ageof34.2years. erofstaff;2,655peoplewithundergraduatedegree,accounting accountingfor4.43%ofthetotalnumb staff;1,219peoplewithjuniorcollegedegree,accountingfor for59.76%ofthetotalnumberof yees;372peoplewithjuniorcollegedegreeorbelowaccounting 27.44%ofthetotalnumberofemplo for8.37%ofthetotalnumberofstaff. CorporateGovernance

IntroductiontoGeneralMeetingofShareholders

Duringthereportingperiod,instrictcompliancewiththe"CompanyLaw","CommercialBank

Law"andotherrelevantlawsandregulationsaswellasincombinationwiththeactualsituationofthe

Bank,theBankhasbeenhasconstantlyimprovedthecorporategovernancestructureandgivenfull playtotheroleofthe"BoardofDirectors,BoardofSupervisors,GeneralMeetingofShareholdersand

Management",andthelevelofcorporategovernancesawcontinuousimprovement.

IShareholdersandgeneralmeetingofshareholders

Attheendofthereportingperiod,thetotalnumberofshareholdersoftheBankwas184,of whichtherewere84corporateshareholdersand100naturalpersonshareholders.Duringthereporting period,theBankheldoneannualgeneralmeetingandoneextraordinarygeneralmeeting,passed11 importantproposals.Notifying,conveningandvotingproceduresofthemeetingwereconductedin strictaccordancewiththerelevantprovisionsofthe"CompanyLaw","ArticlesofAssociationofthe

LongjiangBankCo.,Ltd."(hereinafterreferredtoas"theBank'sArticlesofAssociation")andthe

"RulesofProcedureofGeneralMeetingsofLongjiangBank"soastoensureallshareholders,espe- ciallyminorityshareholders,toexercisetheirrighttoinformation,participationandvoting.Beijing

JunZeJunLawOfficepresentedatthegeneralmeetingtwiceforwitnessandprovidedlegalopinion.

(I)OnMay26,2012,theBank'sAnnualGeneralMeetingin2011washeldonthesiteofthe headofficeofLongjiangBankinHarbinCity,HeilongjiangProvince.Thismeetingwasattendedbya totalof65shareholdersdirectlyorbyappointedagents,onbehalfofthevotingsharesof

3,423,037,390,reaching92.09%oftheBank'stotalvotingsharesof3,720,000,000.Afterconsideration andvotingbytheshareholdersattendingthemeeting,bywayofanordinaryresolution,thefollowing tenproposalswereconsideredandapproved,includingthe"Proposalonthe2011AnnualReporton theWorkoftheBoardofDirectorsofLongjiangBankCorporation","Proposalonthe2011Annual

ReportontheWorkoftheBoardofSupervisorsofLongjiangBankCo.,Ltd.","Proposalonthe2011

199 2012 Annual Report 200 ce ateGovernan Corpor firstextraordinarygeneralmeetingin2012washeldonthe (II)OnOctober13,2012,theBank's ecialcommittees IIDirectors,boardofdirectorsandsp rectorsconsistedof13 (I)Directors.Attheendofthereportingperiod,theBank'sBoardofDi rdofDirectorsofthe (II)Specialcommittees.FourspecialcommitteesaresetupundertheBoa etailedinthe"Annual Duringthereportingperiod,theBoardofDirectorsoftheBankwasd nkinHarbinCity,HeilongjiangProvince.Themeetingwasat- siteoftheheadofficeofLongjiangBa irectlyorbyappointedagents,onbehalfofthevotingsharesof tendedbyatotalof47shareholdersd eBank'stotalvotingsharesof3,720,000,000.Afterconsideration 3,361,878,112,teaching90.37%ofth dingthemeeting,bywayofaspecialresolution,itpassedthe andvotingbytheshareholdersatten ShareandUpgradingRegisteredCapitalofLongjiangBankin "ProposalonIncreaseinCapitaland 2012". experienceandawealthof directors,includingthreeindependentdirectors.AllDirectorshadwork elatedfields. managementexperienceintheeconomic,financial,accountingandotherr relatedtransactioncontrol, Bank,whichconsistedofstrategicplanning(6S),riskmanagementand alcommitteeshadclearre- nominationandcompensation,andauditspecialcommittees.Variousspeci committee(6S)washeldby sponsibilities,acleardivisionoflabor.Inadditiontothestrategicplanning wereheldbyindependent thechairmanoftheboardaschairman,therestofthespecialcommittees directorsaschairmen. getof salonthe2012AnnualFinancialBud tatementsofLongjiangBank","Propo AnnualFinancialS salon ionPlanoftheLongjiangBank","Propo Proposalonthe2011ProfitDistribut LongjiangBank"," the2012 ountantstoProvidetheBankwith cheTohmatsuCertifiedPublicAcc HiringDeloitteTou onCen- ongjiangBankCo.,Ltd.","Proposal ices","On2011AnnualReportonL AnnualAuditServ ank","Proposalonthe2011EvaluationReportonResumption tralizedHostingoftheSharesoftheB "Proposalonthe2011EvaluationReportonResumptionof ofDirectorsofLongjiangBank",and SupervisorsofLongjiangBank". CorporateGovernance

ReportontheWorkoftheBoardofDirectorsofLongjiangBankin2012".

IIISupervisorsandtheBoardofSupervisors,andspecialcommittees

(I)Supervisors.Attheendofthereportingperiod,theBoardofSupervisorsoftheBankconsist- edofsevensupervisors,amongwhichthereweretwoshareholdersupervisors,threeemployeesuper- visors,andtwoexternalsupervisors,whichwasinlinewithrelevantlawsandregulationsandtheAr- ticlesofAssociationoftheBank.

(II)Specialcommittees.Inaccordancewiththerequirementsoftheregulatoryrequirementsand theBank'sArticlesofAssociation,theBoardofSupervisorshasestablishedtheAuditandNomination

Committeesunderit;chairmenoftwospecialcommitteeswereactedbyexternalsupervisors.

Duringthereportingperiod,theBoardofSupervisorswasdetailedinthe"AnnualReportonthe

WorkoftheBoardofSupervisorsofLongjiangBankin2012".

IVAssessment,incentiveandrestraintmechanismsforexecutives

TheBankadherestotheprincipleofkeepingtheincentivesandconstraintsinunity,andexecu- tives'managementhasacleardivisionofresponsibilities,clearperformancetargets.Duringthereport- ingperiod,inordertofurtherimprovethecorporategovernancestructure,strengtheninternalrisk control,theBankhashiredanindependentprofessionalconsultingfirmforconductingexecutives' performanceappraisalandimprovingthecompensationmanagementsystem.

201 2012 Annual Report 202 ngBank Longjia ngBank rsofLongjia rdofDirecto eportonBoa 2012R theBankconscientiouslyfulfilledtheduties,continuedto In2012,theBoardofDirectorsof ofDirectorsof portonBoard 2012Re inuedtoimprovecorporategovernance,investedeffortsto strengthenstrategicmanagement,cont andcontrol,realizedthesuccessfulcompletionofvarioustasks, increasethelevelofriskmanagement ationalmacroeconomicandfinancialpoliciesandtheArticlesof inaccordancewiththeprovisionsofn Co.,Ltd.(hereinafterreferredtoas"theBank'sArticlesof AssociationoftheLongjiangBank heregulatoryauthorities.Afteraudit,in2012,theBankachieved Association"),undertheguidanceoft pcriteria,thesamebelow),representinganincreaseof52.64% anetprofitof1.708billionyuan(Grou %,anincreaseof0.06percentagepointsoverthepreviousyear; overlastyear;areturnonassetsof1.00 increaseof0.59percentagepointsoverthepreviousyear.The andareturnoncapitalof22.17%,an ncrease;totalassetsreached186.055billionyuan,anincreaseof returntoshareholderscontinuedtoi ewlevelcontinuously;the 21.59%overthepreviousyear;thescaleofoperationwasupgradedtoan overthepreviousyear,an depositsreached114.095billionyuan,anincreaseof20.722billionyuan corporatedepositsoverthe increaseratioof22.2%,including:anincreaseof13.007billionyuanin intheprovince'sbanking previousyear;thebalancereached84.952billionyuan,rankingsecond syear,anincreaseratioof industry;savingsdepositsincreasedby7.715billionyuanoverthepreviou ncereached29.143billion 36%,rankingthefirstoftheprovince'smajorcommercialbanks;thebala coverageoftheregulatory yuan;theloanbalancewas35.481billionyuan(basedonthestatistical increaseratioof38.35%, authorities),anincreaseof9.835billionyuanoverthepreviousyear,an le'sBankofChina;the whichiscontrolledwithinthecreditscaleapprovedbythePeop previousyear,to0.75%, non-performingloanratiodroppedby0.08percentagepointsoverthe 2012ReportonBoardofDirectorsofLongjiangBank

maintaininggoodassetquality;theBankalsorealizedsuccessfulcompletionoftheincreaseincapital andshare;attheendoftheyear,thecapitaladequacyratioandcorecapitaladequacyratioreached

14.18%and13.77%;capitalstrengthhasbeenfurtherenhanced,themainregulatoryindicatorsall meetthestandards.ThemainworkoftheBoardofDirectorsin2012isasfollows: IStrengthenstrategicmanagement,achievethecontinuous improvementoftheoverallcompetitivenessoftheBank

In2012,theBoardgavefullplaytotheroleofstrategicmanagement,seizedtheworkfocusof theBank,activelypromotedtheimplementationofthedevelopmentstrategyandguidedtheBankon thedevelopmentroadofdifferentiation,characterization, communalization,refiningand professionalization.

First,vigorouslypromotetheconstructionofmodernagriculturaldevelopmentbank,and constantlyimprovethebusinessscaleandbrandinfluenceofthe"Huinonglian".Accordingtothe customer'sbusinessneeds,thesystemandprocessoftheoriginalfiveagriculture-relatedcredit productswereclassified,revisedandimproved,andlaunchedthe"Nongxintong","Nonghedai",

"Rongtongcang","Jintudi","Xunhuandai","Jinyidai","Jinqiaotong",andother"Hunonglian"business newvarieties,soastobettermeettheneedsoffarmers,agriculturalenterprisesforcreditservices.At theendof2012,thewholebank'sagriculture-relatedloansreached10.591billionyuan,anincreaseof

2.996billionyuanoverthepreviousyear,accountingfor30.46%oftheBank'snewloans.

"Nongxintong"productwonthetitleoftheBankingAssociationofHeilongjiangProvince2012

ServingSmallandMicroEnterprisesandAgriculture,RuralAreaandFarmerDoubleTenExcellent

FinancialProducts;"Huinonglian"seriesofloanswonthe"Bank-EnterpriseCooperation"BestSocial

ResponsibilityAward,theBestInnovationAchievementAwardaswellastheBestBrandPotential

AwardgrantedbytheRuralFinancialNewspaper,ChineseMicrofinanceAlliance,ChineseSocietyof

CooperativeEconomicCooperationFinancialProfessionalCommittee,ChinaUrbanAndRural

Well-OffDevelopmentPromotionCenterandothers.

203 2012 Annual Report 204 ngBank rsofLongjia rdofDirecto eportonBoa 2012R ong sinesscreditmonopoly,providestr rtstobuildanexemplarysmallbu Second,investeffo servicebrandbringing Third,investfulleffortstobuildthe"Xiaolongren"communitybanking promote ises.TheBankcontinuedtoactively lopmentofsmallandmicroenterpr supportforthedeve isecredit nstructionworkofthesmallenterpr fspecialtychannels,carryouttheco theconstructiono lofour rtherenhancetheprofessionalleve tstructureandspecialtychannels,fu centermanagemen s;providefineanddetailedmicro-enterprisefinancialservices, serviceforsmallandmicroenterprise arketingandtheprofessionalpromotionbetweenbanksand carryoutavarietyofmatchingm ,andachievedremarkableresults;italsoconductedpositive enterprises,banksandgovernments ntofgoodwillloan,rentloans,revolvingloanandothernew innovation,researchanddevelopme smallmicro-creditsystem,andactivelymeetthefinancingneeds productssoastofurtherimprovethe anceservingabilityfortherealeconomy.Attheendof2012, ofsmallandmicroenterprises,andenh ed15.382billionyuan,anincreaseof3.226billionyuan,an oursmallmicro-loanbalancereach viousyear.In2012,oursmallmicro-enterprisecreditbusiness increaseratioof26.54%overthepre eChinaBankingRegulatoryCommission(CBRC),theChina won7nationalawardsgrantedbyth icDevelopmentForumOrganizingCommittee,theChinese BankingAssociation,theChinaEconom yofIndustryandSMEDevelopmentPromotionCenterand financialmagazine,NationalMinistr others. of"beingrootedinthe convenienceandbenefitstopeople.Inaccordancewiththeconcept onstructionofcommunity community,servingthepeople",theBankvigorouslycarriedoutthec sandsofoutlets",further banksfeaturedwith"hundredsofbanks,thousandsofstationsandtenthou cialservices,andgradually enhancedthecompetitivenessoftheBankinthefieldofpersonalfinan endof2012,theBankhad establishedalargeandstablecommunityresidents'customerbase.Asofthe 7.256billionyuanoverthe savingsdepositstime-pointbalanceof28.262billionyuan,anincreaseof ommunitybankingchannel previousyear,anincreaseratioof34.54%,representingtheveryuniquec buildinghighlightingthestronglate-moveadvantage. 2012ReportonBoardofDirectorsofLongjiangBank

IIEffectivelycarryouttheworkoftheBoardofDirectors, constantlyimprovethedecision-makinglevel

In2012,accordingtotheprovisionsoftheArticlesofAssociationoftheBank,combinedwith practicalwork,theBankappropriatelyconvenedtheshareholders'meeting,themeetingoftheBoard ofDirectorsandworkmeetingsofspecialcommittees,soastoensurethatthetransparentprocessand efficientoperationofmajordecision-makingoftheBoardofDirectorsoftheBank.

(I)Conveneashareholdersmeetinginatimelymanner

In2012,theBoardofDirectorsoftheBankhasconvenedoneannualshareholdersmeetingand oneextraordinaryshareholdersmeeting,passed11proposalssuchasthe"ProposalonCentralized

HostingoftheSharesoftheBank","ProposalonIncreaseinCapitalandShareandUpgrading

RegisteredCapitalofLongjiangBankin2012"and"Proposalonthe2011ProfitDistributionPlanof theLongjiangBank",andeffectivelyprotecttheexercisingofrightsofshareholders.

(II)TimelyconvenethemeetingofBoardofDirectorsformakingdecisionsonsignificantevents

In2012,theBankfurtherimprovedtheplanningofmeetingorganizationoftheBoardof

Directorsandtheexecutionabilityofthemeetingplans,effectivelybringingintoplaytheroleof scientificdecision-makingandstrategicmanagement.AtotaloffivemeetingsofBoardofDirectors wereheldduringthewholeyear.AccordingtotheArticlesofAssociationoftheBank,theBankgave seriousdiscussionandconsiderationonmatterswithinthepurviewofthefunctionsandpowers,with thefullimplementationofthedecision-makingresponsibilities,researchedandconsidered21 proposalssuchastheBank's2011financialfinalcostprogramandprofitdistributionplan,the2012 financialbudgetprogramandmaterialrelatedpartytransactions,institutionalsettings,andother aspects,andlistenedtofourbusinessreportsonthework.

(III)MaketheeffectiveimplementationofthedutiesofthespecialcommitteeoftheBoardof

Directors

VariousspecialcommitteesoftheBoardofDirectorsconscientiouslyperformedtheirduties,and activelyperformedtheirfunctions,providedstrongsupportandauxiliaryfortheBoardofDirectorsto

205 2012 Annual Report 206 ngBank rsofLongjia rdofDirecto eportonBoa 2012R thelevelofcorporategovernance, IIIContinuetoenhance conductedin-depth Duringthereportingperiod,theBoardofDirectorsoftheBank ercialBanks'Capital (I)Furtherstrengthencapitalmanagement.Accordingtothe"Comm aladequacyratiotobe Inordertomeettheneedsoftheactualbusinessdevelopment,ensurecapit rkforchangeoftheBoardofDirectors (IV)Doagoodjobinpreparatorywo eArticlesofAssociationoftheBank,thefirstsessionofthe Basedontherelevantprovisionsofth comprehensivegraspofthe implementationoftherequirementsoftheregulatoryauthorities,madea visors,GeneralMeetingof focusedcorporategovernance,the"BoardofDirectors,BoardofSuper aborandcooperation,and ShareholdersandManagement"balancedeachother,withdivisionofl ntlevel. jointlypromotedthedevelopmentandeffectivelyimprovedthemanageme ngjiangBankCorporation ManagementApproach(TrialVersion)"promulgatedbytheCBRC,"Lo minestheBank'scapital CapitalManagement(TrialVersion)"wasformulated,whichdeter arketrisksandoperational managementobjectivesandmeasurementmethodsforthecreditrisks,m divisionofresponsibilities. risksatthisstage,makesclearcapitalmanagementgovernancestructureand titiveness enhanceourcorecompe kexpiredinDecember2012.Tomakeanorderlyelection,the BoardofDirectorsofLongjiangBan eredandpassedtheProposalonTermChangeoftheBoardof BoardofDirectorsoftheBankconsid gtheprinciples,proceduresandprecautionsinthetermchange DirectorsofLongjiangBank,clarifyin announcementtoallshareholders.Nowrelatedproceduresare ofBoardofDirectors,andmadean gram. performedinaccordancewiththepro agement, dthefinancialmanagement,riskman andefficientdecision-makingaroun makethescientific esofthe ere12meetingsofspecialcommitte ationandotherkeywork.Therew executivecompens ning(6S) udingtwomeetingsofstrategicplan organizedthroughouttheyear,incl BoardofDirectors ofRisk ensationCommittee,fourmeetings eetingsofNominationandComp committee,twom ransactionsControlCommittee,fourmeetingsoftheAudit ManagementandRelatedPartyT proposalswereexamined,and9reportswerelistenedto. Committee,andatotalof15typesof 2012ReportonBoardofDirectorsofLongjiangBank

maintainedatascientificandrationallevel,theBoardofDirectorsoftheBank,accordingtothe relevantprovisionsoftherelevantlawsandregulationsandtheArticlesofAssociationofthe

Company,carriedoutacapitalincreaseandregisteredcapitalincreasein2012.Therewasatotalof31 originalcorporateshareholderstoparticipateintheallotmentofrightsissueanddirectionaladditional issue,thenewsharecapitalof640millionshares,raising1.28billionyuanoffunds.Thiscapital increasecompletedbeforetheendof2012;theregisteredcapitaloftheBankincreasedfrom3.72 billionto4.36billionyuan.Oureffortswerealsogiventoenhanceourendogenouscapital accumulationcapacitytocarryouttheincreaseincapitalandshare.Asoftheendof2012,theBank's totalcapitalreached9.2billionyuan,2.97timesofitsinception,providingastrongcapitalprotection forfuturedevelopment.

(II)Investeffortstoachievestockequitymanagementstandardization.Accordingtothespiritof theresolutionofthe2011annualshareholders'meeting,thesharesheldbytheshareholdersofthe

Bankwillbeentrustedinaphasedandcentralizedhostingwaywithindependentequityhosting institutions.Attheendofthereportingperiod,thewholebankhascompletedthesharerights recognitionandhostingfor112shareholders,accountingfor61%ofallshareholders.

(III)Improvethesystemofcorporategovernance.Inaccordancewithregulatoryrequirements, combinedwiththeactualneedsoftheBank'scorporategovernance,theBankfurtherstrengthenedthe systemconstructionin2012,anddevelopedthe"ManagementApproachonProposalandMotionof

BoardofDirectorsofLongjiangBank","LongjiangBankInternalAuditCharter"andotherrulesand regulations,whichfurtherenhancedtheBank'scorporategovernancenorms.Atthesametime,the

BoardofDirectorscontinuedtostrengthenthesystemimplementationandoptimizethecorporate governancemechanism,andfurtherimprovedthelevelofcorporategovernance.

(IV)Seriouslycarryoutinformationdisclosure.Duringthereportingperiod,theBoardof

DirectorsearnestlyimplementedthevariousregulatoryrequirementsandLongjiangBankInformation

DisclosureRequirements.Theinformationwasdisclosedinstrictaccordancewithstandardized procedures,accuratelygraspedthedisclosurecontent,timingandscale,didwellinthepreparationand

207 2012 Annual Report 208 ngBank rsofLongjia rdofDirecto eportonBoa 2012R ol,effectively IVComprehensivelystrengthentheinternalcontr eontheoperationof In2012,themacroeconomicdownwardtrendformedagreaterpressur the ansactions.TheBoardofDirectorsof ethemanagementofrelatedpartytr (V)Furtherimprov icationwiththeregulatoryauthorities,conductthefull (VI)Strengthencontactsandcommun withbusinessprinciplesof commercialbanks.TheBoardofDirectorsoftheBank,inaccordance ustypesofrisksbroughtby prudentmanagementandsteadydevelopment,activelyrespondedtovario ManagementandRelated theeconomicdownturn,calledaspecialworkmeetingoftheBoardRisk riskpreventionandcontrol PartyTransactionsControlCommitteetohearthereportoftheBank's ntionandcontrolefforts. work,andputforwardspecificrequirements,thusincreasingtheriskpreve guardagainstoperationalrisks irection, nsactions,withriskcontrolasthed trolledtheriskofrelatedpartytra Bankeffectivelycon ncyasthefocus,andregulateddevelopmentandcompliant improvementofmanagementefficie ulfilledthedutyofsupervisionandmanagement,investedefforts operationasthemainobjectivesandf ytransactionsmanagement,regulatedrelatedpartytransaction toenhancethelevelofrelatedpart the"TransactionManagementApproachofRelatedParty managementinaccordancewith stoensuretheannualrelatedpartytransactionstobeoperatedin TransactionsofLongjiangBank",soa ceandsupervisionwork. compliancethroughaseriesofguidan irements.Duringthereportingperiod,theBoardofDirectorsof implementationoftheregulatoryrequ regulatoryopinionoftheBankingRegulatoryBureauof theBanklistenedcarefullytothe thevariousregulatoryrequirements,promotedscientific,steady HeilongjiangProvince,implemented to-daycommunicationandcontactwithregulatoryauthorities, development,strengthenedtheday- gulatoryguidance,attached reflectedthesituationinatimelymanner,tooktheinitiativetoobtainre developedpracticalreform greatimportancetotheexaminationoftheregulatoryauthorities,and theBank. proposalsandinvestedeffortstoimprovetheoperationandmanagementof ityofthe ess,accuracy,completenessandlegal 1annualreport,ensuredthetimelin disclosureofthe201 munity. isionoftheshareholdersandthecom ure,andsincerelyacceptedthesuperv informationdisclos 2012ReportonBoardofDirectorsofLongjiangBank

First,strictcontrolwasimplementedonthecreditaccess,thelong-termmechanismforcompliant accesswasimplemented;throughin-depthimplementationofthenewregulationsonloans,the qualityofloanswaseffectivelyraised.Second,theBankpaidcloseattentiontotheriskofthestock loans,developedeffectivemeasurestopreventit,maderectificationfortheexistingproblemsina timelymannerandachievedsomeresults.Third,aftereffortsfromvariousparties,theBank'shistorical burdenbeforetherestructuringwascompletelydisposedandfurtherreinforcedthefoundationforthe developmentofthewholebank.Thefourthistostrengthentheinternalauditsupervision,continueto strengthentheauditofkeyareas,keyfundingandkeydepartments;atotalof60auditsofvarioustypes werecarriedout;aftertheproblemswereidentified,timelysupervisionofrectificationwouldbe followed,thuspromotingthecomplianceofbusinessoperations.TheBankalsoactivelyandsteadily promotedthebuildingoftheconcentratedverticalmanagementmodelauditsystemorganizational structureoftheAuditDepartmentoftheBoardofDirectors-RegionalAuditDivision;audit managementsystemandauditmanagementprocesseswerestreamlinedandimproved,having improvedscientificness,authorityandoperabilityoftheauditmanagement. VFurtherstrengthenthebuildingofcorporateculture, enhancetheoverallqualityofstaff

BoardofDirectorsoftheBankfocusedonthebuildingofcorporateculture,regardedtheyear

2012asthecorporateculturebuildingyear,andorganizedtostudyandacquireaprofound understandingoftheessenceofcorporateculturesystem,consciouslylookedtooptimizetheirown ideasandbehaviors,combinedcorporateculturewithmanagementpractice,andstrivedtocarryout thediscussionaboutcorporatecultureandfurtherunifiedtheideas,whichenabledtheBank'smission, visionandvaluetobecometheinternalmotivepowerfortheemployeestopromotethedevelopment oftheBank.Italsoactivelypromotedthecorporateculturefurther,enrichedtheconnotationof corporateculture,carriedoutthesub-cultureconstructionsuchasserviceculture,riskculture, marketingcultureandsoon,explorethe"double-100-markevaluationmode"andbuiltaunique

209 2012 Annual Report 210 ngBank rsofLongjia rdofDirecto eportonBoa 2012R ieshonestly,diligently iouslyperformtheirdut VIConscient of ictaccordancewiththeauthorization ngperiod,allofourdirectors,instr Duringthereporti plementvariousrequirementsoftheregulatoryauthorities, In2013,theBoardwillcontinuetoim nseofresponsibilityandsenseofmission,carefullyfollowedthe thegeneralmeeting,withastrongse theArticlesofAssociationoftheBank,investedmoreeffortsin provisionsofthelaws,regulationsand andattachedimportancetodecision-makinganddiligently bigaffairs,controlledthedirection, activelysafeguardedthelegitimaterightsandinterestsofthe performedtheirvariousduties,and rs,andconsciouslyacceptedthesupervisionoftheregulatory shareholders,theBankanddeposito sorsoveritsduties.Thedirectorsattendedthemeetingtimely, authoritiesandtheBoardofSupervi stions,reflectedthehighdegreeofresponsibilityandgood expressedtheiropinionsandsugge ntcontributiontothesustainedandsteadydevelopmentofthe professionalism,andmadeanimporta Bank. theexternalbusinessenvironment,focusoninvestigationand andactivelyrespondtochangesin asedonstrategicobjectives, research,enhancetheplanningandpertinenceoftheworkoftheBoard;b enthereform,optimizethe theBankwillfocusonimportantaffairs,adheretothecharacteristics,deep etherestructuringand companygovernancemechanism,enhancethemanagementlevel,andpromot italmanagementwork,and development;theBankwillfurtherstrengthentheequitymanagement,cap anagement,improverisk strivetoimprovecapitalefficiency;strengtheninternalcontrolm cttheBank'ssustainedand managementandcontrol;improvetheinformationdisclosure,andprote healthydevelopment. onstructionevaluationsystem. corporateculturec ioustasks completevar 2012ReportonBoardofSupervisorsofLongjiangBank

2012ReportonBoardofSupervisors ofLongjiangBank

In2012,withthestrongsupportoftheBank'sBoardofDirectorsandseniormanagement,the

BoardofSupervisorshascompletedtheworkinaccordancewiththeBank'sArticlesofAssociation andtheprovisionsofrelevantlaws.Theworkhasbeencarriedoutaroundthecentralworkofthe

Bankinaccordancewiththeannualworkplan,withthefocusonfinancialsupervision.Theemphasis isalsolaidonperformingoversightofdirectors,seniormanagementanditsmembers,guidedbyrisk andinternalcontrolmanagement.Thesustainableandhealthydevelopmentisachievedbyfurther improvingthemechanism,rationalizingtheprocess,refiningthecontents,implementingeffective errorcorrection,carryingoutsupervisionandevaluationwork,andactivelypromotingtheBankto improvethecorporategovernancestructure,enhancingthemanagementlevel,andachieving sustainabledevelopment.Theworkwillnowbereportedasfollows: IOverviewontheworkin2012

(1)Dowellintheannualperformanceevaluationofdirectors,supervisorsandsenior management.Onthebasisofperformanceassessmentworkin2011,BoardofSupervisorsfurther refinedtheevaluationoftheperformanceofdutiesofdirectorsandseniormanagement,well completingtheannualperformanceofthedirectors,supervisorsandseniormanagement.First,based ontheImplementationDetailsofPerformanceEvaluationMethodsonDirectorsbyBoardof

SupervisorsofLongjiangBankCo.,Ltd.,throughcollectingmeetingrecords,meetingmaterialsand otherrelevantinformationofBoardofDirectorsanditsspecialcommittee,afterthedirectors' self-assessment,peerassessment,andevaluationonthedirectorsbyBoardofDirectors,acareful assessment,objectiveevaluationonthedirectors'performancewasmade,thusformingthefinal evaluationresultsonthedirectors'performanceofdutiesbyBoardofSupervisorsasfollows:among13 directors,12directorswereprovedtobecompetent,onedirectorbasicallycompetent;atthesame

211 2012 Annual Report 212 gjiangBank isorsofLon rdofSuperv eportonBoa 2012R ision.First,bycommunicatingmorewiththeOfficeofthe (2)Furtherdowellinfinancialsuperv meetingofbank-wide (3)Strengthenriskoversight.First,BoardofSupervisorsorganizedajoint fundsandfinancialdepartmentsandDeloitteToucheTohmatsu BoardofDirectorsoftheBank,the encommunication,BoardofSupervisorskeptabreastofand CertifiedPublicAccountants,strength ionoftheauditreportoftheBankfortheyear2011,profit madeaseriousstudyandconsiderat ors,paidsustainedattention distributionplan,andindependentlyissuedviewsoftheBoardofSupervis ngfirms.Second,Boardof toadjustmentandrectificationofmajormattersputforwardbyaccounti elofBoardofDirectorsto Supervisorsstrengthenedthefinancialauditbytransferringtheauditpersonn lsoryleavesupervisionand carryouttheauditoftheoutgoingexecutivesandsomeexecutives'compu strengthenedsupervision, inspectionwork.Third,duringthedailywork,BoardofSupervisors meetingsheldbythehead participatedin85centralizedprocurementtendermeetingsandreview mprovementofcentralized office,10financialreviewmeetings,puttingforwardsuggestionsonthei toavoidoperationalrisk. procurementbiddingprocess,biddingunits'provisionofinformation,soas esoncomprehensiverisk riskmanagement,jointmeetingofthreeheads,madethematicstudi tings,"MinutesoftheJoint management,creditriskcontrolandotherimportantwork.Afterthemee ThreeHeads"wereissued, MeetingonRiskManagement",and"MinutesoftheJointMeetingof thefour theworkofBoardofDirectors, toimprovingandstrengthening time,withregard strategic studyoftheoperatingmechanismof ereputforwardsuchasthefurther recommendationsw promote reportingsystematalllevels,soasto gement,theestablishmentoftherisk planningandmana agement, instrategymanagement,riskman sinfulfillingitsimportantduties BoardofDirector erationmanagement.Second,throughself-assessmentof assessmentmanagement,andremun withthem,BoardofSupervisorsunderstoodandmasteredthe executivesorholdingconversations uties,performanceresultsanddeviationsintheperformanceof executives'abilitiestoperformtheird theperformanceassessmentoftheBank'sseniormanagementin theirduties,especiallyfurtherrefined ent,costcontrol,riskpreventionandcontrol,teambuilding thestrategiclanding,businessdevelopm tentevaluationresultsofallthesevenexecutives,andproposed andotheraspects,formedthecompe rrationalizingriskmanagement,strengtheningtheconstruction ninerecommendationssuchasfurthe omotetheirdedicationandresponsibility. ofthecadreandstaffteamssoastopr 2012ReportonBoardofSupervisorsofLongjiangBank

puttingforwardcommentsandsuggestionsonriskmanagementsystem,systemconstructionandthe disposalofnon-performingloanssoastopromotethebank-wideriskmanagementtocontinueto strengthen.Second,inMarchandOctober,respectively,BoardofSupervisorsparticipatedinthe specialmeetingsofthebank-wideannualaudit,riskcontrolandriskmanagement;theprincipal leadersofBoardofSupervisorsdeliveredthreethematicspeechesondoingwellinauditwork, strengtheningriskmanagementandavoidingcreditrisk,proposedtheviewsanddemandsonthe supervisionandmanagement.Third,threeriskwarningsweremadeonstrengtheningthemanagement ofcreditrisk,loandisposalofenterprisesinvolvedinlitigation,withrelevantworkrecommendations.

