ANNUAL REPORT 2016 China Everbright Bank Company Limited Bank Company China Everbright limited liability) Republic of China with in the People’s (a joint stock company incorporated Stock Code : 6818
China Everbright Bank 2016 ANNUAL REPORT Xicheng District, Beijing P. R. China. Xicheng District, Address : Ave, Center, No.25 Taipingqiao Everbright Tel : Fax : Postal Code : 100033 (86)10-63636363 Website : (86)10-63639066 www.cebbank.com is printed on environmentally friendly paper. This Annual Report Important Notice
The Board of Directors, Board of Supervisors and Directors, Supervisors and Senior Management of the Bank hereby warrant the authenticity, accuracy and completeness of the content of this report and that there are no false representations, misleading statements or material omissions, and jointly and severally accept full responsibility for the information in this report.
The Seventh meeting of the Seventh session of the Board of Directors of the Bank was convened in Beijing on 30 March 2017, at which the 2016 Annual Report of the Bank was considered and approved. 14 out of 14 Directors attended the meeting in person. Director Mr. Zhang Shude was authorized by Director Mr. Zhao Wei, who was unable to attend the meeting due to other official duties, to attend the meeting and exercise the voting right on his behalf. 6 Supervisors attended this meeting.
The financial report of the Bank for the year 2016 was prepared in accordance with the PRC Generally Accepted Accounting Principles (“PRC GAAP”) and the International Financial Reporting Standards (“IFRS”) and was audited by Ernst & Young Hua Ming LLP and Ernst & Young in accordance with the China Standards on Auditing and the International Standards on Auditing. Both auditors issued standard unqualified audit reports.
Mr. Tang Shuangning, Chairman of the Board of Directors, Mr. Zhang Jinliang, President, and Mr. Xie Rong, Independent Non-Executive Director, hereby warrant the authenticity, accuracy and completeness of the financial report in this report.
Unless otherwise stated, all monetary sums stated in this report are expressed in Renminbi/RMB.
The Board of Directors of the Bank proposed to pay an ordinary share dividend of RMB0.98 (before tax) for every 10 shares for 2016. Please refer to “Significant Events” for details.
Forward-looking statements such as future plans of the Bank mentioned in this report do not constitute actual commitments of the Bank to the investors. The investors and related parties should keep sufficient risk awareness in this regard, and should understand the difference between plans, predictions and commitments.
In this report, “We/we”, “our Company”, “the Company”, “the Bank”, “Whole Bank” and “China Everbright Bank” all refer to China Everbright Bank Company Limited, and “the Group” refers to China Everbright Bank Company Limited and its subsidiaries.
The Board of Directors of China Everbright Bank Company Limited 30 March 2017 Contents
Definition and Significant Risk Warning 2
Company Profile 3
Honors and Awards 6
Chairman’s Message 8
President’s Message 10
Summary of Accounting Data and 12 Financial Indicators
Business Overview of the Bank 17
Discussion and Analysis of Operations 20
Significant Events 56
Changes in Ordinary Shares and 68 Shareholders
Changes in Preference Shares and 75 Shareholders
Directors, Supervisors, Senior Management, 79 Staff, Branches and Outlets
Corporate Governance 99
Independent Auditor’s Report and 124 Financial Statements
Address Book of Head Office and Branches 278 CHINA EVERBRIGHT BANK 2 Analysis ofOperations”fordetails. the Bankisplanningtotakedealwiththesemajorrisksaccordingly.Pleaserefer“Discussionand The Bankhasdisclosedhereinthemajorrisksinvolvedinitsoperationsandsomeriskmanagementmeasures II. with anappointment. subscription, thegenerallevelofreturnratewillbeidentifiedinaccordancewithfinalnumbercustomers with an appointment, the higher the expected annualized return rate will be. Upon the completion of the expected annualizedreturnrateoftheproductineachissueperiod.Thehighernumbercustomers which is the first product of this type launched in the banking industry in China. There is a range of the “E-crowd-funding”: (II) HKSE SSE Everbright Group CHI CIC CSRC CBRC Central Bank Ministry ofFinance (I) I. Definition andSignificantRiskWarning
Significant RiskWarning with productsoftheCompanytofacilitateunderstandinginvestors: The followingglossarycontainsexplanationsofcertaintermsusedinconnection In thisreport, Definition have themeaningssetoutbelow: An onlineshort-termwealthmanagementproductissuedthroughcrowd-fundingchannel : : : : : : : : : unless the context otherwise requires, the following terms shall The StockExchangeofHongKongLimited Shanghai StockExchange China EverbrightGroupLimited Central HuijinInvestmentLtd. China InvestmentCorporation China SecuritiesRegulatoryCommission China BankingRegulatoryCommission The People’sBankofChina Ministry ofFinancethePeople’sRepublicChina 2016 Annual Report 3 ) 中國光大銀行 or 光大銀行 (Abbreviation:
中國光大銀行股份有限公司 CHINA EVERBRIGHT BANK COMPANY LIMITED CHINA EVERBRIGHT BANK) (Abbreviation: CEB China Everbright Center, No. A25, No. 25 Taipingqiao Avenue, China Everbright Center, No. A25, No. Xicheng District, Beijing 91110000100011743X Zhang Jinliang, Lu Hong Zhang Jinliang, Lu China Everbright Center, No. 25 Taipingqiao Avenue, Xicheng District, Beijing China Everbright Center, No. 25 Taipingqiao www.sse.com.cn 010-63636363 Basic Information of the Bank Basic Information Registered English Company Name: Registered English Bank’s website: www.cebbank.com Websites for publication of H share annual report: HKSE’s website: www.hkex.com.hk Bank’s website: www.cebbank.com Copies of annual report are available at: Office of the Board of Directors of the Bank, SSE Code of financial authority: B0007H111000001 Principal Place of Business in Hong Kong Principal Place of Business in Hong 16, Harcourt Road, Admiralty, Hong Kong CEB Hong Kong Branch: 30/F, Far East Finance Centre, No. Newspaper and Website Designated for Information Disclosure: Daily Mainland China: China Securities Journal, Shanghai Securities News, Securities Times, Securities Websites designated by CSRC for publication of A share annual report: SSE’s website: Secretary to the Board of Directors, Company Secretary: Lu Hong Secretary to the Board of Directors, Securities Affairs Representative: Li Jiayan Assistant to Company Secretary: Lee Mei Yi Postal code: 100033 Tel: Fax: 010-63636713 Email: [email protected] Investor hotline: 010-63636388 Corporate information Registered and Office Address: United Social Credit Code: Contacts Contact Address: Name of the Bank Company Name: Registered Chinese Relevant Persons Tang Shuangning Legal Representative: Authorized representatives:
(V) (VI) (III) (IV) (I) (II) Company Profile Company I. CHINA EVERBRIGHT BANK 4 (X) (IX) (VIII) (VII) Company Profile
H ShareRegistrar: A ShareOrdinarySharesandPreferenceDepository: Share Depository H ShareLegalAdvisor: A ShareLegalAdvisor:JunHeLawOffices Legal advisorsoftheBoardDirectorsduringreportingperiod Office Address: Domestic Auditor:Ernst&YoungHuaMingLLP Auditors duringthereportingperiod Abbreviated name: A share:SSE Stock ExchangesforListingofShares: Office Address: Office Address: Certified PublicAccountantsforSignature:LeungShingKit Office Address:22/F,CITICTower,1TimMeiAvenue,Central,HongKong Overseas Auditor:Ernst&Young Certified PublicAccountantsforSignature:LeungShingKit,GuJun Abbreviated name:CEBBank;Stockcode:6818 H share:HKSE Stock codeofPreferenceShares:360013,360022(SSEComprehensiveBusinessPlatform) Abbreviated nameofPreferenceShares: Stock codeofOrdinaryShares:601818 16/F,Ernst&YoungTower,OrientalPlaza,No.1EastChangAnAvenue,Beijing Wan Chai,HongKong Rooms 1712-1716,17/F,HopewellCentre,183Queen’sRoadEast, Pudong NewDistrict,Shanghai 36/F, ChinaInsuranceBuilding,No.166,LujiazuiEastRoad, ComputershareHongKongInvestorServicesLimited EverbrightBank; HerbertSmithFreehills 光大優1; 光大優2; D Shanghai Branch,ChinaSecurities epository and Clearing Corporation Limited 2016 Annual Report 5 Introduction of the Bank Introduction of
China Everbright Bank (CEB), which was established in August 1992 and headquartered in Beijing, is a a is Beijing, in headquartered and 1992 August in established was which (CEB), Bank Everbright China Bank of China. Council of China and the People’s commercial bank approved by the State national joint-stock 601818) and the (SSE) in August 2010 (stock code on the Shanghai Stock Exchange The Bank was listed (stock code 6818). Exchange (HKSE) in December 2013 Hong Kong Stock branches 1,119 with network nationwide a formed has Bank the period, reporting the of end the at As municipalities. and regions autonomous provinces, 30 of cities center economic 115 covering outlets and Its institutions. overseas up setting of pace the accelerated Bank the strategy, global” “go the Following already started Investment Corporation Limited have Seoul branch and CEB International Hong Kong branch CEB (Europe) S.A. and CEB Luxembourg branch are under preparation. operation, and the establishment of Cellar for Mothers”, a public welfare program, has demonstrated CEB’s Its long-term sponsorship for “Water which has been well recognized in China and has positive impact on commitment to its social responsibility, 46 in the “Top 1,000 World Banks” by the Banker, a U.K. magazine, the society. The Bank was ranked No. previous year. in 2016, rising by 11 places over the service and development channel design, products its optimizing in innovation and reform continuous With a strong market competitive edge in its major product and business models improvement, the Bank forged etc. business, card credit and e-banking business, banking investment management, asset as such lines balanced growth of all business lines, with improved risk management Therefore, the Bank has achieved a and enhanced innovation capabilities. of Chinese economy and the growth of Chinese financial sector, the Over the years, along with the evolution Bank has been enhanced continuously. The Bank has achieved a good brand image and market value of the with bank listed recognized well a now is and services, financial quality high providing while performance sound compliance. II. CHINA EVERBRIGHT BANK 6 Best InnovativeWealthManagementProductsinChina for2016 Best BankforPrivateBankinginChina2016 Best WealthManagementBrandinChinafor2016 Best InvestmentBankinPowerIndustryChinaDistrict for2016 Best BondUnderwritingBankinChinafor2016 Securities Times Excellent BankforInnovativeInternetServices Excellent GreenBank Excellent BankforInnovativeFinancialServices Excellent State-ownedBank Wisemoney Award ofInnovativeE-banking Sina.com Bank ofBestPublicImagefortheYear IFENG.COM Most InfluentialCommercialBankfor2016 Best ProfitMakingBankfor2016 Best AssetCustodianBankAwardfor2016 Best AutoFinanceBusinessServiceBankfor2015 21st CenturyBusinessHerald Best CreditCardBrand China.com.cn Best High-endCustomerMarketingAwardfor2015 VISA Inc. Award oftheBestCardIssuingBankfor2015 JCB Co.,Ltd. Most PopularCreditCardBrand Financial InstitutionwiththeBestPublicImage China SecuritiesMarketResearchandDesignCenter,Hexun.com Gold RoundTableAward–theExcellentBoardofDirectorsPrize Directors &Boards Ranked No.46inthe“Top1,000WorldBanks” The Banker Honors andAwards 2016 Annual Report 7 China Banking Association the Year on Social Responsibility Award for Best Green Finance Wealth Management Ability Award Best Comprehensive CFO Service Award Best Enterprise Annuity Economic Observer in China Most Respected Enterprises for the Year Contribution to Small and Micro Business Excellent Bank for the Year Excellent Credit Card Service Bank for JRJ.com. Award for Social Responsibility Outstanding Wealth Management Award Financial News for the Year Top 10 Internet Finance Innovative Company Finance Service Bank for the Year Best Small and Micro Company Business China Business Journal Innovation 2016 Excellent Bank in Competitive Product Service 2016 Excellent Bank in Competitive Pension The Asian Banker Services Award Excellence in Quality of Private Wealth China National Radio, CNR Management for 2016 The Most Promising APP for Wealth CHINA EVERBRIGHT BANK 8 determination. The Bank and I were left no choice but to stand and fight our way out. Adopting “trading taking officeasChairmanof theBank,Ihavealwaysbeenhumbleandcareful on eachstepwithdogged other words,anenterprise not issuingannualreportwillbeingreatjeopardytoget marketrecognition.Since not issuedannualreportfor years.Inmyunderstanding,annualreportisanenterprise’s IDtothemarket.In Firstly, adoptapropermixture ofseverityandgentleness.Turntheclockbackto 2007whentheBankhad share severalofmyprescriptions. has recoveredandpreserveditsstrengtheversince, nowisingoodhealth.Lookingback,Iwouldliketo physician for ten years, bringing the Bank back to life through special treatments and medications. The Bank Someone maysay,Chairmanisthe“physician”foramodern enterprise.IhavebeentheBank’sChairmanor physician’s diagnosticaccuracy,denotinghighexpectations fromtheSupervisor. assessed toalowergrade,soonandforth”.Such keyperformanceindicatorswereusedtoinspecteach ten outofwereassessedas“perfect”.Thosewhose diagnosticaccuracyratewasnineoutoftenwere physician wouldbeassessedbasedonone’sdiagnostic accuracy.Physicianswhomadeaccuratediagnosis Physicians” (a book about etiquettes and rituals of Zhou Dynasty). It wrote that “By the year end, each meaning beingperfectineveryaspect.Thisidiomisderivedfrom“TheRitesofZhou-ChapterSupervising perspective ofChinesepeople,“ten”isasignperfection,associatedwithanidiom“ShiQuanShiMei” I have presented the annual report of the Bank for ten consecutive years from 2007 to 2016. From the Chairman’s Message TANG Shuangning Chairman 2016 Annual Report 9 ” The solid foundation of the Bank is a testimony of the Bank is a testimony The solid foundation devoted by of continuous efforts and diligence successful development successive colleagues. The of gratitude to the of the Bank owes a great debt generous support of all stakeholders. “ space for time and trading time for space” strategy (details available online), the Bank has accumulated over space for time and trading time for space” strategy (details available online), in China. The Bank is taking new RMB4 trillion assets and grown into one of the leading commercial banks strides and now in its best time in history. of an enterprise. In the aspect of Secondly, carry out people-oriented strategy. Employees are the core cells as “open recommendation and open talent cultivation, I recommend “ten virtues and ten capabilities” as well get-it-done, “willing-to-do, of spirit the advocate I expansion, business and management of terms In election”. the Bank has built a professional no-fault”, so called “people-oriented economics”. After much toil and effort, and society. and energetic management team making contributions to both the Bank and turns, the Bank has built up a Thirdly, map out a longer-term business strategy. After a decade of twists international expansion. The Bank’s network of domestic branches and outlets, attaching great importance to IT card, credit finance, consumer leasing, financial including sectors diversified in engaged are subsidiaries and innovation, a comprehensive and direct banking and so on. With business operation featuring steadiness financial platform is taking shape. diligence devoted by successive a testimony of continuous efforts and of the Bank is The solid foundation of gratitude to the generous support colleagues. The successful development of the Bank owes a great debt of all stakeholders. I would like to extend my heartfelt thanks to them all. President’s Message CHINA EVERBRIGHT BANK
ZHANG Jinliang President
In 2016, while focusing on steady growth, structural adjustment, risk prevention, image building and profit increase, the Bank conscientiously served the real economy, unswervingly deepened the reform and properly responded to risk challenges, leading to a progressive operating situation while ensuring stable performance.
In 2016, the business development of the Bank gained good momentum in terms of its scale, structure and quality. The net profit attributable to equity shareholders of the Bank was RMB30,329 million, representing an increase of 2.71% over the previous year. Major operating indicators such as capital adequacy ratio, provision coverage ratio, deposit deviation ratio, loan concentration ratio all met the regulatory requirements while return on assets, return on net assets and cost-to-income ratio also reached the goals set by the Board of Directors.
During the reporting period, the Bank actively adjusted its development strategy through strengthening the overall management of assets and liabilities and strictly controlling the cost of liabilities. Centering on the implementation of national strategy and service to the real economy, the Bank enhanced structural adjustments to ensure a multi-sources profit growth. Particular strength was laid on providing integrated services to customers and highlighting balanced development of its corporate banking, retail banking and financial market business. In reinforcing the influence of three lines of defense, the Bank improved the comprehensive risk management system, resulting in effective risk prevention. The Bank continuously consolidated the operating foundation and actively sought capital replenishment by successful issuance of
10 2016 Annual Report
In 2017, following the general principle of making progress “ while working to keep performance stable, we will solidify the management foundation, accelerate the operational transformation, effectively enhance the capability to serve the real economy and continuously gain competitive edges in the market in an unremitting endeavor to become an outstanding joint-stock domestic commercial bank with scientific management, quality service, good performance, active market participation and distinctive features.”
RMB10 billion worth of preference shares. The Bank advanced the construction of channels both at home and abroad by means of setting up 72 domestic branches and outlets and accelerating paces of overseas institution establishment. The development and performance of the project of “CEB in the Cyberspace” were further improved. The reform of the performance appraisal system and staff grading system was unremittingly deepened so as to release the operational vitality.
The year 2017 is a vital stage of the implementation of “the 13th Five-year Plan” of China, a mark of the deepening of the supply-side structural reform and also an essential period for the transformation and innovation of the Bank. Following the general principle of making progress while working to keep performance stable, we will solidify the management foundation, accelerate the operational transformation, effectively enhance the capability to serve the real economy and continuously gain competitive edges in the market in an unremitting endeavor to become an outstanding joint-stock domestic commercial bank with scientific management, quality service, good performance, active market participation and distinctive features.
11 CHINA EVERBRIGHT BANK 12 I. Financial Indicators Summary ofAccountingDataand Net profitattributabletoequityshareholdersoftheBank Net profit Share capital Profit beforetax Equity attributabletoequityshareholdersoftheBank Impairment lossesonassets
Operating expenses Total liabilities Proportion offeeandcommissionincomein Operating income
Net interestmargin Net feeandcommissionincome Cost-to-income ratio Return onweightedaveragenetassets Net interestspread Basic anddilutedearningsperordinaryshare Net interestincome Operating performance(RMBmillion) Return onaveragetotalassets Profitability indicators(%) Net assetspershareattributableto Per Share(inRMB) Total assets Scale indicators(RMBmillion)
Balance ofdepositsfromcustomers Provision forimpairmentofloans Total loansandadvances operating income ordinary shareholdersoftheBank Key AccountingDataandFinancialIndicators 1 3
2
,2,8 1,993,843 2,120,887 ,6,7 ,4,6 80 ,5,2 ,6,3 2,164,973 2,262,034 2,557,527 28.04 2,943,663 3,768,974 ,9,7 ,1,4 86 ,9,5 ,6,1 1,023,187 1,166,310 1,299,455 18.61 1,513,543 1,795,278 ,2,4 ,6,1 69 ,3,1 ,1,8 2,279,295 2,415,086 2,737,010 26.91 3,167,710 4,020,042 5,5 2,9 20 7,7 5,3 114,178 152,839 178,975 12.06 223,493 250,455 2,3)(162 05 1,0)(,3)(5,795) (4,633) (10,209) 10.53 (21,652) (23,931) 3,5)(234 64 3,0)(643 (22,685) (26,473) (30,008) -6.49 (32,354) (30,254) 03929,528 30,329 03829,577 30,388 66946,679 46,679 01039,358 40,180 43593,364 94,365 3643,1 44 8052,7 25,856 24,172 28,025 14.47 38,119 43,634 81226,301 28,112 5286,5 17 8295,6 50,263 50,862 58,259 -1.76 66,459 65,288 90 70 +1.95 27.05 29.00 97 81 +1.62 28.17 29.79 38 55 -1.70 15.50 13.80 2016 1.78 1.59 0.85 0.63 4.72
2015 .5-0.47 2.25 .1-0.42 2.01 .0-0.15 1.00 0.63 4.36
Change (%) percentage percentage percentage percentage percentage percentage points points points point point point .12,8 67523,591 26,715 28,883 2.71 .42,2 67423,620 26,754 28,928 2.74 .93,5 44131,590 34,421 38,554 2.09 .717537165281,426,941 1,605,278 1,785,337 6.37 .77,7 55760,070 65,527 78,771 1.07 .91,5 4929,479 14,952 19,157 6.89 8.26 6694,7 40,435 46,277 46,679 – –
00 18 30.19 31.84 30.02 43 28 15.78 22.82 24.32 73 14 22.54 21.48 17.36 2014 2.30 2.06 1.12 0.62 3.83
2013 2.16 1.96 1.14 0.66 3.30
2012 2.54 2.34 1.18 0.58 2.82 2016 Annual Report
13 0.74 2.53 2012 30,329 250,455 2016
0.86 2.07 2013 29,528 223,493
1.19 2.16 2014
180.52 241.02 339.63 28,883 178,975 2014 2015 2016 2014 2015 Net profit attributable to equity shareholders of the Bank Unit: RMB million Equity attributable to equity shareholders of the Bank Unit: RMB million
point point points percentage percentage percentage
Change (%) 40,180 3,768,974 2016
1.61 -0.01 2.52 -0.09 2015
39,358 2,943,663
1.60 2.43 2016 152.02 156.39 -4.37
38,554 2,557,527 2014 2015 2014 2015 2016
Profit before tax Unit: RMB million Total liabilities Unit: RMB million
94,365 4,020,042 2016 2016
93,364 3,167,710 2015 weighted average net assets = net profit attributable to ordinary shareholders of the Bank (with the dividends of the the of dividends the (with Bank the of shareholders ordinary to attributable profit net = assets net average weighted sic earnings per ordinary share = net profit attributable to ordinary shareholders of the Bank (with the dividends of the the of dividends the (with Bank the of shareholders ordinary to attributable profit net = share ordinary per earnings sic 78,771 2,737,010 preference shares declared during the period deducted)/weighted average number of ordinary shares outstanding. preference shares declared during the period deducted)/weighted other equity instrument)/total number of ordinary shares at the end of the period. other equity instrument)/total number of ordinary Ba on Return average net assets attributable to ordinary shareholders of the Bank. preference shares declared during the period deducted)/weighted Net assets per share attributable to ordinary shareholders of the Bank = (net assets attributable to equity shareholders of the Bank – Net assets per share attributable to ordinary shareholders 2014 2014 2015 Total assets Unit: RMB million Operating income Unit: RMB million
Asset quality indicators (%) Asset quality indicators Non-performing loan ratio Provision coverage ratio Provision-to-loan ratio 3. 2. by Companies that Offer Securities to the to Compilation Rules for Information Disclosures The above figures were calculated according of Return on Equity and Earnings per Share (2010 Revision) issued by the CSRC and the Public (No.9): Calculation and Disclosure of Rate Enterprises (No.7)” of the Ministry of Finance. “Interpretation of Accounting Standards for Business shares of RMB1.06 billion (before tax) on 17 June 2016. The Bank declared the first dividends of the preference Note: 1.
CHINA EVERBRIGHT BANK Note: 14 III. II. Summary ofAccountingDataandFinancialIndicators Loan exposuretotoptencustomersratio Net cashflowsfromoperatingactivities Loan exposuretosinglelargestcustomerratio Net profitattributabletoequityshareholders Liquidity ratio Item Operating income Item
of theBank
Supplementary FinancialIndicators Quarterly OperatingIndicatorsDuringtheYear The aboveindicatorswerecalculatedinaccordancewiththebankinglevel.
Foreign currency RMB Standard
value ≤50 ≤10 ≥25 ≥25 quarter 1062343(506 120,226 (85,066) 233,423 81,096 3542,0 38523,469 23,815 23,507 23,574
,4 ,9 ,9 5,892 7,998 7,993 8,446 First 31 December
14.62 78.81 63.18 2016 Second 2.37 quarter
31 December
quarter 11.86 98.87 54.90 2015 2.38 Third
Unit: RMBmillion
31 December quarter Fourth 109.61 Unit: % 15.19 45.90 2014 3.05
2016 Annual Report
– – – 15 9.22 9.22 Non– 4,400 11.11 (4,955) 35,382 208,280 177,853 172,898 172,898 126,051 consolidated
– – 10 9.34 9.34 4,400 11.21 (2,085) 35,438 31 December 2014 Unit: RMB million, % Unit: RMB million,
– – 9.16 Non– 4,970 10.09 11.80 (5,479) 19,965 36,621 253,120 212,719 202,013 179,356 196,534 177,271 216,499 177,281 146,445 127,377 consolidated Consolidated
– – 9.24 4,970 10.15 11.87 (2,115) 19,992 37,655 259,482 203,950 201,835 221,827 148,160 31 December 2015
– – 8.17 9.31 Non– 7,079 10.77 (5,488) 29,947 37,813 280,783 218,511 213,023 242,970 164,066 consolidated Consolidated
– – 8.21 9.34 7,757 10.80 (2,125) 29,997 39,007 31 December 2016 287,880 221,001 218,876 248,873 166,292 2,490,988 2,435,979 2,032,386 1,993,875 1,766,454 1,744,119 2,665,037 2,607,124 2,185,516 2,145,290 1,898,231 1,874,570 Consolidated
and overseas branches, as well as invested financial institutions within the scope of consolidated management in in management consolidated of scope the within institutions financial invested as well as branches, overseas and t common equity tier-1 net capital = Common equity tier-1 capital – Common equity tier-1 capital deductions; Net tier-1 capital = capital tier-1 Net deductions; capital tier-1 equity Common – capital tier-1 equity Common = capital net tier-1 equity common t Net common equity tier-1 capital + Additional tier-1 capital – Additional tier-1 capital deductions; Net capital base = Net Tier-1 Net common equity tier-1 capital + Additional tier-1 capital – Additional tier-1 capital deductions; capital + Tier-2 capital – Tier-2 capital deductions. , should be included in the calculation of of calculation the in included be should (Provisional), Banks Commercial of Capital Governing Regulation the with accordance of consolidated management include the consolidated capital adequacy ratios. The invested financial institutions within the scope Huai’an Everbright Village Bank Co., Everbright Financial Leasing Co., Ltd., Shaoshan Everbright Village Bank Co., Ltd., Jiangsu Ltd. and CEB International Investment Co., Ltd. Ne Please refer to the website of the Bank for details of the capital composition. All domestic All Net capital base Common equity tier-1 capital Common equity tier-1 capital deductions Net common equity tier-1 capital Additional tier-1 capital Additional tier-1 capital deductions Net tier-1 capital Tier-2 capital Tier-2 capital deductions Credit risk-weighted assets Market risk-weighted assets Operational risk-weighted assets Total risk-weighted assets Common equity tier-1 capital adequacy ratio Tier-1 capital adequacy ratio Capital adequacy ratio
Capital Composition and Changes Capital Composition
1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2. 3. 4. 5. 6. 7. 8. Item 3. 2. Note: 1.
Regulation Governing Capital of Commercial Banks the Regulation Governing calculated in accordance with Capital adequacy ratios on 7 June 2012) are as follows: (provisional) (released by the CBRC IV. CHINA EVERBRIGHT BANK 16 Please referto“UnauditedSupplementaryFinancialInformation”fordetails. VI. Please referto“UnauditedSupplementaryFinancialInformation”fordetailsofleverageratio. follows: of the Leverage Ratio of Commercial Banks (Revised) (released by the CBRC on 30 January 2015) are as The leverage ratio indicators of the Group calculated in accordance with the Measures for the Administration V. Summary ofAccountingDataandFinancialIndicators Leverage ratio Item
Tier-1 capitaladequacyratio Adjusted on-balancesheetand
off-balance sheetassets
Liquidity CoverageRatio Leverage Ratio
31 December ,7,9 ,6,8 ,9,1 4,060,388 4,298,614 4,360,389 4,573,997 2016 5.44 9.34
30 September 2016 5.65 9.73
30 June 2016 5.30 9.36 Unit: RMBmillion,%
31 March 2016 5.68 9.95 2016 Annual Report 17 and Regulatory Environments during the Reporting Reporting the during Environments Regulatory and Facilitation to the development of real economy Review of Main Work of the Bank Industry Landscape and State of the Bank Industry Landscape and State Economic, Financial Economic, Period
In response to the national structural reform in the supply side, great support is exerted to the “The Belt Belt “The the to exerted is support great side, supply the in reform structural national the to response In development of the Yangtze River and Road” Initiative, the Beijing-Tianjin-Hebei Integration Initiative, and the projects of the country, new type of Economic Belt and credit resources are allocated to major development more credit resources into under- urbanization, and strategic emerging industries. The Bank actively channeled loans agricultural and business micro and small in of growth rapid continuous a in resulting sectors developed higher indicator” respectively. The and the realization of the request of “Three No-less indicators” and “One which contributed to the continuous bank also reduced its credit exposure to industries with overcapacity, optimization of the customer structure. III. (1) In 2016, China’s banking industry achieved sound operation in general, credit risk management and control in sound operation in general, credit risk management and control in In 2016, China’s banking industry achieved service for real economy continued to be strengthened. key areas was enhanced and financial paid stable, performance keeping while progress making of principle the to committed was Bank The and adjustments structural promoted actively development, of efficiency and quality the to attention more to as so building capacity and foundation the enhanced innovation, and reform strengthened control, risk the Bank achieved good operation promote the steady and healthy development of every business. Therefore market as demonstrated by its well- performance for the year and gained more competitive advantages in the card businesses. recognized asset management, investment banking, E-banking and credit II. In 2016, the growth in world economy and trade has been depressed with the growing volatility in global depressed with the growing volatility been world economy and trade has in In 2016, the growth are uncertainties geopolitical and rise to coming are protectionism and deglobalisation market, financial increasing. rate of 6.7%, range. With an annual GDP growth its economic growth within a reasonable China maintained in reform and world. Continued advances were made major economies all around the China outpaced most strength. up. New drivers of growth gained structure adjustment was stepped opening up. Economic The adequate. reasonably was system banking China’s of liquidity the policy, monetary prudent the With inclusion The forward. pushed further been has marketization rate exchange and rate interest of reform policy macro-prudential the With force. into come officially has basket currency SDR the in Renminbi of adjustment mechanism of differentiated reserve requirement ratios framework further improved, the dynamic assessment (MPA). has been upgraded into the macro-prudential and banks private of Establishment deepened. continuously been have innovation and reform Regulatory The pilot scheme of investment-loan linkage business has smoothly consumer finance company is normalized. of rectification the on project Special launched. been has swap debt-to-equity Market-driven progressed. Internet of development orderly and healthy the promote to out carried been has risks financial Internet guidelines were issued to improve the capacities of comprehensive finance. Comprehensive risk management institutions. risk management among the banking Business Overview of the Bank of Overview Business I. CHINA EVERBRIGHT BANK 18 banking isacceleratedtoacquire clientsfromonlinechannelwithanaimtoboost salesandprofitability. management, direct banking, information technology, and consumer finance. The establishment of online platform, establishment of a number of subsidiaries is being planned, which include credit cards, asset Luxembourg branchapprovedbytheCBRCandatpresent beingprepared.Tobuildanintegratedoperating operation, the Seoul branch opening for business, and the establishment of CEB (Europe) S.A. and CEB 63 outlets. Foreign institution layout was speeded up with CEB International Investment Co., Ltd. starting in the establishment of branches and outlets by building 1 first-tier branch and 8 second-tier branches, RMB10 billionworthofpreferencesharestosupport itssustainabledevelopment.Moreeffortsweremade unique features drafted. A capital replenishment plan was successfully implemented with an issuance of A new five-year development plan has been formulated and a well-defined development strategy with more (5) stand out. system, applycompetitiveprocessesintalentselection,andcultivateinternationalizedtalentstoletmoreelites sharing. Reform of human resources was actively promoted to comprehensively optimize the staff grading Management Department) to push forward business interaction among departments and realize resources the R-P Linkage Evaluation Assessment System (Customer Relation Management Department and Product of branches.Thedepartmentassessmentindicatorsystemtheheadofficewasimprovedbyimplementing centres inoperationtoproperlywidenauthorizedoperationsbranchesandadjusttheassessmentsystem to effectively motivate branches and staff. The Bank insisted on highlighting the role of branches as profit Performance orientation was strengthened and a sound performance assessment system was established (4) asset custodianservice,managingassetsforcustomers,andinterbankplacement,etc. actively engagewithenterpriseswithintheGroupinbusinessessuchaspayrollagentservice,crossselling, liabilities. Thirdly,intermsofGroupbusiness,theBanktookadvantageCEBGroup’sfulllicensesto deposits andmarketcapital,effectivelyexpandingtheBank’ssourcesofcapitalcontrollingcost terms of liabilities, full-scale capital management is pushed forward by breaking the barrier of the ordinary management, interbank operation, investment banking, leasing, and capital market operations. Secondly, in Firstly, on asset linkage, the Bank promoted the integration of traditional credit businesses with asset (3) control ofreputationriskwerestrengthenedtomaintainastabilityinoperation. control systemandauthorizationmanagement,preventionofinformationrisks,origin market risk were strengthened to keep various market risk indicators within limits. Development of internal liquidity risk management indicators were kept within a reasonable range. Monitoring and measurement of system. Coordinatedliquiditymanagementandlimitassessmentwerestrengthenedtheannual of dedicated officers for examining and approving corporate loans and developing an online credit risk alert further enhancetheriskmanagementability.Creditwasenhancedbylaunchingasystem Comprehensive riskmanagementframeworkwasimprovedtostrengthenthe“ThreeLinesofDefense”and (2) Business OverviewoftheBank
Continuous consolidationofoperatingfoundation Unswerving deepeningofreform Emphasis onbusinessinteractionandcooperation Firmly insistingonthebottomlineofriskcontrol 2016 Annual Report 19 Other Information on Business Review of the Bank Other Information on Business Analysis on Core Competitiveness Analysis on Core
V. principal the of discussion a includes which review, business Bank’s the to relation in information Certain performance key financial using performance Bank’s the of analysis an management, their and risks and an indication of likely future indicators, particulars of important events affecting the Bank during the year, and Analysis on Operation” of this developments in the Bank’s business, can be found in the “Discussion the compliance with relevant laws annual report. In addition, discussions on the Bank’s environmental policies, with its key stakeholders, charity and regulations which have a significant impact on the Bank, relationships Events” of this annual report. activities and permitted indemnity provisions are included in the “Significant Parent company with a full range of financial licenses. As a key state-owned enterprise under the management a key state-owned enterprise under a full range of financial licenses. As Parent company with and has set up the full range of financial licenses China Everbright Group owns of the central government, under the among the Bank and all other companies collaboration and cooperation a platform for business solutions to all clients. comprehensive financial Group to provide cross-market the Bank stepped Sunshine and Innovating Lifestyle”, Upholding the value of “Sharing Unified Sunshine brand. good and images favorable whose series, brand “Sunshine” the create to efforts building brand its up the competitiveness of the brand. reputations have forged China, in products management wealth launch to bank first the As sectors. businesses some in roles Leading advantages in wealth management and asset management business. the Bank has maintained its competitive has enjoyed the first-mover advantage in the industry with the ability The Bank’s investment banking business banking services to corporate customers. Its E-banking business has to provide comprehensive investment service system based on an open platform, which thus has developed focused on the building of an open into an industry leading business model. a established Bank the framework, III Basel the on Based system. management risk Comprehensive which covered all substantial risks. The Bank continued to build up comprehensive risk management system capital management so as to improve its risk management capabilities the technology platform for economic with quantitative instruments. IT R&D capabilities. As the first Chinese commercial bank to put Advanced IT management and independent maintenance and operation of its safe terms in industry the led Bank has the place “data centralization”, in In recent years, the Bank has also set up a platform for independent IT and technology support capabilities. IT R&D capability. R&D, which helps to enhance its independent IV. CHINA EVERBRIGHT BANK 20 regulatory requirements. was 9.34%whilecommonequitytier-1capitaladequacy ratiowas8.21%,whichallconsistentlymeetsthe end ofthereportingperiod,capitaladequacyratio of theGroupwas10.80%,tier-1capitaladequacyratio During thereportingperiod,Banksuccessfullyissued RMB10billionworthofpreferenceshares.Asatthe (IV) the previousyear. provision coverage ratiowas152.02%,decreasingby4.37 percentagepointsascomparedwiththeendof was 1.60%, decreasing by 0.01 percentage point as compared with the end of the previous year. Credit an increaseofRMB4,327millionascomparedwiththe endofthepreviousyear.Non-performingloanratio As attheendofreportingperiod,Group’snon-performingloanswereRMB28,702million,representing (III) further optimized. representing a year-on-year increase of 1.62 percentage points. The Group’s income structure has been income growth. The proportion of net fee and commission income to operating income reached 29.79%, representing ayear-on-yearincreaseofRMB1,811millionor6.89%,andbecamethemaindriveroperating During the reporting period, net fee and commission income of the Group was RMB28,112 million, a year-on-yearincreaseofRMB811millionor2.74%. million, ayear-on-yearincreaseofRMB822millionor2.09%.NetprofitwasRMB30,388representing million, representingayear-on-yeardecreaseofRMB2,100millionor6.49%.ProfitbeforetaxwasRMB40,180 of RMB1,001millionor1.07%ascomparedwiththepreviousyear.ItsoperatingexpenseswereRMB30,254 During thereportingperiod,operatingincomeofGroupwasRMB94,365million,representinganincrease (II) increasing byRMB127,044millionor6.37%ascomparedwiththeendofpreviousyear. as compared with those at the end of the previous year. The total deposits were RMB2,120,887 million, balance of loans was RMB1,795,278 million, representing an increase of RMB281,735 million or 18.61% an increaseofRMB852,332millionor26.91%ascomparedwiththoseattheendpreviousyear.The As attheendofreportingperiod,totalassetsGroupwereRMB4,020,042million,representing (I) remained controllableanditscapitalstrengthwasreinforced,whichfurtherimprovedthebrandimage. improved income structure, the Bank achieved the profit growth as anticipated, while all kinds of risks to a sound operating result. With the moderately fast growth of assets and liabilities and the continuously business, whileitstrictlymaintainedtheriskbottomlineandbroadenedsourcesofcapital,leading During thereportingperiod,Bankfocusedongrowthofcoredepositsandactivelypromotedlending I. Discussion andAnalysisofOperations
Successful issuanceofpreferenceshares and continuouscapitalsupplement Asset qualityremainsrelativelystableandoverallriskscontrollable business Continuous growth Fast growthofassetsandliabilitiesasthefoundationforimprovedprofitability Overall operationsoftheBank of operating income and larger contribution of fee-based 2016 Annual Report 1 11 21 801 811 822 336 410 (274) (112) 0.65 2015 2,279 1,811 71.18 28.17 Unit: % (2,100) (1,171) 100.00 Increase/ (Decrease) Unit: RMB million
4 13 (72) 324 335 1.02 2015 2016 9,781 69.19 29.79 29,528 29,577 39,358 21,652 32,354 26,301 66,459 100.00
5 660 338 223 (261) 2016 9,792 30,329 30,388 40,180 23,931 30,254 28,112 65,288
Operating income Changes in items of Income Statement Changes in items Income Statement Analysis Income Statement shareholders of the Bank securities
Net profit attributable to equity Net profit Income tax Profit before tax Impairment losses on assets Operating expenses Other net operating income Net foreign exchange gains/(losses)
Net (losses)/gains arising from investment Dividend income Net trading gains Net fee and commission income Net fee and commission Net fee and commission income Other income Operating income Item Net interest income Item Net interest income
(II) income of the Group was RMB94,365 million, an increase of RMB1,001 During the reporting period, operating mainly due to increase of operating income was previous year. The the million or 1.07% as compared with income. The proportion of net fee and commission income to total the increase of net fee and commission a year-on-year increase of 1.62 percentage points. The proportionoperating income was 29.79%, representing representing a year-on-year decrease of 1.99 percentage points. of net interest income was 69.19%, operating income: The following table sets out the composition and proportion of the Group’s
II. (I) CHINA EVERBRIGHT BANK 22 2. 1. Note: assets wasgreaterthanthatinthecostoninterestbearingliabilities. program of replacing business taxwith value-added tax,thedeclinein the yields on various interest-earning interest rates and the impact on interest income that taxes were separated from prices charged after the interest margin was 1.78%, representing a year-on-year decrease of 47 base points, mainly due to falling The Group’snetinterestspreadwas1.59%,representingayear-on-yeardecreaseof42basepoints.Its a decreaseinnetinterestmargin. year decreaseofRMB1,171millionor1.76%.Thenetinterestincomewasmainlyattributableto During the reporting period, the Group’s net interestincome was RMB65,288million,representingayear-on- (III) Discussion andAnalysisofOperations Item Net interestmargin Net interestspread Net interestincome Deposits fromcustomers Interest-bearing liabilities Loans andadvances Interest-earning assets Debt securitiesissued Total interest-earningassets Placements anddepositsfrombanks Finance leasereceivables Interest income Total interest-bearingliabilities Investments Interest expense Deposits withthecentralbank Placements anddepositswithbanks
and otherfinancialinstitutions and otherfinancialinstitutions
Net interestincome Net interestmarginisnetincomedividedbytheaveragebalance oftotalinterest-earningassets. Net liabilities; interest spread is the difference between average yield of total interest-earning assets and average cost of total interest-bearing
,9,4 14119 ,7,6 7582.54 47,538 1,874,760 1.98 5.80 41,451 82,545 2,091,143 1,424,267 4.57 77,702 1,701,422 ,5,0 4,5 .22992111974.81 141,907 2,949,241 3.92 143,450 3,658,902 ,5,6 81223 ,9,6 5482.80 75,448 2,697,768 2.33 5.02 78,162 3,352,365 38,801 773,425 4.03 46,560 1,155,338 Average balance 1,7 54227 6,6 1303.19 21,340 668,367 3.71 2.77 14,015 25,412 377,487 915,773 3.01 11,870 394,855 4,4 12932 5,4 ,7 4.25 6,570 154,641 3.27 11,299 345,449 5,6 ,0 .932435101.50 5,120 342,443 1.49 5,306 356,866 04120239 1691464.51 1,426 31,619 3.99 2,012 50,421
expense income/ Interest 143,450 2016 65,288 78,162
yield/cost Average 1.78 1.59
Average balance
Unit: RMBmillion,% expense income/ Interest 141,907 2015 66,459 75,448
yield/cost Average 2.25 2.01 2016 Annual Report 23 186 586 yield 1,543 1,543 2,714 2,714 4,729 7,759 4,072 (2,145) (4,843) (6,087) (1,171) interest Average
Changes in Unit: RMB million
Unit: RMB million, % 2015 income Interest (28) (164)
(2,667) (1,512) (7,632) (2,793) (26,280) (12,548) (17,500) (10,376) Interest rate balance Average
522 214 750 yield 6,241 6,865 4,289 27,823 15,262 15,391 12,657 Volume Average
2016 income Interest
74,770 2,761 3.69 73,352 2,959 4.03 591,441 27,035 4.57 490,269 28,199 5.75 balance Average 1,701,422 77,702 4.57 1,424,267 82,545 5.80 1,035,211 47,906 4.63 860,646 51,387 5.97
Interest income from loans and advances Interest income from loans and Interest income
and other financial institutions and other financial institutions
Loans and advances Changes in interest income Interest-earning assets Discounted bills Changes in interest expense
Placements and deposits with banks Interest-bearing liabilities Deposits with the central bank Deposits with the central Personal loans Debt securities issued Investments Finance lease receivables Placements and deposits from banks Corporate loans Net interest income Deposits from customers Item Loans and advances Item
1. and advances was RMB77,702 During the reporting period, the Group’s interest income arising from loans The decrease in interest income million, representing a year-on-year decrease of RMB4,843 million or 5.87%. yields. arising from loans and advances was mainly due to the decrease in its average average yield of major types of loans The following table sets forth the average balance, interest income, and and advances of the Group: (IV) a year-on-year was RMB143,450 million, representing income interest Group’s the period, reporting the During The increase in interest income was mainly due to the increase of increase of RMB1,543 million or 1.09%. the interest income from investments.
The following table sets forth the breakdown of changes in interest income and interest expense of the Group in interest income and interest expense sets forth the breakdown of changes The following table business scale and interest rate. due to changes in CHINA EVERBRIGHT BANK 24 representing ayear-on-yearincreaseofRMB4,072million or19.08%. institutions and financial assets sold under repurchase agreements of the Group was RMB25,412 million, During thereportingperiod,interestexpenseonplacements anddepositsfrombanksotherfinancial 2. deposits fromcustomersoftheGroup: The followingtablesetsforththeaveragebalance,interestexpenseandcostratioofmajortypes deposits fromcustomerswasmainlyduetothedecreaseinaveragecostofcustomers. representing ayear-on-yeardecreaseofRMB6,087millionor12.80%.Theininterestexpenseon During the reporting period, interest expense on deposits from customers was RMB41,451 million, 1. the interestexpenseondebtsecuritiesissued. increase ofRMB2,714millionor3.60%.Theininterestexpensewasmainlyduetothe During thereportingperiod,Group’sinterestexpensewasRMB78,162million,representingayear-on-year (V) year-on-year decreaseofRMB2,145millionor15.31%. financial institutionsandassetsheldunderresaleagreementswasRMB11,870million,representinga During thereportingperiod,Group’sinterestincomefromplacementsanddepositswithbanksother 3. representing ayear-on-yearincreaseofRMB7,759millionor20.00%. During the reporting period, the Group’s interest income from investments was RMB46,560 million, 2. Discussion andAnalysisofOperations Item Corporate deposits Including: Corporatedemanddeposits
Personal deposits Including: Personaldemanddeposits
Total depositsfromcustomers
and financialassetssoldunderrepurchaseagreements Interest expenseonplacements and depositsfrombanksotherfinancialinstitutions, Interest expenseondepositsfromcustomers Interest expense and financialassetsheldunderresaleagreements Interest incomefromplacementsanddepositswithbanksotherfinancialinstitutions Interest incomefrominvestments Corporate time Personal time deposits deposits
,2,6 20519 ,4,2 5852.48 35,815 1,444,628 1.97 32,035 1,625,568 ,5,1 82826 9,9 2653.30 32,675 990,690 2.68 28,288 1,055,016 ,9,4 14119 ,7,6 7582.54 47,538 1,874,760 1.98 41,451 2,091,143 Average balance 7,5 ,4 .643983100.69 3,140 453,938 0.66 3,747 570,552 6,7 ,1 .240121,2 2.73 11,723 430,132 2.02 9,416 465,575 4,8 2 .21444670.53 607 114,454 0.42 621 146,586 1,8 ,9 .635681,1 3.52 11,116 315,678 2.76 8,795 318,989
expense Interest 2016
Average cost
Average balance
expense Unit: RMBmillion,% Interest 2015
Average cost 2016 Annual Report 4 13 25 (72) 324 604 335 2015 2015 1,312 1,078 1,169 1,740 1,190 1,512 7,253 (1,444) 26,301 27,745 12,491 Unit: RMB million Unit: RMB million
5 965 338 660 223 934 828 (261) 2016 2016 1,854 1,614 1,576 1,442 7,472 (1,820) 28,112 29,932 14,212
Other income Net fee and commission income Net fee and commission Interest expense on debt securities issued Interest expense
Agency service fees fees Custody and other fiduciary business Others Underwriting and advisory fees Bank card service fees Settlement and clearing fees Wealth management service fees Acceptance and guarantee fees
Total Net foreign exchange gains/(losses) Other net operating income Fee and commission expense Net fee and commission income Item Net trading gains Dividend income
Fee and commission income Item Net (losses)/gains arising from investment securities
(VII) year-on-year a representing million, RMB965 was income other Group’s the period, reporting the During to net gain arising from net foreign increase of RMB361 million. The increase in other income was mainly due exchange gains. The following table sets forth the major components of other income:
(VI) representing income was RMB28,112 million, period, the Group’s net fee and commission During the reporting income was The increase of net fee and commission of RMB1,811 million or 6.89%. a year-on-year increase card credit The fees. service agency and fees service card bank in increase significant the to due mainly to accelerate cardholder introduction, which pushed forward the Bank business enhanced its marketing efforts increase of RMB1,721 million or 13.78%. Insurance agency and card service fees reaching a year-on-year achieving a year-on-year increase of RMB685 million in agency actively developed, trust agency business were of 58.60%. service fees, representing an increase components of net fee and commission income of the Group: The following table sets forth the major 3. RMB11,299 million, on debt securities issued was period, the Group’s interest expense During the reporting on expense interest of increase The 71.98%. or million RMB4,729 of increase year-on-year a representing securities issued. of the average balance of debt was due to the year-on-year increase debt securities issued CHINA EVERBRIGHT BANK 26 RMB11 millionor0.11%. During the reporting period, income tax was RMB9,792 million, representing a year-on-year increase of (X) The followingtablesetsforththemajorcomponentsofimpairmentlossesonassets: a year-on-yearincreaseofRMB2,279millionor10.53%. During thereportingperiod,impairmentlossesonassetsofGroupwereRMB23,931million,representing (IX) The followingtablesetsforththemajorcomponentsofoperatingexpenses: million or6.33%.Theincreaseinstaffcostswasmainlyduetoincreasedbranchesandemployees. of operating expenses amounted to RMB15,171 million, representing a year-on-year increase of RMB903 increase of1.95percentagepoints.Duringthereportingperiod,staffcosts,whichwaslargestproportion year decreaseofRMB2,100millionor6.49%.Cost-to-incomeratiowas29.00%,representingayear-on-year During thereportingperiod,Group’soperatingexpenseswereRMB30,254million,representingayear-on- (VIII) Discussion andAnalysisofOperations Item Total impairmentlossesonassets Others Impairment lossesondebtsecuritiesclassifiedasreceivables Impairment lossesonavailable-for-salefinancialassets Impairment lossesonheld-to-maturityinvestments Impairment lossesonfinanceleasereceivables Impairment lossesonloansandadvances Item Total Others Tax andsurcharges Premises andequipmentexpenses Staff costs
prtn expenses Operating Income tax Impairment lossesonassets
23,931 22,111 30,254 15,171 7,458 2,885 4,740 2016 2016 242 330 574 102 572
Unit: RMBmillion Unit: RMBmillion 21,652 19,724 32,354 14,268 6,500 7,096 4,490 1,194 2015 2015 148 171 411 4 2016 Annual Report 27
Unit: RMB million, % Unit: RMB million, (38,119) 1,513,543
1,281 0.03 1,281 0.04 5,622 0.14 3,923 0.12 55,560 1.38 38,735 1.22 25,339 0.63 18,546 0.59 14,228 0.35 12,646 0.40 35,720 0.90 13,207 0.42 (43,634) 232,630 5.79 86,311 2.72 381,620 9.49 326,735 10.31 193,305 4.81 285,406 9.01 Balance Percentage Balance Percentage 31 December 2016 31 December 2015 1,751,644 43.57 1,475,424 46.58 1,795,278 1,323,093 32.91 905,496 28.59 4,020,042 100.00 3,167,710 100.00
Assets Balance Sheet Analysis Balance Sheet institutions, and financial assets held under institutions, and financial assets held resale agreements
Provision for impairment of loans Net loans and advances Total loans and advances Item Finance lease receivables Deposits with banks and other financial institutions Deposits with banks and other financial Cash and deposits with the central bank Investment in securities and other financial assets Investment in securities and other financial Placements with banks and other financial
Interests receivable Fixed assets Goodwill Deferred tax assets Other assets Total assets
As at the end of the reporting period, the Group’s total assets reached RMB4,020,042 million, representing assets reached RMB4,020,042 million, the reporting period, the Group’s total As at the end of year, mainly due to with the end of the previous million or 26.91% as compared an increase of RMB852,332 and other financial assets. and advances, investment in securities the increase in loans of the Group: sets forth the composition of total assets The following table III. (I) CHINA EVERBRIGHT BANK 28 The followingtablesetsforththemajorcomponentsofGroup’sloansandadvances: compared withtheendofpreviousyear. of netloansandadvancestototalassetswas43.57%,representingadecrease3.01percentagepointsas increase ofRMB281,735millionor18.61%,ascomparedwiththeendpreviousyear.Theproportion As attheendofreportingperiod,Group’stotalloansandadvanceswereRMB1,795,278million,an 1. Discussion andAnalysisofOperations 1,200,000 1,500,000 Item Total loansandadvances Discounted bills Personal loans Corporate loans
300,000 600,000 900,000 Unit: RMBmillion Loans andadvances 0 2015
Corporate
917,327
loans 1,075,974 2016
Personal
525,020
loans 663,131 components oftheGroup’sloansandadvances As oftheendreportingperiod,major
Discounted 71,196
bills 56,173
,9,7 0.015353100.00 1,513,543 100.00 1,795,278 1,075,974 aac ecnaeBlnePercentage Balance Percentage Balance 31 December2016 663,131 56,173
Corporate loans 36.94% 69 525,020 917,327 36.94 59.93 .371,196 3.13 34.68%
3.13% 4.70% Personal loans 31 December2015 60.62% Unit: RMBmillion,%
Discounted bills 2015 2016 59.93% 34.68 60.62 4.70 2016 Annual Report – – – – – – – – – – 29 0.62 2.13 0.18 Losses impairment Provision for
Unit: RMB million,% Unit: RMB million,% Unit: RMB million, % Unit: RMB million, 31 December 2015 31 December 2015 2019-09-23 2018-06-09
0.59 5,637 1.63 1,419 0.37 1,625 3.22 2017-05-23 3.23 2017-02-06 3.32 2018-09-15 4.04 2019-07-22 4.23 2021-11-05 2.95 2019-10-28 3.95 2031-02-26 3.80 2036-01-25
7,834 1,861 4,950 54,146 47.53 47,331 71.24 57,920 50.84 17,690 26.63 Current interest rate Expiring date 425,131 32.13 222,495 24.57 113,927 100.00 66,440 100.00 257,500 19.46 152,312 16.82 627,678 47.45 523,427 57.81 31 December 2016 31 December 2016 Balance Percentage Balance Percentage Balance Percentage Balance Percentage 1,323,093 100.00 905,496 100.00
5-day average of 3-month Shibor-0.20 One-year time deposit interest rate+0.70
1,000 1,000 1,050 1,030 1,070 1,050 1,160 1,200 2,290 2,760 value Nominal
Investment Top 10 financial bonds held in scale Types and amounts of financial bonds held Types and amounts of financial profit or loss profit or loss other financial assets
Bond 10 Bond 9 Bond 7 Bond 8 Bond 5 Bond 6 Bond 4 Bond 3 Bond 2 Item Item Bond 1 Name of bonds Financial assets at fair value through
Financial assets at fair value through Positive fair value of derivatives Available-for-sale financial assets Held-to-maturity investments Available-for-sale financial assets Total Held-to-maturity investments Debt securities classified as receivables
Total investment in securities and
4.
3.
2. assets was in securities and other financial the reporting period, the Group’s investment As at the end of the previous year, as compared with the end of an increase of RMB417,597 million RMB1,323,093 million, as compared an increase of 4.32 percentage points of total assets, and representing accounting for 32.91% previous year. with the end of the and other financial the Group’s investment in securities sets forth the major components of The following table assets: CHINA EVERBRIGHT BANK 30 of thepreviousyear. RMB2,120,887 million,representinganincreaseofRMB127,044 millionor6.37%,ascomparedwiththeend As at the end of the reporting period, the balance of the Group’s deposits from customers reached Note: The followingtablesetsforththecomponentsofGroup’stotalliabilities: banks andotherfinancialinstitutions. liabilities wasmainlyduetotheincreaseofdepositsfromcustomers,debtsecuritiesissuedand of RMB825,311 million or 28.04% as compared with the end of the previous year. The increase in total As attheendofreportingperiod,Group’stotalliabilitiesreachedRMB3,768,974million,anincrease (II) 6. million, whichwasthesameasthatatendofpreviousyear. for impairmentlossesongoodwillwasRMB4,738million,andthecarryingvalueofRMB1,281 The costoftheGroup’sgoodwillwasRMB6,019million.Asatendreportingperiod,provision 5. Discussion andAnalysisofOperations Total liabilities Other liabilities Debt securitiesissued Interests payable Taxes payable Accrued staffcosts Negative fairvalueofderivatives Placements frombanksandotherfinancial Deposits frombanksandotherfinancialinstitutions Deposits fromcustomers Due tothecentralbank Item
institutions, andfinancialassetssoldunder repurchase agreements
Liabilities mortgage orpledgeoftheBank’sprincipalassets. As at the end of the reporting period, there was no seizure, attachment, freezing or Goodwill Deposits fromcustomersincludestructureddepositsmeasuredatfair valueasspecified,samehereinafter.
,6,7 0.029363100.00 2,943,663 100.00 3,768,974 ,2,8 62 ,9,4 67.73 1,993,843 56.27 2,120,887 aac ecnaeBlnePercentage Balance Percentage Balance 1Dcme 0631December2015 31 December2016 1,0 09 1,6 7.14 210,061 10.94 412,500 3,9 .319184.05 119,178 3.63 136,696 3,5 20 4,6 18.38 541,066 22.03 830,354 8,0 .61,4 0.50 14,840 4.96 187,000 13608 5030.51 15,063 0.83 31,316 35608 0621.04 30,612 0.89 33,576 ,0 .26320.22 6,392 0.12 4,501 ,7 .11,1 0.38 11,217 0.21 7,776 ,6 .21310.05 1,391 0.12 4,368
Unit: RMBmillion,%
2016 Annual Report 31 554 2015 3,929 14,964 40,271 64,320 46,679 19,965 33,365 223,493 224,047
31 December Unit: RMB million
Unit: RMB million, % Unit: RMB million, 509 613 2016 17,951 51,447 70,557 46,679 29,947 33,365
250,455 251,068 31 December
656,760 30.97 515,929 25.88 996,440 46.98 1,028,124 51.56 359,660 16.96 339,125 17.01 183,856 8.67 145,561 7.30 175,804 8.29 193,564 9.71 108,027 5.09 110,665 5.55 31 December 2016 31 December 2015 Balance Percentage Balance Percentage 1,653,200 77.95 1,544,053 77.44 2,120,887 100.00 1,993,843 100.00
deposits deposits Corporate time Corporate Personal time Personal Equity of shareholders
Item Surplus reserve General reserve Retained earnings Total equity attributable to equity shareholders of the Bank Total equity Item Share capital Other equity instrument Capital reserve Other comprehensive income Non-controlling interests Corporate deposits Including: Corporate demand deposits Including: Corporate
Personal deposits Including: Personal demand deposits Including: Personal
Other deposits Total deposits from customers
(III) was Bank the of shareholders equity to attributable equity the period, reporting the of end the at As the of end the with compared as million RMB26,962 of increase an representing million, RMB250,455 the of shareholders equity to attributable profit net of increase the (i) to due mainly was It year. previous of equity by RMB9,982 million due to the issuance of preference Bank by RMB30,329 million; (ii) the increase RMB9,929 million due to the distribution of dividend. shares; (iii) the decrease of equity by of the equity attributable to equity shareholders of the Bank: The following table sets forth the composition
The following table sets forth the components of the Group’ deposits from customers: sets forth the components of the Group’ The following table CHINA EVERBRIGHT BANK 32 RMB9,982 million. issuance of bonds was RMB202,440 million; cash inflow generated from preference shares issued was Net cash inflow from financing activities was RMB191,134 million, of which cash inflow generated from the including paymentsonacquisitionofinvestmentswasRMB890,635million. disposal and redemption of investments was RMB470,303 million; cash outflow generated from activities Net cash outflow from investing activities was RMB423,325 million, of which cash inflow generated from RMB319,799 million;cashinflowgeneratedfromoperatingliabilitieswasRMB593,353million. generated from operating activities was RMB76,125 million; cash outflow generated from operating assets was Net cashinflowgeneratedfromtheGroup’soperatingactivitieswasRMB349,679million,ofwhich IV. The followingtablesetsforththecompositionofGroup’screditcommitments: RMB615 millionascomparedwiththatattheendofpreviousyear. reporting period,thetotalamountofcreditcommitmentswasRMB702,117million,representingadecrease commitments, acceptances, letters of guarantee, letters of credit and guarantees. As at the end of the The Group’s off-balance sheet items are mainly credit commitments, including loan and credit card (IV) Discussion andAnalysisofOperations Item Total Guarantees Letters ofcredit Letters ofguarantee Acceptances Loan andcreditcardcommitments
Cash FlowAnalysis Off-balance sheetitems
31 December 702,117 401,420 158,477 60,611 81,424 2016 185
Unit: RMBmillion 31 December 702,732 449,385 128,389 63,069 61,704 2015 185 2016 Annual Report – – – 33
Unit: RMB million, %
– 525,020 – 71,196 – 1,513,543
95,554 8.88 54,119 5.90 92,260 8.57 75,108 8.19 62,480 5.81 50,084 5.46 51,275 4.77 28,592 3.12 34,201 3.18 26,349 2.87 28,473 2.65 31,416 3.42 76,678 7.12 67,320 7.34 56,173 235,514 21.89 246,140 26.83 160,657 14.93 70,864 7.72 126,717 11.78 143,428 15.64 112,165 10.42 123,907 13.51 663,131 31 December 2016 31 December 2015 Balance Percentage Balance Percentage 1,075,974 100.00 917,327 100.00 1,795,278
of agriculture, forestry, animal husbandry and fishery; accommodation and catering; public administration and and administration public catering; and accommodation fishery; and husbandry animal forestry, agriculture, of social organizations; information transmission, computer services and software; health, social security and social welfare; resident transmission, social organizations; information recreation; and sports culture, prospecting; geological and services technical research, scientific services; other and services education etc. “Others” consist “Others” Distribution of loans by industry Distribution of Analysis of Loan Quality Analysis of Loan
Item Manufacturing Water, environment and public utility management Water, environment and public utility Real estate Wholesale and retail trade Leasing and commercial services Transportation, storage and postal services Construction Finance Production and supply of power, gas and water Production and supply of power, gas Mining Others (note) Subtotal of corporate loans Personal loans Discounted bills Gross loans and advances Note:
During the reporting period, by focusing on the target of economic restructuring, transforming and upgrading, of economic restructuring, transforming period, by focusing on the target During the reporting of its loans to and as a result, the proportion adjusted its credit portfolio by industry, the Bank proactively and public utility reduced while the loans to livelihood estate, wholesale and retail trade manufacturing, real sectors rose. loans by industry: sets forth the distribution of Group’s The following table V. (I) CHINA EVERBRIGHT BANK 34 The followingtablesetsforththetypesofloansecurityandtheirproportionGroup: and theremainingunsecuredloansweremainlyofferedtocustomerswithrelativelyhighcreditratings. The percentageofguaranteedloans,mortgageloansandpledgedcombinedaccountedfor72.63%, (III) The followingtablesetsforththedistributionofGroup’sloansbyregion: The distributionofloansbyregionwasrelativelystableleadingtoabalancedregionalstructure. (II) Discussion andAnalysisofOperations Gross loansandadvances Overseas Head Office Northeastern Western Gross loansandadvances Central Pledged loans Bohai Rim Mortgage loans Pearl RiverDelta Guaranteed loans Yangtze RiverDelta Unsecured loans Item Region
Types ofloansecurityandtheirproportions Distribution ofloansbyregion
,9,7 0.015353100.00 1,513,543 100.00 1,795,278
aac ecnaeBlnePercentage Balance Percentage Balance 31 December2016 1,5 21 7,6 11.84 179,160 12.10 217,250 9,7 87 8,3 38.69 585,530 38.73 695,272 9,2 18 1,1 20.75 314,118 21.80 391,427 9,2 73 3,3 28.72 434,735 27.37 491,329 ,9,7 0.015353100.00 1,513,543 100.00 1,795,278 aac ecnaeBlnePercentage Balance Percentage Balance 1Dcme 0631December2015 31 December2016 1,3 18 7,2 11.42 172,822 11.83 212,336 0,0 .99,4 6.35 96,047 6.09 109,300 6,9 45 2,8 15.18 229,682 14.52 260,592 0,9 69 3,9 15.25 230,898 16.93 303,996 9,1 66 6,1 17.57 265,918 16.64 298,715 1,3 18 9,5 12.68 191,858 11.89 213,533 5,3 96 0,0 19.95 301,904 19.64 352,631 41524 4441.60 24,414 2.46 44,175
31 December2015 Unit: RMBmillion,% Unit: RMBmillion,%
2016 Annual Report 35 1.09 1.11 1.15 1.22 1.31 1.25 1.67 1.41 2.04 2.37 14.62 4.39 0.73 0.70 0.18 1.61 net capital Proportion to
2.34 0.17 0.18 0.18 0.20 0.21 0.20 0.27 0.22 0.33 0.38 Unit: RMB million, % Unit: RMB million, % Unit: RMB million, 31 December 2015 total loans Proportion to
3,150 3,187 3,300 3,510 3,600 3,780 4,056 4,800 5,874 6,824 3.78 66,512 0.63 11,109 0.79 10,572 0.18 2,694 1.60 24,375 42,081 Balance of loans
31 December 2016
3,257 67,853 11,367 14,078 28,702 31 December 2016 Balance Percentage Balance Percentage 1,698,723 94.62 1,422,656 94.00 1,795,278 100.00 1,513,543 100.00 1,766,576 98.40 1,489,168 98.39
Manufacturing Finance Industry Manufacturing
There is no related-party relationship between top ten borrowers and the Bank. There is no related-party relationship between The proportion of the balance of loans to net capital is calculated according to the relevant requirements of the CBRC. The proportion of the balance of loans to net Five-category loan classification Top 10 loan customers
Item Total amount Borrower J storage and postal services Transportation, Borrower I Transportation, storage and postal services Borrower H Water, environment and public utility management Borrower F Borrower G Real estate Borrower D Borrower E Water, environment and public utility management Borrower C Public administration and social organization Borrower B services Transportation, storage and postal Normal Name Borrower A Special mention Substandard Doubtful Loss Gross loans and advances Performing loans Non-performing loans
(V) due to some internal and external factors such as macro economy As at the end of the reporting period, balance The moderately. increased loans non-performing Group’s the adjustment, structural and slowdown RMB4,327 million as compared of increase an representing million, was RMB28,702 loans non-performing of year. Non-performing loan ratio was 1.60%, down by 0.01 percentage with that as at the end of the previous end of the previous year. point as compared with that as at the The following table sets forth the five-category loan classification of the Group: Note: 1. 2.
