Information Disclosure of NCCB 2010
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Information Disclosure of NCCB 2010 Contents Chapter 1 Important Notes 2 Chapter 2 Brief Introduction to NCCB 3 Chapter 3 Financial Highlights 3 Chapter 4 Report of the Board of Directors 6 Chapter 5 Risk Management 12 Chapter 6 Shareholders and Related Party Transactions 16 Chapter 7 Information on Directors, Supervisors, Senior Management and Staff 18 Chapter 8 Corporate Governance 19 Chapter 9 Report of Supervisory Board 23 Chapter 10 Significant Events 27 Chapter 11 Audit Report 28 1 Chapter 1 Important Notes The Board of Directors of Nanchong City Commercial Bank, the Supervisory Board, all their members and the Senior Management hereby acknowledge and warrant that the report contains no false records, misleading statements or major omissions, and assume joint and several liabilities as to the authenticity, accuracy and integrity of the content. Relative contents have been approved by 11th Meeting of the Third Board of Directors on March 12, 2011. Tianjian (Chongqing) Certified Public Accountants Co., Ltd has audited the Financial Report according to Independent Auditing Standards for CPAs in China and issued its Audit Report without reservation. Mr. Huang Guangwei, the Chairman of the Board, Mr. Xing Min, the President, and Mr. Guo Yue, the Chief Financial Officer, declare and guarantee the authenticity and completeness of the financial statements in this report. Board of Directors Nanchong City Commercial Bank Co., Ltd. 2 Chapter 2 Brief Introduction to NCCB 南充市商业银行股份有限公司 Legal Chinese Name Nanchong City Commercial Bank Co., Ltd. (Abbreviation: NCCB, hereinafter referred to as “the Bank”) Legal Representative Huang Guangwei Secretary to the Board Jian Ting Registered Office No.1 Fujiang Road, Shunqing District, Nanchong, Sichuan, China Business Address No. 301 Wenhua Road, Shunqing District, Nanchong, Sichuan, China Telephone 86-817-2228870 Fax 86-817-2220889 Website www.cgnb.cn E-mail [email protected] Business Development 2006-2010 Unit: RMB 10 thousand Yuan 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2006 2007 2008 2009 2010 Loans Assets Deposits 3 Chapter 3 Financial Highlights 1. Key profit indicators (from the consolidated financial statements) Unit: Million Yuan Net interest income 984.77 Net intermediary business income 121.99 Other business income 0.98 Investment gains 47,83 Net amount of non-operating revenue and expenditure 11.31 Profit before capital loss reserve being raised 792.83 Gross profit 699.80 Net profit 572.38 Net cash flow Generated from operating activities 6,562.75 Net increase from cash and cash equivalents 4,273.99 2. Key financial data and indicators(from the consolidated financial statements) Unit: Million Yuan, % Total assets 43,113.33 Total liabilities 41,620.26 Shareholders equity 1,493.06 Deposits(including due from other banks) 37,662.24 Loans 12,976.42 including: bank notes business 15.71 NPL 69.70 Excess reserves ratio (%) 13.54 Capital adequacy (%) 11.17 NPL ratio (%) 0.54 Loan loss provision adequacy (%) 383.42 Provision coverage ratio (%) 379.84 Loan-to-deposit ratio (%) 46.45 Liquidity ratio (%) 91.93 Inter-bank borrowing ratio (%) 0.00 Inter-bank lending ratio (%) 0.09 Loan Concentration ratio to top ten clients (%) 35.09 Loan Concentration ratio of a single client (%) 6.63 Loan Concentration ratio of a single group client (%) 6.63 Interest recovery ratio (%) 99.56 Average ROA (%) 1.70 Average ROE (%) 46.61 4 3. Changes in main operating indicators for the past three years (from the consolidated financial statements) Unit: Million Yuan 2010 2009 2008 Total assets 43,113.33 24,155.06 16,418.46 Deposit balance(including due from other 37,662.24 20,162.05 13,178.40 banks) Loan balance 12,976.42 10,049.00 6,466.07 Operating income 1,543.56 947.78 742.01 Shareholders’ equity 1,493.06 963.18 748.49 Earnings per share (Yuan) 0.95 1.01 0.62 Cost to profit ratio (%) 27.40 29.69 33.32 4. The capital structure and its movement for the past three years (from the consolidated financial statements) Unit: Million Yuan 2010 2009 2008 Core capital 1,497.29 955.49 681.15 Paid-in capital 600.00 300.00 300.00 Capital reserve 7.97 7.97 7.97 Surplus reserve and common reserve 307.93 196.21 126.75 Undistributed profit 560.18 434.94 231.52 Minority equity 21.21 16.37 14.91 Supplementary capital 171.32 104.34 98.33 Fair-value variation -4.23 3.85 33.67 Provision for loan loss 175.55 100.49 64.66 Long-term tier II bonds 0 0 0 Convertible bonds 0 0 0 Less: 9.00 0 0 Goodwill 0 0 0 Investment in non-owner-occupied real estate 0 0 0 Capital investment in industrial or commercial 0 0 0 enterprises Unwritten-off part of loan loss 0 0 0 Unconsolidated capital investment in non-banking 0 0 0 financial institutions Unconsolidated capital investment in banking 900 0 0 financial institutions Net capital 1,659.61 1,059.83 779.48 5 Chapter 4 Report of the Board of Directors In 2010, according