Meeting Details - The annual general meeting of Shengjing Bank Co., Ltd. is scheduled for June 13, 2025, at 9:30 AM [1] - The meeting will be convened by the Board of Directors [2] - The location of the meeting is Room 604, 6th Floor, No. 109 Beizhan Road, Shenhe District, Shenyang, Liaoning Province [3] - The meeting will be conducted in person with voting [4] Agenda Items - The main content of the meeting includes ordinary and special resolutions such as: - 2024 Board of Directors' work report [5] - 2024 Supervisory Committee work report [5] - 2024 financial settlement and 2025 financial budget report [5] - 2024 profit distribution plan [5] - Appointment of auditors for 2025 [5] - Proposal for purchasing liability insurance for directors, supervisors, and senior management [5] - Recommendation for the election of non-executive directors [5] - Proposal for acquiring shares from other shareholders of Shenbei Village Bank, Fakou Village Bank, Xinmin Village Bank, and Liaozhong Village Bank, and converting them into branches [6] - Report on the performance of independent non-executive directors for 2024 [6] - Supervisory Committee's evaluation report on the performance of directors, supervisors, and senior management for 2024 [6] - Report on related party transactions for 2024 and control plan for 2025 [6] Attendance and Registration - Shareholders are required to suspend share transfer registration from May 24, 2025, to June 13, 2025, to determine eligibility for attending and voting at the meeting [7] - Eligible shareholders can appoint one or more proxies to attend and vote on their behalf [7] - The registration for domestic shareholders will take place on June 4, 2025, from 9:00 AM to 11:00 AM and 2:00 PM to 4:00 PM [10] - Registration for H-share shareholders will be communicated separately [14] Other Information - Shareholders intending to participate must submit a signed receipt by May 23, 2025 [15] - Contact information for the Board of Directors' office is provided for any inquiries [16]

Meeting Details - The 2024 Annual General Meeting of Shengjing Bank will be held on June 13, 2025, at 9:30 AM in Shenyang, Liaoning Province[2]. - The meeting is expected to last no more than half a working day[13]. - The bank will suspend the registration of shareholders from May 24, 2025, to June 13, 2025, to facilitate the meeting[11]. - Shareholders must submit transfer documents by May 23, 2025, to be eligible to attend and vote at the meeting[11]. Agenda Items - The agenda includes the approval of the 2024 financial statements and the 2025 budget report[3]. - A proposal to acquire shares from Shenbei Village Bank, Faku Village Bank, Xinmin Village Bank, and Liaozhong Village Bank to convert them into branches will be discussed[5]. - The bank will appoint auditors for the 2025 fiscal year during the meeting[3]. - The meeting will also address the distribution plan for the 2024 profits[3]. Regulatory Information - The bank is not regulated by the Hong Kong Monetary Authority and is not authorized to conduct banking or deposit-taking business in Hong Kong[14].

Core Viewpoint - The banking sector in both Hong Kong and A-shares has experienced a collective decline after reaching continuous highs, with significant drops in major banks' stock prices and disappointing first-quarter earnings reports for 2025 [1][4][5]. Group 1: Stock Performance - The A-share banking sector index fell by 1.69%, with notable declines including Huaxia Bank down over 8%, and other banks like Beijing Bank, Shanghai Rural Commercial Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China dropping more than 3% [1][2]. - In the Hong Kong market, Shengjing Bank fell over 5%, while China Merchants Bank, Industrial and Commercial Bank of China, and Postal Savings Bank of China dropped more than 4% [1][3]. Group 2: Earnings Reports - Multiple banks reported disappointing earnings for the first quarter of 2025, with Huaxia Bank's net profit at 5.063 billion yuan, a year-on-year decrease of 14.04% [6][8]. - Other banks such as Guizhou Bank, Construction Bank, Industrial and Commercial Bank, and China Bank also reported declines in net profit, with decreases ranging from 2.90% to 14.04% [6][8]. Group 3: Market Sentiment and Future Outlook - Analysts noted that the reduction in the Loan Prime Rate (LPR) in 2024 suggests that banks may face pressure on asset yields in 2025, with expectations of further interest rate cuts and reserve requirement ratio reductions [9]. - Despite some banks showing profit growth, the overall performance did not meet market expectations, leading to diminished investor confidence [8]. - Passive funds have increased their holdings in bank stocks, while active funds have reduced their exposure, indicating a shift in investment strategy [10][12].

