2018 Interim Report

Co., Ltd. INTERIM REPORT jiang Jiu f 2018 o Code: 6190 司九江銀行股份有限公 Bank incorporated in the People’s (A joint stock company limited liability) Republic of China with Stock

九江銀行股份有限公司 Bank of Jiujiang Co., Ltd. Interim Report 2018 中期報告中期報告 Co., Ltd. 2018 jiang Jiu 6190 f ： o 股份代號司九江銀行股份有限公 Bank （於中華人民共和國註冊成立的股份有限公司） 2018 Interim Report

Content

Company Profile 2

Accounting Data and Key Financial Indicator Highlights 4

Management Discussion and Analysis 7

Share Capital Changes and Shareholders 60

Directors, Supervisors, Senior Management, Staff and Institution Condition 65

Corporate Governance 79

Significant Issues 83

Organizational Chart 88

Report on Review of Condensed Consolidated Financial Statements 89

Condensed Consolidated Statement of Profit or Loss 90

Condensed Consolidated Statement of Financial Position 91

Condensed Consolidated Statement of Changes in Equity 92

Condensed Consolidated Statement of Cash Flows 93

Notes to the Condensed Consolidated Financial Statements 95

Definition 150

1 BANK OF JIUJIANG Legal 1. Company Profile 2 Legal 九江銀行股份有限公司 Bank Number 9136040070552834XQ The H-share LIU Legal No. Registered B0348H236040001 operations: Unified 6190 Stock BANK OFJIUJIANG Stock TONG Board TONG Joint PAN Authorized Jiujiang (Postcode: 332000)

( Xianting Stock Basics 619, ( Ming company of name name representative: code: short secretary: ( Faping ( Faping social

exchange: Jiujiang

of Changhong City, Exchange representatives: address 潘明),

in in name: license 劉羨庭) credit 童發平) 童發平), Chinese: English: secretaries:

Co., Jiangxi TONG and

code: of

for Ltd. Street, ( NG WingYan Hong

office ( Faping

financial Province,

Kong Lianxi address: 童發平)

business Limited

District,

伍穎欣) China

Principal ABCI Compliance Clifford H-share PRC Deloitte ToucheTohmatsu International auditor: Partnership) Public Accountants LLP (Special General Computershare office: Hong 律師事務所) Jiangxi Yangmingyang Law Firm ( Domestic Limited Corporation China http://www.hkexnews.hk Exchange for publicationofthisreport: HKEXnews websiteof the HongKongStock Bank Contact East, WanChai,HongKong 40/F, Sunlight Tower, 248 Queen’s Road Tel: Province, Street, Deloitte Domestic auditor: Website: Email: Fax: +86 +86 legal of Capital

Kong

[email protected] Securities Lianxi Chance Jiujiang

address: (792) business http://www.jjccb.com/ China (Postcode:332000) (792) 8325019 securities

share advisor: Touche legal advisor: Limited Limited

District, 7783000-1101 Hong depository: Mansion, advisor:

address Depository

(CSDC) Tohmatsu Certified registrar and transfer Kong

Jiujiang No. in Investor 619, Hong

and City, Changhong 江西陽明陽

Kong: Clearing Services

Jiangxi

2018 Interim Report

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a Approved 2. (“Bank 2000 staying and all shareholders, as well as the united efforts and innovation of the staff of the Bank, and innovation of the staff as well as the united efforts and all shareholders, the Since development can be characterized as having “low having as characterized be can development developed into a As and department of department officially fostering institutions controls and consolidates 18 globally balance and Xiushui Jiuyin As Bank IFRS 9 Financial Instruments, the Instruments, Financial 9 IFRS middle allowance coverage in to composed Kowloon of BANK OF JIUJIANG unless otherwisestated. accordance with International Financial Reporting Standards and expressed in Renminbi to as the “Group”) set forth in this interim report is prepared on a consolidated basis in The financial information of the Bank and its subsidiaries (hereinafter collectively referred Accounting Data and Key Financial Indicator Highlights 4 Return onaveragetotalassets Profitability indicators(%) Gains pershare Operating expenses Operating income Net feeandcommissionincome Net interestspread Cost-to-income ratio Net feeandcommissionincometo Net interestmargin Return onaverageequity

Net profitattributabletoshareholdersof Net assetspershareattributabletothe Calculated onapersharebasis(RMB) Net profit Profit beforetax Impairment lossesonassets Net interestincome Results ofoperations operating income the Bank Bank’s shareholders (4) (3) (5) (2) (1)

(in millionsofRMB,exceptpercentages)

For thesixmonths (1,015.3) (1,180.2) 3,495.8 1,055.7 1,035.9 1,309.2 2,141.0 ended June30, 138.0 28.28 11.62 2018 1.06 3.95 2.44 2.26 0.75 9.09

(1,068.2) 2,646.5 2,651.4 (717.2) 149.9 26.43 664.8 679.2 867.9 2017 0.66 8.70 5.66 2.29 2.21 0.55 8.57

period oflastyear Rate ofchanges(%) Rate ofchanges(%) Change overthe corresponding Changes (19.3) (1.71) 58.8 32.1 2.92 1.85 0.15 0.05 0.20 58.8 52.5 50.8 10.5 41.6 (7.9) 6.0

2018 Interim Report 5 6.3 6.3 8.0 0.0 3.3 6.0 5.9 0.03 0.05 4.01 15.1 (0.67) Changes Changes last year with the end of Change over the end of the period Rate of changes (%)

1.62 3.11 2017 57.19 507.7 192.00 2,000.0 99,528.2 17,143.5 17,651.2 271,254.1 253,602.8 179,636.6 December 31,

1.65 3.16 2018 61.20 524.6 191.33 2,000.0 18,176.3 18,700.9 June 30, 288,335.9 114,578.9 269,635.0 193,926.1 (in millions of RMB, except percentages) (in millions of RMB,

(8) (6) (7) Bank

Non-performing loan ratio Non-performing loan (%) Asset quality indicators Allowance to gross loan ratio General allowance ratio Other indicator (%) Loan to deposit ratio Volume indicator Total assets Including: Net loan products Total liabilities Including: Taking deposits Share capital Equity attributable to shareholders of the Equity attributable to shareholders of the Total equity Non-controlling interests BANK OF JIUJIANG (5) (1) Notes: Accounting DataandKeyFinancialIndicatorHighlights 6 (8) (7) (6) (3) (4) (2)

interest-earning assets. Calculated bydividingallowanceforimpairmentlossesonloansgrosstocustomers. Calculated bydividingallowanceforimpairmentlossesonloanstotalnon-performingloans. Calculated bydividingtotalnon-performingloansgrosstocustomers. Calculated bydividingoperatingexpenses,excludingbusinesstaxandsurcharges,income. Calculated of Calculated asthedifferencebetweenaverageyieldontotalinterest-earningassetsandcost period. balance oftotalequityattributabletotheShareholdersCompanyatbeginningandend Represents netprofitattributabletotheShareholdersofBankforperiodasapercentageaverage Represents netprofitfortheperiodas liabilities. the endofperiod. total interest-bearing liabilities, and based on daily average interest-earning assets and interest-bearing by dividing net interest income by average interest-earning assets, and based on daily average a percentageof average balance oftotal assets at thebeginningand 2018 Interim Report 7 continued to enhance. As at June 30, 2018, the operating income of the the of income operating the 2018, 30, June at As enhance. to continued overall asset quality has improved. As at June 30, 2018, before applying IFRS 9 9 IFRS applying before 2018, 30, June at As improved. has quality asset overall The Financial Instruments, the balance of non-performing loans of the Bank was RMB1.960 Financial Instruments, the balance of non-performing loans of was ratio coverage allowance the 1.65%, was ratio loan non-performing the billion, 191.33% and the allowance to gross loan ratio was 3.16%. Profitability Bank was RMB3.496 billion, the net fee and commission income was RMB138 million, Bank was RMB3.496 billion, the net fee and commission income profit the net was 0.75% and assets was 11.62%, return on total assets net return on was RMB1.056 billion. Operational overview The scale of results recorded a steady expansion. As at June 30, 2018, total assets of The scale of results recorded a billion, an increase of 6.3% from the beginning of the Bank amounted to RMB288.336 to RMB193.926 billion, an increase of 8.0% from the period; total deposits amounted the beginning of the period.

2) (3) (1) 2. During the reporting period, the economies of the major developed countries in the world world the in countries developed major the of economies the period, reporting the During remained recovery of statuses their and momentum, growth positive a show to continued the with tense, increasingly became however, situation, economic global The unchanged. heightening, policies monetary in uncertainties apparent, more growing wars trade of risks bring all would which intensifying, tensions geopolitical as well as rising, levels debt to the economic development. uncertainty factors development positive a showed and stable remained China of economy overall The adjustments structural economic promoting Through 2018. of half first the in momentum growth The stabler. became level employment and inflation the reform, supply-side a and (GDP) remained at the same level as last year at 6.8%. The rate of Gross Domestic Product was and steady was period same the during Province Jiangxi of growth economic overall was 2.2% which city increased by 9% year-on-year, the entire of GDP quality. The of good The banking industry of the entire province ran stably and higher than the national average. began Bank the institution, banking a As steady. remained quality asset the and soundly, gradually We supervision. strict under proactively development transformative for seek to our core business and our roots, and achieved transformation brought our operation back to growth to a high-quality development. step-by-step from a high-speed Management Discussion and Analysis and Discussion Management environment economic and financial 1. Historical ( BANK OF JIUJIANG liabilities for theperiodindicated. the average yield of interest-earning assets and the average cost ratio of interest-bearing bearing liabilities, the interest income and expenses of these assets and liabilities, and The following table sets forth the average balance of interest-earning assets and interest- 26.0%, whichaccountedfor95.6%ofoperating income. Financial Instruments) of RMB3.340 billion, a year-on-year increase of RMB689 million, or In thefirsthalfof2018,Bankachieved a netinterestincome(beforeapplyingIFRS9 3.1 year increaseof50.8%;anetprofitRMB1.056 billion,ayear-on-yearincreaseof58.8%. In thefirsthalfof2018,Bankachieveda pre-taxprofitofRMB1.309billion,ayear-on- 3. (4) Management DiscussionandAnalysis 8 Net gains/(losses)oninvestment Net feeandcommissionincome Net profit Income taxexpense Profit beforetax Other income,gainsorlosses Fee andcommissionexpense Share ofprofitassociates Impairment lossesonassets Operating expenses Operating income Net interestincome Interest expense Interest income Fee andcommissionincome

securities

& NationalInterbankFundingCenter. Dealer inInterbankRMBMarket2017”bytheChinaForeignExchangeTradeSystem moving up72placesfromthepreviousyear.Inaddition,Bankwasawarded“Active ranked 372ndinthe“Top1,000WorldBanks2018”rankingspublishedbyTheBanker, The brandimagehasimprovedsignificantly.Duringthereportingperiod,Bankwas Income statementanalysis Net interestincome,netspread andnetinterestmargin

(in millionsofRMB,exceptpercentages) 1102 1082 (112.0) (1,068.2) (1,180.2) 1053 772 (298.1) (717.2) (1,015.3) 3416 2976 (484.0) (2,937.6) (3,421.6) 1,055.7 1,309.2 ,0. 193 ,1. (1,205.5) 1,317.3 (109.3) 1,208.0 ,9. 2,646.5 3,495.8 ,4. ,5. (510.4) 2,651.4 2,141.0 ,6. 5,589.0 5,562.6 235 (203.1) (253.5) 138.0 215.9 (77.9) 2018 8.8 8.9 For thesixmonthsendedJune30,

149.9 664.8 867.9 179.0 (29.1) (45.5) 2017 6.8

Net change 390.9 441.3 849.3 (11.9) (48.8) (50.4) (26.4) 43(119.4) 54.3 36.9 2.1

Change 168.0 (19.3) 58.8 24.8 50.8 30.6 20.6 10.5 41.6 32.1 16.5 (7.9) (0.5) (%) 2018 Interim Report

9 (1) 4.14 2.34 2.61 1.37 4.82 1.57 3.29 4.09 5.63 4.05 4.97 5.25 5.61 1.94 Average rate (%) yield/interest

3.2 50.7 827.9 161.6 364.1 538.8 508.3 315.7 2.21 2017 2.29% 2,651.4 Interest income/ expense

273.8 balance Average

(1) 2.31 2.69 225,236.3 2,937.6 4.94 231,872.1 5,589.0 4.76 39,986.6 1.14 7,411.7 1.57 20,539.7 3.00 22,100.7 5.15 106,658.4 2,648.8 3.79 26,329.2 5.87 80,329.2 2,110.0 5.39 18,069.0 5.79 79,193.3 2,219.6 2.11 147,296.1 1,426.8 4.25 15,579.1 Average rate (%) yield/interest For the six months ended June 30, For the six months ended

(in millions of RMB, except percentages) (in millions of RMB, 9.1 50.5 966.0 202.1 176.6 765.8 470.2 290.1 2.26 2018 2.44% 3,340.3 Interest income/ expense

786.6 8,816.3 balance Average 40,594.7 75,533.7 2,217.5 25,719.2 11,781.1 40,413.3 17,431.6 13,657.2 254,704.9 3,421.6 273,543.5 6,761.9 115,947.0 2,983.3 105,629.4 3,055.8 187,885.3 1,979.8

(5)

(7) (6) (4) (2) (3) as receivables bank liabilities assets and other financial institutions Investments classified bank repurchase agreements Debt securities resale agreement customers and other financial assets and other financial institutions Borrowings from central Total interest-bearing Net interest income Net interest spread Total interest-earning Amounts due from banks Debt securities issued Balances with central Financial assets sold under Financial assets held under Assets Loans and advances to

Investments in securities Net interest margin Deposits from banks Liabilities Customer deposits

BANK OF JIUJIANG (6) (1) Notes: Management DiscussionandAnalysis 10 (7) ( (4) (3) (2) 5)

securities. Calculated bydividingnetinterestincomethedailyaveragebalanceoftotalinterest-earningassets. total interest-bearingliabilities. Calculated asthedifferencebetweenaverageyieldontotalinterest-earningassetsandcostof Consists institutions. Consists ofdepositswithbanksandotherfinancialinstitutionsplacements Consists primarilyofmandatoryreservedepositsandsurplusdeposits. PRC commercialbanks. as receivablesmainlyincludeassetmanagement,trustplansandotherwealthmanagementproductsissuedby Consists ofourholdingsinvestmentsclassifiedasreceivablesanddebtsecurities.Our Calculated bydividinginterestincome/expenseaveragebalance. of tier-two capital bonds issued, interbank negotiable certificates of deposit and asset-backed 2018 Interim Report (3) 11 Net increase/ (decrease)

(2) rate Increase/ in interest (decrease)

percentages) (1) 9.6 (9.9) (0.3) 6.0 (0.1) 5.9 12.6 125.5 138.1 40.8 (0.3) 40.5 (17.9) (20.2) (38.1) (38.9) 13.4 (25.5) 740.9230.7 95.3 103.9 836.2 334.6 393.2 159.9 553.0 202.9 281.2 484.0 288.2 (61.2) 227.0 801.2 (112.4) 688.9 (126.0) 233.5 107.5 (170.0) (17.5) (187.5) Scale 1,004.1 168.8 1,172.9 (in millions of RMB, except for the six months ended June 30 for the six months ended June Change in the current period from Change in the

the corresponding period last yearthe corresponding (4) (5) (7) (6) institutions Debt securities Investments classified as receivables Amounts due from banks and other financial Amounts due from banks and other Financial assets held under resale agreement Financial assets held under resale Interest-earning assets Loans and advances to customers Investments in securities and other financial assets Investments in securities and other Change in interest income Interest-bearing liabilities Customer deposits Borrowings from central bank Change in interest expense Balances with central bank Deposits from banks and other financial institutions Financial assets sold under repurchase agreements Debt securities issued Change in net interest income

The following table sets forth the changes in interest income and interest expenses due due expenses interest and income interest in changes the forth sets table following The in scale is the period indicated. The change and interest rates during to changes in scale interest- and assets interest-earning of balance average the in change the by measured the in change the by measured is rates interest in change the while liabilities, bearing The combined and interest-bearing liabilities. rate of interest-earning assets average interest included in interest rate changes. in scale and interest rates is effect of changes BANK OF JIUJIANG 3.2 (1) Notes: Management DiscussionandAnalysis 12 each componentofthe Bank’scustomerloansduringtheperiodindicated. The following table sets forth the average balance, interest income and average yield for loan portfolio. balance oftotalcustomerloansincreased,mainly reflectingtheoverallgrowthofBank’s the increaseinaverageyieldofcustomer loans. Duringthereportingperiod,average year, mainlyattributabletotheincreasein averagebalanceoftotalcustomerloansand billion, a year-on-year increase of RMB836 million or 37.7% over the same period of last In the first half of 2018, interest income from the Bank’s customer loan was RMB3.056 3.2.1 customer loans. Bank. Theaverageassetyieldgrowthwasmainlyduetotheincreaseinof loans and debt securities investment of the Bank as a result of business growth of the reporting periodwasmainlyattributabletotheincreaseinaveragebalanceofcustomer return onassets.Theincreaseintheaveragebalanceofinterest-earningassetsduring due to the increase in the average balance of interest-earning assets and the average on-year increaseofRMB1.173billion,or21.0%.Theininterestincomewasmainly In thefirsthalfof2018,BankachievedaninterestincomeRMB6.762billion,ayear- ( (6) ( (5) (4) (3) 7) 2)

Interest income Interest Interest incomefromcustomerloan securities. Consists institutions. Consists ofdepositswithbanksandotherfinancialinstitutionsplacements Consists primarilyofmandatoryreservedepositsandsurplusdeposits. Our Represents Represents multiplied bytheaverageyield/costratioofpreviousperiod. Represents theaveragebalanceofreportingperioddeductingpreviousperiod, management productsissuedbyPRCcommercialbanks. previous period. previous periodmultipliedbytheaveragebalanceforreportingperiod. investments classified as receivables mainly include asset management, trust plans and other wealth of tier-two capital bonds issued, interbank negotiable certificates of deposit and asset-backed the average yield of the reporting period/cost ratio deducting the average yield/cost ratio of the interest income/expense during the reporting period deducting interest income/expense from the 2018 Interim Report

13 5.64 5.55 5.22 5.61 Average yield (%)

37.7 738.1 income Interest 2017

balance Average

5.78 51,171.8 1,443.8 5.82 26,578.4 5.37 1,443.1 5.79 79,193.3 2,219.6 Average yield (%)

For the six months ended June 30, For the six months 46.3 (in millions of RMB, except percentages) (in millions of RMB, income Interest 2018

1,724.6 balance Average 65,905.8 1,903.9 37,999.0 1,105.6 105,629.4 3,055.8

Interest income from deposits with central bank Interest income from financial assets held under resale agreements Interest income from financial assets held under resale Interest income from investments in securities and other financial assets Interest income from investments

Corporate loans Personal loans Discounted bills Total 3.2.4 the central bank was RMB202 In the first half of 2018, interest income from deposits with mainly due to the increase in million, a year-on-year increase of RMB40 million, or 25.0%, increase was mainly attributable the average balance of deposits with the central bank. Such customer the by caused was that deposits reserve mandatory in growth continued the to deposits. In the first half of 2018, interest income from our financial assets held under resale resale under held assets financial our from income interest 2018, of half first the In RMB38 million, or 7.5%, mainly agreements was RMB470 million, a year-on-year decrease of held under resale agreements due to the decrease in the average yield of financial assets in average yield was mainly and then due to the decrease in average balance. The decrease the in decline The agreement. resale under bills of percentage the in decline the to due resale agreement in 2018, average balance was mainly due to the decrease in bills under under resale agreement. which was partially offset by the rise in average balance of bonds 3.2.3 In the first half of 2018, interest income from investments in our securities and other other and securities our in investments from income interest 2018, of half first the In or million, RMB335 of increase year-on-year a billion, RMB2.983 was assets financial average the in increase the to due mainly was income interest in increase The 12.6%. and then due to the increase in the average yield of balance of debt securities investment securities debt of balance average the in increase The investments. asset financial other the continuous rise in assets and the scale of deposits of the investment was mainly due to the in increase the balance; investment bond the of growth natural a to led which Bank, other financial assets was due to the rise in the interest rate average yield of investment in banking industry from the fourth quarter of 2017 to the first of the market rate in the entire as and period, this during increased Bank the by allocated assets Such 2018. of quarter yield average asset non-standard entire the matured, yields lower with assets of stock the increased in general. 3.2.2

BANK OF JIUJIANG each componentoftheBank’scustomerdeposits intheperiodindicated. The following table sets forth average balance, interest expense and average interest rate for retail bankingbranchnetwork. customer deposits;and(ii)ourincreasedpersonaldepositsinlinewiththeexpansionof our customer service and marketing activities, which resulted in an increase in corporate (i) (a)ourcontinuouseffortstobroadencorporatecustomerbase,(b)improvementsin the industry.Theincreaseinaveragebalanceofcustomerdepositswasmainlydueto in theaverageinterestrateoncustomerdepositswasmainlyduetofiercecompetition average interestrateofcustomerdepositsandtheincreaseinbalance.The a year-on-year increase of RMB553 million, or 38.8%, mainly due to the increase in the In thefirsthalfof2018,ourinterestexpenseoncustomerdepositswasRMB1.98billion, 3.3.1 of RMB484million,or16.5%year-on-year. In thefirsthalfof2018,ourinterestexpensewasRMB3.422billion,ayear-on-yearincrease 3.3 gradual improvementonliquiditymanagementmeasures. higher yields than demand deposits. The increase in the average balance was due to our proportion of time deposits deposited in banks and other financial institutions which earn balance. Thedecreaseintheaverageyieldwasmainlyattributableto and other financial institutions, which was partially offset by an increase in the average year. Thiswasmainlyduetothedecreaseinaverageyieldofamountsfrombanks institutions wasRMB50million,remainingbasicallythesameasthatofperiodlast In thefirsthalfof2018,interestincomefromamountsduebanksandotherfinancial 3.2.5 Management DiscussionandAnalysis 14

Interest expense Interest Interest expenseoncustomerdeposits Interest incomefromamountsduebanksandotherfinancialinstitutions 2018 Interim Report 15 0.69 2.86 1.67 1.40 0.36 2.49 3.10 1.94 0.00 interest Average expense (%)

0.0 65.7 19.6 164.7 592.2 822.6 604.2 584.6 Interest expense 2017

369.4 balance Average

0.86 47,625.4 3.10 41,438.9 1.85 98,440.2 2.74 9,376.0 0.38 10,742.1 2.65 48,486.4 3.37 37,744.4 0.00 2.11 147,296.1 1,426.8 interest Average expense (%)

For the six months ended June 30, For the six months 0.0 28.1 (in millions of RMB, except percentages) (in millions of RMB, 285.2 551.1 331.1 812.4 784.3 Interest expense 2018

685.3 balance Average 66,196.6 35,571.7 24,173.2 14,717.5 61,258.5 46,541.0 125,941.5 1,167.4 187,885.3 1,979.8 n deposits from banks and other financial institutions n deposits from banks and other

Interest expense o deposits

Subtotal Subtotal Total customer Corporate deposits Demand Time Margin deposits Personal deposits Demand Time Others

3.3.2 financial other and banks from deposits on expense interest our 2018, of half first the In a year-on-year decrease of RMB26 million, or 8.1%. This institutions was RMB290 million, in the average balance of deposits from banks and other was mainly due to the decrease partially offset by the increase in the average interest rate. financial institutions, which was and other financial institutions The decrease in the average balance of deposits from banks funding of reduction the and structure financing the of adjustment our to due mainly was of rate interest average the in increase The institutions. financial other and banks from market in increase the reflects mainly institutions financial other and banks from deposits quarter of 2017 to the first interest caused by the tightened market liquidity from the fourth quarter of 2018. BANK OF JIUJIANG during thereportingperiod. capital bonds with higher interest costs as compared to certificates of interbank deposits the increase in the average interest rate mainly reflected the additional issuance of tier-two the averageinterestrate.Theincreaseinbalanceofdebtsecuritiesissuedand to the increase in the average balance of our debt securities issued and the increase in RMB966 million,ayear-on-yearincreaseofRMB138or16.7%.Thiswasmainlydue In the first half of 2018, our interest expense on debt securities issued amounted to 3.3.4 of billssoldunderrepurchaseagreementwithhigheryields. assets soldunderrepurchaseagreementswasmainlyduetothedecreaseinpercentage transaction of selling for repurchase. The decline in the average interest rate on financial deposits in the first half of 2018, which reduced the number of times carrying out the of financialassetssoldunderrepurchaseagreementswasduetotheincreaseincustomer repurchase agreementsandtheaverageinterestrate.Thedecreaseinbalance This is mainly due to the decrease in the average balance of financial assets sold under agreements was RMB177 million, a year-on-year decrease of RMB187 million, or 51.5%. In the first half of 2018, interest expense on financial assets sold under repurchase 3.3.3 Management DiscussionandAnalysis 16 improved aswestrengthenedloanandinvestment pricingmanagement. of thepreviousyearto2.44%,mainlydue the factthatloanandinvestmentpricinglevels the previousyearto2.26%.Thenetinterestmargin increasedfrom2.29%inthesameperiod In thefirsthalfof2018,ournetinterestspreadincreasedfrom2.21%insameperiod 3.4 average balanceofborrowingsfromthecentralbank. million, ayear-on-yearincreaseofRMB6million.Thisismainlyduetothein In the first half of 2018, our interest expense on borrowings from central bank was RMB9 3.3.5

Interest expensefromborrowingscentralbank Interest expensefromdebtsecuritiesissued Interest expensefromfinancialassetssoldunderrepurchaseagreements Net interestspreadandnetmargin 2018 Interim Report

17 5.6 9.3 (%) (7.9) (3.5) 20.6 25.0 Change

6.8 110.4 0.5 3.2 7.9 (2.0) 36.9 20.5 321.5 change Amount of

6.4 6.2 9.9 12.5 58.5 85.5

For the six months ended June 30, For the six months ended June 26.9 13.0 10.4 15.7 56.5 93.4 2018 2017 (77.9) (29.1) (48.8) 168.0 138.0 149.9 (11.9) 215.9 179.0 (in millions of RMB, except percentages)

Fee and commission income Fee and commission Non-interest income

commitment fee Net fee and commission income Fee and commission expense Subtotal Bank card fee Transaction and consultancy fee Settlement and clearing service fee Settlement and clearing service Acceptance and guarantee Wealth management fee

Fee and commission income Agency service fee income 3.5.1 a million, RMB138 of income commission and fee achieved we 2018, of half first the In in third-party mainly due to the increase of RMB12 million, or 7.9%, year-on-year decrease platform business. the expansion of third-party platform fees with in the period of fee and commission income sets forth each component The following table indicated. 3.5 In the first half of 2018, we achieved agency service fee income of RMB93 million, a year- In the first half of 2018, we achieved agency service fee income expansion and extensionon-year increase RMB8 million, or 9.3%, mainly due to our vigorous and funds. of a number of agency services such as sales of insurance products million, RMB57 of income fee management wealth achieved we 2018, of half first the In due mainly is This year. last period same the of that as same the basically was which wealth of scale the expand and base customer the broaden to efforts continuous our to by value added tax (VAT) and management products issued by us, which was partially offset additional set-offs of asset management products. income fee commitment guarantee and acceptance achieved we 2018, of half first the In the to due mainly 25.0%, or million, RMB3 of increase year-on-year a million, RMB16 of acceptance the of development vigorous our of result a as volume trading in increase business. BANK OF JIUJIANG operating expensesoftheBankinperiodindicated. The followingtablesetsforthamount,amountofchangeandforeachcomponent overall growthofourbusiness. RMB298 million, or 41.6% over the same period of last year, which was in line with the In the first half of 2018, our operating expenses were RMB1.015 billion, an increase of 3.6 marketing effortstocontinuouslydevelopthisbusiness. million, ayear-on-yearincreaseofRMB7or110.4%,mainlyreflectingourenhanced In the first half of 2018, we achieved transaction and consultancy fee income of RMB13 related handlingfeeincomeasaresultofpromotionandapplicationourcreditcards. on-year increaseofRMB21million,or321.5%.Thiswasmainlyduetothein In thefirsthalfof2018,ourbankcardhandlingfeeincomereachedRMB27million,ayear- continuous effortstobroadenitscustomerbaseandexpandtradingvolume. million, a slight increase over the same period last year, or 5.6%, mainly due to our In thefirsthalfof2018,weachievedsettlementandclearingservicefeeincomeRMB10 Management DiscussionandAnalysis 18

Staff costs Total staffcosts General Tax andsurcharges Rental expenses Depreciation Others Amortization Salaries, bonusesandallowances Staff welfare Social insurance Housing funds

Labor unionfeesandstaff Total operatingexpenses Cost-to-income ratio

Operating expenses Operating education expenses

,1. 1. 298.1 717.2 1,015.3 (in millionsofRMB,exceptpercentages) 9. 4. 144.5 246.0 390.5 5. 0. 149.1 305.4 454.5 6. 3. 130.4 236.6 367.0 82 26.43 28.28 082017 2018 18.4 27.8 13.3 26.7 49.3 73.3 14.2 30.3 For thesixmonthsendedJune30, 4.5

16.7 26.7 11.8 17.7 47.2 58.3 18.4 33.6 4.2

Amount of change 15.0 42 (22.8) (4.2) 33 (10.0) (3.3) 1.7 1.1 1.5 0.3 9.0 2.1 1.8