(IV) CHINA EVERBRIGHT BANK 36 (VIII) 2. 1. (VII) (VI) Discussion andAnalysisofOperations Total amountofnon-performingloans Discounted bills Personal loans Including: Restructuredloansand Item Loan migrationratioofdoubtfulloans Loan migrationratioofsubstandardloans Loan migrationratioofspecialmentionloans Loan migrationratioofnormalloans Item Corporate loans Restructured loansandadvances Item
Non-performing loansbybusinesstype loans. Please referto“NotestheConsolidatedFinancialStatements”fordetailsofoverdue Restructured loans Restructured loansandoverdue Loan migrationratio more advances than 90 days overdue for
aac ecnaeBlnePercentage Balance Percentage Balance 31 December2016 872100 435100.00 24,375 100.00 28,702 1427.01,2 78.88 19,227 74.60 21,412 56 24.98 86.57 30.33 25.66 62.17 26.78 ,9 54 ,4 21.12 5,148 25.40 7,290 062015 2016 .14.27 3.31 1Dcme 0631December2015 31 December2016 Balance 73009 2040.80 12,034 0.97 17,380 ,4 .74220.28 4,202 0.07 1,240 –
Proportion to total
on Balance loans +0.68 percentagepoint -24.40 percentagepoints -3.55 percentagepoints -0.96 percentagepoint Changes asofyearend Year-on-Year –
31 December2015 Unit: RMBmillion,% Unit: RMBmillion,% –
Proportion
to total Unit: % loans 28.77 64.04 26.68 2014 4.08 – 2016 Annual Report – – – 37 1.71 0.04 7.95 2.03 0.57 0.18 4.50 8.63 2.87 9.46
– – 10 45 – 416 494 139 Unit: RMB million, % Unit: RMB million, % Unit: RMB million, 699 31 December 2015 31 December 2015
–
2.75 0.03 0.14 4.10 1,938 1.37 0.27 0.77 0.77 1,096 4.39 0.03
– 10 40 77
788 392 220 220 7,290 25.40 5,148 21.12 1,177 8,178 28.49 7,836 32.15 8 28,702 100.00 24,375 100.00 21,412 74.60 19,227 78.88 10,310 35.91 7,253 29.75 Balance Percentage Balance Percentage 31 December 2016 6,520 22.72 5,974 24.51 4,663 16.25 4,357 17.87 3,666 12.77 2,104 4,654 16.21 4,022 16.50 4,599 16.02 4,914 20.16 1,259 3,333 11.61 2,305 28,702 100.00 24,375 100.00 31 December 2016 Balance Percentage Balance Percentage
of agriculture, forestry, animal husbandry and fishery; accommodation and catering; finance; education; information finance; education; catering; and accommodation fishery; and husbandry forestry, animal agriculture, of transmission, computer services and software; scientific research, technical services and geological prospecting; health, social social health, prospecting; geological and services technical research, scientific software; and services computer transmission, security and social welfare, etc. “Others” consist Distribution of non-performing loans by industry Distribution of non-performing Distribution of non-performing loans by region Distribution of
Total amount of non-performing loans Discounted bills Personal loans Subtotal of corporate loans Others (note) Public administration and social organization Production and supply of power, gas and water Mining Construction Leasing and commercial services Transportation, storage and postal services Real estate Wholesale and retail trade Item Region Manufacturing Yangtze River Delta Pearl River Delta Bohai Rim Central Western Northeastern Head Office Overseas Total amount of non-performing loans Note:
(X) the Group’s non-performing loans were mainly from manufacturing and As at the end of the reporting period, wholesale and retail trade. distributions of the non-performing loans of the Group: The following table illustrates the industrial
During the reporting period, the Group’s non-performing loans in Western regions decreased whereas the the whereas decreased regions Western in loans non-performing Group’s the period, reporting the During in other regions increased. non-performing loans Group: of the non-performing loans of the illustrates the geographic distributions The following table (IX) CHINA EVERBRIGHT BANK The followingtablesetsforththechangesinprovisionforimpairmentlossesofloansGroup: period iftherewasobjectiveevidenceindicatingthatthecreditassetswereimpaired. sheet date,andprovisionforimpairmentlosseswouldberecognizedthroughprofitorlossthecurrent discounted bills.TheGroupconductedimpairmenttestsonthecarryingvalueofcreditassetsbalance The Group’sprovisionforloanimpairmentlossesincludescorporateloans,personalloansand (XIII) Note: 38 (XII) (XI) Discussion andAnalysisofOperations Total amountofnon-performingloans Pledged loans Mortgage loans Guaranteed loans Disposal intheyear Write-offs duringtheyear Unwinding ofdiscount(note) Recoveries Release fortheyear Charge fortheyear Balance atthebeginningofyear Item Balance attheendofyear Unsecured loans Net valueofrepossessedassets Less: provisionforimpairmentlosses Of which:land,buildingsandstructures Repossessed assets Item Item
Provision forloanimpairmentandwrite-off Repossessed assetsandprovisionforimpairment Distribution ofnon-performingloansbyguaranteetype It referstocumulativeinterestincomeofimpairedloansduethesubsequent increaseinpresentvalueovertime.
aac ecnaeBlnePercentage Balance Percentage Balance 31 December2016 872100 435100.00 24,375 100.00 28,702 1564.31,9 43.46 10,593 40.23 11,546 1,329 ,0 27 ,8 31.95 7,788 32.76 9,402 ,2 23 ,6 18.74 4,568 22.38 6,425
1Dcme 0631December2015 31 December2016 1Dcme 0631December2015 31 December2016 .31,426 4.63 (10,835)
22,798 38,119 43,634 (5,632) (876) (687) 747 389 406 406 (17) 31 December2015
Unit: RMBmillion,% Unit: RMBmillion,% Unit: RMBmillion
20,071 28,025 38,119 (5,579) (3,583) 5.85 (802) (347) 334 329 346 346 (17) 2016 Annual Report 39 Major measures for non-performing assets management and write-off policies of management and write-off for non-performing assets Major measures bad debts Segment Performance Capital Adequacy Ratio
VII. for lines business and areas geographical by segments different into business its divided Group The at conducted was segments business and regional different between lending Fund purpose. management on the basis of market interest rate, and interest income and interest an internal transfer price determined expenses among segments were recognized. performance of the Group’s various regional and business segments. The following table lists the operating Financial Statements” for more details. Please refer to “Notes to the Consolidated VI. Data and Financial Indicators” for details. Please refer to the “Key Accounting The Bank improved asset quality management mechanism, strengthen the whole monitoring process, process, monitoring whole the strengthen mechanism, management quality asset improved Bank The innovations in broadened disposal channels, made process of non-performing assets, optimized the disposal effectiveness. assets and enhanced disposal disposing non-performing revised Bank further the authorities, regulatory the Ministry of Finance and of requirements the Pursuant to loss category of non-performing assets, on Write-off of Bad Debts, and reviewed the Administrative Measures of management daily the reinforced and debts bad of identification of requirements specific the updated the principle of “filing after witting-off”, the Bank will continue to recover written-off items. In accordance with written-off items. of debts bad off wrote million, RMB6,534 of debts bad recovered Bank the period, reporting the During creditor’s rights of RMB14,344 million. RMB5,632 million and assignment of (XIV) CHINA EVERBRIGHT BANK 40 (II) (I) Discussion andAnalysisofOperations Total Overseas Head Office Northeastern Total Western Other business Central Financial marketbusiness Bohai Rim Retail bankingbusiness Pearl RiverDelta Item Item Yangtze RiverDelta Corporate bankingbusiness
Performance bybusinesssegments Performance byregion
Operating Operating Income income 4354,8 33439,358 93,364 40,180 94,365 8731,7 75722,041 27,557 17,874 28,793 4354,8 33439,358 93,364 40,180 94,365 2945661,2 3,102 11,625 5,696 12,974 2371,2 27117,791 22,701 18,728 22,337 3595451,0 6,397 15,200 5,435 13,599 9491,7 7577,997 27,537 10,376 29,479 5435081,8 4,071 14,882 5,068 15,423 2381,3 29413,482 42,974 11,037 42,388 ,0 ,5 ,1 1,722 4,714 1,558 4,509 ,6 ,3 9,244 2,631 8,865 ,6 ,5 ,1 1,407 9,715 1,655 9,563 639 161 2016 2016
before tax before tax Profit Profit 263 39
Operating Operating Income income 427 152 2015 2015 Unit: RMBmillion Unit: RMBmillion
before tax before tax Profit Profit 200 418 88 2016 Annual Report 41
Unit: RMB million, % Unit: RMB million, Major reasons for change ease in interbank negotiable certificate of deposits of certificate negotiable interbank in ease and increase in financial leasing receivables position and changes in the market interest rate position and changes the revaluation of some foreign exchange swaps increased held under resale agreements to repurchase financial assets including treasury bonds and credit bonds financial institutions banks based on fund position and changes in the market interest rate revaluation of some foreign exchange swaps decreased ncr Additional issuance of preference shares Valuation losses from available-for-sale assets Increase in funds pending clearance Increase in due to the central bank Increase in deposits with non-deposit Increase in scale of financial leasing business, Increase in scale of precious metals Increase in interests receivable I Increase in deferred tax assets Decrease in purchase scale of financial assets Increase in deposits with banks based on treasury Increase in deposits with Increase in bonds held for trading Affected by changes in RMB exchange rate, Increase in scale of placement from Decrease in financial assets sold under agreements Increase in investment in available-for-sale Increase in held-to-maturity investments Affected by changes in RMB exchange rate, the
Increase/ (Decrease)
31 2015 December
31 509 3,929 -87.05 2016 5,622 3,923 43.31 7,834 5,637 38.97 4,950 1,625 204.62 4,368 1,391 214.02 29,947 19,965 50.00 31,316 15,063 107.90 55,560 38,735 43.44 35,720 13,207 170.46 25,339 18,546 36.63 67,000 153,045 -56.22 95,501 60,30541,195 58.36 58,873 -30.03 187,000 14,840 1,160.11 830,354 541,066 53.47 412,500 210,061 96.37 232,630 86,311 169.53 257,500 152,312 69.06 425,131 222,495 91.07 December
Changes in major financial indicators and reasons financial indicators and Changes in major Others
income and other financial institutions held under resale agreements and other financial institutions at fair value through profit or loss derivatives investments and other financial institutions derivatives under repurchase agreements financial assets
Other comprehensive Other equity instrument Deposits from banks Other liabilities Due to the central bank Finance lease receivables Available-for-sale Available-for-sale Other assets Financial assets Financial assets Interests receivable Deposits with banks Item Positive fair value of Debt securities issued Held-to-maturity Deferred tax assets Placements from banks Negative fair value of Financial assets sold
VIII. (I) CHINA EVERBRIGHT BANK 42 1. (IV) 2. 1. (III) During thereportingperiod,Bankdidnotincuranyoverdueandoutstandingdebts. (II) Discussion andAnalysisofOperations Net foreignexchange Net (losses)/gainsarising Net tradinggains Item Other receivables Item Balance ofprovisionforbaddebtinterestsreceivable Item On-balance sheetinterestsreceivable Item Other comprehensive Other netoperating
gains/(losses) securities from investment income, netoftax income
Change inotherreceivables Other receivablesandprovisionforbaddebts Provision forbaddebtofinterestsreceivable Change inon-balancesheetinterestsreceivable Interests receivableandprovisionforbaddebts Overdue andoutstandingdebts
340 ,0 -192.26 3,707 (3,420) 062015 2016 (261) 338 660 223
the beginning of theyear Balance at 2 103.70 324 3 -33.43 335 (72) 3-2,107.69 13 8539,7 62125,376 86,281 93,074 18,583
o plcbeIncreaseinnetforeignexchangegainsdueto Not applicable (Decrease) Increase/
31 December 31 December in theyear
Loss fromdisposalofavailable-for-salebonds Valuation lossesfromavailable-for-saleassets Increase intheoperationofleasingbusiness Increase invaluationlossesfrom Increase bonds heldfortrading the changesofexchangerate advancement ofcustomerrepayment of subsidiariesandincreaseindamagesfor 6,719 2016 2016 37 Major reasonsforchange
31 December 31 December in theyear Decrease ,0 1,518 5,201 05Increase 2015 Increase 2015 37
Unit: RMBmillion Unit: RMBmillion Unit: RMBmillion
Balance at the endof the year
– 2016 Annual Report 22 43 Unit: RMB million
535 2015 Increase 31 December
557 2016 31 December
Small and Micro Enterprise (SME) finance Small and Micro Enterprise (SME) Corporate Banking Corporate deposits and loans Performance of Business Segments Performance Provision for bad debt of other receivables Provision for bad
Item for bad debt of other receivables Balance of provision The Bank explored ways to improve the system and mechanism for SME finance and strengthened its risk the system and mechanism for SME finance and strengthened its risk The Bank explored ways to improve actively and model business the in innovations accelerated It manner. comprehensive a in management finance, The Bank pushed forward innovation of SME products, and developed sci-tech finance and green business credit optimize to continuing while management in expertise professional of level the increased sound and orderly development process for SME clients with a credit line at RMB5 million or below to ensure by the Ministry of Industry and of SME business. According to the criteria for classifying SMEs jointly issued requirements of CBRC, the balance Information Technology and three other ministries in 2011 and regulatory of the reporting period, representing of the Bank’s SME loans amounted to RMB340,970 million as at the end at the end of the previous year. The an increase of RMB52,535 million or 18.21% as compared with that as increase of 77.2 thousand. number of SME clients was 249.9 thousand, representing a year-on-year 2. (I) 1. the growth of core corporate deposits and gradually reduced the The Bank continued to actively promote business strengthened Bank The structures. deposit the optimized significantly which liabilities, of costs comprehensive the upgraded and resources and products banking corporate its integrated coordination, national the implemented actively and target investment credit the optimized and services, financial resources on the national strategic focus areas, major projects and development strategy, focusing the credit the risk management and controlled the total credit exposure the construction of urbanization. It enhanced deposits corporate of balance the period, reporting the of end the at As overcapacity. with industries to deposits), other in portion related business corporate the (including million RMB1,658,846 to amounted million or 7.17%, as compared with that at the end of the previous representing an increase of RMB111,039 Bank’s the of balance The 19.97%. by increased deposits corporate core the above, the Among year. or million RMB158,647 of increase an representing million, RMB1,075,974 to amounted loans corporate end of the previous year. 17.29%, as compared with that at the IX.
2. CHINA EVERBRIGHT BANK 44 The proportionofcoredepositscontinuedtoincrease. accounted forRMB300,300million,upbyRMB33,849 millionor12.70%fromtheendofpreviousyear. 3.59% fromthatasat the endofpreviousyear,among whichthecoredepositsofpersonalbanking the retail business related deposits in other deposits), representing an increase of RMB16,005 million or at theendofreportingperiod,balancepersonal depositsamountedtoRMB462,041million(including transformation projects,whichincreasedboththescale andtheprofitofpersonaldepositsbusiness.As shanty areasandthe urbanization drive, the Bank successfully launched “one-stop service” for shanty area the business operation foundation. Seizing the opportunities of Chinese government’s efforts to transform held some working skill competition to improve standard operations of banking offices, which enhanced banking andtheretailbusinesslinesfrom theutilizationofvariousbusinesschannels.TheBank deposits. It launched some joint projects and achieved synergy from the collaboration between the corporate The Bankactivelyexpandedthecoredepositsofpersonalbankingandcontinuedtooptimizestructure 1. (II) compared withthatattheendoflastyear. balance-sheet and off-balance-sheet trade finance combined (excluding acceptances) increased by 14.81% as achieve asustainableandhealthybusinessgrowth.Attheendofreportingperiod,balanceon- the business background examination and the compliance efforts of foreign exchange business so as to Zones inChina,andwasdeterminedtosetupabank-widefreetradebusinessplatform.Italsostrengthened trade financewhileensuringtheassetquality.ItactivelypromotedbusinessrelatedtoPilotFreeTrade the structure of trade finance business and increased the scale of on-balance-sheet and off-balance-sheet as L/Gwithseparatedapplicantandtheguaranteedfornon-bankinstitutions.TheBankoptimized business and sped up the product innovation by launching some new types of letters of guarantee (L/G), such way byregardingtradefinanceasanintegralpartofcorporatebankingbusiness.Itexpandedtheinternational The Bank enhancedthemarketingandproductpromotion of trade finance business in a bettercoordinated 4. out mergersandacquisitionsinforeignmarkets. of newequity,theacquisitionassetsandundertakingliabilities.TheBankalsosuccessfullycarried Bank’s businessmodecoveredvarioustypesofM&A,includingpurchaseexistingequity,thesubscription of the first credit asset securitization products; increased the marketing efforts of M&A loan business. The and “2016GezhoubaTrustAsset-backedNotes(PhaseI)”,completedtheapplicationforestablishment asset-backed securitiesproduct,“ShanghaiJunchuangLease(PhaseI)”,securitizationprogram securitization business and succeeded in issuing “2016 Wuhan Provident Fund (Phase I)”, mortgage loan of issuing USD bonds for domestic companies in Hong Kong; actively carried out innovation in the asset transportation, constructionandmaterialindustriesetc..TheBankactivelyexpandedthebusiness RMB195,078 millioninaggregate,continuingtosecuretheBank’scomparativeadvantagesservingpower, served as a leading underwriter of 259 non-financial corporate debt financing instruments with a value of The Bankactivelyprovidedawiderangeofdebtfinancingproducts.Duringthereportingperiod, 3. Discussion andAnalysisofOperations
Personal deposits Retail bankingbusiness Trade banking Investment banking 2016 Annual Report 45 the ten areas of people’s daily life such as “medical service, dining, housing, traveling and and traveling housing, dining, service, “medical as such life daily people’s of areas ten the Bank card business Private banking business Personal loan business Debit card business
(1) on Focusing debit its to innovation some made Bank the beauty”, and safety health, entertainment, education, tourism, to travel. The Bank launched card business and continued to promote ETC projects to assist the residents of re-upgrade the and clients payroll the for treatment preferential the achieved which Card Payment the payment platform to achieve the financial service. The Bank set up the “Internet + Medical” innovative mobile accounts. The Bank launched a new online docking mobile payment of health insurance accounts and bank bank card without using password, function with which the client can pay a small amount online through a reporting period, the accumulated providing convenient and secure payment services. As at the end of the 3.95 million new cards issued in number of debit cards issued by the Bank reached 58.46 million, including the year. 4. By regarding the mid-to-high end customers as its strategic target, the Bank sped up the building of wealth of the building up sped Bank the target, its strategic as end customers mid-to-high the regarding By internal through platform product open an up set Bank The business. banking private and management The Bank implemented the customer segmentation, improved customer collaboration and external integration. of differentiated services. The Bank carried out precision marketing experience so as to establish a system and improved the execution of its team. The Bank launched a “Family activities with the support of big data one-stop solutions for the comprehensive needs of private banking Office” private banking business, providing period, the Bank had 28,213 private banking customers, representing clients. As at the end of the reporting 16.34% from that as at the end of the previous year. The total assets an increase of 3,963 customers or RMB29,524 by up million, RMB257,965 to amounted business banking private its of management under end of the previous year. million or 12.92% from that as at the 3. 2. a wide range customer needs and the Bank provided business of the Bank focused on The personal loan residents’ the supported It finance. inclusive of practice a as services quality convenient and products of the of aid the With operation. business and upgrades consumption loans, housing rational for demand which loan, self-service e-channel standard the developed Bank the technology, Internet the and data big the bottom line finance. The Bank strictly defended experience of small-amount consumer provided innovative reporting period, personal loans. As at the end of the maintained a stable quality of its of risk control and an increase of amounted to RMB450,805 million, loans (excluding credit card loans) the balance of personal of personal loans of the previous year. The volume or 27.99% from that as at the end RMB98,597 million from that as at up by RMB68,656 million or 41.57% in 2016 was RMB233,801 million, granted by the Bank the end of the previous year. CHINA EVERBRIGHT BANK The Bank 46 months exceededRMB600million. by insurance.Therelevantloanamount in two the otherwasmicroloanproductsguaranteed based on personal provident fund data and which was an on-line application credit loan provided via “E-Financing” channel, one of China. Two types of consumer loans were open-ended on-line fee payment platform in 230 million.Thisplatformbecamethebiggest the total number of transactions reaching business on “Cloud Payment” platform, with business. There were over 1,000 payment bank had 4.6732 million clients since starting corporate banking clients. The on-line direct million electronic payment customers, 18.5489 million customers for WeChat banking, 358.2 thousand online the Bank had 26.9135 million mobile banking customers, 24.51 million retail e-banking customers, 16.2586 significantly improvedandtheBankreceived20majorindustrialawards.Asatendofreportingperiod, services, fully enhancing customer service capabilities. The brand influence of its e-banking business was the buildingofcorporateandpersonalbusinesschannelsstrengthenedrefinedmanagementintelligent Payment”, “Cloud Payment”, “E-Commerce”, “E-Wealth Management” and “E-Financing”. The Bank enhanced Bank launched,amongothers,themakingof6keybusinesses,namely“SunshineDirectBank”,“CloudFee integration ofinternalandexternalelectronicchannelsadvantagesonlineofflineintegration,the in an innovative way and achieved an overall and rapid development of the whole business. With the In line with the concept of “openness, cooperation and win-win”, the Bank promoted the e-banking business 5. year. Theoverduerateforbillspastdueover180dayswas0.82%,wheretheriskremainedcontrollable. the paymentadjustmenttotransitionalaccount)amountedRMB214,213million,upby22.41%overlast reporting periodwasRMB1,277,387million,upby27.30%overlastyear.Theoverdraftbalance(excluding total numberofcreditcardsreaching35,958.7thousand.Theaccumulatedtransactionsvolumeduringthe As attheendofreportingperiod,7,625.3thousandnewcreditcardswereissuedbyBankwith distribution (Hadoop)integratedplatformformanagingrisktoachieveintelligentandpersonalizedcontrol. the customerbase.Relyingonartificialintelligenceandcloudcomputingtechnology,Bankbuiltabigdata third-party dataresourcesandbigtechnology,theBankcreatedaprecisionmarketingsystemtoexpand upgraded thecreditcardAPPofCEBtoactivelyexpandintomobilefinancebusiness.Withhelp multi-dimensional productsystemunderthe“Internet+”scenarios.Inlinewithconsumerscenarios,Bank enterprises suchasJingdongandYoukutodevelopcross-sectorinnovativecreditcards,inorderbuilda (2) Discussion andAnalysisofOperations
Credit cardbusiness E-banking promoted the development of credit card business development with innovation. It worked with 2016 Annual Report 47 Asset custodian services Asset management Interbank business Financial market business Financial market Financial market and interbank business Financial market
4. strengthening market, “Expanding at targeted was business custodian asset the of development The the Bank’s insurance fund investment innovation and enhancing service”. With continuous efforts in marketing, also Bank The China. in banks commercial joint-stock the among forefront ranked was business custody business custody, private equity extended its product line by starting services such as entrusted investment an build to upgraded was system custody of generation new A business. outsourcing and custody funds service capabilities. As at the end of automated and intelligent custody business platform and enhance market amounted to RMB1,507 million the reporting period, the income generated from the Bank’s custody business compared to the previous year, and the custody assets reached RMB4,432,619 million, increasing by 31.45% reaching a record high. 3. professionalism, of level the enhance to business management asset the in efforts made has Bank The Wealth investment. increase to opportunity the grasping and allocation, asset of ability the strengthening thanks to the Bank’s persistent work in innovations of business management products were better diversified a The Bank continued to promote IT system construction and launched and optimization of its asset portfolio. The Bank improved the risk management system, actively promoted full functional asset management system. business growth. As at the end of the reporting period, the balance divisional reform and achieved a steady to RMB1.36 trillion, up by 11.48% from that as at the end of the of wealth management products amounted year amounted to RMB3.95 trillion, previous year. The issuance of wealth management products for the whole year. All products under “Sunshine up by RMB0.87 trillion or 28.25% from that as at the end of the previous of outstanding wealth management Wealth Management” brand were honored upon maturity, while the risk products was at a normal level. Taking risk management and liquidity safety as top priority, the Bank adjusted its product structure and and structure product its adjusted Bank the priority, top as safety liquidity and management risk Taking to steadily develop its interbank business. It promoted product innovationstrengthened its refined management interbank products. The Bank also continued to work with other banks and further enriched the variety of vigorously expanded cooperation with non-banking financial institutions. in assets and liabilities business and business was strictly implemented in order to achieve the compliant and The licensed operation for interbank the end of the reporting period, the balance of the interbank deposits orderly business development. As at of interbank assets amounted to RMB1,053,613 million. was RMB830,354 million and the balance 2. 1. CDs. interbank issued actively and management treasury in capacities its strengthened continuously Bank The The Bank has and improved its fiduciary business. expanded precious metal sector The Bank has steadily portfolio by effectively and strengthened its investment in the credit bond risk control reformed its capacities balance of bonds bonds. As at the end of 2016, the bonds and high-grade credit investing in the government total assets, accounting for 12.07% of the Bank’s amounted to RMB485.024 billion, in proprietary account has cumulatively bonds. In 2016 the Bank were government bonds and local government 54.18% of which banks (by ranked No. 2 among joint-stock commercial in RMB bonds settlement, which was scored 21.31 trillion Co., Ltd.). China Central Depository & Clearing (III) CHINA EVERBRIGHT BANK 48 and positioning” works of the Head Office, improving the organizational performance appraisal system optimization ofstaffgrading systemreformandthe“clarificationofjobdescription, personnelallocation reserves ofvarioustypes talentsandconstantlyconsolidatedthebasisoftalents. TheBankpromotedthe and performed functions of supervising the cadres. The Bank increased efforts in the introduction and established and improved the long-term mechanism, strengthened the building of the contingent of cadres The Bankhasthoroughlyimplemented therequirementsofreformbanking systemandmechanism, XII. from theMinistryofIndustryandInformationTechnology andtheCBRC. wining thefirstprizeandtwoprojectssecond prize.Anumberofprojectsalsowonmajorawards achievements inthePeople’sBankofChinaScience and TechnologyDevelopmentAwardwithoneproject System, HealthInsuranceMobilePaymentPlatformand StaffPalmPilot.In2016,theBankmadeoutstanding innovation mechanism, launching innovative projects such as the Face Recognition System, CEB Insight and CharityDonationPlatform.TheBankactivelycarried outtheconstructionofscientificandtechnological the Intermediary Business Cloud Platform, Cash Management Cloud System, Big Data Application System continuously explored,suchascloudcomputing,big data, blockchain,basedonwhichtheBankconstructed Management SystemandCross-borderInterbankPaymentSystem.Theapplicationofnewtechnologieswas Overseas Innovative Banking System, Overseas Trading & Finance System, phase II of Sunshine Asset Trusteeship System,CustomerLineManagementMobilePaymentInternetFinancing The Bank successively completed the construction of the following systems, including the New Fund ranking thetopofjoint-stockcommercialbanksinCBRCInformationSupervisionRating. The Bank’s operation remained safe and sound with no material accidents occurred throughout the year, XI. for innovation. direct bank.Duringthereportingperiod,Bankwonanumberofawards government cooperation. The Bank also upgraded “Sunshine Bank”, a electronic businessplatformattheprovinciallevelunderamodeofbank- an on-linewealthmanagementproductand“YunnanGoujingcai”,thefirst residents. Intermsofinternetfinance,theBanklaunched“E-Crowd-funding”, service” forshantytowntransformation,withasizeofrelocation100,000 on anagentbasis.Itsuccessfullylaunchedthebusinessmodelof“one-stop model, featuringtheelectronic,intelligentandautomatedsalesofproducts banking clients. It provides an innovative intelligence distribution service providing one-stop solutions for the comprehensive needs of private terms ofretailbanking,itlauncheda“FamilyOffice”privatebankbusiness, which was the first deal in 2016 in the interbank market of China. In Housing ProvidentFund”(PhaseI),mortgageloanasset-backedsecurities, services. As the main underwriter, the Bank successfully issued “Wuhan leasing, capital and other services to enhance the comprehensive financial traditional credit and capital management, interbank, investment banking, financing. Thecorporatebankingbusinesslinepromotedtheintegrationof key businesssectorssuchascorporatebanking,retailandInternet The Bankvigorouslypromotedtheinnovationofproductsandservicesin X. Discussion andAnalysisofOperations
Human ResourcesManagement Information Technology Business Innovation 2016 Annual Report
49
Shaoshan City Construction Investment Company Limited Co., Ltd. Construction and Investment Development Group Co., Ltd., Wuhan Rail Transit Construction Co., Ltd. Changsha Tongcheng Holding Co., Ltd., Hunan Poly Real Estate Development Co., Ltd., Garment Co., Ltd., Huai’an Shuanglong Weiye Technology Co., Ltd., Jiangsu Taihua Pharmaceutical Company Limited, Nanjing Mengdu Tobacco Packing Nil Wuhan New Harbor Sany Group Co., Ltd., Jiangsu East Golden Fox Other commercial banks
the 573 million period Partner Loss in Profit or reporting duration Long-term HK$-39.38 Long-term 53,813 Long-term 1,069 Long-term Long-term 550,000 Investment
Equity Fund Source of fund Equity Fund Equity Fund Equity Fund Equity Fund
Unit: RMB ten thousand, ten thousand shares, % Unit: RMB ten thousand, ten thousand 90 70 70 100 2.56 percentage Shareholding
– Shares Number of
7,000 7,000 9,750 7,500 10,500 10,500 270,000 333,000 Amount Investment
information exchange network Financial leasing Commercial bank Commercial bank Investment banking HK$600 million Bank card interbank
the end of the reporting period, the balance of the Bank’s long-term long-term Bank’s the of balance the period, reporting the of end the The above equity investments are not subject to any litigation. equity investment was RMB3,369 million, which was on a par with that of the equity investment was RMB3,369 previous year. Material equity investments As at As Investment Analysis
Leasing Co., Ltd. Village Bank Co., Ltd. Everbright Village Bank Co., Ltd. Investment Co., Ltd. Co., Ltd.
) Investment entityEverbright Financial business Principle Jiangsu Huai’an CEB International China UnionPay Shaoshan Everbright Note:
(II) XIII. (I and individual performance appraisal, as well as enhancing the effectiveness of the assessment incentive incentive assessment the of effectiveness the enhancing as well as appraisal, performance individual and welfare together costs, optimized the remuneration and reasonably allocated personnel mechanism. The Bank and carried out in a systematic and normative way It enhanced the training system with other basic systems. It continuously developing new training channels. with focus and at all levels, actively various types of training resources in strengthening the key section of human of assigned personnel, strengthened the management healthy development of business. order to promote the CHINA EVERBRIGHT BANK 50 million, respectively. reporting period, its total assets, net assets, net profit were RMB775 million, RMB112 million, RMB5.73 rural areas and, developed its micro finance business which achievedsteady growth. As atthe end of the of RMB100million.Duringthereportingperiod,village bankcontinuedtoservefarmers,agricultureand commercial banking services. It was registered in Huai’an City, Jiangsu Province with a registered capital The village bank was established in February 2013 and engaged in deposit-taking, lending and other (III) million, RMB194RMB10.69respectively. and services. As at the end of the reporting period, its total assets, net assets, net profit were RMB860 county leveleconomybyexploringwaysofsupportingruraleconomicdevelopmentwithitsfinancialproducts agriculture and rural areas and developed its micro finance business, which helped support the growth of of RMB150million.Duringthereportingperiod,villagebankcontinuedtoworkhardservefarmers, commercial banking services. It was registered in Shaoshan City, Hunan Province with a registered capital The village bank was established in September 2009 and engaged in deposit-taking, lending and other (II) RMB538 million,respectively. the reportingperiod,itstotalassets,netassetsandprofitwereRMB64,547million,RMB5,209million exploration oftheleasingbusinessintransportation,tourism,andmedicinehealthcare.Asatend public utilitymanagement,andtransportation,therapiddevelopmentofaircraftleasingbusiness,positive period, the company was mainly engaged in financial leasing business in relation to water, environment, registered inWuhanCity, Hubei Provincewith a registeredcapitalofRMB3,700million.Duringthereporting The company was established in May 2010 and engaged in financial leasing business. The company was (I) XIV. ordinary courseofitsbusiness.Pleasereferto“NotestheConsolidatedFinancialStatements”fordetails. The Bankhelddomesticandoverseasbondsfinancialderivativeinstrumentsmeasuredatfairvalueinthe (IV) (III) Discussion andAnalysisofOperations XV.
Jiangsu Huai’anEverbrightVillageBankCo., Ltd. Shaoshan EverbrightVillageBankCo.,Ltd. Everbright FinancialLeasingCo.,Ltd. Analysis ofMajorCompaniesinWhichtheBankHeldEquity During the Financial assetsatfairvalueduringthereportingperiod aforementioned fordetails. bond investmentintheordinarycourseofitsbusinesses.Pleasereferto The Bank had no material non-equity investment, and the Bank conducted interest oftheBank. reporting period, there was no material disposal of equity 2016 Annual Report 51 products whose equities are held by the Group but not not but Group the by held are equities whose products Special Purpose Entities Controlled by the Bank and Structured Products Entities Controlled by the Special Purpose entities controlled by the Bank. There are no special purpose structured The special include mainly statements financial consolidated the in recognized refer to “Notes to the Consolidated Financial asset management plans. Please Statements” for details. CEB International Investment Corporation Limited. Investment Corporation CEB International Risk Management Credit Risk Management
I) To continuously improve the overall risk management framework and optimize the risk management scheme, risk management framework and optimize the risk management scheme, To continuously improve the overall in business, risk management and internal audit on the principle of “fullthe Bank established three lines of defense and improved credit approval efficiency by implementing a “One-stop”range, whole process and all staff control”, clients group key the of Management Credit risks. general with business credit corporate for process approval Strategic Corporate Banking Department at the headquarter. Mechanism was strengthened by establishing a and treasury business, market, financial interbank management, asset in decision-making investment for to support the development of “Large-Assets” business. Credit investment banking business were improved tightened, was business credit the of sectors key over control operation, into put was System Alert Risk were formalities underwriting signed and receipts tax of inspection collaterals, of registration centralized management credit corporate the of operation the on conducted was evaluation Comprehensive tightened. system. dynamically and orientation, policy credit through structure credit optimize to efforts no spared Bank The projects, by vigorously increasing adjust credit policies on China’s Three Main Strategies and key development as well as public utility sectors to loans to public management, highway, railway, urbanization construction selective a on portfolio readjusting credit in progress made Bank The projects. PPP of finance the support overcapacity, and exercised limit basis, continued to reduce credit granted to industries plagued with massive control over loans issued to enterprises in the commodity wholesale sector. incentive and assessment the and improved was quality asset of system management all-round The reviewed were policies meanwhile, the In loans. overdue recover to order in optimized were mechanisms the strengthened also Bank The loans. non-performing of conversion and restructuring the promoting for mitigating risks, while introducing recovery of non-performing loans and overdue loans, and stepped up efforts diversified channels for bad-loan disposal. details on credit risk management Please refer to “Notes to the Consolidated Financial Statements” for more of the Bank. XVII. XVI. (I) (I The company was established in June 2015 and licensed in securities trading, securities consulting, financial in securities trading, securities established in June 2015 and licensed The company was of capital registered a with Kong Hong in registered was It business. management asset and consulting banking business focused on developing investment the reporting period, the company HKD600 million. During period, its total As at the end of the reporting in the stock and bond market. to raise fund for customers reporting period, million, respectively. During the were HKD2,883 million and HKD519 assets and net assets million. its net loss was HKD39.38 (IV) (I) CHINA EVERBRIGHT BANK 52 the Bank. Please referto“Notesthe FinancialStatements”forfurtherdetailsoftheoperational riskmanagementof standardization ofthecounter business. management inthecounterbusiness,Bankpromoted theuseofelectronicsealsandaccomplished improve the standard of internal control and management. To enhance the standards of operational risk reorganized by formulating the Thirty-Sixth Article on the Internal Control of Sub-branches and Outlets the authorizationofcounterbusinessandon-spotcheck ofunusualbehaviourthestaff.Keypointswere unusual fund transactions by staff and clients and conducting special inspection of the standardization in risks and incidents. On-site and off-site inspections were strengthened by optimizing the alert models of a timelywarning,reminding,reportingandhandlingsystem topreventtheoccurrenceofmaterialoperational Risk Index(KRI)andthresholdvalue,improvingthepertinence andsensitivenessofindexes,settingup operational LDC (Loss Data Collection) reporting standards, re-checking history loss events, re-setting Key The Bankcontinuouslyimproveditsoperationalriskmanagement frameworkandsystembyestablishingnew (4) management oftheBank. Please refer to the “Notes to the Consolidated Financial Statements” for further details of market risk information anditsriskmeasuringcapabilities. the buildingofMarketRiskMeteringEngineinaimenhancingitsabilitiesintegratingmarketrisks market risklimitsmanagement.ItmanagedtolaunchtheDataMarketofRiskandpushedforward financial business,preciousmetaltrading,investmentbankingandoverseasbranchesintoofthescheme market risk. It also strengthened the risk limit management, incorporating treasury management, interbank dynamic monitoring on limits of interest rate risk and exchange rate risk as well as regular stress tests on conversion between market risk, liquidity risk and credit risk was fully concerned. The Bank carried out market risk management. The risk predictions on interest rate and exchange rate was enhanced and, mutual optimized the decision-making mechanism for market-oriented business investment and the procedures of The Bankcontinuedtoimproveitsmarketriskmanagementmechanism,updatedpolicies,and (3) of theBank. Please referto“NotestheConsolidatedFinancialStatements”forfurtherdetailsofliquidityriskmanagement was setuptostrengthenthecapabilitiesofmitigatingliquidityrisks. Renminbi and foreign currencies. Liquidity risk awareness was enhanced and an emergency drilling mechanism evaluated totakecareofthedomesticandoverseasliquidityriskson/off-balancesheetconvertedboth sources andfilledtheBank’sliquiditygap.Liquidityriskpointsofnewproductsbusinesseswerefully and coordinationinbusinessstructures.Liabilitychannelswerediversifiedtoenhancethestabilityofcapital stress testingwereexercised.Internalfundtransferpricingwasadjustedtoachieveforward-lookingorientation to make preventative arrangements in advance. Daily monitoring of liquidity risk limits and periodic liquidity The BankalsopaidcloseattentiontochangeinCentralBank’smonetarypoliciesandcapitalmarket management indicatorsmaintainedwithinareasonablerangeandthemarketrisklimitstolerablelevel. The Bank insisted on a prudent and stable attitude towards theliquidityriskmanagement policy with therisk (2) Discussion andAnalysisofOperations
Operational RiskManagement Market RiskManagement Liquidity RiskManagement to to 2016 Annual Report 53 Anti-money Laundering (AML) Management Anti-money Laundering (AML) Reputation Risk Management Compliance Risk Management Compliance Risk Outlook of the Bank Competitive landscape and development trend of the industry
Chinese banking industry will push forward its transformation, strengthen financial services for key areas areas key for services financial strengthen transformation, its forward push will industry banking Chinese also will They economy. real the serve and reform structural supply-side the support society, economic in prevent and mitigate various risks and defend the bottom line of asset quality. XVIII. (7) anti-money on guidance the improving by system control internal of construction the reinforced Bank The monitoring transaction of lots established and system laundering anti-money new the launched laundering; diligence due enhanced products; financial of risk laundering money the assessed constantly models; and timely reported block and suspicious transaction data to authorities necessary for high risk customers; to the authorities’ requirements. and carried out investigations according (6) Bank the system, management risk all-round of part integral important an as risk reputation Regarding risk monitoring, pre-warning and emergency response to continuously optimized the mechanism of reputation level. By means of training, emergency drilling and risk sorting, the Bank improve management capacities and the foundation of relevant work. It took numerous reputation fostered a strong staff team and consolidated product design, business conducting and customer service. risk factors into full account concerning of services and management was promoted to better maintain the Through regular noise analysis, optimization Bank’s reputation and image. The Bank, through the implementation and integration of internal control and operational risk management, of internal control and operational the implementation and integration The Bank, through regulation and laws judicial external improve to continued It efficiency. management the improved further The branches. and departments business of operation compliance for support provided and database strictly comply with in outlets was established to of sale of wealth management products publication system inspection Compliance selling. product illegal prevent practically and Record” “Dual of requirement CBRC’s the the promote and areas weak and key of inspection the strengthen to exercised also were auditing and to enhance managers was further strengthened of problems. Team building of compliance effective rectification capacities of institutions. compliance risk management (5) (I) CHINA EVERBRIGHT BANK 54 realize sustainabledevelopment. stress scenario in order to smooth the influence of economic fluctuation and regulatory changes so as to will implementcounter-cyclicalcapitalmanagementand increasethescaleofreservecapitalunderamedium endogenous type of capital replenishment mechanism and expand external replenishment channels. The Bank optimize the scale and structure of available capital, draw up a capital replenish plan, strengthen the development, and carry out regular review in accordance with the business development. The Bank will management policybasedontheBank’sfinancialbudget, strategicplanningandexpectationoneconomic The Bank will continue to improve the capital management system, formulate capital plans and capital (IV) operating planandperformancecommitment. the Banktoinvestors,whoshallmaintainsufficientriskawarenessandunderstanddiscrepancybetween environment andregulatorypolicies.Thisoperatingplandoesnotconstituteaperformancecommitmentof strive toachievealoangrowthofapproximately15%,ifthereisnosignificantchangeinthecurrentoperating sound andcontinuousdevelopmentoftheBankwithbottomlinesecuritycompliance.Thewill management of interest margin and spread to enhance the comprehensive profitability, and will ensure a improvement and expand multiply liabilities sources. By focusing on income growth, it will strength the the premiseofcapitalcontrol.TheBankwillpromotegrowthcoredepositsonbasisliquidity In 2017, the Bank will maintain a steady growth of business scale and optimize its business structure on (III) the developmenttrendofinternetfinance. to improvethestandardofintelligentdevelopmentandcreate“CEBinCyberspace”orderadapt promoting adjustmentsinbusinessstructureordertodevelopitselfintoacapital-savingbank.Fourthly,itis potential andparticipateindifferentiatedcompetition.Thirdly,itistostartwithlightassetsoutlets flexible and marketized mechanism to consolidate, enhance existing advantages, strengthen development provider, transforming from a financial agency to a service agency. Secondly, it is to introduce a more secondary non-banking financial businesses and build itself into a leading comprehensive financial services the Bankintendstodevelopacomprehensivefinancialservicesplatformwithprimarybankingbusinessesand corporate banking, retail banking and financialmarketbusiness.Firstly,by coordinating clients’financial needs, and channelsinordertoachievetheharmoniousdevelopmentofthreemajorbusinesssectors,namely will speedupitsstrategictransformation,adjustandoptimizethestructureofclientbase,business,profits Adhering tothedevelopmentconceptsof“Innovation,Harmony,Green,OpennessandSharing”,Bank shareholders. active market participation, outstanding features” in an aim to create greater values for its clients and national joint-stock commercial banks with “scientific management mechanism, extraordinary performance, The Bankwillinsistonreformandinnovation,progresssteadily,strivetodevelopitselfintoafirstclass (II) Discussion andAnalysisofOperations
Capital demandplan Operating plan Development strategyoftheBank 2016 Annual Report 55 Potential risks and counter measures Potential risks
In 2017, Chinese banking industry will mainly face the following risks: internationally, world economic growth following risks: internationally, world banking industry will mainly face the In 2017, Chinese spill-over their and economies major of policies the about uncertainties many are there sluggish, remains the internet stage in its own development endeavors, China is at a crucial and challenging effect. Domestically, environment, the In such a complicated operating growth needs to be strengthened. forces driving economic challenges growing, and the Bank is facing increasing on commercial banks is obviously credit risk pressure operational risk. of liquidity risk, market risk and towards its management will Bank the stable, performance keeping while progress making of principle underlying the to Committed and firmly, risk of line bottom the up hold development, of efficiency and quality the improving on focus and internal control. Priorities will be given to the following works: strengthen comprehensive risk management business development of the business through a comprehensive risk firstly, to promote sustainable and sound risk the optimize to continuously secondly, system; management risk sound framework and a management credit new the tighten and management, post-loan and approval loan consolidate further system, approval mitigation structure, strength the loan collection and risk mitigation and issuance; thirdly, to adjust the risk quality. ensure a steady improvement of asset (V) CHINA EVERBRIGHT BANK 5. 4. 2. 56 The aboveprofitdistributionplanissubjecttotheapproval bythe2016AnnualGeneralMeetingofBank. 6. 3. 1. 2016 isproposedasfollows: accordance withrelevantrequirementsoftheArticlesAssociationBank,profitdistributionplanfor People’s Republic of China, Securities Law of the People’sRepublicofChinaand other provisionsandin and therequirementof regulatory authorities on capital adequacy ratio,pursuantto Taking into consideration the interests of all shareholders, sustainable development of the Bank’s business (II) profit oftheyearifbothforandaccumulatedundistributedarepositive. special situations,theprofittobedistributedincasheachyearshallnolessthan10%ofdistributable the ArticlesofAssociationBank,Bankshallprioritizecashdividendsinprofitdistribution.Exceptfor In accordancewiththeprofitdistributionprinciple,specificpoliciesandprocedureofconsiderationstipulatedin (I) I. Significant Events
the AnnualGeneralMeetingofBank(inclusivedategeneralmeeting). against Hong Kong Dollar as published by thePeople’s Bank of China one week preceding the date of distribution amountinHongKongDollarisbasedontheaveragebenchmarkexchangerateofRenminbi to shareholders of H shares in Hong Kong Dollar. The exchange rate for the calculation of actual and declared in Renminbi, and distributed to shareholders of A shares in Renminbi, and distributed thousand, tobedistributedallexistingordinaryshareholders.Thecashdividendswilldenominated A cash 2016. A dividendofRMB1,060,000.0thousandwhichwasdistributedtopreferenceshareholderson27June RMB10 Company’s levelin2016,tobeappropriatedthestatutorysurplusreservefund. RMB2,986,862.2 thousandwhichamountsto10%ofRMB29,868,621.8thousand,thenetprofitat adequacy ratios. Retained profits No capitalreserveshallbecapitalizedintoshare oftheCompanyfor2016. relevant requirementsoftheMinistryFinance. The profitdistributionplanfortheyear Profit distributionpolicy Formulation andImplementationofProfitDistributionPolicy ,361,403.2 thousand to be appropriated to the general reserve in 2016 in accordance with dividend of RMB0.98 (before tax) per 10 shares, amounting to an aggregate of RMB4,574,551.3 to be used for replenishing capital to meet the regulatory requirements of capital the CompanyLaw of the 2016 Annual Report 57 2014 30.06
Unit: RMB million, % 2015 30.04
2016 15.63 4,574.55 8,869.03 8,682.31
and Performance of Undertakings Given by the the by Given Undertakings of Performance and Bank and the Bank’s Actual Controllers, Controlling Shareholders or other Bank and the Bank’s Actual Related Parties of the Bank Important Undertakings Important Profit distribution of ordinary shares and cash dividend for the last three years Profit distribution of ordinary (including the Reporting Period) According to the initial Plan for Non-public Issuance of Domestic Preference Shares, Everbright Group, According to the initial Plan for Non-public Issuance of Domestic Preference the of inquiry the in participate not would it that undertook Bank, the of shareholder substantial the determined by the Bank and coupon rate of preference shares and would accept the coupon rate finally and requirements of the sponsor institutions (the lead underwriters) in accordance with the procedures issuance of the second tranche of the issuance of the 2016, the Bank completed the August CSRC. In 100,000,000 shares, of which, 10 million shares issued was shares Preference Shares. The number of Shares, Preference the of issuance the of process the During Group. Everbright by subscribed were Everbright Group did not violate the aforementioned undertaking.
ordinary shares of the listed company
Item Cash dividend Proportion to net profit attributable to holders of Proportion to net profit attributable to (I) II.
For 2016, the Bank intended to distribute a cash dividend of RMB0.98 (before tax) per 10 shares to all all to shares 10 per tax) (before RMB0.98 of dividend cash a distribute to intended Bank the 2016, For Bank the 2015, For reserves. capital of capitalization the implement not will and shareholders ordinary not did and shareholders ordinary all to shares 10 per tax) (before RMB1.90 of dividend cash a distributed RMB1.86 dividend of a cash distributed Bank the For 2014, of capital reserves. capitalization any implement capital of capitalization any implement not did and shareholders ordinary all to shares 10 per tax) (before reserves. (III) The profit distribution plan for the year did not make any adjustment or amendments to the existing cash any adjustment or amendments to plan for the year did not make The profit distribution of the Bank, complied with the Articles of Association the Bank. The profit distribution plan dividend policy of decision- complete and distribution dividend for proportion and standards definite and clear defines which and discussed Supervisors of Board the and Directors of Board The mechanism. and procedures making their duties to Non-Executive Directors performed distribution plan and the Independent considered the profit opinions on the shareholders and issued independent interests of medium and small safeguard the legitimate the Annual General distribution plan will be subject to distribution plan. The above profit rationality of the profit will including medium and small shareholders ordinary shareholders all of the where of Shareholders Meeting of the Bank shall The Annual General Meeting and express their views and demands. be able to participate profit distribution small shareholders in relation to the when the votes of medium and open the online voting, fully protect the lawful rights of medium and small shareholders. plan will be counted separately as to CHINA EVERBRIGHT BANK 58 (II) Significant Events Bank andtheBank’sshareholders, Directors,Supervisors,SeniorManagementor other relatedparties. As farastheBankisaware, otherthantheabovematters,thereisnomaterial undertakingsgivenbythe had beennoviolationofthe undertakingabovebytheDirectorsandSeniorManagement oftheBank. On 17March2017,theBank madeapublicissuanceofASharesconvertiblebonds ofRMB30billion.There 5. 4. 3. 2. 1. (IV) (III)
for thereturn. under theintendedequityincentiveschemeshallbelinked totheimplementationofremedymeasures If theBanklaunchesanyequityincentiveschemein the future,conditionsforexercisingitsrights implementation ofremedymeasuresforthereturnby Bank; The remunerationsystemformulatedbytheBoardor RemunerationCommitteeshallbelinkedtothe the performanceoftheirduties; The assetsoftheBankshallneverbeutilizedinanyinvestment orconsumptionactivitiesirrelevantwith consumption andextravagancewaste; with the They shallbethrifty,theirworkduty-relatedconsumptionunderrestrictioninstrictcompliance jeopardize theinterestsofBankbyothermeans; No interestsshallbetransferredto following commitments: their duties,safeguardthelegitimaterightsandinterestsofBankallshareholders,made all directors and senior management officers of the Bank promised to faithfully and diligently perform effectively implementremedymeasuresinrelationtotheproposedpublicissuanceofconvertiblebonds, Pursuant totherelevantprovisionsofChinaSecuritiesRegulatoryCommission,ensureBankshall reporting period,therewasnobreachofundertakingsgivenbyCHI. undertaking. CHI’s undertaking in this regard is effective fora permanent term.Asat the end of the in banksandotherfinancialinstitutions,thebusinessofcompaniesunderCHIisnotobligatedwiththis However, sinceCHIhasbeentheinvestmentarmofChinesegovernmentspecializedininvesting or actual controller of the Bank, CHI shall not be engaged in competitive business with the Bank. CHI, asubstantialshareholderoftheBank,undertookthataslongCHIiscontrolling representing 29.16%ofthetotalissuedordinarysharesBank. 13,355,232,402 A shares and 256,595,000 H shares of the Bank, in total 13,611,827,402 shares, million. Uponthecompletionof the increase of shareholding,EverbrightGroupandits subsidiaries held Bank intotal,representing0.28%ofthetotalissuedordinarysharesBank,equalingtoRMB497 2016, EverbrightGroupactuallyincreaseditsholdingby129,143,382Asharesand0Hofthe would belowerthan30%ofthetotalissuedordinarysharesBank.From15JulytoOctober such increase, the aggregated percentage of shareholding by Everbright Group and its subsidiaries number ofsharestheincreasewastobenolessthan10millionshares.Uponcompletion increase the shareholding in the Bankwhen appropriate within three months since15 July 2016. The During the Reporting Period, Everbright Group, the substantial shareholder of the Bank, undertook to relevant requirements at the national, local and the Bank level, and refrain from over- other entities or individualsforfreein an unfairway,andnot to 2016 Annual Report 59 Reserve Application of New Auditing Standards Changes in Accounting Policies Use of Capital by the Controlling Shareholders or Other Related Parties of Use of Capital by the Controlling Purposes the Bank for Non-operating Major Customers Pre-emptive Rights Retirement and Benefits Purchase, Sale or Repurchase of the Bank’s Listed Securities or Repurchase of the Bank’s Purchase, Sale Fixed Assets
XI. 2017, for details about the “KeyThe Bank has adopted the new auditing and reporting standards since 1 January Young Hua Ming LLP. Audit Matters”, please refer to the financial audit report issued by Ernst & X. policies. During the reporting period, the Bank did not have any changes in its accounting During the reporting period, revenue generated from the top 5 major customers of the Bank did not exceed generated from the top 5 major customers of the Bank did not exceed During the reporting period, revenue other operating income. 30% of the Bank’s interest income and IX. related other or shareholders controlling by used was Bank the of capital no period, reporting the During a special audit opinion. parties for non-operating purposes. Ernst & Young Hua Ming LLP has issued Please refer to “Notes to Financial Statements” for details about the retirement benefits provided by the Bank for details about the retirement benefits provided by the Bank Please refer to “Notes to Financial Statements” to its employees. VIII. VI. do not provide on pre-emptive rights, and shareholders of the Bank The Articles of Association of the Bank right. have not been granted any pre-emptive VII. V. listed any repurchase or sell purchase, not did subsidiaries its and Bank the period, reporting the During securities of the Bank. Please refer to “Consolidated Statement of Changes in Equity” for details about reserve change of the Bank. Equity” for details about reserve change Statement of Changes in Please refer to “Consolidated IV. the of assets fixed in change the about details for Bank the of Statements” Financial to “Notes to refer Please of the reporting period. Bank as at the end III. CHINA EVERBRIGHT BANK 60 stock ownershipplan. As attheendofreportingperiod,Bankdidnot implement anystockincentiveplanandtheemployee XVII. with effectivecourtjudgmentsorrepaysignificantmatured debts. During thereportingperiod,Bank,controllingshareholders andactualcontrollersdidnotfailtocomply XVI. regulatory body. by anystockexchange,orpenaltywithsignificantimpactontheBank’soperationimposedother proceedings, investigation, administrative penalty or circulation of criticism by the CSRC, or public censure measures by judicial authorities or disciplinary departments, transferal to judicial authorities, criminal shareholders andactual controllers was subject to any investigation by competentauthorities, any mandatory During the reporting period, none of the Bank, its Directors, Supervisors, Senior Management, controlling XV. During thereportingperiod,Bankwasnotinvolvedinanymateriallitigationorarbitration. XIV. During thereportingperiod,nobankruptcyorreorganizationtookplaceinBank. XIII. Young HuaMingLLPwasRMB0.60million(inclusiveofreimbursementandvalue-addedtax). at theFirstExtraordinaryGeneralMeetingofShareholders2015andauditingfeepayabletoErnst& On 19November2015,Ernst&YoungHuaMingLLPwasapprovedastheinternalcontrolauditorof2016 (II) value-added tax).Thelengthoftheirservicetermsis1year. signatories fortheauditreport.TheauditingfeepayablewasRMB6.23million(inclusiveofreimbursementand overseas auditors for 2016 respectively. Leung Shing Kit and Gu Jun (domestic only) were the authorized which Ernst & Young Hua Ming LLP and Ernst & Young were appointed by the Bank as the domestic and On 19November2015,theBankheldFirstExtraordinaryGeneralMeetingofShareholdersin (I) XII. Significant Events
Plan Implementation of Credibility oftheBank,ControllingShareholders andActualControllers Management, ControllingShareholdersandtheActualControllers Penalty ImposedontheBankandBank’sDirectors,Supervisors,Senior Material LitigationandArbitrationMatters Matters ConcerningBankruptcyorReorganization Appointment ofInternalControlAuditor Appointment ofauditorsforauditingtheannualfinancialstatements2016 Appointment andResignationofAccountingFirm Stock Incentive Plan and Employee Stock Ownership 2016 Annual Report 61 Exempted connected transactions Everbright Group’s subscription of domestic preference shares subscription of domestic preference Everbright Group’s Non-exempt connected transactions Non-exempt connected Matters Concerning Connected Transactions of the Bank under Hong Kong of the Bank under Hong Connected Transactions Matters Concerning Listing Rules
(II) into between the Bank and its During the reporting period, a series of connected transactions were entered Hong the of 14A Chapter to Pursuant Bank. the of business of course ordinary the in persons connected announcement review, annual reporting, from exempted were transactions connected such Rules, Listing Kong and independent shareholders’ approval requirements. 1. an into entered Bank the Bank, the of Directors of Board the by approved as 2014, October 31 On connected the announced and Group Everbright with shares preference for subscription of agreement Transaction”), under which Everbright Group proposed to subscribe transaction with Everbright Group (“the shares to be issued by the Bank, the details of which were set out in for part of the domestic preference of Domestic October 2014 on “Connected Transaction – Subscription the Bank’s announcement dated 31 person of the Bank, . Since Everbright Group is a connected Preference Shares by Controlling Shareholder” transaction of the Bank and was subject to reporting, announcement the transaction constituted a connected Rules. Listing Kong Hong the of 14A Chapter under requirements approval shareholders’ independent and resolution ordinary of way by shareholders independent the by passed and to proposed was Transaction The Meeting of the Bank on 23 December 2014. As at the date of this at the 2014 Third Extraordinary General regulatory authorities (CBRC and CSRC) had approved the issuance of report, the relevant government and the issuance of the first tranche of 200 million preference shares was the domestic preference shares and for the first tranche did not include any connected person of the completed on 2 July 2015. The subscribers Bank. the issuance of domestic preference shares granted at the 2014 Third The original specific mandate regarding Bank had expired in December 2015. In order to carry out the issuance Extraordinary General Meeting of the preference shares pursuant to the preference shares issuance plan of subsequent tranches of the domestic was passed by the Board of Directors of the Bank and then was as well as the Transaction, a resolution relevant and Meeting General Annual 2015 the both at shareholders independent Bank’s the by approved the to re-granted was mandate specific The 2016. June 29 on Bank the of meetings shareholders’ class domestic of tranches subsequent the of issuance the to relating matters all handle to Directors of Board to the principles as considered preference shares individually or jointly within the framework and according shareholders’ meetings. The validity and approved by the shareholders’ general meeting and relevant class effective date of the shareholders’ period of the specific mandate shall be 12 months commencing from the announcement dated 29 March resolutions. The details of the specific mandate were set out in the Bank’s . The Issuance” Shares Preference Domestic the Concerning Mandate Specific the of “Re-grant on 2016 Transaction was completed in August 2016. In accordance with the Hong Kong Listing Rules, the transactions between the Bank and its connected connected its and Bank the between transactions the Rules, Listing Kong Hong the with accordance In Bank The Bank. the of transactions connected constitute Rules) Listing Kong Hong the in defined (as persons Rules. accordance with the Hong Kong Listing these connected transactions in monitors and manages (I) XVIII. CHINA EVERBRIGHT BANK (I 62 the above-mentionedregulationstookplaceinBank. guarantee businessbyon-siteandoff-siteinspections. Duringthereportingperiod,nobusinessinviolationof management measures and operating procedures, and effectively monitored and prevented risks in the Attaching importancetotheriskmanagementofguaranteebusiness,Bankformulatedspecificbusiness balance oftheguaranteebusinessBank,pleasereferto“NotesFinancialStatements”. Central Sub-Branchof the People’sBank of China for agriculture loan refinancing. Save as disclosed,for the Huai’an EverbrightVillageBankCo.,Ltd.,asubsidiaryoftheBank,forlatter’sapplicationwith million shares of a large securities firm. The Bank agreed to provide a guarantee of RMB70 million to Jiangsu financial bonds issued by Everbright Group, and Everbright Group provided counter guarantee with its 50 reporting period, the Bank continued to provide a guarantee for the RMB180 million payable interests of business scopewhichhas been approvedbythePeople’sBank of ChinaandCBRC.Asat the end of the It was verified that the provision of external guarantee is one of the routine operations within the Bank’s their opinionasfollows: the Bankreviewedexternalguaranteeprovidedbyonajust,fairandobjectivebasisissued Provision ofGuarantee(ZhengJianFa[2003]No.56)CSRC,theIndependentNon-ExecutiveDirectors Regulating the Capital Flow between Listed Companies and Their Related Parties and Listed Companies’ In accordance with relevant regulations and requirements of (III) guarantees withinitsbusinessscopeasapprovedbythePeople’sBankofChinaandCBRC. the Bank didnotenterinto any materialguarantees which wasrequiredtobe disclosed save for the financial The provisionofguaranteebusinessisonetheroutineoperationsBank.Duringreportingperiod, (II) custody, contractingandleasingofassetsbyortotheBank. Except for daily business, during the reporting period, there was no significant matter in relation to any XIX. Significant Events )
of theBank companies, orothercompanies’materialcustody,contractingleasingassets Significant events Material ContractsandTheirPerformance Directors concerningtheprovisionofexternalguaranteebyBank Explanatory notes Significant guarantee Mr. QiaoZhimin,XieRong,Ms.FokOiLingCatherine, of material custody, contracting or leasing assets of other Mr. XuHongcai,FengLun,WangLiguo and independent opinion of Independent Non-Executive China EverbrightBankCompanyLimited Independent Non-ExecutiveDirectorsof the Notice Concerning Certain Issues including 2016 Annual Report 63 to others in matters relating to cash assets assets cash to relating matters in others to management Fulfillment of Social Responsibilities Other material contracts Other material Significant Authorization Significant Other Significant Events Non-public issuance of H shares Poverty Alleviation
and established the “Steering Group for Poverty Plan and established the “Steering Group Work “13th Five-Year” Financial Poverty Alleviation
XXII. and considered Company was the by of H shares issuance non-public of plan the of respect proposal in The It was planned to issue 4 billion non- approved at the Shareholder’s General Meeting on 19 November 2015. HK$19.6 billion. As at the public H shares to Everbright Group and raise capital amounting to approximately issuance of H shares by the end of the reporting period, the proposal in respect of the plan of non-public of the plan of non-public Bank had expired, thus plan of issuance had lapsed. Accordingly, implementation issuance of H shares of the Bank has been terminated. XXI. Opinions on Finance-Helped Poverty Relief of seven departments The Bank actively follows the Implementation and attaches great importance to financial work in relation to poverty including the People’s Bank of China support and services in relation to poverty alleviation, it formulated alleviation. Being committed to financial the and responsible for studying and making decisions for significant matters Alleviation” chaired by the President It developed the “finance + production” service model and set up in relation to accurate poverty alleviation. Government. Provincial Yunnan with collaboratively platform e-commerce Shopping” Wonderful “Yunnan the promoting to view a with PRC, the in platform e-commerce co-established bank-government first the is It areas. poverty of development industrial the promoting and nationwide products high-quality brand-name poverty alleviation and supported “Mother Water Cellar” for 12 The Bank continued to carry out charitable reporting period, the Bank has provided assistance for constructing 8,593consecutive years. As at the end of the conservancy project and helped 23,855 beneficiary families and 111,228 water cellars, 68 small-scaled water beneficiaries. alleviation. Please refer to the Social Responsibility Report for more details of poverty XX. of the Social Responsibilities Report. Please refer to the website of SSE, The Bank has disclosed the full text HKSE and the Bank for details. During the reporting period, there was no significant authorization to others in matters relating to cash assets to others in matters relating period, there was no significant authorization During the reporting management. (V) was of contracts were normal. There performance and operation daily Bank’s the period, reporting the During contracts. no other significant (IV) (I) CHINA EVERBRIGHT BANK 64 Meeting. Asatthedateofthisreport,matterisin progress. Meeting, the2017FirstHShareholders’ClassMeeting andthe2017FirstPreferenceShareholders’Class reviewed andapprovedatthe2017FirstExtraordinary GeneralMeeting,the2017FirstAShareholders’Class with anaggregate amount of proceeds not exceeding RMB50 billion. On28 February 2017, this proposal was the proposal,aggregatenumberofPreferenceShares tobeissuedshallnotexceed500millionshares, considered andapprovedattheFifthMeetingofSeventh SessionoftheBoardBank.Accordingto On 20 December 2016, the proposal of the issuance of the Preference Shares for the second time was (V) the Bankisentitledtoredeembondsatendoffifthyear. RMB28 billion,fixedcouponrateof4.60%andaterm10yearsinthenationalinterbankbondmarket, issued byPBOC.On2March2017,theBanktier-2capitalbondswithatotalprincipalamountof in thenationalinterbankbondmarketpursuanttodocumentNo.YinShiChangXuZhunYuZi[2017]12 approval wasgiventotheCompanypubliclyissuetier-2capitalbondsofnomorethanRMB40billion RMB40 billionpursuanttothedocumentNo.YinJianFu[2017]34issuedbyCBRC.On7February2017, January 2017,approvalwasgiventotheCompanypubliclyissuetier-2capitalbondsofnotmorethan November 2016,the2016FirstExtraordinaryGeneralMeetingreviewedandapprovedsuchproposal.On20 was consideredandapproved at the Third Meeting of the Seventh Sessionof the Board of the Bank. On15 On 2September2016,theproposalofissuancetier-2capitalbondsnomorethanRMB40billion (IV) On 17March2017,theBankmadeapublicissuanceofASharesconvertiblebondsRMB30billion. approved theBanktopubliclyissueAshareconvertiblecorporatebondsofnotmorethanRMB30billion. CBRC. On18January2017,theIssuanceReviewCommitteeofCSRCreviewedBank’sapplicationand of not more than RMB30 billion in accordance with the document No. Yin Jian Fu [2016] 337 issued by 31 October2016,approvalwasgiventotheBankpubliclyissueAshareconvertiblecorporatebonds to theproposal,Bank was goingtoissuenomorethan RMB30 billionconvertiblecorporatebonds.On considered and approved at the Shareholders’ General Meeting of the Bank on 29 June 2016. According The proposal concerning the public issuance of A share convertible corporate bonds and its listing was (III) proceeds raisedamountedtoRMB9,982million,allofwhichwereusedreplenishtheothertier-1capital. a parvalueofRMB100pershareandcouponrate3.90%.Withissuanceexpensesdeducted,theactual second trancheofthefirstissuance100millionpreferenceshareswascompletedon8August2016with of 200 million preference shares by the Bank was completed on 19 June 2015 and the issuance of the issuance ofnomorethan300millionpreferenceshares.Thethefirsttranche CSRC approval No. Zheng Jian Xu Ke [2015]1239. The Bank was permitted to conduct the non-public On 15 June 2015, the non-public issuance of preference shares by the Bank was approved through the (II) Significant Events
Second IssuanceofthePreferenceShares Issuance oftier-2bonds Issuance oftheConvertibleCorporateBonds Issuance ofthesecondtranchefirstissuancePreferenceShares 2016 Annual Report 65 Insurance for the Directors, Supervisors and Senior Senior and Supervisors Directors, the for Insurance CEB International Investment Co., Limited CEB International Investment Jiangsu Huai’an Everbright Village Bank Co., Ltd. Jiangsu Huai’an Everbright Village Shaoshan Everbright Village Bank Co., Ltd. Shaoshan Everbright Village Everbright Financial Leasing Company Limited Everbright Financial Significant Matters of Subsidiaries Significant Matters Publication of Annual Report Management Professional Liability Professional Review of Annual Results of the Bank
XXVI. with the IFRS and Hong The Annual Report, in Chinese and English, prepared by the Bank in accordance Kong Listing Rules, are available at the websites of the HKSE and the Bank. XXV. Bank’s financial statements, which Ernst & Young Hua Ming LLP and Ernst & Young respectively audited the unqualified auditor’s reports. were prepared according to the PRC GAAP and IFRS, and issued the standard the annual results and financial Audit Committee have reviewed the Bank and its The Board of Directors of reports of the Bank for the year ended 31 December 2016. During the reporting period and up to the date of this report, the Bank established a professional liability liability professional a established Bank the report, this of date the to up and period reporting the During laws relevant with accordance in Management Senior and Supervisors Directors, the for system insurance Bank and such and regulations and the Articles of Association of the Bank. The Articles of Association of the insurance such and provisions, indemnity permitted relevant out set system insurance liability professional from relevant liabilities and possible policies shall cover compensations to the insured parties for relevant fees litigations. XXIV. (IV) to approved Bank the of Board the of Session Seventh the of meeting Third the 2016, September 2 On report, this of date the at As Limited. Co., Investment International CEB into billion HKD2 invest further profit make not did company this period, reporting the During progress. in is matter increase capital the material assets, major of disposal or acquisition arbitration, or litigation material no had and distribution It penalty. administrative or investigation administrative or judicial contract, material transaction, connected report. engaged Ernst & Young to audit its financial (III) Huai’an Everbright Village Bank Co., Ltd., did not make profit distribution During the reporting period, Jiangsu connected material assets, major of disposal or acquisition arbitration, or litigation material no had and engaged It penalty. administrative or investigation administrative or judicial contract, material transaction, to audit its financial report. Huai’an Xinrui Public Accounting Firm (II) Everbright Village Bank Co., Ltd., did not make profit distribution and During the reporting period, Shaoshan acquisition or disposal of major assets, material connected transaction, had no material litigation or arbitration, investigation or administrative penalty. It engaged Baker Tilly China material contract, judicial or administrative its financial report. Certified Public Accountants to audit On 28 October 2016, it was approved to further invest no more than RMB1.980 billion to Everbright Financial Everbright to billion RMB1.980 than more no invest further to approved was it 2016, October 28 On Bank. As of the Seventh Session of the Board of the Limited at the Fourth Meeting of the Leasing Company not distribute any During the reporting period, it did the capital increase is in progress. date of this report, material connected or disposal of major assets, material litigation or arbitration, acquisition profit and it had no It engaged Ernst investigation or administrative penalty. contract, judicial or administrative transaction, material LLP to audit its financial report. & Young Hua Ming XXIII. (I)
Changes in Ordinary Shares and 68 Shareholders Changes in Preference Shares 75 and Shareholders Directors, Supervisors, Senior 79 Management, Staff, Branches and Outlets Corporate Governance 99 CHINA EVERBRIGHT BANK 68 III. (IV) (III) corporate bonds. During thereportingperiod,Bankhadnoissuanceandredemptionofconvertiblecorporatebonds (II) During thereportingperiod,Bankdidnotissueanyordinaryshares. (I) II. I. Shareholders Changes inOrdinarySharesCapitaland
