hankou bank co., ltd. 2019annual report
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2019 Annual Report of Hankou Bank Co., Ltd.
I
Contents
Chapter I Important Notice................................................................................................................ 1
Chapter II Basic Information..............................................................................................................2
I. Terms and Definitions......................................................................................................................................... 2
II. Company Profile................................................................................................................................................ 2
III. Organizational Chart of the Company..............................................................................................................4
Chapter III Summary of Accounting & Business Data.................................................................... 5
I. Major Financial Data for the Reporting Period.................................................................................................. 5
II. Major Accounting Data and Financial Indicators for the Three Years before the End of the Reporting
Period...................................................................................................................................................................... 6
III. Return on Equity and Earnings per Share........................................................................................................ 7
IV. Supplementary Financial Data for the Three Years before the End of the Reporting Period.......................... 8
V. Supplementary Financial Indicators for the Three Years before the End of the Reporting Period...................9
VI. Changes in Shareholder’s Equity during the Reporting Period.....................................................................10
VII. Composition of Capital and Its Changes...................................................................................................... 11
VIII. Liquidity Coverage Ratio at the End of the Period..................................................................................... 12
Chapter IV Report of the Board of Directors..................................................................................14
I. Management Discussion and Analysis..............................................................................................................14
i. Business review during the reporting period............................................................................................ 14
ii. Analysis of financial position and operating results during the reporting period....................................23
iii. Assets and liabilities during the reporting period................................................................................... 29
iv. Analysis of investment status.................................................................................................................. 37
II. Business Overview...........................................................................................................................................37
i. Institution setup......................................................................................................................................... 37
ii. Loan quality analysis................................................................................................................................40
iii. Group customer credit business and its risk management......................................................................42
iv. NPA changes and management measures................................................................................................42
2019 Annual Report of Hankou Bank Co., Ltd.
II
v. Impairment provisions for repossessed assets and other prime assets.....................................................43
vi. Categories, average balances and average interest rates of major deposits and loans at the end of the
reporting period............................................................................................................................................ 43
vii. Debt securities investment..................................................................................................................... 44
viii. Items designated at fair value................................................................................................................46
ix. Bad debt provisions for interest receivable and other receivables..........................................................46
x. Balances and risk management of major off-balance-sheet items...........................................................47
III. Risk Exposures and Countermeasures of the Bank........................................................................................47
i. Credit risk.................................................................................................................................................. 47
ii. Market risk................................................................................................................................................48
iii. Operational risk....................................................................................................................................... 49
iv. Compliance risk....................................................................................................................................... 50
v. Liquidity risk.............................................................................................................................................50
vi. Reputational risk......................................................................................................................................52
IV. Changes in the Business Environment and Macro Policies, Laws and Regulations and Influences thereof 52
i. Influence of macro control........................................................................................................................ 52
ii. Influence of reform in financial supervision............................................................................................53
V. Outlook............................................................................................................................................................. 53
i. Industry development pattern and trend....................................................................................................53
ii. Possible external risks in future operation............................................................................................... 54
iii. Challenges and opportunities in future operation................................................................................... 54
iv. Operating plan..........................................................................................................................................54
VI. Work of the Board of Directors during the Reporting Period........................................................................56
i. Meetings of the Board of Directors and resolutions during the reporting period.....................................56
ii. Implementation of the resolutions of Shareholders’ General Meeting by the Board of Directors..........57
iii. Performance of duties by the special committees of the Board of Directors......................................... 58
iv. Performance of strategic management functions by the Board of Directors.......................................... 59
v. Development of policies and procedures of the Board of Directors........................................................59
2019 Annual Report of Hankou Bank Co., Ltd.
III
VII. Profit Distribution Plan during the Reporting Period...................................................................................60
Chapter V Report of the Board of Supervisors............................................................................... 61
I. Work of the Board of Supervisors during the Reporting Period.......................................................................61
i. Meetings of the Board of Supervisors and Resolutions............................................................................61
ii. Performance of duties by the special committees of the Board of Supervisors...................................... 62
iii. Supervisors’ attendance of the general meetings and the meetings of the Board of Directors as
non-voting delegates.....................................................................................................................................62
iv. Supervision of duty performance............................................................................................................ 62
iv. Special work done....................................................................................................................................63
v. Development of policies and procedures..................................................................................................63
vi. Application of supervision findings........................................................................................................ 64
vii. Studies.................................................................................................................................................... 64
II. Independent Opinions of the Board of Supervisors on Relevant Issues......................................................... 64
i. Compliant operation of the Company....................................................................................................... 64
ii. Authenticity of the financial statements of the Company........................................................................64
iii. Acquisitions and sales of assets.............................................................................................................. 64
iv. Related party transactions........................................................................................................................64
v. Implementation of resolutions made by the general meetings.................................................................64
vi. Risk management and internal control....................................................................................................64
Chapter VI Significant Events.......................................................................................................... 66
I. Material Legal Proceedings and Arbitrations................................................................................................... 66
II. Increase or Decrease of Registered Capital, Split-off and Merger..................................................................66
III. Material Asset Acquisition and Sale, Merger and Acquisition...................................................................... 66
IV. Related Party Transactions..............................................................................................................................66
i. Related parties........................................................................................................................................... 66
ii. Summary of related party transactions.....................................................................................................68
iii. General related party transactions...........................................................................................................69
iv. Major related party transactions.............................................................................................................. 70
2019 Annual Report of Hankou Bank Co., Ltd.
IV
V. Material Contracts and Performance of Obligations thereunder..................................................................... 71
i. Material trusts, sub-contracts and leases...................................................................................................71
ii. Material guarantees.................................................................................................................................. 71
iii. Other material contracts and performance of obligations thereunder.................................................... 71
VI. Engagement and Dismissal of the Accounting Firm......................................................................................71
VII. Regulatory Penalties on Directors, Supervisors and Senior Executives of the Company........................... 72
VIII. Other Important Information Necessary to Inform the Public.................................................................... 72
i. Acquisition of business access qualifications........................................................................................... 72
ii. Establishment of institutions.................................................................................................................... 72
iii. Other important information................................................................................................................... 72
Chapter VII Share Capital Changes and Shareholders................................................................. 74
I. Share Changes................................................................................................................................................... 74
i. List of share changes................................................................................................................................. 74
ii. Share offerings in the three years before the end of the reporting period............................................... 74
II. Shareholders.....................................................................................................................................................74
i. Total number of shareholders.................................................................................................................... 74
ii. Major equity transfers.............................................................................................................................. 74
iii. Shareholdings of the top 10 shareholders and changes thereof as at the end of the reporting period... 74
iv. Substantial shareholders.......................................................................................................................... 76
Chapter VIII Directors, Supervisors, Senior Executives and Employees.....................................79
I. Directors, Supervisors and Senior Executives.................................................................................................. 79
i. Basic information on the members of the Fifth Board of Directors and Board of Supervisors and senior
executives during the reporting period1.......................................................................................................79
ii. Posts of directors and supervisors in shareholder entities and related enterprises.................................. 81
iii. Major work experience and posts of directors, supervisors and senior executives at the end of the
reporting period............................................................................................................................................ 81
iv. Changes in directors, supervisors and senior executives during the reporting period............................85
II. Remunerations of Directors, Supervisors, Senior Executives and Key Management Personnel................... 86
2019 Annual Report of Hankou Bank Co., Ltd.
V
III. Employees of the Bank...................................................................................................................................87
Chapter IX Corporate Governance Practice...................................................................................90
I. Corporate Governance during the Reporting Period........................................................................................ 90
i. About shareholders and the Shareholders’ General Meeting....................................................................90
ii. About directors, the Board of Directors and special committees............................................................ 91
iii. About supervisors, the Board of Supervisors and special committees...................................................91
iv. About information disclosure and investor relations management.........................................................92
II. Duty Performance of Independent Directors and External Supervisors......................................................... 92
i. Attendance of independent directors at Board of Directors’ meetings..................................................... 92
ii. Attendance of external supervisors at Board of Supervisors’ meetings.................................................. 93
iii. Objections raised by independent directors and external supervisors to relevant matters of the
Company.......................................................................................................................................................93
III. Operation Decision-making System of the Company....................................................................................93
IV. Assessment, Incentive and Constraint Mechanism for Senior Executives.................................................... 93
Chapter X Internal Control.............................................................................................................. 95
I. Statement of the Board of Directors on Internal Control Responsibilities.......................................................95
II. Basis of Internal Control over Financial Reporting and Internal Control System Development................... 95
i. Basis of establishing internal control over financing reporting................................................................95
ii. General plan on the establishment of internal control............................................................................. 95
iii. Establishment and improvement of internal control system...................................................................96
iv. Operation of internal control supervision mechanism............................................................................ 96
v. Internal control self-assessment................................................................................................................97
vi. Development and improvement of internal control................................................................................ 97
Chapter XI Financial Report............................................................................................................ 98
Chapter XII List of Documents for Reference................................................................................ 98
Chapter XIII Annexes........................................................................................................................98
Written Confirmation of Directors and Senior Management of Hankou Bank Co., Ltd. on theCompany’s 2019 Annual Report.......................................................................................................99
2019 Annual Report of Hankou Bank Co., Ltd.
VI
2019 Auditor’s Report of Hankou Bank Co., Ltd. ...................................................................... 100
2019 Annual Report of Hankou Bank Co., Ltd.
1
Chapter I Important Notice
The Board of Directors, and the Board of Supervisors, as well as the directors, supervisors and senior executives
of the Company warrant that the information contained herein does not contain any false records, misleading
statements or material omissions, and shall bear the joint and several liabilities for the authenticity, accuracy and
integrity of its contents.
The 2019 Annual Report of the Company and its summary were reviewed and approved at the 12th Meeting of the
Sixth Board of Directors of the Company on 29 May 2019. Of the 10 directors supposed to attend the meeting, 10
directors were present. Eight supervisors of the Company attended the meeting as non-voting delegates.
The annual financial report of the Company has been audited by Union Power Certified Public Accountants LLP
in accordance with the PRC Auditing Standards with a standard unqualified auditor’s report issued.
The Board of Directors of Hankou Bank Co., Ltd.
Chen Xinmin, Chairman, Ruan Xuzhou, Vice President & Financial Controller, and Li Daquan, Principal of the
Planning and Finance Department, warrant the authenticity and integrity of the financial report herein.
2019 Annual Report of Hankou Bank Co., Ltd.
2
Chapter II Basic Information
I. Terms and Definitions
i. The Company, the Bank or Hankou Bank: Hankou Bank Co., Ltd.
ii. Our Group or the Group: Hankou Bank Co., Ltd. and its subsidiaries
iii. Articles of Association: Articles of Association of the Company
iv. Shareholders’General Meeting: The Shareholders’ General Meeting of the Company
v. Board of Directors: The Board of Directors of the Company
vi. Board of Supervisors: The Board of Supervisors of the Company
II. Company Profile
i. The Company’s legal Chinese name: 汉口银行股份有限公司
Legal English name: Hankou Bank Co., Ltd. (“HKB” in short)
ii. Legal Representative of the Company: Chen Xinmin
iii. Board Secretary: Ding Rui
Address: 933 Jianshe Road, Jianghan District, Wuhan City, Hubei Province
Postal Code: 430015
Tel: 027-82656263
Fax: 027-82656099
iv. Registered/office address: 933 Jianshe Road, Jianghan District, Wuhan City, Hubei Province
Postal Code: 430015
Tel: 027-82656263
Fax: 027-82656099
Customer service hotline: 96558 (Wuhan), 4006096558 (Nationwide)
Website: http://www.hkbchina.com
Email: hkbank@hkbchina.com
v. Newspaper designated for information disclosure: Financial Times
Website designated for publication of annual report: http://www.hkbchina.com
2019 Annual Report of Hankou Bank Co., Ltd.
3
Place where the Annual Report can be obtained: Office of the Board of Directors of the Company
vi. Other relevant information:
Date of First Registration: 15 December 1997
Date of change of registration: 26 December 2012
Place of initial registration: 21 Jianghan Road, Jianghan District, Wuhan City
Place of registration changed to: 933 Jianshe Road, Jianghan District, Wuhan City
Unified Social Credit Code: 91420100300248067P
Name of domestic accounting firm engaged: Union Power Certified Public Accounts (Special General
Partnership)
Office address: F/2-9, Donghu Road, Wuchang District, Wuhan City
vii. This report is prepared in both Chinese and English. The Chinese version shall prevail in case of any
discrepancy between the two versions.
2019 Annual Report of Hankou Bank Co., Ltd.
5
Chapter III Summary of Accounting & Business
Data
I. Major Financial Data for the Reporting Period
(Unit: RMB1,000)
Item Consolidated Parent Company
Total profits (before tax) 2,076,681 2,019,903
Net profit attributable to common shareholders of the Company 2,416,842 2,362,902
Net profit attributable to common shareholders of the Company
with deduction of non-recurring profit and loss 2,213,308 2,161,836
Profit from principal operation 2,062,961 2,004,965
Operating profit 2,080,038 2,023,222
Profit from other operations 17,077 18,257
Investment income 1,227,191 1,227,191
Net non-operating income/expenses -3,357 -3,319
Net cash flows from operating activities 35,160,127 35,816,711
Net increase in cash and cash equivalents 15,758,041 15,827,747
Notes: 1. The non-recurring profit and loss are recognized and calculated in accordance with the Announcements for the Explanation
on the Information Disclosure by Companies that Offer Securities to the Public No.1-Non-recurring Gain and Loss (Announcement
No. 43 of China Securities Regulatory Commission (CSRC) in 2008).
2. Non-recurring profit and loss during the reporting period are presented below:
(Unit: RMB1,000)
Non-recurring profit and loss Consolidated Parent Company
2019 Annual Report of Hankou Bank Co., Ltd.
6
Non-recurring profit and loss Consolidated Parent Company
Gains/losses on disposal of non-current assets, including the offset
part of allowance for impairment losses on assets set aside 97 95
Government subsidy recognized in the current profit or loss,
excluding the government subsidy closely relating to the
Company's normal business operation, complying with national
policies and enjoyed by the Company at a fixed amount or
quantity according to certain standards
6,951 6,635
Amounts recovered in current year on the assets written off in
previous years 272,839 266,847
Other non-operating income and expenses -3,357 -3,319
Income tax effects of non-recurring gains or losses 70,767 69,192
Net non-recurring profit and loss 205,764 201,066
Less: net effect of non-recurring profit and loss attributable to
minority shareholders (after tax) 2,231 0
Non-recurring profit and loss attributable to common
shareholders of the Company 203,534 201,066
II. Major Accounting Data and Financial Indicators for the Three Years before
the End of the Reporting Period
(Unit: RMB1,000)
Item
Consolidated Parent Company
2019 2018 2017 2019 2018 2017
Operating income 6,472,600 6,076,107 5,802,988 6,334,879 6,030,548 5,763,219
Net profit attributable to
common shareholders of
the Company
2,416,842 1,891,963 1,691,224 2,362,902 1,902,528 1,688,504
Net profit attributable to
common shareholders of
the Company with
2,213,308 1,841,902 1,633,975 2,161,836 1,852,707 1,632,037
2019 Annual Report of Hankou Bank Co., Ltd.
7
Item
Consolidated Parent Company
2019 2018 2017 2019 2018 2017
deduction of
non-recurring profit and
loss
Total assets 405,739,564 319,295,909 281,077,036 405,041,970 318,471,383 280,077,198
Total liabilities 383,891,723 299,253,630 263,070,054 383,307,789 298,501,765 262,163,626
Shareholders’ equity 21,847,841 20,042,279 18,006,982 21,734,181 19,969,618 17,913,571
Net cash flows from
operating activities35,160,127 12,718,627 26,286,307 35,816,711 13,037,621 26,121,571
Basic earnings per share 0.59 0.46 0.41 0.57 0.46 0.41
Net assets per share 5.29 4.86 4.36 5.27 4.84 4.34
Net cash flows from
operating activities per
share (RMB)
8.52 3.08 6.37 8.68 3.16 6.33
Note: Relevant indicators are calculated in accordance with Article 21 of the Standards for Content and Format of Information
Disclosure by Companies Offering Securities to the Public No.2: Content and Format of Annual Report (2017 Revision) and the
provisions under the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.9: Calculation
and Disclosure of Return on Equity and Earnings per Share (2010 Revision). Where, basic earnings per share = P0÷S, S=S0+S1+
Si×Mi÷M0– Sj×Mj÷M0-Sk
Where: In the equation, P0 denotes the net profit attributable to the common shareholders or the net profit excluding non-recurring
items attributable to the common shareholders; S denotes the weighted average number of common shares outstanding; S0 denotes the
total number of shares at the beginning of the period; S1 denotes the increased shares as a result of recapitalization of public reserve
fund or the allotment of stock dividends during the reporting period; Si denotes the increased shares as a result of issue of new shares
or debt-for-equity swap during the reporting period; Sj denotes the decreased shares due to repurchase during the reporting period; Sk
denotes the number of shares downsized during the reporting period; M0 denotes the number of months of the reporting period; Mi
denotes the accumulative number of months from the next month of increase of shares to the end of the reporting period; Mj denotes
the accumulative number of months from the next month of reduction of shares to the end of the reporting period.
III. Return on Equity and Earnings per Share
Consolidated
Item Profit for the Weighted average Basic earnings per Diluted earnings per
2019 Annual Report of Hankou Bank Co., Ltd.
8
reporting period
(RMB1,000)
ROE (%) share (RMB yuan) share (RMB yuan)
Net profit attributable to
common shareholders of the
Company2,416,842 11.55 0.59 0.59
Net profit attributable to
common shareholders of the
Company with deduction of
non-recurring profit and loss
2,213,308 10.58 0.54 0.54
Parent Company
Item
Profit for the
reporting period
(RMB1,000)
Weighted average
ROE (%)
Basic earnings per
share (RMB yuan)
Diluted earnings per
share (RMB yuan)
Net profit attributable to
common shareholders of the
Company
2,362,902 11.31 0.57 0.57
Net profit attributable to
common shareholders of the
Company with deduction of
non-recurring profit and loss
2,161,836 10.35 0.52 0.52
Note: Relevant indicators are calculated in accordance with the provisions in the Compilation Rules for Information Disclosure by
Companies Offering Securities to the Public No. 9: Calculation and Disclosure of Return on Equity and Earnings per Share (2010
Revision).
IV. Supplementary Financial Data for the Three Years before the End of the
Reporting Period
(Unit: RMB1,000)
ItemConsolidated Parent Company
2019 2018 2017 2019 2018 2017
2019 Annual Report of Hankou Bank Co., Ltd.
9
Total liabilities 383,891,723 299,253,630 263,070,054 383,307,789 298,501,765 262,163,626
Total deposits 250,341,491 202,019,724 175,765,692 249,303,848 201,051,872 174,880,342
Due to banks and
other financial
institutions
1,850,576 1,504,290 1,625,404
1,850,576
1,504,290 1,625,404
Total loans 172,611,177 137,188,020 114,916,650 171,943,350 136,563,754 114,381,736
Notes: 1. Total deposits include savings deposits, corporate deposits, margin deposits, remittances outstanding and temporary deposits,
principal-guaranteed wealth management liabilities (principal-guaranteed wealth management was cleared to zero upon maturity at the
end of 2019) and large-value certificates of deposit issued;
2. Total loans include personal loans, corporate loans, discounts, import & export bill advances, trade finance, advances and
overdue loans.
V. Supplementary Financial Indicators for the Three Years before the End of the
Reporting Period
(In %)
ItemRegulatorystandard
Consolidated Parent Company
2019 2018 2017 2019 2018 2017
Capital adequacyratio
≥10.5% 13.31 13.60 12.80 13.26 13.57 12.69
Liquidity ratioRMB
≥25% 103.46 76.13 59.73 103.27 76.10 59.72
Foreign currency≥60% 208.30 174.22 127.57 208.30 174.22 127.57
Loan-to-depositratio RMB 68.48 66.69 64.81 68.50 66.70 64.83
Foreign currency 95.11 69.74 42.43 95.11 69.74 42.43
Percentage ofinter-bankplacementsBorrowing
≤4%0.74 0.74 0.92
0.740.75 0.93
Lendings to banksand other financialinstitutions
≤8%2.16 0.25 0.18
2.170.25 0.18
NPL ratio ≤5% 1.75 2.11 2.14 1.75 2.10 2.13
2019 Annual Report of Hankou Bank Co., Ltd.
10
ItemRegulatorystandard
Consolidated Parent Company
2019 2018 2017 2019 2018 2017
Percentage ofloans to singlelargest customer
≤10% 6.80 6.72 6.04 6.84 6.76 6.08
Provision coverageratio
≥150% 194.23 158.23 176.17 194.38 158.71 176.54
Cost-to-incomeratio 34.34 34.04 34.30 34.61 33.86 34.09
Return on assets 0.67 0.63 0.69 0.65 0.64 0.69
Return on capital 11.55 9.89 9.72 11.33 10.04 9.73
Leverage ratio ≥4% 5.03 5.90 5.59 5.01 5.88 5.56
Net tier-1 capital(RMB1,000) 21,826,695 20,013,663 17,886,362 21,639,804 19,882,576 17,734,536
Balance ofconsolidated assetson and off thebalance sheet(RMB1,000)
434,033,201 338,960,513 320,256,589 432,275,595 338,079,044 318,997,845
Notes: 1. The above indicators except return on assets and return on capital are calculated on the basis of year-end balances. Return on
assets = Net profit/[(total assets at the beginning of the period + total assets at the end of the period)/2], and return on capital = Net
profit/[(net assets at the beginning of the period + net assets at the end of the period)/2];
2. NPL ratio = (Substandard loans + doubtful loans + loss loans)/loan balance;
3. Calculated capital adequacy ratios in accordance with the Regulation Governing Capital of Commercial Banks (Provisional);
4. Percentage of loans to single largest customer = Balance of loans to single largest customer/net capital;
5. For the loan-to-deposit indicator, the denominator “deposits” is calculated under the statistical approach of the credit receipts
and payments table of the People’s Bank of China, including corporate and personal principal-guaranteed wealth management
liabilities; and the numerator is the original value of loans not deducting the allowance for impairment losses on loans.
6. Leverage ratio, net tier-1 capital and balance of consolidated assets on and off the balance sheet are disclosed under the
Measures for Management of Leverage Ratio of Commercial Banks (Revised) (CBRC [2015] No. 1 Decree).
VI. Changes in Shareholder’s Equity during the Reporting Period
(Unit: RMB1,000)
Consolidated
2019 Annual Report of Hankou Bank Co., Ltd.
11
ItemShare
capital
Capital
reserve
Other
comprehensive
income
Surplus
reserves
General
reserve
Retained
profit
Minority
interests
Total
shareholders’
equity
Beginning
balance 4,127,846 3,259,204 364,218 1,569,803 4,203,355 6,461,342 56,511 20,042,279
Increase
during the
period0 1,167 0 236,290 781,045 945,444 0 1,963,946
Decrease
during the
period0 0 144,276 0 0 0 14,107 158,384
Ending
balance 4,127,846 3,260,371 219,941 1,806,093 4,984,400 7,406,786 42,404 21,847,841
(Unit: RMB1,000)
Parent Company
ItemShare
capital
Capital
reserve
Other
comprehensive
income
Surplus
reserves
General
reserveRetained profit
Total
shareholders’
equity
Beginning
balance 4,127,846 3,258,594 364,218 1,569,803 4,203,355 6,445,802 19,969,618
Increase
during the
period0 0 0 236,290 781,045 891,505 1,908,839
Decrease
during the
period0 0 144,276 0 0 0 144,276
Ending
balance 4,127,846 3,258,594 219,941 1,806,093 4,984,400 7,337,307 21,734,181
Note: Changes in the shareholders’ equity are mainly due to the increase of profit during the reporting period, the changes in the fair
value of the available-for-sale financial assets and the withdrawal of general reserve.
VII. Composition of Capital and Its Changes
(Unit: RMB1,000)
2019 Annual Report of Hankou Bank Co., Ltd.
12
Item
Consolidated Parent Company
2019 2018 2019 2018
Net capital
Net core tier-1 capital 21,825,403 20,012,176 21,639,804 19,882,576
Net tier-1 capital 21,826,695 20,013,663 21,639,804 19,882,576
Total net capital 29,405,445 26,702,732 29,209,203 26,561,713
Credit risk weighted assets
On-balance-sheet risk weighted assets 193,508,229 172,586,998 193,015,954 172,044,293
Off-balance-sheet risk weighted assets 15,406,870 12,928,415 15,406,870 12,928,415
Total credit risk weighted assets: 208,915,100 185,515,412 208,422,825 184,972,708
Market risk weighted assets 556,703 252,871 556,703 252,871
Operational risk weighted assets 11,421,716 10,625,549 11,283,476 10,553,443
Total risk weighted assets beforeapplication of capital bottom line: 220,893,518 196,393,832 220,263,003 195,779,022
Total risk weighted assets after applicationof capital bottom line: 220,893,518 196,393,832 220,263,003 195,779,022
Core tier-1 capital adequacy ratio (%) 9.88 10.19 9.82 10.16
Tier-1 capital adequacy ratio (%) 9.88 10.19 9.82 10.16
Capital adequacy ratio (%) 13.31 13.60 13.26 13.57
Note: The capital adequacy ratio, tier-1 capital adequacy ratio and core tier-1 capital adequacy ratio are calculated according to the
Regulation Governing Capital of Commercial Banks (Provisional).
VIII. Liquidity Coverage Ratio at the End of the Period
Item Consolidated Parent Company
2019 Annual Report of Hankou Bank Co., Ltd.
13
Liquidity coverage ratio (%) 182.58 180.24
Eligible high-quality liquid assets (RMB1,000) 58,238,033 58,232,262
Ending value of net cash outflows over the next
30 days (RMB1,000)31,898,025 32,307,465
2019 Annual Report of Hankou Bank Co., Ltd.
14
Chapter IV Report of the Board of Directors
I. Management Discussion and Analysis
i. Business review during the reporting period
1. Scope of principal operations
Principal operations of the Company are deposits taking, extension of short, medium and long-term loans, domestic
settlement, bill discounting, issuance of financial bonds, commissioned issuance, honoring and underwriting of
government bonds, trading over government bonds, interbank lending, provision of security, agency
collection/payment and insurance, provision of safety deposit box services, entrusted deposits and loans on behalf
of local public finance, foreign exchange deposits, foreign exchange loans, foreign exchange remittance, foreign
currency conversion, foreign exchange guarantee, credit reference, inquiry and witness services, international
settlement, interbank foreign exchange lending, foreign exchange settlement, foreign exchange sales, foreign
exchange trading on its own behalf and as an agent, foreign exchange borrowings, trading or agency trading over
non-stock foreign currency securities, policy-related housing finance services, and other services approved by the
CBIRC Hubei Office and the State Administration of Foreign Exchange.
2. Performance review during the reporting period
In 2019 with economic and financial complexities and tough market environment, the Bank overcame difficulties
under self-inflicted pressure according to the work plan that “take leading peers as benchmark, fighting three tough
battles”, delivering good results based on the high comparison level in 2018.
2.1 Fulfillment of operating targets across the Bank
At the end of 2019, the Bank’s total assets reached RMB405,042 million, an increase of RMB86,571 million or
27.18% over the previous year. The balance of deposits amounted to RMB249,304 million1, an increase of
RMB48,252 million or 24.00% over the previous year. The balance of loans amounted to RMB171,943 million, an
increase of RMB35,380 million or 25.91% over the previous year. The balance of net assets totaled RMB21,734
million, an increase of RMB1,765 million or 8.84% over the previous year.
In 2019, the Bank reported a net profit of RMB2,363 million, an increase of RMB460 million or 24.20% over the
previous year.
Accumulated intermediary business income registered RMB963 million, accounting for 15.20% of net operating
income.
As at the end of the reporting period, the balance and ratio of non-performing loans were RMB3,003 million and
1.75% respectively. Provision coverage ratio was 194.38%, better than regulatory standard.
2.2 Progress was made in the transition from old to new growth drivers
1 According to the PBOC statistical criteria, the balance of deposits at the end of 2018 included RMB13.2 billion of principal-guaranteed wealthmanagement products. The accounting firm restated them in “financial liabilities designated at fair value through profit or loss”. At the end of 2019, thebalance of principal-guaranteed wealth management products was cleared to zero.
2019 Annual Report of Hankou Bank Co., Ltd.
15
The corporate customer base was restructured vigorously. The number of trade finance customers grew by 178%
year-on-year. 77 supply chain projects were implemented in the year, with the first ever independent lead
underwriting deal accomplished and the first residential mortgage-backed security (RMBS) successfully issued.
Investment banking, trade finance, transaction banking, wealth management and credit card business were
developed with vigor, pushing intermediary business income up by 35% year-on-year. The Bank worked hard to
address regional imbalance in development and structural imbalance in business, with a focus on major business
areas and weaker fields of management, such as quality and compliance.
2.3 The way of serving the real economy was increasingly enriched.
The Bank served major government strategies, cumulatively granting RMB231.3 billion of credits, on or off
balance sheet, and held RMB21,547 million of local government bonds with a focus on high-quality development
areas in Hubei and the “Two Points” positioning of Chongqing. In serving emerging industries, the Bank became
the first banking lender to the PPP project of the Wuhan National Aerospace Industry Base, extended integrated
credit to Yangtze Memory Technologies Co., Ltd. and supported 35 major investment promotion projects. In
serving the private-sector economy, the Bank took actions to serve private enterprises with financial services and
introduced measures to improve the business environment. The balance of loans to private enterprises increased by
RMB10,231 million over the beginning of the year. The Bank’s case of serving the private-sector real economy
won the first prize for excellent cases awarded by the Asian Financial Cooperation Association. In serving poverty
alleviation, the Bank carried out financial service-based precision poverty alleviation with vigor and further
performed its duty. The Bank’s balance of precision poverty alleviation loans was RMB362 million, up 31.49%
from the beginning of the year.
2.4 The pursuit of innovation-driven development yielded new results
In terms of technology finance, the Bank developed the “STAR IPO Loan” for seeded enterprises for the Star
Market of Shanghai Stock Exchange. A total of 40 STAR seeded enterprises in Hubei were served, including the
enterprise supported by the first “venture loan” in China’s banking industry that successfully went public on the
STAR Market. In terms of MSE finance, an innovative integrated inclusive finance business system was launched,
with nearly 4,000 new customers added and over RMB1 billion of new loans granted, achieving the “Two Increases,
Two Curbs” regulatory targets. In terms of Internet finance, 30 Internet finance innovations were introduced,
bringing personal financial assets in direct banking to a level beyond RMB10 billion. In terms of everyday financial
services, the Bank strengthened “Financial Plus” everyday, government and consumer services by rolling out over
30 everyday financial products. In terms of services for the 7th CISM Military World Games, the Bank enhanced
support during key time intervals and at major outlets during the event, including online customer service
representatives and offline “bilingual” guides at outlets, extending service recipients to players, staff, volunteers
and foreign guests to the Games.
2.5 Comprehensive risk management took on a new look
In the battle for asset quality enhancement, a multi-level supervision mechanism was implemented to monitor
organizations, people and projects according to plan and schedule. In the battle for compliance, a register focused
on “three fields, one priority” was established, “account closure” management was carried and the “troubleshooting
project” as advanced to crack down on non-compliances. In terms of building the comprehensive risk management
2019 Annual Report of Hankou Bank Co., Ltd.
16
system, the new-generation credit risk management system development was accelerated.
2.6 IT development made new progress
The three-year plan for FinTech of the Bank was further implemented. The leading group on major information
system projects was established to ensure major projects are completed to schedule and quality criteria. FinTech
penetration into business was carried out continuously to boost business innovation. The online supply chain
platform, the MSE inclusive finance system and the integrated investment banking platform were built successively
in 2019. The existing big data platform was further exploited to provide decision-making support for customer
acquisition and marketing. The Bank’s data governance system began to reap the harvest. The Data Governance
Committee and the working group on data governance were established to promote fine-grained implementation of
all data governance work. The Internet security was enhanced through increasingly strengthened top-level design of
information security, and certified for ISO 27001. The information security system was comprehensively enhanced.
The dynamic security protection platform and the threat intelligence analysis platform were imported. As at the end
of 2019, the Bank had 127 IT staff, representing 3.1% of total headcount. The Bank spend RMB159 million in
information technology this year.
2.7 The foundation of operation and management was further reinforced.
Corporate governance was improved, with the Board of Directors, the Board of Supervisors and the senior
management re-elected. Another round of share capital increase was advanced. The quality and efficiency of
swindle prevention work were enhanced, with the responsibility for swindle prevention well assigned to
management personnel at each level and coordinated efforts made on annual key work on swindle prevention.
Bank-wide safety and stability were assured by formulating contingency plans against some bank risk incidents,
nipping problems in the bud and strengthening market monitoring. The “wartime” mechanism requirement was
implemented for the 7th CISM Military World Games. The Bank strengthened team building and sent young
officers to branches and sub-branches on secondment to strengthened their leadership staffing.
2.8 Development led by Party building went deeper
The Bank carried out the “Staying True to Our Founding Mission” themed education program and a range of
required activities, including studies, surveys, topical Party classes and topical democratic meetings under the
guiding principle of studying and implementing the Xi Jinping Thought on Socialism with Chinese Characteristics
for a New Era. The Bank cemented the outputs of the “Year of Development Led by Party Building” program,
increased the depth of “Party Building Plus”, improved the primary-level Party building assessment measures and
built the “Red Smelter” of amateur Party schools. To further improve Party conduct and uphold integrity, a conduct
supervision group was established to cement the outcomes of strict bank governance. The total-process
accountability mechanism for credit business was improved to further enforce accountability for credit
non-compliances.
3. Operation of main businesses
3.1 Corporate banking
3.1.1 Corporate business
2019 Annual Report of Hankou Bank Co., Ltd.
17
During the reporting period, the Bank deepened the philosophy of “serving you with idea” in line with the
regulatory orientation and stayed true to its principal responsibility and business. By serving the real economy,
broadening the mind, enhancing professional capabilities, boosting development vitality and promoting business
transformation, the Bank managed to make solid progress in high-quality development. SME financial services
achieved the “Two Increases, Two Curbs” regulatory targets. The Bank strictly abided by the rules for “Two Bans,
To Restrictions”, “Seven Nos” and “Four Opens”, provided strong support for the development of private MSEs
and established Hankou Bank’s financial service system supporting SME development.
(1) Corporate deposits: As at the end of the reporting period, the balance of the Bank’s corporate deposits reported
RMB160,639 million, an increase of RMB27,821 million or 20.95% over the beginning of the year.
(2) Corporate loans: As at the end of the reporting period, the balance of the Bank’s corporate loans reported
RMB127,857 million, an increase of RMB26,263 million or 25.85% over the beginning of the year. Among those,
the balance of loans to small and micro enterprises reached RMB38,708 million, an increase of RMB5,291 million
or 15.83% over the beginning of the year.
(3) International banking: As at the end of the reporting period, the Bank reported an international settlement
volume of USD2,423 million, an increase of USD229 million or 10.41% over the beginning of the year.
(4) Intermediary business income: As at the end of the reporting period, the Bank generated an intermediary
corporate business income of RMB462 million, an increase of RMB125 million or 37.14% year-on-year.
3.1.2 Investment banking
During 2019, the Bank adhered to the economic and financial policies. The investment banking business returned
to the original mission of serving the real economy, working as an engine for transformation of corporate business.
They adhered to the development path of “light capital, pursuit of reform, and strict risk management”. It continued
to innovate services and products, enriched service methods, enhanced the capability of post-investment risk
prevention, and effectively and efficiently promoted collaboration with multiple lines in the Bank.
As at the end of the reporting period, balance of investment banking assets stood at RMB33.7 billion. RMB11.6
billion of financing was granted in the year and balance of investment banking assets rose by RMB3.3 billion.
Financing under debt financing plans stood at RMB5.13 billion, ranking first across Hubei Province. The Bank
underwrote 21 debt financing instruments as lead underwriter in the year, ranking third province-wide, and
underwriting shares amounted to RMB6.51 billion, ranking eighth province-wide and up RMB1.46 billion from the
previous year. 395 bonds were distributed with an aggregate value of RMB35 billion, the highest across Hubei
Province.
(1) Adhering to product innovation
During the reporting period, the Bank issued RMB3,511 million of residential mortgage-backed security (RMBS).
Its successful issuance helped expand the Bank’s sources of funding, accelerate turnover of credit funds and
optimize allocation of resources across the Bank.
(2) A number of “first-of-its-kind” lead underwriting deals were accomplished
During the reporting period, the Bank issued the 2019 commercial paper of Wuhan Municipal Construction Group
2019 Annual Report of Hankou Bank Co., Ltd.
18
Co., Ltd. as independent lead underwriter for the first time. Subsequently the commercial paper of Hongshan City
Construction Investment, the super-short-term commercial paper of Tus Environmental, the super-short-term
commercial paper of Humanwell Healthcare and the super-short-term commercial paper of Jointown
Pharmaceutical, for which the Bank served as independent lead underwriter, were registered and issued. These
independent lead underwriting deals marked a new milestone in the Bank’s capability of “solicitation, undertaking
and underwriting” in the lead underwriting business.
(3) New channels were developed for non-standard business
In 2019, the Bank successfully had a number of peer institutions participate in a RMB1,615 million debt financing
plan registered and issued by it. The project served customers of the Bank, generated light-capital income and
pointed to a new direction of investment banking development.
3.2 Retail banking
3.2.1 Overview
During the reporting period, the Bank continued to foster the “neighborhood finance” brand, carried forward the
local “neighborhood culture” under the traditional Chinese philosophy that “a far-off relative is not as helpful as a
near neighbor” and built an online-offline integrated service system featuring “hearty finance” and “neighbor
service”. The Bank furthered the social security card-based inclusive finance services, tapped deep into distinctive
community banking services and launched a wide variety of innovative “Jointown” series products. Retail banking
maintained good momentum of growth, showing continuous improvements in professional value and regional
competitiveness. “Neighborhood finance” and “Jointown” brands became increasingly influential in market.
3.2.2 Personal financial assets
The Bank adapted itself to customers’ demand for diversity of financial assets and met their wealth management
needs in terms of earning, liquidity and safety. By improving business structure and attracting target customers, the
Bank steadily expanded the size of personal financial assets. At the end of 2019, personal financial assets grew by
24.78%, with a three-year compound annual growth rate of over 18%. The Bank continued to enhance its deposit
taking capacity by providing distinctive products and services, maintaining stable growth in savings deposits. The
balance of savings deposits grew by 29.85%. The balance of principal-guaranteed wealth management products
were reduced to zero.
3.2.3 Personal consumption loans
The Bank integrated online and offline development of personal consumer loans to serve the diverse consumer
needs. The Bank implemented the real estate regulation policy of the State, strictly implemented the differentiated
housing credit policy and gave priority to the needs of first-time homebuyers while supporting the loan demand of
home upgraders and curbing speculative trading in housing market. LPR was steadily applied to residential
mortgages. The Bank developed online high-quality channels for cooperation, enriched online business varieties,
enhanced fine-grained operation and management and enhanced online service capacity. The Bank issued the
RMB3,511 million Jointown 2019 Residential Mortgage-Backed Security Tranche I, in a bid to increase the return
on asset operation, liquidize remnant assets and improve the credit structure. At the end of 2019, personal
consumption loans grew by 35.57%.
2019 Annual Report of Hankou Bank Co., Ltd.
19
3.2.4 Credit cards
The Bank continued to improve the credit card business structure, carried out business innovation, diversified
customer acquisition channels and kept enhancing the service capacity. Under the “micro and decentralized”
principle of credit card business, the Bank made solid moves in marketing toward “demand depositors” and
developed distinctive credit card installment facilities. As at the end of 2019, credit card overdrafts grew by
35.27%.
3.2.4 Debit cards
The Bank attached importance to reinforcing the foundation of debit card business, upgrading payment channels
and fostering a secure and convenient environment for debit card users. Such special customer groups as social
security card holders, Jointown co-branded card holders and Jointown themed card holders were expanded
vigorously to win broad market recognition. At the end of 2019, the total number of debit cards issued grew by
8.68%.
3.2.5Entrusted loans under housing provident funds
The Bank implements the local and national policies on entrusted loans under housing provident funds, persistently
regards entrusted loans under housing provident funds as a service for people’s wellbeing, introduces innovative
service models, improves business processes, enhances improves the quality and efficiency of service to boost its
market position. As at the end of 2019, the balance of entrusted loans under housing provident fund grew by 84.3%.
3.3 Financial market business
3.3.1 Main operating results
During the reporting period, the Bank’s financial market business was sound and developed in compliance with
regulations. While continuing to develop bond investment, interbank investment, wealth management agency,
foreign exchange, bills, etc., the Bank also integrated market channel resources, optimized the structure of assets
and liabilities, and strengthened internal control & compliance efforts. In the complex and ever-changing financial
market environment, the Bank ensured continuous improvement in operating capacity and market influence.
