Financial Performance - As of December 31, 2022, Jiangxi Bank's total assets amounted to RMB 515.573 billion, with total deposits of RMB 352.711 billion and total loans and advances of RMB 311.481 billion[24]. - The bank achieved an operating income of RMB 12.714 billion and a net profit of RMB 1.601 billion for the year ended December 31, 2022[24]. - Net interest income for 2022 was RMB 9,624.33 million, an increase of 9.84% compared to RMB 8,761.81 million in 2021[27]. - Total operating income reached RMB 12,714.04 million, reflecting a growth of 14.08% from RMB 11,144.43 million in the previous year[27]. - The net profit attributable to shareholders decreased by 25.15% to RMB 1,549.55 million from RMB 2,070.31 million in 2021[27]. - The total assets increased by 1.38% to RMB 515,572.66 million, compared to RMB 508,559.81 million in 2021[28]. - The total equity attributable to shareholders increased by 12.54% to RMB 46,047.95 million from RMB 40,917.32 million in 2021[28]. - The group's net profit for the period was RMB 1.60 billion, down RMB 511.04 million or 24.20% year-on-year, primarily due to an increase in asset impairment losses of RMB 2.39 billion[42]. - The group's total operating income for the year was RMB 12,714.04 million, compared to RMB 11,144.43 million in the previous year, reflecting a growth of approximately 14.1%[117]. Asset Quality and Risk Management - The non-performing loan ratio rose to 2.18%, an increase of 0.71% from 1.47% in 2021[28]. - The coverage ratio for provisions was 178.05%, down from 188.26% in the previous year[28]. - The bank emphasized the importance of risk prevention and control, implementing a "one customer, one policy" risk disposal plan to mitigate existing risks[34]. - The group has implemented measures for managing non-performing assets, including a "one customer, one strategy" approach for asset recovery[106]. - The total amount of non-performing loans reached RMB 6.78 billion, an increase of RMB 2.71 billion compared to the end of the previous year[99]. - The overdue loans totaled RMB 14.82 billion, representing 4.76% of the total loans, an increase of 2.66 percentage points from the previous year[105]. - The group has developed 56 non-retail customer rating models to enhance credit risk management and improve approval efficiency[165]. Customer Base and Market Position - Jiangxi Bank employed a total of 5,221 staff members and has established branches covering all prefecture-level cities in Jiangxi Province, as well as two branches in Guangzhou and Suzhou[24]. - The number of corporate and individual customers grew by 9.19% and 7.28% year-on-year, indicating a more diversified customer base[34]. - The bank aims to provide high-quality, efficient, and convenient financial services to various customer types, focusing on supporting local economic development and entrepreneurship[24]. - The bank plans to expand its retail banking and credit card services to enhance customer engagement and market share[116]. - Personal deposits exceeded RMB 160.5 billion, increasing by RMB 25.05 billion or 18.49%, with a market share of 5.15% in Jiangxi Province, ranking first among city commercial banks[136]. Strategic Initiatives and Future Plans - Jiangxi Bank plans to continue expanding its market presence and enhancing its service offerings in line with the strategic goals set by the provincial government[24]. - The bank's focus on digital transformation aligns with the provincial digital economy development strategy, aiming to improve financial service levels in the digital economy sector[34]. - The bank aims to implement its third board strategic plan and focus on "one guarantee, two accelerations, and three breakthroughs" for 2023[188]. - The group has implemented a series of measures to enhance credit support for key areas, including inclusive finance and agriculture-related sectors, to stabilize market entities and promote economic growth[133]. Governance and Compliance - The bank's governance structure has been strengthened, integrating party leadership into all aspects of corporate governance[32]. - The company is committed to enhancing compliance, risk, and audit systems to strengthen new risk prevention mechanisms[34]. - Legal risk management was prioritized, with a comprehensive plan for legal compliance and risk prevention established for new products and business operations[176]. - Compliance risk management was enhanced through the implementation of a new compliance management system and regular internal audits to identify and rectify risks[177]. Shareholder Structure - The top shareholder, Jiangxi Provincial Transportation Investment Group, holds 937,651,339 shares, representing 15.56% of the total share capital as of December 31, 2022[192]. - The total number of shares held by the top ten shareholders remains unchanged compared to 2021, indicating stability in shareholder structure[192]. - The report highlights the importance of state-owned enterprises in the ownership structure, with several major shareholders being state-controlled[192]. - The overall shareholder composition suggests a strong influence of government-related entities in Jiangxi Bank's governance[192].

Financial Performance - Net interest income for the first half of 2022 was RMB 4,621.67 million, an increase of 11.75% compared to RMB 4,135.59 million in 2021[8] - Total operating income reached RMB 6,317.67 million, reflecting an 18.00% growth from RMB 5,354.06 million in the previous year[8] - The net profit attributable to shareholders was RMB 1,281.52 million, down 3.67% from RMB 1,330.32 million in 2021[8] - The average return on total assets decreased to 0.52% from 0.58% in the previous year[8] - The cost-to-income ratio improved to 23.24%, down from 27.09% in 2021[8] - The bank's basic earnings per share for the first half of 2022 was RMB 0.21, a decrease of 4.55% from RMB 0.22 in 2021[8] - The bank's operating expenses were RMB 1,543.25 million, a slight increase of 2.29% from RMB 1,508.64 million in the previous year[8] - The bank's asset impairment losses rose significantly to RMB 3,207.25 million, an increase of 43.20% compared to RMB 2,239.73 million in 2021[8] - The bank's net profit for the first half of 2022 was RMB 1,317.34 million, a decrease of 2.66% compared to the same period last year[13] Asset and Liability Management - As of June 30, 2022, total assets reached RMB 516,256.21 million, an increase of 1.51% compared to the end of 2021[9] - Net loans and advances amounted to RMB 291,423.66 million, reflecting a growth of 7.67% year-on-year[9] - Total liabilities were RMB 473,030.91 million, up by 1.31% from the previous year-end[9] - Total equity attributable to shareholders reached RMB 42,473.36 million, a growth of 3.80% year-on-year[9] - The bank's capital adequacy ratio was reported at 13.29%, down from 14.41% at the end of 2021[9] - The liquidity coverage ratio improved to 409.76%, up by 22.31% compared to the previous year[9] Loan and Credit Quality - The non-performing loan ratio stood at 1.88%, up from 1.47% at the end of 2021, indicating a deterioration in asset quality[9] - The total amount of non-performing loans was RMB 5.65 billion, with a non-performing loan ratio of 1.88%, an increase of 0.41 percentage points from the end of the previous year[68] - The total overdue loans amounted to RMB 8.985 billion, an increase of RMB 3.142 billion compared to the end of the previous year, with an overdue loan ratio of 3.00%, up by 0.90 percentage points[78] - The total amount of loans and advances issued by the group reached RMB 300.13 billion, with non-performing loans (NPLs) totaling RMB 5.65 billion, resulting in an NPL ratio of 1.88%[76] Customer Base and Market Position - Customer base expanded with 61,588 corporate clients, an increase of 1,989 clients from the previous year-end[12] - The bank maintained a strong market share in corporate deposits within Jiangxi Province and Nanchang City[92] - The number of corporate deposit customers reached approximately 75,800, while corporate loan customers numbered about 4,700[103] - The number of personal effective customers increased to 7.22 million, a growth of 870,000, or 13.76% year-on-year[110] Strategic Initiatives and Future Outlook - The company expects continued economic recovery in China, supported by effective pandemic control and economic stabilization policies, with a focus on achieving annual targets[149] - The company aims to navigate the challenges posed by economic instability and structural issues while promoting steady growth in Jiangxi Province[149] - The company has focused on supporting local economies and small and medium-sized enterprises, increasing loan allocations to key areas such as green finance and digital economy[94] - The bank has focused on providing differentiated financial services to support green finance and the development of small and medium enterprises[105] Risk Management - The bank implemented a risk management framework with a three-line defense structure, ensuring comprehensive risk management responsibilities are clearly defined[130] - The bank's credit risk management measures included enhancing credit concentration control and advancing intelligent risk control construction[131] - The bank has strengthened employee behavior management by implementing a bi-weekly reporting mechanism and collaborating with law enforcement to investigate employee misconduct[136] Shareholder Structure - The total issued share capital of the company as of June 30, 2022, is RMB 6,024,276,901, consisting of 1,345,500,000 H shares and 4,678,776,901 domestic shares[150] - The largest domestic shareholder, Jiangxi Provincial Transportation Investment Group, holds 937,651,339 shares, representing 15.56% of the total share capital[154] - The bank's shareholding structure includes various state-owned enterprises and investment groups, indicating strong government ties[167]