I. Total numberofshareholdersasatthelasttradingday of Total numberofshareholdersasattheendreporting period II. III.
the monthpriortodisclosure oftheAshareannualreport
Shares subjecttotradingmoratorium Shares notsubjecttotradingmoratorium .Others 4. 3. 2. 1. Total shares Number ofShareholders The Bankdoesnothaveanyinternalemployee shares. issuance orforotherreasons. corporate bonds, capital reduction, listing of internal employee share, bond or exercise of share incentive scheme, mergers, conversion of convertible of new shares, non-public issuance of shares, exercise of warrants, adoption of bonus shareholding structureorassetsandliabilitiesoftheBankasaresult During thereportingperiod,therewasnochangeintotalnumberofshares, Bond issuanceandredemption Securities issuance Share IssuanceandListing Changes inshares
Overseas listedforeignshares(HShares) Domestically listedforeignshares RMB-denominated ordinaryshares(AShares) issue, capitalization of the capital reserves, rights issue, issuance 39,810,359,500 46,679,095,000 6,868,735,500 ubrPretg ubrPercentage Number Percentage Number Before change – – – –
100.00 14.71 85.29 – – – –
Changes duringthe reporting period
– – – – – – –
hrsHShares A Shares 245,531 261,923 – – 6,868,735,500 – – 39,810,359,500 – – 46,679,095,000 –
Number Unit: Shareholder After change – – – –
Unit: share,% Percentage 1,015 1,017 100.00 14.71 85.29 – – – –
2016 Annual Report – – – – – – – – – – – – – 69 shares pledged or frozen Number of
Unit: Share, % 1.30 0.81 1.64 1.55 1.35 1.34 3.48 2.80 3.37 2.64 0.37 24.78 21.96 14.70 Unknown period percentage Shareholding as at the end of the reporting
the Number of 376,393,000 766,002,403 723,999,875 629,693,300 626,063,556 609,713,367 172,965,000 6,863,031,480 1,626,366,000 1,309,218,000 1,572,735,868 1,230,609,251 at the end of 11,565,940,276 10,250,916,094 shares held as reporting period
H shares A shares A shares A shares A shares H shares H shares H shares A shares A shares Class of shares A shares H shares A shares A shares
– – – – +371,980 Change in +17,093,000 +45,930,000 period (+, -) -104,885,029 -173,200,000 +317,953,000 +723,999,875 +626,063,556 +146,505,000 +508,660,242 the reporting
Domestic legal person Domestic legal person State Domestic legal person – Overseas legal person Nature of shareholder Domestic legal person State Overseas legal person
all institutional and individual investors that maintain an account with it was 6,863,031,480 H shares as at the end of H shares as at it was 6,863,031,480 with account maintain an that investors individual and all institutional was aware that as at the end of the Reporting Period, Central Huijin Investment Limited held 55.67% and 71.56% 71.56% and 55.67% held Limited Investment Huijin Central Period, Reporting the of end the at as that aware was The shares of the Bank held by Zhuhai Shipping Corporation Limited were transferred from COSCO Shipping (Guangzhou) Co., The shares of the Bank held by Zhuhai Shipping Corporation Limited were transferred from Ltd. and Guangzhou Haining Maritime Service Co., Ltd by means of block trade. The shares of the Bank held by Yunnan Hehe (Group) Co., Ltd. were from Hongta Tobacco (Group) Limited and Hongyunhonghe The shares of the Bank held by Yunnan Hehe (Group) Co., Ltd. were from Hongta Tobacco Tobacco (Group) Co., Ltd. under gratuitous transfer. The total number of H shares of the Bank held by the Hong Kong Securities Clearing Company Nominees Limited acting as the The total number of H shares of the Bank held by the Hong Kong Securities Clearing Company for nominee and 376,393,000 H 1,626,366,000, 1,309,218,000, 172,965,000 from the apart aware that Bank was the reporting period. The Limited, China Everbright Group shares of the Bank held by Ocean Fortune Investment Limited, China Life Reinsurance Company the name of Hong Kong Securities Limited and China Reinsurance (Group) Corporation held respectively, all of which were under Kong Hong of name the under held Bank the of shares H remaining of number The Limited. Nominees Company Clearing Securities Clearing Company Nominees Limited was 3,378,089,480 H shares. As at the end of the Reporting Period, all ordinary shares of the Bank are not subject to selling restrictions. As at the end of the Reporting Period, all ordinary Bank The Asset Huijin Central respectively; Corporation (Group) Reinsurance China and Limited Group Everbright China in interest subsidiary a is Limited Everbright China Limited; Investment Huijin Central of subsidiary wholly-owned a is Ltd. Management subsidiary wholly-owned a is Limited Company Holdings Everbright China and Limited, Company Holdings Everbright China of (Group) Reinsurance China of subsidiary a is Limited Company Reinsurance Life China Limited; Group Everbright China of both subsidiaries of China Shipping Corporation; Zhuhai Shipping Corporation Limited and Ocean Fortune Investment Limited are or concerted action among the above (Group) Company. Save for the above, the Bank is not aware of any connected relationship ordinary shareholders. Shareholding of Top 10 Shareholders Shareholding
China Life Reinsurance Company Limited Domestic legal person Nominees Limited including: Ocean Fortune Investment Limited
Shenergy (Group) Co., Ltd Zhuhai Shipping Corporation Limited Central Huijin Asset Management Ltd. Yunnan Hehe (Group) Co., Ltd.
China Everbright Group Limited Name of shareholder Central Huijin Investment Ltd Hong Kong Securities Clearing Company China Everbright Limited China Securities Finance Corporation LimitedChina Reinsurance (Group) Corporation Domestic legal person Domestic legal person 5. 4. 2. 3. Note: 1.
IV. CHINA EVERBRIGHT BANK 70 company wereasfollows: As at 31 December 2016, the shareholding of Everbright Group in other domestic and overseas listed 2. 1. (II) See thechartattachedtothischapter. (I) VI. granted bytheHKSE. Bank hadmaintainedtheminimumpublicfloatasrequiredbyHongKongListingRulesandwaiver Based on publicly available information and to theknowledgeofDirectors, as at 31 December 2016, the V. Changes inOrdinarySharesCapitalandShareholders Business scope: hna ogunScrte o,Ld ShenzhenStockExchange Shenwan HongyuanSecuritiesCo.,Ltd. China EverbrightInternationalLimited China EverbrightLimited Everbright SecuritiesCo.,Ltd. Company Name Date ofestablishment: Legal Representative: Company name:
Shareholding inotherdomesticandoverseaslistedcompanies Basic information China EverbrightGroupLimited The chartofshareholdingstructuretheBankanditssubstantialshareholders Profile ofSubstantialShareholderstheBank Public FloatundertheHongKongListingRules Confirmation oftheBank’sCompliancewithRequirementSufficiency Investment inandmanagementoffinancialenterprises,includingbanking, 12 November1990(Namechangedon8December2014following Tang Shuangning China EverbrightGroupLimited regulatory authorities.) out onlyafterobtainingofsuchapprovalsgrantedbycompetent relevant approvalinaccordancewithapplicablelawsshallbecarried non-financial enterprises.(Businessactivitieswhicharesubjectto transactions; assetmanagement;investmentinandmanagementof securities, insurance,funds,trust,futures,leasingandgoldsilver transformation toajointstockcompany)
Hong KongStockExchange Hong KongStockExchange Shanghai StockExchange, Stock ExchangesforListing Hong KongStockExchange
Shareholding Percentage Unit: % 41.40 49.74 49.85 4.98 2016 Annual Report 71 40.03 64.02 57.11 71.56 31.34 25.03 28.45 33.29 34.71 Unit: % Percentage Shareholding
Hong Kong Stock Exchange Hong Kong Stock Exchange Hong Kong Stock Exchange Hong Kong Stock Exchange Hong Kong Stock Exchange Stock Exchanges for Listing Shanghai Stock Exchange, Shanghai Stock Exchange, Hong Kong Stock Exchange Shanghai Stock Exchange, Shenzhen Stock Exchange Hong Kong Stock Exchange
Shanghai Stock Exchange,
authorization by the State Council; other relevant businesses approved by State Council; other relevant businesses authorization by the the State Council.
Shareholding in other domestic and overseas listed companies Shareholding in other domestic Basic information Central Huijin Investment Ltd. Central Huijin
Bank of China Limited China Construction Bank Corporation China Reinsurance (Group) Corporation Limited New China Life Insurance Company Shenwan Hongyuan Securities Co., Ltd. LimitedChina International Capital Corporation CSC Financial Co., Ltd Hong Kong Stock Exchange Company Name LimitedIndustrial and Commercial Bank of China Shanghai Stock Exchange, Company name:Legal Representative:Date of establishment: Xuedong Ding Business scope: Central Huijin Investment Ltd. 16 December 2003 in major state-owned financial enterprises in accordance with Equity investment Agricultural Bank of China Limited
2. 1. (III) CHINA EVERBRIGHT BANK 72 2. 1. Notes: to benotifiedtheBank: under section336oftheSecuritiesandFuturesOrdinanceHongKong(“HKSFO”)orwhichwererequired short positionsinthesharesorunderlyingofBankasrecordedregisterrequiredtobekept persons or corporations(otherthanDirectors,SupervisorsChiefExecutivesoftheBank)hadinterestsand As at 31 December 2016, so far as was known to Directors and Supervisors of the Bank, the following VII. Changes inOrdinarySharesCapitalandShareholders Central HuijinInvestmentLtd. China EverbrightGroupLtd. National CouncilforSocialSecurityFund China LifeReinsuranceCompanyLtd. China Reinsurance(Group)Corporation Central HuijinInvestmentLtd. Ocean FortuneInvestmentLimited COSCO SHIPPINGFinancialHoldingsCo., China Shipping(Group)Company China COSCOShippingCorporationLimited Name ofsubstantialshareholder
Shipping (HongKong)HoldingsCo.Ltd”) Limited (formerlyknownas“China
Interests orShort Positions ofSubstantial Regulations in SharesandUnderlyingoftheBankunderHongKongLaws China LifeReinsuranceCompanyLtd.heldalongpositionin1,309,218,000 HsharesoftheBankdirectly.ChinaReinsurance(Group) deemed tobeinterestedinthe1,626,366,000HsharesheldbyOcean FortuneInvestmentLimited. Shipping Corporation Limited, China Shipping (Group) Company and COSCO SHIPPING Financial Holdings Co., Limited were Company was wholly-owned by China COSCO Shipping Corporation Limited. In accordance with the HKSFO, China COSCO SHIPPING Financial aware, OceanFortuneInvestmentLimitedwaswholly-ownedbyCOSCO SHIPPINGFinancialHoldingsCo.,Limited,whileCOSCO Ocean FortuneInvestmentLimitedheldalongpositionin1,626,366,000 HsharesoftheBankdirectly.Asfarasis total of1,942,206,000 HsharesoftheBank. held byChinaEverbrightHoldings Company Limited.Therefore,CentralHuijinInvestmentLtd.wasdeemed tobeinterestedina China LifeReinsuranceCompanyLtd., whileChinaEverbrightGroupLtd.wasdeemedtobeinterested in the83,630,000Hshares with theHKSFO,ChinaReinsurance (Group)Corporationwasdeemedtobeinterestedinthe1,309,218,000 Hsharesheldby while 55.67%oftheissuedsharecapital ofChinaEverbrightGroupLtd.washeldbyCentralHuijinInvestment Ltd..Inaccordance by CentralHuijinInvestmentLtd..China EverbrightHoldingsCompanyLimitedwaswholly-ownedbyChina EverbrightGroupLtd., Reinsurance (Group)Corporation, while 71.56% of theissuedshare capital ofChinaReinsurance(Group)Corporationwasheld H Shares of the Bank directly. As far as theBank is aware, China Life Reinsurance CompanyLtd.waswholly-ownedby China in 172,965,000HsharesoftheBankdirectly.ChinaEverbrightHoldings CompanyLimitedheldalongpositionin83,630,000 Corporation heldalongpositionin376,393,000HsharesoftheBank directly.ChinaEverbrightGroupLtd.heldalongposition Holdings Co., Limited was wholly-owned by China Shipping (Group) Company. China Shipping (Group)
Notes 3 3 2 2 2 1 1 1 1
hrsBeneficialowner/Interestof A shares Beneficialowner/Interestof A shares Beneficialowner H shares hrsBeneficialowner H shares hrsBeneficialowner/Interestof Interestofcontrolledcorporation H shares H shares hrsBeneficialowner H shares hrsInterestofcontrolledcorporation H shares hrsInterestofcontrolledcorporation Interestofcontrolledcorporation H shares H shares shares Class of
Type ofinterest controlled corporation controlled corporation controlled corporation
Shareholders and Other Persons
og139280019.06 1,309,218,000 Long og2,4,5,6 24 53.22 28.61 62.40 33.55 24,845,555,163 13,355,232,402 Long 24.54 Long 1,685,611,000 Long og617,375,500 Long og192260028.27 1,942,206,000 Long og166360023.67 1,626,366,000 Long og166360023.67 1,626,366,000 Long og166360023.67 23.67 1,626,366,000 1,626,366,000 Long Long position Short Long/
Number of shares
Percentage issue (%) shares in relevant of the 8.98 4,5
shares (%) Percentage of thetotal issued 2.80 3.61 1.32 4.16 3.48 3.48 3.48 3.48 4,5
2016 Annual Report 73 (Group) Group Ltd. directly held a long position in 11,565,940,276 A shares of the Bank. China Everbright Group Ltd. Group Everbright China Bank. the of shares A 11,565,940,276 in position long a held directly Ltd. Group Underlying Shares and Debentures of the Bank under Hong Hong under Bank the of Debentures and Shares Underlying Everbright Financial Holding Asset Management Co., Ltd. held a long position of 60,400,000 A shares of the Bank. Asset Management Co., Ltd. held a long Everbright Financial Holding China Everbright Limited directly held a long position in 1,572,735,868 A shares of the Bank. directly held a long position in 1,572,735,868 China Everbright Limited Bank. long position of 148,156,258 A shares of the Properties Company Limited directly held a Meiguang Enyu (Shanghai) of the held a long position of 8,000,000 A shares and Assets Management Co., Ltd. directly China Everbright Investment Bank.
As at 31 December 2016, the total issued share capital of the Bank was 46,679,095,000 shares, including 39,810,359,500 A As at 31 December 2016, the total issued share shares and 6,868,735,500 H shares. by rounding to two decimal places. The percentage of shareholdings are calculated Therefore, China Everbright Group Ltd. directly and indirectly held a long position of 13,355,232,402 A shares of the Bank in total. Therefore, China Everbright Group Ltd. directly position in 10,250,916,094 A shares of the Bank, whereas China Reinsurance Central Huijin Investment Ltd. directly held a long (2) (3) (4) China Everbright was deemed to be interested in a long position in a total of 1,789,292,126 A shares of the Bank held by its following subsidiaries: A shares of the Bank held by its following in a long position in a total of 1,789,292,126 was deemed to be interested (1) Ltd. directly held a long position of 609,713,367 and 629,693,300 A shares Corporation and Central Huijin Asset Management Management Asset Huijin Central of capital share issued the of 100% aware, is Bank the as far As respectively. Bank the of China Reinsurance (Group) Corporation and 55.67% of the issued share capital of Ltd., 71.56% of the issued share capital of Central HKSFO, the with accordance In respectively. Ltd. Investment Huijin Central by held were Ltd. Group Everbright China in the long position in 629,693,300 A shares held by Central Huijin Asset Huijin Investment Ltd. was deemed to be interested A shares held by China Reinsurance (Group) Corporation, and the long positionManagement Ltd., the long position in 609,713,367 Huijin Investment Ltd. directly and indirectly held by China Everbright Group Ltd.. Therefore, Central in 13,355,232,402 A shares of the Bank in total. held a long position in 24,845,555,163 A shares Kong Laws and Regulations Interests or short positions of Directors, Supervisors and Chief Executives Interests or short positions of Directors, Supervisors Shares, in
As at 31 December 2016, as far as the Directors and Supervisors of the Bank are aware, none of the the of none aware, are Bank the of Supervisors and Directors the as far as 2016, December 31 at As or short positions in the shares, Directors, Supervisors nor the Chief Executives of the Bank had any interests (as defined in the HKSFO) underlying shares or debentures of the Bank or any of its associated corporations under Section 352 of the HKSFO, which were required to be recorded in the register required to be kept to Divisions 7 and 8 of Part XV or which were required to be notified to the Bank and the HKSE pursuant HKSE pursuant to the Model Code of the HKSFO, or which are required to be notified to the Bank and the set out in Appendix 10 to the Hong for Securities Transactions by Directors of Listed Issuers (“Model Code”) interests in shares or debentures of Kong Listing Rules nor have they been granted the right to acquire any the Bank or any of its associated corporations. VIII. 5. December 2016, the Bank had not been notified by any persons who Save as disclosed above, as at 31 be to required were which Bank the of shares underlying or shares the in positions short or interests had were which or HKSFO, the of XV Part of 3 and 2 Divisions of provisions the under Bank the to disclosed kept by the Bank under section 336 of the HKSFO. recorded in the register required to be 3. 4. CHINA EVERBRIGHT BANK 0 100% Management .13% Everbright Financial Co., Ltd. Holding Asset 74 and itssubstantialshareholders The chart of shareholding structure of China Everbright Bank Company Limited Changes inOrdinarySharesCapitalandShareholders 0.32% 100% (Shanghai) Properties Meiguang Company China EverbrightGroupLimited Limited Enyu 100% Everbright Holdings Co., Ltd. China 55.67% 49.74% 3.37% China EverbrightBankCompanyLimited(the Company) Everbright Limited China 0.18% 25.15% 0.02% Central HuijinInvestmentLtd. 100% Management 100% Investment Everbright and Asset Company Everbright Co., Ltd. Limited Industry (Group) China China 21.96% Central Huijin Management 1.35% 100% Asset Ltd. .1 2.80% 2.11% 71.56% Reinsurance Corporation As at31December2016 (Group) China Reinsurance China Life Company Limited 100% 42.61% shareholders Public 2016 Annual Report
– – – – – – – – – – 18 18 75 frozen shares pledged/ Date of Delisting
Number of Unit: Share, % 20,000 – 10,000 – Trading Approved Volume for Listing and
Unit: %, Ten thousand shares Unit: %, Ten thousand Domestic preference shares Domestic preference shares Domestic preference shares Domestic preference shares Type of shares Domestic preference shares Domestic preference shares Domestic preference shares Domestic preference shares Domestic preference shares Domestic preference shares
Date of Listing 21 July 2015 2016 August 26
7.75 6.94 5.00 5.00 8.88 7.76 7.75 6.94 5.00 18.88 Volume Issuance shareholding
Percentage of
5.303.90 20,000 10,000 Rate Coupon Number of
shares held
– 15,500,000 – 13,870,000 – 10,000,000 – 10,000,000 – 37,750,000 – 17,750,000 – 15,510,000 – 15,500,000 – 13,870,000 – 10,000,000 100 100 period Issuance reporting Price (RMB) during the Changes in
shareholding Others Others Others Others Nature of shareholder Others Others Others Others Others Others
Date of Issuance
Everbright P1Everbright P2 19 June 2015 8 August 2016
Everbright P1 (Code of preference shares 360013) Everbright P1 (Code of preference Total Number of Preference Shareholders and Shareholdings of Top 10 10 Top of Shareholdings and Shareholders Preference of Number Total Preference Shareholders Use of Proceeds The Issuance and Listing of Preference Shares for the last three years and Listing of Preference The Issuance
the disclosure of this annual report (shareholder) Limited Limited International Trust Co., Ltd. Co., Ltd. Casualty Insurance Co., Ltd.
Bank of Communications China Resources SZITIC Trust China Ping An Property & China CITIC Bank Corporation Chuangjin Hexin Fund Management BOCI Securities Limited Hwabao Trust Co., Ltd. CCB Trust Co., Limited China Ping An Life Insurance Co., Ltd. Number of preference shareholders as at the last trading day of the month prior to Number of preference shareholders as at the last Name of preference shareholder Bank of Communications Schroder Fund Management Co., Ltd. Number of preference shareholders as at the end of the reporting period (shareholder) Number of preference shareholders as at the end 360022 360013 Code Abbreviation
III. (I) II. 100 million preference shares for the second tranche of the first issuance On 8 August 2016, the Bank issued With issuance expenses deducted, the actual proceeds raised were with a par value of RMB100 per share. be used to replenish the other tier-1 capital of the Bank. RMB9,982 million, all of which would
Changes in Preference Shares Capital and Capital Shares in Preference Changes Shareholders I.
CHINA EVERBRIGHT BANK Note: 76 (II) Note: Changes inPreferenceSharesCapitalandShareholders
Number ofpreferenceshareholdersasatthelasttradingdaymonthpriortodisclosure Number ofpreferenceshareholdersasattheendreportingperiod(shareholder) AXA SPDBInvestment shareholder Name ofpreference Bank OfHangzhouCo.,Ltd. BOCI SecuritiesLimited China ResourcesSZITICTrust Bank ofCommunications Bank ofCommunicationsSchroder Postal SavingsBankofChina China EverbrightGroupLimited Shanghai WisdomAsset China CreditTrustCo.,Ltd. HuaAn FutureAssetManagement China LifeInsuranceCompany (Shanghai) Limited Co., Ltd. International TrustCo.,Ltd. Fund ManagementCo.,Ltd. Co., Ltd. Limited Management Co.,Ltd. ManagersCo., Ltd this annualreport(shareholder)
Everbright P2(Codeofpreferenceshares360022) shares andthetop10shareholdersofordinaryshares. above, connected relations.ChinaEverbrightGroupLimitedisoneofthetop 10holdersoftheordinarysharesBank.Saveforthe Bank ofCommunicationsSchroderFundManagementCo.,Ltdand BankofCommunicationsInternationalTrustCo.,Ltdhave above shareholdersofpreferencesharesandthetop10ordinaryshares. connected relations.Savefortheabove,Bankisnotawareofanyconnectingrelationshiporconcertedactionsamong Bank ofCommunicationsSchroderFundManagementCo.,LtdandInternationalTrusthave China Ping the Bank is not aware of any connecting relationship or concerted actions among the above shareholders of preference An Property & Casualty Insurance Co., Ltd. and China Ping An Life Insurance Co., Ltd have connected relations.
Others Others Others Others Others Others Others Others shareholder Nature of Others Others Others Others shareholding Changes in 3000013,090,000 13,090,000 6400016,470,000 16,470,000 0000010,000,000 10,000,000 during the ,7,0 3,270,000 3,270,000 ,8,0 3,680,000 6,540,000 3,680,000 6,540,000 ,4,0 6,540,000 7,200,000 6,540,000 7,200,000 ,8,0 8,180,000 8,180,000 ,7,0 3,270,000 3,270,000 ,7,0 3,270,000 3,270,000 ,7,0 3,270,000 3,270,000 reporting period
shares held Number of Percentage of shareholding 13.09 16.47 10.00 3.27 3.68 6.54 6.54 7.20 8.18 3.27 3.27 3.27
Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Type ofshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares Domestic preferenceshares
Unit: Share,% Number of pledged/ shares frozen 23 23 – – – – – – – – – – – –
2016 Annual Report – – 77 2014 shares for
Unit: RMB million, % – – 2015
2016 1,060 100.00
Proportion of distribution is based on the declared dividend and the agreed dividend payable for the year. Proportion of distribution is based on the declared dividend and the agreed dividend payable the last three years The amount and proportion of the distributed dividend of preference of the distributed The amount and proportion The profit distribution Plan of Preference Shares for the year The profit distribution Plan of Policy of profit distribution of Preference Shares Policy of profit Profit Distribution of the Preference Shares Profit Distribution
Proportion of distribution Item Amount of distribution Note: (III) According to relevant agreement, the Bank will hold a Board Meeting at least ten working days prior to the Bank will hold a Board Meeting at least ten working days prior to the According to relevant agreement, the Preference Shares (i.e. 26 June 2017) and the Second Tranche dividend payment date of the First Tranche issue and payment dividend the to relating issues consider to 2017) August 11 (i.e. Shares Preference preference shares. announcements to notify holders of the the First Tranche Preference Shares on 27 June 2016 at a dividend rate The Bank distributed the dividend for implemented. of 5.30%. The distribution plan has been (II) The first tranche under the first issuance of preference shares issued by the Bank in June 2015 (hereinafter shares issued by the Bank in June the first issuance of preference The first tranche under of issuance first the under tranche second the and Shares”) Preference Tranche “First the as to referred Shares”) to as the “Second Tranche Preference 2016 (hereinafter referred issued in August preference shares remain shall rate coupon The intervals. different at adjustments to subject rates coupon at priced are rate shall be issuance date. Subsequently, the coupon first 5 years commencing from the unchanged for the Through market unchanged for every new period. 5 years. The coupon rate will remain adjusted once every at 5.30%. Through Preference Shares was determined coupon rate for the First Tranche consultation, the first rate for the Second Tranche Preference Shares was determined at 3.90%. market consultation, the first coupon be shall dividends the and non-cumulative, are Shares Preference of tranches two the on dividends The the circumstance that the Bank decides to cancel part of or all of the paid in cash and paid annually. Under the to forward carried be not shall dividends undistributed the Shares, Preference the of payment dividend remaining the of distribution the to entitled not are Shareholders Preference The period. dividend following after receiving dividends at agreed rate. profit along with ordinary shareholders IV. (I) CHINA EVERBRIGHT BANK 78 was accountedforasanequityinstrument. Relevant AccountingTreatment”promulgatedbytheMinistryofFinance,preferencesharesBank Financial Instruments” Measurement of Financial Instruments”, “Accounting Standards for Enterprises No. 37 – Presentation of According to the provisions of the “Accounting Standards for Enterprises No. 22- Recognition and VII. VI V. Changes inPreferenceSharesCapitalandShareholders
.
Reasons The Accounting Preference SharesoftheBank. During the or conversionofPreferenceSharesintoordinarysharesbytheBank. During thereportingperiod,therewasnoredemptionofPreferenceShares reporting period, there was no voting right restoration of the and “Rules on Differentiating the Financial Liabilities and the Equity Instruments and Policies for the Preference Shares of the Bank and 2016 Annual Report No No No No No No No No No No No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 79 from the remuneration connected party Whether received
– – – – – – – – – 7.25 2.08 Total 47.02 39.00 37.00 37.00 35.00 30.00 15.00 129.60 129.60 130.90 208.10 105.18 (Pretax, from the Company during the remuneration reporting period RMB ten thousand)
August 2003) December 2010) 2007.07-2019.06 2016.08-2019.06 2015.03-2019.06 2016.09-2019.06 2014.12-2019.06 2016.09-2019.06 2016.09-2019.06 2015.02-2019.06 2013.01-2019.06 2013.01-2019.06 2014.01-2019.06 2015.02-2019.06 2015.02-2019.06 2017.01-2019.06 2015.06-2019.06 2014.12-2019.06 2009.11-2019.06 2012.11-2019.06 2016.06-2019.06 2016.06-2019.06 2016.11-2019.06 2012.11-2019.06 2016.06-2019.06 Terms of Office vice president since vice president since since February 2016) (serving as the president (serving as the executive (serving as the executive
62 47 58 58 53 58 45 64 64 52 57 59 56 50 51 67 64 67 56 53
Male Male Male Female 58 Gender Age Male Male Male Male Male Male Female 58 Male Male Male Male Male Male Male Male Male Male Male Female 43
Chairman, Non-Executive Director Executive Director, President Executive Director, Executive Vice President Executive Director, Executive Vice President
Position Secretary of CPC Committee of the Bank, Vice Chairman, Non-Executive Director Deputy Secretary of CPC Committee of the Bank, Member of CPC Committee of the Bank, Non-Executive Director Deputy Secretary of CPC Committee of the Bank, Non-Executive Director Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Chairman of the Board of Supervisors Shareholder Supervisor Shareholder Supervisor External Supervisor External Supervisor External Supervisor External Supervisor Employee Supervisor Employee Supervisor
Profile of Directors, Supervisors and Senior Management Supervisors and Senior Profile of Directors,
Name Mr. Tang Shuangning Mr. Gao Yunlong Mr. Ma Teng Ms. Li Jie Mr. Zhang Shude Mr. Zhang Jinliang Mr. Li Huaqiang Mr. Zhao Wei Mr. Qiao Zhimin Mr. Xie Rong Ms. Fok Oi Ling Catherine Mr. Xu Hongcai Mr. Feng Lun Mr. Wang Liguo Mr. Li Xin Mr. Yin Lianchen Mr. Wu Junhao Mr. Yu Erniu Mr. Wu Gaolian Mr. Deng Ruilin Mr. Wang Zhe Mr. Ye Donghai Ms. Liu Yan
Directors, Supervisors, Senior Management, Management, Senior Supervisors, Directors, and Outlets Branches Staff, I. CHINA EVERBRIGHT BANK
7. 6. 5. 4. 3. 2. 1. Note: 80 Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets Mr. SunQiang Mr. HuangHaiqing Mr. YaoZhongyou Mr. WuJian Mr. LuHong Total remunerationreceivedfromtheBank Mr. ZhangHuayu Name
authorities intherecentthreeyears. The incumbentDirectors,Supervisors,SeniorManagementoftheBank havenotbeensubjecttopenaltybyanysecuritiesregulatory Management ofBankheldanyshareoptiontheBank’ssharesor was grantedanyrestrictiveshares. During the During thereportingperiod,noneofDirectors,SupervisorsandSenior ManagementheldanysharesoftheBank. Deng Ruilin,theExternalSupervisor,hasnotreceivedremunerationfrom theBanksinceOctober2016; office. The remuneration of Directors,Supervisors announcement willbemadeforfurtherdisclosureinduecourse. The remuneration The remunerationofDirectorsandSupervisorsissubjecttoapprovalthegeneralmeetingshareholders; reporting period, the Bank had not implemented any share incentive scheme, and none of the Directors and Senior of certain Directors, Supervisors, and Senior Management of the Bank has not been finalized and an
Member ofCPCCommitteetheBank, Member ofCPCCommitteetheBank, Member ofCPCCommitteetheBank, Member ofCPCCommitteetheBank, Member ofCPCCommitteetheBank, Member ofCPCCommitteetheBank, Position
Assistant tothePresident (Executive VicePresidentLevel) Secretary ofDisciplinaryCommittee Executive VicePresident General ManagerofBeijingBranch Executive VicePresident, Executive VicePresident,SecretarytotheBoard Executive VicePresident and SeniorManagementserving in 2016 was calculated accordingtotheactualtermof
edrAge Gender Male Male Male Male Male Male
48 52 53 55 53 58
Terms ofOffice 2016.08– 2016.06– 2014.05– 2014.01– 2009.03– 2006.02–
RMB tenthousand) reporting period remuneration during the Company from the 1,505.21 (Pretax, 129.60 129.60 35.98 58.10 99.60 99.60 Total
Whether received connected party remuneration from the No No No No No No 2016 Annual Report
No No No No No No No Yes Yes Yes Yes Yes Yes 81 party Whether received from the connected remuneration
– – – – – – – Total 15.00 54.00 83.00 period 556.51 129.60 111.44 163.47 from the Bank during the reporting remuneration ten thousand) (Pre-tax, RMB
Terms of Service
46 2007.12-2016.06 6444 2013.01-2016.06 50 2016.08-2016.11 70 2015.02-2016.12 2011.11-2017.01 58 2011.03-2017.01 60 2009.11-2017.03 71 2013.01-2016.06 45 2012.11-2016.06 56 2012.12-2016.05 45 2014.05-2016.12 Male FemaleMale Male Male 60Male 2012.02-2016.06 Male Male Male FemaleMale 51 2003.07-2016.06 Male Male Gender Age
and Senior Management who Resigned during the the during Resigned who Management Senior and Executive Vice President, General Manager of Beijing Branch Secretary to the Board (Executive Vice President Level) Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Independent Non-Executive Director Non-Executive Director Vice Chairman of the Board of Supervisors Employee Supervisor Employee Supervisor Member of CPC Committee of the Bank, Member of CPC Committee of the Bank, Title
The remuneration of resigned Directors, Supervisors, and Senior Management of the Bank for 2016 was calculated according to the The remuneration of resigned Directors, Supervisors, and Senior Management of the Bank for actual term of office; to penalty from securities regulatory The resigned Directors, Supervisors, Senior Management of the Bank have not been subject authorities in the recent three years. Reporting Period Directors, Supervisors Directors,
Total remuneration received from the Bank Mr. Wu Jian Ms. Wang ShuminMr. Wu Gaolian Mr. Liu Jun Mr. Yang Jigui Non-Executive Director Mr. Zhang Xinze Mr. Wu Gang Mr. Mu Huijun Mr. James Parks StentMs. Chen Yu Mr. Ma Ning External Supervisor Mr. Qiu Huofa Mr. Cai Yunge Name 2. Note: 1.
II. CHINA EVERBRIGHT BANK 6. 5. 4. 2. 82 11. 9. 8. 7. 3. 1. III. Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets (I) 10.
On 18 Shude andMr.LiHuaqiangtoserveastheNon-ExecutiveDirectors. On 27September2016,CBRCapprovedMs.LiJietoserveastheExecutiveDirectorandMr.Zhang Jinliang toserveastheExecutiveDirector. On 25August2016,CBRCapprovedMr.LiuJuntoserveastheNon-ExecutiveDirectorandZhang Board ofDirectorsandmembertheRemunerationCommitteeBank. as Non-ExecutiveDirectoroftheBoardDirectors,memberRiskManagementCommittee On 29June2016,duetochangeofsessiontheBoardDirectors,Mr.WuGaolianceasedserve On 29 June Audit CommitteeoftheBoardDirectorsBank. Directors, ChairmanoftheRiskManagementCommitteeBoardDirectorsandmember Non-Executive DirectoroftheBoardDirectors,memberStrategyCommittee On 29June2016,duetochangeofsessiontheBoardDirectors,Mr.WuJianceasedserveas the approvalfrom CBRC. Board. Asatthedateofdisclosure ofthisReport,thequalificationabove Directors issubjectto Cai YungeandMr.LiuChong wereelectedastheNon-ExecutiveDirectorof Seventh Sessionofthe of theBoard.On28February 2017,atthefirstextraordinarygeneralmeetingof Bankfor2017,Mr. Mr. CaiYungeandLiu Chong asthecandidatesforNon-ExecutiveDirectorof theSeventhSession On 20December2016,the fifthmeetingoftheSeventhSessionBoard of theBankapproved and memberoftheStrategyCommitteeBoard DirectorsoftheBank. Director oftheBoardDirectors,memberRemuneration CommitteeoftheBoardDirectors On On On 10January2017,CBRCapprovedMr.WangLiguotoserveastheIndependentDirector. of DirectorsandmembertheAuditCommitteeBoardBank. Executive DirectoroftheBoardDirectors,memberRiskManagementCommittee On 5 of DirectorsandmembertheAuditCommitteeBoardBank. Executive DirectoroftheBoardDirectors,memberRiskManagementCommittee Board ofDirectorsandmembertheRemunerationCommitteeBank. serve asNon-ExecutiveDirectoroftheBoardDirectors,memberStrategyCommittee Changes ofDirectors Changes in Reporting Period of theBoardDirectorsBank. Committee oftheBoardDirectorsandmember RelatedPartyTransactionsControlCommittee the Bank, member of the Audit Committee of the Board of Directors, member of the Remuneration 16 January 2017, due to job assignment, Mr. Wu Gang resigned from the positions of Non-Executive 10 January 2017, Mr. Zhang Xinze ceased to serve as Independent Non-Executive Director of December 2016, due to job assignment, Mr. Yang Jigui resigned from the positions of Non- November 2016, due to job assignment, Mr. Liu Jun resigned from the positions of Non- 2016, due to changeof session of theBoard of Directors,Ms.Wang Shumin ceased to Directors, Supervisors and Senior Management during the 2016 Annual Report 83 June 2016, due to change of session of the Board of Supervisors, Mr. James Parks Stent Stent Parks James Mr. Supervisors, of Board the of session of change to due 2016, June March 2017, Mr. Mu Huijun resigned from the positions of Vice Chairman of the Board of of Board the of Chairman Vice of positions the from resigned Huijun Mu Mr. 2017, March Changes of Supervisors Supervisors, Employee Supervisor and member of the Supervision Committee of the Board of Supervisor Supervisor of Board the of Committee Supervision the of member and Supervisor Employee Supervisors, of the Bank due to his retirement. On 1 On ceased to serve as External Supervisor, Chairman of the Supervision Committee of the Board of of Board the of Committee Supervision the of Chairman Supervisor, External as serve to ceased Committee of the Board of Supervisors of the Bank. Supervisors and member of the Nomination was elected as the External Supervisors of the Seventh Session On 15 November 2016, Mr. Wang Zhe Bank at the First Extraordinary General Meeting of Shareholders of of the Board of Supervisors of the 2016. On 29 On and Mr. Deng Ruilin were elected as External Supervisors of the On 29 June 2016. Mr. Wu Gaolian of the Bank at the 2015 annual general meeting of the Seventh Session of the Board of Supervisors Bank. On 27 June 2016, Ms. Liu Yan was elected as the Employee Supervisor of the seventh session of the On 27 June 2016, Ms. Liu Yan was the special meeting of employee representatives for 2016 of the Board of Supervisors of the Bank at Bank. On 27 June 2016, due to change of session of the Board of Supervisors, Ms. Chen Yu ceased to serve of Supervisors, Ms. Chen Yu ceased due to change of session of the Board On 27 June 2016, of Committee of the Board of Supervisors and member of the Supervision as an Employee Supervisor the Bank. to serve of Supervisors, Mr. Ma Ning ceased due to change of session of the Board On 27 June 2016, of Committee of the Board of Supervisors and member of the Nomination as an Employee Supervisor the Bank.
5. 6. 7. 1. 2. 3. 4. (II) CHINA EVERBRIGHT BANK 2. 4. 3. 2. 84 7. 6. 5. 4. 3. 1. (IV) 5. 1. (III) Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets
Directors ofChinaEverbrightInternationalLimited. director ofChinaEverbrightInternationalLimited,andceasedtoserveastheChairmanBoard Chairman oftheBoardDirectorsChinaEverbrightLimited.HeconcurrentlyservedasNon-executive concurrently servedas Mr. Tang Shuangning, Chairman of the Board of Directors and Non-Executive Director of the Bank agreed to On 28October2016,the4thmeetingofSeventhSessionBoardDirectorsBank In September by theCBRCon10January2017. Mr. SunQiangastheAssistantPresidentofBank,whoseappointmentqualificationwasapproved 2016, the4thmeetingofSeventhSessionBoardDirectorsBankagreedtoappoint In August2016,Mr.SunQiangservedasamemberofCPCCommitteetheBank.On28October Disciplinary CommitteeoftheCPCBank(ExecutiveVicePresidentLevel). In June2016,Mr.HuangHaiqingwasappointedasamemberofCPCCommitteeandSecretarythe President oftheBank. In May 2016, due to job assignment, Mr. Qiu Huofa resigned from the position of Executive Vice Shanghai FinancialAssociation andanIndependentDirectorofShanghaiPudongDevelopment Bank. Mr. Wang Dalian YadongInvestmentConsulting Co.,Ltd. Mr. WangLiguo,Independent Non-ExecutiveDirectoroftheBank,concurrently served asChairmanof International TrustCompanyLimited. of ShanghaiBaosightSoftwareCo.,Ltd.andconcurrently servedasIndependentDirectorofShanghai Mr. XieRong,IndependentNon-ExecutiveDirectorof the Bank,ceasedtobeanIndependentDirector Everbright GroupLimited. Mr. Li Everbright GroupLimited. Mr. Zhang Management Limited. Ms. Li appointment qualificationwasapprovedbytheCBRCon26December2016. Board ofDirectorstheBank. Committee oftheBank.On26December2016,Mr.CaiYungeceasedtoserveasaSecretary Period Changes inInformationofDirectorsandSupervisorsduringtheReporting Changes ofSeniorManagement Huaqiang, Non-Executive Director of the Bank, concurrently served as a Director of China Jie, Executive Director of the Bank, concurrently served as Director of Everbright Jin’ou Asset appoint Mr. Lu Hong as the Secretary to the Board of Directors of the Bank, whose Zhe, an External Supervisor of the Bank, concurrently served as the Vice Chairman of Shude, Non-Executive Director of the Bank, concurrently served as Director of China 2016, due to job assignment, Mr. Cai Yunge ceased to serve as a member of CPC Non-Executive Director of China Everbright Limited. He ceased to serve as the 2016 Annual Report 85 Apr. 2012 to the present Sep.2015 to the present Sep.2016 to the present Jun.2016 to the present Sep. 2016 to the present Jun.2016 to the present Jan. 2016 to the present Mar.2016 to the present Jul. 2014 to the present Term Jul. 2007 to the present Dec. 2016 to the present
The remuneration plan is reviewed by the Nomination by the plan is reviewed The remuneration Manager of Financial Management Department Apr. 2011 to the present Chief Investment Officer Designated Director Director Designated Director Director Member of CPC Committee Executive Director Vice Chairman, General Manager Title Secretary of CPC Committee, ChairmanChairman Non-Executive Director Jun. 2007 to the present
the Remuneration of the Directors, Supervisors Directors, of the Remuneration the in Shareholder Company by Directors, Supervisors and and Supervisors Directors, by Company Shareholder in Shenergy (Group) Co., Ltd. China Everbright Limited China Reinsurance (Group) Corporation Assistant President CHI China Everbright Group Limited CHI China Everbright Group Limited China Everbright Group Limited China Everbright Group Limited Name of shareholder China Everbright Group Limited China Everbright Group Holdings Limited China Everbright Limited
and Senior Management, Basis for Determining the Remuneration and the the Remuneration Basis for Determining and Senior Management, Paid Actual Remunerations Positions Held Positions Senior Management Members Procedures for Determining Procedures for
Mr. Wu Junhao Mr. Yin Lianchen Mr. Zhao Wei Mr. Li Huaqiang Mr. Zhang Shude Mr. Zhang Jinliang Mr. Gao Yunlong Name Mr. Tang Shuangning
VI. Remuneration of Directors and Senior Management of the Bank are approved and paid in accordance with the Bank are approved and paid and Senior Management of Remuneration of Directors plan for of Association of the Bank. The remuneration authorities as well as the Articles the rules of relevant of Board the of Committee Remuneration the by reviewed is members Management Senior and Directors for directors is for approval. The remuneration plan is submitted to the Board of Directors Directors before it approval. shareholders’ general meeting for further subject to the relevant of rules the with accordance in paid and verified is Bank the of Supervisors of Remuneration of the Bank. Association the Articles of authorities and is it before Supervisors, of Board the by considered is then and Supervisors of Board the of Committee meeting for approval. subject to the shareholders’ general detailed the for Management” Senior and Supervisors Directors, of “Profile table the to refer Please and Senior Management for 2016. remuneration of Directors, Supervisors V. CHINA EVERBRIGHT BANK 86 Eleventh andtheTwelfthNationalCommitteeofCPPCC. senior engineer,professorandtutorforMAcandidates atTsinghuaUniversity.Heisalsoamemberofthe Corporation. HegraduatedfromTsinghuaUniversitywith adoctoraldegreeinchemicalengineering.Heis of QinghaiProvinceCNDCA,ExecutiveDirectorand DeputyGeneralManagerofChinaEverbright(Group) National Democratic Construction Association (“CNDCA”), Deputy Governor of Qinghai Province, Chairman Zhuang AutonomousRegion,ViceChairmanandofGuangxiRegionChina as Deputy Division Head and Division Head in ChinaDevelopment Bank, DeputyMayor of BaiseGuangxi and DirectorofSunLifeEverbrightInsuranceCo.,Ltd.From1994toJune2014,hesuccessivelyserved Chairman andGeneralManagerofChinaEverbrightGroupLimited,DirectorSecuritiesCo.,Ltd Mr. Gao has served as Vice Chairman of the Bank since December 2014. He currently serves as Vice Mr. GaoYunlong Government Allowance”bytheStateCouncilofChina. of theAgricultureandVillagesCommitteeNationalPeople’sCongress.Heisarecipient“Special Communist PartyofChina(“CPC”),adelegatetotheTwelfthNationalPeople’sCongressandViceChairman People’s PoliticalConsultativeConference(“CPPCC”),adelegatetotheEighteenthNationalCongressof and is a senior economist. He has been a member of the Eleventh National Committee of the Chinese graduate ofDongbeiUniversityFinanceandEconomics,holdsamaster’sdegreeininvestmenteconomics, of China Economic and Social Council and China Center for International Economic Exchanges. He is a for FinanceandBankingAdvisoroftheInvestmentAssociationChinaaswellExecutiveDirector April 2003toJune2007,hewasViceChairmanofCBRC.HealsoPresidenttheChinaSociety Bureau of the PBC and Director-General of the First Banking Supervision Department of the PBC. From General oftheCreditManagementDepartmentPBC,Director-GeneralCurrency,GoldandSilver of Shenyang Branch of State Administration of Foreign Exchange. He served successively as Director- Shenyang BranchofthePeople’sBankChina(“PBC”)andDeputyDirector-General Shenyang Branch of China Construction Bank (“CCB”), Deputy General Manager and General Manager of the BoardofDirectorsSunLifeEverbrightInsuranceCo.,Ltd.HewasDeputyGeneralManager International Limited, member of the Board of Directors of Everbright Securities Co., Ltd. and member of Limited, Non-Executive Director of China Everbright Limited, Non-Executive Director of China Everbright of ChinaEverbrightGroupLimited,ChairmantheBoardDirectorsHoldingsCompany Mr. TangjoinedtheBankasChairmanofBoardDirectorsinJuly2007.Currently,heisalso Mr. TangShuangning (I) VII. Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets
Directors Supervisors andSeniorManagement Working Experience,appointmentandconcurrentofDirectors, 2016 Annual Report 87 Ms. Li has served as Executive Director of the Bank since September 2016. Ms. Li, member of the CPC Ms. Li has served as Executive Director of the Bank since September as Director of China UnionPay Committee and Executive Vice President of the Bank, also concurrently serves Asset Management Limited. She Co., Ltd., Sun Life Everbright Life Insurance Co., Ltd. and Everbright Jin’ou Finance and Accounting Department) was the General Manager of the Planning and Finance Department (the positions in Bank of Communications of the Bank. From October 1988 to April 2001, she worked at different Jinan Branch of BOCC, Chief of the Co., Ltd. (“BOCC”), including Deputy Chief of the Planning Division of of Branch Jinan of Manager General Deputy BOCC, of Branch Jinan of Division Accounting and Finance in worked She BOCC. of Branch Zhuhai of Manager General and Manager General Deputy and BOCC, (“ICBC”) and in Huaiyin Office of Huaiyin Office of Jinan Branch of Industrial and Commercial Bank of China 1983 to July 1986, she attended Jinan Branch of the People’s Insurance Company of China. From August the Open University of China, majoring in finance. She is an accountant. Ms. Li Jie Mr. Ma has been Executive Director of the Bank since March 2015. He currently serves as Deputy Secretary of the Bank since March 2015. He currently serves as Deputy Secretary Mr. Ma has been Executive Director the of Chairman as concurrently and Bank, the of President Vice Executive and Committee CPC the of December to 2010 December From Limited. Corporation Investment International CEB of Directors of Board Committee and Executive Vice President of the Bank. From November 2014, he was a member of the CPC China Department of General Manager of the Financial Management as 2009 to December 2010, he served March to November 2009, he was a member of CPC Committee of Everbright (Group) Corporation. From From June 2005 to February 2009, he was the Deputy Secretary of China Everbright Industry Group Ltd. June to 1984 July From Bank. Bohai China of Officer Executive Chief and Director and Committee CPC and Center Card Peony of Manager General and Committee, CPC the of Secretary as served he 2005, in the ICBC; he also served as Secretary of the CPC Committee General Manager of Bank Card Department Branch and Deputy Wuhan of the CPC Committee and President of Secretary Branch, and President of Hebei Finance of University Dongbei from graduated He ICBC. of Office Head the of Office General of Director from economics political in degree doctoral a and economics in degree bachelor’s a with Economics and Law. He holds a certificate of senior economist. Zhongnan University of Economics and Mr. Ma Teng Mr. Zhang Jinliang also serves as Bank since August 2016. He currently the Executive Director of the Mr. Zhang has become CPC Committee of the Bank, a member of the of the CPC Committee and President a Deputy Secretary President of Bank He served as Executive Vice of China Everbright Group Limited. and Executive Director Branch of Bank of as General Manager of the Beijing 2014 to January 2016. He served of China from July Department worked in the Financing and Accounting 2009 to December 2014. He had China from November he served as From February 2007 to November 2009, of Bank of China for many years. of the Head Office October From China. of Bank of Office Head the of Department Management Financial of Manager General Department Accounting and Finance the of Manager General Deputy as served he 2007, February to 2003 Implementation as General Manager of the IT Blueprint of Bank of China, and also served of the Head Office 2007. He obtained his doctorate in economics from Xiamen University in Office from March 2005 to February accountant. September 1997. He is a certified public CHINA EVERBRIGHT BANK 88 Fiscal ScienceoftheMinistryFinancewithadoctoral degreeineconomics. of CPCCommitteeChinaReAssetManagementCo., Ltd.HegraduatedfromtheResearchInstitutefor Management Co.,Limited,VicePresidentofNewChina AssetManagementCo.,Ltd.,andDeputySecretary of China Life Insurance (Hong Kong) Asset Management Co., Ltd., President of China Life Franklin Asset Reinsurance Corporation.FromMarch2003toApril2012, hesuccessivelyservedastheGeneralManager of Directors of China Re Asset Management (Hong Kong) Co., Ltd., and member of the council of Asia Board ofDirectorsandGeneralManagerChinaRe AssetManagementCo.,Ltd.,ChairmanoftheBoard President of China Reinsurance (Group) Co., Ltd., Secretary of CPC Committee, Vice Chairman of the Mr. Zhao became Non-Executive Director of the Bank in February 2015. He is currently the Assistant Mr. ZhaoWei Department ofCHI.HeholdsaMaster’sDegreeEMBAfromPekingUniversity. of Securities Institutions of Securities Institution Management Department/Insurance Institution Management Co., Ltd.FromDecember2011toAugust2015,hewasHeadoftheFirstDivisionEquityManagement November 2012toSeptember2016,hewastheViceChairmanofBoardDirectorsChinaSecurities 2012, hewasaDesignatedDirectorofCHI(servingatChinaInvestmentSecuritiesCompanyLimited).From China LionSecuritiesCompanyLimitedfromJanuary2007toFebruary2011.FromMarch2011October from September2004toJanuary2007andPresidentDeputySecretaryoftheCPCPartyCommittee and PresidentofFounderSecuritiesLimited.HewastheViceHuaxiCompanyLimited September 2004,heservedasChairmanoftheBoardDirectors,SecretaryCPCPartyCommittee Manager oftheInvestmentBankingDepartmentGuosenSecuritiesCompanyLimited.FromJune2002to Park CorporationJointVentureShenzhen(Moscow).FromMarch1997toJune2002,hewastheDeputyGeneral 1997, heservedasAssistantGeneralManagerandDepartmentDirectorofShenzhenScienceIndustry Director oftheSecondPlantandGeneralManagerjointventureinShenzhen.FromJuly1990toMarch Corporation, the Deputy Secretary of the Communist Youth League Committee of the Main Plant, Vice served successively as an engineer of Zhuzhou smelter factory of China National Nonferrous Metals Industry CHI while serving as director of China Everbright Group Limited. From September 1982 to July 1990, he Mr. LihasservedasNon-ExecutiveDirectoroftheBanksinceSeptember2016.currentlyworksat Mr. LiHuaqiang graduated fromthepostgraduateprograminFudanUniversity,majoringlaw.Heholdsabachelor’sdegree. International BusinessDepartmentofBankShanghaiandSecretarytheBoardShanghai.He Manager ofInternationalBusinessDepartmentShanghaiCityCooperativeBankandGeneral May 1994toAugust2008,hewasSeniorDirectorofShanghaiBranchBankEastAsia,DeputyGeneral Transaction Centre, head of General Affairs Department of China Foreign Exchange Trading Centre. From June 1992toApril1994,hewasdeputymanagerofmarketingdepartmentShanghaiForeignExchange to May1992,hewasresearchanalystanddeputydirectorofShanghaiInstituteFinancePBC.From Bank, ChinaEverbrightGroupLimitedandDevelopmentBankSecuritiesCo.,Ltd.FromAugust1987 works at Central Huijin Investment Ltd. (“CHI”), and concurrently serves as Director of China Development Mr. Zhang has served as Non-Executive Director of the Bank since September 2016. Mr. Zhang currently Mr. ZhangShude Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets 2016 Annual Report 89 Ms. Fok Oi Ling Catherine in January 2014. Currently, she is a Ms. Fok became an Independent Non-Executive Director of the Bank of the Hong Kong Institute of consultant of Siya International Consultancy Service Co. Ltd., a senior member Association and a member Directors, a voting member of the Hong Kong Professionals and Senior Executives Kong Hong the of member a and Committee, Affairs Economic and Group Economics and Finance its of she served successively in the Hong Women Professionals & Entrepreneurs Association. From 1981 to 2006, of the International Trade Financing Kong and Shanghai Banking Corporation Limited (“HSBC”) as Manager and commercial banking and trade Division and the Commercial Credit Division, Regional Director of industrial Regional Director of retail banking finance, Chief of the Risk Management Department of retail banking, and banking business. From 2010 to and Director of wealth management and investment products for the retail of HSBC, and a marketing and 2012, she served as Director of business integration of Asia-Pacific Region Co., Ltd. (“BOCC”). She was management advisor to the retail banking business of Bank of Communications – Shanghai. She holds a master’s Honorary Chairman of the Hong Kong Chamber of Commerce in China She is an associate of the Hong degree in business administration from the Chinese University of Hong Kong. Kong Institute of Bankers and a certified financial management planner. Mr. Xie Rong of professor a is He 2013. January in Bank the of Director Non-Executive Independent became Xie Mr. and concurrently serves as Director of Shanghai Automotive Industry Shanghai National Accounting Institute- Hongyuan Shenwan of Director Independent and Corporation, (Group) Electric Shanghai and Corporation Group Holding Investment Bairun Shanghai Ltd, Co., Medicine Chinese Traditional China Ltd., Co., Group Trust Corp. Ltd. Mr. Xie was Independent Director of China CITIC Bank. Co., Ltd and Shanghai International of Institute Accounting of Head Deputy and Tutor Doctorial Professor, Professor, Associate as served He 1997. During that period, to December December 1985 from and Economics of Finance Shanghai University and year one for Kingdom United the in Warwick of University at research conducted and visited Xie Mr. Da Pricewaterhouse and Accountants Public Certified Hua Da of accountant certified part-time a became became a partner of KPMG Huazhen Certified Public Accountants from Hua Certified Public Accountants. He Institute Accounting National Shanghai of Dean and Deputy Professor and October 2002 to 1997 December Mr. Xie graduated from Shanghai University of Finance and Economics from October 2002 to August 2012. a doctoral degree in economics and is a senior non-practicing certified and majored in accounting. He holds by the State Council. public accountant. Mr. Xie is a recipient of the “Special Government Allowance” Mr. Qiao Zhimin concurrently is He 2013. January in Bank the of Director Non-Executive Independent became Qiao Mr. from (“BOC”) China of Bank for worked had He Bank. Commercial Rural Wuhan of director independent Director of the in BOC, including Deputy Division July 1996 and served at various positions February 1978 to Branch and Deputy General Manager of Luxemburg Department of the Head Office, Finance and Accounting had also worked of the Head Office. Mr. Qiao of the General Planning Department Deputy General Manager Director-General at various positions, including Deputy July 1996 to July 2003 and served for the PBC from Department. He of the First Banking Supervision Department and Deputy Director-General of the Accounting of the Finance and level) for ICBC. He was Director of Regulation Team (Director-General also served as Chief as Vice Chairman 2007. Mr. Qiao was appointed of CBRC from July 2003 to January Accounting Department Board and Chairman of the Fifth Session of the Supervisory Board of the Fourth Session of the Supervisory Ltd. from January 2007 to April 2012. Mr. Qiao graduated from Hunan for China Minsheng Banking Corp., holds a master degree and a certificate of finance. He majored in Economics and Finance and College of senior accountant. CHINA EVERBRIGHT BANK 90 Higher EducationEngineeringManagementoftheMinistry ofHousingandUrban-RuralDevelopment. Management, DongbeiUniversityofFinanceandEconomicsamembertheEvaluationCommittee Yadong Investment Consulting Co., Ltd. He has served as Dean of the School of Investment Engineering Industry Association, Vice Chairman of Dalian Engineering Consulting Association and Chairman of Dalian Investment Association, an Executive Director of construction economics branch of China Construction doctoral tutor, Chief Expert of major bidding project of National Social Science Fund, Director of China works as a Professor (National Second Class) of the Dongbei University of Finance and Economics, a Mr. WanghasbeenanIndependentNon-ExecutiveDirectoroftheBanksinceJanuary2017.Hecurrently Mr. WangLiguo Vantone Groupin1991andhasbeentheChairmanofBoardDirectorstodate. and Development Research Institute and Director of China Minsheng Banking Corp., Ltd. He founded the Economic System Reform Commission, Senior Vice President of the Research Centre of the Hainan Reform of the Central Committee of CPC, the deputy department director of the Research Institute of the State Public Policy at the National University of Singapore. Since 1984, he served as a lecturer of the Party School Academy of Social Sciences and a Master of Public Policy (MPP) degree from Lee Kuan Yew School of Party SchooloftheCentralCommitteeCPC,adoctoraldegreeinlawfromGraduateChina obtained a bachelor’s degree in economics from Northwest University, a master’s degree in law from the Vantone Group, and Chairman of the Board of Directors of Vantone Investment Holdings Co., Ltd. He Mr. Feng became Independent Non-Executive Director of the Bank in February 2015. He is Chairman of Mr. FengLun 1981, hemajoredinorganicchemicalengineeringAnhuiChemicalEngineeringSchool. Renmin UniversityofChinawithamaster’sdegreeinphilosophyJuly1993.FromSeptember1978to of SocialSciencesGraduateSchoolandreceivedadoctorateineconomicsJuly1996.Hegraduatedfrom as anassistantengineeroftheChinaNationalPetrochemicalCorp.HegraduatedfromChineseAcademy worked inFinancialClaimsOfficeoftheHeadPBC.FromJuly1981toSeptember1990,heserved Co., Ltd.andProfessorofCapitalUniversityEconomicsBusiness.FromJuly1996toJune1998,he as Deputy General Manager at Shanghai Office of GF Securities, Vice President at Beijing Venture Capital scholar oftheUniversityBritishColumbia,Canada.FromJune1998toMarch2010,hesuccessivelyserved Deputy ChiefEconomistoftheChinaCenterforInternationalEconomicExchanges,aresearcherandvisiting Mr. XuhasbecomeanIndependentNon-ExecutiveDirectoroftheBanksinceFebruary2015.Heiscurrently Mr. XuHongcai Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets 2016 Annual Report 91 Supervisors
Mr. Yu Erniu is also independent director of the Mr. Yu became External Supervisor of the Bank in November 2012. He of Director and Ltd., Co., Network Information Flush Hithink and Ltd. Co., Management Fund First-Trust and Deputy Director-General Shanghai Benemae Pharmaceutical Corporation. He served as a staff member the Ministry of Finance. Mr. Yu was and Director-General of the Department of Personnel and Education of of Directors, Director of the Human appointed as Designated Director of CHI to BOC, a member of the Board the of Chairman and Committee CPC the of Department Organization the of Chief Department, Resource management studies from the Labor Union of China Investment Corporation. He is a graduate of economic also obtained a master’s degree in PLA Air Force Political College majoring in economic management. He economic laws from Capital University of Economics and Business. Mr. Wu Junhao of Supervisors in November 2009. He is Manager of the Financial Mr. Wu became a member of the Board Co., Securities Orient of Director as serves also and Limited Group Shenergy of Department Management General Manager of Shanghai Ltd. and China Pacific Insurance (Group) Co., Ltd. He was Executive Deputy of Shanghai Bailitong Investment New Resources Investment Consulting Company, Deputy General Manager Ltd., Deputy Director, Director and Company, Deputy Director of Shanghai Shenergy Asset Management Co., Director of Financial Management Senior Director of the Asset Management Department and Deputy (Acting) obtained later and University Normal China East from graduated He Ltd. Co., (Group) Shenergy of Department a master’s degree in enterprise management at East China Normal University. Mr. Yin Lianchen Chief currently is He 2014. December since Supervisors of Board the of member a become has Yin Mr. Limited and Director of Everbright Securities Co., Ltd. Since April 2002, Investment Officer of China Everbright Securities of Director Department, Administration Corporate of Manager General as served successively he Limited, Everbright China of Department Communications Corporate of Director and Department Brokerage of Moody’s KMV, Deputy General Manager of Beijing Yonder Investment Chief Representative of China Desk Office of China Everbright (Group) Corporation and Assistant General Group, Division Chief in the Executive He graduated from Nankai University with a master’s degree in western Manager of China Everbright Limited. financial accounting. Mr. Li Xin of Board the of Chairman became and 2015, May since Bank the of Supervisor as served has Li Mr. 304 Beijing of engineer assistant an as served successively He 2015. June in Bank the of Supervisors of Ministry the of Office General the of secretary Industry, Aviation of Ministry the of Institute Research Deputy and level) chief (section secretary level), chief section (deputy secretary secretary, Industry, Aviation Economic of 1 Section of Head Finance, of Ministry the of Office General the of Secretariat the of Director of Good Ocean Branch, Deputy Managing Director of Xinhua News Agency Hong Kong Affairs Department Division Finance of Head and Office General the of Director Deputy Kong, Hong in Limited Development Resources Human of Director Defense, National for Industry and Technology Science, of Commission of of the CPC Committee and Senior Managing Director of China Department, Chief of Organization Department Investment China of Director Representative Employee as served concurrently and Corporation, Investment Vice and Corporation, Investment China of Committee Working CPC of Secretary Deputy Corporation, of the Labour Union of China Investment Corporation. He graduated fromChairman of the Working Committee with a bachelor’s degree in aviation machinery processing technology. Shenyang Aviation Industrial College (II) CHINA EVERBRIGHT BANK 92 economics. Heisasenioraccountant. Department oftheBank.Mr.YegraduatedfromRenmin UniversityofChinaandholdsamaster’sdegreein General ManagerofTianjinBranch,andDeputy(Acting) GeneralManagerandoftheAudit Finance Department, Deputy (Acting) General Manager of the Finance and Accounting Department, Deputy in the Bank, including Assistant General Manager (Deputy General Manager level) of the Planning and Department, SectionHeadand Deputy Head of the Planning Department. He also served at variouspositions and worked at various positions in Beijing Normal University, including section member of the Financial Department oftheBank.Mr.Yeservedasateacher ofBeijingCollegeGeologicalManagementCadres Mr. Ye became an employeesupervisorin November 2012 and is currentlyGeneral ManageroftheAudit Mr. YeDonghai Administration andholdsamaster’sdegree. Trade System.HegraduatedfromSouthwesternUniversityofFinanceandEconomicsmajoringinBusiness and PartySecretaryofShanghaiGoldExchangeCPCCommitteeChinaForeign and DeputyGeneralManagerofChinaGoldCoinIncorporation.HeservedasManager,Chairman Shenzhen BranchofChinaCITICBank,GeneralManagerGoldCoinCommercialCentre successively served as Manager of China Gold Coin Shenzhen Commercial Centre, Vice President of served as a staff member of Monetary Division and Deputy Section Chief of General Office of PBC. He Financial AssociationandanindependentdirectorofShanghaiPudongDevelopmentBank.Hesuccessively of AssociationShanghaiInternetFinancialIndustryandservesconcurrentlyasVicePresident Mr. WangbecameanExternalSupervisoroftheBankinNovember2016.HeiscurrentlySecretaryGeneral Mr. WangZhe master’s degreeandisasenioreconomist. from GraduateSchoolofChineseAcademySocialScienceswithMonetaryandBankingmajor.Heholds a Guizhou Regulatory Bureau of CBRC and independent director of Industrial Bank Co., Ltd.. He graduated of CPCCommitteeandCommissionerChengduBranchPBC,PartySecretaryHead Zunyi BranchofPBC,VicePresidentandmemberPartyCommitteeGuizhou Director andofGuizhouBranchPBC,CPCCommitteeSecretaryPresident(temporarypost) Mr. DengbecameanExternalSupervisoroftheBankinJune2016.HehassuccessivelyservedasDeputy Mr. DengRuilin He holdsamaster’sdegreeandissenioreconomist. graduated fromGraduateSchoolofChineseAcademySocialScienceswithMonetaryandBankingmajor. Reinsurance (Group)Corporation,DirectoroftheBankandChinaEverbrightGroupLimited.He (Group) ofChina(People’sInsuranceCompanyHoldingsCompany),DirectorandPresident People’s Insurance(Property)CompanyofChina,Ltd.),VicePresidentthe Manager ofGuangxi Branch and General Manager of Liaoning Branch of the People’s Insurance Company (The County, Jilin, General Manager of Tonghua Branch, Jilin, Deputy General Manager of Jilin Branch, General member ofCountyCommittee,DeputyMagistrateandManagingFusong Mr. WubecameanExternalSupervisoroftheBankinJune2016.Hehassuccessivelyservedasacommittee Mr. WuGaolian Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets 2016 Annual Report 93 Senior Management
