No. 1 Fuxingmen Nei Dajie, Beijing, China, 100818 Tel: (86) 10-6659 6688 Fax: (86) 10-6601 6871 Customer Service and Complaint Hotline: (86) Area Code-95566 http://www.boc.cn 會 夥 Annual Report 2018 Stock Code: 3988 / 4601 2018 Annual Report Ordinary H-Share Stock Code: 3988 Offshore Preference Share Stock Code: 4601 STOCKHOLM MANCHESTER DUSSELDORF GLASGOW HAMBURG MOSCOW DUBLIN BERLIN BIRMINGHAM ROTTERDAM WARSAW LONDON PRAGUE CALGARY FRANKFURT AKTOBE BRUSSELS PARIS KHABAROVSK VANCOUVER VIENNA ALMATY ULAANBAATAR LUXEMBOURG BUDAPEST MUNICH MONTREAL LYON TORONTO MILAN BELGRADE VLADIVOSTOK ROME ISTANBUL CHICAGO NEW YORK LISBON STUTTGART BEIJING KOBE SEOUL TOKYO ANSAN LOS ANGELES CASABLANCA DAEGU YOKOHAMA OSAKA NAGOYA DOHA BAHRAIN DUBAI KARACHI TAIPEI MACAO HONG KONG ABU DHABI CHIANG MAI MEXICO CITY MUMBAI VIENTIANE GRAND CAYMAN YANGON KHON KAEN BANGKOK NAKHON RATCHASIMA RAYONG SIEM REAP MANILA PHNOM PENH HO CHI MINH CITY COLON HAT YAI SIHANOUKVILLE COLOMBO PENANG KUALA LUMPUR PANAMA CITY MEDAN MUAR BANDAR SERI BEGAWAN KLANG KUCHING NAIROBI PUCHONG MELAKA SINGAPORE JOHOR BAHRU LUANDA DAR ES SALAAM JAKARTA SURABAYA LIMA KITWE LUSAKA PORT LOUIS RIO DE JANEIRO SAO PAULO JOHANNESBURG BRISBANE DURBAN PERTH ADELAIDE SYDNEY SANTIAGO AUCKLAND MELBOURNE BOC Head Office BOCHK Singapore Branch STOCKHOLMSTOCKHOLM MANCHESTERMANCHESTER DUSSELDORFDUSSELDORF GLASGOWGLASGOW HAMBURGHAMBURG MOSCOWMOSCOW DUBLINDUBLIN BERLINBERLIN BIRMINGHAMBIRMINGHAMROTTERDAMROTTERDAM WARSAWWARSAW LONDONLONDON PRAGUEPRAGUE CALGARYCALGARY FRANKFURTFRANKFURT AKTOBEAKTOBE BRUSSELSBRUSSELSPARISPARIS KHABAROVSKKHABAROVSK VANCOUVERVANCOUVER VIENNAVIENNA ALMATYALMATY ULAANBAATARULAANBAATAR LUXEMBOURGLUXEMBOURG BUDAPESTBUDAPEST MUNICHMUNICH MONTREALMONTREAL LYONLYON TORONTOTORONTO MILANMILAN BELGRADEBELGRADE VLADIVOSTOKVLADIVOSTOK ROMEROME ISTANBULISTANBUL CHICAGOCHICAGO NEWNEW YORK YORK LISBONLISBONSTUTTGARTSTUTTGART BEIJINGBEIJING KOBEKOBE SEOULSEOUL TOKYOTOKYO ANSANANSAN LOSLOS ANGELES ANGELES CASABLANCACASABLANCA DAEGUDAEGU YOKOHAMAYOKOHAMA OSAKAOSAKANAGOYANAGOYA DOHADOHA BAHRAINBAHRAIN DUBAIDUBAI KARACHIKARACHI TAIPEITAIPEI MACAOMACAO HONGHONG KONG KONG ABUABU DHABI DHABI CHIANGCHIANG MAI MAI MEXICOMEXICO CITY CITY MUMBAIMUMBAI VIENTIANEVIENTIANE GRANDGRAND CAYMAN CAYMAN YANGONYANGON KHONKHON KAEN KAEN BANGKOKBANGKOK NAKHONNAKHON RATCHASIMA RATCHASIMA RAYONGRAYONG SIEMSIEM REAP REAP MANILAMANILA PHNOMPHNOM PENH PENH HO HOCHI CHI MINH MINH CITY CITY COLOCOLON N HATHAT YAI YAI SIHANOUKVILLESIHANOUKVILLE COLOMBOCOLOMBO PENANGPENANG KUALAKUALA LUMPUR LUMPUR PANAMAPANAMA CITY CITY MEDANMEDAN MUARMUAR BANDARBANDAR SERI SERI BEGAWAN BEGAWAN KLANGKLANG KUCHINGKUCHING NAIROBINAIROBI PUCHONGPUCHONG MELAKAMELAKA SINGAPORESINGAPORE JOHORJOHOR BAHRU BAHRU LUANDALUANDA DARDAR ES SALAAMES SALAAM JAKARTAJAKARTA SURABAYASURABAYA LIMALIMA KITWEKITWE LUSAKALUSAKA PORTPORT LOUIS LOUIS RIORIO DE DEJANEIRO JANEIRO SAOSAO PAULO PAULO JOHANNESBURGJOHANNESBURG BRISBANEBRISBANE DURBANDURBAN PERTHPERTH ADELAIDEADELAIDE SYDNEYSYDNEY SANTIAGOSANTIAGO AUCKLANDAUCKLAND MELBOURNEMELBOURNE London Branch New York Branch Shanghai Branch Introduction Bank of China is the Bank with the longest continuous foreign exchange business. In 1994, the Bank was operation among Chinese banks. The Bank was transformed into a wholly state-owned commercial formally established in February 1912 following the bank. In August 2004, Bank of China Limited was approval of Dr. Sun Yat-sen. From 1912 to 1949, the incorporated. The Bank was listed on the Hong Kong Bank served consecutively as the country’s central Stock Exchange and the Shanghai Stock Exchange in bank, international exchange bank and specialised June and July 2006 respectively, becoming the first international trade bank. Fulfilling its commitment to Chinese commercial bank to launch an A-Share and serving the public and developing China’s financial H-Share initial public offering and achieve a dual services sector, the Bank rose to a leading position in listing in both markets. Having served the Beijing the Chinese financial industry and developed a good 2008 Olympic Games, the Bank became the official standing in the international financial community, banking partner of the Beijing 2022 Olympic and despite many hardships and setbacks. After 1949, Paralympic Winter Games in 2017, thus making it the drawing on its long history as the state-designated only bank in China to serve two Olympic Games. In specialised foreign exchange and trade bank, the Bank 2018, Bank of China was again designated as a Global became responsible for managing China’s foreign Systemically Important Bank, thus becoming the sole exchange operations and provided vital support to financial institution from an emerging economy to be the nation’s