农业银行(01288) - 2020 - 中期财报

Company Overview and Key Financial Indicators This section provides a comprehensive overview of the company's fundamental status and key financial performance indicators Key Financial Data and Indicators This chapter presents key financial data and indicators as of June 30, 2020, highlighting asset growth, revenue increase, net profit decline, and stable capital adequacy Key Financial Data (As of Report Period End) | Indicator (CNY Million) | June 30, 2020 | December 31, 2019 | Change from Prior Year-End | | :--- | :--- | :--- | :--- | | Total Assets | 26,472,127 | 24,878,288 | +6.4% | | Total Customer Loans and Advances | 14,548,269 | 13,360,188 | +8.9% | | Total Liabilities | 24,379,118 | 22,918,526 | +6.4% | | Deposits from Customers | 20,363,098 | 18,849,155 | +8.0% | | Equity Attributable to Parent Company Shareholders | 2,082,127 | 1,948,355 | +6.9% | Interim Operating Performance (H1 2020) | Indicator (CNY Million) | Jan–Jun 2020 | Jan–Jun 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Income | 339,774 | 324,467 | +4.7% | | Net Interest Income | 258,897 | 237,632 | +8.9% | | Credit Impairment Losses | 99,123 | 73,475 | +34.9% | | Net Profit | 109,190 | 122,372 | -10.8% | | Net Profit Attributable to Parent Company Shareholders | 108,834 | 121,445 | -10.4% | | Basic Earnings Per Share (CNY) | 0.30 | 0.34 | -11.8% | Key Financial Ratios | Indicator (%) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Profitability (Annualized) | | | | Return on Average Total Assets | 0.85 | 1.05 (H1 2019) | | Weighted Average Return on Equity | 11.94 | 14.57 (H1 2019) | | Net Interest Margin | 2.14 | 2.16 (H1 2019) | | Cost-to-Income Ratio | 24.64 | 25.75 (H1 2019) | | Asset Quality | | | | Non-Performing Loan Ratio | 1.43 | 1.40 | | Provision Coverage Ratio | 284.97 | 288.75 | | Capital Adequacy | | | | Common Equity Tier 1 Capital Adequacy Ratio | 10.87 | 11.24 | | Tier 1 Capital Adequacy Ratio | 12.60 | 12.53 | | Capital Adequacy Ratio | 16.42 | 16.13 | Discussion and Analysis This section provides an in-depth discussion and analysis of the company's performance, strategic initiatives, and risk management Environment and Outlook This chapter analyzes the economic environment and outlook for the second half of 2020, highlighting challenges and the bank's strategic priorities - In the first half, China's economy showed resilience amidst the pandemic, with Q2 GDP growing by 3.2% year-on-year, and improvements in industrial output, investment, and exports[16] - Looking ahead to the second half, global economic uncertainties are increasing, with the lagged impact of the pandemic expected to transmit to the banking sector, leading to downward pressure on operating performance[17] - The bank's strategic priorities for the second half include providing relief to enterprises, strengthening financial services for the real economy, strictly adhering to risk bottom lines, consolidating advantages in county-level and retail businesses, and enhancing competitiveness in urban areas[17] COVID-19 Prevention and Control Efforts This chapter details the bank's comprehensive measures to ensure safety, support economic recovery, and provide digital financial services during the COVID-19 pandemic - Issued a series of special policies, including 31 measures to support work resumption, 16 for small and micro enterprises, and 12 for spring farming preparation[19] - Provided cumulative loans of CNY 33.6 billion to 1,082 key national epidemic prevention and control enterprises, with loans to key agricultural product stable production and supply enterprises growing by 40% from the beginning of the year[19] - The bank and its employees donated CNY 180 million to Hubei's anti-epidemic efforts and provided exclusive insurance to 465,000 frontline epidemic prevention personnel[19] Progress in Digital Transformation This chapter outlines the bank's significant achievements in digital transformation, including growth in online lending, mobile banking, and scenario-based financial services - As of end-June, "ABC e-Loan" balance reached CNY 999.3 billion, an increase of CNY 410 billion from the beginning of the year, with both small and micro e-loans and industry e-loans doubling[20] - Mobile banking monthly active users reached 78.45 million, an increase of 6.07 million from the beginning of the year, and the poverty alleviation mall covered 98.9% of the 832 national key poverty-stricken counties[20] - The digital risk control system continues to improve, with the intelligent anti-fraud platform successfully launched and the intelligent anti-money laundering platform upgraded[20] Financial Statement Analysis This chapter provides an analysis of the bank's financial statements for the first half of 2020, focusing on profit, balance sheet, and off-balance sheet items Income Statement