Mr. Lu became Executive Vice President of the Bank in December 2010, and a member of the CPC CPC the of member a and 2010, December in Bank the of President Vice Executive became Lu Mr. Secretary of the Board of the BankCommittee of the Bank in March 2009. He has concurrently served as the positions of the Bank, including since December 2016. He joined the Bank in 1994 and served at various for the Board, Assistant General Manager of the Securities Department, Division Chief in the Executive Office Planning and Finance Department Manager of the Planning and Treasury Department, General Manager of the Department, Deputy Accounting and Finance the the Bank, Deputy General Manager of of Branch Beijing of and Secretary of the Board of General Manager and General Manager of Planning and Finance Department Manager Business and Railways of Ministry the of Institute Planning the in engineer an was He Directors. is a graduate of Shanghai Railway in the Investment Banking Department of Huaxia Securities Co., Ltd. He degree in applied economics of Institute and holds a master’s degree in railway engineering and a doctoral Xi’an Jiaotong University. He holds a certificate of senior economist. Mr. Lu Hong Please refer to the section “Directors”. Mr. Zhang Huayu CPC the of member a and 2007 March in Bank the of President Vice Executive became Zhang Mr. 2006. He has concurrently served as Chairman of Everbright Financial Committee of the Bank in February Chairman of Everbright Technology Co., Ltd. since December 2016. Leasing Co., Ltd. since July 2014 and 2001. He successively served as Assistant President of the Bank and Mr. Zhang joined the Bank in February of the Head Office. From November 1994 to February 2001, he General Manager of the Banking Department Credit the Management Division of Credit for Chief Division including BOCC, of positions various at worked Manager and General Manager Approval Department of Zhengzhou Branch of BOCC, and Deputy General Regional Branch of the PBC in of Xi’an Branch of BOCC. He was Director of the General Office of Shangqiu in Shangqiu regional and Director Henan Province, General Manager of Xiayi County Sub-Branch of the PBC College of Finance and Economics of the Urban Credit Union in Shangqiu region. He is a graduate of Hunan Business and Economics. and holds a master’s degree in economic management of University of International He holds a certificate of senior economist. Please refer to the section “Directors”. Mr. Ma Teng Please refer to the section “Directors”. Ms. Li Jie (III) Mr. Zhang Jinliang Ms. Liu Yan as Deputy General in June 2016. She currently serves employee supervisor of the Bank Ms. Liu became an as served successively She Bank. the of Department Management Liability and Asset the of Manager the Banking Department of Planning and Finance associate business manager of the staff, business senior Division Management Accounting of chief business manager and division associate Bank, the Department of (Assistant General Office of the Bank, Deputy Director Finance Department of the Head of the Planning and a member of CPC East Audit Center of the Bank, of Head Office level) of the Manager of the Department from Northern branch and so on. Ms. Liu graduated General Manager of Shanghai committee and Deputy certified public accountant. with a master’s degree and she is a Jiaotong University CHINA EVERBRIGHT BANK 94 Finance andEconomics.He holdsaDoctor’sdegreeinEconomicsandcertificate ofsenioreconomist. Office oftheChinaHuarong AssetManagementCo.,Ltd.Mr.Huanggraduatedfrom SouthwestUniversityof Director ofCPCCommittee Office andSecretaryofOrganizationDepartmentCPC CommitteeoftheHaikou of theIndustrialandCommercialBankChina,Senior ManageroftheGeneralManagementDepartment, Deposits Department andDeputyDirector(divisionchieflevel) of the General Office of Hainan ProvinceBranch Chemical Equipment Company, Director of theXinhuaNorthOfficeHaikou branch, DeputyDirectorofthe 2002, hesuccessivelyservedasDeputyChiefofJiangxi ProvinceYichunAreaHardware,ElectricMaterialand Office and DeputyGeneral Manager ofPudong Branch ofBankShanghai. From August1982 to March March 2002toDecember2008,heservedasDeputy GeneralManageroftheBankingDepartmentHead successively servedasAssistantMayor,ViceMayorand memberoftheCPCCommitteeXi’ancity.From Commission (Vice President level) of the Bank in June 2016. From December 2008 to June 2016, he Mr. Huang became a member of the CPC Party Committee and Secretary of the Discipline Inspection Mr. HuangHaiqing economist. of CCB. He graduated from Wuhan University andholdsa master’s degree.Heholdsa certificate ofsenior of theGeneralOffice,DeputyManagerandamemberCPCCommitteeHebeiBranch (“CCB”), theGeneralManagerandSecretaryofCPCCommitteeChengdeBranchCCB,Director and DeputyManageroftheInternationalBankingDepartmentHebeiBranchChinaConstructionBank Everbright (Group)Corporation.FromJuly1984toNovember2009,heservedsuccessivelyasastaffmember Asset ManagementCo.,Ltd.aswellGeneralManageroftheFinancialDepartmentChina Executive Director, a member of the CPC Committee and Vice President of Everbright Financial Holding Deputy General Manager of the Equity Management Department of China Everbright (Group) Corporation, Committee of the Bank since May 2014. From November 2009 to May 2014, he served successively as Mr. YaohasservedasExecutiveVicePresidentoftheBanksinceAugust2014andamemberCPC Mr. YaoZhongyou with amaster’sdegreeineconomics.Mr.WuholdsprofessionaltitleofAssistantResearcher. University withabachelor’sdegreeinengineering.In1987,hegraduatedfromRenminofChina (Deputy DivisionChieflevel)andDirector(Divisionlevel).In1982,hegraduatedfromShanghaiJiaotong Office oftheNPCStandingCommittee,andsuccessivelyservedasViceDirectorEconomicResearchTeam State CouncilPovertyAlleviationOffice.From1987to1995,heworkedattheResearchDivisionofGeneral October 1995 to October 1996, he served as Section Chief of Foreign CapitalManagementCenterof the he was Director of Comprehensive Analysis Division of Balance of Payments Department of SAFE. From Committee ofDisciplinaryInspection(ExecutiveVicePresidentlevel).FromOctober1996toDecember1997, of SME Business Department and General Manager of Human Resources Department and Secretary of Manager of Strategic Management Department, General Manager of Shenyang Branch, General Manager Branch, General Manager of Retail Banking Department, General Manager of R&D Department, General the HeadOffice,GeneralManagerofCreditCardBusiness Department, Deputy GeneralManagerofNanjing Bank, andsuccessivelyservedasDeputyGeneralManager(Acting)ofMarketDevelopmentDepartment October 2016andSecretaryofCPCCommittee(sinceSeptember2016).InDecember1997,hejoinedthe of the Bank in January 2014, and has concurrently served as General Manager of Beijing Branch from Mr. WubecameExecutiveVicePresidentoftheBankinDecember2014,amemberCPCCommittee Mr. WuJian Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets 2016 Annual Report 95 Directors’ and Supervisors’ Interests in Contracts and Service Contracts Directors’ and Supervisors’ Financial, Business and Kinship Relationships among Members of the the of Members among Relationships Kinship and Business Financial, Board of Directors Directors’ and Supervisors’ Interests in Competing Business Directors’ and Supervisors’
None of the Directors or Supervisors of the Bank or related parties had any material interest in any material of the Bank or related parties had any material interest in any material None of the Directors or Supervisors to which the Bank or any of its subsidiaries was a party during the transaction, arrangements and contracts or Supervisors of the Bank entered into any service contract, pursuant reporting period. None of the Directors to director or supervisor if the contract for each year is terminated for to which the Bank shall compensate the Bank’s reason (excluding statutory compensation). Saved as disclosed in this report, there is no financial, business, kinship relationships or other material material other or relationships kinship business, financial, no is there report, this in disclosed as Saved the Board of Directors. relationships among the members of X. None of the Directors and Supervisors of the Bank had interests in any business that competes or is likely to of the Bank had interests in any business that competes or is likely to None of the Directors and Supervisors with the business of the Bank. compete, either directly or indirectly, IX. VIII. Mr. Sun Qiang CPC Committee of 2017 and a member of the President of the Bank in January Mr. Sun became Assistant as Deputy General 1997. He successively served 2016. He has joined the Bank since the Bank in August Assistant sub-branch, Shantou of Manager General branch, Guangzhou of sub-branch Zhuhai of Manager General Manager of Head Office of the Bank, Assistant and Security Department General Manager Inspection and (Acting) Manager General Deputy Department, Banking Corporate of Manager General Deputy and Banking Corporate the of manager General and Department Institutions Financial the of Manager General the People’s Bank Department and General Office of to work in Survey and Statistics Department. He used City Branch (SAFE) and the PBC of Shantou State Administration of Foreign Exchange of China (PBC), the in professional University with a bachelor’s degree Mr. Sun graduated from Peking in Guangdong Province. a master’s degree in Money and Banking from Renmin University probability and statistics. He then acquired of China. CHINA EVERBRIGHT BANK (I) 96 preferential treatmenttofrontlineemployeesandprofit centers toattractandmotivatekeycorepersonnel. basic salary, performance-based bonus and benefits. The Bank’s remuneration policies continued to give both “efficiency and fairness”. The remuneration of employees is comprised of three components, namely In responsetomarketcompetition,theBankhasestablished aunifiedremunerationsystemwhichemphasizes (II) accounting for26.33%;6,701generalmanagementandsupportstaff,15.86%. business and e-banking business), accounting for 38.73%; 11,126 operation support staff (including tellers), business, accountingfor19.08%;16,362employeesintheretailbankingbusiness(includingcreditcard above, accounting for 12.98%. In terms of profession, there were 8,061 employees in thecorporate banking bachelor’s degree,accountingfor68.97%,and5,482incumbentemployeesholdapostgraduatedegreeor college degreeorbelow,accountingfor18.05%ofthetotalemployees,29,141incumbentemployeesholda and 657retiredemployees.Intermsofeducationalbackground,7,627incumbentemployeesholdajunior As attheendofreportingperiod,Bankhad42,250employees(exclusivethosesubsidiaries) XI. Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets
68.97% Employees Remuneration policiesforemployees Overview Postgraduate degreeorabove Bachelor’s degree Junior collegedegreeorbelow structure ofemployeestheBank The educationalbackground 12.98% 18.05% 26.33% General managementandsupportstaff:6,701 Operation supportstaff:11,126 Retail bankingbusiness:16,362 Corporate bankingbusiness:8,061 The professionstructureof 15.86% employees oftheBank 19.08% 38.73% 2016 Annual Report 97 Institutions Employees of main subsidiaries Training plans
XII. establishing more domestic branches During the reporting period, the Bank continued to step up its efforts in branches in Baoding, Zhenjiang, and outlets. Xining (tier-1) Branch received operating qualification and 8 tier-2 and Branch Regional Xiamen Zone Trade Free Pilot Fujian Branch, Yiyang Huanggang, Rizhao, Ganzhou, operation. Meanwhile 63 banking Guangdong Pilot Free Trade Zone Qianhai Shenzhen Branch commenced the Bank had 1,119 branches and outlets were open for business. As at the end of the reporting period, and municipalities, including 38 outlets in 115 economic center cities of 30 provinces, autonomous regions in different cities, county level tier-1 branches, 76 tier-2 branches and 1,005 outlets (including sub-branches of branches). The Bank accelerated sub-branches, sub-branches in the same city and banking department for Application operation. commenced officially branch Seoul institutions. overseas up setting of plan the period, reporting the of end the at As CBRC. by approved been has Luxembourg branch CEB establishing the Bank had 2 overseas branches in Hong Kong and Seoul. (IV) employees, formal 100 had Ltd. Co., Leasing Financial Everbright period, reporting the of end the at As a holding them of 96% with staff, supporting 29 and staff business 49 staff, administrative 22 including bachelor’s degree or above. business 8 staff, administrative 7 including employees, 29 had Ltd. Co., Bank Village Everbright Shaoshan of them holding a bachelor’s degree or above. staff and 14 supporting staff, with 69% 13 staff, administrative 13 including employees, 33 had Ltd. Co., Bank Village Everbright Huai’an Jiangsu with 97% of them holding a bachelor’s degree or above. business staff and 7 supporting staff, 21 staff, administrative 4 including employees, 47 had Limited Corporation Investment International CEB with 85% of them holding a bachelor’s degree or above. business staff and 22 supporting staff, In order to improve the effectiveness of training, the Bank actively explored new training methods and and methods training new explored actively Bank the training, of effectiveness the improve to order In to promote on its staff training. The Bank continued ratio of the Bank’s expenditure improved the input-output nearly designed and 2016 in trainers internal 150 trained and Platform” “Sunshine of program training the which curriculum training existing its improved and reviewed Bank The study. case of micro-courses 150 and the courseware, 212 mobile micro-courses, E-Learning (network education platform) now includes 503 training continued to carry out senior management “Sunshine E-classroom”. The Bank mobile learning platform from campus talents and new employees recruited training programs for overseas project, actively promoted strategy of 2016, following the training management of business training projects. In and held various types office and training implementation at branches and departments”, 6,686 “centralized management at the head 372,561 total of participation a with held were products business, management, covering sessions training of senior officers of the Bank. person-times, including 1,717 person-times (III) CHINA EVERBRIGHT BANK 98 2. 1. Note: Details oftheBank’semployeesandbusinessoutletsareasfollows: Directors, Supervisors,SeniorManagement,Staff,BranchesandOutlets Head office Name ofBranch Beijing Branch Shanghai Branch Tianjin Branch Chongqing Branch Shijiazhuang Branch Taiyuan Branch Huhhot Branch Dalian Branch Shenyang Branch Changchun Branch Heilongjiang Branch Nanjing Branch Suzhou Branch Wuxi Branch Hangzhou Branch Ningbo Branch Hefei Branch Fuzhou Branch Xiamen Branch Nanchang Branch Jinan Branch Qingdao Branch Yantai Branch Zhengzhou Branch Wuhan Branch Changsha Branch Guangzhou Branch Shenzhen Branch Nanning Branch Haikou Branch Chengdu Branch Kunming Branch Xi’an Branch Urumqi Branch Guiyang Branch Lanzhou Branch Yinchuan Branch Xining Branch Hong KongBranch Seoul Branch Total Adjustment onconsolidation
The numberofoutlets, employeesandthetotalassets intheabovetableexcludedthose ofthesubsidiariesBank. Centre. The employeesoftheHeadOffice oftheBankincluded644staffinCreditCardCentreand1,774 staffinRemoteBanking
Number of Outlets 1,122 68 55 34 27 46 33 17 23 33 30 37 38 20 34 19 41 35 15 19 26 33 13 45 32 53 81 49 25 20 24 23 35 11 1 7 6 8 2 2 1 1
Number of employees 2203,963,519 42,250 ,9 2,645,476 3,899 2,931 1,941 1,187 1,080 1,335 1,167 1,185 1,118 1,307 1,309 1,408 1,328 1,060 1,381 1,123 1,291 2,441 1,239 1,095 595 743 882 888 328 833 555 665 905 511 917 747 964 807 191 312 309 122 85 39 27
(RMB million) Total assets
(1,841,666) 513,818 219,545 168,895 109,837 164,828 173,410 71,797 76,511 78,819 66,365 34,287 63,773 63,224 46,365 37,741 71,619 59,385 98,826 55,440 61,289 50,925 55,083 61,674 81,579 29,084 87,215 58,229 85,158 44,688 49,086 70,026 35,630 73,621 32,684 14,955 76,648 9,346 3,190 5,114 –
2016 Annual Report 99 Committee Committee Nomination Supervision and other requirements. The Bank’s Bank’s The requirements. other and Board of Supervisors Senior Meeting Board of Directors Shareholders’ Management Audit Committee Control Committee Strategy Committee Nomination Committee Overview Corporate Governance Structure Corporate Governance Remuneration Committee Related Party Transactions
Risk Management Committee Risk Management
II. governance in the capital market, the Bank has established a sound Aiming at the best practice of corporate corporate modern the for essential procedures and rules of system and framework governance corporate the with complied strictly Bank the 2016, In Bank. the of governance corporate better to leading system, Corporate Governance of the Code the Banks, Commercial on the Law Law, Securities the Law, Company on the Corporate Governance of Commercial Banks, the Guidelines for for Listed Companies, the Guidance Board of Directors of Commercial Banks, the Guidelines for the Board the Due Diligence Performance of the Rules Listing Kong Hong the Banks, Commercial of Supervisors of corporate governance had no deviation from regulatory documents regulating the corporate governance of the from regulatory documents regulating the corporate governance of the corporate governance had no deviation Securities Regulatory Committee (CSRC). listed company issued by the China performed the duties as set out in Rule D.3.1 of Appendix 14 of the The Board of Directors of the Bank the practices, and policies governance corporate Bank’s the reviewing including Rules Listing Kong Hong Bank’s the management, senior the and directors the of development professional continuous and training requirements, the Bank’s compliance policies and practices in respect of observance of law and regulatory the Bank’s compliance with the with the Model Code and the compliance manual applicable to employees, disclosure requirement as stated in code provisions of Appendix 14 of the Hong Kong Listing Rules and the the chapter headed “Corporate Governance” in this Annual Report. Corporate Governance Corporate I. CHINA EVERBRIGHT BANK 100 safeguarding thelegitimaterightsandinterestsofshareholders andstakeholders. thus ensuringtheauthenticity,accuracy,completeness, fairnessandtimelinessofinformationdisclosure, regulatory announcements)anddisclosedits2015annual reportand2016interiminJapanmarket, online non-announcementdocuments)and136Hshare adhocannouncements(includingAshareoverseas During thereportingperiod,Bankpublishedregular reports,94Ashareadhocannouncements(including financial affairs,fullyensuringtheBank’sfullautonomy in itsoperation. shareholders were independent from each other in terms of their business, personnel, asset, organization and thereby effectivelysafeguardingtheinterestofsmalland mediumshareholders.TheBankanditssubstantial such transactions were well justified and in the interest of listed companies and shareholders as a whole, their professionalopinionsontheissuanceandlistingofAshareconvertiblecorporatebondswhether Shareholders’ MeetingandHMeeting,theBankappointedanindependentfinancialadviserfor and disclosed separately. When the Bank convened the 2015 Annual General Meeting, 2016 First A medium and small investors were involved, the votes made by medium and small investors were counted both on-site voting and online voting were adopted, when material matters concerning the interests of rights ofparticipationanddecision-makingthroughpropersystems,procedures.Atthegeneralmeetings, During the reporting period, the Bank safeguarded the minority shareholders’ rights of being well-informed, is pendingfortheapprovalofCBRC). of partycommitteeincorporategovernancestate-ownedenterprises.(RevisiontheArticleAssociation party construction,theBankrevisedArticleofAssociationandspecifiedstatutorystatus the legitimateinterestsofinvestors.Inordertomeetrequirementscentralgovernmentinrelation regulation oninformationdisclosureandpreventedreducedinsiderdealingactivitiestosufficientlyprotect and announcements further improved the information disclosure mechanism of the Bank, strengthened the disclosure, registration and reporting of insider information as well as accountability. Such amendments providing further details in relation to the basic principle, items, procedures, contents of information disclosure managementwork,theBankrevisedandannouncedRulesonAffairsofInformationDisclosures, satisfy domesticandforeignregulatoryrequirementsconstantlyfurtherregulateenhanceinformation with reference to the regulatory requirements issued by regulatory authorities in recent year. In order to and theBoardofDirectorstoPresident;revisedManagementMeasuresConnectedTransactions and managementmeasuresof authorization by the Shareholders’ General MeetingtotheBoardofDirectors Directors. In order to further enhance the management of authorization, the Bank improved the proposals the Bank made amendments to the rules of procedures of the six special committees of the Board of Procedures of the General Meeting of Shareholders and the Rules of Procedures of the Board of Directors, During thereportingperiod,inordertobelinewithArticlesofAssociationBank,Rules compliance withtherequirementsofdomesticandforeignregulatoryauthorities. Board of Supervisors has been adjusted. The member structure and their professional background are in supervisors, the composition ofthecommittees the Seventh Session of theBoardDirectorsand the been approved by the China Banking Regulatory Commission. According to the expertise of directors and regulations andtheArticlesofAssociationBank.Thequalificationnewly-appointeddirectorshas of theSixthBoardDirectorsandSessionSupervisorsaccordingtolaws During the reporting period, the Bank has smoothly completed the re-election and appointment of members Corporate Governance
2016 Annual Report 101 Implementation of the resolutions of the general meetings of shareholders by by shareholders of meetings general the of resolutions the of Implementation the Board of Directors Shareholders’ Meetings Shareholders’ meetings Convening of shareholders’
During the reporting period, the Board of Directors of the Bank earnestly and fully implemented resolutions and fully implemented Bank earnestly the of Directors of Board the period, reporting the During meetings of the Bank. considered and approved at the general Directors of the Board of General Meeting, the 2015 Annual and approval at the Bank’s Upon consideration time, dividends to shareholders in distributed plan for 2015, Bank earnestly implemented the profit distribution implemented. and safeguarded shareholders’ interests. The profit distribution plan has been share A of listing and issuance public the regarding resolution the of approval and consideration Upon First A Shareholders’ Class Meeting convertible corporate bonds at the Annual General Meeting of 2015, the timely reported to CBRC and CSRC of 2016 and the First H Shareholders’ Class Meeting of 2016, the Bank convertible corporate bonds. On 17 on the proposal in respect of the public issuance and listing of A share billion. March 2017, the Bank publicly issued the A share convertible bonds of RMB30 seventh the of directors the of election the regarding resolution the of approval and consideration Upon General Extraordinary First the and 2015 of Meeting General Annual at Directors of Board the of session approval its and obtained PBC the and CBRC to reported timely Bank the of 2016, Shareholders of Meeting on the qualifications of the new directors. (II) III. (I) meeting, class shareholders’ A one meeting, general annual one held Bank the period, reporting the During and one extraordinary general meeting in conformity with the procedures one H shareholders’ class meeting, specified in the Articles of Association of the Bank. the 2015 Annual General Meeting, 2016 First A Shareholders’ Class On 29 June 2016, the Bank convened Class Meeting. The announcement on these meetings was published Meeting, and 2016 First H Shareholders’ and the Bank on 30 June 2016. on the websites of the SSE, the HKSE the 2016 First Extraordinary General Meeting. The announcement On 15 November 2016, the Bank convened the websites of the SSE, the HKSE and the Bank on 16 November for these meetings was published on 2016. The Bank won the Excellent Board of Directors Prize and was granted the “Award of Creating Value of the and was granted the “Award of Creating Excellent Board of Directors Prize The Bank won the sponsored by the of Chinese Listed Companies Gold Round Table Award for Boards Board” in the Twelfth magazine. Directors & Boards work during the implementation and execution of its of the Bank has reviewed the The Board of Directors that the Board of the Bank, and concluded feedback from the senior management reporting period, solicited of the Bank and duties and safeguarded the interests Bank has effectively performed their of Directors of the its shareholders. CHINA EVERBRIGHT BANK 102 (III) in China’sinterbankbondmarket. People’s BankofChina.On2March2017,theissuedqualifiedtier-2capitalbondsRMB28.0billion the FirstExtraordinaryGeneralMeetingofShareholders2016,BanktimelyreportedtoCBRCand Upon considerationandapprovaloftheresolutionregardingissuancequalifiedtier-2capitalbondsat Corporate Governance Hongcai, andMr.FengLun). Non-Executive Directors(Mr.ZhangXinze,Mr.QiaoZhimin, Mr.XieRong,Ms.FokOiLingCatherine,Xu Mr. GaoYunlong,ZhangShude,WuGang, LiHuaqiang,andMr.ZhaoWei),6Independent Directors (Mr.ZhangJinliang,Mr.MaTeng,andMs.Li Jie),6Non-ExecutiveDirectors(Mr.TangShuangning, As attheendofreportingperiod,BoardDirectorsconsisted15Directors,including3Executive (I) IV. Note: Mr. FengLun Mr. XuHongcai Ms. FokOiLingCatherine Mr. XieRong Mr. QiaoZhimin Mr. ZhangXinze Mr. ZhaoWei Mr. LiHuaqiang Mr. WuGang Mr. ZhangShude Ms. LiJie Mr. MaTeng Mr. ZhangJinliang Mr. GaoYunlong Mr. TangShuangning Name
Attendance rateofdirectorsatgeneralmeetings Board Composition Directors andBoardof meetings in2016duetootherofficialduties. general meetings In accordancewithRuleA.6.7ofAppendix14theHongKongListingRules,IndependentNon-ExecutiveDirectorsshouldattend of the Bank. Some independent non-executive directors of the Bank were unable to attend relevant general
Number of Meetings 2 2 2 2 2 2 2 1 2 1 1 2 1 2 2
Attendance in Person 0 1 1 1 2 0 0 1 2 1 1 0 1 1 1 2016 Annual Report 103 2016-2020 Development Plan Development 2016-2020 and and Overall Strategy the fostered strategic transformation and considered and approved the resolutions regarding the the regarding resolutions the approved and considered and transformation strategic fostered Board Meetings and Resolutions Duties and Powers of the Board of Directors Duties and Powers of the Board
(III) 3 and meetings on-site 8 including meetings, 11 held Directors of Board the period, reporting the During 18 heard and proposals 85 of total a considered Directors of Board The resolutions. written via meetings decision-making. reports, playing an effective role in scientific consolidate to system management capital the improved continuously Bank the of Directors of Board The second (the shares preference million 100 of issuance the completed successfully foundation, capital the Report on Capital Planning and its tranche of the first issuance) and considered and approved 2016-2020 convertible bonds, proposal in review report and the proposal of public issuance and the listing of A shares of preference shares (second respect of the issuance of qualified tier-2 capital bonds and non-public issuance from approval the with internationalization fostered It proposals. replenishment capital other and issuance) strengthened branch; Luxembourg CEB and S.A. (Europe) CEB establishing of preparation the on CBRC approved and considered and strategic management (II) Bank, the Board of Directors is responsible for convening the general As the decision-making body of the to the general meeting of shareholders and implementing resolutions meeting of shareholders, reporting work The Board of Directors shall also make strategies, operation passed at the general meeting of shareholders. various proposals on financial budget, final accounts, risk capital plans and investment plans and formulate appoint members of senior management. Please refer to the Articles of allocation, profit distribution plan and Association of the Bank for details. of the Bank; the of bank, establishment of direct technology companies, establishment of subsidiaries information investments in effectively etc.; Bank, Village Everbright Ruijin and business card credit the for entity legal separate a of related-party of management refined of standard the improved constantly and control internal implemented information disclosure in strict transactions; enhanced the management of information insider and performed compliance with regulatory requirements. The Bank has paid special attention to the diversity of the members of the Board of Directors. In accordance Directors. In of Board the of members the of diversity the to attention paid special has Bank The the Director of the Bank, upon examining Diversity of the Board of Directors with the Policy on Membership Committee Nomination the Directors, of Board the to recommendation its submitting and candidates professional background, educational and cultural age, gender, candidates’ the evaluated comprehensively for responsible also is Committee Nomination The etc. service, of length knowledge, skills, experience, and recommending of the Board of Directors, number of members and composition evaluating the structure, of 15 Directors Out of the of the Bank. strategy that correspond with the adjustments to the Board on any or above with 7 12 hold a postgraduate degree end of the reporting period, 2 are female, the Bank as at the banking sector and managerial work in the commercial degree. Engaged in the operational holding a doctoral Directors are highly experienced. The Non-Executive of time, the Executive Directors for an extensive period The experience. managerial of a wealth and possess respective institutions their in key positions held have are experts in finance, accounting, auditing and other aspects who can Independent Non-Executive Directors in different areas. provide the Bank with professional advice Directors, please refer to “Directors, Supervisors, Senior Management, For the details of the biographies of Staff, Branches and Outlets”. CHINA EVERBRIGHT BANK 104 general meeting. and approvetheproposal on thenominationofdirectorcandidatesandfurther submit itforelectionatthe conditions ofeachdirector candidate andsubmitsaproposaltotheBoardofDirectors, whichwillconsider directors. The Nomination Committee of the Board of Directors preliminarily reviews the qualification and The regulatory authorities. term ofofficefortheindependentnon-executivedirectors shallconformtoapplicablelawsandprovisionsof The termofofficefortheindependentnon-executive directors isthesameasthatofotherdirectors.The the generalmeetingofshareholders. re-appointed directorscommencesfromthedatewhen suchre-electionandre-appointmentsareapprovedat re-elected andre-appointedwhenthetermofofficehas expiredandthetermofofficere-elected years startingfromthedatewhenappointmentqualifications areapprovedbytheCBRC.Directorscanbe general meeting of shareholders, and the term of officefor directors (including non-executivedirectors) is three In accordance with the Articles of Association of the Bank, directors shall be elected and replaced at the (V) 2 1. Note: (IV) SSE, theHKSEandBank. The announcementsofresolutionsallBoardMeetingstheBankarepublishedonwebsites Corporate Governance . Mr. TangShuangning Name Mr. GaoYunlong Mr. ZhangJinliang Mr. MaTeng Ms. LiJie Mr. ZhangShude Mr. WuGang Mr. LiHuaqiang Mr. ZhaoWei Mr. ZhangXinze Mr. QiaoZhimin Mr. XieRong Ms. FokOiLingCatherine Mr. XuHongcai Mr. FengLun
Articles of Association of the Bank stipulates the procedures for appointing, re-electing and removing Appointment, re-electionandremovalofdirectors perform hisorherdutyupontheapprovalofqualificationsbyCBRCinSeptember2016. Executive Directors CBRC inAugust2016. Executive DirectorMr.ZhangJinliangstartedtoperformhisdutyasexecutivedirectorupontheapprovalofqualificationsby Attendance RecordsofDirectorsatBoardMeetings Ms. Li Jie and Non-Executive Director Mr. Zhang Shude, Non-Executive Director Mr. Li Huaqiang started to
Number of Meetings 11 11 11 11 11 11 11 11 11 11 11 4 2 2 2
Attendance in Person 11 10 10 11 10 11 4 7 1 2 2 9 8 9 6
Attendance by Proxy 0 1 0 4 1 0 1 0 2 3 0 1 0 2 5
Absence 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2016 Annual Report 105 Independent Non-Executive Directors’ objections to any issues of the Bank Independent Non-Executive Directors’ objections to any Attendance of board meetings by Independent Non-Executive Directors Attendance of board meetings by Independent Non-Executive Attendance of general meetings by Independent Non-Executive Directors Attendance of general meetings by Independent Non-Executive Duty Performance of Independent Non-Executive Directors Duty Performance of Independent Non-Executive Directors Independence of the Independent Chairman and Chief Executive (President) Chairman and Board Statement on the Financial Statements Board Statement
(IV) of the Bank had raised any During the reporting period, none of the Independent Non-Executive Directors objections to the proposals of the Board of Directors or other issues. Please refer to “III (III)” of this section for details. (III) Please refer to “IV (IV)” of this section for details. (II) VI. (I) their influencing factors any in involved not are Bank the of Directors Non-Executive Independent six The has received the letter of of the Hong Kong Listing Rules. The Bank independence mentioned in Rule 3.13 directors non-executive independent each from issued independence her or his about confirmation annual Non- . The Bank is of the view that all Independent according to Rule 3.13 of the Hong Kong Listing Rules requirements of the Hong Kong Listing Rules. executive Directors have met the independence V. of the Board and the President are performed by different individuals, The roles and work of the Chairman clearly defined and divided, which is in compliance with the provisions and their respective responsibilities are of the Board of Directors of the Bank of the Hong Kong Listing Rules. Mr. Tang Shuangning, the Chairman the meetings of the Board of Directors, ensuring that all directors is responsible for convening and presiding informed of the issues to be reviewed or reported, managing the attending the Board Meeting are properly making sure that all key and relevant issues are discussed by the Board operation of the Board of Directors, manner. Mr. Zhang Jinliang is the President of the Bank and leads of Directors in a constructive and timely Bank, the implementation of the Board resolutions and the execution of the operation and management of the the Bank’s strategies and business plans. The Senior Management has provided sufficient explanation and information for the Board of Directors to to Directors of Board the for information and explanation sufficient provided has Management Senior The approval. for data statements and other financial respect to the submitted judgments in make well-informed statements of the responsible to prepare the financial Bank acknowledge that they are The directors of the best knowledge of Bank for the year of 2016. To the the operating results of the Bank which truly represent adverse effect on condition that might have a material was no material uncertain event or the directors, there of the Bank. the continuing operation (VI) CHINA EVERBRIGHT BANK 106 the Boardaccordingly. researches ontheBank’sbusinessobjectivesandmedium andlong-termdevelopmentstrategiesadvising capital management and replenishment, annual operation plan and major investment programs, conducting Primary duties and responsibilities of the Strategy Committee include reviewing and discussing plans on Catherine, Mr.XuHongcai,andFengLun. Directors Mr.ZhangJinliangandMaTeng, Independent Non-ExecutiveDirectorsMs.FokOiLing Directors Mr. Gao Yunlong (Chairman), Mr. Zhang Shude, Mr. Wu Gang, and Mr. Li Huaqiang, Executive At theendofreportingperiod,StrategyCommittee consistedof9membersincludingNon-Executive (I) Board ofDirectorstomakescientificdecisions. powers, carefullyconsideredmaterialissuesintheBank’soperationandprovidedprofessionalsupportfor reviewed and 28 reports were considered. The Board Committees, based on the division of duties and meetings of the Related Party Transactions Control Committee. During these meetings, 69 proposals were Committee, 7 meetings of the Nomination Committee, 4 meetings of the Remuneration Committee, and 6 of the Strategy Committee, 8 meetings of the Audit Committee, 7 meetings of the Risk Management Control Committee.Duringthereportingperiod,BoardCommitteesheld39meetingsincluding7 Committee, the Nomination Committee, the Remuneration Committee, and the Related Party Transactions The Board of Directors has set up the Strategy Committee, the Audit Committee, the Risk Management VII. business development. in definingstrategicdirectionoftheBank,improvingBank’smanagementandoperationguiding non-executive directors’recommendationswerehighlyvaluedandsomeadopted,playingapositiverole executive directors maintained close contacts with the Bank via emails and phone calls. The independent and externalauditors,soastoobtainnecessaryinformationperformtheirduties.Theindependentnon- risk management; communicated actively with other directors, supervisors, senior management members Directors, soastobewellinformedofinternalcontrolaudit,strategictransformation,businessdevelopment, information ontheBulletinofBoardandparticipatedinseniormanagement’sbriefingsfor is not in session, the independent non-executive directors often read the Bank’s internal documents and and constructive opinions and recommendations on issues under discussion. When the Board of Directors committees, eachoftheindependentnon-executivedirectors,basedontheirexpertise,providedprofessional major related party transactions in accordance with the Articles of Association of the Bank. In all Board interests ofminorityshareholders,suchasprofitdistributionplans,remunerationtheseniormanagement, directors. Duringthereportingperiod,theyexpressedtheirindependentopinionsonallissuesinvolving Committee andtheAuditofBoardDirectorswereallchairedbyindependentnon-executive for one-thirdoftheBoardmembers.TheRemunerationCommittee,RelatedPartyTransactionsControl As at the end of the reporting period, the Bank had six Independent Non-Executive Directors, accounting (V) Corporate Governance
Strategy Committee Duty PerformanceofBoardCommittees Duty PerformanceofIndependentNon-ExecutiveDirectors 2016 Annual Report 0 0 0 0 0 0 0 0 0 107 Absence
4 1 0 1 1 0 3 0 1 by proxy Attendance
3 6 7 1 6 2 4 3 6 in person Attendance , the issuance the Bank”, the of Plan Development “2016-2020
7 7 7 2 7 2 7 3 7 Number of Meetings
lection of the Members of the Remuneration, Strategy, Risk Management, Audit, Related Party Transaction Control Committees Committees Control Transaction Party Related Audit, Management, Risk Strategy, Remuneration, the of Members the of lection The appointment of Non-Executive Directors Mr. Zhang Shude and Mr. Li Huaqiang became effective upon the approval of their The appointment of Non-Executive Directors Mr. Zhang Shude and Mr. Li Huaqiang became appointment qualifications as Non-Executive Directors by the CBRC in September 2016. Audit Committee On 29 June 2016, the Bank held the 1st meeting of the Seventh Session of the Board of Directors, when Resolution relating to the On 29 June 2016, the Bank held the 1st meeting E and passed. The Board elected Mr. Gao Yunlong, Mr. Zhang Jinliang, Mr. of the Seventh Session of the Board was considered Mr. Li Huaqiang, Ms. Fok Oi Ling Catherine, Mr. Xu Hongcai, and Mr. Feng Lun as Ma Teng, Mr. Zhang Shude, Mr. Wu Gang, members of the Strategy Committee of the Board of Directors. of his appointment qualifications as an The appointment of Executive Director Mr. Zhang Jinliang became effective upon the approval Executive Director by the CBRC in August 2016.
Mr. Feng Lun Mr. Xu Hongcai Ms. Fok Oi Ling Catherine Mr. Li Huaqiang Mr. Wu Gang Mr. Zhang Shude Mr. Ma Teng Mr. Zhang Jinliang Mr. Gao Yunlong Name At the end of the reporting period, the Audit Committee consists of 6 members, of which the majority and At the end of the reporting period, the Audit Committee consists of 6 Non-Executive Independent include members Its Directors. Non-Executive Independent were chairman the Ms. Fok Oi Ling Catherine, Mr. Xu Directors Mr. Xie Rong (Chairman), Mr. Zhang Xinze, Mr. Qiao Zhimin, Hongcai and Non-Executive Director Mr. Li Huaqiang. control system and monitoring its Primary duties of the Audit Committee include examining the Bank’s internal compliance conditions; examining implementation; inspecting and monitoring the Bank’s risk management and departments; audit internal the of work the guiding and system audit internal Bank’s the monitoring and the work of external auditors; and recommending the engagement of external auditors; guiding and monitoring supervising the Bank’s annual audit. (II) 2. 3. Note: 1.
of qualified tier-2 capital bonds, the capital increase of CEB International Investment Corporation Limited, Limited, Corporation Investment International CEB of increase capital the bonds, capital tier-2 qualified of Report, the the 2015 Strategy Implementation shares, etc., heard and discussed public offering of preferred of Consumer Rights in 2015. Report on Protection meetings and 1 7 meetings (including 6 on-site period, the Strategy Committee convened During the reporting of the committee and heard 2 reports. The attendance resolutions), reviewed 18 proposals meeting via written members is as follows: During the reporting period, the Strategy Committee reviewed and passed the proposal on the Company’s reviewed and passed the proposal period, the Strategy Committee During the reporting Budget, the the 2016 Annual Fixed Assets Investment financial budget plans for 2016, business plans and Corporate Convertible A-share of Offering Public the 2016), in (revised Rules Working Committee Strategic the and “Overall Strategy” Plan, Listing and Bonds CHINA EVERBRIGHT BANK 108 1. Note: committee membersisasfollows: meetings viawrittenresolutions),reviewed11proposalsandconsidered17reports.Theattendanceofthe During thereportingperiod,AuditCommitteeconvened8meetings(including6on-siteand,2 for consideration. reflect theBank’soverallsituationandreachedaresolutiontosubmitfinancialstatementsBoard auditors. The committee was of theview that the audited financial statements truly,accuratelyandcompletely of the Board of Directors held its sixth meeting to consider the audited 2016 financial statements by the new auditing standards and commented on the major auditing issues. In March 2017, the Audit Committee reviewed the2016annualauditingworkplanandobserveddisclosureofkeyissuesasrequiredby Bank byErnst&YoungLLP.Thecommitteeheardtheauditor’sreportonhand-overofauditingwork, of Directors,theAuditCommitteeBankattachedgreatimportancetofirstyear’sauditing In accordancewiththerequirementsofAnnualReportProceduresAuditCommitteeBoard Debt-to-Equity SwapunderNon-PerformingAssetsRestructuringPlan. Information SecurityRiskfromBoardofDirectors’Perspective,andPracticalApplicationtheNewPolicy make presentationson2015AnnualReportofListedBanks,CapitalManagementunderConstraints, off-site auditsystemandriskmanagementsoon.TheCommitteealsoinvitedErnst&YoungLLPto observed anddiscussed the performance of the annual, interim and quarterly operation; inspected the Bank’s plan, theRecommendationsforManagementof2015andmanagement’sreportonrelatedrectifications; the auditreportoninternalcontrol.Thecommitteealsoheardauditingworksummaryand quarterly reports on the implementation of agreed procedures, the internal control self-appraisal report and considered the annual financial audit reports for A shares and H shares, the interim review report, the During the reporting period, the Audit Committee amended the rules of work of the Committee and Corporate Governance 3. 2. Mr. XieRong Name Mr. LiHuaqiang Mr. ZhangXinze Mr. QiaoZhimin Ms. FokOiLingCatherine Mr. XuHongcai
CBRC sinceSeptember2016. Mr. LiHuaqiang,theNon-Executive Director,startedperforminghisdutyafterappointmentqualification wasapprovedbythe of hisreplacementasIndependentNon-ExecutiveDirectorsatthegeneral meetingofshareholderstheBankandapprovalo Mr. ZhangXinzecontinuedtoperformhisdutyofthemember AuditCommitteeoftheBoardDirectorspriortoelection On 29 his/her appointmentqualificationby theCBRC. Directors bytheBoard. Qiao Zhimin,Ms.FokOiLingCatherineandMr.XuHongcaiwereelected asthemembersofAuditCommitteeBoard Committees oftheSeventhSessionBoard”wasconsidered and passed.Mr.LiuJun,LiHuaqiang,XieRong, relating totheElectionofMembersRemuneration,Strategy, RiskManagement,Audit,RelatedPartyTransactionControl June 2016, the Bank held the 1st meeting of the Seventh Session of the Board of Directors, at which the “Resolution
Number of Meetings 8 1 8 8 5 8
Attendance in person 8 0 4 8 5 7
Attendance by proxy 0 1 4 0 0 1
Absence 0 0 0 0 0 0 f 2016 Annual Report 0 0 0 0 0 0 109 Absence
4 0 4 1 0 0 by proxy Attendance
3 7 3 1 3 2 in person Attendance
7 7 7 2 3 2 Meetings Number of
Mr. Zhang Jinliang started to perform his duty of Executive Director after his appointment qualification was was qualification appointment his after Director Executive of duty his perform to started Jinliang Zhang Mr. June 2016, the Bank held the 1st meeting of the Seventh Session of the Board of Directors, at which the “Resolution “Resolution the which at Directors, of Board the of Session Seventh the of meeting 1st the held Bank the 2016, June Executive Director Ms. Li Jie and Non-Executive Director Mr. Zhang Shude started to perform their duties after their appointment Executive Director Ms. Li Jie and Non-Executive Director Mr. Zhang Shude started to perform qualifications were approved by the CBRC in September 2016. On 29 On Director Executive approved by the CBRC in August 2016. relating to the Election of the Members of the Remuneration, Strategy, Risk Management, Audit, Related Party Transactions Control Strategy, Risk Management, Audit, Related Party Transactions Remuneration, of the to the Election of the Members relating Shude, Mr. Zhang Jinliang, Ms. Li Jie, Committees of the Seventh Session of the Board” was considered and passed. Mr. Zhang Management Committee of the Board Mr. Zhao Wei, Mr. Qiao Zhimin and Mr. Feng Lun were elected as the members of the Risk of Directors by the Board. Risk Management Committee Risk Management
Mr. Feng Lun Mr. Qiao Zhimin Mr. Zhao Wei Ms. Li Jie Mr. Zhang Jinliang Name Mr. Zhang Shude 3. 2. Note: 1.
As at the end of the reporting period, the Risk Management Committee consisted of 6 members, including Committee consisted of 6 members, the reporting period, the Risk Management As at the end of Mr. Zhang Jinliang, Mr. Zhao Wei, Executive Directors Mr. Zhang Shude (Chairman), Non-Executive Directors Qiao Zhimin and Mr. Feng Lun. Non-Executive Directors Mr. Ms. Li Jie, and Independent risk the determining include: Directors of Board the of Committee Management Risk the of duties Primary the of performance duty the supervising tolerance; risk overall the and Bank the of strategy management reputation, etc.; liquidity, operation, IT and market in controlling risks of credit, market, Senior Management recommending the mechanism of the Bank; risk management system and management evaluating the basic adequacy ratio, reviewing and supervising the implementation of the Bank’s management objective of capital on the disclosure of the capital adequacy ratio. Bank’s capital plan and the recommendations the of reference of terms the amended Committee Management Risk the period, reporting the During regular risk management report submitted by the Senior Management committee, analyzed and evaluated the operational risks, compliance risks, and liquidity risks and the related of managing credit risks, market risks, of the Bank’s credit policy and the related policy re-examination, policy re-examination, clarified the proposal considered indicators, appetite risk the adjusted and re-examination, related the and appetite risk the set risk the adjusting and improving for plan the developed (2016-2020), plan capital the re-examined and business and the financial market business, revised strategies management systems of the asset management management, and continuously paid attention to the approvals of large- and policies on business continuity Office’s Commission for Credit Examination and Approval. amount credit allocation by the Head meetings Directors convened 7 the Board of of Committee Management Risk period, the reporting the During 7 heard and proposals 13 reviewed resolutions), written via meetings 2 and meetings on-site 5 (including reports. (III) CHINA EVERBRIGHT BANK 110 Note: as follows: and 2 meetingsvia written resolutions)andconsideredproposals. The attendanceofcommitteemembers is During thereportingperiod,NominationCommitteeconvened7meetings(including5on-site Directors. of theBoardDirectors,reviewedadjustmentssomeseniormemberandSecretary advised theBoardaccordingly,proposedcompositionofsomespecialcommitteesSeventhSession reviewed thequalificationofdirectorcandidatesSeventhSessionBoardDirectorsand During thereportingperiod,NominationCommitteeamendedtermsofreferencecommittee, management. to theBank’sstrategy;evaluatingtrainingandprofessionaldevelopmentofDirectorssenior composition eachyearandofferingrecommendationsontheadjustmentofBoardDirectorsaccording Board ofDirectors;makingassessmentthestructure,numberboardmembersand and taking into account the expertise and willingness of the directors as well as the actual needs of the committees for the Board’s approval based on the nomination of the Chairman of the Board of Directors candidates, andadvisingtheBoardaccordingly;makingsuggestionsoncompositionofotherboard directors andseniormanagementmembers,preliminarilyreviewingthepositionqualificationsconditionsof candidates for directors and senior management; drafting the procedures and the selection criteria for Primary dutiesandresponsibilitiesoftheNominationCommitteeinclude:buildingtalentpoolqualified Zhimin, Mr.XieRong,Ms.FokOiLingCatherine,andXuHongcai. Executive Director Mr. Tang Shuangning (Chairman) and Independent Non-Executive Directors Mr. Qiao As at the end of the reporting period, the Nomination Committee consisted of 5 members, including Non- (IV) Corporate Governance Mr. TangShuangning Name Mr. QiaoZhimin Mr. XieRong Ms. FokOiLingCatherine Mr. XuHongcai
Nomination Committee On 29June Directors bytheBoard. Rong, Ms.FokOiLingCatherineandMr.XuHongcaiwereelectedas themembersofNominationCommitteeBoard Committees oftheSeventhSessionBoard”wasconsideredandpassed.Mr.TangShuangning,QiaoZhimin, Mr.Xie relating to theElection of the Membersof the Remuneration, Strategy, Risk Management, Audit, Related Party Transactions Control 2016, the Bank heldthe 1st meeting of the Seventh Session ofthe Board of Directors, at which the“Resolution
Number of Meetings 4 7 7 7 7
Attendance in person 4 7 7 7 7
Attendance by proxy 0 0 0 0 0
Absence 0 0 0 0 0 2016 Annual Report 0 0 0 0 0 0 0 111 Absence
2 0 1 0 0 0 0 by proxy Attendance
2 4 3 4 0 4 4 in person Attendance
4 4 4 4 0 4 4 Meetings Number of
“Resolution “Resolution the which at Directors, of Board the of Session Seventh the of meeting 1st the held Bank the 2016, June Non-Executive Director Mr. Zhang Shude, started to perform his duty after his appointment qualification as non-executive director Non-Executive Director Mr. Zhang Shude, started to perform his duty after his appointment was approved by the CBRC in September 2016. Mr. Zhang Xinze continued to perform his duty as the member of the Remuneration Committee of the Board of Directors prior to Mr. Zhang Xinze continued to perform his duty as the member of the Remuneration Committee of shareholders of the Bank and the the election of his replacement as Independent Non-Executive Directors at the general meeting approved by the CBRC. approval of his or her appointment qualification as independent non-executive directors was On 29 On Related Party Transactions Control relating to the Election of the Members of the Remuneration, Strategy, Risk Management, Audit, Committees of the Seventh Session of the Board” was considered and passed. Mr. Tang Shuangning, Mr. Zhang Shude, Mr. Wu Remuneration Committee of the Board Gang, Mr. Qiao Zhimin, Mr. Xie Rong and Mr. Feng Lun were elected as the members of the of Directors by the Board. Remuneration Committee Remuneration
Mr. Feng Lun Mr. Xie Rong Mr. Zhang Xinze Mr. Wu Gang Mr. Zhang Shude Mr. Tang Shuangning Name Mr. Qiao Zhimin 3. 2. Note: 1.
As at the end of the reporting period, the Remuneration Committee consisted of 7 members, of which the Committee consisted of 7 members, the reporting period, the Remuneration As at the end of Independent include members The Directors. Non-Executive Independent were Chairman the and majority Lun and Non- Zhang Xinze, Mr. Xie Rong, Mr. Feng Mr. Qiao Zhimin (Chairman), Mr. Non-Executive Directors and Mr. Wu Gang. Mr. Tang Shuangning, Mr. Zhang Shude, Executive Directors remuneration the drafting include: Committee Remuneration the of responsibilities and duties Primary to the Board management, making recommendations for the directors and the senior management system senior the and directors of performance duty the reviewing system; the of implementation the overseeing and of evaluation and examination the on Board the to recommendations making and members management and members management senior the and directors of plan remuneration the of proposal making them; reviewing the basic systems involving salaries and benefits of the submit the same to the Board for approval; accordingly and supervising the implementation of these systems, etc. Bank’s employees, advising the Board Committee amended the terms of reference of the committee, During the reporting period, the Remuneration Duties of Performance General of Evaluation the on Report Directors’ of Board the approved and considered Remuneration Standard for Directors, decided the 2015 Remuneration by Directors for 2015 and the 2015 established the mechanism of deferred payment of remuneration, Standard for Senior Management members, and evaluation result of senior management members in 2015. and studied and proposed the assessment on-site (including 2 total in meetings 4 convened Committee Remuneration the period, the reporting During attendance The report. 1 hear and proposals, 6 considered resolutions), written via meetings 2 and meetings of Committee members is as follows: (V) CHINA EVERBRIGHT BANK 112 1. Note: report. TheattendancerateofCommitteemembersisasfollows: 4 on-site meetings and 2 meetings via written resolutions), reviewed 9 proposals and considered 1 work During the reporting period, the Related Party Transactions Control Committee held 6 meetings in total (including transactions. responsibilities ofmanagementandprogressintheadjustmentsystemrelatedparty related party transactionsandthe investment in an IT company,andheardthereportson divisions of reviewed and considered the proposals on the 2015 report on related party transactions, 5 significant Rules oftheCommitteeandAdministrativeMeasuresforManagementRelatedPartyTransactions During the reporting period, the Related Party Transactions Control Committee amended the Procedural relevant staffoftheBank. Directors andtheBoardofSupervisors,timelyannouncingidentitiessuchrelatedpartiesto approval before implementation; identifying and reporting the related parties of the Bank to the Board of the connected transactions management measures and submitting the same to the Board of Directors for status, risk level and structural distribution of connected transactions conducted in the year; developing to theBoardofDirectorsforconsideration;providingdetailedreportsonoverall common connected transactions; reviewing the significant connected transactions and submitting the same Primary duties and responsibilities of the Related Party Transactions Control Committee include: filing the and Non-ExecutiveDirectorMr.ZhaoWei. Ling Catherine(Chairman),Mr.ZhangXinze,QiaoZhimin,XieRong,XuHongcai,FengLun, Independent Non-executive Director. Its members include Independent Non-executive Directors Ms. Fok Oi members, themajorityofwhichareIndependentNon-executiveDirectors.Thecommitteeischairedbyan As at the endof the reporting period, theRelatedPartyTransactions Control Committee is composed of 7 (VI) Corporate Governance 2. Ms. FokOiLingCatherine Name Mr. ZhangXinze Mr. QiaoZhimin Mr. XieRong Mr. XuHongcai Mr. FengLun Mr. ZhaoWei
of Directors Mr. ZhangXinzecontinuedtoperform hisdutyofthememberRelatedPartyTransactionsControl CommitteeoftheBoard On 29 Related PartyTransactionsControlCommittee the CBRC. shareholders oftheBankand approval oftheappointmentqualificationIndependentNon-Executive Directorwasapprovedby Committee oftheBoardDirectors bytheBoard. Fok OiLingCatherine,Mr.XuHongcai andMr.FengLunwereelectedasthemembersofRelated PartyTransactionsControl Committees oftheSeventhSessionBoard”wasconsideredandpassed.Mr.ZhaoWei,QiaoZhimin,Xie Rong,Ms. relating totheElectionofMembersRemuneration,Strategy, RiskManagement,Audit,RelatedPartyTransactionControl June 2016, the Bank held the 1st meeting of the Seventh Session of the Board of Directors, at which the “Resolution prior to the election of the Independent Non-Executive Directors taking over his place at the general meeting of
Number of Meetings 6 6 6 6 4 4 6
Attendance in person 6 3 6 6 3 2 4
Attendance by proxy 0 3 0 0 1 2 2
Absence 0 0 0 0 0 0 0 2016 Annual Report 113 Meetings of the Board of Supervisors Performance of its Supervisory Duties by Board of Supervisors Performance of its Supervisory Composition of the Board of Supervisors Composition of the Board of Supervisors and the Board of Supervisors Supervisors and
(III) the in provisions relevant the with accordance in Supervisors, of Board the period, reporting the During of Board the of meetings 7 convened procedures, of rules the and Bank the of Association of Articles 19 proposals and reviewed via written resolutions, meetings and 2 meetings Supervisors, including 5 on-site duty the of evaluation Bank, the reports on the the of reports regular including reports, considered 2 and reports on internal control, the profit performance of the Board of Directors and the senior management, the on relevant proposals. distribution plan and remuneration of the supervisors, and formed clear opinions (II) regular holding include: duties supervising its perform to Supervisors of Board the for ways primary The the Board of Directors and board meetings of meetings, the general attending the shareholders’ meetings, reports, management business reviewing management, senior the of meetings the attending committees, of charge in persons with interviews conducting branches, and lines business all of reports the to attending on the Bank’s branches and various branches and departments, conducting collective or individual inspections to the Board of Directors and outlets, and providing its supervision recommendations and meetings minutes the Board of Directors and senior the senior management. In this way, the Board of Supervisors supervised control internal management, risk management, financial performance, duty their of terms in management management, strategic management and remuneration management. (I) Board of Supervisors consists of 10 members, including 3 shareholder At the end of the reporting period, the Board the of members The supervisors. external 4 and supervisors employee 3 supervisors, representative have management, business and accounting finance, in experience rich have all who Supervisors, of independence, thus ensuring the effective functioning of the Board of demonstrated sufficient expertise and Supervisors. the Nomination Committee and the Supervision Committee. The Board of Supervisors has set up The Board of Supervisors fully executed the regulatory requirements and collaborated with the Board of of Board the with collaborated and requirements regulatory the executed fully Supervisors of Board The the with accordance in duties supervisory various performed while management, senior the and Directors senior the Directors, of Board the on opinions evaluation and supervision the provided prudently It law. the Supervisors, in of the duty performance of their members, and conducted evaluation management and decision-making financial major Bank’s the on focused performance; duty effective their facilitate to order plans so as to statements and the profit distribution and reviewed the financial and related implementation control, and on the risk management, internal supervision; enhanced the supervision achieve targeted financial and steady management and promoted the compliant management and remuneration supervision of strategies Based departments. various with interviews conducting and reports to attending by Bank the of operation the Bank’s business development, implementation of strategies, and risk on its investigations and studies on the of decision-making the for recommendations relevant provided Supervisors of Board the management, corporate Bank’s the improving in role active an playing thus management, senior the and director of board development. governance and healthy and sustainable VIII. CHINA EVERBRIGHT BANK 114 system andpoliciesofthebank andtheremunerationplanofseniormanagement. regard andreportingtothe BoardofSupervisors;supervisingtherationality remunerationmanagement duty performance of directors, supervisors and senior management, making a comprehensive evaluation in this supervising theprocedures of theselectionandappointmentdirectors;drafting theplanofsupervising qualifications andconditionsofthesupervisorcandidates andadvisingtheBoardofSupervisorsaccordingly; selecting supervisorsandadvisingtheBoardofSupervisors accordingly;conductingpreliminaryreviewofthe regarding the size and composition of the Board of Supervisors; drafting the procedures and criteria for Primary duties of the Nomination Committee include making suggestions to the Board of Supervisors Wu Gaolian,Mr.DengRuilinandMs.LiuYan. The membersoftheNominationCommitteeincludeMr. YuErniu(Chairman),Mr.LiXin,YinLianchen, 1. members. Thechairmenofbothcommitteesareexternal supervisors. Committee. TheNominationCommitteeconsistsof6memberswhiletheSupervision The two committees under the Board of Supervisors are the Nomination Committee and the Supervision (V) 3. 2. 1. Note: (IV) members oftheBoardDirectors. of the aforementioned meetings, the voting procedures and the attendance, speeches and voting of the the meetingsofBoardDirectorsasnon-votingdelegatesandsupervisedcompliancelegality During thereportingperiod,BoardofSupervisorsattendedallshareholders’generalmeetingsand Corporate Governance Mr. LiXin Name Mr. MuHuijun Mr. YinLianchen Mr. WuJunhao Mr. YuErniu Mr. WuGaolian Mr. DengRuilin Mr. WangZhe Mr. YeDonghai Ms. LiuYan
Nomination Committee Special CommitteesoftheBoardSupervisors Supervisors attheFirstExtraordinaryGeneralMeetingofShareholders2016on15November2016. Mr. WangZhestartedtoperformhisdutyafterbeingelectedastheExternalSupervisorofSeventhSessionBoard Supervisors atthemeetingofrepresentativesemployees2016on27June2016; Ms. Liu Session oftheBoardSupervisorsat2015generalmeetingshareholderson29June2016; Mr. WuGaolianandDengRuilinstartedtoperformtheirdutiesafterbeingelectedastheExternalSupervisorsofSeventh Attendance RecordoftheBoardSupervisors Yan started to perform her duty after being elected as the Employee Supervisor of the Seventh Session of the Board of
Number of Meetings 7 7 7 7 7 4 4 0 7 4
Attendance in person 6 7 5 6 7 4 2 0 7 4
Attendance by proxy 1 0 2 1 0 0 2 0 0 0
Absence 0 0 0 0 0 0 0 0 0 0 2016 Annual Report 0 0 0 0 0 0 115 Absence
0 1 0 2 1 0 by proxy Attendance
1 0 1 2 3 4 in person Attendance
1 1 1 4 4 4 Meetings Number of
was considered and passed, and Mr. Yu Erniu, Mr. Li Xin, Mr. Yin Lianchen, Mr. Wu Gaolian, Mr. Deng Ruilin was considered and passed, and Mr. Yu Erniu, Ms. Liu Yan started performing her duty after being elected as the Employee Supervisor of the Seventh Session of the Board of Ms. Liu Yan started performing her duty after of employees on 27 June 2016. Supervisors at the 2016 meeting of representatives Supervision Committee On 29 June 2016, the Bank held the 1st meeting of the Seven Session of the Board of Supervisors, at which the “Proposal on On 29 June 2016, the Bank held the 1st meeting of the Seventh Session of the Board of Supervisors of China Everbright Bank the Election of Members of the Special Committee Company Limited” of the Nomination Committee of the Board of Supervisors. and Ms. Liu Yan were elected as the members performing their duties after being elected as the External Supervisor of the Seventh Mr. Wu Gaolian and Mr. Deng Ruilin started general meeting of shareholders on 29 June 2016; Session of the Board of Supervisors at the 2015
Ms. Liu Yan Mr. Deng Ruilin Mr. Wu Gaolian Mr. Yin Lianchen Mr. Li Xin Name Mr. Yu Erniu The members of the Supervision Committee include Mr. Wu Gaolian (Chairman), Mr. Mu Huijun, Mr. Wu Wu Mr. Huijun, Mu Mr. (Chairman), Gaolian Wu Mr. include Committee Supervision the of members The Junhao, Mr. Yu Erniu, Mr. Deng Ruilin and Mr. Ye Donghai. for supervising the Bank’s operation Primary duties of the Nomination Committee include developing the plan of for the implementation management and internal control, and being responsible decision-making, risk and plan for supervising the financial Board of Supervisors; developing the approved by the this plan after it is this plan after it is approved by the activities of the Bank, and being responsible for the implementation of business prudent of concept the up setting in Directors of Board the supervising Supervisors; of Board the development strategy that works operation and the principles of value for the Bank and in formulating Directors of Board the by reports regular the of preparation the of informed itself keeping Bank; the for best good maintaining Supervisors; of Board the to same the reporting and adjustments material relevant and of the Bank relevant departments Directors, Board of of the relevant special committees communication with its of appointment Bank’s the on recommendations supervision providing and intermediaries, external and external auditors when the Committee deems it necessary. 2. 3. 2. Note: 1.