Financial Performance - The bank achieved an operating income of RMB 11.14 billion and a net profit of RMB 2.11 billion during the reporting period[6]. - Total operating income rose by 8.35% to RMB 11,144.43 million, compared to RMB 10,285.45 million in 2020[12]. - The net profit attributable to shareholders increased by 11.36% to RMB 2,070.31 million from RMB 1,859.17 million in 2020[12]. - The net profit for the period was RMB 2.11 billion, representing a growth of 10.85% compared to the previous year[20]. - The bank's pre-tax profit was RMB 2,496.19 million, with a pre-tax profit margin of 22.70%[95]. - The net interest income for 2021 was RMB 8,761.81 million, a decrease of 3.22% compared to RMB 9,053.68 million in 2020[12]. - The net interest income decreased to RMB 8.76 billion, a decline of 3.22% year-on-year[22]. - The net interest margin was 1.88%, a decrease of 0.19 percentage points from the previous year, while the net interest yield was 1.94%, down 0.16 percentage points[27]. Asset and Liability Management - As of the reporting period, the total assets of Jiangxi Bank amounted to RMB 508.56 billion, with total deposits of RMB 343.73 billion and total loans and advances of RMB 277.71 billion[6]. - Total assets reached RMB 508,559.81 million, reflecting a growth of 10.87% from RMB 458,692.82 million in 2020[13]. - Total liabilities amounted to RMB 466.93 billion, an increase of RMB 44.18 billion or 10.45% compared to the previous year[61]. - The total amount of loans and advances issued by the company reached RMB 277,714.31 million, an increase of RMB 54,292 million, representing a growth of 24.30% compared to the previous year[54]. - The total amount of corporate loans and advances was RMB 164,808.21 million, with an NPL amount of RMB 3,327.09 million and an NPL ratio of 2.02%[77]. - The total amount of non-performing loans was RMB 4.074 billion, with a non-performing loan ratio of 1.47%, a decrease of 0.26 percentage points from the previous year[74]. Risk Management - The group maintains a "stable and moderate" risk appetite, focusing on "risk control, structural adjustment, and stable growth" as part of its comprehensive risk management strategy[133]. - The group has established a risk management organization structure that emphasizes "centralized management and matrix distribution," clarifying risk management responsibilities[134]. - The company implemented various measures for non-performing asset disposal, including cash recovery, debt transfer, and write-offs, to enhance the efficiency of asset management[84]. - The company has established a comprehensive risk management framework to monitor and mitigate potential credit risks effectively[84]. - The total risk exposure to the top ten non-related single customers was RMB 30.080 billion, accounting for 10.82% of total loans and 68.75% of tier 1 capital[86]. Customer and Market Engagement - The bank aims to provide high-quality, efficient, and convenient financial services to various customer segments, focusing on risk control and structural adjustment[7]. - The number of internet payment customers increased to 2.47 million, a growth of 20.72% year-on-year[116]. - The cumulative number of enterprise mobile banking accounts reached 12,926, with new transactions amounting to RMB 3.649 billion during the reporting period[109]. - The bank's customer service center received 863,600 calls during the reporting period, with a daily average of 2,366 calls and a call connection rate of 90.49%[123]. Shareholder Structure - The top shareholder, Jiangxi Provincial Transportation Investment Group, holds 937,651,339 shares, representing 15.56% of the total share capital as of December 31, 2021[158]. - Jiangxi Provincial Financial Holding Group holds 347,546,956 shares, accounting for 5.77% of the total share capital, with no change from the previous year[158]. - The largest shareholder's stake increased to 20.04% when considering beneficial ownership, indicating a significant concentration of ownership[160]. - The total number of shares held by the top ten shareholders remains stable, with no changes reported compared to December 31, 2020[158]. Strategic Initiatives - The bank aims to maintain a focus on risk control, structural adjustment, and stable growth in 2022[154]. - The bank continues to focus on supporting small and micro enterprises, green finance, and rural revitalization initiatives[100]. - The bank has launched various credit products targeting key sectors, including green finance and supply chain finance, to support small and micro enterprises[110]. - The bank established a comprehensive financial service implementation plan for the inclusive finance reform pilot area, enhancing credit support for key development sectors[112]. Awards and Recognition - Jiangxi Bank received multiple awards in 2021, including recognition as one of the top 100 members in the interbank market and for its innovative credit card products[9]. - The bank received multiple awards in 2021, including the "Best Mobile Banking Security Innovation Award" from the China Financial Certification Center[11]. - The bank's digital finance initiatives were recognized with the "Best Security Innovation Award" by the China Financial Certification Authority in November 2021[123].

[Chairman's Statement](index=3&type=section&id=Chairman%27s%20Statement) Chairman Chen Xiaoming's statement reviews the achievements in overcoming COVID-19 challenges in 2020, highlighting progress in party building, corporate governance, supporting the real economy, technological innovation, and risk mitigation, with a focus on optimizing structure and service quality for 2021 [Chairman's Statement](index=3&type=section&id=Chairman%27s%20Statement) Chairman Chen Xiaoming's statement reviews the achievements in overcoming COVID-19 challenges in 2020, highlighting progress in party building, corporate governance, supporting the real economy, technological innovation, and risk mitigation, with a focus on optimizing structure and service quality for 2021 - Actively responded to "Six Stabilities" and "Six Guarantees" policies, increasing lending to small and micro enterprises, agriculture-related sectors, and poverty alleviation, supporting business resumption, and earning the "Best Small and Medium-sized Bank Supporting Anti-epidemic and Resumption of Production" award[3](index=3&type=chunk) - Promoted technological innovation and transformation, leveraging blockchain technology for supply chain finance, launching social finance products like "Jiangyin Micro-store," and increasing green credit issuance[4](index=4&type=chunk) - Successfully advanced non-performing asset disposal, strengthened internal control and compliance foundations, and won the battle against financial risk prevention and mitigation[4](index=4&type=chunk) [Company Profile](index=5&type=section&id=Company%20Profile) This chapter provides an overview of Jiangxi Bank, its market position, financial highlights, and key achievements in 2020 [Company Overview and Introduction](index=5&type=section&id=Company%20Overview%20and%20Introduction) Jiangxi Bank, the sole provincial-level corporate bank in Jiangxi, listed in Hong Kong in 2018, reported total assets of RMB 458.693 billion by the end of 2020, holding an AAA credit rating and focusing on local economy, SMEs, community services, green finance, and technology finance 2020 Year-End Financial Data (RMB) | Metric | 2020 Year-End Data (RMB) | | :--- | :--- | | Total Assets | 458.693 billion yuan | | Total Deposits | 315.771 billion yuan | | Net Loans and Advances | 217.449 billion yuan | | Operating Income | 10.285 billion yuan | | Net Profit | 1.905 billion yuan | - The bank's main credit rating is AAA, the highest among domestic city commercial banks, and its Tier 1 capital ranked **264th** in The Banker's "Top 1000 World Banks 2020" list[7](index=7&type=chunk) - In the field of technology finance, the bank launched "Yunqilian," an online factoring financing business based on blockchain technology[7](index=7&type=chunk) [Major Awards in 2020](index=7&type=section&id=Major%20Awards%20in%202020) In 2020, Jiangxi Bank received multiple awards, reflecting its outstanding performance and market recognition in bond business, interbank market trading, wealth management, anti-epidemic support, inclusive finance, and green finance - Awarded "Best Small and Medium-sized Bank Supporting Anti-epidemic and Resumption of Production" by Financial Times[12](index=12&type=chunk) - Ranked **35th** in the "Top 100 Chinese Banking Industry List 2019" published by the China Banking Association[10](index=10&type=chunk) - Recognized as an "Excellent Unit in Green Credit Work Assessment for Provincial Banking Institutions 2019" by the Jiangxi Banking and Insurance Regulatory Bureau[10](index=10&type=chunk) [Summary of Accounting Data and Financial Indicators](index=10&type=section&id=Summary%20of%20Accounting%20Data%20and%20Financial%20Indicators) This chapter provides a concise overview of the bank's key financial performance and position, highlighting revenue, profit, asset quality, and capital adequacy metrics for the reporting period [Financial Data Summary](index=10&type=section&id=Financial%20Data%20Summary) In 2020, the Group's operating income decreased by 20.59% to RMB 10.285 billion, and net profit decreased by 9.68% to RMB 1.905 billion, while asset quality significantly improved with non-performing loan ratio falling to 1.73% and provision coverage ratio increasing to 171.56% Operating Performance (RMB Million) | Metric | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 10,285.45 | 12,952.81 | (20.59) | | Profit Before Tax | 2,484.70 | 2,957.16 | (15.98) | | Net Profit for the Year | 1,904.94 | 2,109.16 | (9.68) | | Net Profit Attributable to Bank Shareholders | 1,859.17 | 2,050.59 | (9.33) | Profitability Indicators (%) | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Return on Average Total Assets | 0.42% | 0.48% | (0.06%) | | Return on Average Equity | 5.33% | 6.15% | (0.82%) | | Net Interest Margin | 2.10% | 2.62% | (0.52%) | Asset Quality Indicators (%) | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Non-performing Loan Ratio | 1.73% | 2.26% | (0.53%) | | Provision Coverage Ratio | 171.56% | 165.65% | 