Fourth,BoardofSupervisorsattendedasanon-votingparty40loanreviewcommitteemeetingsheld bytheheadofficein2012,soastosupervisetheloanreviewprocess,andmadetherecommendations toloansinsomeindustriessuchasthecoal.

(4)Holdthesupervisorymeetingsandspecialcommitteesmeetings,withcarefulconsiderationof theproposals.In2012,inaccordancewiththerelevantprovisions,BoardofSupervisorsheldthree workingmeetings,oneAuditCommitteespecialmeetingandoneNominationCommitteespecial meetingtostudyandconsidertheeightissuessuchasthe"2011AnnualReportonWorkofBoardof

Supervisors",and"WorkProgramofTermChangeofBoardofSupervisors";allsupervisors independentlyandseriouslyexercisedoversightfunctions,carriedoutsupervisionoftheBank's businessmanagement,financialinvestment,riskmanagementandcontrolandotherimportantmatters inaccordancewiththelaw,madeobjectiveevaluationoftheperformanceoftheirdutiesonBoardof

Directorsandseniormanagement,putforwardpositivesuggestions,effectivelyplayedasupervisory role,andprovidedastrongimpetustothebank'sworktobecarriedoutsmoothly.

（5） BoardofSupervisorsattendedthegeneralmeetingofshareholdersaccordingtolaw,attended

BoardofDirectors'meetingsasanon-votingparty,withtheeffectiveexerciseofsupervisory functions.In2012,membersoftheBoardofSupervisorsattendedtheAnnualGeneralMeetingof

ShareholdersandoneInterimGeneralMeetingsofShareholdersheldbytheBank,carefullyreviewed themeetingdocumentsandtheproposals,checkedthelegalityandcomplianceoftheconvening proceduresandtheproposalvotingofthemeetings,andreportedonthethreeissuessuchasthe evaluationresultsofthedirectorsandsupervisors.ThemembersofBoardofSupervisorsattendedall

213 2012 Annual Report 214 gjiangBank isorsofLon rdofSuperv eportonBoa 2012R sonrelevantissuesofBoardof IIIndependentopinion eBankhadtotalassetsof184.258billionyuan(Parent (1)Business.Attheendof2012,th kactivelyrespondedtothecomplicatedinternationaland Withinthereportingperiod,theBan sauditedbyDeloitte (2)Thefinancialposition.TheBank's2012annualfinancialreportwa increaseof21.1%comparedwiththebeginningoftheyear;the companycriteria,thesamebelow),an uan,anincreaseof21.56%comparedwiththebeginningofthe depositsbalancewas112.456billiony onyuan,anincreaseof37.44%comparedwiththebeginningof year;theloanbalancewas34.374billi as0.77%,adecreaseof0.08percentagepointscomparedwith theyear;non-performingloanratew itwas1.698billionyuan. thebeginningoftheyear.Thenetprof ofenterpriseculture,made domesticeconomicandfinancialsituation,wasguidedbythebuilding ductedsolidandeffective scientificdecision-makingincompliancewithlawsandregulations,con gy.Businessdevelopment operation,andachievedfurtherimplementationofdevelopmentstrate ded.Exceptforcoredebt advancedinstability,andmanagementefficiencywassignificantupgra ank-wideoperationand interdependency,theindicatorsmetregulatoryrequirements,theb .TheBoardofDirectors managementcontinuedtomaintainthegoodmomentumofdevelopment diligentobligationandno andseniormanagementmembersconscientiouslyperformedtheirloyaland n,andotherdamagesto violationofthelawsandregulations,theBank'sArticlesofAssociatio shareholdersandtheBank'sinterestswasfound. rds;astandardunqualified ToucheTohmatsuCPAinaccordancewithdomesticauditingstanda meeting ardofDirectorsoftheBank,annual asanon-votingpartyheldbytheBo the(five)meetings, tannual edinthestudiesanddiscussionabou ingsoftheheadofficeandparticipat andquarterlymeet withthe italsupplementandotherissues, nk,thedistributionofprofits,cap budgetoftheBa general sofBoardofDirectorsmeetingand econveningandholdingprocedure supervisionoverth rvariousproposalsliveduptotheinterestsofthemajorityof meetingofshareholdersandwhethe eperformanceoftheproposals,thusprovidingtheconstructive shareholdersandthebankaswellasth lopment. commentsontheBank'sbusinessdeve Supervisors 2012ReportonBoardofSupervisorsofLongjiangBank

opinionauditreportwasissued.Afterexamination,theBoardofSupervisorshasbelievedthat:The

Bank's2012annualauditreportistrue,fairandcompleteinthereflectionofourfinancialcondition andoperatingresults.

(3)Thecompany'smajorassettransactions.In2012,theBankinvested69.70millionyuaninthe fivevilliagebankssuchasXingshanVillageBankandNingdongVillageBank.Italsoinvested165 millionyuaninpurchasingtheofficebuildings,electronicequipmentandotherfixedassets.TheBoard ofSupervisorsbelievedthat:duringthereportingperiodandnoinsidertrading,damagestothe shareholders'equity,orbehaviorscausingthelossofassetsoftheBankwasfoundinmajorasset transactions.

(4)Relatedtransactions.TheBank'srelatedtransactionsmainlyinvolvethebankdepositsand lendingbusiness.TheBoardofSupervisorsbelievedthat:withinthereportingperiod,theresultsofthe

Bank'srelatedtransactionsarefair,noinsidertradinganddamagestotheinterestsoftheshareholders andtheBankwasfound,asaresultofconductingtherelatedtransactionsinaccordancewiththe provisionsofthe"LongjiangBankRelatedTransactionsManagementApproach".

(5)Riskmanagementandinternalcontrol.In2012,theBankactivelypromotedthe"twoofficial" systems,investedeffortstobuildacomprehensiveriskmanagementsystem;strictlycontrolledthe accessgateway,establishedcomplianceandlong-termeffectmechanism;throughin-depth implementationofthenewregulationsonloans,theBankeffectivelyenhancedthequalityofloans.It alsopaidcloseattentiontorealestateloans,theplatformcreditrisk,madetimelyadjustmentofthe creditpolicy,developedeffectivemeasurestopreventit,andconductedtimelyrectificationofthe existingproblems;througheffortsofvariousparties,thehistoricalburdenwasdisposed,meetingthe requirementsoftheregulatoryauthorities.

(6)Theimplementationoftheresolutiongeneralmeetingofshareholders.In2012,themembers oftheBoardofSupervisorsattendedthegeneralmeetingofshareholdersaccordingtolaw,hadno objectiontoproposalssubmittedtotheshareholders'meetingforconsideration.TheBoardof

Supervisorssupervisedovertheimplementationoftherelevantresolutionsofthegeneralmeetingof shareholdersconvenedthisyearandbelievedthattheBoardofDirectorsconscientiouslyimplemented theresolutionsofthegeneralmeetingofshareholders.

215 2012 Annual Report 216 in2012 jiangBank abiliaofLong Memor hecustomerservicecenteroftheBankwasformally OnMarch14,thenewsystemoft gulatoryCommission(CBRC)heldthe2011National OnApril27,theChinaBankingRe epartmentandQi- InAugust,theheadofficebusinessdepartment,DaqingBranchbusinessd chedintheQiqi- OnJuly26,thefirstpersonalrevolvingcreditbusinesswassuccessfullylaun llycameonstream. OnMay24,thenewfinancingproductssellingsystemoftheBankforma eprojectofestablishingtheassetandliabilitymanage- OnFebruary28,theBanklaunchedth rmallycameonstream. mobilephonebankingoftheBankfo OnJanuary17,the ★ ★ ★ ★ ★ ★ ★ 12 iangBankin20 abiliaofLongj Memor brandinfluenceoftheper- harBranch,whichaddedtothepersonalloanvarietiesandimprovedthe sonalloanproductsoftheBank. izedthesalesprocessoffi- Thenewsystemhasstrengthenedcustomerriskmatchcontrolandoptim nancialproducts. lyforFinancialServiceofSmallandMicroBusinessesinBei- ExcellenceSelectionandAwardAssemb llandmicrobusinesseswas jing.The"LongYiDai"fullrangesupplychainfinancingproductforsma fFinancialServiceforSmall onceagainawardedbyCBRCthetitleof"2011CharacteristicProductso ndustryofChina". andMicroBusinessesOfferedbytheFinancialInstitutionsintheBankingI centersystemadoptsahard-switchtechnology,expandsbusiness launched.Thenewcustomerservice sinessprocess,thuspromotingthechannelconstructionofthe linesandimprovestheefficiencyofbu Bank. testing,thefirstphaseoftheprojecthasbeensuccessfullycom- mentsystem.Afterdevelopmentand theassetandliabilitymanagementsystemcanbeusedforfund pletedandformallyputintouse.As andbankaccountinterestrateriskmanagement,thelaunchof transferpricing,liquidityriskcontrol estrategicexecutionandriskcontrolcapacity. thesystemhaseffectivelypromotedth MemorabiliaofLongjiangBankin2012

taiheBoliBranchwonthetitleof"2012TopThousandDemonstrationUnitsforCivilizedandNor- mativeService".TheBankrankssecondamongitspeersinHelongjiangintermsofthenumberof award-receivingagencies.

★ OnSeptember8,the"LongjiangPersonalWealthClub"ofLongjiangBankwasopened grandlyandLongjiangBankformallylaunchedpersonalbankingservice.

★ OnSeptember12,theoperationriskmornitoringsystemoftheheadofficeformallycameon stream.

★ OnNovember4,the"2ndAnnualAwardsCeremonyforFinancialInstitutions(Businesses)

ServingAgricultural,FarmersandCountrysideBusiness"washeldinBejingbyCCTVandtheBank wonthe"AwardforBestFinancialInstitutionServingSmallandMicro-businesses".

★ Bytheendof2012,theBankhassuccessfullycompletedcapitalincreaseandregisteredcapital increase,havingissued640millionnewsharesforcapitalofRMB1.28billion.Theregisteredcapitalof theBankhasincreasedfromRMB3.72billiontoRMB4.36billion.

★ In2012,theBankwonsecondprizeof"SoftScienceAward"givenbytheheadofficeofthe people'sBankofChinaforitsagriculturalsupplychainfinance"farmer-benefitingchain"product.

TheBankisthesoleurbancommercialbankwhichwonthishonor;theBankwonThirdprizeof

"TechnologyDevelopmentAwardoftheBankingSector"givenbytheheadofficeofthepeople's

BankofChinaforitsITconstruction.

★ AsofDecember31,2012,thebankhadissued1.79millionFunongCardsandwasgranted withthehonorarytitleof"No.1BankinIssuanceofFunongCardsinHeilongjiangProvincein2012" byChinaUnionpayHeilongjiangBranch.

217 2012 Annual Report 219 220 222 223 218 eport tandAuditR ialStatemen Financ AuditorReport cember2012 Fortheyearended31De nd alStatementsa Financi BankandConsolidatedCashFlowStatement 226 NotestoFinancialStatements 224 BankandConsolidatedStatementsofChangesinEquity eStatements BankandConsolidatedIncom Auditor'sReport eSheet BankandConsolidatedBalanc AuditReport

AUDITOR'SREPORT DeShiJingBao(Shen)Zi(13)No.P0544 TOTHESHAREHOLDERSOFLONGJIANGBANKCORPORATION: WehaveauditedtheaccompanyingfinancialstatementsofLongjiangBankCorporation(hereinafterre- ferredtoas"LongjiangBank"),whichcomprisetheBankandconsolidatedbalancesheetasat31December 2012,andtheBankandconsolidatedincomestatements,theBankandconsolidatedcashflowstatements, theBankandconsolidatedstatementsofchangesinequityfortheyearthenended,andthenotestothefi- nancialstatements. 1.Management'sresponsibilityforthefinancialstatements ManagementofLongjiangBankisresponsibleforthepreparationandfairpresentationofthesefinan- cialstatements.Theseresponsibilitiesinclude:(1)preparingthefinancialstatementsinaccordancewithAc- countingStandardsforBusinessEnterprisestoachievefairpresentationofthefinancialstatements;(2)de- signing,implementingandmaintaininginternalcontrolwhichisnecessarytoenablethatthefinancialstate- mentsarefreefrommaterialmisstatement,whetherduetofraudorerror. 2.Auditor'sresponsibility Ourresponsibilityistoexpressanauditopiniononthesefinancialstatementsbasedonouraudit.We conductedourauditinaccordancewithChinaStandardsonAuditing.ChinaStandardsonAuditingrequire thatwecomplywiththeCodeofEthicsforChineseCertifiedPublicAccountantsandplanandperformthe audittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstate- ment. Anauditinvolvesperformingauditprocedurestoobtainauditevidenceabouttheamountsanddisclo- suresinthefinancialstatements.Theproceduresselecteddependontheauditor'sjudgment,includingthe assessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.In makingthoseriskassessments,CertifiedPublicAccountantsconsidertheinternalcontrolrelevanttothe preparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareap- propriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpolicies usedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverall presentationofthefinancialstatements. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisfor ourauditopinion. 3.Opinion Inouropinion,thefinancialstatementsofLongjiangBankpresentfairly,inallmaterialrespects,the Bankandconsolidatedfinancialpositionasof31December2012,andtheBankandconsolidatedresultsof operationsandcashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusiness Enterprises.

DeloitteToucheTohmatsuChineseCertifiedPublicAccountant CertifiedPublicAccountantsLLPJiangChangzheng BeijingBranch

MaQiang

April26,2013

219 2012 Annual Report - 220 983,561 106,700 192,056 106,529 802,401 1,073,651 4,511,313 7,308,937 1,377,455 24,503,271 28,019,798 47,415,649 16,786,842 18,966,897 2011 152,155,060 Asat31December TheBank UNIT:RMBTHOUSAND 176,400 151,078 707,180 189,001 1,102,026 5,506,642 5,136,454 7,245,367 2,000,000 1,434,050 33,495,928 33,001,603 59,602,793 15,989,496 18,519,494 2012 184,257,512 Asat31December - - 983,561 192,609 106,529 810,111 1,077,254 4,511,313 7,308,937 1,394,910 25,131,807 28,257,329 47,491,071 16,786,842 18,966,897 2011 153,019,170 Asat31December - TheGroup 151,670 195,611 752,277 2,000,000 1,119,608 5,136,454 5,506,642 7,245,367 1,458,269 33,337,825 60,050,452 15,989,496 18,519,494 34,592,200 2012 186,055,365 Sheet atedBalance dConsolid Bankan Asat31December 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Note8 loss tutions Interestreceivable Loansandadvancestocustomers Held-to-maturityinvestments Available-for-salefinancialassets Debtssecuritiesclassifiedasreceivables Placementswithbanks Long-termequityinvestments Intangibleassets Financialassetsatfairvaluethroughprofitor Financialassetsheldunderresaleagreements Fixedassets ASSETS Cashandbalanceswithcentralbank Depositswithbanksandotherfinancialinsti Deferredtaxassets Otherassets Totalassets ANCESHEET CONSOLIDATEDBAL BANKAND ECEMBER2012 ASAT31D BankandConsolidatedBalanceSheet-Continued

BANKANDCONSOLIDATEDBALANCESHEET-CONTINUED

ASAT31DECEMBER2012 UNIT:RMBTHOUSAND

TheGroup TheBank

2012 2011 2012 2011 LIABILITY Note8 Asat31December Asat31December Asat31December Asat31December

BorrowingsfromCentralbank 17 141,050 60,000 - -

Depositsfrombanksandotherfinancialinstitutions 18 39,973,946 28,359,816 40,122,999 28,531,435

Financialassetssoldunderrepurchaseagreements 19 20,554,273 22,869,886 20,554,273 22,869,886

Duetocustomers 20 114,094,984 93,372,969 112,455,524 92,507,548

Accruedstaffcosts 21 256,107 202,953 255,882 202,881

Taxespayable 22 504,490 162,841 498,269 156,632

Interestpayable 23 1,156,676 1,135,365 1,151,871 1,134,099

Otherliabilities 24 185,310 493,838 179,703 492,074

Totalliabilities 176,866,836 146,657,668 175,218,521 145,894,555

EQUITY

Sharecapital 25 4,360,000 3,720,000 4,360,000 3,720,000

Capitalreserve 26 1,709,283 1,053,006 1,709,283 1,053,006

Surplusreserve 27 318,555 148,750 318,555 148,750

Generalreserve 28 845,407 441,437 837,000 437,000

Retainedearnings 29 1,815,403 906,768 1,814,153 901,749

Equityattributabletoequityholdersofthe Bank 9,048,648 6,269,961 9,038,991 6,260,505

Non-controllinginterests 30 139,881 91,541 - -

Totalequity 9,188,529 6,361,502 9,038,991 6,260,505

Totalliabilitiesandequity 186,055,365 153,019,170 184,257,512 152,155,060

Theaccompanyingnotesformpartofthefinancialstatements.

Thefinancialstatementsonpages2to87wereapprovedbythefollowing:

LegalRepresentativePresidentinChargeofHeadofFinanceand FinanceandAccountingAccountingDepartment

221 2012 Annual Report - 524 5,634 2,062 222 24,978 26,133 86,835 91,031 (9,611) 358,295 115,471 (24,440) (257,414) (111,900) 1,107,064 1,460,880 1,459,725 1,101,430 1,101,430 3,238,463 3,067,622 5,888,311 (1,777,583) (1,408,269) (2,820,689) 2011 - TheBank UNIT:RMBTHOUSAND 3,339 16,277 21,134 34,631 60,097 12,784 12,556 557,928 165,404 114,951 (50,453) (434,866) (186,705) 1,714,332 2,269,480 2,255,983 1,698,055 1,698,055 4,707,083 4,503,356 8,646,128 (2,437,603) (1,816,032) (4,142,772) 2012 14 0.36 8,968 5,634 8,968 2,062 29,040 26,143 87,080 92,199 (9,611) 364,155 116,648 (24,449) (260,754) (113,516) 1,124,857 1,115,889 1,480,481 1,483,378 1,119,223 1,110,255 3,292,635 3,120,891 5,952,898 (1,812,154) (1,437,884) (2,832,007) 2011 TheGroup 0.45 9,510 9,510 3,339 16,277 30,645 34,894 11,026 12,784 60,181 561,503 116,252 167,298 (51,046) (439,227) (189,458) 1,724,043 1,714,533 1,707,766 1,698,256 2,269,269 4,787,480 4,583,898 8,749,483 2,273,518 (2,513,962) (1,885,277) (4,165,585) 2012 Statement tedIncome dConsolida Bankan 42 43 38 39 40 41 36 37 31 32 33 34 35 Note8 theBank -EquityholdersoftheBank Theaccompanyingnotesformpartofthefinancialstatements. -Non-controllinginterests -Non-controllinginterests Othercomprehensiveincome Earningspershare -Basic(RMBYuan) Totalcomprehensiveincome Impairmentlossesonassets Totalcomprehensiveincomeattributableto: Less:Non-operatingexpenses ?Less:Incometaxexpense Netprofit Netprofitattributableto:-Equityholdersof Operatingincome Netinterestincome Operatingexpenses Operatingprofit Add:Non-operatingincome Profitbeforetax Interestincome Otheroperatingincome Businesstaxesandsurcharges Operatingandadministrativeexpenses Netgains/(losses)onfairvaluechanges Foreignexchangegains Feeandcommissionincome Investmentincome Interestexpenses Netfeeandcommissionincome Feeandcommissionexpense OMESTATEMENTS CONSOLIDATEDINC BANKAND BER2012 EARENDED31DECEM FORTHEY BankandConsolidatedCashFlowStatement

BANKANDCONSOLIDATEDCASHFLOWSTATEMENTS

FORTHEYEARENDED31DECEMBER2012 UNIT:RMBTHOUSAND

TheGroup TheBank Note8 2012 2011 2012 2011 Cashflowsfromoperatingactivities Netincreaseinduetocustomersanddepositsfrombanks 32,336,312 44,073,275 31,539,706 43,477,365

Netincreaseinfinancialassetssoldunderrepurchaseagreements - 22,869,886 - 22,869,886

Netdecreaseinfinancialassetsheldunderresaleagreements 1,399,467 - 1,399,467 - Netincreaseinborrowingsfromcentralbank 81,050 10,000 - - Cashreceivedfrominterest,feeandcommission 8,647,404 4,853,607 8,556,134 4,789,413 Cashreceivedfromotheroperatingactivities 213,917 124,054 205,630 118,168 Subtotalofcashinflowsfromoperatingactivities 42,678,150 71,930,822 41,700,937 71,254,832 Netincreaseinloansandadvancestocustomers (9,799,207) (5,558,221) (9,327,110) (5,257,988)

Netincreaseinbalanceswithcentralbankanddepositswithbanks (1,466,918) (18,218,926) (1,404,328) (18,168,261)

Netincreaseinfinancialassetsheldunderresaleagreements - (14,675,929) - (14,675,929)

Netdecreaseinfinancialassetssoldunderrepurchaseagreements (2,315,613) - (2,315,613) - Cashpaidforinterest,feesandcommission (4,195,321) (2,079,284) (4,175,451) (2,067,824) Cashpaidtoandforemployees (889,247) (691,072) (861,039) (678,817) Cashpaidforalltypesoftaxes (518,820) (561,460) (505,560) (558,158) Cashpaidtootheroperatingactivities (239,229) (11,850,235) (220,240) (11,830,966) Subtotalofcashoutflowsfromoperatingactivities (19,424,355) (53,635,127) (18,809,341) (53,237,943) Netcashgeneratedfromoperatingactivities 45 23,253,795 18,295,695 22,891,596 18,016,889 Cashflowsfrominvestingactivities

Cashreceivedfromdisposalandredemptionofinvestmentsecurities 11,647,908 297,935 11,647,908 297,935 Cashreceivedfromreturnsoninvestmentsecurities 220,292 362,400 221,822 362,910

Cashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets 16,001 555,402 16,001 555,403 Subtotalofcashinflowsfrominvestingactivities 11,884,201 1,215,737 11,885,731 1,216,248 Cashpaidforpurchaseofinvestmentsecurities (16,732,421) (5,955,196) (16,802,121) (5,975,196)

Cashpaidforpurchaseoffixedassets,intangibleassetsandotherlong-termassets (385,209) (520,104) (324,185) (516,476) Subtotalofcashoutflowsfrominvestingactivities (17,117,630) (6,475,300) (17,126,306) (6,491,672) Netcashusedininvestingactivities (5,233,429) (5,259,563) (5,240,575) (5,275,424) Cashflowsfromfinancingactivities Proceedsfromissueofshares 1,320,300 1,132,800 1,280,000 1,132,800

Including:cashreceivedfromnon-controllingshareholdersofsubsidiaries 40,300 - - - Subtotalofcashinflowsfromfinancingactivities 1,320,300 1,132,800 1,280,000 1,132,800

Cashpaidfordistributionofdividends,profitsorinterestexpense (217,316) (490) (215,846) - Including:dividendspaidtonon-controllinginterests (1,470) (490) - - Subtotalofcashoutflowsfromfinancingactivities (217,316) (490) (215,846) - Netcashgeneratedbyfinancingactivities 1,102,984 1,132,310 1,064,154 1,132,800

Effectofexchangeratechangesoncashandcashequivalents 1,671 (7,244) 1,509 (7,244) Netincreaseincashandcashequivalents 19,125,021 14,161,198 18,716,684 13,867,021 Add:openingbalancesofcashandcashequivalents 30,866,311 16,705,113 30,656,581 16,789,560 Closingbalanceofcashandcashequivalents 44 49,991,332 30,866,311 49,373,265 30,656,581 Theaccompanyingnotesformpartofthefinancialstatements.

223 2012 Annual Report - - - - (490) 5,634 224 16,277 40,300 Total Total (217,316) 6,361,502 1,724,043 1,280,000 9,188,529 4,104,335 1,119,223 1,124,857 1,132,800 6,361,502 1,707,766 ------(490) 9,510 8,968 8,968 9,510 91,541 83,063 91,541 40,300 (1,470) 139,881 UNIT:RMBTHOUSAND linginterests linginterests Non-control- Non-control------5,634 16,277 Subtotal Subtotal (215,846) 1,280,000 6,269,961 6,269,961 1,698,256 9,048,648 4,021,272 1,132,800 1,110,255 1,115,889 1,714,533 ------906,768 906,768 348,093 earnings earnings (169,805) (215,846) (441,437) (403,970) (110,143) Retained Retained 1,698,256 1,698,256 1,815,403 1,110,255 1,110,255 ------441,437 441,437 441,437 403,970 845,407 Generalreserve Generalreserve ------reserve reserve 38,607 110,143 169,805 148,750 318,555 148,750 Surplus Surplus ------reserve reserve 5,634 5,634 16,277 16,277 554,572 492,800 640,000 1,053,006 1,709,283 1,053,006 Capital Capital ity gesinEqu mentsofChan lidatedState Conso TotalequityattributabletoequityholdersoftheBank oequityholdersoftheBank Totalequityattributablet ------capital capital 640,000 640,000 4,360,000 3,080,000 3,720,000 3,720,000 Share Share serve serve serve serve vestors sidiaries vestors Theaccompanyingnotesformpartofthefinancialstatements. 4.Profitdistribution Asat31December2012 4.Profitdistribution Asat31December2011 (1)Appropriationtosurplusre (2)Appropriationtogeneralre (3)Dividendpaid Asat1January2011 Changesfortheyear 1.Profitfortheyear 2.Othercomprehensiveincome Subtotalof1and2 3.Capitalinjectionbyinvestors (1)Capitalinjectionbyin (3)Dividendpaid 2.Othercomprehensiveincome Subtotalof1and2 3.Capitalinjectionbyinvestors (1)Capitalinjectionbyin (2)Establishmentofnewsub (1)Appropriationtosurplusre (2)Appropriationtogeneralre Asat1January2012 Changesfortheyear 1.Profitfortheyear FCHANGESINEQUITY ATEDSTATEMENTSO CONSOLID ECEMBER2012 ASAT31D BankandConsolidatedStatementsofChangesinEquity

STATEMENTSOFCHANGESINEQUITY

ASAT31DECEMBER2012 UNIT:RMBTHOUSAND

Retained Sharecapital Capitalreserve Surplusreserve Generalreserve Total earnings

Asat1January2012 3,720,000 1,053,006 148,750 437,000 901,749 6,260,505

Changesfortheyear

1.Profitforthe year - - - - 1,698,055 1,698,055

2.Othercomprehensiveincome - 16,277 - - - 16,277

Subtotalof1and2 - 16,277 - - 1,698,055 1,714,332

3.Capitalinjection byinvestors

(1)Capitalinjectionbyinvestors 640,000 640,000 - - - 1,280,000

4.Profitdistribution

(1)Appropriation tosurplusreserve - - 169,805 - (169,805) -

(2)Appropriationtogeneralreserve - - - 400,000 (400,000) -

(3)Dividendpaid - - - - (215,846) (215,846)

Asat31December2012 4,360,000 1,709,283 318,555 837,000 1,814,153 9,038,991

Retained Sharecapital Capitalreserve Surplusreserve Generalreserve Total earnings

Asat1January2011 3,080,000 554,572 38,607 - 347,462 4,020,641

Changesfortheyear

1.Profitforthe year - - - - 1,101,430 1,101,430

2.Othercomprehensiveincome - 5,634 - - - 5,634

Subtotalof1and2 - 5,634 - - 1,101,430 1,107,064

3.Capitalinjection byinvestors

(1)Capitalinjectionbyinvestors 640,000 492,800 - - - 1,132,800

4.Profitdistribution

(1)Appropriation tosurplusreserve - - 110,143 - (110,143) -

(2)Appropriationtogeneralreserve - - - 437,000 (437,000) -

Asat31December2011 3,720,000 1,053,006 148,750 437,000 901,749 6,260,505

Theaccompanyingnotesformpartofthefinancialstatements.