During the reporting period, the Nomination Committee considered and approved the proposals on the Board considered and approved the proposals period, the Nomination Committee During the reporting management, of the Board of Directors, senior report on the overall duty performance of Supervisors’ appraisal Supervisor determination of the the Supervisors, for Standards Remuneration 2015 Supervisors, Directors and the and the amendment of Procedural Rules of Seventh Session of the Board of Directors Candidates of the Committees. meetings 4 convened Supervisors of Board the of Committee Nomination the period, reporting the During attendance proposals. The reviewed 10 and via written resolution) meeting 1 and meetings on-site 3 (including is as follows: of committee members CHINA EVERBRIGHT BANK 116 of theguidelinesduringreportingperiod. lenient thantheModelCode.IthasnotcometoattentionofBankthatany employeewasinviolation guidelines regardingthedealingofBank’ssecurities byrelevantemployeesandtheguidelinesarenoless always complied with the Model Code for the year ended 31 December 2016. The Bank has also formulated the Bank. Having been enquired by the Company, all directors and supervisors confirmed that they had Listing Rulesasthecodeofconducttogovern securities transactionsbydirectorsandsupervisorsof The Bank has adopted the standards set out in the Model Code in the Appendix 10 to the Hong Kong IX. The BoardofSupervisorshadnoobjectiontothesupervisionmattersduringreportingperiod. (VI) 2. 1. Note: follows: of whichwereon-sitemeetings,andconsidered4proposals.Theattendancecommitteemembersisas During thereportingperiod,SupervisionCommitteeofBoardSupervisorsconvened3meetings,all Supervisors. Report 2016 and the amendment of the Procedural Rules of the Supervision Committee of the Board of the proposalson2015annualreportofBank,EvaluationReportInternalControl,ThirdQuarter During thereportingperiod,SupervisionCommitteeofBoardSupervisorsconsideredandapproved Corporate Governance Mr. WuGaolian Name Mr. MuHuijun Mr. WuJunhao Mr. YuErniu Mr. DengRuilin Mr. YeDonghai
Securities TransactionsbyDirectors,SupervisorsandRelevantEmployees Supervision bytheBoardofSupervisors Session oftheBoardSupervisorsat2015generalmeetingshareholderson29June2016. Mr. WuGaolianandDengRuilinstartedtoperformtheirdutiesafterbeingelectedastheExternalSupervisorsofSeventh and Mr.YeDonghaiwereelectedasthemembersofNominationCommitteeBoardSupervisors. Company Limited” the ElectionofMembersSpecialCommitteeSeventhSessionBoardSupervisorsChinaEverbrightBank On 29June2016,theBankheld1stmeetingofSeventhSessionBoardSupervisors,atwhich“Proposalon wasconsideredandpassed,Mr.WuGaolian,MuHuijun,Junhao,YuErniu,DengRuilin
Number of Meetings 1 3 3 3 1 3
Attendance in person 1 3 2 3 0 3
Attendance by proxy 0 0 1 0 1 0
Absence 0 0 0 0 0 0 2016 Annual Report 117 Implementation of Assessment and Incentive of Senior Senior of Incentive and Assessment of Implementation Auditor’s Remuneration Management Training of Directors and Supervisors Evaluation and Evaluation Senior Management
Please refer to “Significant Events” of this Annual Report for details. XIII. During the reporting period, some directors participated in 2016 qualification training course for independent participated in 2016 qualification training course for independent During the reporting period, some directors for course training special the and SSE by organized training follow-up the and directors non-executive of Board The Companies. Listed of Association Beijing the by held companies listed Beijing of directors the by supervisors new on courses training some in participate to members its of part sent Supervisors Beijing Securities Regulatory Bureau. on corporate governance, the training programs and supervisors in directors The participation by the Bank’s of A.6.5 Provision with complied management, and operation business and regulations, and laws policies, Appendix 14 of the Hong Kong Listing Rules. XII. XI. Assessment of Senior of the Provisional Measures on Performance In accordance with the relevant provisions Board of Directors formulated the implementation plan for Management, the Remuneration Committee of the management. During the reporting period, by taking into consideration the performance assessment of senior Remuneration the management, senior the of performance duty the and Bank the of operation overall the formulated the proposal of the 2015 performance evaluation grade of Committee of the Board of Directors the remuneration plan, which were considered and approved by the each senior management member and was granted. Board of Directors before the remuneration The Senior Management of the Bank consisted of 9 members, who are responsible for the operation and members, who are responsible for of the Bank consisted of 9 The Senior Management the plans, strategic the Directors, of Board the of resolutions the implementing Bank: the of management developing plan, the developing Directors, of Board the by approved plans investment and plan business and regulations, and systems management basic the and bodies managerial internal up setting of plans administrative measures. formulating specific the of strategy development the with accordance in Management, Senior the period, reporting the During implemented the and management, earnestly effectively carried out the Bank’s operation Bank, actively and determined by the Board of Directors, better achieved the developmentbusiness plan and the financial budget and ensured the steady growth of business and continuous increase of targets set at the beginning of year profits. X. CHINA EVERBRIGHT BANK 118 training intheforthcomingyearordertocomplywith Rule3.29oftheHongKongListingRules. Hong, the newly appointed Company Secretary on 26 December 2016, will participate in relevant professional training for no less than 15 hours in compliance with Rule 3.29 of the Hong Kong Listing Rules. Mr. Lu the CompanySecretaryon26December2016)andMs. LeeMeiYihadparticipatedinrelevantprofessional contact person within theBankis Mr. Lu Hong. During the reporting period, Mr. Cai Yunge (who resigned as Tricor ServicesLimited)isappointedastheAssistant to CompanySecretary.Ms.LeeMeiYi’smainpointof under theHongKongListingRulesandMs.LeeMei Yi (adirectoroftheCorporateServicesDepartment As at the date of this report, Mr. Lu Hong (BoardSecretary of the Bank) serves as the Company Secretary XVI. been updatedinatimelymannertoinforminvestorsabouttheCompany. such as“SSEe-interaction”.ThecontentsoftheBank’swebsiteinbothChineseandEnglishversionshave and heldover10on-sitegroupmeetingstheBankinteractedwithinvestorsviainteractiveonlineplatforms management membersandstaffoftheBankparticipatedinstrategyseminarsbyinvestmentinstitutions, 45 visitandon-siteinvestigationswerearrangedfor266domesticoverseasinvestorsanalysts.The bank analysts and media correspondents from home and abroad participated this communication events. results (A+H shares) announcement and press conference in Hong Kong. Over 120 institutional investors, various activities so as to enhance its communication with investors. The Bank held the 2015 financial regulations and the requirements of regulatory authorities, actively managed investor relationships through During the reporting period, the Bank strictly abided by provisions of domestic and overseas laws and XV. disclosure requirementsoftheJapanesemarket. to strengthen the consistency of information disclosed in the H-shares market and satisfy the information regulatory requirementsontheissuanceofPOWLinJapanesecapitalmarket,Banktookinitiative H share ad hoc announcements (including A share overseas regulatory announcements). Pursuant to the published 94 A share ad hoc announcements (including online non-announcement documents) and 136 by majorshareholders,andthesuspensionresumptionoftradingshares.Duringyear,Bank projects such as convertible bonds, etc., auditing by the National Audit Office, the plan of share increase carefully formulated disclosure procedures and plans, and made timely announcement on refinancing disclosure requirements for material matters by domestic and overseas regulatory authorities, the Bank and quarterly reports. Regarding the disclosure of temporary reports, the Bank complied with different and properlycompletedthepreparationdisclosureof2015annualreport,2016interimreports of regular reports, the Bank complied with the regulatory requirements of both Shanghai and Hong Kong rules, andensuredthattheinformationdisclosedwastrue,accuratecomplete.Regardingdisclosure with relevant requirements for information disclosure, set up a sound information disclosure system and During thereportingperiod,BankasacompanylistedinbothShanghaiandHongKong,fullycomplied XIV. Corporate Governance
Kong ListingRules Company SecretaryandAssistanttoundertheHong Relationship Investor Implementation ofInformationDisclosure 2016 Annual Report 119 , including the , all the shareholders the Bank, all operation of the Bank and putting forward recommendations or inquiries inquiries or recommendations forward putting and Bank the of operation the distribution of the Bank’s remaining assets in proportion to the number of of number the to proportion in assets remaining Bank’s the of distribution the individually or jointly hold more than three percent of voting shares of the Bank Bank the of shares voting of percent three than more hold jointly or individually individually or jointly hold more than ten percent of the voting shares of the Bank Bank the of shares voting the of percent ten than more hold jointly or individually nsferring shares in accordance with laws, regulations, rules, regulatory documents, relevant relevant documents, regulatory rules, regulations, laws, with accordance in shares nsferring shares held by the shareholders when the Bank is terminated or liquidated. Obtaining relevant information according to the Articles of Association of the Bank in Participating accordingly; Tra authority of the jurisdiction where shares of the Bank are regulations of the securities regulatory listed and the Articles of Association of the Bank; Collecting dividends and other forms of benefits distributed on the basis of the number of shares Collecting dividends and other forms held by them; meetings of shareholders and exercise the voting rights; Attending or entrusting proxy to attend business Supervising Bank’s financial and accounting statements; status of share capital of the Bank; minutes of the the of minutes Bank; the of capital share of status statements; accounting and financial Bank’s of resolutions and Directors of Board of meetings of resolutions meetings, general shareholders’ meetings of the Board of Supervisors, etc.;
Shareholders’ Shareholders’ Rights of the Bank shall have the following rights: of the Bank shall have the following 1. 4. 5. may provide an interim proposal and submit it in writing to the Board of Directors ten days before the to the Board of Directors ten days proposal and submit it in writing may provide an interim notice of Directors shall issue a supplementary meeting is convened. The Board shareholders’ general submit such upon receipt of the proposal and general meeting within two days for the shareholders’ meeting for approval. proposal to the shareholders’ general 2. 3. Unless there are specified provisions regarding the rights of the holders of preference shares in laws, Unless there are specified provisions and the Articles of Association of regulations, rules, regulatory documents shall have the right to request the Board of Directors to convene an extraordinary general meeting. Such convene an extraordinary general meeting. to request the Board of Directors to shall have the right in writing to the Board of Directors. request shall be made be convened and presided over by the Chairman within ten days An extraordinary Board meeting shall who individually or jointly hold more than ten percent of the voting it is proposed by the shareholders shares of the Bank. 6. Shareholders who Shareholders who Shareholders
(III) (I) (II) (IV) XVII. CHINA EVERBRIGHT BANK 120 websites oftheSSE,HKSE (intheformofOverseasRegulatoryAnnouncement)and theBank. The fulltextofthe2016Self-assessmentReport onInternalcontroloftheBankhasbeenpublished onthe the internalcontrolsystem. assessment reportoninternalcontrol,therewasnofactor whichmayaffecttheeffectivenessofevaluation From the reference date of self-assessment report on internal control to the date of release of the self- than financialstatementsreporting. (i.e. 31December2016),hadnotdiscoveredanymaterial defectsininternalcontrolrelatingtotheareasother reporting oftheBank,asatreference date fortheself-assessmentreportoninternalcontrol Based on theoutcome of thereviewinternalcontrolrelating to theareasotherthanfinancialstatements accordance withtheStandardsofEnterprise’sInternal Control inallmaterialaspects. statements reporting,andhadmaintainedaneffective internalcontroloverfinancialstatementsreportingin December 2016),hadnotdiscoveredanymaterialdefectsintheinternalcontrolsystemrelatedtofinancial of theBank,asatreferencedateforself-assessmentreportoninternalcontrol(i.e.31 Based ontheoutcomeofreviewmaterialdefectsininternalcontrolrelatedtofinancialreporting XX. Chapter, theCompanyhasfullycompliedwithallCodeProvisionsduringreportingperiod. Kong Listing Rules (the Corporate Governance Code). Except for the relevant disclosures made in this Since itslistingontheHKSE,BankhasappliedprinciplesasstipulatedinAppendix14toHong XIX. Rules bytheHongKongMonetaryAuthority. The Bankhaspreparedthe2016HshareannualfinancialstatementsinaccordancewithBanking(Disclosure) XVIII. “Company Profile”ofthisreport. As tothecontactdetailsforshareholderscommunicatewithandenquireofBoard,pleaserefer Please refertotheArticlesofAssociationBank (V) Corporate Governance
4. 3. 2. 1. Holders ofpreferencesharestheBankshallbeentitledtofollowingspecialrights: Rules Compliance withtheCorporateGovernanceCodeofHongKongListing Statement ofCompliancewiththeBanking(Disclosure)Rules Self-assessment ReportonInternalControlbytheBank
Upon occurrenceofprescribedevents,tohaveitsvotingrightsrestored. Rights toattendandvoteatshareholders’generalmeetingsuponoccurrenceofprescribedevents; shares; Rights todistributionofresidualassetstheBankuponliquidationinpriorityholdersordinary Rights todividendsinpriorityholdersofordinaryshares; formoredetailsaboutshareholders’rights. 2016 Annual Report 121 Auditor’s Report on the Internal Control of the Bank Auditor’s Report on the Internal
XXI. the internal control system of the Bank and issued an audit opinionErnst & Young Hua Ming LLP has audited Bank has maintained an effective internal control on its financial reporting that, as at 31 December 2016, the System of Enterprises with the Basic Standards for Internal Control and in all material aspects in accordance the audit opinion has been published on the websites of the SSE, the relevant regulations. The full text of Announcement) and the Bank. HKSE (in the form of Overseas Regulatory Articles of Association of the Bank and is on the Articles of Association system of the Bank is primarily based The internal control system covers system and evaluation system. The including general system, specific tiers into three divided market and business, retail banking business, financial lines such as corporate banking seven major business supporting corporate governance and management risk management, business support, interbank business, intermediate businesses, front-line of management the including aspects various covers and auditing, and rather than Such systems are designed to manage control, supervision and evaluation. and back-office risk and not absolute and can only provide reasonable failure to achieve business objectives, eliminate the risk of material misstatement or loss. assurance against relevant to the risk for details of information “Discussion and Analysis on the Operations” Please refer to the works during the reporting period. management system of the Bank and risk governance, corporate the assesses and reviews periodically Bank the of Directors of Board The Board of Directors believes that the system of corporate governance, management and internal control. The of the Bank is sufficient and effective during the reporting period. risk management and internal control
Independent Auditors’ Report of 2016 124 Financial Statements of 2016 131 Notes to the Financial Statements of 2016 138 Unaudited Supplementary Financial 271 Information of 2016 CHINA EVERBRIGHT BANK 124 consolidated financialstatements. performed to address the matters below, provide the basis for our audit opinion on the accompanying of the consolidated financial statements. The results of our audit procedures, including the procedures the performanceofproceduresdesignedtorespond ourassessmentoftherisksmaterialmisstatement financial statementssectionofourreport,includinginrelationtothesematters. Accordingly,ourauditincluded We havefulfilledtheresponsibilitiesdescribedinAuditor’sforauditofconsolidated addressed thematterisprovidedinthatcontext. do notprovideaseparateopiniononthesematters.For eachmatterbelow,ourdescriptionofhowaudit of ouraudittheconsolidatedfinancialstatementsasawhole,andinformingopinionthereon,we of theconsolidatedfinancialstatementscurrentperiod.Thesematterswereaddressedincontext Key auditmattersarethosethat,inourprofessionaljudgment,wereofmostsignificance Key auditmatters sufficient andappropriatetoprovideabasisforouropinion. ethical responsibilitiesinaccordancewiththeCode.Webelievethatauditevidencewehaveobtainedis (the “Code”)issuedbytheHongKongInstituteofCertifiedPublicAccountants,andwehavefulfilledourother report. WeareindependentoftheGroupinaccordancewithCodeEthicsforProfessionalAccountants described intheAuditor’sResponsibilitiesforauditofconsolidatedfinancialstatementssectionour International AuditingandAssuranceStandardsBoard.Ourresponsibilitiesunderthosestandardsarefurther We conducted our audit in accordance with International Standards on Auditing (“ISAs”) issued by the Basis foropinion the disclosurerequirementsofHongKongCompaniesOrdinance. issued bytheInternational Accounting StandardsBoardandhavebeenproperlypreparedincompliancewith cash flowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards(“IFRSs”) position oftheGroupasat31December2016,anditsconsolidatedfinancialperformance In ouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewof summary ofsignificantaccountingpolicies. cash flow statement for the year then ended, and notes to the consolidated financial statements, including a statement ofcomprehensiveincome,theconsolidatedchangesinequityand financial positionasat31December2016,andtheconsolidatedstatementofprofitorloss, and itssubsidiaries(the“Group”)setoutonpages131to270,whichcomprisetheconsolidatedstatementof We haveauditedtheconsolidatedfinancialstatementsofChinaEverbrightBankCompanyLimited(the“Bank”) Opinion (Established inthePeople’sRepublicofChinawithlimitedliability) To theshareholdersofChinaEverbrightBankCompanyLimited Independent Auditors’Report 2016 Annual Report
Key audit matters (Continued)
Key audit matter How our audit addressed the key audit matter
Impairment assessment of loans and advances to customers
The assessment of impairment of loans and We evaluated and tested the effectiveness of design advances to customers involves significant and implementation of key controls relating to credit judgment. The Group adopts individual impairment approval process, post approval credit management, assessment approach for individually significant loan grading system, collateral monitoring and loan loans and loans with unique characteristics of the impairment assessment, including testing of relevant credit risk; and collective impairment assessment data quality and information systems. approach for individually assessed loans with no objective evidence of impairment on an individual We adopted a risk-based sampling approach in basis, and homogeneous groups of loans which our loan review procedures. We assessed the are not considered individually significant and debtors’ repayment capacity and evaluated the not assessed individually. Under the collective appropriateness of the Group’s loan classification, approach, assessment of future cash flows for loan by reviewing post-lending investigation reports, portfolios is based on historical loss experience of debtors’ financial information, collateral valuation loans with similar credit risk characteristics, with reports and other available information. adjustments based on the impact from changes of and uncertainties in macro-economic environment. We assessed the collective impairment model and The future cash flows of loans without collaterals considered the appropriateness of management’s or guarantees, or loans that are not adequately assumptions on classification of loan portfolios, collateralized, are subject to higher uncertainties. loss identification period, migration rate, loss given default and impact of macro-economic changes for Since loan impairment assessment involves judgment various types of loan portfolio. We also assessed and assumptions, and in view of the significance management consideration of macro-economic of the amount (As at 31 December 2016, gross indicators, industry trends and other changes in loans and advances to customers amounted to current economic environment. We evaluated the RMB1,795.278 billion, representing 44.66% of total parameters and assumptions used in the collective assets, and impairment allowance for loans and impairment model, and compared them with advances to customers amounted to RMB43.634 historical loss data for loan portfolios, observable billion), we consider it as a key audit matter. economic data, market information and industry trends. Relevant disclosures are included in Note V.18 to the consolidated financial statements. We tested the discounted cash flow models and the related assumptions used in individual impairment assessment by assessing the amount, timing and likelihood of estimated future cash flows, including cash flows from collaterals. We compared the assumptions with available external information.
Furthermore, we evaluated and tested the design and operating effectiveness of internal controls over the financial statements disclosure on credit risk and impairment allowance.
125 CHINA EVERBRIGHT BANK 126 Key auditmatters Independent Auditors’Report the consolidatedfinancialstatements. Relevant disclosures are included in Note V.52 to audit matter. the uncertaintyinvaluation,thisisconsideredakey financial instruments measured at fair value, and measured at fair value. Due to the significance of hierarchy, represented 0.01% of total financial assets hence categorized within level 3 of the fair value which required significant unobservable inputs, assets measuredatfairvalue;Financialinstruments hierarchy, represented 91.32% of total financial hence categorized within level 2 of the fair value prices) orindirectly(i.e.derivedfrominputs, instruments which required either directly (i.e. as total assetsandliabilitiesrespectively.Financial respectively, representing 10.88% and 6.14% of to RMB437.515 billion and RMB231.258 billion financial liabilities measured at fair value amounted As at 31 December 2016, financial assets and results canvarysignificantly. techniques and assumptions applied, the valuation judgment and assumptions. With different valuation unobservable inputs, usually involve subjective techniques, in particularly those required significant are not quoted in active markets. These valuation determine thefairvalueoffinancialinstrumentsthat The Group has applied valuation techniques to Valuation offinancialinstruments Key auditmatter (Continued)
Group. annual reportadequatelypresentedtheriskof relevant fairvalueandsensitivitydisclosuresinthe disclosures offairvalue.Wealsoassessedwhether effectiveness of the Group’s controls related to We assessed and tested the design and operating sources. valuation outcomes obtained from various pricing using external market data, and comparison with used inthemarkets,validationofobservableinputs comparison withthevaluationtechniquescommonly and assumptions used by the Group through We evaluated the valuation techniques, inputs and ITsystemsinvolved. financial instruments,includingrelevantdataquality effectiveness ofkeycontrolsrelatedtovaluation We assessed and tested the design and operating How ourauditaddressedthekeymatter 2016 Annual Report
Key audit matters (Continued)
Key audit matter How our audit addressed the key audit matter
Unconsolidated structured entities
The Group established various structured entities, We assessed and tested the design and operating such as bank wealth management products, funds, effectiveness of the key controls relating to trust plans, in conducting asset management the Group’s assessment of whether it controls business and investments. The Group determines structured entities. whether or not to consolidate these structured entities based on the assessment of whether We assessed the Group’s analysis and conclusions the Group has control over them through taking on whether or not it controls structured entities consideration of power arising from rights, variable by reviewing relevant term sheets to analyze returns, and link between power and returns. whether the Group has obligation to absorb any loss of structured entities, as well as the Group’s The assessment of the Group’s control over analysis on its power over structured entities, the structured entities involves significant judgment magnitude and variability of variable returns from and estimation such as the purpose and design its involvement with structured entities. We also of structured entities, its ability to direct relevant assessed whether the Group had provided liquidity activities, interests it holds directly or indirectly, support or credit enhancement to structured performance fee obtained, profit and the exposure entities, as well as fairness of transactions between to loss from providing credit enhancement or the Group and structured entities. liquidity support, etc. Due to the significance of the unconsolidated structured entities and the complexity Furthermore, we assessed and tested the design of judgment exercised by the management, it is and operating effectiveness of the Group’s controls considered a key audit matter. over its disclosures of unconsolidated structured entities. Relevant disclosures are included in Note V.44 to the consolidated financial statements.
127 CHINA EVERBRIGHT BANK 128 statements. expected to influence the economic decisions of users taken on the basis of these consolidated financial from fraudorerrorandareconsideredmaterialif,individually orintheaggregate,theycouldreasonablybe accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in assume responsibilitytowardsoracceptliabilitytoany other personforthecontentsofthisreport. that includes ouropinion.Ourreportis made solely to you, as a body,and for no other purpose. We do not whole arefreefrommaterialmisstatement,whetherdue tofraudorerror,andissueanauditor’sreport Our objectivesaretoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsas a Auditor’s responsibilitiesfortheauditofconsolidatedfinancialstatements overseeing theGroup’sfinancialreportingprocess. The directors of the Bank are assisted by the Audit Committee in discharging their responsibilities for the Grouportoceaseoperations,havenorealisticalternativebutdoso. and usingthegoingconcernbasisofaccountingunlessdirectorsBankeitherintendtoliquidate Group’s abilitytocontinueasagoingconcern,disclosing,applicable,mattersrelatedconcern In preparingtheconsolidatedfinancialstatements,directorsofBankareresponsibleforassessing consolidated financialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror. Ordinance, andforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablepreparationof a trueandfairviewinaccordancewithIFRSsthedisclosurerequirementsofHongKongCompanies The directorsoftheBankareresponsibleforpreparationconsolidatedfinancialstatementsthatgive Responsibilities ofthedirectorsforconsolidatedfinancialstatements this otherinformation,wearerequiredtoreportthatfact.Wehavenothinginregard. misstated. If,basedontheworkwehaveperformed,concludethatthereisamaterialmisstatementof consolidated financialstatementsorourknowledgeobtainedintheauditotherwiseappearstobematerially information and, in doing so, consider whether the other information is materially inconsistent with the In connectionwithourauditoftheconsolidatedfinancialstatements,responsibilityistoreadother express anyformofassuranceconclusionthereon. Our opinion on the consolidated financial statements does not cover the other information and we do not report thereon. information includedintheAnnualReport,otherthanconsolidatedfinancialstatementsandourauditor’s The directors of the Bank are responsible for the other information. The other information comprises the Other informationincludedintheBank’s2016annualreport Independent Auditors’Report 2016 Annual Report
Auditor’s responsibilities for the audit of the consolidated financial statements (Continued)
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
129 CHINA EVERBRIGHT BANK 130 30 March2017 Hong Kong Certified PublicAccountants Ernst &Young The engagementpartnerontheauditresultinginthisindependentauditor’sreportisLeungShingKit. expected tooutweighthepublicinterestbenefitsofsuchcommunication. not be communicated in our report because the adverse consequences of doing so would reasonably be disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should key auditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublic significance intheauditofconsolidatedfinancialstatementscurrentperiodandaretherefore From thematterscommunicatedwithAudit Committee, wedeterminethosemattersthatwereofmost may reasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards. requirements regardingindependenceandtocommunicatewiththemallrelationshipsothermattersthat We also provide the Audit Committee with a statement that we have complied with relevant ethical (Continued) Auditor’s responsibilitiesfortheauditofconsolidatedfinancialstatements Independent Auditors’Report 2016 Annual Report
Consolidated Statement of Profit or Loss for the year ended 31 December 2016 (Expressed in millions of Renminbi, unless otherwise stated)
Note V 2016 2015
Interest income 143,450 141,907 Interest expense (78,162) (75,448)
Net interest income 1 65,288 66,459
Fee and commission income 29,932 27,745 Fee and commission expense (1,820) (1,444)
Net fee and commission income 2 28,112 26,301
Net trading gains 3 223 335 Dividend income 5 4 Net (losses)/gains arising from investment securities 4 (261) 13 Net foreign exchange gains/(losses) 338 (72) Other net operating income 660 324
Operating income 94,365 93,364 Operating expenses 5 (30,254) (32,354)
Operating profit before impairment 64,111 61,010 Impairment losses on assets 8 (23,931) (21,652)
Profit before tax 40,180 39,358
Income tax 9 (9,792) (9,781)
Net profit 30,388 29,577
Net profit attributable to: Equity shareholders of the Bank 30,329 29,528 Non-controlling interests 59 49
30,388 29,577
Basic and diluted earnings per ordinary share (in RMB) 10 0.63 0.63
The notes on pages 138 to 270 form part of these financial statements.
131 CHINA EVERBRIGHT BANK 132 (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Consolidated StatementofComprehensiveIncome
The notesonpages138to270formpartofthesefinancialstatements. Available-for-sale financialassets: Items thatmaybereclassifiedsubsequentlytoprofitorloss: Other comprehensiveincome: Net profit Items thatwillnotbereclassifiedtoprofitorloss: Exchange differencesontranslationof Non-controlling interests Equity shareholdersoftheBank Total comprehensiveincomeattributableto: Total comprehensiveincome Other comprehensiveincome,netoftax – Reclassifiedtoprofitorlossupondisposal – Netchangeinfairvalue eesrmn fsplmnayrtrmn eeis33(b) – Remeasurementofsupplementaryretirementbenefits financial statementsofoverseassubsidiaries – Relatedincometaxeffect
Note V 26 (b)
03829,577 30,388 69933,235 33,284 26,909 26,968 69833,284 26,968 515 4,964 (5,165) 340 3,707 (3,420) ,4 (1,254) 1,143 2016 592 (23) 33 59
2015 (64) 53 49 8 2016 Annual Report
Consolidated Statement of Financial Position As at 31 December 2016 (Expressed in millions of Renminbi, unless otherwise stated)
31 December 31 December Note V 2016 2015
Assets Cash and deposits with the central bank 11 381,620 326,735 Deposits with banks and other financial institutions 12 232,630 86,311 Placements with banks and other financial institutions 13 126,305 132,361 Financial assets at fair value through profit or loss 14 7,834 5,637 Positive fair value of derivatives 15 4,950 1,625 Financial assets held under resale agreements 16 67,000 153,045 Interests receivable 17 25,339 18,546 Loans and advances to customers 18 1,751,644 1,475,424 Finance lease receivables 19 55,560 38,735 Available-for-sale financial assets 20 425,131 222,495 Held-to-maturity investments 21 257,500 152,312 Debt securities classified as receivables 22 627,678 523,427 Fixed assets 24 14,228 12,646 Goodwill 25 1,281 1,281 Deferred tax assets 26 5,622 3,923 Other assets 27 35,720 13,207
Total assets 4,020,042 3,167,710
Liabilities and equity
Liabilities Due to the central bank 187,000 14,840 Deposits from banks and other financial institutions 29 830,354 541,066 Placements from banks and other financial institutions 30 95,501 60,305 Negative fair value of derivatives 15 4,368 1,391 Financial assets sold under repurchase agreements 31 41,195 58,873 Deposits from customers 32 2,120,887 1,993,843 Accrued staff costs 33 7,776 11,217 Taxes payable 34 4,501 6,392 Interests payable 35 33,576 30,612 Debt securities issued 36 412,500 210,061 Other liabilities 37 31,316 15,063
Total liabilities 3,768,974 2,943,663
The notes on pages 138 to 270 form part of these financial statements.
133 CHINA EVERBRIGHT BANK 134 The notesonpages138to270formpartofthesefinancialstatements. Non-executive Director of Directors, Chairman oftheBoard Tang Shuangning Approved andauthorisedforissuebytheboardofdirectorson30March2017. (Expressed inmillionsofRenminbi,unlessotherwisestated) As at31December2016 Consolidated StatementofFinancialPosition Non-controlling interests Total equityattributabletoshareholdersoftheBank Equity Total liabilitiesandequity Total equity
Share capital Other equityinstrument Capital reserve Other comprehensiveincome Surplus reserve General reserve Retained earnings Executive Director President Zhang Jinliang
Note V 38 39 40 41 42 42 43 Director Independent Non-executive Xie Rong
1Dcme 31December 31 December ,2,4 3,167,710 4,020,042 5,5 223,493 250,455 5,6 224,047 251,068 66946,679 46,679 99719,965 29,947 33533,365 33,365 79114,964 17,951 14740,271 51,447 05764,320 70,557 2016 613 0 3,929 509
2015 554 2016 Annual Report
Consolidated Statement of Changes in Equity for the year ended 31 December 2016 (Expressed in millions of Renminbi, unless otherwise stated)
Attributable to equity shareholders of the Bank
Other Other Non– Share equity Capital comprehensive Surplus General Retained controlling Note V Capital instrument reserve income reserve reserve earnings Sub-total interests Total
Balance at 1 January 2016 46,679 19,965 33,365 3,929 14,964 40,271 64,320 223,493 554 224,047
Changes in equity for the year:
Net income – –– – – – 30,329 30,329 59 30,388 Other comprehensive income 41 – –– (3,420) – – – (3,420) – (3,420) Capital injection by preference shareholders – 9,982 – ––– – 9,982 – 9,982 Appropriation of profit: 43 – Appropriation to surplus reserve – –– – 2,987 – (2,987) – –– – Appropriation to general reserve – –– – – 11,176 (11,176) – –– – Dividends to common shareholders – –– – – – (8,869) (8,869) – (8,869) – Dividends to preference shareholders – –– – – – (1,060) (1,060) – (1,060)
Balance at 31 December 2016 46,679 29,947 33,365 509 17,951 51,447 70,557 250,455 613 251,068
Attributable to equity shareholders of the Bank
Other Other Non– Share equity Capital comprehensive Surplus General Retained controlling Note V Capital instrument reserve income reserve reserve earnings Sub-total interests Total
Balance at 1 January 2015 46,679 – 33,365 222 12,050 33,903 52,756 178,975 508 179,483
Changes in equity for the year:
Net income – –– – – – 29,528 29,528 49 29,577 Other comprehensive income 41 – –– 3,707 – – – 3,707 – 3,707 Capital injection by preference shareholders – 19,965 – ––– – 19,965 – 19,965 Appropriation of profit: 43 – Appropriation to surplus reserve – –– – 2,914 – (2,914) – –– – Appropriation to general reserve – –– – – 6,368 (6,368) – –– – Dividends to common shareholders – –– – – – (8,682) (8,682) (3) (8,685)
Balance at 31 December 2015 46,679 19,965 33,365 3,929 14,964 40,271 64,320 223,493 554 224,047
The notes on pages 138 to 270 form part of these financial statements.
135 CHINA EVERBRIGHT BANK 136 The notesonpages138to270formpartofthesefinancial statements. (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Consolidated CashFlowStatement Adjustments for: Net profit Cash flowsfromoperatingactivities Net cashflowsfromoperatingactivities Changes inoperatingliabilities Changes inoperatingassets Depreciation andamortisation Impairment lossesonassets Net (decrease)/increaseinotheroperatingliabilities Income taxpaid Net increaseindepositsfromcustomers Net increase/(decrease)inamountduetocentralbank Net (decrease)/increaseinfinancialassetssoldunder Net increaseinplacementsfrombanksandotherfinancialinstitutions Net increaseindepositsfrombanksandotherfinancialinstitutions Net increaseinotheroperatingassets Net decreaseinfinancialassetsheldunderresaleagreements Net increaseinloansandadvancestocustomers Net (increase)/decreaseinplacementswithbanks Net increaseindepositswiththecentralbank, Income tax Net lossesondisposaloffixedassets Interest expenseondebtsecuritiesissued Revaluation gainsonfinancialinstrumentsatfairvalue Net gainsondisposaloftradingsecurities Net losses/(gains)ondisposalofinvestmentsecurities Unrealised foreignexchangegains Dividends income Unwinding ofdiscount repurchase and otherfinancialinstitutions banks andotherfinancialinstitutions through profitorloss agreements
2793 (223,635) (297,953) 3979 (109,927) (319,799) 4,7 211,400 349,679 208,506 (15,200) 127,044 172,160 33,879 289,288 9,5 253,206 593,353 1,2)(9,367) (12,126) (27,418) 31,780 (33,292) (25,986) (24,247) (51,367) 1,2)7,168 (17,720) 39121,652 29,577 23,931 30,388 51623,561 35,196 135,332 87,060 6,570 11,299 61568,121 76,125 ,8 2,105 2,182 ,9 9,781 9,792 2016 49 4,659 (489) (213) (632) (876) 261 (10) (5) 8
2015 (294) (419) (802) (13) (41) (4) 9 2016 Annual Report
Note V 2016 2015
Cash flows from investing activities
Proceeds from disposal and redemption of investments 470,303 186,122 Proceeds from dividends income 5 4 Proceeds from disposal of fixed assets and other assets 212 42 Payments on acquisition of investments (890,635) (497,518) Payments on acquisition of fixed assets, intangible assets and other long-term assets (3,210) (1,782)
Net cash flows used in investing activities (423,325) (313,132)
Cash flows from financing activities
Net proceeds from issue of preference shares 9,982 19,965 Net proceeds from issue of new debt securities 202,440 157,004 Cash paid on debts securities redeemed – (36,619) Interest paid on debt securities issued (11,350) (6,552) Dividends paid (9,938) (8,691)
Net cash flows from financing activities 191,134 125,107
Effect of foreign exchange rate changes on cash and cash equivalents 2,055 588
Net increase in cash and cash equivalents 47(a) 119,543 23,963
Cash and cash equivalents as at 1 January 121,964 98,001
Cash and cash equivalents as at 31 December 47(b) 241,507 121,964
Interest received 135,397 136,669
Interest paid (excluding interest expense on debt securities issued) (63,806) (68,298)
The notes on pages 138 to 270 form part of these financial statements.
137 CHINA EVERBRIGHT BANK 138 II I (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
These financialstatementshavebeenapprovedbytheBoardofDirectorson30March2017. Kong andSeoulinSouthKoreaasat31December2016. The Bankhasbranchesin30provinces,autonomousregions,municipalitiesmainlandChina,Hong the PRCandTaiwan. Special AdministrationRegionofthePRC(“HongKong”),Macau mainly operates in mainland China, which, for the purpose of the report, excludes the Hong Kong financial servicesasapprovedbytheChinaBankingRegulatoryCommission(the“CBRC”).TheBank provision ofcorporateandretaildeposits,loansadvances,settlement,treasurybusinessother The principal activities of the Bank and its subsidiaries (Note V 23) (collectively the “Group”) are the Taipingqiao Ave,EverbrightCenter,XichengDistrict,Beijing,P.R.China. by theStateAdministrationofIndustryandCommercePRC.TheregisteredaddressisNo.25, No. B0007H111000001andisissuedthebusinesslicenseoflegalenterprise91110000100011743X The BankislicensedasafinancialinstitutionbytheChinaBankingRegulatoryCommission(the“CBRC”) December 2013respectively. on theShanghaiStockExchangeinAugust2010andTheofHongKongLimited Republic ofChina(“thePRC”)on18August1992.TheA-sharesandH-sharestheBankwerelisted China EverbrightBankCompanyLimited(the“Bank”)commenceditsoperationsinBeijing,thePeople’s 1 Summary ofprincipalaccountingpolicies Background information
statements aredisclosedinNoteIII. complexity, orareaswhereassumptionsandestimates aresignificanttotheconsolidatedfinancial applying the Group’s accounting policies. The areas involving a higher degree of judgement or accounting estimates. It also requires management to exercise its judgement in the process of The preparationoffinancialstatementsinconformitywith IFRSsrequirestheuseofcertaincritical Impairment isrecognisedifthereobjectiveevidence of impairmentassets. consolidated financial statement. Other accounting items are measured at their historical costs. profit or loss (including derivative financial instruments) are measured at their fair values in the Financial assetsavailableforsaleandfinancialliabilitiesatfairvaluethrough statements complywiththedisclosurerequirementsofHongKongCompaniesOrdinance. International Financial Reporting Standards (“IFRSs”). In addition, the consolidated financial The consolidated financial statements of the Group have been prepared in accordance with Basis ofpreparation 2016 Annual Report
II Summary of principal accounting policies (Continued)
1 Basis of preparation (continued)
As a financial institution incorporated in the PRC and listed on the Shanghai Stock Exchange, the Group also prepared its consolidated financial statements for the reporting period in accordance with the “Accounting Standards for Business Enterprises-Basic Standard” issued by the Ministry of Finance of the People’s Republic of China (the “MOF”), as well as additional specific accounting standards, the Application Guide and Interpretations of Accounting Standards and other relevant regulations (collectively known as the “PRC GAAP”). There is no difference in the net profit for the year or total equity as at the end of the year between the Group’s consolidated financial statements prepared under IFRSs and those prepared under PRC GAAP.
1.1 Standards, amendments and interpretations effective in 2016 On 1 January 2016, the Group adopted the following new standards, amendments and interpretations.
IAS 27 Amendments Equity Method in Separate Financial Statements IFRS 10, IFRS 12 and Investment Entities: Applying the Consolidation IAS 28 Amendments Exception IAS 1 Amendments Disclosure Initiative IAS 16 and IAS 38 Amendments Clarification of Acceptable Methods of Depreciation and Amortisation Annual Improvements to IFRSs 2012-2014 cycle (issued in September 2014)
IAS 27 Amendments allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.
The amendments to IFRS 10, IFRS 12 and IAS 28 address issues that have arisen in applying the investment entities exception under IFRS 10. The amendments to IFRS 10 clarify that the exception from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. The amendments also clarify that only a subsidiary of an investment entity that is not an investment entity itself and that provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value. The amendments to IAS 28 allow the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries.
The amendments to IAS 1 include narrow-focus improvements in materiality, disaggregation and subtotals, notes structure, disclosure of accounting policies and presentation of items of other comprehensive income arising from equity accounted investments.
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Group. significant impactontheoperatingresults,financialposition andcomprehensiveincomeofthe The adoption of the above standards, amendments and interpretations does not have any currency, governmentbondratesmustbeused. obligation islocated.Whentherenodeepmarketforhighqualitycorporatebondsinthat on thecurrencyinwhichobligationisdenominated,ratherthancountrywhere The amendmentclarifiesthatmarketdepthofhighqualitycorporatebondsisassessedbased IAS 19Employeebenefits provide asignificantupdatetotheinformationreportedinmostrecentannualreport. requirements donotapplytocondensedinterimfinancialstatements,unlesssuchdisclosures disclosures are required. In addition, the amendment clarifies that the offsetting disclosure arrangement against the guidancefor continuing involvement in order to assess whether the involvement in a financial asset. An entity must assess the nature of the fee and the The amendmentclarifiesthataservicingcontractincludesfeecanconstitutecontinuing IFRS 7FinancialInstruments:Disclosures original plan.Thereis,therefore,nointerruptionoftheapplicationrequirementsinIFRS5. other would not be considered a new plan of disposal, rather it is a continuation of the owners. Theamendmentclarifiesthatchangingfromoneofthesedisposalmethodstothe Assets (or disposal groups) are generally disposed of either through sale or distribution to IFRS 5Non-CurrentAssetsHeldforSaleandDiscontinuedOperations Annual ImprovementstoIFRSs2012-2014cycle: equipment andmayonlybeusedinverylimitedcircumstancestoamortiseintangibleassets. total revenue expected to be generated cannot be used to depreciate property, plant and that areconsumedthroughuseoftheasset.Asaresult,ratiorevenuegeneratedto benefits that are generated from operating a business rather than the economic benefits The amendmentstoIAS16and38clarifiesthatrevenuereflectsapatternofeconomic Standards, amendmentsandinterpretationseffectivein2016 (continued) (Continued) (continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
1 Basis of preparation (continued)
1.2 Standards, amendments and interpretations that are not yet effective and have not been early adopted by the Group in 2016 Effective for annual periods beginning on or after
IAS 7 Amendments Statement of Cash Flow 1 January 2017 IAS 12 Amendments Recognition of Deferred Tax Assets 1 January 2017 for Unrealised Losses IAS 40 Amendments Transfers of Investment Property 1 January 2018 IFRS 2 Amendments Share-based Payment 1 January 2018 IFRS 4 Amendments Insurance Contracts 1 January 2018 IFRS 9 Financial Instruments 1 January 2018 IFRS 15 and Amendments Revenue from Contracts with Customers 1 January 2018 IFRIC Interpretation 22 Foreign Currency Transactions and 1 January 2018 Advance Consideration IFRS 16 Leases 1 January 2019 IFRS 10 and IAS 28 Amendments Sale or Contribution of Assets between Effective date an Investor and its Associate or has been Joint Venture deferred indefinitely Annual Improvements to IFRSs 2014-2016 cycle (issued in December 2016)
The amendments to IAS 7 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.
The amendments to IAS 12 clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
IAS 40 Amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.
The International Accounting Standards Board (“IASB”) issued amendments to IFRS 2 Share- based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share- based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled.
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1.2 Basis ofpreparation
not beenearlyadoptedbytheGroupin2016 Standards, amendmentsandinterpretationsthatarenotyeteffectivehave the extentofunrelated investor’s interestinthatassociateorjointventure. gain orlossresultingfromthetransactionisrecognised intheinvestor’sprofitorlossonlyto constitutes abusiness.Fortransactioninvolvingassets thatdonotconstituteabusiness, or losswhenthesalecontributionbetweenaninvestor anditsassociateorjointventure investor andits associate or joint venture. The amendments require a full recognition of a gain in IFRS 10 and in IAS 28 in dealing with the sale or contribution of assets between an The amendmentstoIFRS10andIAS28addressaninconsistency betweentherequirements new standardincludesleasesofallassets,withcertain exceptions. lessors, thereislittlechangetotheexistingaccounting inIAS17Leases.Thescopeofthe IFRS 16 – Leases payment orreceiptofadvanceconsideration. or receiptsinadvance,thentheentitymustdetermineadateoftransactionsforeach non-monetary liabilityarisingfromtheadvanceconsideration.Iftherearemultiplepayments the transactionisdateonwhichanentityinitiallyrecognisesnon-monetaryassetor non-monetary asset or non-monetary liability relating to advance consideration, the date of recognition oftherelatedasset,expenseorincome(orpartit)onderecognitiona IFRIC IFRS. applicable toallentitiesandwillsupersedecurrentrevenuerecognitionrequirementsunder structured approach to measuring and recognising revenue. The new revenue standard is for transferring goods or services to a customer. The principles in IFRS 15 provide a more amount thatreflectstheconsiderationtowhichanentityexpectsbeentitledinexchange revenue arisingfromcontractswithcustomers.UnderIFRS15isrecognisedatan IFRS 15wasissuedinMay2014andestablishesanewfive-stepmodelthatwillapplyto new requirementsforclassificationandmeasurement,impairment,hedgeaccounting. Recognition and Measurement and all previous versions of IFRS 9. The standard introduces all phasesofthefinancialinstrumentsprojectandreplacesIAS39–FinancialInstruments: In July2014,theIASBissuedfinalversionofIFRS9–FinancialInstrumentswhichreflects and anoverlayapproach. options forentitiesissuinginsurancecontracts:atemporaryexemptionfromapplyingIFRS9 standard that the Board is developing to replace IFRS 4. The amendments introduce two new financialinstrumentsStandard,IFRS9,beforeimplementingtheinsurancecontracts The IASBissuedamendmentstoIFRS4thataddressconcernsarisingfromimplementingthe Interpretation 22clarifiesthatindeterminingthespotexchangeratetouseoninitial requires lessees to recognise assets and liabilities for most leases. For (continued) (Continued) (continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
1 Basis of preparation (continued)
1.2 Standards, amendments and interpretations that are not yet effective and have not been early adopted by the Group in 2016 (continued) Annual Improvements to IFRSs 2014-2016 cycle: IAS 28 Investments in Associates and Joint Ventures
The amendments clarifies that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. The amendments are effective from 1 January 2018.
IFRS 1 First-time Adoption of International Financial Reporting Standards
Short-term exemptions for first-time adopters in IFRS 1 were deleted because they have now served their intended purpose. The amendment is effective from 1 January 2018.
IFRS 12 Disclosure of Interests in Other Entities The amendments clarify that the disclosure requirements in IFRS 12, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. The amendments are effective from 1 January 2017.
The Group is in the process of assessing the impact of these new standards amendments and interpretations on the consolidated and separate financial statements of the Group and the Bank respectively.
2 Consolidation
Subsidiaries are all entities (including corporates, divided parts of associates, and structured entities controlled by corporates) over which the Group has control. That is the Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The existence and effect of potential voting rights that are currently exercisable or convertible and rights arising from other contractual arrangements are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. If the changes of the relevant facts and circumstances resulting in the definition of control involved in the changes of relevant elements, the Group will re-evaluate whether subsidiaries are controlled.
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4 3 2 Summary ofprincipalaccountingpolicies
monetary assetsandliabilities arerecognisedinthestatementofprofitandloss. carrying amountarerecognised inothercomprehensiveincome.Translationdifferences onallother the amortisedcostarerecognised inthestatementofprofitandloss,other changesinthe other changesinthecarrying amountofthesecurity.Translationdifferencesrelated tochangesin between translationdifferences resultingfromchangesintheamortisedcostof the securityand monetary securities denominated in foreign currency classified as available for sale are analysed are translated at the foreign exchange rates ruling at that date. Changes in the fair value of Monetary assets and liabilities denominated in foreign currencies at the financial reporting date the spotexchangeratesatdatesoftransactions. on initialrecognition,translatedtoRMBatthespotexchange ratesorthethatapproximate Renminbi atthespotexchangerateondateofreceipt. Otherforeigncurrencytransactionsare, When theGroupreceivescapitalinforeigncurrencies frominvestors,thecapitalistranslatedto to aninsignificantriskofchangeinvalue. short-term investmentswhicharereadilyconvertibleintoknownamountsofcashandsubject short-term deposits and placements with banks and other financial institutions, and highly liquid Cash and cash equivalents comprise cash on hand, non-restricted balances with central banks, Consolidation Foreign currencytranslation Cash andcashequivalents by theBankascurrentinvestmentincomeofsubsidiaries. incurred. Thedividendsorprofitsdeclaredtodistributebytheinvestedentityshallberecognised consideration amendments,butdoesnotincludeacquisition-relatedcosts,whichareexpensedas cost lessimpairment.Costisadjustedtoreflectchangesinconsiderationarisingfromcontingent In the Bank’s statement of financial position, investments in subsidiaries are accounted for at policies adoptedbytheGroup. necessary, accountingpoliciesofsubsidiarieshavebeenchangedtoensureconsistencywiththe transactions between members of the Group are eliminated in full on consolidation. Where All intra-group assets and liabilities, equity, income, expenses and cash flows relating to directly inthestatementofprofitorloss. assets ofthesubsidiaryacquiredincaseabargainpurchase,differenceisrecognised identifiable netassetsacquiredisrecordedasgoodwill.Ifthislessthanthefairvalueof acquisition-date fairvalueofanypreviousequityinterestintheacquireeover of theconsiderationtransferred,amountanynon-controllinginterestinacquireeand business combinationaremeasuredinitiallyattheirfairvaluestheacquisitiondate.Theexcess arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a transferred includesthefair value of any asset or liabilityresultingfrom a contingentconsideration transferred, theliabilitiesincurredandequityinterestsissuedbyGroup.Theconsideration The consideration transferred for the acquisition of a subsidiary is the fair values of the assets The Group uses the acquisition method of accounting to account for business combinations. (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
4 Foreign currency translation (continued)
Non-monetary assets and liabilities that are measured at historical cost in foreign currencies are translated using the foreign exchange rates at the date of the transaction. Non-monetary assets and liabilities that are measured at fair value in foreign currencies are translated using the foreign exchange rates at the date the fair value is determined. Translation differences on non-monetary financial assets classified as available for sale are recognised in other comprehensive income. Translation differences on non-monetary financial assets and liabilities held at fair value through profit or loss are recognised as “Net trading gains” in the statement of profit and loss.
Assets and liabilities of foreign operation are translated to Renminbi at the spot exchange rate at the balance sheet date. Equity items, excluding “Retained Earnings”, are translated to Renminbi at the spot exchange rates at the transaction dates. Income and expenses of foreign operation are translated to Renminbi at the rates that approximate the spot exchange rates at the transaction dates. The resulting translation differences are recognised in other comprehensive income. The translation differences accumulated in shareholders, equity with respect to a foreign operation are transferred to profit or loss in the period when the foreign operation is disposed.
5 Financial instruments
5.1 Classification The Group classifies its financial assets into the following four categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets.
Financial liabilities are classified into two categories: financial liabilities at fair value through profit or loss and other financial liabilities.
The Group determines the classification of its financial assets and financial liabilities at initial recognition.
(1) Financial assets and financial liabilities at fair value through profit or loss Financial assets and financial liabilities at fair value through profit or loss have two sub- categories: financial assets and financial liabilities held for trading, and those designated as at fair value through profit or loss at inception.
– acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or
– part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
– a derivative except for a derivative that is a designated and effective hedging instrument or a financial guarantee contract.
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(2) (1) Classification
requirements. to a significant deterioration in the issuer’s creditworthiness or industry’s regulatory maturity other than restricted circumstances such as sales or reclassifications due reclassified more than an insignificant amount of held to maturity investments before during the current financial year or during the two preceding financial years, sold or The Groupshallnotclassifyanyfinancialassetsas held tomaturityiftheentityhas, sale. receivables noraredesignatedasatfairvaluethroughprofitorlossavailablefor and ability payments andfixedmaturitiesthattheGroup’smanagementhaspositiveintention Held tomaturityinvestmentsarenon-derivativefinancialassetswithfixedordeterminable Held-to-maturity investments – management oninitialrecognition: at inception if it meets either of the following criteria and is designated as such by A financial asset or financial liability is classified at fair value through profit or loss (continued) Financial assets – –
with littleornoanalysis,thatitwouldnotbeseparatelyrecorded. embedded derivative(s)doesnotsignificantlymodifythecashflowsoritisclear, the financial that basistokeymanagementpersonnel;or risk managementorinvestmentstrategy,andinformationisprovidedinternallyon performance isevaluatedonafairvaluebasisinaccordancewithdocumented a group or financial liabilitiesorrecognisingthegainsandlossesonthemdifferentbases; inconsistency that would otherwise arise from measuring the financial assets or the designation (continued) to hold to maturity and that do not meet the definition of loans and of financial assets, financial liabilities or both is managed and its instrument contains one or more embedded derivatives, unless the (continued) and financial liabilities at fair value through profit or loss eliminates or significantly reduces a measurement or recognition (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
5 Financial instruments (continued)
5.1 Classification (continued) (3) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than:
(a) those that the Group intends to sell immediately or in the short term, which are classified as held for trading, and those that the Group upon initial recognition designates as at fair value through profit or loss;
(b) those that the Group, upon initial recognition, designates as at fair value through profit or loss or as available-for-sale; or
(c) those for which the Group may not recover substantially all of its initial investment, other than because of credit deterioration, which will be classified as available-for- sale.
Loans and receivables mainly comprise loans and advances to customers, debt securities classified as receivables, deposits and placements with banks and other financial institutions and financial assets held under resale agreements.
(4) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories.
(5) Precious metals Precious metals comprise gold, silver and other precious metals. Precious metals that are not related to the Group’s precious metals trading activities are initially measured at acquisition cost and subsequently measured at the lower of cost and net realisable value. Precious metals acquired by the Group for trading purposes are initially measured at fair value less costs to sell, and subsequent changes in fair value less costs to sell are recognised in profit or loss in the period of the change.
(6) Other financial liabilities Financial liabilities other than the financial liabilities at fair value through profit or loss are classified as other non-derivative financial liabilities.
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5.4 5.3 5.2 Financial instruments
payments isestablishedarerecognisedinthestatementofprofitandloss. as dividendsonequityinstrumentsofthiscategorywhentheGroup’srighttoreceivesuch on availableforsaledebtinstrumentscalculatedusingtheeffectiveinterestmethodaswell comprehensive income”isreclassifiedfromequitytothestatementofprofitandloss.Interest or impaired. At this time the cumulative gain or loss previously recognised in “Other recognised in “Other comprehensive income”, until the financial asset is de-recognised Gains and losses arising from changes in the fair value of available for sale assets are payments isestablished. are also recognised in the statement of profit and loss when the Group’s right to receive and lossintheperiodwhichtheyarise.Dividendsonequityinstrumentsofthiscategory liabilities atfairvaluethroughprofitorlosscategoryareincludedinthestatementof Gains andlossesarisingfromchangesinthefairvalueoffinancialassets using theeffectiveinterestmethod. and receivablesheldtomaturityotherfinancialliabilitiesarecarriedatamortisedcost through profitorlossaresubsequentlycarriedatfairvalue.Financialassetsclassifiedasloans Financial assets available for sale and financial assets and financial liabilities at fair value liabilities, anyattributabletransactioncostsareincludedintheirinitialcosts. costs are charged to profit or loss. For other categories of financial assets and financial and financialliabilitiesatfairvaluethroughprofitorloss,anydirectlyattributabletransaction Financial assets andfinancialliabilities are measuredinitiallyatfairvalue.Forfinancialassets becomes apartytothecontractualprovisionsofinstrument. A financialassetorliabilityisrecognisedontrade-date,thedatewhenGroup market transactions inthesameinstruments. its chosenvaluationtechniques andtestsforvalidityusingpricesfromanyobservable current factors thatmarketparticipants wouldconsiderinsettingaprice,andincorporates theseinto estimates of prices obtained in actual market transactions. The Group makes use of all financial instruments and techniques which have been demonstrated to provide reliable The Group uses the valuation techniques commonly used by market participants to price techniques commonlyusedbymarketparticipants. transactions, discounted cash flow analysis and option pricing models, and other valuation fair value by using valuation techniques. These include the use of recent arm’s length bid pricesandaskprices,asappropriate.Ifthereisno activemarket,theGroupestablishes values of quotedfinancial assets and financialliabilitiesinactivemarkets are basedoncurrent in an orderly transaction between market participants at the measurement date. The fair The fairvalueisthepricethatwouldbereceivedtosell anassetorpaidtotransferaliability Initial recognition Determination offairvalue Subsequent measurement (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
5 Financial instruments (continued)
5.5 De-recognition of financial instruments Financial assets (or a part of a financial asset or group of financial assets)are derecognised when the financial assets meet one of the following conditions:
– the contractual rights to the cash flows from the financial asset expire; or
– the Group transfers substantially all the risks and rewards of ownership of the financial assets or where substantially all the risks and rewards of ownership of a financial asset are neither retained nor transferred, the control over that asset is relinquished.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, but retains control, the Group continues to recognise the financial asset and relevant liability to the extent of its continuing involvement in the financial asset.
The financial liability (or part of it) is derecognised only when the underlying present obligation (or part of it) specified in the contracts is discharged, cancelled or expired. An agreement between the Group and an existing lender to replace the original financial liability with a new financial liability with substantially different terms, or a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. The difference between the carrying amount of the derecognised financial liability and the consideration paid is recognised in profit or loss.
5.6 Impairment of financial assets The carrying amounts of financial assets other than those at fair value through profit or loss are reviewed by the Group at the end of the year to determine whether there is objective evidence of impairment. If any such evidence exists, impairment loss is provided. Objective evidence of impairment in the financial asset represents events that occur after the initial recognition of the financial asset and have impact on the estimated future cash flows of the asset, which can be estimated reliably.
Objective evidence includes the following loss event:
– significant financial difficulty of the issuer or borrower;
– a breach of contract, such as a default or delinquency in interest or principal payments;
– it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
– the disappearance of an active market for that financial asset because of financial difficulties;
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5.6 Financial instruments
– (1) – – Impairment offinancialassets
obtaining andsellingthecollateral. loan orreceivablereflectsthecashflowsthatmayresult fromforeclosurelesscostsfor The calculation of the present value ofthe estimated future cash flowsof a collateralised its presentvalueisimmaterial. assessing impairmentlossifthedifferencebetween estimatedfuturecashflowsand Cash flows relating to short-term loans and receivables are not discounted when it maybepossibletoidentifyimpairmentthroughthecombined effectofseveralevents. It maynotbepossibletoidentifyasingle,discreteevent thatcausedtheimpairmentbut profit orloss. discounted attheoriginaleffectiveinterestrate.Theimpairmentlossesarerecognisedin future cash flows (exclusive of future credit losses that have not been incurred) measured astheexcessofitscarryingamountoverpresentvalueestimated objective evidence of impairment of loans and receivables, the amount of loss is characteristics of the credit risk are assessed individually for impairment. If there is Loans and receivables, which are considered individually significant or with unique Individual assessment individually andthoseassessedonacollectivebasis. The Group Loans andreceivables other objectiveevidenceindicatingimpairmentofthefinancialasset. 50% ofitsinitialinvestmentcost;or in thefairvalueofanequityinstrumentismorethan20%(20%inclusive)butless whether animpairmentlossshouldberecognisedfortheequityinstrumentifdecline The Groupwillconsiderotherrelevantfactors,suchasthepricevolatility,todetermine below itsinitialcostby50%ormore;fairvalueforoneyearlonger. of impairmentinsuchinvestmentswhereadeclinethefairvalueequityinstrument a significantorprolongeddeclineinthefairvalueofanequityinstrumentisindicator the costofinvestmentsinequityinstrumentsmaynotberecovered; market, economicorlegalenvironmentinwhichtheissueroperatesandindicatesthat any significantchangewithanadverseeffectthathastakenplaceinthetechnological, uses two methods of assessing impairment losses: those assessed (continued) (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
5 Financial instruments (continued)
5.6 Impairment of financial assets (continued) (1) Loans and receivables (continued) Collective assessment Loans and receivables which are assessed collectively for impairment include individually assessed loans and receivables with no objective evidence of impairment on an individual basis, and homogeneous groups of loans and receivables which are not considered individually significant and not assessed individually. Loans and receivables are grouped for similar credit risk characteristics for collective assessment. The objective evidence of impairment mainly includes that, though it is unable to identify the decrease of cash flow of each individual asset, after collective assessment based on observable data, there is observable evidence indicating that there is a measurable decrease in the estimated future cash flow from a group of financial assets since the initial recognition of those assets.
Homogeneous groups of loans not considered individually significant For homogeneous groups of loans that are not considered individually significant, the Group adopts a flow rate methodology to collectively assess impairment losses. This methodology utilises a statistical analysis of historical trends of probability of default and amount of consequential loss, as well as an adjustment of observable data that reflects the current economic conditions and judgement based on management’s historical experience.
Individually assessed loans and receivables with no objective evidence of impairment on an individual basis Loans and receivables which are individually significant and therefore have been individually assessed but for which no objective evidence of impairment can be identified, either due to the absence of any loss events or due to an inability to measure reliably the impact of loss events on future cash flows, are grouped together in portfolios of similar credit risk characteristics for the purpose of assessing a collective impairment loss. This assessment covers those loans and advances that were impaired at the end of the year but which will not be individually identified as such until some time in the future.
The collective impairment loss is assessed after taking into account:
– historical loss experience in portfolios of similar credit risk characteristics;
– the emergence period between a loss occurring and that loss being identified; and
– the current economic and credit environments and the judgement on inherent loss based on management’s historical experience.
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5.6 Financial instruments
(1) Impairment offinancialassets
loan’s originaleffectiveinterest rate. individual orcollectiveimpairment assessment,andtheprovisioniscalculatedusing the met andthatfuturepayments arelikelytooccur.Theloanscontinuebesubject to Management continuously reviews renegotiated loans to ensure that all criteria are Once the terms have been renegotiated, the loan is no longer considered past due. involve extendingthepaymentarrangementsandagreement ofnewloanconditions. Group seekstorestructureloansratherthantake possession ofcollateral.Thismay that itwouldnototherwiseconsiderundernormalcircumstances. Wherepossible,the to repayaccordingtheoriginaltermsandwhere Grouphasmadeconcessions deterioration intheborrower’sfinancialpositionto extent thattheborrowerisunable Rescheduled loans and receivables are loans that have been restructured due to in profitorlossthroughimpairmentlosses. subsequent period the loan written off is recovered, the amount recovered is recognised is writtenoffagainstitsprovisionforimpairmentlossesuponnecessaryapproval.Ifina the Grouphascompletedallnecessarylegalorotherclaimproceedings,loan When theGroupdeterminesthataloanhasnoreasonableprospectofrecoveryafter date ofthereversalhadimpairmentnotbeenrecognised. result in a carrying amount of the financial asset that exceeds the amortised cost at the recognised, theimpairmentlossisreversedthroughprofitorloss.Thereversalshallnot decrease canberelatedobjectivelytoaneventoccurringaftertheimpairmentlosswas If, in a subsequent period the amount of an impairment loss decreases and the the provisionforimpairmentlosses. subsequent changestotheestimatedrecoverableamountsandresultedin The Groupperiodicallyreviewsandassessestheimpairedloansreceivablesforany collective assessmentforimpairment. for which an impairment loss is or continues to be recognised are not included in a portfolio of financial assets. Assets that are individually assessed for impairment and impairment on individual assets in a portfolio, those assets are removed from the As soon as information is available that specifically identifies objective evidence of operates. by management based on the historical experience of the markets where the Group The emergence period between a loss occurring and its identification is determined an individualbasis Individually assessedloansandreceivableswithnoobjectiveevidenceofimpairmenton Loans andreceivables(continued) (continued) (continued) (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
5 Financial instruments (continued)
5.6 Impairment of financial assets (continued) (2) Held-to-maturity investments The impairment loss is calculated based on the excess of its carrying amount over the present value of the estimated future cash flows (exclusive of future credit losses that have not been incurred) discounted at the original effective interest rate. All impairment losses are recognised in profit or loss.
If, in a subsequent period the amount of an impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through profit or loss. The reversal shall not result in a carrying amount of the financial asset that exceeds the amortised cost at the date of the reversal had the impairment not been recognised.
(3) Available-for-sale financial assets If objective evidence of impairment exists for available for sale financial assets, the cumulative loss recognised in “Other comprehensive income” is reclassified from equity to the income statement and is measured as the difference between the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment loss on that financial asset previously recognised in the income statement.
If, in a subsequent period, the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the income statement, the previously recognised impairment loss is reversed through the income statement.