Change (%) 58.8 10.1 12.6 48.8 55.2 50.9 25.6 41.6 4.0 7.6 4.4 7.0 2018 Interim Report 19 In the first half of 2018, our staff costs were RMB454 million, a year-on-year increase increase year-on-year a million, RMB454 were costs staff our 2018, of half first the In the in increase general the to attributable mainly was This 48.8%. or million, RMB149 of business continued our of result a as remuneration average and employees of number provident and allowances and housing in increases in salaries, bonuses expansion, resulting funds for our employees. million, an expenses were RMB367 of 2018, our general and administrative In the first half is mainly due to same period last year. This million or 55.2% over the increase of RMB130 grows. the promotion cost as our business the increase in year-on-year a million, RMB27 were surcharges and tax our 2018, of half first the In mainly due to our business growth. increase of RMB9 million, or 50.9%, expenses were RMB49 million, a year-on-year increase of In the first half of 2018, our rental mainly due to the expansion of our branch network and the is RMB2 million, or 4.4%. This prices and rentals. year-by-year increase in housing and million RMB73 were values amortization and depreciation 2018, of half first the In and year-on-year, million RMB15 by increased Depreciation respectively. million RMB30 tangible in changes to due mainly year-on-year, million RMB3 by decreased amortization and renovation expenses during the relevant period. assets, property and equipment year-on-year a million, RMB14 were expenses operating other 2018, of half first the In control cost effective of implementation the to due mainly million, RMB4 of decrease measures. BANK OF JIUJIANG component ofimpairmentlosstheBankinperiodindicated. The following table sets forth amount, amount of change and change in percentage for each factors manifestedaftertheapplicationofIFRS9FinancialInstruments. as theimpairmentallowanceforfinancialguaranteesandcommitments.The above-mentioned impairment allowance for financial assets other than customer loans and advances, as well cost whichledtoanacceleratedriseinimpairmentallowance;and(iii)theincrease impairment lossoncustomerloans;(ii)theincreaseinfinancialassetsmeasuredatamortised RMB112 million, or 10.5% year-on-year, mainly due to (i) the increase in allowance for In the first half of 2018, our impairment losses were RMB1.180 billion, an increase of 3.7 Management DiscussionandAnalysis 20 Financial guaranteeand Repossessed assets Other assets Deposits withbanksandother Financial assetsheldunderresale Total impairmentlosses Placements withbanksandother Loans andadvancestocustomers Investments classifiedas Financial assetsmeasured Financial assetsmeasuredat commitment financial institutions agreements financial institutions receivables comprehensive income at fairvaluethroughother amortized cost

Impairment losses Impairment

,8. 1082 112.0 1,068.2 1,180.2 (in millionsofRMB,exceptpercentages) (14.2) 6. 839.2 866.4 222.4 082017 2018 (0.5) 67.9 25.5 For thesixmonthsendedJune30, 8.1 0.7 3.9 –

2. (220.7) 220.7 8.3 – – – – – – –

Amount of change (14.2) 222.4 (0.2) (0.5) 67.9 25.5 27.2 0.7 3.9

Change (%) (1.2) 10.5 3.2 – – – – – – – – 2018 Interim Report 21 24.8 73.9 50.8 Change (%)

50.4 change Amount of

2.6 (24.3) (932.5)

For the six months ended June 30, For the six months ended June 2018 2017 (21.7) 19.36 23.40 (4.04) (17.3) 253.5 203.1 535.6 307.9 227.7 (260.4) (107.4) (153.0) 142.5 (in millions of RMB, except percentages) 1,309.2 867.9 441.3

Income tax expenses

Effect of tax for previous years Deferred income tax Current income tax Effective tax rate Total income tax expenses Income tax expense

Profit before tax In the first half of 2018, our income tax was RMB253 million, a year-on-year increase of of increase year-on-year a million, RMB253 was tax income our 2018, of half first the In 30, 2018, our ended June 30, 2017 and June or 24.8%. For the six months RMB50 million, the statutory tax respectively, lower than tax rate was 23.40% and 19.36%, effective income income from enterprise income tax on interest due to the exemption of rate of 25%, mainly bonds. bonds and local government investments in national each for percentage in change and change of amount amount, forth sets table following The of the Bank in the period indicated. component of income tax expense 3.8 BANK OF JIUJIANG the Bank. The followingtablesetsforth,asatthedatesindicated,eachcomponentoftotalassets investment insecuritiesandotherfinancialassets. due to the increase in the following assets: (i) loans and advances to customers; and (ii) RMB17.082 billion, or 6.3% from the end of the previous year. The increase was mainly As at June 30, 2018, our total assets amounted to RMB288.336 billion, an increase of 4.1 4. Management DiscussionandAnalysis 22 Placements withbanksandotherfinancial Deposits withbanksandotherfinancial Financial assetsheldunderresale Investments inassociates Total assets Other assets Cash andbalanceswithcentralbanks Net securitiesandotherfinancialassets Allowance forimpairmentlosses Total loansandadvancestocustomers–at Change infairvalue Net loansandadvancestocustomers– Total investmentsinsecuritiesandother Net loansandadvancestocustomers– Allowance forimpairmentlosses Total loansandadvancestocustomers–

institutions institutions agreements fair valuethroughprofitandloss at fairvaluethroughprofitandloss financial assets,gross measured atamortizedcost measured atamortizedcost

Assets Analysis ofmajorfinancialpositionitems

288,335.9 122,583.0 123,493.4 110,363.6 114,436.7 29,689.3 (4,073.1) Amount 2,114.0 9,314.6 9,566.8 4,242.5 4,215.3 (910.4) June 30,2018 374.1 115.2 (27.2) (in millionsofRMB,exceptpercentages)

% oftotal amount 0. 271,254.1 100.0 0328,750.5 10.3 25103,495.4 42.5 28104,495.0 42.8 8399,528.2 38.3 97102,725.2 39.7 (0.3) 14 (3,197.0) (1.4) 0.7 . 26,506.7 3.3 0.1 3.3 0.0 1.5 0.0 1.5

December 31,2017 Amount 1,667.8 1,481.0 9,713.2 (999.6) 111.3 0.0 0.0 0.0

% oftotal amount 100.0 10.6 38.2 38.6 36.7 37.9 (0.4) (1.2) 0.6 0.5 9.8 3.6 0.0 0.0 0.0 0.0 2018 Interim Report 23 3.1 4.5 4.4 53.2 26.7 12.5 59.4 36.2 100.0 100.0 amount amount % of total % of total

1,908.2 2,742.3 7,604.1 4,571.1 Amount Amount December 31, 2017 December 31, 2017

3.4 9.9 3.7 26.0 16,281.4 21.1 39.6 32,462.6 63.3 60,998.6 33.0 37,155.5 100.0 60,998.6 100.0 102,725.2 amount amount % of total % of total

(in millions of RMB, except percentages) (in millions of RMB, except percentages) June 30, 2018 June 30, 2018 2,534.9 7,468.0 4,374.4 Amount Amount 19,524.5 15,825.5 29,805.2 75,158.1 75,158.1 39,146.7 118,679.2

(1) (1) (1) (1) (2) 14.160 billion, or 23.2% from the end of the previous year. The overall increase in in increase overall The year. previous the of end the from 23.2% or billion, 14.160 Loans and advances to customers Loans and advances Corporate loans

Corporate loans

Large enterprises

Total corporate loans Medium enterprises Micro enterprises Others Small enterprises Personal loans Discounted bills Total loans and advances to customers corporate loans was mainly due to our continued expansion of its corporate loan portfolio. corporate loans was mainly due corporate our of distribution the indicated, dates the at as forth, sets table following The loans by size of corporate borrower. (1) As at June 30, 2018, our total loans and advances to customers were RMB118.679 billion, to customers were RMB118.679 2018, our total loans and advances As at June 30, growth The year. previous the of end the from 15.5% or billion, RMB15.954 of an increase loans; and (ii) stable growth in our corporate portfolio was mainly due to (i) the of the our loan business. to develop personal loan our continued efforts by loans our of distribution the indicated, dates the at as forth, sets table following The business type. 4.1.1 As at June 30, 2018, our corporate loans amounted to RMB75.158 billion, an increase of loans amounted to RMB75.158 billion, an increase of As at June 30, 2018, our corporate RMB BANK OF JIUJIANG As indicated. The tablebelowsetsoutthedetailsofourpersonalloansbyproducttypeasatdates expansion ofbranchnetwork. to grow, mainly due to the rapid development of our personal consumption loans and RMB1.991 billion,or5.4%fromtheendofpreviousyear.Ourpersonalloanscontinued (2) business forsmallandmicroenterprises. and micro enterprises mainly reflected our strategy of sustainably developing financial 31, 2017toRMB49.330billionasatJune30,2018.Theoverallgrowthofloanssmall Our loanstosmallandmicroenterprisesincreasedfromRMB48.744billionasatDecember (1) Notes: Management DiscussionandAnalysis 24 acquire asteadysourceofretailcustomers. loans primarilyreflectedourcooperationwith quality propertydevelopers,throughwhomwe at December31,2017 to RMB19.681 billion.The slight increase inourresidential mortgage As atJune30,2018,ourresidentialmortgage loansincreasedfromRMB19.162billionas (2) Total personalloans Bank cardbalances Personal consumptionloans Personal businessloans Residential mortgageloans

at June 30, 2018, our personal loans amounted to RMB39.147 billion, an increase of

Personal loans Standards ofSmallandMediumEnterprises.See“Definitions”fordetails. Consist primarilyofpublicsectororganizationsinChina. The classification criteria for large, medium, small and micro enterprises are set forth in the Classification

39,146.7 19,681.3 Amount 1,038.6 9,548.1 8,878.7 June 30,2018 (in millionsofRMB,exceptpercentages)

% oftotal amount 0. 37,155.5 100.0 24.4 22.7 0319,162.3 50.3 2.6

December 31,2017 Amount 8,113.0 9,246.8 633.4

% oftotal amount 100.0 21.8 24.9 51.6 1.7 2018 Interim Report 25 Investment in securities and other financial assets Investment in securities and Discounted bills

at June 30, 2018, our discounted bills were RMB4.374 billion, a decrease of RMB197 RMB197 of decrease a billion, RMB4.374 were bills discounted our 2018, 30, June at 4.1.2 amounted other financial assets and securities in our total investment 30, 2018, As at June the of end the from 18.2% or billion RMB18.998 of increase an billion, RMB123.493 to the fact that after IFRS 9 Financial Instruments is applied, previous year, primarily due to plan trust in investments (ii) increased; cost amortised at measured assets financial (i) equity (iv) and increased; Bank the by held securities debt Bank’s the (iii) increased; slightly increased, primarily in bond funds and money market investments held by the Bank funds. million from the end of the previous year, or 4.3%, primarily due to reduced customer customer reduced to due primarily 4.3%, or year, previous the of end the from million rates for discounted bills. demand with the increasing market As at June 30, 2018, our personal business loans decreased by 4.0% from RMB9.247 billion RMB9.247 4.0% from by decreased business loans our personal 2018, As at June 30, personal mainly due to our efforts to develop 31, 2017 to RMB8.879 billion, as at December with lower risks. consumption loans from RMB8.113 loans increased significantly 2018, our personal consumption As at June 30, to develop billion, primarily due to our efforts 31, 2017 to RMB9.548 billion as at December meet customer demand. this product to million as at by 64.0% from RMB633 2018, our bank card balance increased As at June 30, billion, mainly due to the rapid growth of the Bank’s new December 31, 2017 to RMB1.039 credit card services. (3) As BANK OF JIUJIANG other financialassetsbyinvestmentintentionasofthedatesindicated. The following table sets out the components of the Bank’s investments in securities and Management DiscussionandAnalysis 26 investments classifiedasreceivablesandequityatthedatesindicated. forth the distribution of investment securities andotherfinancial assets by debt securities, investments classified as receivables and equity investments. The following table sets We classifyinvestmentsecuritiesandotherfinancialassetsintothreeparts:debtsecurities, Investment atfairvaluethroughother Total investmentsinsecuritiesand Investment atamortizedcost Investments classifiedasreceivables Financial assetsatfairvaluethrough Held-to-maturity investments Available-for-sale financialassets comprehensive income other financialassets,gross profit orloss

123,493.4 53,780.2 20,780.1 48,933.1 Amount June 30,2018 (in millionsofRMB,exceptpercentages) – – –

% oftotal amount 0. 104,495.0 100.0 43.6 16.8 39.6 – – –

December 31,2017 69,904.1 13,125.5 20,554.6 Amount 910.8 – –

% oftotal amount 100.0 66.9 12.5 19.7 0.9 – – 2018 Interim Report 27 8.5 0.1 6.5 0.8 0.0 3.7 3.7 (1.0) 14.3 29.4 66.1 66.9 99.0 100.0 amount % of total

15.1 124.0 877.9 (999.6) 8,871.0 6,816.1 3,843.6 3,858.7 Amount December 31, 2017

7.2 0.1 1.5 0.6 5.2 5.8 (0.7) 12.4 14,921.0 10.9 30.6 30,732.1 62.1 69,026.3 63.6 69,904.2 99.3 103,495.4 100.0 104,495.0 amount % of total

(in millions of RMB, except percentages) (in millions of RMB, 145.0 720.4 June 30, 2018 (910.4) 8,881.5 1,807.9 6,428.8 7,149.2 Amount 15,359.4 13,512.1 37,898.0 76,638.3 78,446.2 123,493.4 122,583.0

Other Components of Our Assets other financial assets, gross financial assets, net

issuers Subtotal and financial institutions other PRC commercial banks Subtotal Subtotal Total investments in securities and Investments in securities and other

Debt securities Government bonds Debt securities issued by PRC policy banks Debt securities issued Debt securities issued by PRC corporate Debt securities issued by PRC corporate Debt securities issued by other PRC banks Debt securities issued Investments classified as receivables Trust plans and asset management plans Wealth management products issued by Wealth management products issued by Funds investment Equity investments Equity investments Allowance for impairment losses 4.1.3 balances with central bank; Other components of our assets consist primarily of (i) cash and with banks and other (ii) deposits with banks and other financial institutions; (iii) placements agreements. financial institutions; and (iv) financial assets held under resale was bank central with balances and cash of amount total the 2018, 30, June at As previous the of end the from 3.3% or million RMB939 of increase an billion, RMB29.689 line in bank central with deposits reserve mandatory our in increase an to due primarily year, surplus reserve deposits with the growth in our total customer deposits and our increased with central bank.

BANK OF JIUJIANG of theBank. The followingtablesetsforth,asatthedatesindicated,eachcomponentoftotalliabilities accounting for71.9%,15.9%,7.2%and2.4%ofourtotalliabilities,respectively. and otherfinancialinstitutions;(iv)assetssoldunderrepurchaseagreements, composed of (i) customer deposits; (ii) issued debt securities; (iii) deposits from banks RMB16.032 billion, or 6.3% over that at the end of last year. Our liabilities are primarily As at June 30, 2018, we recorded total liabilities of RMB269.635 billion, increasing by 4.2 our liquiditymanagementmeasures. year, primarily reflectingour reduced financial assets held underresaleagreementsbased on RMB9.315 billion,adecreaseofRMB17.192or64.9%fromtheendprevious As atJune30,2018,thetotalamountoffinancialassetsheldunderresaleagreementswas management measures. the previousyear,mainlyduetogradualenhancementofourgraduallyimprovedliquidity institutions wasRMB374million,adecreaseofRMB1.107billion,or74.7%fromtheend As at June 30, 2018, the total amount of placements with banks and other financial situation andmarketliquiditychanges. year, mainlyduetoouradjustmentofliquiditymanagementmeasuresbasedonthefunding was RMB2.114 billion, an increase of RMB446 million or 26.8% from the end of the previous As atJune30,2018,thetotalamountofdepositswithbanksandotherfinancialinstitutions Management DiscussionandAnalysis 28 (1) Note: Other liabilities Placements frombanks Deposits frombanksandotherfinancial Financial assetssoldunderrepurchase Issued debtsecurities Total liabilities Borrowings fromcentralbank Customer deposits

institutions agreements

Liabilities Consists payable. of interest payable, other payables, settlement payable, salaries payable, tax payables and dividends (1)

269,635.0 193,926.1 43,063.4 19,309.2 Amount 6,383.6 5,407.2 June 30,2018 809.5 736.0 (in millionsofRMB,exceptpercentages)

% oftotal 0. 253,602.8 100.0 5940,247.8 15.9 19179,636.6 71.9 7.2 . 17,406.0 2.4 0.3 2.0 0.3

December 31,2017 Amount 8,268.7 1,116.9 6,114.9 811.9

% oftotal 100.0 15.9 70.8 3.3 0.4 6.9 2.4 0.3 2018 Interim Report 29 0.2 6.7 40.9 17.5 12.4 70.8 29.0 22.3 100.0 % of total

271.8 Amount December 31, 2017

0.2 6.7 11,996.4 36.6 73,454.0 18.1 31,406.9 11.9 22,420.4 66.6 127,281.3 33.2 52,083.5 26.5 40,087.1 100.0 179,636.6 % of total

(in millions of RMB, except percentages) 376.4 June 30, 2018 Amount 70,931.9 35,181.9 23,102.8 13,036.3 64,333.1 51,296.8 193,926.1 129,216.6

(1) Consists primarily of funds deposited with us for remittance and outbound remittance. Borrowings from central bank Deposits from banks and other financial institutions Customer deposits

Sub-total Sub-total

Total customer deposits

Corporate deposits Demand Time Margin deposits Personal deposits Demand Time Other deposits 4.2.3 RMB736 at bank central from borrowing of balance a recorded we 2018, 30, June at As is which year, last of end the at that from 9.4% or million, RMB76 by declining million, from the central bank within mainly because of the Bank’s due loans of various proportions the reporting period. 4.2.2 financial institutions in our bank As at June 30, 2018, the deposits from banks and other billion, or 133.5% over recorded a balance of RMB19.309 billion, increasing by RMB11.04 to our strategic adjustment on that at the end of last year. This can be primarily ascribed other and banks from deposits the up driven has which portfolio structure financing the financial institutions. Note: (1)

As at June 30, 2018, we recorded total deposits of RMB193.926 billion, increasing by by increasing billion, RMB193.926 of deposits total recorded we 2018, 30, June at As rising the to due mainly year, last of end the at that over 8.0% or billion, RMB14.29 business. corporate and retail banking momentum of our product type indicated, customer deposits by as at the dates sets forth, The following table and maturity. 4.2.1 BANK OF JIUJIANG equity oftheBank’sshareholders. The following table sets forth, as at the dates indicated, the various components of the Bank’s Shareholderscanbeprimarilyascribedtothegrowingnetprofit. by RMB1.033billion,or6.0%overthatattheendoflastyear.Theincreaseinequity shareholder’s equityattributedtoourparentcompanyvaluedRMB18.176billion,increasing RMB1.05 billion,or5.9%overthatattheendoflastyear;asJune30,2018,ourtotal As atJune30,2018,ourtotalshareholder’sequityvaluedRMB18.701billion,increasingby 4.3 of depositforthepurposemeetingliquidityneedsatalowcostandrisk. new issueofsecondarycapitalbondsandadditionalinterbanknegotiablecertificate RMB2.816 billion,or7.0%overthatattheendoflastyear.Thisisprimarilybecauseour As at June 30, 2018, our issued debt securities totaled RMB43.063 billion, increasing by 4.2.5 compliance withtheworkingcapitalmanagementmeasures. year, which is primarily a result of our adjustment on selling bonds for repurchase in RMB6.384 billion, declining by RMB11.022 billion, or 63.3% from that at the end of last As at June 30, 2018, our financial assets sold under repurchase agreements valued 4.2.4 Management DiscussionandAnalysis 30 Non-controlling interests Equity attributabletoshareholdersof Shareholders’ equitygross Retained earnings Reserve forfairvaluechangesof General reserve Surplus reserve Capital reserve Share capital the Bank available-for-sale securities

Shareholders’ equity Shareholders’ Issued debtsecurities Financial assetssoldunderrepurchaseagreements

18,700.9 18,176.3 Amount 5,746.9 3,275.4 2,758.0 5,020.0 2,000.0 (624.0) June 30,2018 524.6 (in millionsofRMB,exceptpercentages)

% oftotal 0. 17,651.2 100.0 7217,143.5 97.2 30.7 17.5 14.8 26.8 10.7 33 (1,017.6) (3.3) 2.8

December 31,2017 Amount 5,107.7 3,275.4 2,758.0 5,020.0 2,000.0 507.7

% oftotal 100.0 97.1 28.9 18.6 15.6 28.4 11.3 (5.7) 2.9 2018 Interim Report 31 2017 463.4 3,268.8 3,018.0 December 31,

2018 3,307.0 2,421.6 3,545.7 37,482.6 34,662.5 28,208.3 27,912.3 June 30, (in millions of RMB) (in millions of

Loan quality analysis Off-balance sheet commitments of assets and liabilities sheet commitments of Off-balance

Letters of guarantee Total Bank acceptance bills Letters of credit Loan commitments In the reporting period, the Bank paid close attention to external dynamics and took took and dynamics external to attention close paid Bank the period, reporting the In management over loans, sped up credit structure concrete steps to strengthen full-process risk enhanced and loans, non-performing of disposal and recovery intensified adjustment, loan quality was maintained management performance assessment. As a result, the Bank’s changes, the slowdown in under control overall. However, the external business environment enterprises jointly posed economic growth and the business difficulties in small and medium 30, 2018, the Bank’s non- pressure on rising non-performing loans of the Bank. As at June 1.65%, at ratio loan a non-performing recording totaled RMB1.960 billion, performing loans 0.03 percentage point higher than that at the end of last year. 6. RMB37.483 totaled commitments sheet off-balance Bank’s the 2018, 30, June at As vigorous effort in promoting credit cards, which results in billion, mainly due to the Bank’s and assets of commitments sheet off-balance on details For commitments. loan increased and Contingent Liabilities” to the financial statement in liabilities, see the note “Commitments this report.

The following table sets forth, as at the dates indicated, the Bank’s off-balance sheet sheet off-balance Bank’s the indicated, dates the at as forth, sets table following The of assets and liabilities. commitments amount 5. BANK OF JIUJIANG (1) Note: categorized byfive-categoryloanclassification. The following table sets forth, as at the dates indicated, loans and advances to customers 6.1 Management DiscussionandAnalysis 32 classified intosubstandardloans,doubtfulloansandlossloans. Based onthefive-categoryloanclassificationsystem,Bank’snon-performingloansare Non-performing loanratio Substandard Special mention Doubtful Loss Gross amountofloansand Normal

advances tocustomers

advances tocustomers. Non-performing loanratioiscalculatedbydividingthenon-performingloansgrossamountofand Distribution ofloansbyfive-categoryloanclassification (1)

118,679.2 114,716.5 Amount 2,002.8 June 30,2018 895.4 814.3 250.2 (in millionsofRMB,exceptpercentages)

% oftotal 0. 102,725.2 100.0 6699,534.1 96.6 1.65 1.7 0.8 0.7 0.2

December 31,2017 Amount 1,525.9 677.3 832.8 155.1

% oftotal 100.0 96.9 1.62 1.5 0.7 0.8 0.1 2018 Interim Report 33 (%) Non- loan ratio performing

0.0 0.00 4.4 0.69 0.0 0.00 0.0 0.00 0.0 0.00 loan Non- amount performing

1.9 158.5 8.22 0.9 9.07.90.6 455.7 44.4 4.93 0.55 4.4 0.6 3.8 December 31, 2017 % of total

(%) Amount Non- loan ratio performing

0.0 0.00 960.6 0.0 0.00 4,571.1 0.0 0.00 690.0 0.0 0.00 3,881.1 loan Non- (in millions of RMB, except percentages) amount

performing

1.5 135.1 7.54 1,927.0 1.1 7.58.00.9 466.5 127.1 14.1 5.25 1.33 9,246.8 1.36 8,113.0 633.4 3.7 0.1 3.6 June 30, 2018 % of total

114.2 1,791.0 1,302.8 9,548.1 1,038.6 8,878.7 4,374.4 4,260.2 Amount 48,360.223,704.1 40.7 20.0 1,048.6 127.4 2.17 38,826.5 0.54 19,284.5 37.8 18.8 811.9 143.6 2.09 0.74 19,681.3 16.6 41.1 0.21 19,162.3 18.7 46.7 0.24 75,158.1 63.3 1,311.1 1.74 60,998.6 59.4 1,114.0 1.83 39,146.7 33.0 648.8 1.66 37,155.5 36.2 551.2 1.48 118,679.2 100.0 1,959.9 1.65 102,725.2 100.0 1,665.2 1.62

Loans and non-performing loans classified by business type loans classified Loans and non-performing

Sub-total Sub-total and advances to customers Sub-total Corporate loans Working capital loans Fixed asset loans Personal loans Residential mortgage loans Others Trade finance loans Personal consumption loans Bank card balances Personal business loans Gross amount of loans Commercial acceptance bills Discounted bills Bank acceptance bills

The following table sets forth, on the dates indicated, loans and non-performing loans of the loans and non-performing sets forth, on the dates indicated, The following table type. Bank by business 6.2

BANK OF JIUJIANG (2) Bank byindustry. The followingtablesetsforth,onthedatesindicated,loansandnon-performingof 6.3 Management DiscussionandAnalysis 34 (1) Notes: Others Transportation, Leasing and Hotels andcatering Agriculture, forestry, Construction Manufacturing Real estate Gross amount Wholesale andretail Discounted bills Total personalloans Total corporate

services storage andpostal commercial services and fishery animal husbandry customers advances to of loansand loans

industry. heat, gasandwater;(v) mining. and entertainment;(iii)residential services,repairandotherservices;(iv)production supplyofelectricity, Consist primarilyof(i)information transmission,softwareandinformationtechnicalservices; (ii)culture,sports Calculated Loans andnon-performingloansclassifiedbyindustry (2) by dividing non-performing loans in each industry by gross loans to corporate customers in that

118,679.2 12,725.2 21,841.3 39,146.7 75,158.1 16,890.3 Amount 6,835.3 6,641.4 8,281.8 4,374.4 640.0 865.4 437.4

June 30,2018 % oftotal 100.0 (in millionsofRMB,exceptpercentages) 10.7 18.4 33.0 63.3 14.2 0.5 0.7 0.4 5.8 5.6 7.0 3.7

performing loan ratio 10.25 (%) Non- 4.21 .96,814.0 0.19 7.03 .57,433.2 1.35 .84,888.8 5.48 .619,338.5 0.86 .5102,725.2 1.65 .68,380.8 4.86 .04,571.1 0.00 .637,155.5 1.66 .460,998.6 1.74 .412,009.7 0.64 (1)

Amount 532.0 853.6 748.0 December 31,2017

% oftotal 100.0 18.8 36.2 59.4 11.7 0.5 6.6 0.8 0.7 7.2 4.8 8.2 4.4

performing loan ratio (%) Non- 1.96 0.53 6.81 9.40 0.96 3.56 1.32 4.89 1.62 0.00 1.48 1.83 0.23 (1) 2018 Interim Report 35 (%) Non- loan ratio performing

loan Non- amount performing

December 31, 2017 % of total

Loan amount

(%) Non- loan ratio performing

loan Non- amount (in millions of RMB, except percentages) performing

June 30, 2018 % of total

Loan amount 14,694.1 12.4 67.7 0.46 13,359.2 13.0 62.7 0.47 118,679.2 100.0 1,959.9 1.65 102,725.2 100.0 1,665.2 1.62

Loans and non-performing loans classified by collateral loans classified Loans and non-performing

loans 27,465.2 23.1 351.5 1.28 20,224.6 19.7 244.3 1.21 loans 56,429.6 47.6 1,403.0 2.49 53,190.1 51.8 1,305.7 2.45 loans 20,090.3 16.9 137.7 0.69 15,951.3 15.5 52.5 0.33 Guaranteed Collateralized Unsecured Pledged loans Total

6.4 loans of the loans and non-performing sets forth, on the dates indicated, The following table Bank by collateral. As at June 30, 2018, the Bank’s non-performing corporate loans were primarily from: (i) (i) from: primarily were loans corporate non-performing Bank’s the 2018, 30, June at As industry; (iv) industry; (iii) the manufacturing industries; (ii) the real estate wholesale and retail industries. industry; and (v) hotels and catering the construction BANK OF JIUJIANG loan balancestoourtenlargestsingleborrowers.Suchloanswereclassifiedasnormal. of theBank’snetcapitalbase.Thefollowingtablesetsforth,asatdateindicated,our As atJune30,2018,theBank’sloanbalancetoanysingleborrowerdidnotexceed10% 6.5 Management DiscussionandAnalysis 36 Total orwrJWholesaleandretail Borrower J orwrIScientificresearch Borrower I orwrHRealestate Borrower H orwrGWaterconservancy, Borrower G orwrFLeasingand Borrower F orwrELeasing and Borrower E orwrDRealestate Borrower D orwrCWaterconservancy, Borrower C orwrBRealestate Borrower B orwrALeasingand Borrower A

Borrower concentration Borrower Industry

businesses services and technical management public utility environment and services commercial services commercial management public utility environment and services commercial

balance 7,362.0 1,000.0 (in millionsofRMB,exceptpercentages) 615.0 618.0 650.0 650.0 700.0 750.0 780.0 799.0 800.0 Loan

% oftotal June 30,2018 loans .030.16 6.20 0.52 0.52 0.55 0.55 0.59 0.63 0.66 0.67 0.67 0.84

regulatory capital % of .2Normal 2.52 .3Normal 2.53 .6Normal 2.66 .6Normal 2.66 .7Normal 2.87 .7Normal 3.07 .0Normal 3.20 .7Normal 3.27 .8Normal 3.28 .0Normal 4.10 classification Loan

2018 Interim Report 37 5.4 1.6 6.7 0.1 2.2 0.8 0.5 0.8 1.4 86.3 97.8 100.0 100.0 % of total % of total

43.3 2017 142.4 177.3 153.7 772.0 474.0 852.5 2,646.5 2,283.5 2,225.2 1,399.7 Amount December 31, 2017

4.4 1.7 4.0 0.2 2.2 0.6 0.6 0.8 1.4 89.9 97.8 100,500.0 100.0 100.0 102,725.2 % of total % of total

For the six months ended June 30, (in millions of RMB, except percentages) (in millions of RMB, (in millions of RMB, except percentages) 60.5 2018 153.7 140.9 223.7 701.1 737.4 985.5 June 30, 2018 3,495.8 3,140.7 2,647.7 1,662.2 Amount 116,031.5 118,679.2

Segment reporting Overdue loans

advances to customers Sub-total Over 3 years 1 to 3 years 3 months to 1 year Up to 3 months (inclusive)

Total operating income

Jiangxi Province

Other areas Anhui Province Guangdong Province Current loans Gross amount of loans and Overdue loans Loans overdue for 91 days or more The following table sets forth, on the dates indicated, the Bank’s operating income in in income operating Bank’s the indicated, dates the on forth, sets table following The income. various geographical regions and shares in the total operating 7. 7.1 By geographical region As at June 30, 2018, overdue loans totaled RMB2.648 billion, increasing by RMB423 million loans totaled RMB2.648 billion, increasing by RMB423 million As at June 30, 2018, overdue loans, total the of 2.2% for accounted loans overdue year; last of end the at that over compared to the end of last year. Specifically, loans more remaining at equilibrium level as for 1.4%. than 90 days overdue accounted The following table sets forth, on the dates indicated, the Bank’s loans and advances to to advances and loans Bank’s the indicated, dates the on forth, sets table following The of maturity. customers by length 6.6 BANK OF JIUJIANG for eachofourprincipalbusinesssegments: The followingtablesetsforth,fortheperiodsindicated,operatingresultsofBank 7.2 Management DiscussionandAnalysis 38 Profit beforetax Share ofprofit Impairment losses Operating expenses Operating income Net gains/(losses) Other income, Net interest Net feeand External interest Net inter-segment External interest associates on assets securities investment arising from gains orlosses income income/(expense) commission income interest (expense) income