Group 1 - The banking sector in China is experiencing a decline, with several banks showing significant drops in their stock prices [1] - Shengjing Bank (02066.HK) has seen a decline of over 8% [1] - Postal Savings Bank (01658.HK) and China Merchants Bank (03968.HK) have both dropped over 5% [1] - Industrial and Commercial Bank of China (01398.HK), China Construction Bank (00939.HK), and Agricultural Bank of China (601288.SH) have all decreased by more than 4% [1]

Group 1 - The stock prices of several banks have experienced significant declines, with Shengjing Bank down by 8.57%, China Merchants Bank down by 3.60%, Postal Savings Bank down by 3.51%, Industrial and Commercial Bank down by 3.47%, and China Construction Bank down by 2.86% [1]

Core Viewpoint - The A-share market shows that nearly 80% of banks have a net interest margin (NIM) below the self-regulatory mechanism's warning line of 1.8%, indicating significant pressure on the banking sector's profitability as interest rates continue to decline [2][3][6]. Summary by Sections Net Interest Margin Trends - As of the end of 2024, 36 A-share listed banks reported a decline in NIM compared to the previous year, with the lowest being Shanghai Bank at 1.17%, down from 1.28% in 2023 [3][4]. - In the Hong Kong market, Shengjing Bank's NIM has dropped to 0.8%, while Luzhou Bank has the highest at 2.49% [4]. - Among non-listed banks, Shanxi Bank has a particularly low NIM of 0.57%, highlighting the pressure on smaller institutions [2][5]. Factors Influencing NIM - The decline in NIM is attributed to several factors, including the continuous reduction of the Loan Prime Rate (LPR), insufficient effective credit demand, and a general decrease in the yield of interest-earning assets [5][7]. - The recent political bureau meeting has led to speculation about potential adjustments to deposit rates, particularly for smaller banks, which may face greater pressure to lower rates [2][6]. Market Expectations and Future Adjustments - Analysts predict that the next round of deposit rate adjustments may prioritize smaller banks to alleviate pressure on larger banks' liabilities [7][8]. - The overall trend indicates that banks will need to continue reducing deposit rates to manage funding costs and mitigate the narrowing of interest margins [7][8].

Core Viewpoint - Shengjing Bank is struggling to transform itself two years after shedding its "Evergrande system" identity, facing significant historical burdens and declining financial performance, with a strategic goal of "stabilizing growth, improving quality, increasing efficiency, and enhancing effectiveness" for 2024 [2] Financial Performance - In 2024, Shengjing Bank reported revenue of 8.577 billion yuan, a year-on-year decrease of 14.57%, and a net profit attributable to shareholders of 621 million yuan, down 15.21%, marking the fourth consecutive year of revenue and profit decline [2] - The bank's net interest margin was only 0.8%, down 16 basis points year-on-year, significantly lower than the average for commercial banks and city commercial banks, which were 1.52% and 1.38% respectively [4][3] - Total interest-earning assets decreased by nearly 70 billion yuan to 8555.16 billion yuan, a decline of 7.5% year-on-year, with a significant gap between interest-earning assets and interest-bearing liabilities [5] Asset Quality and Loan Performance - As of the end of 2024, Shengjing Bank's total assets grew by 4% to 1.12 trillion yuan, with loans issued amounting to 500.6 billion yuan, a year-on-year increase of 4.8% [9] - The bank's corporate loans, which account for over two-thirds of its credit portfolio, reached 337.88 billion yuan, growing by 9.67% year-on-year, while personal loans showed mixed performance with a notable increase in personal consumption loans [10] - The non-performing loan (NPL) ratio for personal loans was 2.9%, with mortgage loans having a particularly high NPL ratio of 3.66% [12][11] Non-Interest Income - Shengjing Bank achieved non-interest income of 1.69 billion yuan in 2024, a significant increase of 44% year-on-year, attributed to improved investment trading capabilities [7] Market Performance and Shareholder Sentiment - The bank's stock price in the Hong Kong market has been underperforming, trading around 1.06 HKD per share, significantly lower than its initial listing price of 7.65 HKD in 2014, with liquidity issues evident as trading volumes dropped to zero during certain periods [15] - The number of H-share shareholders has dwindled to just 124, reflecting market skepticism regarding the bank's future profitability and growth prospects [15] Strategic Direction - Shengjing Bank is actively pursuing a "de-Evergrande" strategy, having removed references to Evergrande from its annual reports since 2023, and has undergone significant management restructuring to align with its vision of becoming a "good bank for enterprises and the public" [16][17]