With respect to equity instruments, impairment losses recognised in the income statement are not subsequently reversed through the income statement. If there is objective evidence that an impairment loss has been incurred on an unquoted equity investment that is not carried at fair value because its fair value cannot be reliably measured, the impairment loss is not reversed.
5.7 Derivative financial instruments Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valuation techniques, including discounted cash flow analysis and option pricing models, as appropriate. Credit risk valuation adjustments are applied to the Group’s over-the-counter derivatives to reflect the credit risk of the counterparties and the Group respectively. They are dependent on expected future values of exposures for each counterparty and default probabilities, etc. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
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6 5 Summary ofprincipalaccountingpolicies
using theeffectiveinterestmethod. are recognisedrespectively as interestincomeandexpenseoverthelifeof eachagreement Interest earnedonreverserepurchaseagreementsand interestincurredonrepurchaseagreements principles. Theproceedsfromthesalearereportedas liabilities andarecarriedatamortisedcost. in thestatementsoffinancialpositionandmeasured accordancewiththeiroriginalmeasurement Financial assetssoldsubjecttoasimultaneousagreement torepurchasetheseassetsareretained but asreceivablesandarecarriedinthestatementsof financialpositionatamortisedcost. Financial assetspurchasedunderagreementstoresell are reportednotaspurchasesoftheassets 5.9 5.8 5.7 Financial instruments Financial assetsheldunderresaleandrepurchase agreements
recognises profitorlossonthedateoftransaction. variables includeonlydatafromobservablemarkets.Whensuchevidenceexists,theGroup instrument (i.e. without modification or repackaging) or based on a valuation technique whose is evidencedbycomparisonwithotherobservablecurrentmarkettransactionsinthesame the fairvalueofconsiderationgivenorreceived)unlessthatinstrument The bestevidenceofthefairvalueaderivativeatinitialrecognitionistransactionprice(i.e. distribution ofprofits.Redemptionbeforematuritywillwritedownequityasredemptionprice. recognised as equity in actual amount received. Dividends payables are recognised as For the issued preference shares that should be classified as equity instruments, will be policy asaccountingfortheconvertiblebondsonlywithliabilitycomponent. preference shares which do not contain equity component, the Group follows the accounting the sameaccountingpolicyasforconvertiblebondswithequitycomponents.Forissued When theissuedpreferencesharescontainequityandliabilitycomponents,Groupfollows combined withthedefinitionoffinancialassets,liabilitiesandequityinstruments. financial liabilitiesorequityinstrumentsaccordingtothetermsandeconomicsubstance Such preference shares or their components are initially recognised as financial assets, liability simultaneously. amounts and there is an intention to settle on a net basis, or realise the asset and settle the financial positionwhenthereisacurrentlegallyenforceablerighttosetofftherecognised Financial assetsandliabilitiesareoffsetthenetamountisreportedinstatementof Derivative financialinstruments Offsetting financialinstruments Preference share (continued) (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
7 Investment in subsidiaries
In the Group’s consolidated financial statements, investments in subsidiaries are accounted for in accordance with the principles described in Note II 2.
In the Bank’s financial statements, investments in subsidiaries are accounted for using the cost method. An investment in a subsidiary acquired other than through a business combination is initially recognised at actual payment cost if the Bank acquires the investment by cash. The investment is stated at cost less impairment loss (Note II 13) in the statements of financial position. Except for declared but not yet distributed cash dividends or profits distribution that have been included in the price or consideration paid in obtaining the investments, the Group recognises its share of the cash dividends or profit distribution declared by the investees as investment income.
8 Fixed assets
Fixed assets are assets held by the Group for operation and administration purposes with useful lives over one year.
The Group’s fixed assets mainly comprise premises, electronic equipment, aircraft and construction in progress.
The assets purchased or constructed are initially measured at acquisition cost or deemed cost, as appropriate. Such initial cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in an asset’s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the statement of profit and loss during the financial period in which they are incurred.
Depreciation is calculated on the straight-line method to write down the cost of such assets to their residual values over their estimated useful lives. The residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each financial reporting date.
Gains and losses on disposals are determined by the difference between proceeds and carrying amount, after deduction of relevant taxes and expenses. These are included in the statement of profit and loss.
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9 8 Summary ofprincipalaccountingpolicies
8.1 8.3 8.2 9.1 operating leaseisaotherthanfinancelease. the lessee,irrespectiveofwhetherlegaltitleto assetiseventuallytransferredornot.An that transferssubstantiallyalltherisksandrewardsincidental toownershipofaleasedasset A lease is classified as either a finance lease or an operating lease. A finance lease is a lease Fixed assets Leases
15%. years, lesstheyearsinserviceattimeofpurchasetoanestimatedresidualvaluerate Aircraft are depreciated using the straight-line method over the expected useful life of 25 Aircraft areusedintheGroup’saircraftoperatingleasingbusiness. values anddepreciationratesofeachclassfixedassetsareasfollows: after takingintoaccounttheirestimatedresidualvalues.Theusefullives, Fixed assetsaredepreciatedusingthestraight-linemethodovertheirestimatedusefullives, accounting periodinwhich they areincurred. line basisovertheleaseterm.Contingentrentalpayments arerecognisedasexpensesinthe Rental paymentsunderoperatingleasesarerecognised ascostsorexpensesonastraight- such assetsaretransferredtopropertyandequipment. such assetsarereadyfortheirintendeduseandthedepreciationchargecommencesafter Items classifiedasconstructioninprogressaretransferredtopropertyandequipmentwhen at cost.Costincludesequipmentcost,costofconstruction,installationandotherdirectcosts. Construction inprogressconsistsofassetsunderconstructionorbeinginstalledandisstated Premises, electronicequipmentandothers Construction inprogress Operating leasecharges Aircraft Premises Asset category Electronic equipment Others (continued)
Estimated useful life (years) 30-35 (Continued) 5-10 3-5
Estimated value(%) residual rate of - 19.0-32.3 3-5 3-5 3
Depreciation 9.5-19.4 rate(%) 2.8-3.2 2016 Annual Report
II Summary of principal accounting policies (Continued)
9 Leases (continued)
9.2 Assets leased-out under finance lease When the Group is a lessor under finance leases, the present value of the aggregation of the minimum lease payment receivable from the lessee, unguaranteed residual value and initial direct costs is recognised as a receivable. The difference between the receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using an interest rate which reflects a constant rate of return.
Unearned finance income is allocated to each accounting period during the lease term using the effective interest method. At the end of the year, finance lease receivables, net of unearned finance income, are presented as finance lease receivables in the statements of financial position. The difference between the receivable and the present value of the receivable is recognised as unearned finance income.
The unguaranteed residual values are reviewed at least at each year end. Any excess of the carrying amount of the unguaranteed residual values over their estimated recoverable amounts is recognised as impairment loss. If there is an indication that there has been a change in the factors used to determine the provision for impairment losses and as a result the estimated recoverable amount of the unguaranteed residual values is greater than its carrying amount, the impairment loss recognised in prior periods is reversed. Reversals of impairment losses are recognised in profit or loss.
10 Intangible assets
Intangible assets are identifiable non-monetary assets without physical substance, including computer software and other intangible assets.
Computer software and other intangible assets are stated at acquisition cost less accumulated amortisation and impairment. These costs are amortised on a straight-line basis over their estimated useful lives with the amortisation recognised in the statement of profit and loss.
The respective amortisation periods for intangible assets are as follows:
Estimated useful lives Asset category (years)
Computer software 5 Others 5-10
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13 12 11 Summary ofprincipalaccountingpolicies
the Group’sassets. the Group’s operations and how management makes decisions about continuing or disposing of asset groups.Inidentifying an assetgroup,theGroupalsoconsidershowmanagement monitors generated by the asset group are largely independent of the cash inflows from other assets or directly relating to cash-generation. Identification of a CGU is based on whether major cash inflows independent ofthecashinflowsfromotherassetsorasset groups.ACGUiscomposedofassets A CGU is the smallest identifiable group of assets that generates cash inflows that are largely combination forthepurposeofimpairmenttesting. allocated totheCGU,orgroupofCGUs,thatisexpected tobenefitfromthesynergiesof each year-end, irrespective of whether there is any indication of impairment or not. Goodwill is estimated. Inaddition,the Group estimates therecoverableamounts ofgoodwill at nolaterthan – – impairment: the internal and external sources of information to determine whether there is any indication of The carrying amounts of the following assets are reviewed at the end of the year based on revaluation arechargedtotheprofitorloss. are not depreciated or amortised. The impairment losses of initial measurement and subsequent and the fair value of the assets less costs to sell on the acquisition date. Repossessed assets repossessed assetsismeasuredatthelowerofnetcarryingamountloansandadvances warrantors or third parties following the enforcement of its creditor’s rights. The initial cost of Repossessed assetsarephysicalorpropertyrights obtained bytheGroupfromdebtors, of theprofitorlossondisposal. CGUs, anyattributableamountofpurchasedgoodwilliswrittenoffandincludedinthecalculation impairment loss(NoteII13).Ondisposaloftherelatedcash-generatingunit(“CGU”)orgroup not under common control. Goodwill is not amortised and is stated at cost less accumulated of the identifiable net assets of the acquiree under the business combination involving entities Goodwill represents the excess of cost of acquisition over the Group’s interest in the fair value If any – – – Goodwill Provision forimpairmentlossesonnon-financialassets Repossessed assets
fixed assets; investment insubsidiaries. goodwill; intangible assets; construction inprogress; indication exists that an asset may be impaired, the recoverable amount of the asset is (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
13 Provision for impairment losses on non-financial assets (continued)
The recoverable amount of an asset or CGU, or a group of CGUs (hereinafter called “asset”) is the higher of its fair value less costs to sell and its present value of expected future cash flows. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset; if it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the asset group to which the assets belongs.
The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal, to their present value using a pre-tax discount rate that reflects expected future cash flows, the useful life and the discount rate specific to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit or loss. A provision for an impairment loss of the asset is recognised accordingly.
For the purpose of goodwill impairment testing, goodwill arising from business combination is allocated to asset group since the acquisition date. If it cannot be reliably allocated to an asset group, it should be allocated to the relevant group of asset groups. The asset group or group of asset groups is expected to benefit from the synergies of the business combination and is not larger than a segment as defined by the Group.
If there is indication of impairment when testing for asset group or group of asset groups with goodwill for impairment, the Group shall first test the asset group or group of asset groups excluding goodwill for impairment and recognized the impairment loss in the income statement. Then the Group shall test the asset group or group of asset groups including goodwill for impairment, by comparing the carrying amount with its recoverable amount. Any impairment loss shall be allocated to reduce the carrying amount of any goodwill allocated to the asset group or group of asset groups first and then pro rata on the basis of carrying amount of each of the asset group or group of asset groups (excluding goodwill).
An impairment loss in respect of goodwill is not reversed. If, in a subsequent period, the amount of impairment loss of the non-financial asset except for goodwill decreases and the decrease can be linked objectively to an event occurring after impairment was recognised, the previously recognised impairment loss is reversed through the profit or loss. A reversal of impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior periods.
14 Employee benefits
Employee benefits refer to all forms of consideration and other related expenditure given by the Group in exchange for services rendered by employees. The benefits payable are recognised as liabilities during the period in which the employees have rendered services to the Group. If the effect of discounting the benefits payable which are payable after one year from the end of the reporting period is significant, the Group will present them at their present value.
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14 Summary ofprincipalaccountingpolicies
14.4 14.3 14.2 14.1 Employee benefits
contributions iftheAnnuityPlandoesnotholdsufficientassetstopayallemployeebenefits. Group paysafixedcontributionintotheAnnuityPlanandhasnoobligationtopayfurther to the Annuity Plan. The contribution is charged to profit or loss when it is incurred. The required to contribute a certain percentage of the employees’ previous year basic salaries benefit plan established by the Group (the “Annuity Plan”). The Group and its employees are In addition,employeesinMainlandChinaalsoparticipateadefinedcontributionretirement to profitorlossastherelatedservicesarerenderedbyemployees. pension insurancecontributionsarerecognisedaspartofthecostassetsorcharged plans based on the applicable benchmarks and rates stipulated by the government. Basic by government organizations. The Group makes contributions to basic pension insurance contribution basicpensioninsuranceinthesocialsystemestablishedandmanaged Pursuant totherelevantlawsandregulationsofPRC,Groupparticipatedinadefined the localregulatorybodies. The Group contributes to these defined contribution schemes based on the requirements of All eligibleemployeesoutsideMainlandChinaparticipateinlocaldefinedcontributionschemes. assets whereappropriate. provides services, with a corresponding charge to profit or loss or included in the cost of or at the applicable benchmarks and rates, are recognised as a liability as the employee work injuryinsurance,maternityinsuranceandhousingfund,measuredattheamountincurred Employee wagesorsalaries,bonuses,socialsecuritycontributionssuchasmedicalinsurance, of thepresent valueoftheliabilitiesarerecognised inprofitorlosswhen itisincurred. to thenormal retirement date.Differences arisingfromchangesinassumptions andestimates from theGroup.Thesalaries andbenefitpaymentsaremadefromthedateofearly retirement take leaveofabsenceand in returnreceiveacertainlevelofstaffsalariesandrelated benefits According totheGroup’spolicy onearlyretirementbenefits,certainemployeesare entitledto – – recognise terminationbenefitsinprofitorlossattheearlier of: to accept an offer of benefits in exchange for the termination of employment. The Group an employee’s employment before the normal retirement date or an employee’s decision Termination benefits are payable as a result of either the Group’s decision to terminate Short-term employeebenefits Early retirementbenefits Post-employment benefits-definedcontributionplans Termination benefits Termination
the plan,thereforeeachpartyformedreasonableexpectations. benefits, andtheplanhasstartedorinformedeachaffected partyabouttheinfluenceof When theGrouphasaspecific,formalrestructureplan involvingpaymentoftermination When theGroupcannolongerwithdrawanofferofthose benefits;and (continued) (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
15 Financial guarantees, provisions and contingent liabilities
15.1 Financial guarantees Financial guarantees are contracts that require the issuer (the “guarantor”) to make specified payments to reimburse the beneficiary of the guarantee (“holder”) for a loss that the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. The fair value of the guarantee (being the guarantee fees received) is initially recognised as deferred income in other liabilities. The deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued. Provisions are recognised in the statements of financial position as stated in Note II 15.2 if and when it becomes probable that the holder of the guarantee will call upon the Group under the guarantee, and the amount of that claim on the Group is expected to exceed the carrying amount of the deferred income.
15.2 Other provisions and contingent liabilities A provision is recognised for an obligation related to a contingency if the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows.
For a possible obligation resulting from a past transaction or event whose existence will only be confirmed by the occurrence or non-occurrence of uncertain future events or a present obligation resulting from a past transaction or event, where it is not probable that the settlement of the above obligation will cause an outflow of economic benefits, or the amount of the outflow cannot be estimated reliably, the possible or present obligation is disclosed as a contingent liability.
16 Fiduciary activities
The Group acts in a fiduciary activity as a manager, a custodian, or an agent for customers. Assets held by the Group and the related undertakings to return such assets to customers are recorded as off-balance sheet items as the risks and rewards of the assets reside with customers.
The Group enters into entrusted loan agreements with customers, whereby the customers provide funding (“entrusted funds”) to the Group, and the Group grants loans to third parties (“entrusted loans”) under instructions of the customers. As the Group does not assume the risks and rewards of the entrusted loans and the corresponding entrusted funds, the entrusted loans and funds are recorded as off-balance sheet items at their principal amount. No provision for impairment loss is made for entrusted loans.
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17 Summary ofprincipalaccountingpolicies
17.3 17.2 17.1 measured reliablyandthefollowingrespectiveconditionsaremet: it is probable that the economic benefits will flow to the Group, the income and costs can be increase relating to contributions from shareholders. Income is recognised in profit or loss when ordinary activities when the inflows result in an increase in shareholder’s equity, other than an Income isthegrossinflowofeconomicbenefitinperiodsarisingcourseGroup’s Income recognition
cash flows(“unwindingofdiscount”)forthepurposemeasuringrelatedimpairmentloss. Interest ontheimpairedassetsisrecognisedusingrateofinterestusedtodiscountfuture discounts thatareanintegralpartoftheeffectiveinterestrate. paid orreceivedbetweenpartiestothecontract,transactioncostsandallotherpremiums options) but does not consider future credit losses. The calculation includes all fees and points all contractual terms of the financial instrument (for example, prepayment, call and similar asset. Whencalculatingtheeffectiveinterestrate,Groupestimatescashflowsconsidering instrument or,whenappropriate,ashorterperiodtothenetcarryingamountoffinancial discounts estimatedfuturecashpaymentsorreceiptsthroughtheexpectedlifeoffinancial asset and of allocating the interest income. Theeffectiveinterest rate is the rate that exactly The effective interest method is a method of calculating the amortised cost of a financial interest rate. amount ofaninterest-bearingassetanditsatmaturitycalculatedusingtheeffective includes theamortisationofanydiscountorpremiumdifferencesbetweeninitialcarrying on thetimeforalienationofrighttousecapitalandeffectiveinterestrates.Interestincome Interest income for financial assets is recognised in profit or loss as it is incurred, based Other incomeisrecognisedonanaccrualbasis. and commissionincomeuponitsexpiry. interest rate.Ifthecommitmentexpireswithoutmaking aloan,thefeeisrecognisedas acquisition ofafinancialassetaredeferredandrecognised asanadjustmenttotheeffective Origination or commitment fees received by the Group which result in the creation or provided. Fee andcommissionincomeisrecognisedinprofitorlosswhenthecorrespondingservice Fee andcommissionincome Interest income Interest Other income Other (Continued) 2016 Annual Report
II Summary of principal accounting policies (Continued)
18 Expenses recognition
18.1 Interest expenses Interest expenses from financial liabilities are accrued on a time proportion basis with reference to the amortised cost and the applicable effective interest rate.
18.2 Other expenses Other expenses are recognised on an accrual basis.
19 Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
– when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
– in respect of taxable temporary differences associated with investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carryforward of unused tax credits and unused tax losses can be utilised, except:
– when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
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22 21 20 19 Summary ofprincipalaccountingpolicies
entity andthesametaxationauthority. off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable Deferred taxassetsanddeferredliabilitiesareoffsetifalegallyenforceablerightexiststoset tax assettoberecovered. become probablethatsufficient taxable profitwillbeavailabletoallowallorpartofthedeferred are reassessedattheendofeachreportingperiodandrecognisedtoextentthatithas to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets reduced to the extent that it is no longer probable that sufficient taxable profit will be available The carryingamountofdeferredtaxassetsisreviewedattheendeachreportingperiodand have beenenactedorsubstantivelybytheendofreportingperiod. period whentheassetisrealisedorliabilitysettled,basedontaxrates(andlaws)that Deferred taxassetsandliabilitiesaremeasuredattheratesthatexpectedtoapply – reported atconsolidationlevel. Any segmentswhichdonot complywiththereportingofsegmentsbydivision ofquantitiesare to makedecisionsaboutresourcesbeallocated thesegmentandassessitsperformance. reporting system, whose operating results are regularly reviewed by the Group’s management on the structure of the Group’s internal organisation, management requirements and internal Reportable segments are identified based on operating segments which are determined based the Stateandthathavenootherrelatedpartyrelationships arenotregardedasrelatedparties. be individualsorenterprises.Enterpriseswithwhichthe Groupisundercommoncontrolonlyfrom or jointcontrolfromanotherparty,they are consideredto be relatedparties.Relatedpartiesmay party, orviceversa,wheretheGroupandonemorepartiesaresubjecttocommoncontrol If aGrouphasthepowertocontrol,jointlycontrolorexercisesignificantinfluenceoveranother a liabilityattheendofyearbutdisclosedseparatelyinnotestofinancialstatements. authorised bytheGroupanddeclaredafterendofreportingperiodarenotrecognisedas Dividends or distributions of profits proposed in the profit appropriation plan which will be Income tax Segment reporting Related parties Dividends
in respect which thetemporarydifferencescanbeutilised. differences will reverse in the foreseeable future and taxable profit will be available against deferred taxassetsareonlyrecognisedtotheextentthatitisprobabletemporary of deductible temporary differences associated with investments in subsidiaries, (continued) (Continued) 2016 Annual Report
III Critical accounting estimates and judgements in applying accounting policies
The preparation of financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
Areas susceptible to changes in critical estimates and judgements, which affect the carrying value of assets and liabilities, are set out below. It is possible that actual results may be materially different from the estimates and judgements referred below.
1 Impairment losses on loans and receivables, available-for-sale financial assets and held-to-maturity investments
The Group reviews portfolios of loans and receivables, available-for-sale financial assets and held- to-maturity investments periodically to assess whether any impairment losses exist and the amount of impairment losses if there is any indication of impairment. Objective evidence for impairment includes observable data indicating that there is a measurable decrease in the estimated future cash flows for personal loans, available-for-sale financial assets and held-to-maturity investments. It also includes observable data indicating adverse changes in the repayment status of the debtors, or change in national or local economic conditions that causes the default in payment.
The impairment loss for loans and receivables, and held-to-maturity investments that is individually assessed for impairment is the net decrease in the estimated discounted future cash flow of the assets. When the financial assets are collectively assessed for impairment, the estimate is based on historical loss experience for assets with credit risk characteristics similar to the financial assets. Historical loss experience is adjusted on the basis of the relevant observable data that reflect current economic conditions and the judgement based on management’s historical experience. Management reviews the methodology and assumptions used in estimating future cash flows regularly to reduce any difference between loss estimates and actual loss.
The objective evidence of impairment for available-for-sale financial assets includes significant or continual decline in fair value of investment. When deciding whether there is significant or continual decline in fair value, the Group will consider the historical fluctuation records of market and debtors’ credit condition, financial position and performance of related industry.
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4 3 2 Critical accounting policies
to berecovered. are recognisedifitbecomesprobablethatfuturetaxable profitswillallowthedeferredtaxassets taxable profits. Management’s assessment is constantly reviewed andadditional deferredtaxassets tax creditscanbeutilised,management’sjudgementis requiredtoassesstheprobabilityoffuture the extentthatitisprobablefuturetaxableprofits willbeavailableagainstwhichtheunused used andtemporarydeductibledifferences.Asthosedeferredtaxassetscanonlyberecognisedto into accountallchangesintaxlegislation.Deferredassetsarerecognisedforlossesnotyet are setupaccordingly.Thetaxtreatmentofsuchtransactionsisreconsideredperiodicallytotake transactions. The Group carefully evaluates the tax implications of transactions and tax provisions Determining income tax provisions involves judgement on the future tax treatment of certain as available-for-sale. ability toholdspecificinvestmentsuntilmaturitymayresultinreclassificationofthewholeportfolio management makessignificantjudgements.FailureincorrectlyassessingtheGroup’sintentionand maturity. Inevaluatingwhetherrequirementstoclassifyafinancialassetasheld-to-maturityaremet, as held-to-maturity investments, if the Group has the intention and ability to hold them until Non-derivative financialassetswithfixedordeterminablepaymentsandmaturityareclassified necessary. The Groupreviewstheaboveestimationsandassumptionsperiodicallymakesadjustmentif input, suchascreditandcounterpartyrisk,riskcorrelationsrequiremanagement’sestimates. and relyaslittlepossible on theGroup’sspecific data. However,it should benotedthatsome market conditions.ValuationmodelsestablishedbytheGroupmakemaximumuseofinput certified and calibrated before implementation to ensure the valuation result reflects the actual personnel and are validated and reviewed by independent personnel. Valuation techniques are has establishedaworkflowtoensurethatthevaluationtechniquesareconstructedbyqualified value of similar instruments, discounted cash flow analysis and option pricing models. The Group techniques include using recent arm’s length market transactions by referring to the current fair fair values for these financial instruments are established by using valuation techniques. These There are no quoted prices from an active market for a number of financial instruments. The Fair valueoffinancialinstruments Income taxes The classificationoftheheld-to-maturityinvestments (Continued) estimates and judgements in applying accounting 2016 Annual Report
III Critical accounting estimates and judgements in applying accounting policies (Continued)
5 Impairment of non-financial assets
Non-financial assets are reviewed regularly to determine whether the carrying amount exceeds the recoverable amount of the assets. If any such indication exists, an impairment loss is provided.
Since the market price of an asset (the asset group) cannot be obtained reliably, the fair value of the asset cannot be estimated reliably. In assessing the present value of future cash flows, significant judgements are exercised over the asset’s selling price, related operating expenses and discounting rate to calculate the present value. All relevant materials which can be obtained are used for estimation of the recoverable amount, including the estimation of the selling price and related operating expenses based on reasonable and supportable assumption.
6 Depreciation and amortisation
Fixed assets and intangible assets are depreciated and amortised using the straight-line method over their estimated useful lives after taking into account residual values. The estimated useful lives are regularly reviewed to determine the depreciation and amortisation costs charged in the reporting period. The estimated useful lives are determined based on historical experiences of similar assets and the estimated technical changes. If there is an indication that there has been a change in the factors used to determine the depreciation or amortisation, the amount of depreciation or amortisation will be revised.
7 Judgement in assessing control over structured entities
The Group is involved with structured entities in its normal business course, and the Group determines whether or not to consolidate those structured entities depending on whether the Group has control over them. When assessing control over structured entities, the Group takes consideration of power arising from rights it directly owns or indirectly owns through subsidiaries (including controlled structured entities), variable returns, and link between power and returns.
The variable returns the Group is exposed to from its involvement with structured entities include decision makers’ remuneration (such as management fees and performance-related fees), as well as other benefits (such as investment income, remuneration and exposure to loss from providing credit or liquidity support, and variable returns from transactions with structured entities). When assessing whether it controls a structured entity, the Group not only considers applicable legal or regulatory requirements, and contractual agreements, but also other circumstances where the Group may have obligation to absorb any loss of the structured entity.
The Group reassesses whether it controls a structured entity if facts and circumstances indicate that there are changes to one or more of the relevant elements of control.
167 CHINA EVERBRIGHT BANK 168 IV (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
(e) (d) (c) (b) (a) The Group’smainapplicabletaxesandtaxratesareasfollows: Taxation
Ltd., theHongKongsubsidiary,is16.5%. domestic subsidiariesis25%.ThestatutoryincometaxrateofCEBInternationalInvestmentCo., The incometaxiscalculatedontaxableincome.statutoryrateoftheBankand Education surchargeiscalculatedas3%ofbusinesstax. City constructiontaxiscalculatedas1%-7%ofbusinesstax. by value-addedtax. Business taxischargedat5%ontaxableincome.From1May2016,businesswasreplaced Value-added taxischargedat6%or17%ontaxableaddedvalue. Value-added tax Income tax Education surcharge City constructiontax Business tax 2016 Annual Report
V Notes to the consolidated financial statements
1 Net interest income
Note 2016 2015
Interest income arising from Deposits with the central bank 5,306 5,120 Deposits with banks and other financial institutions 4,610 2,137 Placements with banks and other financial institutions 4,412 3,110 Loans and advances to customers (a) – Corporate loans and advances 47,906 51,387 – Personal loans and advances 27,035 28,199 – Discounted bills 2,761 2,959 Finance lease receivables 2,012 1,426 Financial assets held under resale agreements 2,848 8,768 Investments 46,560 38,801
Sub-total 143,450 141,907
Interest expenses arising from Due to the central bank 2,223 642 Deposits from banks and other financial institutions 19,334 18,277 Placements from banks and other financial institutions 2,082 1,224 Deposits from customers – Corporate customers 25,867 30,830 – Individual customers 4,064 5,017 – Structured deposits from corporate customers 6,168 4,985 – Structured deposits from individual customers 5,352 6,706 Financial assets sold under repurchase agreements 1,773 1,197 Debt securities issued (b) 11,299 6,570
Sub-total 78,162 75,448
Net interest income 65,288 66,459
Note:
(a) The interest income arising from impaired financial assets in 2016 amounted to RMB876 million (2015: RMB802 million).
(b) Interest expense on financial liabilities with maturity over five years mainly represented the interest expense on debt securities issued.
169 CHINA EVERBRIGHT BANK 170 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
3 2 Notes totheconsolidatedfinancialstatements
Net feeandcommissionincome Net tradinggains Others Acceptance andguaranteefees Settlement andclearingfees Underwriting andadvisoryfees Custody andotherfiduciarybusinessfees Agency servicesfees Wealth managementservicefees Bank cardservicefees Fee andcommissionincome Total Financial instrumentsdesignatedatfairvalue Sub-total – Debtsecurities – Derivatives Trading financialinstruments Net feeandcommissionincome Sub-total Settlement andclearingfees Bank cardtransactionfees Fee andcommissionexpense Sub-total Others through profitorloss (Continued)
42212,491 14,212 81226,301 28,112 27,745 29,932 ,7 1,190 1,512 1,576 1,740 1,169 7,253 1,442 1,614 1,854 7,472 ,2 1,444 1,151 1,820 1,320 2016 2016 (148) 2 1,078 1,312 828 934 223 191 339 403 32 97
2015 2015 335 309 376 210 (67) 26 83 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
4 Net (losses)/gains arising from investment securities
2016 2015
Net gains/(losses) on disposal of available-for-sale financial assets 331 (63) Net revaluation (losses)/gains reclassified from other comprehensive income on disposal (592) 53 Net gains on disposal of held-to-maturity investments – 12 Net gains on disposal of debt securities classified as receivables – 11
Total (261) 13
5 Operating expenses
Note 2016 2015
Staff costs – Salaries and bonuses 10,642 10,343 – Pension and annuity 1,569 1,470 – Housing allowances 634 590 – Staff welfares 336 295 – Supplementary retirement benefits 251 38 – Others 1,739 1,532
Sub-total 15,171 14,268
Premises and equipment expenses – Rental and property management expenses 2,558 2,385 – Depreciation of fixed assets 1,461 1,442 – Amortisation of other long-term assets 428 417 – Amortisation of intangible assets 293 246
Sub-total 4,740 4,490
Tax and surcharges 2,885 7,096 Other general and administrative expenses (a) 7,458 6,500
Total 30,254 32,354
Note:
(a) Auditors’ remuneration for the year ended 31 December 2016 was RMB6.83 million (2015: RMB9.90 million).
171 CHINA EVERBRIGHT BANK 172 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
6 Notes totheconsolidatedfinancialstatements
office duringthereportingperiodareasfollows: The emolumentsbeforeindividualincometaxinrespectofthedirectorsandsupervisorswhoheld Directors’ andsupervisors’emoluments
Tang Shuangning Zhang Jinliang Executive directors
Fok OiLing Gao Yunlong Qiao Zhimin Zhang Shude Ma Teng Xie Rong Li Huaqiang Li Jie Xu Hongcai Zhao Wei Feng Lun Wu Gang Non-executive Zhang Xinze Independent non directors executive directors
oeFe Salaries Fees Note (iii) (ii) (ii) (ii) (i) (i)
M’0 M’0 M’0 M’0 M’0 M’0 M’0 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 370 390 370 350 – – 339 – – 1,150 – – – – 1,150 – – –
– – – – – – – – – – – –
Discretionary bonus adPayable Paid – – – – – – – – – – – – – – –
– 370 – – 339 – 390 – – 1,150 – 370 – – – – 1,150 – 350 – – – (Continued) 2016
Sub-total – – – – – – – – Contributions schemes to social pension 49 470 97 34 0161,296 106 40 0161,296 106 40 – – – – – – – – – – – –
welfares Other – – 370 – – – 390 – – – 370 – – – – – – – 350 – – – – –
Total
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
6 Directors’ and supervisors’ emoluments (continued)
The emoluments before individual income tax in respect of the directors and supervisors who held office during the reporting period are as follows (continued):
2016
Discretionary bonus Contributions
to social pension Other Note Fees Salaries Paid Payable Sub-total schemes welfares Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Supervisors Li Xin – 1,163 – – 1,163 40 106 1,309 Mu Huijun – 1,150 – – 1,150 40 106 1,296 Yin Lianchen – – – – – – –– Wu Junhao – – – – – – –– Yu Erniu 300 – – – 300 – – 300 Wu Gaolian (iv) 150 – – – 150 – – 150 Deng Ruilin (iv) 73 – – – 73 – – 73 Wang Zhe (iv) 21 – – – 21 – – 21 Ye Donghai – 703 1,231 – 1,934 42 105 2,081 Liu Yan (iv) – 412 564 – 976 21 55 1,052
Former executive directors Zhao Huan (i) – – – – – – ––
Former non-executive director Wu Jian (ii) – – – – – – –– Wang Shumin (ii) – – – – – – –– Wu Gaolian (ii) – – – – – – –– Yang Jigui (ii) – – – – – – –– Liu Jun (ii) – – – – – – ––
Former supervisors Ma Ning (iv) – 506 1,057 – 1,563 21 51 1,635 James Parks Stent (iv) 150 – – – 150 – – 150 Chen Yu (iv) – 340 702 – 1,042 21 51 1,114
2,174 6,913 3,554 – 12,641 299 783 13,723
173 CHINA EVERBRIGHT BANK 174 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
6 Notes totheconsolidatedfinancialstatements
office duringthereportingperiodareasfollows(continued): The emolumentsbeforeindividualincometaxinrespectofthedirectorsandsupervisorswhoheld
Directors’ andsupervisors’emoluments Zhao Huan Executive directors Fok OiLing Zhang Jinliang Zhang Xinze Ma Teng Qiao Zhimin Tang Shuangning Non-executive directors Xie Rong Gao Yunlong Xu Hongcai Wu Jian Feng Lun Wu Gang Li Xin Supervisors Wang Shumin Mu Huijun Wu Gaolian Yin Lianchen Zhao Wei Wu Junhao Yang Jigui Yu Erniu Independent non-executive James ParksStent Chen Yu Ye Donghai Ma Ning directors
M’0 M’0 M’0 M’0 M’0 M’0 M’0 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 esSlre adPayable Paid Salaries Fees 370 390 370 283 283 300 300 352 – – – 1,009 – – – – – 194 – – 1,009 – – – – – – 8 1,138 681 – 0 1,276 702 – 8 1,999 981 –
– – – – – – – – – – – – – – – – – – –
Discretionary bonus – – – – – – – – – – – – – – – – – – – – – – – (continued)
352 – 370 – – – 1,009 – 390 – – 370 – – 283 – – 283 – – 194 – – 1,009 – – – – – – 300 – 300 – 1,819 – 1,978 – 2,980 – (Continued) 2015
Sub-total – – – – – – – – – – – – Contributions schemes to social pension 49 487 91 44 4231,296 243 44 4231,296 243 44 49 1,958 95 44 49 2,117 95 44 49 3,119 95 44 6218 16 8 – – – – – – – – – – – – – – – – – – –
welfares Other 370 – – – – – 390 – – – 370 – – – 283 – – – 283 – – – – – – – – – – – – – – – 300 – 300 –
Total
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
6 Directors’ and supervisors’ emoluments (continued)
The emoluments before individual income tax in respect of the directors and supervisors who held office during the reporting period are as follows (continued):
2015
Discretionary bonus Contributions
to social pension Other Fees Salaries Paid Payable Sub-total schemes welfares Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Former non-executive director Narentuya – – – – – – –– Wang Zhongxin – – – – – – ––
Former independent non-executive director Zhou Daojiong – – – – – – ––
Former supervisors Cai Haoyi – 491 – – 491 21 143 655
2,296 5,419 4,413 – 12,128 293 1,021 13,442
Note:
(i) Mr. Zhang Jinliang was appointed as the President and executive director of the Bank on 14 January 2016, whose appointment as the President has been approved by CBRC on 22 February 2016 while the appointment as the executive director of the Bank has been approved by the CBRC on 25 August 2016. Ms. Li Jie was elected as executive director of the Bank in the board meeting held on11 May 2016 and the appointment was approved by CBRC on 27 September 2016.
Due to the transfer of the work, Mr Zhao Huan resigned from the position of executive director of the board of directors on 14 January 2016.
(ii) Mr. Zhang Shude and Mr. Li Huaqiang were elected as non-executive directors of the Bank on the shareholders’ general meeting held on 29 June 2016 and their appointments were approved by CBRC on 27 September 2016.
Mr. Wu Jian, Ms. Wang Shumin and Mr. Wu Gaolian ceased to serve as non-executive director of the board of directors on 29 June 2016. At the same time, due to the transfer of the work, Mr. Yang Jigui and Mr. Wu Gang resigned from the position of non-executive director of the board of directors on 5 December 2016 and 16 January 2017 respectively.
Mr. Liu Jun ceased to serve as non-executive director of the board of directors and on approved by CBRC 25 August 2016. Due to the transfer of the work, he resigned from the position of non-executive director of the board of directors on 18 November 2016.
(iii) Mr. Zhang Xinze ceased to serve as non-executive director of the board of directors on 10 January 2017.
175 CHINA EVERBRIGHT BANK 176 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
7 6 Notes totheconsolidatedfinancialstatements
any emolumentsduringthe reporting period. None oftheseindividualsreceived anyinducementsorcompensationforlossof office,orwaived is setoutbelow: of theseindividualswhoseemolumentsbeforeindividualincometaxarewithinthefollowingbands None ofthefiveindividualswithhighestemolumentsaredirectorsorsupervisors.Thenumber (v) (iv) Note: Directors’ andsupervisors’emoluments Individuals withhighestemoluments RMB6,500,001-7,000,000 RMB6,000,001-6,500,000 RMB5,500,001-6,000,000 RMB5,000,001-5,500,000 RMB4,500,001-5,000,000 RMB4,000,001-4,500,000 RMB3,500,001-4,000,000 RMB3,000,001-3,500,000 Total Others Contributions topensionschemes Discretionary bonuses Salaries andotheremoluments
(continued) supervisors inthe2015shareholders’generalmeetingheldon29June,2016. Ms. LiuYanwaselectedasthesupervisoron27June2016.Mr.WuGaolianandDengRuilinwere provided for yet beenfinalisedinaccordancewithregulationsofthePRCrelevantauthorities.Theamountcompensationnot The totalcompensationpackageforthesedirectorsandsupervisorstheyearended31December2016hasnot Stent (Mr.ShiWeiping)ceasedtoserveasthesupervisorofBankon29June2016. Ms. ChenYuandMr.MaNingceasedtoserveasthesupervisorofBankon27June2016.JamesParks was electedasthesupervisorinfirsttemporaryshareholders’meetingofyear2016. accordance withtheiractualtenure. The above directors’ and supervisors’ emoluments for the year ended 31 December 2016 were calculated in ended 31December2016. is not expected to have significant impact on the Group’s and the Bank’s financial statements for the year (continued) (Continued)
On 15 November2016,Mr.WangZhe M’0 RMB’000 RMB’000 17628,051 21,746 24,944 17,662 ,6 2,538 3,461 2016 2016 404 219 1 4 – – – – – –
2015 2015 362 207 3 2 – – – – – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
8 Impairment losses on assets
2016 2015
Loans and advances to customers 22,111 19,724 Available-for-sale financial assets 574 171 Finance lease receivables 572 411 Debt securities classified as receivables 330 1,194 Held-to-maturity investments 102 4 Others 242 148
Total 23,931 21,652
9 Income tax
(a) Income tax: Note V 2016 2015
Current tax 10,131 12,083 Deferred tax 26(b) (556) (2,143) Adjustments for prior year 9(b) 217 (159)
Total 9,792 9,781
(b) Reconciliations between income tax and accounting profit are as follows: 2016 2015
Profit before tax 40,180 39,358
Statutory tax rate 25% 25%
Income tax calculated at statutory tax rate 10,045 9,841
Effect of different tax rates applied by certain subsidiaries 3 2
Non-deductible expenses – Staff costs 5 43 – Impairment losses on assets 1,324 973 – Others 79 245
Sub-total 1,408 1,261
Non-taxable income – Interest income from the PRC government bonds (1,880) (1,164) – Dividend income (1) –
Sub-total 9,575 9,940
Adjustments for prior year 217 (159)
Income tax 9,792 9,781
177 CHINA EVERBRIGHT BANK 178 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
10 Notes totheconsolidatedfinancialstatements
outstanding duringtheyear. difference betweenbasicanddilutedearningspershareastherewasnopotentiallydilutiveshares for the year by the adjusted weighted average number of ordinary shares in issue. There is no ordinary shareholders of the Bank based on assuming conversion of all dilutive potential shares Diluted earnings per share was computed by dividing the adjusted profit attributable to the Weighted averagenumberofordinarysharesinissue(inmillionshares) year. shareholders oftheBankbyweightedaveragenumberordinarysharesinissueduring Basic earnings per share was computed by dividing the profit attributable to the ordinary Basic anddilutedearningsperordinaryshare Weighted averagenumberofordinarysharesinissue Add: weightedaveragenumberofsharesfrom Issued ordinarysharesasat1January Basic earningspershare(inRMBshare) Weighted averagenumberofordinarysharesinissue Profit attributabletoordinaryshareholdersoftheBank Less: dividendsonpreferencesharesdeclared Profit attributabletoequityholdersoftheBank (in millionshares)
conversion ofconvertiblebonds (Continued)
66946,679 46,679 46,679 46,679 46,679 29,528 46,679 29,528 29,269 30,329 1,060 2016 2016 0.63 –
2015 2015 0.63 – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
11 Cash and deposits with the central bank
31 December 31 December Note 2016 2015
Cash on hand 6,667 6,594
Deposits with the central bank – Statutory deposit reserves (a) 303,772 287,484 – Surplus deposit reserves (b) 66,255 27,553 – Foreign currency risk reserves (c) 1,433 154 – Fiscal deposits 3,493 4,950
Sub-total 374,953 320,141
Total 381,620 326,735
Note:
(a) The Group places statutory deposit reserves with the People’s Bank of China (the “PBOC”) in accordance with relevant regulations. As at the end of the year, the statutory deposit reserve ratios applicable to the Bank were as follows:
31 December 31 December 2016 2015
Reserve ratio for RMB deposits 15.0% 15.0% Reserve ratio for foreign currency deposits 5.0% 5.0%
The statutory deposit reserves are not available for the Group’s daily business.
(b) The surplus deposit reserves are maintained with the PBOC for the purpose of clearing.
(c) The Group places foreign currency risk reserves with the PBOC in accordance with relevant regulations. As at 31 December 2016, the foreign currency risk reserve ratio was 20% (As at 31 December 2015: 20%).
179 CHINA EVERBRIGHT BANK 180 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
13 12 Notes totheconsolidatedfinancialstatements
Analysed bytypeandlocationofcounterparty Analysed bytypeandlocationofcounterparty Deposits withbanksandotherfinancialinstitutions Placements withbanksandotherfinancialinstitutions Net balances Less: Provisionforimpairmentlosses Total Sub-total – Banks Placements outsidemainlandChina Sub-total – Otherfinancialinstitutions – Banks Placements inmainlandChina Net balances Less: Provisionforimpairmentlosses Total Sub-total – Banks Deposits outsidemainlandChina Sub-total – Otherfinancialinstitutions – Banks Deposits inmainlandChina (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 2,0 132,361 126,305 132,362 126,308 99,065 108,394 86,311 232,630 86,341 232,667 80,491 80,192 224,913 224,635 79433,297 33,297 17,914 17,914 79,529 19,536 97,520 10,874 ,5 5,850 5,850 7,754 7,754 2016 2016 278 (37) (3)
2015 2015 299 (30) (1) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
14 Financial assets at fair value through profit or loss
31 December 31 December Note 2016 2015
Debt securities held for trading (a) 7,743 5,474 Financial assets designated at fair value through profit or loss (b) 91 163
Total 7,834 5,637
(a) Debt securities held for trading 31 December 31 December Note 2016 2015
Issued by the following governments or institutions:
In mainland China – Government 70 266 – The PBOC – 40 – Banks and other financial institutions 1,793 1,356 – Other institutions (i) 5,395 3,722
Sub-total 7,258 5,384
Outside mainland China – Government 20 – – Banks and other financial institutions 68 63 – Other institutions 397 27
Total (ii) 7,743 5,474
Listed 534 102 – of which listed in Hong Kong 445 49 Unlisted 7,209 5,372
Total 7,743 5,474
Note:
(i) Debt securities issued by other institutions in mainland China mainly represented debt securities issued by state- owned enterprises and joint stock enterprises in mainland China.
(ii) No investments were subject to material restrictions on realisation.
181 CHINA EVERBRIGHT BANK 182 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
15 14 Notes totheconsolidatedfinancialstatements
(b) represent exposureatrisk. the derivativesindicatevolumeoftransactionsoutstandingatendyear,theydonot of theGroupandtheircorrespondingfairvaluesatendyear.Thenotionalamounts The followingtablesprovideananalysisofthenotionalamountsderivativefinancialinstruments structural positions. Group alsousesderivativefinancialinstrumentstomanageitsownassetandliabilityportfolios with external parties to ensure the Group’s net exposures are within acceptable risk level. The customer needs. These positions are actively managed through entering into back-to-back deals a wide range of customers for structuring deals to provide risk management solutions to meet Group inforeigncurrencyandinterestratemarkets.Theactsasanintermediarybetween Derivative financial instruments included forward, swap and option contracts undertaken by the Financial assetsatfairvaluethroughprofitorloss Derivatives
changes andthemaximumcreditriskexposureattributabletowereimmaterial. the associatedinterestraterisk.Thechangesinfairvalueduringyear,accumulated For fixedinterestratepersonalmortgageloans,theGroupusedswaptomanage Financial assetsdesignatedatfairvaluethroughprofitorloss Total Precious metal Fixed interestratepersonalmortgageloans (Continued)
(continued) 1Dcme 31December 31 December 2016 91 43 48
2015 163 113 50 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
15 Derivatives (continued)
(a) Analysed by nature of contract 31 December 2016
Fair value
Notional amount Assets Liabilities
Interest rate derivatives – Interest rate swap 92,013 413 (356) – Interest rate futures 500 1 –
Currency derivatives – Foreign exchange forward 10,329 140 (160) – Foreign exchange swap 346,885 4,394 (3,852) – Foreign exchange option 49 2 –
Total 449,776 4,950 (4,368)
31 December 2015
Fair value
Notional amount Assets Liabilities
Interest rate derivatives – Interest rate swap 63,214 377 (410)
Currency derivatives – Foreign exchange forward 11,369 181 (43) – Foreign exchange swap 144,089 1,067 (937) – Foreign exchange option 309 – (1)
Total 218,981 1,625 (1,391)
183 CHINA EVERBRIGHT BANK 184 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
16 15 Notes totheconsolidatedfinancialstatements
(b) (a) (b) Derivatives Financial assetsheldunderresaleagreements
in accountingtreatment. As at31December2016,theGroupdidnotholdanyderivativesusedashedgeinstruments CBRC in2012. derivative transactions, which are calculated with reference to the guidelines issued by the The credit risk weighted amounts represent the counterparty credit risk associated with
Analysed bycreditrisk-weightedamounts Analysed bytypeandlocationofcounterparty Analysed bytypeofsecurityheld Net balances Total Bank acceptances Sub-total – Otherdebtsecurities – Governmentbonds Bonds Net balances Total – Otherfinancialinstitutions – Banks In mainlandChina Total – Interestratederivatives Counterparty defaultrisk-weightedassets Credit valueadjustment – Currencyderivatives (continued) (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 31December 31 December 700153,045 153,045 67,000 72,450 67,000 60,590 11,860 67,000 45,073 21,927 153,045 153,045 28,640 67,000 124,405 67,000 24,354 42,646 ,2 1,490 1,327 2016 2016 2016 432 871 24 80,595 –
2015 2015 2015 524 876 90 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
17 Interests receivable
31 December 31 December 2016 2015
Interests receivable from investments 17,654 12,420 Interests receivable from loans and advances to customers 5,251 4,620 Interests receivable from deposits and placements with banks and other financial institutions 1,875 1,263 Other interests receivable 596 280
Total 25,376 18,583
Less: Provision for impairment losses (37) (37)
Net balances 25,339 18,546
18 Loans and advances to customers
(a) Analysed by nature 31 December 31 December 2016 2015
Corporate loans and advances 1,075,974 917,327
Personal loans and advances – Personal housing mortgage loans 290,114 180,127 – Personal business loans 132,376 148,706 – Personal consumption loans 28,315 23,375 – Credit cards 212,326 172,812
Sub-total 663,131 525,020
Discounted bills 56,173 71,196
Gross loans and advances to customers 1,795,278 1,513,543
Less: Provision for impairment losses – Individually assessed (11,285) (10,083) – Collectively assessed (32,349) (28,036)
Total provision for impairment losses (43,634) (38,119)
Net loans and advances to customers 1,751,644 1,475,424
At financial reporting date, part of the above loans and advances to customers was pledged for repurchase agreements, see Note V 28(a).
185 CHINA EVERBRIGHT BANK 186 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
18 Notes totheconsolidatedfinancialstatements
(b) Loans andadvancestocustomers
Analysed byeconomicsector Net loansandadvancestocustomers Total provisionforimpairmentlosses Less: Provisionforimpairmentlosses Gross loansandadvancestocustomers Sub-total ofcorporateloansandadvances Manufacturing Personal loansandadvances Water, environmentandpublic Discounted bills Real estate Wholesale andretailtrade Leasing andcommercialservices Transportation, storageandpostalservices Construction Finance Others utility management – – Collectively assessed Individually assessed (continued)
1,751,644 912,522 100.00% 438,860 1,795,278 59.93% 1,075,974 3,1 31%69,758 13.12% 235,514 6,3 69%426,392 36.94% 663,131 78,141 8.95% 160,657 2,1 .6 91,907 7.06% 126,717 1,6 .5 43,138 6.25% 112,165 3,5 .5 48,550 7.75% 139,352 mutPercentage Amount (43,634) (32,349) (11,285) 61331%47,270 3.13% 56,173 55453%46,694 5.32% 95,554 22051%37,362 5.14% 92,260 24034%20,526 3.48% 62,480 12528%2,784 2.86% 51,275 (Continued) 31 December2016
secured by Loans and collaterals advances 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
18 Loans and advances to customers (continued)
(b) Analysed by economic sector (continued) 31 December 2015
Loans and advances secured by Amount Percentage collaterals
Manufacturing 246,140 16.26% 64,126 Real estate 143,428 9.48% 115,126 Wholesale and retail trade 123,907 8.19% 49,311 Transportation, storage and postal services 75,108 4.96% 30,576 Water, environment and public utility management 70,864 4.68% 35,952 Leasing and commercial services 54,119 3.58% 27,982 Construction 50,084 3.31% 14,551 Finance 28,592 1.89% 1,462 Others 125,085 8.27% 40,971
Sub-total of corporate loans and advances 917,327 60.62% 380,057 Personal loans and advances 525,020 34.68% 323,307 Discounted bills 71,196 4.70% 61,326
Gross loans and advances to customers 1,513,543 100.00% 764,690
Less: Provision for impairment losses – Individually assessed (10,083) – Collectively assessed (28,036)
Total provision for impairment losses (38,119)
Net loans and advances to customers 1,475,424
187 CHINA EVERBRIGHT BANK 188 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
18 Notes totheconsolidatedfinancialstatements
(c) (b) Loans andadvancestocustomers
Analysed byeconomicsector Analysed bytypeofcollateral to customersareasfollows: respect ofeacheconomicsectorwhichconstitute10%ormoregrossloansandadvances and advances to customers as well as thecorresponding provision forimpairment losses in As attheendofyearandduringperiod,detailedinformationimpairedloans Net loansandadvancesto customers Total provisionforimpairmentlosses Less: Provisionforimpairmentlosses Gross loansandadvancestocustomers – Bymonetaryassets – Bytangibleassetsotherthanmonetary Secured loans Guaranteed loans Unsecured loans Manufacturing Manufacturing
– Collectivelyassessed – Individuallyassessed
loans and loans and dacslse losses losses advances losses losses advances Impaired Impaired 030(,0)(,0)8901,270 8,900 (7,303) (5,509) 10,310 ,5 356 686 ,2 988 6,526 (6,806) (3,516) 7,253 (continued)
rvso o provisionfor provision for provisionfor provision for maretipimn uigduring during impairment impairment during during impairment impairment niiulyCollectively Individually niiulyCollectively Individually sesdasse Impairment assessed assessed sesdasse Impairment assessed assessed (continued) 31 December2016 31 December2015
(Continued)
1Dcme 31December 31 December
,5,4 1,475,424 1,751,644 1,513,543 1,795,278 1,5 179,160 585,530 217,250 314,118 695,272 434,735 391,427 491,329 4,3)(38,119) (28,036) (10,083) (43,634) (32,349) (11,285) h ertheyear the year theyear the year hre Written-off charged Written-off charged 2016
2015 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
18 Loans and advances to customers (continued)
(d) Overdue loans analysed by overdue period 31 December 2016
Overdue Overdue Overdue within more than more than three three months one year to Overdue months to one year three years more than (inclusive) (inclusive) (inclusive) three years Total
Unsecured loans 4,987 3,684 1,086 39 9,796 Guaranteed loans 4,469 7,051 5,122 522 17,164 Secured loans – By tangible assets other than monetary assets 6,141 6,194 6,596 370 19,301 – By monetary assets 228 3,951 1,079 21 5,279
Total 15,825 20,880 13,883 952 51,540
As a percentage of gross loans and advances to customers 0.88% 1.17% 0.77% 0.05% 2.87%
31 December 2015
Overdue Overdue Overdue within more than more than three three months one year to Overdue months to one year three years more than (inclusive) (inclusive) (inclusive) three years Total
Unsecured loans 5,991 3,187 661 60 9,899 Guaranteed loans 8,851 9,197 5,046 70 23,164 Secured loans – By tangible assets other than monetary assets 10,228 9,886 5,034 292 25,440 – By monetary assets 1,591 1,169 555 15 3,330
Total 26,661 23,439 11,296 437 61,833
As a percentage of gross loans and advances to customers 1.76% 1.55% 0.75% 0.03% 4.09%
Overdue loans represent loans, of which the whole or part of the principal or interest were overdue for one day or more.
189 CHINA EVERBRIGHT BANK 190 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
18 Notes totheconsolidatedfinancialstatements
(e) Loans andadvancestocustomers
(ii) (i) Note: Loans andadvancesprovisionforimpairmentlosses
Gross loansand Net loansandadvancesto Gross loansand Net loansand Less:Provision for Less:Provision for
advances tocustomers advances tocustomers customers advances tocustomers – – have beenidentifiedasbearingan impairment lossandassessedeither: Identified impairedloansandadvances areloansforwhichobjectiveevidenceofimpairmentexistsand which been specificallyidentifiedasimpaired. Loans and
impairment losses impairment losses Collectively (includingpersonalloans andadvanceswhichareimpaired). Individually (includingcorporateloans andadvanceswhichareimpaired);or advances for which allowance is collectively assessed consist of loans and advances which have not
Loans and Loans and collectively collectively ,6,0 ,7 ,4 1,475,424 1.61% 9,144 1,513,543 2,779 19,227 1,463,501 5,148 1,489,168 1,751,644 1.60% 10,127 1,795,278 3,532 21,412 1,737,985 7,290 1,766,576 advances advances for which for which assessed assessed provision provision (Note (i)) (Note (i)) 2,6)(,6)(003 (38,119) (10,083) (2,369) (25,667) (43,634) (11,285) (3,758) (28,591) are are (continued)
collectively collectively for which for which assessed assessed provision provision loans andadvances loans andadvances (Note (ii))Impaired (Note (ii))Impaired are are 31 December2016 31 December2015
(Continued) individually individually for which for which assessed assessed provision provision
are are
Total Total
a percentage a percentage advances as advances as loans and loans and loans and loans and advances advances impaired impaired of gross of gross Gross Gross 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
18 Loans and advances to customers (continued)
(f) Movements of provision for impairment losses 31 December 2016
Provision for Provision for loans and impaired loans and advances
advances which are which are which are collectively collectively individually assessed assessed assessed Total
As at 1 January (25,667) (2,369) (10,083) (38,119) Charge for the year (2,924) (3,903) (15,971) (22,798) Release for the year – – 687 687 Recoveries – (489) (258) (747) Unwinding of discount – – 876 876 Disposal – – 10,835 10,835 Write-offs – 3,003 2,629 5,632
As at 31 December (28,591) (3,758) (11,285) (43,634)
31 December 2015
Provision for Provision loans and for impaired loans and advances
advances which are which are which are collectively collectively individually assessed assessed assessed Total
As at 1 January (20,968) (2,111) (4,946) (28,025) Charge for the year (4,699) (3,121) (12,251) (20,071) Release for the year – – 347 347 Recoveries – (228) (106) (334) Unwinding of discount – – 802 802 Disposal – – 3,583 3,583 Write-offs – 3,091 2,488 5,579
As at 31 December (25,667) (2,369) (10,083) (38,119)
191 CHINA EVERBRIGHT BANK 192 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
18 Notes totheconsolidatedfinancialstatements
(g) Loans andadvancestocustomers
Analysed bygeographicalsector Gross loansandadvancestocustomers Yangtze RiverDelta Gross loansandadvancestocustomers Yangtze RiverDelta Bohai Rim Central Central Bohai Rim Western Western Pearl RiverDelta Pearl RiverDelta Northeastern Northeastern Overseas Overseas Head Office Head Office (continued)
Loan balance Loan balance ,1,4 0.0 764,690 100.00% 1,513,543 912,522 100.00% 1,795,278 0,0 99%169,533 19.95% 301,904 183,215 19.64% 352,631 6,1 75%129,959 17.57% 265,918 178,952 16.93% 303,996 3,9 52%129,482 15.25% 230,898 147,435 16.64% 298,715 2,8 51%142,753 15.18% 229,682 163,907 14.52% 260,592 9,5 26%127,514 12.68% 191,858 157,849 11.89% 213,533 0,0 .9 71,241 6.09% 109,300 7,2 11.42% 172,822 11.83% 212,336 60763%58,777 6.35% 96,047 44416%6,672 1.60% 24,414 9,923 2.46% 44,175 (Continued) 31 December2016 31 December2015
Percentage ecnaecollaterals Percentage
secured by secured by Loans and Loans and collaterals advances advances – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
18 Loans and advances to customers (continued)
(g) Analysed by geographical sector (continued) As at the end of the year, detailed information of the impaired loans and advances to customers as well as the corresponding impairment provision in respect of geographic sectors which constitute 10% or more of gross loans and advances to customers are as follows:
31 December 2016
Individually Collectively assessed assessed Impaired provision for provision for loans and impairment impairment advances losses losses
Yangtze River Delta 6,520 (3,299) (6,184) Pearl River Delta 4,663 (2,036) (4,987) Central 4,654 (1,901) (4,561) Western 4,599 (1,901) (5,072) Bohai Rim 3,666 (1,699) (6,024)
31 December 2015
Individually Collectively assessed assessed Impaired provision for provision for loans and impairment impairment advances losses losses
Yangtze River Delta 5,974 (2,947) (6,247) Pearl River Delta 4,357 (1,872) (4,186) Central 4,022 (1,656) (3,891) Western 4,914 (2,445) (4,531) Bohai Rim 2,104 (913) (5,043)
The definitions of the regional distributions are set out in Note V 50(b).
(h) Rescheduled loans and advances to customers 31 December 31 December 2016 2015
Rescheduled loans and advances to customers 17,380 12,034 Of which: Rescheduled loans and advances to customers overdue more than 90 days 1,240 4,202
193 CHINA EVERBRIGHT BANK 194 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
20 19 Notes totheconsolidatedfinancialstatements
Minimum financeleasereceivablesanalysedbyremainingperiodislistedasfollows:
Finance leasereceivables Available-for-sale financialassets Less: unearnedfinanceleaseincome Minimum financeleasereceivables Net balance Less: impairmentlosses Present valueofminimumleasereceivable Total Unlisted – ofwhichinHongKong Listed Total Available-for-sale equityinvestments Available-for-sale debtinvestments Total More than3years 2 yearto3years(inclusive) 1 yearto2years(inclusive) Less than1year(inclusive) Available-for-sale fundinvestmentsandothers – – Collectively assessed Individually assessed
Note Note (b) a 3,8 193,650 237,788 (a) c 8,9 28,200 186,794 (c) (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 31December 31 December 2,3 222,495 175,315 425,131 387,740 222,495 425,131 42444,732 64,244 55038,735 55,560 39,672 57,069 73147,180 37,391 44,732 15,845 6,911 9,557 64,244 12,419 23,113 10,462 12,616 18,053 715 (5,060) (7,175) (1,106) ,3 3,284 7,331 2016 2016 2016 (403) 549
2015 2015 2015 (732) (205) 645 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
20 Available-for-sale financial assets (continued)
(a) Available-for-sale debt investments All available-for-sale debt investments were stated at fair value and issued by the following governments and institutions:
31 December 31 December Note 2016 2015
In mainland China – Government 75,981 43,908 – Banks and other financial institutions (i) 51,688 45,110 – Other institutions (ii) 101,600 100,257
Sub-total 229,269 189,275
Outside mainland China – Government 88 – – Banks and other financial institutions 2,458 2,221 – Other institutions 5,973 2,154
Sub-total 8,519 4,375
Total (iii) 237,788 193,650
Note:
(i) Debt securities issued by banks and other financial institutions mainly represent debt securities and interbank deposits issued by banks and other financial institutions in the mainland China.
(ii) Debt securities issued by other institutions mainly represent debt securities issued by state-owned enterprises and joint stock enterprises in mainland China.
(iii) As at the end of the year, part of the available-for-sale financial assets were pledged for repurchase agreements (see Note V 28(a)).
(iv) As at the end of the year, the allowance for impairment losses of available-for-sale debt investment was RMB745 million (as at 31 December 2015: RMB171million).
195 CHINA EVERBRIGHT BANK 196 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
20 Notes totheconsolidatedfinancialstatements
(b) (d) (c) Available-for-sale financialassets
(i) Note:
Available-for-sale equityinvestments assets duringtheyearareasfollows: Movements of Available-for-sale fundinvestmentsandothers
Reductions fortheyear Additions fortheyear As at1January At cost Less: Provisionforimpairmentlosses As attheendofyear At fairvalue Sub-total Total Measured asfairvalueInmainlandChina Total At 31December2016 At 31December2015 At 1January2015 Charge fortheyear Charge fortheyear – Banksandotherfinancialinstitutions and 1January2016 cannot bemeasuredreliablyarestatedatcostlessanyimpairmentlosses. Available-for-sale unlistedequityinvestmentswhichdonothaveanyquotedmarketpricesandwhosefairvalues allowance for impairment losses of available-for-sale financial
etivsmnsequityinvestments debt investments viaefrsl Availabe-for-sale Availabe-for-sale (continued) 745 171 171 574
– Note
(Continued) (i)
1Dcme 31December 31 December 1Dcme 31December 31 December 8,9 28,200 28,200 186,794 186,794 2016 2016 1 1 1 – – 401 401 149 400 549
(1) – –
2015 2015 Total 132 305 401 245 400 645 746 172 171 574 (36) (1) 1 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
21 Held-to-maturity investments
Debt securities analysed by type and location:
31 December 31 December Note 2016 2015
In mainland China – Government 187,965 116,017 – Banks and other financial institutions 56,567 16,577 – Other institutions (a) 8,576 17,979
Sub-total 253,108 150,573
Outside mainland China – Government 410 330 – Banks and other financial institutions 1,353 1,113 – Other institutions 2,741 306
Sub-total 4,504 1,749
Total (b) 257,612 152,322
Less: Provision for impairment losses (112) (10)
Net balances 257,500 152,312
Listed 4,439 1,289 – of which in Hong Kong 2,722 894 Unlisted 253,061 151,023
Net balances 257,500 152,312
Fair value 258,891 156,516
Note:
(a) Debt securities issued by other institutions mainly represent debt securities issued by state-owned enterprises and joint stock enterprises in mainland China.
(b) As at the end of the year, part of the held-to-maturity investments were pledged as securities for repurchase agreements and time deposits transactions (see Note V 28(a)).
(c) The Group did not dispose of any held-to-maturity debt investments in 2016. The Group disposed of the held-to- maturity debt investments with a notional amount of RMB540 million prior to their maturity dates for the year ended 31 December 2015, which account for 0.48% of the portfolio before the disposal.