By businesssegment (3) (2)

income/ (4)

Corporate banking 1199 708 1459 8.)(,2.)(9.)(7.)(,5.)(47 (2,937.6) (14.7) (1,557.6) (572.0) (793.3) (3,421.6) (85.0) (1,425.9) (770.8) (1,139.9) ,8. 3. 9. 7. ,9. ,8. 9. 2. 5. 2,646.5 152.3 823.1 390.4 1,280.7 3,495.8 277.9 896.7 635.6 1,685.6 ,0. 1. 318 7. ,4. ,0. 7. 7. 9. 2,651.4 198.5 872.1 379.4 1,201.4 2,141.0 274.7 (351.8) 611.6 1,606.5 ,7. 8. ,2. 8. ,6. ,5. 3. ,2. 7. 5,589.0 178.2 3,325.7 633.1 1,452.0 5,562.6 283.3 2,423.6 981.2 1,874.5 591 253 257 7.)(,8.)(0.)(8.)(2.)(16 (1,068.2) (61.6) (220.7) (182.9) (603.0) (1,180.2) (70.1) (255.7) (285.3) (569.1) 305 247 335 9.)(,1.)(9.)(1.)(1.)(56 (717.2) (95.6) (217.4) (111.2) (293.0) (1,015.3) (96.6) (343.5) (214.7) (360.5) 5. 3. 9. 2. ,0. 8. 63385.0 96.3 384.7 1,309.2 120.1 297.5 135.6 756.0 7. 0. 1395 76.4 (1,349.5) 401.2 871.9 912. 57(.)1807. 1056.1 11.0 79.3 138.0 (0.8) 35.7 24.0 79.1 0.0 0.0 0.0

banking Retail 0.0 . 1,208.0 0.0 0.0

Financial uiesOthers business market 2018 0.0 4.8

8.9 4.0 . 1,208.0 0.0 (1) Six monthsendedJune30,

(in millionsofRMB) Total 8.9 8.8 . 4. 1. 860 35.0 (896.0) 318.3 542.7 0.0

Corporate banking 0.0 0.0 0.0

banking Retail 0.0 0.0 . 177 16 (109.3) (1.6) (107.7) 0.0

Financial uiesOthers business market 2017 0.0 . 4.)(45.5) (48.1) 2.6

. 867.9 1.9 6.8 . 149.9 3.5 (1)

Total 6.8 0.0 2018 Interim Report 39 5.8 48.4 14.8 31.1 100.0 % of total

152.3 390.4 823.1 June 30, 2017 2,646.5 1,280.7 Amount For the six months ended

7.9 48.2 18.2 25.7 100.0 % of total

(in millions of RMB, except percentages) 277.9 635.6 896.7 June 30, 2018 3,495.8 1,685.6 Amount For the six months ended

(1) Corporate banking business Consists primarily of income and expenses that are not directly attributable to any specific segment. Consists primarily of income and expenses Business operation Represents net interest income from each segment’s external customers or activities. income from each segment’s external Represents net interest customers or activities. expense from each segment’s external Represents net interest segment’s transactions with other segments. income/(expense) attributable to each Represents net interest Consists primarily of income and expenses that are not directly attributable to any specific segment. income and expenses that are not directly Consists primarily of

Total operating income

Corporate banking Retail banking Financial market business Others (3) (4) (2) We provide our corporate customers with diversified financial products and services, services, and products financial diversified with customers corporate our provide We products commission-based and fee- and deposits corporate loans, corporate including sector public departments, government include customers corporate Our services. and is business banking Corporate enterprises. commercial and industrial and organizations June ended months six the For income. operating of sources important most our of one billion, RMB1.686 of income operating banking corporate a registered Bank the 2018, 30, by 31.6% year-on-year. accounting for 48.2% of the total operating income, increasing 8 8.1 Note: (1) The following table sets forth, for the periods indicated, the operating income of the Bank’s indicated, the operating income sets forth, for the periods The following table shares in the total operating income. various business segments and Notes: (1) BANK OF JIUJIANG or 23.2%overthatattheendoflastyear. for 63.3%oftheloanstocustomeronsameday,increasingbyRMB14.160billion, As atJune30,2018,theBankissuedcorporateloanstotalingRMB75.158billion,accounting favorable prospectsinthesupplyanddistributionchains. small andmicroenterpriseswhileexploringtoservelargemedium-sizedwith services to small and micro enterprises, focusing on building a financial service brand for The Bankissettoprovidebetterprofessional,all-roundandefficientfinancingschemes 8.1.2 corporate loansasatthesamedates. total our of respectively, 9.09%, and 11.02%, 13.52%, 16.93%, 29.06%, for accounted effort ofJiangxiProvince.AsatJune30,2018,ourloanstocustomersintheseindustries businesses; and (v) the construction sector, which are critical to the “new urbanization” services; (iii) water, environment and public utility management; (iv) wholesale and retail customers are primarily from the industries of (i) real estate; (ii) leasing and business customers and around 31,200 corporate deposits customers. Our corporate banking especially in Jiujiang. As at June 30, 2018, the Bank had around 1,800 corporate loan We have established a large and stable corporate customer base in Jiangxi Province, 8.1.1 Management DiscussionandAnalysis 40 by RMB197million,or4.3%overthatattheend oflastyear. accounting for3.7%ofthegrossamount loans andadvancestocustomers,decreasing income. As at June 30, 2018, the Bank’s discounted bills totaled RMB4.374 billion, licensed toconductbilldiscountingbusiness, toobtainadditionalliquidityandnetinterest customers. The Bank may resell these bills to the central bank or other financial institutions year at discounts. Bill discounting provides short-term financing to our corporate banking acceptance bills andcommercialacceptancewithremainingmaturitiesoflessthanone acceptance billswithremainingmaturitiesoflessthansixmonths;and(ii)electronicbank Discounted bills refers to our purchase of (i) bank acceptance bills and commercial 8.1.3

oprt loans Corporate customers Corporate icutd bills Discounted 2018 Interim Report 41 Retail banking business Retail customers Fee- and Commission-based Products and Services for Corporate Customers Fee- and Commission-based Corporate deposits

8.2.1 Province. With China’s “new We have an extensive retail banking customer base in Jiangxi sub-branches community 93 built has Bank the years, recent in advances plan urbanization” 454,000 around had Bank the 2018, 30, June at As residents. urban of doorstep the on customers. personal loans customers, and around 2,851,600 personal deposits personal deposits their customers with approximately 70,000 there are June 30, 2018, As at total The Bank. the in RMB300,000 over valuing accounts asset management wealth and value of such accounts amounted to RMB47.642 billion. We offer a wide range of products and services to our retail banking customers, including and services to our retail banking customers, including We offer a wide range of products retail Our services. commission-based and fee- other and cards, bank deposits, loans, retail a registered Bank The years. recent in significantly grown has business banking operating total the of 18.2% for accounting million, RMB636 of income operating banking income, increasing by 62.8% year-on-year. 8.2 8.1.5 customers with a broad range of fee- and commission- We provide our corporate banking and domestic of issuance the acceptance, bank including services, and products based management wealth services, agency guarantee, of letters credit, of letters international and fee- and commission-based products and services. services, other domestic settlement and fee net a produced customers banking corporate our period, reporting the During million. commission income of RMB79 We offer our corporate customers time deposits, demand deposits and margin deposits in demand deposits and margin customers time deposits, We offer our corporate Japanese dollar, Kong Hong dollar, U.S. as, such currencies foreign major and Renminbi of tenor maximum a with deposits time Renminbi-denominated provide We Euro. and yen market demand of deposit to meet also offer large-denomination certificates five years. We based on the PRC, and we set interest rates rates liberalization in the arising from interest the 2018, 30, June at As customers. corporate different of demand management capital total the of 66.6% for accounting billion, RMB129.217 totaled deposits corporate Bank’s day, increasing by RMB1.935 billion, or 1.5% over that at corporate deposits of the same the end of last year. 8.1.4 BANK OF JIUJIANG or RMB12.250billionoverthatattheendoflastyear. accounting for 33.2% of the total corporate deposits of the same day, increasing by 23.5%, than five years. As at June 30, 2018, our personal deposits totaled RMB64.333 billion, deposit products. The time deposits for our retail customers have maturities of no more We offer retail banking customers a variety of demand deposit, time deposit and notice 8.2.3 home renovationandpurchasingdurablegoodscars. of personalconsumptionloanstosupportandfamilyneedssuchas business activities with personal business loans, and retail customers with a wide range hand houses, individual business owners, farmers and other retail customers engaged in We provide retail customers with residential mortgage loans for purchasing new or second- on thesameday,increasingby5.4%,orRMB1.991billionoverthatatendoflastyear. personal loansofRMB39.147billion,accountingfor33.0%thetotaltocustomers personal consumptionloansandbankcardbalances.AsatJune30,2018,theBankhad Our personal loans mainly include residential mortgage loans, personal business loans, 8.2.2 Management DiscussionandAnalysis 42 cardholders depending on thetypeofcreditcard. plans to develop our credit card business, and plan to provide value-added services to credit card and public service card business. We have formulated concrete strategies and billion. Duringthereportingperiod,wehada revenueofRMB25milliongeneratedfromthe issued 86,700creditcards(publicservice included)withtotalcreditfacilitiesof2.864 and commenced our credit card business in July 2017. As at June 30, 2018, we have We obtainedthequalificationtoissuecreditcards tothegeneralpublicinDecember2016, Credit card around theworld. UnionPay, ourdebitcardsareacceptedthroughtheChinaUnionPaynetworkinand a totalof2,999,400debitcards,increasingby464,300year-on-year.AsmemberChina cash deposit and withdrawal services free of charge. As at June 30, 2018, we have issued customers who maintain deposit accounts with us. We offer our cardholders cross-bank We issue Renminbi-denominated debit cards, branded as “Lushan Card ( Debit card 8.2.4

Bank cardservices deposits Personal loans Personal 廬山卡)”, to retail 2018 Interim Report

財 the the 43 and

joint

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management 8.3 micro and small to services credit provides business finance micro and small Our business owners. This business includes loans provided to enterprises, as well as individual business personal and business banking corporate our under enterprises micro and small business. loans under our retail banking such recognitions, and awards numerous won has business finance micro and small Our Services Provider to Small and Micro Enterprises in the PRC as the “Outstanding Financial upon 2010, In historically. times several CBRC the by granted award Industry” Banking the first bank in Jiangxi Province to establish a small approval from the CBRC, we became our financial services to small and micro enterprises. We enterprise credit center to manage technology developed by International Project Consult GmbH also introduced the micro-loan customers of ability the assess to micro-loans, in specializing company German a (IPC), Our other fee- and commission-based retail banking products and services consist primarily products and services and commission-based retail banking Our other fee- services. services and payroll and payment management services, agency of personal wealth commission and fee net a harvested business banking retail our period, reporting the During million. income of RMB24 to 8.2.5 micro is responsible for managing for responsible is same include and we We department 園信貸通) owners under by businesses on guarantee BANK OF JIUJIANG total million, Dai As dealer BAIC manufacturers, financial for underwriting management issued 25.7% financial We Management DiscussionandAnalysis 44 We 8.4 Standard Our 8.5 We products. enabled collects and to Building Materials and Hardware City ( development

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2018 Interim Report

by by 45 last

and and day,

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with trading

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in 2018,

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that non-banking (iii) investments deposits 18th money investments Investments Money reporting

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well at RMB123.493

Our Limited, 8.5.2 Our to issued as Our 8.5.1 Non-standard Standard increasing and and the As increasing and other from RMB6.384 As 27.5%, repurchase RMB19.309 policy As Our rising year. 64.9%, BANK OF JIUJIANG equity billion, that established the supervision the instruments, interests standard or Our bills agreements. We customers, and management income June issuance During plans or Our Management DiscussionandAnalysis 46 We 8.5.3 Our 8.5.4

RMB108

rediscounts

engage Group

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30,

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have

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2018 Interim Report

of 13 93

our 47

first

rising and 3 assets inquiry service branch

around banking banking the 320,200 promote

platform

banking banking,

products customer needs

million.

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enterprise

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online

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2018, payment

Jiangxi

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our

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net traditional of in also

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company to

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electronic

service efficient value

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delivered a balance total

half in financial we We corporate

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building

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half

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June

amounting 24,600

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we is year- around In

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sub-branches

sub-branches management.

transfer total banks channels million

of completed

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2018, and

241 channels

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we to

billion.

on- 30,

banking We Province including banking the Bank the to sub-branches all 30, liquidity with

our Shandong county retail

investment.

and

with and

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2018, banking, 18

June

management, online services electronic of Online Branches Electronic Distribution Businesses

use at

at Jiuyin the Beijing,

efficiency. in 8.7.3 Our 8.7 8.7.1 As As 8.6 of 8.7.2 Our capabilities half channels, billion, and the branches products mobile experience. wealth community 16.71% customers network Guangdong centralized and 18 network registered customers, products handled RMB335.836 BANK OF JIUJIANG 30, management, withdrawal, 200 of account receive around has service the and search retail management services convenient transactions. automated investment channels. our access utility such of 8.7.5 We 8.7.4 Management DiscussionandAnalysis 48 We 8.7.7 Our 8.7.6 We including

approximately Jiujiang”

offer 2018, offer introduced

premises self-service Self-service Telephone Mobile WeChat multimedia also self-service customers

banking as fees.

for 254,700 notifications,

hotlines information

management, mobile account and telephone become notification As we

outlet services wealth

voice fund In on

banking

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2018 Interim Report

all the 49 risk loan also

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2018 Interim Report

in in to the

51 and and risk

profit

rates. market bonds’ liability revenue financial activities reporting

tolerance mismatch

securities

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liquidity current

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2018 Interim Report

in in In to to

are the 53 and and and and risk,

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addition,

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2018 Interim Report

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risk have bank source

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2018 Interim Report

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9.1 We We 9. We department to collect 程》 encourage 合規政策》訴訟案件管理辦法》合規審查管理辦法》 stage region commercial with development We We business-related Bank intends automobile compliance, performance so management assessment Through inquiries, new BANK OF JIUJIANG customer in which reorganization its bank. Group, production and transaction, partners small the make controllable culture business extension 9.3 As 9.2 Management DiscussionandAnalysis 58 We 9.5 We 9.4 We

Jiujiang.

increasing

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2018 Interim Report

in to

59 and attract, to support motivate improvement order

strong in with

attract, provide training, to system can

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appraisal human

resources high-caliber performance and human

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We 9.6 our motivate terms BANK OF JIUJIANG 2.2 Stock Exchangeandhad691domesticshareholdersintotal. As atJune30,2018,theBankhadnotbeenlistedonMainBoardofHongKong 2.1 2. including 2,000,000,000DomesticSharesand407,367,200HShares. 2018. Asatthedateofthisreport,Bank’stotalnumberissuedsharesis2,407,367,200, shares havebeenavailableontheMainBoardofHongKongStockExchangeAugust9, prospectus hasbeenpartiallyexercised,involving47,367,200HSharesintotal.Theinvolved Kong Stock Exchange on July 10, 2018. In addition, the over-allotment option stated inthe The Bankissued360,000,000HSharesandbecamelistedontheMainBoardofHong No sharecapitalchangesoccurtotheBankduringreportingperiod. 1. Share CapitalChangesandShareholders 60 As atJune30,2018,thetop10shareholdersareasfollows: Foshan GaomingJindunHengyeComputer ahn Fja)ArclueC. t.Domestic Shares Dasheng (Fujian)AgricultureCo.,Ltd. Industrial BankCo.,Ltd. ijagHhiIpr xotC. t.DomesticShares Jiujiang State-ownedAssets Jiujiang HehuiImport&Export Co.,Ltd. Tellhow GroupLimited inx ase nutilC. t. DomesticShares Junhe (Xiamen)HoldingsCo.,Ltd. Jiangxi BaoshenIndustrialCo.,Ltd. Beijing AutomotiveGroupCo.,Ltd. Total Jiujiang FinanceBureau Name ofShareholder

Shareholders Share capitalchanges Shareholding statusesoftheTop10shareholders Total numberofshareholdersinthereportingperiod Management Co.,Ltd. Special PrintingCo.,Ltd.

Domestic Shares Domestic Shares Domestic Shares Domestic Shares Domestic Shares Domestic Shares

Domestic Shares Class ofShares

1,628,817,909 (Unit: Share) Shares Held 136,077,498 294,400,000 366,020,000 135,840,000 366,020,000 Number of 56,392,500 57,040,000 86,653,080 86,920,000 43,454,831

of theBankby Percentage of Share Capital Approximate Total Issued Period (%) Reporting End of 14.72 18.30 18.30 81.43 6.80 2.82 2.85 4.33 4.35 6.79 2.17

2018 Interim Report

(%) 61 4.44 4.44 2.80 2.80 1.42 1.42 1.42 5.77 5.76 1.42 15.51 15.51 12.47 the Bank capital of percentage Approximate of total share

(%) 9.32 9.32 9.32 6.80 6.79 9.32 18.30 18.30 14.72 29.07 29.07 18.34 18.34 Approximate shareholding percentage of class of share in the relevant Nature of interest Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Investment Manager Beneficial Owner Investment Manager Beneficial Owner

(1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1)

Shares Number of 66,037,600(L) 33,557,000(L) 66,037,600(L) 33,557,000(L) 33,557,000(L) 33,557,000(L) 104,666,400(L) 366,020,000(L) 294,400,000(L) 136,077,498(L) 366,020,000(L) 135,840,000(L) 104,666,400(L) H Shares H Shares H Shares Domestic Shares Domestic Shares Domestic Shares

Domestic Shares Domestic Shares

Class of Shares H Shares H Shares H Shares H Shares H Shares

(6) (4) (7) (5) (3) ) in shares and related shares in shares and Interests and short positions of substantial shareholders and other personnel shareholders and other short positions of substantial Interests and

肇慶市天城有限公司廣州錦繡投資有限公司) Pte. Ltd. 有限公司) Limited Company Limited (廣州錦繡大地房地產發展 ( Special Printing Co., Ltd. (

Name of Shareholder Taiping Assets Management (HK) Company EasternGate SPC Fairshore Asset Management Company Guangzhou Jinxiu Dadi Property Development Beijing Automotive Group Co., Ltd. Industrial Bank Co., Ltd. Dasheng (Fujian) Agriculture Co., Ltd. Shaoxing Tiancheng Company Limited Faithful Edge Limited Foshan Gaoming Jindun Hengye Computer FORESEA LIFE INSURANCE CO LTD Guangzhou Jinxiu Investment Company Limited Jiujiang Finance Bureau The Bank had not been listed on the Main Board of the Hong Kong Stock Exchange on on Exchange Stock Kong Hong the of Board Main the on listed been not had Bank The SFO does not apply. and hence, Section 336 of the June 30, 2018, following the Date, Listing the on acknowledge directors its and Bank the as far As Supervisors and persons (excluding Directors, of the Bank and other substantial shareholders or underlyingand short positions in the Shares of the Bank) had interests the chief executive as Exchange Stock Kong Hong the or Bank the to acknowledged be shall that Shares of Part XV of the SFO, or that were recorded in the register stipulated in Divisions 2 and 3 the SFO. as stipulated in Section 336 of 2.3 BANK OF JIUJIANG Share CapitalChangesandShareholders 62 Success CypressLimited COAST TOWNLIMITED R&F Properties(HK)CompanyLimited Guangzhou R&FPropertiesCo.,Ltd. Venfi GroupLimited HShares Yingcheng InvestmentPropertyCompany China InternationalCapitalCorporationLimited China InternationalCapitalCorporation Hong KongKaiLiFurnitureCompanyLimited Rong DeInvestmentsLimited China InternationalCapitalCorporation AVICT GlobalHoldingsLimited Name ofShareholder ( Limited (盈盛投資有限公司) Hong KongSecuritiesLimited (Hong Kong)Limited 香港凱利家居有限公司 (12) ) (10) (8) (9) (11) (13)

H Shares H Shares Class ofShares H Shares H Shares H Shares H Shares H Shares H Shares H Shares H Shares H Shares 33,018,800(S) 33,018,800(S) 20,418,800(L) 21,909,400(L) 31,642,800(L) 21,909,400(L) 22,205,400(L) 33,018,800(L) 33,018,800(L) 33,308,200(L) 33,557,000(L) 27,370,800(L) 31,642,800(L) 31,642,800(L) Number of Shares

(1) (2) (1) (1) (1) (1) (1) (1) (1) (1) (2) (1) (1) (1) Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner Beneficial Owner of interest Nature in therelevant class ofshare percentage of shareholding Approximate 8.79 9.17 5.67 6.09 6.09 6.17 7.60 8.79 8.79 9.17 9.25 9.32 (%)

of totalshare Approximate percentage capital of the Bank 1.34 1.40 0.87 0.93 0.93 0.94 1.16 1.34 1.34 1.40 1.41 1.42 (%)

2018 Interim Report 63 for 15.51% of the Bank’s total issued share capital as at the Listing Date. The bureau’s legal legal bureau’s The Date. Listing the at as capital share issued total Bank’s the of 15.51% for R&D and sales, and is the earliest in China to apply hot stamping to magnetic stripes of deposit deposit of stripes magnetic to stamping hot apply to China in earliest the is and sales, and R&D Finance Bureau and Jiujiang State-owned Assets Management Co., Ltd have acted in concert since since concert in acted have Ltd Co., Management Assets State-owned Jiujiang and Bureau Finance the Bank’s total issued share capital as at the Listing Date. The company’s legal representative is Xu Xu is representative legal company’s The Date. Listing the at as capital share issued total Bank’s the 8, 2006, Dasheng Agriculture, with Lu Tingfu as its legal representative, is situated in Fuzhou city, Fujian Fujian city, Fuzhou in situated is representative, legal its as Tingfu Lu with Agriculture, Dasheng 2006, 8, 2.47% of the Bank’s total share capital as at the Listing Date. The company’s legal representative is Gao Gao is representative legal company’s The Date. Listing the at as capital share total Bank’s the of 2.47% January 1, 2016 and controlled an aggregate of approximately 17.35% of the interest of the total issued share 17.35% of the interest of the total controlled an aggregate of approximately January 1, 2016 and capital of the Bank. Rong De Investments Limited is a company incorporated in the British Virgin Islands and is owned as to 36%, Rong De Investments Limited is a company incorporated in the British Virgin It is principally engaged in 34.06% and 29.94% by Liao Tengjia, Zhu Qingsong and Zhu Muzhi, respectively. investment holding business. Kong and is wholly owned by Hong Kong KaiLi Furniture Company Limited is a company incorporated in Hong Che Jianxing. It is principally engaged in home furniture, trade and investment. Success Cypress Limited is a company incorporated in the British Virgin Islands and is ultimately held by Tan Success Cypress Limited is a company incorporated in the British Virgin Islands 25%, respectively. It is principally Huichuan, Tan Mei, Tan Haocheng and Tan Yuehua as to 43%, 7%, 25% and engaged in investment holding business. Foshan Gaoming Jindun Hengye Computer Special Printing Co., Ltd. (“Foshan Gaoming”) holds 135.84 million Foshan Gaoming Jindun Hengye Computer for 5.76% of the Bank’s total issued share capital as at the end of domestic shares of the Bank, accounting Luo Hanmin as its legal representative, was established in 2000 and the reporting period. Foshan Gaoming with deposit receipt and deposit books is located in Foshan city, Guangdong province. The company is engaged in printing, Dasheng (Fujian) Agriculture Co., Ltd. (“Dasheng Agriculture”) holds 136.08 million domestic shares of the Bank, Dasheng (Fujian) Agriculture Co., Ltd. (“Dasheng share capital as at the end of the reporting period. Founded on May accounting for 5.77% of the Bank’s total 1 Industrial Bank Co., Ltd. (“Industrial Bank”) holds 294.40 million domestic shares of the Bank, accounting for Industrial Bank Co., Ltd. (“Industrial Bank”) 1 Jiujiang 366.02 million domestic shares of the Bank, accounting for 15.51% Beijing Automotive Group Co., Ltd. holds of The letter “S” denotes the person’s short position in the Shares. the person’s short position in the Shares. The letter “S” denotes of the Bank, holds 366.02 million domestic shares an official organ as legal person, Jiujiang Finance Bureau, accounting The letter “L” denotes the person’s long position in the Shares. The letter “L” denotes province and is wholly owned by Shenzhen D.S Agriculture. It has been consecutively shortlisted as one of the province and is wholly owned by Shenzhen 2015 to 2017. Top 500 Chinese private enterprises from Jianping. Founded in August 1988 and headquartered in Fuzhou City, Fujian province, Industrial Bank is one of by the State Council and the central bank. Industrial Bank was the first joint-stock commercial banks approved on February 5, 2007 (stock code: 601166) and ranks among the officially listed in Shanghai Stock Exchange Top 50 banks in the world. Heyi. Founded in 1958, Beijing Automotive Group Co., Ltd. is headquartered in Beijing and is one of leading Heyi. Founded in 1958, Beijing Automotive 500 Company. automotive groups in China and a Fortune books. It is also a member of “China Trade Association for Anti-counterfeiting”, one of the “Top 500 Printing books. It is also a member of “China Trade Association for Anti-counterfeiting”, Enterprises in Guangdong Province”, and a “Garden-like Unit in Foshan City”. representative is Wu Zexun. representative is Wu

(4) (10) (9) (3) (2)

Notes: (1) (7) (6) (5) (8) BANK OF JIUJIANG securities oftheBankduringreportingperiod. The Bank or any of its subsidiaries has not purchased, sold or redeemed any listed 3. (11) Share CapitalChangesandShareholders 64 (13) (12)

business. Purchasing, saleorredemptionoflistedsecuritiestheBank of R&F Properties(HK)CompanyLimitedisacompanyincorporatedinHongKongandwholly-ownedsubsidiary engaged ininvestmentholding. Venfi GroupLimitedisacompanyincorporatedinHongKongandwhollyownedbyLiuYang.Itprincipally control ofShenzhenPutaiInvestmentDevelopmentLimited.Itisprincipallyengagedinequityinvestment. AVICT GlobalHoldingsLimitedisacompanyincorporatedintheBritishVirginIslandsandundereffective Guangzhou R&F Properties Co., Ltd. (stock code: 2777). It is principally engaged in investment holding 2018 Interim Report Nil Nil Nil Nil Nil Nil Nil Nil 65 Number of shares held

2017.08-2020.05 2017.08-2020.05 2017.08-2020.05 2017.08-2020.05 2017.05-2020.05 500,000 2017.05-2020.05 2017.08-2020.05 2017.08-2020.05 2017.05-2020.05 2017.05-2020.05 224,910 2017.05-2020.05 500,000

Terms of Appointment

Executive Director Executive Director Executive Director Executive Director Vice President Executive Director, President and Chief Customer Manager Executive Director Independent Non- Independent Non- Independent Non- Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Independent Non- Executive Director and Vice Chairman,

Chairman and 44 46 54 42 44 59 60 43 57

Male Male Female 68 Male Male Male Male Male Female 54 Male GenderMale Age Position

YANG Tao QUAN Ze GAO Yuhui ZENG Huasheng ZHANG Jianyong LI Jianbao YI Zhiqiang CHUA Alvin Cheng-Hock CAI Liping PAN Ming Name LIU Xianting

Directors Directors, Supervisors, Senior Management, Staff and Institution Condition Staff and Institution Senior Management, Supervisors, Directors, and Senior Management Directors, Supervisors 1. Incumbent BANK OF JIUJIANG Supervisors Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 66 DAI Wenjing LIAO Jingwen CHEN Chunxia GUO Jiequn QIU Jian LUO Xinhua Name eae45 Female eae3 Supervisor 33 Female eae5 Supervisor 54 Female Male eae3 Supervisor 38 Female edrAePosition Age Male Gender

7Supervisor 47 58

Supervisor andVice Chairman of Department of theAudit General Manager Supervisors the Boardof

2017.05 –2020.05 2017.05 –2020.05 2017.05 –2020.05 2017.05 –2020.05 2017.05 –2020.05 2017.05 –2020.05 Appointment Terms of

shares held Number of 411,600 55,125 14,000 Nil Nil Nil 2018 Interim Report

67 Nil 16,170 55,566 33,369 220,500 217,560 331,100 249,900 500,000 434,588 379,291 500,000 224,910 Number of shares held

President, Chairman and President of Beijing Daxing Jiuyin County Bank and President of Fuzhou Branch Officer enterprise Credit Banking Board Secretary Vice President Executive Director, Executive Director, President and Chief Customer Manager

Assistant to President Assistant to President Assistant to the Assistant to President Chief Information Director of Small- Director of Retail Assistant to President Vice President Vice President Vice President and Executive Director and Executive Director Vice Chairman,

54 49 51 50 41 52 47 48 60 42 45 54 43 Age Position Female Male Male Male Male Male Male Male

Male

Male Male Female Gender Male and passed at the 7th meeting of the fifth session of the Board, Mr. XIAO Wenfa has reached the reached has Wenfa XIAO Mr. Board, the of session fifth the of meeting 7th the at passed and (1) Considered retirement age and retired as the Vice President of Bank of Jiujiang on August 24, 2018. retirement age and retired as the Vice President of Bank of Jiujiang on August

WANG Li CAI Jianhong WANG Yuanxin XU Cao XIAO Jing CHEN Luping QI Yongwen HUANG Chaoyang XIAO Wenfa WANG Kun TONG Faping CAI Liping Name PAN Ming Note: (1)

Senior Management Personnel Senior Management BANK OF JIUJIANG of theBank,Bankisnotawareanyincompliance withtheguidelines. the relevantemployeesregardingtheircompliancewithguidelinesofdealinginsecurities period fromtheListingDatetodateofthisreport.Havingmadespecificenquiries confirmed thatthosestandardsasprovidedthereunderhavebeencompliedwithduringthe regarding their compliance with the Model Code, each of the Directors and Supervisors defined intheListingRules).HavingmadespecificenquiriestoallDirectorsandSupervisors which termsarenolessexactingthanthoseoftheModelCode,forrelevantemployees(as The BankhasalsoputinplaceguidelinesrespectofdealingssecuritiestheBank, the codeofconductforsecuritiestransactionsBankbyallDirectorsandSupervisors. From theListingDatetodateofthisreport,BankhasadoptedModelCodeas Stock Exchange,therefore,theModelCodewasnotapplicable. As atJune30,2018,theBankhadnotbeenlistedonMainBoardofHongKong 3. management oftheBank. above-mentioned, there were no changes of the other Directors, Supervisors and senior From the end of the reporting period and as at the date of this report, except for the retired astheVicePresidentofBankJiujiangonAugust24,2018. the BoardheldonAugust24,2018,Mr.XIAOWenfahasreachedageofretirementand As atthedateofthisreport,afterapproval7thmeetingfifthsession management oftheBank. During thereportingperiod,therewerenochangesofDirectors,Supervisorsandsenior 2. Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 68

Changes Securities TransactionsbyDirectors,SupervisorsandRelevantEmployees the ReportingPeriod in Directors, Supervisors and Senior Management during 2018 Interim Report 69 Interests and Short Positions of Directors, Supervisors and Senior Supervisors and Short Positions of Directors, Interests and Shares and Debentures in Shares, Underlying Executive Personnel

As at June 30, 2018, the Bank had not been listed on the Main Board of the Hong Hong the of Board Main the on listed been not had Bank the 2018, 30, June at As not were Code Model the and SFO the of 352 Section Therefore, Exchange. Stock Kong applicable. Bank who had and chief executive of the Date, the Directors, Supervisors As at the Listing of the Bank Shares and debentures positions in the Shares, underlying interests and short (within the meaning of Part XV of the SFO) which were or any of its associated corporations SFO, the of 352 Section under Bank the by kept be to required register the in recorded Exchange Stock Kong Hong the and Bank the to notified be to required were which or Part XV of the SFO and the Model Code were as follows: pursuant to Divisions 7 and 8 of 4. BANK OF JIUJIANG Interest intheSharesofBank(LongPositions) Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 70 (1) Notes: I inigChairmanand LIU Xianting Name A igViceChairman, PAN Ming A iigExecutive Director CAI Liping U ihaChairmanof LUO Xinhua A ejn Supervisorand DAI Wenjing LIAO Jingwen

As attheListingDate,numberoftotalissuedshares theBankwas2,360,000,000,including2,000,000,000 Domestic Sharesand360,000,000HShares.