Analysis This chapter analyzes the bank's income statement for the first half of 2020, highlighting the decline in net profit due to increased credit impairment losses despite revenue growth Key Income Statement Items Changes (H1 2020) | Item (CNY Million) | Jan–Jun 2020 | Jan–Jun 2019 | Growth Rate (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 258,897 | 237,632 | 8.9 | | Net Fee and Commission Income | 52,350 | 50,899 | 2.9 | | Operating Income | 339,774 | 324,467 | 4.7 | | Credit Impairment Losses | 99,123 | 73,475 | 34.9 | | Net Profit | 109,190 | 122,372 | -10.8 | | Net Profit Attributable to Parent Company Shareholders | 108,834 | 121,445 | -10.4 | - Net Interest Margin (NIM) was 2.14%, a year-on-year decrease of 2 basis points; Net Interest Spread (NIS) was 1.98%, a year-on-year decrease of 4 basis points, primarily due to declining market interest rates and the implementation of national policies to benefit the real economy, leading to lower loan yields[24] - Credit impairment losses increased by CNY 25.648 billion year-on-year, a 34.9% increase, mainly due to the bank's prudent provisioning for loan impairment in consideration of macroeconomic uncertainties[23][45] Balance Sheet Analysis This chapter analyzes the bank's balance sheet as of June 30, 2020, showing steady growth in total assets and liabilities, driven by customer loans and deposits Key Balance Sheet Items (As of June 30, 2020) | Item (CNY Million) | June 30, 2020 | December 31, 2019 | Growth Rate from Beginning of Year (%) | | :--- | :--- | :--- | :--- | | Total Assets | 26,472,127 | 24,878,288 | 6.4 | | Net Customer Loans and Advances | 13,956,264 | 12,819,610 | 8.9 | | Financial Investments | 7,847,830 | 7,422,930 | 5.7 | | Total Liabilities | 24,379,118 | 22,918,526 | 6.4 | | Deposits from Customers | 20,363,098 | 18,849,155 | 8.0 | | Total Shareholders' Equity | 2,093,009 | 1,959,762 | 6.8 | - Total customer loans increased by 8.9% from the beginning of the year to CNY 14.55 trillion, with corporate loans growing by 10.7% and personal loans by 8.1%[54][55][61] - Deposits from customers increased by 8.0% from the beginning of the year to CNY 20.36 trillion, with the proportion of personal deposits rising to 59.1% and demand deposits decreasing to 54.8%[72] Off-Balance Sheet Items This chapter describes the bank's off-balance sheet items, primarily credit commitments, which saw a significant increase in the first half of 2020 Composition of Credit Commitments | Item (CNY Million) | June 30, 2020 | December 31, 2019 | Growth Rate from Beginning of Year (%) | | :--- | :--- | :--- | :--- | | Loan Commitments | 1,188,499 | 1,056,796 | 12.5 | | Bank Acceptance Bills | 505,320 | 339,829 | 48.7 | | Credit Card Commitments | 682,896 | 646,134 | 5.7 | | Total | 2,773,340 | 2,410,028 | 15.1 | Business Overview This chapter provides a comprehensive overview of the bank's steady business development across corporate, personal, treasury, and asset management segments in the first half of 2020 Corporate Banking Business This chapter details the corporate banking business's focus on national strategies, steady growth in deposits and loans, and digital transformation efforts - As of end-June, corporate banking customers totaled 6.3781 million, an increase of 380,300 from the beginning of the year; customers with loan balances reached 305,600, an increase of 92,600[81] - In the first half, underwriting volume for non-financial enterprise debt financing instruments was CNY 271.28 billion, a year-on-year increase of 47.0%; investment banking business income was CNY 6.999 billion, a year-on-year increase of 11.3%[85] Personal Banking Business This chapter highlights the personal banking business's digital transformation, significant growth in customer base, deposits, and loans, and rapid expansion of private banking Personal Banking Business Scale (As of June 30, 2020) | Indicator | Balance (CNY Billion) | Increase from Beginning of Year (CNY Billion) | | :--- | :--- | :--- | | Domestic Personal Deposits | 11,899.686 | +994.955 | | Domestic Personal Loans | 5,830.371 | +437.898 | | Personal Housing Loans | 4,421.731 | +259.300 | | Private Banking Assets Under Management | 1,629.6 | +225.6 | Treasury and Asset Management Businesses This chapter covers the treasury business's flexible investment strategies and the asset management business's progress in net-value transformation and growth in entrusted assets - As of June 30, financial investments balance was CNY 7.85 trillion, an increase of CNY 424.9 billion from the beginning of the year, representing a 5.7% growth[94] - As of June 30, wealth management product balance was CNY 1.80 trillion, with net-value products accounting for 37.98%; entrusted assets under management reached CNY 10.33 trillion, a 4.5% increase from the beginning of the year[96][97] Online