foreign trade development and economic designated as a Global Systemically Important Bank for infrastructure through its offering of international eight consecutive years. trade settlement, overseas fund transfer and other non-trade foreign exchange services. During China’s As China’s most globalised and integrated bank, Bank reform and opening up period, the Bank seized the of China has a well-established global service network historic opportunity presented by the government’s with institutions set up across the Chinese mainland as strategy of capitalising on foreign funds and advanced well as in 57 countries and regions. It has established technologies to boost economic development, an integrated service platform based on the pillars and became the country’s key foreign financing of its corporate banking, personal banking, financial channel by building up its competitive advantages in markets and other commercial banking business, which covers investment banking, direct investment, securities, insurance, funds, aircraft leasing and other areas, thus providing its customers with a comprehensive range of financial services. In addition, BOCHK and the Macau Branch serve as local note- issuing banks in their respective markets. Bank of China has upheld the spirit of “pursuing excellence” throughout its history of over one century. With adoration of the nation in its soul, integrity as its backbone, reform and innovation as its path forward and “people first” as its guiding principle, the Bank has built up an excellent brand image that is widely recognised within the industry and by its customers. In face of the period of historic opportunities for great achievements, as a large state-owned commercial bank, the Bank will follow Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, persistently enable advancement through technology, drive development through innovation, deliver performance through transformation and enhance strength through reform, in an effort to build BOC into a world-class bank in the new era. It will make a greater contribution to developing a modernised economy and to the efforts to realise the Chinese Dream of national rejuvenation and the aspirations of the people to live a better life. 1 2018 Annual Report Development Strategy Strategic goal We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era, persistently enable advancement through technology, drive development through innovation, deliver performance through transformation and enhance strength through reform, in an effort to build Bank of China into a world-class bank in the new era. The Bank will realise the strategic goal of “Building a World-class Bank in the New Era” in three steps. By 2020, when China completes building a moderately prosperous society in all respects, the Bank should achieve the goal of “further strengthening of the development foundation, further consolidating advantages of featured businesses, further improving of management system and mechanism, and further enhancing of comprehensive strength”. By 2035, when the socialist modernisation is basically realised, the Bank should leap forward from a big world-class bank to a strong world-class bank, and complete in all respects the building of a world-class bank in the new era. By 2050, we should build Bank of China into a “financial mainstay” of the strong modern socialist China and to be a banner of global financial industry. Strategic implications Enable advancement through technology. The Bank will embed technological elements into all business processes and fields and build a digitalised bank with a premier user experience, ecology of diversified scenarios, online & offline coordination, flexible product innovation, efficient operations management and intelligent risk control, in a bid to foster new-finance, develop “a new ecosystem” and build a new BOC. Drive development through innovation. Keeping a close eye on the market trends and customer needs, we will accelerate innovation in technology, products and business. By adopting innovative and groundbreaking initiatives, we will strive to become a provider of high-quality financial services, a builder of connected platforms, a creator of data- driven value and a pioneer of intelligent services across the globe. Deliver performance through transformation. Centred on the demands of the real economy and the requirement for high-quality development, we will implement in line with the new development philosophies, focus on the “three tough battles” and support the supply-side structural reform. We will rapidly advance digital technologies, globalised businesses, integrated services, asset-light operations, and streamlined organisation, in a bid to effectively prevent financial