Duties Supervisor Director Executive Manager Chief Customer President and Director, Executive President and Vice Supervisors the Boardof Audit Department Manager ofthe Vice General

ls fSae Natureofinterest Class ofShares oetcSae BeneficialOwner Domestic Shares oetcSae BeneficialOwner Domestic Shares oetcSae BeneficialOwner Domestic Shares oetcSae BeneficialOwner Domestic Shares oetcSae BeneficialOwner Domestic Shares oetcSae BeneficialOwner Domestic Shares

of shares Number 500,000 224,910 500,000 411,600 55,125 14,000

the totalissued of therelevant percentage of share capital Approximate class ofthe Bank (%) 0.03 0.01 0.03 0.02 0.00 0.00 (1)

share capitalof the totalissued the Bank(%) percentage of Approximate 0.02 0.01 0.02 0.02 0.00 0.00 (1)

2018 Interim Report 71 0.20 0.25 0.25 0.40 0.40 0.40 0.50 0.50 0.50 0.20 0.50 0.50 0.50 0.25 0.25 of share capital (%) percentage Approximate

80,000 shares 100,000 125,000 125,000 160,000 200,000 100,000 200,000 250,000 100,000 250,000 125,000 100,000 200,000 125,000 Number of

Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner

Nature of interest Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial

(2) (2) (2) (1) (1) (1) 分分分 (4) (4) (4) (5) (3) (5) (5) (3) (3) 彭澤九銀村鎮銀行股份有限公司) 彭澤九銀村鎮銀行股份有限公司) ) 彭澤九銀村鎮銀行股份有限公司 ( Ltd. (瑞昌九銀村鎮銀行股份有限公司) ( Ltd. (瑞昌九銀村鎮銀行股份有限公司) ( Ltd. (瑞昌九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) Associated Corporation Pengze Jiuyin County Bank Co., Ltd. Pengze Jiuyin County

Ruichang Jiuyin County Bank Co., Ruichang Jiuyin County Bank Co., Ruichang Jiuyin County Bank Co., Ruichang Jiuyin County Fenyi Jiuyin County Bank Co., Ltd. ( Ltd. Co., Bank County Jiuyin Fenyi Chongren Jiuyin County Bank Co., Chongren Jiuyin County Bank Co., ( Ltd. Co., Bank County Jiuyin Fenyi Zixi Jiuyin County Bank Co., Ltd. (資 Pengze Jiuyin County Bank Co., Ltd. Chongren Jiuyin County Bank Co., ( Ltd. Co., Bank County Jiuyin Fenyi Zixi Jiuyin County Bank Co., Ltd. (資 Pengze Jiuyin County Bank Co., Ltd. Zixi Jiuyin County Bank Co., Ltd. (資 Executive Director Director and Vice President Executive Director, President and Chief Customer Manager

Executive Name LIU Xianting Chairman and Duties CAI Liping PAN MingChairman, Vice

Interest in associated corporation (Long Positions) corporation (Long Interest in associated BANK OF JIUJIANG

Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 72 A ejn Supervisorand DAI Wenjing LIAO Jingwen aeDuties Chairmanof LUO Xinhua Name Supervisor

Department the Audit Manager of Vice General Supervisors the Boardof Ruichang JiuyinCountyBankCo., Pengze JiuyinCountyBankCo.,Ltd. Fenyi Jiuyin County Bank Co., Ltd. ( Zixi JiuyinCountyBankCo.,Ltd.(資 Chongren JiuyinCountyBankCo., Fenyi Jiuyin County Bank Co., Ltd. ( Chongren JiuyinCountyBankCo., Zixi JiuyinCountyBankCo.,Ltd.(資 Fenyi Jiuyin County Bank Co., Ltd. ( Chongren JiuyinCountyBankCo., Zixi JiuyinCountyBankCo.,Ltd.(資 Ruichang JiuyinCountyBankCo., Ruichang JiuyinCountyBankCo.,

Pengze JiuyinCountyBankCo.,Ltd. Associated Corporation Ltd. (瑞昌九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) Ltd. (崇仁九銀村鎮銀行股份有限公司) 溪九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) 宜九銀村鎮銀行股份有限公司) Ltd. (瑞昌九銀村鎮銀行股份有限公司) Ltd. (瑞昌九銀村鎮銀行股份有限公司) ( ( 彭澤九銀村鎮銀行股份有限公司) 彭澤九銀村鎮銀行股份有限公司) (5) (3) (5) (3) (5) (3) (4) (4) (4) 分分分 (1) (1) (1) (1) (2) (2) (2) Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial Beneficial interest Nature of

Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner Owner

Number of 200,000 160,000 100,000 100,000 shares 80,000 50,000 40,000 20,000 50,000 75,000 60,000 30,000 50,000 50,000

Approximate percentage capital (%) of share 0.40 0.40 0.20 0.40 0.10 0.10 0.10 0.10 0.15 0.15 0.15 0.10 0.20 0.10 2018 Interim Report 73 崇仁九銀村鎮資溪九銀村鎮銀行股 54.0% voting rights of Ruichang Jiuyin County Bank Co., Ltd. (瑞昌九銀村鎮 Bank Co., Ltd. County of Ruichang Jiuyin rights 54.0% voting ectors, Supervisors and Senior Management in ectors, Supervisors and holds 35.0% equity and 53.9% voting rights of Pengze Jiuyin County Bank Co., Ltd. (彭澤九銀村鎮銀 Ltd. Co., Bank County Pengze Jiuyin of rights voting 53.9% and equity 35.0% holds Bank holds 35.0% equity and 54.8% voting rights of Fenyi Jiuyin County Bank Co., Ltd. (分宜九銀村鎮銀行 Ltd. Co., Bank County Jiuyin Fenyi of rights voting 54.8% and equity 35.0% holds Bank 銀行股份有限公司), a subsidiary of the Bank. ), a subsidiary of the Bank. 銀行股份有限公司), a subsidiary of the 股份有限公司), a subsidiary of the Bank. The Bank holds 35.0% equity and 54.8% voting rights of Chongren Jiuyin County Bank Co., Ltd. ( Chongren Jiuyin County Bank Co., Ltd. equity and 54.8% voting rights of The Bank holds 35.0% The The Bank holds 35.0% equity and The Bank holds 35.0% Zixi Jiuyin County Bank Co., Ltd. ( equity and 54.2% voting rights of The Bank holds 35.0% The Bank ), a subsidiary of the Bank. 行股份有限公司), a subsidiary of the ), a subsidiary of the Bank. 份有限公司), a subsidiary of the County Bank Positions Held by Dir

(5) (3) 5. of supervisors of board the of chairperson the as serves Jingwen LIAO Ms. Supervisor director of Jingdezhen Changjiang Jiuyin County Bank, the Xiushui Jiuyin County Bank, the County Bank and the director of Hukou Jiuyin County Bank. director of Lushan Jiuyin Yishu Mr. HUANG Chaoyang serves as the director of Beijing Assistant to President of the Bank Daxing Jiuyin County Bank. Mr. WANG Yuanxin serves as the chairman of the board Assistant to President of the Bank County Bank. of directors of Beijing Daxing Jiuyin Notes: (1) (2) (4) BANK OF JIUJIANG By education By age By department/function 6.1 6. Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 74 Undergraduate andjunior college Total Master’s degreeandabove Total Aged below30 Legal andcompliance,humanresources Risk management,internalcontrolandaudit Others Jiuyin countybank Teller Management Total Finance andAccounting Financial marketbusiness Inclusive financialbusiness Retail banking Corporate banking Others Aged over50 Aged 41–50 Aged 31–40

and informationtechnology

Staff Condition Composition ofpersonnel

ubro tf %oftotal(%) Number ofstaff ubro tf %oftotal(%) Number ofstaff ubro tf %oftotal(%) Number ofstaff As atJune30,2018 As atJune30,2018 As atJune30,2018 2,984 3,318 3,318 2,429 3,318 323 162 465 915 265 620 484 195 175 694 33 91 44 44 11 20

14.01 27.58 18.68 14.59 89.93 73.21 20.92 9.74 4.88 7.99 5.88 0.99 2.74 1.33 1.33 0.33 5.27 0.60 100 100 100 2018 Interim Report 75 Staff remuneration policies Staff training plan Staff training

6.3 and reasonable remuneration and welfare policy, adhering The Bank established a scientific incentive the to adhering flexible”, fairness, first, “efficiency of ideology guiding the to power creation value personnel the improving spirit, fighting our maintaining of directions score with ranking the connecting system remuneration the establishing line, key the as performance. The incentivization, bindingness, and protection and connecting the post with welfare were fully displayed fostering the organic unification effects of the remuneration and and value allocation. In the light of the combined strategy of value creation, value evaluation performance strengthen to personnel guiding incentive, mental and incentive material of improving the timeliness, awareness and continue to create win-win value. Comprehensively progressiveness and fairness of the incentive and restraint. To help the employees of the Bank to become professional and expert managers in their their in managers expert and professional become to Bank the of employees the help To regarding its program according to its vision formulated an annual training work, the Bank works. training various out carrying started It plan. training and strategies development, the overall a life habit and aimed to enhance to see learning as It encouraged employees continuously as well as to improve competency of the employees, quality and professional the reporting their career development. During work and provide support for the employees’ It Bank. the of resources training external and internal both integrated Bank the period, new businesses, new systems, centralized training for organized initiatives such as launching training and training for new employees. It aimed at new products, top-down and off-the-job training, post-training examination and archiving work, excelling in their work in organizing learning platform and forming an internal lecturer team. A as well as establishing an online training off-the-job 15 and lines business all across sessions training business 51 of total and a total of 6865 employees had received training in the sessions were held by the Bank first half of 2018. 6.2 BANK OF JIUJIANG consolidated 18JiuyinCountyBanksasatJune30,2018. distribution network to all major cities in Jiangxi Province. In addition, we controlled and Guangzhou, GuangdongProvinceandHefei,AnhuiProvince.Weplantosteadilyexpandour The branch network of the Bank is primarily located in Jiangxi Province, and also covers branches, 93 community sub-branches and 10 small and micro enterprises sub-branches. office inJiujiang,13branchesand241sub-brancheswhichconsistedof138traditionalsub- As atJune30,2018,weoperatedourbusinessthroughoperationdepartmentofhead 7. Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 76 inx rvneHa fieBankofJiujiangMansion,No.619 HeadOffice Jiangxi Province District

Basic InformationofInstitutionsundertheBank

institution Name of Nanchang Ganjiang River ia rnh196JinggangshanAvenue,Ji'an Ji'an Branch Ganzhou Branch Branch New Area Branch Operating Address

No.1398 HongguzhongAvenue, 528 ShuanggangWSt,Jingkai 9 ZanxianRd,ZhanggongDistrict, Jiangxi Province Changhong Avenue,Jiujiang, Nanchang, JiangxiProvince Province District, NanchangCity,Jiangxi City, JiangxiProvince Ganzhou City,JiangxiProvince Remark branches community sub- sub-branches, 16 office, 39traditional

department 1 operation sub-branch micro enterprises branch, 1smalland community sub- branches, 19 traditional sub- 1 headoffice,11 1 branch sub-branches and microenterprises branches, 3small community sub- branches, 6 traditional sub- 1 branch,14 sub-branch and microenterprises branches, 1small community sub- branches, 10 traditional sub- 1 branch,10 of head

Number 56 32 24 22 1 2018 Interim Report 5 7 8 12 15 18 21 77 Number

1 branch, 2 traditional1 branch, sub-branches, 1 community sub- branch, 1 small and micro enterprises sub-branch 1 branch, 2 traditional1 branch, sub-branches, 3 community sub- branches, 1 small and micro enterprises sub-branch 1 branch, 5 traditional1 branch, sub-branches, 2 community sub- branches 1 branch, 6 traditional1 branch, sub-branches, 5 community sub- branches 1 branch, 8 traditional1 branch, sub-branches, 6 community sub- branches 1 branch, 11 traditional sub- branches, 3 community sub- branches, 3 small and micro enterprises sub-branches 1 branch, 11 traditional sub- branches, 9 community sub- branches

Remark W Rd, Yuehu District, Yingtan City Jiangxi Province Jiangxi Province Shangrao City, Jiangxi Province (Opposite to Municipal Hospital) City, Jiangxi Province Jiangxi Province Meiyahuijin Guangchang, 31 Shengli 121 Yuejin N Rd, Pingxiang City, 197 Licun Garden, Jingdezhen City, 197 Licun Garden, Jingdezhen City, 87 Wusan Avenue, Xinzhou District, 87 Wusan Avenue, Xinzhou District,

Operating Address 1250 Gandong Avenue, Fuzhou City, 1250 Gandong Avenue, Branch Branch Branch Branch Yingtan Xinyu Branch 720 Xianlai E Ave, Xinyu City Pingxiang Jingdezhen Shangrao Yichun Branch 206 Yuanshan Middle Rd, Yichun Name of institution Fuzhou Branch District

BANK OF JIUJIANG Directors, Supervisors,SeniorManagement,StaffandInstitutionCondition 78 Total Guangdong District nu rvneHfiBac BlockB,Jingding Guangchang,287 HefeiBranch Anhui Province Province

institution Name of Guangzhou Nansha Sub- Branch Trade Zone Pilot Free- Guangdong branch in Operating Address

Aoyuan Daxia,108,HuangpuW Rms 105,401,402,403,404,405, City Ave, TianheDistrict,Guangzhou District, GuangzhouCity floor 1)FengzeERd,Nansha 406 and407,106(Self-named City, AnhuiProvince Suixi Rd,LuyangDistrict,Hefei Remark

branches community sub- sub-branches, 7 1 branch, 9traditional 1 sub-branch branches community sub- sub-branches, 6 1 branch, 9traditional

Number 255 17 16 1 2018 Interim Report 79 Compliance with the Model Code for Securities Transactions by Compliance with the Model Code for Securities Directors of the Listed Issues Compliance with Corporate Governance Code Compliance with Corporate Overview

The Bank has adopted the Model Code as its code of conduct for Directors’ securities securities Directors’ for conduct of code its as Code Model the adopted has Bank The Exchange during the Stock the Hong Kong on listed was not yet As the Bank transactions. Listing Rules in relation to the six months ended June 30, 2018, the provisions under the applicable to the Bank during compliance with the Model Code by the Directors were not Directors, all of the Directors the reporting period. Having made specific enquiries with the as set out in the Model Code confirmed that they have complied with the required standards of this interim report. since the listing of the Bank on July 10, 2018 as at the date 3. 2. had not been listed on the Main Board of the Hong Kong As at June 30, 2018, as the Bank reporting the during applicable not was Code Governance Corporate the Exchange, Stock period. has complied with all the code During the Listing Date to the date of this report, the Bank adopted a vast majority of and provisions under the Corporate Governance Code and has the recommended best practices therein. During the reporting period, the Bank has been improving its corporate governance and and governance corporate its improving been has Bank the period, reporting the During governance corporate in situations, actual its of view in explorations, proactive making mechanisms, restriction and stimulation procedures, and rules decision-making structures, of enhancement and systems, governance external control, internal and management risk regulations and laws with accordance in China of Party Communist the of leadership the the Corporate Company Law of the PRC and governance, such as the concerning corporate of leadership and supervision under and Banks, Commercial for Guidelines Governance competent supervision department. Supervisors, of Board Directors, of Board shareholders, of meeting general Bank’s The of Board the and Directors of Board the under committees special various as well as effectively has which period, reporting the during operation efficient enjoyed Supervisors healthy and sustainable as well as operation robust and compliance Bank’s the ensured a total of 22 meetings during the reporting period, namely development. The Bank convened of meetings 9 Directors, of Board the of meetings 4 shareholders, of meeting general 1 Supervisors of Board the of meetings 4 Directors, of Board the under committees special under the Board of Supervisors. and 4 meetings of special committees Corporate Governance Corporate 1. BANK OF JIUJIANG Committee, anddeliberatedonadoptedatotalof47proposals. meetings of the Strategy Committee, and 1 meeting of the Nomination and Remuneration the Audit Committee, 2 meetings of the Related Party Transactions Control Committee, 3 held 9 meetings, including 1 meeting of the Risk Management Committee, 2 meetings of and adoptedatotalof54proposals.ThespecialcommitteesundertheBoardDirectors olding of meetings of Board of Directors and its special committees During thereportingperiod,BoardofDirectorsheldatotal4meetings,deliberatedon 5. Association. of shareholders all comply with relevant laws and regulations as well as the Articles of convening, notifying, holding and voting procedures concerning the above general meeting Ltd., andProposalonDeliberatingthe2017AnnualReportofJiujiangBankCo.,Ltd.The Supervisors and Senior Executives from the Supervisory Committee of Jiujiang Bank Co., Co., Ltd., Proposal on Deliberating on the 2017 Annual Evaluation Report of Directors, Report of Directors and Senior Executives from the Board of Directors of Jiujiang Bank Report ofJiujiangBankCo.,Ltd.,ProposalonDeliberatingthe2017AnnualEvaluation Jiujiang BankCo.,Ltd.,ProposalonDeliberatingthe2017AnnualSupervisoryCommittee 18 proposals, such as Proposal on Deliberating on the 2017 Annual Directors’ Report of 2018, theBankheld2017annualgeneralmeetingofshareholders,anddeliberatedon The Bank held 1 general meeting of shareholders during the reporting period. On June 22, 4. Corporate Governance 80 proposals. meeting of the Nomination Committee, and deliberated on and adopted a total of 29 Supervisors held 4 meetings, including 3 meetings of the Monitoring Committee, and 1 on and adopted a total of 47 proposals. The special committees under the Board of During thereporting period, the Board ofSupervisors held a total of4meetings,deliberated lding of meetings of Board of Supervisors and its special 6.

Ho H committees Holding ofgeneralmeetingsshareholders 2018 Interim Report 81 Internal control and internal audit Internal control Internal control

7.1 internal encompassing and well-designed a up set Bank the period, reporting the During customer improving control, risk Bank’s the enhancing of purpose the for system control sustainable development. services and promoting of meeting general the with structure governance corporate modern a up built Bank The the Board of Directors as the decision-making body, the shareholders as the body of power, body, and the management as the executing body, Board of Supervisors as the supervisory control internal its improved it Meanwhile, environment. control internal sound a creating on the Basic Internal Control System of Bank of Jiujiang, system. The system is structured Jiujiang Co., Ltd., and Authorization Management Measures Compliance Policies of Bank of (product) management business by dominated and Jiujiang, of Bank of Persons Legal for of various business lines and departments. measures and operating instructions corrected and supervised effectively and evaluation, and on inspection stress Bank laid The business specific targeting effort inspection enhancing kept It found. problems any internal control evaluation in light and carried out risks, development statuses and existing Banks Commercial for Guidelines Control Internal the by determined elements five the of for Commercial Banks, namely internal control environment, and Internal Evaluation Measures and exchange information measures, control internal evaluation, and identification risk and correction. It included key problems found during feedback, and supervision, evaluation into the Problem Base and Records of Implementing internal audit and regulator inspection pertinent rectifications by means of site correction, follow-up, Supervision Opinions, enforced improved internal control in a and coordinated supervision over follow-up audit, which had sustainable manner. 7. BANK OF JIUJIANG such inspection. auditees fromtimetotime, andascertaincorrespondingresponsibilities basedonresultsof to ensure the audit effectiveness, relevant subordinate units inspect the rectifications of The audit report covers the overview, basis, conclusion and opinions of audit. In order preparatory stage,the implementation stage,thereportingstageand theconcludingstage. site audit, off-site audit, and audit survey, etc. The audit procedure is made up of the according to entrustment terms. The Bank usually carries out internal audit in forms of the economic responsibilities of the Bank’s senior management during their tenure of office as creditrisks,marketoperational andinformationtechnologyrisks,audits plans upon approval. The Bank carries out special audit centering on various risks, such into consideration, reports them to the Audit Committee for approval, and implements the plans taking business operation, riskmanagement,and internal control compliance statuses regulatory departments, the audit department of head office makes annual internal audit According to the requirements of the Board of Directors, the Board of Supervisors and the headofficeisobligedtoguideandsuperviseaboveauditwork. and reportauditworktothedepartmentofheadoffice.The audit plans,etc.accordingtotherequirementsofdepartmentheadoffice, and the Board of Supervisors. Its subordinate units take on audit projects and implement organizing andperformingauditworkfollowingtherequirementsofBoardDirectors assumes responsibilitiesdominatedbyformulatingandimplementingannualauditplans, The audit department reports audit work to the Audit Committee on a regular basis and The audit department of the head office is an internal audit department of the Bank. Committee is supervised by the Board of Directors and reports to it when appropriate. as well as annual audit plans, offering guidance and supervising execution. The Audit reviewing andapprovingtheBank’sinternalauditmethods,policiesprocedures, the headoffice.TheBoardofDirectorsBankhasanAuditCommitteeresponsiblefor by itsBoardofDirectorsandcomprisestheauditcommitteedepartment The Bankhasestablishedanindependentinternalauditorganizationalstructurewhichisled efficiency, importanceandrelevancethroughouttheinternalauditwork. governance. The Bank sticks to the principles of independence, objectivity, prudence, areas including our business operations, risk management, internal control and corporate our steady operation and value enhancement. Our audit covers a comprehensive range of evaluation andadvisoryactivitiesinasystematicstandardizedmanner,soastopromote compliance and corporate governance through independent and objective supervision, and improvement of our business operations, risk management, internal control and Bank’s business operation. The objectives of our internal audit are the review, evaluation Effective internal audit is of vital importance for ensuring sustainable development of the 7.2 Corporate Governance 82

Internal audit Internal 2018 Interim Report 83 Substantial related transactions Profits and dividends

During the reporting period, no substantial related transactions that adversely impact the the impact adversely that transactions related substantial no period, reporting the During Bank’s operation performance and financial status occurred. 3. The income and financial condition of the Bank for the six months ended June 30, 2018 2018 30, June ended months six the for Bank the of condition financial and income The financial statement of the interim report. have been set out in the interim General Annual 2017 the at passed and considered resolutions relevant the to According 2018, the Bank plans to carry out Meetings of shareholders of the Bank held on June 22, $0.1 of dividend cash distributing 2018, 30, September before scheme sharing profit the whose names appear on per share (inclusive of tax) to the shareholders of Domestic Shares the 2017 annual cash the register of members of the Bank on June 22, 2018 distributing to $200,000,000.00 (inclusivedividend, the total amount of cash dividend distributed amounted of tax). ended months six the for dividend interim of payment the recommend not did Bank The June 30, 2018. 2. For the purpose of seeking sustainable business development and expanding its own capital own its expanding and development business sustainable seeking of purpose the For Stock Kong Hong the of Board Main the on listed successfully was Bank the capability, 10, 2018. Exchange on July H Shares the issue of 360,000,000 H Shares this time, which comprised The Bank issued exercised) partially was Option Over-allotment the which (for Shares H 47,367,200 and RMB1.00 was Shares H of value nominal The shares. 407,367,200 totaling respectively, was price issue The RMB407,367,200.00. was value nominal aggregate the and each, capability capital the enrich to are funds raised the of purposes the and share per HK$10.60 business development. of the Bank and to promote sustainable Offering of the Bank was approximately HK$4,317.47 million, The net proceeds from Global to approximately HK$501.91 million from the issuance including the net proceeds amounting prospectus. the in stated as Option Over-allotment the exercising partially by Shares H of the fund raised through the Global Offering of the Bank has As of the date of this report, purposes the with accordance in utilised be will and account special into deposited been disclosed in the prospectus. Significant Issues Significant (H Shares) listed foreign shares offering of overseas 1. Initial public BANK OF JIUJIANG 5. that hadagreatimpactonitsbusinessactivitiesduringthereportingperiod. Save asdisclosedabove,theBankwasnotinvolvedinanyotherlawsuitsandarbitration business, financialstatusandoperationperformance. will notresultinanysignificantadverseimpact(whetherindividuallyorjointly)ontheBank’s million. TheBankestimatedthatanyexistingandpendinglegalorarbitrationalproceedings normal business operation, including 126 outstanding case(s) involving at least RMB10 As at June 30, 2018, the Bank had been involved in outstanding legal proceedings in its to preparetheapplicationforjurisdictionobjection. held thatitwasmoreappropriatetofilethelawsuitinaMainlandChinacourt,andstarted Instance oftheHongKongHighCourtconcerningleasingagreementdispute.TheBank In June2018,theplaintiffofcasefiledalawsuitagainstBankinCourtFirst 4. Significant Issues 84 The Bankdidnotimplement anyshareincentiveplanduringthereporting period. 8. businesses. concrete planson significant investment oronacquiring significantcapitalassetsorother During thereportingperiod,Bankneither made anysignificantinvestment,norhad 7. must perform. During thereportingperiod,Bankwasnotinvolvedinanysignificantcontractsthatit 6. regulators. by CSRC,norunderanypubliccensurestockexchangeorpunishmentother management were neither under any investigation, administrative penalty or open criticism During the reporting period, the Bank, as well as its Directors, Supervisors and senior

reporting period Share Significant investmentandrelevant plans Significant contractsandtheirperformance senior management Punishment againsttheBankanditsDirectors,Supervisors Material lawsuitsandarbitrationmatters incentive plans and specific implementation during the 2018 Interim Report 85 Approval and opening of newly established county banks Approval and opening Auditors

Hukou Jiuyin County Bank Co., Ltd. Hukou Jiuyin County Bank Ltd., which was initiated by the Bank, received the “Reply Hukou Jiuyin County Bank Co., Jiuyin County Bank Co., Ltd.” (Xun Yin Jian Fu [2018] No. on approving opening of Hukou Financial the obtained and 2018, 1, February on CBRC of Branch Jiujiang by issued 2) Branch Jiujiang from S0070H336040001) code: (Organization Permit Operation Business Ltd. Co., Bank County Jiuyin Hukou 2018, 2, February On 2018. 2, February on CBRC of (Unified social credit code: 91360400MA37PXD676), and the obtained the business license Jiujiang County, Hukou Town, Shuangzhong Avenue, Sanli 29, No. is address registered is capital registered The Lingling. Tian is representative legal The Province. Jiangxi City, business scope covers taking RMB50 million, with the bank holding 50% of the shares. The acceptance bill settlement, domestic loans, short-term/long-term offering deposits, public and discounting etc. 11. county banks funded by the Bank had gained approval on During the reporting period, two Branch of CBRC. The Bank actively carried out the following starting business from Jiujiang the approval opinions: work in strict accordance with 10. Acquisition and sales of assets, business merger and sales of assets, 10. Acquisition Bank was not involved in any significant assets acquisition, During the reporting period, the sales or business merger. The Bank held the 2017 general meeting of shareholders on June 22, 2018, which which 2018, 22, June on shareholders of meeting general 2017 the held Bank The Touche Deloitte reappointing respectively on decision the adopted and on deliberated Deloitte Touche General Partnership) and Public Accountants LLP (Special Tohmatsu Certified in 2018. report auditors of the Bank domestic and overseas financial Tohmatsu as the 9. BANK OF JIUJIANG Standards. June 30,2018whichwaspreparedinaccordancewiththeInternationalFinancialReporting interim report,aswelltheunauditedfinancialstatementforsixmonthsended interim resultsannouncementoftheBankforsixmonthsendedJune30,2018,2018 On August 24, 2018, the Audit Committee of the Bank had reviewed and confirmed the standards, andissuedtheauditors’reviewreportwithacleanopinion. accordance with the International Financial Reporting Standards, following relevant review statement for the six months ended June 30, 2018, which was prepared by the Bank in Tohmatsu Certified Public Accountants LLP has reviewed the unaudited interim financial The interim financial report disclosed in this interim report is unaudited. Deloitte Touche 12. etc. offering short-term/long-term loans, domestic settlement, bill acceptance and discounting with theBankholding50%ofshares.Thebusinessscopecoverstakingpublicdeposits, Province. The legal representative is Ji Hongjin. The registered capital is RMB50 million, registered address is No. 99, Dongfeng Avenue, Duchang County, Jiujiang City, Jiangxi license on February 2, 2018 (Unified social credit code: 91360400MA37PXJN4R) and the CBRC on February 2, 2018. Duchang Jiuyin County Bank Co., Ltd. obtained the business Business Operation Permit (Organization code: S0071H336040001) from Jiujiang Branch of 3) issued by Jiujiang Branch of CBRC on February 1, 2018, and obtained the Financial on approving opening of Duchang Jiuyin Rural Bank Co., Ltd.” (Xun Yin Jian Fu [2018] No. Duchang JiuyinCountyBankCo.,Ltd.,whichwasinitiatedbytheBank,received“Reply Duchang JiuyinCountyBankCo.,Ltd. Significant Issues 86 and thewebsiteofBank(www.jjccb.com) on August24,2018. published ontheHKExnewswebsiteofHong KongStockExchange(www.hkexnews.hk) The interim results announcement of the Bank for the six months ended June 30, 2018 was 13.

nei results Interim Review ofinterimreport 2018 Interim Report 87 Events after the reporting period Events after

In accordance with the Decision of the People’s Bank of China on Granting Administrative of the People’s Bank of China on Granting Administrative In accordance with the Decision of Branch Jiangxi of Reply the and 5) No. (2018) Zi Yu Zhun Xu Chang Shi (Yin Permits 86), the No. Fu (2018) Jian (Gan Yin Bank of Jiujiang by CBRC on Issuance of Green Bonds financial bonds in the inter- Bank was allowed to issue not more than RMB4 billion of green bank bond market in China. August 15, 2018 to August The Bank issues the 2018 Phase-I green financial bonds from a with bonds fixed-rate 3-year of form in all billion, RMB1 was scale issuing The 2018. 16, face interest rate of 4.25%. Green financial bonds Secondary capital bonds of the People’s Bank of China on Granting Administrative In accordance with the Decision Yu Zi (2017) No. 235) and the Reply of Jiangxi Branch of Permits (Yin Shi Chang Xu Zhun Capital Bonds by Bank of Jiujiang (Gan Yin Jian Fu (2017) CBRC on Issuance of Secondary the 2018 Phase-II secondary capital bonds of Bank of No. 203), the Bank publicly issued 2018 to July 17, 2018, with the issuing scale being RMB1.5 Jiujiang Co., Ltd. from July 13, bonds (conditional issuer redeemable right at the end billion, all in form of 10-year fixed-rate a face interest rate of 6.29%. of the 5th year). The bond has Global offering Bank became 360,000,000 H Shares of the its global offering. The The Bank has finished Exchange on July 10, 2018. Board of Hong Kong Stock listed on the Main partially been has Prospectus the in described as option over-allotment the addition, In listed on Shares, and such H Shares became a total of 407,367,200 H exercised, involving Stock Exchange on August 9, 2018. Please refer to the the Main Board of the Hong Kong July 29, 2018 for details. announcement of the Bank dated 14.