Finance, Inclusive Finance, and Green Finance This chapter highlights the bank's advancements in online lending, robust growth in inclusive finance for small and micro enterprises, and significant expansion of green credit Scale of Featured Financial Businesses (As of June 30, 2020) | Business Segment | Indicator | Balance (CNY Billion) | Increase from Beginning of Year | | :--- | :--- | :--- | :--- | | Online Finance | Online Lending | 999.3 | +CNY 410 billion | | Inclusive Finance | Inclusive Small and Micro Enterprise Loans | 866.142 | +46.2% | | Green Finance | Green Credit | 1,304.0 | +9.5% | Cross-Border, Diversified Operations, and Channel Technology This chapter details the bank's steady growth in cross-border services, profitable diversified operations, enhanced digital channels, and continued investment in financial technology - In the first half, domestic branches' international settlement volume was USD 547.4 billion, a year-on-year increase of 7.3%; cross-border RMB business volume was CNY 886.56 billion, a year-on-year increase of 41.9%[114] - Six diversified operation subsidiaries achieved a combined net profit of CNY 1.754 billion in the first half; ABC Wealth Management expanded its product system to a "6+N" model[115][117] - Personal mobile banking customers reached 332 million, with transaction volume of CNY 34.13 trillion in the first half, a year-on-year increase of 19.5%[118] County-Level Financial Business This chapter highlights the steady growth of the bank's county-level financial business, with significant asset and profit increases, and strong support for poverty alleviation County-Level Financial Business Financial Status (As of June 30, 2020) | Indicator (CNY Million) | June 30, 2020 | Growth Rate from Beginning of Year (%) | | :--- | :--- | :--- | | Total Assets | 9,547,333 | 9.7 | | Total Customer Loans and Advances | 5,055,815 | 11.0 | | Deposits from Customers | 8,713,465 | 9.5 | County-Level Financial Business Profit Performance (H1 2020) | Indicator (CNY Million) | Jan–Jun 2020 | Year-on-Year Growth Rate (%) | | :--- | :--- | :--- | | Operating Income | 129,042 | 10.2 | | Total Pre-Tax Profit | 56,528 | 23.7 | - As of end-June, loan balance in 832 national key poverty alleviation counties was CNY 1.22 trillion, an increase of 12.0% from the beginning of the year; targeted poverty alleviation loan balance was CNY 450.49 billion, an increase of 15.1%[147] - The non-performing loan ratio for county-level financial business was 1.48%, a decrease of 0.10 percentage points from the beginning of the year; provision coverage ratio was 325.26%[153][155] Risk Management and Internal Control This chapter details the bank's comprehensive risk management framework, covering credit, market, and liquidity risks, alongside internal control and anti-money laundering efforts Credit Risk Management This chapter outlines the bank's credit risk management strategies, including loan structure optimization and asset quality maintenance, despite a slight increase in the non-performing loan ratio Loan Five-Category Classification Distribution | Category | Amount (CNY Million) | Proportion (%) | Proportion at 2019 Year-End (%) | | :--- | :--- | :--- | :--- | | Pass | 13,999,128 | 96.48 | 96.36 | | Special Mention | 303,924 | 2.09 | 2.24 | | Non-Performing Loans | 207,745 | 1.43 | 1.40 | | Substandard | 96,239 | 0.66 | 0.50 | | Doubtful | 95,527 | 0.66 | 0.78 | | Loss | 15,979 | 0.11 | 0.12 | - The non-performing loan ratio for corporate loans was 2.12%, and for personal loans was 0.59%; manufacturing and wholesale and retail industries had higher proportions of non-performing loans[170][171] Market and Liquidity Risk Management This chapter details the bank's management of market and liquidity risks, demonstrating overall control and compliance with regulatory requirements through various monitoring tools - The end-of-period Value at Risk (VaR) for the trading book was CNY 256 million, with an average of CNY 188 million for the first half, an increase from the same period last year, mainly due to increased exposure to gold and silver trading portfolios and higher price volatility[176][178] - If interest rates were to instantly rise by 100 basis points, the bank's net interest income would decrease by CNY 52.476 billion, and other comprehensive income would decrease by CNY 44.648 billion[180] - As of end-June 2020, the RMB liquidity ratio was 55.53%; the average daily Liquidity Coverage Ratio (LCR) for Q2 was 141.7%, and the Net Stable Funding Ratio (NSFR) was 124.7%[190] Internal Control This chapter details the bank's efforts to enhance internal control and compliance, including new anti-fraud plans, strengthened group-wide management, and improved anti-money laundering systems - Issued the "Sharp Arrow" plan for case prevention and control (2020–2022), setting