SHENGJING BANK CO., LTD.* 盛京銀行股份有限公司* (A Joint Stock Company Incorporated in the People’S Republic of China with Limited Liability) (Stock Code: 02066)
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. SHENGJING BANK CO., LTD.* 盛京銀行股份有限公司* (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 02066) ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016 The board of directors (the “Board”) of Shengjing Bank Co., Ltd. (the “Bank”) is pleased to announce the audited annual results (the “Annual Results”) of the Bank and its subsidiaries for the year ended 31 December 2016 prepared in accordance with the International Financial Reporting Standards (the “IFRSs”) promulgated by the International Accounting Standards Board and the proposed cash dividend for the year of 2016. The Board and the audit committee have reviewed and confirmed the Annual Results. The Annual Results are published on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and the website of the Bank (www.shengjingbank.com.cn). The 2016 annual report of the Bank will be published on the website of the Hong Kong Stock Exchange (www.hkexnews.hk) and the website of the Bank (www.shengjingbank.com.cn), and will be despatched to the holders of H shares of the Bank in due course. By order of the Board Shengjing Bank Co., Ltd. ZHOU Zhi Joint Company Secretary Shenyang, Liaoning, China 17 March 2017 As at the date of this announcement, the executive directors of the Bank are WANG Chunsheng, WANG Yigong, WU Gang and SUN Yongsheng; the non-executive directors of the Bank are LI Yuguo, LI Jianwei, ZHAO Weiqing and LIU Xinfa; and the independent non-executive directors of the Bank are YU Yongshun, LAU Chi Pang, BA Junyu, SUN Hang and DING Jiming. * Shengjing Bank Co., Ltd. is not an authorised institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking and/or deposit-taking business in Hong Kong. CONTENTS 1. Company Information 2 2. Financial Highlights 4 3. Message from the Board 8 4. Honours and Awards 10 5. Management Discussion and Analysis 12 5.1 Environment and Prospects 12 5.2 Development Strategies 13 5.3 Business Review 14 5.4 Financial Review 15 5.5 Business Overview 49 5.6 Risk Management 65 5.7 Analysis on Capital Adequacy Ratio 77 6. Significant Events 79 7. Change in Share Capital and Shareholders 81 8. Directors, Supervisors, Senior Management 89 and Employees 9. Corporate Governance Report 107 10. Report of the Board of Directors 136 11. Report of the Board of Supervisors 147 12. Social Responsibility Report 151 13. Internal Control 155 14. Independent Auditor’s Report 158 15. Financial Statements 164 16. Notes to the Financial Statements 172 17. Unaudited Supplementary Financial 279 Information 18. Organisational Chart 283 19. List of Branches 284 20. Definition 298 * Shengjing Bank Co., Ltd. is not an authorised institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong Kong Monetary Authority, and not authorised to carry on banking and/or deposit-taking business in Hong Kong. COMPANY INFORMATION Legal Name in Chinese 盛京銀行股份有限公司 Abbreviation in Chinese 盛京銀行 Legal Name in English Shengjing Bank Co., Ltd. Abbreviation in English SHENGJING BANK Legal Representative ZHANG Yukun Authorised Representatives WANG Yigong and ZHOU Zhi Secretary to the Board of Directors ZHOU Zhi Joint Company Secretaries ZHOU Zhi and KWONG Yin Ping Yvonne Registered and Business Address No. 109 Beizhan Road, Shenhe District, Shenyang, Liaoning Province, the PRC Contact Number 86-24-22535633 Website www.shengjingbank.com.cn Principal Place of Business in Hong Kong Units 08–09, 18/F, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong Website of the Hong Kong Stock Exchange www.hkexnews.hk on which the H Share Annual Report is Published Place of Maintenance of the Annual Report Office of the Board of Directors of the Bank Stock Name Shengjing Bank 2 COMPANY INFORMATION (Continued) Stock Code 02066 H Share Registrar and Computershare Hong Kong Investor Services Limited its Business Address Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong Legal Advisor as to PRC Laws and Tian Yuan Law Firm its Business Address 10/F, China Pacific Insurance Plaza 28 Fengsheng Hutong Xicheng District Beijing, the