197 CHINA EVERBRIGHT BANK 198 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
22 23 Notes totheconsolidatedfinancialstatements
( (b) (a) Note: (b (a) Note: Debt securitiesclassifiedasreceivables Investments insubsidiaries c) Net balances Less: Provisionforimpairmentlosses Total Beneficiary interestsintrustandotherplans Wealth managementproductsissuedby CEB InternationalInvestmentCo.,Ltd. Total Everbright FinancialLeasingCo.,Ltd. Others Jiangsu Huai’anEverbrightVillageBankCo.,Ltd. Shaoshan EverbrightVillageBankCo.,Ltd. )
financial institution rights ofShaoshanEverbright. Everbright aretheprovisionofcorporate andretailbankingservices.TheBankholds70%ofequityinterests andvoting Shaoshan city of Hunan Province, with registered capital of RMB150 million. The principal activities of Shaoshan Shaoshan Everbright business activities.TheBankholds 100%ofequityinterestsandvotingrightsCEBI. on thedayoftransferringregistrationcapital.Theprincipalactivity ofCEBIistheprovisioninvestmentbanking capital ofHKD600million,whichequalstoRMB494millionapproximately, accordingtothespotexchangerate0.823655, CEB InternationalInvestmentCo.,Ltd.(“CEBI”)wasincorporatedon 9 November2015inHongKong,withregistered Leasing. is the provision of leasing services. The Bank holds 90% of equity interests and voting rights of Everbright Financial of Hubei Everbright FinancialLeasingCo.,Ltd.(“EverbrightLeasing”) was incorporatedon19May2010inWuhancity million). Thefairvaluesoftheabovementionedinvestmentsapproximatetotheircarryingamount. institutions in mainland China, the notional amount of which was RMB636 million (31 December 2015: RMB14,220 in theplansfortransferofbeneficialinterestsheldbyGroupwereunderforwardsalecontractswithotherfinancial companies, insurancecompaniesandassetmanagementcompanies.Asat31December2016,partofinvestments Beneficiary interests Wealth managementproductsissuedbyfinancialinstitutionsarefixed-termandprincipleguaranteedproducts. Province, with registered capital of RMB3,700 million. The principal activity of Everbright Financial Leasing in trust and other plans are mainly beneficial interests issued by trust companies, securities Village Bank Co., Ltd. (“Shaoshan Everbright”) was incorporated on 24 September 2009 in
Note Note b 7,2 388,394 476,623 (b) (b) (d) a 5,6 136,434 150,460 (a) (a) (c) (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 2,7 523,427 524,828 627,678 629,409 171 (1,401) (1,731) ,0 2,700 2,700 ,6 3,369 3,369 2,326 2016 2016 105 494 70
2015 2015 105 494 70 – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
23 Investments in subsidiaries (continued)
Note: (continued)
(d) Jiangsu Huai’an Everbright Village Bank Co., Ltd. (“Huai’an Everbright”) was incorporated on 1 February 2013 in Huai’an city of Jiangsu Province, with registered capital of RMB100 million. The principal activities of Huai’an Everbright are the provision of corporate and retail banking services. The Bank holds 70% of equity interests and voting rights of Huai’an Everbright.
24 Fixed assets
Construction Electronic Premises Aircraft in progress equipment Others Total (Note(i))
Cost As at 1 January 2016 11,117 – 900 5,325 3,420 20,762 Additions 53 2,266 52 536 164 3,071 Transfers out – – (3) – – (3) Disposals – – – (130) (48) (178)
As at 31 December 2016 11,170 2,266 949 5,731 3,536 23,652
Accumulated depreciation As at 1 January 2016 (2,630) – – (3,376) (1,951) (7,957) Charge for the year (365) (50) – (692) (354) (1,461) Disposals – – – 119 34 153
As at 31 December 2016 (2,995) (50) – (3,949) (2,271) (9,265)
Provision for impairment As at 1 January 2016 (159) – – – – (159)
As at 31 December 2016 (159) – – – – (159)
Net book value As at 31 December 2016 8,016 2,216 949 1,782 1,265 14,228
Note:
(i) As at 31 December 2016, Everbright Financial Leasing Co., Ltd., the group’s subsidiary leases certain aircrafts and aircraft engines which were included in “Aircraft” to third parties under operating lease arrangements, with a net book value of RMB2,216 million.(2015: null)
199 CHINA EVERBRIGHT BANK 200 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
24 Notes totheconsolidatedfinancialstatements
leases asfollows: The netbookvaluesofpremisesattheendyearareanalysedbyremainingterms there wouldbenosignificantcostinobtainingthetitledeeds. of RMB156million (31 December2015:RMB176million).ManagementoftheGroupexpectedthat As at31December2016,titledeedswerenotyetfinalisedforthepremiseswithacarryingamount Fixed assets Cost Accumulated depreciation
Provision forimpairment Net bookvalue Total – Shorttermleases(lessthan10years) – Mediumtermleases(1050years) Held inmainlandChina
As at1January2015 As at1January2015 As at31December2015 As at31December2015 As at1January2015 As at31December2015 As at31December2015 Additions Charge fortheyear Transfers in/(out) Transfers out/(in) Disposals Disposals (continued)
Premises 0926349633719,938 3,367 4,906 673 10,992 1179053534020,762 3,420 5,325 900 11,117 (2,273) (2,630) ,2 0 ,4 ,6 12,646 1,469 1,949 900 8,328 (159) (159) (357) 131 (6) – – –
osrcinElectronic Construction in progress 3 627 234 (7) 289 154 (6,736) (1,564) (2,899) – 336 191 (7,957) (1,951) (3,376) – – – 68 47 (1,442) (407) (678) – – – –
(Continued) qimn tesTotal Others equipment
(205) 1Dcme 31December 31 December 199 (3) 2 – –
,1 8,328 8,315 8,016 7,967 2016 49 3)(247) (36) 61,078 86 2221 22
(2) 3 (159) – (159) –
2015 13 (7) – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
25 Goodwill
31 December 31 December 2016 2015
Gross amount 6,019 6,019 Less: Provision for impairment losses (4,738) (4,738)
Net balances 1,281 1,281
As approved by the PBOC, the Bank and China Development Bank (“CDB”) jointly signed an “Agreement between China Development Bank and China Everbright Bank for the transfer of assets, liabilities and banking premises of China Investment Bank” (the “Agreement”) on 18 March 1999. According to the Agreement, CDB transferred the assets, liabilities, equity and 137 outlets of 29 branches of the former China Investment Bank (“CIB”) to the Bank. The Agreement became effective on 18 March 1999. The Bank assessed the fair value of the transferred assets and liabilities, and recognised the excess of the purchase cost over the sum of the fair value of the net assets transferred and deferred tax assets as goodwill.
The goodwill is subject to annual impairment testing. The Bank makes provision for impairment if necessary. The Bank calculates the recoverable amount of the CGU using cash flow projections based on financial forecasts approved by management covering a five-year period. The discount rate used reflects specific risks relating to the relevant segments.
Based on the result of the impairment testing, no additional impairment losses on goodwill were recognised for the year.
26 Deferred tax assets and liabilities
(a) Analysed by nature 31 December 2016 31 December 2015
Deferred Deferred Temporary Tax assets Temporary Tax assets Difference /(liabilities) Difference /(liabilities)
Deferred income tax assets 22,489 5,622 15,694 3,923 Deferred income tax liabilities – – – –
Net balances 22,489 5,622 15,694 3,923
201 CHINA EVERBRIGHT BANK 202 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
26 Notes totheconsolidatedfinancialstatements
(b) Deferred taxassetsandliabilities
(iii) (ii) (i) Note: Movements ofdeferredtax
Recognised inother Recognised inother Recognised inprofitorloss Recognised inprofitorloss 31 December2015 1 January2015 31 December2016 1 January2016
comprehensive income comprehensive income impaired assetscould beapprovedbytherelevanttax authoritiesintheforeseeablefuture. 2015: RMB14,691million).Thiswas mainlybecauseitwasuncertainwhetherthelossesfromwrite-offs ofthe 2015 As at31December2016,theGroup hasnotrecogniseddeferredtaxassetsofRMB5,157million(31December Unrecognised deferredtaxassets Net losses/(gains)onfairvaluechangesoffinancialinstrumentsaresubject totaxwhenrealised. criteria assetoutinthePRCtaxrulesandareapprovedbyauthorities. the grosscarryingamountofqualifyingassetsatendyear, togetherwithwrite-offswhichfulfillspecific assets attheendofyear.Besides,amountsdeductibleforincome taxpurposesarecalculatedat1%of provision for The Groupmadeprovisionforimpairmentlossesonloansandadvances tocustomersandotherassets.The : RMB3,673 million) for provision of impairment losses amounting to RMB20,629 million (31 December impairment losses were determined based on the expected recoverable amount of the relevant
Provision for Provision for impairment impairment (continued) Note(i) Note(i) losses losses ,0 349 1,804 556 (59) (609) 1,224 ,8 ,4 148 3,923 (1,408) 3,034 2,043 (144) 3,288 1,694 1,484 5,622 (324) 3,923 1,434 (1,408) 4,512 2,043 3,288 – –
staff costs staff costs (Continued) Accrued Accrued 124 (1,254) (1,254) – 1,143 1,143 –
instruments instruments Net losses/ Net losses/ of financial of financial changes changes from fair from fair Note(ii) Note(ii) (gains) (gains) value value 1)2,143 (10)
Net balance Net balance of deferred of deferred tax assets tax assets 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
27 Other assets
31 December 31 December Note 2016 2015
Precious metal 22,677 4,779 Other receivables (a) 6,162 4,666 Long-term deferred expense 1,337 1,450 Fixed assets purchase prepayment 1,187 995 Intangible assets 844 834 Repossessed assets 389 329 Land use rights 106 112 Others 3,018 42
Total 35,720 13,207
Note:
(a) Other receivables and prepayments mainly include items in the process of clearing and settlement.
28 Pledged assets
(a) Assets pledged as collaterals Financial assets pledged by the Group as collaterals for liabilities include discounted bills and debt securities. They are mainly pledged for repurchase agreements and time deposits. The carrying amount of the financial assets pledged as securities as at 31 December 2016 is RMB72,500 million (31 December 2015: RMB70,574 million).
(b) Collaterals received The Group conducts resale agreements under the usual and customary terms of placements, and holds collaterals for these transactions. As at the end of the year, the Group did not hold any resale agreement that collaterals were permitted to be sold or repledged in the absence of the counterparty’s default on the agreements.
29 Deposits from banks and other financial institutions
Analysed by type and location of counterparty 31 December 31 December 2016 2015
Deposits in mainland China – Banks 344,988 234,625 – Other financial institutions 484,186 305,547
Sub-total 829,174 540,172
Deposits outside mainland China – Banks 1,180 894
Sub-total 1,180 894
Total 830,354 541,066
203 CHINA EVERBRIGHT BANK 204 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
31 30 Notes totheconsolidatedfinancialstatements
(a) Analysed bytypeandlocationofcounterparty (b) Placements frombanksandotherfinancialinstitutions Financial assetssoldunderrepurchaseagreements Total Sub-total – Banks Placements outsidemainlandChina Sub-total – Otherfinancialinstitutions – Banks Placements inmainlandChina
Analysed bytypeandlocationofcounterparty Analysed bycollateral Total Debt securities Bank acceptances Total – Otherfinancialinstitutions – Banks In mainlandChina (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 1Dcme 31December 31 December 55160,305 18,542 18,542 95,501 34,111 41,763 34,111 41,263 61,390 61,386 11558,873 39,103 41,195 33,585 58,873 55,550 41,195 41,195 ,1 19,770 7,610 2016 2016 2016 4 3,323 –
2015 2015 2015 500 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
32 Deposits from customers
31 December 31 December Note 2016 2015
At amortised cost
Demand deposits – Corporate customers 628,167 480,487 – Individual customers 183,856 145,026
Sub-total 812,023 625,513
Time deposits – Corporate customers 639,629 677,167 – Individual customers 115,941 121,019
Sub-total 755,570 798,186
Pledged deposits – Acceptances 173,385 190,874 – Letters of credit 9,980 14,327 – Letters of guarantees 20,763 8,299 – Others 14,249 7,365
Sub-total 218,377 220,865
Other deposits 108,027 110,665
Total deposits from customers at amortised cost 1,893,997 1,755,229
At fair value
Structured deposits (i) – Corporate customers 167,967 166,646 – Individual customers 58,923 71,968
Total deposits from customers at fair value 226,890 238,614
Total 2,120,887 1,993,843
Note:
(i) Due to customers measured at fair value are structured deposits designated as at fair value through profit or loss at inception. There were no significant changes in the Group’s credit risk and therefore there were no significant gains or losses attributable to changes in the Group’s credit risk for the above-mentioned structured deposits during the years ended 31 December 2016 and 2015.
205 CHINA EVERBRIGHT BANK 206 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
33 Notes totheconsolidatedfinancialstatements
(b) (a) Note:
Accrued staffcosts Total Supplementary retirementbenefitspayable Pension payable Salary andwelfarepayable
(ii) (i) Co., Ltd. society ofActuariesinAmerica)anexternalindependentactuary:TowersWatsonManagementConsulting(Shenzhen) obligations inrespectoftheSRBwereaccessedusingprojectedunitcreditmethodbyqualifiedstaff(amember of fu The GrouppaysSRBforeligibleemployees.amountrepresentsthepresentvalueoftotalestimated Supplementary retirementbenefits(“SRB”) its employees’grosswagesinprioryear,whichareexpensedtoprofitorlosswhenthecontributionsmade. The Group provides an annuity plan to the eligible employees. The Group makes annuity contributions in proportion to organisations. to the the employeesarrangedbylocalgovernmentlabourandsocialsecurityorganisations.TheGroupmakescontributions Pursuant totherelevantlawsandregulationsinPRC,Grouphasjoinedadefinedcontributionschemefor Pension scheme
ture benefits that the Group is committed to pay for eligible employees at the end of the year. The Group’s retirement scheme at the applicable rates based on the amounts stipulated by the relevant government
Remeasurement ofdefinedbenefit plan wasrecognisedinothercomprehensiveincome,seeNoteV41. Movements ofSRBtheGroupareasfollows: The balancesofSRBtheGroupareasfollows: Present valueofSRBobligation As at31December As at1January Current servicecost Payments made Remeasurement ofdefinedbenefitplan Interest cost
Note (b) (a) (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December ,7 11,217 7,776 10,721 6,992 2016 2016 2016 126 658 658 658 399 236 (15) 23 15
2015 2015 2015 399 399 399 314 97 (17) 64 13 25 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
33 Accrued staff costs (continued)
Note: (continued)
(b) Supplementary retirement benefits (“SRB”) (continued)
(iii) Principal actuarial assumptions of the Group are as follow:
31 December 31 December 2016 2015
Discount rate 3.75% 3.90% Medical cost trend rate 5.88% 6.00% Average expected future lifetime 22.80 23.20
(iv) Sensitivity analysis:
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumption constant, would have affected the defined benefit obligation by the amounts shown below.
31 December 2016
Increase Decrease
Discount rate (1% movement) (163) 178 Medical cost trend rate (1% movement) 187 (133)
31 December 2015
Increase Decrease
Discount rate (1% movement) (80) 114 Medical cost trend rate (1% movement) 99 (70)
Although the analysis does not take account of the full distribution of cash flows expected under the plans, it does provide an approximation of the sensitivity of the assumptions shown.
Except as mentioned in Note (a) and Note (b) above, the Group has no significant responsibilities to pay any other retirement benefits to retired employees.
207 CHINA EVERBRIGHT BANK 208 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
36 35 34 Notes totheconsolidatedfinancialstatements
Taxes payable Debt securitiesissued Interests payable Value addedtaxpayable Income taxpayable Total Others Debt securitiesissued Deposits fromcustomers Total Others Business taxandsurchargespayable Financial bondsissued Total Subordinated debtsissued Interbank depositsissued Tier-two capitalbonds Medium termnotes Certificates ofdepositsissued
Note (b) d 4,6 146,531 347,067 (d) (a) (c) (e) (Continued) (f)
1Dcme 31December 31 December 31December 31 December 1Dcme 31December 31 December 1,0 210,061 412,500 35630,612 33,576 25,854 26,890 62016,200 32,800 16,200 32,800 ,4 4,527 1,416 2,741 ,5 3,036 1,722 4,955 1,731 6,392 4,501 ,0 6,700 6,700 3,451 ,8 7,830 6,282 2016 2016 2016 340 1,702 4
2015 2015 2015 122 41 – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
36 Debt securities issued (continued)
(a) Subordinated debts 31 December 31 December Note 2016 2015
Subordinated fixed rate debts maturing in June 2027 (i) 6,700 6,700
Total 6,700 6,700
Note:
(i) Fixed rate subordinated debts of RMB6.7 billion with a term of fifteen years were issued on 7 June 2012. The coupon rate is 5.25% per annum. The Group has an option to redeem the debts on 8 June 2022 at the nominal amount.
(ii) As at 31 December 2016, the fair value of the total subordinated debt securities issued approximates to RMB6,957 million (31 December 2015: RMB7,142 million).
(b) Financial bonds 31 December 31 December Note 2016 2015
Financial fixed rate bonds maturing in March 2017 (i) 20,000 20,000 Financial floating rate bonds maturing in March 2017 (ii) 10,000 10,000 Financial fixed rate bonds maturing in June 2018 (iii) 2,800 2,800
Total 32,800 32,800
Note:
(i) Fixed rate financial bonds of RMB20 billion with a term of five years were issued on 28 March 2012. The coupon rate is 4.20% per annum.
(ii) Floating rate financial bonds of RMB10 billion with a term of five years were issued on 28 March 2012. The bonds bear interest at a floating rate based on the PBOC’s one-year time deposits rate plus a margin of 0.95%.
(iii) Fixed rate financial bonds of RMB3.50 billion with a term of three years were issued by Everbright Financial Leasing Co., Ltd on 16 June 2015. The coupon rate is 4.00% per annum. As at 31 December 2016, the Bank held RMB0.7 billion of these bonds.
(iv) As at 31 December 2016, the fair value of the total financial bond securities issued approximates to RMB32,736 million (31 December 2015: RMB32,958 million).
209 CHINA EVERBRIGHT BANK 210 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
36 Notes totheconsolidatedfinancialstatements
(f) (e) (d) (c) Debt securitiesissued
approximates totheircarryingamount. branch andmeasuredatamortisedcost.Thefairvalueofthecertificatesdepositsissued As at 31 December 2016, the certificates of deposits were issued by the Bank’s Hong Kong December 2015:RMB146,688million). value oftheinterbankdepositsissuedmentionedaboveapproximatestoRMB342,860million(31 As at31December2016,theinterbankdepositsweremeasuredamortisedcost.Thefair (i) (ii)
(ii) (i) Note: Tier-two capitalbonds Medium termnotes Certificates ofdepositsissued Interbank depositsissued
Medium termnoteswithfixedrate Total
maturing in15September2019 to RMB16,881million(31December2015:RMB17,436million). As at31December2016,thefairvalueoftotaltier-twocapitalbondsapproximates redeem thedebtson10June2019atnominalamount. on 9June2014.Thecouponrateis6.20%perannum.Grouphasanoptionto Fixed ratetier-twocapitalbondsofRMB16.2billionwithatermtenyearswereissued by TheBank’sHongKongbranchon8September2016.coupon rateis2.00%perannum. Fixed ratemediumtermnotesofUSD500million(i.e.RMB3,473million) withatermofthreeyearswereissued As at31December2016,thefairvalueofmediumtermnotesapproximates toRMB3,440million. (continued)
Note (Continued) (i)
1Dcme 31December 31 December 3,451 3,451 2016
2015 – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
37 Other liabilities
31 December 31 December Note 2016 2015
Deferred emoluments payment (a) 4,440 – Payment and collection clearance Accounts 4,165 1,743 Finance leases payable 3,618 3,366 Deferred income (b) 2,903 2,083 Bank Loans (c) 2,387 – Provisions (d) 415 446 Dormant accounts 319 295 Dividend payables 20 28 Others 13,049 7,102
Total 31,316 15,063
Note:
(a) This represents deferred emoluments payable to employees in respect of services provided to the Group. Such amount will be distributed according to plans. As at 31 December 2016, the deferred emolument payable amounted to RMB4,440 million.
(b) Deferred income primarily comprised the credit card income to be distributed.
(c) As at 16 December 2016, Everbright Financial Leasing Co., Ltd., the group’s subsidiary borrowed long-term loans with a terms for 5 years. Everbright Financial Leasing should repay capital with interest quarterly at a floating rate based on the Libor plus a margin of 150BP. As at 31 December 2016, the amount of the long-term bank loan is RMB516 million. CEB International Investment Co., Ltd., the group’s subsidiary borrowed short-term loans. As at 31 December 2016, the amount of the short-term bank loan is RMB1,871 million at rates between 0.80% to 2.32%, and the remaining terms are from 6 days to 39 days.
(d) As at 31 December 2016, the accruals for litigation losses estimated by the Group based on the status of outstanding litigation cases and the probability of losses amounted to RMB17 million (31 December 2015: RMB17 million).
38 Share capital
The Bank’s shareholding structure as at the end of the year is as follows:
31 December 31 December 2016 2015
Ordinary shares listed in mainland China (A share) 39,810 39,810 Ordinary shares listed in Hong Kong (H share) 6,869 6,869
Total 46,679 46,679
The H shares rank pari passu in all respects with the A shares including the right to receive dividends and distributions declared.
211 CHINA EVERBRIGHT BANK 212 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
39 Notes totheconsolidatedfinancialstatements
(a) (b) Other equityinstrument
(ii) (i) Preference sharesattheendofyear Main Clauses 2015-6-19 Everbright P1 date Issue Book value Issuing costs Less: Sub-Total 2016-8-8 Everbright P2
the preferenceshares. and thebenchmarkrate.Thefixedspreadwillremainunchangedthroughouttermof The fixedspreadequalstothebetweendividendrateattimeofissuance spread. Dividend resetevery5yearsthereaftertothesumofbenchmarkrateandfixed Fixed rateforthefirst5yearsafterissuance. Dividend requires ashareholder’sresolutiontobepassed. requirements. The Group may elect to cancel any dividend, but such cancellation making general provisions, and the Group’s capital adequacy ratio meets regulatory after making up previous years’ losses, contributing to the statutory reserve and The Group Conditions todistributionofdividends could pay dividends while the Group still has distributable after-tax profit
Dividend 5.30% 3.90% rate
100 RMB/share 100 RMB/share Issue price
Number of shares issued million (Continued) 0 20,000 200 0 10,000 100
29,947 30,000 million RMB (53)
condition Conversion Mandatory conversion Mandatory conversion trigger events trigger events
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
39 Other equity instrument (continued)
(b) Main Clauses (continued) (iii) Dividend blocker If the Group cancels all or part of the dividends to the preference shareholders, the Group shall not make any dividend distribution to ordinary shareholders before the Group pays the dividends for the current dividend period to the preference shareholders in full.
(iv) Order of distribution and liquidation method The preference shareholders are subordinated to the depositors, ordinary creditors, holders of subordinated debt and holders of Tier-two capital bonds, but will be senior to the ordinary shareholders
(v) Mandatory conversion trigger events Upon the occurrence of an Additional Tier-one Capital Trigger Event (Common equity tier-one capital Adequacy Ratio of the Group falling to 5.125% or below), the Group shall have the right to convert all or part of the Preference Shares into A shares, in order to restore the Common equity tier-one capital Adequacy Ratio of the Group to above 5.125%; If Preference Shares were converted to A shares, it could not be converted to Preference Shares again.
Upon the occurrence of a Non-Viability Trigger Event (Earlier of the two situations: (1) CBRC has determined that the Group would become non-viable if there is no conversion or write-down of capital; or (2) the relevant authorities have determined that a public sector injection of capital or equivalent support is necessary, without which the Group would become non-viable), the Group shall have the right to convert all Preference Shares into A shares.
(vi) Redemption Subject to the prior approval of the CBRC and the satisfaction of the relevant requirements, the Group shall have the right to redeem all or part of the Preference Shares on any redeemable day (the payment date for dividends of the Preference Shares each year) after the fifth year following the completion date of the Issuance of the Preference Shares. The specific commencement date of the redemption period shall be determined by the Board in line with market conditions, subject to authorisation at a shareholders’ general meeting (the authorisation can be further delegated). The redemption period for the Preference Shares shall commence on such commencement date of the redemption period and end on the completion date of the redemption or conversion of all the Preference Shares. Where redemption is in part, the Preference Shares shall be redeemed based on the same proportion and conditions. Preference Shares shall be redeemed in cash. The redemption price shall be the par value plus the dividend declared but unpaid for the relevant period.
213 CHINA EVERBRIGHT BANK 214 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
40 39 Notes totheconsolidatedfinancialstatements
(c) (d)
Other equityinstrument Capital reserve Total Share premium
Changes inPreferencesharesoutstanding Interests attributabletoequityinstruments’holders 2. Totalequityattributabletonon-controllinginterests 1. TotalequityattributabletoshareholdersoftheBank Preference Shares Preference Shares Items
(2) EquityattributabletopreferencesharesholdersoftheBank (1) Equityattributabletonon-controllinginterestsof (1) EquityattributabletoordinaryequityholdersoftheBank (2) Equityattributabletonon-controllinginterestsof preference shares ordinary shares
of shares of shares Number Number mlin au mlin au mlin value (million) value (million) value value (million) (million) value (million) value (million) (continued) aur 05Adtosfrteya 31December2015 Additionsfortheyear 1 January2015 31December2016 Additionsfortheyear 1 January2016 0 995109923029,947 300 9,982 100 19,965 200 0 9952019,965 200 19,965 200 – –
Carrying Carrying
of shares of shares Number Number
(Continued)
Carrying Carrying
1Dcme 31December 31 December 1Dcme 31December 31 December
2,0 203,528 220,508 5,5 223,493 250,455 33533,365 33,365 33,365 33,365 29,947
2016 2016 of shares of shares 613 613 Number Number –
Carrying Carrying 19,965 2015 2015 554 554 –
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
41 Other comprehensive income
31 December 31 December 2016 2015
Items that may be reclassified subsequently to profit or loss Fair value changes on available-for-sale financial assets 552 3,982 Exchange differences on translation of financial statements of overseas subsidiaries 41 8
Items that will not be reclassified to profit or loss Remeasurement of defined benefit plan (84) (61)
Total 509 3,929
Other comprehensive income attributable to equity holders of the Bank in the consolidated statement of financial position:
Fair value Exchange gains on differences available for on translation Remeasurement sale financial of foreign of defined assets operations benefit plan Total
As at 1 January 2015 219 – 3 222 Changes in amount for the previous year 3,763 8 (64) 3,707
As at 1 January 2016 3,982 8 (61) 3,929 Changes in amount for the year (3,430) 33 (23) (3,420)
As at 31 December 2016 552 41 (84) 509
42 Surplus reserve and general reserve
(a) Surplus reserve The surplus reserve at the end of the year represented statutory surplus reserve fund. The Bank is required to appropriate 10% of its net profit, after making good prior year’s accumulated loss, to statutory surplus reserve fund until the reserve fund balance reaches 50% of its registered capital.
(b) General reserve The Bank is required, in principle, to set aside a general reserve, through appropriation of profit after tax, with an amount of not lower than 1.5% of the ending balance of its gross risk-bearing assets.
215 CHINA EVERBRIGHT BANK 216 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
43 Notes totheconsolidatedfinancialstatements
(c) (b) (a) Appropriation ofprofits
– shares wasapprovedbytheBoardofDirectors: At theBoardMeetingheldon17June2016,dividenddistributionoffirstpreference – approved thefollowingprofitappropriationsforyearended31December2015: At the Annual General Meeting of shareholders held on 29 June 2016, the shareholders – following profitappropriationsfortheyearended31December2016: At theMeetingofBoardDirectorson30March2017,boarddirectorsapproved – – – –
preference shares. using the 5.30% of dividend yield ratio for China Everbright Bank the first phase RMB5.3 per share before tax, start accruing from 25 June 2015, and are calculated Declared cash per 10sharesbeforetax. Declared cashdividendstoallshareholdersofRMB8,869millionrepresentingRMB1.90 Appropriated RMB6,368milliontogeneralreserve;and Appropriated RMB2,914million(10%ofthenetprofitbank)tosurplusreserve; per 10sharesbeforetax. Declared cashdividendstoallshareholdersofRMB4,575millionrepresentingRMB0.98 Appropriated RMB10,362milliontogeneralreserve;and Appropriated RMB2,987million(10%ofthenetprofitbank)tosurplusreserve; dividends to preference shareholders of RMB1,060 million representing (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
44 Involvement with unconsolidated structured entities
(a) Structured entities sponsored by third party institutions in which the Group holds an interest: The types of structured entities that the Group does not consolidate but in which it holds an interest include entities set up for wealth management products issued by other financial institutions and beneficiary interests in trust and other plans (“asset management plans”), available-for-sale fund investments, wealth management products and asset-backed securities. The nature and purpose of these structured entities are to generate fees from managing assets on behalf of third party investors. These vehicles are financed through the issue of units to investors.
The following table sets out an analysis of the carrying amounts and maximum exposure of interests held by the Group in unconsolidated structured entities sponsored by third party institutions as at 31 December 2016:
31 December 2016 31 December 2015
Carrying Maximum Carrying Maximum amount exposure amount exposure
Debt securities classified as receivables 627,678 627,678 523,427 523,427
Available-for-sale financial assets – Fund investments and others 186,794 186,794 28,200 28,200 – Asset-backed securities – – 12,385 12,385
Held-to-maturity investments – Asset-backed securities 1,688 1,688 – –
Total 816,160 816,160 564,012 564,012
(b) Structured entities sponsored by the Group which the Group does not consolidate but holds an interest in: The types of unconsolidated structured entities sponsored by the Group include non-principal guaranteed wealth management products. The nature and purpose of these structured entities are to generate fees from managing assets on behalf of investors. These structured entities are financed through the issue of units to investors. Interest held by the Group includes investments in units issued by these structured entities and fees charged by providing management services. As at 31 December 2016, the carrying amounts of the investments in the notes issued by these structured entities and management fee receivables being recognized are not material in the statement of financial positions.
As at 31 December 2016, the amount of assets held by the unconsolidated non- principal guaranteed wealth management products, which are sponsored by the Group, is RMB1,028,903 million (31 December 2015: RMB876,855 million).
217 CHINA EVERBRIGHT BANK 218 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
46 45 44 Notes totheconsolidatedfinancialstatements
additional tier-onecapitaland tier-twocapital. issued by the CBRC. The capital of the Group is divided into common equity tier-one capital, ratio management. The Group calculates the capital adequacy ratio in accordance with guidelines management andeconomiccapitalmanagement,ofwhich theprimaryfocusisoncapitaladequacy The Group’s capital management includes capital adequacy ratio management, capital financing million). the GroupcontinuestorecogniseamountsRMB2,983 million(31December2015:RMB2,682 in theformofsubordinatedtranches.Asat31December 2016,thecarryingamountofassetsthat the Groupunderarrangementsin which the Groupretains a continuinginvolvementin such assets and fairvalueofRMB6,593million(31December2015:RMB5,204million)hadbeentransferredby value ofthetransferredassets.As at 31December2016,loanswithanoriginalcarryingamount the Group’s continuing involvement is theextent to whichthe Group isexposedtochangesin the statement offinancialpositiontotheextentGroup’scontinuinginvolvement.The the financialassetandithasretainedcontrolonthem,theseassetsarerecognised As theGroupneithertransfersnorretainssubstantiallyallrisksandrewardsofownership it transferscreditassetstostructuredentitieswhichselltrustbenefitinterestsinvestors. The Groupentersintocreditassetstransfertransactionsinthenormalcourseofbusinessbywhich continued torecognisethetransferredassets. as the Group has retained substantially all the risks and rewards of these assets, the Group accordance withIFRSs.Inothercaseswherethetransferredassetsdonotqualifyforderecognition these transfers may give rise to full or partial derecognition of the financial assets concerned in recognised financial assets to third parties or to structured entities. In some cases where The Group enters into transactions in the normal course of business by which it transfers (d) (c) Involvement withunconsolidatedstructuredentities Capital management Transferred financialassets
entities bytheGroupamountedtoRMB7,472million(2015:RMB7,253million). The amount of fee and commission income received from the above mentioned structured 2016 amountedtoRMB771,868million(2015:RMB543,077million). sponsored andissuedbytheGroupafter1January2016butmaturedbefore31December The aggregated amount of the non-principal guaranteed wealth management products does nothaveaninterestinasat31December2016. Unconsolidated structureentitiessponsoredbytheGroupduringyearwhich (Continued) (continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
46 Capital management (continued)
Capital adequacy ratio management is the key in capital management. The capital adequacy ratio reflects the soundness of the Group’s operations and risk management capabilities. The main objective in capital adequacy ratio management is to set an optimal capital adequacy ratio that meets the regulatory requirements by benchmarking against the capital adequacy ratio level of leading global banks with reference to its own business environment and conditions.
The Group considers its strategic development plans, business expansion plans and risk variables when conducting scenario analysis and stress testing and executing other measures to forecast, plan and manage its capital adequacy ratio. The required information is filed with the CBRC by the Group and the Bank semi-annually and quarterly.
With effect from 1 January 2013, the Group started computing its capital adequacy ratios in accordance with “Regulation Governing Capital of Commercial Banks (provisional)” and other relevant regulations promulgated by the CBRC.
The CBRC requires commercial banks to meet the requirements of capital adequacy ratios by the end of 2018 in accordance with “Regulation Governing Capital of Commercial Banks (provisional)”. For systemically important banks, each bank is required to maintain the common equity tier-one capital adequacy ratio, tier-one capital adequacy ratio and capital adequacy ratio of at least 8.50%, 9.50% and 11.50%, respectively. For non-systemically important banks, the minimum ratios for common equity tier-one capital adequacy ratio, tier-one capital adequacy ratio and capital adequacy ratio are 7.50%, 8.50% and 10.50%, respectively. In addition, those individual banking subsidiaries or branches incorporated outside Mainland China are also directly regulated and supervised by their respective local banking supervisors. There are certain differences in the capital adequacy requirements of different countries.
The on-balance sheet risk-weighted assets are measured using different risk weights, which are determined according to the credit, market and other risks associated with each asset and counterparty, taking into account any eligible collaterals or guarantees. Similar treatment is adopted for off-balance sheet exposure, with adjustments made to reflect the more contingent nature of any potential losses. The counterparty credit risk-weighted assets for over-the-counter (OTC) derivatives are the summation of default risk-weighted assets and credit value adjustment (CVA). Market risk- weighted assets are calculated using the standardised approach. Operational risk-weighted assets are calculated using basic indicator approach.
The capital adequacy ratios and related components of the Group illustrated below are computed based on the Group’s statutory financial statements prepared in accordance with PRC GAAP. During the year, the Group has complied in full with all its externally imposed capital requirements.
219 CHINA EVERBRIGHT BANK 220 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
46 Notes totheconsolidatedfinancialstatements
Capital management of CommercialBanks(provisional)”andrelevantrequirementspromulgatedbytheCBRC. The Groupcalculatesthecapitaladequacyratiosinaccordancewith“RegulationGoverningCapital Capital adequacyratio Tier-one capitaladequacyratio Common equitytier-onecapitaladequacyratio Total risk-weightedassets Net capitalbase Tier-two capital Additional tier-onecapital Net commonequitytier-onecapital Common equitytier-onecapitaldeductions Total commonequitytier-onecapital Tier-one capitalnet Qualifying portionsofnon-controllinginterests Excess loanlossprovisions Qualifying portionsoftier-twocapitalinstrumentsissued Qualifying portionsofnon-controllinginterests Additional tier-onecapitalinstruments Other intangibleassetsotherthanlanduseright Goodwill Qualifying portionsofnon-controllinginterests Retained earnings General reserve Surplus reserve Qualifying portionsofcapitalreserveand Share capital and sharepremium other comprehensiveincome (continued) (Continued)
1Dcme 31December 31 December ,6,3 2,185,516 2,665,037 8,8 259,482 287,880 201,835 218,876 203,950 221,001 4,7 221,827 248,873 08%11.87% 10.80% 60414,680 22,900 37,655 16,014 22,900 39,007 19,965 19,992 29,947 29,997 64,320 40,271 14,964 37,294 70,557 51,447 46,679 17,951 33,874 46,679 .4 10.15% 9.24% 9.34% 8.21% 215 (2,115) (1,281) (2,125) 2016 (844) 493 93 50
(1,281) 2015 (834) 422 75 27 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
47 Notes to consolidated cash flow statements
(a) Net increase in cash and cash equivalents 31 December 31 December 2016 2015
Cash and cash equivalents as at 31 December 241,507 121,964 Less: Cash and cash equivalents as at 1 January 121,964 98,001
Net increase in cash and cash equivalents 119,543 23,963
(b) Cash and cash equivalents 31 December 31 December 2016 2015
Cash on hand 6,667 6,594 Deposits with the central bank 66,255 27,553 Deposits with banks and other financial institutions 141,711 30,642 Placements with banks and other financial institutions 26,874 57,175
Total 241,507 121,964
48 Related party relationships and transactions
(a) The immediate and ultimate parent Companies The immediate and ultimate parents of the Group are China Everbright Group Ltd. (“China Everbright Group”) and China Investment Corporation.
The national organisation code of China Everbright Group is 10206389-7, and the transactions and balances with China Everbright Group and its affiliates are listed in Note V 48(b).
221 CHINA EVERBRIGHT BANK 222 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
48 Notes totheconsolidatedfinancialstatements
(b) Related partyrelationshipsandtransactions
(i) Transactions betweentheGroupandotherrelatedparties
Other relatedpartieshavingtransactionswiththeGroupin2015and2016: Other relatedpartiesinformation
– ChinaEverbrightInternationalTrust& AffiliateofChinaEverbrightGroupLtd. – EverbrightYunfuInternetCo.,Ltd. – SunLifeEverbrightAssetManagementCo.,Ltd. AffiliateofChinaEverbrightGroupLtd. – EverbrightHappyLifeInternationalLeasingCo.,Ltd. AffiliateofChinaEverbrightGroupLtd. – EverbrightCapitalInvestmentManagementCo.,Ltd. – EverbrightFortuneInvestmentCo.,Ltd. – ShanghaiEverbrightSecuritiesAsset AffiliateofChinaEverbrightGroupLtd. – EverbrightFuturesCo.,Ltd. – EverbrightPramericaFundManagementCo.,Ltd. – ChinaEverbrightXinglongTrustCo.,Ltd. – SunLifeEverbrightInsuranceCo.,Ltd. – EverbrightFinancialHoldingAsset – EverbrightRealEstateCo.,Ltd. – ChinaEverbrightInvestmentAndAssets – ShanghaiEverbrightConventionand – ChinaEverbrightIndustry(Group)Co.,Ltd. – ChinaEverbrightInternationalLimited – ChinaEverbrightGroupLimited – ChinaEverbrightLimited Affiliated companies Related party – EverbrightSecuritiesCo.,Ltd.
Management Co.,Ltd. Management Co.,Ltd. Management Co.,Ltd. Exhibition CentreLimited (“Everbright Securities”) Investment Co.,Ltd.
(continued) (Continued)
Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd. Affiliate ofChinaEverbrightGroupLtd.
Shareholder, affiliateofChinaEverbright Relationship withtheGroup Group Ltd. 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
48 Related party relationships and transactions (continued)
(b) Transactions between the Group and other related parties (continued) (i) Other related parties information (continued) Other related parties having transactions with the Group in 2015 and 2016 (continued):
Related party Relationship with the Group
Affiliated companies – Everbright Jinhui Asset Management Co., Ltd. Affiliate of China Everbright Group Ltd. (Shanghai) – Everbright jin’ou Asset Management Limited Affiliate of China Everbright Group Ltd. – Wuxi Everbright Real Estate Development Co., Ltd. Affiliate of China Everbright Group Ltd. – Everbright Lide Asset Management Affiliate of China Everbright Group Ltd. (Shanghai) Co., Ltd. – Jiaxing Meiyin Investnent Management Co., Ltd. Affiliate of China Everbright Group Ltd. – China Everbright Baode Trust Fund Affiliate of China Everbright Group Ltd. Management Co., Ltd. – Everbright Industrial Capital Management Affiliate of China Everbright Group Ltd. (Shenzhen) Co., Ltd. – Sunshine Fuzun (Shenzhen) Financial Affiliate of China Everbright Group Ltd. Services Consulting Co., Ltd. – China Banks and Securities Data Network Co., Ltd. Affiliate of China Everbright Group Ltd. – China Everbright Securities International Limited Affiliate of China Everbright Group Ltd. – Everbright Securities Financial Holdings Limited Affiliate of China Everbright Group Ltd. – Everbright International Hotel Property Affiliate of China Everbright Group Ltd. Management Co., Ltd. – Everbright Photon Investment Management Co., Ltd. Affiliate of China Everbright Group Ltd. – Everbright Deshang Investment Management Affiliate of China Everbright Group Ltd. (Shenzhen) Co., Ltd. – China Everbright Ivy Investment Management Affiliate of China Everbright Group Ltd. (Shanghai) Co., Ltd. – Beijing Wenzi Everbright cultural and creative Affiliate of China Everbright Group Ltd. industry Investment Management Co., Ltd. – Beijing Everbright Wudaokou Investment Fund Affiliate of China Everbright Group Ltd. Management Co., Ltd. – Shanghai Everbright Securities Equity Investment Affiliate of China Everbright Group Ltd. Fund Management Co., Ltd.
223 CHINA EVERBRIGHT BANK 224 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
48 Notes totheconsolidatedfinancialstatements
(b) Related partyrelationshipsandtransactions
(i) Transactions betweentheGroupandotherrelatedparties
Other relatedpartieshavingtransactionswiththeGroupin2015and2016(continued): Other relatedpartiesinformation(continued)
hn rdtoa hns eiieC. t.Commonkeymanagement – BeijingScienceandTechnologyPark – ChinaTraditionalChineseMedicineCo.,Ltd. – ShanghaiElectricGroupCo.,Ltd. Commonkeymanagement – HithinkFlushInformationNetworkCo.,Ltd. – ShanghaiBenemaePharmaceuticalCorporation – First-trustFundManagementCo.,Ltd. – ChinaPacificLifeInsuranceCo.,Ltd. – ChinaPacificPropertyInsuranceCo.,Ltd. Commonkeymanagement – ShanghaiICYNewEnergyVentureCapitalCo.,Ltd. – OrientSecuritiesCo.,Ltd. – ChinaUnionPayCo.,Ltd. – HaitongSecuritiesCo.,Ltd. – VantoneHoldingsCo.,Ltd. – ShanghaiElectricGroupCo.,Ltd. – ShanghaiBaosightSoftwareCo.,Ltd. – COSCOFinanceCo.,Ltd. – ShanghaiInternationalTrustCo.,Ltd. – ChinaShipping(Group)Company – ChinaReAssetManagementCo.,Ltd. Other relatedparties Related party
Construction (group)Co.,Ltd.
(continued) (Continued)
Common keymanagement
Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Common keymanagement Relationship withtheGroup (continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
48 Related party relationships and transactions (continued)
(b) Transactions between the Group and other related parties (continued) (ii) Related party transactions The Group’s material transactions and balances with China Everbright Group and the above related parties during the reporting period are summarised as follows:
China China Everbright Everbright Affiliated Group Limted Companies Others Total (Note V 48(a))
Transactions with related parties for the year ended 31 December 2016:
Interest income – – 701 27 728 Interest expense (8) – (1,289) (676) (1,973)
Balances with related parties as at 31 December 2016:
Interests receivable 2 – 593 2 597 Loans and advances to customers – – 5,142 – 5,142 Positive fair value of derivatives – – 1 – 1 Available-for-sale financial assets 190 – 3,000 – 3,190 Held-to-maturity investments – – – 950 950 Debt securities classified as receivables – – 196,460 60 196,520
Total 192 – 205,196 1,012 206,400
Deposits from banks and other financial institutions – – 8,434 1,204 9,638 Negative fair value of derivatives – – – 1 1 Deposits from customers 460 – 9,308 12,477 22,245 Interests payable – – 109 317 426 Other liabilities – – 4 – 4
Total 460 – 17,855 13,999 32,314
Significant off-balance items with related parties as at 31December 2016:
Guarantee granted (Note) 180 – – – 180
225 CHINA EVERBRIGHT BANK 226 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
48 Notes totheconsolidatedfinancialstatements
(b) Related partyrelationshipsandtransactions
(ii) Transactions betweentheGroupandotherrelatedparties
above relatedpartiesduringthereportingperiodaresummarisedasfollows(continued): The Related partytransactions(continued)
owned commercial banks. outstanding interest obligationofRMB180million(31 December2015:RMB180million) duetooneofthestate- As at 31 December 2016, the Bank has guarantee obligations relating to the China Everbright Group’s Note: Significant off-balanceitemswith Total Other liabilities Interests payable Deposits fromcustomers Deposits frombanksand Total Interests receivable Financial assetsheldunderresaleagreements Financial assetsatfairvaluethrough Balances withrelatedpartiesasat Interest expense Interest income Transactions withrelatedpartiesfortheyear Guarantee granted(Note) Held-to-maturity investments Available-for-sale financialassets Loans andadvancestocustomers Other assets Debt securitiesclassifiedasreceivables profit orloss 31 December2015: ended 31December2015: related partiesasat31December2015: other financialinstitutions Group’s material transactions and balances with China Everbright Group and the (Note V48(a)) vrrgtEebih Affiliated Everbright Everbright ru itdCmaisOhr Total Others Companies Limted Group hn China China 546 546 180 – – – – – – – – – – – – – –
(continued) (Continued) 1771,2 108,111 15,828 91,720 91,737 12,754 – 78,420 – – 24037386,183 3,713 – – 82,470 – (3,366) – – (939) (2,427) – – 23829415,282 2,964 12,318 – – – – – 05920082,539 2,000 80,539 – –
(continued) 9 1 1,105 110 995 973 624 349 998 533 47 86 4 4 0 105 105 – 0 900 900 – –
19 110 24 65 – 998 533 – – 180 –
66 69 4
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
48 Related party relationships and transactions (continued)
(c) China Investment Corporation, Central Huijin Investment Ltd. and its affiliates Approved by the State Council of the PRC, China Investment Corporation was established on 29 September 2007 with a registered capital of USD200 billion. Central Huijin Investment Ltd. (“Huijin”) is a wholly owned subsidiary of CIC and exercises its rights and obligations as an investor on behalf of CIC.
Huijin was incorporated as a wholly state-owned investment company on 16 December 2003. It was registered in Beijing with a registered capital of RMB828,209 million. Apart from equity investments as authorised by the State Council of the PRC, it does not engage in any other commercial operations.
The Group’s transactions with CIC, Huijin and its affiliates mainly include deposit taking, purchase and sale of debt securities, money market transactions and inter-bank clearing. These transactions are priced based on market prices and conducted under normal commercial terms.
The Group has issued subordinated debts, financial bonds, interbank deposits and certificates of deposits which are bearer bonds tradable in the secondary market. Accordingly, the Group has no information in respect of the amount of the debts held by these banks and other financial institutions as at the end of the year.
The Group’s material transactions and balances with CIC, Huijin and its affiliates during the reporting period are summarised as follows:
2016 2015
Interest income 7,140 4,875 Interest expense (5,981) (5,261)
227 CHINA EVERBRIGHT BANK 228 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
48 Notes totheconsolidatedfinancialstatements
(c) (d) Related partyrelationshipsandtransactions
separate disclosure. the opinionthatnoneofthesetransactionsarematerial relatedpartytransactionsthatrequire state-owned entities.Havingconsideredthesubstance oftherelationships,Groupis loans, deposits and commission income, donot depend on whether or not the customers are Group’s pricing strategy and approval processes for major products and services, such as terms similartothosethatwouldhavebeenentered into withnon-state-ownedentities.The These transactionsare conducted inthe ordinary courseoftheGroup’s bankingbusinesson assets; andrenderingreceivingofutilitiesother services. bonds issuedbyotherstate-ownedentities;purchase, saleandleasesofpropertyother agency, and other intermediary services; sale, purchase, underwriting and redemption of inter-bank balances; entrusted lending and other custody services; insurance and securities owned entitiesincludebutarenotlimitedto:lendinganddeposittaking;takingplacingof affiliations and other organisations (“state-owned entities”). Transactions with other state- indirectly owned by the PRC government through its government authorities, agencies, The Group operates in an economic regime currently predominated by entities directly or China InvestmentCorporation,Huijinanditsaffiliates Transactions withotherPRCstate-ownedentities Other assets Debt securitiesclassifiedasreceivables Held-to-maturity investments Available-for-sale financialassets Loans andadvancestocustomers Interests receivable Financial assetsheldunderresaleagreements Positive fairvalueofderivatives Financial assetsatfairvaluethroughprofitorloss Placements withbanksandotherfinancialinstitutions Deposits withbanksandotherfinancialinstitutions Other liabilities Interests payable Deposits fromcustomers Financial assetssoldunderrepurchaseagreements Negative fairvalueofderivatives Placements frombanksandotherfinancialinstitutions Deposits frombanksandotherfinancialinstitutions (continued) (Continued)
(continued) 1Dcme 31December 31 December 1,9 122,095 111,896 5,7 135,682 256,275 36112,645 7,588 13,601 7,152 48,964 31,266 10,210 5,049 14,523 71,096 32128,637 36,628 17,659 13,271 15,627 33,821 ,5 2,457 4,355 2,041 ,4 1,179 1,643 2016 570 1,631 341 651 973 1
2015 222 380 208 – –
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
48 Related party relationships and transactions (continued)
(e) Key management personnel 31 December 31 December 2016 2015 RMB’000 RMB’000
Remuneration 20,116 21,904
Retirement benefits 1,182 1,154
– Basic social pension insurance 636 602
The total compensation packages for senior management of the Group for the year ended 31 December 2016 have not been finalised in accordance with the regulations of the PRC relevant authorities. The remuneration not yet accrued is not expected to have a significant impact on the Group’s and the Bank’s 2016 financial statements.
(f) Loans and advances to directors, supervisors and officers Loans and advances to directors, supervisors and officers of the Group disclosed pursuant to section 78 of Schedule 11 to the new Hong Kong Companies Ordinance (Cap. 622), with reference to section 161 of the predecessor Hong Kong Companies Ordinance (Cap. 32), are as follows:
31 December 31 December 2016 2015 RMB’000 RMB’000
Aggregate amount of relevant loans outstanding as at the year end 14,034 17,572
Maximum aggregate amount of relevant loans outstanding during the year 18,686 21,045
229 CHINA EVERBRIGHT BANK 230 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
49 Notes totheconsolidatedfinancialstatements
Statement offinancialpositiontheCompany Liabilities Liabilities andequity Total assets Assets Total liabilities Other liabilities Debts securitiesissued Interests payable Taxes payable Accrued staffcosts Deposits fromcustomers Financial assetssoldunderrepurchaseagreements Negative fairvalueofderivatives Placements frombanksand Deposits frombanksandotherfinancialinstitutions Due tothecentralbank Other assets Deferred taxassets Goodwill Fixed assets Investments insubsidiaries Debt securitiesclassifiedasreceivables Held-to-maturity investments Available-for-sale financialassets Loans andadvancestocustomers Interests receivable Financial assetsheldunderresaleagreements Positive fairvalueofderivatives Financial assetsatfairvaluethroughprofitorloss Placements withbanksandotherfinancialinstitutions Deposits withbanksandotherfinancialinstitutions Cash anddepositswiththecentralbank other financialinstitutions
Note V 23 (Continued)
1Dcme 31December 31 December ,1,8 1,992,919 2,119,882 1,474,494 1,750,693 ,6,1 3,132,315 3,963,519 ,1,6 2,910,337 3,715,061 0,0 207,261 409,700 543,300 14,800 834,288 187,000 523,427 153,012 222,157 627,678 258,200 423,371 134,861 85,628 326,514 130,214 230,394 381,493 45210,585 30,418 24,592 33,174 58,873 33,431 41,195 48,879 12,553 12,613 34,841 11,977 18,334 153,045 24,877 67,000 ,5 6,240 11,119 4,352 1,391 7,631 4,368 3,765 1,281 3,369 5,348 1,281 3,369 1,625 5,637 4,949 7,834 2016
2015 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
49 Statement of financial position of the Company
31 December 31 December Note V 2016 2015
Equity Share capital 46,679 46,679 Other equity instrument 29,947 19,965 Capital reserve 33,365 33,365 Other comprehensive income 478 3,920 Surplus reserve 17,951 14,964 General reserve 50,633 40,271 Retained earnings 69,405 62,814
Total equity 248,458 221,978
Total liabilities and equity 3,963,519 3,132,315
Approved and authorised for issue by the board of directors on 30 March 2017.
Tang Shuangning Zhang Jinliang Xie Rong Chairman of the Board President Independent Non-executive of Directors, Executive Director Director Non-executive Director
50 Segment reporting
The Group divides its operation by business line and geographical area into different operating segments, and manages them accordingly. In order to better reflect the Group’s future business developments and to provide more useful information to the users of the financial statements, this year, the Group has combined the interbank business and the treasury business into the ‘financial markets business’ for disclosure purposes, and split the asset management business and the custody business across the corporate banking, the retail banking and financial markets businesses. The comparative segment information for the same period last year has also been adjusted. The Group defines reporting segments based on the following operating segments:
231 CHINA EVERBRIGHT BANK 232 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
50 Notes totheconsolidatedfinancialstatements
property andequipment,intangibleassetsotherlong-term assets. part oftheconsolidationprocess.Segmentcapitalexpenditure isthetotalcostincurredtoacquire liabilities aredeterminedbeforeintra-groupbalancesand intra-grouptransactionsareeliminatedas well asthosethatcanbeallocatedonareasonablebasis. Segmentincome,expenses,assetsand Segment income,expenses,assetsandliabilitiesinclude itemsdirectlyattributabletoasegmentas income/expense”. arising frominternalchargesandtransferpricingadjustments arereferredtoas“internalnetinterest parties are referred to as “external net interest income/expense”. Net interest income and expense reflected in the performance of each segment. Interest income and expense earned from third Internal charges and transferpricesare determined with referenceto market ratesand have been based ontheGroup’saccountingpolicies. Measurement of segment assets and liabilities and of segment income, expenses and results is These representequityinvestmentsandrelatedincome. Others debts. trading, aswellmanagementoftheGroup’soverallliquidityposition,includingissuance financial market business segment also covers customer-driven derivatives and foreign currency It alsotradesindebtsecurities,derivativesandforeigncurrencytradingforitsownaccounts.The into inter-bank money market transactions, repurchases transactions and inter-bank investments. This segmentcoverstheGroup’sfinancialmarketbusiness.Thebusinessenters Financial marketbusiness business, personalwealthmanagementservices,remittanceservicesandsecuritiesagencyservices. customers. Theseproductsandservicesincludepersonalloans,deposittakingactivities,bankcard This segment represents the provision of a range of financial products and services to retail Retail banking consulting andadvisoryservices,remittancesettlementservicesguaranteeservices. trade financinganddeposittakingactivities,agencyservices,cashmanagementfinancial and government agencies. These products and services include corporate loans and advances, This segment representstheprovision of a range of financial productsandservicestocorporations Corporate banking Segment reporting (continued) (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
50 Segment reporting (continued)
(a) Segment results, assets and liabilities 2016
Financial Corporate Retail market banking banking business Others Total
Operating income
External net interest income 17,357 18,266 29,665 – 65,288 Internal net interest income/(expense) 17,015 (5,936) (11,079) – –
Net interest income 34,372 12,330 18,586 – 65,288 Net fee and commission income 6,810 16,957 4,345 – 28,112 Net trading gains – – 223 – 223 Dividend income – – – 5 5 Net gains/(losses) arising from investment securities – 21 (282) – (261) Foreign exchange gains/(losses) 786 105 (553) – 338 Other net operating income 420 66 18 156 660
Operating income 42,388 29,479 22,337 161 94,365
Operating expenses (13,545) (14,072) (2,515) (122) (30,254)
Operating profit before impairment 28,843 15,407 19,822 39 64,111 Impairment losses on assets (17,806) (5,031) (1,094) – (23,931)
Profit before tax 11,037 10,376 18,728 39 40,180
Other segment information – Depreciation and amortisation (1,011) (1,036) (135) – (2,182)
– Capital expenditure 2,348 757 105 – 3,210
31 December 2016
Financial Corporate Retail market banking banking business Others Total
Segment assets 1,434,132 813,671 1,764,652 684 4,013,139
Segment liabilities 1,726,670 493,530 1,546,910 1,844 3,768,954
233 CHINA EVERBRIGHT BANK 234 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
50 Notes totheconsolidatedfinancialstatements
(a) Segment reporting
Segment results,assetsandliabilities Segment liabilities Segment assets – Capitalexpenditure – Depreciationandamortisation Other segmentinformation Profit beforetax Operating profitbeforeimpairment Operating expenses Operating income Operating income Impairment lossesonassets
Net interestincome External netinterestincome Foreign exchangegains/(losses) Net feeandcommissionincome Internal netinterest Other netoperatingincome Net tradinglosses Dividend income Net gainsarisingfrom investment securities income/(expense) (continued)
,0,8 7,6 6,2 5 2,943,635 158 3,162,506 765 860,425 475,666 1,235,055 671,926 1,607,386 1,254,760 oprt Retail Corporate akn akn uiesOhr Total Others business banking banking
oprt Retail Corporate akn akn uiesOhr Total Others business banking banking 1,7)(429 351 6)(32,354) (64) (3,541) (14,279) (14,470) 1,2)(,6)(1,369) (5,261) (15,022) 3427971,9 839,358 88 61,010 88 93,364 17,791 152 7,997 19,160 13,482 13,258 22,701 28,504 27,537 42,974 18,555 (10,278) 12,507 (5,629) 28,833 35,397 18,136 15,907 19,490 ,1 4874,186 14,897 7,218
93 108 (154) (1,018) (933) 9 6 130 862 790 3 3(391) 83 236 2 01 4 324 148 13 40 123 10 – – – (continued)
31 December2015
(Continued) 335 – – Financial
market Financial 2015 market
3 –
4 1,782 – (2,105) – 13 – 66,459 – 66,459 – – 26,301 – (72) – (21,652) – 335 –
4 – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
50 Segment reporting (continued)
(a) Segment results, assets and liabilities (continued) Reconciliation between segment assets, liabilities and total assets and total liabilities:
31 December 31 December Note V 2016 2015
Segment assets 4,013,139 3,162,506 Goodwill 25 1,281 1,281 Deferred tax assets 26 5,622 3,923
Total assets 4,020,042 3,167,710
Segment liabilities 3,768,954 2,943,635 Dividend payables 37 20 28
Total liabilities 3,768,974 2,943,663
(b) Geographical information The Group operates principally in mainland China with branches located in 30 provinces, autonomous regions and municipalities directly under the central government, with subsidiaries located in Wuhan city of Hubei Province, Shaoshan city of Hunan Province, Huai’an city of Jiangsu Province and Hong Kong.
Non-current assets include property and equipment, land use rights and intangible assets. In presenting of geographical information, non-current assets are allocated based on geographical location of the underlying assets. Operating income is allocated based on the locations of the branches which generate income. Geographical areas, as defined for management reporting purposes, are as follows:
– “Yangtze River Delta” refers to the following areas serviced by subsidiary and branches of the Bank: Huai’an Everbright, Shanghai, Nanjing, Hangzhou, Suzhou, Ningbo and Wuxi;
– “Pearl River Delta” refers to the following areas serviced by branches of the Bank: Guangzhou, Shenzhen, Fuzhou, Xiamen and Haikou;
– “Bohai Rim” refers to the following areas serviced by branches of the Bank: Beijing, Tianjin, Shijiazhuang, Jinan, Qingdao and Yantai;
– “Central” refers to the following areas serviced by subsidiaries and branches of the Bank: Everbright Financial Leasing and Shaoshan Evergright, Zhengzhou, Taiyuan, Changsha, Wuhan, Hefei and Nanchang;
– “Western” refers to the following areas serviced by branches of the Bank: Xi’an, Chengdu, Chongqing, Kunming, Nanning, Hohhot, Urumchi, Guiyang, Lanzhou and Yinchuan;
235 CHINA EVERBRIGHT BANK 236 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
50 Notes totheconsolidatedfinancialstatements
(b) Segment reporting
– – –
(i) Note: Geographical information
2016 2015 31 December2016 31 December2015 “Head Office”referstotheheadquarterofGroup. Seoul; and “Overseas” referstothefollowingareasservicedbybranchesofBank:HongKong, “Northeastern” refers Heilongjiang, Changchun,ShenyangandDalian; Including fixedandintangibleassets.
Yangtze Yangtze 5431,9 8731,7 ,6 ,6 ,0 3 94,365 639 4,509 8,865 9,563 12,974 28,793 13,599 15,423 4821,0 7571,2 ,1 ,4 ,1 2 93,364 427 4,714 9,244 9,715 11,625 27,557 15,200 14,882 ,1 7 ,1 ,8 ,0 ,6 6 415,178 54 966 1,067 1,202 3,388 4,914 970 2,617 ,5 ,3 ,7 ,3 ,3 ,0 ,2 513,592 45 1,021 1,103 1,234 1,234 5,171 1,033 2,751 Delta (continued) River Delta River
Bohai Bohai to the following areas serviced by branches of the Bank: Rim Rim (continued)
fieCentral Office fieCentral Office Head Head
Non-current Asset(Note(i)) Operating Income
et Western Delta Pearl River et Western Delta Pearl River (Continued)
eastern eastern North North
Over– sa Total –seas Over– sa Total –seas
2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management
The Group has exposure to the following risks from its use of financial instruments: credit risk, market risk, liquidity risk and operational risk.
This note presents information about the Group’s exposure to each of the above risks and their sources, and the Group’s objectives, policies and procedures for measuring and managing these risks.
The Group’s risk management policies were established to identify and analyse the risks to which the Group is exposed, to set appropriate risk limits, and to design relevant internal control policies and systems for monitoring risks and adhering to risk limits. Risk management policies and relevant internal control systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Internal Audit Department of the Group undertakes both regular and ad hoc reviews of the compliance of internal control implementation with risk management policies.
(a) Credit risk Credit risk represents the potential loss that may arise from the failure of a debtor or counterparty to meet its contractual obligation or commitment to the Group. It arises primarily from credit and bond investment portfolios and guarantees granted.
Credit business The board of directors is responsible for setting the Group’s risk management strategy and the overall risk tolerance level. The board also monitors the Group’s risk management process and regularly assesses the Group’s risk position and risk management strategies. The board gives advice on internal controls relating to risk management. The senior management is responsible for the implementation of the development strategy, risk strategy and risk management policies set by the board of directors. The senior management is responsible for the improvement of risk management system and establishment of risk management policies and rules. The senior management is responsible for establishment of procedures and standards to identify, measure, evaluate, monitor and control credit risks. And the senior management is responsible for the management of all types of risks and ensure that the business activities of the Bank are consistent with the risk strategy, risk appetite and risk policies adopted by the board of directors.
The business lines of the Group are directly responsible for the management of credit risk. The Risk Management Department is responsible for the development of risk management policies and procedures, and is responsible for the monitoring and management of credit risks. The Internal Audit Department is responsible for auditing the performance of duties of business lines and the Risk Management Department, specifically as follows:
237 CHINA EVERBRIGHT BANK 238 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(a) Risk management
– – – Credit business(continued) Credit risk
undertakes theresponsibility ofsupervisionandperformanceevaluation. The InternalAuditDepartment isthethirdlineofdefensecreditriskmanagement, and and areresponsiblefortheoverallsupervisionofcredit riskmanagement. function departmentsconstitutethesecondlineofdefense ofcreditriskmanagement, disposal of repossessed assets of the Group, etc.. The above credit risk management is responsible for collection and disposal of non-performing assets, management and risk warnings monitoring of retail business; The Special Assets Resolution Department the Bank;TheRetailBusinessDepartmentisresponsible forpost-lendingmonitoringand the keyphasesofcreditbusinessandguideoperation ofcreditpaymentreview monitoring ofcorporatebusiness,andisresponsiblefor thecontrolandmanagementof Management Department is responsible for post-lending monitoring and risk warnings business linedepartmentstoensuretheindependenceofcreditapproval;TheCredit managed directlybyheadquarter.Thecreditapprovalauthorityisindependentofthe approving credit lines which beyond the approval authority of branches and those retail business and group client. The Credit Approval Department is responsible for risk business includes corporate and institutions, banks and other financial institutions, for overallplanningandmanagementofcreditlinesevaluationapprovalgeneral policy which covers credit business; The Credit Approval Department is responsible system andprocedures,leadingthedevelopmentofgeneralindustry-specificlimits of thebasicpoliciescreditriskmanagement,leadingdevelopment ordination of the overall risk management system of the Group, leading the development Resolution”. TheRiskManagementDepartmentisresponsiblefortheplanningandco- – Investigation and approval – During and post-lending monitoring – Collection and functional positioninginaccordancewiththebasicproceduresof“Policyandtechnology risk management.Thefunctionaldepartmentsofcreditmanagementdeterminetheir in creditriskmanagement,andtheyare responsible fortheoverallsupervisionofcredit Assets Resolution Department, CreditApprovalManagementandSpecial The mainresponsibledepartmentsforcreditriskmanagementaretheRiskManagement they arefirstlyresponsibleforthecomplianceandsecurityofbusiness. customer relationship and the whole process of specific business in its duration, and the firstlineofdefenseinternalcontrol.Thebusinesslinesindependentlycontrol The businesslinesaredirectlyresponsibleforthemanagementofcreditrisk,they business inaccordancewiththeriskmanagementpoliciesandproceduresofGroup. Retail Banking Department and other business lines carry out corporate and retail The Corporate (continued) (continued) Banking Department, Small and Micro Enterprises Finance Department, Department. They are the second line of defense of internal control (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(a) Credit risk (continued) Credit business (continued) The Group continuously improves the internal control mechanism and strengthens the management of the credit business. The Group has established comprehensive assessment and inquiry mechanisms, assigning the credit management accountability to the relevant departments and individuals.
For corporate businesses, the Group has established industry-specific limits for credit approval. It has put in place dynamic monitoring mechanism, with regular reporting of credit exposures to the board. The Group’s credit risk management covers key operational phases, including pre-lending evaluations, credit approval, and post-lending monitoring. With respect to pre-lending evaluations, the Group assesses customer credit ratings and performs integrated analysis on the risk and return of the loan. In the credit approval phase, the Group has stablished standardized system and procedures for credit evaluating and approving in accordance with the principle of separation of duties for approval and lending as well as hierarchical approval principle. All credit applications are approved by designated credit officers. In the loan payment phase, independent responsible department has been established to manage and control the payment of the loan, ensuring that the payment conform with the intended use of the loan approved. During the post-lending monitoring, the Group continually monitors outstanding loans and other credit related businesses. Any adverse events that may significantly affect a borrower’s repayment ability are reported immediately, and actions are taken to mitigate the risks.