(1) Treasury operation
During the reporting period, the Bank recorded RMB4.53 trillion in pledge-type repurchases and RMB3.52 trillion
in spot bond transactions. It won such awards and honors as Top 300 Interbank RMB Market Dealers 2019, Active
Dealers in the Interbank RMB Market, ChinaBond Excellent Proprietary Trader, ChinaBond Excellent Market
Making Settlement Agency for Treasury Bonds, ChinaBond Excellent Market Making and Settlement Agency for
Local Government Bonds and ChinaBond Outstanding Contributor to Collateral Business.
(2) Asset management business
At the end of the reporting period, the Bank registered RMB55,796 million in balance of proprietary wealth
management products, down RMB136 million or 0.24% year-on-year.
(3) Bills business
2019 Annual Report of Hankou Bank Co., Ltd.
20
During the reporting period, the Bank registered nearly RMB1 trillion in bills financing, making itself a vibrant city
commercial bank in the bills market. Through imposing control at both front and middle offices, reasonably
arranging the business operation strategy and harnessing the role of Bills Appraisal Committee, the Bank ensured
scientific and complying major decisions under the guiding principle of “Shared Wisdom and Joint Risk
Identification” and in pursuit of sustained, steady business development and transformation. The Bank maintained
the record of six zeros (zero case, zero incident, zero fake bill, zero non-performing asset, zero advance and zero
penalty). In 2019, nearly ten major product series were launched, including “Discounting-Counter-discounting
Link”, “Discounting-Rediscounting Link”, “Bills ABS” and “Treasury Link”, running across the primary,
secondary and tertiary bills markets. Corporate customers and financial institutions were provided with a wide
variety of multi-tiered bills services.
3.4 Characteristic businesses -- technology finance
3.4.1 Operating results
As of the end of the reporting period, the Bank had served 2,713 high-tech firms, including 518 credit customers.
The balance of on- and off- balance sheet credits to high-tech enterprises stood at RMB27,974 million. Specifically,
the balance of on-balance-sheet loans (including discounted bills) to high-tech enterprises reached RMB17,398
million, an increase of RMB6,632 million or 61.6% over the beginning of the year. Technology finance made
breakthroughs, giving stronger impetus and support for the Bank’s business transformation.
3.4.2 Business development initiatives
(1) The action plan for the “Hundred, Thousand and Ten Thousand” Hi-tech Program was further implemented. The
three project pipelines (basic, select and core) were established, putting focus on enterprises in the strategic
emerging industries, participants in the “venture loan” program and capital market players. 443 enterprises were
added to the high-tech customer base in the year. As of the end of the reporting period, 71 of Hubei-based listed
companies were customers of the Bank. All the five Hubei applicants for listing on the STAR Market were
customers of the Bank.
(2) The technology finance business system was strengthened. Asset allocations to strategic emerging industries
were strengthened in the exploration for transforming to an asset trading bank. The Bank advanced the reform and
innovation in the technology finance system to improve the performance assessment and staff development policies
for technology finance. The banker-investor-business starter matchmaking business was strengthened under the
“venture loan” program to further improve the cooperation mechanism for technology finance channels.
(3) The research and development of new products were strengthened. The Bank approached government agencies
and capital markets, launched such innovative products as “STAR Listing Loan” and “Proportional Re-guarantee”
to meet the particular financing needs of high-tech businesses in different life stages and enterprises applying for
listing. These products enriched the Bank’s methods to foster high-tech enterprises and serve seeded enterprises for
listing.
3.5 Distribution channels
The Bank rendered products and services through a variety of channels which mainly consist of physical outlets
and e-banking means.
2019 Annual Report of Hankou Bank Co., Ltd.
21
3.5.1 Physical outlet channels
(1) Establishment of institutions
As at the end of the reporting period, the Bank had established 181 institutions, including the Banking Department
of the Head Office, 15 branches, one sub-branch directly under the Head Office, 16 tier-1 sub-branches, two
specialized institutions and 146 tier-2 sub-branches (27 of which were community sub-branches). So far, the Bank
had its outlet layout almost cover the entire Hubei Province and set up a branch in Chongqing.
(2) New institutions and changes in existing ones
During the reporting period, the Bank established eight institutions in total, among which one branch and two
sub-branches were sub-branches beyond Wuhan and five sub-branches in Wuhan. During the reporting period, the
Bank established Suizhou Branch, Shiyan Shanghai Road Sub-branch and Xianing Xian’an Sub-branch outside
Wuhan, and established Shuguang Xingcheng Sub-branch, Yuanlin Road Sub-branch, Yongqing Sub-branch, Youyi
Road Sub-branch and Taizihu Sub-branch in Wuhan.
3.5.2 E-banking channels
(1) Operating results
As at the end of the reporting period, personal Internet banking customers reached 2,126,100, an increase of
17.92%; mobile banking customers reached 2,028,500, an increase of 19.78%; corporate Internet banking
customers reached 57,300, an increase of 5.72%; and new direct banking customers increased by 262,700. The
transaction volume of e-banking reached RMB2.18 trillion, an increase of 12.37%. In the year, the replacement rate
of counter-based transactions by e-banking arrived at 92.51%. There were 1,179 self-service equipment across the
Bank, 119 units more than the beginning of the year. The Bank established a total of 191 self-service banks, an
increase of three over the beginning of the year. Intelligent equipment at outlets recorded 126.09 transactions a day
on average, up 64.93% year-on-year. 833,000 passbook-based cash withdrawals were made on self-service
equipment, accounting for 52.57% of total passbook-based cash withdrawals, up 24.69% year-on-year.
(2) Channel innovation
First, online financial services were deepened to accelerate Internet banking transformation. 20 innovations were
completed in E-channel and Internet finance, with the versions of personal Internet banking, mobile banking and
direct banking updated 28 times. Both quantity and quality of mobile banking customers were improved. As of the
end of the reporting period, the customers with effective changes in balance of mobile banking accounts saw
year-on-year growth of 19.95% in number of transactions, or 39.62% in value of transactions. Direct banking
recorded over RMB10 billion in personal financial assets, maintaining high-quality growth.
Second, business innovation and upgrading gained pace and core competitiveness of channels was enhanced.
Mobile banking and direct banking were remodeled to optimize business processes. Mobile banking and direct
banking were integrated. The new version of mobile banking allows trusted login to the direct banking APP. The
mobile number-based payment project was completed. Application scenarios were actively developed to attract user
traffic. The mobile traffic fine payment service was launched.
Third, business scenarios were enriched to expand the everyday finance market. Based on the electronic social
2019 Annual Report of Hankou Bank Co., Ltd.
22
security cards, the Bank entered local social security markets to increase deposits from social security agencies and
also expand the individual customers and corporate customers through pharmacies. The Bank partnered with China
UnionPay in the QuickPass-based marketing. 27,000 effective users of UnionPay APP were added to the customer
base, expanding the sources of intermediary service income. The online housing provident fund withdrawal service
was promoted. Direct banking rolled out nine new services, including transfer and withdrawal by home-buying
railway workers, withdrawal for commercial loan repayment and withdrawal under hybrid loan, pushing the
housing provident fund withdrawals up by 240% year-on-year. The unconscious pay parking scenarios were
developed, covering 64 Park & Ride parking areas. The Bank competed for the education and training tuition
collection market, achieving nearly RMB100 million in tuition collection service.
Fourth, smart outlet development was advanced. 16 outlets completed the upgrading of their intelligent
equipment-based service areas. The intelligent equipment systems were improved. 49 new features went online and
63 programs were optimized in the year The Bank accelerated the upgrading of self-service passbook-based
withdrawal features at outlets and enhanced the elderly customer service capability. Passbook-based withdrawals
increased by 24.69% year-on-year in Wuhan. The social security self-service process was optimized. 366,700
third-generation social security cards were issued through intelligent equipment and self-service card replacement
machines, representing a substitution ratio of 71.81%.
Fifth, the Bank strictly prohibited crossing the line for compliance and strengthened channel risk control. The
E-banking policies and procedures were improved to enhance compliance of business and standardize the risk
prevention and control for incremental business. Business continuity drills were conducted for all E-banking
channels. Business risk training was intensified.
4. Categories of principal operation income
(Unit: RMB1,000)
Income category
Amount during the reporting period
Consolidated Parent Company
Loan interest income6,428,926 6,380,126
Interest income from due from central banks381,665 380,410
Interest income from interbank business (including due
from banks and other financial institutions, assets
purchased under resale agreements and placements)850,966 849,457
Bond investment income (including interest income,
spread income and dividends during the holding period) 6,333,403 6,237,023
Interest income from principal-guaranteed wealth
management products 298,827 298,827
2019 Annual Report of Hankou Bank Co., Ltd.
23
Income category
Amount during the reporting period
Consolidated Parent Company
Fee and commission income963,520 963,497
Total15,257,307 15,109,341
5. Market shares of main products or services
According to the statistics in RMB terms from the Operation Management Department of Wuhan Branch of the
People’s Bank of China, at the end of 2019, the Bank accounted for 9.49% of the total RMB deposits in Wuhan,
ranking third in the banking industry. Specifically, the Bank’s market share in the corporate deposit segment was
7.74%, ranking fourth; the market share in the savings deposit segment was 8.78%, ranking fifth. The Bank
accounted for 5.02% of the total RMB loans in Wuhan, ranking the seventh. The market share in the corporate loan
segment was 3.72%, ranking ninth; the market share in discounting segment was 32.99%, ranking first; and the
market share in personal loan market segment was 4.24%, ranking eighth.
ii. Analysis of financial position and operating results during the reporting period
1. Changes in major financial indicators and reasons
(Unit: RMB1,000)
Item
Consolidated Parent Company
Main reason31 December
2019
31December2018
Change31 December
2019
31December2018
Change
Total assets 405,739,564 319,295,909 27.07% 405,041,970318,471,383
27.18%
Increase in loans
and investments
Total liabilities 383,891,723 299,253,630 28.28% 383,307,789 298,501,765 28.41% Increase in deposits
Shareholders’
equity 21,847,841 20,042,279 9.01% 21,734,18119,969,618
8.84%
Increase in net
profit
Total profit 2,076,681 1,715,761 21.04% 2,019,9031,737,377
16.26%
Increase in
operating income
Net profit 2,418,902 1,882,378 28.50% 2,362,9021,902,528
24.20%
Increase in
operating income
2. Items with 30% or more changes in the financial report and reasons
2019 Annual Report of Hankou Bank Co., Ltd.
24
(Unit: RMB1,000)
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
Assets:
Depositswith banks andother financialinstitutions
2,279,318 1,072,991 112.43% 2,264,500 929,158 143.72%
Increase in
general deposits
with banks and
other financial
institutions
Lendingso banks andther financialnstitutions
5,400,000 500,000 980.00% 5,400,000 500,000 980.00%
Increase in
placements with
banks
Financialassetsdesignated atfair valuethrough profitor loss
1,822,570 13,042,298 -86.03% 1,822,570 13,042,298 -86.03%
Balance of
principal-guaran
teed wealth
management
products was
cleared to zero
upon maturity
Financialassets underreverserepurchaseagreements
10,627,229 4,010,200 165.00% 10,627,229 4,010,200 165.00%
Increase in
policy bank
bonds, notes
and government
bonds under
reverse
repurchase
agreements
Held-to-maturityinvestments
79,155,034 41,149,070 92.36% 79,155,034 41,149,070 92.36%
Increase in
held-to-maturity
investment
assets
2019 Annual Report of Hankou Bank Co., Ltd.
25
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
Constructionin progress
11,790 36,370 -67.58% 11,790 29,860 -60.52%
Archive
storeroom
construction-in-
progress
transferred to
fixed asset
Otherassets 8,137,603 4,074,952 99.70% 8,125,212 4,064,941 99.89%
Increase in
non-recourse
factoring;
increase in
assets from
continuous
involvement
Liabilities:
Borrowingsfrom centralbanks
63,000 1,700,000 -96.29% 0 1,650,000 -100.00%
Maturity of
on-lending
supporting
small
enterprises
Depositsfrom banksand otherfinancialinstitutions
9,210,489 4,799,804 91.89% 9,712,287 5,088,388 90.87%
Increase in
general due
from banks and
other financial
institutions
Financialliabilitiesdesignated atfair valuethrough profitor loss
0 13,190,558 -100.00% 0 13,190,558 -100.00%
Balance of
principal-guaran
teed wealth
management
products was
cleared to zero
upon maturity
2019 Annual Report of Hankou Bank Co., Ltd.
26
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
Financialassets underrepurchaseagreements
34,414,642 17,496,238 96.70% 34,414,642 17,496,238 96.70%
Increase in
government
bonds and bills
under
repurchase
agreements
Customerdeposits 250,341,491 188,829,166 32.58% 249,303,848 187,861,314 32.71%
Increase in
customer
deposits
Deferredincome taxliabilities
73,822 122,432 -39.70% 73,822 122,432 -39.70%
Decrease in
changes in fair
value of
available-for-sal
e financial
assets
Otherliabilities 6,648,892 3,646,474 82.34% 6,667,618 3,625,206 83.92%
Increase in
customer
deposits and
interest payable;
increase in
on-lending
funds; increase
in liabilities
from continuous
involvement
Shareholders’equity:
Othercomprehensiveincome
219,941 364,218 -39.61% 219,941 364,218 -39.61%
Decrease in fair
value of
available-for-sal
e financial
assets
2019 Annual Report of Hankou Bank Co., Ltd.
27
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
Items onincomestatement:
Net fee and
commission
income
888,083 613,744 44.70% 888,164 613,786 44.70%
Increase in fee
and commission
income
Fee and
commission
income
963,520 688,905 39.86% 963,497 688,890 39.86%
Increase in fee
income from
agency service
and trade
finance
Incl.:
Investment
income on
associates and
joint ventures
35,169 24,434 43.94% 35,169 24,434 43.94%
Increase in
investment
income from
Aerospace
Science &
Industry
Financial
Leasing Co.,
Ltd.
Net gain on
changes in fair
value (Loss is
presented with
“-”)
35,887 60,020 -40.21% 35,887 60,020 -40.21%
Decrease in fair
value of
held-for-trading
financial assets
Exchange
gain (Loss is
presented with
“-”)
11,477 19,490 -41.11% 11,477 19,490 -41.11%Exchange rate
changes
Other
operating10,099 7,703 31.11% 11,597 9,201 26.04%
Increase in
rental income
2019 Annual Report of Hankou Bank Co., Ltd.
28
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
income
Gain on
disposal of
assets (Loss is
presented with
“-”)
97 -3,206 103.04% 95 -3,206 102.96%
Decrease in loss
on disposal of
repossessed
housing
properties
Other
operating costs70 102 -31.12% 70 102 -31.12%
Less spending
on invoicing fee
Add:
non-operating
income
4,401 7,619 -42.24% 4,381 7,577 -42.18%
Decrease in
cleanup of
income from
unclaimed funds
Less: Income
tax expense-342,220 -166,617 -105.39% -342,999 -165,150 -107.69%
Increase of
tax-free income
Minority
profit or loss2,060 -9,585 121.49% 0 0 0
Increase in net
profit of
subsidiaries
Other
comprehensive
income after
tax, net
-144,276 566,304 -125.48% -144,276 566,304 -125.48%
Decrease in fair
value of
available-for-sal
e financial
assets
Other
comprehensive
income that
will be
reclassified
into profit or
loss
-144,276 566,304 -125.48% -144,276 566,304 -125.48%
Decrease in fair
value of
available-for-sal
e financial
assets
2019 Annual Report of Hankou Bank Co., Ltd.
29
Item
Consolidated Parent Company
Main reason31
December2019
31December2018
Change31
December2019
31December2018
Change
Gains or
losses on
changes in fair
value of
available-for-s
ale financial
assets
-144,276 566,304 -125.48% -144,276 566,304 -125.48%
Decrease in fair
value of
available-for-sal
e financial
assets
Total
comprehensive
income
attributable to
minority
shareholders
2,060 -9,585 121.49% 0 0 0
Increase in net
profit of
subsidiaries
iii. Assets and liabilities during the reporting period
1. Assets
1.1 Loans
(1)Loan structures in the three years before the end of the reporting period
(Unit: RMB1,000)
Item
Consolidated Parent Company
31 December2019
31 December2018
31 December2017
31 December2019
31 December2018
31 December2017
Corporateloans andadvances
128,101,998 101,851,286 91,398,912 127,857,137 101,594,053 91,093,493
Incl.:Loans 82,844,309 73,266,363 71,872,923 82,599,448 73,016,020 71,572,881
Discounting 38,488,847 24,375,970 16,407,588 38,488,847 24,369,080 16,402,211
Advances 287,689 379,084 1,106,319 287,689 379,084 1,106,319
Personalloans 44,509,179 35,336,734 23,517,738 44,086,213 34,969,701 23,288,243
2019 Annual Report of Hankou Bank Co., Ltd.
30
Item
Consolidated Parent Company
31 December2019
31 December2018
31 December2017
31 December2019
31 December2018
31 December2017
Total 172,611,177 137,188,020 114,916,650 171,943,350 136,563,754 114,381,736
(2) Distribution of loans and advances
(i) Top 10 borrower industries and their percentages at the end of the reporting period
(Unit: RMB1,000)
Industry
Consolidated Parent Company
Balance of loans Percentage (%) Balance of loans Percentage (%)
Financial industry 26,351,963 15.27 26,351,963 15.33
Wholesale and retail 19,410,738 11.25 19,388,815 11.28
Real estate 19,353,038 11.21 19,353,038 11.26
Manufacturing 17,803,214 10.31 17,675,544 10.28
Leasing and commercial services 16,788,354 9.73 16,770,354 9.75
Construction 9,080,755 5.26 9,066,855 5.27
Others 5,523,391 3.20 5,523,390 3.21
Water, environment and public utility
management3,695,589 2.14 3,689,589 2.15
Transport, storage and post 3,605,518 2.09 3,583,918 2.08
Personal loans and advances: 44,509,179 25.79 44,086,212 25.64
(ii) Loan distribution by geographical area at the end of the reporting period
(Unit: RMB1,000)
Consolidated
Area Balance of loans Percentage (%)
2019 Annual Report of Hankou Bank Co., Ltd.
31
Consolidated
Area Balance of loans Percentage (%)
Wuhan 139,753,193 80.96
Ezhou 1,937,522 1.12
Yichang 5,027,768 2.91
Huangshi 4,415,290 2.56
Jingmen 2,256,009 1.31
Xiangyang 2,825,460 1.64
Jingzhou 2,264,055 1.31
Enshi 1,686,980 0.98
Shiyan 870,100 0.50
Xiaogan 1,941,566 1.12
Xianning 800,727 0.46
Huanggang 390,189 0.23
Xiantao 585,922 0.34
Suizhou 229,540 0.13
Chongqing 7,626,856 4.42
(iii) Loan distribution by guarantee mode at the end of the reporting period
(Unit: RMB1,000)
Item
Consolidated Parent Company
Balance of loans Percentage (%) Balance of loans Percentage (%)
2019 Annual Report of Hankou Bank Co., Ltd.
32
Item
Consolidated Parent Company
Balance of loans Percentage (%) Balance of loans Percentage (%)
Unsecured loans 30,704.583 17.79 30,678,709 17.84
Guaranteed loans 27,373,589 15.86 27,030,116 15.72
Loans secured by mortgages 64,069,292 37.12 63,786,713 37.10
Pledged loans 50,463,713 29.24 50,447,811 29.34
Total 172,611,177 100.00 171,943,349 100.00
(3) Balance and percentage of 10 largest borrowers at the end of the reporting period
(Unit: RMB1,000)
Consolidated & Parent Company
Borrower Balance of loans Percentage (%)
Customer A 1,999,000.00 1.16
Customer B 1,650,000.00 0.96
Customer C 1,385,132.00 0.81
Customer D 1,200,000.00 0.70
Customer E 1,088,000.00 0.63
Customer F 1,028,000.00 0.60
Customer G 1,000,000.00 0.58
Customer H 994,800.00 0.58
Customer I 977,052.30 0.57
Customer J 966,761.70 0.56
1.2 Financial assets purchased under resale agreements
2019 Annual Report of Hankou Bank Co., Ltd.
33
(Unit: RMB1,000)
Consolidated & Parent Company
Item Ending balance Percentage (%) Beginning balance Percentage (%)
Bonds 10,427,229 98.12 3,510,200 87.53
Bills 200,000 1.88 0 0.00
Interbank CDs 0 0.00 500,000 12.47
Total 10,627,229 100.00 4,010,200 100.00
1.3 Investments
(i) Investment by accounting item
(Unit: RMB1,000)
Consolidated
Item Ending balance Percentage (%) Beginning balance Percentage (%)
Financial assets designatedat fair value through profit orloss
1,822,570 1.02 13,042,298 8.81
Available-for-sale financialassets 69,517,090 38.84 57,161,098 38.61
Held-to-maturityinvestments 79,155,034 44.23 41,149,070 27.79
Receivables investment 27,663,576 15.46 35,920,612 24.26
Long-term equity investment 822,813 0.46 787,643 0.53
Total 178,981,083 100.00 148,060,721 100.00
(Unit: RMB1,000)
Parent Company
Item Ending balance Percentage (%) Beginning balance Percentage (%)
Financial assets designatedat fair value through profit orloss
1,822,570 1.02 13,042,298 8.81
2019 Annual Report of Hankou Bank Co., Ltd.
34
Available-for-sale financialassets 69,517,090 38.83 57,161,098 38.60
Held-to-maturityinvestments 79,155,034 44.22 41,149,070 27.79
Receivables investment 27,617,404 15.43 35,890,612 24.24
Long-term equity investment 894,753 0.50 844,583 0.57
Total 179,006,851 100.00 148,087,661 100.00
(ii) Investment by investor
(Unit: RMB1,000)
Consolidated
Item Ending balance Percentage (%) Beginning balance Percentage (%)
Government bonds 87,036,973 48.63 47,132,295 31.83
Financial institution bonds 9,539,046 5.33 19,171,941 12.95
Corporate bonds 5,771,416 3.22 10,839,209 7.32
Securities investment funds 42,106,766 23.53 30,047,802 20.29
Others 34,526,882 19.29 40,869,474 27.60
Total 178,981,083 100.00 148,060,721 100.00
(Unit: RMB1,000)
Parent Company
Item Ending balance Percentage (%) Beginning balance Percentage (%)
Government bonds 87,036,973 48.62 47,132,295 31.83
Financial institution bonds 9,539,046 5.33 19,171,941 12.95
Corporate bonds 5,771,416 3.22 10,839,209 7.32
2019 Annual Report of Hankou Bank Co., Ltd.
35
Securities investment funds 42,106,766 23.52 30,047,802 20.29
Others 34,552,650 19.30 40,896,414 27.62
Total 179,006,851 100.00 148,087,661 100.00
Note: Others include wealth management products purchased from financial institutions and equity investments.
2. Liabilities
2.1 Loan structures in the three years before the end of the reporting period
(Unit: RMB1,000)
Item
Consolidated Parent Company
31 December2019
31 December2018
31 December2017
31 December2019
31 December2018
31 December2017
Demanddeposits:
109,526,753 107,711,523 99,793,721 109,293,843 107,453,187 99,530,303
Corporatecustomers
86,188,086 87,732,106 81,482,714 86,011,416 87,530,173 81,260,222
Personalcustomers
23,338,667 19,979,417 18,311,007 23,282,427 19,923,014 18,270,081
Time deposits: 101,465,491 66,964,221 55,280,001 100,705,929 66,297,758 54,696,051
Corporatecustomers
56.267,196 29,219,566 22,913,847 56,131,654 29,087,107 22,786,585
Personalcustomers
45,198,295 37,744,654 32,366,154 44,574,275 37,210,650 31,909,466
Margin deposits 9,265,067 7,854,304 7,691,565 9,219,896 7,811,302 7,653,583
Other deposits 30,085,180 19,489,676 13,000,405 30,084,180 19,489,625 13,000,405
Total 250,341,491 202,019,724 175,765,692 249,303,848 201,051,872 174,880,342
Notes: 1. Time deposits at the ends of 2017 and 2018 included principal-guaranteed wealth management liabilities, while the balance
of principal-guaranteed wealth management products was cleared to zero at the end of 2019.
2. Other deposits mainly include large-value CDs issued and treasury term deposits.
2.2 Deposits from banks and other financial institutions
(Unit: RMB1,000)
Item Consolidated Parent Company
2019 Annual Report of Hankou Bank Co., Ltd.
36
31 December2019
31 December2018
31 December2017
31 December2019
31 December2018
31 December2017
Demanddeposits fromdomesticbanks
240,890 110,749 118,399 742,689 349,333 175,241
Time depositsfrom domesticbanks
8,102,936 1,100,013 3,000,013 8,102,935 1,150,013 3,000,013
Demanddeposits fromdomesticnon-bankingfinancialinstitutions
863,614 991,893 351,799 863,614 991,893 351,799
Time depositsfrom domesticnon-bankingfinancialinstitutions
3,049 2,597,149 1,142,711 3,049 2,597,149 1,142,711
Total 9,210,489 4,799,804 4,612,922 9,712,287 5,088,388 4,669,764
2.3 Financial assets under repurchase agreements
(Unit: RMB1,000)
Consolidated & Parent Company
Item 31 December 2019 31 December 2018 31 December 2017
Securities under repurchaseagreements:
Financial bonds 1,416,000 1,608,000 2,365,980
Government bonds 15,260,250 4,007,100 6,646,760
Subtotal 16,676,250 5,615,100 9,012,740
Bills under repurchaseagreements:
Bank acceptance bills 17,738,392 11,881,138 6,110,655
Subtotal 17,738,392 11,881,138 6,110,655
Interbank CDs underrepurchase agreements 0 0 98,000
Total 34,414,642 17,496,238 15,221,395
2019 Annual Report of Hankou Bank Co., Ltd.
37
iv. Analysis of investment status
1. Use of proceeds
The Bank did not raise any funds during the reporting period.
2. External equity investments
During the reporting period, the balance of the Bank’s external equity investments was RMB910,335,000, up
RMB50,170,000 over the beginning of the year, as detailed below.
(Unit: RMB1,000)
NameAccounting
method
Book valueat periodbeginning
ChangeBook valueat periodend
Shareholding ratio
Accountingitem
HB Zhijiang Rural Bank , Ltd.Costmethod
25,500 - 25,500 51.00%Long-term
equityinvestment
HB Yangxin Rural Bank , Ltd.Costmethod
31,440 15,000 46,440 80.00%Long-term
equityinvestment
Aerospace Science & IndustryFinancial Leasing , Ltd.
Equitymethod
787,643 35,170 822,813 25.00%Long-term
equityinvestment
Urban Commercial Bank ClearingCenter
Costmethod
400 - 400 1.33%Available-for-sa
le financialassets
Wuhan Steel Electricity Co., Ltd.Costmethod
8,030 - 8,030 0.88%Available-for-sa
le financialassets
China UnionPay Co., Ltd.Costmethod
7,152 - 7,152 0.27%Available-for-sa
le financialassets
Total 860,165 50,170 910,335
II. Business Overview
i. Institution setup
S/N Institution Address Number of institutions
1 Head Office 933 Jianshe Road, Jianghan District, Wuhan City 1
2Banking Department
of the Head Office933 Jianshe Road, Jianghan District, Wuhan City
1
3 Chongqing Branch Building 1, 11 East Honghu Road, Yubei District, Chongqing 9
2019 Annual Report of Hankou Bank Co., Ltd.
38
S/N Institution Address Number of institutions
City
4 Xiangyang Branch8 Chunyuan Road, Xiangyang City High and New Technology
Development Zone, Hubei Province
2
5 Yichang Branch Tourism Square, 25 Yunji Road, Yichang City, Hubei Province 6
6 Huangshi Branch861 Huangshi Avenue, Huangshigang District, Huangshi City,
Hubei Province
3
7 Shiyan BranchWanlong Plaza, 9 Chaoyang Middle Road, Maojian District,
Shiyan City, Hubei Province
4
8 Jingzhou Branch280 Jiangjin West Road, Jingzhou City, Hubei Province
(Hengyuan Hotel)
5
9 Jingmen Branch 21 Changning Avenue, Jingmen City, Hubei Province 4
10 Ezhou Branch59 Wenxing Avenue, Echeng District, Ezhou City, Hubei
Province
2
11 Xiaogan Branch51, Beijing Road, Xiaonan District, Xiaogan City, Hubei
Province
3
12 Huanggang Branch 55 Building, Feicui Yipin, No. 76 Chibi Avenue, Huangzhou
District, Huanggang City, Hubei Province
1
13 Xianning Branch Yangguang Weina International Celebrity Plaza, 25 Ganhe
Avenue, Xianning City, Hubei Province
2
14 Suizhou BranchNorthwest Corner of the Intersection of Jiaotong Road and
Yingbin Road, Zengdu District, Suizhou City, Hubei Province
1
15 Enshi Branch67 Shizhou Avenue (Jinlin Mansion), Enshi City, Hubei
Province
4
16 Xiantao Sub-branch 11-6, Xiantao Avenue, Xiantao City, Hubei Province 1
17 Optical Valley BranchMinzu Avenue, East Lake High-tech Development Zone,
Wuhan City
4
18
Hubei Pilot Free
Trade Zone Wuhan
Area Branch
Building A5, Optical Valley Software Park, Te 1 Guanshan
Avenue, Donghu New Technology Development Zone, Wuhan
City
1
2019 Annual Report of Hankou Bank Co., Ltd.
39
S/N Institution Address Number of institutions
19Technology Finance
Service Center
Building A5, Optical Valley Software Park, Donghu New
Technology Development Zone, Wuhan City
1
20
Wuhan Economic &
Technological
Development Zone
Sub-branch
10 Chuangye Road, Plot 1C1, Wuhan Economic &
Technological Development Zone, Wuhan City4
21 Jiang’an Sub-branchBuilding 1, Tower B, Sanyang Jincheng, 1541 Zhongshan
Avenue, Jiang’an District, Wuhan City
16
22 Jianghan Sub-branchFloors 1-2, Te 8, Xinhuaxia Road, Jianghan District, Wuhan
City
14
23 Qiaokou Sub-branch 160 Qiaokou Road, Qiaokou District, Wuhan City 10
24Hanzheng Street
Sub-branch107-109 Liji South Road, Hankou, Wuhan City
7
25 Hanyang Sub-branch Te 1 Cuiwei Road, Hanyang District, Wuhan City 8
26 Wuchang Sub-branch 440 Zhongshan Road, Wuchang District, Wuhan City 15
27Shuiguohu
Sub-branch33 Hongshan Road, Wuchang District, Wuhan City
11
28 Qingshan Sub-branch Yangang Road, Qingshan District, Wuhan City 7
29 Hongshan Sub-branch 586 Wuluo Road, Wuchang, Wuhan City 13
30 Caidian Sub-branch 208 Caidian Avenue, Caidian District, Wuhan City 2
31 Jiangxia Sub-branchZhongbei Jiangxia Shopping Center, Wenhua Road, Jiangxia
District, Wuhan City
3
32 Huangpi Sub-branch 387 Huangpi Avenue, Huangpi District, Wuhan City 4
33 Dongxihu Sub-branch288 Wuzhong Road, Wujiashan, Dongxihu District, Wuhan
City
5
34
Yangluo Economic
Development Zone
Sub-branch
Te 1 Hanshi Road, Yangluo Economic Development Zone,
Wuhan City
4
35 Jiutong (Hong Kong Floor 1 (Floors 1-12), 160 Qiansanyanqiao, Jiang’an District, 2
2019 Annual Report of Hankou Bank Co., Ltd.
40
S/N Institution Address Number of institutions
Road) Sub-branch Wuhan City
36Small and Micro
e Service Center
Floor 3, Zone B, Hankou Bank, No. 933 Jianshe Avenue,
Jianghan District, Wuhan City
1
37 Xinlu Sub-branchFloor 1, Building A, Yongsheng Tower, Shengli Street, Yiyuan
Street, Jiang’an District, Wuhan City
1
Total: 181 branches and sub-branches (including specialized institutions, tier-2 sub-branches in Wuhan, sub-branches beyondWuhan directly under the Head Office and sub-branches under non-Wuhan branches). In addition, Xinlu Sub-branch is the Bank’sAssets Preservation Department. The Small and Micro Enterprise Financial Service Center is the Bank’s specialized institutionengaged in providing financial services for small and micro enterprises. The Technology Finance Service Center is the Bank’sspecialized institution engaged in providing financial services for technological enterprises.
ii. Loan quality analysis
1. Five-category loan classification at the end of the reporting period
(1) Five-category loan classification method:
The Bank formulated the Administrative Measures for Risk Classification of the Credit Assets of Hankou Bank and
classified loans into five categories and 12 grades. It established the management mechanism of real-time and
dynamic classification, and the classification results reflected the risks that the Bank’s credit assets were exposed to
on a true, comprehensive and accurate basis.
(2) Five-category loan classification
(Unit: RMB1,000)
Parent Company
Five-categoryclassification
Loan balance atthe end of theperiod
Percentage (%)Loan balance atthe beginning ofthe period
Percentage (%) Change
Pass 156,622,329 91.09 123,092,056 90.14% 33,530,273
Specialmention 12,318,529 7.16 10,604,669 7.77% 1,713,860
Sub-standard 703,814 0.41 1,996,452 1.46% -1,292,638
Doubtful 2,238,780 1.30 802,858 0.59% 1,435,922
Loss 59,897 0.03 67,719 0.05% -7,822
Total 171,943,350 100.00% 136,563,754 100.00% 35,379,596
2019 Annual Report of Hankou Bank Co., Ltd.
41
2. Provisioning and write-off of allowance for impairment losses on loans
(Unit: RMB1,000)
Item
Consolidated Parent Company
2019 2018 2019 2018
Beginning balance 4,591,017 4,341,694 4,550,169 4,313,314
Accrued during the
reporting period 2,011,485 2,208,581 2,005,786 2,168,429
Transfer-out during the
reporting period 0 0 0 0
Written off during the
reporting period 997,309 2,024,479 985,997 1,996,770
Reversed during the period 273,414 65,221 267,423 65,196
Ending balance 5,878,607 4,591,017 5,837,381 4,550,169
Note: The foregoing balance of provisions excludes general risk reserves allocated on an after-tax basis. No special reserves are set
aside at present.
3. Overdue loans
(Unit: RMB1,000)
Consolidated
Item Ending balanceBeginningbalance
Change duringthe period (+,
-)Change (%) Reasons for the change
Overdue
loans2,771,817 3,111,457 -339,640 -10.92%
Multi-pronged approaches
taken to reduce overdue loans
vigorously and effectively.
Note: Overdue loan means the principal amount of the loans of which principal or interest has become overdue. As for loans repaid by
installments, as long as the principal or interest on any installment has become overdue, the principal amount of other non-defaulted
installments shall also be included in overdue loans.
4. Interest-subsidized loans
The balance of outstanding interest-subsidized loans stood at RMB136 million at the end of the reporting period.
2019 Annual Report of Hankou Bank Co., Ltd.
42
iii. Group customer credit business and its risk management
In 2019, the Bank formulated the Management Measures for Group Credit Business of Hankou Bank, effectively
prevented and controlled the risks arising from the credits extended to group customers, and promoted the healthy
growth of the group customer credit business in accordance with the Guideline for Risk Management of Group
Customer Credits Granted by Commercial Banks and the Notice of the CBIRC General Office on Credit Risk Alerts
against Group Customers and its actual conditions in group customers.
1. The Bank defined the group customer identification criteria and procedures as well as the responsibilities and
requirements for managing such customers, and further strengthened the identification and risk management of
group customers across the Bank.
2. The principle that “substance overweighs form”, was upheld. The Bank intensified the investigation into
customers’ shareholder background, equity ties and relations of key persons as well as included the enterprises with
which the Bank shares jointly controlled parties and material influences into the group customer credit management,
in a bid to prevent the occurrence of excess credit.
3. The “unified credit” principle was followed. The on and off-balance-sheet credit business, various investment
businesses like bonds, and derivative trading business where risk incurred shall be taken by the Bank as well as the
full margin, CD pledge and other low-risk businesses shall be brought under uniform credit management.
4. The “appropriate credit” principle was followed. Under the “look-through” principle, priority was given to
assessing the risk of ultimate debtors. The group customers’ credit limit was reasonably determined according to
the risk level of borrowers and the Bank’s risk tolerance, and the regulatory policies on credit concentration in
group customers were strictly followed to prevent concentration risk.
5. The “early warning” principle was followed. The early risk warning mechanism was established to strengthen
monitoring various risks in members of group customers. Timely actions were taken to forestall and defuse credit
risk of group customers.
6. A classified management mechanism was established. Group customers were managed by category. The group
customer management mechanism and relevant business processes were streamlined to enhance the efficiency of
group customer marketing management and service.
iv. NPA changes and management measures
During the reporting period, the Bank worked harder to strictly control new loans and strengthen the disposal of
outstanding risky loans. Five-category classification of loans was carried out in accordance with regulatory
requirements. The Bank made solid progress in the asset quality enhancement campaign, with the quality of credit
assets improved in general, NPL balance increased mildly and NPL ratio reduced slightly. As at the end of the
reporting period, the balance and ratio of non-performing loans were RMB3,003 million and 1.75%. In 2019, the
Bank acted upon economic and financial policies and requirements on the “three critical battles”, aligned its
activities with local economic development to serve the real economy and kept improving the structure of credit
customers. It controlled risks in new credits through strict authorization and prudent underwriting. It strengthened
risk monitoring, early warning and activity supervision and gave timely warning against and addressed risks in
outstanding loans. A range of measures were taken to strengthen the disposal and recovery of risky loans. The
2019 Annual Report of Hankou Bank Co., Ltd.
43
credit risk system and team building were strengthened to further fortify the foundation of credit business
management and effectively boost the quality of credit assets and improve the ability to control and forestall credit
risks.
v. Impairment provisions for repossessed assets and other prime assets
(Unit: RMB1,000)
Item
Consolidated Parent Company
31 December2019
31 December2018
Increase/(decrease)
31 December2019
31 December2018
Increase/(decrease)
Repossessed assets: 394,777 224,294 170,483 394,041 223,557 170,483
Allowance forimpairment losses
13,010 0 13,010 13,010 0 13,010
Receivablesinvestment
27,663,576 35,920,612 -8,257,035 27,617,404 35,890,612 -8,273,207
Allowance forimpairment losses
1,038,457 1,047,153 -8,696 996,035 1,047,153 -51,118
Due from banks: 2,279,318 1,072,991 1,206,326 2,264,500 929,158 1,335,341
Allowance forimpairment losses
0 0 0 0 0 0
Placements withbanks:
5,400,000 500,000 4,900,000 5,400,000 500,000 4,900,000
Allowance forimpairment losses
0 0 0 0 0 0
vi. Categories, average balances and average interest rates of major deposits and loans at theend of the reporting period
(Unit: RMB1,000)
Parent Company
Category Average balance Average interest rate (%)
Corporate loans 112,944,636 4.03
Personal loans 38,152,724 4.80
Corporate deposits 141,680,288 2.34
Personal deposits 81,252,030 2.63
Note: Corporate loans include trade financing, discounts, rediscounts and advances, and personal loans include credit card business.
2019 Annual Report of Hankou Bank Co., Ltd.
44
1. Structures, average balances and average interest rates of major deposits
(Unit: RMB1,000)
Parent Company
Item Average balance Average interest rate (%)
Corporate demand deposits 82,807,632 1.29
Corporate time deposits 58,872,656 3.83
Personal demand deposits 22,682,705 0.42
Personal time deposits 58,569,325 3.48
Total 222,932,318 2.45
Note: Demand deposits include call deposits, while time deposits include margin deposits, principal-guaranteed wealth management
liabilities and large-value CDs issued.
2. Structures, average balances and average interest rates of major loans
(Unit: RMB1,000)
Parent Company
Item Average balance Average interest rate (%)
Corporate loans (short term, due within one year) 68,064,790 3.19
Corporate loans (medium and long term) 44,879,845 5.31
Personal loans 38,152,724 4.80
Total 151,097,359 4.22
Note: Corporate loans include trade financing, discounts, rediscounts and advances, and personal loans include credit card business.
vii. Debt securities investment
1. Types and amounts of financial bonds held by the Bank at the end of the reporting period
(Unit: RMB1,000)
Consolidated & Parent Company
2019 Annual Report of Hankou Bank Co., Ltd.
45
Item Face value
Government bonds 87,036,972
Financial institution bonds 12,028,947
Central bank bills 0
Corporate bonds 5,221,879
Subordinated bonds 0
Other bonds 1,786,397
Total 106,074,195
2. Top five government bonds held by the Bank at the end of the reporting period
Consolidated & Parent Company
Bond name CodeFace value(RMB1,000)
Coupon rate (%) Maturity
18 Coupon-bearingT-bond 23
180023 5,210,000 3.29 18 October 2023
18 Coupon-bearingT-bond 28
180028 4,560,000 3.22 6 December 2025
19 Coupon-bearingT-bond 03
190003 3,280,000 2.69 7 March 2022
16 Coupon-bearingT-bond 17
160017 3,055,000 2.74 4 August 2026
18 Coupon-bearingT-bond 19
180019 2,840,000 3.54 16 August 2028
3. Top five central bank bills held by the Bank at the end of the reporting period
The Bank did not hold any central bank bills at the end of the reporting period.