BANK OF JIUJIANG Audit Department Audit Organizational Chart 88 Related PartyTransactionsControlCommittee

Risk ManagementCommittee Nomination andRemunerationCommittee Ganjiang River New Area Branch Area New River Ganjiang Strategy Committee

Audit Committee

Research and Planning Department Planning and Research

Branch Guangzhou

Security Department Security

Consolidated Management Department Management Consolidated Hefei Branch Hefei

Logistics Service Center Service Logistics

Nanchang Branch Nanchang

Of ce of the Board the of Of ce

Secretary Of ce Secretary

Ji'an Branch Ji'an

Resources Human

Small-enterprise Credit Center Credit Small-enterprise

Fuzhou Branch Fuzhou Party Work Department Work Party

Strategic Planning Department Planning Strategic

Yichun Branch Yichun

Planning and Finance Department Finance and Planning

Strategic Customer Department Customer Strategic

Branch Jingdezhen

Board of Directors

Investment Bank Department Bank Investment Corporate Finance Management Headquarters Management Finance Corporate

Shangrao Branch Shangrao

Retail Customer Management Department Management Customer Retail

Headquarters Management Banking Retail Ganzhou Branch Ganzhou

Strategic Planning Department Planning Strategic

General Meetings

Pingxiang Branch Pingxiang

Discipline Supervising Of ce Supervising Discipline The Bank Shareholders’ Management Online Loan Department Loan Online

Senior

Integrated Services Department Services Integrated

Xinyu Branch Xinyu

Credit Approval Department Approval Credit Community Financial Business Department Business Financial Community

Branch Yingtan

Supervisors

Sub-branches under the head of ce head the under Sub-branches Asset Preservation Center Preservation Asset Risk Management Department Management Risk Board of

Information TechnologyManagementCommittee Bill center Bill

Public ProcurementCommittee

Call Center Call Asset andLiabilityCommittee Department Management Operational

Internal ControlCommittee

Accountability Committee Credit ReviewCommittee

Inclusive Finance Headquarters Finance Inclusive

Information Technology Department Technology Information Automobile Financial Business Department Business Financial Automobile

Centralized Operations Center Operations Centralized Nomination Committee Monitoring Committee

Department Management Project Financial Equity Business Department Business Equity Financial

Trading and Financial Department Financial and Trading

Compliance Department Compliance Credit Card Center Card Credit

Direct Banking Business Department Business Banking Direct

County Bank Management Department Management Bank County Headquarters Management Market Financial

Infrastructure Of ce Infrastructure Financial InstitutionalDepartment Integrated ServicesDepartment Asset ManagementDepartment Direct InvestmentBankingDepartment Risk ManagementDepartment Fund OperationsCenter Credit Approvaland

2018 Interim Report 89 Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong August 24, 2018 Other matters condensed comparative the that fact the to attention draw we conclusion, review our qualifying Without statement of changes in equity and consolidated statement of profit or loss and other comprehensive income, and the relevant explanatory notes statement of cash flows for the six-month period ended 30 June 2017 been reviewed in accordance with included in these condensed consolidated financial statements have not ISRE 2410. Conclusion condensed the that believe to us causes that attention our to come has nothing review, our on Based in accordance with IAS 34. consolidated financial statements are not prepared, in all material respects, Scope of Review with International Standard on Review Engagements 2410 “Review We conducted our review in accordance by the Independent Auditor of the Entity” (“ISRE 2410”) issued by of Interim Financial Information Performed Standards Board. A review of these condensed consolidated financial the International Auditing and Assurance matters, accounting and financial for responsible persons enquiries, primarily of of making consists statements audit an than scope in less substantially is review A procedures. review other and analytical applying and Standards on Auditing and consequently does not enable us to conducted in accordance with International aware of all significant matters that might be identified in an audit. obtain assurance that we would become opinion. Accordingly, we do not express an audit Introduction Ltd (the “Bank”) statements of Bank of Jiujiang Co., the condensed consolidated financial We have reviewed comprise which 149, to 90 pages on out set “Group”) the as to referred (collectively subsidiaries its and related condensed as of June 30, 2018 and the statement of financial position the condensed consolidated in equity and income, statement of changes of profit or loss and other comprehensive consolidated statement The directors ended, and certain explanatory notes. flows for the six-month period then statement of cash financial presentation of these condensed consolidated for the preparation and of the Bank are responsible (“IAS Reporting” Financial “Interim 34 Standard Accounting International with accordance in statements a Standards Board (the “IASB”). Our responsibility is to express 34”) issued by the International Accounting our report to and review, our on based statements financial consolidated condensed these on conclusion our agreed terms of engagement, and for no other in accordance with conclusion solely to you, as a body, towards or accept liability to any other person for the contents of purpose. We do not assume responsibility this report. Report on Review of Condensed of on Review Report s Statement Financial Consolidated CO., LTD OF DIRECTORS OF BANK OF JIUJIANG TO THE BOARD BANK OF JIUJIANG (Amounts inthousandsofRenminbi,unlessotherwisestated) Condensed ConsolidatedStatementofProfitorLoss 90

Attributable to: Profit fortheperiod Income taxexpense Profit beforetax Impairment losses,netofreversal Operating expenses Operating income Net gains/(losses)arisingfromfinancialassets Net feeandcommissionincome Fee andcommissionincome Net interestincome Interest income Fair valuegainondebtinstrumentsmeasuredatfair Income tax Net changesininvestmentrevaluationreservefor Items thatmaybereclassifiedsubsequentlytoprofitorloss: Profit fortheperiod Earnings pershare(ExpressedinRMBYuanshare) Income tax Amount reclassifiedtolossupondisposaloffinancialassets Non-controlling interests Shareholders oftheBank Total comprehensiveincomeattributableto: Total comprehensiveincomefortheperiod Other comprehensiveincome/(expenses) Total comprehensiveincome fortheperiod Fee andcommissionexpense Share ofprofitassociates Other income,gainsorlosses Interest expense Non-controlling interests Shareholders oftheBank measured atfairvaluethroughothercomprehensiveincome credit lossimpact through othercomprehensiveincome,excludingexpected available-for-sale financialassets – Basic for theperiod,netoftax

NOTES 0(5,5)(203,117) (253,453) 10 11 11014 (1,068,152) (717,247) (1,180,154) (1,015,311) (109,277) 9 8 1,208,014 2,651,419 6 5 2,140,995 5,589,012 5 5,562,582 4 4 5 7 (2,937,593) (3,421,587) 4

Six monthsendedJune30, (Unaudited) ,3,6 679,205 1,035,866 ,5,5 664,912 868,029 1,055,850 1,309,303 2,646,598 3,495,847 ,5,5 664,912 1,055,850 ,1,7 385,238 370,945 1,417,579 1,437,563 ,3,6 370,945 1,437,563 (127,238) 493,364 8,1 (293,967) 381,713 3,0 149,911 178,976 138,005 215,892 7,8)(29,065) (77,887) 994(14,293) 19,984 15,587 994(14,293) 19,984 ,2 6,830 8,921 ,3 (45,455) 8,833 2018 0.52 97,978 (391,945) – –

(Unaudited) 2017 0.38 – – – 2018 Interim Report – – – – – 91 2017 As at (Audited) December 31,

– 68,904,526 – 13,125,507 – 20,554,576 – 910,763 2018 As at 289,406 425,970 352,600 524,601 507,653 736,000 811,940 June 30, 2,758,0463,275,3585,746,908 2,758,046 3,275,358 5,107,661 5,020,023 5,020,023 (Unaudited) 18,176,299 17,143,507 18,700,900 17,651,160 288,335,870 271,254,063 269,634,970 253,602,903 288,335,870 271,254,063 Pan Ming

Executive Director 26 5,699,777 6,042,802 25 1,467,921 1,257,970 24 2,399,098 2,412,473 23 115,251 111,330 22 20,780,083 22 52,869,764 22 48,933,125 21 20 19 18 4,215,256 32 4,691,838 5,762,322 18 110,363,587 99,528,133 31 43,063,399 40,247,839 17 9,314,582 26,506,739 30 193,926,108 179,636,570 16 29 6,383,617 17,405,997 15 374,068 1,480,987 34 (624,036) (1,017,581) 28 809,478 1,116,931 14 2,113,975 1,667,765 33 2,000,000 2,000,000 27 19,309,154 8,268,704 13 29,689,383 28,750,492 NOTES

Liu Xianting Chairman of the Board fair value through other comprehensive income fair value through other comprehensive fair value through profit or loss fair value through profit or loss Other assets Deferred tax assets Property and equipment Investments in associates

Investment securities measured at Investment securities measured at amortised cost Investment securities measured at amortised

Investment securities measured at Investments classified as receivables Held-to-maturity investments Available-for-sale financial assets

Loans and advances to customers at Loans and advances Provision for credit commitments and financial guarantees Provision for credit commitments and Other liabilities Loans and advances to customers at amortised cost, net Loans and advances Income tax payable Debt securities issued Financial assets held under resale agreements Financial assets held Customer deposits Financial assets held for trading Financial assets held Surplus reserve General reserve Retained earnings Financial assets sold under repurchase agreements Financial assets sold under repurchase Placements with banks and other financial institutions Placements with banks Capital reserve Investment revaluation reserve Placements from banks Deposits with banks and other financial institutions Deposits with banks Share capital Borrowings from central bank institutions Deposits from banks and other financial Cash and balances with central bank Cash and balances

Equity attributable to Shareholders of the Bank Total equity Total equity and liabilities Non-controlling interests EQUITY Total liabilities Total assets LIABILITIES ASSETS issue for authorized and approved were 149 to 90 pages on statements financial consolidated condensed The by: by the Board of Directors on August 24, 2018 and are signed on its behalf

Condensed Consolidated Statement of Financial Position of Financial Statement Consolidated Condensed otherwise stated) of Renminbi, unless (Amounts in thousands BANK OF JIUJIANG (Amounts inthousandsofRenminbi,unlessotherwisestated) Condensed ConsolidatedStatementofChangesinEquity 92

Dividend distribution Other comprehensiveexpenses Other comprehensiveincome Appropriation togeneralreserve Dividend distribution As atJune30,2017(Unaudited) Capital injectionbythe Total comprehensive(expenses)/ Profit fortheperiod As atJanuary1,2017(Audited) As atJune30,2018(Unaudited) Capital injectionbynon- Total comprehensive Profit fortheperiod As atJanuary1,2018 Effect ofchangeinaccounting As atDecember31,2017(Audited) Capital injectionbynon- controlling shareholders shareholders oftheBank income fortheperiod for theperiod controlling shareholders income fortheperiod for theperiod principles forfinancialinstruments

NOTE 12 12

,0,0 ,2,2 6038 ,2,4 ,0,1 ,3,2 65563544117,070,104 534,491 16,535,613 4,930,429 2,804,516 2,421,043 (640,398) 5,020,023 2,000,000 13,598,311 533,016 13,065,295 4,491,724 2,804,016 18,700,900 2,421,043 524,601 (346,431) 18,176,299 2,178,943 5,746,908 1,516,000 3,275,358 2,758,046 (624,036) 5,020,023 17,421,047 462,327 2,000,000 16,958,720 17,651,160 4,911,042 507,653 3,275,358 17,143,507 2,758,046 5,107,661 (1,005,749) 3,275,358 5,020,023 2,758,046 2,000,000 (1,017,581) 5,020,023 2,000,000 8,0 2,841,080 484,000 capital capital Share Share – – – – – – – – – – – –

reserve reserve Capital Capital – – – – (293,967) – (293,967) – – 381,713 – 381,713 – 11,832 – – –

Attributable toShareholdersoftheBank Attributable toShareholdersoftheBank Investment Investment revaluation revaluation reserve reserve – – – – – – – –

Surplus Surplus reserve reserve 0 (500) 500 – – – – – – – – – – – – –

General General reserve reserve 7,0 7,0 1,9)664,912 (14,293) 679,205 679,205 – 1,055,850 19,984 1,035,866 1,035,866 – 7,0 8,3 1,9)370,945 (14,293) – 385,238 679,205 – – 1,437,563 19,984 1,417,579 – 1,035,866 (230,113) – (45,326) – (184,787) (196,619) – – 2000 2000 158 (241,568) (1,568) (240,000) (240,000) – 2000 2000 770 (207,710) (7,710) (200,000) (200,000) –

Retained Retained annsSubtotal earnings annsSubtotal earnings – (293,967) – – 381,713 – 3,325,080 –

– 73617,336 17,336 – 50,000 50,000 –

controlling controlling neet Total interests neet Total interests Non– Non– – (293,967) – 381,713 – 3,325,080 –

– 2018 Interim Report – – – – – 93 (152) 2017

–– (484,387) (2,109,957) –– 43,132 77,943 1 2018 (3,084) 6,500 (8,921) (6,830) 57,559 (345,881) 22,609 15,587 (75,940) (2,850,020) (21,913) (24,214) (47,844) 519,252 358,509 103,994 92,410 966,007 827,883 (404,544) 461,297 (307,453) 273,071 (440,568) (337,893) 1,218,226 (2,116,336) 1,180,154 1,068,152 1,309,303 868,029 (1,078,338) (1,161,130) (1,353,281) (130,225) (1,827,231) (1,169,410) (Unaudited) (Unaudited) 17,183,687 12,500,493 11,040,450 2,342,067 14,289,538 15,958,588 13,817,305 12,331,572 13,376,737 11,993,679 (16,249,471) (12,774,647) (11,022,380) (184,214) Six months ended June 30, Six months ended

at fair value through profit or loss and other assets at fair value through profit or loss income at fair value through other comprehensive as receivables as fair value through profit or loss at fair value through profit or loss other financial institutions resale agreements with banks and other financial institutions Unrealised exchange (gains)/losses Net losses on other financial instruments Net losses on other financial instruments Net losses on financial assets measured Share of profit of associates and equipment (Gains)/losses on disposal of property Interest income arising from impaired financial assets Interest income arising from impaired issued Interest expense arising from debt securities measured at Net unrealised gains on bond investments held for trading Net unrealised losses on financial assets assets Net losses on available-for-sale financial Impairment losses from investment securities Interest income arising from other financial assets Interest income arising Interest income arising from bonds investment classified Interest income arising from investments Depreciation and amortisation Cash generated by operating activities Net cash generated by operating activities Decrease/(increase) in placements with banks and Decrease in financial assets held under (Increase)/decrease in bonds investment measured Increase in loans and advances to customers Decrease in borrowings from central bank Increase in deposits from banks and other financial institutions Increase/(decrease) in placements from banks Decrease in financial assets sold under repurchase agreements Increase in customer deposits Decrease/(increase) in other operating assets Decrease in other operating liabilities Income tax paid Operating cash flows before movements in working capital Operating cash flows before movements and deposits Increase in balances with central bank

OPERATING ACTIVITIES Profit before tax Adjustments for:

(Amounts in thousands of Renminbi, unless otherwise stated) of Renminbi, unless (Amounts in thousands Condensed Consolidated Statement of Cash Flows of Statement Consolidated Condensed BANK OF JIUJIANG (Amounts inthousandsofRenminbi,unlessotherwisestated) Consolidated StatementofCashFlows 94

Cash receivedfromdisposalofpropertyandequipment Issue costspaid Dividends paid Interest expensespaidfordebtsecuritiesissued Payments forthecostsofdebtsecuritiesissued Repayment ofdebtsecuritiesissued Cash receivedfromdebtsecuritiesissued Cash receivedfromcapitalcontribution FINANCING ACTIVITIES Net cashusedininvestingactivities Cash receivedfromdisposalandredemptionof INVESTING ACTIVITIES Cash paidforpurchaseofpropertyandequipment Cash paidforpurchaseofinvestmentsecurities Interest received Dividends receivedfromfundinvestment Dividends receivedfromanassociate Net cashgeneratedbyoperatingactivitiesinclude: Cash andcashequivalentsatendoftheperiod Effect offoreignexchangeratechanges Cash andcashequivalentsatbeginningoftheperiod Net increaseincashandequivalents Net cashgeneratedbyfinancingactivities Net interestreceivedfromoperatingactivities and otherassets and otherassets investment securities Interest paid Interest received

5735208,099,832 7,305,260 35

Six monthsendedJune30, 2,4,4)(38,714,600) (22,941,040) (23,854,055) (14,924,421) 5,5,9)(96,499,448) (52,353,598) 4852270,339,932 34,875,242 5100054,151,906 25,110,000 Uadtd (Unaudited) (Unaudited) ,0,0 2,577,799 2,707,208 ,7,5 2,024,081 3,063,658 2,279,157 3,681,775 ,8,1 5,013,413 6,886,213 14,953,295 1,963,647 ,0,1 1,039,577 1,402,618 1163 (279,180) (181,653) 2756 (253,263) (237,556) 1,6 3,092,919 415,963 00017,336 50,000 3252,629 23,245 687 (246,749) (1,335) (9,300) (6,857) (1,600) ,0 3,750 5,000 ,8 (6,500) 3,084 2018 135

2017 463 – 2018 Interim Report 95 General information Basis of preparation The condensed consolidated financial statements have been prepared in accordance with with accordance in prepared been have statements financial consolidated condensed The issued by the International International Accounting Standard 34 (IAS 34) Interim Financial Reporting Appendix 16 requirements of disclosure the applicable with as as well Board Standards Accounting of Hong Kong Limited (the to the Rules Governing the Listing of Securities on The Stock Exchange “Listing Rules”). Bank of Jiujiang Co., Ltd. (hereinafter referred to as the “Bank”) is formerly known as Jiujiang Jiujiang as known formerly is “Bank”) the as to referred (hereinafter Ltd. Co., Jiujiang of Bank Credit on the basis of Jiujiang Urban a joint-stock commercial bank established Commercial Bank, 300). Wuhan Branch (Wuyinfu [1999]No. Bank of China by the People’s Cooperatives as approved in September 2008. its name to Bank of Jiujiang Co., Ltd. The Bank changed Commission Regulatory Banking China the by institution financial a as licensed is Bank The business a as registered is and B0348H236040001) (No. Bureau Province Jiangxi “CBRC”) (the Administration of Industry and Commerce of the People’s enterprise with the approval of Jiujiang In March 2018, the CBRC was mergedRepublic of China (the “PRC”) (No. 9136040070552834XQ). to become the China Banking and Insurance Regulatory with the then insurance industry regulator Kong Hong of Exchange Stock The on listed was Bank the 2018, 10, July On Commission. Limited with the stock code of 06190. headquartered in Jiujiang, Jiangxi Province, the PRC. It had As at June 30, 2018, the Bank was which consisted of 138 traditional sub-branches, 93 13 tier- one branches and 241 sub-branches, and micro enterprises sub-branches. community sub-branches and 93 small of comprise “Group”) the (collectively, subsidiaries its and Bank the of activities principal The overseas and domestic loans; long-term and medium-term short-term, granting taking, deposit issue, to agent as acting bonds; financial issuing discounting; and acceptance bill settlements; trading of government bonds and financial bonds; inter- bonds; and underwrite government settle credit services and guarantee; acting as agent on inward and bank placement; providing letters of agent; safe-box service and other business approved by outward payments, acting as insurance the CBRC. Renminbi (“RMB”), which is also are presented in statements The condensed consolidated financial the functional currency of the Bank and its subsidiaries.

General Information and Basis of Preparation General Information 1.1 1.2

Notes to the Condensed Consolidated Financial Statements Financial Consolidated to the Condensed Notes otherwise stated) of Renminbi, unless (Amounts in thousands 1. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 96

amounts reportedand/ordisclosuresasdescribedbelow. provisions intherespectivestandardsandamendmentswhichresultchangesaccountingpolicies, The new and amendments to IFRSs have been applied in accordance with the relevant transition TransfersofInvestmentProperty Compensation inadvanceoftheeffectivedate,i.e.January1,2019. AspartoftheAnnualImprovementstoIFRSs2014-2016 Cycle In addition, the Group has applied Amendments to IFRS9 Prepayment Features with Negative ApplyingIFRS9Financial InstrumentswithIFRS4InsuranceContracts ClassificationandMeasurement ofShare-basedPaymentTransactions Amendments toIAS40 Amendments toIAS28 Amendments toIFRS4 Amendments toIFRS2 IFRIC 22 IFRS 15 IFRS 9 statements: on or after 1 January 2018 for the preparation of the Group’s condensed consolidated financial amendments to IFRSs issued by the IASB which are mandatory effective for the annual period beginning In the current interim period, the Group has applied, for the first time, the following new and Application ofnewandamendmentstoIFRSs year endedDecember31,2017. the sameasthosefollowedinpreparationofGroup’sconsolidatedfinancialstatementsfor used inthecondensedconsolidatedfinancialstatementsforsixmonthsendedJune30,2018are International FinancialReportingStandards(“IFRSs”),theaccountingpoliciesandmethodsofcomputation Other than changes in accounting policies resulting from application of new and amendments to for certainfinancialinstruments,whicharemeasuredatfairvalues,asappropriate. The condensedconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasisexcept Principal AccountingPolicies Foreign CurrencyTransactionsandAdvanceConsideration Revenue fromContractswithCustomersandtherelatedAmendments Financial Instruments 2018 Interim Report 97 (continued) Step 1: Identify the contract(s) with a customer Step 1: Identify the contract(s) with a in the contract Step 2: Identify the performance obligations Step 3: Determine the transaction price contract Step 4: Allocate the transaction price to the performance obligations in the obligation. Step 5: Recognise revenue when (or as) the Group satisfies a performance when “control” of the goods or services underlying the particular performance obligation is is obligation performance particular the underlying services or goods the of “control” when

Im Revenue from Contracts with Customers Revenue from • • • • obligation is satisfied, Under IFRS 15, the Group recognises revenue when (or as) a performance i.e. transferred to the customer. goods or services) that is A performance obligation represents a good and service (or a bundle of same. distinct or a series of distinct goods or services that are substantially the Key changes in accounting policies resulting from application of IFRS 15 Key changes in accounting policies when recognising revenue: IFRS 15 introduces a 5-step approach • The Group has applied IFRS 15 for the first time in the current interim period. IFRS 15 superseded current interim period. IFRS 15 superseded IFRS 15 for the first time in the The Group has applied related interpretations. 11 Construction Contracts and the IAS 18 Revenue, IAS among income, commission and fee and income interest included mainly revenue Group’s The was of IFRS 15, while interest income income was within the scope which fee and commission on or after January 1, 2018. IFRS 9 for the annual periods beginning within the scope of applying this initially the cumulative effect of with 15 retrospectively IFRS applied The Group has application, January 1, 2018. Any difference at the date of standard recognised at the date of initial opening retained earnings (or other components of equity, as initial application is recognised in the has not been restated. Furthermore, in accordance with appropriate) and comparative information the Group has elected to apply the Standard retrospectively the transition provisions in IFRS 15, comparative certain Accordingly, 2018. 1, January at completed not are that contracts to only 18 IAS under prepared was information comparative as comparable be not may information Revenue.

Principal Accounting Policies Principal Accounting 2.1 15 IFRS on application of policies accounting in changes and pacts

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 98

pacts and changes in accounting policies of application on IFRS 15 2.1 Principal AccountingPolicies

distinct goodorservice. Otherwise, revenue is recognised at a point in time when the customer obtains control of the • is met: towards completesatisfactionoftherelevantperformanceobligationifonefollowingcriteria Control istransferredovertimeandrevenuerecognisedbyreferencetotheprogress • • best depicttheGroup’sperformanceintransferringcontrol ofgoodsorservices. obligation relativetothetotalexpectedinputssatisfaction ofthatperformanceobligation, recognise revenueonthebasisofGroup’seffortsor inputstothesatisfactionofaperformance complete satisfactionofaperformanceobligationismeasured basedonoutputmethod,whichisto guarantees fees overtime as the related services are transferred overtime. The progress towards The Group recognises the wealth management fees and credit commitments and financial customer. for which the Grouphasreceivedconsideration (or anamount of considerationisdue)fromthe A contractliabilityrepresentstheGroup’sobligationtotransfergoodsorservicesacustomer consideration isdue. unconditional righttoconsideration,i.e.onlythepassageoftimeisrequiredbeforepaymentthat for impairment in accordance with IFRS 9. In contrast, a receivable represents the Group’s that the Group has transferred to a customer that is not yet unconditional. It is assessed A contractassetrepresentstheGroup’srighttoconsiderationinexchangeforgoodsorservices satisfaction ofaperformanceobligation. Over time revenue recognition: measurement of progress towards complete Revenue fromContractswithCustomers Im

the Grouphasanenforceablerighttopaymentforperformancecompleteddate. the Group performs;or the Group’sperformancecreatesandenhancesanassetthatcustomercontrolsas the performance astheGroupperforms; customer simultaneously receives and consumes the benefits provided by the Group’s Group’s performance does not create an asset with an alternative use to theGroup and (continued) (continued) 2018 Interim Report 99 (continued) (continued)

(continued) and changes in accounting policies of application on IFRS 9 9 IFRS on application of policies accounting in changes and Financial Instruments and the related amendments Financial Instruments and the Impacts Im Revenue from Contracts with Customers Revenue from Regarding the credit card services, those contracts that contain more than one performance performance one than more contain that contracts those services, card credit the Regarding allocates Group the points, of exchanging from benefit the and service card credit the obligations, of these on a relative stand-alone fair value to each performance obligation the transaction price performance obligations. is obligation performance each underlying service distinct the of price selling stand-alone The Group would sell a promised price at which the the determined at contract inception. It represents the observable, directly not is price selling stand-alone a If customer. a to separately service loan techniques such that the transaction price ultimately allocated Group estimates it using appropriate the amount of consideration to which the Group expects to to any performance obligation reflects the promised services to the customer. be entitled in exchange for transferring commission and fee and income interest includes mainly revenue Group’s the period, current In while 15, IFRS of scope the within be will income commission and fee which among income, IFRS 9 for the annual periods beginning on or after January 1,interest income is within the scope of 2018. that the adoption of IFRS 15 as of January 1, 2018 does not The directors of the Bank consider of equity attributable to the owners of the Bank as at have any significant impact on the amount December 31, 2017. In the current period, the Group has applied IFRS 9 Financial Instruments, Amendments to IFRS In the current period, the Group has applied IFRS 9 Financial Instruments, amendments consequential related the and Compensation Negative with Features Prepayment 9 and measurement of to other IFRSs. IFRS 9 introduces new requirements for 1) the classification and assets, financial for (“ECL”) losses credit expected 2) liabilities, financial and assets financial general 3) and commitments), credit and contracts guarantee financial example, (for items other hedge accounting. Over time revenue recognition: measurement of progress towards complete complete towards progress of measurement recognition: revenue time Over performance obligation satisfaction of a

Principal Accounting Policies Principal Accounting 2.2 2.1 15 IFRS on application of policies accounting in changes and pacts

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 100

2.2 Principal AccountingPolicies

was preparedunderIAS39FinancialInstruments:RecognitionandMeasurement. Accordingly, certain comparative information may not be comparable as comparative information components ofequity,withoutrestatingcomparativeinformation. carrying amountsasatJanuary1,2018arerecognisedintheopeningretainedearningsandother January 1, 2018. The difference between carrying amounts as at December 31, 2017 and the and hasnotappliedtherequirementstoinstrumentsthathavealreadybeenderecognisedasat instruments that have not been derecognised as at January 1, 2018 (date of initial application) applied the classification and measurement requirements (including impairment) retrospectively to The GrouphasappliedIFRS9inaccordancewiththetransitionprovisionssetout9.i.e. 2.2.1 Impacts Financial Instrumentsandtherelatedamendments

All otherfinancialassetsaresubsequentlymeasuredatfair valuethroughprofitorloss(“FVTPL”), • • through othercomprehensiveincome(“FVTOCI”): Debt instrumentsthatmeetthefollowingconditionsaresubsequentlymeasuredatfairvalue • 3 BusinessCombinationsapplies. contingent considerationrecognised byanacquirerinabusinesscombinationto whichIFRS other comprehensiveincome (“OCI”)ifthatequityinvestmentisneitherheldfor tradingnor may irrevocablyelecttopresent subsequentchangesinfairvalueofanequityinvestment in except thatatthedateofinitialapplication/initialrecognition ofafinancialasset,theGroup • cost: Debt instrumentsthatmeetthefollowingconditionsaresubsequentlymeasuredatamortised impairment underIAS39. at amortisedcostorfairvalue,includingunquotedequityinvestmentsmeasuredless All recognisedfinancialassetsthatarewithinthescopeofIFRS9subsequentlymeasured Classification andmeasurementoffinancialassets Key changesinaccountingpoliciesresultingfromapplicationofIFRS9

that aresolelypaymentsofprincipalandinterestonthe principalamountoutstanding. the contractualtermsoffinancialassetgiverise on specifieddatestocashflows collecting contractualcashflowsandsellingthefinancial assets;and the financialassetisheldwithinabusinessmodelwhose objectiveisachievedbyboth that aresolelypaymentsofprincipalandinterestontheamountoutstanding. the contractualtermsoffinancialassetgiveriseonspecifieddatestocashflows assets inordertocollectcontractualcashflows;and the financialassetisheldwithinabusinessmodelwhoseobjectivetohold and changes in accounting policies of application on IFRS 9 (continued) (continued)

2018 Interim Report 101 (continued) (continued) (continued) and changes in accounting policies of application on IFRS 9 9 IFRS on application of policies accounting in changes and Key changes in accounting policies resulting from application of IFRS 9 accounting policies resulting from Key changes in Classification and measurement of financial assets (continued) measurement of financial assets Classification and as at FVTOCI Debt instruments classified FVTOCI at as classified instruments debt for amounts carrying the in changes Subsequent foreign and method interest effective the using calculated income interest of result a as carrying the in changes other All loss. or profit in recognised are losses and gains exchange recognised in OCI and accumulated under the heading amount of these debt instruments are loss or profit in recognised are allowance Impairment reserve. revaluation investments of these debt carrying amounts of reducing the without to OCI adjustment corresponding with in profit or loss are the same as the amounts instruments. The amounts that are recognised been had instruments debt these if loss or profit in recognised been have would that cumulative the derecognised, are instruments debt these amortised cost. When measured at in other comprehensive income are reclassified to profit gains or losses previously recognised or loss. Financial assets at FVTPL at fair value at the end of each reporting period, with Financial assets at FVTPL are measured in profit or loss. The gains or losses recognised in any fair value gains or losses recognised gains/ “Net the in included is and assets financial the on earned interest includes loss or profit item. losses arising from financial assets” line and assessed the Group’s financial assets as at January The directors of the Bank reviewed in Changes date. that at existed that circumstances and facts the on based 2018 1, are thereof impacts the and assets financial Group’s the on measurement and classification detailed in Note 2.2.2. Impairment under ECL model to subject are which assets financial on ECL for allowance loss a recognises Group The banks with deposits customers, to advances and loans (including 9 IFRS under impairment institutions, financial and other financial institutions, placements with banks and other financial cost, amortised at measured securities investment agreements, resale under held assets and financialinvestment securities measured at FVTOCI, other receivables, credit commitments to reflect changesguarantee contracts). The amount of ECL is updated at each reporting date in credit risk since initial recognition. the over events default possible all from result will that ECL the represents ECL Lifetime ECL”) represents expected life of the relevant instrument. In contrast, 12-month ECL (“12m possible are that events default from result to expected is that ECL lifetime of portion the Group’s the on based done are Assessment date. reporting the after months 12 within the debtors, general historical credit loss experience, adjusted for factors that are specific to at the reporting date economic conditions and an assessment of both the current conditions as well as the forecast of future conditions.