5.91% | | Capital Adequacy Ratio | 12.89% | 12.63% | 0.26% | [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This chapter provides an in-depth analysis of the Group's financial performance, asset and liability structure, risk management, and business segments in the context of the macroeconomic environment [Macroeconomic Environment Review](index=13&type=section&id=Macroeconomic%20Environment%20Review) In 2020, China's economy steadily recovered from the COVID-19 impact with a 2.3% GDP growth, while Jiangxi Province also showed robust recovery with a 3.8% GDP growth, providing a favorable external environment for the bank's operations - China's GDP grew by **2.3%** year-on-year in 2020, with economic operations recovering steadily after an initial decline[18](index=18&type=chunk) - Jiangxi Province, the bank's primary operating region, saw its GDP grow by **3.8%** year-on-year in 2020, with the economy accelerating towards normalized recovery[18](index=18&type=chunk) [Overall Business Overview](index=13&type=section&id=Overall%20Business%20Overview) During the reporting period, Jiangxi Bank achieved good results despite pandemic challenges, optimizing its asset-liability structure, strengthening risk management with a reduced non-performing loan ratio of 1.73%, and enhancing service quality for the real economy, particularly in inclusive finance - Optimized asset-liability structure: total deposits reached **RMB 315.771 billion**, a **10.97%** year-on-year increase; net loans and advances as a percentage of total assets increased to **47.41%**[20](index=20&type=chunk) - Significant achievements in risk management: non-performing loan ratio decreased to **1.73%**[21](index=21&type=chunk) - Deepened development of inclusive finance: outstanding inclusive small and micro enterprise loans reached **RMB 32.328 billion**, an increase of **RMB 4.309 billion** from the end of the previous year, with **3,423** more borrowing accounts[22](index=22&type=chunk) [Income Statement Analysis](index=16&type=section&id=Income%20Statement%20Analysis) In 2020, the Group's net profit decreased by 9.68% to RMB 1.905 billion, primarily due to a 20.59% decline in operating income from reduced loan interest rates and service fees, and a 63.60% drop in net financial investment income, partially offset by a 33.98% reduction in asset impairment losses Item (RMB Million) | Item (RMB Million) | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 10,285.45 | 12,952.81 | (20.59) | | Net Interest Income | 9,053.68 | 10,744.81 | (15.74) | | Net Gains from Financial Investments | 536.74 | 1,474.65 | (63.60) | | Asset Impairment Losses | (4,284.43) | (6,489.59) | (33.98) | | Profit Before Tax | 2,484.70 | 2,957.16 | (15.98) | | Net Profit for the Year | 1,904.94 | 2,109.16 | (9.68) | [Net Interest Income, Net Interest Spread, and Net Interest Margin](index=17&type=section&id=Net%20Interest%20Income%2C%20Net%20Interest%20Spread%2C%20and%20Net%20Interest%20Margin) In 2020, the Group's net interest income decreased by 15.74% to RMB 9.054 billion, with both Net Interest Spread (NIS) and Net Interest Margin (NIM) narrowing by 49 and 52 basis points respectively, primarily due to a larger decline in average yield on interest-earning assets than the increase in average cost of interest-bearing liabilities Net Interest Income, Net Interest Spread, and Net Interest Margin | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Interest Income (Million) | 9,053.68 | 10,744.81 | | Net Interest Spread (NIS) | 2.07% | 2.56% | | Net Interest Margin (NIM) | 2.10% | 2.62% | [Interest Income](index=19&type=section&id=Interest%20Income) Interest income decreased by 3.93% year-on-year to RMB 19.805 billion in 2020, mainly due to a decline in the average yield of interest-earning assets, particularly a drop in the average yield on loans and advances from 6.06% to 5.39% as the bank implemented preferential interest rate policies - Interest income from loans and advances decreased by **1.83%**, primarily due to a decline in average yield from **6.06%** to **5.39%**[32](index=32&type=chunk) - Interest income from financial investments decreased by **6.65%**, primarily due to a **0.30 percentage point** decrease in average yield[34](index=34&type=chunk) [Interest Expense](index=21&type=section&id=Interest%20Expense) Interest expense increased by 8.91% year-on-year to RMB 10.751 billion in 2020, primarily driven by a 29.90% increase in interest expense on deposits due to higher average deposit balances and an increase in the average cost rate from 2.04% to 2.37%, reflecting intense competition in the deposit market - Interest expense on deposits increased by **RMB 1.648 billion**, a **29.90%** year-on-year rise, primarily due to an increase in average balance and a **0.33 percentage point** increase in average cost rate[40](index=40&type=chunk) [Non-Interest Income](index=23&type=section&id=Non-Interest%20Income) In 2020, non-interest income saw significant structural changes, with net fee and commission income growing by 6.98% due to reduced platform cooperation service fees, but net gains from financial investments sharply declined by 63.60% to RMB 537 million due to bond market volatility and fair value changes, significantly impacting overall revenue - Net fee and commission income increased by **6.98%** year-on-year, primarily due to a significant decrease in platform cooperation service fees from **RMB 399 million** to **RMB 58 million**[47](index=47&type=chunk)[48](index=48&type=chunk) - Net gains from financial investments decreased by **RMB 938 million**, a **63.60%** year-on-year decline, mainly due to reduced disposal gains and fair value changes of financial investments measured at fair value through profit or loss[50](index=50&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) Operating expenses remained stable in 2020, with a slight increase of 0.45% to RMB 3.524 billion, as a 9.39% rise in staff costs due to increased headcount and wages was effectively offset by a 19.17% decrease in other general and administrative expenses from enhanced cost control Item (RMB Million) | Item (RMB Million) | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Staff Costs | 2,133.05 | 1,949.87 | 9.39 | | Other General and Administrative Expenses | 694.20 | 858.79 | (19.17) | | **Total Operating Expenses** | **3,523.78** | **3,508.05** | **0.45** | [Asset Impairment Losses](index=26&type=section&id=Asset%20Impairment%20Losses) Asset impairment losses significantly decreased by 33.98% to RMB 4.284 billion in 2020, primarily due to the bank's intensified efforts in non-performing asset recovery and disposal, which reduced impairment losses on loans and advances from RMB 4.638 billion to RMB 876 million, despite an 88.83% increase in impairment losses on financial investments Item (RMB Million) | Item (RMB Million) | 2020 | 2019 | Change Amount | | :--- | :--- | :--- | :--- | | Loans and Advances | 875.85 | 4,638.40 | (3,762.55) | | Financial Investments | 3,362.97 | 1,780.94 | 1,582.03 | | **Total** | **4,284.43** | **6,489.59** | **(2,205.16)** | [Income Tax Expense](index=26&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by 31.63% to RMB 580 million in 2020, mainly because the bank's intensified non-performing asset disposal efforts led to the reversal of deferred tax assets previously recognized for asset impairment losses - Income tax expense decreased by **RMB 268 million**, a **31.63%** year-on-year decline, primarily due to the conversion of temporary differences related to previously recognized asset impairment losses into substantive differences as a result of non-performing asset disposal[57](index=57&type=chunk) [Balance Sheet Analysis](index=27&type=section&id=Balance%20Sheet%20Analysis) As of year-end 2020, the Group's total assets remained stable, increasing by 0.56% to RMB 458.693 billion, with asset structure shifting towards credit business as net loans and advances grew by 7.12% to 47.41% of total assets, while deposits increased by 10.97% to become the primary funding source, reducing reliance on interbank liabilities and issued bonds [Asset Analysis](index=27&type=section&id=Asset%20Analysis) As of the end of the reporting period, the Group's total assets reached RMB 458.693 billion, a 0.56% year-on-year increase, with core assets of loans and advances growing by 6.38% to RMB 223.422 billion, driven by a 13.28% increase in corporate loans, while financial investments decreased by 7.11% to RMB 176.093 billion to optimize asset structure Asset Item (RMB Million) | Asset Item (RMB Million) | 2020 Year-End | 2019 Year-End | Proportion Change | | :--- | :--- | :--- | :--- | | Net Loans and Advances | 217,448.76 | 202,989.37 | 44.50% -> 47.41% | | Financial Investments | 176,093.09 | 189,577.67 | 41.56% -> 38.39% | | **Total Assets** | **458,692.82** | **456,118.53** | - | [Liability Analysis](index=31&type=section&id=Liability%20Analysis) As of the end of the reporting period, the Group's total liabilities slightly increased by 0.41% to RMB 422.750 billion, with a significant optimization in liability structure as core deposits grew by 10.97% to RMB 315.771 billion, increasing their proportion of total liabilities from 67.58% to 74.68%, while market-based liabilities like interbank deposits and issued bonds decreased, indicating reduced reliance on wholesale funding Liability Item (RMB Million) | Liability Item (RMB Million) | 2020 Year-End | 2019 Year-End | Proportion Change | | :--- | :--- | :--- | :--- | | Deposits from Customers | 315,770.82 | 284,548.91 | 67.58% -> 74.68% | | Deposits from Banks and Other Financial Institutions | 21,416.59 | 31,212.14 | 7.41% -> 5.07% | | Issued Debt Securities | 42,439.82 | 55,178.64 | 13.11% -> 10.04% | | **Total Liabilities** | **422,750.37** | **421,030.83** | - | [Shareholders' Equity](index=33&type=section&id=Shareholders%27%20Equity) As of year-end 2020, the Group's total equity increased by 2.44% to RMB 35.942 billion, with equity attributable to bank shareholders growing by 2.35% to RMB 35.268 billion, primarily driven by an increase