Annual Report
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2019 ANNUAL REPORT (A joint stock company incorporated in the People’s Republic of China with limited liability) (H Shares Stock Code: 3866) (Preference Shares Stock Code: 4611) 2019 Contents Section I Important Notice, Contents and Definitions 3 Section II Corporate Information and Key Financial Highlights 6 Section III Chairman’s Statement 13 Section IV President’s Statement 14 Section V Business Overview 15 Section VI Discussion and Analysis of Operations 18 Section VII Significant Events 78 Section VIII Changes in Share Capital and Information on Shareholders 95 Section IX Preference Shares 105 Section X Directors, Supervisors, Senior Management and Employees 108 Section XI Corporate Governance 126 Section XII Report of the Board of Directors 150 Section XIII Report of the Board of Supervisors 157 Section XIV Independent Auditor’s Report 158 Section XV Financial Statements and Notes 165 Section XVI Unaudited Supplementary Financial Information 282 Bank of Qingdao Co., Ltd. 2 2019 Annual Report Section I Important Notice, Contents and Definitions 1. The Board of Directors, Board of Supervisors, Directors, Supervisors and senior management of the Bank assure that the information in this annual report contains no false records, misleading statements or material omissions, and severally and jointly take full responsibility for the authenticity, accuracy and completeness of the information in this annual report. 2. The proposals on the 2019 Annual Report of Bank of Qingdao Co., Ltd. and its summary were considered and approved at the 33rd meeting of the seventh session of the Board of Directors of the Bank held on 20 March 2020. There were 14 Directors eligible for attending the meeting, of whom 14 Directors attended the meeting. 3. The Bank’s chairman Mr. GUO Shaoquan, president Mr. WANG Lin, vice president in charge of financial work Mr. YANG Fengjiang Note and head of planning and finance department Mr. MENG Dageng assure the authenticity, accuracy and completeness of the financial reports in this annual report. 4. The 2019 financial statements of the Company prepared in accordance with Accounting Standards for Business Enterprises have been audited by KPMG Huazhen LLP, with standard unqualified auditor’s report issued; the 2019 financial statements of the Company prepared in accordance with International Financial Reporting Standards have been audited by KPMG, with unqualified auditor’s report issued. 5. Unless otherwise specified, the currency of the amounts mentioned in this annual report is RMB. 6. Profit distribution proposal has been considered and approved by the Board of Directors of the Bank to distribute cash dividend of RMB2.00 (tax inclusive) for every 10 shares to all ordinary shareholders of the Bank based on the total number of shares on the record date of the equity distribution, instead of distributing bonus shares and increasing share capital with provident fund. The profit distribution proposal will be submitted to the 2019 annual general meeting for consideration. 7. This report contains certain forward-looking statements about the financial conditions, operating results and business developments of the Company. The report uses the words “will”, “may”, “strive”, “plan”, “hope”, “endeavor”, “expect”, “aim” and similar wordings to express forward-looking statements. These statements are made based on current plans, estimates and projections, and although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company cannot assure that these expectations will be attained or confirmed to be correct and therefore they do not constitute substantive undertakings of the Company. Investors and relevant individuals should maintain sufficient risk awareness in this regard and understand the difference between plans, forecasts and commitments, and should not unduly rely on such statements, and should be aware of investment risks. Please note that these forward-looking statements are related to future events or future financial, business or other performance of the Company, and are subject to certain uncertainties which may cause the actual results to differ substantially. 