07 May 2021 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 6 1 8 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 1,891 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 Remarks: Please use BLACK ink for scanning purpose 2 3 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 177 OF THE REVISED CORPORATION CODE OF THE PHILIPPINES December 31, 2020 1. For the fiscal year ended ..................................... 2. SEC Identification Number ..........4..4..3........... 3. BIR Tax Identification No. 0..0..0..-.4..4..4..-..2..1.0...-.0 0.0 4. Exact name of issuer as specified in its charter .C...h..i.n..a...B...a..n..k..i.n..g...C...o..r..p..o..r.a...t.i.o..n................... 5. .P...h..i.l.i.p..p..i.n..e...s................................................ 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization China Bank Building, 8745, Paseo de Roxas 7. ..c..o...r.....V..i.l.l.a..r...S..t..,..M...a...k..a.t..i..C..i.t.y...................................... ..................1..2..2..6...................... Address of principal office Postal Code 8. ..(.6..3..2..)..8..8...8.-..5..5..-.5..5..5..................................................................................................................... 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: P38.27 Billion (as of 31 December 2020) 13. Portions of the Bank’s 2020 Annual Report to Stockholders are incorporated by reference in Parts I & II of this report. 4 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 5 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, stock brokerage, and bancassurance through its subsidiaries, China Bank Savings, China Bank Capital, China Bank Securities, Chinabank Insurance Brokers (CIBI), and Manulife China Bank Life Assurance Corp (MCBLife). Its banking franchise stems from its 100-year history, 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 renamed the same to China Bank Savings, Inc. (CBSI) in the following year. To fast-track the expansion, the Bank acquired Pampanga- based rural bank Unity Bank. It also entered into a bancassurance joint venture with Manulife to establish MCBLife. In 2014, the Parent Bank 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, as well as its distribution network. In the following year, CBSI 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), and stock brokerage subsidiary, China Bank Securities Corporation. On the same year, the China Bank MasterCard was publicly launched. In 2017, China Bank completed a P15-billion stock rights offer (SRO). This follows its P8-billion SRO in 2014. In 2019, the Bank marked a successful return to the market with a USD 150-million Green Bond issue to the International Finance Corporation and the P30 billion Peso fixed-rate retail bond issue. In 2020, China Bank celebrated its centennial anniversary, bearing the theme, "Celebrating the Past, Embracing the Future". The celebrations kicked off with the restoration & conversion of the Binondo Business Center as a heritage site, as well as the launch of two deposit promos for the Bank’s loyal clientele. The Bank then embarked on a television & social media campaign that tells the story of its founding and how its core values remained amid the changing times. Also, the Board and stockholders approved and ratified, respectively, a centennial stock grant plan wherein qualified employees will receive 100 China Bank shares for every year of service. At the annual stockholders’ meeting conducted virtually on June 18, the Bank declared a P1.00 cash dividend per share for a total of P2.68 billion, 14% higher than the previous year. China Bank also listed P15 billion-peso bonds due 2022 on the Philippine Dealing & Exchange Corp. (PDEx) with a fixed rate of 2.75% per annum. The COVID-19 global pandemic and the subsequent quarantine measures disrupted economic and business activities in 2020. Nevertheless, the Bank navigated this unprecedented time by adjusting its operations and customer service to the new normal. Aside from complying with the relief measures under the Bayanihan I and II, the Bank also invested in the health & safety of its employees and customers by establishing work-from-home setups, providing employees with temporary accommodation and transportation arrangements, setting up of dedicated antigen & swab testing facilities for employees, imposing a contact tracing scheme, paying employees’ salaries in full during the ECQ, giving financial assistance to agency personnel, waiving InstaPay and PesoNet fees, increasing ATM withdrawal limits, and ensuring the availability of digital banking channels, among others. China Bank continues to champion good corporate governance. The Bank was recognized at the ASEAN Corporate Governance Awards as one of the Top 20 ASEAN Publicly Listed Companies (PLCs), among the Top 3 in the Philippines, and among the ASEAN Asset Class PLCs for the year 2019. China Bank’s main business include corporate and SME lending, retail loans (e.g. credit cards, housing, auto, personal & automatic payroll deduction), treasury & foreign exchange trading, trust & asset management, investment banking & advisory services, wealth management, cash management, insurance products through CIBI and MCBLife, internet & 6 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.