4. Top five financial bonds held by the Bank at the end of the reporting period
Consolidated & Parent Company
Bond name CodeFace value
(RMB1,000)Coupon rate (%) Maturity
17 Harbin Bank GreenFinance 03
1720022 800,000 4.75 10 May 2022
19 Ping An Bank CD284 111911284 498,691 - 20 January 2020
18 CDB 03 180203 490,000 4.62 9 March 2021
2019 Annual Report of Hankou Bank Co., Ltd.
46
Consolidated & Parent Company
Bond name CodeFace value
(RMB1,000)Coupon rate (%) Maturity
14 CDB 03 140203 420,000 5.79 14 January 2020
19 CDB 10 190210 420,000 3.65 6 July 2028
viii. Items designated at fair value
(Unit: RMB1,000)
Consolidated & Parent Company
ItemBeginningbalance
Profit/loss onchanges in fairvalue duringthe period
Accumulatedchanges in fairvalue recognizedinto equity
Impairmentprovisionsset asideduring thisperiod
Endingbalance
Financial assets
Incl.: 1. Financial assetsdesignated at fair value throughprofit or loss
13,042,298 35,887 0 0 1,822,570
Incl.: Derivativefinancial assets 0 0 0 0 0
2. Available-for-salefinancial assets 57,161,098 0 -144,276 0 69,517,090
Sub-total of financial assets 70,203,396 35,887 -144,276 0 71,339,660
Financial liabilities designated atfair value through profit or loss 13,190,558 0 0 0 0
Investment properties 0 0 0 0 0
Productive biological assets 0 0 0 0 0
Others 0 0 0 0 0
ix. Bad debt provisions for interest receivable and other receivables
In accordance with the Accounting Rules for Financial Corporations issued by the Ministry of Finance, the Group
did not set aside bad debt provisions for loan interest receivable. If loan interest receivable or the corresponding
loan principal is 90 days overdue, interest receivable shall be recorded off balance sheet to offset interest income
during the same period. For other receivables confirmed to be unrecoverable, the Group set aside bad debt
provisions using the specific identification method.
2019 Annual Report of Hankou Bank Co., Ltd.
47
(Unit: RMB1,000)
Item
Consolidated Parent Company
31 December2019
31 December2018
Increase/(decrease)
31 December2019
31 December2018
Increase/(decrease)
Otherreceivables 4,688,184 1,353,664 3,334,520 4,687,220 1,352,828 3,334,391
Bad debtprovisions 66,106 4,368 61,738 66,106 4,368 61,738
x. Balances and risk management of major off-balance-sheet items
Off-balance-sheet items of the Bank are incorporated in the Bank’s unified credits to the customers and deemed to
be on-balance-sheet items for management. They must conform to management procedures and requirements
including due diligence, examination, approval, contract execution, disbursement, post-disbursement and guarantee
or collateralization. For each type of off-balance-sheet items, dedicated management policies have been placed with
specified regulatory requirements. In addition to the “three investigations” into the authenticity of trade background,
the Bank maintained a reasonable level of margin ratios by applying percentage and limit management to
off-balance-sheet exposures.
As at the end of the reporting period, the balances of the Bank’s major off-balance-sheet items were as follows:
(Unit: RMB1,000)
Consolidated & Parent Company
Item 31 December 2019 31 December 2018 31 December 2017
Bank acceptance bills 20,488,412 16,233,495 18,464,131
Letters of guarantee 1,246,199 1,562,158 1,234,268
Letters of credit 5,319,239 2,836,565 1,530,073
III. Risk Exposures and Countermeasures of the Bank
i. Credit risk
Credit risk means the risk of economic losses caused to the creditor or financial instrument holder as a result of the
debtor or counterparty failing to perform contract or due to changes in credit quality, which affects the value of
financial products. The Bank’s on and off-balance-sheet credit assets and non-credit assets with counterparties are
all exposed to credit risk. During the reporting period, the Bank took the following measures to control credit risk:
1. The Bank tightened credit orientation and improved credit customer structure. The Bank formulated the 2019
Credit Orientation Policy and Guideline of Hankou Bank, kept serving development, the real economy and
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48
household consumption, adhered to green development, prudence and compliance, enhanced support for the real
economy, effectively promoted the continuous improvements in the Bank’s credit structure and achieved
high-quality development of credit business. The credit policy first encourages support for comprehensive health,
mega education, high-end equipment manufacturing, strategic emerging industries and modern service industries,
requires prudence in the financing of projects in the “heavy-polluting, energy-intensive and oversupplied”
industries, imposes strict control over credits to steel, cement, electrolytic aluminum, shipbuilding, flat glass, paper
making and coal chemicals industries, required resolute removal of ineffective supply by exiting from “zombie
enterprises” and requires unconditional exit from backward enterprises that fail to meet the standards for
environmental protection, seriously pollute the environment and are unable to take remedial actions.
2. The Bank stepped up its policy guidance for credit review and review. The 2019 Guidance of Hankou Bank on
Review of Corporate Credit was formulated, with credit results optimized to prevent credit risk. Credit review was
carried out under the principle of “objectivity, prudence, compliance, operation and continuity”. The Bank achieved
steady development of credit business under the basic strategy of “classified policy, penetrative review, cash flow
management and precision services” while striking a balance between business development and risk control.
3. The Bank strengthened risk prevention and management. The measures for management of potential risky loans
were effectively implemented with proper classification of potential risky loans, which were managed through
“dynamic adjustments”, “borrower-specific policy”, “differentiated management” and “strict assessment”. The risk
prediction and management were increasingly strengthened to enable early detection, prevention, reporting and
mitigation of potential risky loans.
4. The Bank evaluated the quality of credit assets more frequently. During the reporting period, the Bank stepped
up its monitoring and inspection of credit asset risks and evaluated the quality of credit assets every month; it
classified credit assets into five tiers and 12 grades so as to timely and accurately understand the risk status of credit
assets. The Bank regularly classified its non-credit risk assets, and timely classified, regularly monitored and
effectively managed all risk assets.
ii. Market risk
Market risk means the risk of potential loss on future earnings or cash flows arising from changes in the value of
financial instruments due to movements of market prices (interest rate, exchange rate, stock price and commodity
price, etc.). The market risk exposure of the Bank is mainly divided into interest rate risk and exchange rate risk.
The Bank has separated the front, middle and back offices of treasury operation and established a mutual check and
restraint mechanism by manual prevention and machine-based control. Risk measurement level was enhanced,
market risk capital occupancy was regularly calculated, monitoring functions were improved, the reporting
mechanism was standardized and the market risk profile was reported to the management regularly.
1. Interest rate risk
(i) Interest rate risk in the trading book management solutions
With regard to the interest rate risk in the trading book, the Bank monitored market risk limits on a daily basis
mainly through the treasury operation management system, conducted market value reassessment and VaR
measurement over the trading book and gradually strengthened combined operations and interest rate risk control
2019 Annual Report of Hankou Bank Co., Ltd.
49
for the trading book using such parameters as maturity, convexity and basis point value, having regard to the
market environment.
(ii) Interest rate risk in the banking book management solutions
The banking book market risk mainly arises from the mismatch of agreed-upon maturity date and re-pricing date
between interest-generating assets and interest-bearing liabilities. The Bank regularly monitored re-pricing maturity
gaps of assets and liabilities sensitive to interest rates using gap analysis and other methods and effectively
managed banking book interest rate risk by using FTP to actively adjust the percentages of short-term and
long-term, variable-rate and fixed-rate assets and liabilities.
2. Exchange rate risk
The Bank’s foreign currency assets represent a small part of total assets. Foreign exchange exposures are mainly
denominated in US dollars. The exchange rate risk the Bank takes mainly arises from price movements of foreign
exchange in stock and foreign exchange trading. The Bank reasonably controlled foreign exchange exposure
position to the extent permitted by policies according to its risk appetite and operation level and strictly controlled
exchange rate risk by proactively adjusting the mix of foreign currencies and the structure of assets and liabilities in
line with market conditions.
iii. Operational risk
Operational risk is defined as the risk that causes losses through imperfect or faulty internal procedures, employees
and IT systems, as well as external events. The Bank took the prevention and control of operational risk as an
important part of daily operations. Through performing inspections across the Bank, addressing both the symptoms
and root causes, combining punishment and prevention, the Bank was able to identify and rectify various types of
violations and non-compliances, thereby improving the policies and processes, ameliorating internal controls and
ensuring the continuous reasonable and steady development of all businesses.
During the reporting period, the Bank took the following key measures to control operational risk:
1. Special crackdown campaigns were carried out. A crackdown register was created and maintained with respect to
“three fields, one priority” to advance the crackdown work, with a focus on problems found in internal and external
inspections in recent years as well as various potential risks and management weaknesses exposed in the ordinary
course of business.
2. Swindle prevention and control were strengthened. 33 branches and sub-branches signed the Agreement on
Overall Management Responsibility for Swindle Prevention and Control, assigning the relevant duties to
responsible persons at all levels. The Work Plan of Hankou Bank for Swindle Prevention and Control in 2019,
including 74 special inspection plans of the Head Office’s departments and 22 self-inspection plans of branches and
sub-branches for internal control and swindle prevention.
3. Assessment and demerit scoring strictly conducted. The Bank conducted performance assessment and demerit
scoring for compliance and operational risk management of branches and sub-branches, made quarterly notification
of assessment results and underlying policies and required branches and sub-branches to avoid similar problems
and ensure compliance.
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50
4. Behavioral management was strengthened. The ten-point rule for risk management of employee behaviors was
implemented, with unusual employee behaviors screened continuously and employee mentality monitored on an
ongoing basis, which covered senior executives. The management measures for unusual employee behaviors
screening were formulated to further standardize the screening process of unusual employee behaviors. The
management of retiring and departing employees was strengthened, with behavioral screening completed for 1,475
retiring and departing employees of the Bank.
iv. Compliance risk
Compliance risk refers to the risk of exposing a commercial bank to legal punishment, regulatory penalty, material
financial loss and reputation damage due to the failure to comply with laws, regulations and rules. During the
reporting period, the Bank took the following measures to control compliance risk:
1. The compliance risk development was advanced. The Bank organized special training of medium and senior
management personnel to enhance their capability of internal control, compliance and swindle management,
general discussions on case-based warning and education, warning and education on credit compliance and
compliance lecturing by heads of Head Office departments. The “Internal Control and Compliance Management
Column” was optimized encouraging employees to share their compliance perceptions and exchange experience in
compliance management, with 876 articles regarding typical cases, compliance writings and study updates
published in the year. “Monthly Exam” on compliance was carried out, with the scores aggregated and included in
the institutional performance assessment and personal performance score. A total of 24,778 persons took the exams.
2. Internal control policies and procedures were improved continuously. The Head Office strengthened the annual
planning for policies and procedures, maintenance of system information on policies and procedures and the
development of non-Wuhan branches’ policies and procedures. The compliance, effectiveness and feasibility of the
Bank’s policies and procedures were thoroughly reviewed and streamlined through various work, including the
streamlining of policies on financing of private enterprises, the “Month of Internal Control Policy
Re-Optimization”, self-examination of comprehensive risk management policy and follow-up assessment of 2019
policies and procedures.
3. The anti-money laundering (AML) management was further improved. The AML management work mechanism
was improved. The leading group on AML held meetings to cause all AML management departments to fulfill their
respective compliance duties. Special tasks such as existing customer data cleanup and beneficiary owner
identification were carried out. 12 AML internal control policies were formulated or revised in line with regulatory
standards. The centralized management mode of suspicious transactions reporting was leveraged to enhance the
quality and efficiency of suspicious transactions reporting and effectively curtail the spreading of money laundering
risk. The money laundering risk management compliance culture was fostered, AML in-house training was
provided by tier and category, onsite examination was conducted over the AML duty performance of branches and
sub-branches and the staff in AML positions continued to enhance their sense and capability of performing duties in
a proactive manner.
v. Liquidity risk
Liquidity risk means the risk that occurs when a commercial bank cannot obtain sufficient funds in time at a
reasonable cost, to repay matured debts, perform other payment obligations and meet the other fund needs for
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51
normal business operation. It requires commercial banks must hold certain current assets or have smooth fund
borrowing channels.
The Bank has in place a governance structure fit for its objectives of liquidity risk management, which fully meets
regulatory requirements on the organizational structure for liquidity risk management of commercial banks.
Specifically, the Bank maintains a decision-making system composed of the Board of Directors and its special
committees, the senior management and the Asset and Liability Committee; the Planning and Finance Department
takes overall charge of liquidity management. The Financial Market Department, branches and sub-branches are
implementing bodies for day-to-day liquidity management; the Board of Supervisors, the Risk Management
Department, the Internal Control & Compliance Department and the Audit Department together constitute an
internal supervision system; the Operation Department and the Information Technology Department are supporting
departments. They constitute the Bank’s comprehensive, efficient and strong framework for liquidity risk
management to ensure liquidity safety of the Bank.
While meeting regulatory requirements and maintaining liquidity safety, under the principle of prudence and its
liquidity risk policy and management objectives, the Bank strikes a dynamic balance in yield of funds and liquidity
needs from time to time according to changes in market liquidity demands at home and abroad, thereby ensuring
safe and sound operation and good public image of the Bank.
During the reporting period, the Bank adhered to a robust liquidity risk appetite tilted towards prudence. The
overall liquidity position was sound, as evidenced by conformity and continued improvement of all regulatory
indicators. The overall capability of liquidity risk management continued to improve. During the reporting period,
the Bank mainly took the following measures to manage liquidity risk:
First, the assets and liabilities structure was further improved. The Bank managed the assets and liabilities structure
with a focus on liquidity risk in a proactive manner, followed the work approach of “managing real-time position,
short-term gap and medium- and long-term mismatches”, increased the proportion of core liabilities, balanced the
mature size an maturity of interbank liabilities, diversified the sources of funds and employed FTP for structural
optimization.
Second, intraday liquidity risk management was refined. Substantial fund flows were closely monitored bank-wide
to ensure sufficient intraday liquidity position and relevant financing arrangements and timely satisfaction of
intraday payment needs under normal and stress scenarios.
Third, liquidity risk monitoring was strengthened. The Bank set liquidity risk limits, identified, measured,
monitored and controlled liquidity risk and improved the tiered analysis and management mechanism for liquidity
gap in accordance with the Bank’s liquidity risk appetite policy, the monetary policy of PBOC, regulatory standards
and requirements, market liquidity changes and the actual operation and management objectives of the Bank, thus
ensuring the liquidity indicators met management targets and regulatory requirements.
Fourth, liquidity risk management under stress scenarios was strengthened. High-quality liquidity reserve assets
were steadily increased to effectively boost the ability to manage liquidity under stress scenarios. The liquidity risk
stress test was conducted regularly, with special stress tests carried out from time to time according to market
changes and internal management needs.
2019 Annual Report of Hankou Bank Co., Ltd.
52
Fifth, the capability of liquidity emergency management was enhanced. The Bank conducted liquidity emergency
drills, formulated the contingency funding plan, strictly implemented relevant work measures and boosted the
awareness of liquidity emergency management. The drill outcomes were used to improve the liquidity emergency
management mechanism, effectively tackle the external liquidity stock and improved the bank-wide capability of
liquidity emergency management.
vi. Reputational risk
Reputational risk is the risk of negative comments made on a commercial bank by its stakeholders due to any
operating, managerial or external events of the commercial bank. The Bank attached great importance to
reputational risk management and strengthened employee education on compliance management. It improved the
reputational risk management mechanism and revised management policies. It strengthened collaboration in
prevention of public opinion crisis, carried out continuous and proactive screening of risk areas and properly
handled and reduced potential reputational risks. It organized fruitful training and drills. It adhered to a routine
public opinion monitoring process, continued to step up positive publicity, cemented the good partnership with
various media outlets and created good atmosphere for the high-quality development of the Bank. No material
reputational risk events took place during the reporting period.
IV. Changes in the Business Environment and Macro Policies, Laws and
Regulations and Influences thereof
i. Influence of macro control
The global macro-economy was sluggish in 2019. Major developed economies remained in deceleration while
emerging economies were under higher downturn pressure. The global economic growth was throttled by the
Trump administration’s unilateralism and trade protectionism policy, coupled by the diminishing effects of
monetary and fiscal stimulus of developed economies, depressed global demand and continued downturn of
advanced economies. The US economy further slowed down. The Eurozone economy nearly came to a standstill.
The Japanese economy was under rising downward pressure due to stagnant exports. Emerging economies were
under rising downward pressure. Central banks of India, Brazil, Russia and some other emerging market countries
have cut interest rates several times to boost their economies. Malaysia and New Zealand even announced the first
rate cut since 2016.
In 2019, in the face of a situation complicated by rising risks both at home and abroad, China’s economy upheld the
general principle of seeking progress while keeping performance stable. China promoted high-quality development
focused on supply-side structural reform, made solid achievements in “six stabilities” and maintained sustained and
healthy economic and social development. The three major tough battles have made key progress, precision target
alleviation delivered remarkable results and financial risks were effectively prevented and controlled. Th overall
ecological environment quality was improved, the reform and opening-up achieved milestones, the supply-side
structural reforms continued to go further and new breakthroughs made in scientific and technological innovation.
People enjoyed a stronger sense of gain, of happiness and of security. The major indicators in the 13th Five-Year
2019 Annual Report of Hankou Bank Co., Ltd.
53
Plan met progress expectations. Major progress was made in building a moderately prosperous society in all
respects.
ii. Influence of reform in financial supervision
Since 2019, the regulatory authorities have provided a series of regulatory policy guidance and support in a bid to
support the high-quality development of the real economy, forestall and defuse risks and promote high-level
opening-up.
First, precision efforts were made to support high-quality economic development. The MSE and private enterprise
services were improved and the money and credit transmission mechanism were unclogged to lower the overall
financing cost of enterprises. Development, policy and commercial financial institutions played their respective
roles to support the major strategies and projects of the State. The credit supply structure was improved to increase
the weight of medium- and long-term manufacturing loans in support of technological innovation and advanced
manufacturing. With a focus on weaker areas of financial services, including poverty alleviation, elderly care and
health care, a wide variety of financial resources were mobilized to support the upgrading of consumption and
improvement of people’s livelihood.
Second, what risk prevention addressed shifted from “symptoms” to “root causes”. The write-off of non-performing
assets was continuously strengthened for consistent, look-through and full-coverage supervision of shadow banking.
Risks in major financial holding groups were dealt with by category. The real estate financing measurement and
monitoring system was improved to crack down on irregularities. Continued efforts were made to reign in internet
finance risks, including P2P lending, and contain the surge in illegal fundraising and other illegal financial
activities.
Third, a spectrum of measures were taken to promote high-level development. The financial institution system,
market system and product system were bettered. The Bank further reformed the system of city commercial banks
and rural credit cooperatives, promoted transformation of trust, wealth management and old-age insurance
industries and guided insurance companies and asset management companies back to their founding mission. The
equity structure of bancassurance institutions was optimized, the supervision of related party transactions was
strengthened and the incentive and constraint mechanism was refined.
V. Outlook
i. Industry development pattern and trend
COVID-19 has had a fundamental impact on the Chinese economy and also will send ripples to the banking
industry in the short term. In the long run, however, the banking industry is able to withstand risk shocks from
inside and outside and contribute positively to the high-quality development of China’s economy. The COVID-19
epidemic will not change the long-term development opportunities for China’s banking industry.
First, asset quality is under pressure in the short run but will remain under control over the long term. Enterprises
affected by the epidemic will have weaker operating capability, cash flows and debt service ability, which may
result in a certain size of non-performing loans or even bad debts. Also, a large number of enterprises and
individuals will see their income falling in the short term, which also will impact the deposit and lending business
2019 Annual Report of Hankou Bank Co., Ltd.
54
of banks and impede fee-based business development. Overall, COVID-19 will have a negative impact on
short-term revenue of banks. In the long term, however, as the economic activity gradually gets back on track,
coupled with policy supports including tax cuts and capital market liquidity support, the economy is recovering in a
faster pace. The long-term impact on banks is limited.
Second, the destinations of credit flows will be changed. COVID-19 has impacted various industries more or less.
Retail and catering, hotels and tourism and real estate have been hit hard. Work-from-home, online education,
grocery delivery and biopharmaceutics burgeoned. The industry development adjustments will trigger adjustments
to fund demand. The bank credit will flow to different destinations, giving an impetus to the transformation and
upgrading of banks themselves.
Third, digital transformation will gain pace. COVID-19 has had a far-reaching impact on consumption behaviors of
consumers, forcing some consumers to try new modes of financial consumption. Massive transactions will move
from offline to online scenarios for dealing via internet or mobile banking. The future demand for online
transactions, including online transfer, savings deposit, investment and wealth management, will keep expanding.
Fintech-driven new business models will go deeper as a positive contributor, while offline outlets will speed up
their transformation.
ii. Possible external risks in future operation
The external risks faced by the Bank in its future operation will mainly come from the changes in economic
situation and financial policy. The slowdown of domestic and foreign economic growth, weak demand of real
economy, uncertainty over US-China trade frictions and the bond default risk that may spread to the credit market
will have an impact on commercial banks’ operating pattern and profitability.
iii. Challenges and opportunities in future operation
In the foreseeable future, the COVID-19 spreads will put micro, small and medium-sized enterprises in business
difficulties and at higher default risk, which may directly push up banks’ non-performing debts and NPL ratio. The
quality and profitability of banking assets will remain under pressure in the short term.
Challenges coexist with opportunities. Traditional retail builds on physical outlets. Against the backdrop of the
pandemic, however, digital retail business has become the mainstream model. COVID-19 outbreaks have slashed
consumer spending on tourism, catering and offline recreational and entertainment activities. Consumers show
uncertainty in willingness to spend again, likely to remain long prudent in buying consumer durables. In the future,
banks may establish a professional “Internet Plus” business mode, embrace a multi-channel, integrated and
differentiated approach to development and utilize mobile banking, Internet banking, etc. to further improve the
online service system, tap deep into customers’ financial needs in every respect, innovate financial products
specific to customer groups, provide targeted and diverse products and services and further boost and harness
consumer demand.
iv. Operating plan
1. Major operating targets for 2020
In 2020, the Bank will actively adapt itself to the fundamental changes in banking environment in line with the
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55
macro-economic and financial policies, uphold the guiding principle of pursuing progress while ensuring stability,
unswervingly adhere to the new development philosophy and maintain strategic resolve. The Bank will maintain
wartime status to win the fight against the COVID-19 epidemic to bolster confidence, advance the reform and
opening-up, prevent and control risks as well as pursue high-quality development of the Bank. Overall, assets and
liabilities are expected to steadily expand in size in 2020 with continuous structural improvements, stable
profitability, sound quality of assets and conformity of regulatory indicators.
2. Major working measures for 2020
(1) Promote corporate business development vigorously
The Bank will make solid moves to expand the corporate customer base. The three chains (“industry chains, supply
chains and trade chains”) will be further extended to boost the capability of serving MSEs. The Bank will seize
opportunity to accelerate marketing to the “new infrastructure” segment. The “door-to-door service” campaign will
be well implemented to communicate policy, provide support and enhance the emotional bond with customers.
Credit supply will be quickened to increase user adhesion to, and harness the engine role of, transaction banking.
The bond with local governments will be strengthened in the post-epidemic stage. Comprehensive partnership with
new investors will be established and the service level will be enhanced on the backing of shareholders.
Breakthroughs will be made in the partnership with central government-run enterprises, state-owned enterprises
and strong private enterprises. Cooperation with banks and other financial institutions will be strengthened.
Collaboration will be strengthened between business lines, between front, middle and back offices and between
upper and lower levels.
(2) Effectively strengthen retail business development
Efforts will be intensified to expand such customer groups as technology finance, healthcare system, education and
individual shareholders. The Bank will strengthen customer acquisition and fully tap the potential of existing
customers. The consumption stimulus policy in Hubei will be harnessed and the credit features of credit cards and
the unique advantages of the trade union cards will be leveraged, thereby integrating products and services into the
wave of boosting consumption. Online banking and mobile banking will be upgraded by fully commencing the
“Online Hankou Bank” program and building the Bank into “Premier Bank” and “Preferred Bank”.
(3) Continue to promote technology finance
Focus will be placed on high-tech enterprises supported principally by the State, small and medium-sized tech firms
and gazelle enterprises on the State’s support list and customers in the emerging industries and new infrastructure
fields, such as 5G and new-generation information technology, so as to expand and improve the customer base.
Business modes will be duplicated to Chongqing and Hubei free trade zones. Reform will be deepened by
increasing the size of indirect investment and making bold innovation in direct investment. Technology finance will
shift from brand enhancer to profit contributor.
(4) The “mega asset management” business will be further advanced.
The Bank will seize the “window” provided by a series of monetary policies and capital policies and embrace the
opportunity of incremental factor market and declining market interest rates to develop the asset management
business with vigor. The value orientation of asset management and front-office marketing will be harmonized.
2019 Annual Report of Hankou Bank Co., Ltd.
56
Connectivity will be established between traditional credit and funds, bonds, bills and other factor markets. The
pricing of asset and liability will be managed scientifically. The deposit rates will be taken as an important indicator
of deposit development quality to lower the costs of deposits.
(5) Strengthen risk control and management
Risk profiling will be conducted to assess the COVID-19 impact. Supervision will be focused on key industries and
support will be provided for troubled industries. “Iron Hand on Non-compliances” will be deepened. The
responsibility for credit approval management will be strengthened for personal consumption loans, MSE credit,
technology finance and financial market businesses. The potential economic and financial risks and the risks of
other city commercial banks that may be triggered by the epidemic will be strictly guarded against. A liquidity risk
prevention and control mechanism involving front, middle and back offices will be established in a faster pace.
Reputational risk management will be incorporated in the entire process of operation and management.
(6) Strengthen IT support
Information technology will penetrate into all departments and areas of management across the Bank, in a bid to
enhance the Bank’s IT capacity and management level on all fronts. The Bank will move faster forward in building
the new-generation risk management system Online Hankou Bank and other information system platforms and
invest more in boosting the digital governance capacity.
(7) Strengthen corporate cultural development
The market-oriented management mechanism reform will be furthered vigorously. Organizational reform will be
promoted actively. The performance assessment management mechanism will be adjusted and improved in a
well-targeted manner. Officers’ performance assessment will be strengthened with respect to epidemic containment,
financial services and return to work. An action plan for development and promotion of excellent young officers
will be formulated. A positivity culture will be fostered.
(8) Continue to deepen the development led by Party building
The Bank will thoroughly study the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era
and keep consolidating the outputs of the “Staying True to Our Founding Mission” themed education program. The
model role of CPC members will be enhanced. The Party’s conduct will be further improved. The bad conducts that
impede development of the Bank will be fully screened again and the To-Don’t List will be further refined.
Officials’ political stance and sense of bigger picture will be heightened so that the key minority will keep playing a
good example.
VI. Work of the Board of Directors during the Reporting Period
i. Meetings of the Board of Directors and resolutions during the reporting period
The Board of Directors held 10 meetings in 2019.
1. The First Meeting of the Sixth Board of Directors of the Bank was held on 15 January 2019. Of the 10 directors
supposed to attend the meeting, 10 directors were present in person. The meeting reviewed and approved 10
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57
proposals.
2. The SecondMeeting of the Sixth Board of Directors of the Bank was held on 4 March 2019. Of the 10 directors
supposed to attend the meeting, 10 directors were present in person. The meeting reviewed and approved 17
proposals and heard two reports.
3. The Third Meeting of the Sixth Board of Directors of the Bank was held on 24 April 2019. Of the 10 directors
supposed to attend the meeting, nine supervisors were present in person, and the other one attended by proxy. The
meeting reviewed and approved 27 proposals and heard five reports.
4. The Fourth Meeting of the Sixth Board of Directors of the Bank was held on 30 May 2019. Of the 10 directors
supposed to attend the meeting, nine supervisors were present in person, and the other one attended by proxy. The
meeting reviewed and approved eight proposals and heard three reports.
5. The Fifth Meeting of the Sixth Board of Directors of the Bank was held on 5 September 2019. Of the 10
directors supposed to attend the meeting, seven directors were present in person, and three attended by proxy. The
meeting reviewed and approved five proposals and heard eight reports.
6. The Sixth Meeting of the Sixth Board of Directors of the Bank was held through written circulation on 10
October 2019. All of the 10 directors supposed to vote were present in person. One proposal was reviewed and
approved at the meeting.
7. The Seventh Meeting of the Sixth Board of Directors of the Bank was held on 12 November 2019. Of the 10
directors supposed to attend the meeting, nine directors were present in person, and one attended by proxy. The
meeting reviewed and approved 12 proposals and heard six reports.
8. The Eighth Meeting of the Sixth Board of Directors of the Bank was held on 9 December 2019. Of the 10
directors supposed to attend the meeting, eight directors were present in person, and two attended by proxy. The
meeting reviewed and approved two proposals.
9. The Ninth Meeting of the Sixth Board of Directors of the Bank was held on 16 December 2019. Of the 10
directors supposed to attend the meeting, 10 directors were present in person. The meeting reviewed and approved
one proposal.
10. The 10th Meeting of the Sixth Board of Directors of the Bank was held on 24 December 2019. Of the 10
directors supposed to attend the meeting, 10 directors were present in person. The meeting reviewed and approved
two proposals.
ii. Implementation of the resolutions of Shareholders’ General Meeting by the Board ofDirectors
The Bank held three general meetings in 2019.
1. The Bank held the 2019 First Extraordinary General Meeting on 15 January 2019 and reviewed and approved the
16 proposals. All resolutions made at this general meeting have been fully implemented.
2. The Bank held the 2018 Annual General Meeting on 20 June 2019 and reviewed and approved the 12 proposals.
All resolutions made at this general meeting have been fully implemented.
2019 Annual Report of Hankou Bank Co., Ltd.
58
3. The Bank held the 2019 Second Extraordinary General Meeting on 27 November 2019 and reviewed and
approved the eight proposals.
iii. Performance of duties by the special committees of the Board of Directors
Strategy Committee
The Strategy Committee held two meetings in 2019:
1. The Strategy Committee of the Sixth Board of Directors held its first meeting on 24 April 2019, and reviewed
and approved five proposals and one report.
2. The Strategy Committee of the Sixth Board of Directors held its second meeting on 12 November 2019, and
reviewed and approved eight proposals and one report.
Audit Committee
The Audit Committee held three meetings in 2019:
1. The Audit Committee of the Sixth Board of Directors held its first meeting on 24 April 2019, and reviewed and
approved six proposals.
2. The Audit Committee of the Sixth Board of Directors held its second meeting on 5 September 2019 and heard
three reports.
3. The Audit Committee of the Sixth Board of Directors held its third meeting on 12 November 2019 and heard two
reports.
Risk and Related Party Transactions Control Committee
The Risk and Related Party Transactions Control Committee held eight meetings in 2019:
1. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its first
meeting on 24 April 2019 and reviewed and approved 12 proposals and heard two reports.
2. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its second
meeting on 13 May 2019 and reviewed and approved one proposal.
3. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its third
meeting on 30 May 2019 and reviewed and approved six proposals and heard two reports.
4. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its fourth
meeting on 8 August 2019 and reviewed and approved the following two proposals:
5. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its fifth
meeting on 5 September 2019 and reviewed and approved five proposals and heard three reports.
6. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its sixth
meeting on 12 November 2019 and reviewed and approved three proposals and heard one report.
7. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its seventh
2019 Annual Report of Hankou Bank Co., Ltd.
59
meeting on 9 December 2019 and reviewed and approved two proposals.
8. The Risk and Related Party Transactions Control Committee of the Sixth Board of Directors held its eighth
meeting on 24 December 2019 and reviewed and approved one proposal.
Nomination and Compensation Committee
The Nomination and Compensation Committee held four meetings in 2019:
1. The Nomination and Compensation Committee of the Sixth Board of Directors held its first meeting on 24 April
2019, and reviewed and approved two proposals.
2. The Nomination and Compensation Committee of the Sixth Board of Directors held its second meeting on 30
May 2019, and reviewed and approved one proposal.
3. The Nomination and Compensation Committee of the Sixth Board of Directors held its third meeting on 12
November 2019, and reviewed and approved one proposal and heard one report.
4. The Nomination and Compensation Committee of the Sixth Board of Directors held its fourth meeting on 16
December 2019, and reviewed and approved one proposal.
Consumer Protection Committee
The Consumer Protection Committee held one meeting in 2019:
1.The Consumer Protection Committee of the Sixth Board of Directors held its first meeting on 30 May 2019 and
heard one report.
iv. Performance of strategic management functions by the Board of Directors
In 2019, the Board of Directors continued to push forward strategy management work, participated in decision
making on major strategic issues, paid close attention to regulatory policy developments, discussed and considered
major strategic issues including distribution of outlets and capital replenishment strategy, strengthened guidance
and supervision of the senior management’s behaviors, caused major decisions to be implemented, enhanced the
informed decision making of the Board of Directors and leveraged on the core functions of strategic
decision-making to promote another round of leap-forward development of the Bank.
v. Development of policies and procedures of the Board of Directors
In order to guarantee the smooth and efficient operation of mechanisms, the Board of Directors continuously
improved policies and procedures and standardized corporate governance behaviors according to regulatory
requirements and the Bank’s corporate governance conditions. In the reporting period, the Board of Directors
organized the formulation of relevant corporate governance policies and procedures. First, the Delegation of
Authority to President by the Board of Directors of Hankou Bank Co., Ltd. in 2019 and other corporate governance
policies were formulated. Second, the Articles of Association of Hankou Bank Co., Ltd. and the Administrative
Measures for the Connected Transactions of Hankou Bank Co., Ltd. were revised in a timely manner in accordance
with relevant regulatory requirements, playing a positive role in further improving corporate governance of the
Bank. Third, the procedural rules for corporate governance were continuously improved. The Procedural Rules of
2019 Annual Report of Hankou Bank Co., Ltd.
60
the Board of Directors of Hankou Bank Co., Ltd., the Procedural Rules of the Strategy Committee of the Board of
Directors of Hankou Bank Co., Ltd., the Procedural Rules of the Risk and Related Party Transactions Control
Committee of the Board of Directors of Hankou Bank Co., Ltd. and the Procedural Rules of the Nomination and
Compensation Committee of the Board of Directors of Hankou Bank Co., Ltd. were revised promptly. The
Procedural Rules of the Consumer Protection Committee of the Board of Directors of Hankou Bank Co., Ltd. was
formulated.
VII. Profit Distribution Plan during the Reporting Period
According to the standard unqualified auditor’s report issued by Union Power Certified Public Accountants LLP,
the Company’s profit available for distribution at the end of 2019 was RMB8,354,641,674.22. The preliminary plan
for profit distribution for 2019 is set as follows:
1. Set aside 10% or RMB236,290,242.16 as statutory surplus reserve;
2. In accordance with the Accounting Rules for Financial Corporations (MOF Order No.42) and the Administrative
Measures for Bad Debt Provisioning of Financial Corporations (C.J. [2012] No.20), RMB781,044,579.42 will be
set aside as general risk reserve;
3. Allot cash dividends of RMB0.12 (pre-tax) per share, totaling RMB495,341,496.96, based on the Company’s
outstanding 4,127,845,808.00 shares in 2019. The Company’s retained profit of RMB6,841,965,355.68 after the
profit distribution will be carried over the next year.
Year Dividend per share (RMB) Total outstanding shares(100 million)
Total dividends (RMB100million)
2017 0.10 41.28 4.13
2018 0.11 41.28 4.54
2019 0.12 41.28 4.95
2019 Annual Report of Hankou Bank Co., Ltd.
61
Chapter V Report of the Board of Supervisors
I. Work of the Board of Supervisors during the Reporting Period
i. Meetings of the Board of Supervisors and Resolutions
The Board of Supervisors held seven meetings in 2019.
1. The First Meeting of the Sixth Board of Supervisors of the Bank was held on 15 January 2019. Of the eight
supervisors supposed to attend the meeting, eight supervisors were present in person. The meeting heard the report
on election of employee supervisors for the Sixth Board of Supervisors of Hankou Bank Co., Ltd. and reviewed
and approved three proposals on election of Chairman of the Board of Supervisors election of members of the
Supervision Committee of the Sixth Board of Supervisors, etc.
2. The Second Meeting of the Sixth Board of Supervisors of the Bank was held on 4 March 2019. Of the eight
supervisors supposed to attend the meeting, eight supervisors were present in person. The meeting reviewed and
approved four proposals on revision of the procedural rules of the Board of Supervisors and its Supervision
Committee, etc. and heard three reports.
3. The Third Meeting of the Sixth Board of Supervisors of the Bank was held on 24 April 2019. Of the eight
supervisors supposed to attend the meeting, seven supervisors were present in person, and the other one attended
by proxy. The meeting reviewed and approved 20 proposals, including 2018 work report of the Board of
Supervisors, 2018 Annual Report and its summary, 2018 final accounts and 2019 financial budget and 2018 profit
distribution plan, and heard four reports.
4. The Fourth Meeting of the Sixth Board of Supervisors of the Bank was held on 30 May 2019. Of the eight
supervisors supposed to attend the meeting, eight supervisors were present in person. The meeting reviewed and
approved six proposals, including the comprehensive risk management report of the Bank for 2018 and the risk
appetite statement of the Bank for 2019, and heard four reports.
5. The Fifth Meeting of the Sixth Board of Supervisors of the Bank was held on 5 September 2019. Of the eight
supervisors supposed to attend the meeting, eight supervisors were present in person. The meeting reviewed and
approved three proposals, including the comprehensive risk management report of the Bank for the first half of
2019 and the consolidated management work report for the first half of 2019, and heard eight reports.
6. The Sixth Meeting of the Sixth Board of Supervisors of the Bank was held on 12 November 2019. Of the eight
supervisors supposed to attend the meeting, seven supervisors were present in person, and the other one attended
by proxy. The meeting reviewed and approved three proposals, including amendment to the Articles of Association
of the Bank and the capital plan for 2019-2022, and heard three reports.
7. The SeventhMeeting of the Sixth Board of Supervisors of the Bank was held on 9 December 2019. Of the eight
supervisors supposed to attend the meeting, eight supervisors were present in person. The meeting reviewed and
approved two proposals, including the proposal on batch transfer and write-off of non-performing loans in 2019.
2019 Annual Report of Hankou Bank Co., Ltd.
62
ii. Performance of duties by the special committees of the Board of Supervisors
Supervision Committee
The Supervision Committee of the Board of Supervisors held six meetings in 2019:
1. The Supervision Committee of the Sixth Board of Supervisors held its first meeting on 4 March 2019 and
reviewed and approved two proposals and heard three reports.
2. The Supervision Committee of the Sixth Board of Supervisors held its second meeting on 24 April 2019 and
reviewed and approved 14 proposals and heard two reports.
3. The Supervision Committee of the Sixth Board of Supervisors held its second meeting on 30 May 2019 and
reviewed and approved four proposals and heard two reports.
4. The Supervision Committee of the Sixth Board of Supervisors held its fourth meeting on 5 September 2019 and
reviewed and approved two proposals and heard five reports.
5. The Supervision Committee of the Sixth Board of Supervisors held its fifth meeting on 12 November 2019 and
reviewed and approved two proposals and one report.
6. The Supervision Committee of the Sixth Board of Supervisors held its sixth meeting on 9 December 2019 and
reviewed and approved two proposals.
Nomination Committee
The Nomination Committee of the Board of Supervisors held three meetings in 2019:
1. The Nomination Committee of the Sixth Board of Supervisors held its first meeting on 4 March 2019 and
reviewed and approved one proposal.
2. The Nomination Committee of the Sixth Board of Supervisors held its second meeting on 24 April 2019 and
reviewed and approved five proposals.
3. The Nomination Committee of the Sixth Board of Supervisors held its third meeting on 30 May 2019 and
reviewed and approved two proposals.
iii. Supervisors’ attendance of the general meetings and the meetings of the Board of Directorsas non-voting delegates
During the reporting period, supervisors attended the 2019 First Extraordinary General Meeting, 2018 Annual
General Meeting and the 2019 Second Extraordinary General Meeting, attended nine onsite meetings of the Board
of Directors as non-voting attendees, and oversaw one offsite meeting of the Board of Directors.
iv. Supervision of duty performance
1. The Board of Supervisors assessed the duty performance of supervisors by means of supervisor self-assessment,
peer review and assessment by the Board of Supervisors according to the 2018 records on duty performance of
supervisors, supervisors’ duty performance reports as well as reading of and feedbacks to the information provided
by the Bank. The 2018 Supervisor Duty Performance Assessment Report was prepared and deliberated and
2019 Annual Report of Hankou Bank Co., Ltd.
63
approved by the Board of Supervisors and the Annual General Meeting.
2. The Board of Supervisors conducted total-process supervision over decision making of the Board of Directors
and duty performance of directors by attending meetings of the Board of Directors and reviewing meeting
materials and minutes of the Board of Directors and its special committees. The Report on 2018 Director Duty
Performance Assessment by the Board of Supervisors was prepared according to the personal performance reports
of directors and the 2018 Director Duty Performance Assessment Report issued by the Board of Directors and
submitted to the Board of Supervisors and the Annual General Meeting for review and approval. The Report on
2018 Senior Executives Duty Performance Assessment by the Board of Supervisors was prepared according to the
implementation of resolutions of the Board of Directors by the senior management, management performance and
operating results of the Bank in 2018, taking into account senior executives’ personal work reports, and submitted
to the Board of Supervisors and the Annual General Meeting for review and approval.
