Financial Performance - Total assets of the company reached RMB 1,233.5 billion, a year-on-year increase of 6.18%[5] - Customer deposits grew by 7.15% year-on-year[5] - Total loans and advances increased by 5.22% year-on-year[5] - Net profit attributable to shareholders rose by 9.98% year-on-year[5] - Net interest income decreased by 5.00% to RMB 18,582.02 million in 2022 compared to 2021[19] - Fee and commission income increased by 4.78% to RMB 1,382.08 million in 2022[19] - Total operating income decreased by 3.99% to RMB 22,544.65 million in 2022[19] - Net profit attributable to shareholders increased by 9.98% to RMB 3,492.16 million in 2022[19] - Total assets increased by 6.18% to RMB 1,233,454.45 million in 2022[19] - Interest income increased by 1,252.45 million RMB (2.94%) to 43,818.40 million RMB in 2022 compared to 2021[32] - Interest expense rose by 2,229.59 million RMB (9.69%) to 25,236.38 million RMB in 2022[32] - Net interest income decreased by 977.14 million RMB (5.00%) to 18,582.02 million RMB in 2022[32] - Net profit increased by 261.49 million RMB (6.92%) to 4,037.78 million RMB in 2022[32] - Pre-tax profit grew by 53.06 million RMB (1.19%) to 4,510.35 million RMB in 2022[32] - Credit impairment losses decreased by 1,914.17 million RMB (15.26%) to 10,626.00 million RMB in 2022[32] - Net interest margin (NIM) declined to 1.69% in 2022 from 2.00% in 2021[33] - Customer loans and advances averaged 664,045.00 million RMB with an average yield of 4.93% in 2022[33] - Total interest-bearing liabilities averaged 1,107,332.82 million RMB with an average cost rate of 2.28% in 2022[33] - Total interest-earning assets averaged 1,097,359.84 million RMB with an average yield of 3.99% in 2022[33] - The group's overall interest-earning assets average yield decreased by 37 basis points to 3.99% in 2022, while the average cost rate of interest-bearing liabilities decreased by 7 basis points to 2.28%[34] - Net interest margin decreased by 31 basis points to 1.69% in 2022[34] - Interest income increased by RMB 1.25245 billion in 2022, driven by a RMB 5.20983 billion increase due to scale factors and a RMB 3.95738 billion decrease due to interest rate factors[34] - Interest expense increased by RMB 2.22959 billion in 2022, with a RMB 3.28806 billion increase due to scale factors and a RMB 1.05847 billion decrease due to interest rate factors[34] - The group achieved interest income of RMB 43.818 billion in 2022, an increase of RMB 1.252 billion or 2.94% year-on-year[35] - Customer loan and advance interest income was RMB 32.73973 billion in 2022, an increase of RMB 258 million or 0.79% year-on-year, with an average yield decrease of 37 basis points to 4.93%[36] - Interest income from receivables from other financial institutions decreased by RMB 79 million or 3.52% year-on-year to RMB 2.17314 billion in 2022[37] - Interest expense increased by RMB 2.230 billion or 9.69% year-on-year to RMB 25.236 billion in 2022[39] - Customer deposit interest expense increased by RMB 1.318 billion or 7.42% year-on-year to RMB 19.07819 billion in 2022, with an average cost rate decrease of 2 basis points to 2.22%[40][41] - Interest expense on payables to other financial institutions decreased by RMB 292 million or 14.06% year-on-year to RMB 1.78264 billion in 2022, mainly due to a decline in interbank liability interest rates[42] - Fee and commission net income in 2022 was RMB 13.82 billion, an increase of RMB 0.63 billion, or 4.78% YoY, accounting for 6.13% of total operating income[43] - Trading net income in 2022 was RMB 1.077 billion, primarily from interest income and fair value changes of financial investments measured at fair value through profit or loss[44] - Net income from financial investments in 2022 was RMB 510 million, mainly from fair value changes of financial investments measured at fair value through other comprehensive income and gains from financial investments measured at amortized cost[45] - Other operating net income in 2022 was RMB 993 million, primarily from PBOC interest rate swap incentives and exchange gains/losses[46] - Operating expenses in 2022 were RMB 7.346 billion, an increase of RMB 926 million, or 14.42% YoY, with employee costs being the largest component at RMB 4.855 billion, up 23.16% YoY[47][48] - Asset impairment losses in 2022 were RMB 10.688 billion, with credit impairment losses accounting for RMB 10.626 billion, a decrease of 15.26% YoY[51] - Total assets as of December 31, 2022, were RMB 1,233.454 billion, an increase of RMB 71.826 billion, or 6.18% YoY, driven by growth in loans and advances (up 5.22% YoY) and financial investments (up 11.20% YoY)[53][54] - Total loans and advances increased by RMB 34.309 billion (5.22%) to RMB 6,919.72 billion as of December 31, 2022, with corporate loans growing by RMB 33.558 billion (8.24%) to RMB 4,405.85 billion[55] - Personal loans increased by RMB 7.529 billion (4.75%) to RMB 1,659.59 billion, while bill financing decreased by RMB 6.778 billion (7.35%) to RMB 854.29 billion[55] - Working capital loans, fixed asset loans, and financial lease receivables increased by RMB 23.113 billion (14.53%), RMB 13.435 billion (6.00%), and RMB 2.094 billion (11.17%) respectively, reaching RMB 1,821.95 billion, RMB 2,373.04 billion, and RMB 208.42 billion[56] - Personal mortgage loans and personal business loans increased by RMB 2.27 billion (0.31%) and RMB 5.951 billion (9.12%) respectively, while personal consumption loans and credit card balances grew by RMB 948 million (9.44%) and RMB 403 million (4.13%)[57] - Bank acceptance bill financing decreased by RMB 15.965 billion, while commercial acceptance bill financing increased by RMB 9.187 billion[58] - Mortgage loans, pledged loans, and credit loans increased by RMB 7.155 billion (2.20%), RMB 919 million (2.55%), and RMB 27.120 billion (20.43%) respectively, while guaranteed loans decreased by RMB 885 million (0.54%)[58] - Total investments increased by RMB 35.199 billion (11.20%) to RMB 3,494.37 billion, with financial assets measured at amortized cost growing by RMB 39.113 billion (24.85%) to RMB 1,965.17 billion[59] - Total liabilities increased by RMB 70.462 billion (6.56%) to RMB 11,452.05 billion, with customer deposits growing by RMB 60.718 billion (7.15%) to RMB 9,104.85 billion[62] - Customer deposits increased by 7.15% to RMB 910.485 billion, with personal deposits growing by 13.90% to RMB 516.654 billion and corporate deposits decreasing by 5.71% to RMB 358.236 billion[64] - The proportion of demand deposits decreased by 2.92 percentage points to 32.97%, while the proportion of time deposits (excluding margin and other deposits) increased by 0.92 percentage points to 63.12%[64] - The non-performing loan (NPL) ratio increased by 0.28 percentage points to 2.11%, and the proportion of special mention loans rose by 3.59 percentage points to 7.71%[68] - The total shareholder equity reached RMB 88.249 billion, with paid-in capital at RMB 11.451 billion, capital reserve at RMB 18.951 billion, and undistributed profits at RMB 19.995 billion[65] - The leasing and business services sector accounted for 37.50% of the total non-performing corporate loans, with an NPL ratio of 3.57%, up from 25.13% and 2.64% respectively in the previous year[70] - The wholesale and retail trade sector accounted for 37.34% of the total non-performing corporate loans, with an NPL ratio of 7.60%, slightly up from 7.35% in the previous year[70] - The real estate sector's non-performing loans increased to 13.50% of the total, with an NPL ratio of 2.83%, up from 5.66% and 1.00% respectively in the previous year[70] - The manufacturing sector's non-performing loans accounted for 4.78% of the total, with an NPL ratio of 1.18%, down from 1.54% in the previous year[70] - The construction sector's non-performing loans decreased to 1.55% of the total, with an NPL ratio of 0.50%, down from 2.36% in the previous year[70] - The health and social work sector's non-performing loans accounted for 1.17% of the total, with an NPL ratio of 5.76%, down from 7.02% in the previous year[70] - The non-performing loan ratio increased to 2.11% at the end of 2022, up by 0.28 percentage points compared to the previous year[74] - Corporate loans accounted for 81.38% of total loans, with a non-performing loan ratio of 2.70%[73] - Personal loans accounted for 18.62% of total loans, with a non-performing loan ratio of 1.64%[73] - Overdue loans decreased by RMB 4.813 billion to RMB 26.936 billion, with the overdue loan ratio dropping by 0.94 percentage points to 3.89%[76] - Restructured loans and advances increased by RMB 3.473 billion to RMB 23.004 billion[77] - The capital adequacy ratio decreased to 12.59% at the end of 2022, down by 0.50 percentage points[79] - The leverage ratio stood at 6.09% at the end of 2022[80] - Corporate banking business contributed 50.78% to total operating income, while retail banking contributed 39.62%[81] - Off-balance sheet items included RMB 51.149 billion in acceptance bills, RMB 32.556 billion in issued guarantees, and RMB 150.325 billion in loan commitments[82] - Corporate deposits reached 363.1 billion yuan, an increase of 11.6 billion yuan from the beginning of the year, ranking third in Guangzhou[84] - Corporate loan balance increased by 34 billion yuan to 396.5 billion yuan by the end of 2022[86] - Successfully issued the first green financial bond of 3 billion yuan, expanding funding sources and reducing financing costs for green enterprises[86] - Launched the "Green Enterprise Loan" and "Specialized and Sophisticated Loan" to support green finance and specialized enterprises[86] - Retail deposit scale ranked second in Guangzhou, with annual deposit growth reaching a historical high[89] - Introduced 14 differentiated and scenario-based deposit products targeting rural, education, and small customer segments[89] - Upgraded Huadu Branch to a Green Finance Reform and Innovation Pilot Zone Branch, elevating green finance to a strategic level[85] - Obtained approval for cross-border trade and investment facilitation services in the Nansha New Area, becoming the first local bank in Guangzhou with this qualification[87] - Won multiple awards for bond underwriting, including the Best Credit Bond Underwriter Award for four consecutive years[88] - Enhanced digital transformation in transaction banking, launching electronic letter of credit systems and supply chain factoring services[87] - Retail loan business grew steadily in 2022, with the company launching multiple mortgage loan products and establishing strategic partnerships with leading real estate developers and mortgage intermediaries[90] - The company's consumer loan business improved in quality and efficiency in 2022, with the launch of the "Jinmi Consumption e-Loan" and expansion of customer groups for the "Jinmi Fingertip Loan"[90] - Platform loans saw significant growth in 2022, with the successful launch of three major platform loans and the development of a second batch of bank-type platform loans[90] - Wealth management business focused on customer service management, product system construction, investment advisory services, and system support upgrades in 2022[91] - The company's wealth management business won multiple awards in 2022, including the "Golden Bull Award for Wealth Management Banks" and the "Golden Ding Award for Wealth Management Banks"[92] - The company issued a "Jinmi Rural Revitalization Card" debit card and the first cross-branch social security card in Guangdong Province in 2022[93] - Credit card business saw a 5.6% year-on-year increase in cumulative card issuance, reaching 1.9931 million cards by the end of 2022[94] - Financial market business achieved steady growth in scale and quality in 2022, with optimized asset and liability structures and reduced liability costs[95] - The company's core capabilities in financial market business were enhanced in 2022, with total transaction volume exceeding 11.8 trillion yuan by the end of the year[96] - The company explored new business models in financial markets in 2022, including bond reverse repurchase transactions and bond borrowing and lending[96] - The bank's wealth management product balance reached 69.946 billion yuan by the end of 2022[98] - The bank issued 19.341 billion yuan in small business loans, benefiting 5,192 customers, ranking first among local legal entities in the province[100] - The bank provided 7.643 billion yuan in loan repayment extensions, assisting 2,184 customers[100] - The bank completed interest subsidies for 273 first-time borrowers (individuals and enterprises), involving 908 million yuan in loans, ranking first among local legal entities in the province[100] - The bank's WeChat banking service had 1.2637 million customers by the end of 2022[102] - The bank's "Jinmi Market" e-commerce platform generated nearly 3 million yuan in sales for agricultural products in 2022[103] - The bank has 605 branches (including 1 specialized institution), with 586 in Guangzhou, ranking first in the region[103] - The bank has 2,065 self-service terminals, including 1,044 ATMs, 473 self-service inquiry terminals, and 548 intelligent service terminals[104] - The bank has 255 smart banking outlets with 548 STM devices[104] - The bank achieved stable operation of all major information systems in 2022, with no unplanned system interruptions[105] - The company successfully launched 46 projects in 2022, including a risk management system, a small and micro financial service platform, a corporate intelligent marketing system, and an intelligent voice outbound system, effectively supporting the development and management of various business lines[109] - The company introduced new technologies such as RPA robots and federated learning, reducing manual workload and enhancing business processing efficiency[110] - The company achieved a customer service satisfaction rate of 99.12% in 2022, with 1,263 consumer complaints handled across all channels, all resolved in a timely manner[111] - The company conducted consumer rights protection education activities, covering approximately 15 million people, and received multiple awards from regulatory authorities[111] - The company established a comprehensive risk management governance structure, covering all business lines, branches, and subsidiaries, and continuously optimized its risk management framework[112] - The company strengthened credit risk management by improving the organizational structure, establishing a cross-departmental post-loan management supervision group, and enhancing the credit approval process[114] - The company promoted the use of a "credit investigation APP" for pre-loan processes, optimized review tools for mid-loan processes, and revised post-loan systems to strengthen risk monitoring[115] - The company enhanced risk asset control by revising management measures, optimizing risk management assessment mechanisms, and increasing the weight of asset quality assessment indicators[115] - The company completed the second phase of the risk system project group, with all functions within the project scope successfully launched, and implemented electronic management of credit files[116] - The company established a scientific liquidity risk management mechanism to ensure timely fulfillment of liquidity needs and payment obligations under normal or stressed conditions[117] - The company's liquidity coverage ratio reached 397.90% and the net stable funding ratio was 118.62% at the end of 2022[118] - The company conducted regular liquidity risk stress tests and increased testing during sensitive periods to enhance monitoring and prevention[118] - The company's market risk indicators were all within acceptable limits, and stress tests showed the ability to withstand valuation changes impacting revenue, net profit, and capital adequacy[119] - The company strengthened operational risk management by setting up quantitative monitoring indicators and conducting internal control checks[120] - The company implemented multiple measures to enhance information technology risk management, including issuing new regulations and conducting emergency drills[121] - The company focused on compliance risk management by improving the system construction and conducting case risk investigations[122] - The company continued to strengthen legal risk management and improved the risk prevention and control capabilities[123] - The company completed key projects in anti-money laundering system reconstruction and self-assessment of money laundering risks[124] - The company established a sound reputation risk management mechanism to effectively respond to negative public opinion events[125] - The

Financial Performance - Total assets reached RMB 1,233.5 billion, an increase of 6.18% year-on-year, ranking among the top three rural commercial banks in China[6]. - Customer deposits grew by 7.15%, while total loans and advances increased by 5.22%[6]. - Net profit attributable to shareholders rose by 9.98%[6]. - Revenue for the quarter reached $500 million, a 15% increase compared to the previous quarter, driven by strong performance in the digital banking sector[14]. - The company reported a significant increase in net profit, reaching 1.2 billion RMB, representing a 15% year-over-year growth[180]. - The total operating income for 2022 was RMB 22,544.65 million, reflecting a decline of 3.99% compared to RMB 23,480.53 million in 2021[20]. - The company achieved a pre-tax profit of RMB 4.51 billion, an increase of 1.19% year-on-year, and a net profit of RMB 4.04 billion, up 6.92% year-on-year[33]. - The company reported a net profit margin of 12%, up from 10% in the previous year, reflecting improved operational efficiency[9]. Customer Engagement and Growth Strategies - The bank implemented a "Customer Doubling Plan" focusing on small and micro enterprises and retail customers, enhancing service efficiency[7]. - The company plans to implement a "Customer Doubling Plan" to expand its customer base and improve service quality[9]. - The company reported a significant increase in user data, with a total of 1.5 million new accounts added in Q3 2023, representing a 25% year-over-year growth[13]. - The company is expanding its market presence by opening 10 new branches across key urban areas, aiming to increase its customer base by 30% in the next year[14]. - The company aims to achieve a return on equity of 12% by the end of the fiscal year, up from 10%[182]. - The company is actively seeking to expand its market presence through strategic appointments and governance improvements[166]. Risk Management and Compliance - A comprehensive risk management system was established, featuring a seven-level classification and four-level management mechanism for asset risk[8]. - The company emphasizes risk management and aims to reduce existing asset risks while enhancing capital strength[10]. - The bank has strengthened compliance risk management by enhancing the regulatory framework and conducting risk assessments to prevent legal and regulatory breaches[123]. - The bank has established a comprehensive anti-money laundering risk management system, enhancing internal inspection and training to prevent money laundering risks effectively[125]. - The company has improved its consumer rights protection framework, conducting extensive educational campaigns that reached approximately 15 million people[112]. Technology and Innovation - Investment in technology R&D has increased by 40%, focusing on enhancing cybersecurity measures and improving user experience[15]. - The company has invested in new technologies such as RPA and federated learning to enhance operational efficiency and information security[111]. - The bank has a strong focus on technology and innovation, with leaders like Mr. Li, who has extensive experience in the technology department of various banks[184]. - The company is focusing on optimizing its product system and improving service efficiency as part of its "Customer Doubling Plan"[29]. - The company has successfully completed all objectives of its information technology innovation plan for 2022, receiving multiple awards for its digital transformation initiatives[111]. Asset Quality and Financial Health - The non-performing loan ratio increased to 2.11% in 2022 from 1.83% in 2021, reflecting a change of 0.28%[22]. - The provision coverage ratio decreased to 156.93% in 2022 from 167.04% in 2021, a decline of 10.11%[22]. - The capital adequacy ratio fell to 12.59% in 2022 from 13.09% in 2021, a decrease of 0.50%[22]. - The company has established a seven-level classification and four-level management mechanism for asset risk classification and management[31]. - The actual credit impairment loss for 2022 was RMB 10.626 billion, a decrease of RMB 1.914 billion or 15.26% from 2021[52]. Shareholder Structure and Governance - Total share capital as of December 31, 2022, is 11,451,268,539 shares, with no changes during the reporting period[134]. - The largest shareholder, Guangzhou Municipal Government, has a significant influence over the company's strategic decisions due to its majority stake[144]. - The company has multiple beneficial owners, including individuals with substantial indirect holdings through controlled corporations[146][147]. - The company’s board of directors and senior management underwent changes, with several new appointments and resignations in 2022 and early 2023[162]. - The company is committed to maintaining a strong leadership team to drive future growth and strategic initiatives[167]. Employee and Organizational Structure - As of the end of 2022, the total number of employees in the group is 13,975, with 13,342 under labor contracts and 633 dispatched personnel[197]. - The gender distribution of employees shows 7,333 males (52.47%) and 6,642 females (47.53%)[198]. - Employee education structure indicates that 3,655 employees (26.15%) have an associate degree or below, 9,048 employees (64.75%) hold a bachelor's degree, and 1,272 employees (9.10%) have a graduate degree or above[198]. - The company has implemented a continuous improvement policy for the compensation management and performance evaluation system for directors and senior management[195]. - The management team includes individuals with extensive backgrounds in finance and banking, enhancing the company's expertise[165].