Financial Instruments and the related amendments and the related amendments Financial Instruments Impacts 2.2.1

Principal Accounting Policies Principal Accounting 2.2

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 102

2.2 Principal AccountingPolicies

2.2.1 Impacts Financial Instrumentsandtherelatedamendments

• • risk hasincreasedsignificantly: In particular, the following information is taken into account when assessing whether credit looking informationthatisavailablewithoutunduecostoreffort. information that is reasonable and supportable, including historical experience and forward- recognition. Inmakingthis assessment, theGroupconsidersbothquantitativeandqualitative date with the risk of a default occurring on the financial instrument as at the date of initial Group comparestheriskofadefaultoccurringonfinancialinstrumentasatreporting In assessing whether the credit risk has increased significantly since initial recognition, the Significant increaseincreditrisk increases inthelikelihoodorriskofadefaultoccurringsinceinitialrecognition. ECL. TheassessmentofwhetherlifetimeECLshouldberecognisedisbasedonsignificant a significant increase in credit risk since initial recognition, the Group recognises lifetime The Group measures the loss allowance equal to 12m ECL, unless when there has been Impairment underECLmodel(continued) demonstrates otherwise. than 30 days past due, unless the Group has reasonable and supportable information that risk hasincreasedsignificantlysinceinitialrecognition whencontractualpaymentsaremore Irrespective of the outcome of the above assessment, the Group presumes that the credit • • • Key changesinaccountingpoliciesresultingfromapplicationofIFRS9

obligations; debtor’s abilitytomeetitsdebtobligations. technological environment of the debtor that results in a significant decrease in the an an actualorexpectedsignificantdeteriorationintheoperating resultsofthedebtor; are existing orforecastadversechangesinbusiness,financialeconomicconditionsthat significant an increase inthecreditspread,defaultswappricesfordebtor; available) orinternalcreditrating; and changes in accounting policies of application on IFRS 9 actual or expected significant deterioration in the financial instrument’s external (if actual or expected significant adverse change in the regulatory, economic, or expected to cause a significant decrease in the debtor’s ability to meet its debt deterioration in external market indicators of credit risk, e.g. a significant (continued) (continued) (continued) 2018 Interim Report 103 (continued) (continued) (continued) and changes in accounting policies of application on IFRS 9 9 IFRS on application of policies accounting in changes and Key changes in accounting policies resulting from application of IFRS 9 accounting policies resulting from Key changes in Significant increase in credit risk (continued) Significant increase not has instrument debt a on risk credit the that assumes Group the aforegoing, the Despite have to determined is instrument debt the if recognition initial since significantly increased risk is determined to have low credit reporting date. A debt instrument low credit risk at the contractual meet its capacity to strong has a borrower ii) the default, risk of it has a low if i) business and economic in changes adverse iii) and term near the in obligations flow cash will not necessarily, reduce the ability of the borrower conditions in the longer term may, but The Group considers a debt instrument to have to fulfil its contractual cash flow obligations. or external credit rating of ‘investment grade’ as per low credit risk when it has an internal globally understood definitions. becomes Group the date that the contracts, guarantee financial and commitments credit For for recognition initial of date the be to considered is commitment irrevocable the to party a instrument for impairment. In assessing whether there the purposes of assessing the financial credit risk since initial recognition of a loan commitment, has been a significant increase in the risk of a default occurring on the loan to which a loan the Group considers changes in the contracts, the Group considers the changes in the commitment relates; for financial guarantee on the contract. risk that the specified debtor will default occurred when the instrument is more than 90 days The Group considers that default has and supportable information to demonstrate that a past due unless the Group has reasonable appropriate. more lagging default criterion is more Measurement and recognition of ECL given default (i.e. the The measurement of ECL is a function of the probability of default, loss assessment of themagnitude of the loss if there is a default) and the exposure at default. The adjusted by forward- probability of default and loss given default is based on historical data looking information. that flows cash contractual all between difference the as estimated is ECL the Generally, flows that the Group are due to the Group in accordance with the contract and all the cash initial recognition. expects to receive, discounted at the effective interest rate determined at only in the event For a financial guarantee contract, the Group is required to make payments that is guaranteed. of a default by the debtor in accordance with the terms of the instrument to reimburse Accordingly, the expected losses is the present value of the expected payments expects to receive the holder for a credit loss that it incurs less any amounts that the Group from the holder, the debtor or any other party.

Financial Instruments and the related amendments and the related amendments Financial Instruments Impacts 2.2.1

Principal Accounting Policies Principal Accounting 2.2

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 104

2.2 Principal AccountingPolicies

2.2.1 Impacts Financial Instrumentsandtherelatedamendments

thereof aredetailedinNote2.2.2. accordance withtherequirementsofIFRS9.Theresults oftheassessmentandimpact reasonable and supportable information that is available without undue cost or effort in financial assets, credit commitments and financial guarantee contracts for impairment using As at January 1, 2018, thedirectorsof the Bankreviewedandassessed theGroup’sexisting recognised overtheguaranteeperiod. and the amount initially recognised less, where appropriate, cumulative amount of income at the higher of the amount of the loss allowance determined in accordance with IFRS 9; For financialguaranteecontractsandcreditcommitments,thelossallowancesarerecognised these debtinstruments. accumulated intheinvestmentrevaluationreservewithoutreducingcarryingamountsof debt instrumentsthataremeasuredatFVTOCI,thelossallowanceisrecognisedinOCIand corresponding adjustmentisrecognisedthroughalossallowanceaccount.Forinvestmentsin profit or loss for/ all financial instruments by adjusting their carrying amount where the and financial guarantees contracts, the Group recognises an impairment gain or loss in Except forinvestmentsindebtinstrumentsthataremeasuredatFVTOCI,creditcommitments amortised costofthefinancialasset. the financialassetiscreditimpaired,inwhichcaseinterestincomecalculatedbasedon Interest income is calculatedbased on the gross carryingamountofthefinancial asset unless the discountrateinsteadofadjustingcashshortfallsbeingdiscounted. cash flowsbutonlyif,andtotheextentthat,risksaretakenintoaccountbyadjusting current marketassessmentofthetimevaluemoneyandrisksthatarespecificto interest rate cannot be determined, the Group will apply a discount rate that reflects the For ECL on financial guarantee contracts or on credit commitments for which the effective drawn down. draws downtheloan,andcashflowsthatGroupexpectstoreceiveifloanis the contractualcashflowsthatareduetoGroupifholderofcreditcommitments For undrawn credit commitments, the ECL is the present value of the difference between Measurement andrecognitionofECL Significant increaseincreditrisk(continued) Key changesinaccountingpoliciesresultingfromapplicationofIFRS9 and changes in accounting policies of application on IFRS 9 (continued) (continued) (continued) (continued) 2018 Interim Report – – – – – Non- interests 105 controlling

– – earnings Retained

– –– 11,038 170,031 – reserve revaluation Investment

– – – (13,580) 13,580 liabilities Deferred tax assets/

(continued) – – 1,257,970 (1,017,581) 5,107,661 507,653 – –– (3,679) (56,677) – Provision for credit guarantees and financial commitments

– – – loans and Amortised receivables) classified as cost (previously

– 13,125,507 – 227,933,847 – (24,983,266) – – – (326,711) (221,531) 137,060 25,412 (391,268) (45,326) Debt at FVTOCI instruments

– – FVTPL Financial assets at required by IAS39/IFRS9 (continued)

– 30,720,748 16,681,029 215,749,377 (221,531) 1,334,674 (1,005,749) 4,911,042 462,327 – 24,983,266 – –– 14,717 226,708 – 4,585,294 16,681,029 maturity Held-to-

– – (13,125,507) – – – – and for-sale Available- investment 21,266,323 13,125,507 910,763 (21,266,323) (13,125,507) 29,809,985 16,681,029 (12,184,470) (221,531) 76,704 11,832 (196,619) (45,326) (21,266,323) other assets

and changes in accounting policies of application on IFRS 9 9 IFRS on application of policies accounting in changes and receivables ECL model impairment to fair value to fair value 2017 – IAS 39 application of IFRS 9 From loans and From cost less From amortised cost As at January 1, 2018 Remeasurement Impairment under From held-to-maturity

As at December 31, Effect arising from initial Reclassification From available-for-sale Summary of effects arising from initial application of IFRS 9 arising from initial application Summary of effects

The table below illustrates the classification and measurement (including impairment) of of impairment) (including measurement and classification the illustrates below table The IAS subject to ECL under IFRS 9 and financial liabilities and other items financial assets and application, January 1, 2018. 39 at the date of initial

Financial Instruments and the related amendments and the related amendments Financial Instruments Impacts 2.2.2

Principal Accounting Policies Principal Accounting 2.2

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 106

2.2 Principal AccountingPolicies

2.2.2 Impacts Financial Instrumentsandtherelatedamendments

allowance asatJanuary1,2018isfollows: and debtinstrumentsatFVTOCIasDecember31,2017reconciledtotheopeningloss financial assets at amortised cost, financial guarantee contracts and credit commitments, All loss allowances for financial assets including loans and advances to customers, other

resale agreements,held-to-maturityinvestmentsunderIAS39andotherreceivables. institutions, placementswithbanksandotherfinancialassetsheldunder Other financial assets at amortise cost include deposits with banks and other financial Summary ofeffectsarisingfrominitialapplicationIFRS9 As January1,2018–IFRS9 Reversal ofallowancearising At December31,2017–IAS39 Amounts remeasuredthrough investment revaluation opening retainedearnings/ from reclassification reserve and changes in accounting policies of application on IFRS 9

(continued) to customers Loans and ,9,1 3,0 975215133,883 221,531 99,765 630,100 3,399,611 18,379 999,619 3,197,047 advances 244,595 4,3)(370,249) (42,031)

management beneficiary and asset rights plans Trust 3 136215133,883 221,531 81,386 730

amortised (continued) assets at financial Other cost –

(continued) commitments guarantees and loan Financial – –

instruments at FVTOCI Debt – –

2018 Interim Report – – – – 107 2018 January 1,

– 2,412,473 – 111,330 – 28,750,492 (80) 1,667,685 (663) 1,480,324 IFRS 9

– 16,681,029 16,681,029 – 58,970,375 58,970,375 – 28,695,426 28,695,426 – 2,025,322 2,025,322 2017 111,330 910,763 (910,763) 6,042,802 (711,747) 5,331,055 1,257,970 76,704 1,334,674 2,412,473 1,480,987 1,667,765 68,904,526 (68,904,526) 13,125,507 (13,125,507) 20,554,576 (20,554,576) 99,528,133 (2,226,844) 97,301,289 26,506,739 (22,732) 26,484,007 28,750,492 271,254,063 (8,582) 271,245,481 December 31,

consolidated statement of financial position of financial consolidated statement

(continued)

amortised cost at amortised cost financial institutions financial institutions Other assets Deferred tax assets Property and equipment Investments in associates Investment securities measured at FVTOCI

Investment securities measured at Investment securities measured at FVTPL Investments classified as receivables Held-to-maturity investments Available-for-sale financial assets Loans and advances to customers at FVTPL Loans and advances to customers at

Loans and advances to customers Financial assets held under resale agreements Financial assets held for trading

Placements with banks and other

Deposits with banks and other Total assets ASSETS Cash and balances with central bank arising from the application of all new standards, amendments and and amendments standards, new all of application the from arising interpretations Impacts on opening condensed Impacts on opening

As a result of the changes in accounting policies above, the opening condensed consolidated consolidated condensed opening the above, policies accounting in changes the of result a As adjustments the show table following The restated. be to had position financial of statement individual line item. recognised for each

Principal Accounting Policies Principal Accounting 2.3

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 108

2.3 Principal AccountingPolicies

condensed consolidatedfinancialstatements. period has had no material effect on the amounts reported and/or disclosures set out in these Except as described above, the application of otheramendmentsto IFRSs in the current interim Impacts onopeningcondensed interpretations arising from the application of all new standards, amendments and Total equityandliabilities Total equity Equity attributabletoShareholdersoftheBank Share capital EQUITY Total liabilities Borrowings fromcentralbank LIABILITIES Deposits frombanksandother Capital reserve

Non-controlling interests Investment revaluationreserve Placements frombanks Surplus reserve Financial assetssoldunderrepurchase

General reserve Customer deposits Retained earnings Income taxpayable Debt securitiesissued Provision forfinancialguaranteesand

Other liabilities financial institutions agreements commitments (continued) (continued)

consolidated statement of financial position

December 31, 7,5,6 852 271,245,481 (8,582) 271,254,063 253,824,434 221,531 253,602,903 179,636,570 76110(3,1)17,421,047 (230,113) 16,958,720 (184,787) 17,651,160 17,143,507 17,405,997 40,247,839 10751 182(1,005,749) 11,832 (1,017,581) 2,000,000 5,020,023 8,268,704 1,116,931 2,758,046 3,275,358 ,0,6 1669 4,911,042 (196,619) 5,107,661 5,762,322 811,940 0,5 4,2)462,327 (45,326) 507,653 352,600 2017 2,3 221,531 221,531 –

IFRS 9 811,940 – 2,000,000 – 5,020,023 – 8,268,704 – 1,116,931 – 2,758,046 – 17,405,997 – 3,275,358 – 179,636,570 – 352,600 – 40,247,839 – 5,762,322 –

January 1, 2018 2018 Interim Report 109 (continued) Critical accounting judgements and key sources of estimation uncertainty judgements and key sources Critical accounting Critical judgements in applying the group’s accounting policies Critical judgements in applying apart from those involving estimations (which are dealt critical judgements, The following are the Group’s the applying of process the in made have directors the that below), separately with most significant effect on the amounts recognised in financial accounting policies and that have the statements: Business model assessment assets depend on whether the contractual cash flows Classification and measurement of financial interest on the principal amount outstanding (SPPI) and the are solely payments of principal and Group determines the business model at a level that reflects results of business model test. The managed together to achieve a particular business objective. how groups of financial assets are reflecting all relevant evidence including how the performance This assessment includes judgement performance measured, the risks that affect the performance of the assets is evaluated and their and how the managers of the assets are compensated. of the assets and how these are managed other through value fair or cost amortised at measured assets financial monitors Group The for reason the understand to maturity their to prior derecognised are that income comprehensive of the business for which their disposal and whether the reasons are consistent with the objective the whether of assessment continuous Group’s the of part is Monitoring held. was asset the and appropriate to be continues financial assets are held remaining the for which business model prospective a so and model business in change a been has there whether appropriate not is it if change to the classification of those assets. In the application of the Group’s accounting policies, which are described in note 2, the directors which are described in note 2, the of the Group’s accounting policies, In the application of amounts carrying the about assumptions and estimates judgements, make to required are other sources. The estimates and associated that are not readily apparent from assets and liabilities be to considered are that factors other and experience historical on based are assumptions may differ from these estimates. relevant. Actual results to Revisions basis. ongoing an on reviewed are assumptions underlying and estimates The in the period in which the estimate is revised if the revision accounting estimates are recognized future periods if the revision affects revision and of the period only that period, or in the affects both current and future periods.

Principal Accounting Policies Principal Accounting 2.4

2. BANK OF JIUJIANG 2. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 110

2.4 Principal AccountingPolicies

• ECL aremeasuredasanallowanceequalto: Significant increaseofcreditrisk • because thecreditriskofportfoliosdiffer. to bemeasuredonthesamebasisof12-monthorlifetime ECLsbuttheamountofECLchanges from 12-monthtolifetimeECLs,orviceversa,butitcan alsooccurwithinportfoliosthatcontinue a significantincreaseincreditrisk(orwhenthatreverses)andsoassetsmove Re-segmentation ofportfoliosandmovementbetweenismorecommonwhenthere an existingportfoliothatbetterreflectsthesimilarcreditriskcharacteristicsofgroupassets. segmentation oftheassets.Thismayresultinnewportfoliosbeingcreatedorassetsmovingto required inordertoensurethatshouldcreditriskcharacteristicschangethereisappropriatere- characteristics on an ongoing basis to assess whether they continue to be similar. This is basis of shared risk characteristics. The Group monitors the appropriateness of the credit risk When ECLs are measured on a collective basis, the financial instruments are grouped on the Establishing groupsofassetswithsimilarcreditriskcharacteristics quantitative reasonableandsupportableforwardlookinginformation. the creditriskofanassethassignificantlyincreased,Grouptakesintoaccountqualitativeand IFRS 9doesnotdefinewhatconstitutesasignificantincreaseincreditrisk.Inassessingwhether An assetmovestostage2whenitscreditriskhasincreasedsignificantlysinceinitialrecognition. Critical judgementsinapplyingthegroup’saccountingpolicies Critical accountingjudgementsandkeysourcesofestimationuncertainty

or instrument thatarepossiblewithin12monthsafterthereportingdate,(referredtoasStage1); 3 assets. of when oneormoreeventsthathaveadetrimentalimpactontheestimatedfuturecashflows financial instrument,(referredtoasStage2and3).Aassetis‘credit-impaired’ full lifetimeECL,i.e.ECLthatresultfromallpossibledefaulteventsoverthelifeof 1 2-month ECL, i.e. lifetime ECL that result from those default events on the financial the financial assethaveoccurred. Credit-impaired financial assets are referred to as Stage (continued)

(continued) 2018 Interim Report 111 (continued)

(continued) (continued) Critical accounting judgements and key sources of estimation uncertainty- judgements and key sources Critical accounting continued The following are key estimations that the directors have used in the process of applying the the applying of process the in used have directors the that estimations key are following The have the most significant effect on the amounts recognised in Group’s accounting policies and that financial statements: of type each for scenarios forward-looking of weightings relative and number the Establishing scenario: When to each information relevant looking forward the determining and product/market and supportable forward looking information, which is measuring ECL, the Group uses reasonable drivers how these economic drivers and different of on assumptions for the future movement based will affect each other. the of estimate an is PD ECL. measuring in input key a constitutes PD default: of Probability data, historical includes which of calculation the horizon, time given a over default of likelihood conditions. assumptions and expectations of future of the loss arising on default. It is based on the difference Loss Given Default: LGD is an estimate due and those that the lender would expect to receive, taking between the contractual cash flows into account cash flows from collateral and integral credit enhancements. or asset financial a of value fair the estimating In process: valuation and measurement value Fair Where such Level 1 a liability, the Group uses market-observable data to the extent it is available. fair value of its financial inputs are not available the Group uses valuation models to determine the instruments. Key sources of estimation uncertainty Critical judgements in applying the group’s accounting policies in applying the group’s accounting Critical judgements Models and assumptions used Models and assumptions as well fair value of financial assets models and assumptions in measuring The Group uses various type the most appropriate model for each Judgement is applied in identifying as in estimating ECL. in these models, including assumptions for determining the assumptions used of asset, as well as that relate to key drivers of credit risk.

Principal Accounting Policies Principal Accounting 2.4

2. BANK OF JIUJIANG 3. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 112

subsidiaries oftheBank. instruments investment for its own accounts or on behalf of customers except for those carried by The Group’s treasury operations conduct money market or repurchase transactions, and debt Treasury operations subsidiaries oftheBank. management services and other types of personal intermediary services except for those carried by The products and services include personal loans, deposit products, card business, personal wealth The personal banking segment provides financial products and services to individual customers. Personal banking subsidiaries oftheBank. deposit takings and other types of corporate intermediary services except for those carried by agencies andfinancialinstitutions.Theproductsservicesincludecorporateloans,tradefinancing, The corporate banking segment provides financial products and services to corporations, government Corporate banking services offeredtocustomersareorganisedintothefollowingoperatingsegments: The Group provides a diversified range of banking and related financial services. The products and as thosethatcanbeallocatedonareasonablebasis. Segment revenues,results,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswell expense”. income andexpenseearnedfrom/incurredwiththirdpartiesarereferredtoas“externalinterestincome/ and transfer pricing adjustments are referred to as “inter-segment interest income/expense” Interest reflected intheperformanceofeachsegment.Interestincomeandexpensearisingfrominternalcharges Internal charges and transfer pricing are determined with reference to market rates and have been for preparingandpresentingthecondensedconsolidatedfinancialstatementsasdisclosedinNote2. accounting policies.Segmentinformationispreparedinconformitywiththepoliciesadopted Measurement ofsegmentassetsandliabilitiesincomeresultsisbasedontheGroup’s based onoperatingsegmentsforthepurposeofallocatingresourcesandperformanceassessment. The Group’schiefoperatingdecisionmakerreviewscondensedconsolidatedfinancialstatementsmainly decision maker)forthepurposesofallocatingresourcestosegmentsandassessingtheirperformance. are regularlyreviewedbytheBoardofDirectorsandrelevantmanagementcommittees(chiefoperating Operating segments areidentifiedonthebasis of internalreportsaboutcomponentstheGroupthat Segment Analysis 2018 Interim Report – Total 113 (253,453) 1,055,850

– 1,208,014 – 37,482,613 613 181,653 963 215,892 (754) 138,005

– 8,921 8,921 – – 115,251 115,251 Treasury operations Unallocated

– 4,832 4,001 8,833 – – 1,208,014 – banking Personal

– – – – 73,526 37,148 70,366 49,464 24,463 19,063 11,004 103,994 79,079 23,991 35,689 (31,943) (15,883) (28,344) (1,717) (77,887) banking 111,022 39,874 64,033 756,066 135,581 297,488 120,168 1,309,303 871,949 401,195 (1,349,559) 76,415 (360,456) (214,756) (343,489) (96,610) (1,015,311) (569,101) (285,308) (255,664) (70,081) (1,180,154) Corporate 1,606,544 611,654 (351,894)1,685,623 274,691 2,140,995 635,645 896,641 277,938 3,495,847 1,874,543 981,216 2,423,586 283,237 5,562,582 (1,139,948) (770,757) (1,425,921) (84,961) (3,421,587) 78,062,810 35,743,945 164,310,139 10,218,976 288,335,870 35,060,988 2,421,625 126,320,025 62,168,269 72,635,162 8,511,514 269,634,970

(continued)

in associates Investments

Including: -Credit commitments net of reversal financial assets income/(expense) (Unaudited) Impairment losses, Fee and commission expense Net inter-segment interest Net inter-segment interest Supplementary information Purchase of non-current assets Net gains arising from Income tax expense Fee and commission income Operating expenses Other income, gains or losses Share of profit of associates

External interest expense Segment liabilities

Profit for the period Depreciation and amortisation As at June 30, 2018 (Unaudited) Segment assets Profit before tax Net fee and commission income Operating income Net interest income External interest income

Six months ended June 30, 2018 Six months ended June Segment Analysis Segment Analysis

3. BANK OF JIUJIANG 3. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 114

Segment Analysis Six monthsendedJune30,2017 External interestincome Profit fortheperiod Profit beforetax Operating income Net feeandcommissionincome Net interestincome Segment assets As atJune30,2017(Unaudited) Depreciation andamortisation Segment liabilities External interestexpense

Other income,gainsorlosses Operating expenses Fee andcommissionincome Purchase ofnon-currentassets Income taxexpense Net lossesarisingfrom

Supplementary information Net inter-segmentinterest Impairment losses,netofreversal Fee andcommissionexpense Share ofprofitanassociate (Unaudited) financial assets income/(expense) Including: -Credit commitments

Investment inan associate

(continued)

0,6,0 966607,4,1 ,0,5 239,688,423 6,801,051 75,648,113 49,676,650 107,562,609 207002,6,4 5,0,6 ,6,7 256,748,115 8,367,578 159,400,762 26,962,745 62,017,030 93460115,880 29,384,630 ,5,2 3,9 ,2,1 7,6 5,589,012 178,169 3,325,719 633,096 1,452,028 ,8,4 9,0 2,8 5,6 2,646,598 152,263 823,289 390,400 2,651,419 198,476 1,280,646 872,164 379,372 1,201,407 Corporate 7325 5201 15758 1,9)(2,937,593) (14,699) (1,557,578) (572,021) (793,295) 2305 1116 2741 9,2)(717,247) (95,625) (217,451) (111,156) (293,015) 6307 1281 2077 6,6)(1,068,152) (61,567) (220,707) (182,871) (603,007) 8,2 6333511191868,029 1,901 385,131 96,373 384,624 4,7 1,9 8597 35,006 (895,977) 318,297 542,674 4,3 2589,4 ,7 279,180 2,178 94,241 42,528 140,233 banking 1,4)(,7)(,2)(,2)(29,065) (1,724) (7,028) (3,172) (17,141) 9291,2 611353149,911 3,523 56,121 11,028 79,239 6481,7 31,194 14,077 46,418 6301,0 319527178,976 5,247 63,149 14,200 96,380 – – – –

Personal banking – 1765 162 (109,277) (1,632) (107,645) – ,4 4,0)(45,455) (48,104) 2,649 – –

prtosUnallocated operations Treasury 69486,944 86,944 – – ,3 6,830 6,830 –

2 92,410 721 29,500,510 –

(203,117) 664,912 Total – 2018 Interim Report – – (118) 115 2017

–– 538,794 2,109,957 2018 3,431 37,689 (9,072) (3,201) 21,913 24,214 21,217 18,449 29,253 32,293 (12,925) 202,076 161,650 470,160 508,268 434,861 (277,246)(176,581) (315,564) (966,007) (364,079) (827,883) 2,140,995 2,651,419 3,012,645 2,219,601 1,827,231 2,648,751 5,562,582 5,589,012 1,903,6621,105,552 1,443,772 738,140 1,392,370 (3,421,587) (2,937,593) (1,979,756) (1,426,748) Six months ended June 30, Six months ended

Bonds investment Bonds Other investments classified as receivables cost Investment securities measured at amortised Investment securities measured at FVTOCI Corporate loans and advances Personal loans and advances bills Discounted Debt securities issued Borrowings from central bank institutions Deposits from banks and other financial Placements from banks agreements Financial assets sold under repurchase Customer deposits Investment, including: Placements with banks and other financial institutions Placements with banks under resale agreements Financial assets held amortised cost, including: Loans and advances to customers at Balances with central bank Balances with central and other financial institutions Deposits with banks Subtotal Net interest income Impaired loans’ interest income Interest expense: Subtotal

Interest income: Net Interest Income

4. BANK OF JIUJIANG 6. 5. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 116 7.

(1) Other Income,GainsorLosses Net Gains/(Losses)ArisingfromFinancialAssets Net FeeandCommissionIncome Others Donation Net gainsonfinancialassetsmeasuredatFVTPL(1) Net lossesonavailable-for-salefinancialassets Total Fee andcommissionexpense Subtotal Transaction andconsultancyfees Credit commitmentsandfinancialguaranteesfees Bank cardfees Settlement andclearingservicefees Wealth managementfees Agency servicefees Fee andcommissionincome Total Depreciation ofinvestmentproperties Tax refund Exchange gains Government subsidies Rental income Total Net lossesonfinancialassetsmeasuredatFVTOCI Net lossesonfinancialassetsheldfortrading

Net gainsonfinancialassetsmeasuredatFVTPLincludedinterestincomeofRMB1,199,280thousand.