8. The Company invites investors to read the full text of this annual report carefully. The Company has described in detail the major risks and countermeasures in this report. For details, please refer to the content related to risk management set out in “Section VI Discussion and Analysis of Operations”. Note: As of the date the Board of Directors of the Bank considered and approved this annual report (i.e., 20 March 2020), Mr. YANG Fengjiang remained as an executive Director and vice president of the Bank. Subsequently, Mr. YANG Fengjiang resigned from positions of an executive Director and vice president of the Bank. Elected by the employee representative meeting and the Board of Supervisors, Mr. YANG Fengjiang now serves as chairman of the Board of Supervisors and employee Supervisor of the Bank. Bank of Qingdao Co., Ltd. 2019 Annual Report 3 Definitions Term Definition PRC or China The People’s Republic of China Company Bank of Qingdao Co., Ltd. and its subsidiaries and branches Bank Bank of Qingdao Co., Ltd. and its branches CBIRC China Banking and Insurance Regulatory Commission CSRC China Securities Regulatory Commission Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited SZSE the Shenzhen Stock Exchange Qingdao Office of CBIRC Qingdao office of the China Banking and Insurance Regulatory Commission Hong Kong Listing Rules Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Company Law Company Law of the People’s Republic of China Articles of Association Articles of Association of the Bank of Qingdao Co., Ltd. SFO Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Reporting Period from 1 January 2019 to 31 December 2019 (both days inclusive) RMB the lawful currency of the PRC H Share(s) shares issued outside the mainland area of China, listed on Hong Kong Stock Exchange and subscribed for and traded in foreign currency A Share(s) shares issued in China, listed on the domestic stock exchanges and subscribed for and traded in RMB Model Code Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Hong Kong Listing Rules Director(s) director(s) of the Bank Supervisor(s) supervisor(s) of the Bank Bank of Qingdao Co., Ltd. 4 2019 Annual Report Definitions Board of Directors or Board the board of Directors of the Bank Board of Supervisors the board of Supervisors of the Bank Hong Kong The Hong Kong Special Administrative Region of the PRC Interface Banking a strategic model which facilitates the systematic integration between the business platforms of the Bank and the service platforms of our partners. Our partners comprise the corporate customers of the Bank, financial institutions and other third-party platforms. Under such model, our partners can satisfy their demands for financial services, while the Bank can identify the business of our partners and acquire their customer resources through systematic integration. Green Credit the Bank commenced energy saving and environmental protection project and service loans as well as loans that comply with Catalog of Projects Backed by Green Bonds (2015 version) issued by the Green Finance Professional Committee of the China Society for Finance and Banking (中 國金融學會綠色金融專業委員會). “Energy saving and environmental protection project and service loans” refers to the Notice on Submitting Statistical Table of Situations of Green Credit issued by General Office of the CBIRC (Yin Jian Ban Fa [2013] No. 185). Small and Micro Enterprises including small and micro enterprises, individual business owners, and the owners of small and micro enterprises. Bank of Qingdao Co., Ltd. 2019 Annual Report 5 Section II Corporate Information and Key Financial Highlights I. CORPORATE INFORMATION Stock abbreviation (A Shares) BQD Stock code (A Shares) 002948 Listing stock exchange of A Shares SZSE Stock abbreviation (H Shares) BQD Stock code (H Shares) 3866 Listing stock exchange of H Shares Hong Kong Stock Exchange Stock abbreviation (offshore BQD 17USDPREF Stock code (offshore 4611 preference shares) preference shares) Listing stock exchange of offshore Hong Kong Stock Exchange preference shares Company name in Chinese 青島銀行股份有限公司 Abbreviation in Chinese 青島銀行 Company name in English BANK OF QINGDAO CO., LTD. Abbreviation in English BANK OF QINGDAO Legal representative GUO Shaoquan Authorized representatives GUO Shaoquan, LU Lan Joint company secretaries LU Lan, YU Wing Sze Registered address Building 3, No. 6 Qinling Road, Laoshan District, Qingdao, Shandong Province, the PRC Postal code of registered address 266061 Office address No. 6 Qinling Road, Laoshan District, Qingdao, Shandong Province, the PRC Postal code of office address 266061 Registered office address 31st Floor, Tower Two, Times Square, 1 Matheson Street, in Hong Kong Causeway Bay, Hong Kong Company website http://www.qdccb.com/ Email [email protected] II. CONTACT PERSONS AND CONTACT INFORMATION Item Secretary to the Board Securities Affairs Representative Name LU Lan LU Zhenzhen Address No. 6 Qinling Road, Laoshan District, No. 6 Qinling Road, Laoshan District, Qingdao, Shandong Province, the PRC Qingdao, Shandong Province, the PRC Tel +86 40066 96588 ext. 6 +86 40066 96588 ext. 6 Fax +86 (532) 85783866 +86 (532) 85783866 Email [email protected] [email protected] Bank of Qingdao Co., Ltd. 6 2019