北京银行(601169) - 2018 Q4 - 年度财报

Important Notice and Financial Highlights This section provides key disclosures, a company overview, and a summary of major financial indicators Important Notice The Board of Directors, Supervisory Board, and senior management ensure the report's truthfulness, accuracy, and completeness, with the 2018 financial report audited by Ernst & Young Hua Ming LLP receiving a standard unqualified opinion, and a proposed cash dividend of 2.86 yuan (tax inclusive) per 10 shares - The Board of Directors approved this annual report on April 23, 2019[5] - The 2018 profit distribution plan proposes a cash dividend of 2.86 yuan (tax inclusive) per 10 shares based on the total share capital of 21.143 billion shares at the end of 2018, totaling approximately 6.047 billion yuan[5] - The annual financial report was audited by Ernst & Young Hua Ming LLP, which issued a standard unqualified audit opinion[5] Key Financial Data and Indicators In 2018, Beijing Bank's total assets reached 2.57 trillion yuan, growing by 10.43%, with net profit attributable to shareholders at 20.002 billion yuan, up 6.77%, while asset quality showed a non-performing loan ratio of 1.46% and a provision coverage ratio of 217.51%, maintaining a sound core Tier 1 capital adequacy ratio of 8.93% Key Financial Performance (Million Yuan) | Indicator | 2018 | 2017 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,572,865 | 2,329,805 | 10.43% | | Total Liabilities | 2,378,731 | 2,153,091 | 10.48% | | Equity Attributable to Parent Company Shareholders | 192,450 | 174,844 | 10.07% | | Operating Revenue | 55,488 | 50,353 | 10.20% | | Net Profit Attributable to Parent Company Shareholders | 20,002 | 18,733 | 6.77% | | Basic Earnings Per Share (Yuan) | 0.91 | 0.99 | -8.08% | | Weighted Average Return on Net Assets (%) | 11.65% | 13.77% | Decreased by 2.12 percentage points | Asset Quality and Capital Adequacy Ratio (%) | Asset Quality & Capital Adequacy | End of 2018 | End of 2017 | End of 2016 | | :--- | :--- | :--- | :--- | | Non-Performing Loan Ratio | 1.46 | 1.24 | 1.27 | | Provision Coverage Ratio | 217.51 | 265.57 | 256.06 | | Loan Loss Provision Ratio | 3.18 | 3.30 | 3.25 | | Cost-to-Income Ratio | 25.19 | 26.85 | 25.81 | | Core Tier 1 Capital Adequacy Ratio | 8.93 | 8.92 | 8.26 | | Tier 1 Capital Adequacy Ratio | 9.85 | 9.93 | 9.44 | | Capital Adequacy Ratio | 12.07 | 12.41 | 12.20 | Deposit and Loan Balances (Million Yuan) | Deposit & Loan Balances | End of 2018 | End of 2017 | End of 2016 | | :--- | :--- | :--- | :--- | | Total Deposits | 1,386,006 | 1,268,698 | 1,150,904 | | Total Loans | 1,261,811 | 1,077,101 | 899,907 | Business Overview This section outlines the bank's core business segments, including corporate banking, retail banking, financial markets, direct banking, and information technology development Corporate Banking Business Corporate banking actively supports national strategies, private enterprises, and achieves significant progress in institutional, small and micro, transaction, and investment banking, with cultural and tech finance loan balances growing over 20% - Actively served national strategies, with loan balances supporting Beijing-Tianjin-Hebei at 31.2 billion yuan and "Belt and Road" initiatives at 23.9 billion yuan at the end of the reporting period[28][29] - Strongly supported the private economy, with private enterprise corporate loan balances exceeding 200 billion yuan at the end of the reporting period[29] - Small and micro financial services achieved significant results, with small and micro enterprise corporate loan balances reaching 425.6 billion yuan, a 19% year-on-year increase; cultural and tech finance loan balances were 70.8 billion yuan and 145.4 billion yuan respectively, both growing over 20%[30] - Investment banking business saw both volume and quality improvements, underwriting 204 bonds for the year, a 42.7% year-on-year increase, with an underwriting scale of 141.8 billion yuan, up 33.0%[31] Retail Banking Business Retail business transformation yielded significant results, with rapid growth in scale, retail AUM exceeding 650 billion yuan, double-digit growth in savings deposits and personal loans, and a reduced