Shengjing Bank 2016 Annual Results Announcement

Net Profit of Shengjing Bank Maintained Solid Performance with a Double-Digit Increase in Net Profit, Making a Successful Diversified Development

HONG KONG — Shengjing Bank Co., Ltd (“Shengjing Bank”, or “the Bank”, stock code: 2066.HK), the largest city commercial bank in terms of total assets in Northeast China, is pleased to announce its audited annual results for the year ended 31 December 2016 (the “Reporting Period”).

– Total assets were RMB905.483 billion, representing a YoY increase of 29.1%
– Net profit of RMB6.878 billion, representing a YoY increase of 10.5%.
– Net profit attributable to equity shareholders of the Bank were RMB6.865 billion, representing a YoY increase of 10.5%
– Operating income of RMB16.114 billion, representing a YoY increase of 13.6%
– Net interest income were RMB13.218billion,representing a YoY increase of 10.6%
– The balance of deposits was RMB415.246 billion, representing a YoY increase of 3.2%
– The balance of all loans amounted to RMB235.417 billion, representing a YoY increase of 20.4%
– The capital adequacy ratio, Tier-one capital adequacy ratio and core Tier-one capital adequacy ratio of the Bank were 11.99%, 9.10% and 9.10%
– The Board has proposed the payment of a cash dividend of RMB2.5 for every ten Shares of the Bank (tax inclusive) for the year ended 31 December 2016 in an aggregate amount of RMB1,449 million (tax inclusive) to all the Shareholders of the Bank

In 2016, faced with the complicated situation of continuous macro-economic downward pressures and risks exposure in the region and in the banking industry, the Bank adhered to forward-looking market research and judgment as well as prudent risk control strategies, thoroughly implemented innovation and transformation and integrated operation strategies, constantly enriched businesses, products and functional licenses, and continuously strengthened pricing management and operating cost management and control, all of which have contributed to a good situation where the Bank’s operational results recorded steady increases and its developmental potentials were gradually released.

As at 31 December 2016, the Bank’s total assets were RMB905.483 billion, representing a year-on-year increase of 29.1%; the balance of all loans amounted to RMB235.417 billion, representing a year-on-year increase of 20.4%; and the balance of deposits was RMB415.246 billion, representing a year-on-year increase of 3.2%. In 2016, the Bank realised an operating income of RMB16.114 billion, representing a year-on-year increase of 13.6%, and a net profit of RMB6.878 billion, representing a year-on-year increase of 10.5%.

In 2016, by virtue of our advantages in good operational results, sound business functions, and outstanding brand reputation, the Bank successfully entered the list of Top 500 Chinese Enterprises, ranking 364th; and ranked 186th in the list of “Top 1,000 Global Banks for 2016” as issued by The Banker, a magazine in Britain, moving up 6 places as compared with 2015, and ranked 24th in all Chinese banks in the list; at China Banking Association, Ranked 23rd in Top 100 Chinese Banks for 2016; won the 21st Century Business Herald has Ranked 6th in the Competitiveness List of Urban Commercial Banks in China for 2016; get the One of Top 10 Urban Commercial Banks for Excellent Competitiveness for 2016; and won China Financial Market, a financial magazine in Hong Kong-China Financial Market Listed Company Award for 2016-Best Listed Company .

Steady Growth of Retailing Business
Shengjing Bank the main segment including corporate banking, Personal banking, and Treasury business. At 2016, the corporate banking revenue was RMB11.444 billion; the personal banking revenue was RMB1.057 billion; and the treasury business revenue was RMB3.595 billion. Until end of 2016, the balance of personal loans amounted to RMB8.160 billion, representing an increase of RMB1.263 billion or 18.3% when compared to that at the end of the previous year, and accounted for 3.4% of total loans and advances to customers. Among personal loans, residential mortgage increased by RMB494 million or 12.3% when compared to that at the end of the previous year, mainly driven by the demand from the personal residential mortgage loan market; and personal consumption loans increased by RMB1.246 billion or 99.3% when compared to that at the end of the previous year. As a result of China’s economic development and the changes in people’s spending preference, the Bank increased its efforts in marketing and granting personal consumption loans, thereby driving the rapid growth of personal consumption loans.

Meanwhile, the Bank deepened the strategic transformation and innovation by accelerating the transformation from a traditional business to the newly-emerged business and from a traditional operating structure to the comprehensive operating structure,The first consumer finance company in the Northeast China, Shengjing Bank Consumer Finance Co., Ltd, was approved and officially opened for business. At present, the introduction of the family loan, general loan, help loan three series of consumer loan products in 14 categories, stimulating domestic demand, promote the upgrading of the consumer has carried out a useful exploration.

Prudent Risk Management and Expanding Innovation
Shengjing Bank for a long time adhered to the prudent and steady strategy for risk control, strictly complied with the bottom line of risk control, continued to strengthen the comprehensive risk management and compliant operation, continuously optimised the differentiation strategy in terms of industries, regions, customers and projects, strengthened the risk management and internal control, and implemented self-assessment of compliant operation and risk management, all of which contributed to its strengthened ability to respond to market changes and competition.

As the same time, in the treasury business including the money market transactions, financial investment, bond distribution, bill discount, rediscount and valet funds business. Shengjing Bank timely adjusted its operation strategy for treasury business, enhanced the design and management of business diversification, orderly promoted the business expansion and customer development, and minimised the unfavourable impact caused by market risks, through strengthening its studies on the macro-economy, opining on the trend of market changes and analysing the impact of regulatory policies, in order to ensure a steady growth in the business scale and revenue of the Bank’s treasury business.

Strategic Outlay
In particular, the banking sector will be embracing new opportunities for the implementation of national strategies such as “one belt, one road”, coordinated development of Yangtze River economic belt and the Beijing-Tianjin-Hebei region, a new round of revitalising Northeast China, “made in China 2025” as well as the strategy of the deepening structural reform in the supply side further promoted by the Central Economic Working Conference. However, under the influence of multiple complicated factors such as intensifying competition in the finance industry, tightened financial regulation and impact from Internet finance, the risk control, business innovation and strategic transformation of commercial banks are confronting challenges and tests.

In the next two or three years, the Bank will actively adapt to the new economic mode, proactively cooperate in the nation’s efforts of revitalising Northeast China, and capture the opportunities in the financial reform. In particular, with the aim of “developing itself into a first-class bank and building up a century-old brand”, it will focus on steady progress and adhere to the positioning of “driving the strategic development of regional economy”, “cultivating emerging industries”, “supporting small and medium-size enterprises” and “providing accommodating services to residents”. Emphasising reform, development, sound quality, structure adjustment and innovation, it will give full play to the leadership and strategic values of the finance industry and constantly optimise its ideas and ways of serving the real economy, in order to achieve a win-win situation for itself and the regional economy.