3. The Board of Supervisors organized an assessment of the Board of Directors’ and the Senior Executives’
performance of liquidity risk management duties in 2018 in accordance with the CBIRC Liquidity Risk
Management Measures of Commercial Banks (Trial) and the Liquidity Risk Management Policy of Hankou Bank
(Revised). The assessment report was reviewed and approved by the Board of Supervisors and presented to the
Annual General Meeting.
4. In accordance with the regulatory guidelines and the Bank’s policies, the employee supervisors of the Fifth
Board of Supervisors presented the report on duty performance of employee supervisors to the Sixth Plenary
Session of the Third Employees’ (Members’) Congress of the Bank.
iv. Special work done
First, the Board of Supervisors conducted follow-up audit of the audit projects carried out by the Board of
Supervisors in 2019, the special audit of disposal of non-performing assets, the special audit of related party
transaction management, special audit of swindle risk prevention, general audit of Xiangyang Branch and
departure audit of selected senior executives. Second, the Board of Supervisors surveyed Xiantao Sub-branch,
Jianghan Sub-branch and Enshi Branch, conducted the survey on related party transaction management, the
special survey on financial services for private enterprises, the special survey on wealth management business
transformation under the New Regulation on Wealth Management, the special survey on liquidity management
and the special survey on swindle risk prevention and control, and organized supervisors to conduct field survey of
Yichang Branch and Xiangyang Branch based on the special audit on disposal of non-performing assets and the
general audit of Xiangyang Branch. Third, a special inspection was conducted over the corrective actions for
onsite examination findings with respect to swindle risk prevention and control to ensure effective rectification.
For outstanding problems, relevant departments were urged to take corrective actions until they were corrected.
v. Development of policies and procedures
During the reporting period, the Procedural Rules of the Board of Supervisors, the Procedural Rules of the
Supervision Committee of the Board of Supervisors and the Measures for Duty Performance Assessment of
Supervisors were revised, and the Management Measures for Duty Performance of Supervisors and the
Management Measures for Remuneration of Supervisors were formulated.
2019 Annual Report of Hankou Bank Co., Ltd.
64
vi. Application of supervision findings
During the reporting period, the supervisory opinion of the Board of Supervisors was issued to the Board of
Directors and the senior management in accordance with the Management Measures for Application of
Supervision Findings of the Board of Supervisors (Trial), incorporating the opinions and suggestions given by the
Board of Supervisors in meeting supervision, surveys, interviews and special audits.
vii. Studies
In the reporting period, supervisors participated in the prudential supervision meetings held by regulators and
training programs organized by the Bank and studied national policies, economic and financial conditions,
regulatory rules and industry developments by a combination of massed learning and self-study.
II. Independent Opinions of the Board of Supervisors on Relevant Issues
The Board of Supervisors supervised the Company in accordance with the Company Law and the Articles ofAssociation of the Company and issued the following opinions:
i. Compliant operation of the Company
In the reporting period, the Bank operated in compliance with the Company Law, the Articles of Association and
other laws and regulations. The decision-making procedures were lawful and valid. No violation of the Articles of
Association of the Bank or laws or regulations or impairment of interests of shareholders was found.
ii. Authenticity of the financial statements of the Company
Union Power Certified Public Accountants LLP has audited the Bank in accordance with the new accounting
standards for business enterprises and issued a standard unqualified auditor’s report. The auditor’s report
authentically, objectively and fairly represent the Bank’s financial position and operating results.
iii. Acquisitions and sales of assets
The Bank had no material acquisitions or sales of assets during the reporting period.
iv. Related party transactions
During the reporting period, related party transactions of the Bank were fair and reasonable and found no
detrimental to the interests of shareholders or the Company.
v. Implementation of resolutions made by the general meetings
The Board of Supervisors raised no objection to reports and proposals submitted by the Board of Directors to the
general meetings during the reporting period. The Board of Supervisors supervised the implementation of
resolutions made by the general meetings and believed that the Board of Directors of the Company could
implement resolutions made by the general meetings earnestly.
vi. Risk management and internal control
In the reporting period, the Bank continued to strengthen risk management and internal control, further improvedthe comprehensive risk management and internal control system, fostered a total compliance atmosphere and
2019 Annual Report of Hankou Bank Co., Ltd.
65
enhanced the ability to identify, measure, monitor and control risks.
2019 Annual Report of Hankou Bank Co., Ltd.
66
Chapter VI Significant Events
I. Material Legal Proceedings and Arbitrations
As at the end of the reporting period, the Bank was involved in 48 pending lawsuits of equal to or more than
RMB10 million each as plaintiff, with RMB1,396.41 million of outstanding balance of principal involved.
II. Increase or Decrease of Registered Capital, Split-off and Merger
During the reporting period, the Company did not increase or decrease registered capital or had any split-off or
merger.
III. Material Asset Acquisition and Sale, Merger and Acquisition
The Company had no material asset acquisition or sale, merger or acquisition during the reporting period.
IV. Related Party Transactions
i. Related parties
In accordance with the Company Law, the Accounting Standard for Business Enterprises No. 36 - Disclosure of
Related Parties, the Administrative Measures for the Connected Transactions between the Commercial Banks and
Their Insiders and Shareholders and the Provisional Measures for Equity Management of Commercial Banks
issued by CBIRC and the Administrative Measures for Related Party Transactions of Hankou Bank Co., Ltd., the
Bank's related parties include related natural persons and related legal persons or other organizations.
The related natural persons of the Bank include the insiders of the Bank; major natural person shareholders of the
Bank, and close relatives of the Bank’s insiders and major natural person shareholders; the related legal persons of
the Bank or holding natural person shareholders, directors and key executives of other organizations related to the
Bank. The related legal persons or other organizations exclude the legal persons or other organizations that can be
directly, indirectly or jointly controlled or be greatly influenced by the Bank’s insiders, major natural person
shareholders and their close relatives; and other natural persons who have a significant influence on the Bank.
Related legal persons and other organizations of the Bank include major non-natural shareholders of the Bank;
controlling shareholders, de-facto controllers, related parties, persons acting in concert and ultimate beneficiaries
of major non-natural shareholders of the Bank; legal persons or other organizations directly or indirectly
controlled by the same enterprise as the Bank; legal persons or other organizations directly or indirectly controlled,
or under common control by or subject to significant influence of the Bank's insiders and major natural person
shareholders as well as their close relatives; other legal persons or other organizations who may directly, indirectly
or jointly control the Bank or have a significant influence on the Bank; and the Bank's subsidiaries and associate.
1. Shareholders holding 5% or more shares of the Bank as at 31 December 2019:
2019 Annual Report of Hankou Bank Co., Ltd.
67
Shareholdercompany
Related partyrelationship
Company type Place of registrationLegal
RepresentativeBusinessnature
Registeredcapital(Unit:
RMB1,000)
Legend HoldingsCorporation Shareholder
Other limitedcompany(listed)
Room 1701, 17F,Building 1, Yard 2,Kexueyuan SouthRoad, HaidianDistrict, Beijing
Ning Min Investment 2,356,231
Wuhan Iron andSteel GroupCorporation
Shareholder
Limitedliabilitycompany (soleproprietorshipof legal personinvested orcontrolled by anon-naturalperson)
Changqian, QingshanDistrict, Wuhan City,Hubei Province
ZhouZhongming
Investment 4,739,610
WuhanDevelopment andInvestment Co., Ltd.
Shareholder
Limitedliabilitycompany (soleproprietorshipof legal personinvested orcontrolled by anon-naturalperson)
F20 & 21, XinheBuilding, No. 618,Jianshe Avenue,Jiang'an District,Wuhan City, HubeiProvince
Tang Wu Investment 3,000,000
2. Disclosure of information on subsidiaries of the Bank
Subsidiary TypeCompanytype
Place ofregistration
LegalRepresentative
Businessnature
Registeredcapital
(RMB10,000)
Combinedshareholdingpercentage(%)
Combinedpercentage ofvoting sharesheld (%)
UnifiedSocialCreditCode
HBZhijiangRuralBank , Ltd.
Controlledsubsidiary
Ajoint-stockcompany
Hubei Yin ZuoyinFinancialindustry
5,000 51% 51%9142050058549827XY
HBYangxinRuralBank , Ltd.
Controlledsubsidiary
Ajoint-stockcompany
Hubei Zou LihongFinancialindustry
5,000 80% 80%91420200594244829H
3. Disclosure of information on associate of the Bank
Associatename
Associatetype
Companytype
Place ofregistration
LegalRepresentative
Businessnature
Registeredcapital
(RMB10,000)
Combinedshareholdingpercentage(%)
Combinedpercentageof votingshares held
(%)
UnifiedSocialCreditCode
2019 Annual Report of Hankou Bank Co., Ltd.
68
AerospaceScience &IndustryFinancialLeasing ,Ltd.
Associate
Otherlimitedliabilitycompanies
Hubei Li DongfengFinancialindustry
300,000 25% 25%91420112MA4KTG0Q7G
ii. Summary of related party transactions
Related party transactions of the Company are conducted in compliance with laws, administrative regulations,
unified accounting policy of the State and relevant banking regulatory rules, and are on normal commercial
principles that are not superior to similar transactions with non-related parties.
1. Balance of on-balance-sheet and off-balance-sheet credit
(Unit: RMB1,000)
Category 31 December 2019 31 December 2018
Related legal persons or other
organizations (on balance sheet)6,806,294 5,537,621
Related legal persons or other
organizations (off balance sheet)2,846,738 1,896,814
Related natural persons (including
credit card overdrafts)37,561 33,200
2. Balance of deposits
(Unit: RMB1,000)
Category 31 December 2019 31 December 2018
Related legal persons or other
organizations5,668,406 4,528,187
Related natural persons 66,257 48,044
3. Loan interest income
(Unit: RMB1,000)
Category 31 December 2019 31 December 2018
Related legal persons or otherorganizations
136,109 120,500
Related natural persons 3,582 1,323
2019 Annual Report of Hankou Bank Co., Ltd.
69
4. Deposit interest expense
(Unit: RMB1,000)
Category 31 December 2019 31 December 2018
Related legal persons or otherorganizations
69,008 37,644
Related natural persons 63 59
5. Off-balance sheet positions, net
(Unit: RMB1,000)
Category 31 December 2019 31 December 2018
Related legal persons or otherorganizations
1,044,002 905,187
Related natural persons 0 0
6. Remunerations paid to key executives
The Bank had 22 key management members as at 31 December 2019, and 23 key management members as at 31
December 2018. The remunerations paid to them are as follows:
(Unit: RMB1,000)
Related party 31 December 2019 31 December 2018
Key executives 6,492 7,927
iii. General related party transactions
During the reporting period, the Bank conducted 228 general related party transactions totaling RMB19.42 billion,
of which 220 transactions with an aggregate value of RMB19,416 million were conducted with related legal
persons and eight transactions with an aggregate value of RMB4.45 million were conducted with related natural
persons.
(Unit: RMB1,000)
Type of related party transactions Number of transactions Amount
Related legal persons
Credit business 142 6,523,443
Treasury operation 71 12,189,570
Bond business 2 262,500
2019 Annual Report of Hankou Bank Co., Ltd.
70
SPVs 1 200,000
Investment by principal-guaranteed
wealth management products4 240,000
Subtotal 220 19,415,513
Related natural persons Credit business 8 4,450
Total 228 19,419,963
iv. Major related party transactions
According to CBIRC’s Administrative Measures for the Connected Transactions between the Commercial Banks
and Their Insiders and Shareholders and the Bank’s Management Measures on Related Party Transactions, major
related party transaction means a transaction between the Bank and a related party that accounts more than 1% of
the Bank’s net capital and results in a balance of transactions between the Bank and the related party accounting
for more than 5% of the Bank’s net capital.
In calculating the balance of the Bank’s transactions with related natural persons, their close relatives’ transactions
with the Bank should be included. In calculating the balance of the Bank’s transactions with related legal persons
or other organizations, the Bank’s transactions with the legal persons or other organizations under common control
with them should be included.
1. Major transactions with related natural persons
As of the end of the reporting period, the Bank had no major transactions with related natural persons.
2.Major transactions with related legal persons
First, amount of a single major related party transaction. During the reporting period, the Bank had six major
related party transactions accounting for over 1% of the Bank’s net capital individually, with an aggregate value of
RMB3,222 million. For details, see the table below:
(Unit: RMB1,000)
S/N Related legal persons Transaction type Date Amount
1Aerospace Science & Industry Financial
Leasing , Ltd.
Due from banks and other
financial institutions19 March 2019 400,000
2019 Annual Report of Hankou Bank Co., Ltd.
71
2 Wuhan Financial Holdings (Group)
Investment of
non-principal-guaranteed
wealth management funds
29 March 2019 300,000
3 Wuhan Financial Holdings (Group) Entrusted loans 27 May 2019 900,000
4 Tianfeng Securities Co., Ltd. Reverse repurchase 11 July 2019 297,000
5 Tianfeng Securities Co., Ltd. Reverse repurchase 12 July 2019 297,000
6Wuhan Development and Investment Co.,
Ltd.Working capital loans 31 December 2019 1,028,000
Total 3,222,000
Second, cumulative balance of major related party transactions. As at the end of the reporting period, the following
major related party transactions of the Bank with group customers had a balance accounting for over 5% of the
Bank’s net capital: The balance of credit transactions with Wuhan Financial Holdings (Group) and its related
parties stood at RMB4,104 million; the balance of credit transactions with Wuhan State-owned Assets
Management Co., Ltd. and its related parties stood at RMB2,250 million.
V. Material Contracts and Performance of Obligations thereunder
i. Material trusts, sub-contracts and leases
During the reporting period, the Company had not entered into any material trusts, sub-contracts or leases.
ii. Material guarantees
During the reporting period, the Company did not have any other material guarantees necessary for disclosure
except for the financial guarantees within the business scope as approved by CBIRC.
iii. Other material contracts and performance of obligations thereunder
The Bank entered into no material contracts during the reporting period.
VI. Engagement and Dismissal of the Accounting Firm
During the reporting period, the Company engaged Union Power Certified Public Accounts LLP to audit the
financial statements. The auditor’s fee was RMB950,000.
2019 Annual Report of Hankou Bank Co., Ltd.
72
VII. Regulatory Penalties on Directors, Supervisors and Senior Executives of the
Company
During the reporting period, no directors, supervisors or senior executives of the Company were subject to any
regulatory penalties.
VIII. Other Important Information Necessary to Inform the Public
i. Acquisition of business access qualifications
1. During the reporting period, the Bank obtained the qualification for online banking sale of savings treasury
bonds (electronic). In 2019, the Ministry of Finance and PBOC published an announcement approving the Bank to
launch the online banking sale of savings treasury bonds (electronic).
2. During the reporting period, four new institution of the Bank, 74 ones in total, were permitted to provide
exchange settlement and sales service to the personal customers.
ii. Establishment of institutions
During the reporting period, the Bank established eight institutions in total, among which one branch and two
sub-branches were sub-branches beyond Wuhan and five sub-branches in Wuhan.
iii. Other important information
1. Another round of share capital increase was implemented. The Bank implemented another round of share
capital increase and introduced strategic investors in 2019, which was reviewed and approved at the 2019 Second
Extraordinary General Meeting on 27 November 2019. Relevant matters are underway.
2. A wealth management subsidiary was established. The Bank planned to establish a wholly-owned wealth
management subsidiary, which was reviewed and approved at the 2019 Second Extraordinary General Meeting on
27 November 2019. Relevant matters are underway.
3. The Bank became the first SWIFT GPI banking corporation in Hubei Province. During the reporting period, the
Bank joined SWIFT’s Global Payments Innovation (GPI) program, the first Hubei-based banking corporation to
join the program. By creating a global network of SWIFT GPI interbank business, the GPI service program
enables quick receipt of payments, transparent charges, traceable status of remittances and complete transmission
of remittance information. The customers who conduct cross-border remittance via the Bank have access to a
number of value added services, including payment progress, total-process tracking and domestic and overseas
remittance fee inquiries. The cross-border payment experience has been significantly improved. Based on SWIFT
GPI, the Bank will further enrich and improve the cross-border payment and settlement product line, innovate
cross-order payment products for various channels and improve the quality and efficiency of cross-border
payments, so as to provide cross-border payment services of improved quality, speed, transparency and traceability
for the real economic development and importers’/exporters’ international settlement in Wuhan City and enhance
local enterprises’ competitiveness and brand awareness in international markets.
2019 Annual Report of Hankou Bank Co., Ltd.
73
4. The Bank issued the first residential mortgage-backed security across the banking industry in Hubei Province.
During the reporting period, the Bank issued the “Jointown 2019 Residential Mortgage-Backed Security Tranche
I” (RMBS) in the China interbank market, with an issue size of RMB3,511 million. This RMBS issue came as the
first ever among Hubei-based banks, and also the first RMBS issued by a Chinese city commercial bank with an
AA+ issuer rating since 2017. The proceeds from this RMBS issue will be used to serve the national strategy for
consumer upgrades to meet local residents’ essential consumer demand.
5. The Bank successfully underwrote the first bond as an independent lead underwriter. During the reporting
period, the Bank successfully underwrote the 2019 first tranche of the commercial paper issued by Wuhan
Municipal Construction Group Co., Ltd. as its independent lead underwriter. The issue size was RMB300 million
and the one-year coupon rate was 4.67%. It came as the first bond underwitted by the Bank as independent lead
underwriter after the Bank became eligible as a Class B lead underwriter for debt financing instruments of
non-financial enterprises in 2016, based on ongoing expirations and buildup of experience in lead underwriting of
bonds. The Bank will take the opportunity to build an “asset-light bank” leveraging on its Class B independent
lead underwriter license, keep enriching the product series and financing channels and lay a solider financial
foundation for local economic growth.
6. The archive center opened for service. During the reporting period, the Bank’s archive center was completed
and put into service in Jiangxia District, Wuhan. The center has substantially improved the records retention and
archival service conditions of the Bank.
7. The Bank won a number of awards and honors during the reporting period, including the “Top Ten Innovators
in Mobile Banking” from The Chinese Banker, the “Model Partner for Cardless Business” from China UnionPay,
the first prize for excellent cases awarded by the Asian Financial Cooperation Association, “Cavalry -- Most
Socially Responsible Small and Medium-sized Banks” in 2019 from the Modern Bankers, “2019 Top Ten City
Commercial Banks” in the Chinese Financial Institutions Gold Metals List, the “Bank with Outstanding
Competitiveness in Brand Building in 2019” and the Golden Cicada Awards for “City Commercial Bank of the
Year 2019”, “Outstanding Contribution to FinTech Innovation in 2019”, “Excellent Bank Dealer” in 2019,
“Banking Technology Award in Hubei Province in 2019”, “Best Mobile Banking Security” in 2019, “Excellent
Equity Investment Service Provider in Hubei Province” and “Model Organization in the Pilot Program of Hubei
Provincial Banking Association on Collaborative Credit in 2019”.
2019 Annual Report of Hankou Bank Co., Ltd.
74
Chapter VII Share Capital Changes and
Shareholders
I. Share Changes
i. List of share changes
See below for the changes in shares as at the end of 31 December 2019:
Item
At the end of the period At the beginning of the period
Quantity (shares) Percentage (%) Quantity (shares) Percentage (%)
State shares 205,199,820 4.97 123,369,000 2.99
Legal-person shares 3,764,319,907 91.19 3,846,150,727 93.17
Natural-person shares 158,326,081 3.84 158,326,081 3.84
Total share capital 4,127,845,808 100.00 4,127,845,808 100.00
ii. Share offerings in the three years before the end of the reporting period
The Bank did not issue any new shares in the three years before the end of the reporting period.
II. Shareholders
i. Total number of shareholders
The Bank had 4,084 shareholders at the end of the reporting period, including 235 state shareholders and
legal-person shareholders, and 3,849 natural-person shareholders.
ii. Major equity transfers
During the reporting period, in order to further improve the state-owned financial capital management system and
mechanism and perform its duty as a state-owned financial capital contributor, the Bank’s shareholder Wuhan
Bureau of Finance received 81.83 million state-owned shares in the Bank transferred to it.
iii. Shareholdings of the top 10 shareholders and changes thereof as at the end of the reportingperiod
(Unit: Share)
2019 Annual Report of Hankou Bank Co., Ltd.
75
S/N Shareholder nameNumber of sharesat the end of the
period
Percentage(%)
Number ofshares at thebeginning of the
period
Percentage(%)
Number of sharespledged or locked up
1 Legend Holdings Corporation 633,000,000 15.33 633,000,000 15.33
2Wuhan Iron and Steel Group
Corporation550,600,000 13.34 550,600,000 13.34
3Wuhan Development and
Investment Co., Ltd.337,500,000 8.18 337,500,000 8.18
4 Wuhan Bureau of Finance 205,199,820 4.97 123,369,000 2.99
5 Good First Group Co., Ltd. 200,000,000 4.85 200,000,000 4.85 99,000,000, pledged
6
Wuhan Triumphal Conch
Investment Management Co.,
Ltd.1
200,000,000 4.85 200,000,000 4.85
7Wuhan Huahan Investment
Management Co., Ltd.176,000,000 4.26 176,000,000 4.26
8Wuhan Credit Risk Management
Co., Ltd.2150,988,499 3.66 150,988,499 3.66
9Wuhan Department Store Group
Co., Ltd.100,295,200 2.43 100,295,200 2.43
10Hainan Chuangqi Properties Co.,
Ltd.100,000,000 2.42 100,000,000 2.42
10Shanghai High Gain Industrial
Limited100,000,000 2.42 100,000,000 2.42
10 National Trust Co., Ltd.3 100,000,000 2.42 100,000,000 2.42
Note: Connected relations among the above-mentioned shareholders
1200 million shares in the Bank held by the company were transferred to Wuhan Financial Holdings (Group) in April 2020.2 151 million shares in the Bank held by the company were transferred to Wuhan Financial Holdings (Group) in April 2020.3100 million shares in the Bank held by the company were transferred to Wuhan Financial Holdings (Group) in April 2020.
2019 Annual Report of Hankou Bank Co., Ltd.
76
(1) As at the end of the reporting period, Wuhan Development Investment Co., Ltd. is the wholly-owned subsidiary of Wuhan
Financial Holdings (Group) Co., Ltd., and Wuhan Credit Risk Management Co., Ltd. (now renamed “Wuhan Credit Risk
Management Financing Guarantee Co., Ltd.”) is the controlled subsidiary of Wuhan Financial Holdings (Group) Co., Ltd. Therefore,
Wuhan Development Investment Co., Ltd. and Wuhan Credit Risk Management Co., Ltd. have become related parties under the same
controller.
(2) Wuhan Huahan Investment Management Co., Ltd. and Wuhan Department Store Group Co., Ltd. are controlled by Wuhan
State-owned Assets Management Co., Ltd. Thus, the two have become related parties under common control.
iv. Substantial shareholders
1. Shareholders holding 5% or more shares as at the end of the reporting period
(1) Legend Holdings Corporation, with its Unified Social Credit Code being 911100001011122986, legal
representative Ning Min, registered capital RMB2,356,230,900 and date of establishment 9 November 1984.
Scope of business: Project investment; investment management; asset management; economic and trade advisory
services; investment advisory services; business management advisory services; technology development, transfer
and promotion; property management; sale of industrial chemicals (excluding hazardous chemicals and Class I
precursor chemicals); mineral products; import and export of goods, import and export of technologies and import
and export agency services; computer system services; data processing. Legend Holdings Corporation has no
controlling shareholder or de-facto controller. The final beneficiary of shares held in the Bank is Legend Holdings
Corporation. There is no person acting in concert with it. At the end of the period, Legend Holdings Ltd. held a
15.33% interest in the Bank and pledged no shares in the Bank.
(2) Wuhan Iron and Steel Group Corporation, with its Unified Social Credit Code being 914201001776819133,
legal representative Zhou Zhongming, registered capital RMB4,739.61 million and date of establishment 9
January 1990. Scope of business: Scope of business: intelligent equipment manufacturing; smart city development;
logistics services; software development and information technology services; energy conservation, environmental
protection and civil construction; elder service enterprise management; metallurgical products and their
byproducts, metallurgical mine products and extended steel products, chemical products (excluding hazardous
chemicals), building materials, metallurgical auxiliary materials, metallurgical plants, electromechanical
equipment design and manufacturing; sales of automobile (excluding sedans); gas production and supply;
industrial technology development and advisory services. The controlling shareholder and de-facto controller of
Wuhan Iron and Steel Group Corporation is China Baowu Iron and Steel Group Corp, and the final beneficiary is
Wuhan Iron and Steel Group Corporation. Persons acting in concert with it include Wuhan Iron and Steel Jiangbei
Group Corporation and Wisco Industrial Company, which together held a 13.36% interest in the Bank at the end of
the period, and had pledged no shares in the Bank.
(3) Wuhan Development and Investment Co., Ltd., with its Unified Social Credit Code being
91420100717953714H, legal representative Tang Wu, registered capital RMB3 billion and date of establishment
21 January 2000. Scope of business: Investment in energy resources, environmental protection, high and new
technology, urban infrastructure, real estate, ecological agriculture, commerce, trade and tourism; research and
development of energy-efficient new materials and technologies; machining; retail and wholesale of machinery,
electric appliances, general merchandise and hardware & electric materials; other approved activities (subject to
special regulations of the State, if any). The controlling shareholder and de-facto controller of Wuhan
2019 Annual Report of Hankou Bank Co., Ltd.
77
Development Investment Co., Ltd. is Wuhan Financial Holdings (Group) Co., Ltd. The ultimate beneficiary is
Wuhan Development Investment Co., Ltd. At the end of the period, it held an 8.18% interest in the Bank and
pledged no shares in the Bank.
2. Other substantial shareholders defined by the Provisional Measures for Equity Management of
Commercial Banks
(1) Wuhan Financial Holdings (Group), with its Unified Social Credit Code being 91420100778164444G, legal
representative Chen Zanxiong, registered capital RMB4 billion and date of establishment 8 August 2005. Its main
scope of business includes: Financial-sector equity investment and management; investment in energy,
environmental protection, high and new technologies, urban infrastructure, agriculture, manufacturing, logistics,
real estate, commerce and trade, tourism, hotels and other fields related to industry structure adjustments; building
decoration materials, metallic and nonmetallic materials, agricultural and sideline products and wholesale and
retail sales of machinery and electric appliances; warehousing services; non-financial equity investment and
management; investment management advisory services; business management services; and financial information
and technology research.
The controlling shareholder and de-facto controller of Wuhan Financial Holdings (Group) Co., Ltd. is State-owned
Assets Supervision and Administration Commission of Wuhan Municipal Government. Wuhan Financial Holdings
(Group) Co., Ltd. directly holds 11.44% of shares in the Bank after acquiring shares in Wuhan Credit Risk
Management Co., Ltd. (now renamed “Wuhan Credit Risk Management Financing Guarantee Co., Ltd.”), Wuhan
Triumphal Conch Investment Management Co., Ltd., National Trust Co., Ltd., Wuhan Construction and
Investment Co., Ltd. and Wuhan Changxin Asset Management Co., Ltd. (its shareholder status was approved by
CBIRC Hubei Office in January 2020). Wuhan Financial Holdings (Group) Co., Ltd. and its related parties and
persons acting in concert Wuhan Development Investment Co., Ltd. and Wuhan Trade State-owned Holding
Group Co., Ltd. held a 19.61% interest in the Bank in aggregate.
(2) Wuhan State-owned Assets Management Co., Ltd., with its Unified Social Credit Code being
91420100177758917D, legal representative Wang Yubao, registered capital RMB4,138,564,000 and date of
establishment 12 August 1994. Its main scope of business includes: State-owned assets management within
mandate; ownership and equity investment; merger, acquisition and reorganization of businesses (assets); trading
in ownership of state-owned assets; information consulting, agency and intermediary services (business items
subject to statutory approval shall not be carried out without the approval of the competent authority).
The controlling shareholder and de-facto controller of Wuhan State-owned Assets Management Co., Ltd. is
State-owned Assets Supervision and Administration Commission of Wuhan Municipal Government. The ultimate
beneficiary is Wuhan State-owned Assets Management Co., Ltd. The related parties and the persons acting in
concert with it are Wuhan Wushang Group Co., Ltd., Wuhan Huahan Investment Management Co., Ltd. and
Wuhan Dongchuang Investment & Guarantee Co., Ltd. At the end of the period, Wuhan State-owned Assets
Management Co., Ltd. and its related parties and persons acting in concert with it together held a 7.69% interest in
the Bank. Wuhan Dongchuang Investment & Guarantee Co., Ltd. pledged 10,000,000 shares in the Bank,
accounting for 0.24% of the share capital of the Bank.
(3) Wuhan Bureau of Finance. Wuhan Municipal Bureau of Finance is a department of Wuhan Municipal
2019 Annual Report of Hankou Bank Co., Ltd.
78
Government. It takes charge of public finance management in Wuhan, including formulating and organizing the
implementation of Wuhan’s fiscal development strategy, program and reform plans, managing the non-tax
revenues of the government and managing government-managed funds and managing all municipal government
revenues and expenditures. It is also responsible for formulating and organizing implementation of the annual
municipal budget and financial accounts, reviewing and approving the annual budget and final accounts of
departments (or entities) directly managed by the municipal government, organizing formulation of the treasury
management policy and the central treasury receipts and payments management policy, implementing the
regulations on state-owned assets of government agencies and public institutions and participating in the
formulation of regulations on budgeting of state-owned capital management.
As at the end of the reporting period, Wuhan Bureau of Finance held a 4.97% interest in the Bank after acquiring
some shares through transfer. Wuhan Bureau of Finance had no person acting in concert.
(4) Good First Group Co., Ltd., with its Unified Social Credit Code being 91310000612260305J, legal
representative Wu Di, registered capital RMB133 million and date of establishment 2 May 1995. Its main scope of
business includes: High-tech product research, development and sales; industrial investment; investment in
education, agriculture, industrial entertainment and health products; sales of photography and new building
materials; wholesale and retail sale of industrial chemicals (excluding hazardous chemicals and chemical subject
to control), knit goods, textile products, hardware & electric materials, general merchandise, metallic materials,
building materials, automobile (excluding passenger vehicles) and parts, ordinary machinery, electronic products
and communication equipment and mineral products licensed by the State.
The controlling shareholder of Good First Group Co., Ltd. is Huang Xi. The de facto controller is Huang Xi. The
final beneficiary is Huang Xi. There is no person acting in concert. At the end of the period, Good First Group Co.,
Ltd. held a 4.85% interest in the Bank and pledged 99,000,000 shares in the Bank, accounting for 2.40% of the
share capital of the Bank.
2019 Annual Report of Hankou Bank Co., Ltd.
79
Chapter VIII Directors, Supervisors, Senior
Executives and Employees
I. Directors, Supervisors and Senior Executives
i. Basic information on the members of the Fifth Board of Directors and Board of Supervisorsand senior executives during the reporting period1
Name Post Gender Age TenureShareholding(shares)
Paid or not (√)
Chen Xinmin Chairman Male 5615 January 2019 to
expiration of tenure√
Ruan XuzhouDirector/Vice
President/Financial ControllerMale 56
15 January 2019 to
expiration of tenure500,000 √
Zhou Min Directors Male 4315 January 2019 to
expiration of tenure
Wen Fu Directors Male 4215 January 2019 to
expiration of tenure
Yao Ke Directors Male 4415 January 2019 to
expiration of tenure
Shao Bo Directors Female 3815 January 2019 to
expiration of tenure
Guo Li Independent Director Male 4415 January 2019 to
expiration of tenure√
Hou Chengqi Independent Director Male 4315 January 2019 to
expiration of tenure√
Zhang Yabing Independent Director Male 4715 January 2019 to
expiration of tenure√
Wu Bin Independent Director Male 46 15 January 2019 to √
2019 Annual Report of Hankou Bank Co., Ltd.
80
Name Post Gender Age TenureShareholding(shares)
Paid or not (√)
expiration of tenure
Bai Junwei
Employee
Supervisor/Chairman of the
Board of Supervisors
Male 5615 January 2019 to
expiration of tenure500,000 √
Yuan Wenjian Shareholder Supervisor Male 4815 January 2019 to
expiration of tenure
Zhang Li Shareholder Supervisor Male 5515 January 2019 to
expiration of tenure
Guo Tianyong External Supervisor Male 5115 January 2019 to
expiration of tenure√
Cui Baoshun External Supervisor Male 5515 January 2019 to
expiration of tenure√
Guo Wei External Supervisor Male 4515 January 2019 to
expiration of tenure√
Sun ZhiqiangEmployee Supervisor/General
Manager of Audit DepartmentMale 53
15 January 2019 to
expiration of tenure469,000 √
Yang CanEmployee Supervisor/Head of
Jianghan Sub-branchMale 46
15 January 2019 to
expiration of tenure495,460 √
Sun Zhengbai Vice President Male 5115 January 2019 to
expiration of tenure√
Lei Fengxin Vice President Male 5415 January 2019 to
expiration of tenure500,000 √
Ding Rui Board Secretary Male 5515 January 2019 to
expiration of tenure500,000 √
2019 Annual Report of Hankou Bank Co., Ltd.
81
Name Post Gender Age TenureShareholding(shares)
Paid or not (√)
Xu Jinming1 Vice President Male 4215 January 2019 to 29
September 2019
Zhan Tianle Chief Risk Officer Male 5515 January 2019 to
expiration of tenure500,000 √
ii. Posts of directors and supervisors in shareholder entities and related enterprises
Name Shareholder entity Post
Zhou Min Legend Holdings CorporationExecutive Director of Financial Services &Investment Department
Wen FuWuhan Iron and Steel Green City Technology andDevelopment Co., Ltd.
General Manager
Yao Ke Wuhan Development and Investment Co., Ltd.Deputy General Manager and Party CommitteeMember
Shao Bo Wuhan State-owned Assets Management Co., Ltd.Manager of Strategic Research Department(Board of Directors’ Office)
Yuan Wenjian Good First Financial Holding Co., Ltd. Chief Fund Officer
Zhang Li Wuhan Bureau of Finance Chief of the Agriculture Division
iii. Major work experience and posts of directors, supervisors and senior executives at the endof the reporting period
1. Directors
Chen Xinmin, holder of doctoral degree and a senior accountant, is currently Chairman & Party Committee
Secretary of Hankou Bank. He formerly served as the deputy chief of the Banking Department of Shishou County
Sub-branch, Hubei Branch, Industrial and Commercial Bank of China; cadre, chief section member, deputy
division chief, deputy division chief of the Planning Department, head and Secretary of Party Committee of
Xiantao Sub-branch, Hubei Branch, Industrial and Commercial Bank of China, head and Secretary of Party
Committee of Huangshi City Branch, Hubei Branch, Industrial and Commercial Bank of China; Assistant
President, Deputy Head and member of Party Committee of Hubei Branch, Industrial and Commercial Bank of
China. He was Chairman of the Third/Fourth/Fifth Board of Directors of Hankou Bank.
Ruan Xuzhou, holder of master’s degree and an economist, is currently Director, Vice President, Financial
1According to the plan of the Wuhan Municipal Committee of CPC for attracting 100 officials directly managed by provincial andcentral governments to Wuhan City on secondment, Mr. Xu Jinming was appointed Vice President of the Bank upon approval of theSixth Board of Directors at its first meeting. Xu Jinming finished his secondment period on 29 September 2019. The Seventh Meetingof the Sixth Board of Directors of the Bank reviewed and approved the removal of Xu Jinming from the office of Vice President onsecondment.
2019 Annual Report of Hankou Bank Co., Ltd.
82
Controller & Party Committee Member of Hankou Bank. Prior posts included Senior Staff Member and Principal
Staff Member of the Financial Management Division of Wuhan Branch of the People's Bank of China; Chief of the
Comprehensive Team of the Wuhan City Cooperative Bank Preparatory Office; and General Manager of the
Treasury Department, General Manager of the Credit Fund Management Department, and Vice President and Party
Committee Member of Wuhan City Commercial Bank. He was Chairman of the First Board of Supervisors and
served on the Second, the Third, the Fourth and the Fifth Board of Directors of Wuhan City Commercial Bank
(Hankou Bank).
Zhou Min, holder of a master’s degree from Cambridge University, is currently an executive director of the
Financial Services & Investment Department of Legend Holdings Ltd. He was a business director and business
manager of Legal Department of PICC Property and Casualty Company Limited, a division manager, a division
manager (in charge of work) of Legal and Compliance Department and Assistant to General Manager of the Credit
Credibility Assessment of The People’s Insurance Company (Group) of China Limited, and investment director of
the Financial Services & Investment Department of Legend Holdings Ltd.
Wen Fu, holder of bachelor’s degree, master candidate and accountant, is currently General Manager of Wuhan
Iron and Steel Green City Technology and Development Co., Ltd. Previously he was Staff Member, Senior Staff
Member and Principal Staff Member of the Cost Division and Budget Division of the Planning and Finance
Department at WISCO, Deputy Chief of the Price Investigation Division of the Financial and Assets Department
at China Iron and Steel Industry Association, Head of the Asset Management Division of the Planning and
Finance Department at WISCO, Senior Manager (Capital and State-owned Assets Management) of the Operation
and Finance Department at WISCO, Chief Accountant at Wuhan Iron & Steel Group Echeng Iron & Steel Co., Ltd.
and General Manager of the Operation and Finance Department (Investment Management Department) of Wuhan
Iron and Steel Group Corporation.
Yao Ke, holder of bachelor’s degree and master candidate, is currently Deputy General Manager and Party
Committee Member of Wuhan Development and Investment Co., Ltd. Previously he served as Project Manager of
the Financial Department of Wuhan Development and Investment Co., Ltd., Manager of Financial Department of
Wuhan Bohai Bioengineering Co., Ltd. (expatriated by Wuhan Development and Investment Co., Ltd.) and Project
Manager of Audit Department, Deputy Head and Head of Asset Department and Assistant to General Manager of
Wuhan Development and Investment Co., Ltd.
Shao Bo, master’s degree, is currently Manager of the Strategic Research Department (Board Office) at Wuhan
State-owned Assets Management Co., Ltd. Previously he served as Legal Secretary and Manager of Legal Affairs
Department of China Eastern Airlines Corporation Limited, Director of President Office and Manager of Legal
Department at Orientlucky Horse Industry Ltd. and Senior Executive and Vice Director of Executive Office (in
charge) of Wuhan State-owned Assets Management Co., Ltd.
Guo Li, holder of master’s degree, PhD in law and post-doctoral researcher in applied economics, is currently
Professor, Doctoral Supervisor, Party Secretary and Deputy Dean of Peking University Law School, Vice
Chairman of the China Banking Law Society, Executive Director of the Economic Law Division and Securities
Law Division of China Law Society and Alexander von Humboldt Research Fellow. Previously he was a lecturer
and associate professor at Peking University Law School, Independent Director of China Railway Tielong
Container Logistics Co., Ltd. and Independent Director of Beijing North Star Co., Ltd.
2019 Annual Report of Hankou Bank Co., Ltd.
83
Hou Chengqi, a PhD of management and post-doctoral researcher in applied economics, is currently a professor,
doctoral supervisor and Dean of the Financial Department of the Economics and Management School of Wuhan
University, and Head of the Financial Research Center of Wuhan University. Previously he was a lecturer and
associate professor at the Economics and Management School of Wuhan University.
Zhang Yabing, MBA, Chinese Certified Public Accountant, Certified Public Valuer and qualified for securities
and futures business, is currently a partner of Daxin Certified Public Accountants LLP, independent director of
Beijing Water Business Doctor Co., Ltd. and Henan Yicheng New Energy Co., Ltd. Previously he was independent
director of Gpro Titanium Industry Co., Ltd.
Wu Bin, a PhD in Economies and lawyer, is currently President of Shanghai Zhongping Guoyu Asset
Management Co., Ltd., independent director of Shanghai AJ Trust Co., Ltd., independent director of CMBC
Capital Holdings Limited (listed in Hong Kong) and an equity and insurance PE fund appraisal expert at the
Insurance Asset Management Association of China. Previously he was Deputy General Manager of Haitong
Securities Co., Ltd., Chairman of Haitong Unitrust International Financial Leasing Co., Ltd., Vice President of
Shanghai Media & Entertainment Group Co., Ltd., Party Committee Secretary and Vice Chairman of Shanghai
Oriental Pearl Media Co., Ltd., Chairman of Shanghai Media & Entertainment Technology Development Co., Ltd.,
Chairman of Shanghai Jingwen Property (Group) Co., Ltd., Chairman of Shanghai Sony Music Co., Ltd.,
Chairman of Shanghai Shendi (Group) Co., Ltd., controlling director of China Business Network Co., Ltd. and
director of Shanghai Oriental TV Shopping Co., Ltd.
