鄭州銀行股份有限公司 鄭州銀行股份有限公司 BANK OF ZHENGZHOU CO., LTD. BANK OF ZHENGZHOU CO., LTD. （於中華人民共和國註冊成立的股份有限公司） （於中華人民共和國註冊成立的股份有限公司） (A joint stock company incorporated in the People's Republic of China with limited liability) (A joint stock company incorporated in the People's Republic of China with limited liability) 股份代號 Stock Code: 6196 股份代號 Stock Code: 6196 優先股股份代號 Preference Shares Stock Code: 4613 優先股股份代號 Preference Shares Stock Code: 4613 年 度 報 告 年 度 報 告 2017 ANNUAL REPORT 2017 ANNUAL REPORT ANNUAL REPORT 2017 年度報告 此年報以環保紙印刷 This annual report is printed on environment-friendly paper CONTENTS CHAPTER I CORPORATE INFORMATION 2 CHAPTER II HIGHLIGHTS OF ACCOUNTING DATA AND 5 MAJOR FINANCIAL INDICATORS CHAPTER III CHAIRMAN’S STATEMENT 8 CHAPTER IV PRESIDENT’S STATEMENT 10 CHAPTER V MANAGEMENT DISCUSSION AND 12 ANALYSIS CHAPTER VI CHANGES IN SHARE CAPITAL AND 76 INFORMATION ON SHAREHOLDERS CHAPTER VII DIRECTORS, SUPERVISORS, SENIOR 92 MANAGEMENT, STAFF AND INSTITUTIONS CHAPTER VIII CORPORATE GOVERNANCE REPORT 119 CHAPTER IX REPORT OF THE BOARD OF DIRECTORS 160 CHAPTER X REPORT OF THE BOARD OF SUPERVISORS 168 CHAPTER XI SIGNIFICANT EVENTS 171 CHAPTER XII INTERNAL CONTROL AND INTERNAL 174 AUDIT CHAPTER XIII INDEPENDENT AUDITOR’S REPORT 177 DEFINITIONS 358 * This annual report was prepared in both Chinese and English versions. Where there is discrepancy between the Chinese and English version, the Chinese version shall prevail. CHAPTER I CORPORATE INFORMATION 1 BASIC INFORMATION Legal name in Chinese: 鄭州銀行股份有限公司* (Abbreviation: 鄭州銀行) Legal name in English: Bank of Zhengzhou Co., Ltd.* (Abbreviation: ZHENGZHOU BANK) Legal representative: Mr. WANG Tianyu Authorised representatives: Mr. WANG Tianyu, Mr. FU Chunqiao Board secretary: Mr. FU Chunqiao Joint company secretaries: Mr. FU Chunqiao, Ms. LEUNG Wing Han Sharon Stock exchange on which H Shares and Hong Kong Stock Exchange Offshore Preference Shares are listed: Stock abbreviation: BANK OF ZHENGZHOU H Shares stock code: 6196 Offshore Preference Shares stock code: 4613 Unified Social Credit Code: 914100001699995779 Financial licence number: B1036H241010001 Registered address and office address: 22 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, China Principal place of business in Hong Kong: 18/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong Contact address: 22 Shangwu Waihuan Road, Zhengdong New District, Zhengzhou, Henan Province, China Tel: +86–371–6700 9199 Fax： +86–371–6700 9898 E-mail: [email protected] Website: www.zzbank.cn Auditor: KPMG PRC legal advisor: King & Wood Mallesons (Beijing) Hong Kong legal advisor: King & Wood Mallesons H Share Registrar: Computershare Hong Kong Investor Services Limited Trustee agency for Domestic Shares: China Securities Depository and Clearing Corporation Limited * The Bank 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 relevant banking/deposit-taking business in Hong Kong. Bank of Zhengzhou Co., Ltd. 2 CHAPTER I CORPORATE INFORMATION (Continued) 2 COMPANY PROFILE Bank of Zhengzhou is a regional joint stock commercial bank incorporated in November 1996 upon the approval by the PBoC, based on 48 city credit cooperatives in Zhengzhou City. The Bank was renamed as Zhengzhou Commercial Bank Co., Ltd. in February 2000 and Bank of Zhengzhou Co., Ltd. in December 2009. The Bank was listed on the main board of the Hong Kong Stock Exchange in December 2015, becoming the first listed city commercial bank in Henan Province and the tenth in China. Under its market positioning strategy of “commerce and logistics bank, financing expert for small and medium enterprises and boutique banking for residents”, Bank of Zhengzhou has long been focusing on the area of small and micro enterprises, serving the real economy and adhering to the development path with uniqueness and differentiation with the value proposition of “being a good financial service partner of small and medium-sized enterprises (“SME”)” and the brand idea of “serving with the heart”, leading to consistent historic breakthroughs in each of its lines of business and a significant enhancement of its competitive edge and comprehensive strength. Currently, the Bank has already established Jiuding Financial Leasing Company (九鼎金融租賃公司) and 6 county banks at Zhongmu, Xinmi, Yanlin, Fugou, Queshan and Xunxian as well as acquired Xinzheng Jingu County Bank (新鄭金穀村鎮銀行) which was renamed as Xinzheng Zhengyin County Bank and its comprehensive business operation has proceeded steadily. As at 31 December 2017, the Bank had 4,171 employees and 166 institutions for conducting external business, comprised of 12 branches, 153 sub-branches (including the operation division of the headquarters) and