晉商銀行股份有限公司 JINSHANG BANK CO., LTD. (A joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code: 2558 Interim Report 2019 CONTENTS Definitions 2 Corporate Information 4 Summary of Accounting Data and Financial Indicators 7 Management Discussion and Analysis 11 Changes in Share Capital and Information on Shareholders 62 Directors, Supervisors, Senior Management and Employees 67 Corporate Governance and Other Information 73 Review Report to the Board of Directors 81 Unaudited Consolidated Statement of Profit or Loss and Other Comprehensive Income 82 Unaudited Consolidated Statement of Financial Position 84 Unaudited Consolidated Statement of Changes in Equity 86 Unaudited Consolidated Cash Flow Statement 89 Notes to Unaudited Interim Financial Statements 92 Unaudited Supplementary Financial Information 196 List of Branches 200 Jinshang Bank Co., Ltd. Interim Report 2019 1 DEFINITIONS In this Interim Report, unless the context otherwise requires, the following terms shall have the meanings set out below: “IFRS 9” International Financial Reporting Standard 9 – Financial Instruments “Articles of Association” the articles of association of the Bank, as amended, supplemented or otherwise modified from time to time “Bank” or “our Bank” Jinshang Bank Co., Ltd. (晉商銀行股份有限公司), a joint stock company established on October 16, 1998 in the PRC with limited liability pursuant to the relevant PRC laws and regulations, and, if the context requires, includes its predecessors, branches and sub-branches, excluding its subsidiary “Board” or “Board of Directors” the Board of Directors of the Bank “Board of Supervisors” the Board of Supervisors of the Bank “CBRC” China Banking Regulatory Commission (中國銀行業監督管理委 員會) “CBIRC” China Banking and Insurance Regulatory Commission (中國銀 行保險監督管理委員會) “China” or “PRC” the People’s Republic of China, for the purpose of this Interim Report, unless the context otherwise requires, excluding Hong Kong, Taiwan and Macau Special Administrative Region of the PRC “Director(s)” the director(s) of the Bank “Domestic Shares” ordinary shares issued by the Bank with a nominal value of RMB1.00 each, which are subscribed for or credited as paid up in Renminbi “Group”, “we” or “us” the Bank together with its subsidiary, and, if the context requires, includes its predecessors, branches and sub-branches 2 Jinshang Bank Co., Ltd. Interim Report 2019 DEFINITIONS “H Shares” the ordinary shares issued by the Bank with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange “HKD” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “Listing Date” July 18, 2019, the listing date on which the H Shares were listed on the Hong Kong Stock Exchange “PBoC” or “the central bank” the People’s Bank of China (中國人民銀行) “Reporting Period” the six months ended June 30, 2019 “RMB” or “Renminbi” Renminbi, the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Shareholder(s)” the holder(s) of the Shares of the Bank “Shares” ordinary shares in the share capital of the Bank with a nominal value of RMB1.00 each “Supervisor(s)” the supervisor(s) of the Bank Jinshang Bank Co., Ltd. Interim Report 2019 3 CORPORATE INFORMATION Legal Chinese Name 晉商銀行股份有限公司 Abbreviation in Chinese 晉商銀行 Legal English Name Jinshang Bank Co., Ltd. Abbreviation in English Jinshang Bank Legal Representative YAN Junsheng Authorized Representatives YAN Junsheng, YEUNG Ching Man Listing Place of H Shares The Stock Exchange of Hong Kong Limited Abbreviated Stock Name JINSHANG BANK Stock Code 2558 Secretary to the Board of Directors LI Weiqiang1 Joint Company Secretaries HAO Qiang, YEUNG Ching Man Registered Address and Address of No. 59 Changfeng Street, Xiaodian District, Taiyuan, Head Office Shanxi Province, the PRC Principal Place of Business in 40th Floor, Sunlight Tower, No. 248 Queen’s Road East, Hong Kong Wanchai, Hong Kong Tel 0351-6819503 Fax 0351-6819503 E-mail [email protected] Website www.jshbank.com Initial Registration Date October 16, 1998 1 As of the date of this Interim Report, the qualification of Mr. LI Weiqiang as secretary to the Board of Directors is still subject to the approval of CBIRC Shanxi Office. Prior to obtaining the approval, the duty of the secretary to the Board of Directors is performed by Ms. HAO Qiang. 