2019 Annual Report
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* * (A joint stock company incorporated in the People’s Republic of China with limited liability) Stock Code : 6122 Annual Report 2019 *Jilin Jiutai Rural Commercial Bank Corporation Limited is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of the Laws of Hong Kong), not subject to the supervision of the Hong 2019 Kong Monetary Authority, and not authorized to carry on banking/deposit-taking business in Hong Kong. Annual Report Contents Chairman’s Statement 2 President’s Statement 4 Chapter 1 Defi nitions and Glossary 6 Chapter 2 Company Profi le 18 Chapter 3 Financial Highlights 26 Chapter 4 Management Discussion and Analysis 29 Chapter 5 Report of the Board of Directors 101 Chapter 6 Report of the Board of Supervisors 122 Chapter 7 Changes in Share Capital and Particulars of Shareholders 127 Chapter 8 Directors, Supervisors, Senior Management, Employees and Organisations 132 Chapter 9 Corporate Governance Report 156 Chapter 10 Risk Management, Internal Control and Internal Audit 199 Chapter 11 Environmental, Social and Governance Report 209 Chapter 12 Financial Reports 242 Chapter 13 Unaudited Supplementary Financial Information 442 Chairman’s Statement Mr. Gao Bing Chairman of Board of Directors 2 JIUTAI RURAL COMMERCIAL BANK Chairman’s Statement 2019 marked the 70th anniversary of the establishment of New China and the beginning of the Bank’s new ten-year development strategy. In view of the challenging international and domestic economic and fi nancial situation and the external environment with intensifying competition, the Bank maintained its strategies by responding proactively to the national policies, complying with regulatory requirements and coordinating and promoting structural reform, risk prevention, management enhancement and transformation. The “Four in One Mechanism”, which integrates fi nance for three rurals, community fi nance, cooperation platform and charity works, has been effectively implemented and our operating results began turn around to an upward development trend. In the past year, we strengthened our foundation, and enhanced our corporate governance and refi ned our organisation structure under guidance of the party committee. The effi ciency of our management system signifi cantly improved after transformation and reform. We adhered to our positioning and further focused on our principal business of credit by allocating more fi nancial resources to private enterprises and micro-, small- and medium-sized enterprises and three rurals. The quality and effi ciency of our services in traditional business improved. We kept abreast of the latest development and proactively adjust the allocation of our assets, liabilities and revenue in accordance with government policies, regulatory requirements and our strategies. Our business structure gradually improved while maintaining stability. We prudently strengthened our capital management in an all-round way and improved our internal control system. Various regulatory indicators remained stable and were in compliance with the applicable regulations. With effective risk control, our business operation has been further consolidated. We fulfi lled our social responsibilities by organizing charity activities and taking initiatives to participate in poverty alleviation to implement the targeted fi nancial poverty alleviation in various aspects. In 2019, during the acceleration of our transformation and quality development, we have implemented the “Jiushang Practices (九商實踐)” and the “Jiushang Responsibilities (九商擔當)”, and demonstrated the “Jiushang Value (九商價值)”. According to the fi nancial statements prepared under the IFRS, as at the end of 2019, the Group’s total assets amounted to RMB173,276 million, total deposits from customers amounted to RMB122,840 million, total loans and advances to customers amounted to RMB96,104 million, and net profi t reached RMB1,196 million. The Bank was successively honoured the “Three Rurals Financial Service Bank with Excellent Competitiveness in 2019 (2019卓越競爭力三農金 融服務銀行)”, “Bank for Inclusive Financial Services in 2019 (2019普惠金融業務銀行)” and “Banking Institution for Targeted Poverty Alleviation in 2019 (2019年度金準扶貧銀行機構)”. The Bank’s fruitful achievements in 2019 were largely attributable to the trust of customers, confi dence of investors, guidance of the government and regulatory authorities as well as the dedication and hard work of all employees. On behalf of the Board, I would like to express our sincere gratitude to all parties. 