one specialized section. With its scale of assets amounting to RMB435,828 million, balance of deposits amounting to RMB255,407 million, balance of loans amounting to RMB124,456 million and its capital adequacy ratio of 13.53%, non-performing loan (“NPL”) ratio of 1.50% and allowance to NPL ratio of 207.75%, the Bank has met all regulatory requirements in respect of major indicators. The Bank’s operating and management ability continues to improve, receiving wide recognition from various sectors of the community. In the list of the “Top 1,000 World Banks 2017”, the Bank ranked 322nd on Tier-one capital, up 16 places from last year. On the ranking of “PRC Commercial Banks in respect of Competitiveness” published by “The Chinese Banker”, the Bank ranked 2nd for being the “Most Competitive Bank among Commercial Banks with Asset Scale of over RMB300 billion” and received the “Best Branded City Commercial Bank” award. According to the latest “Top 40 Value- Creating Banks in China” issued by McKinsey & Company, the Bank ranked second among other city commercial banks in terms of economic profit. In the 2017 evaluation results of “GYROSCOPE Evaluation System of the China Banking Association”, the Bank ranked fourth among the city commercial banks in terms of comprehensive evaluation. The Bank received an award for being the “Best Investment Value Award for Listed Companies” once again in the “China Securities Golden Bauhinia Awards” in 2017. 3 Annual Report 2017 CHAPTER I CORPORATE INFORMATION (Continued) 3 MAJOR AWARDS IN 2017 In June 2017, the Bank received three awards at the “2017 China Financial Innovation Forum and Financial Innovation Award Ceremony” organized by “The Chinese Banker”, namely the “Best Financial Innovation” award, the “Top Ten Financial Product Innovation” award (retail business) and the “Top Ten Internet Finance Innovation” award. In July 2017, the Bank ranked 322nd on Tier-one capital in the list of “Top 1,000 World Banks 2017” published by “The Banker”, up 16 places from last year. In September 2017, the Bank ranked 2nd for being the “Most Competitive Bank among City Commercial Banks with Asset Scale of over RMB300 billion” on the ranking of “PRC Commercial Banks in respect of Competitiveness” for 2017 published by “The Chinese Banker” and received the “Best Branded City Commercial Bank” award. In November 2017, the Bank ranked second among other city commercial banks in terms of economic profit according to the “Top 40 Value-Creating Banks in China” issued by McKinsey & Company. In November 2017, the Bank received an award for being the “Best Investment Value Award for Listed Companies” once again in the “China Securities Golden Bauhinia Awards” co-organised by Ta Kung Pao and other institutions. In December 2017, in the 2017 evaluation results of “GYROSCOPE Evaluation System of China Banking Association”, the Bank ranked fourth among the city commercial banks in terms of comprehensive evaluation, up 12 places year-on-year. Bank of Zhengzhou Co., Ltd. 4 CHAPTER II HIGHLIGHTS OF ACCOUNTING DATA AND MAJOR FINANCIAL INDICATORS The financial information set forth in this annual report is prepared on a combined basis in accordance with International Financial Reporting Standards (“IFRS”). Unless otherwise stated, such information is the data of the Bank and its subsidiaries (collectively the “Group”) denominated in RMB. In respect of the financial statements of the Bank prepared under the PRC GAAP (China Accounting Standards) and IFRS, there is no difference between the net profit attributable to shareholders for the year ended December 31, 2017 and net profit attributable to shareholders as at the end of the Reporting Period. For the year ended December 31, Year-on- year change between 2017 2017 2016 and 2016 2015 2014 2013 (Expressed in millions of Renminbi, unless otherwise stated) Operating Results Rate of change (%) Net interest income 8,106 8,300 (2.34) 6,906 5,284 4,102 Net fee and commission income 1,865 1,215 53.50 713 348 162 Operating income 10,213 9,981 2.32 7,861 5,505 4,257 Operating expenses (2,752) (2,435) 13.02 (2,252) (1,842) (1,386) Provision of impairment losses on assets (1,957) (2,346) (16.58) (1,298) (497) (400) Profit before taxation 5,548 5,257 5.54 4,362 3,203 2,507 Net profit 4,334 4,045 7.14 3,356 2,463 1,902 Net profit attributable to shareholders of the Bank 4,280 3,999 7.03 3,357 2,463 1,902 Calculated on a per share basis (RMB) Rate of change (%) Net assets per share attributable to shareholders of the Bank 4.58 4.00 14.50 3.46 2.89 2.42 Earnings per share 0.80 0.75 6.67 0.85 0.62 0.48 Profitability Indicators (%) Change Return on average total assets(1) 1.08 1.28 (0.20) 1.43