to the work plan set up at the beginning of the year of “emancipate the mind, lay down the burden, dare to dream, dare to do and do it right”, Board of Directors led the management team and all employees to further promote the development strategies, strengthen the analysis of macroeconomic and financial situation, optimize the asset structure, reform innovatively, fight with all strength, and achieved rapid, efficient and healthy development. Ⅰ Main work and achievements in 2010 1.The core decision-making role of the Board was Further enhanced and corporate governance was in good condition Board of Directors held five meetings throughout the year and hosted one general meeting of shareholders. With a high sense of responsibility , the Directors performed their duties conscientiously and strictly in accordance with company procedures in decision-making to ensure that the bank followed standardized, efficient and safe development of orbit: Firstly, the analysis of macroeconomic and financial trends was targeted and guiding. In the high quality board meetings, the directors used their expertise to express their views freely and debated intensely. Analysis and understanding were moving in the depth and breadth. Professor Ba Shusong provided many economy situation analysis reports and opinions, which offered a very efficient help to development of the bank. Secondly, a consensus on implementation of the strategy of the bank was reached. For instance, market positioning Services for SMEs and specialization was the direction and foundation of the bank’s sustainable development. In the post-financial crisis era, to adapt approaching interest rate liberalization, the bank must insist on the philosophy of “boutique bank, specialization bank, security bank” ;Thirdly, understanding On cross-regional development, and rural financial development was deepened. Establishment of Shanghai village bank was a good example. Fourthly, a consensus on the enterprise culture was reached. Board meetings were getting increasingly standardized, including the conditions of the meeting venue, quality of meeting materials, dress and other participants have significantly improved and changed, indicating while enhancing the bank’s strength, quality was becoming mature. In 2010, under the leadership of the board, management team seriously implemented the resolutions around the objectives and tasks set up by the Board, strengthened management and risk control, promoted specialization, accelerated innovation and development, and reached objectives and tasks of entire year through fruitful and hard work. 2. The bank was under rapid development with good indicators By the end of 2010, total assets of the bank (from the consolidated financial statements) reached 43.113 billion Yuan, up 78.49% over the beginning of this year; the deposit 6 balance was 37.662 billion Yuan, up 86.80% over the beginning, of which basic deposit was 27.940 billion Yuan, an increase of 61.82% over the beginning of this year; the loan balance was 12.976 billion Yuan, up 29.13% over the beginning; owner's equity was 1.493 billion Yuan, a growth of 530 million Yuan over the beginning; after-tax profit was 567 million, an increase of 264 million over the beginning. loan loss reserve adequacy ratio was 383.42 percent; coverage provision was 379.84 percent; capital adequacy ratio was 11.17%; core capital adequacy ratio was 10.07%; liquidity ratio was 91.93%; Non-performing loans accounted for 0.54%; average return on assets was 1.70%, return on average net assets was 46.61%; the proportion of deposits and loans was 46.45%; revenue cost ratio was 27.40%; single loan concentration was 6.63%; single group credit concentration was 6.63%; ten largest customer concentration was 36.09% loans. Data above shows that the bank is experiencing rapid development and healthy operation condition with qualified financial indicators and monitoring indicators. 3. Capital structure optimized, profitability significantly improved In 2010, the bank further adjusted capital structure and optimized asset allocation, assets structure was allocated in accordance with the "5-3-2" ratio as conducting policy, in which interbank financial assets accounted for 50%, credit assets of 30%, bonds of 20%; Revenue structure reached 55:25:20, that is, the credit interests income accounted for the total income 55%;the income from bonds investments accounted for 25%; intermediate business income (including interbank financial income) accounted for 20%. It was the first time that the portion of loan interests income fell below 60%.In expenditure structure, the interest expenses accounted for 40%; the operating expenses accounted for 30%, tax expenses (including corporate income tax) accounted for 20%; various of asset impairment expenses accounted for 10%. Data above illustrated that the bank's profitability was growing, net profit after tax increased from 301 million in 2009 to 562 million in 2010.