Company Overview - The registered capital of Guangzhou Rural Commercial Bank is RMB 11,451,268,539[6]. - The bank operates under the Hong Kong Stock Exchange with the stock code 1551.HK[6]. - The bank's main business scope includes monetary financial services[6]. - The bank has multiple branches across Guangzhou, with a total of 11 listed in the report[10]. - The bank's legal representative is Mr. Cai Jian[6]. - The bank's financial report period covers six months from January 1, 2022, to June 30, 2022[5]. - The bank's contact number for investor relations is (8620) 28019324[6]. - The bank's registered address is No. 9 Yingri Road, Huangpu District, Guangzhou, China[6]. - The bank's major operating address in Hong Kong is 40th Floor, Dah Sing Financial Centre, 248 Queen's Road East, Wanchai[6]. - The bank's auditor is PricewaterhouseCoopers[6]. Financial Performance - Net interest income for the first half of 2022 was RMB 9,101.21 million, a decrease of 5.78% compared to RMB 9,659.72 million in the same period of 2021[13]. - Total operating income decreased by 4.96% to RMB 11,210.56 million from RMB 11,796.21 million year-on-year[13]. - Pre-tax profit fell by 28.82% to RMB 3,172.40 million, down from RMB 4,457.16 million in the previous year[13]. - Net profit attributable to shareholders decreased by 19.27% to RMB 2,526.58 million compared to RMB 3,129.78 million in the same period last year[13]. - Total assets increased by 6.46% to RMB 1,236,655.46 million from RMB 1,161,628.63 million at the end of 2021[14]. - Customer loans and advances net amount rose by 5.05% to RMB 669,738.62 million from RMB 637,553.81 million[14]. - Non-performing loan ratio increased to 2.03% from 1.83%[16]. - The coverage ratio for provisions decreased to 151.47% from 167.04%[16]. - The capital adequacy ratio decreased to 12.35% from 13.09%[16]. Income and Expenses - Interest income for the same period was RMB 21.75767 billion, an increase of RMB 1.29424 billion or 6.32% compared to the previous year[20]. - The company's total interest-bearing assets averaged RMB 1,078.14228 billion, with total interest-bearing liabilities averaging RMB 1,092.01423 billion[21]. - The net interest margin decreased by 34 basis points to 1.69% compared to the previous year[22]. - The company reported a significant reduction in commission income, with net commission income dropping by 18.74% year-on-year[18]. - Interest expenses for the first half of 2022 totaled RMB 12.656 billion, an increase of RMB 1.853 billion, representing a growth of 17.15%[27]. Customer Deposits and Loans - Customer deposits accounted for RMB 885.997 billion, representing 77.10% of total liabilities, an increase from 79.07% at the end of the previous year[48]. - The total loans and advances reached RMB 690.941 billion, up by RMB 33.278 billion or 5.06% from the end of the previous year, with corporate loans increasing by 4.39% and personal loans by 3.80%[43]. - The proportion of mortgage loans in total loans was 48.15%, while pledged loans accounted for 5.22%[46]. - The group’s personal mortgage loans, personal operating loans, personal consumption loans, and credit card balances were RMB 749.89 billion, RMB 687.67 billion, RMB 102.92 billion, and RMB 104.05 billion, respectively[45]. Risk Management - The bank's credit risk management framework was enhanced in the first half of 2022, with the establishment of a credit management department to streamline risk management processes[94]. - The bank's liquidity risk management measures included monthly monitoring of liquidity indicators and quarterly liquidity risk stress tests, ensuring overall liquidity risk remained controllable[95]. - The bank's overall credit risk was deemed controllable in the first half of 2022, supported by enhanced risk management capabilities[94]. - The bank has established a compliance risk management mechanism to effectively identify, assess, prevent, and address compliance risks, ensuring legal and regulatory compliance in operations[99]. Shareholder Information - The total share capital of the bank as of June 30, 2022, was 11.45 billion shares, with non-overseas listed shares accounting for 9.33 billion shares, representing 81.44% of the total[110]. - The top ten shareholders held a combined 47.33% of the bank's shares, with the largest shareholder, Hong Kong Central Clearing Limited, holding 2.12 billion shares, or 18.56%[113]. - The company does not have a controlling shareholder or actual controller as of the reporting period[116]. - The company has a diverse shareholder base with significant stakes held by various investment and government entities[120]. Employee and Governance - Total number of employees as of the reporting period is 13,993, a decrease of 175 compared to the end of 2021[142]. - The company organized 155 offline training programs covering over 30,000 employee instances, and conducted 152 online live training sessions with an average of 32 hours of online learning per employee[144]. - The company’s governance structure includes various committees such as the Strategic and Investment Committee and the Audit Committee, ensuring comprehensive oversight[151]. - The bank's management is tasked with regular reporting to the board on operational matters and compliance with governance standards[153].

Financial Performance - The total asset scale of Guangzhou Rural Commercial Bank reached CNY 1,161.6 billion, ranking second among rural commercial banks in China[8]. - The bank raised CNY 9.677 billion in capital to support stable operations and enhance growth momentum[8]. - The bank's operating indicators, including deposits and loans, continued to show good growth, indicating a solid financial performance[8]. - In 2021, Guangzhou Rural Commercial Bank's total assets reached CNY 1,161.6 billion, with deposits of CNY 849.8 billion and loans of CNY 657.7 billion[11]. - Net interest income for 2021 was RMB 19,559.16 million, an increase of 10.83% compared to RMB 17,647.48 million in 2020[22]. - Total operating income reached RMB 23,480.53 million, reflecting a growth of 10.66% from RMB 21,218.41 million in the previous year[22]. - The net profit attributable to shareholders of the parent company decreased by 37.51% to RMB 3,175.21 million from RMB 5,081.30 million in 2020[22]. - The total assets increased to RMB 1,161,628.63 million, up by 13.03% from RMB 1,027,871.65 million in 2020[22]. - The average return on equity decreased to 4.43% from 7.10% in the previous year[23]. - The cost-to-income ratio improved to 26.08%, down from 31.95% in 2020[23]. - The capital adequacy ratio increased to 13.09% from 12.56% in 2020[24]. - The bank's customer loans and advances net amount rose to RMB 637,553.81 million, a significant increase of 84,385.47 million from RMB 553,168.34 million in 2020[22]. Strategic Goals and Development - The bank aims to become a leading rural commercial bank by 2023 and a first-class commercial bank in China by 2025[8]. - The bank's strategic plan for 2021-2025 aims to achieve high-quality development and improve its overall business structure[11]. - The bank's vision is to become a leading commercial bank in China, guided by Xi Jinping's thoughts on socialism with Chinese characteristics for a new era[10]. - The bank's commitment to innovation and reform is expected to drive its future growth and market expansion[8]. - The bank plans to strengthen rural finance, industrial finance, consumer finance, and wealth finance, with a commitment to support small and medium enterprises and enhance retail credit, especially consumer loans[9]. Risk Management - The bank actively managed risk assets with a comprehensive approach, focusing on controlling new risks and resolving existing ones[8]. - The bank will continue to optimize its risk monitoring and approval processes to build a robust risk management culture[9]. - The bank's leadership emphasizes the need for a proactive approach to risk management and a customer-centric business philosophy[12]. - The company implemented a comprehensive risk management framework, focusing on credit risk management and optimizing asset structure to support local enterprises and small businesses[115]. - The company conducted liquidity risk management measures, ensuring that all important liquidity risk indicators met targets each month[119]. - The company maintained overall market risk control, with all key market risk indicators meeting targets and stress test results indicating resilience against valuation changes[120]. Awards and Recognition - The bank has received multiple awards, including the "China Financial Innovation Award" and "Annual Regional Influence Bank," reflecting its competitive position in the market[11]. - The bank's wealth management business received multiple awards, including the "Annual Wealth Management Award" and "Gold Quality Financial Brand Award" in 2021, reflecting its strong market recognition[88]. Capital Structure and Shareholder Information - The registered capital of Guangzhou Rural Commercial Bank is RMB 11,451,268,539[13]. - The total share capital increased from 9,808,268,539 shares at the end of 2020 to 11,451,268,539 shares by the end of 2021, representing an increase of 1,643,000,000 shares[132]. - The company issued a total of 1.643 billion shares during the reporting period, raising approximately RMB 9.663 billion for core tier one capital[134]. - The company distributed cash dividends of approximately RMB 1.202 billion (including tax) for the fiscal year 2021, proposing a payout of RMB 1.05 per 10 shares[153]. Governance and Management - The company’s governance structure was strengthened with the appointment of new supervisory board members, enhancing oversight and compliance[157]. - The company’s board of supervisors saw new external supervisors appointed on February 23, 2021, including Mr. Zhan Li Yuan and Mr. Han Zhen Ping[157]. - The company has established a performance assessment system that emphasizes risk management and high-quality development, with various indicators for core development, operational efficiency, compliance risk, and business transformation[180]. - The board of directors consists of 14 members, including 3 executive directors and 5 independent non-executive directors[189]. Customer and Market Engagement - The bank's retail deposit scale reached CNY 360.1 billion by the end of 2021, an increase of CNY 40.8 billion, representing a growth rate of 12.7%, outperforming the industry average by 3.22 percentage points[84]. - The bank's credit card issuance reached 1.8873 million cards by the end of December 2021, a growth of 7% year-on-year, with intermediary income from credit card business amounting to CNY 184 million and operating income of CNY 725 million in 2021[89]. - The bank's mobile banking customers numbered approximately 4.02 million, with a transaction volume of 17.71 million and a total transaction amount of 493.005 billion RMB[101]. Employee Development - The total number of employees in the group as of December 31, 2021, was 14,168, an increase of 227 employees or 2% compared to the previous year[177]. - The company organized over 450 training programs in 2021, covering more than 60,000 employee training sessions, with an average of 66 hours of online learning per employee[178]. - The compensation structure for employees includes fixed salaries, variable pay, and benefits, with total compensation being dynamically adjusted based on various factors including economic performance and risk control[179].

[Company Profile](index=3&type=section&id=Company%20Profile) [Company Overview](index=3&type=section&id=Company%20Overview) Guangzhou Rural Commercial Bank Co., Ltd. (GRCB), established in 2009 and listed in 2017, operates diverse financial services with a registered capital of RMB 9.81 billion - The company's legal Chinese name is 廣州農村商業銀行股份有限公司, abbreviated as "廣州農村商業銀行"[5](index=5&type=chunk) - The company's legal English name is Guangzhou Rural Commercial Bank Co., Ltd., abbreviated as "GRCB"[5](index=5&type=chunk) Company Basic Information | Indicator | Content | | :--- | :--- | | Registered Capital | RMB 9,808,268,539.00 | | H-share Listing Exchange | The Stock Exchange of Hong Kong Limited | | H-share Abbreviation and Code | GRCB (1551.HK) | | Overseas Preference Share Abbreviation and Code | GRCB 19USDPREF (4618.HK) | | Business Scope | Monetary financial services | [Branch Network](index=4&type=section&id=Branch%20Network) As of the reporting period, the bank operates 635 branches, with 617 in Guangzhou and 18 in other Guangdong cities, leading in Guangzhou's branch count - As of June 30, 2021, the bank had **635 branches**, including **617 in Guangzhou** (1 specialized institution) and **18 in other Guangdong cities**[551](index=551&type=chunk) - The bank's Guangzhou branch network ranks first among banks in the Guangzhou area[551](index=551&type=chunk) - The bank has **5 off-site branches**, **12 sub-branches**, and **1 banking outlet** in Foshan, Qingyuan, Heyuan, Zhaoqing, and Zhuhai[551](index=551&type=chunk) [Major Honors in H1 2021](index=5&type=section&id=Major%20Honors%20in%20H1%202021) In H1 2021, GRCB achieved significant recognition, ranking 159th in global bank brand value and 30th in China's banking industry Major Honors in H1 2021 | No. | Honor Name | Awarding/Granting Body | Award Time | | :--- | :--- | :--- | :--- | | 1 | Top 500 Global Banking Brands 2020, ranked 159th | Brand Finance & The Banker | Feb 2021 | | 2 | Golden Lion 20-Year Public Welfare Partner Award | Information Times | May 2021 | | 3 | Top 100 Chinese Banking Industry 2021, ranked 30th | China Banking Association | Jul 2021 | [Financial Highlights](index=6&type=section&id=Financial%20Highlights) [Operating Performance](index=6&type=section&id=Operating%20Performance) In H1 2021, the group's operating performance showed steady growth, with net profit increasing by 10.17% and basic earnings per share rising to RMB 0.26 H1 2021 Operating Performance (RMB millions) | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | 9,659.72 | 9,390.31 | 269.41 | 2.87 | | Net fee and commission income | 694.19 | 600.04 | 94.15 | 15.69 | | Operating income | 11,796.21 | 11,793.68 | 2.53 | 0.02 | | Profit before tax | 4,457.16 | 4,094.65 | 362.51 | 8.85 | | Net profit | 3,660.08 | 3,322.26 | 337.82 | 10.17 | | Net profit attributable to equity holders of the parent | 3,129.78 | 3,085.66 | 44.12 | 1.43 | | Basic earnings per share (RMB) | 0.26 | 0.25 | 0.01 | 4.00 | [Scale Indicators](index=6&type=section&id=Scale%20Indicators) As of June 30, 2021, the group's total assets exceeded RMB 1 trillion, growing 6.17% from year-end, with double-digit growth in net customer loans and deposits H1 2021 Scale Indicators (RMB millions) | Item | As of June 30, 2021 | As of December 31, 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 1,091,302.07 | 1,027,871.65 | 63,430.42 | 6.17 | | Of which: Net customer loans and advances | 619,653.42 | 553,168.34 | 66,485.08 | 12.02 | | Total liabilities | 1,014,276.54 | 951,986.34 | 62,290.20 | 6.54 | | Of which: Customer deposits | 829,957.30 | 778,424.85 | 51,532.45 | 6.62 | | Equity attributable to equity holders of the parent | 70,248.29 | 69,487.08 | 761.21 | 1.10 | | Total equity | 77,025.53 | 75,885.31 | 1,140.22 | 1.50 | [Profitability Indicators](index=7&type=section&id=Profitability%20Indicators) In H1 2021, the group's average return on equity improved, while average return on total assets, net interest margin, and net interest spread slightly decreased H1 2021 Profitability Indicators | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change Amount | | :--- | :--- | :--- | :--- | | Average return on total assets | 0.69% | 0.71% | (0.02) | | Average return on equity | 10.08% | 9.24% | 0.84 | | Net interest spread | 2.04% | 2.23% | (0.19) | | Net interest margin | 2.03% | 2.26% | (0.23) | | Net fee and commission income to operating income ratio | 5.88% | 5.09% | 0.79 | | Cost-to-income ratio | 28.59% | 22.23% | 6.36 | [Asset Quality Indicators](index=7&type=section&id=Asset%20Quality%20Indicators) As of June 30, 2021, the group's non-performing loan ratio, provision coverage ratio, and loan loss allowance ratio all decreased, indicating stable and slightly improved asset quality H1 2021 Asset Quality Indicators | Item | As of June 30, 2021 | As of December 31, 2020 | Change Amount | | :--- | :--- | :--- | :--- | | Non-performing loan ratio | 1.77% | 1.81% | (0.04) | | Provision coverage ratio | 154.05% | 154.85% | (0.80) | | Loan loss allowance ratio | 2.73% | 2.81% | (0.08) | [Capital Adequacy and Other Indicators](index=7&type=section&id=Capital%20Adequacy%20and%20Other%20Indicators) As of June 30, 2021, the group's core Tier 1, Tier 1, and total capital adequacy ratios slightly decreased, while the loan-to-deposit ratio increased, reflecting stable capital structure and liquidity management H1 2021 Capital Adequacy and Other Indicators | Item | As of June 30, 2021 | As of December 31, 2020 | Change Amount | | :--- | :--- | :--- | :--- | | Core Tier 1 capital adequacy ratio | 8.87% | 9.20% | (0.33) | | Tier 1 capital adequacy ratio | 10.34% | 10.74% | (0.40) | | Capital adequacy ratio | 11.98% | 12.56% | (0.58) | | Total equity to total assets ratio | 7.06% | 7.38% | (0.32) | | Loan-to-deposit ratio | 76.73% | 73.09% | 3.64 | - The group reclassified credit card installment income from fee income to interest income, restating net interest margin and net fee and commission income to operating income ratio[20](index=20&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) [H1 2021 Financial Review](index=9&type=section&id=H1%202021%20Financial%20Review) In H1 2021, the group achieved a profit before tax of RMB 4.46 billion and a net profit of RMB 3.66 billion, with steady asset and liability growth and stable asset quality - In H1 2021, the group achieved **profit before tax of RMB 4.46 billion**, an increase of **RMB 363 million**, or **8.85%** year-on-year[21](index=21&type=chunk) - **Net profit was RMB 3.66 billion**, an increase of **RMB 338 million**, or **10.17%** year-on-year[21](index=21&type=chunk) - **Total assets were RMB 1.09 trillion**, an increase of **RMB 63.43 billion**, or **6.17%** from year-end[500](index=500&type=chunk) - **Total liabilities were RMB 1.01 trillion**, an increase of **RMB 62.29 billion**, or **6.54%** from year-end[507](index=507&type=chunk) [Income Statement Analysis](index=9&type=section&id=Income%20Statement%20Analysis) In H1 2021, net interest income and net fee and commission income grew, but net gains from financial investments and other income declined, while operating expenses increased significantly H1 2021 Income Statement Key Data (RMB millions) | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | 9,659.72 | 9,390.31 | 269.41 | 2.87 | | Net fee and commission income | 694.19 | 600.04 | 94.15 | 15.69 | | Net trading gains | 1,180.64 | 1,035.95 | 144.69 | 13.97 | | Net gains from financial investments | 159.31 | 363.55 | (204.24) | (56.18) | | Other income, gains or losses | 102.35 | 403.83 | (301.48) | (74.66) | | Operating income | 11,796.21 | 11,793.68 | 2.53 | 0.02 | | Operating expenses | (3,503.41) | (2,720.87) | (782.54) | 28.76 | | Credit impairment losses | (3,826.94) | (4,976.55) | 1,149.61 | (23.10) | | Profit before tax | 4,457.16 | 4,094.65 | 362.51 | 8.85 | | Net profit | 3,660.08 | 3,322.26 | 337.82 | 10.17 | [Net Interest Income](index=10&type=section&id=Net%20Interest%20Income) In H1 2021, net interest income reached RMB 9.66 billion, growing 2.87% due to scale, despite a decline in average yield on interest-earning assets and net interest margin - In H1 2021, the group achieved **net interest income of RMB 9.66 billion**, an increase of **RMB 270 million**, or **2.87%** year-on-year[22](index=22&type=chunk)[23](index=23&type=chunk) - Net interest income accounted for **81.89% of total operating income**, primarily driven by scale benefits[22](index=22&type=chunk) - The average yield on overall interest-earning assets decreased by **17 basis points** year-on-year to **4.31%**, while the average cost of overall interest-bearing liabilities increased by **2 basis points** to **2.27%** year-on-year[25](index=25&type=chunk) - Net interest spread decreased by **19 basis points** year-on-year to **2.04%**, and net interest margin decreased by **23 basis points** year-on-year to **2.03%**[25](index=25&type=chunk)[33](index=33&type=chunk) - Interest income from customer loans and advances was **RMB 15.46 billion**, an increase of **RMB 1.42 billion** year-on-year, but the average yield decreased by **41 basis points** to **5.14%**, mainly due to policies guiding lower loan interest rates[481](index=481&type=chunk) - Interest expense on customer deposits was **RMB 8.25 billion**, an increase of **RMB 1.28 billion**, or **18.41%** year-on-year, with the deposit cost rate rising by **2 basis points** to **2.13%**, mainly due to higher interest rates on individual time deposits[484](index=484&type=chunk) [Non-Interest Income](index=15&type=section&id=Non-Interest%20Income) In H1 2021, net fee and commission income grew 15.69% driven by syndicated loans, while net trading gains increased, but net gains from financial investments and other income significantly declined - Net fee and commission income was **RMB 694 million**, an increase of **RMB 94 million**, or **15.69%** year-on-year, primarily due to growth in syndicated loan business fees[487](index=487&type=chunk) - Net trading gains were **RMB 1.18 billion**, mainly from interest income and fair value changes of financial investments measured at fair value through profit or loss[488](index=488&type=chunk) - Net gains from financial investments were **RMB 159 million**, primarily from trading spreads of financial investments measured at fair value through other comprehensive income, a **56.18% decrease** year-on-year[21](index=21&type=chunk)[489](index=489&type=chunk) - Other income, gains or losses were **RMB 102 million**, a **74.66% decrease** year-on-year, mainly due to PBOC interest rate swap incentives and exchange losses[21](index=21&type=chunk)[489](index=489&type=chunk) [Operating Expenses](index=16&type=section&id=Operating%20Expenses) In H1 2021, total operating expenses reached RMB 3.50 billion, a significant 28.76% year-on-year increase, mainly due to higher staff costs and taxes and surcharges H1 2021 Major Components of Operating Expenses (RMB millions) | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Staff costs | 2,379.53 | 1,719.03 | 660.50 | 38.42 | | Taxes and surcharges | 130.51 | 98.97 | 31.54 | 31.87 | | Depreciation and amortization | 457.27 | 394.05 | 63.22 | 16.04 | | Others | 536.10 | 508.82 | 27.28 | 5.36 | | Total operating expenses | 3,503.41 | 2,720.87 | 782.54 | 28.76 | - Staff costs, the largest component of operating expenses, increased by **38.42%** year-on-year, mainly due to the cessation of COVID-19 social insurance relief policies and an increase in employees[492](index=492&type=chunk)[493](index=493&type=chunk) - Taxes and surcharges increased by **31.87%** year-on-year, primarily because certain tax exemptions enjoyed in the prior year due to COVID-19 were no longer applicable[494](index=494&type=chunk) [Impairment Losses](index=18&type=section&id=Impairment%20Losses) In H1 2021, credit impairment losses decreased by 23.10% year-on-year due to fewer non-performing loan write-offs, but impairment losses on assets taken in lieu of debt significantly increased H1 2021 Major Components of Impairment Losses (RMB millions) | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change Amount | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Credit impairment losses on loans and advances | 2,541.63 | 3,662.02 | (1,120.39) | (30.59) | | Credit impairment losses on financial investments | 803.42 | 982.79 | (179.37) | (18.25) | | Other credit impairment losses | 481.89 | 331.74 | 150.15 | 45.26 | | Total credit impairment losses | 3,826.94 | 4,976.55 | (1,149.61) | (23.10) | | Impairment losses on assets taken in lieu of debt | 8.70 | 1.61 | 7.09 | 440.37 | - Total credit impairment losses decreased by **RMB 1.15 billion**, a **23.10% decrease** year-on-year, mainly due to fewer non-performing loan write-offs in the current period[497](index=497&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) In H1 2021, income tax expense was RMB 797 million, an increase of RMB 25 million year-on-year, primarily due to higher profit before tax, with an effective tax rate of 17.88% - Income tax expense was **RMB 797 million**, an increase of **RMB 25 million** year-on-year, mainly due to higher profit before tax[498](index=498&type=chunk) - The effective income tax rate was **17.88%**[498](index=498&type=chunk) [Statement of Financial Position Analysis](index=19&type=section&id=Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2021, total assets reached RMB 1.09 trillion, growing 6.17% from year-end, with increased loans and financial investments, while customer deposits remained the primary funding source H1 2021 Statement of Financial Position Key Data (RMB millions) | Item | As of June 30, 2021 | Percentage of Total (%) | As of December 31, 2020 | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Net loans and advances | 619,653.42 | 56.78 | 553,168.34 | 53.82 | | Financial investments | 276,662.81 | 25.35 | 262,524.19 | 25.54 | | Total assets | 1,091,302.07 | 100.00 | 1,027,871.65 | 100.00 | | Customer deposits | 829,957.30 | 81.83 | 778,424.85 | 81.77 | | Total liabilities | 1,014,276.54 | 100.00 | 951,986.34 | 100.00 | | Total equity | 77,025.53 | 100.00 | 75,885.31 | 100.00 | [Assets](index=19&type=section&id=Assets) As of June 30, 2021, total assets reached RMB 1.09 trillion, a 6.17% increase from year-end, driven by growth in total loans and advances and financial investments - Total assets were **RMB 1.09 trillion**, an increase of **RMB 63.43 billion**, or **6.17%** from year-end[500](index=500&type=chunk) - Total loans and advances were **RMB 636.83 billion**, an increase of **RMB 67.90 billion**, or **11.93%** from year-end, mainly due to increased support for the real economy[500](index=500&type=chunk)[501](index=501&type=chunk) - Financial investments were **RMB 276.66 billion**, an increase of **RMB 14.14 billion**, or **5.39%** from year-end, mainly due to optimizing asset structure and increasing bond investments[500](index=500&type=chunk)[505](index=505&type=chunk) - Total bill discounts were **RMB 85.44 billion**, an increase of **RMB 36.70 billion**, or **75.30%** from year-end[501](index=501&type=chunk) - Mortgage and pledged loans accounted for **55.71%** of total loans, reflecting prudent risk management policies[504](index=504&type=chunk) [Liabilities](index=22&type=section&id=Liabilities) As of June 30, 2021, total liabilities reached RMB 1.01 trillion, a 6.54% increase from year-end, with customer deposits growing 6.62% and individual deposits accounting for 52.52% - Total liabilities were **RMB 1.01 trillion**, an increase of **RMB 62.29 billion**, or **6.54%** from year-end[507](index=507&type=chunk) - Customer deposits were **RMB 829.96 billion**, an increase of **RMB 51.53 billion**, or **6.62%** from year-end, representing the group's most important funding source[507](index=507&type=chunk)[509](index=509&type=chunk) - Individual deposits accounted for **52.52%**, with a balance increase of **RMB 39.67 billion**, or **10.01%** from year-end[509](index=509&type=chunk) - Demand deposits accounted for **36.15%**, a decrease of **1.57 percentage points** from year-end; time deposits accounted for **60.71%**, an increase of **1.63 percentage points** from year-end[509](index=509&type=chunk) [Composition of Shareholders' Equity](index=24&type=section&id=Composition%20of%20Shareholders'%20Equity) As of June 30, 2021, total shareholders' equity was RMB 77.03 billion, a 1.50% increase from year-end, with stable share capital and reserves, and increased retained earnings H1 2021 Composition of Shareholders' Equity (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | Amount as of December 31, 2020 | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 9,808.27 | 12.73 | 9,808.27 | 12.92 | | Preference shares | 9,820.73 | 12.75 | 9,820.73 | 12.94 | | Capital reserve | 10,919.38 | 14.18 | 10,952.99 | 14.43 | | Surplus reserve | 5,055.78 | 6.56 | 5,055.78 | 6.66 | | General risk reserve | 12,944.07 | 16.81 | 12,944.07 | 17.06 | | Retained earnings | 21,700.49 | 28.17 | 21,138.63 | 27.86 | | Total shareholders' equity | 77,025.53 | 100.00 | 75,885.31 | 100.00 | - Paid-in capital was **RMB 9.81 billion**, and capital reserve was **RMB 10.92 billion**, both unchanged from year-end[510](index=510&type=chunk) [Loan Quality Analysis](index=25&type=section&id=Loan%20Quality%20Analysis) As of June 30, 2021, the non-performing loan ratio decreased to 1.77%, and special mention loans also declined, indicating continuous asset quality improvement, despite an increase in total overdue loans - Non-performing loan ratio was **1.77%**, a decrease of **0.04 percentage points** from year-end[513](index=513&type=chunk) - Special mention loans accounted for **3.76%**, a decrease of **0.66 percentage points** from year-end[513](index=513&type=chunk) - Non-performing corporate loan balance was **RMB 9.65 billion**, an increase of **RMB 871 million** from year-end, mainly due to increased non-performing loans in wholesale and retail trade and construction industries[515](index=515&type=chunk)[517](index=517&type=chunk) - Total overdue loans were **RMB 19.36 billion**, an increase of **RMB 6.82 billion** from year-end, with overdue loans over 3 months increasing by **RMB 4.86 billion**[518](index=518&type=chunk) - Restructured loans and advances were **RMB 6.25 billion**, a decrease of **RMB 424 million** from year-end[519](index=519&type=chunk) [Five-Category Loan Classification](index=25&type=section&id=Five-Category%20Loan%20Classification) As of June 30, 2021, normal loans accounted for 94.47%, and the non-performing loan ratio was 1.77%, a slight decrease from year-end, indicating a stable loan risk classification structure H1 2021 Five-Category Loan Classification (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | Amount as of December 31, 2020 | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Normal | 601,611.59 | 94.47 | 533,499.04 | 93.77 | | Special Mention | 23,912.37 | 3.76 | 25,117.15 | 4.42 | | Substandard | 4,541.05 | 0.71 | 2,829.24 | 0.50 | | Doubtful | 6,125.65 | 0.96 | 6,211.36 | 1.09 | | Loss | 634.33 | 0.10 | 1,269.38 | 0.22 | | Total loans and advances | 636,824.99 | 100.00 | 568,926.17 | 100.00 | | Non-performing loan ratio | 1.77 | – | 1.81 | – | [Distribution of Non-Performing Corporate Loans by Industry](index=26&type=section&id=Distribution%20of%20Non-Performing%20Corporate%20Loans%20by%20Industry) As of June 30, 2021, total non-performing corporate loans were RMB 9.65 billion, with wholesale and retail, leasing and business services, and construction being major sources, and increases in wholesale and retail and construction H1 2021 Non-Performing Corporate Loan Distribution (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | NPL Ratio (%) | Amount as of December 31, 2020 | Percentage of Total (%) | NPL Ratio (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Wholesale and retail trade | 2,485.22 | 25.76 | 3.78 | 1,376.26 | 15.68 | 2.22 | | Real estate | 1,126.18 | 11.68 | 1.87 | 1,217.20 | 13.87 | 2.06 | | Leasing and business services | 2,672.98 | 27.71 | 2.81 | 2,921.50 | 33.29 | 3.42 | | Manufacturing | 731.24 | 7.58 | 1.78 | 643.66 | 7.33 | 1.66 | | Construction | 1,115.70 | 11.56 | 2.88 | 312.59 | 3.56 | 0.80 | | Transportation, warehousing and postal services | 766.42 | 7.94 | 7.44 | 1,065.51 | 12.14 | 10.54 | | Agriculture, forestry, animal husbandry and fishery | 497.30 | 5.15 | 4.87 | 975.09 | 11.11 | 9.49 | | Total non-performing corporate loans | 9,647.30 | 100.00 | 2.40 | 8,776.70 | 100.00 | 2.31 | - Non-performing loans in wholesale and retail trade increased from year-end, mainly due to individual clients' stock price declines, tight liquidity, and the impact of the pandemic[515](index=515&type=chunk) - Non-performing loans in the construction industry increased from year-end, mainly due to developers' arrears on project payments and tight liquidity caused by the pandemic[515](index=515&type=chunk) [Distribution of Non-Performing Loans by Product Type](index=27&type=section&id=Distribution%20of%20Non-Performing%20Loans%20by%20Product%20Type) As of June 30, 2021, total non-performing loans were RMB 11.30 billion, with corporate loans having the highest proportion, and individual operating loans having the highest NPL ratio among personal loans H1 2021 Non-Performing Loan Product Type Distribution (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | NPL Ratio (%) | Amount as of December 31, 2020 | Percentage of Total (%) | NPL Ratio (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Corporate loans | 9,647.30 | 100.00 | 2.40 | 8,776.70 | 100.00 | 2.31 | | Personal loans | 1,653.73 | 100.00 | 1.11 | 1,533.28 | 100.00 | 1.09 | | ├─ Personal mortgage loans | 280.90 | 16.99 | 0.40 | 288.65 | 18.83 | 0.43 | | ├─ Personal operating loans | 887.14 | 53.64 | 1.46 | 728.60 | 47.52 | 1.34 | | ├─ Personal consumption loans | 201.24 | 12.17 | 2.14 | 221.45 | 14.44 | 2.33 | | └─ Credit card balances | 284.45 | 17.20 | 3.19 | 294.58 | 19.21 | 3.30 | | Total non-performing loans | 11,301.03 | 100.00 | 1.77 | 10,309.98 | 100.00 | 1.81 | [Overdue Customer Loans](index=28&type=section&id=Overdue%20Customer%20Loans) As of June 30, 2021, total overdue loans were RMB 19.36 billion, accounting for 3.04% of total loans, an increase from year-end, with a significant rise in loans overdue for more than 3 months H1 2021 Overdue Customer Loans (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | Amount as of December 31, 2020 | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Non-overdue loans | 617,464.55 | 96.96 | 556,383.67 | 97.80 | | Overdue loans | 19,360.44 | 3.04 | 12,542.50 | 2.20 | | ├─ Within 3 months | 6,942.53 | 1.09 | 4,983.21 | 0.87 | | ├─ Over 3 months to 1 year | 7,721.77 | 1.21 | 5,606.14 | 0.99 | | ├─ Over 1 year to 3 years | 4,384.45 | 0.69 | 1,603.10 | 0.28 | | └─ Over 3 years | 311.69 | 0.05 | 350.05 | 0.06 | | Total loans and advances | 636,824.99 | 100.00 | 568,926.17 | 100.00 | | Loans overdue for more than 3 months | 12,417.91 | 1.95 | 7,559.29 | 1.33 | [Restructured Loans and Advances](index=28&type=section&id=Restructured%20Loans%20and%20Advances) As of June 30, 2021, the balance of restructured loans and advances was RMB 6.25 billion, a decrease of RMB 424 million from year-end, indicating a reduction in restructured loan volume H1 2021 Restructured Loans and Advances (RMB millions) | Item | Amount as of June 30, 2021 | Percentage of Total (%) | Amount as of December 31, 2020 | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Restructured loans and advances | 6,245.31 | 0.98 | 6,669.32 | 1.17 | [Capital Adequacy Ratio Analysis](index=29&type=section&id=Capital%20Adequacy%20Ratio%20Analysis) As of June 30, 2021, the capital adequacy ratio was 11.98%, a 0.58 percentage point decrease from year-end, primarily due to risk-weighted assets growing faster than net capital, though still meeting regulatory requirements H1 2021 Capital Adequacy Ratio Indicators (RMB millions) | Item | As of June 30, 2021 | As of December 31, 2020 | | :--- | :--- | :--- | | Core Tier 1 capital adequacy ratio | 8.87% | 9.20% | | Tier 1 capital adequacy ratio | 10.34% | 10.74% | | Capital adequacy ratio | 11.98% | 12.56% | | Net capital | 82,211.77 | 82,469.59 | | Risk-weighted assets | 686,307.86 | 656,572.37 | - Capital adequacy ratio decreased by **0.58 percentage points**, mainly because the growth rate of risk-weighted assets exceeded that of net capital from year-end[521](index=521&type=chunk) - Net capital decreased by **RMB 258 million**, a **0.31% decrease**, primarily due to dividend provisions and reduced excess loan loss provisions in H1[521](index=521&type=chunk) - Risk-weighted assets increased by **RMB 29.74 billion**, a **4.53% increase**, mainly due to increased credit risk-weighted assets for on- and off-balance sheet items and market risk-weighted assets[521](index=521&type=chunk) [Leverage Ratio Analysis](index=30&type=section&id=Leverage%20Ratio%20Analysis) As of June 30, 2021, the group's leverage ratio was 6.12%, which complies with regulatory requirements H1 2021 Leverage Ratio (RMB millions) | Item | As of June 30, 2021 | | :--- | :--- | | Net Tier 1 capital | 70,996.58 | | Adjusted on- and off-balance sheet assets | 1,159,234.34 | | Leverage ratio (%) | 6.12 | [Segment Information](index=30&type=section&id=Segment%20Information) The group primarily operates in Guangdong Province, China, with corporate banking and retail banking being the main revenue contributors in H1 2021, accounting for 52.89% and 30.87% of total operating income, respectively - The group primarily operates in Guangdong Province, China, with major customers and non-current assets located in Guangdong Province[523](index=523&type=chunk) H1 2021 Operating Income Segment Summary (RMB millions) | Item | Amount for Six Months Ended June 30, 2021 | Percentage of Total | | :--- | :--- | :--- | | Corporate banking business | 6,239.51 | 52.89 | | Retail banking business | 3,641.66 | 30.87 | | Financial markets business | 1,738.43 | 14.74 | | Others | 176.61 | 1.50 | | Total operating income | 11,796.21 | 100.00 | [Off-Balance Sheet Items](index=30&type=section&id=Off-Balance%20Sheet%20Items) As of June 30, 2021, the group's off-balance sheet items included significant amounts of loan