225 2012 Annual Report 226 ts ialStatemen totheFinanc Notes d31December2012 ForTheYearEnde FinancialStatements Notestothe NTOTHEBANK I.INTRODUCTIO k")isajointstockcommercialbankincorporatedinthePeo- LongjiangBankCorporation(the"Ban dbythepromoters,theBankacquiredalltheassetsandliabil- Pursuanttothesponsoragreementsigne teno.B1056H223010001issuedbytheCBRC,andbusiness TheBankhasfinancialservicescertifica itssubsidiaries(collectivelyreferredtoasthe"Group")com- TheprincipalactivitiesoftheBankand 13branchesandprovidesretailandcorporatebankingservices Asat31December2012,theBankhas functionalcurrencyof TheconsolidatedfinancialstatementsarepresentedinRMB,whichisalsothe II.BASISOFPREPARATION bytheMinistryofFi- TheGrouphasadoptedAccountingStandardsforBusinessEnterprisesissued III.STATEMENTOFCOMPLIANCE enewCASs,andpre- ThefinancialstatementsoftheBankhavebeenpreparedinaccordancewithth IV.SIGNIFICANTACCOUNTINGPOLICIES 1Accountingyear aryto31December. TheGrouphasadoptedthecalendaryearasitsaccountingyear,i.e.from1Janu 2December2009.TheincorporationwasauthorisedbytheHei- ple'sRepublicofChina("PRC")on2 inaBankingRegulatoryCommission(the"CBRC")inaccordance longjiangRegulatoryBureauoftheCh ionofLongjiangBankCorporation"ofHeiYinJianFu[2009]No. with"Approvalfortheopeningapplicat 309. edoutbyDaqingCityCommercialBankCo.,Ltd.,QiqiharCity itiesandalltherelatedbusinessescarri gCityCommercialBankCo.,Ltd.andQitaiheCityCreditAsso- CommercialBankCo.,Ltd.,Mudanjian FourBankandAssociation")on22December2009. ciationLimitedLiabilityCompany(the" bytheStateAdministrationofIndustryandCommerceofHei- licenseNo.230000100069419issued longjiangprovince. includingRMBandforeigncurrencydepositsandloans,payment prisetheprovisionofbankingservices, esasapprovedbytheCBRC. andsettlementservices,andotherservic inHeilongjiangprovince,thePRC. theBankanditssubsidiaries. ndrelatedregulations("new nanceofthePeople'sRepublicofChina(the"MOF")on15February2006a CASs") 31December2012,andthe senttrulyandcompletely,theBank'sandtheGroup'sfinancialpositionasat thenended. resultsofoperationsandthecashflowsoftheBankandtheGroupfortheyear NotestotheFinancialStatements

2Functionalandpresentationalcurrency RMBisthecurrencyoftheprimaryeconomicenvironmentinwhichtheGroupoperates.Thefunc- tionalcurrencyandthepresentationcurrencyoftheGroupisRMB. 3Basisofaccountingandprincipleofmeasurement TheGrouphasadoptedtheaccrualbasisofaccounting.Exceptforcertainfinancialinstrumentswhich aremeasuredatfairvalue,theGrouphasadoptedthehistoricalcostastheprincipleofmeasurementofthe financialstatements.Whereassetsareimpaired,provisionsforassetimpairmentaremadeinaccordancewith relevantrequirements. 4Theaccountingtreatmentofbusinesscombinationsinvolvingenterprisesundercommoncontroland businesscombinationsnotinvolvingenterprisesundercommoncontrol Thebusinesscombinationisdividedintothebusinesscombinationsinvolvingenterprisesundercom- moncontrolandbusinesscombinationsnotinvolvingenterprisesundercommoncontrol.AlltheGroup's businesscombinationsarenotinvolvingenterprisesundercommoncontrol. Businesscombinationsnotinvolvingenterprisesundercommoncontrol Abusinesscombinationnotinvolvingenterprisesundercommoncontrolisabusinesscombinationin whichallofthecombiningenterprisesarenotultimatelycontrolledbythesamepartyorpartiesbeforeand afterthecombination. Thecostofcombinationistheaggregateofthefairvalues,attheacquisitiondate,oftheassetsgiven, liabilitiesincurredorassumed,andequitysecuritiesissuedbytheacquirerinexchangeforcontroloftheac- quiree.Theintermediaryexpensesincurredbytheacquirerinrespectofauditing,legalservices,valuation andconsultancyservices,etc.andotherassociatedadministrativeexpensesattributabletothebusinesscom- binationarerecognizedinprofitorlosswhentheyareincurred.Whereabusinesscombinationnotinvolv- ingenterprisesundercommoncontrolisachievedinstagesthatinvolvemultipletransactions,thecostof combinationisthesumoftheconsiderationpaidattheacquisitiondateandthefairvalueattheacquisition dateoftheacquirer'spreviouslyheldinterestintheacquiree.Theequityinterestintheacquireeheldbefore theacquisitiondateisremeasuredatitsfairvalueattheacquisitiondate,withanydifferencebetweenitsfair valueanditscarryingamountbeingrecognizedasinvestmentincome.Theothercomprehensiveincomeof theacquireebeforetheacquisitiondaterelatingtothepreviouslyheldinterestintheacquireeistransferred toinvestmentincome. Theacquiree'sidentifiableassets,liabilitiesandcontingentliabilities,acquiredbytheacquirerinabusi- nesscombination,thatmeettherecognitioncriteriashallbemeasuredatfairvalueattheacquisitiondate. Wherethecostofcombinationexceedstheacquirer'sinterestinthefairvalueoftheacquiree'sidentifiable netassets,thedifferenceistreatedasanassetandrecognizedasgoodwill,whichismeasuredatcostoninitial recognition.Wherethecostofcombinationislessthantheacquirer'sinterestinthefairvalueoftheac- quiree'sidentifiablenetassets,theacquirerfirstlyreassessesthemeasurementofthefairvaluesoftheac- quiree'sidentifiableassets,liabilitiesandcontingentliabilitiesandmeasurementofthecostofcombination.If afterthatreassessment,thecostofcombinationisstilllessthantheacquirer'sinterestinthefairvalueofthe

227 2012 Annual Report 228 ts ialStatemen totheFinanc Notes (1)Determinationoffairvalue 5Goodwill and ostlessaccumulatedimpairmentlosses, abusinesscombinationismeasuredatc Goodwillarisingon goodwillisconsideredtogetherwiththerelatedassetsgroup(s), Forthepurposeofimpairmenttesting, hehigherofitsfairvaluelesscostsofdisposalandthepresent Therecoverableamountofanassetist hichitisincurredand Theimpairmentofgoodwillisrecognizedinprofitorlossfortheperiodinw 6Recognitioncriteriaofcashandcashequivalents mand.Cashequivalents Cashcomprisescashonhandanddepositsthatcanbereadilywithdrawnonde 7Financialinstruments apartytothecontrac- FinancialassetsandfinancialliabilitiesarerecognizedwhentheGroupbecomes ettled,betweenknowl- Fairvalueistheamountforwhichanassetcouldbeexchanged,oraliabilitys ttheend nts.Itistestedforimpairmentatleasta lyintheconsolidatedfinancialstateme ispresentedseparate ofeachyear. herelatedassetsgroup(s)oreachofassetsgroup(s)expectedtoben- i.e.,goodwillisreasonablyallocatedtot ion.Animpairmentlossisrecognizediftherecoverableamountof efitfromthesynergiesofthecombinat includinggoodwill)islessthanitscarryingamount.Theimpairment theassetsgrouporsetsofassetsgroups( yingamountofanygoodwillallocatedtosuchassetsgrouporsetsof lossisfirstlyallocatedtoreducethecarr tsofthegrouppro-rataonthebasisofthecarryingamountofeach assetsgroups,andthentotheotherasse asset(otherthangoodwill)inthegroup. tobederivedfromtheasset.Anasset'sfairvalueisthepriceinasale valueofthefuturecashflowsexpected n.Ifthereisnosaleagreementbutanassetistradedinanactive agreementinanarm'slengthtransactio e.Ifthereisnosaleagreementoractivemarketforanasset,fairval- market,fairvalueisthecurrentbidpric ionavailable.Costsofdisposalincludelegalcostsrelatedtothedis- ueisassessedbasedonthebestinformat removingtheassetanddirectcoststobringtheassetintocondition posaloftheasset,relatedtaxes,costsof dfuturecashflowsofanassetshallbedeterminedbyestimatingthe foritssale.Thepresentvalueofexpecte ntinuinguseoftheassetandfromitsultimatedisposalandapplying futurecashflowstobederivedfromco turecashflows. theappropriatediscountratetothosefu willnotbereversedinanysubsequentperiod. letoknownamountsofcash aretheGroup'sshort-term,highlyliquidinvestmentsthatarereadilyconvertib andwhicharesubjecttoaninsignificantriskofchangesinvalue. itiallymeasuredatfairvalue. tualprovisionsoftheinstrument.Financialassetsandfinancialliabilitiesarein ransactioncostsareimmedi- Forfinancialassetsandfinancialliabilitiesatfairvaluethroughprofitorloss,t ties,transactioncostsarein- atelyrecognizedinprofitorloss.Forotherfinancialassetsandfinancialliabili cludedintheirinitialrecognizedamounts. ntwhichhasanactivemar- edgeable,willingpartiesinanarm'slengthtransaction.Forafinancialinstrume profitor eremainingdifferenceimmediatelyin lenetassets,theacquirerrecognizesth acquiree'sidentifiab eriod. lossforthecurrentp NotestotheFinancialStatements

ket,theGroupusesthequotedpriceintheactivemarkettoestablishitsfairvalue.Forafinancialinstrument whichhasnoactivemarket,theGroupestablishesfairvaluebyusingavaluationtechnique.Valuationtech- niquesincludeusingrecentarm'slengthmarkettransactionsbetweenknowledgeable,willingparties,refer- encetothecurrentfairvalueofanotherinstrumentthatissubstantiallythesame,discountedcashflowanal- ysisandoptionpricingmodels. (2)Effectiveinterestmethod Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialassetorafi- nancialliability(oragroupoffinancialassetsorfinancialliabilities)andofallocatingtheinterestincomeor interestexpenseovertherelevantperiod,usingtheeffectiveinterestrate.Theeffectiveinterestrateisthe ratethatexactlydiscountsestimatedfuturecashflowsthroughtheexpectedlifeofthefinancialassetorfi- nancialliabilityor,whereappropriate,ashorterperiodtothenetcarryingamountofthefinancialassetor financialliability. Whencalculatingtheeffectiveinterestrate,theGroupestimatesfuturecashflowsconsideringallcon- tractualtermsofthefinancialassetorfinancialliability(withoutconsideringfuturecreditlosses),andalso considersallfeespaidorreceivedbetweenthepartiestothecontractgivingrisetothefinancialassetandfi- nancialliabilitythatareanintegralpartoftheeffectiveinterestrate,transactioncosts,andpremiumsordis- counts,etc. (3)Classification,recognitionandmeasurementoffinancialassets Oninitialrecognition,theGroup'sfinancialassetsareclassifiedintooneofthefourcategories,includ- ingfinancialassetsatfairvaluethroughprofitorloss("FVTPL"),held-to-maturityinvestments,loansand receivables,andavailable-for-salefinancialassets.Allregularwaypurchasesorsalesoffinancialassetsare recognizedandderecognizedonatradedatebasis. Financialassetsatfairvaluethroughprofitorloss FinancialassetsatFVTPLincludeheld-for-tradingfinancialassetsandthosedesignatedasatfairvalue throughprofitorloss. Afinancialassetisclassifiedasheld-for-tradingfinancialassetsifoneofthefollowingconditionsis satisfied: *Ithasbeenacquiredprincipallyforthepurposeofsellinginthenearterm; *OninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupman- agestogetherandthereisobjectiveevidencethattheGrouphasarecentactualpatternofshort-termprof- it-taking. AfinancialassetmaybedesignatedasatFVTPLuponinitialrecognitiononlywhenoneofthefollow- ingconditionsissatisfied: *Suchdesignationeliminatesorsignificantlyreducesameasurementorrecognitioninconsistencythat wouldotherwiseresultfrommeasuringassetsorrecognisingthegainsorlossesonthemondifferentbases; *Thefinancialassetformspartofagroupoffinancialassetsoragroupoffinancialassetsandfinancial liabilities,whichismanagedanditsperformanceisevaluatedonafairvaluebasis,inaccordancewiththe

229 2012 Annual Report 230 ts ialStatemen totheFinanc Notes rom airvalue.Anygainsorlossesarisingf TPLaresubsequentlymeasuredatf FinancialassetsatFV nvestments Held-to-maturityi ertonon-derivativefinancialassetswithfixedmaturity,fixed Theheld-to-maturityinvestmentsref theeffectiveinterestmethodandissubsequentlymeasuredat Theheld-to-maturityinvestmentuses Loansandreceivables efinancialassetswithfixedordeterminablepaymentsthatare Loansandreceivablesarenon-derivativ measuredatamortisedcostusingtheeffectiveinterestmethod. Loansandreceivablesaresubsequently Available-for-salefinancialassets denon-derivativefinancialassetsthataredesignatedoninitial Available-for-salefinancialassetsinclu dgainsorlossesarising Available-for-salefinancialassetsaresubsequentlymeasuredatfairvalue,an rerecognisedininterest Declareddividendsandinterestarisingfromavailable-for-salefinancialassetsa inanactivemarketand Forinvestmentsinequityinstrumentsthatdonothaveaquotedmarketprice (4)Impairmentoffinancialassets lassetsotherthanthose TheGroupassessesateachbalancesheetdatethecarryingamountsoffinancia gnizedin eearnedonthefinancialassetsarereco alueandanydividendorinterestincom changesinthefairv profitorloss. htheGrouphasthepositiveintentionandabilitytoholdtomatu- ordeterminablerecoveryamount,whic rity. gfromderecognition,impairmentoramortizationshallbeincluded amortizedcost;thegainsorlossesarisin inthecurrentprofitorloss. alassetsclassifiedasloansandreceivablesbytheGroupincludebal- notquotedinanactivemarket.Financi ,placementswithbanksandotherfinancialinstitutions,financial anceswithcentralbank,duefrombanks restreceivable,loansandadvances,investmentsclassifiedasreceiv- assetsheldunderresaleagreements,inte ablesandotherreceivablesetc. impairmentoramortizationisrecognizedinprofitorloss. Gainorlossarisingfromderecognition, financialassetsatfairvalue recognitionasavailableforsale,andfinancialassetsthatarenotclassifiedas throughprofitorloss,loansandreceivablesorheld-to-maturityinvestments. dincludedinthecapitalre- fromchangesinthefairvaluearerecognizedasothercomprehensiveincomean edcostofmonetaryfinancial serve,exceptthatimpairmentlossesandexchangedifferencesrelatedtoamortis hefinancialassetsarederec- assetsdenominatedinforeigncurrenciesarerecognizedinprofitorloss,untilt rloss. ognized,atwhichtimethegainsorlossesarereleasedandrecognizedinprofito incomeandinvestmentincome. whosefairvaluecannotbereliablymeasuredaremeasuredatcost. lassetisimpaired,theGroup atfairvaluethroughprofitorloss.Ifthereisobjectiveevidencethatafinancia ncialassetisimpairedisevi- determinestheamountofanyimpairmentloss.Objectiveevidencethatafina ngisre- egy,andinformationaboutthegroupi driskmanagementorinvestmentstrat Group'sdocumente ementpersonnelonthatbasis. portedtokeymanag NotestotheFinancialStatements

dencethat,arisingfromoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset,theesti- matedfuturecashflowsofthefinancialasset,whichcanbereliablymeasured,havebeenaffected. Objectiveevidencethatafinancialassetisimpairedincludesthefollowingobservableevents: *Significantfinancialdifficultyoftheissuerorobligor; *Abreachofcontractbytheborrower,suchasadefaultordelinquencyininterestorprincipalpay- ments; *TheGroup,foreconomicorlegalreasonsrelatingtotheborrower'sfinancialdifficulty,grantinga concessiontotheborrower; *Itbecomingprobablethattheborrowerwillenterbankruptcyorotherfinancialreorganisations; *Thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficultiesoftheis- suer; *Uponanoverallassessmentofagroupoffinancialassets,observabledataindicatesthatthereisa measurabledecreaseintheestimatedfuturecashflowsfromthegroupoffinancialassetssincetheinitial recognitionofthoseassets,althoughthedecreasecannotyetbeidentifiedwiththeindividualfinancialassets inthegroup.Suchobservabledataincludes: -Adversechangesinthepaymentstatusofborrowerinthegroupofassets; -Economicconditionsinthecountryorregionoftheborrowerwhichmayleadtoafailuretopay thegroupofassets;. *Significantadversechangesinthetechnological,market,economicorlegalenvironmentinwhich theissueroperates,indicatingthatthecostoftheinvestmentintheequityinstrumentmaynotberecovered bytheinvestor; *Asignificantorprolongeddeclineinthefairvalueofaninvestmentinanequityinstrumentbelowits cost; *Otherobjectiveevidenceindicatingthereisanimpairmentofafinancialasset. Impairmentoffinancialassetsmeasuredatamortizedcost Forafinancialassetthatisindividuallysignificant,theGroupassessestheassetindividuallyforimpair- ment.Forafinancialassetthatisnotindividuallysignificant,theGroupassessestheassetindividuallyfor impairmentorincludestheassetinagroupoffinancialassetswithsimilarcreditriskcharacteristicsandcol- lectivelyassessesthemforimpairment.IftheGroupdeterminesthatnoobjectiveevidenceofimpairment existsforanindividuallyassessedfinancialasset(whethersignificantornot),itincludestheassetinagroupof financialassetswithsimilarcreditriskcharacteristicsandcollectivelyreassessesthemforimpairment.Assets forwhichanimpairmentlossisindividuallyrecognizedarenotincludedinacollectiveassessmentofim- pairment. Iffinancialassetscarriedatcostoramortisedcostareimpaired,thecarryingamountsofthefinancial assetsarereducedtothepresentvalueofestimatedfuturecashflows(excludingfuturecreditlossesthathave notbeenincurred)discountedatthefinancialasset'soriginaleffectiveinterestrate.Theamountofreduction isrecognizedasanimpairmentlossinprofitorloss.If,subsequenttotherecognitionofanimpairmentloss

231 2012 Annual Report 232 ts ialStatemen totheFinanc Notes able-for-salefinancialassets ImpairmentofAvail etisimpaired,thecumulativelossarisingfromdeclineinfair Whenanavailable-for-salefinancialass impairmentlossonavailable-for-salefinancialassets,thereis If,subsequenttotherecognitionofan cost Financialassetsimpairmentmeasuredat onaninvestmentinunquotedequityinstrumentwhosefair Ifanimpairmentlosshasbeenincurred (5)Derecognitionoffinancialassets tisfied: TheGroupderecognizesafinancialassetifoneofthefollowingconditionsissa *thecontractualrightstothecashflowsfromthefinancialassetexpire; rdsofownershipofthe *thefinancialassethasbeentransferredandsubstantiallyalltherisksandrewa norretainssubstantially *althoughthefinancialassethasbeentransferred,theGroupneithertransfers fownershipofafinan- IftheGroupneithertransfersnorretainssubstantiallyalltherisksandrewardso asset'scarryingamount Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthe capitalreserveisreclassifiedfromthecapitalreservetoprofitorloss. valuepreviouslyrecognizeddirectlyin tisreclassifiedfromcapitalreservetoprofitorlossisthedifference Theamountofthecumulativelosstha yprincipalrepaymentandamortization)andthecurrentfairvalue, betweentheacquisitioncost(netofan lassetpreviouslyrecognizedinprofitorloss. lessanyimpairmentlossonthatfinancia eofthefinancialassetswhichcanberelatedobjectivelytoanevent objectiveevidenceofarecoveryinvalu nized,thepreviouslyrecognizedimpairmentlossisreversed.The occurringaftertheimpairmentisrecog navailable-for-saleequityinstrumentsisrecognizedasothercom- amountofreversalofimpairmentlosso capitalreserve,whiletheamountofreversalofimpairmentlosson prehensiveincomeandincludedinthe cognizedinprofitorloss. available-for-saledebtinstrumentsisre arryingamountofthefinancialassetisreducedtothepresentvalue valuecannotbereliablymeasured,thec edatthecurrentmarketrateofreturnforasimilarfinancialasset. ofestimatedfuturecashflowsdiscount asanimpairmentlossinprofitorloss.Theimpairmentlossonsuch Theamountofreductionisrecognized financialassetisnotreversedonceitisrecognized. financialassetistransferredtothetransferee; controlofthefinancialasset. alltherisksandrewardsofownershipofthefinancialassetbuthasnotretained ssettotheextentofitscon- cialasset,anditretainscontrolofthefinancialasset,itrecognizesthefinanciala dliability.Theextentofthe tinuinginvolvementinthetransferredfinancialassetandrecognizesanassociate hitisexposedtochangesin Group'scontinuinginvolvementinthetransferredassetistheextenttowhic thevalueofthetransferredasset. egainorlossthathadbeen andthesumoftheconsiderationreceivedandreceivableandthecumulativ financial eevidenceofarecoveryinvalueofthe rriedatamortisedcost,thereisobjectiv onfinancialassetsca eprevi- gaftertheimpairmentisrecognized,th relatedobjectivelytoaneventoccurrin assetswhichcanbe carrying ereversalismadetotheextentthatthe pairmentlossisreversed.However,th ouslyrecognizedim tisedcost everseddoesnotexceedwhattheamor cialassetatthedatetheimpairmentisr amountofthefinan dtheimpairmentnotbeenrecognized. wouldhavebeenha NotestotheFinancialStatements

recognisedinothercomprehensiveincomeandaccumulatedinequityisrecognisedinprofitorloss. (6)Classification,recognitionandmeasurementoffinancialliabilities Theclassificationandmeasurementoffinancialliabilities DebtandequityinstrumentsissuedbytheGroupareclassifiedintofinancialliabilitiesorequityinstru- mentsonthebasisofthesubstanceofthecontractualarrangementsanddefinitionsoffinancialliabilityand equityinstrument. Financialliabilities Financialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod, withgainorlossarisingfromderecognitionoramortizationrecognizedinprofitorloss. Equityinstruments Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofthegroupafter deductingallofitsliabilities.EquityinstrumentsissuedbytheGrouparerecognizedattheproceedsre- ceived,netofdirectissuecosts. (7)Derecognitionoffinancialliabilities TheGroupderecognizesafinancialliabilityonlywhentheunderlyingpresentobligationisdischarged, canceledorexpired.AnagreementbetweentheGroup(anexistingborrower)andanexistinglendertore- placetheoriginalfinancialliabilitywithanewfinancialliabilitywithsubstantiallydifferenttermsisaccount- edforasanextinguishmentoftheoriginalfinancialliabilityandtherecognitionofanewfinancialliability. WhentheGroupderecognizesafinancialliability,itrecognizesthedifferencebetweenthecarrying amountofthefinancialliabilityderecognizedandtheconsiderationpaid(includinganynon-cashassets transferredornewfinancialliabilitiesassumed)inprofitorloss. (8)Financialguaranteecontracts Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreim- bursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendueinaccordance withtheoriginalormodifiedtermsofadebtinstrument. AfinancialguaranteecontracttheGroupmanagedonafairvaluebasisisdesignatedasatFVTPLupon initialrecognition.FinancialguaranteecontractsdesignatedatFVTPLarestatedatfairvalue,withchanges infairvaluearisingfromre-measurementrecogniseddirectlyinprofitorlossintheperiodinwhichthey arise. FinancialguaranteecontractsthatarenotdesignatedasatFVTPLareinitiallyrecognisedatfairvalue, andaresubsequentlymeasuredatthehigheroftheamountoftheobligationunderthecontractasdeter- minedinaccordancewithAccountingStandardforBusinessEnterprisesNo.13-Contingenciesandthe amountinitiallyrecognisedlesswhereappropriate,cumulativeamortizationrecognisedinaccordancewith theprinciplessetoutinAccountingStandardforBusinessEnterprisesNo.14-Revenue. (9)Theoffsettingoffinancialassetsandfinancialliabilities WheretheGrouphasalegalrightthatiscurrentlyenforceabletosetofftherecognizedfinancialassets andfinancialliabilities,andintendseithertosettleonanetbasis,ortorealisethefinancialassetandsettlethe

233 2012 Annual Report 234 ts ialStatemen totheFinanc Notes investments 8Long-termequity ftheinvestmentcost (1)Determinationo rises inesscombinationnotinvolvingenterp ityinvestmentsacquiredthroughbus Foralong-termequ itioninprofitorloss (2)Subsequentmeasurementandrecogn dforusingthecostmethod Long-termequityinvestmentsaccounte whichtheGroupdoesnothavejointcontrolorsignificantin- Forlong-termequityinvestmentsover uityinvestmentismeasuredatinitialinvestmentcost.Exclud- Underthecostmethod,along-termeq Long-termequityinvestmentsaccountedforusingtheequitymethod quitymethod.Anasso- TheGroupaccountsforinvestmentinassociatesandjointventuresusingthee ityinvestmentsexceeds Undertheequitymethod,wheretheinitialinvestmentcostofalong-termequ softheinvesteeforthe Undertheequitymethod,theGrouprecognizesitsshareofthenetprofitorlos costofthelong-termequityinvestmentsisthecostofacquisition. undercommoncontrol,theinvestment uiredthroughbusinesscombinationnotinvolvingenterprisesunder Foralong-termequityinvestmentsacq ,theinvestmentcostofthelong-termequityinvestmentsistheag- commoncontrolandachievedinstages quityinterestheldintheacquireepriortotheacquisitiondateand gregateofthecarryingamountofthee ttheacquisitiondate.Thelong-termequityinvestmentsacquired thecostoftheadditionalinvestmenta onisinitiallymeasuredatitscost. otherthanthroughabusinesscombinati activemarketandthatfairvaluescannotbereliablymeasured,the fluenceandwithoutquotedpricesinan uityinvestmentsusingthecostmethod.Besides,long-termequity Groupaccountsforsuchlong-termeq dforusingthecostmethodintheBank'sseparatefinancialstate- investmentsinsubsidiariesareaccounte controlledbytheGroup. ments.Asubsidiaryisaninvesteethatis dividendsorprofitsdistributionsincludedinthetheactualpurchase ingthedeclaredbutnotdistributedcash ndsorprofitdistributionsdeclaredbytheinvesteearerecognisedas pricepaidorconsideration,cashdivide investmentincomeinthecurrentperiod. ntureisanentityoverwhich ciateisanentityoverwhichtheGrouphassignificantinfluenceandajointve theGroupexercisesjointcontrolalongwithotherinvestors. timeofacquisition,noad- theGroup'sshareofthefairvalueoftheinvestee'sidentifiablenetassetsatthe costislessthantheGroup's justmentismadetotheinitialinvestmentcost.Wheretheinitialinvestment isition,thedifferenceisrec- shareofthefairvalueoftheinvestee'sidentifiablenetassetsatthetimeofacqu investmentsisadjustedac- ognizedinprofitorlossfortheperiod,andthecostofthelong-termequity cordingly. tsshareoftheinvestee'snet periodasinvestmentincomeorlossfortheperiod.TheGrouprecognizesi tifiableassets,etcattheac- profitorlossbasedonthefairvalueoftheinvestee'sindividualseparatelyiden up'saccountingpoliciesand quisitiondateaftermakingappropriateadjustmentstoconformwiththeGro okvalue cialliabilityshallbeoffsetandthenetbo ultaneously,afinancialassetandafinan financialliabilitysim liabilities umstances,financialassetsandfinancial alancesheet.Exceptfortheabovecirc ispresentedintheb tbeoffset. paratelyinthebalancesheetandshallno shallbepresentedse NotestotheFinancialStatements

accountingperiod.UnrealisedprofitsorlossesresultingfromtheGroup'stransactionswithitsassociatesand jointventuresarerecognizedasinvestmentincomeorlosstotheextentthatthoseattributabletothe Group'sequityinterestareeliminated.However,unrealisedlossesresultingfromtheGroup'stransactions withitsassociatesandjointventureswhichrepresentimpairmentlossesonthetransferredassetsarenote- liminated.Changesinowners'equityoftheinvesteeotherthannetprofitorlossarecorrespondinglyad- justedtothecarryingamountofthelong-termequityinvestment,andrecognizedasothercomprehensive incomewhichisincludedinthecapitalreserve. TheGroupdiscontinuesrecognisingitsshareofnetlossesoftheinvesteeafterthecarryingamountof thelong-termequityinvestmentstogetherwithanylong-termintereststhatinsubstanceformpartofits netinvestmentintheinvesteeisreducedtozero.IftheGrouphasincurredobligationstoassumeadditional lossesoftheinvestee,aprovisionisrecognizedaccordingtotheexpectedobligation,andrecordedasin- vestmentlossfortheperiod.Wherenetprofitsaresubsequentlymadebytheinvestee,theGroupresumes recognisingitsshareofthoseprofitsonlyafteritsshareoftheprofitsexceedstheshareoflossespreviously notrecognized. Disposaloflong-termequityinvestments Ondisposalofalongtermequityinvestment,thedifferencebetweentheproceedsactuallyreceived andreceivableandthecarryingamountisrecognizedinprofitorlossfortheperiod.Foralong-termequity investmentaccountedforusingtheequitymethod,theamountincludedintheshareholders'equityat- tributabletothepercentageinterestdisposedistransferredtoprofitorlossfortheperiod. Basisfordeterminingjointcontrolandsignificantinfluenceoverinvestee Controlisthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefits fromitsactivities.Jointcontrolisthecontractuallyagreedsharingofcontroloveraneconomicactivity,and existsonlywhenthestrategicfinancialandoperatingpolicydecisionsrelatingtotheactivityrequirethe unanimousconsentofthepartiessharingcontrol.Significantinfluenceisthepowertoparticipateinthefi- nancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies. Whendeterminingwhetheraninvestingenterpriseisabletoexercisecontrolorsignificantinfluenceover aninvestee,theeffectofpotentialvotingrightsoftheinvestee(forexample,warrantsandconvertibledebts) heldbytheinvestingenterprisesorotherpartiesthatarecurrentlyexercisableorconvertibleshallbecon- sidered. 9Fixedassets Fixedassetsaretangibleassetsthatareheldforuseinservices,forrentaltoothers,orforadministrative purposes,andhaveusefullivesofmorethanoneaccountingyear.Afixedassetisrecognizedonlywhenitis probablethateconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthecostoftheassetcan bemeasuredreliably.Fixedassetsareinitiallymeasuredatcostandtheeffectofanyexpectedcostsofaban- doningtheassetattheendofitsuseisconsidered. Subsequentexpendituresincurredforthefixedassetareincludedinthecostofthefixedassetifitis probablethateconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthesubsequentexpen-

235 2012 Annual Report 236 3.17%-6.47% 19.00%-33.33% 15.83%-25.00% 19.00%-33.33% Annualdepreciationrate 0%-5% 0%-5% 0%-5% 3%-5% Residualvaluerate ts ialStatemen totheFinanc Notes 3-5years 4-6years 3-5years 15-30years Depreciationperiod Items Buildings Motorvehicles Furnitureandothers Electronicequipment istheestimatedamountthattheGroupwouldcurrentlyobtain Estimatedresidualvalueofafixedasset edassets,estimatedresidualvaluesanddepreciationmethodat TheGroupreviewstheusefullifeoffix utureeconomicbenefitsareexpectedtobegeneratedfromits Ifafixedassetisupondisposalornof 10Constructioninprogress rminedastheexpenditureactuallyincurredfortheconstruc- Costofconstructioninprogressisdete 11Intangibleassets Intangibleassetsincludelanduserights,computersoftware,andcoredeposits. -constructedbuildings, Land-userightacquiredisnormallyrecognisedasanintangibleasset.Forself ithafiniteusefullifeis Anintangibleassetismeasuredinitiallyatcost.Whenanintangibleassetw ullifeandamortization Foranintangibleassetwithafiniteusefullife,theGroupreviewstheusef e- aight-linemethodsincethemonthsubs eciatedoveritsusefullifeusingthestr Afixedassetisdepr gtheestimatedcostsofdisposal,iftheassetwerealreadyoftheage fromdisposaloftheasset,afterdeductin ofitsusefullife. andintheconditionexpectedattheend daccountsforanychangeasachangeinanaccountingestimate. leastonceateachfinancialyear-end,an gnized.Whenafixedassetissold,transferred,retiredordamaged, useordisposal,thefixedassetisdereco loftheassetnetofthecarryingamountandrelatedtaxesisrecog- theamountofanyproceedsondisposa nizedinprofitorlossfortheperiod. atedexpenses.Construction tion,comprisingallexpenditureincurredforconstructionprojectsandotherrel oritsintendeduse. inprogressisreclassifiedasfixedassetswhenithasreachedworkingconditionf angibleassetandfixedassets. relatedland-userightandthebuildingsareseparatelyaccountedforasanint ldingsandland-userighton Forbuildingspurchased,thepurchaseconsiderationisallocatedamongthebui econsiderationisrecognised areasonablebasis.Incasethereisdifficultyinmakingareasonableallocation,th infullasfixedassets. pairmentlossesisamortised availableforuse,itsoriginalcostlessnetresidualvalueandanyaccumulatedim withanindefiniteusefullife overitsestimatedusefullifeusingthestraight-linemethod.Anintangibleasset isnotamortised. methodattheendoftheperiod,andmakesadjustmentswhennecessary. rateand usefullife,estimatednetresidualvalue whichitisreadyforintendeduse.The quenttotheonein asfollows: rateofeachcategoryoffixedassetsare annualdepreciation cognized. amountofthereplacedpartisdere suredreliably.Meanwhilethecarrying diturescanbemea rred. ossintheperiodinwhichtheyareincu pendituresarerecognizedinprofitorl Othersubsequentex NotestotheFinancialStatements