retail credit NPL ratio of 0.39% Retail Business Indicators | Retail Business Indicator | 2018 Year-End Data | YoY Growth | | :--- | :--- | :--- | | Savings Deposits | 288.5 billion yuan | 15.8% | | Personal Loans | 361.8 billion yuan | 17.8% | | Personal Loan Interest Income | >15 billion yuan | 19.4% | | Retail Customer Accounts | 20.5 million accounts | - | | Mobile Banking Users | - | 39% | | Retail Credit NPL Ratio | 0.39% | Decreased by 0.09 percentage points from year-start | - Continuously deepened the "One Body, Two Wings" strategy, promoting intelligent integration of online and offline channels, and building "Inclusive Finance," "Smart Finance," and "Wealth Finance" brands[34] - In smart finance, launched the new mobile banking APP 4.0, utilizing biometric recognition and AI to enhance user experience; smart ATM retail business migration rate reached 80%[34] Financial Market Business Financial market business achieved stable and compliant development under a "high efficiency, high turnover, light capital, light platform" strategy, optimizing asset structure and profitability while supporting national strategies and promoting innovation - Asset structure optimized, with high-yield assets proportion increasing by 2 percentage points from the beginning of the year, weighted average yield increasing by 54 basis points; foreign currency asset interest margin increased by 53 basis points[37] - Served national strategies, jointly launched the "Silk Road Connect" brand with Swift, cumulatively invested over 41 billion yuan in Beijing-Tianjin-Hebei region, and cumulatively invested 60.3 billion yuan in local government bonds[38] - Significant achievements in business transformation and innovation, launching new products like bond lending and overseas structured note investments, and continuously strengthening cross-border financial service capabilities[38] - Focused on capital conservation, with light-asset business volumes such as cross-border clearing, FX settlement and sales, and letters of credit increasing by 47%, 45%, and 28% respectively from the beginning of the year[39] Direct Banking Business Direct banking business experienced steady growth, reaching 451,000 customers by the end of the reporting period, with 61.4% being external customers, while the joint venture bank project with ING Group progressed smoothly - As of the end of the reporting period, direct banking customers reached 451,000 accounts, with 61.4% being external customers[41] - Signed a memorandum of understanding with Dutch ING Group to establish a joint venture bank, with the project progressing smoothly[42] Information Technology Development In 2018, the bank implemented its "Five-Five" technology plan, enhancing technological capabilities through innovative governance, accelerated fintech transformation, and infrastructure upgrades, establishing a smart data ecosystem and focusing on mobile-first strategies - Established a cybersecurity and informatization leading group to enhance technology governance efficiency[44] - Smart data ecosystem construction achieved initial results, forming a "big data, artificial intelligence, data visualization" three-platform technology capability system[45] - Focused on a mobile-first strategy, completing the launch of retail mobile banking 4.0 and releasing the "Jingguan+" enterprise mobile APP[45] - Accelerated the construction of the Shunyi R&D Center, increasing internet bandwidth by 2.2 times across two locations and three data centers to ensure stable system operations[45] Discussion and Analysis of Operations This section provides an in-depth analysis of the bank's operating performance, financial position, asset quality, risk management, and future outlook Overview of Operating Performance In 2018, Beijing Bank achieved stable development amidst complex macroeconomic conditions, with total on- and off-balance sheet assets reaching 3.31 trillion yuan, net profit attributable to parent company shareholders of 20 billion yuan, and strong asset quality metrics 2018 Key Performance Indicators | 2018 Key Performance | Value | | :--- | :--- | | Total On- and Off-Balance Sheet Assets | 3.31 trillion yuan | | Net Profit Attributable to