commitments, accepted bills, unused credit card limits, issued guarantees, and issued letters of credit - As of June 30, 2021, the balances of loan commitments, accepted bills, unused credit card limits, issued guarantees, and issued letters of credit were **RMB 136.05 billion**, **RMB 30.39 billion**, **RMB 15.95 billion**, **RMB 43.25 billion**, and **RMB 2.54 billion**, respectively[524](index=524&type=chunk) [Contingent Liabilities and Pledged Assets](index=30&type=section&id=Contingent%20Liabilities%20and%20Pledged%20Assets) Details regarding the group's contingent liabilities and pledged assets are available in Notes 40 and 42 to the condensed consolidated financial statements - Details of contingent liabilities and pledged assets can be found in Notes 40 and 42 to the condensed consolidated financial statements[525](index=525&type=chunk) [Business Operations](index=31&type=section&id=Business%20Operations) In H1 2021, the group achieved steady development across corporate, retail, financial markets, inclusive finance, and "Sannong" (agriculture, rural areas, and farmers) businesses, enhancing financial services through innovation and technology [Corporate Banking Business](index=31&type=section&id=Corporate%20Banking%20Business) The bank's corporate banking focused on deposit growth, leveraging its municipal bank status to expand government platform deposits, supporting the real economy, and innovating loan products and digital transaction banking services - The bank focused on the "deposit-first" philosophy, consolidating traditional village and community business advantages, strengthening corporate deposit marketing, and expanding government platform deposits[526](index=526&type=chunk) - Corporate loan business supported real economic development, contributed to the Guangdong-Hong Kong-Macao Greater Bay Area construction, and launched innovative products like "Jinmi College Loan," "Jinmi Project Loan," and "Jinmi Carbon Emission Right Mortgage Loan"[527](index=527&type=chunk) - Transaction banking focused on product R&D and system platform construction, creating "Cloud Treasury" cash management services, optimizing bank-enterprise cloud connectivity, and promoting online supply chain finance and cross-border financial services[528](index=528&type=chunk)[529](index=529&type=chunk) [Personal Banking Business](index=32&type=section&id=Personal%20Banking%20Business) The bank's personal banking business centered on customers, achieving steady deposit growth, supporting housing demand, exploring digital transformation in loans, focusing on low-to-medium risk wealth management products, and expanding bank card services - Personal deposit business focused on high-frequency daily scenarios, creating differentiated and exclusive deposit products, maintaining the second rank in personal savings deposit scale among peers in Guangzhou[530](index=530&type=chunk) - Personal loan business continued to implement real estate regulation policies, supported residents' housing needs, and intensified exploration of digital transformation for consumer loans[531](index=531&type=chunk) - Personal wealth management focused sales on low-to-medium risk products, innovatively launching the "Jinmi Jiafu" series of net-value wealth management products, promoting net-value transformation[532](index=532&type=chunk) - Bank card business actively expanded to special customer segments, upgraded social security card services, issued **376,200 new personal debit cards**, and accumulated **1.83 million credit cards**[533](index=533&type=chunk) [Financial Markets Business](index=34&type=section&id=Financial%20Markets%20Business) In H1 2021, the bank's financial markets business optimized investment decisions, enhanced research capabilities, and significantly advanced net-value wealth management, with product balances growing 57.87%, and bill rediscount transaction volume increasing 162.94% - The bank continuously improved its investment decision-making mechanism, enhanced investment research and market judgment capabilities, optimized investment structure, and effectively controlled investment duration[534](index=534&type=chunk) - As of the end of June 2021, the balance of net-value wealth management products was **RMB 50.09 billion**, an increase of **57.87%** from the beginning of the year[534](index=534&type=chunk) - In the Puyi Standard Q1 2021 national wealth management capability ranking, the bank ranked first among rural financial institutions in overall wealth management, operational management, and investor service systems[534](index=534&type=chunk) - In H1 2021, bill rediscount business transaction volume increased by **162.94%** year-on-year, and the rediscount balance increased by **75.16%** from the beginning of the year[534](index=534&type=chunk) - Actively promoted cross-border financial cooperation innovation in the Guangdong-Hong Kong-Macao Greater Bay Area, launched Guangzhou's first interbank lending business with a Macao RMB clearing bank, and participated in the subscription of the first batch of infrastructure public REITs nationwide[535](index=535&type=chunk) [Inclusive Finance Business](index=35&type=section&id=Inclusive%20Finance%20Business) The bank's inclusive finance business actively responded to regulatory policies, with inclusive small and micro enterprise loan balances reaching RMB 35.52 billion, growing 12.47%, and an NPL ratio of 1.06%, enhancing service accessibility through network expansion, product innovation, and fintech - Inclusive small and micro enterprise loan balance was **RMB 35.52 billion**, an increase of **RMB 3.94 billion** from the beginning of the year, a growth rate of **12.47%**[536](index=536&type=chunk) - The number of small and micro enterprise customers was **29,564**, an increase of **5,016** from the beginning of the year, with a small and micro loan NPL ratio of **1.06%**, meeting targets[536](index=536&type=chunk) - Actively implemented the PBOC's re-lending policy for small businesses, disbursing **RMB 42.53 billion** in eligible loans and obtaining **RMB 18.06 billion** in re-lending funds[537](index=537&type=chunk) - Improved the inclusive finance specialized system, establishing **13 inclusive and small and micro business centers** and **2 inclusive finance community banks** in Guangzhou[538](index=538&type=chunk) - Launched "Jinmi Small and Micro Loan • Entrepreneurship Guarantee Loan" and optimized "Jinmi • Poverty Alleviation Microcredit" products, actively connecting with government public data platforms to enhance intelligent risk control capabilities[539](index=539&type=chunk)[540](index=540&type=chunk) - Promoted grid-based inclusive small and micro financial services in villages, communities, and specialized markets, with **RMB 5.36 billion** in operating loans disbursed to villages and communities[541](index=541&type=chunk) - Actively built "whole village credit" demonstration credit villages for rural finance, promoting rural credit system construction[542](index=542&type=chunk) ["Sannong" Financial Business](index=37&type=section&id=Sannong%20Financial%20Business) The bank continued to deepen its "Sannong" finance, with agricultural-related loan balances reaching RMB 40.80 billion, growing 6.36%, and inclusive agricultural-related loans growing 8.29%, supporting rural revitalization through policy optimization, re-lending, product innovation, and "Internet+Finance" models - As of the end of the reporting period, the bank's agricultural-related loan balance was **RMB 40.80 billion**, an increase of **RMB 2.44 billion** from the beginning of the year, a growth rate of **6.36%**[544](index=544&type=chunk) - Inclusive agricultural-related loan scale reached **RMB 6.71 billion**, an increase of **RMB 513 million** from the beginning of the year, a growth rate of **8.29%**[544](index=544&type=chunk) - Launched optimized "Sannong" business policies, established a strategic positioning for agricultural support, strengthened performance appraisal and financial resource allocation, and set up green approval channels[545](index=545&type=chunk)[546](index=546&type=chunk) - Disbursed **RMB 3.66 billion** in agricultural-related loans meeting re-lending policy requirements, benefiting **1,161 farmers and agricultural enterprises**[547](index=547&type=chunk) - Innovatively launched "Jinmi Rural Revitalization Forest Easy Loan" (Guangzhou's first loan product secured by ecological public welfare forest compensation rights), and promoted "Jinmi Rural Revitalization Agricultural Loan," "Jinmi Rural Revitalization Pig Farming Loan," and "Jinmi Urban Renewal Village Park Loan"[548](index=548&type=chunk) - Continued to advance the "Ten-Hundred-Thousand Demonstration Project" for mobile payment applications in rural areas, improving the rural payment environment, with **845 merchants** in Guangzhou completing "one-code-for-all" mobile payment upgrades[549](index=549&type=chunk) [Distribution Channels](index=39&type=section&id=Distribution%20Channels) The bank's diversified distribution channels include 635 physical branches, 2,595 self-service devices, 242 smart bank outlets, and internet finance platforms, with internet finance customer numbers and transaction volumes growing, and the e-commerce platform supporting "Sannong" and rural revitalization - As of June 30, 2021, the bank had **635 branches**, including **617 in Guangzhou** and **18 in other Guangdong cities**[551](index=551&type=chunk) - The total number of ATMs, self-service inquiry terminals, and smart service terminals reached **2,595**, with **242 smart bank outlets**[551](index=551&type=chunk) - Mobile banking had approximately **3.92 million customers**, with **8.60 million financial transactions** totaling **RMB 241.14 billion**[552](index=552&type=chunk) - Online banking had approximately **1.94 million individual customers**, and **25,300 corporate online banking customers**, with **RMB 584.84 billion** in transactions[553](index=553&type=chunk) - Direct banking had approximately **1.09 million customers**, with **347,800 financial transactions** totaling **RMB 10.31 billion**[554](index=554&type=chunk) - The e-commerce platform (Jinmi Market) accumulated **960,000 customers**, with **82,000 orders** for agricultural poverty alleviation and a transaction volume of **RMB 3.8 million** in H1[556](index=556&type=chunk) [Major Subsidiaries](index=41&type=section&id=Major%20Subsidiaries) The group owns 30 subsidiaries, including 25 Pearl River Village Banks, 1 Pearl River Financial Leasing Co., Ltd., and 4 strategically controlled rural commercial banks, operating in 9 provinces and cities across China - As of June 30, 2021, the bank had established **25 Pearl River Village Banks** in **9 provinces and cities** nationwide[557](index=557&type=chunk) - The bank wholly-owned and established Pearl River Financial Leasing Co., Ltd., with a registered capital of **RMB 1 billion**[557](index=557&type=chunk) - Strategically controls four rural commercial banks: Hunan Zhuzhou Pearl River Rural Commercial Bank, Chaozhou Rural Commercial Bank, Guangdong Nanxiong Rural Commercial Bank, and Shaoguan Rural Commercial Bank[557](index=557&type=chunk) [Information Technology](index=42&type=section&id=Information%20Technology) In H1 2021, the bank's information systems operated stably, with no unplanned outages. The bank enhanced tech governance, information security, and business continuity, investing in fintech and launching 13 projects - In H1 2021, all important information systems of the bank operated stably, with no unplanned system outages[558](index=558&type=chunk) - Strengthened technology governance capabilities, promoted digital transformation and fintech development, and deepened the integration of business and technology[559](index=559&type=chunk) - Continuously strengthened the information security assurance system, upgraded security protection equipment in key network areas, and conducted information security assessments and all-staff training[560](index=560&type=chunk) - Conducted disaster recovery drills for important information systems in the same city and business continuity drills to enhance emergency response capabilities[561](index=561&type=chunk) - Continuously increased investment in fintech resources, applying big data, cloud computing, artificial intelligence, and other emerging technologies, with **13 fintech projects** launched in H1[562](index=562&type=chunk) [Human Resources Management](index=43&type=section&id=Human%20Resources%20Management) As of June 30, 2021, the group's total employees were 13,810. The bank focused on enhancing employee professional quality through "Pearl River Business School" training, organizing 166 programs covering over 22,000 participants - As of June 30, 2021, the group's total number of employees was **13,810**, a decrease of **131** from the end of 2020[563](index=563&type=chunk) - In H1 2021, the bank organized **166 training programs**, including **59 online live training sessions**, covering over **22,000 participants**, with an average of **50 hours** of online learning per person[564](index=564&type=chunk) - Held workshops for retail and corporate client manager curriculum system development, optimizing learning and growth paths to cultivate specialized talent[564](index=564&type=chunk) [Risk Management](index=43&type=section&id=Risk%20Management) In H1 2021, the group comprehensively advanced risk management, enhancing credit, liquidity, market, operational, reputational, and IT risk controls, maintaining overall controllable risks and effective internal controls - The group comprehensively promoted risk management to address shortcomings, improve overall risk management, and effectively enhance risk prevention and mitigation capabilities[565](index=565&type=chunk) - During the reporting period, the group's risks were generally controllable, internal control management was effective, and risk management capabilities and levels continuously improved[565](index=565&type=chunk) - In H1 2021, the group's credit risk was generally controllable, with the non-performing loan ratio within the control target[567](index=567&type=chunk) - In H1 2021, the group's liquidity risk was generally controllable, with no major liquidity risk events, and all key liquidity risk indicators met targets each month[569](index=569&type=chunk) [Credit Risk Management](index=43&type=section&id=Credit%20Risk%20Management) The group continuously optimized risk control policies, strengthened full-process credit risk management, implemented a principal responsibility system, and advanced risk management system construction to enhance credit risk prevention - Optimized risk control policies, strengthened access management in high-risk areas, and enhanced financial support for the real economy[567](index=567&type=chunk) - Strengthened full-process credit risk management, enhancing risk prevention and control throughout pre-loan, in-loan, and post-loan stages[567](index=567&type=chunk) - Introduced a principal responsibility system for operations, strengthening the principle of equal rights, responsibilities, and benefits for operating principals[567](index=567&type=chunk) - Promoted the construction of risk management system clusters, expanding the introduction of external risk information to support intelligent and digital risk management[567](index=567&type=chunk) [Liquidity Risk Management](index=44&type=section&id=Liquidity%20Risk%20Management) The group strengthened centralized liquidity risk management through fund position management, liquidity risk limit monitoring, stress testing, and emergency drills, maintaining overall controllable liquidity risk in H1 2021 - Utilized a fund position system for daily position management, centralizing dispatch, timely monitoring, and timely replenishment to ensure payment safety[569](index=569&type=chunk) - Set liquidity risk limits quarterly, monitored monthly, and assessed quarterly the implementation of risk limits to ensure controllable liquidity risk[569](index=569&type=chunk) - Conducted quarterly liquidity risk stress tests to assess the group's ability to withstand liquidity risk pressure and its risk mitigation capabilities[569](index=569&type=chunk) - Regularly conducted liquidity risk emergency drills to improve the group's response efficiency in crisis situations[569](index=569&type=chunk) [Market Risk Management](index=45&type=section&id=Market%20Risk%20Management) The group continuously monitored monetary policy and market price fluctuations, enhancing market risk management through basic investment policies, a low-risk appetite, a comprehensive credit bond risk monitoring mechanism, and professional talent development - Formulated basic investment policies, maintained a low-risk appetite, and promoted business transformation towards fixed income, trading, position management, and active management[570](index=570&type=chunk) - Established a comprehensive on- and off-balance sheet credit bond risk monitoring mechanism, implementing the look-through principle to dynamically track underlying bond holdings[570](index=570&type=chunk) - Strengthened the professional talent team, enhancing cooperation and exchange with external excellent investment research teams to continuously improve employee professionalism[570](index=570&type=chunk) [Operational Risk Management](index=45&type=section&id=Operational%20Risk%20Management) The group continuously strengthened operational process management, revised operational risk management methods, set key risk indicators, addressed business continuity risks, and enhanced IT outsourcing risk assessment and employee behavior screening to prevent operational risk events - Revised the bank's operational risk management methods, further clarifying responsibilities and management requirements, and setting **54 key risk indicators**[572](index=572&type=chunk) - Continuously addressed business continuity risks, revised the bank's business continuity plan, and improved drill effectiveness[572](index=572&type=chunk) - Conducted security assessments for important IT outsourcing risks such as card issuance, system hosting, and IT R&D[572](index=572&type=chunk) - Strengthened employee behavior screening, investigating and verifying long-standing undisclosed cases of employee misconduct[572](index=572&type=chunk) [Reputational Risk Management](index=46&type=section&id=Reputational%20Risk%20Management) In H1 2021, the bank established and improved its reputational risk management mechanism, actively preventing and responding to negative public opinion, effectively maintaining a good market image, with no major reputational risk events occurring - Established and improved the reputational risk management mechanism, actively preventing reputational risks and responding to negative public opinion events[573](index=573&type=chunk) - During