12Theforeclosedassets Foreclosedassetsareinitiallyrecognisedatfairvalueandsubsequentlymeasuredatlowerofitscarrying amountandnetrealisablevalueateachbalancesheetdate.Whenthenetrealisablevalueofaforeclosedasset islowerthanitscarryingamount,animpairmentlossisrecognised. Anygainorlossarisingfromdisposalofaforeclosedassetisincludedinprofitorlossintheperiodin whichtheitemisdisposedof. WhenaforeclosedassetisforusebytheGroupandtransferredtootherassets,itismeasuredatthe carryingamount,netofanyimpairmentloss. 13Impairmentofnon-financialassets TheGroupassessesateachbalancesheetdatewhetherthereisanyindicationthatlong-termequity investments,fixedassets,constructioninprogress,intangibleassetswithfinitelifeandotherassetsmaybe impaired.Ifthereisanyindicationthatanassetmaybeimpaired,therecoverableamountisestimatedfor theindividualasset.Ifitisnotpossibletoestimatetherecoverableamountoftheindividualasset,theGroup determinestherecoverableamountoftheassetgrouptowhichtheassetbelongs.Iftherecoverableamount ofanassetislessthanitscarryingamount,thedifferenceisrecognisedasanimpairmentlossandchargedto profitorlossforthecurrentperiod. Therecoverableamountofanassetisthehigherofitsfairvaluelesscostsofdisposalandthepresent valueofthefuturecashflowsexpectedtobederivedfromtheasset.Anasset'sfairvalueisthepriceinasale agreementinanarm'slengthtransaction.Ifthereisnosaleagreementbutanassetistradedinanactive market,fairvalueisbasedonthebidders'price.Ifthereisnosaleagreementandactivemarketfortheasset, itsfairvalueisbasedonthebestinformationavailable.Costsofdisposalincludelegalcostsrelatedtothe disposaloftheasset,relatedtaxes,costsofremovingtheassetanddirectcoststobringtheassetintocondi- tionforitssale. Onceanimpairmentlossonabovementionedassetsisrecognised,itisnotreversedinsubsequentperiod. 14Employeecompensation Intheaccountingperiodinwhichanemployeehasrenderedservices,theGrouprecognisestheem- ployeebenefitspayableforthoseservicesasaliability. Socialwelfare Expenditurerelatedtopaymentsforemployees'socialwelfaresystemestablishedbythegovernment, includingpensions,medicalinsurance,housingfundsandothersocialwelfarecontributions,isincludedin profitorlossfortheperiodinwhichtheyareincurred. Annuityscheme Thein-serviceemployeesoftheBankparticipateinannuityschemesetupbytheBank(the "Scheme").TheBankmadeannuitycontributionswithreferencetoemployees'salaries,andthecontribu- tionsareexpensedinprofitorlosswhenincurred.TheGrouphasnofurtherobligationiftheSchemedoes nothavesufficientassetsforpaymentofsupplementaryretirementbenefitstoemployees. Retirementbenefits

237 2012 Annual Report 238 ts ialStatemen totheFinanc Notes lementaryretirementbenefits. includeearlyretirementbenefitsandsupp Retirementbenefits ent swhodonotreachthestatutoryretirem efitsarewelfarepaymentsmadetostaff Earlyretirementben redit dentactuaryusingtheprojectedunitc mentbenefitsareestimatedbyindepen Obligationsofretire greements 15Assetstransferredunderrepurchasea ents Financialassetsheldunderresaleagreem dunderagreementswithacommitmenttoresellataspecific Financialassetsthathavebeenpurchase reements Financialassetssoldunderrepurchaseag tswithacommitmenttorepurchaseataspecificfuturedateare Financialassetssoldsubjecttoagreemen 16Provisions ofapastevent,anditis ProvisionsarerecognisedwhentheGrouphasapresentobligationasaresult lethepresentobligation Provisionsaremeasuredatthebestestimateoftheconsiderationrequiredtosett dtobereimbursedbya Whereallorsomeoftheexpenditurerequiredtosettleaprovisionisexpecte 17Interestincomeandexpense ngfinancialinstruments Interestincomeandexpensearerecognisedinprofitorlossforinterest-beari lyretire- mthecommencementdayoftheear resignfromtheirworkingposition.Fro agebutvoluntarily cceptthe kpayssuchbenefitstothestaffswhoa othestatutoryretirementage,theBan mentarrangementt ngement. earlyretirementarra chreportingperiod.Allrelatedservicescostandinterestcostare actuarialcostmethodattheendofea odinwhichtheyareincurredandactuarialgainsandlossesarising recognisedinprofitorlossfortheperi rerecognisedinprofitorlossorothercomprehensiveincomebased fromchangesinactuarialassumptionsa etirementorsupplementaryretirement. onwhetherthebenefitrelatestoearlyr alancesheet.Thecostofpurchasingsuchassetsispresentedunder futuredatearenotrecognizedintheb agreements"inthebalancesheet.Thedifferencebetweenthepur- "financialassetspurchasedunderresale nizedasinterestincomeduringthetermoftheagreementusingthe chasingpriceandresellingpriceisrecog effectiveinterestmethod. Theproceedsfromsellingsuchassetsarepresentedunder"financial notderecognizedinthebalancesheet. "inthebalancesheet.Thedifferencebetweenthesellingpriceand assetssoldunderrepurchaseagreements estexpenseduringthetermoftheagreementusingtheeffectivein- repurchasingpriceisrecognizedasinter terestmethod. probablethattheGroupwillberequiredtosettlethatobligation. ssurroundingtheobligation. attheendofthereportingperiod,takingintoaccounttherisksanduncertaintie resentobligation,itscarrying Whereaprovisionismeasuredusingthecashflowsestimatedtosettlethep eofmoneyismaterial). amountisthepresentvalueofthosecashflows(wheretheeffectofthetimevalu ycertainthatreimbursement thirdparty,thereimbursementisrecognizedasanassetonlywhenitisvirtuall willbereceivedandtheamountofthereceivablecanbemeasuredreliably. interestrateandcontractin- byusingtheeffectiveinterestmethod.Ifthedifferencebetweentheeffective terestrateissmall,itmayalsobecalculatedinaccordancewiththecontractrate. NotestotheFinancialStatements

18Feeandcommissionincome Feeandcommissionincomeisrecognizedonanaccrualbasiswhenserviceisprovided. 19Governmentgrants Governmentgrantsaretransferofmonetaryassetsandnon-monetaryassetsfromthegovernmentto theGroupatnoconsideration,excludingthecapitalinvestedbythegovernmentasanowner.Government grantsaredividedintogovernmentgrantsrelatedtoassetsandgovernmentgrantrelatedtoincome. Ifagovernmentgrantisintheformofatransferofamonetaryasset,itismeasuredattheamountre- ceivedorreceivable.Ifagovernmentgrantsisintheformofatransferofanon-monetaryasset,itshallbe measuredatfairvalue;ifthefairvaluecannotbereliablyobtained,itshallbemeasuredatnominalamount andshallbeincludeddirectlyinthecurrentprofitandloss. Governmentgrantrelatestoassetsisrecognizedasdeferredincome,andevenlyamortisedtoprofitor lossovertheusefullifeoftherelatedasset.Forgovernmentgrantthatrelatestoincome,ifthegrantisa compensationforrelatedexpensesorlossestobeincurredinsubsequentperiods,thegrantisrecognizedas deferredincome,andrecognizesinprofitorlossovertheperiodsinwhichtherelatedcostsarerecognized. Ifthegrantisacompensationforrelatedexpensesorlossesalreadyincurred,thegrantisrecognizedimme- diatelyinprofitorlossfortheperiod. Ifthegovernmentgrantsthathasbeenrecognizedneedstoberefunded,ifthereisthebalanceofthe relateddeferredincome,itshallbeoffsetagainstthecarryingamountofthedeferredrevenuebalance,the excesspartshallbeincludedinthecurrentprofitorloss;ifthereisnodeferredincome,itshallberecog- nizedimmediatelyinprofitorlossfortheperiod. 20Incometax Theincometaxexpensesincludecurrentincometaxanddeferredincometax. Currentincometax Atthebalancesheetdate,currentincometaxliabilities(orassets)forthecurrentandpriorperiodsare measuredattheamountexpectedtobepaid(orrecovered)accordingtotherequirementsoftaxlaws. Deferredincometax Fortemporarydifferencesbetweenthecarryingamountsofcertainassetsorliabilitiesandtheirtax base,orbetweenthenilcarryingamountofthoseitemsthatarenotrecognizedasassetsorliabilitiesand theirtaxbasethatcanbedeterminedaccordingtotaxlaws,deferredtaxassetsandliabilitiesarerecognized usingthebalancesheetliabilitymethod. Deferredtaxisgenerallyrecognizedforalltemporarydifferences.Deferredtaxassetsfordeductible temporarydifferencesarerecognizedtotheextentthatitisprobablethattaxableprofitswillbeavailablea- gainstwhichthedeductibletemporarydifferencescanbeutilised.However,fortemporarydifferencesasso- ciatedwiththeinitialrecognitionofgoodwillandtheinitialrecognitionofanassetorliabilityarisingfroma transaction(notabusinesscombination)thataffectsneithertheaccountingprofitnortaxableprofits(orde- ductiblelosses)atthetimeoftransaction,nodeferredtaxassetorliabilityisrecognized. Fordeductiblelossesandtaxcreditsthatcanbecarriedforward,deferredtaxassetsarerecognizedto

239 2012 Annual Report 240 ts ialStatemen totheFinanc Notes tsin ydifferencesassociatedwithinvestmen esarerecognizedfortaxabletemporar Deferredtaxliabiliti assetsandliabilitiesaremeasuredatthetaxrates,accordingto Atthebalancesheetdate,deferredtax incomearerecognizedinprofitorlossfortheperiod,except Currentanddeferredtaxexpensesor mountofdeferredtaxassetsisreviewedandreducedifitisno Atthebalancesheetdate,thecarryinga tleonanetbasisandintendseithertosettleonanetbasisorto WhentheGrouphasalegalrighttoset anetbasis,anddeferred WhentheGrouphasalegalrighttosettlecurrenttaxassetsandliabilitieson 21Fiduciaryactivities ces.Theentrustedloans TheGroup'sfiduciaryactivitiesmainlyincludeentrustedloansandagencyservi trolthe exceptwheretheGroupisabletocon ciates,andinterestsinjointventures, subsidiariesandasso willnot probablethatthetemporarydifference alofthetemporarydifferenceanditis timingoftherevers associated fromdeductibletemporarydifferences ablefuture.Deferredtaxassetsarising reverseintheforesee onlyrecognizedtotheextentthatitisprobablethattherewillbe withsuchinvestmentsandinterestsare ebenefitsofthetemporarydifferencesandtheyareexpectedtore- taxableprofitsagainstwhichtoutiliseth verseintheforeseeablefuture. eperiodinwhichtheassetisrealisedortheliabilityissettled. taxlaws,thatareexpectedtoapplyinth entsthataredirectlyrecognizedinothercomprehensiveincomeor whentheyarisefromtransactionsorev eyarerecognizedinothercomprehensiveincomeorinsharehold- inshareholders'equity,inwhichcaseth inesscombinations,inwhichcasetheyadjustthecarryingamount ers'equity;andwhentheyarisefrombus ofgoodwill. rofitswillbeavailableinthefuturetoallowthebenefitofdeferred longerprobablethatsufficienttaxablep inamountisreversedwhenitbecomesprobablethatsufficienttax- taxassetstobeutilised.Suchreduction ableprofitswillbeavailable. simultaneously,currenttaxassetsandcurrenttaxliabilitiesareoffset realisetheassetsandsettletheliabilities andpresentedonanetbasis. taxationauthorityoneither taxassetsanddeferredtaxliabilitiesrelatetoincometaxesleviedbythesame currenttaxassetsandliabili- thesametaxableentityordifferenttaxableentitieswhichintendeithertosettle taxassetsanddeferredtaxli- tiesonanetbasisortorealisetheassetsandliabilitiessimultaneously,deferred abilitiesareoffsetandpresentedonanetbasis. sanintermediary,atthedi- oftheGrouprefertothebusinessthattheGroupgrantsloanstoborrowers,a asbeencontractedbythese rectionofitscustomers(asthetrustor),whofundtheseloans.TheGrouph alf.Thetrustorsdetermineall trustorstomanagetheadministrationandcollectionoftheseloansontheirbeh rs,purposes,amounts,ma- theunderwritingcriteriaandtermsoftheentrustedloans,includingtheborrowe sinconnectionwiththeen- turityandinterestrates.TheGroupchargesacommissionrelatedtoitsactivitie ceivedfromthetrustorsare trustedloans,buttheriskoflossisbornebythetrustors.Theamountsre grantedonbehalfoftrustors recordedintheentrustedloanfundsaccount,andtheactualamountsofloans iblelosses lbeavailableagainstwhichthededuct probablethatfuturetaxableprofitswil theextentthatitis eutilised. andtaxcreditscanb NotestotheFinancialStatements

arerecordedinentrustedloansaccounts.TheagencyserviceoftheGroupreferstothebusinessthatthe Groupactsasanagenttoundertakeinvestmentactivitieswithintheagreedperiodandscopeonbehalfof thecustomerswhoprovidedthefund.TheGrouponlychargescommission,anddoesnotretaintherisks associatedwiththeinvestmentactivities.Therelatedassetsunderagencyserviceandtheobligationsofre- turningtheassetstothecustomersatthematuritydatearerecognizedasoff-balancesheetitems. 22Leasing Afinanceleaseisaleasethattransfersinsubstancealltherisksandrewardsincidentaltoownershipof anasset.Titlemayormaynoteventuallybetransferred.Allotherleasesareclassifiedasoperatingleases. TheGroupaslesseeunderoperatingleases Operatingleasepaymentsarerecognizedonastraight-linebasisoverthetermoftherelevantlease, andarechargedtoprofitorlossfortheperiod.Initialdirectcostsincurredarechargedtoprofitorlossfor theperiod.Contingentrentsarechargedtoprofitorlossintheperiodinwhichtheyareactuallyincurred. TheGroupaslessorunderoperatingleases Rentalincomefromoperatingleasesisrecognizedinprofitorlossonastraight-linebasisoverthe termoftherelevantlease.Initialdirectcostswithmorethananinsignificantamountarecapitalisedwhen incurred,andarerecognizedinprofitorlossonthesamebasisasrentalincomeovertheleaseterm.Other initialdirectcostswithaninsignificantamountarechargedtoprofitorlossintheperiodinwhichtheyare incurred.Contingentrentsarechargedtoprofitorlossintheperiodinwhichtheyactuallyarise. 23Preparationofconsolidatedfinancialstatements Thescopeofconsolidationintheconsolidatedfinancialstatementsisdeterminedonthebasisofcon- trol.Controlisthepowertogovernthefinancialandoperatingpoliciesofanenterprisesoastoobtain benefitsfromitsoperatingactivities. ForasubsidiarydisposedofbytheGroup,theoperatingresultsandcashflowsbeforethedateofdis- posal(thedatewhencontrolislost)areincludedintheconsolidatedincomestatementandconsolidated statementofcashflows,asappropriate. Thesignificantaccountingpoliciesandaccountingperiodsadoptedbythesubsidiariesaredetermined basedontheuniformaccountingpoliciesandaccountingperiodssetoutbytheBank. TheaccountingpoliciesoraccountingperiodsofthesubsidiariesaredifferentfromthoseoftheBank, whenpreparingtheconsolidatedfinancialstatements,theBankhasmadenecessaryadjustmentstothefi- nancialstatementsofthesubsidiariesbasedonitsownaccountingpoliciesandaccountingperiods. Allsignificantintra-groupbalancesandtransactionsareeliminatedonconsolidation. Theportionofsubsidiaries'equitythatisnotattributabletotheBankistreatedasminorityinterests andpresentedas"non-controllinginterests"intheconsolidatedbalancesheetwithinshareholders'equity. Theportionofnetprofitsorlossesofsubsidiariesfortheperiodattributabletominorityinterestsispresent- edas"non-controllinginterests"intheconsolidatedincomestatementbelowthe"netprofit"lineitem. Whentheamountoflossfortheperiodattributabletotheminorityshareholdersofasubsidiaryex- ceedstheminorityshareholders'portionoftheopeningbalanceofowners'equityofthesubsidiary,theex-

241 2012 Annual Report 242 ts ialStatemen totheFinanc Notes 1.Impairmentlossesonloansandadvancestocustomer ssof subsidiarythatdoesnotresultinthelo rityinterestsordisposalofinterestina Acquisitionofmino bsidiaryduetodisposalofcertainequityinterestorotherrea- WhentheGrouplosescontroloverasu GEMENTSANDKEYASSUMPTIONSANDUNCER- V.CRITICALACCOUNTINGJUD dinNoteIV,theGroupmakesjudgements,estimatesandas- Inapplyingaccountingpoliciesdescribe ontheabovejudgements,estimatesandassumptionsonagoing TheGroupconductsaperiodicreview anagementhasmadein Thefollowingarethecriticaljudgements,estimatesandassumptionsthatthem Indeterminingwhether TheGroupreviewsitsloanportfoliotoassessimpairmentonaperiodicbasis. ank'sin- ctions.ThecarryingamountsoftheB sidiaryisaccountedforasequitytransa controloverthesub idiary. angesintheirrelativeinterestsinthesubs interestsareadjustedtoreflectthech terestsandminority ueofthe yinterestsareadjustedandthefairval ntheamountbywhichtheminorit Thedifferencebetwee rveisnot underowners'equity.Ifthecapitalrese rreceivedisadjustedtocapitalreserve considerationpaido xcessareadjustedagainstretainedearnings. sufficienttoabsorbthedifference,thee redatitsfairvalueatthedatewhencontrolislost.Thedifference sons,anyretainedinterestisre-measu rationreceivedondisposalandthefairvalueofanyretainedinterest between(i)theaggregateoftheconside ry'snetassetscumulativelycalculatedfromtheacquisitiondateac- and(ii)theshareoftheformersubsidia nershipinterestisrecognizedasinvestmentincomeintheperiodin cordingtotheoriginalproportionofow nsiveincomeassociatedwithinvestmentintheformersubsidiaryis whichcontrolislost.Othercomprehe periodinwhichcontrolislost. reclassifiedtoinvestmentincomeinthe ATIONS TAINTYOFACCOUNTINGESTIM temsrecognizedinthefinancialstatementsbutcannotbeaccurately sumptionsonthecarryingamountsofi enatureofthebusiness.Thesejudgements,estimatesandassump- measuredduetotheuncertaintiesofth emanagementandotherrelatedfactors,whichmayresultindiffer- tionsarebasedonpastexperienceofth s. encebetweenactualresultsandestimate theperiodofthechange,if concernbasis.Theeffectofachangeinaccountingestimatesisrecognizedin geandfutureperiodsifthe thechangeaffectsthatperiodonly;orrecognizedintheperiodofthechan changeaffectsboth. e. theprocessofapplyingtheGroup'saccountingpoliciesonthebalancesheetdat gmentsastowhetherthereis animpairmentlossshouldberecognisedinprofitorloss,theGroupmakesjud twhichwillhaveameasur- anyobservabledataindicatingthatthereisanobjectiveevidenceofimpairmen dvances.Whenthedecrease abledecreaseintheestimatedfuturecashflowsfromaportfolioofloansanda cant,managementusesesti- maynothavebeenidentifiedindividuallyortheindividualloanisnotsignifi itriskcharacteristicstoassess matesbasedonhistoricallossexperienceonacollectivebasiswithsimilarcred logyandassumptionsused theimpairmentlosswhileestimatingexpectedfuturecashflows.Themethodo gularlytoreduceanydiffer- forestimatingboththeamountandtimingoffuturecashflowsarereviewedre encesbetweenlossestimatesandactuallossexperience. allocatedagainstminorityinterests. cessamountarestill NotestotheFinancialStatements

2.Fairvalueoffinancialinstruments TheGroupusesvaluationtechniqueforfinancialinstrumentswhicharenotquotedinanactivemar- ket.Valuationtechniquesincludetheuseofdiscountedcashflowsanalysis,etc.Totheextentpractical, modelsuseonlyobservabledata,howeverareassuchascreditriskofthecounterparty,volatilitiesandcor- relationsrequiremanagementtomakeestimates.Changesinassumptionsaboutthesefactorscouldaffect theestimatedfairvalueoffinancialinstruments. 3.Held-to-maturityinvestments TheGroupclassifiesnon-derivativefinancialassetswithfixedordeterminablepaymentsandfixed maturitythattheGroup'smanagementhasthepositiveintentionandabilitytoholdtomaturityas held-to-maturityinvestments.Thisclassificationrequiressignificantjudgement.Inmakingthisjudge- ment,theGroupevaluatesitsintentionandabilitytoholdsuchinvestmentstomaturity.IftheGroupfails toholdtheseinvestmentstomaturityotherthanforspecificcircumstances(suchassellinganinsignificant amountclosetomaturity),itwillberequiredtoreclassifytheentireportfolioofheld-to-maturityinvest- mentsasavailable-for-salefinancialassets. 4.Impairmentofheld-to-maturityinvestments Thedeterminationofwhetheraheld-to-maturityfinancialassetisimpairedrequiressignificant judgement.Objectiveevidencethatafinancialassetorgroupofassetsisimpairedincludesabreachofcon- tract,suchasadefaultordelinquencyininterestorprincipalpaymentsorthedisappearanceofanactive marketforthatfinancialassetbecauseofsignificantfinancialdifficultyoftheissuer,etc.Inmakingsuch judgement,theimpactofobjectiveevidenceforimpairmentonexpectedfuturecashflowsoftheinvest- mentistakenintoaccount. 5.Impairmentofavailable-for-salefinancialassets Thedeterminationofwhetheranavailable-for-salefinancialassetisimpairedrequiressignificant judgement.Inmakingthisjudgement,theGroupevaluatesthedurationandextenttowhichthefairvalue ofaninvestmentislessthanitscost;andthefinancialhealthofandnear-termbusinessoutlookforthein- vestee,includingfactorssuchasindustryandsectorperformance,creditratings,delinquencyratesand counterpartyrisk. 6.Incometax Therearecertaintransactionsandactivitiesforwhichtheultimatetaxdeterminationisuncertaindur- ingtheordinarycourseofbusiness.Wherethefinaltaxoutcomeofthesemattersisdifferentfromthe amountsthatwereinitiallyestimated,suchdifferenceswillimpactthecurrentincometaxanddeferredin- cometaxintheperiodduringwhichsuchadeterminationismade. 7.Retirementbenefitsobligations TheGrouprecognisesliabilitiesinconnectionwithretirementbenefitsofemployeesusingthepro- jectedunitcreditactuarialcostmethodbasedonvariousassumptions,includingthediscountrate,average medicalexpensesgrowthrate,costoflivingadjustmentforearlyretirementsandotherfactors.Actualre- sultsmaydifferfromtheresultoftheprojectedamount.Anydifferencearisingfromtheactualresultor

243 2012 Annual Report 244 51.00 51.00 51.00 51.00 51.00 60.00 61.00 51.00 51.00 100.00 100.00 Votingright(%) (%) 51.00 51.00 51.00 51.00 51.00 51.00 60.00 61.00 51.00 100.00 100.00 Percentageof equityinterest 20,000 50,000 50,000 30,000 20,000 20,000 20,000 20,000 30,000 20,000 20,000 (RMBthousand) Authorisedcapital asat31December2012 ts ialStatemen totheFinanc Notes activities Principle BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry BankingIndustry Placeof Hubei,China Anhui,China Hubei,China Anhui,China incorporation Fujian,China Ningxia,China Heilongjiang,China Heilongjiang,China Heilongjiang,China Heilongjiang,China Heilongjiang,China Nameofentity dcurrentyear. Note1:theserepresenttheBank'ssubsidiariesasoftheendofpreviousyearan Note2:thesesubsidiarieswereestablishedbytheBankduringtheyear2012. VI.TAXES 1.Incometaxes in- EnterpriseIncomeTax,theapplicable ofthePeople'sRepublicofChinaon PursuanttotheLaw profitbeforetaxissubjecttorelevanttaxregulations. Thedeductibilityofcertainitemsfrom 2.Businesstax e.Therateofbusinesstaxis5%fortheBankand3%forits Businesstaxisleviedontaxableincom thebranchesshalldeclareandpaythetaxtothelocaltaxation Businesstaxshallbepaidlocallywhere 3.Cityconstructiontax -7%onbusinesstax. Thecityconstructiontaxisleviedat1% 4.Educationalsurcharge onbusinesstax. Theeducationalsurchargeisleviedat3% ankisleviedat1%onvalue-addedtax,consumptiondutyand ThelocaleducationalsurchargeoftheB CONSOLIDATEDFINANCIALSTATEMENTS VII.SUBSIDIARIESANDSCOPEOF ThegeneralinformationoftheBank'sprincipalsubsidiariesisasfollows: XiaochangBenfuRuralBankCo.,Ltd(Note2) AnhuiHuaiyuanBenfuRuralBankCo.,Ltd(Note2) WuyishanBenfuRuralBankCo.,Ltd(Note2) NingxiaNingdongBenfuRuralBankCorporation(Note2) XingshanBenfuRuralBankCo.,Ltd(Note2) AnhuiLingbiBenfuRuralBankCo.,Ltd(Note2) DongningRunshengRuralBankCo.,Ltd.(Note1) DuerboteRunshengRuralBankCo.,Ltd.(Note1) Yi'anRunshengRuralBankCo.,Ltd.(Note1) JixianRunshengRuralBankCo.,Ltd(Note1) KeshanRunshengRuralBankCo.,Ltd(Note1) iariesis25%. cometaxrateoftheBankanditssubsid subsidiaries. department. %from1February2011inaccordancewiththeNoticeofthePeo- businesstax.Theratewaschangedto2 inceontheAdjustmentoftheStandardforLevyingLocalEduca- ple'sGovernmentofHeilongjiangProv o.13). tionalSurcharges(HeiZhengFa[2011]N prehen- ecognisedinprofitorlossorothercom smayaffecttheamountofexpenser changesinassumption ecognised placeandthecorrespondingliabilityr eriodduringwhichsuchchangestake siveincomeinthep tatementoffinancialposition. intheconsolidateds NotestotheFinancialStatements

VIII.NOTESTOTHEFINANCIALSTATEMENTS 1.Cashandbalanceswithcentralbank

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December Note 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Cash 763,908 785,903 726,285 765,230

Mandatoryreservedepositswithcentralbank (1) 18,292,523 16,160,742 18,067,709 16,112,679

Surplusreservedepositswithcentralbank (2) 12,712,637 10,768,291 12,638,852 10,654,656

Otherdepositswithcentralbank (3) 1,568,757 542,393 1,568,757 487,233

Total 33,337,825 28,257,329 33,001,603 28,019,798

(1)TheGroupplacesmandatoryreservedepositsonitsgeneraldepositswiththePeople'sBankof China(the"PBOC"),whichincludesRMBreservedepositsandforeigncurrencyreservedeposits.These mandatoryreservedepositsarenotavailablefortheGroup'sdailyoperations.Theforeigncurrencyreserve depositsplacedwiththePBOCarenon-interestbearing. Asat31December2012,theRMBmandatoryreservedepositsoftheBankplacedwiththePBOC wascalculatedat18%(31December2011:19%)ofeligibleRMBdepositsandtheRMBmandatoryreserve depositsoftheBank'ssubsidiariesplacedwiththePBOCwerecalculatedat13%(31December2011:14%) ofeligibleRMBdeposits.Theforeigncurrencymandatoryreservedepositswerebasedon5%ofeligible foreigncurrencydepositsfromcustomers. (2)ThesurplusreservedepositsaremaintainedwiththePBOCmainlyforthepurposeofclearing. (3)OtherdepositswithcentralbankrepresentfixeddepositandfiscaldepositsplacedwiththePBOC. ThefiscaldepositsplacedwiththePBOCarenon-interestbearing. 2.Depositswithbanksandotherfinancialinstitutions

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Depositswithdomesticbanks 60,036,871 47,478,790 59,589,212 47,403,368

Depositswithoverseasbanks 13,581 12,281 13,581 12,281

Total 60,050,452 47,491,071 59,602,793 47,415,649

245 2012 Annual Report - - 246 549,813 412,554 3,188,051 4,150,418 12,636,424 16,786,842 18,966,897 18,966,897 2011 2011 2011 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - TheBank TheBank TheBank 711,979 2,280,081 2,992,060 2,000,000 2,000,000 12,997,436 15,989,496 18,519,494 18,519,494 2012 2012 2012 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - - 549,813 412,554 3,188,051 4,150,418 12,636,424 16,786,842 18,966,897 18,966,897 2011 2011 2011 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - TheGroup TheGroup TheGroup ts ialStatemen totheFinanc Notes 711,979 2,280,081 2,000,000 2,000,000 2,992,060 15,989,496 18,519,494 18,519,494 12,997,436 2012 2012 2012 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December 5.Financialassetsheldunderresaleagreements rofitorloss 4.Financialassetsatfairvaluethroughp anks 3.Placementswithb profitorloss Total Financialinstitutionbonds Corporatebonds Total Bills Total Financialassetsheldfortrading Publicsectorbonds Subtotal Wealthmanagementproducts Placementswithdomesticbanks Financialassetsdesignatedasatfairvaluethrough NotestotheFinancialStatements

6.InterestReceivable

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Loansandadvancestocustomers 226,952 109,580 208,908 105,815

Financialassetsheldunderresaleagreements 110,114 305,590 110,114 305,590

Depositswithbanksandotherfinancialinstitutions 199,872 170,850 200,423 171,012

Financialassetsatfairvaluethroughprofitorloss 115,483 405,680 115,483 405,680

Available-for-salefinancialassets 125,673 43,823 125,673 43,823

Debtssecuritiesclassifiedasreceivables 187,865 19,303 187,864 19,303

Held-to-maturityinvestments 143,015 12,256 143,015 12,256

Balanceswithcentralbank 10,634 10,172 10,546 10,172

Total 1,119,608 1,077,254 1,102,026 1,073,651

247 2012 Annual Report 0.72 grossloans 248 852,639 803,980 (114,982) (392,998) 1,634,104 4,551,886 7,842,609 1,004,419 17,168,642 25,011,251 16,164,223 24,503,271 2011 totalloansandadvances RMBthousand andadvancesasa%ofgross Identifiedimpaired Asat31December TheBank 28,044 (888,569) (103,519) (774,314) 2,006,839 7,656,061 1,690,013 1,751,062 34,592,200 35,480,769 21,269,786 13,103,975 34,373,761 21,241,742 33,495,928 Total 2012 RMBthousand Asat31December 816,643 132,864 257,181 (114,982) (399,373) (124,317) 1,634,104 4,638,130 1,161,235 8,250,112 1,067,123 Subtotal 17,396,050 25,646,162 16,328,927 25,131,807 2011 RMBthousand Asat31December 121,312 224,831 TheGroup ts ialStatemen totheFinanc Notes (103,519) 32,697 assessed (103,519) (785,050) isindividually 2,010,334 7,905,036 2,205,344 1,767,054 13,887,768 35,480,769 21,593,001 21,560,304 34,592,200 2012 Forwhichallowance RMBthousand Asat31December 11,552 32,350 (20,798) Identifiedimpairedloansandadvances(ii) assessed iscollectively Forwhichallowance (764,252) 35,223,588 34,459,336 whichallowanceis collectivelyassessed(i) Loansandadvancesfor losses tomers vances ssment: (2)Analysisofloansandadvancestocustomersbycollectiveandindividualasse TheGroup stocustomers 7.Loansandadvance andadvancestocustomersbycategory: (1)Analysisofloans Residentialmortgageloans Loanstoprivatebusiness Farmerloans Others Individuallyassessed Collectivelyassessed Loansandadvances Discountedbills Personalloansandadvances Subtotal Grossloansandadvances Allowancesforimpairmentlosses: Subtotal Asat31December2012 Grossloansandad Allowancesforimpairment Loansandadvancestocus Loansandadvancestocustomers Corporateloansandadvances NotestotheFinancialStatements

Identifiedimpairedloansandadvances(ii)

Loansandadvancesfor Forwhichallowance Forwhichallowance Identifiedimpaired grossloans whichallowanceis iscollectively isindividually Subtotal Total andadvancesasa%ofgross collectivelyassessed(i) assessed assessed totalloansandadvances

Asat31December2011

Grossloansandadvances 25,445,426 23,378 177,358 200,736 25,646,162 0.78

Allowancesforimpairment losses (385,843) (13,530) (114,982) (128,512) (514,355)

Loansandadvancestocustomers 25,059,583 9,848 62,376 72,224 25,131,807

TheBank

Identifiedimpairedloansandadvances(ii)

Loansandadvancesfor Forwhichallowance Forwhichallowance Identifiedimpaired grossloans whichallowanceis iscollectively isindividually Subtotal Total andadvancesasa%ofgross collectivelyassessed(i) assessed assessed totalloansandadvances

Asat31December2012

Grossloansandadvances 34,116,594 32,336 224,831 257,167 34,373,761 0.75

Allowancesforimpairment losses (753,516) (20,798) (103,519) (124,317) (877,833)

Loansandadvancestocustomers 33,363,078 11,538 121,312 132,850 33,495,928

Identifiedimpairedloansandadvances(ii)

Loansandadvancesfor Forwhichallowance Forwhichallowance Identifiedimpaired grossloans whichallowanceis iscollectively isindividually Subtotal Total andadvancesasa%ofgross collectivelyassessed(i) assessed assessed totalloansandadvances

Asat31December2011

Grossloansandadvances 24,810,844 23,049 177,358 200,407 25,011,251 0.80

Allowancesforimpairment losses (379,550) (13,448) (114,982) (128,430) (507,980)

Loansandadvancestocustomers 24,431,294 9,601 62,376 71,977 24,503,271

(i)Loansandadvancesforwhichallowanceiscollectivelyassessedconsistofloansandadvanceswhich havenotbeenspecificallyidentifiedasimpaired. (ii)Identifiedimpairedloansandadvancesincludeloansforwhichobjectiveevidenceofimpairment existsandwhichhavebeenidentifiedasbearinganimpairmentlossandassessedeitherindividuallyorcol- lectively.