Six monthsendedJune30, Six monthsendedJune30, Six monthsendedJune30, 1,223,601 ,0,1 (109,277) 1,208,014 3,0 149,911 178,976 138,005 215,892 7,8)(29,065) (77,887) (15,587) 2956,176 12,523 6,377 9,860 12,995 58,556 15,649 85,484 26,880 10,413 56,510 93,445 619 (57,948) (6,119) ,3 (45,455) 8,833 2,649 3,882 4,769 4,832 5,808 4,487 2018 2018 2018 (198) (420) 4 1,860 443 (77,943) – (31,334) –

2017 2017 2017 (247) (420) – – 2018 Interim Report – – – – – – – 2017 4,196 117 2017 2017 11,775 18,663 26,727 16,679 245,998 305,375

– 220,707 740 2018 (506) 4,514 2018 2018 13,259 19,154 27,803 18,357 8,136 8,235 3,914 390,532 454,465 25,468 67,875 26,73349,29573,30530,269 17,710 14,219 47,203 58,362 33,628 18,416 (14,262) 222,419 866,370 839,210 454,465367,025 305,375 236,553 Six months ended June 30, 1,180,154 1,068,152 1,015,311 717,247 Six months ended June 30, Six months ended June 30, Six months ended

Labor union fees and staff education expenses Housing funds Including: defined contribution plans Social insurance Staff welfare Total Salaries, bonuses and allowances Staff costs

Other assets Repossessed assets Financial guarantees and credit commitments Financial assets held under resale agreements Deposits with banks and other financial institutions Placements with banks and other financial institutions Investment securities measured at amortised cost Total Loans and advances to customers at amortised cost Investments classified as receivables Investment securities measured at FVTOCI General and administrative expenses General and administrative Tax and surcharges Minimum rental expenses investment properties) Depreciation (excluding Amortisation Others Total Staff costs (1) Impairment Losses, Net of Reversal Impairment Losses, Net of Operating Expenses

(1)

9. 8. BANK OF JIUJIANG 10. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 118

income not taxable for tax purpose mainly represents interest income arising from government bonds, dividends (1) statement ofprofitorlossandothercomprehensiveincomeasfollows: The taxchargesfortheperiodcanbereconciledtoprofitbeforepercondensedconsolidated Enterprise IncomeTax.Itiscalculatedat25%oftheestimatedassessableprofitforperiod. The Group carries out its operation in mainland China and all group entities are subject to the PRC Income TaxExpense Effect ofunusedlossesanddeductibletemporarydifferencenot Effect oftax-freeincome(1) Effect ofexpensesnotdeductiblefortaxpurpose Tax adjustmentforprioryears Tax calculatedatapplicablestatutorytaxrateof25% Profit beforetax Total Deferred tax(Note25) Effect oftaxforprioryears Current incometax Income taxexpensecomprises: Total

recognised asdeferredtaxassets distributed frommutualfundinvestment,whichisincometaxfreeinaccordancewiththePRCregulations. The

Six monthsendedJune30, Six monthsendedJune30, ,0,0 868,029 1,309,303 2045 (107,413) (260,485) 2,2 217,008 327,326 203,117 253,453 307,925 535,624 5,5 203,117 253,453 5,8)(36,160) 2,605 (55,480) (21,686) 2,605 (21,686) ,9 16,847 2,791 2018 2018 0 2,817 502

2017 2017 2018 Interim Report 0.38 119 2017 2017 As at December 31,

0.52 2018 2018 As at 435,657 481,398 128,775 27,759 June 30, 1,035,8662,000,000 679,205 1,780,729 4,858,499 4,652,105 24,266,452 23,589,230 29,689,383 28,750,492 Six months ended June 30, Six months ended

and foreign currency reserve deposits. These mandatory reserve funds are not available for the Group’s daily daily Group’s the for available not are funds reserve mandatory These deposits. reserve currency foreign and The surplus reserve deposits are maintained with the PBOC mainly for the purpose of clearing. bearing. Other deposits mainly represent fiscal deposits placed with the PBOC, which are non-interest The Group places mandatory reserve deposits with the People’s Bank of China (the “PBOC”). This includes RMB reserve The Group places mandatory reserve deposits with the People’s Bank of China (the “PBOC”). deposits operations. were calculated at 12.5% and As at June 30, 2018 and December 31, 2017, mandatory reserve deposits with the PBOC respectively; and at 5% of 13.5% of eligible RMB deposits for the Banks and at 9% and 9% of those for the subsidiaries placed with the PBOC are foreign currency deposits for the Bank and its subsidiaries. The foreign currency reserve deposits non-interest bearing.

Basic earnings per share (RMB Yuan) Earnings: Bank attributable to shareholders of the Profit for the period Numbers of shares: number of shares in issue (in thousand) Weighted average Cash Total Mandatory reserve deposits (1) Surplus reserve deposits (2) Other deposits (3) Cash and Balances with Central Bank Cash and Balances with Central Dividends Earnings per Share Earnings per

The calculation of basic earnings per share is as follows: The calculation of (3) (2) (1)

A final dividend of RMB10 cents per share (tax inclusive) in respect of the year ended December 31, A final dividend of RMB10 cents per million was proposed by the Board of Directors of the Bank and 2017 amounting to a total of RMB200 meeting of the Bank on June 22, 2018. approved by the 2017 annual general share (tax inclusive) in respect of the year ended December 31, A final dividend of RMB12 cents per million was proposed by the Board of Directors of the Bank and 2016 amounting to a total of RMB240 meeting of the Bank on May 8, 2017. approved by the 2016 annual general No diluted earnings per share for the six months ended June 30, 2018 and 2017 were presented as No diluted earnings per share for the shares outstanding during the respective periods. there were no dilutive potential ordinary

13. 12. 11. BANK OF JIUJIANG 15. 14. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 120 16.

Financial AssetsHeldforTrading Placements withBanksandOtherFinancialInstitutions Deposits WithBanksandOtherFinancialInstitutions Total Less: Impairmentlossallowance Banks outsidemainlandChina Other financialinstitutionsinmainlandChina Banks inmainlandChina Placements with: Total Deposits with: Total Financial institutions–Policybanks Government Debt securitiesissuedby: Less: Impairmentlossallowance Banks outsidemainlandChina Banks andotherfinancialinstitutionsinmainlandChina

,1,7 1,667,765 2,113,975 1,446,314 1,963,484 June 30, June 30, 7,6 1,480,987 374,068 80,000 1,316,042 250,000 124,225 221,451 151,311 As at As at 2018 2018 (157) (820) 84,945 –

December 31, December 31, December 31, 910,763 764,234 146,529 As at As at As at 2017 2017 2017 – – 2018 Interim Report – – 121 2017 2017 As at As at December 31, December 31,

2018 2018 As at As at (8,470) 738,553696,166 4,571,087 960,630 June 30, June 30, 9,556,2368,878,0941,038,563 8,113,025 9,246,760 633,412 4,215,256 9,314,582 26,506,739 3,734,2535,588,799 22,610,528 3,896,211 (4,073,073) (3,197,047) 39,154,225 37,155,480 73,847,716 60,037,983 75,282,435 65,569,700 19,681,332 19,162,283 114,436,660 102,725,180 110,363,587 99,528,133 114,578,843 99,528,133

of loans and advances to customers by corporate and retail customers are set out as customers retail and corporate by customers to advances and of loans are held with a business model whose objective is neither to collect contractual cash flows nor to both collect both to nor flows cash contractual collect to neither is objective whose model business a with held are contractual cash flows and sell these financial assets, and therefore will be measured subsequently at fair value with contractual cash flows and sell these financial assets, and therefore will be measured subsequently fair value gains or losses to be recognized in profit or loss under IFRS 9. Loans and advances to customers at FVTPL mainly include discounted bills and forfaiting of the Bank. These financial Loans and advances to customers at FVTPL mainly include discounted bills and forfaiting of assets

– Discounted bills – Trade financing – Residential mortgage loans – Personal loans for consumption – Personal loans for business purposes – Credit card – Loans Total loans and advances to customers Subtotal Gross loans and advances to customers at amortised cost Allowance for impairment losses Loans and advances to customers at amortised cost, net Loans and advances to customers at FVTPL (Note) Subtotal Retail loans and advances Corporate loans and advances follows: Note:

Distributions

Total Banks in mainland China Banks in mainland Other financial institutions in mainland China Other financial institutions allowance Less: Impairment loss Loans and Advances to Customers Financial Assets Held Under Resale Agreements Financial Assets (1)

Analysed by counterparties:

18. 17. BANK OF JIUJIANG 18. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 122

(2) Loans andAdvancestoCustomers

(iv) (i) Note: (iii) (ii) Analysis ofloansandadvancestocustomersbycollectiveindividualassessments:

Gross loansandadvances As atDecember31,2017 Allowance forimpairment Loans andadvancesto

customers, net losses

For moredisclosuresofloansandadvancestocustomersasatJune 30,2018,pleaserefertoNote40.1. Movements ofallowanceonloansandadvancestocustomersareasfollows: been identifiedasbearinganimpairmentlossandareassessedeitherindividuallyorcollectively. Identified impairedloansandadvancesincludeforwhichobjectiveevidenceofimpairmentexistshave specifically identifiedasimpaired. Loans andadvancesforwhichallowanceiscollectivelyassessedconsistofloanshavenotbeen Recovery Written off Reversal fortheyear Charge fortheyear As atJanuary1,2017 As atDecember31,2017 Unwinding ofdiscountonallowance

which allowance advances for is collectively 0,6,1 5,2 ,1,4 ,6,6 102,725,180 1,665,168 1,113,944 551,224 101,060,012 assessed (i) 8990815684347591599,528,133 599,105 423,437 175,668 98,929,028 21094 3556 6057 10603 (3,197,047) (1,066,063) (690,507) (375,556) (2,130,984) Loans and

allowance is collectively Identified impairedloansandadvances(ii) For which assessed (continued)

allowance is individually For which sesdSubtotal assessed

Individually ,2,7 9,1 1,915,283 694,410 1,220,873 allowance

assessed 4787 1885 (646,692) (642,711) (178,825) (56,094) (467,867) (586,617) 5,6 ,4,2 2,597,790 2,040,029 557,761 9,0 ,0,4 3,197,047 2,506,540 690,507 3,5)(139 (47,202) (11,349) (35,853) 2,210

Collectively allowance assessed 18,369 Total

impaired loans and advances gross loansa as a%of advances Identified 20,579 1.62% Total 2018 Interim Report

123 2017 As at 15,100 14,840 124,048 3,843,607 3,388,212 9,887,172 3,296,437 16,695,869 20,554,576 16,695,869 16,681,029 December 31,

– Policy banks institutions – Commercial banks and other financial The unlisted equity investments are measured at cost because their fair values cannot be reliably measured. The unlisted equity investments are measured Financial institutions Corporations Government Debt securities Asset-backed securities

Total Fund investment Subtotal Equity investment (1) Total Analysed by debt securities issuers: Debt securities issued by: Debt instruments Available-for-sale Financial Assets Available-for-sale (1)

19. BANK OF JIUJIANG 21. 20. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 124

(1) (3) (2) Investments ClassifiedasReceivables Held-to-maturity Investments Asset-backed securities Debt securities Total Allowance forimpairmentlosses Subtotal Wealth managementproducts(3) Asset managementplans(2) Trust beneficiaryrights(1) Total Debt securitiesissuedby: Analysed bydebtsecuritiesissuers: Total

Corporations Financial institutions Government Wealth managementproductsareissuedbyothercommercialbanks with finiteterms. Asset managementplansaremainlyoperatedbyassetcompaniesandsecuritiescompanies. Trust beneficialrightsareoftruststhatmainlyinvestinloans. – Policybanks

December 31, December 31, 13,113,168 68,904,526 69,904,145 19,734,891 49,291,388 13,125,507 13,125,507 3,519,616 4,269,653 5,336,238 (999,619) 877,866 12,339 As at As at 2017 2017

2018 Interim Report

125 2018 2018 2018 2018 As at As at As at As at 720,442 (910,430) June 30, June 30, June 30, June 30, 6,428,786 1,807,911 1,371,551 15,746,313 38,033,881 52,869,764 20,780,083 38,604,435 48,933,125 48,933,125 52,869,764 20,780,083 122,582,972

Trust beneficiary rights and asset management plans Less: Impairment loss Debt securities Total Debt securities Total Trust beneficiary rights and asset management plans Trust beneficiary rights and asset management Funds Wealth management products Debt securities Equity investments Investment securities measured at FVTOCI Investment securities measured at amortised cost Investment securities measured Investment securities measured at FVTPL Investment securities measured

Total Investment securities measured at FVTPL (1) Investment securities Investment securities measured at amortised cost (2) Investment securities measured at FVTOCI (3) Investment securities Investment Securities (3) (2) (1)

22. BANK OF JIUJIANG 24. 23. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 126

Property andEquipment Investments inAssociates Disposals Disposals Transfers tootherassets Transfers tootherassets Transfers Disposals Disposals Transfers Additions As atJune30,2018(unaudited) As atDecember31,2017 NET BOOKVALUE As atJune30,2018(unaudited) Provided fortheperiod As atDecember31,2017 Provided fortheyear As atJanuary1,2017 ACCUMULATED DEPRECIATION As atJune30,2018(unaudited) Additions As atDecember31,2017 As atJanuary1,2017 COST Total Share ofpost-acquisitionprofitsandothercomprehensiveincome, Cost ofunlistedinvestmentsinassociates net ofdividendsreceived

,1,3 0,3 ,2 467182889392,399,098 859,319 138,248 74,637 7,720 105,835 1,213,339 ,2,9 3017778,9 6,4 ,4,5 2,412,473 1,045,050 160,248 80,395 7,717 93,071 1,025,992 ,2,4 6,9 8661847381889393,112,425 859,319 308,168 138,407 18,696 264,891 1,522,944 ,0,2 2,2 77413003111105003,034,623 1,045,050 311,161 133,020 17,744 226,220 1,301,428 ,5,0 6,8 6209,0 5,9 3,0 2,530,951 838,101 258,995 93,109 16,260 167,082 1,157,404 eshl Leasehold land and 3965 1906 1,7)(370 (169,920) (63,770) (10,976) (159,056) (309,605) 2546 1319 1,2)(265 (150,913) (52,625) (10,027) (133,149) (275,436) 2519 9,2)(,6)(674 (97,616) (36,774) (9,865) (92,323) (215,109) buildings 2,2 26,592 125,222 0,1 32,969 208,418 3,8)(634 122 1,5)(24,112) (11,153) (1,282) (26,304) (34,986) 6,2)(490 210 1,5)(59,925) (17,554) (2,170) (44,910) (60,327) 8823,1 ,4 7553,3 2,6 539,287 425,062 36,333 17,535 3,543 38,012 18,802 3986181271951881368128,974 103,668 1,878 1,995 1,297 6,138 13,998 (900) 817 546 209 233 (7,856) (2,303) (2,059) (5,466) – – – ,8 ,0 ,0 6,628 1,703 2,008 4,084 –

equipment Electronic (436) 397 – –

vehicles Motor (345) 333 – – 4692,8 (200,182) 23,689 24,679 – 3,402 –

and fixtures Furniture 1)(5,105) (10) 5,105 8 – –

improvements

Leasehold June 30, 3 (245,023) 234 1,5 111,330 115,251 20428,143 83,187 32,064 83,187 1,3)(17,931) (17,931) – 4,7)(44,376) (44,376) –

As at 2018

Construction in progress

December 31, (17,684) – (6,796) – 6,660 – 14,423 – (713,327) – (97,837) – (622,150) – (184,886) – (451,687) –

As at 2017 Total – – 2018 Interim Report – – 127 2017 As at December 31,

– – 2018 As at 9,1179,117 9,536 9,536 June 30,

(continued) over 50 years 10-50 years less than 10 years Total Held in mainland China Property and Equipment Property and The carrying amount of buildings of the Group with incomplete title deeds as at June 30, 2018 and 2018 and incomplete title deeds as at June 30, of buildings of the Group with The carrying amount The Group is RMB119.23 million, respectively. amounted to RMB28.74 million and December 31, 2017 directors of deeds for the above buildings. The of applying for the outstanding title still in the process impact on deeds would not cause any significant opinion that these incomplete title the Bank are of the the Group’s operations. with net book land and buildings of the Group and December 31, 2017, leasehold As at June 30, 2018 as investment were rented out to third parties RMB9.12 million and RMB9.54 million value amounting to properties. are analysed by the remaining terms of the land leases as The net book value of investment properties follows:

24. BANK OF JIUJIANG 25. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 128

The followingsarethemajordeferredtaxassetsandliabilitiesrecognisedmovementsthereon:

Deferred Taxation As atJune30,2018 Credit/(charge) to As atJanuary1,2018 Effect ofadoptionIFRS9 As atDecember31,2017 As atDecember31,2017 Credit toprofitorloss As atJanuary1,2017 Credit toother Charge toother comprehensive income (Unaudited) comprehensive income profit orloss

for impairment for impairment

Allowance for impairment ,1,1 6,8 0,6 6483,5 1,467,921 37,454 46,408 208,060 160,289 1,015,710 loac Allowance 0,7 0,9 3,9 0983,7 1,334,674 36,977 1,257,970 36,977 50,928 13,303 335,298 339,242 101,694 101,694 809,777 766,754 6,5 0,9 3,4 3333,7 1,257,970 36,977 803,593 13,303 36,520 339,242 1,908 101,694 115,445 766,754 47,654 54,040 171,074 595,680 0,3 58,595 205,933 43,023 losses losses – –

bonuses and bonuses and allowances allowances Accrued Accrued aais salaries, aais salaries, 394 37,625 (3,944) – 223,797 – (127,238) –

sale financial available-for- changes of changes of netet investment at FVTOCI esrd measured Fair value Fair value available- euiis securities iaca financial o-ae for-sale assets/ assets 11,395 – (4,520) –

assets held assets held changes of for trading/ of financial netet investment for trading esrd measured Fair value Fair value at FVTPL euiis securities changes iaca financial – –

tesTotal Others tesTotal Others 5 230,580 457 7 260,485 477 76,704 – 223,797 – (127,238) –

2018 Interim Report 129 2017 2017 As at As at December 31, December 31,

2018 2018 As at As at 9,556 721,303 6,2681,782 6,426 2,304 72,26843,802 31,673 20,976 (74,840) (50,266) 362,309 460,221 507,077 132,251 227,754 150,778 June 30, June 30, 3,232,608 4,304,308 3,157,768 4,254,042 2,860,743 3,122,784 5,699,777 6,042,802 3,157,7681,683,058 4,254,042 1,444,352

Land use rights Others Property and equipment Gross repossessed assets Allowance for impairment losses Repossessed assets, net Analysed as: Repossessed assets:

Total Repossessed assets (1) Repossessed assets Interest receivables Other receivables Intangible assets Deferred issue costs Land use rights Precious metals Others Other Assets (1)

26. BANK OF JIUJIANG 29. 28. 27. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 130

Analyzed bycounterparties: Financial AssetsSoldUnderRepurchaseAgreements Placements FromBanks Deposits FromBanksandOtherFinancialInstitutions Total Banks outsidemainlandChina Banks inmainlandChina Total Other financialinstitutionsinmainlandChina Banks inmainlandChina Total Other financialinstitutionsinmainlandChina Banks inmainlandChina

939148,268,704 19,309,154 6,734,954 12,126,410 ,8,4 1,533,750 7,182,744 ,8,1 17,405,997 6,383,617 17,297,997 6,383,617 June 30, June 30, June 30, 0,7 1,116,931 809,478 1,031,986 809,478 As at As at As at 2018 2018 2018 84,945 – 108,000 –

December 31, December 31, December 31, As at As at As at 2017 2017 2017 2018 Interim Report 131 2017 2017 2017 As at As at As at December 31, December 31, December 31,

2017 2018 2018 As at As at As at 577,593 414,780 376,390 271,831 399,317 317,447 June 30, June 30, June 30, 1,765,7522,573,382 1,955,048 2,841,990 6,383,617 17,405,997 5,984,300 17,088,550 18,186,076 17,208,618 23,102,803 22,420,436 70,931,88013,036,322 73,453,973 11,996,411 35,181,93051,296,783 31,406,862 23,102,803 40,087,057 22,420,436 (continued) 193,926,108 179,636,570

Guarantees and Letters of guarantee Letters of credit Others Bank acceptances Total Pledged deposits analyzed by products for which deposit is required: Pledged deposits analyzed by

Corporate customers Individual customers Corporate customers Individual customers

Total

Demand deposits Time deposits Pledged deposits (1) Others Total Bonds Bills Customer Deposits Financial Assets Sold Under Repurchase Agreements Sold Under Repurchase Financial Assets Analyzed by collateral type: Analyzed by collateral (1)

30. 29. BANK OF JIUJIANG 31. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 132

maturities attheendofeachreportingperiod. The tablesbelowsummarisethematurityanalysisofdebtsecuritiesissuedbyremainingcontractual (1) (3) (2) (4) Analysis oftheliquidityriskdebtsecuritiesissued Debt SecuritiesIssued Total 15 JiujiangBankbonds(1) Total 15 JiujiangBankbonds(1) Interbank negotiablecertificates 18 JiujiangBankbonds(2) Interbank negotiablecertificates Asset-backed securities(4) Asset-backed securities(4)

of deposit(3) of deposit(3) risks andrewards associatedwithfinancialassetstransferred. issuance oftheasset-backedsecurities wasrecognisedasdebtsecuritiesissuedtheBankretained substantiallyallthe million respectively. The interest rates range from 4.75% to 9.00%. The full amount of the consideration received for the and December31,2017,outstanding amountoftheasset-backedsecuritiesissuedwereRMB1,390 million andRMB1,495 Special AssetManagementPlan”with initialsizeofRMB3,528million,expiringonDecember28,2022. AsatJune30,2018 On total RMB38.82 billion.AsatDecember31,2017,theBankhad86outstanding interbanknegotiablecertificatesofdepositwith As atJune30,2018,theBankhad75outstandinginterbanknegotiable certificatesofdepositwithtotalnotionalamount bond interestrateafterfiveyearsofissue,iftheisnotredeemed inthefifthyear. Bank hastherighttoredeembondinfullatnominalvalue endofthefifthyear.Noadjustmentismadeto agreement, thebondhasatermof10years,expiringonJanuary27, 2028,bearinganinterestat5.00%perannum.The On January28,2018,theBankissuedafixed-ratesubordinatedbond withnominalvalueofRMB1.5billion.Pursuanttothe bond interestrateafterfiveyearsofissue,iftheisnotredeemed inthefifthyear. The Bankhastherighttoredeembondinfullatnominalvalue theendoffifthyear.Noadjustmentismadeto the agreement,bondhasatermof10years,expiringonDecember24,2025,bearinganinterestat4.9%perannum. On December25,2015,theBankissuedafixed-ratetier-twocapitalbondwithnominalvalueofRMB2billion.Pursuantto certificates wereissuedatadiscountofwhichinterestsshouldbepaid inlumpsumatthematuritydate. May 21, 2016, the Bank authorised Tebon Securities Co., Ltd. to issue asset-backed securities, named the “De Xun No.1 notional amount of RMB37.47 billion. All of these certificates were due within 1 year at the time of issuance. Such

73089770010002000040,247,839 2,000,000 120,000 757,000 37,370,839 39,443,399 36,752,839 38,173,399 1,270,000 Less than Less than inclusive) inclusive) 1,0 5,0 120,000 757,000 618,000 (1 year (1 year 1 year 1 year – – –

inclusive) inclusive) (2 years (2 years 1 to2 1 to2 years years As atDecember31,2017 – – 2,0 ,0,0 43,063,399 3,500,000 120,000 – – – – 120,000 – As atJune30,2018

inclusive) inclusive) (5 years (5 years 2 to5 2 to5 years years ,0,0 2,000,000 2,000,000 – 2,000,000 2,000,000 – ,0,0 1,500,000 1,500,000 – – –

over 5 over 5 years years 36,752,839 – 38,173,399 – 1,390,000 – 1,495,000 –

Total Total 2018 Interim Report – 133 2017 2017 2017 As at As at As at December 31, December 31, December 31,

– (1,017,581) – 484,000 – 484,000 2018 2018 2018 As at As at As at 36,424 9,716 892,474819,816307,007 2,651,121 268,784 697,767 214,990 244,854 249,058 14,137 (624,036) June 30, June 30, June 30, 2,000,000 2,000,000 4,691,838 5,762,322 2,000,000 1,516,000 2,000,000 2,000,000 2,000,000 1,516,000 2,152,343 1,895,669

Investment securities measured at FVTOCI Available-for-sale financial assets At end of the period/year Ordinary shares of RMB1 yuan each (in thousand) Ordinary shares of RMB1 yuan each At beginning of the period/year At end of the period/year Issued and fully paid At beginning of the period/year Increase during the period/year Issuance of shares Total Interest payable Other payables Salaries payable Settlement payable tax payables Business and other Dividends payable Accruals for issue costs and listing expenses Investment Revaluation Reserve Share Capital Other Liabilities

34. 33. 32. BANK OF JIUJIANG 36. 35. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 134

three months: Cash andcashequivalentsincludethefollowingbalanceswithanoriginalmaturityequaltoorlessthan 36.2 36.1 Structured Entities Cash andEquivalents Total Placements withbanksandotherfinancialinstitutions Deposits withbanksandotherfinancialinstitutions Balances withcentralbank Cash

(1) consolidated bytheGroup. considers it has control over such structured entities and those structured entities should be As the initiator and manager of the above mentioned wealth management products, the Group million andRMB124respectively. December 31, 2017, the scale of the consolidated structured entities amounted to RMB3,125 guaranteed wealth management products sponsored by the Bank. As at June 30, 2018 and management products issued by the Bank that were invested by its subsidiaries and principal- The consolidatedstructuredentities of theGroupmainlyincludednon-principal-guaranteedwealth Consolidated structuredentities Unconsolidated structuredentities

managed bythirdpartyinstitutions. Group asatJune30,2018andDecember31,2017in thestructuredentitiessponsoredand The following tables setout an analysisofthe gross carrying amounts of interests held by the beneficiary rightsandasset-backedsecurities. wealth managementproductsissuedbyfinancialinstitutions, assetmanagementplans,trust The Group does not consolidate these structured entities. Such structured entities include through investmentsinthebeneficialrightsorplansissued relatingtothesestructuredentities. The Groupholdsaninterestinthesestructuredentities managedbythirdpartyinstitutions an interest Structured entitiesmanagedbythirdpartyinstitutionsinwhichtheGroupholds

,0,6 8,099,832 7,305,260 2,532,030 5,190,839 1,814,695 4,858,499 June 30, 196,409 376,963 435,657 As at 2018

June 30, As at 2017 – 2018 Interim Report

135 Net gains/losses Interest income Interest income Interest income Net gains/losses Net gains/losses Type of income Type of income Net gains/losses Interest income/ Interest income Net gains/losses

exposure exposure Maximum risk Maximum risk

– 6,428,786 – 8,400 – 1,807,911 – 27,179 – 3,843,607 cost As at June 30, 2018 securities measured Investment at amortised receivables Investments classified as

As at December 31, 2017 – 19,734,891 19,429,609 – 49,291,388 48,597,051 – – 877,866 877,866 8,400 FVTPL maturity Held-to- securities 6,428,786 1,807,911 Investment 38,604,435 38,033,881 75,755,206 46,849,532 38,033,881 84,000,303 investments measured at (continued)

– – – assets 14,840 12,339 3,843,607 3,858,447 12,339 69,904,145 72,775,312 sale financial Available-for-

(continued) (continued)

asset management plans asset-backed securities Assets-backed securities Asset management plans Trust beneficiary rights Trust beneficiary rights and Funds Funds Subordinated tranches of Total Wealth management products Wealth management products Total Unconsolidated structured entities managed by the Group Structured entities managed by third party institutions in which the Group holds in which the Group holds managed by third party institutions Structured entities an interest The types of unconsolidated structured entities managed by the Group mainly include non- The types of unconsolidated structured entities managed by the Group these structured principal-guaranteed wealth management products. The purpose of managing Interest held by the entities is to generate fees from managing assets on behalf of investors. structured entities. Group includes fees charged by providing management services to these recognised fee management the 2017, and 2018 30, June ended months six the For amounting to RMB56.51 million, and RMB58.56 million, respectively. the by held assets of amount the 2017, 31, December and 30,2018 June at As by the Bank unconsolidated non-principal-guaranteed wealth management products managed amounting to RMB33,536 million and RMB34,021 million respectively. structured The Group did not provide any financial or other support to these unconsolidated entities during the six months ended June 30, 2018 and 2017.

Unconsolidated structured entities Unconsolidated (2) (1)

Structured Entities Structured Entities 36.2

36. BANK OF JIUJIANG 37. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 136

(1) Related PartyTransactions

with pricingpoliciesconsistentthosetransactionsconductedindependentthirdparties. major shareholdersandentitiesundertheircontrol.Thesetransactionswereenteredintointhenormalcourseofbusiness, During theperiod/year,Grouphadfollowingmaterialbalancesandenteredintotransactionswith Balances andtransactionsbetweentheGroupmajorshareholdersentitiesundertheircontrolareasfollows: The shareholderswithlessthan5%interestintheBankarenotconsideredasrelatedpartiesofGroup. parties oftheGroup: Following majorshareholdersholdingmorethan5%sharesoftheBankareconsideredasrelated Major shareholdersandentitiesundertheircontrol Dasheng (Fujian)AgriculturalCo.,Ltd. Foshan GaominJindunHengyeComputer Industrial BankCo.,Ltd. Beijing AutomotiveGroupCo.,Ltd. Jiujiang CityBureauofFinance Name ofshareholders Special PrintingCo.,Ltd.