the reporting period, the bank experienced no major reputational risk events[573](index=573&type=chunk) [Implementation of Basel Capital Accord](index=46&type=section&id=Implementation%20of%20Basel%20Capital%20Accord) The group continued to implement the new Basel Capital Accord, optimizing risk-weighted asset measurement systems, improving data quality, formulating annual risk appetite statements, and participating in the PBOC's annual banking FSAP stress test - Continuously optimized the construction of risk-weighted asset measurement systems, improving basic data quality and enhancing automated data collection and refined calculation levels[574](index=574&type=chunk) - Formulated annual risk appetite statements and indicator systems, and initiated the non-retail internal rating optimization and upgrade project[574](index=574&type=chunk) - Cooperated in completing the People's Bank of China's annual banking FSAP stress test[574](index=574&type=chunk) [Anti-Money Laundering Status](index=46&type=section&id=Anti-Money%20Laundering%20Status) In H1 2021, the group strictly adhered to regulatory requirements, increased human resources, strengthened internal controls, improved its AML organizational structure, optimized information systems, and conducted AML awareness and training programs - Strictly implemented regulatory requirements, increased human resource investment, strengthened internal controls, and improved an AML organizational management system with clear responsibilities and coordinated divisions of labor[575](index=575&type=chunk) - Improved internal control systems, detailing management regulations for customer due diligence and money laundering risk assessment[576](index=576&type=chunk) - Continuously optimized and upgraded AML information systems and related systems to enhance technical support for money laundering risk management[576](index=576&type=chunk) - Diligently organized AML awareness and training programs to enhance public awareness of AML and the professional quality of frontline staff[576](index=576&type=chunk) [Information Technology Risk Status](index=47&type=section&id=Information%20Technology%20Risk%20Status) In H1 2021, the bank continuously strengthened its IT risk monitoring, assessment, and disposal mechanisms, revised quantitative risk indicators, conducted IT outsourcing risk assessments, and completed customer service system disaster recovery drills - Continuously strengthened IT risk monitoring, assessment, and disposal mechanisms, reviewing and revising quantitative IT risk monitoring indicators[577](index=577&type=chunk) - Conducted IT outsourcing risk assessments, strengthening risk management for important outsourcing suppliers such as card issuance, R&D outsourcing, and system hosting[577](index=577&type=chunk) - Completed disaster recovery drills for the customer service system in the same city, ensuring timely and high-quality implementation of business continuity risk remediation requirements[577](index=577&type=chunk) [Internal Audit](index=47&type=section&id=Internal%20Audit) The bank established an independent and vertical audit management system, with the Audit Department fulfilling its supervisory role as the third line of defense, actively innovating management and expanding audit coverage to identify and prevent major risks - The bank established an independent and vertical audit management system, with the Audit Department coordinating the bank's audit work under the leadership and guidance of the Board of Directors, Party Committee, and Supervisory Board[578](index=578&type=chunk) - The Audit Department fully exercised its audit and supervision function as the third line of defense, continuously improving the bank's operations management, risk management, internal control compliance, and corporate governance through auditing, evaluation, and supervision of rectification[578](index=578&type=chunk) - During the reporting period, the Audit Department actively promoted management innovation, categorized audit projects, adopted integrated and embedded organizational methods, and strengthened project process control[579](index=579&type=chunk) - Guided by risk, the department focused on key areas, matters, businesses, and links to expand audit supervision coverage, timely identify major risk hidden dangers, and play a role in "curing existing problems and preventing future ones"[579](index=579&type=chunk) [Outlook](index=48&type=section&id=Outlook) China's economy recovered quickly in H1 2021, but growth momentum is expected to slow in H2. The bank maintained stable operations in H1 and will focus on rural, industrial, wealth, and consumer finance to enhance competitiveness in the Greater Bay Area - In H1 2021, China's macroeconomy recovered rapidly from the pandemic's impact, but growth momentum is expected to slow in H2, with slow consumption recovery, weak infrastructure, and easing pressure from rising commodity prices[580](index=580&type=chunk) - Economic growth is projected to return to its potential level in Q4, with full-year growth around **8%**[580](index=580&type=chunk) - The bank maintained stable operations in H1 2021, with steady growth in assets and liabilities, stable asset quality, and resilient profitability[580](index=580&type=chunk) - In H2, the bank will focus on four core business directions: rural finance, industrial finance, wealth finance, and consumer finance, optimizing credit resource allocation, enhancing business and product innovation, and deepening its presence in the Greater Bay Area to improve core competitiveness[580](index=580&type=chunk) [Changes in Share Capital and Shareholder Information](index=49&type=section&id=Changes%20in%20Share%20Capital%20and%20Shareholder%20Information) [Table of Changes in Share Capital](index=49&type=section&id=Table%20of%20Changes%20in%20Share%20Capital) As of June 30, 2021, the bank's total share capital remained 9.81 billion shares, with non-H shares accounting for 81.44% and H shares for 18.56% Changes in Share Capital (Shares, %) | Item | Number as of December 31, 2020 | Proportion | Change in Reporting Period | Number as of June 30, 2021 | Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Share Capital | 9,808,268,539 | 100 | – | 9,808,268,539 | 100 | | Non-H Shares | 7,987,933,539 | 81.44 | – | 7,987,933,539 | 81.44 | | H Shares | 1,820,335,000 | 18.56 | – | 1,820,335,000 | 18.56 | - As of the end of the reporting period, the bank had **29,147 non-H share shareholders** and **90 H-share shareholders**[582](index=582&type=chunk) - **37,258,888 non-H shares** of the bank were subject to judicial freezing, accounting for **0.38%** of the bank's total share capital[582](index=582&type=chunk) [Shareholder Holding Status](index=49&type=section&id=Shareholder%20Holding%20Status) As of June 30, 2021, the bank's total share capital was 9.81 billion shares, with a dispersed ownership structure and no controlling shareholder. The top ten shareholders collectively held 41.56% - As of June 30, 2021, the bank's total share capital was **9.81 billion shares**, including **7.99 billion non-H shares** and **1.82 billion H shares**[583](index=583&type=chunk) - There were **715 non-H share corporate shareholders** holding **5.51 billion shares**, accounting for **56.20%** of total share capital; **28,432 non-H share individual shareholders** holding **2.48 billion shares**, accounting for **25.24%** of total share capital[583](index=583&type=chunk) - The bank has no controlling shareholder or actual controller[587](index=587&type=chunk) Top Ten Shareholders as of June 30, 2021 | No. | Name | Shareholder Type | Shareholder Nature | Number of Shares | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | HKSCC Nominees Limited | H-share | Other | 1,819,982,900 | 18.56 | | 2 | Guangzhou Financial Holdings Group Co., Ltd. | Non-H share | State-owned legal person | 366,099,589 | 3.73 | | 3 | Guangzhou Zhujiang Industrial Group Co., Ltd. | Non-H share | State-owned legal person | 338,185,193 | 3.45 | | 4 | Guangzhou Wanli Group Co., Ltd. | Non-H share | State-owned legal person | 319,880,672 | 3.26 | | 5 | Guangzhou Radio Group Co., Ltd. | Non-H share | State-owned legal person | 310,728,411 | 3.17 | | 6 | Shanghai Dazhan Investment Management Co., Ltd. | Non-H share | Non-state-owned legal person | 250,000,000 | 2.55 | | 7 | Guangzhou Commercial Trade Investment Holdings Group Co., Ltd. | Non-H share | State-owned legal person | 191,749,019 | 1.95 | | 8 | Nanjing Gaoke Co., Ltd. | Non-H share | Non-state-owned legal person | 180,000,000 | 1.84 | | 9 | Guangdong Zhujiang Highway Bridge Investment Co., Ltd. | Non-H share | Non-state-owned legal person | 160,020,000 | 1.63 | | 10 | Shenzhen Weilv Investment Holdings Co., Ltd. | Non-H share | Non-state-owned legal person | 140,010,000 | 1.43 | | Total | | | | 4,076,655,784 | 41.56 | - As of June 30, 2021, the bank had **5,689 internal employee shareholders** holding **371 million shares**, accounting for **3.78%** of total share capital[587](index=587&type=chunk) [Information on Overseas Non-Public Issuance of Preference Shares](index=57&type=section&id=Information%20on%20Overseas%20Non-Public%20Issuance%20of%20Preference%20Shares) The bank issued USD 1.43 billion in non-cumulative perpetual overseas preference shares in June 2019, listed on HKEX, with proceeds used to supplement Tier 1 capital, and a dividend of USD 93.74 million distributed in June 2021 - The bank issued **USD 1.43 billion** in non-cumulative perpetual overseas preference shares on June 20, 2019, listed on the Hong Kong Stock Exchange on June 21, 2019 (stock code: 04618)[597](index=597&type=chunk) - The total proceeds from this overseas preference share issuance were approximately **RMB 9.84 billion**, all used to supplement the bank's other Tier 1 capital and improve its Tier 1 capital adequacy ratio[597](index=597&type=chunk) - As of the end of the reporting period, the bank had **1 overseas preference shareholder**[598](index=598&type=chunk) - On June 20, 2021, a dividend of **USD 93,744,444.44** was distributed for overseas preference shares, with **USD 84,370,000** paid to holders and **USD 9,374,444.44** withheld for income tax[601](index=601&type=chunk) - During the reporting period, there were no repurchases, conversions to ordinary shares, or restoration of voting rights for overseas preference shares, nor did any trigger conditions for mandatory conversion to H shares occur[602](index=602&type=chunk) [Information on Directors, Supervisors, and Senior Management](index=59&type=section&id=Information%20on%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) [The Bank's Directors](index=59&type=section&id=The%20Bank's%20Directors) As of the latest practicable date, the Board of Directors comprised 15 members, including 3 executive, 7 non-executive, and 5 independent non-executive directors, with new appointments in February 2021 - As of the latest practicable date, the bank's Board of Directors consisted of **15 directors**: **3 executive directors**, **7 non-executive directors**, and **5 independent non-executive directors**[603](index=603&type=chunk) - Mr. Cai Jian serves as Party Committee Secretary and Chairman, Mr. Yi Xuefei as Deputy Party Committee Secretary, Vice Chairman, and President, and Mr. Zhang Jian as Deputy Party Committee Secretary[603](index=603&type=chunk) - On February 23, 2021, the bank held its first extraordinary general meeting in 2021, appointing directors for the third Board of Directors[603](index=603&type=chunk) [The Bank's Supervisors](index=59&type=section&id=The%20Bank's%20Supervisors) As of June 30, 2021, the Supervisory Board comprised 9 members, including 3 employee supervisors, 3 external supervisors, and 3 shareholder supervisors, with new appointments in February 2021 - As of June 30, 2021, the bank's Supervisory Board consisted of **9 supervisors**: **3 employee supervisors**, **3 external supervisors**, and **3 shareholder supervisors**[604](index=604&type=chunk) - The bank completed the re-election of the third Supervisory Board in February 2021[604](index=604&type=chunk) [The Bank's Senior Management](index=59&type=section&id=The%20Bank's%20Senior%20Management) As of June 30, 2021, the bank's senior management team included 7 members, with Mr. Tan Bo appointed as Board Secretary and Mr. Li Yaguang proposed as Vice President - As of June 30, 2021, the bank's senior management team comprised **7 members**, including Mr. Yi Xuefei (President), Mr. Zhao Wei (Head of Discipline Inspection and Supervision Group), Mr. Chen Jianming and Mr. Lin Ripeng (Vice Presidents), Mr. Tan Bo (Assistant President), Ms. Chen Linjun and Ms. Yang Xuan (Business Directors)[605](index=605&type=chunk) - Mr. Tan Bo was appointed as the bank's Company Secretary and obtained his qualification approval on July 23, 2021[606](index=606&type=chunk) - Mr. Li Yaguang's appointment as the bank's Vice President was approved by the Board of Directors on August 13, 2021, pending regulatory approval of his qualifications[606](index=606&type=chunk) [Biographies of the Bank's Directors, Supervisors, and Senior Management](index=60&type=section&id=Biographies%20of%20the%20Bank's%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section provides detailed educational backgrounds and professional experiences of the bank's directors, supervisors, and senior management, highlighting the team's expertise and extensive experience - Mr. Cai Jian currently serves as Party Committee Secretary and Chairman of Guangzhou Rural Commercial Bank, holding an MBA and a Master's degree in Management, and is a Senior Economist[607](index=607&type=chunk) - Mr. Yi Xuefei currently serves as Deputy Party Committee Secretary, Vice Chairman, and President of Guangzhou Rural Commercial Bank, holding a Master's degree in Economics, an EMBA from Sun Yat-sen University, and is an Economist[607](index=607&type=chunk) - Ms. Wang Xigui currently serves as Chairwoman of the Supervisory Board and Employee Supervisor of Guangzhou Rural Commercial Bank, holding a Bachelor's degree in Economics and is an Accountant[612](index=612&type=chunk) [Securities Transactions by Directors and Supervisors](index=71&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Supervisors) During the reporting period, all directors and supervisors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers, with no non-compliant transactions - The bank has adopted a code of conduct for securities transactions by directors, supervisors, and relevant employees that is no less stringent than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules[618](index=618&type=chunk) - Following specific inquiries to all directors and supervisors, each director and supervisor confirmed their continuous compliance with the aforementioned code during the six months ended June 30, 2021[618](index=618&type=chunk) [Interests and Short Positions of Directors, Chief Executive, and Supervisors in the Bank](index=71&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Chief%20Executive%2C%20and%20Supervisors%20in%20the%20Bank) As of the latest practicable date, some directors and supervisors held interests in the bank's shares or associated corporations, including Mr. Yi Xuefei with 500,000 non-H shares, and Mr. Feng Yaoliang and Mr. Lai Zhiguang through controlled corporations Interests and Short Positions of Directors, Chief Executive, and Supervisors in the Bank | Name | Position | Nature of Interest | Class of Shares | Long/Short Position | Number of Shares Held Directly or Indirectly | Approximate Percentage of the Bank's Interest | Approximate Percentage of the Bank's Relevant Class of Shares | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Yi Xuefei | Director | Beneficial owner | Non-H shares | Long | 500,000 | 0.005% | 0.006% | | Feng Yaoliang | Director | Interest in controlled corporation | Non-H shares | Long | 100,010,000 | 1.019% | 1.252% | | Lai Zhiguang | Director | Interest in controlled corporation | Non-H shares | Long | 62,500,000 | 0.637% | 0.782% | | Liao Wenyi | Director | Beneficial owner | Non-H shares | Long | 1,103,000 | 0.011% | 0.013% | | Lai Jiaxiong | Supervisor | Beneficial owner | Non-H shares | Long | 452,224 | 0.005% | 0.006% | - Mr. Feng Yaoliang holds **100,010,000 shares** through Guangzhou Huaxin Group Co., Ltd., representing approximately **1.019%** of the bank's issued share capital[619](index=619&type=chunk) - Mr. Lai Zhiguang holds **62,500,000 shares** through Guangzhou Dongsheng Investment Co., Ltd., representing approximately **0.637%** of the bank's issued share capital[620](index=620&type=chunk) [Corporate Governance](index=73&type=section&id=Corporate%20Governance) [Overview of Corporate Governance](index=73&type=section&id=Overview%20of%20Corporate%20Governance) During the reporting period, the bank continuously improved its corporate governance structure and standards, complying with relevant laws, regulations, and most provisions of the Corporate Governance Code, with one deviation - The bank strictly adhered to the "Company Law of the People's Republic of China," "Commercial Bank Law of the People's Republic of China," and other laws, regulations, and Listing Rules, continuously improving its corporate governance structure and standards[622](index=622&type=chunk) - During the reporting period, except for a deviation from Corporate Governance Code Provision A.5.1, the bank consistently complied with the code provisions in Appendix 14 of the Listing Rules, "Corporate Governance Code," and most recommended best practices[622](index=622&type=chunk) [Responsibilities of the General Meeting](index=73&type=section&id=Responsibilities%20of%20the%20General%20Meeting) The General Meeting, as the bank's highest authority, determines operational policies, investment plans, elects directors and supervisors, approves financial reports, profit distribution, capital changes, and other major matters - The General Meeting is the bank's highest authority, determining its operational policies and investment plans[623](index=623&type=chunk) - Its powers include electing and replacing directors and supervisors not representing employees, reviewing and approving reports from the Board of Directors and Supervisory Board, and reviewing financial budgets, final accounts, profit distribution, and loss recovery plan

ジェー州衣商银行 guangzhou rural commercial bank 廣州農村商業銀行股份有限公司 ( 於中華人民共和國註冊成立的股份有限公司 ) 股份代號 : 1551 / 2020年度報告 目錄 公司簡介 2 | --- | --- | |-------|-------| | | | | | | | | | | | 10 | | | 12 | | | 13 | | | 55 | | | 66 | | | 77 | | | 100 | | | 111 | | | 119 | | | 120 | | | 131 | | | 139 | | | 292 | | | | 財務數據摘要 7 黨委書記致辭 行長致辭 管理層討論與分析 股本變動及股東情況 董事、監事及高級管理人員 企業管治報告 董事會報告 監事會報告 重要事項 三農金融服務報告 獨立審計師報告 財務報表及附註 未經審計補充財務信息 釋義 295 公司簡介 | --- | --- | --- | --- | |-------------------|-------|----------------|---------------------- ...