249 2012 Annual Report 250 (4,404) (8,967) (7,081) (4,404) (8,967) (7,081) 228,274 507,980 385,901 877,833 302,300 224,934 507,980 514,355 390,262 888,569 305,335 514,355 (14,850) (14,850) Total Total Total Total RMBthousand RMBthousand RMBthousand RMBthousand (576) (576) (8,967) (9,063) (1,024) (9,063) (8,967) (1,024) 190,341 392,998 391,307 774,314 215,636 187,001 392,998 399,373 395,668 785,050 218,671 399,373 RMBthousand RMBthousand RMBthousand RMBthousand Collectivelyassessedallowance Collectivelyassessedallowance ance Collectivelyassessedallow Collectivelyassessedallowance ts ialStatemen totheFinanc Notes Fortheyearended31December2012 Fortheyearended31December2011 mber2012 Fortheyearended31Dece Fortheyearended31December2011 - - 37,933 86,664 37,933 86,664 (3,828) (5,787) (3,828) (5,406) (6,057) (5,787) (6,057) (5,406) 114,982 114,982 103,519 114,982 103,519 114,982 RMBthousand RMBthousand RMBthousand RMBthousand Individuallyassessedallowance Individuallyassessedallowance Individuallyassessedallowance wance Individuallyassessedallo allowances allowances allowances allowances TheBank andadvancestocustomers owancesforimpairmentlossesonloans (3)Movementsofall TheGroup Unwindingofdiscounton Asat31December Netadditions Writtenoff Asat1January Netadditions Writtenoff Unwindingofdiscounton Asat31December Asat1January Netadditions Writtenoff Asat31December Unwindingofdiscounton Asat31December Asat1January Unwindingofdiscounton Asat1January Netadditions Writtenoff NotestotheFinancialStatements

8.Available-for-salefinancialassets

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Debtsecuritiesissuedby:

Governmentandcentralbank 134,363 885,138 134,363 885,138

Publicsector - 14,401 - 14,401

Financialinstitutions 2,557,597 671,349 2,557,597 671,349

Corporations 2,403,594 2,899,525 2,403,594 2,899,525

Subtotal 5,095,554 4,470,413 5,095,554 4,470,413

Equityinstruments 40,900 40,900 40,900 40,900

Total 5,136,454 4,511,313 5,136,454 4,511,313

9.Held-to-maturityinvestments

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Governmentandcentralbank 1,259,464 628,197 1,259,464 628,197

Publicsector 20,947 1,953 20,947 1,953

Financialinstitutions 1,289,537 275,225 1,289,537 275,225

Corporations 2,936,694 78,186 2,936,694 78,186

Total 5,506,642 983,561 5,506,642 983,561

10.Debtssecuritiesclassifiedasreceivables

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December Note 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Trustplansandwealthmanagementproducts (1) 7,318,529 7,332,032 7,318,529 7,332,032

Allowanceforimpairmentlosses (73,162) (23,095) (73,162) (23,095)

Totalbookvalue 7,245,367 7,308,937 7,245,367 7,308,937

(1)Thetrustplansandwealthmanagementproductsarefixedrateandunquotedinstrumentsandare notcallablebeforematurity,whichincludestrustloans,etc.

251 2012 Annual Report - - - - - 252 10,200 25,500 25,500 15,300 10,200 20,000 106,700 106,700 106,700 2011 RMBthousand Asat31December TheBank 31December2011 176,400 176,400 2012 RMBthousand Asat31December 25,500 15,300 10,200 20,000 12,000 12,000 15,300 20,000 10,200 10,200 25,500 - - 176,400 2011 RMBthousand Asat31December 31December2012 - - TheGroup ts ialStatemen totheFinanc Notes 2012 RMBthousand Asat31December (1) Note Nameofentity otheBankwasunlim- Asofeachreportingdate,theabilityoffundstransferoftheabovesubsidiariest (1)Subsidiaries yinvestments 11.Long-termequit Yi'anRunshengRuralBankCo.,Ltd. JixianRunshengRuralBankCo.,Ltd. KeshanRunshengRuralBankCo.,Ltd. XiaochangBenfuRuralBankCo.,Ltd. WuyishanBenfuRuralBankCo.,Ltd. AnhuiHuaiyuanBenfuRuralBankCo.,Ltd. NingxiaNingdongBenfuRuralBankCo.,Ltd. XingshanBenfuRuralBankCo.,Ltd AnhuiLingshanBenfuRuralBankCo.,Ltd. Total DongningRunshengRuralBankCo.,Ltd. Measuredbycostmethod Subsidiaries Total DorbetRunshengRuralBankCo.,Ltd. ited. NotestotheFinancialStatements

12.Fixedassets TheGroup

Buildings Electronic Equipment Motor Vehicles Furnitureand Other Constructionin Progress Total RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand Cost

Asat1January2012 1,145,472 142,845 27,844 90,021 127,798 1,533,980

Additions 72,100 39,356 6,480 28,657 28,788 175,381

Transferredin/(out) 15,694 - - - (15,694) -

Disposals (6,666) - (209) - - (6,875)

Asat31December2012 1,226,600 182,201 34,115 118,678 140,892 1,702,486

Accumulateddepreciation

Asat1January2012 (55,683) (49,033) (5,426) (28,928) (139,070)

Chargefortheyear (44,848) (36,225) (5,154) (19,940) - (106,167)

Disposals 1,013 - 7 - - 1,020

Asat31December2012 (99,518) (85,258) (10,573) (48,868) - (244,217)

Carryingamount

Asat1January2012 1,089,789 93,812 22,418 61,093 127,798 1,394,910

Asat31December2012 1,127,082 96,943 23,542 69,810 140,892 1,458,269

Buildings Electronic Equipment Motor Vehicles Furnitureand Other Constructionin Progress Total RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand Cost

Asat1January2011 672,184 102,037 10,067 30,731 365,574 1,180,593

Additions 31,690 43,163 17,940 57,819 236,722 387,334

Transferredin/(out) 471,915 1,034 - 1,549 (474,498) -

Disposals (30,317) (3,389) (163) (78) - (33,947)

Asat31December2011 1,145,472 142,845 27,844 90,021 127,798 1,533,980

Accumulateddepreciation

Asat1January2011 (24,537) (17,466) (2,260) (16,394) - (60,657)

Chargefortheyear (33,599) (33,164) (3,329) (12,612) - (82,704)

Disposals 2,453 1,597 163 78 - 4,291

Asat31December2011 (55,683) (49,033) (5,426) (28,928) - (139,070)

Carryingamount

Asat1January2011 647,647 84,571 7,807 14,337 365,574 1,119,936

Asat31December2011 1,089,789 93,812 22,418 61,093 127,798 1,394,910

253 2012 Annual Report - - 4,094 1,020 254 (6,875) 385,200 165,413 (33,750) (59,785) (81,282) (136,973) (136,973) (102,963) (238,916) 1,377,455 1,434,050 1,103,193 1,377,455 1,672,966 1,162,978 1,514,428 1,514,428 Total Total RMBthousand RMBthousand ------Progress Progress 28,788 127,798 127,798 140,892 365,574 140,892 365,574 236,722 127,798 127,798 (15,694) (474,498) RMBthousand RMBthousand Constructionin Constructionin - - - 78 (78) Other Other 1,549 59,372 59,372 68,343 13,980 30,322 56,228 88,021 88,021 28,474 116,495 (28,649) (16,342) (12,385) (28,649) (19,503) (48,152) RMBthousand RMBthousand Furnitureand Furnitureand 7 - - 163 (163) (209) 9,509 7,330 3,710 21,680 21,680 20,443 17,569 26,915 26,915 30,416 (3,219) (5,235) (2,179) (4,745) (9,973) (5,235) ts ialStatemen totheFinanc Notes Vehicles Vehicles Motor Motor RMBthousand RMBthousand - - - 1,034 1,400 98,718 42,991 81,714 91,351 35,668 91,351 92,681 (3,192) 139,551 139,551 175,219 (17,004) (48,200) (32,596) (48,200) (82,538) (34,338) Equipment Equipment RMBthousand RMBthousand Electronic Electronic 2,453 1,013 68,773 15,694 31,690 (6,666) 634,595 658,855 471,915 (54,889) (30,317) (24,260) (33,082) (54,889) (98,253) (44,377) 1,077,254 1,209,944 1,077,254 1,111,691 1,132,143 1,132,143 Buildings Buildings RMBthousand RMBthousand ssetswiththenetbook Asat31December2012,thecertificatesofbuildingsfortheGroup'sfixeda TheBank Chargefortheyear Asat31December2011 Asat1January2011 Asat31December2011 Disposals Cost Asat1January2011 Additions Transferredin/(out) Disposals Asat31December2011 Accumulateddepreciation Asat1January2011 Disposals Asat1January2012 Chargefortheyear Asat31December2012 Asat1January2012 Asat31December2012 Cost Asat1January2012 Transferredin/(out) Asat31December2012 Accumulateddepreciation Carryingamount Additions Disposals Carryingamount havenotbeenobtained. valueofRMB206,251thousand(31December2011:RMB441,209thousand) NotestotheFinancialStatements

13.IntangibleAssets TheGroup

Landuserights Softwareuserights Coredeposits Others Total RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand Cost

Asat1January2012 16,579 36,236 201,000 16 253,831

Additions - 6,717 - - 6,717

Disposals (16,579) (55) - - (16,634)

Asat31December2012 - 42,898 201,000 16 243,914

Accumulatedamortization

Asat1January2012 (715) (10,255) (50,250) (2) (61,222)

Changefortheyear (314) (6,634) (25,125) (3) (32,076)

Disposals 1,029 25 - - 1,054

Asat31December2012 - (16,864) (75,375) (5) (92,244)

Carryingamount

Asat1January2012 15,864 25,981 150,750 14 192,609

Asat31December2012 - 26,034 125,625 11 151,670

Residualamortizationperiod(years) - 1-10 5 1-5

Landuserights Softwareuserights Coredeposits Others Total RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand Cost

Asat1January2011 542,729 11,188 201,000 - 754,917

Additions - 25,048 - 16 25,064

Disposals (526,150) - - - (526,150)

Asat31December2011 16,579 36,236 201,000 16 253,831

Accumulatedamortization

Asat1January2011 (11,843) (3,188) (25,125) - (40,156)

Changefortheyear (6,101) (7,067) (25,125) (2) (38,295)

Disposals 17,229 - - - 17,229

Asat31December2011 (715) (10,255) (50,250) (2) (61,222)

Carryingamount

Asat1January2011 530,886 8,000 175,875 - 714,761

Asat31December2011 15,864 25,981 150,750 14 192,609

Residualamortizationperiod(years) 1-50 1-10 6 1-5

255 2012 Annual Report 1,030 6,567 256 17,229 24,576 754,816 714,661 253,242 253,242 192,056 192,056 243,200 151,078 (61,186) (92,122) (40,155) (38,260) (61,186) (31,966) (16,609) (526,150) Total Total RMBthousand RMBthousand ------16 16 16 14 14 16 11 (2) (5) (2) (2) (3) 1-5 1-5 Others Others RMBthousand RMBthousand 6 5 ------201,000 201,000 175,875 201,000 150,750 150,750 201,000 125,625 (50,250) (75,375) (25,125) (25,125) (25,125) (50,250) Coredeposits Coredeposits RMBthousand RMBthousand 1 - - (30) 1-10 1-10 7,900 6,567 25,428 11,087 24,560 35,647 25,428 25,442 35,647 42,184 (3,187) (7,032) (6,524) ts ialStatemen totheFinanc Notes (10,219) (16,742) (10,219) RMBthousand RMBthousand Softwareuserights Softwareuserights ------(715) 1-50 (715) (314) 1,029 17,229 15,864 16,579 16,579 15,864 (6,101) 542,729 530,886 (11,843) (16,579) (526,150) RMBthousand RMBthousand Landuserights Landuserights TheBank Asat31December2011 Carryingamount Disposals Cost Asat1January2011 Disposals Cost Asat1January2012 Asat31December2012 Carryingamount Additions Changefortheyear Asat1January2011 Asat31December2011 Accumulatedamortization Asat1January2011 Asat31December2011 Additions Asat1January2012 Disposals Residualamortizationperiod(years) Changefortheyear Asat31December2012 Accumulatedamortization Asat1January2012 Asat31December2012 Disposals Residualamortizationperiod(years) NotestotheFinancialStatements

14.Deferredtaxassets (1)Deferredtaxassetsandliabilitiesanalysedbynature: TheGroup

31December2012 31December2011 Deductible/(taxable) Deferredtaxassets Deductible/(taxable) Deferredtaxassets temporarydifference /(liabilities) temporarydifference /(liabilities) RMBthousand RMBthousand RMBthousand RMBthousand

Deferredtaxassets

Allowanceofimpairmentloss 645,820 161,455 363,521 90,881

Fairvaluechangesoffinancialinstruments - - 9,825 2,456 atFVTPL

Fairvaluechangesofavailable-for-salefinancialassets - - 29,010 7,253

Earlyretirementbenefits 175,447 43,862 161,022 40,254

Accruedbutnotpaidstaffcost 74,377 18,594 32,308 8,077

Operatinglossmadebysubsidiaries 26,352 6,588 - -

Total 921,996 230,499 595,686 148,921

Deferredtaxliabilities

Coredeposits (125,625) (31,406) (150,750) (37,688)

Fairvaluechangesoffinancialinstrumentsat (3,173) (793) - - FVTPL

Fairvaluechangesofavailable-for-salefinancialassets (10,757) (2,689) - -

Others - - (18,818) (4,704)

Total (139,555) (34,888) (169,568) (42,392)

Netamount 782,441 195,611 426,118 106,529

257 2012 Annual Report - - - 2,456 7,253 8,077 258 90,881 40,254 (4,704) 106,529 106,529 106,529 148,921 (42,392) (37,688) 2011 /(liabilities) RMBthousand RMBthousand Asat31December Deferredtaxassets - - - TheBank 9,825 32,308 29,010 (taxable) 189,001 363,521 161,022 426,118 189,001 595,686 31December2011 (18,818) (169,568) (150,750) 2012 RMBthousand RMBthousand Deductible/ temporarydifference Asat31December - - - - (793) 43,862 18,573 (2,689) 106,529 161,454 189,001 106,529 223,889 (34,888) (31,406) 2011 /(liabilities) RMBthousand RMBthousand Deferredtaxassets Asat31December - - - - TheGroup ts ialStatemen totheFinanc Notes 74,291 (3,173) (taxable) 195,611 195,611 645,816 175,447 755,999 895,554 31December2012 (10,757) (139,555) (125,625) 2012 RMBthousand RMBthousand Asat31December Deductible/ temporarydifference erredtaxassetsandde- AllthebranchesoftheBankwillpaythetaxinanaggregateway,andthedef Aslistedinthebalancesheetasfollows: TheBank FVTPL atFVTPL Deferredtaxassets Deferredtaxliabilities Netamount ets Fairvaluechangesofavailable-for-salefinancialass Deferredtaxassets Allowanceofimpairmentloss Fairvaluechangesoffinancialinstruments ets Fairvaluechangesofavailable-for-salefinancialass Earlyretirementbenefits Accruedbutnotpaidstaffcost Fairvaluechangesoffinancialinstrumentsat Total Netvalue Others Coredeposits Total Deferredtaxliabilities iariesoftheBankwastreated ferredtaxliabilitiesarepresentedatthenetbookvalueafteroffset.Eachsubsid withthesamecompanyare asindependenttaxpayer,andthedeferredtaxassetsanddeferredtaxliabilities presentedatthenetbookvalueafteroffset. NotestotheFinancialStatements

(2)Themovementsofthedeferredincometaxaccountsareasfollows:

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Asat1January 106,529 51,993 106,529 51,993

Chargetoincomestatement 94,508 56,414 87,898 56,414

Chargedtoothercomprehensiveincome (5,426) (1,878) (5,426) (1,878)

Total 195,611 106,529 189,001 106,529

AccordingtotheGroup'sfutureprofitforecast,theGroupbelievesthatitisprobablethatsufficient taxableprofitswillbeavailableinfutureperiodstooffsetthedeductibletemporarydifferences.Therefore, therelateddeferredtaxassetsarerecognized. 15.Otherassets

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December Notes 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Otherreceivables (1) 85,333 231,313 81,685 231,076

Settlementaccount 74,173 83,597 74,173 83,597

Foreclosedassets (2) 4,000 25,127 4,000 25,127

Long-termdeferredexpenses (3) 233,013 122,247 192,585 115,677

Goodwill (4) 340,000 340,000 340,000 340,000

Other 15,758 7,827 14,737 6,924

Total 752,277 810,111 707,180 802,401

(1)Otherreceivables Aginganalysisofotherreceivablesisasfollows:

TheGroup 31December2012 31December2011 Amount Percentage Allowances Carrying amount Amount Percentage Allowances Carrying amount RMB thousand （%） RMB thousand RMB thousand RMB thousand （%） RMB thousand RMB thousand Within1year 59,307 60 - 59,307 182,326 74 - 182,326

1~2years 82 - - 82 1,278 - - 1,278

2~3years 465 - - 465 24 - - 24

Over3years 40,221 40 (14,742) 25,479 63,529 26 (15,844) 47,685

Total 100,075 100 (14,742) 85,333 247,157 100 (15,844) 231,313

259 2012 Annual Report - 24 971 3,560 1,278 amount 260 42,823 10,529 91,617 27,070 47,685 24,156 25,127 25,127 thousand 179,661 233,013 122,247 182,089 231,076 2011 RMB Carrying - - - RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - - thousand (15,844) (15,844) TheBank (921) 4,000 4,000 4,000 Allowances (2,731) (9,426) RMB (51,310) (22,548) (24,685) (28,337) (83,284) - - 2012 74 26 100 ） RMBthousand RMBthousand RMBthousand % Asat31December Changefortheyear Changefortheyear 31December2011 （ - Percentage 971 1,682 38,301 53,031 20,378 75,091 25,127 16,395 24,156 25,127 24 139,354 194,050 1,278 63,529 2011 thousand 182,089 246,920 Additions Additions Amount RMBthousand RMBthousand RMBthousand Fortheyearended31December2012 Fortheyearended31December2011 RMB Asat31December - - 82 465 TheBank TheGroup ts ialStatemen totheFinanc Notes amount 9,423 2,799 3,560 4,000 4,000 4,000 55,659 25,479 81,685 91,617 27,070 63,271 75,493 thousand 122,247 2012 RMB Carrying - - - RMBthousand RMBthousand RMBthousand Asat1January Asat1January Asat31December thousand (14,742) (14,742) Allowances RMB - - 58 42 100 ） % 31December2012 （ Percentage 82 465 55,659 40,221 96,427 thousand Amount RMB TheGroup (3)Long-termdeferredexpenses (2)Foreclosedassets Leaseholdimprovements Total Leaseholdimprovements Total Leaseholdimprovements Others Leaseholdimprovements Others 1~2years Buildings Less:Allowancesforimpairmentlosses Within1year 2~3years Over3years Total Others Total Less:Allowancesforimpairmentlosses NotestotheFinancialStatements

TheBank

Fortheyearended31December2012 Asat1January Additions Changefortheyear Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Leaseholdimprovements 86,191 102,402 (42,894) 145,699

Leaseholdimprovements 26,820 32,391 (21,058) 38,153

Others 2,666 10,731 (4,664) 8,733

Total 115,677 145,524 (68,616) 192,585

Fortheyearended31December2011 Asat1January Additions Changefortheyear Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Leaseholdimprovements 56,528 52,913 (23,250) 86,191

Leaseholdimprovements 9,423 20,128 (2,731) 26,820

Others 2,543 1,044 (921) 2,666

Total 68,494 74,085 (26,902) 115,677

(4)Goodwill TheGroupacquiredthebusinessesoftheFourBankandAssociationon22December2009,andrec- ognizedthedifferenceasgoodwillbetweentheacquisitioncostandthefairvalueoftheacquiree'sidentifi- ablenetassetsoftheFourBankandAssociation.

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Cost 340,000 340,000 340,000 340,000

Less:Allowancesforimpairmentlosses - - - -

Carryingamount 340,000 340,000 340,000 340,000

Asat31December2012and2011,theGroupdeterminesthatthereisnoimpairmentofgoodwill basedonthepresentvalueoftheexpectedfuturecashflows. Thepresentvalueoftheexpectedfuturecashflowsandtheirmajorunderlyingassumptionsaresum- marisedbelow: Theexpectedfuturecashflowsarebasedonfinancialbudgetsapprovedbymanagementcoveringa five-yearperiod,andadiscountrateof14%and14%perannumasat31December2012and2011.The discountratesusedreflectspecificriskrelatingtotherelevantcashgeneratingunits.Cashflowsbeyondthe five-yearperiodareextrapolatedusinga3%annualgrowthrate.Thisgrowthrateisbasedontherelevant

261 2012 Annual Report 262 15,844 23,095 14,742 73,162 15,844 23,095 14,742 73,162 514,355 553,294 877,833 965,737 507,980 546,919 888,569 976,473 RMBthousand RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December Asat31December ------(8,967) (8,967) (8,967) (8,967) (14,850) (27,890) (14,850) (27,890) (42,740) (42,740) Write-off Write-off Write-off Write-off RMBthousand RMBthousand RMBthousand RMBthousand ------(4,404) (7,081) (4,404) (4,404) (4,404) (7,081) (7,081) (7,081) RMBthousand RMBthousand RMBthousand RMBthousand Transferin/(out) Transferin/(out) Transferin/(out) Transferin/(out) ts ialStatemen totheFinanc Notes 9,385 9,385 23,095 50,067 23,095 50,067 (1,102) (1,102) Fortheyearended31December2012 Fortheyearended31December2011 mber2012 Fortheyearended31Dece Fortheyearended31December2011 228,274 260,754 385,901 434,866 224,934 257,414 390,262 439,227 (Reversal) (Reversal) (Reversal) (Reversal) RMBthousand RMBthousand RMBthousand RMBthousand Additions/ Additions/ Additions/ Additions/ - - 34,349 34,349 15,844 23,095 15,844 23,095 507,980 546,919 302,300 336,649 514,355 553,294 305,335 339,684 RMBthousand RMBthousand RMBthousand RMBthousand Asat1January Asat1January Asat1January Asat1January receivables receivables receivables receivables TheBank pairmentlosses 16.Allowancesforim TheGroup Otherreceivables Otherreceivables Debtssecuritiesclassifiedas Loansandadvancestocustomers Otherreceivables Debtssecuritiesclassifiedas Total Loansandadvancestocustomers Total Debtssecuritiesclassifiedas Loansandadvancestocustomers Otherreceivables Debtssecuritiesclassifiedas Total Loansandadvancestocustomers Total try. agelong-termgrowthrateoftheindus owthrateanddoesnotexceedtheaver domesticindustrygr NotestotheFinancialStatements

17.Borrowingsfromcentralbank

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Designatedloans 141,050 60,000 - -

Total 141,050 60,000 - -

18.Depositsfrombanksandotherfinancialinstitutions

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Domesticbanks 39,514,934 28,338,460 39,663,987 28,510,079

Otherdomesticfinancialinstitutions 459,012 21,356 459,012 21,356

Total 39,973,946 28,359,816 40,122,999 28,531,435

19.Financialassetssoldunderrepurchaseagreements

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Bonds 2,480,550 4,049,400 2,480,550 4,049,400

Bills 18,073,723 18,820,486 18,073,723 18,820,486

Total 20,554,273 22,869,886 20,554,273 22,869,886

263 2012 Annual Report 264 31,058 41,336 153,418 496,127 2,636,244 8,992,895 2,636,244 2,067,723 56,240,915 12,318,862 12,165,214 92,507,548 2011 2011 RMBthousand RMBthousand Asat31December Asat31December TheBank TheBank 13,062 305,079 519,633 555,591 2,209,813 2,209,813 1,121,527 61,479,600 12,208,805 20,056,886 16,195,341 2012 2012 112,455,524 RMBthousand RMBthousand Asat31December Asat31December 31,058 87,481 153,418 496,127 2,682,389 9,150,243 2,682,389 2,067,723 56,765,228 12,343,938 12,277,753 93,372,969 2011 2011 RMBthousand RMBthousand Asat31December Asat31December TheGroup TheGroup ts ialStatemen totheFinanc Notes 13,563 305,209 579,000 569,872 2,283,962 1,121,527 2,283,962 12,641,956 20,154,386 16,500,675 62,208,796 2012 2012 114,094,984 RMBthousand RMBthousand Asat31December Asat31December ory: (1)Guaranteedepositsanalysedbycateg 20.Duetocustomers Corporatecustomers Individualcustomers Individualcustomers Corporatecustomers Timedeposits Others Total Bankacceptances Lettersofguaranteeandcredit Total Demanddeposits Guaranteedeposits(1) Guaranteedeposits Others NotestotheFinancialStatements

21.Accruedstaffcosts TheGroup

Fortheyearended31December2012 Note Asat1January Accrued Paid Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Salaries,bonusesandallowances 7,537 593,324 (576,254) 24,607

Staffwelfare - 73,235 (73,235) -

Socialinsurance 534 156,288 (155,920) 902

Housingfunds 1,490 43,208 (43,539) 1,159

Laborunionfeesandstaffeducationexpense 3,840 23,607 (23,225) 4,222

Annuityscheme 28,530 21,240 - 49,770

Retirementbenefits (1) 161,022 31,498 (17,073) 175,447

Total 202,953 942,400 (889,246) 256,107

Fortheyearended31December2011 Note Asat1January Accrued Paid Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Salaries,bonusesandallowances 7,175 494,686 (494,324) 7,537

Staffwelfare - 76,318 (76,318) -

Socialinsurance 727 73,656 (73,849) 534

Housingfunds 405 29,248 (28,163) 1,490

Laborunionfeesandstaffeducationexpense 4,597 11,997 (12,754) 3,840

Annuityscheme - 28,530 - 28,530

Retirementbenefits (1) 146,060 20,627 (5,665) 161,022

Total 158,964 735,062 (691,073) 202,953

265 2012 Annual Report - - 534 822 1,490 3,825 1,145 4,177 7,480 266 24,521 28,530 49,770 202,881 255,882 161,022 175,447 RMBthousand RMBthousand Asat31December Asat31December - - (5,665) (27,753) (72,878) (12,616) (71,293) (42,810) (22,712) (75,620) (17,073) (678,817) (553,817) (153,334) (861,039) (484,285) Paid Paid RMBthousand RMBthousand 28,838 72,685 11,845 71,293 42,465 23,064 75,620 28,530 20,627 21,240 31,498 723,732 570,858 153,622 914,040 485,587 Accrued Accrued RMBthousand RMBthousand mber2012 Fortheyearended31Dece Fortheyearended31December2011 - - - 405 727 534 ts ialStatemen totheFinanc Notes 4,596 7,480 1,490 3,825 6,178 28,530 157,966 146,060 202,881 161,022 RMBthousand RMBthousand Asat1January Asat1January (1) (1) Note Note pense pense TheBank forthein-serviceem- TheBanksetuptheannuityschemeintheformofdefinedcontributionplan Socialinsurance Housingfunds Retirementbenefits Laborunionfeesandstaffeducationex Total Salaries,bonusesandallowances Staffwelfare wances Salaries,bonusesandallo Staffwelfare Socialinsurance Housingfunds Laborunionfeesandstaffeducationex Retirementbenefits Total Annuityscheme Annuityscheme loyees'salaries,andthecon- ployeesin2011.TheBankmadeannuitycontributionswithreferencetoemp tributionsareexpensedinprofitorlosswhenincurred. NotestotheFinancialStatements

(1)Retirementbenefits Thechangestothepost-retirementbenefitrecognizedareasfollows:

TheGroup TheBank Asat31December 2012 Asat31December 2011 Asat31December 2012 Asat31December 2011 RMBthousand RMBthousand RMBthousand RMBthousand

Asat1January 161,022 146,060 161,022 146,060

Currentservicecost 6,470 5,640 6,470 5,640

Interestcost 6,964 6,698 6,964 6,698

Gainoncurtailment/settlement (10,010) - (10,010) -

Pastservicecost 192 - 192 -

Actuariallossarisingduringperiod 18,064 8,289 18,064 8,289

Benefitspaid (7,255) (5,665) (7,255) (5,665)

Asat31December 175,447 161,022 175,447 161,022

Asatbalancesheetdate,theprincipalassumptionsusedforthepurposeoftheactuarialvaluations wereasfollows:

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Discountrate 4.50% 4.25% 4.50% 4.25%

ChinaLifeInsuranceMortalityTable- ChinaLifeInsuranceMortalityTable- Mortalityrates Pensionbusiness(2000-2003) Pensionbusiness(2000-2003)

Expectedgrowthrateofaveragemedicalexpenses 7.00% 7.00% 7.00% 7.00%

Expectedgrowthrateofotherbenefits 3.00% 3.00% 3.00% 3.00%

Expectedgrowthrateofearlyretirementbenefits 10.00% 10.00% 10.00% 10.00%

TheGroup'sobligationsinrespectoftheretirementbenefitsattheendofeachreportingperiodwere estimatedbyTowersWatsonConsulting(Shanghai)Limited,anexternalindependentactuaryusingthe projectedunitcreditmethod.