Parent Company Shareholders | 20 billion yuan (6.77% YoY growth) | | Cost-to-Income Ratio | 25.19% | | Non-Performing Loan Ratio | 1.46% | | Provision Coverage Ratio | 217.51% | | Global Tier 1 Capital Ranking | 63rd | - Signed a memorandum of understanding with Dutch ING Group to establish a joint venture bank, marking a significant step in financial opening for small and medium-sized banks[48] - Continuously upgraded distinctive financial brands, taking the lead in establishing a head office-level technology finance innovation center and the first bank-affiliated cultural creative center[48] Main Business Analysis In 2018, the company's operating revenue reached 55.488 billion yuan, a 10.20% increase, primarily driven by net interest income, while maintaining an excellent cost-to-income ratio of 25.19%, with Beijing remaining the main source of revenue and profit Key Income Statement Items (Million Yuan) | Key Income Statement Items | 2018 | 2017 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 55,488 | 50,353 | 10.20% | | Of which: Net Interest Income | 45,553 | 39,376 | 15.69% | | Net Fee and Commission Income | 8,879 | 10,579 | -16.07% | | Operating Profit | 23,588 | 22,865 | 3.16% | | Net Profit Attributable to Parent Company Shareholders | 20,002 | 18,733 | 6.77% | - The main reasons for the increase in net interest income were the growth in interest-earning assets and the improvement in net interest margin[55] - Business and administrative expenses totaled 13.978 billion yuan, a 3.37% year-on-year increase, with a cost-to-income ratio of 25.19%, maintaining an excellent level[58] Regional Distribution (Million Yuan) | Regional Distribution | Operating Revenue | Total Profit | Total Assets | | :--- | :--- | :--- | :--- | | Beijing Region | 40,840 | 24,244 | 1,858,403 | | Total | 55,488 | 23,522 | 2,572,865 | Asset and Liability Analysis As of the end of 2018, the company's total assets reached 2.57 trillion yuan and total liabilities 2.38 trillion yuan, both growing by approximately 10.4%, driven by a 17.29% increase in net loans and advances and a 9.25% increase in deposits, with an optimized liability structure due to higher savings deposit growth Key Asset and Liability Items (Million Yuan) | Key Asset & Liability Items | End of 2018 | End of 2017 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,572,865 | 2,329,805 | 10.43% | | Net Loans and Advances | 1,218,645 | 1,039,023 | 17.29% | | Financial Investments | 512,289 | 453,467 | 12.97% | | Total Liabilities | 2,378,731 | 2,153,091 | 10.48% | | Deposits from Customers | 1,386,006 | 1,268,698 | 9.25% | | - Corporate Deposits | 1,095,909 | 1,018,338 | 7.62% | | - Savings Deposits | 290,097 | 250,360 | 15.87% | - Loans were the primary driver of asset growth, totaling 1.26 trillion yuan; from an industry distribution perspective, leasing and business services, manufacturing, and real estate were the top three industries for loan disbursement[63] - Deposits grew steadily, with savings deposit growth (15.87%) significantly outpacing corporate deposit growth (7.62%), continuously optimizing the liability structure[61][70] Loan Quality and Structure Analysis At the end of 2018, the bank's loan quality fluctuated, with the non-performing loan ratio rising to 1.46% primarily due to a significant increase in substandard loans, while the bank actively managed risks and disposed of non-performing assets Loan Five-Category Classification (Million Yuan) | Loan Five-Category Classification | End of 2018 Balance | End of 2018 Ratio (%) | End of 2017 Balance | End of 2017 Ratio (%) | | :--- | :--- | :--- | :--- | :--- | | Normal | 1,232,257 | 97.66 | 1,046,957 | 97.19 | | Special Mention | 11,129 | 0.88 | 16,773 | 1.56 | | Substandard | 14,482 | 1.15 | 6,523 | 0.61 | | Doubtful | 1,408 | 0.11 | 5,350 | 0.50 | | Loss | 2,535 | 0.20 | 1,498 | 0.14 | | Total Non-Performing Loans | 18,425 | 1.46 | 13,371 | 1.24 | - Total overdue loans amounted to 24.825 billion yuan, an increase of 4.269 billion yuan from 20.556 billion yuan at the beginning of the year, mainly due to overdue corporate loans[80] - Loan impairment provisions of 16.391 billion yuan were made this year, with 11.157 billion yuan written