2. Supervisors
Bai Junwei, holder of bachelor’s degree and master candidate, is currently Chairman of the Board of Supervisors
(President Level) and Party Committee Member of Hankou Bank. He was Deputy Secretary of Youth League
Committee of Jiangxi Agricultural University (Deputy Division Chief Level) and Manager of the state-owned
Jiangxi Umbrella Factory and worked for Jiangxi Branch of the People’s Bank of China as Senior Supervisor of
the Supervision Office and Deputy Division Chief of the Investigation and Statistics Division, Deputy Division
Chief of the Statistics and Investigation Division of Wuhan Branch of the People’s Bank of China, Deputy Head
of Xinyu Central Sub-branch of the People’s Bank of China, Deputy Division Chief and Division Chief of the
Non-banking Financial Institution Supervision Division of Wuhan Branch of the People’s Bank of China, Division
Chief of the Joint-stock Bank Supervision Division and City Commercial Bank Supervision Division of Hubei
Banking Regulatory Bureau. He was Chairman of the Third/Fourth/Fifth Board of Supervisors of Hankou Bank.
Yuan Wenjian, master’s degree, is currently Chief Fund Officer of Good First Financial Holding Corporation. He
formerly served as a dealer of the Securities Department of Trust and Investment Company of Xiamen Branch of
Industrial and Commercial Bank of China, Deputy Manager of the Securities Department of Fujian Jiuzhou
(Group) Co., Ltd., Senior Manager of the Investment Banking Department of Tiantong Securities, Manager of the
Securities Department of Xiongzhen Industrial, Chairman of the Board of Supervisors of Chengtun Mining Group
Co., Ltd., Assistant President of the Financial Undertaking Department and Deputy General Manager of the
Science and Technology Undertaking Department of Good First Group, and Supervisor of the Fourth and Fourth
Board of Supervisors of Hankou Bank.
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84
Zhang Li, postgraduate of a Party school, currently serves as Chief of the Agricultural Division of Wuhan Finance
Bureau. In Wuhan Finance Bureau, he was ever Section Staff, Deputy Section Chief, Section Chief and Deputy
Division Chief of the Industrial and Transport Division, Deputy Division Chief and Division Chief of the Statistical
Evaluation Division, Chief of Administrative and Public Institution Assets Management Division and Deputy
Secretary of Party Membership Committee. Previously he was Chief of the Financial Division of Wuhan Finance
Bureau and supervisor on the Fifth Board of Supervisors of Hankou Bank.
Guo Tianyong, holder of master’s degree and a PhD of finance, is currently Professor and Doctoral Supervisor of
the School of Finance of Central University of Finance and Economics, and Director of China Banking Research
Center of this University. He ever worked in Yantai Branch of the People’s Bank of China. He was Chairman of
the Fifth Board of Supervisors of Hankou Bank.
Cui Baoshun, holder of a master’s degree and a senior lawyer of China, is currently Director and Secretary of
Party General Branch of Hubei Rui Tong Tian Yuan Law Firm, Arbitrator of the Wuhan Arbitration Committee,
the Standing Director of Wuhan Lawyers Association, Part-time MA Student Adviser of the Law School of
Huazhong University of Science and Technology, Part-time Professor of Law School of Jianghan University and
Visiting Professor of Hubei University of Police. He was Chairman of the Fifth Board of Supervisors of Hankou
Bank.
Guo Wei, master’s degree and PhD in management science and engineering, is currently professor of the
Management School of Huazhong University of Science and Technology, director of the Accounting Association
of Hubei Province, Vice President of Hubei Alliance of Masters of Professional Accounting, Executive Director of
Wuhan Accounting Institute, member of the Wuhan Senior Accounting Positions Review Committee and member
of Wuhan Expert Review Panel for Top Accounting Talents. Previously he was Deputy Secretary-General of the
Systems Engineering Society of Wuhan.
Sun Zhiqiang, self-taught bachelor’s degree and a certified public accountant, is currently General Manager of the
Audit Department of Hankou Bank. Previously he worked at Wuhan Commercial Bank and its successor Hankou
Bank as Assistant Head of Hongshan Road Sub-branch, Deputy Head of Hongshan Road Sub-branch, Deputy
General Manager of Accounting and Settlement Department, Deputy Head of Wangjiaxiang Sub-branch, Deputy
Head of Wuluo Road Sub-branch, Deputy Head of Hongshan Sub-branch, Deputy Head (in charge) of Hongshan
Sub-branch and General Manager (deputy level) of Audit Department.
Yang Can, self-taught bachelor’s degree and master candidate, is currently Head and Party Committee Secretary
of the Jianghan Sub-branch of Hankou Bank. Previously he worked at Hankou Bank as Assistant Head of
Qiuchang Road Sub-branch, Assistant to General Manager of Corporate Banking Management Department,
Deputy General Manager (in charge) of Small Enterprise Finance Department, Deputy Head (in charge) of
Guanggu Sub-branch, Deputy Head (in charge) of Guanggu Sub-branch & Head of Technology Finance Service
Center, Head (in charge) of Guanggu Sub-branch & Head of Technology Finance Service Center, and General
Manager of Technology Finance Department & Head of Technology Finance Service Center.
3. Other senior executives
Sun Zhengbai, graduate degree and master’s degree, senior economist, is now Vice President (President Level)
and Party Committee Member of Hankou Bank. He acted as Senior Staff Member of the Management Committee
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85
of Wuhan Economic and Technical Development Zone, Senior Staff Member, Principal Staff Member, Deputy
Division Chief and Division Chief of the Cadre Education Division, Division Chief of the Economic Cadre
Division, Associate Inspector and Division Chief of the Economic Cadre Division of the Organization Department
of CPC Wuhan Municipal Party Committee.
Lei Fengxin, holder of a master’s degree and a senior economist, is currently Vice President, Party Committee
Member and Chairman of the Labor Union of Hankou Bank. He previously worked for Zhongnan University of
Finance and Economics as a lecturer, for the People's Bank of China as a General Office member and a senior staff
member and principal staff member in the Policy Research Office of Wuhan Branch, for Wuhan Urban
Cooperative Bank as Head of the Asset Verification Team of the Preparatory Office, for Wuhan City Commercial
Bank as General Manager of the Market Development Department, President and Chief of the Executive Office of
Hongshan Road Sub-branch, Assistant President, Chief of Executive Office, General Manager of Development
Planning Department and Deputy Head and Party Committee Member and for Hankou Bank as Vice President,
Party Committee Member and Director of the General Office and General Manager of the Mass Affairs
Department. He was member of the Second Board of Directors and Board Secretary of Wuhan City Commercial
Bank.
Ding Rui, master’s degree and economist, is currently Board Secretary (Vice President Level) and Party
Committee Member of Hankou Bank. He formerly worked as a teacher and Deputy Chief of the Executive Office
of the Training Center of Hubei Provincial Planning Commission, General Secretary to the General Affairs Group
of Wuhan Urban Cooperative Bank and Chief of the Executive Office, General Manager of the Technology
Department and Board Secretary of Wuhan City Commercial Bank. He formerly served as Board Secretary of the
Second, the Third, Fourth and Fifth Board of Directors of Wuhan City Commercial Bank (Hankou Bank).
Zhan Tianle, holder of college degree, master’s degree and an economist, is currently Chief Risk Officer (Vice
President Level) of Hankou Bank. He served as Senior Staff Member and Principal Staff Member of the Planning
and Fund Division of Wuhan Branch of the People’s Bank of China; Director of Wuhan Changjiang Urban Credit
Cooperatives, as well as Director of Tangjiadun Sub-branch, Head of Dadongmen Sub-branch, General Manager
of the Credit Fund Management Department, General Manager of the Credit Management Department and
General Manager of the Asset Risk Control Department of Wuhan City Commercial Bank. He also took the
positions of Chief Risk Officer (Assistant President level) & General Manager of the Risk Management
Department, as well as Chief Risk Officer (Assistant President level) & Head of Honggangcheng Sub-branch,
Assistant President & Head of Qingshan Sub-branch of Hankou Bank, and Assistant President & General Manager
of Risk Management Department.
iv. Changes in directors, supervisors and senior executives during the reporting period
Changes in directors, supervisors and senior executives of the Bank during the reporting period are detailed below:
1. On 15 January 2019, the 2019 First Extraordinary General Meeting of the Bank elected members of the Sixth
Board of Directors. There were 10 new directors in total, namely executive directors Chen Xinmin and Ruan
Xuzhou, shareholder directors Zhou Min, Wen Fu, Yao Ke and Shao Bo and independent directors Guo Li, Hou
Chengqi, Zhang Yabing and Wu Bin.
2. On 10 January 2019, the Six Plenary Session of the Third Employees’ (Members’) Congress of the Bank was
2019 Annual Report of Hankou Bank Co., Ltd.
86
held and elected employee supervisors to the Sixth Board of Supervisors. On 15 January 2019, the 2019 First
Extraordinary General Meeting of the Bank elected shareholder supervisors and external supervisors to the Sixth
Board of Supervisors. There were eight new supervisors in total, namely Employee supervisors Bai Junwei, Sun
Zhiqiang and Yang Can, shareholder supervisors Yuan Wenjian and Zhang Li, and external supervisors Guo
Tianyong, Cui Baoshun and Guo Wei.
3. On 15 January 2019, The first meeting of the Sixth Board of Directors of the Bank was held and appointed six
senior management members, namely Vice President Sun Zhengbai, Vice President and Financial Controller Ruan
Xuzhou, Vice President Lei Fengxin, Board Secretary Ding Rui, Vice President Xu Jinming and Chief Risk
Officer Zhan Tianle 。
4. On 29 September 2019, Xu Jinming finished his secondment period and was automatically removed from the
office of Vice President of Hankou Bank. The Seventh Meeting of the Sixth Board of Directors of the Bank
reviewed and approved the removal of Xu Jinming from the office of Vice President on secondment.
II. Remunerations of Directors, Supervisors, Senior Executives and Key
Management Personnel
1. Management structure, decision-making procedure and basis of determination of remuneration
The Shareholders’ General Meeting of the Bank sets the policy, determination methods and payment methods for
the remuneration of directors and supervisors The Board of Directors is responsible for designing the remuneration
management policies and procedures in accordance with relevant laws and regulations and assumes the ultimate
responsibility for remuneration management. The Nomination and Compensation Committee of the Board of
Directors carries out performance assessment and remuneration management of directors and senior executives of
the Bank and organizes research on the policy, plan and other issues regarding remuneration of directors and
senior executives of the Bank (in the reporting period, the Nomination and Compensation Committee of the Bank
consists of four directors, including three independent directors, and is chaired by an independent director). The
senior management of the Bank organizes the implementation of the Board of Directors’ resolutions on
remuneration management. The Human Resources Department of the Bank is responsible for implementing
specific matters. The risk control, compliance and planning and finance departments participate in and supervise
the execution of the remuneration mechanism and provide feedback for improvements. The audit department
conducts special audits over the design and execution of the remuneration system and reports findings to the
Board of Directors and the banking regulatory authority.
The Nomination and Compensation Committee of the Bank formulated the rules for remuneration of directors of
the Bank, submits them to the Board of Directors for review and approval and then reports them to the
Shareholders’ General Meeting for final approval. The Nomination Committee of the Board of Supervisors of the
Bank formulates the rules for remuneration of supervisors, submits them to the Board of Supervisors for review
and approval and then reports them to the Shareholders’ General Meeting for final approval. The Nomination and
Compensation Committee of the Bank formulates the rules for remuneration of senior executives and submits
them to the Board of Directors for review and approval.
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The remuneration of directors and supervisors of the Bank was determined in accordance with the Policy on
Remuneration of Directors and Supervisors of Hankou Bank Co., Ltd., the Policy on Allowances to Independent
Directors of Hankou Bank Co., Ltd. and the Policy on Allowances to External Supervisors of Hankou Bank Co.,
Ltd. During the reporting period, for senior executives of the Bank who are officers in charge of financial
corporations managed by the Wuhan Municipal Committee of CPC, the remuneration payment standards,
performance assessment methods as well as the composition and payment methods of remuneration and benefits
are determined in accordance with the Provisional Measures for Management of Party-managed Financial
Corporations in Wuhan and Remuneration of Officers in Charge. The remuneration of the senior management of
the Bank consists of basic annual salary, annual performance pay and incentives pay linked to in-tenure
performance assessment. Specifically, basic annual pay is determined according to the average wages of in-service
employees of municipal state-owned enterprises in the previous year, while performance pay is linked to the
annual performance evaluation results.
2.Remunerations of directors, supervisors and senior executives during the reporting period
During the reporting period, the Company paid allowances of RMB1,001,500 (before tax) to incumbent
independent directors and external supervisors. The directors and supervisors appointed by shareholder entities
were not paid by the Company but received remunerations and allowances from their own employers. During the
reporting period, the directors, supervisors and senior executives of the Company received total annual
remunerations of RMB5,490,900 (before tax) from the Company (excluding the above RMB1,001,500 allowances
to independent directors and external supervisors).
III. Employees of the Bank
1. Staff structure
At the end of the reporting period, the Bank had 4,094 employees, including 178 senior executives and
middle-level officers. Among the employees, 13.6% have received master’s degree or above, 74.9% have received
bachelor’s degree and 11.5% have received junior college degree or below. At the end of the reporting period, 34
employees retired.
2. Total annual remuneration, beneficiaries and remuneration structure
Remuneration at the Bank consists of short-term compensation and defined contribution plan. Short-term
compensation items are listed below. For defined contribution plan items, please see notes to the auditor’s report.
Beneficiaries of remuneration include employees and other statutory beneficiaries.
(Unit: RMB1,000)
ItemProvisioning during thereporting period
Contribution during thereporting period
Wages, bonus, allowances and subsidies 944,008 963,442
Staff benefits 44,282 44,282
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88
ItemProvisioning during thereporting period
Contribution during thereporting period
Social security contributions 91,233 127,681
Incl.: Medical insurance 87,395 123,953
Industrial injury insurance 528 421
Birth insurance 3,310 3,307
Housing provident funds 69,130 69,333
Labor union funds and staff education funds 40,820 33,783
Total 1,189,473 1,238,521
3. Standards for remuneration and performance measurement and risk adjustments
The Bank keeps improving the remuneration assessment system according to its operation and development
strategy, adheres to the basic remuneration principle of combining incentives with constraints and matching
compliance with value of post, remains oriented to operating results and links remuneration to performance
assessment to further boost the increase motivation of institutions and employees in workplace. With risk
indicators incorporated in the performance assessment system, the Bank conducts a comprehensive assessment of
operating results using a multi-dimensional indicator system and plays the constraint role of remuneration in risk
management in a bid to promote prudent operation and sustainable development of the Bank.
4. Deferred payment of remuneration and non-cash remuneration
In accordance with the Supervisory Guidelines on Sound Remuneration of Commercial Banks and other relevant
laws, regulations and policies, the Bank defers the payment of the performance-linked remunerations middle-level
executives, risk managers, credit review managers, customer managers and other personnel in positions which can
exert significant influence on risks and defines the rules about how to make deferred payment of
performance-linked remunerations, deferred recourse and charge-back, etc. The performance-linked remunerations
subject to deferred payment are pegged to the roles & responsibilities and the risks exposed in subsequent years
and they are paid by installments in subsequent years. At the end of the reporting period, the Bank recorded
RMB139.88 million in balance of deferred payments. Senior executives of the Bank who are Officers in Charge of
Party-managed Financial Corporations are entitled to in-tenure incentives pursuant to requirements of regulatory
authority. However, those who fail the comprehensive in-tenure assessment in the three-year assessment period
will be disqualified for in-tenure incentives income.
The Bank has paid for employees the contributions to endowment insurance, medical insurance, unemployment
insurance, work-related injury insurance, maternity insurance and housing provident funds, implemented the paid
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89
leave system for employees and further improved the corporate annuity management system to safeguard the basic
interests of employees.
5. Others
(1) The Bank formulated the administrative measures for remunerations of Hankou Bank and the rules for deferred
payment of performance pay and had them reviewed and approved at the Employees’ Congress Senior executives
of the Bank who are Officers in Charge of Party-managed Financial Corporations are assessed in accordance with
the Provisional Measures for Management of Party-managed Financial Corporations in Wuhan and Remuneration
of Officers in Charge.
(2) In the reporting period, the Bank had no exceptions to its original remuneration plan.
(3) In accordance with the Provisional Measures for Management of Party-managed Financial Corporations in
Wuhan and Remuneration of Officers in Charge, during the reporting period, the remuneration of senior
executives of the Bank who were Officers in Charge of Party-managed Financial Corporations were temporarily
based on the annual base salary for 2018.
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90
Chapter IX Corporate Governance Practice
I. Corporate Governance during the Reporting Period
The Bank established a modern and effective corporate governance framework consisting of the Shareholders’
General Meeting (the highest power organ), the Board of Directors (the decision-making organ), the Board of
Supervisors (the supervisory organ) and the management (the executive organ) in accordance with the Company
Law, the Commercial Bank Law, the Guidelines on Corporate Governance of Commercial Banks and other
applicable laws, regulations and normative documents. During the reporting period, the Bank made continuous
improvements in the corporate governance level in strict compliance with regulatory requirements.
i. About shareholders and the Shareholders’ General Meeting
The Bank held three annual general meetings during the reporting period.
1. The First Extraordinary General Meeting in 2019
According to the resolution adopted at the 29th Meeting of the Fifth Board of Directors of the Bank, the Board of
Directors of the Bank published an announcement on the general meeting on the Bank’s website and the Hubei
Daily on 30 December 2018. The Bank convened the First Extraordinary General Meeting in 2019 on the 28th
Floor of Hankou Bank Mansion on 15 January 2019. The meeting reviewed and approved 16 proposals and heard
one report. 24 shareholders and proxies attended the First Extraordinary General Meeting in 2019, representing
2,833,283,553 shares or 68.64% of total shares. Chairman Chen Xinmin presided over the meeting. Some
directors, supervisors and senior executives of the Bank were present at the meeting.
2. 2018Annual General Meeting
According to the resolution adopted at the Fourth Meeting of the Sixth Board of Directors of the Bank, the Board
of Directors of the Bank published an announcement on the general meeting on the Bank’s website and the Hubei
Daily on 31 May 2019. The Bank convened the 2018 Annual General Meeting on the 28th Floor of Hankou Bank
Mansion on 20 June 2019. The meeting reviewed and approved 12 proposals and heard five reports. 33
shareholders and proxies attended the 2018 Annual General Meeting, representing 3,000,929,702 shares or
72.70% of total shares. Chairman Chen Xinmin presided over the meeting. Some directors, supervisors and senior
executives of the Bank were present at the meeting.
3. The Second Extraordinary General Meeting in 2019
According to the resolution adopted at the Seventh Meeting of the Sixth Board of Directors of the Bank, the Board
of Directors of the Bank published an announcement on the general meeting on the Bank’s website on 12
November 2019 and the Hubei Daily on 13 November 2019. The Bank convened the Second Extraordinary
General Meeting in 2019 on the 28th Floor of Hankou Bank Mansion on 27 November 2019. The meeting
reviewed and approved eight proposals and heard one report. 34 shareholders and proxies attended the 2019
Second Extraordinary General Meeting, representing 3,212,931,379 shares or 77.84% of total shares. Chairman
Chen Xinmin presided over the meeting. Some directors, supervisors and senior executives of the Bank were
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91
present at the meeting.
The notification, convening, holding and voting procedures of three annual general meetings conformed to the
Company Law and the Articles of Association of the Bank to ensure all shareholders equally and fully exercise the
right to be informed of, take part in and vote on significant corporate matters. Lawyers from King & Wood
Mallesons witnessed the entire process of and issued a legal opinion for the above meetings.
ii. About directors, the Board of Directors and special committees
The director qualifications and selection procedures of the Bank comply with the provisions of the Company Law,
the Commercial Bank Law and the regulatory rules, and the quorum and composition of the Board of Directors
satisfy the requirements of relevant laws, regulations and the Articles of Association. Directors possess the
knowledge and quality necessary for performance of their duties and meet conditions required by regulators.
The Board of Directors of the Bank consisted of 10 members, including four independent directors.
The Sixth Board of Directors of the Bank had six special committees with the following memberships at the end of
the reporting period:
Members of the Strategy Committee: Chen Xinmin (chairman), Zhou Min, Wen Fu and Yao Ke;
Members of the Technology Finance Committee: Chen Xinmin (chairman), Wen Fu, Zhou Min, Wen Fu and Yao
Ke;
Members of the Audit Committee: Zhang Yabing (chairman), Hou Chengqi, Wen Fu, Wen Fu and Ruan Xuzhou;
Members of the Risk and Related Party Transactions Control Committee: Hou Chengqi (chairman), Guo Li, Zhang
Yabing and Shao Bo;
Members of the Nomination and Compensation Committee: Wu Bin (chairman), Guo Li, Zhang Yabing and Zhou
Min;
Members of the Consumer Protection Committee: Guo Li (chairman), Hou Chengqi, Yao Ke, Shao Bo and Ruan
Xuzhou.
During the reporting period, the Board of Directors held 10 meetings, reviewed and approved 85 proposals and
heard 24 reports. The Strategy Committee held two meetings, reviewed and approved 13 proposals, and heard two
reports; the Audit Committee held three meetings, reviewed and approved six proposals and heard five reports; the
Risk and Related Party Transactions Control Committee held eight meetings, reviewed and approved 32 proposals
and heard eight reports; the Nomination and Compensation Committee held four meetings, reviewed and approved
15 proposals and heard one report. The Consumer Protection Committee held one meeting and heard one report.
iii. About supervisors, the Board of Supervisors and special committees
The supervisor qualifications and selection procedures of the Bank comply with the provisions of the Company
Law, the Commercial Bank Law and the regulatory rules, and the quorum and composition of the Board of
Supervisors satisfy the requirements of relevant laws, regulations and the Articles of Association. The supervisors
possess the knowledge and quality required for duty performance, and meet the conditions prescribed by the
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92
regulatory authorities.
The Board of Supervisors of the Bank consisted of eight members, including two shareholder supervisors, three
external supervisors and three employee supervisors.
The Board of Supervisors of the Bank has two special committees. At the end of the reporting period, members of
the committees were listed below:
Members of the Supervision Committee: Guo Wei (chairman), Zhang Li, Cui Baoshun and Sun Zhiqiang
Members of the Nomination Committee: Guo Tianyong (chairman), Yuan Wenjian and Yang Can.
During the reporting period, the Board of Supervisors held seven meetings, and reviewed and approved 41
proposals and heard 23 reports; the Supervision Committee held six meetings, reviewed and approved 26 proposals
and heard 13 reports; the Nomination Committee held three meetings, and reviewed and approved eight proposals.
iv. About information disclosure and investor relations management
The Bank has continuously increased the timeliness, accuracy and completeness of information disclosure in
accordance with regulators’ requirements on information disclosure of commercial banks and with reference to
standards on listed banks, having regard to its particular conditions, thereby ensuring all shareholders have equal
access to information. In 2019, the Board of Directors prepared the 2018 Annual Report of Hankou Bank Co., Ltd.
in both Chinese and English in accordance with the CBIRC rules on information disclosure and the Information
Disclosure Management Measures of the Bank and published the summary of the annual report on the Financial
Times, published the full text of the annual report on the website of the Bank (www.hkbchina.com). Information
disclosure was accurate, authentic and complete. The Bank attached great importance to maintaining and improving
the investor relations box of its official website and maintained communication with small and medium investors
online. In addition, the Bank safeguarded the interests of all shareholders, especially small and medium investors,
though reasonable response to letters, calls, visits and inquiries from shareholders and stakeholders in accordance
with relevant policies.
II. Duty Performance of Independent Directors and External Supervisors
During the reporting period, the Bank’s independent directors and external supervisors diligently performed their
duties and attended meetings, aired professional opinions and exercised their voting rights as required. Those
unable to attend meetings in person all appointed proxies to attend and vote at the meetings on behalf of them.
Independent directors and external supervisors leveraged their expertise to fulfill duties as chairmen of special
committees, presided over or carried out work of special committees, provided independent professional opinions
on material related party transactions, internal audit and supervision and non-performing asset disposal of the Bank,
etc. and helped improve the efficiency and quality of decision making by the Board of Directors and supervision by
the Board of Supervisors.
i. Attendance of independent directors at Board of Directors’meetings
Independent director Number of meetings to be Attendance in Attendance by Absence Remarks
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93
attended this year person proxy
Guo Li 10 9 1 0
Hou Chengqi 10 10 0 0
Zhang Yabing 10 10 0 0
Wu Bin 10 10 0 0
ii. Attendance of external supervisors at Board of Supervisors’meetings
External supervisorNumber of meetings tobe attended this year
Attendance inperson
Attendance byproxy
Absence Remarks
Guo Tianyong 7 6 1 0
Cui Baoshun 7 7 0 0
Guo Wei 7 7 0 0
iii. Objections raised by independent directors and external supervisors to relevant matters ofthe Company
During the reporting period, neither independent directors nor external supervisors of the Bank raised any
objection to the Company’s proposals to the Board of Directors/Supervisors and other significant matters.
III. Operation Decision-making System of the Company
The Bank implements a system of “Level-one legal person, unified accounting” with the aim of “promoting
economic development and pursuing the maximum interests of shareholders by providing quality and efficient
financial services while ensuring compliance and creditability”. The Bank also implements an operating
mechanism of “operating independently at its own risk and profit/loss on a self-disciplined basis”. The
Shareholders’ General Meeting is the Bank’s highest authority, the Board of Directors performs the
decision-making and management functions and the Board of Supervisors performs the supervision function. The
President, appointed by the Board of Directors, assumes the overall responsibility for day-to-day operation
management of the Bank.
IV. Assessment, Incentive and Constraint Mechanism for Senior Executives
The Bank kept improving the performance assessment system and the incentive and constraint mechanism for
senior executives. The performance and remuneration of senior executives of the Bank are carried out in
accordance with the relevant rules of Wuhan City for remuneration management of Officers in Charge of
Party-managed Financial Corporations. The remuneration consists of annual base salary, annual performance pay
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94
and incentives pay linked to in-tenure performance assessment. Annual base salary is determined according to the
average wages of in-service employees of municipal state-owned enterprises in the previous year. The annual
performance pay of senior executives of the Bank is income linked to the annual performance assessment results
of senior executives. Taking annual base salary as the base for calculation, it is determined at an annual
performance pay adjustment coefficient according to the performance assessment score, assessment type and
results of internal annual performance assessment Annual performance pay is controlled within 1.5 times the
annual base salary. The Bank’s operating performance assessment indicators include profitability indicators,
development transformation indicators, risk management indicators, compliance indicators and social
responsibility indicators. The annual performance pay adjustment coefficient is determined according to the job
rank, functional nature of company and duty performance of senior executives of the Bank.
The in-tenure incentives income of senior executives of the Bank is income linked to the in-tenure assessment
results of senior executives in an assessment period of three years. The senior executives who fail the
comprehensive in-tenure assessment in the three-year assessment period will be disqualified for in-tenure
incentives income. Taking the aggregate annual salary of senior executives during their tenure as base for
calculation, the in-tenure incentives income is determined according to the in-tenure performance assessment
results, subject to a maximum of 30% of the aggregate annual salary in the tenor.
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95
Chapter X Internal Control
I. Statement of the Board of Directors on Internal Control Responsibilities
The Board of Directors and all directors of the Bank warrant that the information contained herein does not contain
any false records, misleading statements or material omissions, and shall bear the joint and several liabilities for the
authenticity, accuracy and integrity of its contents.
The Board of Directors is responsibility for establishing, improving and effectively implementing internal control;
the Board of Supervisors shall supervise the establishment and implementation of internal control by the Board of
Directors; the senior management is responsible for organizing and leading the daily operations of the Bank’s
internal control.
The objectives of the Bank’s internal control are to ensure the implementation of national laws and regulations and
the Bank’s rules and regulations; ensure that the Bank’s development strategy and business objectives are fully
implemented and fully realized; ensure the effectiveness of the risk management system, risk prevention and
protection of asset safety; ensure the timeliness, truthfulness, completeness and reliability of business records,
financial information and other management information; and ensure that the Bank’s business management meets
the prudential supervision requirements of regulatory authorities. Due to inherent limitations of internal control,
only reasonable assurance can be provided for the above target.
II. Basis of Internal Control over Financial Reporting and Internal Control
System Development
i. Basis of establishing internal control over financing reporting
The Bank has established a system of internal control over financing reporting on the basis of the Accounting Law,
the Accounting Standards for Business Enterprises, the Basic Standard for Internal Control of Business Enterprises
and applicable normative documents of regulatory authorities. The internal control over financial reporting for the
year did not have any material deficiencies.
ii. General plan on the establishment of internal control
The Bank has established an internal control system commensurate with the development strategy, business
size, scope of business, and risk characteristics in accordance with regulatory requirements on internal
control of commercial banks. The internal control system plays a positive role in maintaining continuity and
stability of business development and preventing financial risks.
During the reporting period, the Bank upheld the spirit of the national work conference on banking and
insurance regulation, implemented the requirements regarding “cementing the achievements in irregularities
crackdown and promoting compliance”, carried out the “Year of Reinforcing Internal Control and
Compliance Management” program and conducted the “Iron Hand on Non-compliances”. It also made solid
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96
progress in the development of internal control policies and procedures, compliance education of all
employees, inspection of internal control case prevention and employee conduct management and
continuously increased the reasonableness and effectiveness of internal control.
iii. Establishment and improvement of internal control system
In accordance with the supervisory standards on internal control, the Bank has comprehensively diagnosed
and assessed the overall situation of internal control, established the compliance review and post-assessment
mechanism for policies and procedures, regularly evaluated and improved internal control policies and
procedures, continuously reviewed and optimized the Bank’s policies and procedures and improved internal
control policies. The principles, basic rules and procedures for formulating policies and procedures of
branches beyond Wuhan were unified. The total-process management of branches’ work on policies and
procedure by the Head Office was enhanced.
iv. Operation of internal control supervision mechanism
In the reporting period, the Bank carried out comprehensive, in-depth audit work in accordance with the
work plans of the Board of Directors and the Board of Supervisors and regulatory requirements of the PBOC
and CBIRC on a risk- and problem-oriented basis. With emphasis placed on the use of audit findings, internal
audit fully played its role as the “third line of defense”. The Bank also furthered conduct improvement,
advanced the non-corruption and discipline education, strengthened supervision, discipline and
accountability and gave full play to the supervision and inspection roles.
The Bank mainly carried out the following internal supervision work in 2019:
First, eight general audits, 13 special audits and six follow-up audits were conducted in the year to further
expand the depth and breadth of internal audit. A combination of general audits, special audits and follow-up
audits and a combination of direct audit by the Head Office and local audits by regional audit centers were
adopted on a risk-oriented basis and with a sharper focus on higher-risk institutions, businesses, steps and
posts. Regional audit centers played their role to the full.
Second, the professional value of audit was highlighted and the use of audit findings was strengthened. Over
100 Audit Opinions, Audit Recommendations, Audit Penalty Decisions and Risk Reminders were issued
against problems found in audits in the year. Relevant audit opinions and recommendations have been well
considered and adopted by audited entities, well demonstrating the value of auditing.
Third, the Bank urged and advanced the corrective actions for internal and external audit findings,
strengthened the application of internal audit and supervision outcomes, unleashed the role of internal audit
as the “third line of defense” and adhered to the work approach of “intra-year auditing, year-end clearing”.
Follow-up audit was conducted on problem correction at the end of the year. Relevant entities and business
lines were caused to put audit opinions into action and follow-up analysis was conducted on the
“troubleshooting program”.
Fourth, to urge implementation of the central Party leadership's eight-point decision on improving Party and
government conduct (the “Eight-point Decision”), the Disciplinary Case Studies Reader was compiled and
distributed, instructing all employees to learn from cases. Warning and education campaigns were carried out
2019 Annual Report of Hankou Bank Co., Ltd.
97
thoroughly and integrity interviews were conducted at various levels. The Bank investigated clues to
problems with due care, handled cases assigned by overseeing and judicial authorities and dealt with and
strictly pursued liability for any detected violation of the Eight-point Decision, non-corruption policy or
discipline requirements.
Fifth, strict accountability for credit transactions was performed. The accountability for risky loans was
rigorously conducted against 226 persons in accordance with the Accountability Policy for Financial Assets
of Hankou Bank.
v. Internal control self-assessment
The Bank’s Board of Directors authorized the internal audit body to be responsible for specific organization and
implementation of internal control assessment, addressing internal control environment (including corporate
governance, organizational framework, development strategy, human resources, corporate culture and social
responsibilities), risk identification and assessment, internal control activities, information exchange and
communication, and internal supervision.
vi. Development and improvement of internal control
In 2020, the Bank will act on banking regulatory requirements, uphold the philosophy that “internal control
boost development, compliance creates value”, place focus on weaknesses in internal control, strengthen
strict bank governance, continue to foster the compliance culture, improve internal control policies and
procedures, strengthen internal control inspections, fortify the foundation, enhance benchmarking and
establish long-term mechanisms to ensure healthy and sustained business development of the Bank.
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98
Chapter XI Financial ReportThe 2019 financial report of the Company has been audited by Union Power Certified Public Accountants
LLP under the Chinese auditing standards and signed by CPAs Zhu Ye and Xia Caiqu. A standard unqualified
auditor’s report (Z.H.S.Z. [2020] No. 011127) (see Annex) was issued.
Chapter XII List of Documents for ReferenceI. Financial statements bearing the signatures and seals of the legal representative, accounting supervisor and
principal of the accounting institution of the Company;
II. Original auditor’s report affixed with the stamp of the accounting firm as well as the signatures and seals of the
CPAs;
III. Articles of Association of the Bank.
Chapter XIII AnnexesThe 2019 Auditor’s Report and Notes to the Financial Statements of the Company.
Chairman: Chen Xinmin
The Board of Directors of Hankou Bank Co., Ltd.
29 May 2020
99
Written Confirmation of Directors and Senior Management of
Hankou Bank Co., Ltd. on the Company’s 2019 Annual Report
As directors and senior executives of Hankou Bank Co., Ltd., we hereby issue the following opinions after fullunderstanding and review of the Company’s 2019 Annual Report and its summary:
1. The Company operates in strict compliance with the Accounting Standards for Business Enterprises,Accounting System for Enterprises and Accounting Rules for Financial Enterprises. The Company’s 2019 AnnualReport and its summary fairly present the Company’s financial position and operating results for this year.
2. The 2019 financial report of the Company has been audited by Union Power Certified Public Accountants LLPunder the Chinese Auditing Standards, which has issued a standard unqualified auditor’s report.
3. We believe that the Company’s 2019 Annual Report and its summary do not include any false records,misleading statements or material omissions, and bear the joint and several liabilities for the authenticity, accuracyand integrity of its contents.
Signatures of directors, supervisors and senior management members:
Chen Xinmin________________ Ruan Xuzhou________________
Zhou Min________________ Yao Ke________________
Shao Bo________________ Guo Li________________
Hou Chengqi________________ Zhang Yabing________________
Wu Bin________________ Sun Zhengbai________________
Lei Fengxin________________ Ding Rui________________
Zhan Tianle________________
Page 1 of 3, Auditors’ Report
Auditors’ Report
Z.H.S.Z. (2020) No. 011127
To all the shareholders of Hankou Bank Co., Ltd.:
I. Opinion
We have audited the accompanying financial statements of Hankou Bank Co., Ltd. (the “Hankou
Bank”), which comprise the consolidated and corporate balance sheets as at 31 December 2019
and the consolidated and corporate income statements, consolidated and corporate statements of
cash flows and consolidated and corporate statements of changes in equity for the year then ended
and notes to financial statements.
In our opinion, the accompanying financial statements have been prepared in all material respects
in accordance with the Accounting Standards for Business Enterprises and presented fairly the
consolidated and parent company's financial position of Hankou Bank as at 31 December 2019
and the consolidated and parent company’s operating results and cash flows for the year then
ended.
II. Basis for Our Audit Opinion
We conducted our audit in accordance with the Auditing Standards for Chinese Certified Public
Accountants. The section “CPA’s Responsibility for Audit of the Financial Statements” in the
Auditor's Report further described our responsibility under the Auditing Standards. According to
the China Code of Ethics for Certified Public Accountants, we are independent from Hankou Bank,
and has performed other responsibilities in respect of the code of ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Other Information
The management of Hankou Bank is responsible for other information, which include the
information contained in the 2019 Annual Report of Hankou Bank but exclude those contained in
the financial statements and our auditor's report.
Our audit opinion on the financial statements does not cover other information, and we do not
issue any forms of assurance conclusion on any other information.
In combination with our audit of the financial statements, our responsibility is to read other
information, during which process we shall consider whether there is any material inconsistency
between other information and the financial statements or what we have learned during our audit
or whether there seems to be any material misstatement.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
IV. Responsibility of the Management and Those Charged with Governance for the
Financial Statements
The management (the “Management”) of Hankou Bank is responsible for the preparation of the
Page 2 of 3, Auditors’ Report
financial statements in accordance with the Accounting Standards for Business Enterprises. This
responsibility includes fairly presenting the financial statements, and designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of the financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the ability of
Hankou Bank to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the management either intends to
liquidate Hankou Bank or to cease operations, or has no realistic alternative but to do so.
Those charged with governance is responsible for overseeing the financial reporting process of
Hankou Bank.
V. CPA’s Responsibility for Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
i. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
ii. Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of internal control.
iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
iv. Conclude on the appropriateness of the going-concern assumption used by the management.
And, based on the audit evidence obtained, draw a conclusion that whether a material uncertainty
exists in events or conditions that may cast significant doubt on the ability of Hankou Bank to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause Hankou Bank to cease to continue as a going concern.
v. Evaluate the overall presentation, structure and content of the financial statements (including the
disclosures) and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
vi. Obtain sufficient and appropriate audit evidence on the financial information of the entity or
Page 3 of 3, Auditors’ Report
business activity of Hankou Bank in order to issue our audit opinion on the financial statements.
