厦门银行(601187) - 2023 Q2 - 季度财报

Management Discussion and Analysis Industry and Main Business Overview In H1 2023, the company maintained stable operations, optimized its balance sheet, and focused on supporting the real economy, particularly in manufacturing, inclusive finance, and green development, underpinned by robust governance and risk management - The company's core competencies include robust governance, clear strategic execution, enhanced small and micro enterprise service capabilities, distinctive cross-strait financial services, professional financial market operations, and a comprehensive risk management system[637][33][14] Corporate Banking Business Corporate banking focused on serving the real economy by optimizing credit structure and supporting key sectors like manufacturing and green development, resulting in stable loan balances, improved asset quality, and increased transaction banking fee income - Non-performing loan ratio for corporate loans (excluding bill discounting) was 1.18%, a 0.21 percentage point decrease from the beginning of the year, indicating improved asset quality[553] - Green credit balance (PBOC standard) reached RMB 5.973 billion, a significant 44.59% increase from the beginning of the year[559] - Inclusive small and micro enterprise loan balance reached RMB 66.517 billion, growing 8.97% from the beginning of the year, surpassing the bank's overall loan growth rate[583] - Transaction banking fee income grew 8.32% year-on-year through the promotion of supply chain finance products like "Supplier Loan" and optimized transaction banking offerings[562][591] Retail Banking Business The company steadily advanced its retail strategy, achieving robust growth through optimized deposit structures, diversified wealth management, and enhanced technology, resulting in increased personal deposits, lower funding costs, and a low personal loan NPL ratio of 0.50% Key Retail Business Indicators | Indicator | June 2023 End | Change from Year-End | | :--- | :--- | :--- | | Personal Financial Assets | 93.208 Billion RMB | +5.38% | | Personal Deposit Balance | 60.448 Billion RMB | +9.13% | | Retail Customer Count | 2.4777 Million Accounts | +3.05% | | Personal Loan NPL Ratio | 0.50% | Remained Stable | - By actively adjusting business strategies, the average interest rate paid on retail deposits decreased by 0.33 percentage points year-on-year, effectively controlling funding costs[568] - Monthly active users of personal mobile banking increased by 32.67% year-on-year, indicating a significant improvement in online service capabilities and customer stickiness[605] Financial Markets Business The financial markets business consistently improved comprehensive profitability by optimizing asset-liability structure, enhancing trading capabilities, and expanding client services, focusing on strategic bond allocation and growing client-facing FX risk management - In the first half, an "early allocation, yield-focused" asset allocation strategy was adopted, prioritizing increased allocation to local government bonds and credit bonds to stabilize net interest margin and carry income[625] - The number of clients served by agency business increased by 19% year-on-year, with Taiwanese business clients accounting for 24% of the number and 25% of the volume[6] - The company made progress in digital transformation, obtaining computer software copyrights for its independently developed "Financial Market Intelligent Operations," "Algorithmic Trading," and "Algorithmic Market Making" systems[30][29] Cross-Strait Financial Business Leveraging its Taiwanese shareholder background, the company strengthened its cross-strait financial services, growing Taiwanese enterprise and individual client numbers through innovative products and partnerships, aiming to be the preferred bank for Taiwanese businesses Cross-Strait Financial Business Client Growth (As of June 30, 2023) | Indicator | Growth from Year-End | | :--- | :--- | | Taiwanese Enterprise Client Count | 17% | | Taiwanese Enterprise Credit Account Count | 14% | | Taiwanese Individual Client Count | 8% | | Taiwanese Individual Credit Card Issuance | 9% | - Average deposit per Taiwanese enterprise client was 1.76 times that of all corporate clients, and average financial assets per Taiwanese individual client was 2.52 times that of all retail clients, highlighting the high value of this customer segment[11] - The company continuously innovated products and services, such as launching the "Salary Express Remittance" online product to facilitate cross-border transfers of after-tax salaries for Taiwanese individuals[636][32] Discussion and Analysis of Operations In H1 2023, the company's operating performance improved steadily, with net profit attributable to parent growing 15.92% driven by a 24.02% increase in non-interest net income, while total assets slightly decreased by 4.93% due to balance sheet optimization, and asset quality improved with NPL ratio falling to 0.80% Key Financial Indicators for H1 2023 | Indicator | H1 2023 | Year-on-Year Change | | :--- | :--- | :--- | | Operating Income | 2.958 Billion RMB | +3.60% | | Net Profit Attributable to Parent | 1.428 Billion RMB | +15.92% | | Non-Interest Net Income | 0.719 Billion RMB | +24.02% | | Non-Performing Loan Ratio | 0.80% | Decreased by 0.06 percentage points | | Provision Coverage Ratio | 394.86% | Increased by 6.93 percentage points | - Total assets were RMB 352.916 billion, a 4.93% decrease from the end of the previous year, primarily due to the company's proactive optimization of its asset-liability structure and reduction of high-cost deposits[38][47] Income Statement Analysis During the reporting period, operating income grew 3.60% and net profit attributable to parent increased 15.92%, primarily driven by a 24.02% surge in non-interest net income, despite a 1.61% decline in net interest income due to narrowing net interest margin Key Income Statement Items for H1 2023 | Item | Amount (Billion RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Income | 2.958 | +3.60% | | Net Interest Income | 2.238 | -1.61% | | Non-Interest Net Income | 0.719 | +24.02% | | Business and Management Expenses | 1.082 | +14.00% | | Credit Impairment Losses | 0.190 | -66.29% | | Net Profit Attributable to Parent | 1.428 | +15.92% | - Net interest spread and net interest margin were 1.28% and 1.34% respectively, decreasing by 0.14 and 0.15 percentage points year-on-year, primarily due to LPR reductions and the trend of deposit term-deposit conversion[644][41] - Xiamen, as a core market, generated RMB 1.80 billion in operating income, a 11.17% year-on-year increase, accounting for 60.86% of total revenue[42][67] Balance Sheet Analysis As of the reporting period, total assets decreased by 4.93% to RMB 352.916 billion and total liabilities by 5.57% to RMB 327.179 billion, reflecting proactive balance sheet optimization and a 9.67% reduction in deposits, while loans and advances remained stable, increasing 0.44% to RMB 201.259 billion Key Balance Sheet Items as of June 2023 | Item | Balance (Billion RMB) | Change from Year-End | | :--- | :--- | :--- | | Assets | | | | Total Assets | 352.916 | -4.93% | | Loans and Advances | 201.259 | +0.44% | | Financial Investments | 103.229 | +3.05% | | Liabilities | | | | Total Liabilities | 327.179 | -5.57% | | Deposits from Customers | 185.064 | -9.67% | | Bonds Payable | 77.204 | +11.18% | - The company's loan structure remained stable, with corporate loans and personal loans accounting for 51.73% and 37.76% of total loans, respectively[51] - Deposit structure was optimized by actively reducing high-cost margin deposits (down 42.91% from the beginning of the year), while personal deposits grew 9.13%[89][61] Cash Flow Statement Analysis During the reporting period, net cash outflow from operating activities was RMB 27.432 billion, primarily due to decreased deposits, while investing activities resulted in a net outflow of RMB 1.383 billion, and financing activities generated a net inflow of RMB 5.929 billion from interbank certificates of deposit Net Cash Flow for H1 2023 | Activity Type | Net Cash Flow (Billion RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Activities | -27.432 | -256.94% | | Investing Activities | -1.383 | N/A | | Financing Activities | 5.929 | N/A | Risk and Risk Management The company maintains a robust risk culture and comprehensive risk management system, ensuring stable asset quality through credit risk optimization, ample liquidity, effective market risk control via limits, and comprehensive management of operational, compliance, IT, reputational, and anti-money laundering risks - Credit Risk Management: Adhering to a credit philosophy of "centering on strategic planning, optimizing asset structure, and fortifying risk bottom lines," the company strengthens full-lifecycle credit risk management through six lines of defense[199][223] Liquidity Risk Regulatory Indicators (As of End of Reporting Period) | Indicator | Actual Value | Regulatory Requirement | | :--- | :--- | :--- | | Liquidity Ratio | 78.7% | > 25% | | Liquidity Coverage Ratio | 226.48% | > 100% | | Net Stable Funding Ratio | 115.34% | > 100% | - Market Risk Management: Interest rate and exchange rate risks for both trading and banking books are effectively managed through a comprehensive limit system, risk monitoring, and stress testing[231][206] - Compliance and Operational Risk: The company launched a "Case Prevention and Compliance Enhancement Year" special initiative, strengthening institutional and employee behavior management to reinforce internal control and compliance, preventing operational risks[214][267][265] Future Development Outlook Looking ahead, the company will pursue its "focus on SMEs, deep cultivation in Haixi, and integration across the Taiwan Strait" vision, executing a strategy to expand retail, strengthen corporate, deepen cross-strait, and optimize treasury businesses, while actively addressing challenges like credit risk, narrowing net interest margins, and market risk - Company Development Strategy: Continue to execute the business strategy of "expanding retail, strengthening corporate, deepening cross-strait, and optimizing treasury operations" to become a value-leading comprehensive financial service provider[253][277] - Key risks include credit risk from slower-than-expected economic recovery, persistent pressure on net interest margin due to LPR reductions and deposit