This annual report is printed on environmental paper. CHINA MINSHENG BANKING CORP., LTD. 2 017 ANNUAL REPORT Add. : No. 2, Fuxingmennei Avenue, Xicheng District, Beijing, China (a joint stock limited company incorporated in the People’s Republic of China) Tel. : (+86-10) 58560666 Stock Code USD Preference Shares Stock Code 04609 Fax. : (+86-10) 58560720 Zip Code: 100031 Website: www.cmbc.com.cn 2017 ANNUAL REPORT Important Notice The Board, the Supervisory Board, and the Directors, Supervisors and Senior Management of the Company warrant that there are no misstatements, misleading representations or material omissions in this report, and shall assume several and joint liability for the truthfulness, accuracy and completeness of its contents. This Annual Report was considered and approved on 29 March 2018 at the seventh meeting of the seventh session of the Board of the Company. Of the 18 Directors who were entitled to attend the meeting, 15 Directors attended the meeting in person, and three Directors, being the Vice Chairmen Zhang Hongwei and Liu Yonghao as well as the Director Cheng Hoi-chuen, attended the meeting by teleconference. Of the nine Supervisors who were entitled to attend the meeting as non-voting delegates, nine Supervisors attended the meeting as non-voting delegates. A profit distribution plan for the second half of 2017 was approved at the eighth extraordinary meeting of the seventh session of the Board, pursuant to which a cash dividend of RMB0.90 (tax inclusive) will be distributed to all shareholders for every 10 shares being held on the record dates. A capitalisation plan of capital reserve for 2017 was also approved at the eighth extraordinary meeting of the seventh session of the Board for the capitalisation of capital reserve from the issue of shares at premium by issuing shares to holders of A shares and holders of H shares whose names appear on the registers as at the record dates in a proportion of 2 shares for every 10 shares being held. The above proposals are subject to approval by the shareholders’ general meeting of the Company. For the purpose of this Annual Report, China Minsheng Banking Corp., Ltd. shall be referred to as the “Company”, the “Bank”, “China Minsheng Bank” or “Minsheng Bank”, whereas China Minsheng Banking Corp., Ltd. and its subsidiaries together shall be referred to as the “Group”. The financial data and indicators contained in this Annual Report are prepared according to the rules of the International Financial Reporting Standards (“IFRSs”). Unless otherwise specified, all amounts are the consolidated data of the Group and denominated in RMB. KPMG Huazhen LLP and KPMG Certified Public Accountants, auditors of the Company, have audited the financial reports of 2017 prepared in accordance with the Chinese Accounting Standards (“CAS”) and the IFRSs respectively, and issued standard and unqualified auditors’ reports. Board of Directors China Minsheng Banking Corp., Ltd. Hong Qi (Chairman), Zheng Wanchun (President), Bai Dan (Senior Management responsible for finance and accounting) and Li Wen (person in charge of the accounting department) warrant the truthfulness, accuracy and completeness of the financial reports included in this Annual Report. Contents Important Notice Definitions 2 Material Risks Warning 4 Message from the Chairman 5 Message from the President 10 Strategic Positioning and Targets of the Company 16 Annual Awards 17 Bank Profile 18 Summary of Accounting Data and Financial Indicators 20 Discussion and Analysis on Business Operation 22 Changes in Share Capital and Information on Shareholders 98 Directors, Supervisors, Senior Management and Employees 127 Corporate Governance 157 Report of the Board of Directors 210 Report of the Supervisory Board 219 Major Events 223 Financial Reports 236 Organisation Chart 473 List of Entities 474 Statistics of Correspondent Banks 2 China Minsheng Banking Corp., Ltd. Definitions In this report, unless the context otherwise requires, the following terms shall have the meanings set out below. “ACFIC” All-China Federation of Industry and Commerce (中華全國工商 業聯合會) “Bank” or “Company” or China Minsheng Banking Corp., Ltd. “China Minsheng Bank” or “Minsheng Bank” “Board” board of directors of the Company “CBIRC” China Banking and Insurance Regulatory Commission “CBRC” China Banking Regulatory Commission “CIRC” China Insurance Regulatory Commission “CMBC International” CMBC International Holdings Limited “Convertible Bond(s)” or A Share convertible bonds “Minsheng Convertible Bond(s)” or “A Share Convertible Bond(s)” “CPPCC” The National Committee of the Chinese People’s Political Consultative Conference (中國人民政治協商會議全國委員會) “CSRC” China Securities Regulatory Commission “Director” director of the Company “Group” the Company and its subsidiaries “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on SEHK “Minsheng Financial Leasing” Minsheng Financial Leasing Co., Ltd. “Minsheng Royal Asset Management” Minsheng Royal Asset Management Co., Ltd. Annual Report 2017 3 Definitions “Minsheng Royal Fund” Minsheng Royal Fund Management Co., Ltd. “Model Code” Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Hong Kong Listing Rules “PBOC” People’s Bank of China “Phoenix Project” (鳳凰計劃) a customer-oriented comprehensive transformation and reform in the growth pattern and governance model of the Company in response to external environment changes including the liberalisation of interest rate “Reporting Period” the period from 1 January 2017 to 31 December 2017 “SBU(s)” strategic business unit(s) “SEHK” The Stock Exchange of Hong Kong Limited “Senior Management” senior management of the Company “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SSE” Shanghai Stock Exchange “Supervisor” supervisor of the Company “Supervisory Board” supervisory board of the Company “SZSE” Shenzhen Stock Exchange 4 China Minsheng Banking Corp., Ltd. Material Risks Warning The Company has no foreseeable material risks. For potential risks, please refer to the section headed “XI. Prospects and Measures — (III) Potential risks” under “Discussion and Analysis on Business Operation” of this report. Annual Report 2017 5 Message from the Chairman Chairman Mr. HONG Qi 6 China Minsheng Banking Corp., Ltd. Message from the Chairman In face of the complicated domestic and global macro-economic environment, the Company strictly complied with the economic and financial strategies of the CPC Central Committee and the State Council. The Company has clearly defined its development strategies to improve financial services for the real economy, and maintained stable and healthy development with strengthened risk management, advanced reform and transformation as well as deepened business innovation. As at the end of 2017, the total assets of the Group amounted to RMB5,902,086 million, net profit attributable to equity shareholders of the Company amounted to RMB49,813 million, and return on average assets was 0.86%. The results were satisfactory. In 2017, Minsheng Bank ranked 251st in the “Fortune Global 500” by Fortune and ranked 29th in both the “Top 1000 World Banks” and the “Top 500 Banking Brands” by The Banker, and ranked 55th in the “Top 500 Enterprises in China (中國企業500強)”. Further improved efficiency and quality of services for the real economy in line with the national economic strategies. To support major national strategic projects, including the “Belt and Road Initiative”, coordinated development of the Beijing-Tianjin-Hebei region, development of Yangtze River Economic Belt, Guangdong-Hong Kong-Macao Greater Bay Area and construction of Xiong’an New Area, the Company continued to innovate business models and accelerated service tempo. In response to the tasks of cutting overcapacity, reducing excess inventory, deleveraging, lowering costs and strengthening areas of weakness, the Company adopted differentiated credit policies to proactively support emerging industries relating to energy saving and environmental protection, new energy, new material and new information technology. The Company provided targeted and customised comprehensive financial services to small and micro enterprises in order to solve their difficulties in financing and high cost of financing. The Company also vigorously developed green finance to support the development of green economy, and had entered into cooperation agreements with quality customers which had outstanding performance in eco-environmental protection sector to promote the establishment of ecological civilisation. Strengthened strategic planning and specified development objectives. Based on extensive study and in-depth judgment on the internal and external changes and the future development trend of the financial industry and its own development needs, the Company formulated a Three-Year Development Plan 《三年發展規劃》( ) with distinctive features, rational objectives and a complete set of measures. According to the Three-Year Development Plan, the Company will stick to the customer- centered principle and objectives to improve the development quality and efficiency. It has specified the three major strategic positionings of becoming “a bank for the non-state-owned enterprises (NSOEs), a fintech-based bank and a bank of comprehensive services”, as well as the implementation paths to achieve such goal. The Company also strove to build itself into a digitalised, light-weighted and integrated benchmark bank, which shaped the direction of future