off or transferred out, resulting in an ending balance of 43.166 billion yuan for loan impairment provisions[82] - To address non-performing loans, the bank implemented measures including continuously advancing comprehensive risk management, optimizing credit allocation, strengthening source control, strict process management, enhancing early warning and screening, and intensifying dual control over non-performing assets[84] Major Risks and Countermeasures The bank faces credit, liquidity, market, operational, and information risks, which are managed through robust frameworks, including a multi-layered risk management system, liquidity monitoring, sensitivity analysis, and enhanced internal controls and security measures - Credit Risk: Primarily from loans, investment portfolios, and guarantees, managed through a multi-layered structure including the Board of Directors, Risk Management Committee, and Risk Management Department, adhering to a comprehensive "full asset, full scope, full process, full institution" risk management system[100][101] - Liquidity Risk: A comprehensive governance structure is established, using liquidity indicators and gap analysis for risk measurement; the liquidity ratio at the end of the reporting period was 55.93%, exceeding the regulatory requirement of 25%[102][104] - Market Risk: Mainly interest rate and exchange rate risks, managed through repricing gap analysis, scenario simulations for banking book interest rate risk, and controlling foreign exchange exposure for exchange rate risk[106][108] - Operational and Information Risk: Managed by conducting special campaigns to "rectify market irregularities in the banking industry," strengthening the role of the Operational Risk Management Committee, enhancing internal control construction, and improving the information security system[109][110] Future Development Outlook Looking ahead to 2019, the company will prioritize "digital transformation" as its core strategy, accelerate the construction of its Shunyi R&D Center and fintech subsidiary, and continue to transform its corporate, retail, and financial market businesses while strengthening risk control and talent development - Macroeconomic Environment: Global economic growth is expected to slow in 2019 with increased uncertainty; China's economy faces downward pressure but maintains a foundation for high-quality development[114] - Core Strategy: Implement a digital transformation strategy, accelerate the construction of the Shunyi Technology R&D Center and fintech subsidiary, and build a digital operating ecosystem[116] - Business Initiatives: Corporate business will deepen its "four-wheel drive" strategy, retail business will adhere to "mobile-first," and financial market business will maintain its "two highs, two lights" strategy[116] - Risk Outlook: Facing external and domestic economic transition risks, the banking industry is under significant asset quality pressure, with "strong regulation" remaining the main theme[119] Significant Matters This section details the bank's profit distribution, significant related party transactions, and social responsibility initiatives Profit Distribution and Dividend Policy The bank's profit distribution policy allows for cash dividends, provided capital adequacy is met, with cash dividends not less than 10% of the attributable distributable profit, and the 2018 proposed dividend of 2.86 yuan per 10 shares represents a 30.23% cash dividend ratio, maintaining a stable policy Annual Dividend Distribution (Yuan, Billion Yuan, %) | Year | Dividend Per Share (Yuan) | Total Cash Dividend (Billion Yuan) | Cash Dividend Ratio (%) | | :--- | :--- | :--- | :--- | | 2018 | 0.286 | 6.047 | 30.23 | | 2017 | 0.267 | 5.645 | 30.13 | | 2016 | 0.25 | 3.802 | 21.36 | - The profit distribution policy complies with the Articles of Association, with clear and consistent dividend standards, maintaining continuity and stability[120] Significant Related Party Transactions During the reporting period, the bank engaged in normal course of business transactions with related parties, including loans, interbank activities, and agency services, all priced at market rates - Loans extended to related parties