in retained earnings - Total equity attributable to bank shareholders was **RMB 35.268 billion**, an increase of **RMB 811 million** or **2.35%** from the end of the previous year[75](index=75&type=chunk) [Off-Balance Sheet Credit Commitments](index=34&type=section&id=Off-Balance%20Sheet%20Credit%20Commitments) As of year-end 2020, the Group's major off-balance sheet credit commitments increased by 26.08% to RMB 47.961 billion from RMB 38.040 billion in the previous year, primarily driven by a 68.75% year-on-year increase in outstanding guarantees issued Item (RMB Million) | Item (RMB Million) | 2020 Year-End | 2019 Year-End | | :--- | :--- | :--- | | Bank Acceptance Bills | 19,748.12 | 19,365.05 | | Guarantees Issued | 16,474.21 | 9,762.59 | | Letters of Credit Issued | 5,639.16 | 2,982.12 | | Unused Credit Card Limits | 5,954.49 | 5,655.79 | | **Total** | **47,960.98** | **38,039.56** | [Loan Quality Analysis](index=35&type=section&id=Loan%20Quality%20Analysis) In 2020, the Group's loan quality significantly improved, with non-performing loans decreasing by RMB 867 million to RMB 3.870 billion, and the non-performing loan ratio sharply declining from 2.26% to 1.73%, indicating a better asset risk profile with an increased proportion of normal loans and a decreased proportion of special mention loans - The non-performing loan ratio decreased by **0.53 percentage points** from **2.26%** at the end of the previous year to **1.73%**[80](index=80&type=chunk) - The proportion of normal loans increased from **92.83%** to **96.19%**, while special mention loans decreased from **4.91%** to **2.08%**[80](index=80&type=chunk) - Total overdue loans decreased from **RMB 9.143 billion** to **RMB 4.299 billion**, with their proportion falling from **4.36%** to **1.92%**[88](index=88&type=chunk) [Large Exposure Risk](index=41&type=section&id=Large%20Exposure%20Risk) As of year-end 2020, the Group's largest single non-interbank client exposure accounted for 12.64% of Tier 1 capital, and the largest non-interbank related client exposure accounted for 14.82%, both within regulatory limits, with the top ten single client exposures primarily concentrated in leasing and business services - Total exposure to the top ten non-interbank single clients was **RMB 30.371 billion**, accounting for **86.22%** of net Tier 1 capital[90](index=90&type=chunk) - Total exposure to the top ten non-interbank related clients was **RMB 36.758 billion**, accounting for **104.36%** of net Tier 1 capital[92](index=92&type=chunk) [Non-Performing Asset Disposal Measures](index=44&type=section&id=Non-Performing%20Asset%20Disposal%20Measures) During the reporting period, the Group implemented various measures to dispose of non-performing assets, including strengthening organizational leadership, classifying and disposing of existing risks, leveraging government and judicial support, enhancing process management, and improving incentive mechanisms, thereby effectively improving disposal efficiency - Adopted a "one-account, one-strategy" approach for disposal plans, comprehensively utilizing various methods such as collection, auction, transfer, and write-off[96](index=96&type=chunk) - Actively sought government support and collaborated with courts and public security organs to combat debt evasion and accelerate litigation enforcement processes[96](index=96&type=chunk) [Segment Reporting](index=45&type=section&id=Segment%20Reporting) In 2020, corporate banking was the main profit contributor, with profit before tax increasing by 151.53% to RMB 2.375 billion due to significantly reduced asset impairment losses, while retail banking and credit card business profit before tax decreased by 43.51% to RMB 564 million due to narrower interest margins, and financial markets business turned to a pre-tax loss of RMB 260 million from reduced financial investment gains and increased impairment losses Business Segment (Profit Before Tax, RMB Million) | Business Segment (Profit Before Tax, RMB Million) | 2020 | 2019 | | :--- | :--- | :--- | | Corporate Banking Business | 2,374.88 | 944.19 | | Retail Banking and Credit Card Business | 564.07 | 998.55 | | Financial Markets Business | (259.71) | 701.62 | [Business Overview](index=47&type=section&id=Business%20Overview) During the reporting period, various businesses developed steadily, with corporate deposits reaching RMB 195.76 billion, retail deposits exceeding RMB 100 billion with a 35.27% increase, and financial markets business steadily advancing net-value wealth management products, while online finance, international business, and information technology construction also made positive progress [Corporate Banking Business](index=47&type=section&id=Corporate%20Banking%20Business) Corporate banking business made progress in deposits, loans, investment banking, and inclusive finance, with corporate deposits reaching RMB 195.76 billion, ranking first in Nanchang, corporate loans growing by 7.20% to RMB 122.033 billion, and bond underwriting amounting to RMB 5.422 billion, while inclusive small and micro enterprise loans under RMB 10 million increased by 15.38% with a reduced weighted average interest rate - Total corporate loans and advances amounted to **RMB 122.033 billion**, an increase of **7.20%** from the end of the previous year[105](index=105&type=chunk) - Outstanding supply chain finance business reached **RMB 4.673 billion**, with cumulative online factoring financing "Yunqilian" disbursements of **RMB 682 million**[118](index=118&type=chunk) - Outstanding small and micro enterprise loans with single credit lines under **RMB 10 million** reached **RMB 32.328 billion**, an increase of **15.38%** from the end of the previous year, with the weighted average interest rate decreasing by **0.93 percentage points** to **5.01%**[120](index=120&type=chunk) [Retail Banking Business](index=54&type=section&id=Retail%20Banking%20Business) Retail banking business performed strongly, with retail deposits exceeding RMB 100 billion to reach RMB 116.362 billion, a 35.27% year-on-year increase and ranking first in Nanchang, while credit card issuance grew by 16.73% to 605,400 cards, and the proportion of net-value personal wealth management products significantly increased to 55.67% - Retail deposit balance reached **RMB 116.362 billion**, an increase of **RMB 30.342 billion** or **35.27%** from the end of the previous year[123](index=123&type=chunk) - Cumulative credit card issuance reached **605,400 cards**, a **16.73%** year-on-year increase; credit card overdraft balance was **RMB 3.838 billion**, a **3.54%** year-on-year increase[126](index=126&type=chunk) - The proportion of net-value personal wealth management product balance increased to **55.67%**, a **54.73 percentage point** increase from the beginning of the year[127](index=127&type=chunk) [Financial Markets Business](index=57&type=section&id=Financial%20Markets%20Business) In financial markets business, the bank flexibly utilized monetary policy tools to maintain ample liquidity, optimized asset structure by increasing standardized investments, and steadily advanced the net-value transformation of wealth management products, with outstanding wealth management products totaling RMB 34.088 billion, a 2.67% year-on-year increase - Outstanding wealth management products amounted to **RMB 34.088 billion**, a **2.67%** increase from the same period last year, with individual clients accounting for **97.30%**[130](index=130&type=chunk) [Information Technology Construction](index=59&type=section&id=Information%20Technology%20Construction) During the reporting period, the bank supported business development by ensuring security foundations and accelerating technological innovation, including promoting national cryptographic transformation, achieving no major security incidents, enhancing disaster recovery, applying blockchain for supply chain finance, launching WeChat ecosystem products like "Jiangyin Micro-store," and building a digital and intelligent risk control platform - Applied consortium blockchain technology to build "Yunqilian" nodes, enabling full online financing processes for upstream suppliers[137](index=137&type=chunk) - Launched "Jiangyin Micro-store" and "Micro-bank Platform," building customer marketing and operation platforms within the WeChat ecosystem[137](index=137&type=chunk) [Subsidiary Business](index=61&type=section&id=Subsidiary%20Business) As of the end of the reporting period, subsidiary Jiangxi Financial Leasing Co., Ltd. reported total assets of RMB 13.381 billion and net profit of RMB 189 million, while the bank increased its stake in Jinxian Ruifeng Rural Bank to 69.50%, making it a subsidiary, and also holds four non-material associated rural banks - Jiangxi Financial Leasing achieved a net profit of **RMB 189 million** in 2020, a **27.56%** year-on-year decrease, with its main credit rating being **AAA**[138](index=138&type=chunk) - During the reporting period, the bank increased its equity in Jinxian Ruifeng Rural Bank to **69.50%**, making it a subsidiary of the bank[139](index=139&type=chunk)[348](index=348&type=chunk) [Risk Management](index=63&type=section&id=Risk%20Management) The bank employs a comprehensive risk management approach with a "centralized management, matrix distribution" organizational structure and three lines of defense, implementing effective measures across credit, liquidity, market, and operational risks, maintaining robust liquidity indicators with a liquidity coverage ratio of 429.88%, and ensuring all capital adequacy ratios meet and exceed regulatory requirements - Established a three-line defense risk management system: "front-office business units self-control, mid-office risk departments management, and back-office audit departments supervision"[141](index=141&type=chunk) - As of year-end 2020, the liquidity coverage ratio was **429.88%**, and the net stable funding ratio was **147.44%**, indicating a sound liquidity position[144](index=144&type=chunk) Capital Adequacy Ratio Indicators | Capital Adequacy Ratio Indicators | 2020 Year-End | 2019 