2020 will be the fi nal year for the completion of well-off society and the 13th Five-Year Plan. In this year, we will adhere to the guidance of Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era. Based on the general principle of seeking progress while maintaining stability and the “Four in One Mechanism” and with an aim of serving the real economy, we will focus on the adjustment and optimization of our operational structure, acceleration of transformation and development, and effective prevention and control of fi nancial risks. We will continue to emphasize on our principal businesses and reform and strengthen our existing business for a better growth. By unifying scale of business and its effi ciency, coordinating growth and quality and matching revenue with risks, we will strive to establish ourselves as a modernized and well-branded fi rst-class rural commercial bank in China. Mr. Gao Bing Chairman of the Board of Directors Annual Report 2019 3 President’s Statement Mr. Liang Xiangmin President 4 JIUTAI RURAL COMMERCIAL BANK President’s Statement In 2019, with strong support of all shareholders, the management of the Bank duly executed the resolutions adopted by the Board and were voluntarily under the supervision of the Board of Supervisors. The Bank spared no effort in the development of its “Four in One Mechanism”, which integrates fi nance for three rurals, community fi nance, cooperation platform and charity works. The Bank also accelerated its transformation and quality development, and maintained stable and advancing development momentum for all aspects of its operations. Major indicators were good in general. According to the fi nancial statements prepared under the IFRS, as at the end of 2019, the Bank’s total assets amounted to RMB124,787 million, total deposits from customers amounted to RMB77,852 million, total loans and advances to customers amounted to RMB64,239 million, and net profi t reached RMB946 million. The quality and effi ciency of services for the real economy improved. Adhering to its traditional values and positioning to support agricultural and small enterprises, the Bank increased the provision of loans through product innovation and mechanism enhancement, and provided enormous supports to private enterprises, micro-, small- and medium-sized enterprises and three rurals. Business transformation saw remarkable results. The Bank adopted various regulatory policies and downsized interbank business, which further optimized its asset and liability structure and improved transformation momentum. Risk management and control were strengthened. The Bank continuously improved its systems and procedures as well as the comprehensive risk management system. The Bank further rectifi ed market chaos by strengthening the management of its credit risks, liquidity risks, market risks, operation risks and reputation risks. The compliance of all regulatory indicators were satisfactory, which further consolidated safe and prudent operation. The Bank expanded external cooperation. Partnership with enterprises, schools, hospitals and banks was intensifi ed in terms of depth, breadth and contribution, which further strengthened the business foundation of the Bank. Brand image continued to improve. The Bank voluntarily performed its social responsibilities by investing fi nancial resources in targeted poverty alleviation and organizing charity activities to support education, the elderly and disabled, which further improved its social reputation and infl uence. Our achievements would be impossible without solid support of shareholders, investors and various sectors of the society, scientifi c decision-making of the Board, effective supervision of the Board of Supervisors, and effort and contribution of cadres and employees. On behalf of management, I would like to express my sincerest gratitude towards them. 2020 is a crucial year for the transformation and upgrade of the Bank. The management will duly execute decisions and plans of the Board. Through organized development of its “Four in One Mechanism”, the Bank will intensify its services for urban and rural residents, steadily expand businesses and devote itself to targeted poverty alleviation. As a leading local rural fi nancial institution, the Bank will make efforts to support supply-side structural reform, and to increase the availability of fi nancial services for three rurals, private enterprises, and micro-, small- and medium-sized enterprises. With an aim to providing inclusive fi nancial services, the Bank will make more contributions for the development of the real economy and regional economy. Mr. Liang Xiangmin President Annual Report 2019 5 Chapter 1 Definitions and Glossary In this annual report, unless the context otherwise requires, the following terms shall have the meanings set out below: “Anci District Huimin Village Huimin Village Bank Company Limited of Anci, Langfang (廊坊市安次區惠民村 and Township Bank” 鎮銀行股份有限公司), a joint stock company with limited liability incorporated in the PRC