Core Viewpoint - Quality is becoming a vital source of confidence for financial support, with various regions in Northeast China implementing quality financing and credit enhancement initiatives to support enterprise financing and expand financing channels [1][2][3]. Group 1: Financing Initiatives - Liaoning Province has issued a total of 1.495 billion yuan in "Liaozhi Loan" to support quality financing [1]. - Jilin Province has provided quality financing loans amounting to 3.469 billion yuan to enterprises [2]. - Heilongjiang Province has facilitated loans for 40 enterprises under the "Longzhi Loan," with a cumulative loan amount of 1.36 billion yuan [1][3]. Group 2: Policy Implementation - Jilin Province's market supervision department has issued measures to encourage financial institutions to increase loan limits and credit loan ratios for high-quality enterprises [2]. - Heilongjiang Province has collected quality financing needs from 115 enterprises, with a total demand of 2.393 billion yuan [3]. - The market supervision departments are working to establish a long-term service mechanism to connect enterprises with financial institutions [1][8]. Group 3: Impact on Enterprises - Benefiting enterprises report that quality is increasingly translating into creditworthiness, enhancing the precision and effectiveness of financial support [3][4]. - Companies like Xida Electronics have received significant financial backing, allowing them to focus on innovation and development [4]. - The introduction of quality financing policies has shifted banks' focus from collateral to quality certifications, improving access to loans for enterprises [4][6]. Group 4: Bank Participation - Banks in Northeast China are actively customizing quality financing products to meet the specific needs of enterprises [6][7]. - The overall interest rates for quality financing loans are relatively low due to the good qualifications of enterprises, resulting in lower overall loan risks [6]. - Initiatives like "Liaozhi Loan" and "Longzhi Loan" have been effectively implemented by banks, providing substantial financial support to small and micro enterprises [7][8].

Financial Performance - Interest income decreased by 15.0% to RMB 32,619,614,000 from RMB 38,376,991,000 in 2023[8] - Net interest income fell by 22.3% to RMB 6,886,675,000 compared to RMB 8,866,241,000 in the previous year[8] - Non-interest income increased by 44.0% to RMB 1,689,976,000 from RMB 1,173,584,000 in 2023[8] - Operating profit rose by 5.4% to RMB 970,293,000, up from RMB 920,365,000 in 2023[8] - Net profit attributable to shareholders decreased by 15.2% to RMB 621,050,000 from RMB 732,434,000 in 2023[8] - Total operating revenue for 2024 was RMB 8,576.65 million, a decrease of 14.6% from RMB 10,039.83 million in 2023[123] Assets and Liabilities - Total assets increased by 4.0% to RMB 1,122,776,226,000 compared to RMB 1,080,052,706,000 in 2023[10] - Total liabilities rose by 4.2% to RMB 1,042,578,840,000 from RMB 1,000,157,843,000 in 2023[10] - As of December 31, 2024, the total assets of Shengjing Bank reached RMB 1,122.776 billion, with total loans and advances amounting to RMB 500.592 billion and total deposits of RMB 780.589 billion[12] - As of December 31, 2024, total liabilities amounted to RMB 1,042.58 billion, an increase from RMB 1,000.16 billion as of December 31, 2023, reflecting a growth of 4.2%[98] Loan and Deposit Information - Total deposits amounted to RMB 780.589 billion, up RMB 19.435 billion, or 2.6% from the previous year[23] - Total loans reached RMB 500.592 billion, an increase of RMB 22.715 billion, or 4.8% year-on-year[23] - The loan-to-deposit ratio increased to 64.13%, up by 1.35% compared to the previous year[12] - Personal loans had an NPL ratio of 2.90% as of December 31, 2024, up from 2.74% the previous year[115] Risk Management - The non-performing loan ratio remained stable at 2.68%[10] - The bank's risk management system has been upgraded to enhance credit risk prevention and asset quality stability[107] - The company's loan coverage ratio was 157.00% as of December 31, 2024, a decrease of 2.5 percentage points from the previous year[87] - The bank's liquidity risk management emphasizes a prudent and stable approach, ensuring sufficient cash or high-quality liquid assets to meet payment needs under normal and stressed conditions[158] Capital Adequacy - The average return on equity declined to 0.80% from 0.95% in 2023[10] - The core tier 1 capital adequacy ratio decreased to 10.26%, down by 0.16% from 2023, while the tier 1 capital adequacy ratio decreased to 12.24%, down by 0.19% from 2023[12] - The core tier 1 capital adequacy ratio was 10.26%, tier 1 capital adequacy ratio was 12.24%, and total capital adequacy ratio was 14.69% as of December 31, 2024[116] Strategic Initiatives - The bank's strategic vision is to become a "good bank that benefits enterprises and the public," with a focus on high-quality development and digital transformation[15] - The bank has implemented a "12345" development strategy to navigate complex financial environments and enhance operational efficiency[15] - The company aims to enhance its digital risk control capabilities by developing over 10 digital risk models to improve risk identification accuracy and automate approval processes[149] Customer and Market Development - The bank has launched the "Shengqing Community" initiative, serving over one million community residents[13] - The company has actively responded to national policies to support rural revitalization, launching specialized agricultural products and services[140] - The number of personal customers reached 31.8652 million, with a net increase of 324,100 customers, including 1.41903 million first-tier customers[134] Shareholder Information - As of December 31, 2024, the total number of shares is 8,796,680,200, with 6,455,937,700 domestic shares and 2,340,742,500 H shares, showing no changes during the reporting period[173] - The top ten domestic shareholders hold a total of 4,409,061,661 shares, accounting for 50.12% of the company's total share capital[176] - The major shareholder, Zhengbo Holdings Limited, possesses 400,000,000 H shares, which is 17.09% of H shares and 4.55% of total share capital[179] Compliance and Governance - The company is committed to compliance and has implemented a three-year action plan to enhance its compliance framework[143] - The company's governance structure includes various independent non-executive directors, enhancing oversight and compliance[193] - The strategic development committee has been renamed to the strategic development and ESG committee, effective from February 22, 2024[197]