4 Jinshang Bank Co., Ltd. Interim Report 2019 CORPORATE INFORMATION Registration Number of the Enterprise 1400001006774 Business License Unified Social Credit Code 911400007011347302 Financial License Institution Number B0116H214010001 H Share Registrar Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Center 183 Queen’s Road East Wan Chai, Hong Kong PRC Legal Advisor King & Wood Mallesons 17th Floor, One ICC Shanghai ICC 999 Middle Huai Hai Road, Xuhui District Shanghai, the PRC Hong Kong Legal Advisor Paul Hastings 21-22/F, Bank of China Tower 1 Garden Road Hong Kong Auditor KPMG Certified Public Accountants 8th Floor, Prince’s Building 10 Chater Road, Central Hong Kong Board Committees Development and Strategy Committee YAN Junsheng (Chairperson), JIN Haiteng, TANG Yiping, LI Shishan, DUAN Qingshan Audit Committee WANG Liyan (Chairperson), SAI Zhiyi, LIU Chenhang, SUN Shihu, YE Xiang Risk Management Committee SAI Zhiyi (Chairperson), JIN Haiteng, TANG Yiping, WANG Jianjun, DUAN Qingshan Jinshang Bank Co., Ltd. Interim Report 2019 5 CORPORATE INFORMATION Related Parties Transactions Control Committee JIN Haiteng (Chairperson), SUN Shihu, WANG Peiming, RONG Changqing, WANG Liyan Nomination, Remuneration and HR Committee DUAN Qingshan (Chairperson), JIN Haiteng, YAN Junsheng, XIANG Lijun, SAI Zhiyi Consumer Rights Protection Committee SUN Shihu (Chairperson), WANG Liyan, TANG Yiping, LI Yang, SAI Zhiyi 6 Jinshang Bank Co., Ltd. Interim Report 2019 SUMMARY OF AccOUNTING DATA AND FINANCIAL INDICATORS For the six months ended June 30, Rate of 2019 2018 change (%) (Expressed in millions of RMB, unless otherwise stated) Results of operations Interest income 4,376.6 4,283.5 2.2 Interest expense (2,709.6) (2,598.6) 4.3 Net interest income 1,667.0 1,684.9 (1.1) Fee and commission income 328.2 195.1 68.2 Fee and commission expense (20.2) (23.8) (15.1) Net fee and commission income 308.0 171.3 79.8 Net trading gains 45.2 197.7 (77.1) Net gains arising from investment securities 428.3 327.5 30.8 Other operating income 23.4 28.1 (16.7) Operating income 2,471.9 2,409.5 2.6 Operating expenses (799.2) (713.9) 11.9 Impairment losses on assets (898.5) (892.0) 0.7 Share of profits of associates 13.0 26.6 (51.1) Profit before tax 787.2 830.2 (5.2) Income tax (44.9) (151.7) (70.4) Net profit for the period 742.3 678.5 9.4 Net profit attributable to: Equity shareholders of the Bank 745.4 682.8 9.2 Non-controlling interests (3.1) (4.3) (27.9) Earnings per share attributable to equity shareholders of the Bank (RMB per share) －Basic 0.15 0.14 7.1 －Diluted 0.15 0.14 7.1 Jinshang Bank Co., Ltd. Interim Report 2019 7 SUMMARY OF ACCOUNTING DATA AND FINANCIAL INDICATORS As of As of June 30, December 31, Rate of 2019 2018 change (%) (Expressed in millions of RMB, unless otherwise stated) Key indicators for assets/liabilities Total assets 238,848.6 227,247.8 5.1 Of which: net loans and advances to customers 107,385.7 98,118.1 9.4 Total liabilities 222,592.9 211,251.9 5.4 Of which: deposits from customers 161,810.0 144,896.8 11.7 Share capital 4,868.0 4,868.0 0.0 Equity attributable to equity shareholders of the Bank 16,232.7 15,969.8 1.6 Total equity 16,255.7 15,995.9 1.6 For the six months ended June 30, 2019 2018 Change Profitability indicators (%) Return on average assets(1) 0.64 0.65 (0.01) Return on average equity(2) 9.21 9.18 0.03 Net interest spread(3) 1.80 1.76 0.04 Net interest margin(4) 1.70 1.81 (0.11) Net fee and commission income to operating income 12.46 7.11 5.35 Cost-to-income ratio(5) 30.99 28.45 2.54 As of As of June 30, December 31, 2019 2018 Change Asset quality indicators (%) NPL ratio(6) 1.71 1.87 (0.16) Allowance coverage ratio(7) 210.23 212.68 (2.45) Allowance to gross loan ratio(8) 3.60 3.97 (0.37) 8 Jinshang Bank Co., Ltd. Interim Report 2019 SUMMARY OF AccOUNTING DATA AND FINANCIAL INDICATORS As of As of June 30, December 31, 2019 2018 Change Capital adequacy indicators (%)(9) Core tier-one capital adequacy ratio(10) 9.56 10.63 (1.07) Tier-one capital adequacy ratio(11) 9.56 10.63 (1.07) Capital adequacy ratio(12) 11.75 12.99 (1.24) Total equity to total assets 6.81 7.04 (0.23) As of As of June 30, December 31, 2019 2018 Change Other indicators (%) Loan-to-deposit ratio(13) 69.44 70.99 (1.55) Liquidity coverage ratio(14) 242.96 226.64 16.32 Liquidity ratio(15) 81.02 83.91 (2.89) As of As of As of June 30, March 31, December 31, 2019 2019 2018 (Expressed in millions of RMB, unless otherwise stated) Net stable funding ratio(16) Total available stable funding 139,673.1 133,025.0 133,954.3 Total required stable funding 102,601.0 103,434.9 102,688.0 Net stable funding ratio (%) 136.13 128.61 130.45 Jinshang Bank Co., Ltd.