clear three-year targets for case risk prevention across the bank[197] - Strengthened anti-money laundering and sanctions compliance, implemented organizational reform for the global anti-money laundering center, and successfully detected and intercepted multiple fraud and smuggling cases related to the pandemic[198] Capital Management This chapter describes the bank's robust capital management, including successful capital replenishment through bond issuance and continuous improvement of internal capital adequacy assessment - In May 2020, issued CNY 40 billion in Tier 2 capital bonds[202] - In May and August 2020, issued CNY 85 billion and CNY 35 billion respectively in perpetual bonds to supplement Additional Tier 1 capital[202] - Detailed information on capital adequacy ratios and leverage ratios can be found in Appendix I and Appendix IV[204] Share Changes and Major Shareholder Holdings This chapter provides an overview of the bank's share capital and major shareholder structure as of June 30, 2020, noting no changes in total shares or controlling shareholders Top Two Shareholders' Holdings | Shareholder Name | Share Class | Total Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | :--- | | Central Huijin Investment Ltd | A-share | 140,087,446,351 | 40.03 | | Ministry of Finance | A-share | 123,515,185,240 | 35.29 | Preferred Share Information This chapter details the bank's two outstanding domestic preferred share issues, including dividend distributions and their accounting treatment as equity instruments - On March 11, 2020, a cash dividend of CNY 5.50 per share was distributed to "ABC Preferred 2" shareholders, totaling CNY 2.2 billion (tax inclusive)[221] - The Board of Directors approved a cash dividend distribution of CNY 5.32 per share to "ABC Preferred 1" shareholders on November 5, 2020, totaling CNY 2.128 billion (tax inclusive)[221] Directors, Supervisors, and Senior Management This chapter outlines the composition of the bank's Board of Directors, Board of Supervisors, and senior management, noting recent personnel changes - The Board of Directors consists of 13 directors (3 executive, 5 non-executive, 5 independent non-executive); the Board of Supervisors consists of 7 supervisors; and there are 6 senior management members[223] - During the reporting period, Mr. Xu Jiandong and Mr. Chen Jianbo resigned as non-executive directors; Mr. Wang Xingchun's term as supervisor expired; and Mr. Zhou Wanfu resigned as Board Secretary[224] Significant Matters This chapter covers key corporate governance events, dividend distribution, absence of major litigation, and the bank's commitment to investing in the national green development fund - The 2019 profit distribution plan was approved, with a cash dividend of CNY 0.1819 per share (tax inclusive) distributed to ordinary shareholders, totaling CNY 63.662 billion; no interim dividend for 2020 was declared[228] - No significant litigation or arbitration matters materially affecting operating activities occurred during the reporting period[229] - In July 2020, the bank signed an agreement to invest CNY 8 billion in the National Green Development Fund Co., Ltd[233] Appendices This chapter provides detailed regulatory disclosures, including capital adequacy, liquidity coverage, net stable funding, and leverage ratios, all demonstrating the bank's robust financial health Appendix I: Capital Adequacy Ratio Information This appendix details the bank's capital adequacy ratios, which meet regulatory requirements and improved due to recent bond issuances Capital Adequacy Ratios | Indicator (%) | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Adequacy Ratio | 10.87 | 11.24 | | Tier 1 Capital Adequacy Ratio | 12.60 | 12.53 | | Capital Adequacy Ratio | 16.42 | 16.13 | Appendix II: Liquidity Coverage Ratio Information This appendix presents the bank's liquidity coverage ratio for Q2 2020, which remains above the regulatory minimum, indicating strong short-term liquidity - The average daily Liquidity Coverage Ratio (LCR) for Q2 2020 was 141.7%, a decrease of 3.5 percentage points from the previous quarter, meeting regulatory requirements[272][273] Appendix III: Net Stable Funding Ratio Information This appendix provides the bank's net stable funding ratio for Q2 2020, demonstrating compliance with regulatory standards for long-term funding stability - The Net Stable Funding Ratio (NSFR) for Q2 2020 was 124.7%, a decrease of 2.5 percentage points from the previous quarter, meeting regulatory requirements[275][279] Appendix IV: Leverage Ratio Information This appendix details the bank's leverage ratio as of June 30, 2020, which exceeds regulatory requirements, reflecting a sound capital base relative to its exposures - As of June 30, 2020, the leverage ratio was 7.17%, an increase from 6.98% as of March 31, 2020[281]