Capital and Market Presence - The registered capital of Guangzhou Rural Commercial Bank is RMB 9,808,268,539.00[4] - The bank operates under the stock code 1551.HK on the Hong Kong Stock Exchange[4] - The company operates multiple subsidiaries across various provinces, including Beijing, Shandong, and Jiangsu, with a total of 15 listed branches[14] - The registered address for the subsidiaries spans from Beijing to Guangdong, indicating a broad geographical presence in China[17] Financial Performance - Net interest income for 2019 reached RMB 18,563.65 million, a 39.87% increase from RMB 13,271.65 million in 2018[23] - Total operating income increased by 14.47% to RMB 23,657.28 million in 2019, compared to RMB 20,666.67 million in 2018[23] - Net profit for 2019 was RMB 7,910.71 million, reflecting a 15.79% growth from RMB 6,832.16 million in 2018[23] - Total assets as of December 31, 2019, amounted to RMB 894,154.29 million, up from RMB 763,289.60 million in 2018, representing an increase of RMB 130,864.69 million[23] - Customer loans and advances net amount reached RMB 463,051.37 million, an increase of RMB 98,083.40 million from RMB 364,967.97 million in 2018[23] Operational Efficiency - The average return on total assets for 2019 was 0.95%, up from 0.91% in 2018[25] - The net interest margin improved to 2.66% in 2019, compared to 2.28% in 2018[25] - The cost-to-income ratio decreased to 27.25% in 2019 from 28.05% in 2018, indicating improved operational efficiency[25] Risk Management and Compliance - The bank's financial report highlights a commitment to improving corporate governance and transparency[3] - Emphasis on compliance and risk management will be strengthened to ensure operational safety and integrity[44] - The company implemented a comprehensive risk management framework, focusing on balancing scale, efficiency, and quality in its credit risk management[198] Strategic Goals and Future Outlook - Future outlook includes plans for new product development and technological advancements to enhance service offerings[3] - The bank aims to strengthen its market position through strategic mergers and acquisitions[3] - The bank aims to become a world-class bank as part of its long-term strategic goal, focusing on digital transformation and customer-centric services[42][44] Customer Growth and Services - The bank reported a significant increase in user data, reflecting a growing customer base[3] - The bank achieved rapid growth in personal savings deposits, ranking first in incremental deposits among peers in Guangzhou, with an increase in market share to second place compared to the previous year[146] - The bank successfully expanded the online consumer loan service from Guangzhou to the entire Guangdong province (excluding Shenzhen), enhancing customer experience and meeting growing consumer demand[147] Employee and Training Initiatives - The total number of employees increased to 12,668 by December 31, 2019, reflecting a growth of 21% compared to the previous year[187] - In 2019, the company organized over 450 training programs, covering more than 40,000 employee training sessions[189] Innovative Products and Technology - The company launched innovative products such as "Lianlian Loan" to support enterprises and reduce financing costs[141] - The company launched 33 information technology projects in 2019, focusing on integrating technology with business operations[185] - The bank enhanced its risk control and compliance management while leveraging fintech to support business growth and operational efficiency[144] Awards and Recognition - The bank received multiple awards for its financial market operations, including recognition as a top active trader in the interbank market and outstanding self-operated trader[151] - The bank's wealth management products received accolades, including the "2019 China Open-Ended Net Value Bank Wealth Management Product Award" and "2019 China High Net Worth Client Exclusive Wealth Management Product Award"[153]

[Company Overview](index=3&type=section&id=Company%20Overview) This section provides an overview of Guangzhou Rural Commercial Bank Co., Ltd. (GRCB), detailing its registration, capital, listing status, and key accolades received in H1 2019 [Legal Name and Basic Information](index=3&type=section&id=Legal%20Name%20and%20Basic%20Information) Guangzhou Rural Commercial Bank Co., Ltd. (GRCB) was established on December 9, 2009, with a registered capital of **RMB 9.808 billion**, and its H-shares are listed on the HKEX - The company's official Chinese name is Guangzhou Rural Commercial Bank Co., Ltd., and its English name is Guangzhou Rural Commercial Bank Co., Ltd. (GRCB)[4](index=4&type=chunk) - Registered capital is **RMB 9,808,268,539.00**[4](index=4&type=chunk) - H-shares are listed on The Stock Exchange of Hong Kong Limited, with the ticker GRCB (1551.HK)[4](index=4&type=chunk) - Offshore preference shares are listed as GRCB 19USDPREF (4618.HK)[4](index=4&type=chunk) [Major Honors in H1 2019](index=4&type=section&id=Major%20Honors%20in%20H1%202019) In H1 2019, GRCB received multiple domestic and international honors, including "China Top 500 Enterprises by Credit" and ranking 185th in "The Banker's Top 1000 World Banks" - Awarded the title of "**China Top 500 Enterprises by Credit**"[5](index=5&type=chunk) - Received the "**Top 10 Rural Commercial Bank Retail Bank Award**"[5](index=5&type=chunk) - Ranked **62nd** in the "**2018 Global Top 100 Banks for Invention Patents**"[5](index=5&type=chunk) - Ranked **185th** in The Banker's "**2019 Top 1000 World Banks**"[5](index=5&type=chunk) [Financial Data Summary](index=5&type=section&id=Financial%20Data%20Summary) This section summarizes GRCB's key financial data for H1 2019, covering operating performance, scale indicators, capital adequacy, profitability, and asset quality [Operating Performance](index=5&type=section&id=Operating%20Performance) In H1 2019, the Group achieved operating income of **RMB 10.80 billion**, a **32.11% year-on-year increase**, with net profit growing by **8.30%** to **RMB 3.673 billion**, primarily driven by significant growth in net interest income H1 2019 Operating Performance Overview | Item | Six Months Ended June 30, 2019 (RMB Million) | Six Months Ended June 30, 2018 (RMB Million) | Change (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | 7,737.30 | 5,589.18 | 2,148.12 | 38.43 | | Net fee and commission income | 816.62 | 965.95 | (149.33) | (15.46) | | Operating income | 10,800.11 | 8,175.24 | 2,624.87 | 32.11 | | Profit before tax | 4,543.96 | 4,333.37 | 210.59 | 4.86 | | Net profit | 3,672.70 | 3,391.34 | 281.36 | 8.30 | | Net profit attributable to parent company shareholders | 3,591.55 | 3,321.64 | 269.91 | 8.13 | | Basic earnings per share (RMB) | 0.37 | 0.34 | 0.03 | 8.82 | [Scale Indicators](index=5&type=section&id=Scale%20Indicators) As of June 30, 2019, the Group's total assets reached **RMB 853.35 billion**, an **11.80% increase** from year-end, with double-digit growth in net customer loans and deposits, and a **25.33% increase** in total equity H1 2019 Scale Indicators Overview | Item | As of June 30, 2019 (RMB Million) | As of December 31, 2018 (RMB Million) | Change (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 853,345.90 | 763,289.60 | 90,056.30 | 11.80 | | Of which: Net customer loans and advances | 434,412.07 | 364,967.97 | 69,444.10 | 19.03 | | Total liabilities | 783,685.67 | 707,708.53 | 75,977.14 | 10.74 | | Of which: Customer deposits | 618,863.96 | 542,335.16 | 76,528.80 | 14.11 | | Equity attributable to parent company shareholders | 64,967.29 | 52,861.33 | 12,105.96 | 22.90 | | Total equity | 69,660.23 | 55,581.07 | 14,079.16 | 25.33 | [Capital Adequacy Ratios](index=6&type=section&id=Capital%20Adequacy%20Ratios) As of June 30, 2019, the Group's capital adequacy ratio was **14.98%**, up **0.70 percentage points** from year-end, while the core Tier 1 capital adequacy ratio slightly decreased H1 2019 Capital Adequacy Ratios | Item | As of June 30, 2019 (%) | As of December 31, 2018 (%) | Change (%) | | :--- | :--- | :--- | :--- | | Core Tier 1 capital adequacy ratio | 9.83 | 10.50 | (0.67) | | Tier 1 capital adequacy ratio | 11.59 | 10.53 | 1.06 | | Capital adequacy ratio | 14.98 | 14.28 | 0.70 | [Profitability Ratios](index=6&type=section&id=Profitability%20Ratios) In H1 2019, the Group's net interest margin and net interest spread significantly improved, increasing by **0.40** and **0.51 percentage points** respectively, while the cost-to-income ratio substantially optimized H1 2019 Profitability Ratios | Item | Six Months Ended June 30, 2019 (%) | Six Months Ended June 30, 2018 (%) | Change (%) | | :--- | :--- | :--- | :--- | | Return on average total assets | 0.91 | 0.91 | 0.00 | | Return on average equity | 11.73 | 13.64 | (1.91) | | Net interest spread | 2.43 | 2.03 | 0.40 | | Net interest margin | 2.35 | 1.84 | 0.51 | | Net fee and commission income to operating income ratio | 7.56 | 11.82 | (4.26) | | Cost-to-income ratio | 24.33 | 33.64 | (9.31) | [Asset Quality Ratios](index=6&type=section&id=Asset%20Quality%20Ratios) As of June 30, 2019, the Group's non-performing loan ratio increased to **1.40%**, up **0.13 percentage points** from year-end, with both provision coverage and loan loss provision ratios decreasing H1 2019 Asset Quality Ratios | Item | As of June 30, 2019 (%) | As of December 31, 2018 (%) | Change (%) | | :--- | :--- | :--- | :--- | | Non-performing loan ratio | 1.40 | 1.27 | 0.13 | | Provision coverage ratio | 234.34 | 276.64 | (42.30) | | Loan loss provision ratio | 3.27 | 3.52 | (0.25) | [Other Ratios](index=6&type=section&id=Other%20Ratios) As of June 30, 2019, the Group's loan-to-deposit ratio was **72.49%**, an increase of **2.79 percentage points** from year-end H1 2019 Other Ratios | Item | As of June 30, 2019 (%) | As of December 31, 2018 (%) | Change (%) | | :--- | :--- | :--- | :--- | | Loan-to-deposit ratio | 72.49 | 69.70 | 2.79 | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the Group's financial performance, business operations, and risk management strategies for H1 2019 [H1 2019 Financial Review](index=8&type=section&id=H1%202019%20Financial%20Review) This section reviews the Group's H1 2019 financial performance, analyzing key indicators from the income statement, balance sheet, loan quality, capital adequacy, and off-balance sheet items - In H1 2019, the Group achieved a pre-tax profit of **RMB 4.544 billion**, a **4.86% year-on-year increase**, and a net profit of **RMB 3.673 billion**, an **8.30% year-on-year increase**[430](index=430&type=chunk) - The steady growth in net profit was primarily due to the increase in net interest income[430](index=430&type=chunk) H1 2019 Key Income Statement Items Changes | Item | Six Months Ended June 30, 2019 (RMB Million) | Six Months Ended June 30, 2018 (RMB Million) | Change (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net interest income | 7,737.30 | 5,589.18 | 2,148.12 | 38.43 | | Net fee and commission income | 816.62 | 965.95 | (149.33) | (15.46) | | Net trading gains | 2,000.07 | 2,570.85 | (570.78) | (22.20) | | Net gains/(losses) from financial investments | 211.53 | (1,041.12) | 1,252.65 | (120.32) | | Operating income | 10,800.11 | 8,175.24 | 2,624.87 | 32.11 | | Operating expenses | (2,701.05) | (2,841.51) | 140.46 | (4.94) | | Net credit impairment losses | (3,554.66) | (989.45) | (2,565.21) | 259.26 | [Net Interest Income](index=9&type=section&id=Net%20Interest%20Income) In H1 2019, the Group's net interest income surged by **38.43%** to **RMB 7.737 billion**, accounting for **71.64%** of operating income, driven by asset structure adjustments, loan growth, and lower funding costs - Net interest income was **RMB 7.737 billion**, a year-on-year increase of **RMB 2.148 billion**, representing a **38.43% growth**[431](index=431&type=chunk)[432](index=432&type=chunk) - Net interest income accounted for **71.64%** of total operating income[431](index=431&type=chunk) - Net interest spread increased by **40 basis points** year-on-year to **2.43%**, and net interest margin increased by **51 basis points** year-on-year to **2.35%**[434](index=434&type=chunk)[442](index=442&type=chunk) - The change in interest income was primarily contributed by **RMB 1.858 billion** from scale factors and **RMB 0.054 billion** from interest rate factors[435](index=435&type=chunk) - The change in interest expense was primarily due to a **RMB 0.209 billion** decrease from scale factors and a **RMB 0.027 billion** decrease from interest rate factors[435](index=435&type=chunk) [Non-Interest Income](index=15&type=section&id=Non-Interest%20Income) In H1 2019, the Group's net fee and commission income decreased by **15.46%**, mainly due to lower consulting and advisory fees, while net trading gains and net gains from financial investments positively contributed - Net fee and commission income was **RMB 0.817 billion**, a year-on-year decrease of **RMB 0.149 billion**, or **15.46%**, primarily due to reduced consulting and advisory service fees[443](index=443&type=chunk) - Net trading gains were **RMB 2.000 billion**, mainly from interest income on financial investments measured at fair value through profit or loss[444](index=444&type=chunk) - Net gains from financial investments were **RMB 0.212 billion**, primarily from fair value changes of financial assets measured at fair value through other comprehensive income[444](index=444&type=chunk) [Operating Expenses](index=16&type=section&id=Operating%20Expenses) In H1 2019, the Group's operating expenses decreased by **4.94%** to **RMB 2.701 billion**, mainly due to lower staff costs, although depreciation and amortization significantly increased from new right-of-use assets - Operating expenses were **RMB 2.701 billion**, a year-on-year decrease of **RMB 0.140 billion**, or **4.94%**[446](index=446&type=chunk) - Staff costs were **RMB 1.649 billion**, a year-on-year decrease of **RMB 0.161 billion**, or **8.90%**, representing the largest component of operating expenses[447](index=447&type=chunk)[448](index=448&type=chunk) - Depreciation and amortization were **RMB 0.413 billion**, a year-on-year increase of **RMB 0.147 billion**, or **55.52%**, primarily due to depreciation of new right-of-use assets[450](index=450&type=chunk) [Impairment Losses](index=17&type=section&id=Impairment%20Losses) In H1 2019, the Group's net credit impairment losses significantly increased by **259.26%** to **RMB 3.555 billion**, mainly due to growth in loan balances and NPLs, and higher expected default probabilities for some financial investments H1 2019 Net Credit Impairment Losses | Item | Six Months Ended June 30, 2019 (RMB Million) | Six Months Ended June 30, 2018 (RMB Million) | Change (RMB Million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loans and advances | 2,152.86 | 987.21 | 1,165.65 | 118.08 | | Loans and advances measured at fair value through other comprehensive income | 366.30 | 23.29 | 343.01 | 1,472.78 | | Other | 1,035.50 | (21.05) | 1,056.55 | 5,019.24 | | Total | 3,554.66 | 989.45 | 2,565.21 | 259.26 | - The increase in impairment losses was mainly due to the growth in various loan balances and non-performing loan balances, as well as an increase in the expected default probability for some financial investments[452](index=452&type=chunk) [Income Tax Expense](index=17&type=section&id=Income%20Tax%20Expense) In H1 2019, income tax expense was **RMB 0.871 billion**, a year-on-year decrease of **RMB 0.071 billion**, primarily due to increased tax incentives, resulting in an effective tax rate of **19.17%** - Income tax expense was **RMB 0.871 billion**, a year-on-year decrease of **RMB 0.071 billion**, mainly due to increased tax incentives[453](index=453&type=chunk) - The effective income tax rate was **19.17%**[453](index=453&type=chunk) [Balance Sheet Analysis](index=18&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2019, the Group's total assets and liabilities both grew steadily, primarily driven by loans and advances and customer deposits, with total shareholders' equity significantly increasing due to preference share issuance - Total assets were **RMB 853.346 billion**, an increase of **RMB 90.056 billion** from year-end, representing an **11.80% growth**[455](index=455&type=chunk) - Total liabilities were **RMB 783.686 billion**, an increase of **RMB 75.977 billion** from year-end, representing a **10.74% growth**[464](index=464&type=chunk) - Equity attributable to parent company shareholders was **RMB 64.967 billion**, an increase of **RMB 12.106 billion** from year-end, representing a **22.90% growth**[424](index=424&type=chunk) [Assets](index=18&type=section&id=Assets) The Group's total assets grew steadily, primarily driven by increases in loans and advances and financial investments, while cash and balances with central banks decreased, and interbank placements and loans to banks significantly increased H1 2019 Asset Composition | Item | As of June 30, 2019 (RMB Million) | % of Total (%) | As of December 31, 2018 (RMB Million) | % of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Net loans and advances | 434,412.07 | 50.91 | 364,967.97 | 47.82 | | Financial investments | 253,189.62 | 29.67 | 227,853.14 | 29.85 | | Cash and balances with central banks | 88,787.21 | 10.40 | 101,589.71 | 13.31 | | Placements with and loans to banks and other financial institutions | 24,161.83 | 2.83 | 10,866.56 | 1.42 | | Loans to banks | 30,039.75 | 3.52 | 15,299.11 | 2.00 | | Financial assets held under resale agreements | 9,297.40 | 1.09 | 29,338.95 | 3.84 | | Total assets | 853,345.90 | 100.00 | 763,289.60 | 100.00 | - Total loans and advances increased by **RMB 70.611 billion** from year-end, a **18.68% growth**, mainly due to the growth in corporate loans and bill discounting business[455](index=455&type=chunk) - Financial investments increased by **RMB 25.336 billion** from year-end, an **11.12% growth**, mainly due to increased holdings of interbank certificates of deposit, policy bank bonds, and local government bonds[455](index=455&type=chunk) - Total placements with and loans to banks and other financial institutions increased by **RMB 28.036 billion** from year-end, a **107.15% growth**[455](index=455&type=chunk) [Liabilities](index=21&type=section&id=Liabilities) The Group's total liabilities grew by **10.74%**, with customer deposits, the primary funding source, increasing by **14.11%**, while interbank and other financial institution deposits and repurchase agreements decreased, and issued bonds significantly increased H1 2019 Liability Composition | Item | As of June 30, 2019 (RMB Million) | % of Total (%) | As of December 31, 2018 (RMB Million) | % of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Deposits from customers | 618,863.96 | 78.96 | 542,335.16 | 76.63 | | Deposits from banks and other financial institutions | 27,163.61 | 3.47 | 63,215.97 | 8.93 | | Debt securities issued | 104,431.97 | 13.33 | 65,875.44 | 9.31 | | Total liabilities | 783,685.67 | 100.00 | 707,708.53 | 100.00 | - Deposits from customers increased by **RMB 76.529 billion** from year-end, a **14.11% growth**[464](index=464&type=chunk) - Personal deposit balances increased by **19.72%** from year-end, and corporate deposit balances increased by **14.81%**[466](index=466&type=chunk) - The proportion of demand deposits decreased by **6.25 percentage points**, while time deposits increased by **8.71 percentage points**[466](index=466&type=chunk) [Shareholders' Equity Composition](index=23&type=section&id=Shareholders%27%20Equity%20Composition) As of June 30, 2019, the Group's total shareholders' equity was **RMB 69.660 billion**, a **25.33% increase** from year-end, primarily due to the issuance of preference shares and an increase in retained earnings H1 2019 Shareholders' Equity Composition | Item | As of June 30, 2019 (RMB Million) | % of Total (%) | As of December 31, 2018 (RMB Million) | % of Total (%) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 9,808.27 | 14.08 | 9,808.27 | 17.65 | | Preference shares | 9,820.73 | 14.10 | – | – | | Capital reserve | 10,861.00 | 15.59 | 10,861.00 | 19.54 | | Retained earnings | 18,907.70 | 27.14 | 17,277.80 | 31.09 | | Total shareholders' equity | 69,660.23 | 100.00 | 55,581.07 | 100.00 | - The introduction of preference shares significantly altered the shareholders' equity structure, accounting for **14.10%**[467](index=467&type=chunk) [Loan Quality Analysis](index=24&type=section&id=Loan%20Quality%20Analysis) As of June 30, 2019, the Group's non-performing loan ratio increased to **1.40%**, mainly due to the consolidation of Chaozhou Rural Commercial Bank and the acquisition of NPL packages, with overdue loans slightly decreasing as a percentage of total loans - The non-performing loan ratio was **1.40%**, an increase of **0.13 percentage points** from year-end[469](index=469&type=chunk)[470](index=470&type=chunk) - The increase in the non-performing loan ratio was mainly affected by factors such as the consolidation of Chaozhou Rural Commercial Bank and the acquisition of non-performing asset packages[470](index=470&type=chunk) - The non-performing loan ratio for corporate loans was **1.25%**, an increase of **0.12 percentage points** from year-end; for personal loans, it was **1.41%**, an increase of **0.09 percentage points** from year-end[474](index=474&type=chunk) - Overdue loans were **RMB 9.681 billion**, an increase of **RMB 1.230 billion** from year-end; the proportion of overdue loans was **2.16%**, a decrease of **0.08 percentage points** from year-end[476](index=476&type=chunk) [Capital Adequacy Ratio Analysis](index=28&type=section&id=Capital%20Adequacy%20Ratio%20Analysis) As of June 30, 2019, the Group's capital adequacy ratio was **14.98%**, up **0.70 percentage points** from year-end, primarily due to preference share issuance and retained earnings, with capital growth exceeding risk-weighted asset growth H1 2019 Capital Adequacy Ratios | Item | As of June 30, 2019 (%) | As of December 31, 2018 (%) | | :--- | :--- | :--- | | Core Tier 1 capital adequacy ratio | 9.83 | 10.50 | | Tier 1 capital adequacy ratio | 11.59 | 10.53 | | Capital adequacy ratio | 14.98 | 14.28 | - Net capital was **RMB 85.257 billion**, an increase of **RMB 12.450 billion** from year-end, representing a **17.10% growth**, mainly due to the issuance of preference shares to supplement capital by **RMB 9.821 billion** and retained earnings in H1[479](index=479&type=chunk) - Risk-weighted assets were **RMB 569.290 billion**, an increase of **RMB 59.453 billion** from year-end, representing