2015 Interim Report Contents Definitions 2 Chapter I Corporate Information 3 Chapter II Summary of Accounting Data and Business Data 5 Chapter III Management Discussion and Analysis 7 Chapter IV Changes in Share Capital and Particulars of Shareholders 54 Chapter V Directors, Supervisors, Senior Management, 58 Employees and Institutions Chapter VI Corporate Governance 64 Chapter VII Material Events 66 Chapter VIII Interim Financial Statements 70 INTERIM REPORT 2015 Huishang Bank Corporation Limited Definitions In this interim report, unless the context otherwise specifies, the following terms shall have the meaning set out below. “Bank” or “Huishang Bank” means Huishang Bank Corporation Limited, including its subsidiaries, branches and sub-branches “CBRC” means the China Banking Regulatory Commission (中國銀行業監督管理委員會) “CBRC Anhui Office” means the China Banking Regulatory Commission Anhui Office (中國銀行業監督管理 委員會安徽監管局) “CSRC” means the China Securities Regulatory Commission (中國證券監督管理委員會) “Domestic Shares” means ordinary shares issued by the Bank in the PRC, with a nominal value of RMB1.00 per share “HK$” or “Hong Kong dollars” means Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” means the Hong Kong Special Administrative Region of the PRC “Hong Kong Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Hong Kong Stock Exchange” means The Stock Exchange of Hong Kong Limited “Listing” means the listing of H shares of the Bank on the Main Board of the Hong Kong Stock Exchange “Listing Date” means the date on which dealings in the H shares of the Bank first commenced on the Hong Kong Stock Exchange, i.e. 12 November 2013 “Non-green Industries” means the heavily-polluting, highly energy-consuming and over-capacity industries “PBOC” means the People’s Bank of China “PRC” means the People’s Republic of China “Three Dimensional Rural Issues” abbreviation for issues related to agriculture, rural areas and farmers “Yuan” or “RMB” means Renminbi, the lawful currency of China. Unless otherwise specifies, any monetary amount referred to in this report will be Renminbi 2 INTERIM REPORT 2015 Huishang Bank Corporation Limited Chapter I Corporate Information 1.1 CORPORATE BASIC INFORMATION 1.1.1 Statutory Chinese name: 徽商銀行股份有限公司 Statutory English name: Huishang Bank Corporation Limited 1.1.2 Statutory representative: Li Hongming Authorized representatives: Wu Xuemin, Ngai Wai Fung Board secretary: Yi Feng Company secretary: Ngai Wai Fung 1.1.3 Registered and business address: Block A, Tianhui Building, 79 Anqing Road, Hefei, Anhui Province, PRC 1.1.4 Contact address: Block A, Tianhui Building, 79 Anqing Road, Hefei, Anhui Province, PRC Tel: +86-0551-62667787 Fax: +86-0551-62667787 Post code: 230001 Bank’s website: www.hsbank.com.cn E-mail: [email protected] 1.1.5 Principal place of business in Hong Kong: 18/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong 1.1.6 Certified public accountant: PricewaterhouseCoopers 22/F, Prince’s Building, Central, Hong Kong 1.1.7 Legal advisor as to PRC laws: King & Wood Mallesons Legal advisor as to Hong Kong laws: Latham & Watkins 1.1.8 Domestic Shares trustee agency: China Securities Depository and Clearing Corporation Limited H Share registrar: Computershare Hong Kong Investor Services Limited Note: Huishang Bank Corporation Limited is not an authorized institution within the meaning of the Banking Ordinance (Chapter 155 of Laws of Hong Kong), is not subject to the supervision of the Hong Kong Monetary Authority, and is not authorized to carry on banking/deposit-taking business in Hong Kong. 3 INTERIM REPORT 2015 Huishang Bank Corporation Limited Chapter I Corporate Information 1.2 COMPANY PROFILE Headquartered in Hefei, Anhui Province, Huishang Bank is the first regional joint stock commercial bank in the PRC established through the merger and reorganization of city commercial banks and urban credit cooperatives with the approval of the CBRC. The Bank was incorporated on 4 April 1997, and changed its name to Huishang Bank Corporation Limited at the end of 2005. On 28 December 2005, the Bank officially merged with 5 city commercial banks of Wuhu, Ma’anshan, Anqing, Huaibei and Bengbu and 7 urban credit cooperatives of Lu’an, Huainan, Tongling, Fuyang Technology, Fuyang Xinying, Fuyang Yinhe and Fuyang Jinda in Anhui Province. The Bank officially opened for business on 1 January 2006. On 12 November 2013, the Bank was listed on the Main Board of the Hong Kong Stock Exchange. The Bank holds a financial institution license numbered B0162H234010001 from CBRC Anhui Office and a legal entity business license numbered 340000000026144 from Anhui Provincial Administration of Industry and Commerce. The registered address is Block A, Tianhui Building, 79 Anqing