广州农商银行(01551) - 2021 - 中期财报

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