an **11.66% growth**, mainly due to the increase in loan business and interbank lending to non-bank financial institutions[479](index=479&type=chunk) [Leverage Ratio Analysis](index=29&type=section&id=Leverage%20Ratio%20Analysis) As of June 30, 2019, the Group's leverage ratio was **7.27%**, meeting regulatory requirements H1 2019 Leverage Ratio | Item | As of June 30, 2019 (RMB Million) | | :--- | :--- | | Net Tier 1 capital | 65,989.40 | | Adjusted on- and off-balance sheet assets | 908,202.86 | | Leverage ratio (%) | 7.27 | [Distribution Information](index=29&type=section&id=Distribution%20Information) The Group primarily operates in Guangdong Province, China, with corporate banking being the largest revenue source, accounting for **53.80%** of operating income - The Group primarily operates in Guangdong Province, China, with its main customers and non-current assets located in Guangdong Province, China[481](index=481&type=chunk) H1 2019 Operating Income Distribution | Business | Six Months Ended June 30, 2019 (RMB Million) | % of Total (%) | | :--- | :--- | :--- | | Corporate banking business | 5,810.04 | 53.80 | | Personal banking business | 3,747.99 | 34.70 | | Financial markets business | 1,241.08 | 11.49 | | Other businesses | 1.00 | 0.01 | | Total operating income | 10,800.11 | 100.00 | [Off-Balance Sheet Items](index=29&type=section&id=Off-Balance%20Sheet%20Items) As of June 30, 2019, the Group's off-balance sheet items primarily included bankers' acceptances, letters of guarantee, and letters of credit, with balances of **RMB 26.491 billion**, **RMB 26.618 billion**, and **RMB 1.150 billion**, respectively - Bankers' acceptances balance was **RMB 26.491 billion**[482](index=482&type=chunk) - Letters of guarantee issued balance was **RMB 26.618 billion**[482](index=482&type=chunk) - Letters of credit issued balance was **RMB 1.150 billion**[482](index=482&type=chunk) [Contingent Liabilities and Pledged Assets](index=29&type=section&id=Contingent%20Liabilities%20and%20Pledged%20Assets) Details of the Group's contingent liabilities and pledged assets can be found in Notes 41 and 43 to the condensed consolidated financial statements [Business Operations](index=30&type=section&id=Business%20Operations) This section details GRCB's business operations and development strategies across corporate banking, personal banking, financial markets, inclusive finance, "Sannong" finance, distribution channels, subsidiaries, and information technology [Corporate Banking Business](index=30&type=section&id=Corporate%20Banking%20Business) The Bank's corporate banking business developed steadily in H1 2019, expanding corporate deposits, supporting the real economy with a focus on agriculture and small businesses, and innovating in international and transaction banking - Actively expanded corporate deposit business, promoting steady growth in corporate deposits[484](index=484&type=chunk) - Adhered to the strategic positioning of supporting agriculture and small businesses, focusing on private enterprises, SMEs, rural revitalization, "Sannong" (agriculture, rural areas, and farmers), and green credit businesses[484](index=484&type=chunk) - International business developed steadily, launching fixed-rate flexible foreign currency deposits and "International Remittance and Tax Link" products, and strengthening collaboration with Hong Kong and Macao counterparts[485](index=485&type=chunk) - Transaction banking business launched industry-first "Smart Transaction" and "Easy Bidding" products, and built foundational platforms such as a new generation corporate online banking system[486](index=486&type=chunk) [Personal Banking Business](index=31&type=section&id=Personal%20Banking%20Business) In H1 2019, the Bank's personal banking business achieved growth in deposits and loans through product innovation and marketing, optimized wealth management, and saw continued increases in bank card issuance and transaction volumes - Launched multiple deposit products such as "Dream Deposit," "Happiness Deposit," and "Monthly Gain," with strong sales of large-denomination certificates of deposit[487](index=487&type=chunk) - Optimized personal wealth management product structure, with open-ended wealth management products accounting for **32.11%** of the balance, and an outstanding balance of **RMB 64.864 billion**[488](index=488&type=chunk) - Cumulatively issued **509.8 thousand** new personal debit cards, with **6.9967 million** existing personal debit cards, and cumulative deposits of **RMB 109.421 billion**, a year-on-year increase of **RMB 29.476 billion**[489](index=489&type=chunk) - Cumulatively issued **1.4928 million** credit cards, with operating income of **RMB 0.415 billion**, a year-on-year increase of **20.62%**[490](index=490&type=chunk) [Financial Markets Business](index=32&type=section&id=Financial%20Markets%20Business) In H1 2019, the Bank's financial markets business focused on steady operations, enhancing investment capabilities, promoting wealth management transformation with significant growth in net-value products, and advancing asset custody and bond underwriting - Continuously enhanced investment research and market judgment capabilities, timely adjusting investment directions to improve profitability[492](index=492&type=chunk) - Actively adjusted wealth management business structure, reducing interbank wealth management scale and vigorously developing retail wealth management, with net-value wealth management products balance of **RMB 6.456 billion**, a significant increase from the beginning of the year[493](index=493&type=chunk) - In the Q1 2019 National Wealth Management Capability Ranking Report released by Puyi Standard, the Bank ranked **first** among rural financial institutions[493](index=493&type=chunk) - In H1 2019, the average daily scale of asset custody was **RMB 421.734 billion**[494](index=494&type=chunk) [Inclusive and Micro Finance Business](index=33&type=section&id=Inclusive%20and%20Micro%20Finance%20Business) In H1 2019, the Bank's inclusive and micro finance business grew steadily, with increases in loan customers and balances, enhancing service precision and coverage through team building, product innovation, and technological support - The number of micro and small enterprise loan customers was **17,144**, an increase of **2,793** from the beginning of 2019[495](index=495&type=chunk) - The balance of micro and small enterprise loans was **RMB 125.629 billion**, an increase of **RMB 15.036 billion** from the beginning of the year, representing a **13.60% growth**[495](index=495&type=chunk) - Established a vertical management model to cultivate an efficient and orderly business marketing team[496](index=496&type=chunk) - Launched the "Sun Inclusive Finance" brand series products, such as "Sun Micro Loan" and "Sun Micro E-Loan"[498](index=498&type=chunk) - Actively promoted cooperation with third-party e-commerce platforms and big data institutions to transform business towards scenario-based and batch processing[499](index=499&type=chunk) ["Sannong" Finance Business](index=34&type=section&id=Sannong%22%20Finance%20Business) The Bank maintained its "Sannong" service focus, significantly increasing agricultural-related loan balances, implementing a rural revitalization plan, and innovating savings products to support targeted poverty alleviation - Agricultural-related loan balance was **RMB 36.394 billion**, an increase of **RMB 5.593 billion** from the beginning of the year, representing an **18.16% growth**[501](index=501&type=chunk) - Formulated the "Guangzhou Rural Commercial Bank Three-Year Action Plan for Promoting Rural Revitalization Strategy (2018-2020) (Revised 2019)"[502](index=502&type=chunk) - Established a "Sannong" finance approval channel and a green approval channel for inclusive businesses, simplifying business approval processes[504](index=504&type=chunk) - Issued **25** village and community-exclusive wealth management products, raising **RMB 3.582 billion**[505](index=505&type=chunk) - Actively promoted the "Yue Wang Model" for industrial poverty alleviation and leveraged the "Sun Market" e-commerce platform to boost sales of poverty alleviation agricultural products[507](index=507&type=chunk) [Distribution Channels](index=36&type=section&id=Distribution%20Channels) The Bank continuously optimized its distribution channels, expanding its physical and self-service networks, and vigorously developing internet finance, including direct banking, e-commerce, mobile banking, and new payment methods, to provide integrated online and offline financial services - Operates **632** branches, including **619** in Guangzhou and **13** in other cities within Guangdong Province, with Guangzhou branches ranking first in number[509](index=509&type=chunk) - Established **163** 24-hour self-service banks, with **2,859** ATMs and automatic inquiry terminals[510](index=510&type=chunk) - Operates **56** smart bank branches, with cumulative transaction volume reaching **RMB 4.1 billion**[511](index=511&type=chunk) - Direct banking customers totaled approximately **876.9 thousand**, with financial product transaction volume of **RMB 11.315 billion**[511](index=511&type=chunk) - Sun Market had approximately **350 thousand** customers, with about **203.7 thousand** orders, a **292% year-on-year increase**, and transaction volume of **RMB 27.5962 million**, a **182% year-on-year increase**[512](index=512&type=chunk) - Mobile banking had **4.035 million** individual customers and **14.8 thousand** corporate customers, with financial transaction volume of **RMB 167.700 billion**[513](index=513&type=chunk) - New payment transaction volume was **201 million** transactions, with a transaction value of **RMB 150.112 billion**[514](index=514&type=chunk) [Major Subsidiaries](index=38&type=section&id=Major%20Subsidiaries) As of June 30, 2019, the Group established **25** Pearl River Village Banks across **9** provinces and cities, and controls Pearl River Financial Leasing Co., Ltd., Hunan Zhuzhou Pearl River Rural Commercial Bank Co., Ltd., and Chaozhou Rural Commercial Bank Co., Ltd., continuously expanding its business reach - The Bank established **25** Pearl River Village Banks across **9** provinces and cities nationwide[515](index=515&type=chunk) - Pearl River Financial Leasing Co., Ltd. is a wholly-owned subsidiary of the Bank, primarily engaged in financial leasing related businesses[515](index=515&type=chunk) - Hunan Zhuzhou Pearl River Rural Commercial Bank Co., Ltd. and Chaozhou Rural Commercial Bank Co., Ltd. are subsidiaries controlled by the Bank[515](index=515&type=chunk) [Information Technology](index=38&type=section&id=Information%20Technology) In H1 2019, the Bank actively advanced information system construction, strengthened technology governance and information security, enhanced business continuity management, and supported business development and risk management through big data applications - Information systems operated stably, with no unplanned system outages[516](index=516&type=chunk) - Information technology regulatory rating improved by another level, achieving two consecutive years of rating upgrades[517](index=517&type=chunk) - Continuously built and improved information security management and protection systems, launching the "Cyber Shield 2019" initiative[518](index=518&type=chunk) - Completed five batches of local availability switchover drills for **68** business systems, enhancing business continuity assurance for critical systems[519](index=519&type=chunk) - Completed the launch of **15** system projects and focused on researching and implementing big data technology exploration and practice[520](index=520&type=chunk) [Human Resources Management](index=40&type=section&id=Human%20Resources%20Management) As of June 30, 2019, the Group had **11,302** employees, with **66.97%** holding a bachelor's degree or higher, and continued to enhance employee training through its internal "Pearl River Business School" - As of June 30, 2019, the Group had **11,302** active employees, of whom **7,178** were employees with labor contracts signed with the Bank[521](index=521&type=chunk) - Employees with a bachelor's degree or higher totaled **4,807**, accounting for **66.97%** of active employees[521](index=521&type=chunk) - In H1 2019, over **230** training programs were organized, covering more than **20,000** employee-times across all levels of the Bank, with an average of **22** hours of online learning per person[522](index=522&type=chunk) [Risk Management](index=41&type=section&id=Risk%20Management) In H1 2019, the Group implemented a comprehensive, counter-cyclical risk management strategy, strengthening control over credit, liquidity, market, and operational risks, while advancing Basel III implementation and anti-money laundering efforts - The Group strictly implemented regulatory policy requirements, thoroughly applied comprehensive risk management concepts, and adopted counter-cyclical risk management strategies[523](index=523&type=chunk) - During the reporting period, the Group's risks were generally controllable, internal control management was effective, and risk management capabilities and levels continuously improved[523](index=523&type=chunk) [Credit Risk Management](index=41&type=section&id=Credit%20Risk%20Management) The Group continuously improved its credit risk management framework, policies, and systems, strengthening vertical risk management, optimizing lending policies, and enhancing performance assessment to improve credit risk control capabilities - Strengthened vertical risk management and enhanced full-process management of credit business[524](index=524&type=chunk) - Optimized credit and investment policies, strictly controlling access standards for industries, customers, and products deeply affected by counter-cyclical factors[524](index=524&type=chunk) - Promoted optimization of credit business structure, strictly controlled off-site business deployment, and enhanced the desirability of business development[524](index=524&type=chunk) - Improved accountability management systems, introduced the concept of primary business responsibility, and established an assessment and accountability mechanism with balanced responsibilities, rights, and interests[524](index=524&type=chunk) [Liquidity Risk Management](index=42&type=section&id=Liquidity%20Risk%20Management) The Group's Asset and Liability Management Committee formulated liquidity risk policies, strengthened centralized management, managed daily funding positions, set and monitored risk limits quarterly, and conducted regular stress tests to ensure overall controllable liquidity risk - The Asset and Liability Management Committee is responsible for formulating liquidity risk policies and strategies[525](index=525&type=chunk) - Strengthened unified and centralized management of liquidity risk, managed daily funding positions, and ensured adequate reserves[525](index=525&type=chunk) - Liquidity risk limits are set quarterly, and their implementation is monitored monthly and assessed quarterly[525](index=525&type=chunk) - In H1 2019, liquidity risk was generally controllable, with no major liquidity risk events, and all key liquidity risk indicators met targets each month[525](index=525&type=chunk) [Market Risk Management](index=43&type=section&id=Market%20Risk%20Management) The Group manages interest rate and exchange rate risks through limit management, sensitivity analysis, and duration models, continuously monitoring market price changes, standardizing new businesses, and strengthening its market risk management team - Interest rate risk is the primary market risk faced by the banking book, mainly arising from mismatches in repricing dates of interest-earning assets and interest-bearing liabilities[526](index=526&type=chunk) - Exchange rate risk primarily stems from foreign exchange exposures to currency fluctuations[526](index=526&type=chunk) - Implemented multiple measures to enhance market risk management capabilities, including strict adherence to regulatory requirements, formulating annual basic investment policies, implementing market risk monitoring mechanisms, and strengthening talent development[526](index=526&type=chunk) [Operational Risk Management](index=43&type=section&id=Operational%20Risk%20Management) In H1 2019, the Bank continuously strengthened business process standardization, steadily advanced business continuity management, restructured its IT risk monitoring system, and conducted on-site inspections of key IT outsourcing providers to prevent operational risks - Steadily carried out business continuity management, optimized recovery objectives for critical business continuity, and revised and improved emergency plans[527](index=527&type=chunk) - Restructured the information technology risk monitoring and quantitative indicator system, and conducted IT development testing and information security risk assessments[527](index=527&type=chunk) - Conducted on-site inspections of key information technology outsourcing service providers[527](index=527&type=chunk) [Implementation of Basel III](index=44&type=section&id=Implementation%20of%20Basel%20III) The Group actively implemented Basel III, establishing a risk measurement model laboratory and a comprehensive risk measurement system, achieving compliance with the standardized approach for capital measurement in H1 2019, laying the foundation for digital risk management transformation - Gradually established a risk measurement model laboratory to develop various risk measurement and monitoring models[528](index=528&type=chunk) - Built a comprehensive risk measurement system that meets the Bank's risk appetite, risk limits, capital assessment, and stress testing requirements[528](index=528&type=chunk) - In H1 2019, the Bank's standardized approach for capital measurement met the requirements, and the basic conditions for the advanced internal ratings-based approach for capital measurement were largely in place[528](index=528&type=chunk) - Issued the 2019 Risk Appetite Statement and indicator system, and carried out comprehensive risk stress testing and Internal Capital Adequacy Assessment Process (ICAAP) projects[528](index=528&type=chunk) [Anti-Money Laundering Status](index=44&type=section&id=Anti-Money%20Laundering%20Status) In H1 2019, the Group diligently fulfilled its anti-money laundering responsibilities, improved its AML framework, implemented effective controls in high-risk areas, and conducted extensive training and public awareness campaigns to enhance AML management and defense capabilities - Fully benchmarked against the requirements of the "Guidelines for Anti-Money Laundering and Counter-Terrorist Financing Risk Management for Legal Entity Financial Institutions (Trial)," establishing and improving the AML work and institutional system[529](index=529&type=chunk) - Conducted employee training and public awareness campaigns through various methods, including on-site and off-site training, online articles and WeChat promotions, branch electronic signage, and community outreach[529](index=529&type=chunk) - A total of over **1,600** employee-times participated in on-site and off-site training[529](index=529&type=chunk) [Internal Audit](index=45&type=section&id=Internal%20Audit) The Bank established an independent and vertical internal audit management system, with the Internal Audit Department performing its supervisory role through special audits and internal control evaluations to enhance overall internal control and promote steady business development - Established an independent and vertical internal audit management system, with an Audit Committee under the Board of Directors and an Audit and Supervision Committee under the Board of Supervisors[530](index=530&type=chunk) - The Internal Audit Department conducted special audits and internal control evaluation audits with the aim of strengthening internal control, improving internal management, and enhancing economic efficiency[530](index=530&type=chunk) - Innovated management methods, improved audit system functions to achieve full-process audit management, and optimized audit resource allocation through internal rotation of audit personnel via two-way selection[530](index=530&type=chunk) [Outlook](index=45&type=section&id=Outlook) In H1 2019, the Bank maintained stable operations amidst a complex economic environment, achieving good asset growth and profitability, and plans to flexibly adjust strategies and enhance business innovation in H2 to serve the real economy - In H1 2019, China's economic growth faced a complex internal and external environment, with external deterioration increasing downward pressure on the domestic economy[531](index=531&type=chunk) - Despite the unfavorable environment, the Bank maintained stable operations, with steady asset growth and good levels of profitability growth and asset quality[531](index=531&type=chunk) - In H2, the Bank will flexibly adjust its operating strategies, strengthen business innovation capabilities, and better serve real enterprises in response to changes in the macroeconomic environment[531](index=531&type=chunk) [Share Capital Changes and Shareholder Information](index=46&type=section&id=Share%20Capital%20Changes%20and%20Shareholder%20Information) This section details GRCB's H1 2019 share capital changes, shareholder holdings, and information on the offshore non-public issuance of preference shares, including issuance size, dividend terms, and liquidation priority [Table of Share Changes](index=46&type=section&id=Table%20of%20Share%20Changes) As of June 30, 2019, the Bank's total share capital remained unchanged, with a decrease in non-listed corporate shares and an increase in non-listed natural person shares, while offshore listed foreign shares remained constant H1 2019 Share Changes | Item | Number of Shares as of December 31, 2018 (Shares) | Proportion (%) | Change During Reporting Period (Shares) | Number of Shares as of June 30, 2019 (Shares) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total share capital | 9,808,268,539 | 100 | – | 9,808,268,539 | 100 | | Non-offshore listed corporate shares | 5,584,950,888 | 56.94 | -82,800,000 | 5,502,150,888 | 56.10 | | Non-offshore listed natural person shares | 2,402,982,651 | 24.50 | 82,800,000 | 2,485,782,651 | 25.34 | | Offshore listed foreign shares | 1,820,335,000 | 18.56 | – | 1,820,335,000 | 18.56 | [Shareholder Holdings](index=46&type=section&id=Shareholder%20Holdings) As of June 30, 2019, the Bank's total share capital was **9.808 billion shares**, with a dispersed