We are responsible for instructing, overseeing and performing the group audit, and assume all the
responsibilities for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
Union Power Certified Public Accountants Chinese CPA: Zhu Ye
(Special General Partnership)
Chinese CPA: Xia Caiqu
Wuhan, China 29 May 2020
Consolidated Balance Sheet (Assets) S.Y. Table 01
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Assets Note 31 December 2019 31 December 2018
Assets:
Cash and balances with central banks (VIII) 1 31,177,901 26,913,543
Deposits with banks and other financial institutions (VIII) 2 2,279,318 1,072,991
Precious metals
Lendings to banks and other financial institutions (VIII) 3 5,400,000 500,000
Financial assets designated at fair value through profit or loss (VIII) 4 1,822,570 13,042,298
Derivative financial assets
Financial assets under reverse repurchase agreements (VIII) 5 10,627,229 4,010,200
Loans and advances (VIII) 6 166,732,570 132,597,003
Available-for-sale financial assets (VIII) 7 69,517,090 57,161,098
Held-to-maturity investments (VIII) 8 79,155,034 41,149,070
Receivables investment (VIII) 9 26,625,119 34,873,459
Long-term equity investment (VIII) 10 822,813 787,643
Investment properties
Fixed assets (VIII) 11 1,484,510 1,474,700
Construction in progress (VIII) 12 11,790 36,370
Intangible assets (VIII) 13 69,576 71,614
Goodwill
Deferred income tax assets (VIII) 14 1,876,443 1,530,968
Other assets (VIII) 15 8,137,602 4,074,952
Total assets 405,739,565 319,295,909
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 1 of 186
Consolidated Balance Sheet (Liabilities and Shareholders’ Equity) S.Y. Table 01
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Liabilities and shareholders’ equity Note 31 December 2019 31 December 2018
Liabilities:
Borrowings from central banks (VIII) 17 63,000 1,700,000
Deposits from banks and other financial institutions (VIII) 18 9,210,489 4,799,804
Borrowings from banks and other financial institutions (VIII) 19 1,850,576 1,504,290
Financial liabilities designated at fair value through profit or loss (VIII) 20 13,190,558
Derivative financial liabilities
Financial assets under repurchase agreements (VIII) 21 34,414,642 17,496,238
Customer deposits (VIII) 22 250,341,491 188,829,166
Payroll payable (VIII) 23 352,494 406,046
Taxes payable (VIII) 24 162,150 150,507
Estimated liabilities
Bonds payable (VIII) 25 80,774,169 67,408,116
Deferred income tax liabilities (VIII) 14 73,822 122,432
Other liabilities (VIII) 26 6,648,890 3,646,473
Total liabilities 383,891,723 299,253,630
Shareholders’ equity:
Share capital (VIII) 27 4,127,846 4,127,846
Other equity instruments
Incl.: Preference shares
Perpetual bonds
Capital reserve (VIII) 28 3,260,371 3,259,204
Less: Treasury stock
Other comprehensive income (VIII) 29 219,942 364,218
Surplus reserves (VIII) 30 1,806,093 1,569,803
General risk reserve (VIII) 31 4,984,400 4,203,355
Retained profit (VIII) 32 7,406,786 6,461,342
Total equity attributable to owners of the parent company 21,805,438 19,985,768
Minority interest 42,404 56,511
Total shareholders’ equity 21,847,842 20,042,279
Total liabilities and owners’ equity 405,739,565 319,295,909
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 2 of 186
Consolidated Income Statement S.Y. Table 02
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000) Item Note 2019 2018
I. Operating income 6,472,600 6,076,108
Net interest income (VIII) 33 4,292,815 4,001,505
Interest income (VIII) 33 13,103,488 11,140,093
Interest expense (VIII) 33 8,810,673 7,138,588
Net fee and commission income (VIII) 34 888,084 613,744
Fee and commission income (VIII) 34 963,520 688,905
Fee and commission expense (VIII) 34 75,436 75,161
Investment income (Loss is presented with “-”) (VIII) 35 1,227,191 1,370,103
Incl.: Investment income on associates and joint ventures 35,170 24,434
Gain on changes in fair value (Loss is presented with “-”) (VIII) 36 35,886 60,020
Exchange gain (Loss is presented with “-”) 11,477 19,490
Other operating income (VIII) 37 10,099 7,703
Gain on disposal of assets (Loss is presented with “-”) (VIII) 38 97 (3,206)
Other gains (VIII) 39 6,951 6,749
II. Operating expenses 4,392,562 4,360,224
Business taxes and surcharges (VIII) 40 84,123 66,502
General and administrative expenses (VIII) 41 2,222,325 2,068,042
Impairment losses on assets (VIII) 42 2,086,044 2,225,578
Other operating costs (VIII) 37 70 102
III. Operating profit 2,080,038 1,715,884
Add: Non-operating income (VIII) 43 4,401 7,619
Less: Non-operating expenses (VIII) 44 7,757 7,742
IV. Total profit 2,076,682 1,715,761
Less: Income tax expense (VIII) 45 (342,220) (166,617)
V. Net profit 2,418,902 1,882,378
i. By operation continuity: 2,418,902 1,882,378
1. Net profit under going-concern (Net loss is presented with “-”) 2,418,902 1,882,378
2. Net profit under discontinued operation (Net loss is presented with “-”)
ii. By attribution of ownership: 2,418,902 1,882,378
1. Net profit attributable to equity holders of the parent company (Net loss is presented with “-”) 2,416,842 1,891,963
2. Minority interest (Net loss is presented with “-”) 2,060 (9,585)
VI. Other comprehensive income after tax, net (144,276) 566,304
i. Other comprehensive income that cannot be reclassified into profit or loss
1. Changes in net liabilities or net assets of defined benefit plans re-measured
2. Shares of other comprehensive income that cannot be reclassified into profit or loss in investees under the equity method
ii. Other comprehensive income that will be reclassified into profit or loss (144,276) 566,304
1. Shares of other comprehensive income that will be reclassified into profit or loss in investees under the equity method
2. Gains or losses on changes in fair value of available-for-sale financial assets (144,276) 566,304
3. Gains or losses on held-to-maturity investment reclassified into available-for-sale financial assets
VII. Total comprehensive income 2,274,626 2,448,682
i. Total comprehensive income attributable to owners of parent company 2,272,566 2,458,267
ii. Total comprehensive income attributable to minority shareholders 2,060 (9,585)
VIII. Earnings per share:
i. Basic earnings per share (RMB) (XIX) 2 0.59 0.46
ii. Diluted earnings per share (RMB) (XIX) 2 0.59 0.46
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 3 of 186
Consolidated Statement of Cash Flows S.Y. Table 03
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000) Item Note 2019 2018
I. Cash flows from operating activities Net increase in customer deposits and due from banks and other financial institutions 55,322,984 26,143,837 Net increase in borrowings from central banks 1,639,800 Net increase in placements from other financial institutions 346,286 Net increase in repurchase funds 16,643,167 2,226,436 Net decrease in deposits with central banks and other financial institutions 2,693,213 Interest, fees and commissions received 14,863,459 12,571,388 Cash received from other operating activities (VIII) 46 51,344 60,848 Cash inflows from operating activities, subtotal 87,227,240 45,335,522 Net increase in loans and advances to customers 40,015,669 25,306,083 Net increase in deposits with central banks and other financial institutions 1,238,690 Net decrease in borrowings from central banks 1,637,000 Net decrease in borrowings from banks and other financial institutions 121,115 Interest, fees and commissions paid 6,066,709 4,371,941 Cash paid to and for employees 1,407,598 984,346 Taxes and surcharges paid 706,068 867,006 Cash paid for other operating activities (VIII) 46 995,378 966,403 Cash outflows from operating activities, subtotal 52,067,112 32,616,894 Net cash flows from operating activities (VIII) 46 35,160,128 12,718,628
II. Cash flows from investing activities Cash received from disposal of investments 1,840,489,361 833,089,418 Return on investment 1,192,021 1,345,669 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 2,572 1,401 Net cash received from disposal of subsidiaries and other operating institutions Cash received from other investing activities Cash inflows from investing activities, subtotal 1,841,683,954 834,436,488 Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets 181,983 140,855 Cash paid for acquisition of investments 1,871,157,893 852,688,710 Net cash paid for acquisition of subsidiaries and other operating institutions Cash paid for other investing activities Cash outflows from investing activities, subtotal 1,871,339,876 852,829,565 Net cash flows from investing activities (29,655,922) (18,393,077)
III. Cash flows from financing activities: Cash received from investors Incl.: Cash received from equity investment of minority shareholders attracted by subsidiaries Cash received from bond issue 95,752,473 89,731,560 Cash received from other financing activities Cash inflows from financing activities, subtotal 95,752,473 89,731,560 Cash repayment of debts 83,117,130 83,684,950 Dividend and profit distributed or interest paid 2,366,857 2,898,571 Incl.: Dividends and profits paid to minority shareholders by subsidiaries 300 Cash paid for other financing activities 15,000 Cash outflows from financing activities, subtotal 85,498,987 86,583,521 Net cash flows from financing activities 10,253,486 3,148,039
IV. Effect of exchange rate changes on cash and cash equivalents 350 35
V. Net increase in cash and cash equivalents (VIII) 46 15,758,042 (2,526,375)Add: Cash and cash equivalents at the beginning of the period 10,440,095 12,966,470
VI. Cash and cash equivalents at the end of the period (VIII) 46 26,198,137 10,440,095 Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 4 of 186
Consolidated Statement of Changes in Equity S.Y. Table 04
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Item
2019
Total equity attributable to shareholders of the parent company
Minority interest
Total shareholders’
equityShare capital
Other equity instrumentsCapital reserve
Less:Treasury
stock
Other comprehensive
incomeSurplus reserves General risk
reserve Retained profitPreference shares
Perpetual bonds Others Subtot
al
I. Balance at the end of last year 4,127,846 3,259,204 364,218 1,569,803 4,203,355 6,461,342 56,511 20,042,279
Add: Changes in accounting policies
Correction of previous errors
Others
II. Balance at the beginning of the year 4,127,846 3,259,204 364,218 1,569,803 4,203,355 6,461,342 56,511 20,042,279
III. Increase/decrease for the year (Decrease is presented with “-”) 1,167 -144,276 236,290 781,045 945,444 -14,107 1,805,563
i. Total comprehensive income -144,276 2,416,842 2,060 2,274,626
ii. Shareholders’ contribution and capital decrease 1,167 -16,167 -15,000
1. Ordinary shares contributed by shareholders
2. Contribution from other holders of other equity instruments
3. Share-based payment recognized into shareholders’ equity
4. Others 1,167 -16,167 -15,000
iii. Profit distribution 236,290 781,045 -1,471,398 -454,063
1. Appropriation to surplus reserve 236,290 -236,290
2. Appropriation to general risk reserve 781,045 -781,045
3. Distribution to shareholders -454,063 -454,063
4. Others
iv. Carry-forward of shareholders’ equity
1. Transfer of capital reserve to share capital
2. Transfer of surplus reserve to share capital
3. Surplus reserve for offsetting losses
4. Carry-over of changes in defined benefit plans to retained earnings
5. Carry-forward of other comprehensive income to retained earnings
6. Others
IV. Balance at the end of the year 4,127,846 3,260,371 219,942 1,806,093 4,984,400 7,406,786 42,404 21,847,842
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 5 of 186
Consolidated Statement of Changes in Equity S.Y. Table 04
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Item
2018
Total equity attributable to shareholders of the parent companyMinority interest
Total shareholders’
equity Share capitalOther equity instruments
Capital reserve
Less:Treasury
stock
Other comprehensive
incomeSurplus reserves General risk
reserve Retained profitPreference shares
Perpetual bonds Others Subtot
alI. Balance at the end of last year 4,127,846 3,259,204 -202,086 1,379,550 3,870,216 5,505,556 66,696 18,006,982
Add: Changes in accounting policies
Correction of previous errors
Others
II. Balance at the beginning of the year 4,127,846 3,259,204 -202,086 1,379,550 3,870,216 5,505,556 66,696 18,006,982
III. Increase/decrease for the year (Decrease is presented with “-”) 566,304 190,253 333,139 955,786 -10,185 2,035,297
i. Total comprehensive income 566,304 1,891,963 -9,585 2,448,682
ii. Shareholders’ contribution and capital decrease
1. Ordinary shares contributed by shareholders
2. Contribution from other holders of other equity instruments
3. Share-based payment recognized into shareholders’ equity
4. Others
iii. Profit distribution 190,253 333,139 -936,177 -600 -413,385
1. Appropriation to surplus reserve 190,253 -190,253
2. Appropriation to general risk reserve 333,139 -333,139
3. Distribution to shareholders -412,785 -600 -413,385
4. Others
iv. Carry-forward of shareholders’ equity
1. Transfer of capital reserve to share capital
2. Transfer of surplus reserve to share capital
3. Surplus reserve for offsetting losses
4. Carry-over of changes in defined benefit plans to retained earnings
5. Carry-forward of other comprehensive income to retained earnings
6. Others
IV. Balance at the end of the year 4,127,846 3,259,204 364,218 1,569,803 4,203,355 6,461,342 56,511 20,042,279
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 6 of 186
Balance Sheet (Assets) S.Y. Table 01
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Assets Note 31 December 2019 31 December 2018
Assets:
Cash and balances with central banks (IX) 1
31,085,483 26,813,564
Deposits with banks and other financial institutions(IX) 2
2,264,500 929,158
Precious metals
Lendings to banks and other financial institutions (IX) 3
5,400,000 500,000
Financial assets designated at fair value through profit or loss(IX) 4
1,822,570 13,042,298
Derivative financial assets
Financial assets under reverse repurchase agreements(IX) 5
10,627,229 4,010,200
Loans and advances(IX) 6
166,105,969 132,013,585
Available-for-sale financial assets(IX) 7
69,517,090 57,161,098
Held-to-maturity investments(IX) 8
79,155,034 41,149,070
Receivables investment (IX) 9
26,621,369 34,843,459
Long-term equity investment (IX) 10
894,753 844,583
Investment properties
Fixed assets 1,474,664 1,473,703
Construction in progress 11,790 29,860
Intangible assets 69,576 71,614
Goodwill
Deferred income tax assets 1,866,731 1,524,250
Other assets (IX) 11
8,125,211 4,064,941
Total assets 405,041,969 318,471,383
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 7 of 186
Balance Sheet (Liabilities and Shareholders’ Equity) S.Y. Table 01
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Liabilities and shareholders’ equity Note 31 December 2019 31 December 2018
Liabilities:
Borrowings from central banks(IX) 12
1,650,000
Deposits from banks and other financial institutions(IX) 13
9,712,287 5,088,388
Borrowings from banks and other financial institutions(IX) 14
1,850,576 1,504,290
Financial liabilities designated at fair value through profit or loss(IX) 15
13,190,558
Derivative financial liabilities
Financial assets under repurchase agreements(IX) 16
34,414,642 17,496,238
Customer deposits(IX) 17
249,303,848 187,861,314
Payroll payable 351,329 404,722
Taxes payable 159,498 150,502
Estimated liabilities
Bonds payable 80,774,169 67,408,116
Deferred income tax liabilities 73,822 122,432
Other liabilities(IX) 18
6,667,616 3,625,205
Total liabilities 383,307,787 298,501,765
Shareholders’ equity:
Share capital 4,127,846 4,127,846
Other equity instruments
Incl.: Preference shares
Perpetual bonds
Capital reserve 3,258,594 3,258,594
Less: Treasury stock
Other comprehensive income 219,942 364,218
Surplus reserves 1,806,093 1,569,803
General risk reserve 4,984,400 4,203,355
Retained profit 7,337,307 6,445,802
Total shareholders’ equity 21,734,182 19,969,618
Total liabilities and owners’ equity 405,041,969 318,471,383
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 8 of 186
Income Statement S.Y. Table 02
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Item Note 2019 2018
I. Operating income 6,334,880 6,030,548
Net interest income (IX) 19 4,153,834 3,954,251
Interest income (IX) 19 12,955,545 11,076,517
Interest expense (IX) 19 8,801,711 7,122,266
Net fee and commission income (IX) 20 888,165 613,786
Fee and commission income (IX) 20 963,497 688,890
Fee and commission expense (IX) 20 75,332 75,104
Investment income (Loss is presented with “-”) (IX) 21 1,227,191 1,371,003
Incl.: Investment income on associates and joint ventures 35,170 24,434
Gain on changes in fair value (Loss is presented with “-”) 35,886 60,020
Exchange gain (Loss is presented with “-”) 11,477 19,490
Other operating income 11,597 9,201
Gain on disposal of assets (Loss is presented with “-”) 95 (3,206)
Other gains 6,635 6,003
II. Operating expenses 4,311,657 4,293,299
Business taxes and surcharges 83,087 66,326
General and administrative expenses (IX) 22 2,192,312 2,041,565
Impairment losses on assets (IX) 23 2,036,188 2,185,306
Other operating costs 70 102
III. Operating profit (Loss is presented with “-”) 2,023,223 1,737,249
Add: Non-operating income 4,381 7,577
Less: Non-operating expenses 7,700 7,449
IV. Total profit (Total loss is presented with “-”) 2,019,904 1,737,377
Less: Income tax expense (342,999) (165,150)
V. Net profit (Net loss is presented with “-”) 2,362,903 1,902,527
i. Net profit under going-concern (Net loss is presented with “-”) 2,362,903 1,902,527
ii. Net profit under discontinued operation (Net loss is presented with “-”)
VI. Other comprehensive income after tax, net (144,276) 566,304
i. Other comprehensive income that cannot be reclassified into profit or loss
1. Changes in net liabilities or net assets of defined benefit plans re-measured 2. Shares of other comprehensive income that cannot be reclassified into profit or loss in investees under the equity method
ii. Other comprehensive income that will be reclassified into profit or loss (144,276) 566,304 1. Shares of other comprehensive income that will be reclassified into profit or loss in investees under the equity method
2. Gains or losses on changes in fair value of available-for-sale financial assets (144,276) 566,304
3. Gains or losses on held-to-maturity investment reclassified into available-for-sale financial assets
VII. Total comprehensive income 2,218,627 2,468,831
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 9 of 186
Statement of Cash Flows S.Y. Table 03
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000) Item Note 2019 2018
I. Cash flows from operating activities
Net increase in customer deposits and due from banks and other financial institutions 55,461,930 26,290,363
Net increase in borrowings from central banks 1,650,000
Net increase in placements from other financial institutions 346,286
Net increase in repurchase funds 16,643,167 2,226,436
Net decrease in deposits with central banks and other financial institutions 2,764,253
Interest, fees and commissions received 14,696,421 12,501,673
Cash received from other operating activities (IX) 24 95,881 61,560
Cash inflows from operating activities, subtotal 87,243,685 45,494,285
Net increase in loans and advances to customers 39,338,268 25,188,312
Net increase in deposits with central banks and other financial institutions 1,305,561
Net increase in placements with other financial institutions
Net decrease in borrowings from central banks 1,650,000
Net decrease in borrowings from banks and other financial institutions 121,115
Interest, fees and commissions paid 6,057,643 4,355,561
Cash paid to and for employees 1,393,501 974,186
Taxes and surcharges paid 702,693 863,157
Cash paid for other operating activities (IX) 24 979,308 954,333
Cash outflows from operating activities, subtotal 51,426,974 32,456,664
Net cash flows from operating activities (IX) 24 35,816,711 13,037,621
II. Cash flows from investing activities
Cash received from disposal of investments 1,840,459,361 832,137,784
Return on investment 1,192,021 1,346,569
Net cash received from disposal of fixed assets, intangible assets and other long-term assets 2,569 1,401
Net cash received from disposal of subsidiaries and other operating institutions
Cash received from other investing activities
Cash inflows from investing activities, subtotal 1,841,653,951 833,485,754
Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets 178,056 133,420
Cash paid for acquisition of investments 1,871,733,696 852,027,075
Net cash paid for acquisition of subsidiaries and other operating institutions
Cash paid for other investing activities
Cash outflows from investing activities, subtotal 1,871,911,752 852,160,495
Net cash flows from investing activities (30,257,801) (18,674,741)
III. Cash flows from financing activities:
Cash received from investors
Incl.: Cash received from equity investment of minority shareholders attracted by subsidiaries
Cash received from bond issue 95,752,473 89,731,560
Cash received from other financing activities
Cash inflows from financing activities, subtotal 95,752,473 89,731,560
Cash repayment of debts 83,117,130 83,684,950
Dividend and profit distributed or interest paid 2,366,857 2,898,271
Incl.: Cash dividend paid to minority shareholders by subsidiaries
Cash paid for other financing activities
Cash outflows from financing activities, subtotal 85,483,987 86,583,221
Net cash flows from financing activities 10,268,486 3,148,339
IV. Effect of exchange rate changes on cash and cash equivalents 350 35
V. Net increase in cash and cash equivalents (IX) 24 15,827,746 (2,488,746)
Add: Cash and cash equivalents at the beginning of the period 10,348,614 12,837,360
VI. Cash and cash equivalents at the end of the period (IX) 24 26,176,360 10,348,614
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 10 of 186
Statement of Changes in Equity S.Y. Table 04
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Item
2019
Total equity attributable to shareholders of the parent company
Total shareholders’ equityShare capital
Other equity instruments
Capital reserveLess:
Treasury stock
Other comprehensiv
e incomeSurplus reserves General risk
reserve Retained profitPreference shares
Perpetual bonds Others Subtota
l
I. Balance at the end of last year 4,127,846 3,258,594 364,218 1,569,803 4,203,355 6,445,802 19,969,618
Add: Changes in accounting policies
Correction of previous errors
Others
II. Balance at the beginning of the year 4,127,846 3,258,594 364,218 1,569,803 4,203,355 6,445,802 19,969,618
III. Increase/decrease for the year (Decrease is presented with “-”) -144,276 236,290 781,045 891,505 1,764,564
i. Total comprehensive income -144,276 2,362,903 2,218,627
ii. Shareholders’ contribution and capital decrease
1. Ordinary shares contributed by shareholders
2. Contribution from other holders of other equity instruments
3. Share-based payment recognized into shareholders’ equity
4. Others
iii. Profit distribution 236,290 781,045 -1,471,398 -454,063
1. Appropriation to surplus reserve 236,290 -236,290
2. Appropriation to general risk reserve 781,045 -781,045
3. Distribution to shareholders -454,063 -454,063
4. Others
iv. Carry-forward of shareholders’ equity
1. Transfer of capital reserve to share capital
2. Transfer of surplus reserve to share capital
3. Surplus reserve for offsetting losses
4. Carry-over of changes in defined benefit plans to retained earnings
5. Carry-forward of other comprehensive income to retained earnings
6. Others
IV. Balance at the end of the year 4,127,846 3,258,594 219,942 1,806,093 4,984,400 7,337,307 21,734,182
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 11 of 186
Statement of Changes in Equity S.Y. Table 04
Prepared by Hankou Bank Co., Ltd. (Unit: RMB1,000)
Item
2018
Total equity attributable to shareholders of the parent companyTotal shareholders’
equityShare capitalOther equity instruments
Capital reserveLess:
Treasury stock
Other comprehensiv
e incomeSurplus reserves General risk
reserve Retained profitPreference shares
Perpetual bonds Others Subtota
lI. Balance at the end of last year 4,127,846 3,258,594 -202,086 1,379,550 3,870,216 5,479,452 17,913,572
Add: Changes in accounting policies
Correction of previous errors
Others
II. Balance at the beginning of the year 4,127,846 3,258,594 -202,086 1,379,550 3,870,216 5,479,452 17,913,572
III. Increase/decrease for the year (Decrease is presented with “-”) 566,304 190,253 333,139 966,350 2,056,046
i. Total comprehensive income 566,304 1,902,527 2,468,831
ii. Shareholders’ contribution and capital decrease
1. Ordinary shares contributed by shareholders
2. Contribution from other holders of other equity instruments
3. Share-based payment recognized into shareholders’ equity
4. Others
iii. Profit distribution 190,253 333,139 -936,177 -412,785
1. Appropriation to surplus reserve 190,253 -190,253
2. Appropriation to general risk reserve 333,139 -333,139
3. Distribution to shareholders -412,785 -412,785
4. Others
iv. Carry-forward of shareholders’ equity
1. Transfer of capital reserve to share capital
2. Transfer of surplus reserve to share capital
3. Surplus reserve for offsetting losses
4. Carry-over of changes in defined benefit plans to retained earnings
5. Carry-forward of other comprehensive income to retained earnings
6. Others
IV. Balance at the end of the year 4,127,846 3,258,594 364,218 1,569,803 4,203,355 6,445,802 19,969,618
Notes to Financial Statements provided in Pages 13 to 190 are an integral part of the Financial Statements.
Financial statements in Pages 1 to 12 are signed by the following individuals:
Legal representative: Chen Xinmin Person in charge of accounting: Ruan Xuzhou Head of accounting department: Li Daquan
Page 12 of 186
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 13 of 186
Notes to Financial Statements
(31 December 2019)
I. Company Profile:
Hankou Bank Co., Ltd. (the “Bank”) was a joint-stock bank incorporated in December 1997 with
the approval (Document Y.F. [1997] No. 156) of the People’s Bank of China (“PBOC”) and the
approval of the Wuhan Administration for Industry and Commerce, formerly known as Wuhan
Urban Cooperative Bank. In 1998, Wuhan Urban Cooperative Bank was renamed Wuhan
Commercial Bank Co., Ltd. with the approval (Document W.Y.Y.G. [1998] No. 64) of PBOC
Wuhan Branch; in May 2008, Wuhan Commercial Bank Co., Ltd. was renamed Hankou Bank Co.,
Ltd. with the approval (Y.J.F. [2008] No. 181) of China Banking Regulatory Commission
(“CBRC”). Currently the Bank has a Unified Social Credit Code of 91420100300248067P and a
PRC Financial Service License No. of B0187H242010002.
As at 31 December 2019, the Bank recorded a registered capital of RMB4,127,845,808.00 and a
paid-up capital of RMB4,127,845,808.00. Please refer to Note XIII.27 for particulars of the
paid-up capital (shareholders).
1. Place of registration, form of organization and address of headquarters of the Bank
Form of organization: a joint-stock company
Place of registration: 933 Jianshe Road, Jianghan District, Wuhan City, Hubei Province
Office address of headquarters: 933 Jianshe Road, Jianghan District, Wuhan City, Hubei Province
2. Business nature and main activity of the Bank
The Bank operates in the financial industry. Its main operating activities include: deposits taking,
extension of loans on a short-term, medium-term and long-term basis, domestic settlement, bill
discounting, issuance of financial bonds, commissioned issuance, encashment and underwriting of
government bonds, trading of government bonds, interbank lending, provision of security, agency
payment and insurance, provision of safety deposit box services, entrusted deposits and loans on
behalf of local public finance, foreign exchange deposits, foreign exchange loans, foreign
exchange settlement, foreign exchange sales, foreign exchange trading on its own behalf and as an
agent, foreign exchange borrowings, trading or agency trading of non-stock foreign currency
securities, policy-directed housing finance services, and other services approved by the CBRC
Hubei Office and the State Administration of Foreign Exchange.
Business scope of the Bank and its subsidiaries (collectively the “Group”): Commercial banking
services approved by PBOC.
3. Name of the parent company and the ultimate parent company of the Group
The Group has no ultimate parent company.
4. Who and when approved the disclosure of the financial statements
The Sixth Board of Directors of Hankou Bank approved the disclosure of the financial statements
at its 12th meeting on 29 May 2020.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 14 of 186
II. Scope of Consolidated Financial Statements for the Year and Its Changes
As at the end of the reporting period, a total of two subsidiaries were incorporated into the scope
of consolidated financial statements. See Note X.1 for details. For structured entities incorporated
into the scope of consolidated financial statements, please see Note X.4.
III. Basis for Preparation of Financial Statements:
Financial statements of the Group were prepared on a going concern basis according to
transactions and matters that had occurred, with all items measured and recognized in accordance
with the Accounting Standard for Business Enterprises-Basic Standard and other applicable
accounting standards.
IV. Statement on Compliance with Accounting Standards for Enterprises
The financial statements prepared by the Group truly and completely represent the financial
position, results of operations and cash flows of the Bank and the Group in compliance with the
Accounting Standards for Business Enterprises.
The Board of Directors and the Board of Supervisors of the Group and all directors, supervisors
and senior management members undertake that there are no false records or misleading
statements contained in, or material omissions from, this report, and severally and jointly accept
responsibility for the authenticity, accuracy and completeness of the information contained in this
report.
V. Major Accounting Policies and Accounting Estimates
1. Accounting period
The accounting period of the Group is a calendar year, i.e. from 1 January to 31 December each
year.
2. Bookkeeping base currency
RMB is the Group’s bookkeeping base currency.
3. Accounting for business combinations under the same control and not under the same control
(1) Any business combination involving entities under the same control within the reporting
period was accounted for using the pooling of interest method. The assets and liabilities that the
combining party obtains in a business combination shall be measured on the basis of the combined
party's carrying amount in the consolidated financial statements of the ultimate controller on the
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 15 of 186
combining date. As for the balance between the carrying amount of the net assets obtained by the
combining party and the carrying amount of the consideration paid by it (or the total par value of
the shares issued), the additional paid-up capital shall be adjusted. If the balance of capital reserve
is not sufficient, any excess should be adjusted to retained earnings. The direct cost for the
business combination of the combining party shall, including the audit fees, assessment and legal
services paid, be recorded into profit or loss. The bonds issued for a business combination or the
fees, commissions and other expenses for assuming other liabilities shall be recorded into the
amount of initial measurement of the bonds or other debts. The fees, commissions and other
expenses for the issuance of equity securities for the business combination shall be offset against
the premium income on equity securities; if the premium income is not sufficient, the retained
earnings shall be offset. Where a relationship between a parent company and a subsidiary
company is formed due to a business combination, the consolidated financial statements will be
prepared in accordance with the accounting policy on “Consolidated Financial Statements”
formulated by the Group. The period for adjusting comparative data of the consolidated financial
statements shall be no earlier than the later time when the combining party or combined party is
under the control of ultimate controller.
(2) Any business combination involving entities not under the same control within the reporting
period was treated using the purchase method. The combination costs shall be determined
respectively in light of the following circumstances: (i) For a business combination realized by a
transaction of exchange, the combination costs should be fair values, on the acquisition date, of
the assets paid, the liabilities incurred or assumed and the equity securities issued in exchange for
the control on the acquiree. (ii) For a business combination realized by two or more transactions of
exchange, accounting treatment of shares held in the acquiree prior to the acquisition date should
be distinguished between individual financial statements and consolidated financial statements.
A. In the individual financial statements, the sum of the carrying amount of the equity investment
regarding original shareholdings in the acquiree and the additional investment cost are recognized
as initial cost of such investment which is changed to be calculated at the cost method. For other
comprehensive income recognized for equity investment held prior to the acquisition date due to
the adoption of the equity method, the disposal of such investment is accounted for adopting the
same basis for direct disposal of relevant assets or liabilities by the acquiree. The equity
investment held prior to the acquisition date shall be accounted for in accordance with the
Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the accumulated changes in fair value originally recognized in other
comprehensive income shall be transferred to profit or loss when they are changed to be calculated
at the cost method.
B. In the consolidated financial statements, shares held in the acquiree prior to the acquisition date
should be re-measured at their fair value on the acquisition date, with the difference between fair
value and carrying amount recorded in investment income. If shareholdings in the acquiree prior
to the acquisition date involve other comprehensive income under the equity method, such other
comprehensive income concerned will be transferred to investment income for the period on the
acquisition date. The Group discloses in notes the fair value of its shareholdings in the acquiree
prior to the acquisition date and re-measures relevant gain or loss at fair value.
(iii) Intermediary expenses incurred by the acquirer in connection with business combination,
including charges on audit, assessment and legal services and other administrative expenses
concerned should be recorded in profit or loss when incurred; the transaction cost of equity
securities or debt securities issued by the acquirer as the consideration of combination should be
included in the initially recognized amount of equity securities or debt securities; and (iv) Where
the combination contract or agreement covers future matters that may influence the combination
cost, the acquirer should include in the combination cost the future matters that are likely to take
place and whose influence on the combination cost is reliably measurable.
The Group, on the acquisition date, measures the assets given and liabilities incurred or assumed
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 16 of 186
by an enterprise for a business combination at their fair value, and records the difference between
their fair value and carrying amount into profit or loss.
The Group allocates the combination costs on the acquisition date, and recognizes all identifiable
assets, liabilities and contingent liabilities it obtains from the acquiree as required. (i) The positive
balance between the combination costs and the fair value of the net identifiable assets it obtains
from the acquiree will be recognized as goodwill. (ii) If the combination costs are lower than the
fair value of the net identifiable assets it obtains from the acquiree, the Group will check the
measurement of fair value of the identifiable assets, liabilities and contingent liabilities it obtains
from the acquiree as well as the combination costs. If, after the check, the combination costs are
still less than fair value of the net identifiable assets it obtains from the acquiree, the Group will
record the difference into profit or loss.
Where a relationship between a parent company and a subsidiary company is formed due to a
business combination, the parent company shall prepare accounting books for future reference,
which shall record fair values of the identifiable assets, liabilities and contingent liabilities it
obtains from the subsidiary company on the acquisition date. When consolidated financial
statements are prepared, financial statements of the subsidiary company will be adjusted based on
fair values of identifiable assets, liabilities and contingent liabilities determined on the acquisition
date in accordance with the accounting policy of the Group on “Consolidated Financial
Statements”.
4. Preparation method of consolidated financial statements
(1) Scope of consolidation
The scope of consolidated financial statements shall be confirmed base on the control, including
the annual financial statements of the Bank and all subsidiaries by the year ended 31 December
2019. Subsidiary refers to the subject controlled by the Bank (including the dividable part in the
enterprise and investee, and the structured entity controlled by the Bank). Control means an
investor has the right on the investee, can enjoy variable return by participating the relevant
activities of investee and is capable to affect the return amount through its right on the investee.
(2) Preparation method of consolidated financial statements
The Bank prepared consolidated financial statements based on the financial statements of the Bank
and its subsidiaries, and other relevant materials.
When formulating consolidated financial statements, the Bank deems the whole enterprise group
as an accounting subject, and reflects the financial position, business performance and cash flows
of the enterprise group according to the requirements about the identification, measurement and
presentation of relevant accounting standard for business enterprises and the unified accounting
policies.
In case of any difference between the accounting policies or accounting periods adopted by the
Bank and its subsidiaries during the preparation of consolidated financial statements, the financial
statements of subsidiaries shall be adjusted based on the accounting policies and accounting
periods of the Bank. The financial statements of the subsidiary obtained through business
combination not under the same control shall be adjusted based on the fair value of net identifiable
assets on the acquisition date.
(3) Presentation of minority interests and profit or loss
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 17 of 186
The owners’ equity of subsidiaries not attributable to the parent company is presented as “minority
interests” under the owners' equity in the consolidated balance sheet.
Net profit or loss of subsidiaries attributable to minority interests are presented as “minority profit
or loss” under the net profit in the consolidated income statement.
(4) Treatment of excess losses
In the consolidated financial statements, losses attributed to minority shareholders of a subsidiary
in excess of minority shareholders' share in owners' equity of the subsidiary at the beginning of the
reporting period should still be offset against minority interests.
(5) Subsidiaries added to or removed from consolidated financial statements
Where a subsidiary is added due to a business combination involving entities under the same
control in the reporting period, the beginning balance of the consolidated balance sheet should be
adjusted when it is prepared. Where a subsidiary is added due to a business combination involving
entities not under the same control, the beginning balance of the consolidated balance sheet should
not be adjusted when it is prepared. Where a subsidiary is disposed of in the reporting period, the
beginning balance of the consolidated balance sheet should not be adjusted when it is prepared.
Where a subsidiary is added due to a business combination involving entities under the same
control in the reporting period, income, expenses and profit of the subsidiary from the beginning
of the combination period to the end of the reporting period should be included in the consolidated
income statement, and cash flows of the subsidiary from the beginning of the combination period
to the end of the reporting period should be included in the consolidated statement of cash flows.
Where a subsidiary is added due to a business combination involving entities not under the same
control, income, expenses and profit of the subsidiary from the beginning of the combination
period to the end of the reporting period should be included in the consolidated income statement,
and cash flows of the subsidiary from the acquisition date to the end of the reporting period should
be included in the consolidated statement of cash flows. Where a subsidiary is disposed of in the
reporting period, income, expenses and profit of the subsidiary from the beginning of the reporting
period to the disposal date should be included in the consolidated income statement, and cash
flows of the subsidiary from the beginning of the period to the disposal date should be included in
the consolidated statement of cash flows.
When the control on the original subsidiary is lost due to the disposal of partial equity investment
or other reasons, the residual equity investment after disposal shall be re-measured at its fair value
on the date of losing control. The difference after the sum of consideration obtained in disposal of
equity and fair value of residual equity minus portions of net assets of the original subsidiary
calculated continuously from the acquisition date, which shall be enjoyed as calculated by the
original shareholding percentage, is recognized in investment income for the period of losing
control. Other comprehensive income relating to the original equity investment in the subsidiary
should be transferred to investment income for the period when losing control.
For any difference between the long-term equity investment obtained in acquisition of minority
interest and net identifiable assets of the subsidiary that shall be enjoyed as calculated by the
added shareholding percentage, as well as any difference between the proceeds obtained due to the
disposal of partial equity investment in the subsidiary without losing control and net assets of the
subsidiary that shall be enjoyed as corresponding to the disposal of long-term equity investment,
the share premium of capital reserve in the consolidated balance sheet should be adjusted. In case
of insufficient share premium of capital reserve for offset, retained earnings should be adjusted.
(6) Consolidated statement treatment of disposal of equity by step to loss of control
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 18 of 186
If transactions incurred in the disposal of equity investment in the subsidiary by step to loss of
control belong to a package of transactions, these transactions shall be treated in accounting as one
transaction of disposal of the subsidiary to loss of control. However, the difference between each
disposal consideration before the loss of control and net assets of the subsidiary that shall be
enjoyed corresponding to the disposal of investment should be recognized as other comprehensive
income in the consolidated financial statements and transferred to profit or loss for the period of
losing control upon loss of control. If these transactions do not belong to a package, before and
when losing control, accounting treatment shall be conducted in accordance with the accounting
policy for partial disposal of equity investment in the subsidiary without loss of control and the
policy for loss of control on the original subsidiary.
When terms & conditions and economic impact of transactions involved in the disposal of equity
investment in the subsidiary meet one or more circumstances, these transactions shall be treated as
a package: (i) these transactions are concluded at the same time or based on the consideration of
mutual effect; (ii) only the whole of these transactions can reach a complete commercial result; (iii)
one transaction depends on at least one of other transactions; and (iv) one transaction
independently is not economical, but together with other transactions it becomes economical.
The disposal of equity by step to loss of control in individual financial statements is treated in
accordance with the accounting policy for the disposal of long-term equity investment.
5. Preparation method of consolidated financial statements of the Bank
The bank-wide consolidated financial statements of the Bank were prepared according to financial
statements and relevant materials of the Head Office, branches, the Banking Department of the
Head Office and sub-branches of the Bank. Material transactions inside the Bank and their
balances were offset against each other during consolidation.
6. Basis of bookkeeping and principle of pricing
The Group adopts the accrual basis of accounting. Except for some financial instruments, the
Bank adopts the historical cost principle for pricing. Allowance for impaired assets is set aside in
accordance with relevant rules.
7. Cash and cash equivalents
Cash and cash equivalents refer to cash on hand, deposits that can be used for payment at any time,
and short term investments with high liquidity, which are readily convertible into known amounts
of cash and subject to an insignificant risk of changes in value. Cash equivalents include
non-restricted balances with central banks, as well as deposits with banks and other financial
institutions, lendings to banks and other financial institutions and reverse repurchase agreements
with an original maturity of up to three months and bond investments with high liquidity in the
short term, that are readily convertible to cash in known amounts, exposed to an insignificant risk
of value change and due within three months as from purchase date.
8. Foreign currency translation
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 19 of 186
The Group maintains separate accounts for each foreign currency. Foreign currency transactions
are recorded in the original currency when they take place.
Monetary items denominated in foreign currencies are translated on the balance sheet date at spot
exchange rate. Translation differences arising from items other than monetary securities classified
as available-for-sale are recorded in the income statement. Translation differences of monetary
securities measured in foreign currencies and classified as available-for-sale should be separated
into translation differences arising from changes in amortized cost and translation differences
arising from changes in other carrying amounts. Translation differences arising from changes in
amortized cost are recorded in the income statement, while translation differences arising from
changes in other carrying amounts are recorded in “Reserve for fair value changes in
available-for-sale financial assets” under other comprehensive income.
Non-monetary items denominated in foreign currencies that are measured at historical cost are
translated at the spot exchange rate applicable on the transaction date, with the amounts in
bookkeeping base currency remaining unchanged. Non-monetary items measured at fair value are
translated at the spot exchange rate applicable on the date of fair value determination, with
differences between amounts in bookkeeping base currency and amounts in original currency: in
the case of available-for-sale financial assets, recorded into “Reserve for fair value changes in
available-for-sale financial assets” under other comprehensive income; or in the case of financial
assets and financial liabilities designated at fair value through profit or loss, recorded into “Gains
or losses on changes in fair value” in the income statement.
9. Recognition and measurement of financial instruments
(1) Recognition of financial instruments
A financial asset or financial liability is recognized when the Group becomes a party to a financial
instrument contract.
(2) Classification and measurement of financial assets
(i) The Group, based on risk management, investment strategy, purpose for holding financial
assets and other reasons, classifies financial assets held into financial assets designated at fair
value through profit or loss, held-to-maturity investments, loans and receivables and
available-for-sale financial assets.
A. Financial assets designated at fair value through profit or loss
Financial assets designated at fair values through profit or loss, including held-for-trading
financial assets and financial assets designated at fair value through profit or loss upon initial
recognition.
Held-for-trading financial assets refer to those meet one of the following conditions: The purpose
to acquire the financial assets is mainly for selling in the short run; financial assets are a part of
recognizable combination of financial instruments which are managed in a centralized way and for
which there is objective evidence proving that the enterprise may manage the combination by way
of short-term profit making in the near future; financial assets are derivative instruments, except
the designated derivative instruments which are effective hedging instruments, or derivative
instruments to financial guarantee contracts, and the derivative instruments which are linked with
the equity instrument investments for which there is no quoted price in the active market, whose
fair value cannot be reliably measured, and which shall be settled by delivering the said equity
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 20 of 186
instruments.
Financial assets that meet one of the following conditions can be financial assets designated at fair
value through profit or loss upon initial measurement: the designation is able to eliminate or
obviously reduce the discrepancies in the recognition or measurement of relevant gains or losses
arising from the different basis of measurement of the financial instruments; the official written
documents on risk management or investment strategies have recorded that the combination of
said financial instruments will be managed and evaluated on the basis of their fair values and be
reported to the key management personnel; the financial assets have one or more hybrid
instruments with an embedded derivative instrument, except when the embedded derivative
instrument does not significantly change the cash flow of hybrid instrument, or the embedded
derivative shall obviously not be split from relevant hybrid instruments; the financial assets have
the hybrid instruments with the embedded derivative instrument that needs to be split but cannot
be independently measured when it is obtained or subsequently on the balance sheet date.
The equity instrument investments for which there is no quoted price in the active market and
whose fair value cannot be reliably measured cannot be designated at fair value through profit or
loss.
B. Held-to-maturity investments
Held-to-maturity investments refer to non-derivative financial assets that have fixed or
determinable payments, a fixed maturity and the Group has the positive intention and ability to
hold to maturity.
C. Loans and receivables
Loans and receivables refer to non-derivative financial assets without quoted price in the active
market or with fixed or fixable recovery amount.
D. Available-for-sale financial assets
Available-for-sale financial assets refer to non-derivative financial assets designated as available
for sale upon initial recognition and financial assets other than the abovementioned types.
Some financial assets classified into financial assets designated at fair value through profit or loss
upon initial recognition by the Group cannot be reclassified as other financial assets; and other
financial assets cannot be reclassified into financial assets designated at fair value through profit
or loss, either.
(ii) Financial assets are measured at fair value upon initial recognition. Transaction costs relating
to financial assets designated at fair value through profit or loss are directly recorded in profit or
loss. Transaction costs relating to other types of financial assets are included in initially
recognized amounts.
(iii) Subsequent measurement of financial assets
A. Financial assets designated at fair value through profit or loss, including held-for-trading
financial assets and financial assets designated at fair value through profit or loss, are subsequently
measured at fair value. Gains or losses on changes in fair value are recorded in profit or loss.