For personal credit operation business, credit assessment of applicants is used as the basis for loan approval. In the credit assessment, customer relationship managers are required to assess the income level, credit history, and repayment ability of the applicant. The customer relationship managers then forward the application and their recommendations to the loan- approval departments for further approval. The Group monitors borrowers’ repayment ability, the status of collaterals and any changes to their value during the post-lending phase. Once a loan becomes overdue, the Group starts the recovery process in accordance with its standardized loan recovery procedures.
The Group adopts a loan risk classification approach to manage its loan portfolio risk. Loans are generally classified as normal, special mention, substandard, doubtful and loss according to their levels of risk. Substandard, doubtful and loss loans are considered to be impaired loans and advances. They are classified as such when one or more events demonstrate that there is objective evidence of a loss event. The impairment loss is assessed collectively or individually as appropriate. The Group measures and manages the quality of the credit assets of the Group in accordance with the Guidelines of the Risk Classification of Loan issued by China Banking Regulatory Commission (CBRC).
239 CHINA EVERBRIGHT BANK 240 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(a) Risk management
(i) a systematicandreal-timebasis,creditlimitsarereviewedrevisedregularly. products, counterpartiesandgeographicalareas.Creditriskexposureiscloselymonitoredon The Groupsetscreditlimitsfortreasuryoperationsbasedontheriskinherentin Treasury Business Loss: Doubtful: Substandard: Borrowersarecurrently abletoservicetheirloansandinterest,although Special mention: Normal: The coredefinitionsofthefivecategoriesloansandadvancesaresetoutbelow: Credit business(continued) Credit risk
disclosed inNoteV54(a). to creditriskinrespectof type offinancialassets,includingderivativeinstruments. Themaximumexposure The maximumexposuretocreditriskisrepresentedby thenetcarryingamountofeach Maximum creditriskexposure (continued) (continued) resorting toallnecessarylegalprocedures. portion ofthemcanberecoveredaftertakingallpossiblemeasuresor Principal andinterestofloanscannotberecoveredoronlyasmall invoked. losses willneedtoberecognisedevenwhencollateralorguaranteesare Borrowers cannotrepayprincipalandinterestinfullsignificant Losses mayensueevenwhencollateralorguaranteesareinvoked. rely entirelyonnormalbusinessrevenuestorepayprincipalandinterest. Borrowers’ abilitytoservicetheirloansisinquestionandtheycannot repayment maybeadverselyaffectedbyspecificfactors. doubt theirabilitytorepayprincipalandinterestinfullonatimelybasis. Borrowers canhonourthetermsoftheirloans.Thereisnoreasonto these off-balancesheetitems as at the end of theyearis (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(a) Credit risk (continued) Treasury Business (continued) (ii) Financial assets analysed by credit quality are summarised as follows: 31 December 2016
Deposits/ placements Financial with banks assets Loans and Finance and other held under advances to lease financial resale customers receivables institutions agreements Investments(*) Others(**)
Impaired Individually assessed gross amount 21,412 501 16 – 4,074 279 Provision for impairment losses (11,285) (403) (16) – (1,092) (106)
Sub-total 10,127 98 – – 2,982 173
Collectively assessed gross amount 7,290 – – – – 1,216 Provision for impairment losses (3,758) – – – – (94)
Sub-total 3,532 – – – – 1,122
Overdue but not impaired Gross amount – Less than 3 months (inclusive) 15,352 71 – – – – – Between 3 months and 6 months (inclusive) 3,083 44 – – – – – Over 6 months 6,656 98 350 – 1 –
Gross amount 25,091 213 350 – 1 – Provision for impairment losses (4,519) (139) – – – –
Sub-total 20,572 74 350 – 1 –
Neither overdue nor impaired Gross amount 1,741,485 56,355 358,609 67,000 1,316,657 38,484 Provision for impairment losses (24,072) (967) (24) – (1,497) (394)
Sub-total 1,717,413 55,388 358,585 67,000 1,315,160 38,090
Total 1,751,644 55,560 358,935 67,000 1,318,143 39,385
241 CHINA EVERBRIGHT BANK 242 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(a) Risk management
(ii) Treasury Business(continued) Credit risk
** *
Financial assetsanalysedbycreditqualityaresummarisedasfollows(continued)
Total
Neither overduenorimpaired
Overdue butnotimpaired
Impaired
Sub-total Gross amount Sub-total Gross amount – Lessthan3months(inclusive) Gross amount Sub-total Collectively assessed Sub-total Individually assessed Provision forimpairmentlosses Provision forimpairmentlosses – Over6months – Between3monthsand Provision forimpairmentlosses Provision forimpairmentlosses gross amount gross amount business recordedinotherassets, and otherreceivables. Others comprise held-to-maturity investmentsanddebt securitiesclassifiedasreceivables. Investments comprisefinancialassetsatfairvaluethroughprofitorloss, available-for-salefinancialassets, 6 months (inclusive) (continued) (continued) positive fair value of derivatives, interests receivable, assets from wealth management
advances to Loans and customers ,7,2 87528621305938125,261 903,871 153,045 218,672 38,735 1,475,424 ,2,8 84328321305914924,127 901,489 153,045 218,322 38,433 1,429,683 ,4,8 91428371305928124,536 902,891 153,045 218,337 39,134 1,449,781 (20,098) (10,083) 33,818 39,387 26,342 19,227 (5,569) (2,369) 4,890 2,779 5,148 9,144 8,155
receivables Finance lease (701) (205) 199 230 230 103 308 (31) – – – – –
placements with banks institutions and other Deposits/ (Continued) financial 31 December2015 350 350 350 (15) (16) 16 – – – – – – –
gemnsIvsmns* Others(**) Investments(*) agreements held under Financial assets resale 2,242 2,250 – – – – – – – – (1,402) – – 1,968 – – –
(173) 282 140 313 (8) – – – –
: (409) 895 976 239 322 (81) (83) – – – – – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(a) Credit risk (continued) Treasury Business (continued) (iii) Credit rating The distribution according to the credit quality of amounts due from banks and non- bank financial institutions (including deposits with banks and other financial institutions, placements with banks and other financial institutions, and financial assets held under resale agreements for which counterparties are banks and non-bank financial institutions) is as follows:
31 December 31 December 2016 2015
Carrying value Individually assessed and impaired Gross amount 16 16 Provision for impairment losses (16) (16)
Sub-total – –
Overdue but not impaired – grade A to AAA 350 350
Sub-total 350 350
Neither overdue nor impaired – grade A to AAA 383,144 241,116 – grade B to BBB 32,069 32,878 – unrated (Note) 10,372 97,373
Sub-total 425,585 371,367
Total 425,935 371,717
Note: Mainly represent placements with other financial institutions and debt securities held under resale agreements with other financial institutions.
243 CHINA EVERBRIGHT BANK 244 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(a) Risk management
(iii) Treasury Business(continued) Credit risk
the endofyearareasfollows: amounts of debt securities investments analysed by the rating agency designations as at the majorratingagencieswhereissuersofsecuritiesarelocated.Thecarrying securities portfolio.DebtareratedwithreferencetoBloombergComposite,or The Credit rating(continued) – unrated – gradelowerthanA- – gradeA-toA+ – gradeAA-toAA+ – gradeAAA Other agencyratings Sub-total – gradeAAA Neither overduenorimpaired Sub-total Provision forimpairmentlosses Gross amount Individually assessedandimpaired Carrying value Total Sub-total – gradeAA-toAA+ – gradelowerthanA- – gradeA-toA+ Bloomberg Composite Group adopts a credit rating approach in managing the credit risk of the debt (continued) (continued) (Continued)
1Dcme 31December 31 December 9,2 78,093 75,389 296,321 180,112 0,3 351,436 346,770 503,031 492,296 11036,629 11,160 ,7 1,430 155,229 2,373 2,330 4,526 9,971 1,509 ,6 1,710 1,782 3,767 4,981 2016 (745) 687 764 536
2015 (172) 312 161 140 873 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(b) Market risk Market risk is the risk of loss, in respect of the Group’s activities, arising from adverse movements in market rates including interest rates, foreign exchange rates, commodity prices, stock prices and other prices.
The board of directors is ultimately responsible for monitoring the Group’s market risk to ensure that the Group has effectively identified, measured and monitored all types of market risk. The Risk Management Committee monitors the market risk management process within the scope authorised by the board of directors, which include review and approval of market risk management strategies, policies and procedures as well as the market risk tolerance level recommended by senior management. The Group is primarily exposed to market risk in its treasury business. The Financial Market Department is responsible for the Group’s investments and proprietary trading business. The Assets and Liability Management Department is responsible for monitoring and managing the interest rate risk and foreign exchange risk on a daily basis. The Risk Management Department is responsible for formulating the market risk management policies and procedures, as well as identifying, measuring and monitoring the Group’s market risk.
The Group classified the transactions as the banking book transactions and trading book transactions. The identification, measurement, monitoring and controls over the relevant market risks are based on the nature and characteristics of these books. The trading book transactions consist of the Group’s investments which are acquired or incurred primarily for the purpose of selling in the near term, or for the purpose of short-term profit taking. The banking book transactions represent non-trading businesses. Sensitivity analysis, scenario analysis and foreign currency gap analysis are the main tools employed by the Group to measure and monitor the market risk in its trading book transactions. Sensitivity gap analysis, stress testing and effective duration analysis are the main tools used by the Group to measure and monitor the market risk of its non-trading businesses.
Sensitivity analysis is a technique which assesses the sensitivity of the Group’s overall risk profile and its risk profile with reference to the interest rate risks for different maturities.
Scenario analysis is a multi-factor analysis method which assesses the impact of multiple factors interacting simultaneously, taking into consideration of the probabilities of various scenarios.
Foreign currency gap analysis is a technique which estimates the impact of foreign exchange rate movements on the Group’s current profit or loss. The foreign currency gap mainly arises from the currency mismatch in the Group’s on/off-balance sheet items.
245 CHINA EVERBRIGHT BANK 246 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(b) Risk management
rates. in theinvestmentportfolios’ fairvaluegivena100basispoints(1%)movementin theinterest supplementary methodsto measure itsinterestratesensitivity,whichisexpressed aschanges risk is monitored using the effective duration analysis method. The Group employs other Trading interestrateriskmainlyarisesfromthetreasury’s investmentportfolios.Interestrate Trading interestraterisk rate volatility. adverse effects on its net interest income or its inherent economic value caused by interest interest rates.Theprimaryobjectiveofraterisk managementistominimisepotential interest rates and sensitivity analysis on the net interest income as a result of changes in interest raterepricinggapbetweentheassetsandliabilities thataresensitivetochangesin monitoring andmanaginginterestraterisk.TheGroupregularlyperformsassessmentonthe The AssetsandLiabilityManagementDepartmentoftheGroupisresponsibleformeasuring, income oritsinherenteconomicvaluetovarywiththemovementininterestrates. liabilities andoff-balancesheetitems.ThemismatchofrepricingtimingcausestheGroup’s to fixed interest instruments) or repricing (related to floating interest instruments) of assets, of interestraterisk.Itiscausedbythedifferencesintimingbetweenmaturities(related Repricing risk,whichisalsoknownas“maturitymismatchrisk”,themostcommonform Repricing risk banking businessandtheriskoftreasuryposition. The Groupisprimarilyexposedtointerestrateriskarisingfromrepricinginitscommercial Interest raterisk estimate thenon-linearimpactofachangeininterestratesonGroup’seconomicvalue. calculating the weighted exposure, and summarising all periods’ weighted exposures to movements by giving a weight to each period’s exposure according to its sensitivity, Effective duration analysis is a technique which estimates the impact of interest rate loss. stress movesinmarketvariables.Theresultsareusedtoestimatetheimpactonprofitor The results of stress testing are assessed against a set of forward-looking scenarios using taking liabilitiesintodifferentperiodsbasedonrepricingdates. inflows andoutflowsbycategorisingeachoftheGroup’sinterest-bearingassetsinterest- on theGroup’scurrentprofitorloss.Itisusedtoworkoutgapbetweenfuturecash Sensitivity gapanalysisisatechniquewhichestimatestheimpactofinterestratemovements Market risk (continued) (continued) (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(b) Market risk (continued) Interest rate risk (continued) (i) The following tables indicate the effective interest rates for the reporting period and the assets and liabilities as at the end of the year by the expected next repricing dates or by maturity dates, depending on which is earlier:
31 December 2016
Non– Less than Between Between one Effective interest three three months year and More than interest rate Total bearing months and one year five years five years (Note)
Assets Cash and deposits with the central bank 1.49% 381,620 14,831 366,789 – – – Deposits with banks and other financial institutions 2.86% 232,630 – 166,543 66,087 – – Placements with banks and other financial institutions 3.20% 126,305 – 41,249 84,646 410 – Financial assets held under resale agreements 2.98% 67,000 – 65,000 2,000 – – Loans and advances to customers 4.57% 1,751,644 23,124 1,359,000 350,397 15,924 3,199 Finance lease receivables 3.99% 55,560 44 54,023 749 89 655 Investments (Note) 4.03% 1,318,143 1,906 237,364 424,925 562,973 90,975 Others – 87,140 84,123 2,073 810 134 –
Total assets 3.92% 4,020,042 124,028 2,292,041 929,614 579,530 94,829
Liabilities Due to the central bank 3.00% 187,000 – 22,000 165,000 – – Deposits from banks and other financial institutions 2.85% 830,354 – 678,441 151,913 – – Placements from banks and other financial institutions 2.45% 95,501 23 57,029 38,449 – – Financial assets sold under repurchase agreements 2.23% 41,195 – 40,448 747 – – Deposits from customers 1.98% 2,120,887 6,824 1,581,014 327,249 205,798 2 Debt securities issued 3.27% 412,500 – 106,911 276,090 6,599 22,900 Others – 81,537 73,439 6,549 996 553 –
Total liabilities 2.33% 3,768,974 80,286 2,492,392 960,444 212,950 22,902
Asset-liability gap 1.59% 251,068 43,742 (200,351) (30,830) 366,580 71,927
247 CHINA EVERBRIGHT BANK 248 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(b) Risk management
(i) Interest raterisk(continued) Market risk
assets and The followingtablesindicatetheeffectiveinterestratesforreportingperiodand – – Note:
by maturitydates,dependingonwhichisearlier(continued):
Asset-liability gap Total liabilities Due tothecentralbank Liabilities Total assets Cash anddepositswith Assets Deposits fromcustomers Placements frombanksand Financial assetssoldunder Loans andadvances Financial assetsheld Placements withbanksand Deposits withbanksand Finance leasereceivables Deposits frombanksand Debt securitiesissued Investments (Note) Others Others other financialinstitutions other financialinstitutions repurchase agreements to customers under resaleagreements other financialinstitutions other financialinstitutions the centralbank held-to-maturity investments anddebtsecuritiesclassified asreceivables. Investments includefinancialassets atfairvaluethroughprofitorloss,available-for-salefinancialassets, liabilities. Effective interestraterepresentsthe ratioofinterestincome/expensetoaveragebearingassets/ (continued) liabilities as at theend of the yearby the expected next repricing dates or
(continued)
interest rate Effective .0 58,873 60,305 2.20% 541,066 2.41% 3.35% .1 2,4 408(0,6)28511,1 31,030 48,445 15,017 296,464 258,581 562,977 (104,669) 1,969,895 24,088 65,882 224,047 2,943,663 2.01% 2.80% .0 ,7,2 3601064834297873,180 7,827 374,269 1,066,498 23,650 1,475,424 310,652 153,045 5.80% 132,361 16,083 4.26% 86,311 3.01% 326,735 3.11% 1.50% .1 ,6,1 990185268158314179,475 311,481 821,558 1,865,226 89,970 14,840 3,167,710 3.49% 4.81% .4 ,9,4 ,0 ,2,7 6,6 7,4 25,545 271,049 463,965 1,229,275 4,009 1,993,843 2.54% .1 38,735 4.51% .5 210,061 4.25% .2 903,871 5.02% (Note) 4656,5 ,4 1,265 1,444 61,851 64,675 – 1284,6 1,667 49,561 51,228 –
oa ern months bearing Total
interest Non– 7 3,4 9,9 0,5 76,295 303,654 290,699 232,547 676 23,8 22,196 38,087 22 6572,356 56,517 2,433 – 538,633 – 85064,475 66,379 88,570 25,736 65,982 – 60,575 – – ,0 6,840 8,000 – 38,735 – 7996,2 53022,900 25,300 63,922 97,939 – 31 December2015
(Continued) Less than three
n n erfv er fiveyears fiveyears and oneyear he otsoeya n Morethan oneyearand three months ewe Between Between – – –
115 – – – – – – – – – –
– – – – – – – – – – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(b) Market risk (continued) Interest rate risk (continued) (ii) Interest rate sensitivity analysis
The Group uses sensitivity analysis to measure the impact of changes in interest rate on the Group’s net profit or loss and equity. As at 31 December 2016, assuming other variables remain unchanged, an increase in estimated interest rate of one hundred basis points will cause the Group’s net profit to decrease by RMB2,442 million (31 December 2015: RMB2,428 million), and equity to decrease by RMB5,257 million (31 December 2015: RMB5,723 million); a decrease in estimated interest rate of one hundred basis points will cause the Group’s net profit to increase by RMB2,448 million (31 December 2015: RMB2,438 million), and equity to increase by RMB5,436 million (31 December 2015: RMB5,904 million).
The sensitivity analysis above is based on a static interest rate risk profile of the Group’s assets and liabilities. This analysis measures only the impact of changes in interest rates within one year, showing how annualised net profit or loss and equity would have been affected by repricing of the Group’s assets and liabilities within the one-year period. The sensitivity analysis is based on the following assumptions:
– Interest rate movements at the end of the year apply to all derivative and non- derivative financial instruments of the Group;
– At the end of the year, an interest rate movement of one hundred basis points is based on the assumption of interest rates movement over the next 12 months;
– There is a parallel shift in the yield curve with the changes in interest rates;
– There are no other changes to the assets and liabilities portfolio;
– Other variables (including exchange rates) remain unchanged; and
– The analysis does not take into account the effect of risk management measures taken by the management.
Due to the adoption of the aforementioned assumptions, the actual changes in the Group’s net profit or loss and equity caused by an increase or decrease in interest rates might vary from the estimated results of this sensitivity analysis.
249 CHINA EVERBRIGHT BANK 250 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(b) Risk management
The Group’scurrencyexposuresasattheendofyeararefollows: same currencies. and matching its foreign currency denominated assets with corresponding liabilities in the foreign currencyriskbyspotandforwardexchangetransactions,swaptransactions treasury’s proprietaryinvestments,andotherforeigncurrencyexposures.TheGroupmanages The Group’s foreign currency risk mainly arises from the foreign currency portfolio within the Foreign currencyrisk
Market risk Derivative financialinstruments(Note (ii)) Off-balance sheetcreditcommitments Net position Total liabilities Due tothecentralbank Liabilities Total assets Cash anddepositswiththecentralbank Assets Deposits frombanksand Financial assetsheldunder Placements withbanksandother Deposits withbanksandother Deposit fromcustomers Financial assetssoldunder Placements frombanksand Loans andadvancestocustomers Debt securitiesissued Finance leasereceivables Investments (Note(i)) Others Others repurchase agreements other financialinstitutions other financialinstitutions resale agreements financial institutions financial institutions (continued) (continued)
,2,2 1,1 0213,768,974 30,231 113,114 3,625,629 4,020,042 31,955 101,058 3,887,029 ,3,1 2581,4 2,120,887 17,147 72,528 2,031,212 1,751,644 22,797 45,396 1,683,451 ,9,4 0182371,318,143 2,357 20,138 1,295,648 7,4 929598702,117 251,068 5,928 1,724 19,249 (12,056) 676,940 261,400 829,623 187,000 126,305 232,630 2,528 2,886 14,987 12,734 108,790 4,606 217,010 376,515 0,8 ,4 ,7 412,500 1,970 5,049 405,481 1,4)1,5 1,462 14,656 (15,445) 5273,5 ,4 95,501 9,644 30,650 41,195 55,207 67,000 54,833 59142014681,537 1,416 4,210 75,911 3722,470 83,782 M RB(M (RMB (RMB (RMB RMB
(Continued) US Dollars qiaet qiaet Equivalent) Equivalent) Equivalent) 31 December2016 677 727 – – –
tesTotal Others 9 381,620 499 8 87,140 888 4830,354 54 187,000 – 41,195 – 67,000 – 55,560 –
673 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(b) Market risk (continued) Foreign currency risk (continued) The Group’s currency exposures as at the end of the year are as follows (continued):
31 December 2015
US Dollars Others Total RMB (RMB (RMB (RMB Equivalent) Equivalent) Equivalent)
Assets Cash and deposits with the central bank 321,412 4,696 627 326,735 Deposits with banks and other financial institutions 77,701 4,225 4,385 86,311 Placements with banks and other financial institutions 84,330 47,876 155 132,361 Financial assets held under resale agreements 153,045 – – 153,045 Loans and advances to customers 1,431,484 33,943 9,997 1,475,424 Finance lease receivables 38,561 174 – 38,735 Investments (Note (i)) 895,080 8,582 209 903,871 Others 49,806 1,146 276 51,228
Total assets 3,051,419 100,642 15,649 3,167,710
Liabilities Due to the central bank 14,840 – – 14,840 Deposits from banks and other financial institutions 537,681 3,355 30 541,066 Placements from banks and other financial institutions 37,450 18,898 3,957 60,305 Financial assets sold under repurchase agreements 58,873 – – 58,873 Deposit from customers 1,899,128 69,478 25,237 1,993,843 Debt securities issued 204,204 1,682 4,175 210,061 Others 62,947 1,476 252 64,675
Total liabilities 2,815,123 94,889 33,651 2,943,663
Net position 236,296 5,753 (18,002) 224,047
Off-balance sheet credit commitments 676,069 21,856 4,807 702,732
Derivative financial instruments (Note (ii)) (32,176) 13,117 19,359 300
Note:
(i) Investments include financial assets at fair value through profit or loss, available-for-sale financial assets, held-to- maturity investments and debt securities classified as receivables.
(ii) Derivative financial instruments reflect the net notional amounts of derivatives.
251 CHINA EVERBRIGHT BANK 252 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(b) Risk management
significant exposureareasfollows: reporting date, the exchange rate changes of the currencies to which the Group had denominated inUSD,HKDand,toamuchlesserextent,othercurrencies.Asatthefinancial The Group conducts a substantial portion of its business in RMB, with certain transactions Foreign currencyrisk(continued) – profile ofassetsandliabilitiescertainsimplifiedassumptions: The sensitivity analysis mentioned above is based on a static foreign exchange exposure RMB6 million(31December2015:RMB23million). in theUSdollaragainst the RMBwoulddecreaseboth the Group’snetprofitandequityby RMB6 million(31December2015:RMB23million);adepreciationofonehundredbasispoints in theUSdollaragainstRMBwouldincreasebothGroup’snetprofitandequityby assuming other variables remain unchanged, an appreciation of one hundred basis points exchange rates on the Group’s net profit or loss and equity. As at 31 December 2016, The GroupusessensitivityanalysistomeasurethepotentialeffectofchangesinGroup’s – – – – – Market risk
Exchange ratesagainstRMBfortheUSdollars Exchange ratesagainstRMBfortheHKdollars by themanagement. The analysisdoesnottake intoaccounttheeffectofriskmanagementmeasures taken Other variables(includinginterestrates)remainunchanged; and exposures andswaps; The foreignexchangeexposurescalculatedincludespot andforwardforeignexchange foreign currenciesareconvertedintoUSdollarsinthe above sensitivityanalysis; and liabilities denominated in currencies other than US dollars and HK dollars, other direction simultaneously. Due to the immaterial proportion of the Group’s total assets The exchangeratesagainstRMBfortheUSdollars assumption ofexchangeratesmovementoverthenext12months; The fluctuation hundred basispointsfluctuationintheforeigncurrencyexchangeratesagainstRMB; The foreign (continued) exchange sensitivity is the gain and loss recognised as a result of one (continued) of exchange rates by one hundred basis points is based on the (Continued) and HK dollars changeinthe same
31 December .406.4939 0.8378 6.9450 0.8956 2016
31 December 2015 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(b) Market risk (continued) Foreign currency risk (continued) Due to the assumptions adopted, actual changes in the Group’s net profit or loss and equity resulting from the increase or decrease in foreign exchange rates might vary from the estimated results of this sensitivity analysis.
Price risk Equity instrument investment price risk refers to the fair value of the equity securities by stock index level and the change of the value of individual securities and reduce risk The Group is exposed to equity price risk on its available for sale listed equity securities. As at 31 December 2016, a 5 percentage variance in listed equity prices from the year end price would impact the net asset by RMB962 million (31 December 2015: RMB1,067 million). For those available for sale equities considered impaired, the impact would be taken to the statement of profit and loss.
(c) Liquidity risk Liquidity risk is the risk that a commercial bank is unable to obtain funds on a timely basis or obtain funds at a reasonable cost to meet repayment obligations or sustain its asset business. This risk exists even if a bank’s solvency remains strong. In accordance with liquidity policies, the Group monitors the future cash flows and maintains liquid assets of high quality.
The Asset and Liability Management Committee (“ALMC”) is responsible for managing the Group’s overall liquidity risk. The ALMC, chaired by the President of the Bank, is responsible for the formulation of the liquidity policies in accordance with regulatory requirements and prudential principles. Such policies include:
– Maintaining liquidity at a stable and sufficient level; establishing integrated liquidity risk management system; ensuring the meeting on a timely basis of liquidity requirements and the payment of various business, whether under a normal operating environment or a state of stress; balancing the effectiveness and security of funds in an efficient manner; and
253 CHINA EVERBRIGHT BANK 254 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(c) Risk management
respond tovariouspossibleliquidityrisks. tests to assess the impacts from liquidity risks and develop effective contingency plan to continue tofocusonlimitmonitoringanddynamiccontrol,applydifferentscenariostress The Group mainly applies liquidity gap analysis to measure liquidity risk. The Group will thus preventingmarketriskseffectively. ensure theappropriatetotalamounts,stablesources,diversifiedstructureandmatchingterms, diversified proactiveliabilitycapabilitytoimprovetheBank’sstabilityofcapitalsources,and issuing variousbondsasappropriate.TheGroupwillexpandliabilitychannelsandenhance deposits, and will also continue to implement the optimization of liability structure through The Group will proactively promote the growth of stable sources of liabilities such as core or portfoliochangesmustbereportedtotheALMConatimelybasis. monitoring workingcapitalonadailybasisandensuringtheliquidity.Significantdisbursement management strategies.TheAssetsandLiabilityManagementDepartmentisresponsiblefor medium- and long-term working capital on a regular basis, and for formulating liquidity management policies.Itisalsoresponsibleforidentifying,measuring,monitoringandmanaging The Assets and Liability Management Department is responsible for executing liquidity risk – Liquidity risk
integration ofthesecurity,liquidity,andeffectivenessBank’sfunds. minimisation to a modest extent while ensuring appropriate liquidity; achieving the to marketchangesandbusinessdevelopments;pursuingprofitmaximisationcost Making timely (continued) (continued) and reasonable adjustments to capital structure and scale in response (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(c) Liquidity risk (continued) The following tables provide an analysis of assets and liabilities of the Group into relevant maturity groupings based on the remaining periods to repayment at the end of the year:
31 December 2016
Between one Between Between Repayable Within month and three months one year and More than Indefinite on demand one month three months and one year five years five years Total
Assets Cash and deposits with the central bank 308,698 72,922 – – – – – 381,620 Deposit with banks and other financial institutions 350 107,399 31,397 22,904 70,280 300 – 232,630 Placement with banks and other financial institutions – – 18,513 22,736 84,646 410 – 126,305 Financial asset held under resale agreements – – 61,383 3,617 2,000 – – 67,000 Loans and advances to customers 33,626 209,601 65,262 118,212 458,974 423,127 442,842 1,751,644 Finance lease receivables 116 – 581 3,467 10,677 32,785 7,934 55,560 Investments (*) 1,187 25,538 82,832 125,547 425,244 566,893 90,902 1,318,143 Others 47,671 7,674 2,093 12,514 13,659 3,514 15 87,140
Total assets 391,648 423,134 262,061 308,997 1,065,480 1,027,029 541,693 4,020,042
Liabilities Due to the central bank – – 20,000 2,000 165,000 – – 187,000 Deposits from banks and other financial institutions – 185,240 260,340 232,861 151,783 130 – 830,354 Placements from banks and other financial institutions – 23 24,481 32,548 38,449 – – 95,501 Financial assets sold under repurchase agreements – – 34,686 5,762 747 – – 41,195 Deposit from customers – 1,082,376 133,953 266,783 392,789 244,984 2 2,120,887 Debt securities issued – – 14,322 91,689 276,990 6,599 22,900 412,500 Others – 29,393 12,748 6,033 15,986 16,848 529 81,537
Total liabilities – 1,297,032 500,530 637,676 1,041,744 268,561 23,431 3,768,974
Long/(Short) position 391,648 (873,898) (238,469) (328,679) 23,736 758,468 518,262 251,068
Notional amount of derivative financial instruments – – 90,122 57,065 269,778 32,811 – 449,776
255 CHINA EVERBRIGHT BANK 256 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(c) Risk management
(continued): maturity groupings based on the remaining periods to repayment at the end of the year The following tables provide an analysis of assets and liabilities of the Group into relevant
* Liquidity risk
Others Others Debt securitiesissued Investments (*) Deposit fromcustomers Financial assetssoldunder Placements frombanksand Deposits frombanksand Finance leasereceivables Loans andadvancesto Financial assetheldunder Placement withbanksand Deposit withbanksand Notional amountofderivative Long/(Short) position Total liabilities Due tothecentralbank Liabilities Total assets Cash anddepositswith Assets financial instruments repurchase agreements other financialinstitutions other financialinstitutions customers resale agreements other financialinstitutions other financialinstitutions the centralbank maturity investmentsanddebtsecurities classifiedasreceivables. Investments includefinancialassets atfairvaluethroughprofitorloss,available-for-salefinancialassets, held-to-
(continued)
(continued)
Indefinite 4,1 6664 1703 2864 0,3 6,3 8,5 224,047 282,657 369,733 306,438 (248,644) 3,167,710 (137,013) 331,774 (696,634) 687,157 347,510 930,853 334,429 273,236 262,751 347,510 9,8 34,147 292,588 21,036 26818146,5 3,8 6,3 5,5 4,2 1,475,424 249,029 350,552 466,630 136,580 61,751 178,184 32,698 4 0424,1 4,9 9,9 1,1 682903,871 76,812 313,415 291,194 142,794 48,519 30,492 645 193 5 4833,0 23026,836 12,330 31,605 14,883 350 75421,972 17,554 – – 8,6 0,4 4,8 6,6 7,4 5551,993,843 25,545 271,049 463,965 248,980 203,041 781,263 – 5,8 1,4 8,7 2,1 1,2 9172,943,663 49,117 317,424 624,415 583,073 410,249 55,239 – 959,385 212,503 – 111,726 – 160,543 – – – – –
ndmn n ot he otsadoeya ieyasfiveyears five years andoneyear threemonths onemonth on demand eaal Within Repayable 5,045 22,3 66122,196 16,651 21,436 22 33113,213 43,301 3 – – 7754,4 04628,668 90,496 41,842 57,795 – 64,475 – 66,379 10,007 18,503 78,563 47,479 – –
,1 12,117 5,210 ,7 4166,0 7162,0 210,061 22,900 37,116 62,106 84,166 3,773 5,000 109 –
Between one ot n he otsoeya n Morethan oneyearand threemonths month and 31 December2015 ,6 11,713 4,560 2,098 3,000 – (Continued)
ewe Between Between 7,438 ,0 22,513 7,901 2,356 6,840 –
8,204 1,055 370 307 – – – – – –
,2 38,735 5,921 7 64,675 672 8 218,981 180 251,228 12 153,045 132,361 – – 541,066 – 58,873 60,305 – – 14,840 – 86,311 – 326,735 –
Total 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(c) Liquidity risk (continued) The following tables provide an analysis of the contractual undiscounted cash flow of the non- derivative finance liabilities, loan commitments and credit card commitments at the end of the year:
31 December 2016
Contractual Between one Between Between Carrying undiscounted Repayable Within month and three months one year and More than amount cash flow demand one month three months and one year five years five years
Non-derivative financial liabilities Due to the central bank 187,000 191,049 – 20,384 2,061 168,604 – – Deposits from banks and other financial institutions 830,354 838,112 185,240 261,502 235,769 155,458 143 – Placements from banks and other financial institutions 95,501 96,998 23 24,604 32,904 39,467 – – Financial assets sold under repurchase agreements 41,195 41,289 – 34,693 5,836 760 – – Deposits from customers 2,120,887 2,188,318 1,082,865 137,719 276,461 411,482 279,788 3 Debt securities issued 412,500 432,330 – 14,560 93,814 281,899 7,080 34,977 Other financial liabilities 43,593 43,771 29,056 8,301 1,263 1,715 2,907 529
Total non-derivative financial liabilities 3,731,030 3,831,867 1,297,184 501,763 648,108 1,059,385 289,918 35,509
Derivative financial liabilities Derivative financial instruments settled on net basis 58 – – 3 (3) 58 –
Derivative financial instruments settled on gross basis cash inflow 357,306 – 87,299 55,589 213,782 636 – cash outflow (356,541) – (87,112) (55,112) (213,685) (632) –
Total derivative financial liabilities 765 – 187 477 97 4 –
Loan and credit card commitment 158,477 149,358 401 10 1,983 1,071 5,654
257 CHINA EVERBRIGHT BANK 258 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
51 Notes totheconsolidatedfinancialstatements
(c) Risk management
year (continued): derivative finance liabilities, loan commitments and credit card commitments at the end of the The followingtablesprovideananalysisofthecontractualundiscountedcashflownon- might divergefromactualresults. This analysis of the non-derivative financial liabilities by contractual undiscounted cash flow
Liquidity risk Other financialliabilities Debt securitiesissued Deposits fromcustomers Financial assetssoldunder Placements frombanksand Deposits frombanksand
Loan andcreditcard Derivative financialinstruments Total derivativefinancial Derivative financialinstruments Derivative financialliabilities Total non-derivative Due tothecentralbank Non-derivative financial cash outflow commitment cash inflow settled ongrossbasis liabilities settled onnetbasis financial liabilities repurchase agreements other financialinstitutions other financialinstitutions liabilities
(continued)
(continued)
,9,4 ,2,3 8,9 0,6 5,8 7,0 9,7 29,413 292,475 471,105 250,881 203,762 781,898 2,029,534 1,993,843 ,1,6 ,6,1 5,6 0,9 8,9 2,1 3,3 53,017 337,936 624,911 585,393 408,598 956,563 2,966,418 2,911,660 1,6 220,484 210,061 4,6 4,1 6,5 1,2 1,1 56,612 215,416 113,425 160,954 547,616 541,066 arigudsone eaal Within Repayable undiscounted Carrying amount 2623,8 36517,609 13,685 32,689 32,672 88359,988 61,020 58,873 60,305 48015,087 14,840
Contractual cash flow (173,072) 2,8 120,728 128,389 173,381 309 (25)
demand 32,1 68622,676 16,806 21,515 23 34013,986 43,430 3 – 6,9)(760 (67,061) (37,620) (67,498) – – 7563,8 67,088 37,787 67,586 – – –
n ot he otsadoeya ieyasfiveyears fiveyears andoneyear threemonths one month 31 December2015 ,7 5236,1 41523,604 44,135 63,719 85,253 3,773 5,084 340 88 2 (Continued)
Between one ot n he otsoeya n Morethan oneyearand threemonths month and 3,051 1,417 167 2 –
ewe Between Between 1,278 2,569 6,952 1,435 (11) 27
1,209 1,852 (893) 117 920 (18) 27 – – –
2,617 – – – – – – – – – 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
51 Risk management (continued)
(d) Operational risk Operational risk refers to the risk of losses associated with internal processes deficiencies, personnel mistakes and information system failures, or impact from other external events.
The Group establishes a framework of operational risk management system to identify, assess, control, manage and report operational risk. The framework covers all business functions ranging from corporate banking, retail banking, trading, corporate finance, settlement, intermediary business, asset management and all supporting functions, including human resource management, financial management, legal affairs, anti-money laundering and administration management. The key elements of the framework are listed as below:
– A multi-level operational risk management framework with segregation of duties between front and back offices under the leadership of senior management;
– A series of operational risk management policies covering all businesses on the basis of core operational risk management policy;
– A set of standard operational procedures covering all products and services, which is practical, traceable and can be re-performed, investigated and remedied;
– A series of operational risk management tools, including Risk Control Self-Assessment (RCSA), Key Risk Index (KRI), Loss Event Collection and IT system monitoring;
– An operational risk management culture, the core values of the culture is that effective risk management could create value. It is supported with a team of operational risk management professionals across all branches, businesses and functions;
– An emergency plan and a business continuity system designed to deal with emergent and adverse circumstances, including public relation issues, natural disasters, IT system errors, bank runs, robberies, etc.;
– An evaluation system on the operational risk management as well as an inquiry and disciplinary system on the non-compliance issues; and
– An independent risk assessment framework based on the internal audit and the compliance review.
259 CHINA EVERBRIGHT BANK 260 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
52 Notes totheconsolidatedfinancialstatements
(a) Fair value
(ii) (i) The Groupadoptsthefollowingmethodsandassumptionswhenevaluatingfairvalues: (iv) (iii) Methods andassumptionsformeasurementoffairvalue
quoted price. curve isbasedontheoptimisedpricebetweenbroker’squotedandReuters’ circumstances oftheissuers. price/earning ratios of comparable listed companies, after adjustment for the specific year. The fair values of unlisted equity investments are estimated using the applicable market arebasedontheirquotedpricesinanactiveattheendof rate swaps the endofyear,orisbasedonquotedmarketprices.Thefairvaluesinterest difference betweenthepresentvalueofforwardpriceandcontractualat The fairvaluesofforeigncurrencyforwardandswapcontractsaredeterminedbythe Derivative financialinstruments flows. Thediscountratesarebasedonthemarketinterestatendofyear. non-derivative financialliabilitiesarevaluedatthepresentvalueofestimatedfuturecash of theyear,orpresentvalueestimatedfuturecashflows.Thefairvaluesother Fair valuesofdebtsecuritiesissuedarebasedontheirquotedmarketpricesattheend Debt securitiesissuedandothernon-derivativefinancialliabilities the marketinterestratesatendofyear. Fair valuesareestimatedasthepresentvalueoffuturecashflows,discountedat Receivables andothernon-derivativefinancialassets The fair Debt securitiesandequityinvestments values of debt securities and equity investments that are traded in an active are estimated as the present value of estimated future cash flows. The yield (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
52 Fair value (continued)
(b) Fair value measurement (i) Financial assets The Group’s financial assets mainly consist of cash and deposits with the central bank, receivables with banks and other financial institutions, loans and advances to customers, finance lease receivables, and investments.
Deposits with the central bank and receivables with banks and other financial institutions are mostly priced at market interest rates and due within one year. Accordingly, the carrying amounts approximate the fair values.
Loans and advances to customers, finance lease receivables and debt securities classified as receivables are mostly priced at floating interest rates close to the PBOC rates. Accordingly, the carrying amounts approximate the fair values.
Available-for-sale investments and held for trading investments are mostly stated at fair value. The carrying amount and fair value of held-to-maturity investments are disclosed in Note V 21.
(ii) Financial liabilities The Group’s financial liabilities mainly include payables to banks and other financial institutions, deposits from customers and subordinated debts issued. Except the bonds issued, the carrying amounts of other financial liabilities approximate their fair values.
The tables below summarise the carrying amounts and fair values of “Debt securities” classified as held to maturity, and “Bonds issued” not presented at fair value on the statement of financial position.
As at 31 December
Carrying value Fair value
2016 2015 2016 2015
Financial assets Debt securities – Held to maturity 257,500 152,312 258,891 156,516
Financial liabilities Bonds issued 412,500 210,061 409,156 212,054
261 CHINA EVERBRIGHT BANK 262 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
52 Notes totheconsolidatedfinancialstatements
(c) (b) Fair value
(ii) Level 3: Level 1: measurement initsentirety.Thedefinitionsofthreelevelsareasbelow: is determined on the basis of the lowest level input that is significant to the fair value The levelinthefairvaluehierarchywithinwhichmeasurementiscategorised in the statements of financial position across the three levels of the fair value hierarchy. The followingtablepresentsthecarryingvalueoffinancialinstrumentsmeasuredatfair Le Fair valuemeasurement Fair valuehierarchy tries itbesttoconsiderrelevantandobservablemarket pricesinvaluations. This hierarchyrequirestheuseofobservableopenmarket datawhereverpossible.TheGroup vel 2:
used basedonacurrentyieldcurveappropriatefortheremainingtermtomaturity. bonds wherequotedmarketpricesarenotavailable,adiscountedcashflowmodelis The fairvaluesofissuedbondsarecalculatedbasedonquotedmarketprices.Forthose Central DepositoryTrust&ClearingCo.,Ltd. RMB bonds are mainly determined based on the valuation results provided by China expected futuredefaultrates,prepaymentratesandmarketliquidity.Thefairvaluesof discounted cash flows models. Valuation parameters include market interest rates, valuation by referring to prices from valuation service providers or on the basis of dealer price quotations. Where this information is not available, the Bank will perform F Financial liabilities(continued) air values of held to maturity debt securities are based on market prices or broker/
(continued) sourced fromChinaBond,BloombergandShanghaiClearingHouse. Input parameters like ChinaBond interbank yield curves or LIBOR yield curves are prices). This level includes bonds and a majority of OTC derivative contracts. assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from In Inputs other Quoted prices(unadjusted)inactivemarketsforidenticalassetsorliabilities. structured depositswithoneormorethansignificant unobservablecomponent. (unobservable inputs). This level includes complicated derivative contracts and puts for assets or liabilities that are not based on observable market data than quoted prices included within Level 1 that are observable for (continued) (Continued) 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
52 Fair value (continued)
(c) Fair value hierarchy (continued) If there is a reliable market quote for financial instruments, the fair value of financial instruments is based on quoted market prices. If a reliable quoted market price is not available, the fair value of the financial instruments is estimated using valuation techniques. Valuation techniques applied include reference to the fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. The inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and foreign exchange rates. Where discounted cash flow analysis is used, estimated cash flows are based on management’s best estimates and the discount rate used is reference to another instrument that is substantially the same.
Assets and liabilities measured at fair value 31 December 2016
Level 1 Level 2 Level 3 Total
Assets Financial assets at fair value through profit or loss Held for trading – debt instruments 534 7,209 – 7,743 Financial assets designated at fair value through profit or loss – 43 48 91
Positive fair value of derivatives – foreign currency derivatives – 4,536 – 4,536 – interest rate derivatives 1 398 15 414
Available-for-sale financial assets – debt instruments 11,742 226,046 – 237,788 – fund instruments and others 25,500 161,294 – 186,794 – equity instruments 149 – – 149
Total 37,926 399,526 63 437,515
Liabilities Deposits from customers Structured deposits designated at fair value through profit or loss – 226,890 – 226,890
Negative fair value of derivatives – foreign currency derivatives – 4,012 – 4,012 – interest rate derivatives – 330 26 356
Total – 231,232 26 231,258
263 CHINA EVERBRIGHT BANK 264 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
52 Notes totheconsolidatedfinancialstatements
(c) Fair value
Assets andliabilitiesmeasuredatfairvalue(continued)
transfers betweeninstrumentsinLevel1and2. During theyearended31December2016and 2015,therewerenosignificant Fair valuehierarchy Held fortrading Financial assetsatfairvalue Assets Structured depositsdesignatedat Deposits fromcustomers Liabilities Total Total Financial assetsdesignatedatfair
Negative fairvalueofderivatives
Positive fairvalueofderivatives
Available-for-sale financialassets
– debtinstruments through profitorloss fair valuethroughprofitorloss value throughprofitorloss – foreigncurrencyderivatives – foreigncurrencyderivatives – interestratederivatives – interestratederivatives – debtinstruments – fundinstrumentsandothers – equityinstruments (continued) (continued)
ee ee Level3 Level2 Level 1 722119916229,357 126 181,949 47,282 875174,915 18,735 28,200 0 5,372 102 245 238,614 – 3,8 0240,005 20 239,985 – 013163 113 50 – 981 – 1,248 – 9 0410 20 390 – 6 3377 13 364 –
(Continued) 31 December2015 – –
5,474 – 238,614 – 981 – 1,248 – 193,650 – 28,200 – 245 –
Total 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
52 Fair value (continued)
(c) Fair value hierarchy (continued) Assets and liabilities measured at fair value (continued)
The movement during the year ended 31 December 2016 in the balance of Level 3 fair value measurements is as follows:
Financial assets designated at fair value Derivative Derivative through profit financial financial or loss assets Total liabilities Total
1 January 2016 113 13 126 (20) (20)
Total gains or losses: In profit or loss for the current year (7) 3 (4) (6) (6) Purchases 5 – 5 –– Settlements (63) (1) (64) ––
31 December 2016 48 15 63 (26) (26)
Total gains or losses for the year included in profit or loss for assets and liabilities held at the end of the reporting year (6) 3 (3) (6) (6)
The movement during the year ended 31 December 2015 in the balance of Level 3 fair value measurements is as follows:
Financial assets designated at fair value Derivative Derivative through financial financial profit or loss assets Total liabilities Total
1 January 2015 172 30 202 (21) (21)
Total gains or losses: In profit or loss for the current year 10 (8) 2 1 1 Purchases 7 1 8 –– Settlements (76) (10) (86) ––
31 December 2015 113 13 126 (20) (20)
Total gains or losses for the year included in profit or loss for assets and liabilities held at the end of the reporting year 9 (7) 2 1 1
During the year ended 31 December 2016 and 31 December 2015, there were no significant transfers into or out of Level 3. 265 CHINA EVERBRIGHT BANK 266 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
52 Notes totheconsolidatedfinancialstatements
(d) (c) Fair value
position. held tomaturity,and“Bondsissued”notpresentedatfairvalueonthestatementoffinancial The tables below summarise the three levels’ fair values of “Debt securities” classified as Financial assetsandliabilitiesnotmeasuredatfairvalue
assumptions toreasonablypossiblealternative werealsoimmaterial. unobservable inputswereimmaterial,andtheeffects of changesinsignificantunobservable As at31December2016,thecarryingamountoffinancial instrumentvaluedwithsignificant rate volatilities. models incorporate various non-observable assumptions such as discount rate and market derivatives. These financial instruments are valued using cash flow discount model. The Financial instruments valued with significant unobservable inputs are primarily interest Fair valuehierarchy Valuation offinancialinstrumentswithsignificantunobservableinputs Bonds issued Financial liabilitiess – Heldtomaturity Debt securities Financial assets Bonds issued Financial liabilitiess – Heldtomaturity Debt securities Financial assets (continued) (continued)
ee ee Level3 Level2 Level 1 ee ee Level3 Level2 Level 1 ,8 151,023 1,289 253,061 4,439 210,061 – 412,500 –
(Continued) 31 December2016 31 December2015
210,061 – 152,312 – 412,500 – 257,500 –
Total Total 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
53 Entrusted lending business
The Group provides entrusted lending business services to government agencies, corporations and individuals. All entrusted loans are funded by entrusted funds from these entities and individuals. The Group does not take any credit risk in relation to these transactions. The Group acts as an agent to hold and manage these assets and liabilities at the direction of the entrustors and receives fee income for the services provided. The entrusted assets are not the assets of the Group and are not recognised in the statements of financial position.
31 December 31 December 2016 2015
Entrusted loans 120,016 98,671
Entrusted funds 120,016 98,671
54 Commitments and contingent liabilities
(a) Credit commitments The Group’s credit commitments take the form of approved loans with signed contracts, credit card limits, bank acceptances, letters of credit and financial guarantees.
The contractual amounts of loans and credit card commitments represent the amounts should the contracts be fully drawn upon. The Group provides financial guarantees and letters of credit to guarantee the performance of customers to third parties. Acceptances comprise undertaking’s by the Group to pay bills of exchange drawn on customers. The Group expects most acceptances to be settled simultaneously with the reimbursement from the customers.
31 December 31 December 2016 2015
Loan commitments Original contractual maturity within one year 10,809 9,180 Original contractual maturity more than one year (inclusive) 19,580 24,082 Credit card commitments 128,088 95,127
Sub-total 158,477 128,389
Acceptances 401,420 449,385 Letters of guarantees 81,424 61,704 Letters of credit 60,611 63,069 Guarantees 185 185
Total 702,117 702,732
The Group may be exposed to credit risk in all the above credit businesses. Group management periodically assesses the credit risk and makes provision for any probable losses. As the facilities may expire without being drawn upon, the total of the contractual amounts shown above is not representative of expected future cash outflows.
267 CHINA EVERBRIGHT BANK 268 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
54 Notes totheconsolidatedfinancialstatements
(b) (c) (d) Commitments andcontingentliabilities
operating leasesforpropertiesareasfollows: As attheendofyear,Group’sfutureminimumleasepaymentsundernon-cancellable from 0%to100%forcreditcommitments. status ofthecounterparties,maturityprofileandotherfactors.Theriskweightsranged guidelines issued by the CBRC. The risk weights are determined in accordance with the credit The credit risk weighted amount represent to the amount calculated with reference to the As atthebalancesheetdates,Group’sauthorisedcapitalcommitmentsareasfollows: Credit risk-weightedamount Operating leasecommitments Capital commitments Total – Purchaseofpropertyandequipment Approved butnotcontractedfor – Purchaseofpropertyandequipment Contracted for Total After fiveyears After threeyearsbutwithinfive(inclusive) After twoyearsbutwithinthree(inclusive) After oneyearbutwithintwoyears(inclusive) Within oneyear(inclusive) Credit risk-weightedamountofcreditcommitments (continued) (Continued)
1Dcme 31December 31 December 1Dcme 31December 31 December 31December 31 December 6,8 283,635 265,689 19512,036 11,985 ,6 2,006 1,346 2,463 1,260 1,203 3,040 2,915 1,889 2,036 2,791 2,156 2,842 1,863 2,170 2,319 2016 2016 2016
2015 2015 2015 660 2016 Annual Report
V Notes to the consolidated financial statements (Continued)
54 Commitments and contingent liabilities (continued)
(e) Underwriting and redemption commitments The Group has no unexpired commitments for underwriting bonds as at 31 December 2016.
As an underwriting agent of the PRC government bonds, the Group has the responsibility to buy back those bonds it previously sold should the holders decide to make an early redemption of the bonds held. The redemption price for a bond at any time before its maturity date is based on the coupon value plus any interest unpaid and accrued up to the redemption date. Accrued interests payable to the bond holders is calculated in accordance with the relevant MOF and PBOC rules. The redemption price may be different from the fair value of similar financial instruments traded at the redemption date.
As at balance sheet day, the underwritten, sold and immature national bonds’ redemption commitments at nominal value are as follows:
31 December 31 December 2016 2015
Redemption commitments 8,308 8,556
(f) Forward assets purchase and sale commitments The Group has unexpired forward purchase and sale commitments as follows:
31 December 31 December 2016 2015
Forward assets purchase and sale commitments 550 1,350
(g) Outstanding litigations and disputes As at 31 December 2016, the Group was the defendant in certain pending litigation and disputes with gross claims of RMB845 million (31 December 2015: RMB967 million). Provisions have been made for the estimated losses of such litigations based upon the opinions of the Group’s internal and external legal counsels. The Group considers that the provisions made are reasonable and adequate.
269 CHINA EVERBRIGHT BANK 270 V (Expressed inmillionsofRenminbi,unlessotherwisestated) for theyearended31December2016 Notes totheConsolidatedFinancialStatements
56 55 Notes totheconsolidatedfinancialstatements
period. Certain comparativefigureshavebeenadjustedtoconformwithchangesinpresentationscurrent date. the completionofissuance;andendingdatewillbe16March2023,i.e.bondmaturity the conversionperiodwillbe18September2017,i.e.firsttradingdayaftersixmonthsfrom respectively, andthecouponpaymentwasmadeonanannualbasis.Thecommencementdateof coupon ratesforthesixyearsofbonddurationwere0.2%,0.5%,1.0%,1.5%,1.8%and2.0%, On 17 March 2017, the Bank issued a RMB30 billion A-share convertible corporate bond. The was grantedtheoptiontoredeembondatfifthyear-end. The bondwasaten-yearwithfixedcouponrateof4.60%andtheBank,asissuer, On 2 March 2017, theBank issued aRMB28billion tier-2 bond in China’sinterbankbondmarket. was assignedBBBratingbyFitchRatings. EMTN ProgramlistedinHongKong.Thethree-yearRegSbondprovidedacouponof2.5%and Limited uponthesuccessfulissuanceofanUSD500millionoffshorebondunderUSD2billion On 1 March 2017, Hong Kong Branch started trading in Hong Kong Exchanges and Clearing Subsequent events Comparative figures (Continued) 2016 Annual Report
Unaudited Supplementary Financial Information (Expressed in millions of Renminbi, unless otherwise stated)
The information set out below does not form part of the consolidated financial statements, and is included herein for information purposes only.
1 Liquidity Coverage Ratio, Liquidity Ratio and Leverage Ratio
Liquidity Coverage Ratio
Pursuant to the Administrative Measures for Liquidity Risk Management of Commercial Banks (Provisional), the liquidity coverage ratio of commercial banks shall reach 100% by the end of 2018. During the transitional period, such ratio shall reach 70%, 80% and 90% by the end of 2015, 2016 and 2017, respectively.
31 December 2016
Liquidity coverage ratio 86.56% High Quality Liquid Assets 352,296.48 Net cash outflows in 30 days from the end of the year 406,997.37
Liquidity Ratio*
Average for Average for The year The year As at ended As at ended 31 December 31 December 31 December 31 December 2016 2016 2015 2015
RMB current assets to RMB current liabilities 63.18% 57.92% 54.90% 51.29%
Foreign current assets to foreign current liabilities 78.81% 58.56% 98.87% 91.39%
* Liquidity ratio is calculated in accordance with the banking level.
Leverage Ratio
31 December 2016
Leverage Ratio 5.44%
Pursuant to the Leverage Ratio Management of Commercial Banks issued by the CBRC and was effective since April 1, 2015, a minimum leverage ratio 4% is required.
The above liquidity coverage ratio and leverage ratio are calculated in accordance with the formula promulgated by the CBRC and based on the financial information prepared in accordance with PRC GAAP.
271 CHINA EVERBRIGHT BANK 272 2 (Expressed inmillionsofRenminbi,unlessotherwisestated) Unaudited SupplementaryFinancialInformation
currency, oftheBank’sHongKongandSeoulbranch.Structuralassetsmainlyincludefixedassets. The net structural position of the Group includes the structural positions, denominated in foreign Currency concentrations Net structuralposition Net longposition Spot assets Net structuralposition Net longposition Spot assets Spot liabilities Spot liabilities Forward purchases Forward purchases Forward sales Forward sales
SDlasHKDollars US Dollars HKDollars US Dollars qiaet qiaet qiaet equivalent) equivalent) equivalent) equivalent) equivalent) equivalent) equivalent) equivalent) 1314 2,4)(,8)(143,345) (9,884) (20,347) (113,114) 1152 135 1,2)(183,372) (10,425) (1,355) (171,592) 0,4 002557116,291 5,567 10,082 100,642 133,013 12,338 19,617 101,058 8,4 ,6 ,7 199,490 7,679 5,563 186,248 9,8)(676 1,4)(128,540) (16,945) (16,706) (94,889) (70,228) 8801,059 18,870 3358581,3 107,479 15,536 8,598 83,345 ,0 3,478 2,600 (RMB (RMB 11 11
31 December2015 31 December2016 (RMB (RMB 95 380 (75,003) (3,860) (915) 11 28
Others Others (RMB (RMB 22 5,786 (292) 9 20,227 298 8 –
(RMB (RMB Total Total 47 22 2016 Annual Report
3 International claims
The Group is principally engaged in business operations within Mainland China, and regards all claims on third parties outside Mainland China as international claims.
International claims include loans and advances to customers, deposits with the central bank, deposits and placements from banks and other financial institutions and debt investments.
A country or geographical area is reported where it constitutes 10% or more of the aggregate amount of international claims, after taking into account any risk transfers. Risk transfers are only made if the claims are guaranteed by a party in a country which is different from that of the counterparty or if the claims are on an overseas branch of a bank whose Head Office is located in another country.
As at 31 December 2016
Banks and Public other financial sector institutions entities Others Total
Asia Pacific excluding mainland China 28,302 355 22,478 51,135 – of which attributed to Hong Kong 15,081 197 19,606 34,884 Europe 1,715 131 12,553 14,399 North and South America 2,812 263 1,629 4,704
Total 32,829 749 36,660 70,238
As at 31 December 2015
Banks and Public other financial sector institutions entities Others Total
Asia Pacific excluding mainland China 5,306 274 36,353 41,933 – of which attributed to Hong Kong 3,257 168 10,945 14,370 Europe 1,523 – 2,313 3,836 North and South America 2,569 162 914 3,645
Total 9,398 436 39,580 49,414
273 CHINA EVERBRIGHT BANK 274 4 (Expressed inmillionsofRenminbi,unlessotherwisestated) Unaudited SupplementaryFinancialInformation
(b) (a) Gross amountofoverdueloansandadvances
By overduedays By geographicalsegments Overseas Northeastern Head Office Bohai Rim Central Western Yangtze RiverDelta Pearl RiverDelta Total As apercentageoftotalgrossloansandadvances Total Gross loansandadvanceswhichhavebeenoverduewith Total – over1year – between6monthsand1year(inclusive) – between3and6months(inclusive) – over1year – between6monthsand1year(inclusive) – between3and6months(inclusive) respect toeitherprincipalorinterestforperiodsof:
1Dcme 31December 31 December 1Dcme 31December 31 December 57535,172 11,733 15,197 35,715 14,835 13,781 35,172 35,715 .9 2.32% 0.78% 1.00% 0.54% 1.99% 0.82% 0.77% 0.40% ,7 1,707 2,305 4,713 4,872 1,775 6,860 3,333 7,912 4,740 6,803 4,895 5,556 6,079 9,329 ,9 8,242 7,099 2016 2016 8
2015 2015 – 2016 Annual Report
4 Gross amount of overdue loans and advances (Continued)
(b) By overdue days (Continued)
31 December 31 December 2016 2015
Current market value of collateral held against the covered portion of overdue loans and advances 30,004 24,494 Covered portion of overdue loans and advances 18,211 14,589 Uncovered portion of overdue loans and advances 17,504 20,583 Individual impairment allowances made on overdue loans and advances 10,725 9,747
The above analysis includes loans and advances overdue for more than 90 days. Loans and advances with a specific repayment date are classified as overdue when the principal or interest is overdue.
5 Non-bank mainland China exposure
The Bank is a commercial bank incorporated in mainland China with its banking business conducted in mainland China. As at 31 December 2016, substantial amounts of the Group’s exposures arose from businesses with mainland China entities or individuals.
275
Address Book of Head Office and 278 Branches CHINA EVERBRIGHT BANK 278 Address BookofHeadOfficeandBranches Chongqing Shanghai Branch Tianjin Branch Beijing Branch Head office Name Hefei Branch Ningbo Branch Hangzhou Wuxi Branch Suzhou Branch Nanjing Branch Heilongjiang Changchun Shenyang Dalian Branch Huhhot Branch Taiyuan Branch Shijiazhuang Branch Branch Branch Branch Branch Branch
Address No. 200,ChangjiangXilu,HefeiCity No. 1Building,HengfuPlaza,828,FumingRoad, Zheshang TimesBuilding,No.1,MiduqiaoRoad, No. 1,RenminZhonglu,WuxiCity No. 188,XinghaiStreet,IndustrialParkDistrict,SuzhouCity No. 120,HanzhongRoad,GulouDistrict,NanjingCity No. 278,DongdazhiStreet,NangangDistrict,HarbinCity No. 2677,JiefangRoad,ChaoyangDistrict,ChangchunCity No. 156,HepingbeiStreet,HepingDistrict,ShenyangCity No. 4,WuwuRoad, Tower D,Dongfangjunzuo,ChilechuanRoad,SaihanDistrict, No. 295,YingzeRoad,District,TaiyuanCity No. 56,YuhuaEastRoad,ShijiazhuangCity No. 168,MinzuRoad,YuzhongDistrict,ChongqingCity China EverbrightBankBuilding,No.1118,ShijiAve., Annex BuildingofZhonglianBuilding,No.83,QufuAve., No. 1,XuanwumenNeidajie,XichengDistrict,Beijing Everbright Center,No.25,TaipingqiaoAvenue, Jiangdong District,NingboCity Gongshu District,HangzhouCity Zhongshan District,DalianCity Huhhot, InnerMongoliaAutonomousRegion Pudong NewDistrict,ShanghaiCity Heping District,TianjinCity Xicheng District,Beijing
..Tel. P.C. 30105-50880551-65101726 0551-65101888 0574-87317230 230001 0574-87300888 0571-87895367 315040 0510-81802535 0571-87895358 0512-68668766 0510-81802528 310006 025-84712699 0512-68662988 214023 025-84787610 215021 0451-53618775 210029 0431-88400121 0451-53618775 150001 0431-8400080 024-23283218 130061 024-83255555 0411-39037015 110003 0471-4955800 0411-39037007 0351-3839108 116001 0471-4955882 0351-3839008 010096 0311-88628883 030001 0311-88628882 023-63792764 050000 023-63792773 021-23050088 400010 021-63606360 022-23300229 010-66567411 200120 022-23308501 010-66567699 010-63639066 300041 100031 010-63636363 100033
Fax 2016 Annual Report 279 Fax
00852-31239888 00852-21432188
750001 0951-8773000 0951-8773080 03188 00822-37883700 00822-37883701 730030 0931-8688600 0931-8688701 361004 0592-2221666 0592-2237788 510635 020-38730066 518040 020-38730049 0755-83053388 530021 0755-83242955 0771-5568106 570125 0771-5568100 0898-68539999 0898-68520711 610017 650021 028-86665566 710002 0871-63111068 028-86720299 830063 029-87236013 0871-63111078 550001 0991-6765678 023-87236010 0851-85914438 0991-6765678 0851-85911499 810008 0971-6363263 0971-6236234 350003 0591-87837378 0591-87835838 330006 250001 0791-86662030 266071 0531-86155965 0791-86665448 264000 0532-83893801 0531-86155800 450008 0535-6658506 0532-83893800 430014 0371-65766000 0535-6261796 410015 027-82796303 0371-65766000 0731-85363527 027-82801976 0731-85523677 P.C. Tel.
Jongno gu, Seoul, Korea Yinchuan City Lanzhou City Hong Kong Qingxiu District, Nanning City Donglu, Jinmao District, Haikou City Tianhe Beilu, Tianhe District, Guangzhou City Shenzhen City Hubin Nanlu, Siming District, Ximan City Hubin Nanlu, Siming District,
Ground Floor, World Trade Center D/E, Shimao Ground Floor, World Trade Center D/E, Shimao City No. 79, Dacisi Road, Jinjiang District, Chengdu No. 28, Renmin Zhonglu, Wuhua District, Kunming City No. 33, Hongguang Street, Lianhu District, Xi’an City No. 165, Nanhu Donglu, Urumqi City No. 69, Yan’an Middle Road, Yunyan District, Guiyang City No. 555, Donggang West Road, Chengguan District, 30/F., Far East Finance Center, No. 16, Harcourt Road, No. 18, Zizhu Qidao, Zhuzilin Silu, Futian District, No. 18, Zizhu Qidao, Zhuzilin Silu, Futian District, Oriental Mahatton Plaza, No. 52-1, Jinhu Road, No. 148, Beihuan Zhonglu, Gulou District, Fuzhou City No. 148, Beihuan Zhonglu, Building, No. 81, 1-4F, China Everbright Bank Nanchang City No. 399, Guangchang Nanlu, District, Jinan City No. 85, Jingqi Road, Shizhong Shinan District, Qingdao City No. 69, Hongkong Xilu, No. 111, Nandajie, Zhifu District, Yantai City City No. 18, Nongye Road, Jinshui District, Zhengzhou City No. 143–144, Yanjiang Ave., Jiangan District, Wuhan City No. 142, Furong Zhonglu, Tianxin District, Changsha 21F, China Everbright Bank Building, No. 685, Address
Seoul Branch Road, 14/F, Wing Fung Building, 41 Cheonggyecheon Yinchuan Branch No. 219, Jiefang West Road, Xingqing District, Xining BranchHong Kong Branch No. 57-7 Wusi West Road, Chengxi District, Xining City Xi’an Branch Urumqi Branch Guiyang Branch Lanzhou Branch Haikou Branch Chengdu Branch Kunming Branch Shenzhen Branch Nanning Branch Wuhan Branch Changsha Branch Guangzhou Branch Jinan Branch Qingdao Branch Yantai Branch Zhengzhou Branch Fuzhou Branch Xiamen Branch Nanchang Branch Name
Designed & Produced by HeterMedia Services Limited ANNUAL REPORT 2016 China Everbright Bank Company Limited Bank Company China Everbright limited liability) Republic of China with in the People’s (a joint stock company incorporated Stock Code : 6818
China Everbright Bank 2016 ANNUAL REPORT Xicheng District, Beijing P. R. China. Xicheng District, Address : Ave, Center, No.25 Taipingqiao Everbright Tel : Fax : Postal Code : 100033 (86)10-63636363 Website : (86)10-63639066 www.cebbank.com is printed on environmentally friendly paper. This Annual Report