ownership structure where the top ten shareholders collectively held **41.56%**, and Hong Kong Securities Clearing Company Nominees Limited was the largest shareholder - As of June 30, 2019, the Bank's total share capital was **9.808 billion shares**, including **7.988 billion** non-offshore listed shares and **1.820 billion** offshore listed shares[533](index=533&type=chunk) - The top ten shareholders collectively held **41.56%** of the shares, indicating a relatively dispersed ownership structure[534](index=534&type=chunk) - Hong Kong Securities Clearing Company Nominees Limited was the largest shareholder, holding **18.56%** of the shares[535](index=535&type=chunk) - The Guangzhou Municipal People's Government indirectly held **18.22%** of the Bank's shares through **13** corporate shareholders it controls[542](index=542&type=chunk) [Information on Offshore Non-Public Issuance of Preference Shares](index=50&type=section&id=Information%20on%20Offshore%20Non-Public%20Issuance%20of%20Preference%20Shares) On June 20, 2019, the Bank successfully issued **USD 1.43 billion** in non-cumulative perpetual offshore preference shares, raising approximately **RMB 9.839 billion** to supplement additional Tier 1 capital, with a **5.90%** dividend rate and mandatory conversion triggers - On June 20, 2019, **USD 1.43 billion** of non-cumulative perpetual offshore preference shares were issued[543](index=543&type=chunk) - The total proceeds from this offshore preference share issuance were approximately **RMB 9.839 billion**, all of which were used to supplement the Bank's additional Tier 1 capital[543](index=543&type=chunk) - The offshore preference shares have a dividend rate of **5.90%**, are non-cumulative, and include mandatory conversion trigger events[548](index=548&type=chunk)[708](index=708&type=chunk)[710](index=710&type=chunk) - The offshore preference shares are perpetual, with no maturity date, and the Bank has the right to redeem all or part of them after five years[712](index=712&type=chunk) [Directors, Supervisors, and Senior Management Information](index=52&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management%20Information) This section outlines the composition of GRCB's Board of Directors, Board of Supervisors, and senior management as of June 30, 2019, confirming their compliance with securities trading codes during the reporting period [The Bank's Directors](index=52&type=section&id=The%20Bank%27s%20Directors) As of June 30, 2019, the Bank's Board of Directors comprised **13** members, including **2** executive, **6** non-executive, and **5** independent non-executive directors, with two directors resigning post-reporting period - As of June 30, 2019, the Board of Directors had **13** directors, including **2** executive directors, **6** non-executive directors, and **5** independent non-executive directors[549](index=549&type=chunk) - Mr. Wang Jikang and Mr. Shao Jianming resigned as directors of the Bank on July 19, 2019, and August 14, 2019, respectively[549](index=549&type=chunk) [The Bank's Supervisors](index=52&type=section&id=The%20Bank%27s%20Supervisors) As of June 30, 2019, the Bank's Board of Supervisors comprised **8** members, including **3** employee supervisors, **3** external supervisors, and **2** shareholder supervisors - As of June 30, 2019, the Board of Supervisors had **8** supervisors, including **3** employee supervisors, **3** external supervisors, and **2** shareholder supervisors[550](index=550&type=chunk) [The Bank's Senior Management](index=52&type=section&id=The%20Bank%27s%20Senior%20Management) As of June 30, 2019, the Bank's senior management team consisted of **10** members, including the President, Secretary of the Discipline Inspection Commission, **3** Vice Presidents, **3** Business Directors, Chief Information Officer, and Board Secretary - As of June 30, 2019, the senior management team comprised **10** members, including Mr. Yi Xuefei (President), Mr. Zuo Yi (Secretary of the Discipline Inspection Commission), **3** Vice Presidents, **3** Business Directors, Mr. Cai Huiran (Chief Information Officer), and Ms. Zheng Ying (Board Secretary)[551](index=551&type=chunk) [Securities Transactions by Directors and Supervisors](index=52&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Supervisors) All directors and supervisors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2019 - All directors and supervisors of the Bank confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules during the reporting period[552](index=552&type=chunk) [Significant Matters](index=53&type=section&id=Significant%20Matters) This section covers GRCB's key corporate governance practices, dividend distribution, related party transactions, legal proceedings, major asset acquisitions and operations, and post-balance sheet events, highlighting compliance and business developments [Corporate Governance](index=53&type=section&id=Corporate%20Governance) During the reporting period, the Bank strictly adhered to relevant laws and regulations, continuously improved its corporate governance structure, and complied with the Code Provisions and most Recommended Best Practices of the Corporate Governance Code - The Bank strictly adhered to relevant laws and regulations, including the "Company Law of the People's Republic of China" and the "Commercial Bank Law of the People's Republic of China," as well as the Listing Rules, continuously improving its corporate governance structure[553](index=553&type=chunk) - The Bank has consistently complied with and met the Code Provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules, and complied with most of the Recommended Best Practices[553](index=553&type=chunk) [Dividend Distribution Status](index=53&type=section&id=Dividend%20Distribution%20Status) The Bank distributed a final dividend of **RMB 0.20** per share (tax inclusive) for 2018, totaling **RMB 1.962 billion**, on June 21, 2019, and did not declare an interim dividend for 2019 - The Bank distributed a final dividend of **RMB 0.20** per share (tax inclusive) for 2018 to shareholders registered as of June 4, 2019[554](index=554&type=chunk) - A total of **RMB 1.962 billion** (tax inclusive) was distributed[554](index=554&type=chunk) - The Bank did not declare an interim dividend for 2019[554](index=554&type=chunk) [Purchase, Sale, and Redemption of Listed Securities](index=53&type=section&id=Purchase%2C%20Sale%2C%20and%20Redemption%20of%20Listed%20Securities) During the reporting period, the Bank did not repurchase, sell, or redeem any of its listed securities - During the reporting period, the Bank did not repurchase, sell, or redeem any of its listed securities[555](index=555&type=chunk) [Significant Related Party Transactions](index=53&type=section&id=Significant%20Related%20Party%20Transactions) As of the end of the reporting period, significant related party loans totaled **RMB 3.897 billion**, accounting for **0.98%** of the Bank's total loans, with no negative impact on operating results or financial position - Significant related party loan balance was **RMB 3.897 billion**, accounting for **0.98%** of the Bank's total loans[555](index=555&type=chunk) - Significant related party loans had no negative impact on the Bank's operating results or financial position[555](index=555&type=chunk) [Significant Litigation and Arbitration](index=53&type=section&id=Significant%20Litigation%20and%20Arbitration) During the reporting period, the Bank had no litigation or arbitration matters with a significant impact on its operations, and pending cases totaling **RMB 41.337 million** are not expected to have a material effect - During the reporting period, the Bank had no litigation or arbitration matters that had a significant impact on its operating activities[556](index=556&type=chunk) - As of the end of the reporting period, the Bank was a defendant or third party in pending litigation cases involving an amount of **RMB 41.337 million**, which the Bank believes will not have a significant impact on its operating activities[556](index=556&type=chunk) [Interests and Short Positions of Directors, Chief Executive, and Supervisors in the Company](index=54&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Chief%20Executive%2C%20and%20Supervisors%20in%20the%20Company) As of June 30, 2019, the Bank's directors, supervisors, and chief executive held interests in the Bank's shares, all disclosed in compliance with the SFO and Model Code - The Bank's directors, supervisors, and chief executive held interests in the Bank's shares, which have been disclosed in accordance with the SFO and the Model Code[557](index=557&type=chunk)[558](index=558&type=chunk)[559](index=559&type=chunk) [Penalties Imposed on the Bank, its Directors, Supervisors, and Senior Management](index=56&type=section&id=Penalties%20Imposed%20on%20the%20Bank%2C%20its%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, neither the Bank nor its directors, supervisors, or senior management received any significant penalties from the CSRC, HKEX, or other regulatory bodies - During the reporting period, neither the Bank nor its directors, supervisors, and senior management were subject to investigations, administrative penalties, public criticisms by the CSRC, or public condemnations by the HKEX[560](index=560&type=chunk) - Nor were they subject to penalties from other regulatory bodies that had a significant impact on the Bank's operations[560](index=560&type=chunk) [Significant Contracts and Their Performance](index=56&type=section&id=Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the Bank had no significant contracts or their performance to report - During the reporting period, the Bank had no significant contracts or their performance to report[560](index=560&type=chunk) [Major Asset Acquisitions, Disposals, and Business Combinations](index=56&type=section&id=Major%20Asset%20Acquisitions%2C%20Disposals%2C%20and%20Business%20Combinations) During the reporting period, Chaozhou Rural Commercial Bank, in which the Bank holds a **57.72%** stake, officially commenced operations on June 29, 2019, marking a significant business combination - Chaozhou Rural Commercial Bank, in which the Bank holds a **57.72%** stake, officially commenced operations on June 29, 2019[560](index=560&type=chunk) [Major Asset Operations](index=56&type=section&id=Major%20Asset%20Operations) On June 20, 2019, the Bank successfully issued **USD 1.43 billion** in non-cumulative perpetual offshore preference shares in Hong Kong, raising approximately **RMB 9.839 billion** to supplement additional Tier 1 capital - On June 20, 2019, the Bank successfully issued **USD 1.43 billion** of non-cumulative perpetual offshore preference shares in Hong Kong, with a dividend rate of **5.90%**[561](index=561&type=chunk) - The total proceeds from the offshore preference share issuance were approximately **RMB 9.839 billion**, all of which were used to supplement the Bank's additional Tier 1 capital[561](index=561&type=chunk) [Post-Balance Sheet Events](index=56&type=section&id=Post-Balance%20Sheet%20Events) As of the latest practicable date, Guangdong Nanxiong Rural Commercial Bank commenced operations in July 2019, and the establishment of Shaoguan Rural Commercial Bank is progressing, indicating the Bank's continued rural cooperative restructuring strategy - Guangdong Nanxiong Rural Commercial Bank, a subsidiary acquired by the Group, commenced operations in July 2019[562](index=562&type=chunk) - The establishment of Shaoguan Rural Commercial Bank is progressing in an orderly manner[562](index=562&type=chunk) [Review of Interim Results](index=56&type=section&id=Review%20of%20Interim%20Results) The Bank's condensed consolidated interim financial information for the six months ended June 30, 2019, was reviewed by PricewaterhouseCoopers, which issued an unmodified review report, and was also reviewed by the Bank's Audit Committee and Board of Directors - The condensed consolidated interim financial information was reviewed by PricewaterhouseCoopers, which issued an unmodified review report[563](index=563&type=chunk) - The interim report was reviewed by the Bank's Audit Committee and Board of Directors[563](index=563&type=chunk) [Organizational Chart](index=56&type=section&id=Organizational%20Chart) This section presents the organizational chart of Guangzhou Rural Commercial Bank Co., Ltd., clearly depicting its management hierarchy and departmental structure [Interim Financial Information Review Report](index=58&type=section&id=Interim%20Financial%20Information%20Review%20Report) PricewaterhouseCoopers reviewed GRCB's condensed consolidated interim financial information for the six months ended June 30, 2019, issuing an unmodified review conclusion, confirming compliance with IAS 34 for interim financial reporting - The auditor has reviewed the condensed consolidated interim financial information of Guangzhou Rural Commercial Bank Co., Ltd. and its subsidiaries as of June 30, 2019[566](index=566&type=chunk) - The scope of the review is substantially less than that of an audit conducted in accordance with International Standards on Auditing, and therefore no audit opinion is expressed[567](index=567&type=chunk) - The auditor has not found anything that causes them to believe that the Group's interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[568](index=568&type=chunk) [Interim Financial Information (Unaudited)](index=59&type=section&id=Interim%20Financial%20Information%20(Unaudited)) This section provides the unaudited condensed consolidated interim financial information for the six months ended June 30, 2019, including income statements, balance sheets, and detailed notes, presenting the Group's financial performance and position [Condensed Consolidated Interim Income Statement](index=59&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) In H1 2019, the Group's net profit was **RMB 3,672,701 thousand**, a **8.30% year-on-year increase**, primarily driven by significant growth in net interest income, despite decreases in net fee and commission income and net trading gains H1 2019 Condensed Consolidated Interim Income Statement Key Data | Item | 2019 (RMB Thousand) | 2018 (RMB Thousand) | | :--- | :--- | :--- | | Net interest income | 7,737,303 | 5,589,183 | | Net fee and commission income | 816,622 | 965,945 | | Net trading gains | 2,000,070 | 2,570,849 | | Net gains/(losses) from financial investments | 211,525 | (1,041,123) | | Operating income | 10,800,110 | 8,175,239 | | Operating expenses | (2,701,050) | (2,841,512) | | Net credit impairment losses | (3,554,664) | (989,452) | | Net profit | 3,672,701 | 3,391,337 | | Net profit attributable to parent company shareholders | 3,591,552 | 3,321,637 | | Basic earnings per share (RMB) | 0.37 | 0.34 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=60&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) In H1 2019, the Group's total comprehensive income was **RMB 4,328,100 thousand**, a decrease from **RMB 4,870,063 thousand** in H1 2018, mainly due to fair value changes of financial assets measured at fair value through other comprehensive income H1 2019 Condensed Consolidated Interim Statement of Comprehensive Income Key Data | Item | 2019 (RMB Thousand) | 2018 (RMB Thousand) | | :--- | :--- | :--- | | Net profit for the period | 3,672,701 | 3,391,337 | | Fair value changes of financial assets measured at fair value through other comprehensive income | (110,496) | 1,516,101 | | Expected credit loss provision for financial assets measured at fair value through other comprehensive income | 762,671 | (16,189) | | Total comprehensive income for the period | 4,328,100 | 4,870,063 | | Total comprehensive income attributable to parent company shareholders | 4,246,886 | 4,800,363 | [Condensed Consolidated Interim Statement of Financial Position](index=61&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2019, the Group's total assets were **RMB 853,345,899 thousand**, total liabilities were **RMB 783,685,666 thousand**, and total shareholders' equity was **RMB 69,660,233 thousand**, all showing significant growth from year-end 2018, particularly due to preference share issuance H1 2019 Condensed Consolidated Interim Statement of Financial Position Key Data | Item | As of June 30, 2019 (RMB Thousand) | As of December 31, 2018 (RMB Thousand) | | :--- | :--- | :--- | | Total assets | 853,345,899 | 763,289,597 | | Loans and advances | 434,412,069 | 364,967,971 | | Financial investments | 253,189,618 | 227,853,131 | | Total liabilities | 783,685,666 | 707,708,529 | | Customer deposits | 618,863,963 | 542,335,162 | | Debt securities issued | 104,431,970 | 65,875,435 | | Share capital | 9,808,269 | 9,808,269 | | Preference shares | 9,820,734 | – | | Equity attributable to parent company shareholders | 64,967,293 | 52,861,327 | | Total equity | 69,660,233 | 55,581,068 | [Condensed Consolidated Interim Statement of Changes in Equity](index=63&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) In H1 2019, the Group's total shareholders' equity increased to **RMB 69,660,233 thousand**, primarily driven by the issuance of preference shares totaling **RMB 9,820,734 thousand** and net profit contributions, while also reflecting declared and distributed dividends H1 2019 Condensed Consolidated Interim Statement of Changes in Equity Key Data | Item | Balance as of January 1, 2019 (RMB Thousand) | Net Profit for the Period (RMB Thousand) | Subtotal of Other Comprehensive Income for the Period (RMB Thousand) | Total Comprehensive Income (RMB Thousand) | Issuance of Preference Shares (RMB Thousand) | Dividends Declared and Paid (RMB Thousand) | Balance as of June 30, 2019 (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to parent company shareholders | 52,861,327 | 3,591,552 | 655,334 | 4,246,886 | 9,820,734 | (1,961,654) | 64,967,293 | | Non-controlling interests | 2,719,741 | 81,149 | 65 | 81,214 | – | (41,690) | 4,692,940 | | Total equity | 55,581,068 | 3,672,701 | 655,399 | 4,328,100 | 9,820,734 | (2,003,344) | 69,660,233 | [Condensed Consolidated Interim Cash Flow Statement](index=66&type=section&id=Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) In H1 2019, the Group's net cash used in operating activities was **RMB (69,746,100) thousand**, net cash generated from investing activities was **RMB 1,865,020 thousand**, and net cash generated from financing activities was **RMB 44,842,923 thousand**, resulting in a net decrease of **RMB 23,038,157 thousand** in cash and cash equivalents H1 2019 Condensed Consolidated Interim Cash Flow Statement Key Data | Item | 2019 (RMB Thousand) | 2018 (RMB Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (69,746,100) | (31,996,977) | | Net cash generated from/(used in) investing activities | 1,865,020 | (4,546,174) | | Net cash generated from/(used in) financing activities | 44,842,923 | (6,291,235) | | Net decrease in cash and cash equivalents | (23,038,157) | (42,834,386) | | Cash and cash equivalents at end of period | 54,299,530 | 66,432,834 | | Interest received | 12,769,332 | 9,828,347 | | Interest paid | (6,788,240) | (5,618,768) | [Notes to the Condensed Consolidated Interim Financial Information](index=68&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed explanations and disclosures for various items in the consolidated financial statements, including company information, accounting policies, significant judgments, operating segments, and financial risk management - The Group has a total of **28** subsidiaries across China, including **25** village banks, one financial leasing company, and two rural commercial banks[583](index=583&type=chunk)[584](index=584&type=chunk) - The Group adopted IFRS 16 "Leases" from January 1, 2019, recognizing lease liabilities and right-of-use assets in the statement of financial position[589](index=589&type=chunk)[591](index=591&type=chunk) - In H1 2019, interest income from customer loans and advances was **RMB 11.822 billion**, a year-on-year increase of **RMB 2.732 billion**, representing a **30.06% growth**[437](index=437&type=chunk) - As of June 30, 2019, the balance of non-guaranteed wealth management products initiated by the Group and not included in the consolidated financial statements was **RMB 84,145,579 thousand**[730](index=730&type=chunk) - The Bank obtained control of Chaozhou Rural Commercial Bank on June 21, 2019, holding a **57.72%** equity stake and entitled to **74.38%** of the voting rights[736](index=736&type=chunk) [Unaudited Supplementary Financial Information](index=151&type=section&id=Unaudited%20Supplementary%20Financial%20Information) This section provides unaudited supplementary financial information, focusing on liquidity ratios, currency concentration, cross-border claims, and the geographical distribution of overdue customer loans, offering a more comprehensive risk management perspective [Liquidity Ratio, Liquidity Coverage Ratio, and Net Stable Funding Ratio](index=152&type=section&id=Liquidity%20Ratio%2C%20Liquidity%20Coverage%20Ratio%2C%20and%20Net%20Stable%20Funding%20Ratio) As of June 30, 2019, the Group's liquidity ratio was **78.16%**, liquidity coverage ratio was **133.69%**, and net stable funding ratio was **107.77%**, all meeting regulatory requirements H1 2019 Liquidity Ratios | Item | As of June 30, 2019 (%) | As of December 31, 2018 (%) | | :--- | :--- | :--- | | Liquidity ratio (RMB and foreign currency) | 78.16 | 76.91 | | Liquidity coverage ratio | 133.69 | 271.21 | | Net stable funding ratio | 107.77 | 115.15 | - The liquidity coverage ratio significantly decreased from **271.21%** at year-end 2018 to **133.69%**[823](index=823&type=chunk) [Currency Concentration](index=153&type=section&id=Currency%20Concentration) As of June 30, 2019, the Group's net long position was **RMB 68.72 million**, primarily concentrated in USD, indicating a small foreign currency exposure H1 2019 Currency Concentration | Currency | Net Long/(Short) Position (RMB Million) | | :--- | :--- | | USD | 68.36 | | HKD | 0.29 | | Other | 0.07 | | Subtotal | 68.72 | - The Group had no structural positions as of June 30, 2019, and December 31, 2018[828](index=828&type=chunk) [Cross-Border Claims](index=154&type=section&id=Cross-Border%20Claims) A

廣州農村商業銀行股份有限公司 ( 於中華人民共和國註冊成立的股份有限公司 ) 股份代號 : 1551 年度報告 2018年 目錄 公司簡介 2 財務數據摘要 7 董事長致辭 10 行長致辭 11 管理層討論與分析 13 股本變動及股東情況 54 董事、 監事及高級管理人員 62 企業管治報告 74 董事會報告 98 財務報表及附註 133 未經審計補充財務信息 291 監事會報告 109 新闻网 MME. mm 重要事項 112 三農金融服務報告 114 獨立審計師報告 125 釋義 295 公司簡介 | --- | --- | --- | --- | |-------|----------|--------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------- ...