267 2012 Annual Report - 2,409 3,095 268 73,925 33,656 43,547 33,096 492,074 156,632 440,409 295,530 398,160 458,978 1,134,099 2011 2011 2011 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - TheBank TheBank TheBank 5,173 41,685 75,575 16,454 51,506 179,703 359,382 498,269 655,778 101,498 394,595 128,197 1,151,871 2012 2012 2012 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December - 2,425 3,812 78,902 33,764 43,938 34,860 493,838 162,841 441,675 295,530 398,160 458,978 1,135,365 2011 2011 2011 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December 144 TheGroup TheGroup TheGroup ts ialStatemen totheFinanc Notes 5,214 57,113 42,268 76,371 16,542 185,310 364,095 660,179 101,498 128,197 504,490 394,855 1,156,676 2012 2012 2012 RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December (1) Note Items 24.Otherliabilities lycomposedofpropertytaxandlandusetaxetc. Othertaxesanddutiespayablearemain 23.Interestpayable 22.Taxespayable Otherpayables Settlementaccount Duetocustomers Financialassetssoldunderrepurchaseagreements Corporateincometax Individualincometax Businesstax Cityconstructiontaxesandeducationsurcharges Others Depositsfrombanksandotherfinancialinstitutions BorrowingsfromCentralbank Total Total NotestotheFinancialStatements

(1)Otherpayables Listedbynatureasfollows:

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Dormantaccounts 10,761 3,335 10,714 3,335

Qualityassurancedeposit 31,498 21,937 26,660 21,937

Constructioncostpayable 8,494 6,678 7,810 6,678

Others 6,360 2,910 6,322 1,146

Total 57,113 34,860 51,506 33,096

25.Sharecapital

Fortheyearended31December2012 Asat1January Additions Decrease Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Sharecapital 3,720,000 640,000 - 4,360,000

Fortheyearended31December2011 Asat1January Additions Decrease Asat31December RMBthousand RMBthousand RMBthousand RMBthousand

Sharecapital 3,080,000 640,000 - 3,720,000

On19December2012,theBankissued640millionnewshareswithaparvalueofRMB1eachata subscriptionpriceofRMB2.00pershareunderaprivateplacementarrangement.Thecapitalcontribution wasverifiedbyHeilongjiangMingdeCPA.Co.,Ltdwithverificationreport([2012]HeiMingDeYanZi No.06)issuedon19December2012. On23December2011,theBankissued640millionnewshareswithaparvalueofRMB1eachata subscriptionpriceofRMB1.77pershareunderaprivateplacementarrangement.Thecapitalcontribution wasverifiedbyBeijingXingHuaCPA.Co.,Ltdwithverificationreport([2011]JingKuaiXingHeiLong JiangFenYanZiNo.10)issuedon23December2011.

269 2012 Annual Report 6,590 7,253 2,074 270 10,757 (2,689) (8,299) 318,555 148,750 (27,982) (29,010) (11,705) (26,363) 1,720,988 1,709,283 1,080,988 1,053,006 RMBthousand RMBthousand RMBthousand RMBthousand Asat31December Asat31December Asat31December Asat31December ------2,072 4,516 (6,217) (6,217) (8,289) (13,548) (13,548) (18,064) Decrease Decrease Decrease Decrease RMBthousand RMBthousand RMBthousand RMBthousand - - - - 11,851 15,801 39,767 29,825 (3,950) (9,942) 110,143 492,800 169,805 640,000 669,825 504,651 Additions Additions Additions Additions RMBthousand RMBthousand RMBthousand RMBthousand Fortheyearended31December2012 Fortheyearended31December2011 mber2012 Fortheyearended31Dece Fortheyearended31December2011 2 (10) ts ialStatemen totheFinanc Notes 7,253 2,074 38,607 11,203 (8,299) 148,750 588,188 554,572 (33,616) (44,811) (29,010) (27,982) 1,080,988 1,053,006 RMBthousand RMBthousand RMBthousand RMBthousand Asat1January Asat1January Asat1January Asat1January benefits benefits financialassets financialassets Item Item Item Item 27.SurplusReserves TheGroupandtheBank 26.CapitalReserve Bank TheGroupandthe Total Total Statutorysurplusreserve Statutorysurplusreserve Sharecapitalpremium Sharecapitalpremium Othercomprehensiveincome ets Incometaximpactonfairvaluechangesofavailable-for-salefinancialass Incometaxrelatedtoactuariallossfromretirement Incometaxrelatedtoactuariallossfromretirement Including:Netchangesonfairvalueofavailable-for-sale Othercomprehensiveincome Including:Netchangesonfairvalueofavailable-for-sale ets Incometaximpactonfairvaluechangesofavailable-for-salefinancialass Actuariallossfromretirementbenefits Actuariallossfromretirementbenefits NotestotheFinancialStatements

28.Generalreserve TheGroup

Fortheyearended31December2012 Asat1January Additions Decrease Asat31December Item RMBthousand RMBthousand RMBthousand RMBthousand

Generalreserve 441,437 403,970 - 845,407

Fortheyearended31December2011 Asat1January Additions Decrease Asat31December Item RMBthousand RMBthousand RMBthousand RMBthousand

Generalreserve - 441,437 - 441,437

TheBank

Fortheyearended31December2012 Asat1January Additions Decrease Asat31December Item RMBthousand RMBthousand RMBthousand RMBthousand

Generalreserve 437,000 400,000 - 837,000

Fortheyearended31December2011 Asat1January Additions Decrease Asat31December Item RMBthousand RMBthousand RMBthousand RMBthousand

Generalreserve - 437,000 - 437,000

PursuanttoCaijin[2005]No.49"MeasuresonGeneralProvisionforBadandDoubtfulDebtsforFi- nancialInstitutions"andCaijin[2007]No.23"ApplicationGuidanceofFinancingMeasuresforFinancial Institutions"issuedbytheMOF,theGroupisrequiredtotransferacertainamountofitsnetincometothe generalreservethroughitsprofitappropriation.Itisdeterminedbasedonthedegreeofoverallunidentified lossexposure,normallynolowerthan1%oftheendingbalanceofriskassets.On30March2012,theMOF issuedandimplementedCaiJin[2012]No.20"MeasuresonProvisionforFinancialInstitutions"(thepre- viousCaiJin[2005]No.49"MeasuresonGeneralProvisionforBadandDoubtfulDebtsforFinancialIn- stitutions"wasabolishedatthesametime).SinceJuly1,2012,thefinancialinstitutionsshouldselectinter- nalmodelapproachorstandardmethodbasedontheiractualsituationtomakequantitativeanalysisonrisk situationexposuretoriskassetsanddeterminethepotentialriskestimate.Whenthepotentialriskestimateis higherthantheallowanceimpairmentofriskassets,thegeneralreserveshallbemadeforsuchdifference. Whenthepotentialrisksestimateislowerthantheallowanceimpairmentofriskassets,thegeneralreserve maynotbemade.Thegeneralreserveshallbenormallynolowerthan1.5%oftheendingbalanceofrisk assets.Thegeneralreserveisanintegralpartofequityinterestbutnotsubjecttodividenddistribution.Such

271 2012 Annual Report 272 ts ialStatemen totheFinanc Notes 29.ProfitDistribution statutorysurplusreserve (1)Appropriationto toa iredtotransfer10%ofitsnetprofit rticlesofassociation,theBankisrequ Accordingtothea (2)Profitdistributionfortheyear2011 approvedbytheshareholderattheAnnualGeneralMeetingon ProposedbytheBoardofDirectorand (3)Profitdistributionfortheyear2012 ofDirector,theBankintendedtoappropriategeneralreserve AccordingtotheproposaloftheBoard statutory mber2011and2012,appropriationto atutorysurplusreserve.Asat31Dece non-distributablest ,143thousandandRMB169,805thousandwasmaderespective- surplusreserveofapproximatelyRMB110 usreservemayceasewhenthebalanceofsuchreservehasreached ly.Appropriationtothestatutorysurpl 50%oftheregisteredcapital. MB400,000thousandtothegeneralreservefromthenetprofitof 26May2012,theBankappropriatedR fore31December2012;theBankappropriatedacashdividendof 2011,whichhasbeenaccountedforbe ,080,000thousandshares(facevalue1.00RMBpershare)ofregis- RMB0.70(pre-tax)per10sharesto3 1,amountingtoRMB215,600thousandintotal,andappropriat- teredshareholdersasof29December201 -tax)per10sharesto640,000thousandnewshares(facevalue1.00 edacashdividendofRMB0.00384(pre sof30December2011,amountingtoRMB246thousandintotal. RMBpershare)aftercapitalinjectiona B215,846thousand. ThetotalcashdividendamountstoRM fromthe2012annualprofit;theBankintendedtoappropriatea amountingtoRMB1,055,000thousand er10sharesto3,720,000thousandshares(facevalue1.00RMBper cashdividendofRMB0.80(pre-tax)p B297,600thousandintotal; share)ofregisteredshareholdersasof25December2012,amountingtoRM lAdministrationforIndustry theBank'scapitalinjectionhasbeenapprovedbytheHeilongjiangProvincia totheshareholderscouldbe andCommerceon25December2012,therightsanddutiesofthenewshares oposalonIncreaseinRegis- dulyexercisedfrom25December2012,therefore,inaccordancewiththe"Pr cashdividendofRMB0.011 teredCapitalofLongjiangBankin2012",theBankintendedtoappropriatea Bpershare),amountingto (pre-tax)per10sharesto640,000thousandnewshares(facevalue1.00RM val,andtheaboveproposed RMB704thousand.Theaboveproposalwassubjecttoshareholders'appro beforeapproval. generalreserveandcashdividendarenotrecognizedinthefinancialstatements ersatthe ositionuponapprovalbythesharehold cognisedinthestatementoffinancialp generalreserveisre Bank. theunidentifiedpotentiallossesofthe ting,whichwillbeusedtocompensate AnnualGeneralMee NotestotheFinancialStatements

30.Non-controllinginterests Thenon-controllinginterestsoftheGroup'ssubsidiariesareasfollows: TheGroup

Nameofentities 31December2012 31December2011 RMBthousand RMBthousand DongningRunshengRuralBankCo.,Ltd. 15,455 12,576 DorbetRunshengRuralBankCo.,Ltd. 29,123 26,436 Yi'anRunshengRuralBankCo.,Ltd. 30,154 26,903 JixianRunshengRuralBankCo.,Ltd. 15,669 14,947 KeshanRunshengRuralBankCo.,Ltd. 15,121 10,679 WuyishanBenfuRuralBankCo.,Ltd. 6,037 - AnhuiHuaiyuanBenfuRuralBankCo.,Ltd. 6,323 - NingxiaNingdongBenfuRuralBankCo.,Ltd. 13,704 - AnhuiLingbiBenfuRuralBankCo.,Ltd. 8,295 - Total 139,881 91,541

31.Netinterestincome

TheGroup TheBank 2012 2011 2012 2011 RMBthousand RMBthousand RMBthousand RMBthousand Interestincome Loansandadvancestocustomers 2,702,754 2,263,405 2,610,047 2,200,875 Including:Corporateloansandadvances 1,628,593 1,292,532 1,594,852 1,264,870 Personalloansandadvances 959,001 541,943 902,979 513,585 Discountedbills 115,160 428,930 112,216 422,420 Financialassetsatfairvaluethroughprofitorloss 1,097,381 709,346 1,097,381 709,346 Available-for-salefinancialassets 176,964 104,374 176,964 104,374 Held-to-maturityinvestments 312,186 52,362 312,186 52,362 Debtssecuritiesclassifiedasreceivables 111,963 235,192 111,963 235,192 Balanceswithcentralbank 335,894 276,486 333,449 275,282 Financialassetsheldunderresaleagreements 1,338,578 556,786 1,338,578 556,786 Depositswithbanks 2,673,763 1,754,947 2,665,560 1,754,094 Subtotal 8,749,483 5,952,898 8,646,128 5,888,311 Interestexpense Duetocustomers (1,884,588) (1,260,875) (1,870,914) (1,255,756) Borrowingsfromcentralbank (7,585) (4,173) - - Financialassetssoldunderrepurchaseagreements (1,133,704) (470,621) (1,133,704) (470,621) Depositsfrombanksandotherfinancialinstitutions (1,139,708) (1,096,338) (1,138,154) (1,094,312) Subtotal (4,165,585) (2,832,007) (4,142,772) (2,820,689) Netinterestincome 4,583,898 3,120,891 4,503,356 3,067,622 Includedininterestincomeisinterestincomeaccruedon impairedfinancialassets 7,081 4,404 7,081 4,404

273 2012 Annual Report 510 212 510 524 (198) 6,323 6,996 4,171 274 91,031 22,600 32,751 11,248 17,215 14,167 (9,611) (9,611) (5,606) (1,442) 115,471 (17,392) (24,440) 2011 2011 2011 RMBthousand RMBthousand RMBthousand TheBank TheBank TheBank 237 1,530 1,530 6,772 3,214 5,009 10,789 12,784 51,413 37,966 29,342 12,556 12,784 18,796 12,892 (6,631) 114,951 165,404 (22,261) (21,561) (50,453) 2012 2012 2012 RMBthousand RMBthousand RMBthousand - - 14 212 (198) 6,323 6,996 4,171 92,199 23,777 32,751 11,248 17,215 14,167 (9,611) (9,611) (5,615) (1,442) 116,648 (17,392) (24,449) 2011 2011 2011 RMBthousand RMBthousand RMBthousand - - 237 TheGroup TheGroup TheGroup ts ialStatemen totheFinanc Notes 6,779 3,214 6,547 10,789 12,784 12,784 51,413 38,071 29,342 11,026 18,930 13,002 (7,088) 116,252 167,298 (22,397) (21,561) (51,046) 2012 2012 2012 RMBthousand RMBthousand RMBthousand assets 34.Netgains(/losses)onfairvaluechanges 33.Investmentincome missionincome 32.Netfeeandcom Total Netfeeandcommissionincome Netgainsfromlong-termequityinvestments including:dividendreceivedfromsubsidiaries Netgain/(loss)fromfinancialinstrumentsatFVTPL Netgainsondisposalofavailable-for-salefinancial Financialassetsatfairvaluethroughprofitorloss Total Feeandcommissionincome ctsfees Wealthmanagementprodu Settlementandclearingfees Consultancyandadvisoryfees Bankcardrelatedfees Subtotal Feeandcommissionexpense Settlementandclearingfees Bankcardrelatedfees Custodianandotherfiduciaryservicefees Agencycommissions Creditcommitments Others Others Subtotal NotestotheFinancialStatements

35.Otheroperatingincome

TheGroup TheBank 2012 2011 2012 2011 RMBthousand RMBthousand RMBthousand RMBthousand Rentalincome 15,716 2,255 15,716 2,255 Other(1) 44,465 84,825 44,381 84,580 Total 60,181 87,080 60,097 86,835

(1)ItrepresentsrepaymentsduringthereportingperiodonloansacquiredfromtheFourBankand Associationat22December2009,andtheamountoftherepaymentsisinexcessoftheirfairvaluedeter- minedat22December2009,thedifferencewaschargedtocurrentprofitorloss. 36.Businesstaxandsurcharges

TheGroup TheBank 2012 2011 2012 2011 RMBthousand RMBthousand RMBthousand RMBthousand Businesstax 169,921 101,810 167,416 100,792 Cityconstructiontax 11,217 7,769 11,093 7,352 Educationsurcharges 8,320 3,937 8,196 3,756 Total 189,458 113,516 186,705 111,900

37.Operatingandadministrativeexpenses

TheGroup TheBank 2012 2011 2012 2011 RMBthousand RMBthousand RMBthousand RMBthousand Staffcosts 924,336 726,773 895,976 715,443 Generaloperatingandadministrativeexpenses 549,178 416,864 533,374 404,146 Operatingleaserentalexpense 90,324 43,976 85,982 42,647 Depreciationoffixedassets 106,167 82,704 102,963 81,282 Amortizationofintangibleassets 32,076 38,295 31,966 38,260 Amortizationoflong-termdeferredexpenses 83,284 28,337 68,616 26,902 Lowvalueassets 19,664 27,276 18,718 27,276 Taxes 15,002 14,542 14,666 13,954 Other 65,246 59,117 63,771 58,359 Total 1,885,277 1,437,884 1,816,032 1,408,269

38.Impairmentlossesonassets

TheGroup TheBank 2012 2011 2012 2011 RMBthousand RMBthousand RMBthousand RMBthousand Loansandadvancestocustomers 390,262 228,274 385,901 224,934 Debtssecuritiesclassifiedasreceivables 50,067 23,095 50,067 23,095 Otherreceivables (1,102) 9,385 (1,102) 9,385 Total 439,227 260,754 434,866 257,414

275 2012 Annual Report - 1,511 1,910 3,793 4,135 1,600 3,123 276 26,133 13,629 24,978 21,410 358,295 414,709 (56,414) 2011 2011 2011 RMBthousand RMBthousand RMBthousand - TheBank TheBank TheBank 166 808 352 6,558 1,686 34,631 13,602 21,134 22,287 10,306 557,928 645,826 (87,898) 2012 2012 2012 RMBthousand RMBthousand RMBthousand - 1,511 1,910 7,687 4,303 1,605 3,128 21,410 26,143 13,629 29,040 364,155 (56,414) 420,569 2011 2011 2011 RMBthousand RMBthousand RMBthousand - 166 965 376 TheGroup TheGroup TheGroup ts ialStatemen totheFinanc Notes 1,686 6,558 34,894 22,526 22,956 30,645 10,306 561,503 656,011 (94,508) 2012 2012 2012 RMBthousand RMBthousand RMBthousand 41.Incometaxexpense theGrouprelatingtoitsgrantingofagriculturalrelatedloans. (1)Governmentgrantwasprovidedto 40.Non-operatingexpenses ncome 39.Non-operatingi Currentincometax ts Lossondisposaloffixedassetsandintangibleasse Others Deferredtax assetsandintangibleassets Gainsondisposaloffixed losedassets Gainsondisposalofforec Dormantaccounts Governmentgrant(1) Other Total Lossondisposalofforeclosedassets Donationexpenditure Total Total anIncrementofAgriculturalRelatedLoansforCountyFinancial Accordingtothe"MeasurementonLo (HeiCaiJiJinHan[2012]No.9)issuedbytheHeilongjiang InstitutionsinHeilongjiangProvince" he15%incrementmorethantheaveragebalanceofagriculturere- ProvincialDepartmentofFinance,fort ivenarewardbasedonthe2%oftheincrement.Thesamemethod latedloansoftheyear2011,itwillbeg governmentgrantaboutincrementalofagriculture-relatedloansin wasappliedtotheyear2011tocalculate 2010. NotestotheFinancialStatements

Reconciliationofprofitbeforetaxtoincometax:

TheGroup TheBank

2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Profitbeforetax 2,269,269 1,483,378 2,255,983 1,459,725

Taxcalculatedatstatutorytaxrateof25% 567,317 370,845 563,996 364,931

Taxeffectofincomenottaxablefortaxpurpose (11,669) (11,018) (11,669) (10,044)

Taxeffectofexpensesnotdeductiblefortaxpurpose 5,855 4,328 5,601 3,408

Incometaxexpenses 561,503 364,155 557,928 358,295

42.BasicEarningspershare Incalculatingthebasicearningspershare,thecurrentnetprofitattributabletoequityholdersofthe Bankisasfollows:

2012 2011

ProfitfortheyearattributabletoordinaryshareholdersoftheBank 1,698,256 1,110,255

Including:Profitattributabletogoingconcern 1,698,256 1,110,255

Profitattributabletodiscontinuedoperation - -

Incalculatingbasicearningspershare,theweightedaveragenumberofordinarysharesisasfollows:

2012 2011

Numberofordinarysharesasat1January 3,720,000 3,080,000

Add:Weightednumberofordinarysharesissuedduringtheyear 21,041 14,027

Weightedaveragenumberofordinarysharesasat31December 3,741,041 3,094,027

BasicEarningspershare: BasicearningspersharearecalculatedbydividingtheprofitattributabletoequityholdersoftheBank bytheweightedaveragenumberofordinarysharesinissueduringtheyear.

2012 2011

ProfitfortheyearattributabletoordinaryshareholdersoftheBank 1,698,256 1,110,255

Weightedaveragenumberofordinarysharesissued(thousandshares) 3,741,041 3,094,027

Basicearningspershare(RMBYuanpershare) 0.45 0.36

TheBankhasnodilutivepotentialordinaryshares,sothereisnodilutionofearningspershare.

277 2012 Annual Report - (212) 2,072 5,634 278 15,801 16,013 (3,950) (8,289) 765,230 4,290,969 30,656,581 10,654,656 14,945,726 2011 2011 RMBthousand RMBthousand Asat31December TheBank TheBank 4,516 39,767 50,556 16,277 (9,942) 726,285 (10,789) (18,064) 2,000,000 5,243,031 49,373,265 12,638,852 28,765,097 2012 2012 RMBthousand RMBthousand Asat31December - (212) 2,072 5,634 15,801 16,013 (3,950) (8,289) 785,903 4,290,969 30,866,311 10,768,291 15,021,148 2011 2011 RMBthousand RMBthousand Asat31December TheGroup TheGroup ts ialStatemen totheFinanc Notes 4,516 39,767 50,556 16,277 (9,942) 763,908 (10,789) (18,064) 2,000,000 5,243,031 49,991,332 12,712,637 29,271,756 2012 2012 RMBthousand RMBthousand Asat31December benefits than3months salefinancialassets originalmaturityoflessthan3months 44.CashandCashEquivalents nsiveIncome 43.OtherComprehe Cash Surplusreservedepositswithcentralbank Depositwithbanksandotherfinancialinstitutionswithanoriginalmaturityoflessthan3months Placementswithbankswithanoriginalmaturityofless Financialassetsheldunderresaleagreementswithan Incometaxrelatedtoactuariallossfromretirement ble-for-salefinancialassets Fairvaluechangesonavaila Fairvaluegainarisingduringtheyear on Amountreclassifiedtotheprofitorlossup disposalofavailable-for-salefinancialassets Incometaximpactonfairvaluechangesofavailable-for- Actuariallossfromretirementbenefits Total Total NotestotheFinancialStatements

45.Supplementaryinformationtocashflowstatement

TheGroup TheBank

2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

1.Reconciliationofnetprofittocashflowfromoperatingactivities

Profitfortheyear 1,707,766 1,119,223 1,698,055 1,101,430

Add:Impairmentlosses 439,227 260,754 434,866 257,414

Depreciationoffixedassets 106,167 82,704 102,963 81,282

Amortisationofintangibleassets 32,076 38,295 31,966 38,260

Amortisationoflong-termdeferredassets 83,284 28,337 68,616 26,902

Interestincomearisingfromimpairedfinancialassets (7,081) (4,404) (7,081) (4,404)

Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets 5,434 6,270 5,434 6,270

Interestincomefromdebtsecurities (601,113) (391,928) (601,113) (391,928)

Investmentincome (10,789) (212) (12,319) (722)

(Gains)/lossesonfairvaluechanges (12,784) 9,611 (12,784) 9,611

Foreignexchange(Gains)/losses (7,666) 1,932 (7,666) 1,932

Increaseindeferredtaxassets (94,508) (56,414) (87,898) (56,414)

Increaseinoperatingreceivables (8,583,998) (50,478,224) (8,034,022) (50,127,285)

Increaseinoperatingpayables 30,197,780 67,679,751 29,312,579 67,074,541

Netcashgeneratedbyoperatingactivities 23,253,795 18,295,695 22,891,596 18,016,889

2.Netchangesincashandcashequivalents

Closebalanceofcashandcashequivalents 49,991,332 30,866,311 49,373,265 30,656,581

Less:Openingbalanceofcashandcashequivalents 30,866,311 16,705,113 30,656,581 16,789,560

Netincreaseincashandcashequivalents 19,125,021 14,161,198 18,716,684 13,867,021

279 2012 Annual Report 280 ts ialStatemen totheFinanc Notes FORMATION IX.SEGMENTIN re- organisationalstructure,management areidentifiedonthebasisofinternal Operatingsegments liabilities,segmentincomeandresultsisbasedontheGroup's Themeasurementofsegmentassetsand ctedundernormalcommercialtermsandconditions.Inter- Transactionsbetweensegmentsarecondu roupprovideservicesmainlytolocalclientofHeilongjiang ThebranchesandsubsidiariesoftheG ilitiesincludeitemsdirectlyattributabletoasegmentaswellas Segmentrevenues,results,assetsandliab eofbankingandrelatedfinancialservices.Theproductsand TheGroupprovidesadiversifiedrang Corporatebanking esfinancialproductsandservicestocorporations,government Thecorporatebankingsegmentprovid Personalbanking ividualcustomers.The Thepersonalbankingsegmentprovidesfinancialproductsandservicestoind Treasuryoperations ctionsanddebtinstru- TheGroup'streasuryoperationsconductmoneymarketorrepurchasetransa OtherServices ldnotdirectlyfallinto OthercompriseequityinvestmentsandremainingpartoftheGroupthatcou heBoard Groupthatareregularlyreviewedbyt rnalreportsaboutcomponentsofthe quirementsandinte atingre- isionmaker)forthepurposesofalloc ementcommittees(chiefoperatingdec andrelevantmanag manages Group'schiefoperatingdecisionmaker andassessingtheirperformance.The sourcestosegments ssment. locatingresourcesandperformanceasse sfrombusinessactivitiesaspectsforal thebusinessoperation icantdifferencebetweenthesegmentsaccountingpoliciesandthe accountingpolicies.Thereisnosignif tedfinancialstatements. policiesappliedtopreparetheconsolida minedwithreferencetomarketratesandhavebeenreflectedinthe nalchargesandtransferpricingaredeter incomeandexpensearisingfrominternalchargesandtransferpricing performanceofeachsegment.Interest segmentinterestincome/expense".Interestincomeandexpense adjustmentsarereferredtoas"inter- as"externalinterestincome/expense". earnedfromthirdpartiesarereferredto ion,thereisnodependenceonanysingleexternalclient. Province,withfewclientsinotherlocat lebasis. thosethatcanbeallocatedonareasonab edintothefollowingoperatingsegments: servicesofferedtocustomersareorganis escorporateloans,tradefi- agenciesandfinancialinstitutions.Therangeofproductsandservicesinclud nancing,depositproductsandothertypesofcorporateintermediaryservices. iness,personalwealthman- rangeofproductsandservicesincludespersonalloans,depositproducts,cardbus agementservicesandothertypesofpersonalintermediaryservices. mentsinvestments. thatcouldbeallocatedona anyoftheabovesegments,andcertainassets,liabilities,incomeorexpenses reasonablebasis. NotestotheFinancialStatements

TheGroup (Unit:RMBthousand)

2012

Corporatebankin Personalbanking Treasuryoperations Otherservices Total

NetInterestIncome 2,398,117 1,068,827 1,116,954 - 4,583,898

Externalinterestincome 1,724,839 948,880 6,075,764 - 8,749,483

Externalinterestexpense (1,350,247) (534,341) (2,280,997) - (4,165,585)

Inter-segmentinterest(expense)/income 2,023,525 654,288 (2,677,813) - -

Netfeeandcommissionincome 65,032 53,376 (2,156) - 116,252

Feeandcommissionincome 96,954 55,270 15,074 - 167,298

Feeandcommissionexpense (31,922) (1,894) (17,230) - (51,046)

Investmentincome - - 11,026 - 11,026

Netgainsonfairvaluechanges - - 12,784 - 12,784

Foreignexchangegains - - 3,339 - 3,339

Otheroperatingincome 37,819 22,098 264 - 60,181

Businesstaxesandsurcharges (39,879) (21,948) (127,631) - (189,458)

Operatingandadministrativeexpenses (1,215,740) (567,459) (102,078) - (1,885,277)

Impairmentlosses (216,348) (172,812) (50,067) - (439,227)

Operatingprofit 1,029,001 382,082 862,435 - 2,273,518

Add:Non-operatingincome 18,717 9,333 2,595 - 30,645

Less:Non-operatingexpenses 11,702 11,618 11,574 - 34,894

Profitbeforetax 1,036,016 379,797 853,456 - 2,269,269

Less:Incometaxexpense 561,503

Netprofit 1,707,766

Segmentassets 36,096,444 19,147,267 130,276,043 535,611 186,055,365

Segmentliabilities (85,526,561) (29,639,164) (61,337,016) (364,095) (176,866,836)

Supplementaryinformation

Creditcommitments 2,862,369 143,352 - - 3,005,721

Depreciationandamortization 151,999 65,729 3,799 - 221,527

Capitalexpenditure 238,586 103,172 5,963 - 347,721

281 2012 Annual Report - 14 2,062 282 29,040 26,143 92,199 87,080 (9,611) 364,155 149,336 487,489 116,648 (24,449) (260,754) (113,516) 1,480,481 1,483,378 1,119,223 7,081,507 3,120,891 5,952,898 (2,832,007) (1,437,884) Total 153,019,170 (146,657,668) ------557,128 (78,902) Otherservices - 14 452 8,631 2,323 7,582 8,556 2,062 2,583 (9,611) (2,115) 489,885 481,706 635,535 (23,095) (68,041) (10,671) (47,447) 3,689,493 (1,571,132) (1,482,826) 2011 109,644,772 (52,342,701) Treasuryoperations - - - ts ialStatemen totheFinanc Notes 8,689 10,021 51,536 62,992 28,050 60,377 (2,615) 223,925 225,257 325,094 168,233 722,759 541,943 522,940 (80,269) (11,705) (342,124) (495,287) 12,726,740 (21,786,952) Personalbanking - - - 8,823 18,567 95,477 45,100 56,447 33,937 766,671 776,415 311,674 959,886 (11,163) (33,770) (157,390) (918,751) (895,150) 6,756,413 1,762,597 1,721,462 30,090,530 (72,449,113) Corporatebankin penses /income X.RELATEDPARTYRELATIONSHIPSANDTRANSACTIONS 1.Relatedpartieswhereacontrolrelationshipexists nk'ssubsidiaries(details TherelatedpartiesoverwhichtheBankisabletoexercisecontrolaretheBa Impairmentlosses Operatingprofit Add:Non-operatingincome Netprofit Segmentassets Less:Non-operatingexpenses Less:Incometaxexpense Segmentliabilities Supplementaryinformation Profitbeforetax Creditcommitments Depreciationandamortization Capitalexpenditure Externalinterestexpense Feeandcommissionincome Feeandcommissionexpense Investmentincome Otheroperatingincome Businesstaxesandsurcharges NetInterestIncome Operatingandadministrativeex Externalinterestincome Inter-segmentinterest(expense) Netfeeandcommissionincome Netgainsonfairvaluechanges Foreignexchangegains idiariesareconductedinthe informationisdisclosedinNoteVII).Thetransactionscarriedoutwiththesubs dundernormalcommercial normalcourseofbusiness,withpricesbasedonnormaltransactionprices,an terms. NotestotheFinancialStatements

MaterialbalancesandtransactionsbetweentheBankanditssubsidiarieshavebeeneliminatedoncon- solidatedfinancialstatements,detailedinformationisasfollows:

Asat31December2012 Asat31December2011 RMBthousand RMBthousand

Depositswithbanksandotherfinancialinstitutions 429,288 305,000

Depositsfrombanksandotherfinancialinstitutions 125,000 165,721

Interestreceivable 341 162

Interestpayable 243 -

2012 2011 RMBthousand RMBthousand

Interestincome 4,209 5,605

Interestexpense 2,992 98

2.Relatedpartieswithoutcontrollingrelationship (1)Shareholdersholdingnolessthan5%sharesoftheBank Theinformationaboutnamesandshareholdingsoftheshareholdersholdingnolessthan5%sharesof theBankisasfollows:

Asat31December2012 Asat31December2011

Shares Shareholding Percentage Shares Shareholding Percentage

ThousandShares % ThousandShares %

HeilongjiangProvinceDazhengInvestmentGroup 893,800 20.50 762,600 20.50

COFCOLimited 872,000 20.00 744,000 20.00

HeilongjiangTransportDevelopmentCo.,Ltd.(note1) 347,391 7.97 182,280 4.90

DaqingState-ownedAssetsManagementCo.,Ltd. 226,187 5.19 192,985 5.19

ShanghaiIndustrialInvestment(holdings)Co.,Ltd. 218,872 5.02 186,744 5.02

Total 2,558,250 58.68 2,068,609 55.61

Note1:Asof31December2012,theBankcompletedthecapitalinjection,andtheshareholdingof HeilongjiangTransportationDevelopmentCo.,Ltd.increasedfrom4.9%to7.97%,whichbelongstothe shareholdersholdingmorethan5%sharesoftheBank. (2)Otherrelatedparties Otherrelatedpartiesincludeskeymanagementpersonnel(directors,supervisorsandseniormanage- mentofHeadOffice),theclosefamilymembersofkeymanagementpersonnel,aswellasentitiescontrolled orjointlycontrolledbykeymanagementpersonnelortheirclosefamilymembers,andsubsidiariesheldby

283 2012 Annual Report - - 26 26 385 385 662 4,587 284 77,161 71,912 250,300 250,300 RMBthousand RMBthousand RMBthousand RMBthousand Asat31December2011 Asat31December2011 Asat31December2011 Asat31December2011 4 4 2 9 11 13 478 1,900 1,900 5,010 39,026 33,529 RMBthousand RMBthousand RMBthousand RMBthousand Asat31December2012 Asat31December2012 Asat31December2012 Asat31December2012 ts ialStatemen totheFinanc Notes (4)Interestpayable (2)Duetocustomers (3)Interestreceivable seof ankareconductedinthenormalcour riedoutwiththerelatedpartyoftheB Thetransactionscar estocustomers (1)Loansandadvanc HeilongjiangProvinceDazhengInvestmentGroup HeilongjiangTransportDevelopmentCo.,Ltd. DaqingState-ownedAssetsManagementCo.,Ltd. DaqingState-ownedAssetsManagementCo.,Ltd. Otherrelatedparties Total Shareholdersholdingnolessthan5%sharesoftheBank Total Total Otherrelatedparties Bank Shareholdersholdingnolessthan5%sharesofthe Otherrelatedparties Total Otherrelatedparties chshould dundernormalcommercialterms,whi basedonnormaltransactionprices,an business,withprices typeand rreviewandapprovalintermsofthe evantdecision-makingorganizationfo besubmittedtorel contentoftransaction. dingnolessthan5%sharesoftheBank. theshareholdershol NotestotheFinancialStatements

(5)Interestincome

2012 2011 RMBthousand RMBthousand

Shareholdersholdingnolessthan5%sharesoftheBank

DaqingState-ownedAssetsManagementCo.,Ltd. - 1,319

Otherrelatedparties 68 16,893

Total 68 18,212

(6)Interestexpense

2012 2011 RMBthousand RMBthousand

Shareholdersholdingnolessthan5%sharesoftheBank

HeilongjiangTransportDevelopmentCo.,Ltd. 21 -

DaqingState-ownedAssetsManagementCo.,Ltd. - 1

Otherrelatedparties 67 1,476

Total 88 1,477

(7)Otheroperatingincome

2012 2011 RMBthousand RMBthousand

Shareholdersholdingnolessthan5%sharesoftheBank - -

Otherrelatedparties 2,490 7

Total 2,490 7

(8)Remunerationofkeymanagement

2012 2011 RMBthousand RMBthousand

Salariesandbonus 12,070 7,933

Otherallowancesandbenefits 780 3,020

Contributiontopensionschemes - -

Fees 560 520

Total 13,410 11,473

285 2012 Annual Report - 3,085 286 25,327 158,013 158,013 325,094 7,081,507 2,573,692 1,411,198 1,162,494 4,154,309 2011 2011 RMBthousand RMBthousand Asat31December Asat31December - TheBank TheBank 4,281 49,806 187,838 187,838 545,657 431,279 114,378 116,498 3,005,721 2,289,479 2012 2012 RMBthousand RMBthousand Asat31December Asat31December - 3,085 25,327 158,013 158,013 325,094 7,081,507 2,573,692 1,411,198 1,162,494 4,154,309 2011 2011 RMBthousand RMBthousand Asat31December Asat31December - TheGroup TheGroup ts ialStatemen totheFinanc Notes 4,281 49,806 187,838 545,657 431,279 114,378 116,498 187,838 3,005,721 2,289,479 2012 2012 RMBthousand RMBthousand Asat31December Asat31December 3.Creditcommitments tofcreditcommitmentswhichtheBankandtheGrouphas Thefollowingtableindicatestheamoun TS TLIABILITIESANDCOMMITMEN XI.CONTINGEN 1.Legalproceedings ions arisingfromitsnormalbusinessoperat volvedincertainlawsuitsasdefendants TheGroupisnotin nts 2.Capitalcommitme -withanoriginalmaturityoflessthan1year -withanoriginalmaturityof1yearorabove Loancommitments Letterofcredit Creditcardcommitments Total Contractedbutnotprovidedfor Authorisedbutnotcontractedfor Total Letterofguarantee Acceptances committedtoitscustomers: 12and31December2011. asat31December20 NotestotheFinancialStatements

4.Operatingleasecommitments Attheendofthereportingperiod,asalessee,theGroupandtheBankhavethefollowingnon-can- cellableoperatingleasewhichfallsdueasfollows:

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Within1Year 79,149 70,737 78,242 69,692

1to2years 81,632 64,256 80,635 63,281

2to3years 54,008 60,418 53,007 59,738

Above3years 220,036 194,020 216,206 192,590

Total 434,825 389,431 428,090 385,301

5.Collateral (1)Assetspledgedascollateral ThecarryingamountofassetspledgedascollateralunderrepurchaseagreementbytheGroupandthe Bank,andthebalancesofcorrespondingliabilitiesisasfollows: TheGroup

Asat31December2012 Asat31December2011

Collateral Corresponding liability Collateral Corresponding liability

RMBthousand RMBthousand RMBthousand RMBthousand

Bonds 2,475,681 2,480,550 4,063,333 4,049,400

Total 2,475,681 2,480,550 4,063,333 4,049,400

TheBank

Asat31December2012 Asat31December2011

Collateral Corresponding liability Collateral Corresponding liability

RMBthousand RMBthousand RMBthousand RMBthousand

Bonds 2,475,681 2,480,550 4,063,333 4,049,400

Total 2,475,681 2,480,550 4,063,333 4,049,400

Allsuchrepurchaseagreementsareduewithin12monthsfromtheeffectivedatesoftheseagreements. (2)Collateralaccepted TheGroupreceivedcollateralinconnectionwithpurchaseofassetsunderresaleagreements.Asat31 December2012,thecollateralacceptedbytheGroupisRMB18.857billion(31December2012:RMB

287 2012 Annual Report 288 ts ialStatemen totheFinanc Notes ISKMANAGEMENT XII.FINANCIALR 1.Overview an- ofrisks.TheGrouphasdesignedriskm ssesandactivitiesexposeittoavariety TheGroup'sbusine sthereforetoachieveanappropriatebalancebetweenriskand TheGroup'saimofriskmanagementi 2.Riskmanagementframework ommitteeundertheBoardofDirectors.RiskManagement TheBankhasaRiskManagementC 3.Creditrisk 3.1Creditriskmanagement terparty'sfailuretomeet Creditriskrepresentsthepotentiallossthatmayarisefromacustomerorcoun creditinvestigationand TheGroupexercisesstandardisedcreditmanagementprocedures,including banksandfinancialin- Apartfromthecreditriskexposuresoncredit-relatedassetsanddepositswith lstoidentify,analyse,monitorandreportrisks.Therisksassociated agementpoliciesandsetupriskcontro ecreditrisk,liquidityrisk,marketrisk(interestrateriskandfor- withthesebusinessesandactivitiesinclud eigncurrencyrisk),andoperationalrisk. ctsontheGroup'sfinancialperformance. returntominimisepotentialadverseeffe heoverallriskmanagementandinternalcontrolstrategiesofthe Committeeisresponsibleforsettingt t,periodicallyassessingtheoverallriskpositionandriskacceptance Group,monitoringtheriskmanagemen Theseniormanagementestablishesandimprovesrelatedriskman- managementcapabilitiesoftheGroup. thestrategyapprovedbytheRiskManagementCommittee.The agementpoliciesandproceduresunder agementoftheGroupincludestheRiskManagementDepartment, primarydepartmentrelatingtoriskman theFinancingandAccountingDepartment,whichtoperformthe theFinancialMarketDepartmentand rocedures.TheInternalAuditDepartmentisresponsibleforinde- detailedriskmanagementpoliciesandp ntandinternalcontrolenvironment. pendentlyreviewingtheriskmanageme cestocustomers,andother itsobligation.TheGroup'smajorcreditriskscomefromloansandadvan on-balancesheetoroff-balancesheetrelatedcreditriskexposures. non-performingloansman- proposals,creditlimitreview,loandisbursement,postlendingmonitoringand eratingassetsbasedonthe agement.TheGroupmeasuresandmanagesthequalityofcreditrisk-gen GuidelineforLoanCreditRiskClassificationissuedbytheCBRC. counterpartieswithaccept- stitutions,thecreditriskarisingfromtreasurybusinessismanagedbyselecting reavailable.Inaddition,the ablecreditqualitythroughreferencetoexternalcreditratinginformationwhe iretheGrouptomakepay- Groupalsoprovidesfinancialguaranteeservicetocustomerswhichmayrequ fthecontract.Risksarising mentsonbehalfofcustomersupontheirfailuretoperformunderthetermso ces.Thesetransactionsare, fromfinancialguaranteesaresimilartothoseassociatedwithloansandadvan therefore,subjecttothesameriskmanagementproceduresandpolicies. bligation asre-pledgedascollateralbuthasano histotal,thecollateralthattheGrouph 19.449billion).Oft (31De- 2,amountedtoRMB18.396billion rchaseagreement,asat31December201 toreturnunderrepu 19.325billion). cember2012:RMB NotestotheFinancialStatements

3.2ImpairmentAppraisal Keyfactorsonimpairmentassessment TheGroupclassifiesloansintothefollowingfivecategories:normal,specialmention,substandard, doubtfulandloss.Loansclassifiedinthesubstandard,doubtfulandlosscategoriesareregardedasnon-per- formingloans.Themainfactorsconsideredinloanimpairmentassessmentincludeprobabilityofloanre- paymentandrecoverabilityofprincipalandinterest,whichrelatetoborrowers'repaymentability,credit record,repaymentintention,projectedprofitability,guaranteesorcollateralandlegalresponsibilityofre- payment.Theallowanceforimpairmentlossesareassessedcollectivelyorindividuallyasappropriate. TheGroupassessestheimpairmentforloansandadvancestocustomersattheendofreportingperiod inaccordancewiththeaccountingpoliciessetoutinNoteIV.Inaddition,analysisbasedonthecontractual amountsoftheloansandadvancestocustomersattheendofreportingperiodwouldbeprovidedinternally tomanagementforthepurposeofassessingfinancialrisks. ThefivecategoriesofloanclassificationinwhichtheGroupclassifiesitsloansandadvancestocus- tomersaresetoutbelow: NormalBorrowerscanhonourthetermsoftheirloans.Thereisnoreasontodoubttheirabilitytorepay principalandinterestinfullonatimelybasis. SpecialmentionBorrowersareabletoservicetheirloanscurrently,althoughrepaymentmaybead- verselyaffectedbyspecificfactors. SubstandardBorrowers'abilitytoservicetheirloansisinquestionandtheycannotrelyentirelyon normaloperationalrevenuestorepayprincipalandinterest.Lossesmayensueevenwhencollateralorguar- anteesareinvoked. DoubtfulBorrowerscannotrepayprincipalandinterestinfullandsignificantlosseswillneedtobe recognisedevenwhencollateralorguaranteesareinvoked. LossOnlyasmallportionornoneofprincipalandinterestcanberecoveredaftertakingallpossible measuresandexhaustingalllegalremedies. TheaccountingpolicyregardingtheGroup'sestimationofimpairmentlossesonfinancialassetsisset outinNoteIV.7(4). 3.3Maximumexposuretocreditriskbeforetakingintoaccountanycollateralheldorothercrediten- hancements Themaximumexposuretocreditriskrepresentsaworst-casescenarioofcreditriskexposuretothe Groupatthebalancesheetdatewithouttakingintoaccountanycollateralheldorothercreditenhance- ments.TheGroupandtheBank'sexposuretocreditriskderivedfromcreditanddebtsecurityinvestment operations.Inaddition,off-balancesheetitemssuchasloancommitments,acceptances,guaranteesandlet- tersofcredit,etc.havecreditriskaswell.

289 2012 Annual Report - 3,085 290 25,327 325,094 983,561 4,154,309 7,081,507 4,470,413 7,308,937 1,388,324 2,573,692 27,254,568 47,415,649 16,786,842 18,966,897 24,503,271 2011 149,078,462 156,159,969 RMBthousand Asat31December TheBank 4,281 49,806 116,498 545,657 2,289,479 3,005,721 2,000,000 5,095,554 5,506,642 7,245,367 1,257,884 32,275,318 59,602,793 15,989,496 18,519,494 33,495,928 2012 180,988,476 183,994,197 RMBthousand Asat31December - 3,085 25,327 325,094 983,561 4,154,309 7,081,507 2,573,692 4,470,413 7,308,937 1,392,164 27,471,426 47,491,071 16,786,842 18,966,897 25,131,807 2011 150,003,118 157,084,625 RMBthousand Asat31December TheGroup ts ialStatemen totheFinanc Notes 4,281 49,806 545,657 116,498 3,005,721 2,289,479 2,000,000 5,506,642 7,245,367 1,279,114 5,095,554 32,573,917 18,519,494 34,592,200 60,050,452 15,989,496 2012 182,852,236 185,857,957 RMBthousand Asat31December Themaintypesofcollateralobtainedareasfollows: dor etakingintoaccountanycollateralhel aximumexposuretocreditriskbefor Asummaryofthem itigatecreditriskexpo- TheGroupimplementsspecificpoliciesandcreditenhancementpracticestom soverresidentialprop- *Mortgageloanstopersonalcustomersaregenerallycollateralisedbymortgage eralisedbychargesover *Otherpersonallendingandcorporateloansandadvancesaremainlycollat *Reverserepurchasetransactionsaremainlycollateralisedbybondsandbills. Letterofguarantee Subtotal Loancommitments Letterofcredit Acceptances Creditcardcommitments Total Placementswithbanks Financialassetsheldunderresaleagreements Loansandadvancestocustomers Held-to-maturityinvestments Debtssecuritiesclassifiedasreceivables Otherfinancialassets Subtotal Off-balancesheetitems Balanceswithcentralbank Depositswithbanksandotherfinancialinstitutions ss Financialassetsatfairvaluethroughprofitorlo Available-for-salefinancialassets mentisasfollows: othercreditenhance andguarantees.Theamount suretoanacceptablelevel.Themosttypicalpracticeisbyobtainingcollateral borrowers. andtypeofacceptablecollateralaredeterminedbycreditriskevaluationsofthe erties; landandpropertiesandotherassetsoftheborrowers;and NotestotheFinancialStatements

3.4Loansandadvancestocustomers (1)Thecompositionofloansandadvancestocustomersbyindustryisanalysedasfollows: TheGroup

Asat31December2012 Asat31December2011

Amount %oftotal Amount %oftotal

Corporateloansandadvances

Farming,forestry,herdandfishery 3,593,509 16.6 1,705,481 9.8

Mining 1,043,245 4.8 1,463,012 8.4

Manufacturing 5,467,466 25.3 5,419,282 31.2

Productionandsupplyofelectric,thermalpower,gasand water 608,367 2.8 873,966 5.0

Constructionindustry 1,117,650 5.2 764,131 4.4

Transportation,logisticsandpostalservices 1,211,351 5.6 462,223 2.7

Retailandwholesale 4,890,812 22.7 3,238,486 18.6

Accommodationandcatering 438,602 2.0 351,435 2.0

Financialservices - - 363,382 2.1

Realestate 321,990 1.5 862,447 5.0

Leasingandcommercialservices 1,147,818 5.3 763,594 4.4

Water,environmentandpublicutilitiesmanagement 645,550 3.0 330,856 1.9

Residentservicesandotherservices 290,974 1.4 251,134 1.4

Others 815,667 3.8 546,621 3.1

Subtotal 21,593,001 100.0 17,396,050 100

Personalloansandadvances

Residentialmortgage 2,010,334 14.5 1,634,104 19.8

Loanstoprivatebusiness 7,905,036 56.9 4,638,130 56.2

Farmerloans 2,205,344 15.9 1,161,235 14.1

Other 1,767,054 12.7 816,643 9.9

Subtotal 13,887,768 100.0 8,250,112 100.0

Total 35,480,769 25,646,162

291 2012 Annual Report 9.4 8.4 5.0 4.5 2.7 2.0 2.1 5.0 4.4 1.9 1.4 3.1 100 31.3 18.8 20.8 58.0 10.9 10.3 100.0 292 %oftotal 852,639 803,980 865,766 764,131 462,223 349,435 363,382 862,447 763,594 330,856 248,534 535,084 1,603,021 5,359,511 3,210,646 1,634,104 4,551,886 7,842,609 1,450,012 Asat31December2011 17,168,642 25,011,251 Amount - 4.9 2.9 5.2 5.7 2.0 1.5 5.4 3.0 1.4 3.8 15.6 25.7 22.9 15.3 58.4 12.9 13.4 100.0 100.0 %oftotal - ts ialStatemen totheFinanc Notes 608,367 435,702 321,990 642,850 290,974 812,187 3,315,544 1,043,245 5,460,546 1,114,160 1,201,851 4,874,552 1,147,818 2,006,839 7,656,061 1,690,013 1,751,062 Asat31December2012 13,103,975 34,373,761 21,269,786 Amount water TheBank Subtotal Total ces Corporateloansandadvan Farming,forestry,herdandfishery Mining Manufacturing Productionandsupplyofelectric,thermalpower,gasand Constructionindustry Transportation,logisticsandpostalservices Retailandwholesale Accommodationandcatering Financialservices Realestate Leasingandcommercialservices nt Water,environmentandpublicutilitiesmanageme Residentservicesandotherservices Others Subtotal Personalloansandadvances Residentialmortgage Loanstoprivatebusiness Farmerloans Other NotestotheFinancialStatements

(2)Thecompositionofloansandadvancestocustomersbycontractualmaturityandsecuritytypeis analysedasfollows: TheGroup

Asat31December2012

Within1year 1to5years Over5years Total

RMBthousand RMBthousand RMBthousand RMBthousand

Unsecuredloans 683,508 58,088 283,746 1,025,342

Guaranteedloans 7,276,854 5,312,082 876,373 13,465,309

Loanssecuredbymortgage 7,952,462 3,611,687 4,836,462 16,400,611

Pledgedloans 3,441,537 1,045,184 102,786 4,589,507

Total 19,354,361 10,027,041 6,099,367 35,480,769

Asat31December2011

Within1year 1to5years Over5years Total

RMBthousand RMBthousand RMBthousand RMBthousand

Unsecuredloans 126,172 188,455 265,853 580,480

Guaranteedloans 3,421,294 6,405,225 552,023 10,378,542

Loanssecuredbymortgage 4,268,394 4,125,707 3,255,798 11,649,899

Pledgedloans 2,496,380 451,402 89,459 3,037,241

Total 10,312,240 11,170,789 4,163,133 25,646,162

TheBank

Asat31December2012

Within1year 1to5years Over5years Total

RMBthousand RMBthousand RMBthousand RMBthousand

Unsecuredloans 683,508 51,588 283,746 1,018,842

Guaranteedloans 6,735,018 5,040,332 871,057 12,646,407

Loanssecuredbymortgage 7,822,356 3,517,147 4,828,804 16,168,307

Pledgedloans 3,413,465 1,023,954 102,786 4,540,205

Total 18,654,347 9,633,021 6,086,393 34,373,761

293 2012 Annual Report 767 5,951 294 11,779 93,615 10,000 118,121 224,282 121,570 158,432 295,953 576,103 9,961,253 2,963,034 11,510,861 25,011,251 Total Total Total RMBthousand - - - 808 226 1,965 35,502 15,981 36,310 18,172 89,406 261,516 551,123 3,251,751 4,153,796 Over3years Over3years Over5years RMBthousand - - - 3,941 9,687 34,015 22,907 45,607 47,643 68,514 188,415 442,402 6,145,789 4,036,160 years years 10,812,766 Asat31December2011 1to5years 361daysto3 361daysto3 RMBthousand Asat31December2011 Asat31December2012 750 ts ialStatemen totheFinanc Notes 2,352 3,986 46,538 15,226 64,866 33,757 29,095 10,000 76,838 126,172 3,264,341 4,222,950 2,431,226 10,044,689 91to360days 91to360days Within1year RMBthousand - - 17 5,486 36,582 33,378 75,463 64,680 67,749 132,429 Upto90days Upto90days (3)Pastdueloansbypastduedays: TheGroup Unsecuredloans Guaranteedloans Loanssecuredbymortgage Total Unsecuredloans Guaranteedloans Loanssecuredbymortgage Pledgedloans Total Guaranteedloans Loanssecuredbymortgage Pledgedloans Unsecuredloans Pledgedloans Total NotestotheFinancialStatements

TheBank

Asat31December2012

361daysto3 Upto90days 91to360days Over3years Total years

Unsecuredloans 5,486 2,352 3,941 - 11,779

Guaranteedloans 31,257 44,498 9,673 808 86,236

Loanssecuredbymortgage 32,778 14,736 34,015 35,502 117,031

Pledgedloans 17 750 - - 767

Total 69,538 62,336 47,629 36,310 215,813

Asat31December2011

361daysto3 Upto90days 91to360days Over3years Total years

Unsecuredloans - 3,986 - 1,965 5,951

Guaranteedloans 62,828 33,617 22,427 226 119,098

Loanssecuredbymortgage 67,249 28,756 45,607 15,981 157,593

Pledgedloans - - - - -

Total 130,077 66,359 68,034 18,172 282,642

Note:ifeitheraloan'sprincipalorinterestpastdueby1dayinanyperiod,thewholeloanisclassified aspastdueloan. (4)Creditqualityofloansandadvancestocustomers

TheGroup TheBank

Asat31December Asat31December Asat31December Asat31December 2012 2011 2012 2011

RMBthousand RMBthousand RMBthousand RMBthousand

Neitherpastduenorimpaired(i) 35,167,737 25,306,237 34,069,198 24,684,638

Pastduebutnotimpaired(ii) 55,851 139,189 47,396 126,206

Impaired(iii) 257,181 200,736 257,167 200,407

Subtotal 35,480,769 25,646,162 34,373,761 25,011,251

Less:Allowanceforimpairmentlossesofloansandadvancestocustomers (888,569) (514,355) (877,833) (507,980)

Loansandadvancestocustomers 34,592,200 25,131,807 33,495,928 24,503,271

295 2012 Annual Report - 296 36,035 36,035 99,275 53,973 thousand thousand 153,248 Total Total 7,789,897 8,194,089 16,894,741 24,684,638 17,112,148 25,306,237 collateral collateral RMB RMB Fairvalueof Fairvalueof 45 129 mention mention thousand thousand 9,650 1,869,795 1,869,840 1,869,795 1,869,924 46,201 55,851 32,645 106,544 139,189 Special Special RMB RMB Total Total Asat31December2011 Asat31December2011 thousand thousand - 7,789,852 8,193,960 Normal Normal 630 15,024,946 22,814,798 15,242,353 23,436,313 4,418 4,418 RMB RMB 10,000 10,630 Over90days Over90days thousand thousand Total Total 21,035,306 13,033,892 34,069,198 21,358,520 13,809,217 35,167,737 - RMB RMB 2,318 - - 15,791 15,791 37,444 39,762 ts ialStatemen totheFinanc Notes Asat31December2012 Asat31December2011 mention mention thousand thousand 1,909,086 1,909,086 1,909,086 1,909,086 61to90days 61to90days Special Special RMB RMB - - Asat31December2012 Asat31December2012 7,482 7,482 3,578 3,578 thousand thousand Normal Normal 19,126,220 13,033,892 32,160,112 19,449,434 13,809,217 33,258,651 RMB RMB 31to60days 31to60days 9,650 59,100 26,119 18,510 28,160 85,219 Upto30days Upto30days impaired (ii)Loansandadvancespastduebutnot TheGroup sneitherpastduenorimpaired (i)Loansandadvance TheGroup TheBank Corporateloansandadvances Personalloansandadvances Corporateloansandadvances Personalloansandadvances Total Corporateloansandadvances Personalloansandadvances Total Total Corporateloansandadvances Personalloansandadvances Total NotestotheFinancialStatements

TheBank

Asat31December2012

Fairvalueof Upto30days 31to60days 61to90days Over90days Total collateral

Corporateloansandadvances 9,650 - - - 9,650 -

Personalloansandadvances 15,451 5,216 15,191 1,888 37,746 33,930

Total 25,101 5,216 15,191 1,888 47,396 33,930

Asat31December2011

Fairvalueof Upto30days 31to60days 61to90days Over90days Total collateral

Corporateloansandadvances 59,100 - 37,444 - 96,544 89,275

Personalloansandadvances 24,546 2,818 2,298 - 29,662 49,288

Total 83,646 2,818 39,742 - 126,206 138,563

(iii)Impairedloansandadvances TheGroup

Asat31December2012 Asat31December2011

Allowancefor Carrying Allowancefor Carrying Grossamount Grossamount impairmentlosses amount impairmentlosses amount RMB thousand RMB thousand RMB thousand RMB thousand RMB thousand RMB thousand Individuallyassessed 224,831 (103,519) 121,312 177,358 (114,982) 62,376

Collectivelyassessed 32,350 (20,798) 11,552 23,378 (13,530) 9,848

Total 257,181 (124,317) 132,864 200,736 (128,512) 72,224

TheBank

Asat31December2012 Asat31December2011

Allowancefor Carrying Allowancefor Carrying Grossamount Grossamount impairmentlosses amount impairmentlosses amount RMB thousand RMB thousand RMB thousand RMB thousand RMB thousand RMB thousand Individuallyassessed 224,831 (103,519) 121,312 177,358 (114,982) 62,376

Collectivelyassessed 32,336 (20,798) 11,538 23,049 (13,448) 9,601

Total 257,167 (124,317) 132,850 200,407 (128,430) 71,977

297 2012 Annual Report - - - - 0.71% 298 39,900 39,900 21,510 177,358 (23,095) 29,549,753 29,572,848 29,572,848 2011 2011 2011 2011 RMBthousand RMBthousand Asat31December Asat31December Asat31December Asat31December TheBank TheBank 0.65% 76,950 224,831 (73,162) - - - - 33,837,059 33,910,221 33,910,221 2012 2012 TheBank TheGroup 16,500 16,500 RMBthousand RMBthousand Asat31December Asat31December 2012 2012 0.69% 21,510 177,358 (23,095) Asat31December Asat31December 29,549,753 29,572,848 29,572,848 2011 2011 RMBthousand RMBthousand Asat31December Asat31December TheGroup TheGroup ts ialStatemen totheFinanc Notes 0.63% 76,950 224,831 (73,162) 33,837,059 33,910,221 33,910,221 2012 2012 RMBthousand RMBthousand Asat31December Asat31December ables 3.5Debtsecurities (1)Creditqualityofdebtsecurities (5)Rescheduledloansandadvances omreschedulinganddeferralofrepaymenttermsandareunder Rescheduledloansandadvancesarisefr Ofwhich: Including:pastdueover3months Including:pastdueover3months Grossamountofrescheduledloansandadvances Grossamountofrescheduledloansandadvances Neitherpastduenorimpaired(i) Less:allowancefordebtinstrumentsclassifiedasreceiv %ofrescheduledloansandadvancespastdueover3months Total Debtsecurities,net Individuallyassessedandimpaired Individuallyassessedandimpaired% Fairvalueofcollateral 3months %ofrescheduledloansandadvancespastdueover continuousmonitoring. NotestotheFinancialStatements

(i)Debtsecuritiesneitherpastduenorimpaired TheGroup

Asat31December2012 Avail- Debtsecurities Financialassetsat Held-to-maturity fairvaluethrough able-for-sale classifiedas Total investment profitorloss financialassets receivables RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand

Governmentbondsandcentralbankbills - 134,363 1,259,464 - 1,393,827

Publicsectorbonds - - 20,947 - 20,947

Financialinstitutionbonds 2,280,081 2,557,597 1,289,537 - 6,127,215

Corporatebonds 711,979 2,403,594 2,936,694 - 6,052,267

Debtinstrumentsissuedbyfinancialinstitution 12,997,436 - - 7,318,529 20,315,965

Total 15,989,496 5,095,554 5,506,642 7,318,529 33,910,221

Asat31December2011 Avail- Debtsecurities Financialassetsat Held-to-maturity fairvaluethrough able-for-sale classifiedas Total investment profitorloss financialassets receivables RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand

Governmentbondsandcentralbankbills - 885,138 628,197 - 1,513,335

Publicsectorbonds 549,813 14,401 1,953 - 566,167

Financialinstitutionbonds 412,554 671,349 275,225 - 1,359,128

Corporatebonds 3,188,051 2,899,525 78,186 - 6,165,762

Debtinstrumentsissuedbyfinancialinstitution 12,636,424 - - 7,332,032 19,968,456

Total 16,786,842 4,470,413 983,561 7,332,032 29,572,848

TheBank

Asat31December2012 Avail- Debtsecurities Financialassetsat Held-to-maturity fairvaluethrough able-for-sale classifiedas Total investment profitorloss financialassets receivables RMBthousand RMBthousand RMBthousand RMBthousand RMBthousand

Governmentbondsandcentralbankbills - 134,363 1,259,464 - 1,393,827

Publicsectorbonds - - 20,947 - 20,947

Financialinstitutionbonds 2,280,081 2,557,597 1,289,537 - 6,127,215

Corporatebonds 711,979 2,403,594 2,936,694 - 6,052,267

Debtinstrumentsissuedbyfinancialinstitution 12,997,436 - - 7,318,529 20,315,965

Total 15,989,496 5,095,554 5,506,642 7,318,529 33,910,221

299 2012 Annual Report - 300 550,735 566,167 972,556 4,207,907 1,513,335 4,734,625 2,047,390 1,359,128 6,165,762 33,837,059 22,743,721 29,549,753 29,572,848 28,129,878 19,968,456 Total Total Total RMBthousand RMBthousand RMBthousand ------classified 7,308,937 7,308,937 7,245,367 7,332,032 7,245,367 7,332,032 asreceivables receivables receivables classifiedas classifiedas RMBthousand RMBthousand RMBthousand Debtsecurities Debtsecurities Debtsecurities - - - 1,953 27,085 78,186 728,320 983,561 628,197 983,561 776,940 228,156 275,225 5,506,642 2,286,472 2,443,230 investment investment investment RMBthousand RMBthousand RMBthousand Held-to-maturity Held-to-maturity Held-to-maturity Asat31December2012 Asat31December2011 Asat31December2011 - - ts ialStatemen totheFinanc Notes 14,401 141,617 885,138 195,616 603,595 671,349 5,095,554 1,475,568 4,470,413 2,249,633 4,470,413 1,736,174 3,163,764 2,899,525 Avail- Avail- able-for-sale able-for-sale financialassets RMBthousand RMBthousand RMBthousand financialassets financialassets Available-for-sale - - - 409,118 711,979 549,813 412,554 1,931,189 1,215,639 3,188,051 13,230,896 16,786,842 15,277,517 16,786,842 12,636,424 15,989,496 profitorloss profitorloss profitorloss RMBthousand RMBthousand RMBthousand fairvaluethrough fairvaluethrough fairvaluethrough Financialassetsat Financialassetsat Financialassetsat cialinstitution 3.6Bondsandbills ngandcreditriskcharacteristic (1)Debtsecuritiesanalysedbycreditrati eGroupandtheBank,whichisprovidedbyexternalcredita- Thecreditratingofsecuritiesheldbyth TheGroupandtheBank AA-toAA+ A-toA+ Unrated AAA Total AAA AA-toAA+ A-toA+ Unrated Total ankbills Governmentbondsandcentralb Publicsectorbonds Debtinstrumentsissuedbyfinan Total Financialinstitutionbonds Corporatebonds llows: genciesatthebalancesheetdate,isasfo NotestotheFinancialStatements

Theunratedsecuritiesmainlyincludegovernmentbonds,centralbankbills,publicsectorbondsand trustandwealthmanagementproductsheldbytheGroupandtheBank. 4.Liquidityrisk Liquidityriskistheriskthatfundswillnotbeavailabletomeetliabilitiesastheyfalldue.Thismay arisefromcashflowsormaturitymismatchesofassetsandliabilities.TheGroup'sobjectiveinliquidity managementistoensuretheavailabilityofadequatefundingtomeetitsneedstofunddepositwithdrawals andotherliabilitiesastheyfalldueandtoensurethatitisabletomeetitsobligationstofundloanorigina- tionsandcommitmentsandtotakeadvantageofnewinvestmentopportunities. FinancingandAccountingDepartmentoftheGroupmanagesitsliquidityriskvia: Dailyfundingmanagementthroughmonitoringexpectedcashflowstreams; 绎 ★ Maintainingaportfolioofhighlymarketableassetsthatcaneasilybeliquidatedasprotectionagainst anyunforeseeninterruptiontocashflow; ★ Monitoringtheliquidityratiosagainstinternalandregulatoryrequirements; ★ Maintainingstabilityofdepositbase; ★ Settingtargetratioonassetsandliabilitiesstructureinaccordancewithregulatoryrequirementsand businessplan. 4.1Financialinstrumentsanalyzingliquidity (1)Analysisoftheundiscountedcontractualcashflows Thetablesbelowpresentthecashflowsofnon-derivativefinancialassetsandfinancialliabilitiesbyre- mainingcontractualmaturitiesattheendofeachreportingperiod.Theamountsdisclosedinthetablesare theundiscountedcontractualcashflows.