Core Viewpoint - Shengjing Bank, once a top performer among Chinese banks, has faced significant challenges since the Evergrande crisis in 2021, leading to frequent personnel changes and a clear shift away from Evergrande-related issues [1][3]. Financial Performance - In 2024, Shengjing Bank reported revenue of 8.577 billion yuan, a year-on-year decline of 14.57%, and a net profit attributable to shareholders of 621 million yuan, down 15.21% year-on-year [3][4]. - Compared to its peak in 2019, the bank's revenue is less than half of the 21.01 billion yuan recorded that year, and the net profit is only one-ninth of the 5.443 billion yuan achieved in 2019 [3][4]. Operational Metrics - The bank's net interest margin decreased from 0.96% to 0.80%, with net interest income falling by 22.3% to 6.887 billion yuan [5][6]. - Company banking and retail banking revenues both declined, with corporate banking revenue at 4.951 billion yuan (down 27%) and retail banking revenue at 2.467 billion yuan (down 10%) [6][7]. Regional Performance - Shengjing Bank's revenue in Northeast China dropped to 7.668 billion yuan, a decrease of 17.38% from 9.406 billion yuan in 2023, while revenues in North China and other regions increased [7][8]. - The bank's core operations in Northeast China, traditionally a stronghold, are now seen as a constraint on growth, raising concerns among investors [7][8]. Asset Quality - The bank's non-performing loan ratio remained stable at 2.68%, but it is significantly higher than the national average of 1.5% for commercial banks [9][10]. - The amount of loans under special attention increased by 34% year-on-year, indicating potential future asset quality deterioration [9][10]. Capital Adequacy - The capital adequacy ratio improved from 14.12% at the beginning of the year to 14.69% by year-end, although the core tier one capital ratio decreased by 16 basis points to 10.26% [10][11]. Management Actions - In response to declining performance, the management has implemented cost-cutting measures, including a reduction in employee compensation by 1.4% to 3.066 billion yuan and a 7% decrease in other administrative expenses [13][14]. - The new leadership is focused on improving operational efficiency and addressing the historical issues stemming from the Evergrande crisis [15][16]. Future Outlook - Shengjing Bank is attempting to pivot towards credit card business growth, with a 6% increase in credit card issuance, as a strategy to enhance retail banking and overall revenue [19][20]. - Despite the challenges, there is a belief that the worst is over for Shengjing Bank, and future growth may be on the horizon if strategic adjustments are successful [20].