Year-End | | :--- | :--- | :--- | | Core Tier 1 Capital Adequacy Ratio | 10.29% | 9.96% | | Tier 1 Capital Adequacy Ratio | 10.30% | 9.97% | | Capital Adequacy Ratio | 12.89% | 12.63% | [Social Responsibility](index=73&type=section&id=Social%20Responsibility) In 2020, the bank actively fulfilled its social responsibilities by increasing credit support and offering fee reductions for pandemic control, donating RMB 23.4522 million, investing RMB 6.6 million in financial poverty alleviation to lift 20 villages out of poverty, and deploying over RMB 10 billion to major projects and RMB 14.941 billion in green credit, while also protecting consumer rights - Supported epidemic prevention and control: processed principal deferral for **2,460** enterprises, involving **RMB 18.146 billion**; total donations of funds and materials amounted to **RMB 23.4522 million**[158](index=158&type=chunk) - Financial precision poverty alleviation: invested **RMB 6.6 million** in assistance funds, enabling all **20** designated poverty-stricken villages to escape poverty[159](index=159&type=chunk) - Serving local development: as of the end of the reporting period, cumulative green credit disbursements reached **RMB 14.941 billion**[160](index=160&type=chunk) [Future Development Outlook](index=75&type=section&id=Future%20Development%20Outlook) Looking ahead to 2021, the first year of the "14th Five-Year Plan," despite external uncertainties, China's economy is expected to continue its recovery, and the bank will adhere to the principle of seeking progress while maintaining stability, improve corporate governance, strengthen risk control, deepen reform and transformation, and enhance service quality for the real economy to support Jiangxi's new development paradigm - In 2021, the bank will embrace the new development stage, implement new development concepts, build a new development paradigm, further improve corporate governance, strengthen risk control, deepen reform and transformation, and promote business development[162](index=162&type=chunk) [Changes in Share Capital and Shareholder Information](index=76&type=section&id=Changes%20in%20Share%20Capital%20and%20Shareholder%20Information) This chapter details the bank's share capital structure, major shareholders, and any changes or pledges related to shareholdings during the reporting period [Share Capital Structure and Major Shareholders](index=76&type=section&id=Share%20Capital%20Structure%20and%20Major%20Shareholders) As of year-end 2020, the bank's total share capital remained unchanged at 6.024 billion shares, comprising 4.679 billion domestic shares and 1.346 billion H shares, with Jiangxi Provincial Expressway Investment Group Co., Ltd. and Jiangxi Provincial Financial Holding Group Co., Ltd. as the top two shareholders, while some shares were pledged or judicially frozen Major Shareholders as of 2020 Year-End | Shareholder Name | Total Shares Held (Shares) | Percentage of Total Share Capital (%) | | :--- | :--- | :--- | | Jiangxi Provincial Expressway Investment Group Co., Ltd. | 937,651,339 | 15.56 | | Jiangxi Provincial Financial Holding Group Co., Ltd. | 347,546,956 | 5.77 | | China Tobacco Jiangxi Industrial Co., Ltd. | 263,000,000 | 4.37 | - As of the end of the reporting period, **682 million** domestic shares held by **29** domestic shareholders were pledged, accounting for **11.31%** of the bank's equity, with **152 million** shares subject to judicial freeze[183](index=183&type=chunk) [Directors, Supervisors, Senior Management, Employees, and Organizational Structure](index=89&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20Employees%2C%20and%20Organizational%20Structure) This chapter provides details on the composition and changes of the Board of Directors, Board of Supervisors, senior management, and employee demographics, as well as the bank's overall organizational structure [Directors, Supervisors, and Senior Management](index=89&type=section&id=Directors%2C%20Supervisors%2C%20and%20Senior%20Management) As of the end of the reporting period, the Board of Directors comprised 12 members and the Board of Supervisors 9 members, with some changes in their composition and the appointment of Mr. Yu Jian as Vice President, while the bank's total workforce was 5,238, with nearly half aged 30 or below and over 90% holding a bachelor's degree or higher - During the reporting period, Ms. Zhuo Liping's qualification as a non-executive director was approved; Mr. Huang Zhenping resigned as a non-executive director; Ms. Tao Yulan and Mr. Liu Wei resigned as members of the Board of Supervisors, and Mr. Lou Mingnong and Mr. Wang Ruiqiang were elected as new supervisors[192](index=192&type=chunk)[193](index=193&type=chunk) - Mr. Yu Jian was newly appointed as the bank's Vice President, with his qualification approved by the Jiangxi Banking and Insurance Regulatory Bureau on May 28, 2020[194](index=194&type=chunk) - As of the end of the reporting period, the bank had **5,238** employees, with **49.14%** aged 30 or below and **91.85%** holding a bachelor's degree or higher[215](index=215&type=chunk)[216](index=216&type=chunk) [Corporate Governance Report](index=112&type=section&id=Corporate%20Governance%20Report) This chapter outlines the bank's corporate governance framework, compliance with regulatory codes, and the operational effectiveness of its Board of Directors, Board of Supervisors, and various committees [Corporate Governance](index=112&type=section&id=Corporate%20Governance) The bank established a comprehensive corporate governance structure, complying with all applicable code provisions of the Hong Kong Listing Rules' Corporate Governance Code, with the Board holding 26 meetings and the Board of Supervisors 4 meetings, and specialized committees actively performing their duties in reviewing and supervising major matters like strategy, audit, risk, and connected transactions, ensuring standardized governance operations with separate roles for Chairman and President - During the reporting period, the bank consistently complied with all applicable code provisions of the Corporate Governance Code set out in Appendix 14 of the Hong Kong Listing Rules[220](index=220&type=chunk) - The Board of Directors has eight specialized committees, including Strategy, Audit, Risk Management, and Connected Transactions Control, all of which convened meetings and performed their duties as required[238](index=238&type=chunk) - The Board of Directors conducted an annual review of the bank's risk management and internal control systems and deemed the existing systems adequate and effective[254](index=254&type=chunk) [Board Report](index=157&type=section&id=Board%20Report) This chapter presents the Board of Directors' report on the bank's overall performance, financial results, and proposed profit distribution for the reporting period [Dividend Distribution](index=157&type=section&id=Dividend%20Distribution) The Board proposes a final dividend of RMB 0.05 per share (tax inclusive) for 2020, maintaining the 5% payout ratio from 2019, totaling RMB 301 million, subject to shareholder approval Dividend Matters | Dividend Item | Amount | | :--- | :--- | | Dividends Paid for 2019 | RMB 0.05 per share (tax inclusive) | | Proposed Dividends for 2020 | RMB 0.05 per share (tax inclusive) | | Total Proposed Distribution | RMB 301 million | [Supervisors' Report](index=166&type=section&id=Supervisors%27%20Report) This chapter details the work of the Board of Supervisors, including its oversight activities and independent opinions on the bank's operations, financial reporting, and internal controls [Supervisors' Work and Opinions](index=166&type=section&id=Supervisors%27%20Work%20and%20Opinions) During the reporting period, the Board of Supervisors effectively oversaw the bank's legal operations, financial reporting, connected transactions, and risk management through meetings, special inspections, and performance supervision, concluding that the bank's decision-making processes were compliant, directors and senior management were diligent, financial reports were accurate, internal controls were effective, and no actions detrimental to shareholders or the bank were found - The Board of Supervisors issued independent opinions without dissent on the bank's legal operations, the truthfulness of financial reports, compliance of connected transactions, execution of general meeting resolutions, information disclosure, risk management, and capital management[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) - During the reporting period, the Board of Supervisors held **4** meetings, reviewed **16** proposals, and arranged for supervisors to attend **5** Board of Directors meetings to oversee major decision-making[326](index=326&type=chunk)[275](index=275&type=chunk) [Significant Matters](index=173&type=section&id=Significant%20Matters) This chapter highlights key events and developments during the reporting period, including the utilization of proceeds from global offerings and significant corporate actions [Significant Matters](index=173&type=section&id=Significant%20Matters) During the reporting period, all proceeds from the bank's global offering were used to strengthen its capital base, and the bank completed the acquisition and capital increase of Jinxian Ruifeng Rural Bank, making it a controlled subsidiary, with no other material penalties, significant contracts, or major connected transactions impacting operations - Net proceeds from the global offering of approximately **HKD 8.598 billion** were fully utilized to strengthen the capital base and support continuous business growth[342](index=342&type=chunk) - Completed the equity acquisition and private placement of Jinxian Ruifeng Rural Bank, increasing the shareholding from **39%** to **69.5%**, making it a subsidiary of the bank[348](index=348&type=chunk) [Independent Auditor's Report](index=176&type=section&id=Independent%20Auditor%27s%20Report) This chapter presents the independent auditor's opinion on the Group's financial statements and highlights key audit matters [Independent