江西银行(01916) - 2019 - 年度财报

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