included significant balances to Changsha Xinhua Lian Tongguanyao International Cultural Tourism Development Co., Ltd. and China Hi-Tech Group Corporation, amounting to 1.675 billion yuan and 2.59 billion yuan respectively[131][132] - Extensive interbank transactions with financial institution-related parties, such as interbank borrowings from Bank of Communications with an ending balance of 8.662 billion yuan, and interbank lendings to Bank of Beijing Financial Leasing with an ending balance of 7.800 billion yuan[138] - Acted as an agent for Zhonghong Life Insurance Co., Ltd. in selling insurance products, collecting agency fees of 36.0418 million yuan[139] Social Responsibility Performance The bank actively fulfills its social responsibilities, making strides in targeted poverty alleviation, green finance, and consumer protection through various initiatives and educational campaigns - Poverty Alleviation: Developed three targeted poverty alleviation models—"empowering farmers, empowering villages, and fostering industries"—and was honored as one of the "First Batch of Most Influential Enterprises in Targeted Poverty Alleviation"[142] - Green Finance: Strictly enforced a "one-vote veto" system for environmental protection in lending and served as the sole special fund custodian for the ADB loan Beijing-Tianjin-Hebei Air Pollution Control Project[143][144] - Consumer Protection: Organized 3,210 consumer rights protection education sessions throughout the year, reaching 3.025 million person-times, and received the "Outstanding Contribution Award for Civilized and Standardized Service in China's Banking Industry"[147] Shares and Shareholder Information This section details the bank's share capital changes, share structure, major shareholders, and preferred share information Share Changes and Structure As of the end of 2018, the company's total share capital remained unchanged at 21.143 billion shares, with restricted shares accounting for 13.69% and unrestricted tradable shares for 86.31% Share Categories | Share Category | Quantity (Shares) | Proportion (%) | | :--- | :--- | :--- | | Restricted Shares | 2,894,973,450 | 13.69% | | Unrestricted Tradable Shares | 18,248,010,822 | 86.31% | | Total Share Capital | 21,142,984,272 | 100.00% | - Restricted shares primarily resulted from a 2017 non-public offering, involving 7 shareholders including ING Bank N.V., Beijing State-owned Assets Management Co., Ltd., and Beijing Energy Group Co., Ltd., with a 36-month lock-up period expiring on December 28, 2020[150] Major Shareholder Information As of the end of 2018, the bank had no controlling shareholder or actual controller, with ING BANK N.V. being the largest shareholder at 13.03%, and a total of 173,595 shareholders Top Five Shareholders | Top Five Shareholders | Shareholding Ratio (%) | Total Shares Held (Shares) | Pledged or Frozen Status | | :--- | :--- | :--- | :--- | | ING BANK N.V. | 13.03 | 2,755,013,100 | 0 | | Beijing State-owned Assets Management Co., Ltd. | 8.63 | 1,825,228,052 | 0 | | Beijing Energy Group Co., Ltd. | 8.59 | 1,815,551,275 | 0 | | Xinhua Lian Holdings Co., Ltd. | 8.57 | 1,812,681,243 | 1,809,188,742 | | Sunshine Life Insurance Co., Ltd. - Traditional Insurance Products | 3.41 | 720,000,000 | 0 | - The bank has no controlling shareholder or actual controller[155] Preferred Shares Information The bank issued two tranches of preferred shares, "BOB Preferred 1" and "BOB Preferred 2," with total par values of 4.9 billion yuan and 13 billion yuan, and dividend rates of 4.50% and 4.00% respectively, with both tranches paying dividends on time in the reporting period Preferred Share Details | Preferred Share Abbreviation | Issue Date | Coupon Dividend Rate (%) | Issue Quantity (Shares) | | :--- | :--- | :--- | :--- | | BOB Preferred 1 | 2015-12-8 | 4.50 | 49,000,000 | | BOB Preferred 2 | 2016-7-25 | 4.00 | 130,000,000 | - In 2018, BOB Preferred 1 distributed dividends of 220.5 million yuan, and BOB Preferred 2 distributed dividends of 520 million yuan[160][415] Corporate Governance This section covers the composition and changes of the Board of Directors, Supervisory Board, senior management, employee structure, and the bank's corporate