This annual report is printed on environmental paper. CHINA MINSHENG BANKING CORP., LTD. (a joint stock limited company incorporated in the People’s Republic of China) Stock Code USD Preference Share Stock Code 04609 2019 ANNUAL REPORT Add. : No. 2, Fuxingmennei Avenue, Xicheng District, Beijing, China Tel. : (+86-10) 58560666 Fax. : (+86-10) 58560720 Postal Code: 100031 2019 ANNUAL REPORT Website: www.cmbc.com.cn Important Notice The Board, the Board of Supervisors, and the Directors, Supervisors and Senior Management of the Company warrant that there are no misstatements, misleading representations or material omissions in this report, and shall assume several and joint liability for the truthfulness, accuracy and completeness of its contents. This Annual Report was considered and approved on 30 March 2020 at the 20th meeting of the seventh session of the Board of the Company. Of the 15 Directors who were entitled to attend the meeting, two Directors attended the meeting in person, 13 Directors, being the Vice Chairmen Zhang Hongwei, Lu Zhiqiang and Liu Yonghao, and Directors Shi Yuzhu, Wu Di, Song Chunfeng, Weng Zhenjie, Liu Jipeng, Li Hancheng, Xie Zhichun, Peng Xuefeng, Liu Ningyu and Tian Suning, participated in the meeting by teleconference. Of the nine Supervisors who were entitled to attend the meeting as non-voting delegates, nine Supervisors attended the meeting as non-voting delegates. The profit distribution plan for 2019 was approved by the Board, pursuant to which a cash dividend of RMB3.70 (tax inclusive) will be distributed to all shareholders for every 10 shares being held on the record dates. The above profit distribution plan is subject to approval by the shareholders’ general meeting of the Company. For the purpose of this Annual Report, China Minsheng Banking Corp., Ltd. shall be referred to as the “Company”, the “Bank”, “China Minsheng Bank” or “Minsheng Bank”, whereas China Minsheng Banking Corp., Ltd. and its subsidiaries together shall be referred to as the “Group”. The financial data and indicators contained in this Annual Report are prepared according to the rules of the International Financial Reporting Standards (“IFRSs”). Unless otherwise specified, all amounts are the consolidated data of the Group and denominated in RMB. PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers, auditors of the Company, have audited the financial reports of 2019 prepared in accordance with the Chinese Accounting Standards (“CAS”) and the IFRSs, respectively, and issued standard and unqualified auditors’ reports. Board of Directors China Minsheng Banking Corp., Ltd. Hong Qi (Chairman), Zheng Wanchun (President), Bai Dan (Senior Management responsible for finance and accounting) and Li Wen (person in charge of the accounting department) warrant the truthfulness, accuracy and completeness of the financial reports included in this Annual Report. Contents Important Notice Definitions 2 Material Risks Warning 4 Message from the Chairman 5 Message from the President 12 Strategic Positioning and Reform and Transformation of the Company 19 Annual Awards 22 Bank Profile 23 Summary of Accounting Data and Financial Indicators 25 Discussion and Analysis on Business Operation 28 Changes in Share Capital and Information on Shareholders 114 Directors, Supervisors, Senior Management and Employees 143 Corporate Governance 171 Report of the Board of Directors 232 Report of the Board of Supervisors 241 Major Events 249 Financial Reports 264 Organisation Structure 469 List of Entities 470 Statistics of Correspondent Banks 476 2 China Minsheng Banking Corp., Ltd. Definitions In this report, unless the context otherwise requires, the following terms shall have the meanings set out below. “ACFIC” All-China Federation of Industry and Commerce (中華全國工商 業聯合會) “Articles of Association” the Articles of Association of China Minsheng Banking Corp., Ltd. “Bank” or “Company” or China Minsheng Banking Corp., Ltd. “China Minsheng Bank” or “Minsheng Bank” “Board” Board of Directors of the Company “Board of Supervisors” Board of Supervisors of the Company “CBIRC” China Banking and Insurance Regulatory Commission “CMBC International” CMBC International Holdings Limited “CPPCC” The National Committee of the Chinese People’s Political Consultative Conference (中國人民政治協商會議全國委員會) “CSRC” China Securities Regulatory Commission “Director” Director of the Company “former CBRC” former China Banking Regulatory Commission “former CIRC” former China Insurance Regulatory Commission “Group” the Company and its subsidiaries “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on SEHK “Minsheng Financial Leasing” Minsheng Financial Leasing Co., Ltd. “Minsheng Royal Asset Management” Minsheng