PRC Legal Advisor as to Hong Kong Law Freshfields Bruckhaus Deringer and its Business Address 11th Floor, Two Exchange Square Central Hong Kong Auditor and its Business Address KPMG 8th Floor Prince’s Building 10 Chater Road Hong Kong Shengjing Bank Co., Ltd. 3 FINANCIAL HIGHLIGHTS Year-on-year change (Expressed in thousands of Renminbi, between 2016 unless otherwise stated) 2016 2015 and 2015 2014 2013 2012 Rate of change (%) Operating Results Interest income 36,055,533 31,479,529 14.5 25,415,004 18,038,013 13,835,459 Interest expense (22,837,867) (19,530,998) 16.9 (15,513,832) (10,193,830) (7,050,533) Net interest income 13,217,666 11,948,531 10.6 9,901,172 7,844,183 6,784,926 Net fee and commission income 1,913,907 1,204,189 58.9 1,368,431 770,141 112,246 Net trading gains/(losses), net gains/ (losses) arising from investments, Net foreign exchange gains/(losses), other operating income 982,303 1,031,436 (4.8) (64,840) 291,470 11,119 Operating income 16,113,876 14,184,156 13.6 11,204,763 8,905,794 6,908,291 Operating expenses (3,730,598) (4,102,162) (9.1) (3,211,887) (2,445,727) (2,017,380) Impairment losses on assets (3,675,411) (1,955,377) 88.0 (934,151) (171,860) (431,714) Operating profit 8,707,867 8,126,617 7.2 7,058,725 6,288,207 4,459,197 Share of profits of associates – – N/A 2,338 19,719 23,795 Profit before taxation 8,707,867 8,126,617 7.2 7,061,063 6,307,926 4,482,992 Income tax expense (1,829,575) (1,902,790) (3.8) (1,637,225) (1,419,125) (973,653) Net profit 6,878,292 6,223,827 10.5 5,423,838 4,888,801 3,509,339 Net profit attributable to equity shareholders of the Bank 6,864,520 6,211,334 10.5 5,404,933 4,865,531 3,496,626 4 FINANCIAL HIGHLIGHTS (Continued) Year-on-year change (Expressed in thousands of Renminbi, between 2016 unless otherwise stated) 2016 2015 and 2015 2014 2013 2012 Change Calculated on a per share basis (RMB) Basic earnings per share 1.18 1.07 0.11 1.25 1.31 0.95 Dividend per share 0.25 0.28 (0.03) 0.275 0.10 – Rate of change (%) Major indicators of assets/liabilities Total assets 905,482,647 701,628,500 29.1 503,370,514 355,432,167 313,241,579 Of which: loans and advances to customers 228,880,732 191,531,735 19.5 155,946,864 131,557,892 112,271,202 Total liabilities 859,108,021 659,913,547 30.2 467,237,029 333,961,729 298,583,755 Of which: deposits from customers 415,246,159 402,379,086 3.2 315,943,789 262,912,728 207,987,227 Share capital 5,796,680 5,796,680 – 5,646,005 4,096,005 3,696,005 Equity attributable to equity shareholders of the Bank 45,794,429 41,268,528 11.0 35,699,553 21,055,411 14,266,067 Total equity 46,374,626 41,714,953 11.2 36,133,485 21,470,438 14,657,824 Shengjing Bank Co., Ltd. 5 FINANCIAL HIGHLIGHTS (Continued) Year-on-year change (Expressed in thousands of Renminbi, between 2016 unless otherwise stated) 2016 2015 and 2015 2014 2013 2012 Change Profitability Indicators (%) Return on average total assets(1) 0.86 1.03 (0.17) 1.26 1.46 1.31 Return on average equity(2) 15.62 15.99 (0.37) 18.83 27.06 26.98 Net interest spread(3) 1.65 2.00 (0.35) 2.07 2.17 2.51 Net interest margin(4) 1.75 2.14 (0.39) 2.32 2.39 2.68 Net fee and commission income to operating income 11.88 8.49 3.39 12.21 8.65 1.62 Cost-to-income ratio(5) 19.31 19.04 0.27 19.06 19.01 20.80 Change Asset quality indicators (%) Non-performing loan ratio(6) 1.74 0.42 1.32 0.44 0.46 0.54 Allowance to non-performing loans(7) 159.17 482.38 (323.21) 387.42 306.12 302.58 (8) Allowance to total loans 2.78 2.01 0.77 1.70 1.41 1.63 Change Capital adequacy indicators (%) Calculated based on Capital Adequacy Ratio Core capital adequacy ratio N/A N/A N/A N/A 9.39 Capital adequacy ratio N/A N/A N/A N/A 11.92 Calculated based on Capital Administrative Measures Core Tier-one capital adequacy ratio(9) 9.10 9.42 (0.32) 11.04 10.07 N/A Tier-one capital adequacy ratio(9) 9.10 9.42 (0.32) 11.04 10.07 N/A Capital adequacy ratio 11.99 13.03 (1.04) 12.65 11.17 N/A Total equity to total assets ratio 5.12 5.95 (0.83) 7.18 6.04 4.68 Change Other indicators (%) Loan-to-deposit ratio(10) 56.69 48.58 8.11 50.21 50.75 54.87 6 FINANCIAL HIGHLIGHTS (Continued) (1) Calculated by dividing the net profit by the average of total assets at the beginning and at the end of the period.