governance and internal control framework Directors, Supervisors, and Senior Management During the reporting period, the company's board, supervisory board, and senior management underwent changes, with new members elected, and a robust assessment and incentive mechanism in place, while the bank employed 14,760 staff, with 84% holding bachelor's degrees or higher - Mr. Zhang Dongning serves as Chairman, and Mr. Yang Shujian serves as President[163] - The Board of Directors and Supervisory Board underwent re-elections during the reporting period, with several directors and supervisors departing and new directors, independent directors, and supervisors being elected[167][197] - Former shareholder director Zhang Jie was subject to disciplinary review and supervisory investigation for suspected serious violations of discipline and law[129] Employee Information As of the end of 2018, the bank employed 14,760 staff, with business personnel comprising 82% and 84% holding bachelor's degrees or higher, indicating a highly qualified workforce Professional Composition | Professional Composition | Number of Employees | Proportion | | :--- | :--- | :--- | | Management Personnel | 1,787 | 12% | | Support Personnel | 941 | 6% | | Business Personnel | 12,032 | 82% | | Total | 14,760 | 100% | Education Level | Education Level | Number of Employees | Proportion | | :--- | :--- | :--- | | Postgraduate and Above | 2,792 | 19% | | Bachelor's Degree | 9,614 | 65% | | Junior College and Below | 2,354 | 16% | | Total | 14,760 | 100% | Corporate Governance and Internal Control The bank has established a modern corporate governance structure comprising the Shareholders' Meeting, Board of Directors, Supervisory Board, and Management, ensuring independence from major shareholders and maintaining a sound internal control system - Established a modern corporate governance structure of "Three Meetings and One Layer," with clear division of responsibilities among power, decision-making, supervision, and executive bodies[203] - During the reporting period, 9 Board of Directors meetings were held to review significant proposals such as periodic reports; the six specialized committees under the Board of Directors (Strategy, Related Party Transactions, Risk Management, Remuneration, Nomination, and Audit) all performed their duties normally[206][208] - The company is fully independent from its major shareholders in terms of business, personnel, assets, organization, and finance, possessing autonomous operational capabilities[212] - The Board of Directors is responsible for establishing, improving, and effectively implementing internal controls, and has disclosed internal control evaluation reports and internal control audit reports, with no significant deficiencies found[214][215][216] Financial Report and Audit Opinion This section presents the bank's financial report, including the audit opinion and key audit matters identified by the auditor Audit Opinion Ernst & Young Hua Ming LLP issued a standard unqualified audit opinion on Beijing Bank's 2018 financial statements, affirming their fair presentation in all material respects in accordance with enterprise accounting standards - The auditing firm is Ernst & Young Hua Ming LLP (Special General Partnership)[223] - The audit opinion type is a standard unqualified opinion[223] Key Audit Matters The auditor identified two key audit matters: impairment provisions for loans and receivables, due to significant judgment and materiality, and the assessment of control over structured entities, involving complex factors and management judgment, with appropriate audit procedures performed for both - Key Audit Matter 1: Impairment provisions for loans and receivables. The auditor assessed and tested relevant key controls, performed credit reviews using sampling methods, and tested assumptions for both portfolio assessment models and individual assessment discounted cash flow models[226] - Key Audit Matter 2: Assessment of control over structured entities. The auditor evaluated relevant key controls and assessed management's analysis and conclusions regarding control over structured entities based on factors such as power and variable returns[227]