Auditor's Report](index=176&type=section&id=Independent%20Auditor%27s%20Report) KPMG issued an unmodified audit opinion on the Group's 2020 consolidated financial statements, affirming that they fairly present the Group's financial position and operating results, with key audit matters including impairment provisions for loans and advances and financial investments at amortized cost, fair value assessment of financial instruments, and consolidation of structured entities - The audit opinion was an unmodified opinion, stating that the financial statements fairly present the Group's financial position in accordance with International Financial Reporting Standards[350](index=350&type=chunk) - Key audit matters include: - Determination of impairment provisions for loans and advances and financial investments measured at amortized cost - Valuation of financial instruments at fair value - Consolidation of structured entities[352](index=352&type=chunk)[353](index=353&type=chunk)[362](index=362&type=chunk)[364](index=364&type=chunk) [Financial Statements](index=186&type=section&id=Financial%20Statements) This chapter contains the comprehensive financial statements of the Group for the reporting period, including the consolidated statement of financial position, income statement, statement of comprehensive income, statement of changes in equity, and cash flow statement [Notes to Financial Statements](index=195&type=section&id=Notes%20to%20Financial%20Statements) This chapter provides detailed explanatory notes and disclosures supporting the financial statements, including accounting policies, significant judgments, estimates, and breakdowns of various financial statement line items

[Chairman's Statement](index=3&type=section&id=Item%201.%20Chairman's%20Statement) [Chairman's Statement Summary](index=3&type=section&id=Chairman's%20Statement%20Summary) Chairman Chen Xiaoming reviewed the bank's steady development in 2019 despite macroeconomic headwinds, achieving over RMB 450 billion in total assets and significant global ranking improvements - In 2019, the company's total assets exceeded **RMB 450 billion**, ranking **258th** among the top 1,000 global banks by The Banker and **35th** in the China Banking Association's top 100 list[4](index=4&type=chunk) - The company is committed to technology leadership and inclusive finance, launching innovative products like "Handheld Micro-Loan," "Micro-Enterprise Loan," and "Cloud Enterprise Chain" to serve private small and micro enterprises[6](index=6&type=chunk) - The company actively fulfilled its social responsibilities, donating to build Hope Primary Schools and contributing **RMB 23.11 million** to Jiangxi Charity Federation for epidemic prevention and control after the COVID-19 outbreak[8](index=8&type=chunk) [Company Profile](index=5&type=section&id=Item%202.%20Company%20Profile) [Company Overview](index=6&type=section&id=2.2%20Company%20Overview) Jiangxi Bank, the sole provincial corporate bank in Jiangxi, listed in Hong Kong in 2018, reported total assets of RMB 456.119 billion by the end of the reporting period, demonstrating rapid growth and market recognition As of End of 2019 Key Scale Indicators | Indicator | Amount (RMB) | | :--- | :--- | | Total Assets | 456.119 billion | | Total Deposits | 284.549 billion | | Total Loans and Advances | 210.017 billion | | Pre-tax Profit | 2.957 billion | | Net Profit | 2.109 billion | - The bank ranked **258th** in The Banker's "2019 Top 1000 World Banks" list and **35th** in the China Banking Association's "2019 China Banking Top 100 List"[11](index=11&type=chunk) - The bank demonstrated outstanding financial innovation, being the first non-pilot bank nationwide to issue **RMB 8 billion** in green financial bonds and launching "Cloud Enterprise Chain," an online factoring financing business based on "Finance + Blockchain"[11](index=11&type=chunk) [Major Awards in 2019](index=7&type=section&id=2.3%20Major%20Awards%20in%202019) In 2019, Jiangxi Bank received multiple awards for its excellence in market trading, customer service, fintech innovation, and social responsibility - In The Banker's 2019 Top 1000 World Banks list, the bank ranked **258th** by Tier 1 capital and **9th** among the "fastest-growing domestic banks"[15](index=15&type=chunk) - Ranked **35th** in the "2019 China Banking Top 100 List" published by the China Banking Association[15](index=15&type=chunk) - Awarded "2019 Financial Technology Innovation Outstanding Contribution Award—Development Innovation Contribution Award" by Financial Electronic magazine and "Best Mobile Banking Innovation Award" by China Financial Certification Authority (CFCA)[15](index=15&type=chunk) [Summary of Accounting Data and Financial Indicators](index=9&type=section&id=Item%203.%20Summary%20of%20Accounting%20Data%20and%20Financial%20Indicators) [Financial Data](index=9&type=section&id=3.1%20Financial%20Data) In 2019, the Group's operating income grew by 14.12% year-on-year, but a significant 46.22% increase in asset impairment losses led to a decline in pre-tax and net profits 2019 Operating Performance Summary (RMB Million) | Indicator | 2019 | 2018 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Income | 12,952.81 | 11,350.61 | 14.12% | | Asset Impairment Losses | (6,489.59) | (4,438.37) | 46.22% | | Pre-tax Profit | 2,957.16 | 3,367.07 | (12.17%) | | Net Profit for the Year | 2,109.16 | 2,771.27 | (23.89%) | | Net Profit Attributable to Bank Shareholders | 2,050.59 | 2,733.56 | (24.98%) | | Basic Earnings Per Share (RMB) | 0.34 | 0.51 | (33.33%) | As of End of 2019 Scale and Asset Quality Indicators (RMB Million) | Indicator | End of 2019 | End of 2018 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 456,118.53 | 419,064.27 | 8.84% | | Net Loans and Advances | 202,989.37 | 165,523.32 | 22.63% | | Deposits Taken | 284,548.91 | 260,448.65 | 9.25% | | Non-performing Loan Ratio | 2.26% | 1.91% | Up 0.35 percentage points | | Provision Coverage Ratio | 165.65% | 171.42% | Down 5.77 percentage points | | Capital Adequacy Ratio | 12.63% | 13.60% | Down 0.97 percentage points | [Management Discussion and Analysis](index=12&type=section&id=Item%204.%20Management%20Discussion%20and%20Analysis) [Overall Business Overview](index=12&type=section&id=4.2%20Overall%20Business%20Overview) In 2019, Jiangxi Bank achieved steady growth in a complex macroeconomic environment, with significant increases in assets, deposits, and loans, particularly a 23.18% rise in total loans 2019 Key Operating Data Growth | Indicator | Amount as of End of 2019 (RMB) | YoY Growth Rate | | :--- | :--- | :--- | | Total Assets | 456.119 billion | 8.84% | | Total Deposits | 284.549 billion | 9.25% | | Total Loans and Advances | 210.017 billion | 23.18% | | Operating Income | 12.953 billion | 14.12% | - Inclusive finance service capability improved, with inclusive small and micro enterprise loan balance increasing by **RMB 5.526 billion** from the beginning of the year, fully achieving the "two increases and two controls" targets[23](index=23&type=chunk) - Launched "Cloud Enterprise Chain" online factoring financing business based on "Finance + Blockchain," with **RMB 315 million** disbursed, serving 74 upstream supply chain enterprises[24](index=24&type=chunk) - Operating efficiency improved, with cost-to-income ratio at **26.08%**, a year-on-year decrease of **4.40 percentage points**[25](index=25&type=chunk) [Income Statement Analysis](index=14&type=section&id=4.3%20Income%20Statement%20Analysis) In 2019, the Group's operating income grew by 14.12% to RMB 12.953 billion, driven by a strong 19.11% increase in net interest income, but a significant 46.22% rise in asset impairment losses to RMB 6.490 billion led to declines in pre-tax and net profits 2019 Income Statement Core Item Changes (RMB Million) | Item | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 10,618.88 | 8,915.52 | 19.11% | | Operating Income | 12,952.81 | 11,350.61 | 14.12% | | Asset Impairment Losses | (6,489.59) | (4,438.37) | 46.22% | | Pre-tax Profit | 2,957.16 | 3,367.07 | (12.17%) | | Net Profit for the Year | 2,109.16 | 2,771.27 | (23.89%) | [Net Interest Income, Net Interest Spread and Net Interest Margin](index=15&type=section&id=4.3.1%20Net%20Interest%20Income%2C%20Net%20Interest%20Spread%20and%20Net%20Interest%20Margin) In 2019, the Group's net interest income increased by 19.11% to RMB 10.619 billion, with net interest spread and net interest margin significantly improving due to a greater rise in average yield on interest-earning assets than the decline in average cost of interest-bearing liabilities Profitability Indicator Changes | Indicator | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income (RMB Million) | 10,618.88 | 9,306.28 | 14.10% | | Net Interest Spread | 2.53% | 2.09% | Up 0.44 percentage points | | Net Interest Margin | 2.59% | 2.31% | Up 0.28 percentage points | - The growth in interest income was primarily driven by scale, particularly a significant increase in the average balance of loans and advances, contributing **RMB 2.787 billion** to interest income growth[33](index=33&type=chunk) - The increase in interest expenses was mainly due to the expansion of deposit scale and rising cost rates, with interest rate changes (cost increases) contributing **RMB 640 million** to interest expense growth[33](index=33&type=chunk) [Non-Interest Income](index=22&type=section&id=4.3.4%20Non-Interest%20Income) In 2019, the Group's non-interest income was RMB 2.334 billion, a slight increase of 1.1% year-on-year, driven by growth in net fee and commission income and net gains from financial investments, despite a significant decline in other operating income - Net fee and commission income increased by **2.10%** year-on-year to **RMB 667 million**, with significant growth in agency and custody, financial leasing, and acceptance and guarantee business fee income, increasing by **24.82%**, **44.35%**, and **57.07%** respectively[50](index=50&type=chunk)[51](index=51&type=chunk) - Net gains from financial investments increased by **7.80%** year-on-year to **RMB 1.475 billion**, primarily due to increased net gains and valuation from financial investments measured at fair value through profit or loss[53](index=53&type=chunk) [Operating Expenses](index=23&type=section&id=4.3.5%20Operating%20Expenses) In 2019, the Group's operating expenses slightly decreased by 0.61% to RMB 3.508 billion, with employee costs and depreciation/amortization rising, while rent and property management fees significantly declined due to cost control and new leasing standards 2019 Operating Expense Composition (RMB Million) | Item | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Staff Costs | 1,949.87 | 1,840.71 | 5.93% | | Depreciation and Amortization | 516.67 | 365.30 | 41.44% | | Rent and Property Management Expenses | 78.39 | 201.91 | (61.18%) | | Other General and Administrative Expenses | 780.40 | 1,051.63 | (25.79%) | | **Total Operating Expenses** | **3,508.05** | **3,529.63** | **(0.61%)** | [Asset Impairment Losses](index=25&type=section&id=4.3.6%20Asset%20Impairment%20Losses) In 2019, the Group's asset impairment losses surged by 46.22% to RMB 6.490 billion, primarily driven by a 92.44% increase in impairment provisions for loans and advances to enhance risk resilience 2019 Asset Impairment Losses Composition (RMB Million) | Item | 2019 | 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Loans and Advances | 4,638.40 | 2,410.37 | 92.44% | | Financial Investments | 1,780.94 | 1,980.66 | (10.08%) | | Others | 70.25 | 47.34 | 48.39% | | **Total Asset Impairment Losses** | **6,489.59** | **4,438.37** | **46.22%** | [Analysis of Major Balance Sheet Items](index=26&type=section&id=4.4%20Analysis%20of%20Major%20Balance%20Sheet%20Items) As of the end of 2019, the Group's total assets reached RMB 456.119 billion, an 8.84% year-on-year increase, primarily driven by loans and advances, while total liabilities grew by 9.00% to RMB 421.031 billion, with deposits as the core funding source [Assets](index=26&type=section&id=4.4.1%20Assets) As of the end of 2019, the Group's total asset growth was mainly driven by loans and advances, which increased by 23.18% to RMB 210.017 billion, while financial investments remained stable Asset Structure Changes (RMB Million) | Item | End of 2019 | Proportion (%) | End of 2018 | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Net Loans and Advances | 202,989.37 | 44.50% | 165,523.32 | 39.50% | | Financial Investments | 189,577.67 | 41.56% | 190,704.00 | 45.51% | | Cash and Balances with Central Banks | 38,810.81 | 8.51% | 37,740.62 | 9.01% | | **Total Assets** | **456,118.53** | **100.00%** | **419,064.27** | **100.00%** | - Total loans and advances increased by **23.18%** year-on-year, with corporate loans (including bill discounting) growing by **24.83%** and personal loans by **20.61%**[63](index=63&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) [Liabilities](index=30&type=section&id=4.4.2%20Liabilities) As of the end of 2019, the Group's total liabilities increased by 9.00%, with deposits, the primary funding source, growing by 9.25% to RMB 284.549 billion, while issued bonds decreased Liability Structure Changes (RMB Million) | Item | End of 2019 | Proportion (%) | End of 2018 | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Deposits Taken | 284,548.91 | 67.58% | 260,448.65 | 67.43% | | Issued Bonds | 55,178.64 | 13.11% | 61,129.81 | 15.83% | | Due to Banks and Other Financial Institutions | 31,212.14 | 7.41% | 31,863.89 | 8.25% | | **Total Liabilities** | **421,030.83** | **100.00%** | **386,252.94** | **100.00%** | - Within deposits, the proportion of time deposits significantly increased from **42.00%** to **49.11%**, while demand deposits decreased from **52.62%** to **45.63%**, reflecting a shift in deposit structure[74](index=74&type=chunk) [Loan Quality Analysis](index=34&type=section&id=4.6%20Loan%20Quality%20Analysis) In 2019, the Group's loan quality faced pressure, with the non-performing loan ratio rising by 0.35 percentage points to 2.26%, primarily concentrated in corporate loans, especially in wholesale and retail, and leasing and business services Loan Five-Category Classification (RMB Million) | Category | Total as of End of 2019 | Proportion (%) | Total as of End of 2018 | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Normal | 194,952.19 | 92.83% | 158,736.55 | 93.10% | | Special Mention | 10,328.12 | 4.91% | 8,515.78 | 4.99% | | **Non-performing Loans** | **4,736.82** | **2.26%** | **3,248.37** | **1.91%** | - The non-performing loan ratio for corporate loans significantly increased to **3.17%** from **2.44%** at the end of the previous year; the non-performing loan ratio for personal loans slightly increased to **1.40%** from **1.37%**[86](index=86&type=chunk) - Corporate non-performing loans were mainly concentrated in wholesale and retail, leasing and commercial services, and manufacturing, with the wholesale and retail sector's non-performing loan ratio as high as **9.97%**[87](index=87&type=chunk)[88](index=88&type=chunk) - Total overdue loans amounted to **RMB 9.143 billion**, with an overdue ratio of **4.36%**, an increase of **0.68 percentage points** from the end of the previous year[95](index=95&type=chunk) [Business Overview](index=45&type=section&id=4.8%20Business%20Overview) In 2019, the Group's various businesses progressed steadily, with corporate and retail banking achieving significant growth in deposits and loans, and financial markets and online finance also making good progress [Corporate Banking Business](index=45&type=section&id=4.8.1%20Corporate%20Banking%20Business) Corporate banking business developed steadily, with corporate deposit balances growing by 2.21% and corporate loans and advances increasing by 19.07%, while the bank successfully obtained Class B lead underwriter qualification for non-financial enterprise debt financing instruments - Total corporate loans and advances (excluding bill discounting) amounted to **RMB 113.842 billion**, a year-on-year increase of **19.07%**[109](index=109&type=chunk) - Obtained Class B lead underwriter qualification for non-financial enterprise debt financing instruments, with underwriting amount reaching **RMB 4.51 billion** and participation in issuance amounting to **RMB 11.3 billion** during the reporting period, ranking "double first" among the 12 newly qualified lead underwriters nationwide[122](index=122&type=chunk) - Inclusive small and micro enterprise loan balance reached **RMB 28.019 billion**, an increase of **24.57%** from the beginning of the year; the number of loan accounts was **18,140**, an increase of **1,011** from the beginning of the year[123](index=123&type=chunk) [Retail Banking Business](index=53&type=section&id=4.8.2%20Retail%20Banking%20Business) Retail banking business achieved rapid growth, with retail deposit balances increasing by 32.53% to RMB 86.020 billion and retail loan balances growing by 20.61% to RMB 80.728 billion, significantly enhancing profitability - Retail deposit balance was **RMB 86.020 billion**, an increase of **32.53%** from the end of the previous year[126](index=126&type=chunk) - Retail loan balance was **RMB 80.728 billion**, an increase of **20.61%** from the end of the previous year; retail loan interest income increased by **35.52%** year-on-year[128](index=128&type=chunk) - The number of individual VIP clients reached **248,800**, an increase of **22.17%**; VIP client financial asset balance reached **RMB 100.545 billion**, an increase of **26.15%**[132](index=132&type=chunk) [Financial Markets Business](index=57&type=section&id=4.8.3%20Financial%20Markets%20Business) Financial markets business developed steadily, maintaining reasonable liquidity in money market operations, gradually increasing the proportion of standardized assets in securities investments, and steadily advancing the net value transformation of asset management products - As of the end of the reporting period, the investment balance in securities and other financial assets was **RMB 189.578 billion**[134](index=134&type=chunk) - The outstanding balance of wealth management products was **RMB 33.201 billion**, a year-on-year decrease of **3.82%**, with individual client investments accounting for **96.78%**[135](index=135&type=chunk) [Risk Management](index=66&type=section&id=4.10%20Risk%20Management) The bank adopted a comprehensive risk management approach, establishing a "centralized management, matrix distribution" organizational structure and a three-line defense model, effectively managing credit, liquidity, and market risks while maintaining sound liquidity indicators - Established a three-line defense for risk management: "front-office business units self-control, mid-office risk departments management, and back-office audit departments supervision"[146](index=146&type=chunk) As of End of 2019 Liquidity Indicators | Indicator | Value | | :--- | :--- | | Liquidity Ratio | 58.74% | | Net Stable Funding Ratio | 132% | | Liquidity Coverage Ratio | 205.12% | - The main market risks faced by the bank are interest rate risk and exchange rate risk, which are currently overall controllable[151](index=151&type=chunk) [Capital Management](index=79&type=section&id=4.10.9%20Capital%20Management) As of the end of 2019, the Group's capital adequacy ratios decreased year-on-year but remained compliant with Chinese regulatory requirements, with a core Tier 1 capital adequacy ratio of 9.96% and a leverage ratio of 7.20% Capital Adequacy Ratios | Item | End of 2019 | End of 2018 | | :--- | :--- | :--- | | Core Tier 1 Capital Adequacy Ratio | 9.96% | 10.78% | | Tier 1 Capital Adequacy Ratio | 9.97% | 10.79% | | Capital Adequacy Ratio | 12.63% | 13.60% | - As of the end of 2019, the Group's leverage ratio was **7.20%**, complying with the regulatory requirement of not less than **4%**[165](index=165&type=chunk) [Changes in Share Capital and Shareholder Information](index=83&type=section&id=Item%205.