14 April 2020 PHILIPPINE STOCK EXCHANGE, INC. Disclosure
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14 April 2020 PHILIPPINE STOCK EXCHANGE, INC. Disclosure Department 6F PSE Tower One Bonifacio High Street 28th Street corner 5th Avenue, Bonifacio Global City Taguig City ATTENTION: MS. JANET A. ENCARNACION Head – Disclosure Department PHILIPPINE DEALING & EXCHANGE CORP. Phlippine Dealing System Holdings Corp. & Subsidiaries 29th Floor, BDO Equitable Tower 8751 Paseo de Roxas, Makati City Telephone Number: 8884-4446 ATTENTION: ATTY. MARIE ROSE M. MAGALLEN-LIRIO Head – Issuer Compliance and Disclosure Department Mesdames: We are pleased to furnish your good office with a copy of our SEC 17 A Annual Report (pursuant to section 20 of the Securities Regulation Code) filed with the Securities and Exchange Commission (SEC). For your information and guidance. Thank you. Respectfully yours, ALEXANDER C. ESCUCHA Corporate Information Officer ---------------------------------------------- 4 4 3 SEC Registration Number C H I N A B A N K I N G C O R P O R A T I O N (Company‘s Full Name) 1 1 F C H I N A B A N K B L D G 8 7 4 5 P A S E O D E R O X A S C O R V I L L A R S T M A K A T I (Business Address: No., Street City/ Town / Province) ATTY. LEILANI B. ELARMO 888-55-145 Contact Person Company Telephone Number 0 4 1 4 1 7 - A* 0 5 0 2 Month Day FORM TYPE Month Day Annual Meeting Secondary License Type, If Applicable C F D Dept. Requiring this Doc. Amended Articles Number / Section Total Amount of Borrowings 1,894 Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier *with BIR-stamped AFS and CD Copy S T A M P S Remarks: Please use BLACK ink for scanning purposes 1 2 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A, AS AMENDED ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 177 OF THE REVISED CORPORATION CODE OF THE PHILIPPINES December 31, 2019 1. For the fiscal year ended ..................................... 2. SEC Identification Number .........................443 3. BIR Tax Identification No. 000.........................-444-210-000 4. Exact name of issuer as specified in its charter .................................................................China Banking Corporation 5. .............Philippines...................................................... 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization China Bank Building, 8745, Paseo de Roxas 7. ...............................................cor. Villar St., Makati City ................................... ..............................................1226 Address of principal office Postal Code 8. .......................................................................................................(632) 888-55-555 .......................................... Issuer's telephone number, including area code 9. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA: Title of Each Class Number of Shares Outstanding Common 2,685,899,812 10. Are any or all of these securities listed on a Stock Exchange. Yes [✓] No [ ] The above common shares are listed in the Philippine Stock Exchange. 11. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 177 of The Revised Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports): Yes [✓] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days: Yes [✓] No [ ] 12. Aggregate market value of the voting stock held by non-affiliates: P38.46 Billion (as of 31 December 2019) 13. Portions of the Bank‘s 2019 Annual Report to Stockholders are incorporated by reference in Parts I & II of this report. 3 TABLE OF CONTENTS PART I - BUSINESS AND GENERAL INFORMATION Item 1 Business Item 2 Properties Item 3 Legal Proceedings Item 4 Submission of Matters to a Vote of Security Holders PART II - OPERATIONAL AND FINANCIAL INFORMATION Item 5 Market for Issuer‘s Common Equity and Related Stockholder Matters Item 6 Management Discussion and Analysis or Plan of Operation Item 7 Financial Statements Item 8 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures PART III - CONTROL AND COMPENSATION INFORMATION Item 9 Directors and Executive Officers of the Issuer Item 10 Executive Compensation Item 11 Security Ownership of Certain Record and Beneficial Owners and Management Item 12 Certain Relationships and Related Transactions PART IV - CORPORATE GOVERNANCE Item 13 Corporate Governance PART V - EXHIBITS AND SCHEDULES Item 14 Exhibits and Reports (a) Exhibits (b) Reports on SEC Form 17-C SIGNATURES EXHIBITS AND ANNEXES 4 PART I - BUSINESS AND GENERAL INFORMATION Item 1. Business (a) Form and Year of Organization China Banking Corporation (China Bank) is one of the leading private universal banks in the Philippines that offers a full range of banking products and services to institutional and individual customers, as well as thrift banking, investment banking, insurance brokerage, and bancassurance through our subsidiaries, China Bank Savings, China Bank Capital, China Bank Securities, Chinabank Insurance Brokers (CBC-IB), and Manulife China Bank Life Assurance Corp (MCBLife). The Bank started by mainly catering to the Chinese-Filipino commercial sector, but has since expanded its market scope to include the retail and consumer segments. Its core banking franchise stems mainly from its 99-year history in the Philippines, a factor that has enabled it to become deeply entrenched within the socioeconomic fabric of the Chinese-Filipino community. China Bank was incorporated on July 20, 1920 and commenced business on August 16 of the same year. It was listed on the local stock exchange in September 1927 and acquired its universal banking license in 1991. It played a key role in the post-war reconstruction and economic recovery by providing financial support to businesses and entrepreneurs. In 2007, the Bank acquired Manila Banking Corporation, the oldest savings bank in the country, and established the thrift bank arm, China Bank Savings (CBS), the following year. To fast-track the savings bank‘s expansion program, the Bank acquired Pampanga-based rural bank Unity Bank under the BSP‘s Strengthening Program for Rural Banks Plus. Also in 2007, the Bank entered into a bancassurance joint venture with Manulife to establish MCBLife. In 2014, the Parent increased its equity stake in MCBLife to 40%. In 2014, the Bank acquired Planters Development Bank (Plantersbank), the country‘s largest private development bank, which helped grow China Bank‘s middle market & SME portfolio and distribution network. The following year, CBS and Plantersbank completed its merger, with the former as the surviving entity. In 2015, China Bank established its investment house, China Bank Capital Corporation (CBCC), as a spin off of its former investment banking group. The incorporation of the stock brokerage subsidiary, China Bank Securities Corp, followed suit, together with the special purpose company, CBC Assets Once (SPC), Inc. In the same year, the China Bank MasterCard was launched, with three different variants – 1) China Bank Prime, the ―go-to‖ card for everyday expenses; 2) China Bank Platinum MasterCard, the ultimate privilege lifestyle card; and 3) China Bank World MasterCard, the card that gives world-class privileges, taking luxury to a whole new level. In August 2019, two new credit card variants were launched— China Bank Cash Rewards MasterCard and China Bank Freedom Card. In 2017, China Bank completed its stock rights offer in the second quarter, with the full subscription of 484 million additional common shares worth P15 billion, as part of its proactive capital management strategy to enhance financial flexibility to support strategic business expansion. This follows the Bank‘s P8-billion stock rights offer in 2014. In 2019, the Bank marked a successful return to the market with the USD 150-million Green Bond issue to the International Finance Corporation in June and the P30 billion Peso fixed-rate retail bond issue in July. China Bank continues to champion good corporate governance. In November 2018, the Bank was recognized at the ASEAN Corporate Governance Awards as one of the Top 50 ASEAN Publicly Listed Companies (PLCs) and among the Top 3 PLCs in the Philippines. In 2019, it also received a Four-Arrow Recognition for Good Governance from the Institute of Corporate Directors and the Best Corporate Governance Disclosure and Transparency award from the Bangko Sentral ng Pilipinas. 5 China Bank‘s main business include corporate and SME lending, retail loans (e.g. credit cards, housing, auto, personal (e.g. automatic payroll deduction), treasury & foreign exchange trading, trust & asset management, investment banking & advisory services, wealth management, cash management, insurance products through CBC-IB and MCBLife, internet & mobile banking, and remittances through tie-ups in the Middle East, Asia, and major US cities. The Bank also offers foreign currency deposits in four currencies, USD, EUR, CNY, and JPY. China Bank offers a comprehensive suite of products and services through its 631 branches complemented by convenient and secure electronic banking channels which are available 24/7 — 1,002 ATMs, Cash Accept Machine, China Bank TellerPhone (phone banking), China Bank