Road, Hefei, Anhui Province, PRC. As of 30 June 2015, the registered capital of Huishang Bank was RMB11,050 million. The Bank’s principal activities include taking of deposits from corporate and retail customers, using such deposits to finance its loans and funds business, which mainly encompass money market activities, investment and trading activities and transactions on behalf of customers in the PRC. As of 30 June 2015, Huishang Bank had 6,860 on-the-job employees. Apart from the headquarters, the Bank had 279 branches and sub-branches (including 17 branches and 262 sub-branches) and 517 self-service areas. The Bank also has three subsidiaries, Huiyin Finance Leasing Co., Ltd., Jinzhai Huiyin Rural Bank Co., Ltd, and Wuwei Huiyin County Bank Co., Ltd. and holds shares in Chery Huiyin Motor Finance Service Co., Ltd. 1.3 AWARDS FOR THE FIRST HALF OF 2015 During the first half of 2015, the Bank has won numerous accolades and awards in contests organized by domestic authorities: ◆ In February, the Bank was awarded the “2014 Outstanding Sponsors of Asset-backed Securities in China’s Bond Market” by China Central Depository & Clearing Co. Ltd.; ◆ In February, the Bank was awarded the “2014 Outstanding Dealers in China’s Bond Market” in the selection of Outstanding Members in China’s Bond Market in 2014 as organized by China Central Depository & Clearing Co. Ltd.; ◆ In April, the Bank was awarded the first place in the review of the 2014 payment and settlement of financial institutions in Anhui Province as organized by the Hefei Central Sub-branch of the PBOC; ◆ In April, the Bank was promoted to be an “A-class” financial institution of the highest rank in the evaluation of financial institutions of Anhui Province on implementing relevant provisions of the PBOC as organized by the Hefei Central Sub- branch of PBOC; ◆ In April, the Bank was awarded grade A in the 2014 Anhui offsite supervision evaluation of anti-money laundering as organized by the Hefei Central Sub-branch of the PBOC; ◆ In May, the Bank was rated “green card” in the 2014 Anhui banking industry and financial institution supervision evaluation of case-prevention as organized by the CBRC Anhui Office; ◆ In May, the Bank was awarded the “Unionpay Credit Card Business Service Prize”, “2014 Unionpay Installment Business Advanced Prize” and “Official Card Business Advanced Prize” in the 2014 Unionpay card competition among regional banking institutions as organized by China Unionpay Organization; ◆ In May, the Bank was awarded the “2015 Best Direct Sales Bank of China (Anhui)“ at the 2015 China (Anhui) internet finance development conference held by Xinan Evening News. 4 INTERIM REPORT 2015 Huishang Bank Corporation Limited Chapter II Summary of Accounting Data and Business Data 2.1 MAIN FINANCIAL INFORMATION In millions of RMB Changes over the corresponding period of the January to January to previous year Results of operation June 2015 June 2014 +/(-)(%) Net operating income(1) 7,707 6,000 28.45 Profit before income tax 4,005 3,731 7.34 Net profit attributable to shareholders of the Bank 3,067 2,839 8.03 RMB Changes over the corresponding period of the January to January to previous year By per share June 2015 June 2014 +/(-)(%) Basic earnings attributable to shareholders of the Bank 0.28 0.26 7.69 Diluted earnings attributable to shareholders of the Bank 0.28 0.26 7.69 Net assets attributable to shareholders of the Bank as at the end of the period 3.41 3.01 13.29 In millions of RMB Changes over the end of the 30 June 31 December previous year Scale indicators 2015 2014 +/(-)(%) Total assets 575,156 482,764 19.14 Including: Total loans and advances 241,983 219,396 10.30 Total liabilities 536,257 446,211 20.18 Including: Total deposits from customers 349,427 317,870 9.93 Equity attributable to shareholders of the Bank 37,734 36,374 3.74 Note: (1) Net operating income comprises net interest income, net fee and commission income, net trade income, net income from investment in securities, as well as other net operating income, excluding net income from investment in associates. 5 INTERIM REPORT 2015 Huishang Bank Corporation Limited Chapter II Summary of Accounting Data and Business Data 2.2 FiNANCIAL RATIOS Changes over the corresponding period of the January to January to January to previous year Profitability indicators(1) June 2015 December 2014 June 2014 +/(-) Return on average assets (“ROAA”) after tax attributable to shareholders of the Bank 1.16 1.31 1.38 -0.22 Return on average equity (“ROAE”) after tax attributable to shareholders of the Bank 16.55 16.68 17.50 -0.95 Net interest spread 2.46 2.47 2.34 0.12 Net interest margin 2.68 2.74 2.63 0.05 Changes over the corresponding period of the January to January to