B. Held-to-maturity investments are subsequently measured at amortized cost using the effective
interest method. Any gain or loss arising from derecognition, impairment or amortization is
recorded in profit or loss.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 21 of 186
C. Loans and receivables are subsequently measured at amortized cost using the effective interest
method. Any gain or loss arising from derecognition, impairment or amortization is recorded in
profit or loss.
D. Available-for-sale financial assets are subsequently measured at fair value. Any change in their
fair value is recorded in other comprehensive income and transferred to profit or loss when such
available-for-sale financial assets are impaired or derecognized. Any interest or cash dividend
realized during the holding period of available-for-sale financial assets is recorded in profit or loss.
Impairment losses on investments in equity instruments that do not have a quoted price in an
active market and whose fair value cannot be measured reliably, and derivative financial assets
linked to these equity instruments and settled through delivery of these equity instruments, are
measured at cost.
(iv) Allowance for impairment losses on financial assets
A. The Group checks carrying amount of financial assets other than financial assets designated at
fair value through profit or loss. If there is any objective evidence proving a financial asset is
impaired, impairment losses shall be recognized and the related allowance shall be set aside.
B. Objective evidences proving the impairment of the financial asset determined by the Group
include:
a) A serious financial difficulty occurs to the issuer or debtor;
b) The debtor breaches any contractual provisions, such as failing or delaying to pay interest or the
principal;
c) The creditor makes a concession to the debtor that is financially troubled due to economic or
legal considerations;
d) The debtor is likely to become bankrupt or enter into financial reorganizations in any other
form;
e) The financial asset can no longer continue to be traded in an active market due to serious
financial difficulties of the issuer;
f) Public data available show that, though it is impossible to identify whether the cash flow of a
certain asset within a portfolio of financial assets has decreased or not, an overall assessment finds
that the predicted future cash flow of the said portfolio of financial assets has indeed decreased
since it was initially recognized and such decrease is measurable, for example, the ability of the
debtor of the said portfolio of financial assets worsens gradually, the unemployment rate in the
region where the debtor is situated increases, the prices of collaterals drop markedly, or the sector
of the debtor in question is in slump;
g) Any material adverse change has occurred to the technical, market, economic or legal
environment where the debtor operates its business, which makes the investor in an equity
instrument unable to recover investment cost;
h) The fair value of investment in an equity instrument declines seriously or non-temporarily;
i) Other objective evidences showing the impairment of the financial asset.
C. Measurement of impairment losses on financial assets
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 22 of 186
a) Measurement of impairment losses on held-to-maturity investments, loans and receivables
Allowance for impairment losses on held-to-maturity investments, loans and receivables (financial
assets subsequently measured at amortized cost) shall be set aside based on the difference of the
present value of expected future cash flows of the said financial asset lower than its carrying
amount and recorded in profit or loss.
The Group separately conducts impairment tests on financial assets in a significant amount
individually, and conducts impairment tests on financial assets in an insignificant amount
individually or in a portfolio of financial assets having similar credit risk characteristics. Financial
assets found unimpaired in separate impairment tests, no matter in significant or insignificant
amount individually, should be retested in a portfolio of financial assets having similar credit risk
characteristics. Financial assets whose impairment losses have been recognized separately should
not be tested for impairment in a portfolio of financial assets having similar credit risk
characteristics.
After the Bank recognizes impairment losses on a financial asset measured at amortized cost, if
there is an objective evidence proving the value of the said financial asset is restored, which is
objectively related to matters occurred after the recognition of the impairment losses, the formerly
recognized impairment losses should be reversed and recorded into profit or loss.
b) Available-for-sale financial assets
The Group conducts impairment tests on available-for-sale financial assets as single investments.
On the balance sheet date, the fair value of available-for-sale financial assets should be judged
whether dropped significantly or not temporarily: if the fair value of a single available-for-sale
financial asset drops by more than 50% of its cost or maintains falling for above one year, the said
available-for-sale financial assets can be identified as impaired, allowance for impairment losses
should be set aside based on the difference between its cost and fair value, and impairment losses
should be recognized. The cost of available-for-sale financial assets at the end of the period is the
amortized cost initially measured at the investment cost upon acquisition and calculated by the
weighted average method upon sale.
Where the fair value of an available-for-sale financial asset declines not temporarily, even if the
financial asset is not derecognized, the accumulative loss arising from the decline in fair value that
has been directly recorded in other comprehensive income should be transferred to profit or loss.
When available-for-sale investments in equity instruments that do not have a quoted price in an
active market and whose fair value cannot be measured reliably, or derivative financial assets
linked to these equity instruments and settled through delivery of these equity instruments are
impaired, the Group recognizes the difference between the carrying amount of the investment in
equity instrument or derivative financial asset and present value determined by discounting future
cash flows at the market yield rate of similar financial assets at that time as impairment losses and
records the difference in profit or loss.
After impairment losses are recognized for an available-for-sale debt instrument, if there is an
objective evidence proving the value of the said financial asset is restored, which is objectively
related to matters occurred after the recognition of the impairment losses, the formerly recognized
impairment losses should be reversed and recorded into profit or loss.
Any impairment losses on an available-for-sale investment in equity instrument should not be
reversed through profit or loss. Meanwhile, impairment losses on investments in equity
instruments that do not have a quoted price in an active market and whose fair value cannot be
measured reliably, or derivative financial assets linked to these equity instruments and settled
through delivery of these equity instruments, should not be written back.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 23 of 186
(3) Classification and measurement of financial liabilities
(i) Financial liabilities held by the Group are classified into financial liabilities designated at fair
value through profit or loss and other financial liabilities.
Financial liabilities designated at fair values through profit or loss, including held-for-trading
financial liabilities and financial liabilities designated at fair value through profit or loss upon
initial recognition.
Held-for-trading financial liabilities refer to those meet one of the following conditions: The
purpose to acquire the financial liabilities is mainly for repurchase in the short run; financial
liabilities are a part of recognizable combination of financial instruments which are managed in a
centralized way and for which there is objective evidence proving that the enterprise may manage
the combination by way of short-term profit making in the near future; financial liabilities are
derivative instruments, except the designated derivative instruments which are effective hedging
instruments, or derivative instruments to financial guarantee contracts, and the derivative
instruments which are linked with the equity instrument investments for which there is no quoted
price in the active market, whose fair value cannot be reliably measured, and which shall be
settled by delivering the said equity instruments.
Financial liabilities that meet one of the following conditions can be financial liabilities designated
at fair value through profit or loss upon initial measurement: the designation is able to eliminate or
obviously reduce the discrepancies in the recognition or measurement of relevant gains or losses
arising from the different basis of measurement of the financial instruments; the official written
documents on risk management or investment strategies have recorded that the combination of
said financial instruments will be managed and evaluated on the basis of their fair values and be
reported to the key management personnel; the financial liabilities have one or more hybrid
instruments with an embedded derivative instrument, except when the embedded derivative
instrument does not significantly change the cash flow of hybrid instrument, or the embedded
derivative shall obviously not be split from relevant hybrid instruments; the financial liabilities
have the hybrid instruments with the embedded derivative instrument that needs to be split but
cannot be independently measured when it is obtained or subsequently on the balance sheet date.
Some financial liabilities classified into financial liabilities designated at fair value through profit
or loss upon initial recognition by the Group cannot be reclassified into other financial liabilities;
and other financial liabilities cannot be reclassified into financial liabilities designated at fair value
through profit or loss, either.
(ii) Financial liabilities are measured at fair value upon initial recognition. Transaction costs
relating to financial liabilities designated at fair value through profit or loss are directly recorded
in profit or loss. Transaction costs relating to other financial liabilities are included in initially
recognized amounts.
(iii) Subsequent measurement of financial liabilities
A. Financial liabilities designated at fair value through profit or loss, including held-for-trading
financial liabilities and financial liabilities designated at fair value through profit or loss, are
subsequently measured at fair value. Gains or losses on changes in fair value are recorded in profit
or loss.
B. Other financial liabilities are subsequently measured at amortized cost using the effective
interest rate method.
(4) Recognition basis and measurement of financial assets transfer
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When the Group transfers almost all risks and benefits arising from the ownership of a financial
asset to the transferee, the said financial asset will be derecognized. Where the overall transfer of
the financial asset meets the derecognition conditions, the Group recognizes the difference
between the following two items in profit or loss:
(i) Carrying amount of the financial asset transferred;
(ii) Sum of the consideration received due to transfer and the accumulated changes in fair value
formerly recognized in other comprehensive income (where the financial asset transferred is
available-for-sale financial asset).
Where partial transfer of the financial asset of the Group meets derecognition conditions, the
overall carrying amount of the financial asset transferred shall be amortized at its relative fair
value respectively between the derecognized part and not derecognized part. The difference
between the following two items shall be recognized in profit or loss:
(i) Carrying amount of the derecognized part;
(ii) Sum of the consideration of the derecognized part and the amount corresponding to the
derecognized part in accumulated changes in fair value formerly recognized in other
comprehensive income (where the financial asset transferred is available-for-sale financial asset).
The amount corresponding to the derecognized part in accumulated changes in fair value formerly
recognized in other comprehensive income shall be determined after being amortized at the
relative fair values of the derecognized part and not derecognized part of the financial asset.
Where transfer of the financial asset does not meet derecognition conditions, the recognition of the
overall financial asset transferred shall be continued and the consideration received shall be
recognized as a financial liability.
For transfer of the financial asset under the continued involvement conditions, the Group
recognizes the relevant financial asset or liability based on the continued involvement degree of
the financial asset transferred, to completely reflect its reserved right and assumed obligation.
(5) Derecognition of financial liabilities
A financial liability cannot be derecognized in part or in whole until current obligations of the
Group under the liability is terminated in part or in whole. Where the Group and the creditor signs
an agreement to replace the existing financial liability by the way of assuming new financial
liability and the latter is substantially different from contract clauses of the existing one, the
existing financial liability shall be derecognized and the new financial liability shall be recognized
at the same time.
Where the financial liability is derecognized in whole or in part, the difference between the
carrying amount of derecognized part and the consideration paid (including non-cash assets
transferred out or new financial liability assumed) shall be recognized in profit or loss.
(6) Offset of financial assets and financial liabilities
Financial assets and financial liabilities are presented separately on the balance sheet and cannot
be offset with each other. But whenever the following conditions are met at the same time, they
shall be presented on the balance sheet at the net amount after offsetting: the Group has the legal
right to offset recognized amount and is able to execute this legal right; the Group plans to make
the settlement at a net amount or liquidate the financial assets at the same time of paying off the
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financial liabilities. If the transfer of financial assets does not satisfy the conditions of
derecognition, transferrer is not allowed to offset the transferred financial assets and financial
liabilities.
(7) Asset securitization
As part of business activities, for credit asset securitization, the Group generally sells the assets to
the structured entity that issues the securities to investors. The interests in securitized financial
assets are presented in the form of senior asset-backed securities or subordinated asset-backed
securities or other residual interests (“Retained Interests”).
For the credit asset securitization that does not satisfy the derecognition conditions, the relevant
financial assets shall not be derecognized and shall remain in the original category, and funds
raised from the third-party investors shall be treated as financing funds.
If securitization results in full or partial derecognition of a financial asset, the Group will allocate
the par value of transferred financial asset according to the fair value of derecognized financial
asset and financial asset with Retained Interests respectively. The gain or loss on securitization,
which is the difference between received consideration and the allocated par value of the
derecognized financial asset, is recorded in “investment income”. The retained earnings are
measured using the same method as that adopted before securitization.
In applying the accounting policy on securitized financial assets, the Group has considered the
transfer level of risks and rewards transferred to another entity and the level of control exercised
by the Group over the entity:
A. When the Group has transferred substantially all the risks and rewards of ownership of the
financial asset, the Group will derecognize said financial asset;
B. When the Group retains substantially all the risks and rewards of ownership of the financial
asset, the Group will continue to recognize said financial asset; and
C. When the Group has neither transferred nor retained substantially all the risks and rewards of
ownership of the financial asset, the Group will consider whether it has control over the financial
asset or not. If the Group has not retained control, the Group will derecognize the financial asset
and recognize the rights and obligations generated or retained in transfer as assets or liabilities
respectively. If the Group retains control, financial asset will be recognized according to the level
of continuous involvement in the financial asset.
10. Renegotiated loans
If conditions permit, the Group will strive to restructure loans instead of obtaining the ownership
of collaterals. This might involve the extended repayment and the new loan conditions. Once the
terms and conditions are re-negotiated, the loan will not be deemed as overdue. The Management
continues to review the restructured loans so that they could satisfy all conditions and the
following payment is likely to happen. Such loans continue to be assessed for impairment
individually or collectively and measured for allowance for impairment losses by adopting initial
effective interest rate.
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11. Derivative financial instruments and embedded derivative financial instruments
Derivative financial instruments include financial forward contracts, financial futures contracts,
financial swap and options and instruments combining any one or more features of financial
forward contracts, financial futures contracts and financial swap and options. Derivative financial
instruments have the following common characteristics:
(1) Their values vary with specific interest rate, price of financial instruments, commodity price,
exchange rate, price index, rate index, credit rating, credit index or similar variables;
(2) No initial net investment is required, or, as compared to contracts of other types with similar
responses to market changes, small initial net investment is required; and
(3) To be settled on a future date.
Such derivative financial instruments are initially recognized at fair value on the date when a
derivative contract is entered into and are subsequently re-measured at fair value. Changes in fair
value of derivative financial instruments are included in the gains or losses on changes in fair
value, and reflected in “derivative financial assets” or “derivative financial liabilities” on the
balance sheet.
Embedded derivative financial instruments are derivative financial instruments embedded into a
non-derivative contract (the “master contract”) that cause adjustments to cash flows of the master
contract, in part or in whole, to reflect changes in specific interest rate, price of financial
instruments, exchange rate, price index or rate index, credit rating or credit index or changes in
similar variables, such as conversion options embedded into the convertible corporate bonds
purchased. When an embedded derivative financial instrument is not tightly closed to the master
contract in respect of economic features and risks, the Bank removes it from the master contract as
an independent derivative financial instrument that is initially recognized and subsequently
measured at fair value.
After the embedded derivative financial instrument is removed from the master contract, the
master contract, if it is a financial instrument, is accounted for as financial asset or liability in the
relevant category.
12. Financial assets under reverse repurchase agreements and financial assets under repurchase
agreements
Financial assets under reverse repurchase agreements mean relevant assets (bonds, notes and loans)
are purchased by the Bank from the counterparty at a certain price pursuant to contract or
agreement and will be resold to counterparty at agreed price on the date specified in the contract or
agreement. Financial assets under reverse repurchase agreements are accounted for in the amounts
actually paid upon purchase and reflected on the balance sheet. Underlying assets that have
purchased under resale agreements are not recognized on the balance sheet.
Financial assets under repurchase agreements refer to financing in which relevant assets (including
bonds, notes and loans) are sold by the Bank and its subsidiaries to the counterparty at a certain
price pursuant to contract or agreement and will be repurchased from the counterparty at agreed
price on the date specified in the contract or agreement. Financial assets under repurchase
agreements are accounted for in the amount actually received upon sale and reflected on the
balance sheet.
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The bid-ask spread between reverse repurchase agreements and repurchase agreements is
amortized using the effective interest during the relevant transaction period and recognized
interest income or expense.
13. Measurement of long-term equity investment
Long-term equity investment includes equity investment in subsidiaries, joint ventures and
associates.
(1) Initial measurement
Long-term equity investment is initially measured by the Group as follows:
(i) The initial cost of a long-term equity investment acquired through a business combination
should be determined as follows:
A. For a business combination involving enterprises under the same control, if the consideration of
the combination is satisfied by paying cash, transfer of non-cash assets or assumption of liabilities
by the combining party, the initial cost of the long-term equity investment should be the combined
party's share of carrying amount of the owners' equity in the consolidated financial statements of
the ultimate controller on the combination date. The difference between the initial cost and the
carrying amount of cash paid, non-cash assets transferred and liabilities assumed should be
adjusted to capital reserve. If the balance of capital reserve is not sufficient, any excess should be
adjusted to retained earnings. The direct cost for the business combination of the combining party
should, including the expenses for audit, assessment and legal services, be recorded into the profit
or loss.
If the consideration of the combination is satisfied by the issue of equity securities, the initial cost
of the long-term equity investment should be the combined party's share of carrying amount of the
owners' equity in the consolidated financial statements of the ultimate controller on the
combination date. The aggregate face value of the shares issued should be accounted for as share
capital. The difference between the initial investment cost and the aggregate face value of the
shares issued should be adjusted to capital reserve. If the balance of capital reserve is not sufficient,
any excess should be adjusted to retained earnings. The fees, commissions and other expenses
arising from the issuance of equity securities during the business combination should be offset
against the issue premium income from equity securities, and any insufficiency of the issue
premium income should be offset against retained earnings.
B. In a business combination involving entities not under the same control, the Group determines
the combination cost as follows:
a) For a business combination realized by a transaction of exchange, the combination costs should
be fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the
equity securities issued in exchange for the control on the acquiree.
b) For a business combination realized by multiple transactions of exchange in steps, the initial
cost of such investment should be the sum of the carrying amount of equity investment held in the
acquiree prior to the acquisition date and the new investment cost on the acquisition date.
c) Intermediary expenses incurred by the acquirer in connection with business combination,
including charges on audit, assessment and legal services and other administrative expenses
concerned should be recorded in profit or loss when incurred; the transaction cost of equity
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securities or debt securities issued by the acquirer as the consideration of combination should be
included in the initially recognized amount of equity securities or debt securities; and
d) Where the combination contract or agreement covers future matters that may influence the
combination cost, the acquirer should include in the combination cost the future matters that are
likely to take place and whose influence on the combination cost is reliably measurable.
(ii) The initial cost of a long-term equity investment acquired other than through a business
combination should be determined as follows:
A. For a long-term equity investment acquired by paying cash, the initial cost should be the actual
purchase price paid. Initial investment cost includes the costs, taxes and other necessary
expenditures directly attributable to the acquisition of the long-term equity investment.
B. For a long-term equity investment acquired by the issue of equity securities, the initial
investment cost should be the fair value of the equity securities issued, excluding declared but
unpaid cash dividend or profit collected from the investee. Transaction costs incurred upon issue
or acquisition of its own equity instruments that can be directly attributable to the equity
transaction will be deducted from the equity.
C. For a long-term equity investment acquired through an exchange of non-monetary assets, the
initial investment cost should be determined in accordance with the Accounting Standard for Business Enterprises No.7 - Exchange of Non-Monetary Assets.
D. For a long-term equity investment acquired through debt restructuring, the initial investment
cost should be determined in accordance with the Accounting Standard for Business Enterprises
No.12 - Debt Restructurings.
(iii) Where a long-term equity investment is acquired by any means, the share of cash dividend or
profit declared but unpaid by the investee, which is included in the consideration paid when the
investment is acquired, should be separately accounted for as a receivable item and should not
constitute the initial cost of long-term equity investment.
(2) Subsequent measurement
Long-term equity investment that can exert control on the investee shall be accounted for based on
the cost method in individual financial statements. Long-term equity investment that does not
exert joint control or significant influence on the investee shall be accounted for based on the
equity method.
(i) The long-term equity investment accounted for based on the cost method shall be priced based
on the initial investment cost. If there are additional investments or recovered investments, the
cost of the long-term equity investment shall be adjusted. The cash dividend or profit which has
been declared to distribute by the investee shall be included into the investment income for the
period.
(ii) If the initial cost of a long-term equity investment is more than the Group's attributable share
of the fair value of the investee's identifiable net assets for the investment, the initial cost of the
long-term equity investment may not be adjusted. If the initial cost of a long-term equity
investment is less than the Group's attributable share of the fair value of the investee's identifiable
net assets for the investment, the difference shall be included into the profit or loss and the cost of
the long-term equity investment shall be adjusted simultaneously.
After the Group obtains a long-term equity investment, it shall, in accordance with the attributable
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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share of the net profit or loss of the investee and other comprehensive income, recognize the
investment income and other comprehensive income respectively, and adjust the carrying amount
of the long-term equity investment; and in accordance with the cash dividend or profit which has
been declared to distribute by the investee, it shall reduce the carrying amount of the long-term
equity investment. Where any change is made to the owner’s equity other than the net profit or
loss, other comprehensive income and profit distribution of the investee, the carrying amount of
the long-term equity investment shall be adjusted and be included in the owner’s equity. The
Group shall, on the ground of the fair value of all identifiable net assets of the investee when it
obtains the investment, recognize the attributable share of the net profit or loss of the investee after
it adjusts the net profit of the investee. If the accounting policies and accounting periods adopted
by the investee are different from those adopted by the Group, an adjustment shall be made to the
financial statements of the investee in accordance with the accounting policies and accounting
periods of the Group and recognize the investment income and other comprehensive income. The
Group shall recognize the net losses of the investee until the carrying amount of the long-term
equity investment and other long-term rights and interests which substantially form the net
investment made to the investee are reduced to zero, unless the Group has the obligation to
undertake extra losses. If the investee realizes any net profit later, the Group shall, after the
amount of its attributable share of profit offsets against its attributable share of the un-recognized
losses, resume to recognize its attributable share of profit.
When the Group calculates and identifies attributable share of the net profit or loss of the investee,
the unrealized profit or loss of internal transactions with associates and joint venture shall offset
the part attributable to the Group according to the attributable share and the investment return shall
be identified accordingly. If the unrealized losses of internal transactions between the Group and
the investee are included into impairment losses, they shall be fully identified.
If some part of the equity investment in associates is indirectly held by the Group through the
venture capital institution, mutual fund, trust company or similar subjects including
investment-linked insurance fund, the Group shall record this part at fair value through profit or
loss and account the remaining part based on the equity method based on the provisions in the
Accounting Standards for Enterprises No.22-Recognition and Measurement of Financial
Instruments no matter whether the above subjects exert significant influence on this part of
investment.
(iii) When the Group disposes a long term equity investment, the difference between the carrying
amount of the said equity investment and the proceeds from its disposal should be recorded in
profit or loss. The disposal of the long-term equity investment calculated at the equity method,
shall be on the same basis for direct disposal of relevant assets or liabilities by the investee, and
the part formerly recognized in other comprehensive income shall be accounted for based on the
corresponding proportion.
(iv) In case of decreased shareholding ratio by the Group due to capital increase by other investors
in its subsidiaries, causing the Group to lose control but can still carry out joint control or exert
great influence, long-term equity investment shall be accounted for using the equity method
instead of the cost method in the individual financial statements. First, it shall be recognized the
difference between the attributable share of the investor in increased net assets of the original
subsidiary due to capital increase based on the new shareholding ratio and the carrying amount of
the long-term equity investment corresponding to the decrease in shareholding ratio that shall be
carried forward, with such difference recorded in profit or loss; then, deemed as the equity method
has been adopted in accounting since the investment was obtained, adjustment shall be made
according to the new shareholding ratio.
(3) Basis for determination of joint control or significant influence over the investee
Joint control refers to common control over certain arrangement as agreed, and relevant activities
of such arrangement cannot be decided unless being agreed unanimously by all participants to the
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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joint control right. Relevant activities refer to activities that have significant influence on the
return of certain arrangement. Significant influence means the investor has the power to
participate in the decision-making for financial and operating polices of the investee but is unable
to control or jointly control with other parties the preparation of these policies.
(4) Impairment testing methods and impairment provisioning methods
The impairment testing methods and impairment provisioning methods shall be implemented in
accordance with the accounting policy on “Impairment of Assets” prepared by the Group.
14. Recognition and measurement of investment properties
(1) Investment properties of the Group refer to properties held for the purpose of earning rentals or
capital appreciation, or both of them, mainly including:
(i) Land use rights already leased;
(ii) Land use rights held for the purpose of transfer after appreciation; and
(iii) Buildings leased.
(2) An investment property of the Group that meets both of the following conditions should be
recognized:
(i) Financial benefits relating to the investment property are likely to flow into the Company; and
(ii) The cost of the investment property is reliably measurable.
(3) Initial measurement
An investment property is initially measured at cost.
(i) The cost of a purchased investment property comprises purchase price, relevant taxes and other
expenses directly attributable to the asset;
(ii) The cost of an investment property constructed at own cost comprises expenses incurred
necessary for the asset to reach the predefined serviceable condition;
(iii) The cost of investment properties acquired by other means is determined pursuant to relevant
accounting standards.
(4) Subsequent measurement
Investment properties of the Group are measured at cost. An investment property measured at cost
is depreciated or amortized using the same method as for fixed assets and intangible assets.
When the Group has strong evidence to show a change in the property purpose, i.e. changing a
property for self-use or inventory to an investment property or changing an investment property to
a property for self-use, the book value before change will be booked as the value after change.
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An investment property measured at cost is valuated at the lower of cost and recoverable amount
at the end of the reporting period. If the recoverable amount is lower than the cost, allowance for
impairment losses is set aside for the difference between them. Any allowance for impairment
losses set aside should not be reversed.
15. Recognition and measurement of fixed assets
Fixed assets of the Group refer to tangible assets held for production of cargoes, provision of
services, leasing or operation and with a service life of more than a fiscal year.
(1) A fixed asset that meets both of the following conditions is initially measured at cost:
(i) Financial benefits relating to the fixed asset are likely to flow into the Company; and
(ii) The cost of the fixed asset is reliably measurable.
(2) Depreciation of fixed assets
Subsequent expenses relating to fixed assets are recorded in the cost of fixed assets if they meet
the conditions set for recognition of fixed assets, or recorded directly in profit or loss upon
occurrence if they do not meet the conditions set for recognition of fixed assets.
Fixed assets of the Group are depreciated using the straight-line method.
The service life, residual value and annual depreciation rate of fixed assets are listed in the table
below:
Category Service life Estimated net residual
value
Annual depreciation
rate
Buildings and
structures 20 to 50 years
3% 4.85% to 1.94%
Transporting vehicles 6 years 1% 16.50%
Electronic equipment 3 to 5 years 0-3% 33.33% to19.80%
Furniture 5 years 1% 19.80%
The Group reviews the service life, estimated net residual value and depreciation method of fixed
assets at the end of each fiscal year. Where the service life is different from the previous estimate,
the service life of fixed assets should be adjusted; where the estimated net residual value is
different from the previous estimate, the estimated net residual value should be adjusted; where
there is any significant change in the way the economic benefits relating to fixed assets are
anticipated to be realized, the depreciation method of fixed assets should be changed. Changes in
the service life, estimated net residual value and depreciation method of fixed assets should be
deemed changes in accounting estimates.
(3) Fixed assets acquired through finance leasing
Where the Group substantially transfers all risks and benefits arising from a fixed asset leased to it,
leasing of the fixed asset is deemed finance leasing.
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The cost of the fixed asset acquired through financial leasing should be the lower of fair value of
the leased asset on the start date of lease and present value of the minimum lease payment.
Fixed assets acquired through financial leasing are depreciated using the same method as for
owned depreciable assets. Where there is a reasonable ground to believe that the ownership of a
leased asset is obtainable upon the expiration of lease, the leased asset should be depreciated over
its useful life; where there is no reasonable ground to believe that the ownership of a leased asset
is obtainable upon the expiration of lease, the leased asset should be depreciated over the shorter
of the lease term and its useful life.
(4) Impairment of fixed assets should be accounted for in accordance with the Group's accounting
policy on “Impairment of Assets”.
16. Accounting for construction in progress
(1) Pricing of construction in progress: The cost should be determined based on expenses actually
incurred. The cost of construction in progress should also include capitalized loan expenses and
exchange gains or losses.
(2) Construction in progress of the Group is transferred to fixed assets when it reaches the
predefined serviceable condition. Fixed assets that have been constructed to the predefined
serviceable condition but whose final accounts of completion are not conducted should be
recognized as fixed assets at estimated value and depreciated; after the final accounts are
completed, the original estimated value should be adjusted according to the actual cost, without
any adjustment made to depreciation.
(3) Impairment of construction in progress should be accounted for in accordance with the Group's
accounting policy on “Impairment of Assets”.
17. Recognition and measurement of intangible assets
“Intangible assets” of the Group refer to the identifiable non-monetary assets without any physical
shape possessed or controlled by the Group.
(1) Recognition of intangible assets
An intangible asset is recognized by the Group when it meets both of the following conditions:
(i) Financial benefits relating to the intangible asset are likely to flow into the Company; and
(ii) The cost of the intangible asset is reliably measurable.
(2) Measurement of intangible assets
(i) Intangible assets of the Group are initially measured at actual cost.
(ii) Subsequent measurement of intangible assets
A. For an intangible asset with a limited service life, the Group determines its service life upon
acquisition and subsequently amortizes it with the straight-line depreciation method over its
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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service life, with amortized amount recorded into the relevant costs and expenses. An intangible
asset with an uncertain service life should not be amortized.
At the end of the reporting period, the service life and amortization method of intangible assets
with a limited service life will be reviewed. Any change in the same will be treated as a change in
the accounting estimates. In addition, the service life of intangible assets with an uncertain service
life will be reviewed. If there is any evidence proving that the period for such intangible asset to
bring economic benefits for the enterprise is foreseeable, its service life will be estimated and it
will be amortized based on the amortization policy for intangible assets with a limited service life.
The amortization period of the Group's intangible assets with a limited service life is as follows:
Land use rights are averagely amortized over residual statutory service life starting from the
month of acquisition; software expenses are averagely amortized over 5 years starting from the
month of acquisition; other intangible assets are averagely amortized over 5 to 10 years starting
from the month of acquisition; and the Bank has no intangible assets with an uncertain service life.
B. Impairment of intangible assets should be accounted for in accordance with the Group's
accounting policy on “Impairment of Assets”.
(3) Research and development expenses
The internal research and development expenses of the Group are divided into expenses incurred
at the research stage and expenses incurred at the development stage. Research means innovative
and planned research carried out to obtain and understand new scientific or technical knowledge.
Development means to apply research results or other knowledge to a plan or design before the
commercial production or use, so as to produce new or make substantial improvement to materials,
equipment and products etc.
Expenses incurred at the research stage are recorded into profit or loss upon occurrence.
Expenses incurred at the development stage which meet the following conditions are recognized
as intangible assets, but those which cannot meet the following conditions are recorded into profit
or loss:
(i) The technical feasibility of completing the intangible asset so that it will be available for use or
sale;
(ii) Its intention to complete the intangible asset and use or sell it;
(iii) How the intangible asset will generate probable future economic benefits; among other things,
the Company can demonstrate the existence of a market for the output of the intangible asset or
the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
(iv) There are adequate technical, financial and other resources to complete the development and
to use or sell the intangible asset; and
(v) Its ability to measure reliably the expenses attributable to the intangible asset during its
development.
Where expenses incurred at the research stage and expenses incurred at the development stage
cannot be distinguished between each other, all research and development expenses incurred will
be recorded into profit or loss.
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18. Accounting for other assets
(1) Accounting for long-term deferred expenses
The Group recognizes the improvement expenses and other expenses of fixed assets rented in
through commercial lease which have incurred and have an amortization period of more than one
year to be amortized in the current year and over the following periods as long-term deferred
expenses. Long-term deferred expenses are recorded into the amount actually incurred and
averagely amortized over the benefit period.
Expenses arising from the improvement of fixed assets acquired through operating leasing are
averagely amortized over the shorter of lease term and five years.
Where long-term deferred expenses do not produce any benefit in subsequent fiscal years, the
amortized value should be fully recorded in profit or loss.
(2) Accounting for other receivables
Other receivables are accounted for according to specific items and corporate (or individual)
counterparties. The Group regularly analyzes recoverability of other receivables. Where the
recoverable amount of receivables is lower than their carrying amount, allowance for bad debts is
set aside and recorded in profit or loss.
(3) Repossessed assets
Repossessed assets are initially recognized at their fair value and subsequently measured at the
lower of carrying amount and recoverable amount. For the repossessed assets with the recoverable
amount lower than the carrying amount, the allowance for impairment losses should be set aside.
19. Impairment of long-term assets
The following circumstances may constitute a sign of possible asset impairment:
(1) The current market price of an asset declines sharply, and the price drop is obviously higher
than the expected drop over time or due to the normal use;
(2) The economic, technological or legal environment in which the Group conducts its business
operations, or the market where an asset is located has or will have any significant change in the
current period or in the near future, and thus has or will have an adverse impact on the Group;
(3) The market interest rate or any other market investment return rate has risen in the current
period, and the enterprise' discount rate for calculating the present value of the expected future
cash flows of the asset is affected and thus leads to a large fall in recoverable amount of the asset;
(4) Any evidence shows that an asset has become obsolete or it has been damaged substantially;
(5) An asset has been or will be left unused, or the use of an asset has been or will be terminated,
or an asset has been or will be disposed of ahead of schedule;
(6) Any evidence in the internal report of the Group shows that the economic performance of an
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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asset has been or will be lower than the expected performance, for example, net cash flows created
by an asset or business profit (or loss) realized (incurred) by an asset is lower (higher) than the
excepted amount, etc.; and
(7) Other evidence that indicates that an asset impairment has probably occurred.
The Group judges the assets applicable to the Accounting Standards for Business Enterprises No.
8-Asset Impairment like long-term equity investment, fixed assets, engineering materials,
construction in progress, intangible assets (except those with an uncertain service life on the
balance sheet date), conducts the impairment test and evaluates its recoverable amount in case of
impairment signs. The recoverable amount is the higher of the fair value of assets less disposal
costs or the present value of expected future cash flows of assets. Where the recoverable amount
of an asset is lower than its carrying amount, the Group writes down its carrying amount to the
recoverable amount, recognizes the written down amount as impairment losses on assets and
records it in profit or loss, and sets aside the relevant allowance for impairment losses on assets.
When there is a sign showing that the impairment of an asset has probably occurred, the Group
estimates the recoverable amount of the asset individually. Where it is difficult to estimate the
recoverable amount of an individual asset, the recoverable amount of the asset group including the
asset is estimated.
The asset group refers to the minimum combination of assets that may be recognized by the Group
and the cash inflow generated by which shall be generally independent from those generated by
other assets or asset groups. The asset group is composed of assets generating the cash inflow. An
asset group is identified based on whether the main cash inflow from the asset group is
independent of cash inflows from other assets or asset groups.
The Group conducts an impairment test on the goodwill formed by merger of enterprises and
intangible assets with an uncertain useful life every year, no matter whether or not there is any
sign of possible impairment. The impairment test on the business reputation is conducted together
with relevant asset group or combination of asset groups.
Once recognized, the foregoing impairment losses on assets should not be reversed in subsequent
fiscal years.
20. Bonds payable
Bonds payable of the Group comprise general financial bonds, subordinated bonds and interbank
CDs.
Bonds payable are recorded at fair value, i.e. amounts received (fair value of consideration
received) less transaction costs. Bonds payable are measured at amortized cost using the effective
interest rate method, i.e. the difference between the net amount received and the amount repayable
when due is amortized over the borrowing period using the effective interest rate method, with the
amortization amount recorded in profit or loss.
21. Staff compensation
Staff compensation refers to all kinds of payments and other relevant expenditures given by the
Group in exchange of the services offered by the staff or for terminating the labor relationship.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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The staff compensation shall include short-term compensation, welfare after resignation, dismiss
welfare and other long-term staff benefits. It also includes the benefits offered by the Group for
spouse, children, supported person of staff, family dependents and other beneficiaries of deceased
staff.
(1) Short-term compensation
The Group shall recognize the actual short-term compensation as liabilities during the accounting
period when the staff provide services and record it into current profit or loss or relevant asset
cost.
(2) Welfare after resignation
The Group classifies the welfare after resignation into defined contribution plan and defined
benefit plan. Welfare plan after resignation refers to the agreement about the welfare after
resignation concluded between the Group and staff or the regulations or measures formulated by
the Group about the welfare after the resignation of staff. Defined contribution plan refers to the
welfare plan after resignation where the Group does not assume the payment obligation after
contributing fixed fee to an independent fund; defined benefit plan refers to the welfare plan after
resignation except defined contribution plan.
A. Defined contribution plan
The Group recognizes the amount payable calculated based on the defined contribution plan as
liabilities during the accounting period when the staff provide services and record it into profit or
loss or relevant asset cost.
B. Defined benefit plan
The Group has not defined benefit plan or other long-term staff benefits satisfying the conditions
of defined benefit plan.
(3) Dismissal welfare
When providing dismiss welfare for staff, the Group recognizes the staff compensation due to
dismiss welfare as liabilities in the following circumstances whichever occurs earlier, and records
it in profit or loss: When the Group is not allowed to unilaterally cancel the dismiss welfare due to
labor relationship removal plan or the lay-off proposal;
When the Group recognizes the cost or fee related to the reorganization involving the payment of
dismiss welfare.
(4) Other long-term staff benefits
The other long-term staff benefits provided by the Group that meet the conditions of defined
contribution plan are treated based on the above accounting policies of defined contribution plan,
while the net liabilities or net assets of others are recognized and measured based on the above
account policies of defined benefit plan.
22. Accounting for income taxes
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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Income taxes of the Group are treated using the balance sheet liability approach.
(1) Deferred income tax assets
(i) Where there is a deductible temporary difference between the carrying amount of an asset or
liability and its tax base, the deferred income tax asset arising from deductible temporary
difference should be calculated and recognized at the tax rate applicable in the period of
anticipated recovery of the asset or discharge of the liability, subject to a maximum of the taxable
income that is likely to be available in future periods to offset the deductible temporary difference.
(ii) Where there is irrefutable evidence that sufficient taxable income is likely to be available in
future periods to offset the deductible temporary difference, deferred income tax assets that are not
recognized in previous periods should be recognized on the balance sheet date.
(iii) The carrying amount of deferred income tax assets is reviewed on the balance sheet date.
Where it is likely that insufficient taxable income will be available in future periods to offset the
deductible temporary difference, the carrying amount of the deferred income tax assets should be
written down. The written down amount should be reversed when sufficient taxable income
becomes likely to be available.
(2) Deferred income tax liabilities
Where there is a deductible temporary difference between the carrying amount of an asset or
liability and its tax base, the deferred income tax liability arising from deductible temporary
difference should be recognized at the tax rate applicable in the period of anticipated recovery of
the asset or discharge of the liability.
23. Estimated liabilities
(1) Criteria for recognizing estimated liabilities
If any obligation relevant to the contingent matters meets the following conditions, the Group will
recognize it as estimated liabilities:
(i) It is a current obligation of the Group;
(ii) Performance of the obligation will likely lead to the outflow of economic benefit from the
Group;
(iii) The amount of the obligation can be reliably measured.
(2) Measurement of estimated liabilities
The estimated liabilities are initially measured in accordance with the best estimate of the
necessary expenses for the performance of the current obligation. If there is a sequent range for the
necessary expenses and if all the outcomes within this range are equally likely to occur, the best
estimate is determined in accordance with the median estimate within the range. In other cases, the
best estimate shall be conducted in accordance with the following situations, respectively:
(i) If the contingencies concern a single item, it shall be determined in the light of the most likely
outcome.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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(ii) If the contingencies concern two or more items, the best estimate should be calculated and
determined in accordance with all possible outcomes and the relevant probabilities.
To determine the best estimate, the Group takes into full consideration of the risks, uncertainties,
time value of money, and other factors pertinent to the contingencies. If the time value of money is
of great significance, the best estimate shall be determined after discounting the relevant future
outflows of cash.
When all or some of the expenses necessary for the liquidation of estimated liabilities of the
Group is expected to be compensated by a third party, the compensation should be separately
recognized as an asset only when it is virtually certain that the reimbursement will be obtained.
The amount recognized for the reimbursement should not exceed the carrying amount of the
estimated liabilities.
The Group checks the carrying amount of the estimated liabilities on the balance sheet date. If
there is any irrefutable evidence indicating that the carrying amount cannot truly reflect the current
best estimate, the Group adjusts the carrying amount in accordance with the current best estimate.
24. Principles for recognition of income
Income of the Group is recognized under the following principles when economic benefits relating
to transactions are likely to flow into the Group and the amount of relevant income is reliably
measurable:
(1) Interest income and expense
For a financial instrument measured at amortized cost, its interest income or expense is measured
at the effective interest rate. The effective interest rate refers to the rate that exactly discounts
estimated future cash inflows or outflows over the expected life of a financial instrument or a
shorter period, where appropriate, to the net carrying amount of the financial asset or financial
liability. The calculation of interest income should take into account contract provisions of the
financial instrument and include all expenses attributable to effective interest rate components and
all transaction costs, yet exclusive of future loan losses. Where the Bank changes its estimate of
future income or expenses, the carrying amount of financial assets or liabilities may be adjusted
accordingly. As adjusted carrying amount is calculated at the original effective interest rate,
changes are also recorded in interest income or interest expense.
(2) Fee and commission income and other income
Fee and commission income and other income are recognized when relevant services are rendered
and the amounts receivable can be reasonably estimated. Fee and commission income and other
income are recognized on an accrual basis when relevant services are rendered.
(3) Dividend income
Dividend income is recognized when the Bank acquires the right to receive dividend and recorded
in profit or loss.
(4) Rental income
Rental income from investment properties relating to operating leasing is recorded in profit or loss
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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on a straight line basis over the lease term.