term-deposit conversion, and market risk from domestic and international interest rate and exchange rate fluctuations[418][254][303] Corporate Governance Operation of Shareholders' Meeting, Board of Directors, and Board of Supervisors During the reporting period, the company's governance bodies operated effectively, with 2 shareholder meetings, 8 board meetings, and 4 supervisory board meetings held, approving key proposals including the 2022 profit distribution of RMB 2.90 per 10 shares (tax inclusive) - During the reporting period, 2 shareholder meetings, 8 board meetings, and 4 supervisory board meetings were held, reviewing multiple important proposals including the annual report, profit distribution, and amendments to the Articles of Association[307][282][287] - The company implemented its 2022 profit distribution plan, distributing a cash dividend of RMB 2.90 (tax inclusive) per 10 ordinary shares, totaling RMB 765 million, which has been completed[289][447] Environmental and Social Responsibility Environmental, Social, and Consumer Rights Protection The company actively fulfilled its environmental and social responsibilities by integrating green development into its strategy, evidenced by a 44.59% increase in green credit and 12.53% growth in inclusive agricultural loans, while maintaining a 100% complaint resolution rate and 92% customer satisfaction for consumer rights protection - The company vigorously developed green finance, with green credit balance (PBOC standard) reaching RMB 5.973 billion as of the end of the reporting period, a 44.59% increase from the beginning of the year[295] - Actively serving rural revitalization, inclusive agricultural loan balance reached RMB 3.516 billion, a 12.53% increase from the beginning of the year; the company also innovatively launched the "Taiwanese Farmer Loan" product to support Taiwanese agricultural enterprises[321][349] - The company highly values consumer rights protection, establishing a comprehensive management system from the Board of Directors to the executive level, handling 1,868 complaints during the reporting period with a 100% resolution rate[302][323] Significant Matters Major Litigation and Related Party Transactions During the reporting period, the company disclosed several major litigations not expected to materially impact financial results, while strictly adhering to related party transaction policies, with annual estimates approved by shareholders and major transactions primarily involving credit lines to its subsidiary, Fujian Haixi Financial Leasing - The company, as plaintiff, was involved in 87 unresolved litigation and arbitration cases with a total amount of RMB 3.248 billion, which are not expected to have a material adverse impact on the company[339] - The company's estimated annual ordinary related party transaction amount for 2023 was approved by the shareholders' meeting, with normal execution during the reporting period and transactions adhering to market-based principles[395][342] - Major related party transactions primarily involve a comprehensive credit line to its controlled subsidiary, Fujian Haixi Financial Leasing Co., Ltd., with an exposure of RMB 2 billion[375][374] Share Changes and Shareholder Information Shareholder Information During the reporting period, the company's total share capital and structure remained unchanged, with 56,612 ordinary shareholders; the top two shareholders, Xiamen Jinyuan Investment Group and Fubon Financial Holding, held 18.27% and 18.03% respectively, indicating a dispersed ownership structure without a controlling shareholder Top Two Shareholders' Holdings (As of June 30, 2023) | Shareholder Name | Number of Shares (Shares) | Shareholding Percentage | | :--- | :--- | :--- | | Xiamen Jinyuan Investment Group Co., Ltd. | 482,202,748 | 18.27% | | Fubon Financial Holding Co., Ltd. | 475,848,185 | 18.03% | - As of the end of the reporting period, the total number of ordinary shareholders was 56,612[383] - The company has a dispersed equity structure with no controlling shareholder or actual controller[390][436] Financial Report Financial Statements and Notes This semi-annual financial report, unaudited but reviewed by Ernst & Young Hua Ming LLP under Chinese CPA Review Standard No. 2101, received a standard unqualified review opinion, fairly presenting the company's financial position, operating results, and cash flows as of June 30, 2023 - The financial report has been reviewed by Ernst & Young Hua Ming LLP (Special General Partnership) and received a standard unqualified review opinion[162][99][143] Consolidated Income Statement Key Data (RMB) | Item | Jan-Jun 2023 | Jan-Jun 2022 | | :--- | :--- | :--- | | Operating Income | 2,957,516,579.04 | 2,854,758,974.05 | | Total Profit | 1,647,336,956.46 | 1,302,450,020.98 | | Net Profit | 1,475,011,464.52 | 1,261,721,898.81 | | Net Profit Attributable to Parent Company Shareholders | 1,428,441,057.75 | 1,232,285,900.62 | Consolidated Balance Sheet Key Data (RMB) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Assets | 352,916,314,494.38 | 371,208,018,622.35 | | Total Liabilities | 327,179,071,174.44 | 346,464,169,116.75 | | Total Shareholders' Equity | 25,737,243,319.94 | 24,743,849,505.60 |