Royal Asset Management Co., Ltd. Annual Report 2019 3 Definitions “Minsheng Royal Fund” Minsheng Royal Fund Management Co., Ltd. “Model Code” Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules “PBOC” People’s Bank of China “Phoenix Project” (鳳凰計劃) a comprehensive customer-centric project for transformation for growth model and reform of corporate governance of the Company in response to the liberalisation of interest rate and other changes in the external environment “Reporting Period” the period from 1 January 2019 to 31 December 2019 “SBU(s)” strategic business unit(s) “SEHK” The Stock Exchange of Hong Kong Limited “Senior Management” senior management of the Company “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SSE” Shanghai Stock Exchange “Supervisor(s)” Supervisor(s) of the Company “SZSE” Shenzhen Stock Exchange 4 China Minsheng Banking Corp., Ltd. Material Risks Warning The Company has no foreseeable material risks. For potential risks, please refer to the section headed “XI. Prospects and Measures — (III) Potential risks” under Chapter 3 “Discussion and Analysis on Business Operation” of this report. Annual Report 2019 5 Message from the Chairman Chairman Mr. HONG Qi 6 China Minsheng Banking Corp., Ltd. Message from the Chairman In 2019, situations at home and abroad as well as the macro-economy and financial systems were complicated with significantly increasing risks and challenges. Despite the challenges, the domestic economy and society maintained sustainable and healthy growth under the strong leadership of the CPC Central Committee, with General Secretary Xi Jinping as the core. Coupled with the significant milestone in reform and opening-up, these achievements took China a step closer to build a moderately well- off society in an all-round way. As for the financial sector, major progress was made in preventing and mitigating financial risks while the financial institutions continued to improve the quality and efficiency of their service for the real economy. In 2019, on the backdrop of increasing risks and challenges in the macro-economy and financial systems, rising operating difficulties and financial pressures of the non-state-owned enterprises (“NSOEs”) and small and micro enterprises, the adjustments to the operation strategies and business deployment of manufacturing enterprises due to the uncertainties arising from Sino-US trade frictions, and the substantial price fluctuations of financial products in various financial markets, China Minsheng Bank continued its pursuit of reform and transformation to facilitate its development, comprehensively enhanced its operation and management, and recorded the best operating results in recent years, as reflected in the four major aspects below: Firstly, operating efficiency continued to improve. In 2019, the Group recorded net profit attributable to equity shareholders of the Company of RMB53,819 million, representing an increase of 6.94% as compared with the corresponding period of the previous year. Operating income amounted to RMB177,745 million, representing an increase of 15.30% as compared with the corresponding period of the previous year. Net interest margin was 2.11%, representing an increase of 0.24 percentage points as compared with the corresponding period of the previous year. Cost-to-income ratio was 27.14%, representing a decrease of 3.44 percentage points as compared with corresponding period of the previous year. These operating results were the best in recent years. Secondly, rapid growth was made in strategic and key businesses. As at the end of 2019, Minsheng Bank extended a total of over RMB1.5 trillion loans to NSOEs, accounting for approximately 70% of total corporate loans and advances. Total retail loans amounted to RMB1,397,216 million, representing an increase of 14.72% as compared with the end of the previous year. Total amount of loans to small and micro enterprises was RMB444,560 million, representing an increase of 9.25% as compared with the end of the previous year. Total savings deposits was RMB706,354 million, representing an increase of 24.96% as compared with the end of the previous year. Savings deposits accounted for 19.76% of total deposits, representing an increase of 1.76 percentage points as compared with the end of the previous year. Annual Report 2019 7 Message from the Chairman Thirdly, asset quality was improved. As at the end of 2019, the Group recorded non-performing loans (“NPLs”) of RMB54,434 million, representing an increase of RMB568 million as compared with the end of the previous year. Non-performing loan (“NPL”) ratio decreased by 0.20 percentage points to 1.56% as compared with the end of the previous year, bringing to a halt