301 2012 Annual Report 8) 3) 302 159,506 Total (142,362) (185,311) 2,000,862 6,930,262 7,756,616 8,700,501 18,857,057 37,029,130 61,388,834 17,500,722 15,737,656 33,348,459 (116,096,42 (177,934,29 193,671,949 (40,632,156) (20,878,036) ------40,900 (Unit:RMBthousand) 197,055 undated Pastdue/ 18,530,478 18,530,478 18,292,523 ------(541) (2,962) (57,321) (60,824) years Over5 3,324,456 1,076,713 3,531,871 4,150,172 1,593,000 13,676,212 13,615,388 ------(15,387) 4,608,004 3,350,933 2,937,847 2,497,045 1,859,103 8,525,871 23,778,803 17,163,364 (6,600,052) (6,615,439) 1to5years - - - - 336,538 898,565 (18,043) 3to12 months ts ialStatemen totheFinanc Notes 6,993,640 5,760,882 2,376,100 Asat31December2012 24,866,383 10,285,335 21,172,513 65,696,316 (23,462,798) (10,445,335) (24,776,500) (58,702,676) - - 10,634 82,442 (3,493) 120,200 210,156 (50,292) 1to3 months (120,200) 5,092,055 2,042,569 2,872,298 23,275,170 33,705,524 15,491,298 (5,367,830) (12,672,411) (18,214,226) - - 664 678 74,173 (92,070) month (128,305) 3,325,320 2,000,862 8,451,522 2,635,047 5,827,155 5,269,625 21,757,891 (2,758,543) (2,639,317) Lessthan1 (15,930,736) (10,312,501) ------85,333 (17,121) 1,396,090 16,526,725 15,045,302 (1,857,089) Ondemand (76,536,182) (78,410,392) (61,883,667) TheGroup throughprofitorloss Placementswithbanks Totalfinancialassets Duetocustomers Otherfinancialliabilities Totalfinancialliabilities Netposition Financialassetsheldunderresaleagreements Loansandadvancestocustomers Available-for-salefinancialassets Held-to-maturityinvestments Debtssecuritiesclassifiedasreceivables Otherfinancialassets Borrowingsfromcentralbank Depositsfrombanksandotherfinancialinstitutions Financialassetssoldunderrepurchaseagreements Cashandbalanceswithcentralbank Depositswithbanksandotherfinancialinstitutions Financialassetsatfairvalue NotestotheFinancialStatements

Asat31December2011

Lessthan1 1to3 3to12 Over5 Pastdue/ Ondemand 1to5years Total month months months years undated

Cashandbalanceswithcentralbank 12,096,587 - 10,269 - - - 16,160,742 28,267,598

Depositswithbanksandotherfinancialinstitutions 719,104 14,232,999 5,304,467 16,978,636 12,861,237 - - 50,096,443

Financialassetsatfairvalue - 2,422,563 4,106,986 6,958,510 3,116,403 2,168,971 - 18,773,433 throughprofitorloss

Financialassetsheldunderresaleagreements - 10,222,248 4,601,240 4,670,904 - - - 19,494,392

Loansandadvancestocustomers - 1,513,934 3,599,140 14,337,603 5,451,666 3,026,677 345,721 28,274,741

Available-for-salefinancialassets - 678 63,970 360,572 2,364,511 3,705,204 40,900 6,535,835

Held-to-maturityinvestments - - 3,860 333,972 440,003 587,580 - 1,365,415

Debtssecuritiesclassifiedasreceivables - 17,313 3,827,226 3,584,453 70,150 - - 7,499,142

Otherfinancialassets 247,157 83,597 - - - - - 330,754

Totalfinancialassets 13,062,848 28,493,332 21,517,158 47,224,650 24,303,970 9,488,432 16,547,363 160,637,753

Borrowingsfromcentralbank - - (30,463) (30,724) - - - (61,187)

Depositsfrombanksandotherfinancialinstitutions (37,957) (8,048,318) (9,313,484) (9,723,602) (2,312,151) - - (29,435,512)

Financialassetssoldunderrepurchaseagreements - (14,109,484) (4,601,240) (4,670,904) - - - (23,381,628)

Duetocustomers (67,877,589) (1,903,634) (4,526,037) (16,949,083) (3,438,870) (8,353) - (94,703,566)

Otherfinancialliabilities (12,923) (469,075) (2,751) (6,068) (3,021) - - (493,838)

Totalfinancialliabilities (67,928,469) (24,530,511) (18,473,975) (31,380,381) (5,754,042) (8,353) - (148,075,731)

Netposition (54,865,621) 3,962,821 3,043,183 15,844,269 18,549,928 9,480,079 16,547,363 12,562,022

303 2012 Annual Report 304 155,858 Total (179,703) 2,000,862 6,930,262 7,756,616 8,700,501 60,843,233 17,500,722 18,857,057 35,224,525 14,824,056 33,012,149 (114,443,048) (176,157,729) 190,981,785 (40,656,942) (20,878,036) ------40,900 188,530 undated Pastdue/ 18,297,139 18,297,139 18,067,709 ------(541) (2,962) (57,308) (60,811) years Over5 1,076,713 3,322,390 3,531,871 4,150,172 1,593,000 13,674,146 13,613,335 ------(10,054) 8,525,871 3,350,933 4,385,095 2,937,847 2,497,045 1,859,103 23,555,894 17,002,022 (6,543,818) (6,553,872) 1to5years - - - 336,538 898,565 (17,853) 3to12 months ts ialStatemen totheFinanc Notes 6,419,126 5,760,882 2,376,100 Asat31December2012 24,926,485 10,285,335 20,260,862 64,844,767 (23,339,111) (10,445,335) (24,623,342) (58,425,641) - - 10,546 82,442 (3,493) 120,200 210,156 1to3 months (120,200) 2,042,569 4,608,541 2,872,298 23,243,661 15,204,072 33,190,413 (5,240,298) (12,622,350) (17,986,341) - - 664 678 74,173 month (128,305) 3,354,447 2,000,862 5,806,386 5,269,625 8,451,522 2,459,107 21,611,078 (2,639,729) Lessthan1 (2,724,157) (15,804,692) (10,312,501) ------81,685 792,769 (17,036) 15,808,348 14,933,894 (2,055,211) Ondemand (77,326,372) (61,518,024) (75,254,125) TheBank throughprofitorloss Placementswithbanks Duetocustomers Otherfinancialliabilities Totalfinancialliabilities Netposition Loansandadvancestocustomers Available-for-salefinancialassets Held-to-maturityinvestments Debtssecuritiesclassifiedasreceivables Otherfinancialassets Totalfinancialassets Depositsfrombanksandotherfinancialinstitutions Financialassetssoldunderrepurchaseagreements Cashandbalanceswithcentralbank Depositswithbanksandotherfinancialinstitutions Financialassetsatfairvalue Financialassetsheldunderresaleagreements NotestotheFinancialStatements

Asat31December2011

Lessthan1 1to3 3to12 Over5 Pastdue/ Ondemand 1to5years Total month months months years undated

Cashandbalanceswithcentralbank 11,907,119 - 10,172 - - - 16,112,679 28,029,970

Depositswithbanksandotherfinancialinstitutions 488,707 14,313,259 5,326,437 17,033,614 12,861,237 - - 50,023,254

Financialassetsatfairvalue - 2,422,563 4,106,986 6,958,510 3,116,403 2,168,971 - 18,773,433 throughprofitorloss

Financialassetsheldunderresaleagreements - 10,222,248 4,601,240 4,670,904 - - - 19,494,392

Loansandadvancestocustomers - 1,490,416 3,462,132 13,934,833 5,321,578 3,023,376 332,405 27,564,740

Available-for-salefinancialassets - 678 63,970 360,572 2,364,511 3,705,204 40,900 6,535,835

Held-to-maturityinvestments - - 3,860 333,972 440,003 587,580 - 1,365,415

Debtssecuritiesclassifiedasreceivables - 17,313 3,827,226 3,584,453 70,150 - - 7,499,142

Otherfinancialassets 246,920 83,597 - - - - - 330,517

Totalfinancialassets 12,642,746 28,550,074 21,402,023 46,876,858 24,173,882 9,485,131 16,485,984 159,616,698

Depositsfrombanksandotherfinancialinstitutions (209,659) (8,048,318) (9,313,484) (9,723,602) (2,312,151) - - (29,607,214)

Financialassetssoldunderrepurchaseagreements - (14,109,484) (4,601,240) (4,670,904) - - - (23,381,628)

Duetocustomers (67,138,969) (1,895,769) (4,459,003) (16,902,440) (3,429,679) (8,352) - (93,834,212)

Otherfinancialliabilities (11,159) (469,075) (2,751) (6,068) (3,021) - - (492,074)

Totalfinancialliabilities (67,359,787) (24,522,646) (18,376,478) (31,303,014) (5,744,851) (8,352) - (147,315,128)

Netposition (54,717,041) 4,027,428 3,025,545 15,573,844 18,429,031 9,476,779 16,485,984 12,301,570

Assetsavailabletomeetalloftheliabilitiesandcreditcommitmentsincludecashandbalanceswith centralbank,depositswithbanks,placementwithbanks,financialassetsatfairvaluethroughprofitorloss andfinancialassetsheldunderresaleagreement.Inthenormalcourseofbusiness,themajorityofcustomer depositsrepayableondemandareexpectedtoberevolved.Inaddition,available-for-salefinancialassets canbedisposedoftorepaythematuredliabilitiesifnecessary.

305 2012 Annual Report 3,085 306 Total 25,327 2,573,692 4,154,309 7,081,507 325,094 - - - - 281,747 281,747 Over5Years - - - 6,345 410,033 416,378 Asat31December2011 1to5Years 3,085 18,982 325,094 1,881,912 4,154,309 6,383,382 Upto1Year 4,281 49,806 Total 545,657 116,498 ts ialStatemen totheFinanc Notes 2,289,479 3,005,721 - - - - 200 200 Over5Years - - - 3,731 114,178 117,909 Asat31December2012 1to5Years 550 49,806 431,279 116,498 2,289,479 2,887,612 Upto1Year (1)Foreigncurrencyrisk (2)Interestraterisk 5.Marketrisk oftheGroup'sonandoff-balancesheetactivities,arisingfrom Marketriskistheriskofloss,inrespect teeundertheBoardofDirectorsapprovestheoverallmarket TheGroup'sriskmanagementcommit igncurrencyexposures, TheforeigncurrencyriskoftheGroupistheriskoflossinrespectofitsfore denominatedinforeign TheGroupconductsitsbusinessesmainlyinRMB,withsmalltransactions ontractualmaturitiesor TheinterestrateriskoftheGrouparisesfromthemis-matchesbetweenc mainlydenominatedin Theinterest-generatingassetsandinterest-bearingliabilitiesoftheGroupare titem 4.2Off-balanceshee rsof ommitments,lettersofguarantee,lette lancesheetitemsmainlyincludeloanc TheGroup'soff-ba Bank TheGroupandthe Letterofguarantee Acceptances Creditcardcommitments Total Loancommitment Letterofcredit foreignexchangerates. adversemovementsininterestratesand ncialMarketDepartmentwithinriskmanagementandmonitoring riskpoliciesandprocedures.TheFina nitoringthemarketriskoftheGroupandreportingtheriskexpo- lineoftheGroupisresponsibleformo surestoseniormanagementtimely. abilities,whichresultsfrom arisingfromtransactionstakenonforeigncurrencydenominatedassetsandli movementsinforeigncurrencyexchangerates. immaterial. currencies.TheGroupconsidersthattheforeigncurrencyriskoftheGroupis roupmonitorstherepricing re-pricingofinterest-generatingassetsandinterest-bearingliabilities.TheG stemandadjuststhepropor- timegapoftheinterestsensitiveassetsandliabilitiesthroughthegapanalysissy trateonitsowninitiative. tionofinterest-generatingassetsbetweenfixedinterestrateandfloatinginteres acapforRMBdepositrates RMB.ThePBOCestablishesRMBbenchmarkinterestrateswhichinclude andafloorforRMBloanrates. -balance sbelowsetforththeamountsoftheoff ndcreditcardcommitments.Thetable credit,acceptancesa iningmaturity. sheetitemsbyrema NotestotheFinancialStatements

Thetablesbelowsummarisesthecontractualrepricingormaturitydate,whicheverisearlier,ofthe Group'sfinancialassetsandliabilities: TheGroup (Unit:RMBthousand)

Asat31December2012

Lessthan1 3to12 Non-interest 1to3months 1to5years Over5years Total month months bearing

Cashandbalanceswithcentralbank 30,927,363 - - - - 2,410,462 33,337,825

Depositswithbanksandotherfinancialinstitutions 22,565,918 10,329,138 20,209,396 6,946,000 - - 60,050,452

Placementswithbanks 2,000,000 - - - - - 2,000,000

Financialassetsatfairvalue 5,000,000 1,929,360 5,637,358 2,476,945 945,833 - 15,989,496 throughprofitorloss

Financialassetsheldunderresaleagreements 8,364,233 118,867 10,036,394 - - - 18,519,494

Loansandadvancestocustomers 7,570,821 3,818,509 23,063,330 84,531 55,009 - 34,592,200

Available-for-salefinancialassets - 119,652 276,510 1,828,073 2,871,319 40,900 5,136,454

Held-to-maturityinvestments - 199,965 689,865 1,455,975 3,160,837 - 5,506,642

Debtssecuritiesclassifiedasreceivables - 2,572,680 2,208,481 1,281,916 1,182,290 - 7,245,367

Otherfinancialassets - - - - - 1,279,114 1,279,114

Totalfinancialassets 76,428,335 19,088,171 62,121,334 14,073,440 8,215,288 3,730,476 183,657,044

Borrowingsfromcentralbank - (91,050) (50,000) - - - (141,050)

Depositsfrombanksandotherfinancialinstitutions (3,619,086) (12,451,360) (23,603,500) - (300,000) - (39,973,946)

Financialassetssoldunderrepurchaseagreements (10,234,644) (118,906) (10,200,723) - - - (20,554,273)

Duetocustomers (77,762,554) (5,232,532) (23,935,615) (5,684,084) (39,012) (1,441,187) (114,094,984)

Otherfinancialliabilities - - - - - (1,341,986) (1,341,986)

Totalfinancialliabilities (91,616,284) (17,893,848) (57,789,838) (5,684,084) (339,012) (2,783,173) (176,106,239)

Interestrategap (15,187,949) 1,194,323 4,331,496 8,389,356 7,876,276 947,303 7,550,805

307 2012 Annual Report 308 983,561 (60,000) Total 1,392,164 4,511,313 7,308,937 4,538,047 28,257,329 47,491,071 16,786,842 18,966,897 25,131,807 (1,629,203) 150,829,921 (28,359,816) (22,869,886) (93,372,969) (146,291,874) ------40,900 583,693 (559,002) 1,392,164 2,771,898 1,338,834 bearing (2,188,205) (1,629,203) Non-interest ------54,058 (6,530) (6,530) 325,019 4,914,978 1,813,664 2,722,237 4,908,448 Over5years ------64,472 355,938 100,166 2,178,679 1,386,556 16,289,618 12,203,807 11,297,279 (2,982,339) (4,992,339) (2,010,000) 1to5years - - - ts ialStatemen totheFinanc Notes Asat31December2011 160,692 302,604 (30,000) 6,499,975 4,510,238 3,491,947 3to12 months 46,525,717 15,623,489 15,936,772 16,438,638 (9,296,390) (4,516,748) (16,243,941) (30,087,079) - - - - 200,928 (30,000) 4,761,556 3,917,243 4,461,453 2,839,158 3,752,518 2,002,798 19,932,856 (4,427,769) (9,008,000) (4,464,289) (17,930,058) 1to3months ------month 2,377,281 9,995,206 6,201,653 60,394,854 26,918,495 14,902,219 (8,045,426) Lessthan1 (69,153,388) (91,087,663) (30,692,809) (13,888,849) throughprofitorloss Otherfinancialassets Duetocustomers Otherfinancialliabilities Totalfinancialliabilities Totalfinancialassets Interestrategap Held-to-maturityinvestments Debtssecuritiesclassifiedasreceivables Borrowingsfromcentralbank Depositsfrombanksandotherfinancialinstitutions Financialassetssoldunderrepurchaseagreements Cashandbalanceswithcentralbank Depositswithbanksandotherfinancialinstitutions Financialassetsatfairvalue Financialassetsheldunderresaleagreements Loansandadvancestocustomers Available-for-salefinancialassets NotestotheFinancialStatements

TheBank (Unit:RMBthousand)

Asat31December2012

Lessthan1 3to12 Non-interest 1to3months 1to5years Over5years Total month months bearing

Cashandbalanceswithcentralbank 30,628,764 - - - - 2,372,839 33,001,603

Depositswithbanksandotherfinancialinstitutions 22,116,542 10,271,855 20,268,396 6,946,000 - - 59,602,793

Placementswithbanks 2,000,000 - - - - - 2,000,000

Financialassetsatfairvalue 5,000,000 1,929,360 5,637,358 2,476,945 945,833 - 15,989,496 throughprofitorloss

Financialassetsheldunderresaleagreements 8,364,233 118,867 10,036,394 - - - 18,519,494

Loansandadvancestocustomers 7,536,388 3,684,585 22,135,415 84,531 55,009 - 33,495,928

Available-for-salefinancialassets - 119,652 276,510 1,828,073 2,871,319 40,900 5,136,454

Held-to-maturityinvestments - 199,965 689,865 1,455,975 3,160,837 - 5,506,642

Debtssecuritiesclassifiedasreceivables - 2,572,680 2,208,481 1,281,916 1,182,290 - 7,245,367

Otherfinancialassets - - - - - 1,257,884 1,257,884

Totalfinancialassets 75,645,927 18,896,964 61,252,419 14,073,440 8,215,288 3,671,623 181,755,661

Depositsfrombanksandotherfinancialinstitutions (3,818,139) (12,401,360) (23,603,500) - (300,000) - (40,122,999)

Financialassetssoldunderrepurchaseagreements (10,234,644) (118,906) (10,200,723) - - - (20,554,273)

Duetocustomers (76,447,182) (5,106,787) (23,787,349) (5,634,017) (39,002) (1,441,187) (112,455,524)

Otherfinancialliabilities - - - - - (1,331,574) (1,331,574)

Totalfinancialliabilities (90,499,965) (17,627,053) (57,591,572) (5,634,017) (339,002) (2,772,761) (174,464,370)

Interestrategap (14,854,038) 1,269,911 3,660,847 8,439,423 7,876,286 898,862 7,291,291

309 2012 Annual Report 310 983,561 258,943 258,943 Total (237,567) (237,567) 1,388,324 4,511,313 7,308,937 4,349,550 28,019,798 47,415,649 16,786,842 18,966,897 24,503,271 (1,626,173) 149,884,592 (92,507,548) (28,531,435) (22,869,886) (145,535,042) comprehensiveincome comprehensiveincome RMBthousand RMBthousand ------Other Other 2011 2011 40,900 507,050 (559,002) 1,388,324 2,692,225 1,263,001 bearing (2,185,175) (1,626,173) 434,484 428,248 Non-interest (428,248) (434,484) ------RMBthousand RMBthousand 54,058 (6,529) (6,529) Netinterestincome Netinterestincome 325,019 4,914,978 1,813,664 2,722,237 4,908,449 Over5years - - - - - 273,605 273,605 (254,689) (254,689) 64,472 355,938 100,166 comprehensiveincome comprehensiveincome 2,178,679 1,386,556 RMBthousand RMBthousand 16,289,618 12,203,807 11,305,309 (2,974,309) (4,984,309) (2,010,000) Other Other 1to5years 2012 2012 - - - ts ialStatemen totheFinanc Notes Asat31December2011 597,964 588,140 160,692 302,604 (597,964) (588,140) 6,499,975 4,510,238 3,491,947 3to12 months 46,111,612 15,677,489 15,468,667 16,099,611 (9,296,390) (4,516,748) (16,198,863) (30,012,001) RMBthousand RMBthousand - - - - Netinterestincome Netinterestincome 200,928 4,782,556 3,917,243 4,461,453 2,713,302 3,752,518 1,994,130 19,828,000 (4,361,581) (9,008,000) (4,464,289) (17,833,870) 1to3months - - - - - month 2,377,281 9,995,206 6,167,078 60,048,159 26,756,797 14,751,797 (8,217,045) Lessthan1 (68,407,264) (90,513,158) (30,464,999) (13,888,849) TheBank tialimpactofaparallelupwardordownwardshiftof100basis Thefollowingtableillustratesthepoten TheGroup throughprofitorloss Otherfinancialassets Duetocustomers Otherfinancialliabilities Totalfinancialliabilities +100basispoints Totalfinancialassets Interestrategap +100basispoints -100basispoints -100basispoints Held-to-maturityinvestments Debtssecuritiesclassifiedasreceivables Depositsfrombanksandotherfinancialinstitutions Financialassetssoldunderrepurchaseagreements Cashandbalanceswithcentralbank Depositswithbanksandotherfinancialinstitutions Financialassetsatfairvalue Financialassetsheldunderresaleagreements Loansandadvancestocustomers Available-for-salefinancialassets thercomprehensiveincome, pointsinallfinancialinstruments'yieldcurvesonthenetinterestincomeando dofeachreportingperiod. basedontheGroup'spositionsofinterest-bearingassetsandliabilitiesattheen NotestotheFinancialStatements

Thesensitivityanalysisonnetinterestincomeisbasedonreasonablypossiblechangesininterestrates withtheassumptionthatthestructureoffinancialassetsandfinancialliabilitiesheldattheendofeachre- portingperiodremainunchanged. Theeffectonothercomprehensiveincomerepresentstheimpactonthefairvalueoffixedrateavail- able-for-salefinancialassetsoutstandingattheendofeachreportingperiod. Theassumptionabovesupposesthatinterestrateofassetsandliabilities(exceptdemanddeposit)in variousperiodsparallelshiftupwardordownwardssimultaneously,therefore,itdoesn'treflecttheinfluences thatsomeinterestratesarechangedbuttheotherinterestratesareunchanged.Thisassumptionisalsobased onothersimplifiedfactorsaswell,includingthatallthepositionswillbeheldtomaturity.TheGroupex- pectsthatthechangeamountofsensitivityanalysisisnotmaterialunderthecircumstancethatthepositionis notheldtomaturity. TheassumptiondoesnottakeintoaccounttheGroup'scapitalandinterestrateriskmanagementpoli- cy.Thereforetheaboveanalysismaydifferfromtheactualsituation. Inaddition,theimpactofinterestratefluctuationisonlyforillustrativepurpose,showingtheantici- patednetinterestincomeandothercomprehensiveincomeoftheGroupundereachoftheestimatedin- comesituationandthecurrentinterestraterisksituation.Theresultdoesnottakeintoaccounttherisk managementproceduresthatmanagementmaytaketomitigatetheinterestraterisk. 6.Capitalmanagement TheGroup'sobjectivesoncapitalmanagementareto: ★ TocomplywiththecapitalrequirementssetbytheregulatorsoftheGroup; ★ TosafeguardtheGroup'sabilitytocontinueasagoingconcernsothatitcancontinuetoprovide returnsforshareholdersandbenefitsforotherstakeholders; ★ Tomaintainastrongcapitalbasetosupportthedevelopmentofitsbusiness. TheCBRCrequiresthatthecapitaladequacyratioandcorecapitaladequacyratioforcommercial banksshallnotfallbelow8%and4%respectively.Forcommercialbanks,supplementarycapitalshallnot exceed100%ofcorecapital.Atpresent,theGroupisfullycompliantwithlegalandregulatoryrequire- ments.From1January2013,theGroupwillcomplywiththenewmeasuresissuedbyCBRCfortheman- agementoncapitaladequacyratiosandapplicationofregulatorycapital. Theon-balancesheetrisk-weightedassetsaremeasuredbasedondifferentriskratingsthataredeter- minedaccordingtothecreditworthinessofeachassetandcounterparty,takingintoaccountanyeligible collateralorguarantees.Asimilartreatmentisadoptedforoff-balancesheetexposure,withadjustments madetoreflectthemorecontingentnatureofanypotentiallosses.Marketriskcapitaladjustmentiscalcu- latedusingthestandardisedapproach. CapitaladequacyandtheutilisationofregulatorycapitalarecloselymonitoredbytheGroup'sman- agementinaccordancewiththeguidelinesdevelopedbytheBaselCommitteeandrelevantregulations promulgatedbytheCBRC.TherequiredinformationisfiledwiththeCBRCbytheBankquarterly.

311 2012 Annual Report 312 998,032 998,032 92,535,994 93,401,415 FairValue FairValue FairValue FairValue 983,561 983,561 Asat31December2011 Asat31December2011 Asat31December2011 Asat31December2011 92,507,548 93,372,969 Carryingamount Carryingamount Carryingamount Carryingamount 5,621,808 5,621,808 112,491,686 114,131,146 FairValue FairValue FairValue FairValue ts ialStatemen totheFinanc Notes 5,506,642 5,506,642 Asat31December2012 Asat31December2012 Asat31December2012 Asat31December2012 112,455,524 114,094,984 Carryingamount Carryingamount Carryingamount Carryingamount iesaredeterminedinaccordancewith herfinancialassetsandfinancialliabilit thefairvalueofot tandardtermsandconditionsandtraded ncialassetsandfinancialliabilitieswiths thefairvalueoffina TheBank ★ gamountsandfairvaluesofthosefinancialassetsandliabilities Thetablesbelowsummarisesthecarryin TheGroup OFFINANCIALINSTRUMENTS XIII.FAIRVALUE eterminedasfollows: ancialassetsandfinancialliabilitiesared Thefairvalueoffin ★ Held-to-maturityinvestments Duetocustomers Held-to-maturityinvestments Duetocustomers entoffinancialpositionattheirfairvalue.Financialassetsandlia- notpresentedontheconsolidatedstatem approximatesfairvalue,suchasbalanceswithcentralbanks,deposits bilitiesforwhichthecarryingamounts ns,placementswithbanks,financialassetsheldunderresaleagree- withbanksandotherfinancialinstitutio rs,debtsecuritiesclassifiedasreceivables,borrowingsfromcentral ments,loansandadvancestocustome ancialinstitutions,andfinancialassetssoldunderrepurchaseagree- bank,depositsfrombanksandotherfin w. mentsarenotincludedinthetablesbelo srespec- quotedmarketbidpricesandaskprice ketsaredeterminedwithreferenceto inactiveliquidmar tively; iscountedcashflowanalysisusingpricesfromobservablecurrent generallyacceptedpricingmodelsord rsimilarinstruments;Wheresuchpricesarenotavailable,discount- markettransactionsanddealerquotesfo gtheapplicableyieldcurveforthedurationoftheinstruments,to edcashflowanalysisisadoptedbyusin theextentpossible. NotestotheFinancialStatements

Thefollowingtableprovidesananalysisoffinancialinstrumentsthataremeasuredsubsequenttoinitial recognitionatfairvalue,groupedintoLevels1to3basedonthedegreetowhichthefairvalueisobserv- able. ★ Level1fairvaluemeasurementsarethosederivedfromquotedprices(unadjusted)inactivemarket foridenticalassetsorliabilities. ★ Level2fairvaluemeasurementsarethosederivedfrominputsotherthanquotedpricesincluded withinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)orindirectly(i.e. derivedfromprices). ★ Level3fairvaluemeasurementsarethosederivedfromvaluationtechniquesthatincludeinputsfor theassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs). TheGroupandtheBank

Asat31December2012

Level1 Level2 Level3 Total

RMBthousand RMBthousand RMBthousand RMBthousand

Financialassetsatfairvaluethroughprofitorloss - 15,989,496 - 15,989,496

Available-for-salefinancialassets - 5,095,554 40,900 5,136,454

Total - 21,085,050 40,900 21,125,950

Asat31December2011

Level1 Level2 Level3 Total

RMBthousand RMBthousand RMBthousand RMBthousand

Financialassetsatfairvaluethroughprofitorloss - 16,786,842 - 16,786,842

Available-for-salefinancialassets - 4,470,413 40,900 4,511,313

Total - 21,257,255 40,900 21,298,155

TherewerenotransfersbetweenLevel1and2duringyearsended31December2011and2012. TherewerenochangesofLevel3duringyearsended31December2011and2012. XIV.EVENTAFTERTHEBALANCESHEETDATE ExceptfortheprofitappropriationplaninNoteVIII.29,upto26April2013,therearenoeventsof theGroupandtheBankafterthebalancesheetdatewhichshouldbedisclosed. XV.APPROVALOFFINANCIALSTATEMENT ThefinancialstatementwasapprovedbytheBoardoftheBankon26April2013.

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