Percentage ofsharesheld June 30, 47%14.72% 18.30% 18.30% 14.72% 18.30% 18.30% .0 6.80% 6.79% 6.80% 6.79% As at 2018 %

December 31, As at 2017 % 2018 Interim Report – – – 137 2017 2017 As at December 31,

– 1,802 – 2,093,857 2018 2018 As at 8,626 6,003 29,591 29,38932,891 59,870 67,829 37,86525,059 12,502 49,886 619,970 113,801 200,000 June 30, 1,200,000 1,200,000 3,471,848 2,945,249 7,005,758 6,809,754 7,068,682 6,872,142 1,308,3751,337,500 708,000 Six months ended June 30, (continued)

(continued) represented the non-principal-guaranteed wealth management product issued by the Group where the underlying underlying the where Group the by issued product management wealth non-principal-guaranteed the represented It represented the trust products purchased by the Group, which was issued by a subsidiary of Industrial Bank Co., It represented the trust products purchased by by the Group of which the underlying borrower is a related party of Ltd. and the asset management plan purchased the Group. It asset is a loan, and the borrower is a related party of the Group. management products (2)

Interest expense Fee and commission income Net gains arising from investment securities Transactions during the period: Interest income Total Non-principal-guaranteed wealth Total Liabilities Customer deposits institutions Deposits from banks and other financial Interest payable Balances at end of the period/year Balances at end of Assets Interest receivable Deposits with banks and other financial institutions Deposits with banks and other financial amortised cost Loans and advances to customers at (1) Investments classified as receivables (1) Investment securities measured at FVTPL Investment securities measured at amortised cost (1) Investment securities measured at amortised 2): ( (1): Major shareholders and entities under their control and entities under their Major shareholders

Related Party Transactions Related Party (1)

37. BANK OF JIUJIANG 37. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 138

(2) (3) Related PartyTransactions

parties. business, withpricingpoliciesconsistentthosetransactionsconductedindependentthird such individuals. Transactions with other related parties were entered into in the normal course of of Directors, the Board of Supervisors and senior management, and close family members of individuals; entities(andtheirsubsidiaries)controlledorjointlybymembersoftheBoard Directors, the Board of Supervisors and senior management and close family members of such Other related parties can be individuals or enterprises, which include: members of the Board of Zhongshan XiaolanCountyBankCo.,Ltd. During thesixmonthsendedJune30,2018,BankreceivedadividendofRMB5millionfrom Associates oftheBank Other relatedparties Interest income Transactions duringtheperiod: Total Interest payable Deposits frombanksandotherfinancialinstitutions Balances attheendofperiod/year: Interest expense (continued)

Six monthsendedJune30, June 30, 5,5 872,414 868,712 759,256 757,422 54512,751 15,475 ,3 3,702 1,834 As at 2018 2018 –

December 31, As at 2017 2017 10 2018 Interim Report 45 29 67 40 319 139 2017 2017 2017 As at December 31,

19 58 16 225 232 2018 2018 2018 As at 8,805 7,504 8,6248,682 8,968 9,035 7,5211,059 6,421 1,038 13,858 19,193 13,839 19,164 June 30, Six months ended June 30, Six months ended June 30,

(continued) (continued) Fees Total Transactions during the period: Interest income Liabilities Customer deposits Interest payable Total Balances at the end of the period/year: Balances at the end Assets Interest receivable Total Basic salaries, bonuses and allowances Contribution to pension schemes Interest expense Loans and advances to customers at amortised cost Loans and advances to customers at Key management personnel Other related parties Other related parties Balances and transactions between the Group and other related parties are as follows: between the Group and other Balances and transactions

and authority the have who Group the in persons those are personnel management Key responsibility to plan, direct and control the activities of the Group. ended months six the during management key of members other and directors of remuneration The June 30, 2018 and 2017 were as follows:

Related Party Transactions Related Party (4) (3)

37. BANK OF JIUJIANG 38. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 140

counsels, theGroupconsidereditnotnecessarytoprovideforanypotentiallossesfromtheseclaims. operations. AsatJune30,2018andDecember31,2017inlightofcourtdecisionsoradvicefromlegal The group entities are involved as defendants in certain lawsuits arising from their normal business commitments aslesseewithfixedleasetermandpayment: At the end of each reporting period, the Group has the following non-cancellable operating lease Operating leasecommitments Capital commitment Legal proceedings Contingent LiabilitiesandCommitments Over 5years 1 to5years Within 1year Contracted butnotprovidedfor Total

June 30, June 30, 0,2 114,420 217,614 104,929 211,037 221,764 134,800 8,9 402,897 389,192 32670,863 73,226 As at As at 2018 2018

December 31, December 31, As at As at 2017 2017 2018 Interim Report 141 2017 2017 As at As at December 31, December 31,

2018 2018 As at As at 399,317 317,447 June 30, June 30, 5,823,960 17,433,941 6,223,277 17,751,388 2,421,6253,545,6883,307,029 463,413 3,268,750 3,018,059 37,482,613 34,662,475 28,208,271 27,912,253

(continued) Bills Total Bonds Total Loan commitments Letters of credit of guarantee Guarantees and Letters Bank acceptances Contingent Liabilities and Commitments and Commitments Contingent Liabilities the for repurchase agreements under sold assets financial of amount carrying the 2018, 30, June at As million). Group amounted to RMB6,384 million (December 31, 2017: RMB17,406 All repurchase agreements were due within twelve months from inception.

Collateral Assets pledged as collateral under repurchase agreements by the Group are as The carrying amount of assets pledged follows: Credit commitments represent general facility limits granted to customers. These credit facilities may be Credit commitments represent general the issuance of letters of credit, acceptances or or through and advances in the form of loans drawn letters of guarantee. opinion the of are Bank the of directors The specific customers. to commitments loan grants Group The and revocable. that such commitments are conditional

Credit commitments

38. BANK OF JIUJIANG 40. 39. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 142

RMB34,021 millionrespectively. management products issued and managed by the Group amounted to RMB33,536 million and As at June 30, 2018 and December 31, 2017, the balance of the non-principal-guaranteed wealth RMB47,042 millionandRMB42,131respectively. As at June 30, 2018 and December 31, 2017, the entrusted loans balance of theGroup amounted to not theGroup’sassets. thereon arenotincludedinthecondensedconsolidatedfinancialstatementsofGroupasthey managing assetsonbehalfofindividualsorcorporations.Theseandanygainslossesarising The Groupcommonlyactsasassetmanagerorinotherfiduciarycapacitiesthatresultsitsholding 40.1 management hasbeenchangedduetotheadoptionofIFRS9.Keychangesaresummarisedbelow: Group’s consolidatedfinancialstatementsfortheyearendedDecember31,2017,exceptthatcreditrisk these risks for the six-month period ended June 30, 2018 are the same as those presented in the and marketrisk(i.e.interestraterisk,currencyotherpricerisk).Thepoliciesonhowtomitigate financial statements.Therisksassociatedwiththeseinstrumentsincludecreditrisk,liquidityrisk Details of the financial instruments are disclosed in respective notes to the condensed consolidated and systemstoaddresschangesinmarkets,productsemergingbestpractices. and reportrisksarisingfromnormaloperation.TheGroupregularlyreviewsitsriskmanagementpolicies The Group’s risk managementpoliciesaredesignedandcontrolssetuptoidentify,analyse,monitor parameters andsatisfytheregulatoryrequirements. The primary objectives of risk management of the Group are to maintain risk within acceptable Financial RiskManagement Fiduciary Activities

factors thatareindicativeof riskofdefault. taken intoaccountintheanalysis.Creditriskgrades are definedusingqualitativeandquantitative and applyingexperiencedcreditjudgment.Thenatureof the exposureandtypeofcounterpartyare information isbasedonarangeofdatathatdetermined tobepredictiveoftheriskdefault risk gradingtocategorizeexposuresaccordingtheir degreeofriskdefault.Thecreditgrading In ordertominimizecreditrisk,theGrouphastasked todevelopandmaintaintheGroup’scredit 12-month ECL. increase in credit risk, the Group will measure the loss allowance based on lifetime ECL rather has beenasignificantincreaseincreditrisksinceinitial recognition.Iftherehasbeenasignificant monitors allfinancialassetsthataresubjecttoimpairment requirementstoassesswhetherthere After theadoption of IFRS9,inadditionto the credit risk managementinprioryears, the Group Credit risk Credit 2018 Interim Report 143 can honour the terms of their loans. There is no reason to to reason no is There loans. their of terms the honour can (continued) on normal operational revenues to repay principal and interest. interest. and principal repay to revenues operational normal on a small portion or none of the principal and interest can be recovered be can interest and principal the of a small portion or none Borrowers are able to repay their loans currently, although repayment may Borrowers are able to repay their loans be adversely affected by specific factors. is in question and they cannot rely Borrowers’ ability to repay their loans entirely interest in full and significant losses Borrowers cannot repay principal and collateral or guarantees are invoked. will need to be recognised even when Only Borrowers doubt their ability to repay principal and interest in full on a timely basis. repay principal and interest in full doubt their ability to after taking all possible measures and exhausting all legal remedies. after taking all possible measures and Losses may ensue even when collateral or guarantees are invoked. Losses may ensue even when collateral

(continued)

mention:

ormal: Special Substandard: Doubtful: Loss: N

Credit risk • • • The internal credit risk grades are designed and calibrated to reflect the risk of default as credit The internal credit risk grades are designed grades between default of risk in difference the increases, risk credit the As deteriorates. risk the on based recognition, initial at grade risk credit’s a to allocated is exposure Each changes. grade risk credit the and monitored are exposures All counterparty. the about information available into input primary a as grades risk credit uses Group The information. current reflect to updated is of the probability of default (“PD”) for exposures. The Group the determination of the term structure of portfolio per significantly increased has risk credit whether determine to criteria different uses qualitative information that assets. The criteria used are both quantitative changes in PDs as well as are indicative of risk of default. growth, product domestic gross as such data macro-economic forward-looking uses Group The increase of credit producer price index and consumer price index in its assessment of significant risk as well as in its measurement of ECL. internal rating and “stage”An analysis of the Group’s credit risk exposure per class of financial asset, enhancements is provided without taking into account the effects of any collateral or other credit the amounts in the table in the following tables. Unless specifically indicated, for financial assets, represent gross carrying amounts. • The five category classifications in which the Group classifies its loans and advances to customers its loans and advances to customers classifications in which the Group classifies The five category management plans measured at amortised and trust beneficiary rights and asset at amortised cost cost are set out below: •

Financial Risk Management Financial Risk 40.1

40. BANK OF JIUJIANG 40. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 144

40.1 Financial RiskManagement

Credit riskmanagement Credit risk Credit assets. The tables below analyse the movement of the loss allowance during the period per class of asset managementplansatamortisedcost Loss allowance–Trustbeneficiaryrightsand Loss allowanceasat Loss allowanceasat Loss allowanceasat Loss allowanceasat at amortisedcost and advancestocustomers Loss allowance–Loans

Changes inthelossallowance Changes inthelossallowance

June 30,2018 January 1,2018 June 30,2018 January 1,2018 – Transfertostage1 – Transfertostage1 – Transfertostage2 – Transfertostage2 – Transfertostage3 – Transfertostage3 – Charge/(reversal)to – Write-offs – – Recovery Charge toprofitorloss profit or loss (continued)

(continued) (continued)

,5,9 4,3 ,7,4 4,073,073 1,173,648 444,132 2,455,293 ,7,8 1,4 0,8 3,399,611 905,080 318,946 2,175,585 2mnh 12-month 2mnh 12-month 879,129 621,194 257,935 1,9 2,0 2,7 866,370 426,577 128,701 311,092 Stage 1 Stage 1 (31,384) ECL ECL – – – – – – –

Stage 2 Stage 2 ieie Lifetime ieie Lifetime (85,633) 82,118 ECL ECL – – – – – – – 2013 (210,123) (210,123) – –

Stage 3 Stage 3 ieie Lifetime ieie Lifetime (50,734) 85,633 17,215 495 253,010 (4,925) ,8 883,110 3,981 630,100 8,906 ECL ECL – – – –

17,215 Total Total – – – – – – 2018 Interim Report 145 (continued) (continued) Credit risk For other receivables, the Group has applied the general approach in IFRS 9 to measure ECL. ECL. measure to 9 IFRS in approach general the applied has Group the receivables, other For at 12 month ECL. Other Other receivables at Stage 1 of which the loss allowance is measured at lifetime ECL. receivables at Stage 2 or Stage 3 of which the loss allowance is measured Financial guarantees and loans commitments Financial guarantees and loans in approach general the applied has Group the commitments, loans and guarantees financial For proportion of financial guarantees and loans commitment is IFRS 9 to measure ECL. A substantial is measured at 12 month ECL. at Stage 1 of which the loss allowance Other receivables Financial assets held under resale agreements Financial assets held under resale agreements, the Group has applied the general approach in For financial assets held under resale proportion of financial assets held under resale agreements IFRS 9 to measure ECL. A substantial is measured at 12 month ECL. is at Stage 1 of which the loss allowance Deposits with banks and other financial institutions Deposits with banks and other institutions, the Group has applied the general approachFor deposits with banks and other financial financial other and banks with deposits of proportion substantial A ECL. measure to 9 IFRS in loss allowance is measured at 12 month ECL. institutions is at Stage 1 of which the Placements with banks and other financial institutions Placements with general the applied has Group the institutions, financial other and banks with placements For A substantial proportion of placements with banks and other approach in IFRS 9 to measure ECL. which the loss allowance is measured at 12 month ECL. financial institutions is at Stage 1 of Investment securities measured at FVTOCI Investment securities in approach general the applied has Group the FVTOCI, at measured securities investment For is securities measured at FVTOCI ECL. A substantial proportion of investment IFRS 9 to measure 12 month ECL. the loss allowance is measured at at Stage 1 of which

Financial Risk Management Financial Risk 40.1

40. BANK OF JIUJIANG 41. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 146

I • liabilities arecategorisedanddetermined,inparticular,thevaluationtechnique(s)input(s)used. The followingtablesgivetheinformationabouthowfairvaluesofthesefinancialassetsand classified aslevel2. based on observable market data and/or obtainable from active open market, the instruments are and counterparty credit spreads, as appropriate. If these parameters used in the model are substantively The maininputsused in discountedcash flow modelincludeinterestrates, credit spreadof the Bank The mainvaluationtechniqueusedbytheGroupisdiscountedcashflowmodelforfinancialinstruments. from observablecurrentmarkettransactionsforsimilarinstrumentstotheextentavailable. accordance withgenerallyacceptedpricingmodels,includingdiscountedcashflowanalysis,usingprices measurements arenotavailable,thefairvalueoffinancialassetsandliabilitiesdeterminedin it isavailablesuchasthemarketpriceoflistedequitysecuritiesonexchanges.Wherelevel1fairvalue • its entirety,whichisdescribedbelow: fair valuemeasurementsisobservableandthesignificanceofinputstomeasurementin value measurementsarecategorisedintolevel1,2or3basedonthedegreetowhichinputs Certain financialassetsoftheGrouparemeasuredatfairvalueendeachreportingperiod.Fair • Fair ValueofFinancialInstruments n estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent

the assetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs). Level 3fairvaluemeasurementsarethosederivedfromvaluationtechniquesthatincludeinputsfor within Level1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)indirectly Level 2fairvaluemeasurementsarethosederivedfrominputsotherthanquotedpricesincluded for identicalassetsorliabilities. Level 1fairvaluemeasurementsarethosederivedfromquotedprices(unadjusted)inactivemarket derived fromprices).

2018 Interim Report 147 Total Total

– 20,780,083 – 1,807,911 – 3,843,607 – 6,428,786 – 16,695,869 – 910,763 – 21,450,239 – 1,371,551

– 4,215,256 4,215,256 – 720,442 720,442 – 38,604,435 38,604,435 As at June 30, 2018 As at December 31, 2017

– – 20,780,083 – – – 3,843,607 – 1,807,911 – 16,695,869 – 6,428,786 – 910,763 – 21,450,239 – 1,371,551 – 30,388,331 43,540,133 73,928,464 (continued) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

fair value of trust beneficial rights and asset management plans measured at FVTPL and loans and advances to to advances and loans and FVTPL at measured plans management asset and rights beneficial trust of value fair fair value of equity investment is determined with reference to the quoted market multiples with an adjustment of of adjustment an with multiples market quoted the to reference with determined is investment equity of value fair discount for lack of marketability, which are unobservable inputs for the fair value measurement. The higher the discount discount for lack of marketability, which are unobservable for lack of marketability, the lower the fair value. customers at FVTPL are determined by using discounted cash flow method. The future cash flows are estimated based customers at FVTPL are determined by using are which counterparties, various of risk credit the reflect that rates at discounted amounts, contractual expected on The higher the discount rate, the lower the fair value. unobservable inputs for the fair value measurement. The The asset management plans

Trust beneficial rights and customers at FVTPL at FVTOCI – Debt securities – Equity investment – – Fund investments – Wealth management products – Debt instruments – Funds – Debt securities at FVTPL – Debt securities Loans and advances to

Investment securities measured

Available-for-sale financial assets

Total Financial assets held for trading Total

Investment securities measured Investment securities Fair Value of Financial Instruments Fair Value of Note 2: Note ended June 30, 2018 and There were no transfers between Level 1 and Level 2 during the six months the year ended December 31, 2017.

1: Note Fair value of financial assets and financial liabilities that are measured at fair fair at measured are that liabilities financial and assets financial of value Fair basis value on a recurring

41. BANK OF JIUJIANG 41. (Amounts inthousandsofRenminbi,unlessotherwisestated) Notes totheCondensedConsolidatedFinancialStatements 148

financial liabilities Reconciliation of Level 3 fair value measurements of financial assets and flow method. provided byChinaCentralDepository&ClearingCo.,Ltd.anddeterminedusingdiscountedcash Debt instruments traded on China Interbank Market are classified into Level 2. Their fair values are fair valueonarecurringbasis Fair valueoffinancialassetsandliabilitiesthatarenotmeasuredat in “netgains/(losses)arisingfromfinancialassets”. measured atfairvaluetheendofeachreportingperiod.Suchgainsorlossesareincluded The totalgainsorlossesfortheperiodincludedanunrealisedgainrelatingtofinancialassetsthatare Fair ValueofFinancialInstruments As atJune30,2018(Unaudited) As atDecember31,2017 Total Financial liabilities Total Financial assets Effect ofadoptionIFRS9 As atJanuary1,2018

Changes infairvaluerecognised Additions Debt securitiesissued Customer deposits Investments classifiedasreceivables Investment securitiesmeasured Held-to-maturity investments Loans andadvancestocustomers in profitorloss at amortisedcost at amortisedcost

rights andasset

Trust beneficial

management 8644570424252643,540,133 4,215,256 720,442 38,604,435 2296471622053225,066,588 2,025,322 741,662 22,299,604 2296471622053225,066,588 2,025,322 741,662 22,299,604 16,559,619 3,8,0 3,6,8 1,8,0 221,169,759 219,884,409 181,368,530 237,868,789 181,558,166 236,989,507 164,900,229 163,233,351 1,6,8 1,9,9 9581399,640,300 99,528,133 111,098,790 110,363,587 9,2,0 9,9,1 7,3,7 181,716,931 179,636,570 195,395,014 193,926,108 2897453,801,439 52,869,764 303394,7,7 0278939,452,828 40,247,839 42,473,775 43,063,399 2478 2,2)(821 (304,249) (28,241) (21,220) (254,788) As atJune30,2018 Carrying amount plans (continued) – – –

investment Fair value Equity – ,1,7 18,777,794 2,218,175 – 8945668,988,740 68,904,526 12,739,490 – 13,125,507 –

advances to Loans and customers As atDecember31,2017 Carrying amount – –

Fair value Total – – 2018 Interim Report 149 (continued) (continued) Subsequent Events Fair Value of Financial Instruments Fair Value of On July 10, 2018, the Bank was listed on The Stock Exchange of Hong Kong Limited with initial public On July 10, 2018, the Bank was listed HK$10.60 per share. offering of 360,000,000 H shares at of aggregate an of respect in 2018, 28, July on exercised partially was option Over-allotment The Over-allotment option, the the of the partial exercise After share. per HK$10.60 at Shares H 47,367,200 Bank increased to 2,407,367,200. total number of shares issued by the Fair value of financial assets and financial liabilities that are not measured at liabilities that are not measured financial assets and financial Fair value of recurring basis fair value on a Other financial assets and financial liabilities including balances with central bank, deposits and and deposits bank, central with balances including liabilities financial and assets financial Other agreements, resale under held assets financial institutions, financial other and banks with placements institutions, financial other and banks from deposits and placements bank, central from borrowing carrying Their year. one within terms have mostly agreements repurchase under sold assets financial their fair values. values approximate

42. 41. BANK OF JIUJIANG “CBRC” “CBIRC” “Prospectus” “Board ofSupervisors” “Board” or “Board of Directors” “Bank”, “BankofJiujiang”, “Articles ofAssociation”or expressions havethemeaningssetforthbelow: In this interim report, unless the context otherwise requires, the following terms and Definition 150 “Group”, “we”or“us” “Articles” successor, theCBIRC March 24,2018,andin thecontextrequires,includesits 知 the Establishment of Organization ( 會 Insurance RegulatoryCommission(中國銀行保險監督管理委員行業監督管理委員會), which recently merged with Chinese former China Banking Regulatory Commission ( No.6) issuedbytheStateCouncilonMarch24, 2018 Organizations ( Notice oftheStateCouncilregardingEstablishment via the merger of the CBRC and CIRC according to the 國銀行保險監督管理委員會 China Banking and Insurance Regulatory Commission ( the ProspectusofBankdatedJune26,2018 the boardofSupervisorsBank the boardofDirectorsBank branches includes itspredecessors,subsidiaries,branchesandsub- with PRClawsandregulationsand,ifthecontextrequires, Jiangxi Province, China with limited liability in accordance stock company incorporated on November 17, 2000 in Bank of Jiujiang Co., Ltd.( time amended, supplemented or otherwise modified from time to Jiangxi BureauonAugust30,2017,asthesamemaybe meeting onMay8,2017andwas approved bytheCBRC which waspassedbyourshareholdersattheshareholders’ the articles of association of the Bank, the version of ) (Guo Fa [2018] No.6) issued by the State Council on ) accordingtotheNoticeofStateCouncil regarding 國務院關於機構設置的通知 ), a regulatory authority formed 九江銀行股份有限公司國務院關於機構設置的通 ) (Guo Fa [2018] Fa ) (Guo ), a joint 原中國銀中 2018 Interim Report 151 中國證券監督管理 ) jointly promulgated by “中小企業劃型標準規定” China Banking Regulatory Commission Jiangxi Bureau (中國 Commission Jiangxi China Banking Regulatory ) 銀行業監督管理委員會江西監管局 Branch Jiujiang Commission Regulatory Banking China ) Office (中國銀行業監督管理委員會九江監管分局 located in region that covers six provinces a geographical Hubei of China, including Henan Province, the central area Province, Jiangxi Province Province, Anhui Province, Shanxi and Hunan Province the for excluding, but China, of Republic People’s the Macau Kong, Hong only, Report Interim this of purpose Taiwan Special Administrative Region and or higher levels created banks with branches at municipal PRC the to pursuant CBIRC the of approval the with Banking Law Company Law and the PRC Commercial the Classification Standards of Small and Medium Medium and Small of Standards Classification the Enterprises ( the PRC Ministry of Industry and Information Technology, Technology, Information and Industry of Ministry PRC the 2011, 18, June on MOF the and NDRC the NBS, the into medium, small which classifies SMEs in 16 industries of nature the of consideration with enterprises micro and operating employees, of number of terms in industry the income, and total assets all the banking financial institutions in the PRC other than the Banks, Commercial Large the including banks, policy city commercial Banks, Nationwide Joint-stock Commercial financial banking other and banks foreign banks, institutions has the meaning ascribed to it under the Listing Rules ( Commission Regulatory Securities China 委員會) of Small and Medium Enterprises” “CBRC Jiangxi Bureau” “CBRC Jiujiang Branch Office” “CBRC Jiujiang “Central China” “China” or “PRC” “city commercial banks” “Classification Standards “commercial banks” “connected person(s)” “CSRC” BANK OF JIUJIANG “Jiuyin CountyBanks” “Independent ThirdParty(ies)” “IFRS” TheStockExchangeofHongKongLimited “Hong KongStockExchange” “Hong Kong”or“HK” “HK$” or“HKD”“Hong “H Shares” “Global Offering” “Domestic Shares” “Director(s)” Definition 152 Kong dollars” as atJune30,2018 18 JiuyinCountyBankscontrolledandconsolidated byus not itsConnectedPersons reasonable enquiries, are independent of the Bank or are knowledge, information and belief, having made all beneficial owner(s), which, to the best of our Directors’ person(s) or company(ies) and their respective ultimate International AccountingStandardsBoard(“IASB”) standards, amendments and interpretations issued by the Accounting Standards (“IAS”), which include the related International FinancialReportingStandardsand Hong KongSpecialAdministrativeRegionofthePRC Hong Kongdollars,thelawfulcurrencyof permission totradeontheHongKongStockExchange for which an application has been made for listing and be subscribed for and traded in Hong Kong dollars and with a nominal value of RMB1.00 each, which are to overseas-listed shares in the share capital of the Bank, stated intheProspectus Hong Kong Public Offering and International Offering as or creditedaspaidinfullforRMB nominal valueofRMB1.00each,whicharesubscribedfor ordinary shares issued by the Bank in the PRC, with a the director(s)ofBank 2018 Interim Report 153 ), the central central the ), 中國人民銀行 ) 中華人民共和國國家發展和改革委員會) enterprises other than those classified as medium, small small medium, as classified those than other enterprises Standards Classification the under enterprises micro or industrial example, For Enterprises. Medium and Small of operating and employees more or 1,000 with enterprises as classified be shall more or million RMB400 of income large enterprises the H Shares the date on which dealings in July 10, 2018, Stock Kong Hong the on commence first Bank the of Exchange The on Securities of Listing the Governing Rules the amended, as Limited, Kong Hong of Exchange Stock from time to time supplemented or otherwise modified enterprises under the the enterprises classified as medium Enterprises Medium and Small of Standards Classification (“中小企業劃型標準規定” credit assets that are not traded on the interbank markets that are not traded assets credit report this of purpose the for which exchanges, stock or represent our investment in trust plans, asset management other by issued products management wealth and plans PRC commercial banks ( China of Bank People’s The the enterprises classified as micro enterprises under the the under enterprises micro as classified enterprises the and Small Enterprises Classification Standards of Medium (中華人民共和國財政部) Ministry of Finance of the PRC the PRC (中華人民共和國國 National Bureau of Statistics of 家統計局) National Development and Reform Commission of the PRC ( bank of the PRC “Large enterprises” “Listing Date” “Listing Rules” “medium enterprises” “Non-standard Credit Assets” “central bank” “micro enterprises” “MOF” “NBS” “NDRC” BANK OF JIUJIANG “US$”, “USD”or“USdollars” “reporting period” “Supervisor(s)” “State Council” “Standard Investment “small enterprises” “SFO” “RMB” or“Renminbi” “related partytransaction(s)” “related party”or Definition 154 Products” parties” States ofAmerica United States dollars, the lawful currency of the United six monthsfromJanuary1,2018toJune30, 2018 the supervisor(s)ofBank the StateCouncilofPRC(中華人民共和國國務院 ) institutions andPRCcorporateissuers banks, other PRC commercial banks and other financial debt securitiesissuedbythePRCgovernment,policy Enterprises under the Classification Standards of Small and Medium 18, 2011, the enterprises classified as small enterprises for Small and Medium Enterprises; on and after June enterprises undertheInterimProvisionsonStandards before June 18, 2011, the enterprises classified as small modified fromtimeto of Hong Kong), as amended, supplemented or otherwise the SecuritiesandFuturesOrdinance(Chapter571ofLaws Renminbi, thelawfulcurrencyofPRC Business EnterprisespromulgatedbytheMOF,and/orIFRS promulgated by the CBRC, Accounting Standards for the Commercial Banks and their Insiders or Shareholders Measures for the Related Party Transactions between has the meaning ascribed to it under the Administrative Business EnterprisespromulgatedbytheMOF,and/orIFRS promulgated by the CBRC, Accounting Standards for the Commercial Banks and their Insiders or Shareholders Measures for the Related Party Transactions between has the meaning ascribed to it under the Administrative 2018 Interim Report 155 ) and changed to its current current its to changed and 北京汽車工業控股有限責任公司) Model Code for Securities Transactions by Directors of of Directors by Transactions Securities for Code Model Kong Hong the to 10 Appendix in out set Issuers Listed Listing Rules Governance Corporate and Code Governance Corporate Listing Kong Hong the to 14 Appendix in out set Report Rules 中華人民共和國公司法), whichthe Company Law of the PRC ( Standing 8th the of session 5th the by promulgated was Congress on December Committee of the National People’s as 1994, 1, July on effective became and 1993 29, to time from modified otherwise or supplemented amended, time the Corporate Governance Guidelines for Commercial Commercial for Guidelines Governance Corporate the Banks (商業銀行公司治理指引), as promulgated by the CBRC as date, same the on effective and 2013 19, July on to time from modified otherwise or supplemented amended, time Ltd. (北京汽車集團有限公司), Beijing Automotive Group Co., June on the PRC in state-owned enterprise incorporated a Industry Holding Co., Ltd. 30, 1994 as Beijing Automotive ( shareholder substantial the 2010, 28, September on name of the Bank Guidelines for Commercial Banks” “Model Code” “Corporate Governance Code” “Corporate Governance “Company Law of the PRC” “Corporate Governance “BAIC Group” BANK OF JIUJIANG “county bank” “RMB” “Over-allotment Option” Definition 156 growers orenterprisesinruralareas PRC CommercialBankingLaw, to provide services to local CBIRC, pursuant tothe Company Law of the PRC and the banking institution(s)incorporatedwiththeapprovalof Renminbi yuan Shares initiallyavailableundertheGlobalOffering approximately 13.16% of the total number of the Offer Kong Stock Exchange on August 9, 2018, representing has been commenced on the Main Board of the Hong in respectofanaggregate47,367,200HShares,which has beenpartiallyexercisedbytheJointRepresentatives, being offered).OnJuly28,2018,theOver-allotmentOption Offering (representing 15% of the Offer Shares initially 54,000,000 HSharesattheOfferPriceunderInternational to requiretheBankallotandissueupaggregateof lodging applicationsundertheHongKongPublicOffering, Kong StockExchangeuntil30daysafterthelastdayfor on which shares first commence dealing on the Hong behalf of the International Underwriters, from the date Agreement, exercisable by the Joint Representatives on Underwriters pursuant to the International Underwriting the optiontobegrantedbyBankInternational