%20Changes%20in%20Share%20Capital%20and%20Shareholder%20Information) [Shareholder Information](index=83&type=section&id=5.2%20Shareholder%20Information) As of the end of 2019, the bank's total share capital was 6.024 billion shares, with Jiangxi Provincial Expressway Investment Group Co., Ltd. as the largest shareholder, holding 15.56% of the total shares, and some major shareholders having pledged their equity Share Capital Structure as of End of 2019 (Shares) | Share Class | Quantity | | :--- | :--- | | Domestic Shares | 4,678,776,901 | | H Shares | 1,345,500,000 | | **Total** | **6,024,276,901** | - Jiangxi Provincial Expressway Investment Group Co., Ltd. is the largest shareholder, holding **938 million shares**, accounting for **15.56%** of the total share capital[175](index=175&type=chunk) - As of the end of the reporting period, a total of **847 million shares** held by 32 domestic shareholders were pledged, accounting for **14.07%** of the bank's total equity[195](index=195&type=chunk) [Directors, Supervisors, Senior Management, Employees and Organizational Structure](index=99&type=section&id=Item%206.%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20Employees%20and%20Organizational%20Structure) [Directors, Supervisors and Senior Management](index=99&type=section&id=6.1%20Directors%2C%20Supervisors%20and%20Senior%20Management) As of the end of the reporting period, the bank's Board of Directors comprised 11 members, the Board of Supervisors 8 members, and the senior management included the President and four Vice Presidents, with some changes due to re-election during the period - The Board of Directors consists of **11 directors**, including 3 executive directors, 4 non-executive directors, and 4 independent non-executive directors, complying with listing rules[197](index=197&type=chunk) - The Board of Supervisors consists of **8 supervisors**, including 3 employee supervisors, 2 shareholder supervisors, and 3 external supervisors[200](index=200&type=chunk) - On May 31, 2019, the bank's general meeting of shareholders elected the second Board of Directors and Board of Supervisors, with some members no longer serving due to the expiration of their terms[204](index=204&type=chunk)[205](index=205&type=chunk) [Employee Information](index=118&type=section&id=6.6%20Employee%20Information) As of the end of the reporting period, the bank had 5,061 employees, characterized by a young and highly educated workforce, with 54% aged 30 or below and 89.2% holding bachelor's degrees or higher - As of the end of the reporting period, there were **5,061** employees on duty, of whom **54%** were aged 30 or below, and **89.2%** held bachelor's degrees or above[229](index=229&type=chunk)[230](index=230&type=chunk) [Corporate Governance Report](index=121&type=section&id=Item%207.%20Corporate%20Governance%20Report) [Corporate Governance Overview](index=121&type=section&id=7.1%20Corporate%20Governance%20Overview) The bank has adopted and complied with the Corporate Governance Code in Appendix 14 of the Hong Kong Listing Rules, establishing a comprehensive governance framework to safeguard shareholder interests and enhance corporate value - During the reporting period, the bank consistently complied with all applicable code provisions of the "Corporate Governance Code" contained in Appendix 14 of the Hong Kong Listing Rules[235](index=235&type=chunk) [Board of Directors](index=122&type=section&id=7.3%20Board%20of%20Directors) The Board of Directors, comprising 11 members, held 24 meetings during the reporting period, reviewing 147 proposals, with high attendance rates, and its eight specialized committees provided professional support for decision-making - During the reporting period, the Board of Directors held **24 meetings**, including 4 regular meetings and 20 ad-hoc meetings[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - The Board of Directors has eight specialized committees: Strategy Committee, Audit Committee, Risk Management Committee, Connected Transactions Control Committee, Information Technology Management Committee, Remuneration and Nomination Committee, Consumer Rights Protection Committee, and Compliance Management Committee[253](index=253&type=chunk) [Board of Supervisors](index=155&type=section&id=7.5%20Board%20of%20Supervisors) The Board of Supervisors, as the bank's oversight body, completed its re-election during the reporting period, holding 6 meetings to effectively supervise the bank's financial activities, risk management, internal control, and the performance of directors and senior management - During the reporting period, the Board of Supervisors held **6 meetings**, reviewed **19 proposals**, and attended 4 Board of Directors meetings as observers[291](index=291&type=chunk)[342](index=342&type=chunk) [Risk Management and Internal Control](index=165&type=section&id=7.16%20Risk%20Management%20and%20Internal%20Control) The bank has established a comprehensive risk management and internal control system, regularly assessing and managing major risks, and ensuring the effectiveness of its internal control framework through continuous monitoring and evaluation - The bank regularly conducts comprehensive risk and capital adequacy assessment procedures to effectively identify and assess major risks such as credit risk, market risk, operational risk, and liquidity risk[311](index=311&type=chunk) - The bank has established an internal control system with the General Meeting of Shareholders, Board of Directors, Board of Supervisors, and Senior Management as its core, involving all employees, and no significant deficiencies were found during the reporting period[313](index=313&type=chunk)[361](index=361&type=chunk) [Directors' Report](index=167&type=section&id=Item%208.%20Directors'%20Report) [Annual General Meeting and Dividends](index=167&type=section&id=8.2%20Annual%20General%20Meeting%20and%20Dividends) The Board of Directors proposes a final dividend of RMB 0.05 per share (tax inclusive) for 2019, totaling RMB 301 million, subject to shareholder approval, following the RMB 0.08 per share dividend for 2018 Dividend Distribution Plan | Year | Dividend Per Share (RMB, tax inclusive) | Payout Ratio | Total Distribution (RMB) | | :--- | :--- | :--- | :--- | | 2019 (Proposed) | 0.05 | 5% | 301 million | | 2018 (Distributed) | 0.08 | 8% | 482 million | [Supervisors' Report](index=176&type=section&id=Item%209.%20Supervisors'%20Report) [Independent Opinions on Relevant Matters](index=179&type=section&id=9.2%20Independent%20Opinions%20on%20Relevant%20Matters) The Board of Supervisors provided independent opinions on the bank's 2019 operations, affirming its legal and compliant operations, proper decision-making, diligent performance by directors and senior management, and accurate financial reporting - The Board of Supervisors believes that the bank operates in compliance with laws and regulations, its decision-making procedures are legal, and directors and senior management perform their duties diligently, with no actions found to harm the bank's interests[348](index=348&type=chunk) - The financial report was audited and received a standard unqualified opinion, truly, objectively, and accurately reflecting the bank's financial position and operating results[349](index=349&type=chunk) [Significant Matters](index=181&type=section&id=Item%2010.%20Significant%20Matters) [Significant Litigation, Arbitration and Major Cases During the Reporting Period](index=181&type=section&id=10.2%20Significant%20Litigation%2C%20Arbitration%20and%20Major%20Cases%20During%20the%20Reporting%20Period) As of the reporting period, the bank had 89 pending lawsuits/arbitrations as plaintiff involving RMB 5.358 billion and 3 as defendant involving RMB 70 million, with a previously disclosed case resolved in the bank's favor, and no significant adverse impact on operations or financial condition is expected - Pending cases as plaintiff involve a total principal of approximately **RMB 5.358 billion**; pending cases as defendant involve a total principal of approximately **RMB 70 million**[355](index=355&type=chunk) - The "Bank B case" disclosed in the prospectus has been finally adjudicated, with the bank winning and not required to bear any responsibility[355](index=355&type=chunk) [Independent Auditor's Report](index=187&type=section&id=Item%2012.%20Independent%20Auditor's%20Report) [Independent Auditor's Report Summary](index=187&type=section&id=Independent%20Auditor's%20Report%20Summary) KPMG issued a standard unqualified audit opinion on the Group's 2019 consolidated financial statements, highlighting key audit matters including impairment provisions for loans and financial investments, fair value assessment of financial instruments, and consolidation of structured entities - The auditor issued a standard unqualified opinion, stating that the financial statements are true and fair[363](index=363&type=chunk) - Key audit matters include: - Determining impairment provisions for loans and advances and financial investments, involving complex judgments for Expected Credit Loss (ECL) models - Assessing the fair value of financial instruments, especially Level 3 financial instruments - Consolidating structured entities (e.g., asset management plans, wealth management products)[365](index=365&type=chunk)[367](index=367&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) [Financial Statements](index=198&type=section&id=Item%2013.%20Financial%20Statements) [Notes to Financial Statements](index=207&type=section&id=Item%2014.%20Notes%20to%20Financial%20Statements) [Unaudited Supplementary Financial Information](index=360&type=section&id=Unaudited%20Supplementary%20Financial%20Information) [Liquidity Coverage Ratio and Leverage Ratio](index=360&type=section&id=1%20Liquidity%20Coverage%20Ratio%20and%20Leverage%20Ratio) As of the end of 2019, the Group's liquidity coverage ratio was 205.12% and leverage ratio was 7.20%, both significantly exceeding regulatory requirements, indicating robust liquidity and capital adequacy Key Regulatory Indicators | Indicator | End of 2019 | End of 2018 | Regulatory Requirement | | :--- | :--- | :--- | :--- | | Liquidity Coverage Ratio | 205.12% | 206.46% | ≥100% | | Leverage Ratio | 7.20% | 7.35% | ≥4% |