25. Recognition and measurement of government subsidies
The Group's government subsidies are divided into government subsidies relating to assets and
ones relating to income. Government subsidies relating to assets refer to government subsidies
obtained by the Group for purchasing and building long-term assets or forming long-term assets
by other ways. Government subsidies relating to income refer to government subsidies other than
those relating to assets. If government subsidy document does not clearly define the subsidy
recipients, the Group will make judgment on the basis of the basic conditions necessary to get the
subsidiary, recognize those subsidies the basic conditions of which are forming long-term assets
by purchase, construction or other methods as the assets-related government subsidies and all the
other subsidies as the income-related government subsidies.
(1) Recognition of government subsidies
The monetary assets or non-monetary assets received by the Group from governments for free are
recognized as government subsidies in case of meeting the following conditions:
(i) Meet the conditions attached to the government subsidy;
(ii) Be able to receive the government subsidy.
(2) Measurement of government subsidies:
(i) Where the government subsidy is monetary asset, it is measured at the amount received or
receivable. Where the government subsidy is non-monetary asset, it is measured at fair value. In
case the fair value cannot be reliably obtained, it is measured at nominal amount.
(ii) Government subsidies relating to assets are recognized as deferred income upon acquisition by
the Group. When the relevant asset comes to the useful status intended, it shall be recorded into
profit or loss in different periods in reasonable and systematic ways within the service life of the
asset. Where relevant asset is sold, transferred, retired or damaged before the end of its service life,
related deferred income balance not distributed shall be transferred to profit or loss of the disposal
period.
Government subsidies relating to income for compensating relevant cost expenses or losses in the
subsequent periods are recognized as deferred income upon acquisition and recorded into profit or
loss for the period of relevant expenses or losses. Government subsidies relating to income for
compensating relevant cost expenses or losses incurred are directly recorded into profit or loss
upon acquisition.
Government subsidies relating to daily activities are recorded into other income; and those not
relating to daily activities are recorded into non-operating income and expenses.
(iii) Recognized government subsidies to be refunded are treated as follows:
A. Where there is any deferred income, write down its carrying amount and the excess part is
recorded in profit or loss.
B. Where there is no deferred income, they are directly recorded into profit or loss.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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26. Accounting treatments for operating leases and finance leases
(1) Operating leases
As the lessee, the Group records the rents of the operating leases in the relevant asset cost or profit
or loss by using the straight-line method over each period of the lease term; the initial direct costs
incurred by a lessee are recognized into profit or loss; the contingent rents are recorded into profit
or loss in which they actually arise.
As the lessor, the Group includes the assets subject to operating leases in relevant items of its
balance sheets in light of the nature of the asset; the rents from operating leases are recorded in
profit or loss by using the straight-line method over each period of the lease term, unless there are
other more reasonable methods; the initial direct costs incurred are recorded into profit or loss; as
for the fixed assets subject to operating leases, the Group calculates its depreciation by adopting
depreciation policy for similar assets; as for other leased assets, systematic and reasonable
methods are adopted for its amortization; the contingent rents are recorded in profit or loss when
they actually arise.
(2) Finance leases
As the lessee, the Group records the lower one of the fair value of the leased asset and the present
value of the minimum lease payments on the lease beginning date as the bookkeeping value in an
account, recognizes the amount of the minimum lease payments as the bookkeeping value in an
account of long-term account payable, and treats the balance between the recorded amount of the
leased asset and the long-term account payable as unrecognized financing charges; the initial
direct costs such as commissions, attorney fees and traveling expenses, stamp duties directly
attributable to the leased item incurred during the process of lease negotiating and signing the
leasing agreement are recorded in the asset value; the unrecognized financing charge is amortized
to each period during the lease term. The Group adopts the effective interest rate method to
calculate and recognize the financing charge in the current period; the contingent rents are
recognized into profit or loss when they are actually incurred.
When the Group calculates the present value of the minimum lease payments, if it can obtain the
lessor's interest rate implicit in the lease, it adopts the interest rate implicit in the lease as the
discount rate. Otherwise, it adopts the interest rate provided in the lease agreement as the discount
rate. In case the Group cannot obtain the lessor's interest rate implicit in the lease and no interest
rate is provided in the lease agreement, the Group adopts the loan interest rate of the bank for the
same period as the discount rate.
In depreciating a leased asset, the Group adopts a depreciation policy for leased assets consistent
with that for self-owned fixed assets. Where there is a reasonable ground to believe that the
ownership of a leased asset is obtainable upon the expiration of lease, the leased asset should be
depreciated over its useful life; where there is no reasonable ground to believe that the ownership
of a leased asset is obtainable upon the expiration of lease, the leased asset should be depreciated
over the shorter of the lease term and its useful life.
As the lessor, the Group recognizes the sum of the minimum lease receipts on the lease beginning
date and the initial direct costs as the bookkeeping value in an account of the financing lease
values receivable, and records the unguaranteed residual value at the same time. The balance
between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed
residual value, and the sum of their present values is recognized as unrealized financing income.
The unrealized financing income is allocated to each period during the lease term. The Group
calculates the financing income at the current period by adopting the effective interest rate method.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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The contingent rents are recorded into profit or loss when they actually arise.
27. Trustee services
The Group acts as an agent to hold and manage assets of customers. Assets involved in such
activities and relevant profit or loss do not belong to the Bank. Trustee services of the Group
mainly include entrusted loans and entrusted wealth management.
Entrusted loans means funds supplied by the customer (as trustor) and lent by the Group (as
trustee) to such borrower for such purposes, in such an amount, for such a term and at such an
interest rate as determined by the trustor, and overseen and recovered by the Bank on behalf of the
trustor, at the risk of the trustor. Funds supplied by the trustor are recorded in entrusted funds in
the amount received by the Group, and recorded in entrusted loans in the amount lent or invested
when the Group extends the loan at the will of the trustor. The Group only charges fees when
transacting entrusted loans, without advancing any payment for customers or taking any credit
risk.
28. Contingent liabilities
A contingent liability is a possible obligation that arises from past transactions or events and
whose existence will be confirmed only by whether one or more uncertain future events beyond
the control of the Bank occur or not. A contingent liability may also be a current obligation arising
from past events that is not recognized because the obligation is unlikely to result in outflows of
economic benefits or its amount is not reliably measurable. Such contingent liabilities are only
disclosed in notes.
29. Related parties
When a party separately or jointly controls or exerts significant influence over another party, or
two or more parties are controlled separately or jointly by a party, these parties constitute related
parties.
30. Profit distribution
The Bank distributes profit, allocates statutory surplus reserves and general reserve in accordance
with the Company Law and its Articles of Association.
In accordance with the Notice concerning Issuance of the Administrative Measures for Setting
Aside Reserve Funds of Financial Enterprises [C.J. (2012) No. 20], general reserve means reserve
set aside by a financial corporation in proportion to its net profit for the purpose of covering
unidentified possible losses. Setting aside general reserve is deemed profit distribution and
constitutes part of the owners’ equity. General reserve is set aside in proportion to the balance of
assets that assume risks and losses. In principle, the balance of general reserve should not be lower
than 1.5% of the balance of risk assets at the end of the reporting period. If the proportion of
general reserve of financial enterprises to the balance of risk assets at the end of the period is
difficult to reach 1.5%, it can be put in place over years (not exceeding 5 years in principle).
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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31. Changes in major accounting policies and accounting estimates
(1) Changes in accounting policies
The Ministry of Finance issued the revised Accounting Standard for Business Enterprises No.7 - Exchange of Non-Monetary Assets (the “Standard for Exchange of Non-Monetary Assets”) and
the Accounting Standard for Business Enterprises No.12 - Debt Restructurings (the “Standard for
Debt Restructuring”) effective on 1 January 2019. The Bank does not need to restate comparable
data in previous periods. The Bank has adopted the above standards in preparing the 2019
financial statements. The revised Standard for Exchange of Non-Monetary Assets and Standard
for Debt Restructuring have no significant impact on the Bank’s financial position, operating
results or cash flows.
(2) Changes in accounting estimates
The Group made no changes in accounting estimates in the reporting period.
32. Segmental reporting
The Group identifies the business segments based on the internal organizational structure,
management requirements and internal reporting regulations, and accordingly identifies the report
segments and discloses the segment information.
Business segments refer to the components in the Group that satisfy the following conditions: (1)
these components can generate income and incur expenses during the daily activities; (2) the
Management of the Group can regularly evaluate the business performance of these components to
allocate the resources and evaluate their performance; (3) the Group can obtain the financial
position, operating results, cash flow and other accounting information of these components. Two
or more business segments with similar economic features can be consolidated into one business
segment as long as some conditions are met.
VI. Significant Accounting Estimates and Judgments
The Group makes the following uncertain estimates at the end of the reporting period according to
historical experience and reasonable anticipation of future events and will make ongoing
assessment of them subsequently.
1. Allowance for impairment losses on loans and receivables.
The Group regularly evaluates impairment losses on loan portfolios, in addition to separate
evaluations on impairment losses on identified loans impaired. For a loan portfolio composed of
loans not found to decrease in cash flows in an individual test, the Group makes judgment on
whether any sign exists to indicate decrease in anticipated future cash flows of the portfolio, so as
to determine the necessity of setting aside allowance for impairment losses on loans. Signs of
decrease in anticipated cash flows include deterioration in debt service ability of borrowers in the
loan portfolio or adverse changes in the economic environment where borrowers operate that
cause default of borrowers in the portfolio. The Bank makes impairment estimates on loan
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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portfolios showing signs of impairment based on historical losses on asset portfolios with similar
credit risk characteristics. For methods and assumptions used to estimate the timing and amount of
anticipated future cash flows, the Group makes regular assessments to reduce difference between
actual impairment losses on loans and estimated loss.
2. Impairment losses on other assets
The Group regularly assesses impairment on assets other than loans and advances and checks
them for any impairment loss. If any impairment loss is discovered, the Group will set aside
allowance for impairment losses and record it in profit or loss.
3. Fair value of financial instruments
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants on the measurement date. The Group measures
the assets or liabilities at fair value by taking into account the features of the assets or liabilities; it
assumes that the market participant sells an asset or transfer a liability in an orderly transaction on
the current market on the measurement date; it assumes that the orderly transaction where an asset
is sold or a liability is transferred is conducted on the main market of relevant asset or liability;
where there is no such main market, it assumes that the transaction is conducted on the most
advantageous market of relevant asset or liability. The Group uses the assumptions that market
participants would use to achieve the maximum economic benefits when pricing the asset or
liability.
The Group judges whether the fair value equals to the transaction price during the initial
recognition based on the transaction nature and features of relevant assets or liabilities; where the
transaction price does not equal to the fair value, it records relevant gains or losses into profit or
loss, except as otherwise provided in the accounting standards.
The Group adopts the valuation technique applicable in the current circumstance and with
adequate available data and other information support. The valuation technique used mainly
includes market-based approach, income approach and cost approach. During the application of
valuation technique, the Group gives the highest priority to observable inputs and uses
unobservable inputs only when the observable inputs cannot be obtained or the obtaining of
observable inputs is not feasible.
The Group categorizes into three levels the inputs used to measure fair value and gives the highest
priority to Level-1 inputs and the lowest priority to Level-3 inputs. Level-1 inputs are quoted
prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at
the measurement date. Level-2 inputs are inputs other than quoted prices included within Level-1
that are observable for the asset or liability, either directly or indirectly. Level-3 inputs are
unobservable inputs for the asset or liability.
In the measurement of non-financial assets at fair value, the Group considers the ability of the
market participant to make the best use of asset and generate the economic benefits, or to sell the
asset to other market participant who can make the best use of asset to generate the economic
benefits. In the measurement of liabilities at fair value, the Group assumes that the liability is
transferred to other market participant on the measurement date, the liability remains outstanding
and the market participant transferee is required to fulfill the obligation. In the measurement of its
own equity instrument, the Group assumes that its own equity instrument is transferred to other
market participant on the measurement date, its own equity instrument remains outstanding and
the market participant transferee would take on the rights and responsibilities associated with the
instrument.
4. Held-to-maturity investments
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Held-to-maturity investments refer to non-derivative financial assets that have fixed or
determinable payments, a fixed maturity and the Group has the positive intention and ability to
hold to maturity. The Management needs to make significant judgments when assessing whether a
financial asset is classified as held-to-maturity investments. Where any deviation takes place from
the judgment that the Group has the explicit intention and ability to hold an investment to maturity,
the investment portfolio including the investment will be reclassified as available-for-sale
financial assets and measured at fair value other than at amortized cost.
5. Judgment about the control on the investment target
The Management judges whether the Group controls securitization instrument,
non-principal-guaranteed wealth management product, special asset management plan and
asset-backed financing based on the control elements presented in Note V.4.
(1) Securitization instrument
The Group initiates and establishes some securitization instruments that are operated based on the
established contract during the initiation. The Group obtains variable returns by issuing bonds
through some securitization instruments and performs the daily management of assets of
securitization instruments based on the loan service contract. Generally, other parties need to be
involved in the key decision-making only when there is default on the asset. Therefore, the Group
judges whether these securitization instruments are controlled by considering whether it is able to
use the rights of these instruments to affect its variable returns.
(2) Non-principal-guaranteed wealth management products, special asset management plans and
asset-backed financing
The Group manages or invests many non-principal-guaranteed wealth management products,
special asset management plans and asset-backed financing. For the judgment on whether the
structured entity is controlled, the Group mainly evaluates the overall economic benefits it enjoys
in the structured entity (including benefits out of direct holding and expected management fee)
and the extent of decision-making authority on the structured entity. The Group's overall economic
benefits are insignificant in the structured entity. Meanwhile, according to the laws and
supervision regulations, the initiation, sale and management behaviors of the decision maker about
the structured entity should be strictly controlled in the investment agreement. Therefore, the
Group believes that as the agent instead of major responsible person, it does not need to include
the structured entity into the consolidated financial statement.
Please refer to Notes X.3 and X.4 for the securitization instruments where the Group has
beneficial interest or acts as an initiator and that have been included in the consolidated financial
statements, and the for non-principal-guaranteed wealth management products, special asset
management plans and asset-backed financing where the Group has beneficial interest or acts as
an initiator but that have not been included in the consolidated financial statements.
6. Income tax
The deferred income tax assets arising from deductible temporary differences are recognized to
the extent of the taxable income likely to be available for offsetting deductible temporary
differences. The Group checks the carrying amount of deferred income tax assets on the balance
sheet date. Where it is likely that insufficient taxable income will be available in future periods to
offset deductible temporary differences, the carrying amount of the deferred income tax assets
should be written down. Therefore, the Group needs to make significant judgments on tax-related
treatment of relevant transactions in accordance with relevant tax laws and regulations and make
significant estimates on the likelihood of sufficient taxable income available to offset deferred
income tax assets.
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VII. Taxes
1. The VAT rate is 6% of operating income.
2. The urban maintenance and construction tax rate is 7% of turnover tax payable.
3. The education surcharge rate is 3% of turnover tax payable.
4. Local education surcharges are 1.5% of turnover tax payable in Hubei, and 2% of turnover
tax payable in Chongqing.
5. Corporate income tax: The corporate income tax rate applicable to the Group is 25%.
VIII. Notes to Main Items of Consolidated Financial Statements
(Amounts in thousands of RMB unless otherwise stated)
1. Cash and balances with central banks
Item 31 December 2019 31 December 2018
Cash 913,538 757,835
Balances with central banks 30,264,363 26,155,708
Legal reserve 22,788,233 21,888,315
Excess reserve 7,378,052 4,159,069
Public finance reserve 98,078 108,324
Total 31,177,901 26,913,543
Note: (1) The Group deposited legal reserve with PBOC, which should not be used for daily
business operation of the Group.
As at 31 December 2019, the Group's ratio of legal reserve was:
Item 31 December 2019 31 December 2018
Ratio of RMB legal reserve 10.5% 12%
Ratio of foreign-currency legal
reserve 5% 5%
Note: (2) Excess reserve with central banks is mainly used for fund clearing.
2. Deposits with banks and other financial institutions
Item 31 December 2019 31 December 2018
Clearing deposits with banks and
other financial institutions 532,301 609,897
General deposits with banks and
other financial institutions 1,404,760 130,000
Deposits with overseas banks and
other financial institutions 342,257 333,094
Subtotal 2,279,318 1,072,991
Less: Allowance for bad debts with
banks and other financial institutions
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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Item 31 December 2019 31 December 2018
Carrying amount of balances with
banks and other financial institutions 2,279,318 1,072,991
Note: The 2019 balances with banks and other financial institutions increased by 112.43% over
the 2018 figure due to the increase in general deposits with banks and other financial institutions.
3. Lendings to banks and other financial institutions
Item 31 December 2019 31 December 2018
Placements with domestic banks and
other financial institutions 4,600,000 500,000
Placements with overseas banks and
other financial institutions
Placements with domestic
non-banking financial institutions
800,000
Subtotal 5,400,000 500,000
Less: Allowance for losses on
lendings to banks and other financial
institutions
Carrying amount of lendings to
banks and other financial institutions 5,400,000 500,000
4. Financial assets designated at fair value through profit or loss
Item 31 December 2019 31 December 2018
Held-for-trading bond investment
(Classified by issuer):
Governments and central banks 1,392,400
Banks and other financial institutions 20,005
Enterprises 410,165 231,536
Subtotal 1,822,570 231,536
Financial assets measured at fair value
through profit or loss
(Classified by issuer):
Governments and central banks 77,820
Policy banks 1,296,199
Banks and other financial institutions 5,587,083
Enterprises 5,849,660
Subtotal 12,810,762
Total 1,822,570 13,042,298
Note: As at 31 December 2019, of the held-for-trading bond assets held by the Group, bonds with
a par value of RMB200,000,000 were pledged for handling pledge-type repurchase business.
5. Financial assets under reverse repurchase agreements
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
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Item 31 December 2019 31 December 2018
Classified by collateral:
Bonds under reverse repurchase
agreements 10,427,229 3,510,200
Incl.: Government bonds 2,220,183 1,300,000
Financial bonds 8,207,046 2,210,200
Bills under reverse repurchase
agreements 200,000
Incl.: Bank acceptance bills 200,000
Commercial acceptance
bills
Interbank CDs under reverse
repurchase agreements 500,000
Total financial assets under reverse
repurchase agreements 10,627,229 4,010,200
Less: Allowance for bad debts of
financial assets under reverse
repurchase agreements
Carrying amount of financial
assets under reverse repurchase
agreements
10,627,229 4,010,200
Classified by counterparty:
Non-banking financial institutions 9,942,229 675,000
From banks 685,000 3,335,200
Total financial assets under
reverse repurchase agreements 10,627,229 4,010,200
Less: Allowance for bad debts of
financial assets under reverse
repurchase agreements
Carrying amount of financial
assets under reverse repurchase
agreements
10,627,229 4,010,200
6. Loans and advances
(1) Loans and advances by personal and corporate borrowers are presented as follows:
Item 31 December 2019 31 December 2018
Personal loans and advances: 44,509,179 35,336,734
Personal consumption loans 33,268,906 25,249,545
Personal business loans 7,663,261 7,442,801
Advance expenditure of credit
cards 3,577,012
2,644,388
Corporate loans and advances: 128,101,998 101,851,286
Loans 82,844,309 73,266,363
Discounting 38,488,847 24,375,970
Advances 287,689 379,084
Trade finance 6,481,153 3,829,869
Total loans and advances 172,611,177 137,188,020
Less: Allowance for impairment
losses on loans 5,878,607
4,591,017
Incl.: Individually assessed 2,843,605 1,989,989
Collectively assessed 3,035,002 2,601,028
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 48 of 186
Item 31 December 2019 31 December 2018
Carrying amount of loans and
advances 166,732,570
132,597,003
Notes: (1) As at 31 December 2019, the Group did not use the foregoing assets as collateral when
entering into repurchase agreements with other financial institutions.
(2) For the loan balance of shareholders holding 5% or more voting shares in the Bank, please
refer to Note XV.2(1).
(2) Discounting of bills by type:
Item 31 December 2019 31 December 2018
Bank acceptance bills 35,707,210 22,867,182
Commercial acceptance
bills 2,781,637 1,508,788
Total 38,488,847 24,375,970
(3) Advances by type:
Item 31 December 2019 31 December 2018
Acceptance advances 287,689 379,084
Total 287,689 379,084
(4) Loans and advances by industry sector:
Item 31 December 2019 31 December 2018
Corporate loans and advances: 128,101,998 101,851,286
Manufacturing 17,803,214 12,966,285
Wholesale and retail 19,410,738 17,743,801
Transport, storage and post 3,605,518 2,463,749
Farming, forestry, animal husbandry and
fishery 834,585 762,076
Power/heat/gas/water production and
supply 2,071,807 2,617,055
Real estate 19,353,038 14,219,433
Construction 9,080,755 8,920,116
Education 3,000 3,000
Financial industry 26,351,963 12,743,056
Neighborhood services and others 256,207 112,253
Water, environment and public utility
management 3,695,589 3,974,539
Culture, sports and entertainment 366,503 330,862
Information transmission, computer
service and software 2,231,192 1,566,802
Lodging and catering services 1,188 800
Leasing and commercial services 16,788,354 12,565,110
Mining 724,956 360,837
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 49 of 186
Item 31 December 2019 31 December 2018
Others 5,523,391 10,501,512
Personal loans and advances: 44,509,179 35,336,734
Total loans and advances 172,611,177 137,188,020
Less: Allowance for impairment losses on
loans 5,878,607
4,591,017
Incl.: Individually assessed 2,843,605 1,989,989
Collectively assessed 3,035,002 2,601,028
Carrying amount of loans and advances 166,732,570 132,597,003
(5) Loans and advances by the mode of guarantee are presented as follows:
Item 31 December 2019 31 December 2018
Unsecured loans 30,704,583 21,102,365
Guaranteed loans 27,373,589 27,379,390
Collateralized loans 114,533,005 88,706,265
- Loans secured by mortgages 64,069,292 56,022,731
- Pledged loans 50,463,713 32,683,534
Total loans and advances 172,611,177 137,188,020
Less: Allowance for impairment
losses on loans 5,878,607
4,591,017
Incl.: Individually assessed 2,843,605 1,989,989
Collectively assessed 3,035,002 2,601,028
Carrying amount of loans and
advances 166,732,570
132,597,003
(6) Loans and advances by geographical distribution are presented as follows:
Item 31 December 2019 31 December 2018
Wuhan 139,753,193 111,221,758
Ezhou 1,937,522 1,431,151
Yichang 5,027,768 4,030,556
Huangshi 4,415,290 4,130,084
Jingmen 2,256,009 1,960,281
Xiangyang 2,825,460 1,877,636
Jingzhou 2,264,055 1,344,043
Enshi 1,686,980 1,648,941
Shiyan 870,100 1,052,131
Xiaogan 1,941,566 1,458,275
Xianning 800,727 460,932
Huanggang 390,189 187,564
Xiantao 585,922
Suizhou 229,540
Chongqing 7,626,856 6,384,668
Total loans and advances 172,611,177 137,188,020
Less: Allowance for impairment
losses on loans 5,878,607
4,591,017
Incl.: Individually assessed 2,843,605 1,989,989
Collectively assessed 3,035,002 2,601,028
Carrying amount of loans and
advances 166,732,570
132,597,003
(7) Overdue loans are presented as follows:
Item
31 December 2019
Overdue for
less than 3
months
Overdue for
3-12 months
Overdue for
1-3 years
Overdue
for over 3
years
Total
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 50 of 186
Item
31 December 2019
Overdue for
less than 3
months
Overdue for
3-12 months
Overdue for
1-3 years
Overdue
for over 3
years
Total
Unsecured loans 10,082 19,446 47,547 30,000 107,075
Guaranteed loans 68,440 191,257 65,780 859,945 1,185,422
Collateralized
loans
- Loans secured by
mortgages 291,840 362,665 133,906 437,488 1,225,899
- Pledged loans 1,899 10,000 11,445 230,077 253,421
Total loans and
advances 372,261 583,368 258,678 1,557,510 2,771,817
Item
31 December 2018
Overdue for
less than 3
months
Overdue for
3-12 months
Overdue for
1-3 years
Overdue
for over 3
years
Total
Unsecured loans 15,309 15,836 59,337 30,745 121,227
Guaranteed loans 23,385 88,710 217,080 1,060,968 1,390,143
Collateralized loans
- Loans secured by
mortgages 167,681 106,307 301,274 736,439 1,311,701
- Pledged loans 3,674 7,945 25,412 251,355 288,386
Total loans and
advances 210,049 218,798 603,103 2,079,507 3,111,457
(8) Changes in allowance for impairment losses on loans:
Item 31 December 2019 31 December 2018
Beginning balance 4,591,017 4,341,694
Provisioning during the period 2,011,485 2,208,581
Transfer-out during the period
Write-off during the period 997,309 2,024,479
Reversed during the period 273,414 65,221
- Loans and advances written off in
previous years and recovered during the
period
272,839 64,785
- Reversed due to rise in discounted value
- Exchange gains or losses and other
adjustments 575 436
Ending balance 5,878,607 4,591,017
Item 31 December 2019 31 December 2018
Allowance for impairment losses on
corporate loans: 4,994,091
3,756,580
Individually assessed 2,837,914 1,935,207
Collectively assessed 2,156,177 1,821,373
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 51 of 186
Item 31 December 2019 31 December 2018
Allowance for impairment losses on
personal loans: 884,516 834,437
Individually assessed 5,691 54,782
Collectively assessed 878,825 779,655
Total 5,878,607 4,591,017
(9) Write-off of non-performing loans and off-balance-sheet accrued interest receivable:
Item 2019 2018
Loan principal written off 997,309 2,024,479
Off-balance-sheet accrued interest
receivable written off 446,270
1,002,280
Total 1,443,579 3,026,759
7. Available-for-sale financial assets
(1) Classification of available-for-sale financial assets
Item 31 December 2019
Book balance Allowance for
impairment
losses
Carrying
amount
Available-for-sale debt instruments 69,501,508 69,501,508
Available-for-sale equity instruments 15,582 15,582
Incl.: Equity instruments at fair value
Equity instruments at cost 15,582 15,582
Total 69,517,090 69,517,090
Item 31 December 2018
Book balance Allowance for
impairment losses
Carrying
amount
Available-for-sale debt instruments 57,145,516 57,145,516
Available-for-sale equity instruments 15,582 15,582
Incl.: Equity instruments at fair value
Equity instruments at cost 15,582 15,582
Total 57,161,098 57,161,098
(2) Available-for-sale financial assets at fair value at the period end
Classification of available-for-sale financial
assets
Available-for
-sale equity
instruments
Available-for-
sale debt
instruments
Total
Amortized cost 69,208,252 69,208,252
Fair value 69,501,508 69,501,508
Changes in fair value accumulatively recognized
in other comprehensive income
293,256 293,256
Impairment amount set aside
(3) Available-for-sale financial assets at cost at the period end
For the equity investment without quoted price in an active market and its fair value cannot
be reliably measured, the Group measures it at cost and has no disposal plan for relevant equity
investment in the foreseeable future. As at the end of the reporting period, the equity investment
measured at cost is presented as follows:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 52 of 186
Name of investee
Book balance
Shareholding
percentage in
investee (%) 31 December
2018
Incre
ase
durin
g the
perio
d
Decr
ease
durin
g the
perio
d
31
December
2019
Wuhan Steel Electricity Co.,
Ltd.
8,030 8,030 0.88
China UnionPay Co., Ltd. 7,152 7,152 0.27
Urban Commercial Bank
Clearing Center 400
400 1.33
Total 15,582 15,582
Name of investee
Allowance for impairment losses Cash
dividend
during the
period
31
December
2018
Increase
during the
period
Decrease
during the
period
31
December
2019
Wuhan Steel Electricity Co.,
Ltd.
522
China UnionPay Co., Ltd. 1,200
Urban Commercial Bank
Clearing Center
Total 1,722
Notes: (1) As at 31 December 2019, available-for-sale financial assets held by the Group had
not been impaired, so no allowance for impairment losses was set aside for available-for-sale
financial assets.
(2) As at 31 December 2019, the Group’s available-for-sale financial assets included no
bonds pledged as collaterals.
8. Held-to-maturity investments
Item 31 December 2019 31 December 2018
Government bonds 69,933,057 33,892,122
Financial bonds 5,287,313 4,123,148
Bonds of policy banks 3,173,090 3,213,148
Bank bonds 870,000 910,000
Interbank CDs 1,244,223
Corporate bonds 2,680,864 1,704,626
Other bonds 1,253,800 1,429,174
Total 79,155,034 41,149,070
Less: Allowance for impairment
losses on held-to-maturity
investments
Carrying amount of
held-to-maturity investments 79,155,034 41,149,070
Notes: (1) As at 31 December 2019, held-to-maturity bonds held by the Bank had not been
impaired, so no allowance for impairment losses was set aside for held-to-maturity investments.
(2) As at 31 December 2019, of the held-to-maturity financial assets held by the Group, bonds
with a par value of RMB52,643,412,500 were pledged for handling pledge-type repurchase
business, time deposit business of treasury bonds and corporate negotiated deposits.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 53 of 186
9. Receivables investment
Item 31 December 2019 31 December 2018
Government bonds 29,115 28,088
Wealth management products 30,000
Asset management plans and fund
trust plans 26,908,233 35,661,360
Asset-backed securities 725,064 200,000
Other investments 1,164 1,164
Total 27,663,576 35,920,612
Less: Allowance for impairment
losses on receivables investment 1,038,457
1,047,153
Receivables investment 26,625,119 34,873,459
Changes in allowance for impairment losses on receivables investment:
Item 31 December 2019 31 December 2018
Beginning balance 1,047,153 1,044,059
Provisioning during the period -8,696 3,094
Transfer-out during the period
Write-off during the period
Reversed during the period
Ending balance 1,038,457 1,047,153
10. Long-term equity investment
Investee 31 December 2019 31 December 2018
Book
balance
Allo
wanc
e for
impai
rment
losse
s
Carrying
amount
Book
balance
Allo
wanc
e for
impai
rment
losse
s
Carrying
amount
Associate:
Aerospace Science & Industry
Financial Leasing Co., Ltd.
822,813 822,813 787,643 787,643
Total 822,813 822,813 787,643 787,643
(continued)
Investee
Change during the period
Addi
tiona
l
inves
tmen
t
Redu
ced
inves
tmen
t
Investment
gain or loss
recognized
under equity
method
Other
compreh
ensive
income
adjustme
nts
Other
equity
change
s
Announced
payment of
cash
dividend or
profit
Allow
ance
for
impair
ment
losses
set
aside
Ot
her
s
Associate:
Aerospace
Science &
35,170
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 54 of 186
Investee
Change during the period
Addi
tiona
l
inves
tmen
t
Redu
ced
inves
tmen
t
Investment
gain or loss
recognized
under equity
method
Other
compreh
ensive
income
adjustme
nts
Other
equity
change
s
Announced
payment of
cash
dividend or
profit
Allow
ance
for
impair
ment
losses
set
aside
Ot
her
s
Industry
Financial
Leasing Co.,
Ltd.
Total 35,170
Detailed information on the associate:
Company
name
Shareholdi
ng
percentage
(%)
Voting
right
percentage
(%)
Place of registration Busin
ess
natur
e
Registere
d capital
Aerospace
Science &
Industry
Financial
Leasing Co.,
Ltd.
25 25 F/4 & 5, Wealth Plaza, 18
Jinyinhu Road, Dongxihu
District, Wuhan City (11)
Finan
cial
leasin
g
3,000,000
Note: Please refer to Note X.2 for information on equity in the associate.
11. Fixed assets, accumulated depreciation and allowance for impairment losses on fixed assets
Item 31 December 2019 31 December 2018
Fixed assets 1,484,510 1,474,700
Disposal of fixed assets
Total 1,484,510 1,474,700
(1) Fixed assets
Item Buildings and
structures
Transporti
ng
vehicles
Electronic
equipment
Furniture Total
I. Original book value
1. Beginning balance 1,956,412 25,727 549,395 40,521 2,572,055
2. Increase during the
period
87,495 666 45,669 2,674 136,504
(1) Purchases 666 45,423 2,421 48,510
(2) Transfer-in of
construction in
progress
87,495 246 253 87,994
(3) Increase in business
combination
3. Decrease during the
period
1,337 15,589 528 17,454
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 55 of 186
Item Buildings and
structures
Transporti
ng
vehicles
Electronic
equipment
Furniture Total
Disposal or
retirement
1,337 15,589 528 17,454
4. Ending balance 2,043,907 25,056 579,475 42,667 2,691,105
II. Accumulated
depreciation
1. Beginning balance 614,138 22,943 423,901 34,886 1,095,868
2. Increase during the
period
61,273 925 59,705 2,287 124,190
Provisions 61,273 925 59,705 2,287 124,190
3. Decrease during the
period
1,314 13,128 508 14,950
Disposal or
retirement
1,314 13,128 508 14,950
4. Ending balance 675,411 22,554 470,478 36,665 1,205,108
III. Allowance for
impairment losses
1. Beginning balance 1,487 1,487
2. Increase during the
period
Provisions
3. Decrease during the
period
Disposal or
retirement
4. Ending balance 1,487 1,487
IV. Carrying amount
1. Ending carrying
amount
1,367,009 2,502 108,997 6,002 1,484,510
2. Beginning carrying
amount
1,340,787 2,784 125,494 5,635 1,474,700
Notes: (1) As at 31 December 2019, no fixed assets of the Group were from significant leases in
lieu of purchase or finance leases.
(2) Fixed assets without title deed in place:
As at 31 December 2019, the Group had four real properties without title deed due to problems
left over from history, with original value being RMB17,679,000 and carrying amount being
RMB607,000. The foregoing matters do not affect the Group's rights in these properties.
12. Construction in progress
(1) Basic information on construction in progress
Item Ending balance Beginning balance
Book
balance
Allowanc
e for
impairme
Net
carrying
amount
Book
balance
Allowanc
e for
impairme
Net
carrying
amount
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 56 of 186
nt losses nt losses
Business
properties and
fit-outs
2,944 2,944 36,038 36,038
Others 8,846 8,846 332 332
Total 11,790 11,790 36,370 36,370
(2) Changes in important projects under construction
Name of project
Beginn
ing
balanc
e
Increase
during the
period
Transferred
to fixed
assets during
the period
Other
decreas
es
Ending
balance
Interest
capitalizatio
n ratio (%)
Business
properties and
fit-outs
36,038 54,900 87,994 2,944
Others 332 8,514 8,846
Total 36,370 63,414 87,994 11,790
Notes: (1) There was no interest capitalization expense during construction in progress.
(2) As at 31 December 2019, no construction in progress of the Group had been impaired.
13. Intangible assets
Details of intangible assets (a):
Item Software Land use rights Total
I. Original book value
1. Beginning balance 119,971 76,276 196,247
2. Increase during the
period
12,469 12,469
(1) Purchases 12,469 12,469
(2) In-house research
and development
(3) Increase in
business combination
3. Decrease during the
period
Disposal
4. Ending balance 132,440 76,276 208,716
II. Accumulated
amortization
1. Beginning balance 99,358 25,275 124,633
2. Increase during the
period
10,645 3,862 14,507
Amortization 10,645 3,862 14,507
3. Decrease during the
period
Disposal
4. Ending balance 110,003 29,137 139,140
III. Allowance for
impairment losses
1. Beginning balance
2. Increase during the
period
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 57 of 186
Item Software Land use rights Total
Provisions
3. Decrease during the
period
Disposal
4. Ending balance
IV. Carrying amount
1. Ending carrying
amount
22,437 47,139 69,576
2. Beginning carrying
amount
20,613 51,001 71,614
Details of intangible assets (b):
Item
Way of
acquisition
Original
value
Accumulated
amortization
Remaining
amortization period
Software Purchase 132,440 110,003 2 to 5 years
Land use rights Purchase 76,276 29,137 32 years
Total 208,716 139,140
14. Deferred income tax assets and deferred income tax liabilities
(1) Recognized deferred income tax assets and deferred income tax liabilities:
Item 31
December
2019
31
December
2018
I. Deferred income tax assets
Allowance for impairment losses on assets 1,667,966 1,309,778
Difference in amortization years of long-term deferred expenses 17 57
Difference in amortization years of intangible assets 8,849 9,251
Gains on changes in fair value of financial liabilities designated at
fair value through profit or loss
9,489
Others 199,611 202,393
Total 1,876,443 1,530,968
II. Deferred income tax liabilities
Gains on changes in fair value of financial assets designated at fair
value through profit or loss
508 1,026
Unrealized gains on available-for-sale financial assets 73,314 121,406
Total 73,822 122,432
Note: Balance of deferred income tax liability in 2019 fell by 39.70% from 2018 due to decrease
in unrealized gains on available-for-sale financial assets.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 58 of 186
(2) Asset or liability items giving rise to temporary differences
Item
Temporary difference
Amount on
31 December
2019
Amount on
31 December
2018
I. Deductible temporary difference items giving rise to deferred
income tax assets
Allowance for impairment losses on assets 6,671,864 5,239,110
Deductible temporary differences arising from different
amortization periods of long-term deferred expenses
68 227
Deductible temporary differences arising from different
amortization periods of intangible assets
35,396 37,004
Gains on changes in fair value of financial liabilities designated at
fair value through profit or loss
37,958
Others 798,444 809,572
Total 7,505,772 6,123,871
II. Taxable temporary difference items giving rise to deferred
income tax liabilities
Gains on changes in fair value of financial assets designated at
fair value through profit or loss
2,033 4,105
Unrealized gains on available-for-sale financial assets 293,256 485,624
Total 295,289 489,729
15. Other assets
Other assets are presented by item as follows:
Item 31 December 2019 31 December 2018
Deferred expenses 64,301 57,406
Dividend payable 522 522
Other receivables 4,622,078 1,349,296
Repossessed assets 381,767 224,294
Long-term deferred expenses 118,932 117,335
Agency securities 8,690 13,069
Deposits with correspondent banks 9,019
Interest receivable 2,229,458 2,289,154
Assets from continuous involvement 560,803
Others 142,032 23,876
Total 8,137,602 4,074,952
Note: Balance of other assets in 2019 rose by 99.70% over 2018 due to increase in
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 59 of 186
non-recourse factoring.
(1) Other receivables
A. Other receivables are presented by item as follows:
Item 31 December 2019 31 December 2018
Factoring receivable (domestic
factoring without recourse) 4,158,611
1,088,996
Other current account and temporary
payment 528,933
263,638
Refundable deposits 640 1,030
Subtotal 4,688,184 1,353,664
Less: Bad debt provisions 66,106 4,368
Carrying amount of other receivables 4,622,078 1,349,296
B. Changes in allowance for impairment losses on other receivables
Item 2019 2018
Beginning balance 4,368 992
Provisioning during the year 68,645 13,903
Reversed during the year 3,776 1,790
Write-off during the year 10,683 12,317
Ending balance 66,106 4,368
Note: As at 31 December 2019, other receivables had no arrears of shareholders holding 5%
or more shares of the Bank.
C. Other receivables are presented by account age as follows:
Item 31 December 2019 31 December 2018
Within 1 year 4,550,617 1,277,702
1-2 years 76,885 39,894
2 to 3 years 34,213 19,501
Over 3 years 26,469 16,567
Subtotal 4,688,184 1,353,664
Less: Bad debt provisions 66,106 4,368
Carrying amount of other
receivables 4,622,078
1,349,296
(2) Long-term deferred expenses
Item Beginnin
g balance
Increase
during the
period
Amortizatio
n during the
period
Other
decreases
Ending
balance
Reason
for other
decreases
Renovation
and
improvement
expenses
117,335 57,595 55,998 118,932
Total 117,335 57,595 55,998 118,932
(3) Agency securities
Item 31 December 2019 31 December 2018
Securities issued on an agency basis -32,849 -33,473
Securities cashed on an agency basis 41,628 46,632
Others -89 -90
Total 8,690 13,069
(4) Interest receivable
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 60 of 186
Item 31 December 2019 31 December 2018
Interest receivable from bonds 1,864,621 1,504,605
Interest receivable from loans and
advances 334,728 290,141
Interest from transactions with
financial institutions 30,109 29,109
Interest receivable from
principal-guaranteed wealth
management products
465,299
Total 2,229,458 2,289,154
Changes in interest receivable
Item 2019 2018
Beginning balance 2,289,154 1,717,968
Provisioning during the year 13,103,488 11,140,093
Received during the year 13,163,184 10,568,907
Ending balance 2,229,458 2,289,154
16. Allowance for impairment losses on assets
Item
31
December
2018
Provisioni
ng during
the period
Reverse
d
during
the
period
Write-off
during the
period
31
December
2019
Allowance for losses on
loans and advances 4,591,017
2,011,485 273,414 997,309 5,878,607
Bad debt provisions 4,368 68,645 3,776 10,683 66,106
Allowance for impairment
losses on receivables
investment
1,047,153 -8,696 1,038,457
Allowance for impairment
losses on fixed assets 1,487 1,487
Allowance for impairment
losses on repossessed assets 14,610 -1,600 13,010
Total 5,644,025 2,086,044 275,590 1,007,992 6,997,667
17. Borrowings from central banks
Item 31 December 2019 31 December 2018
Borrowings from central banks 63,000 1,700,000
Total 63,000 1,700,000
Note: The balance of borrowings from central banks at the end of 2019 fell by 96.29% as
compared to 2018 due to decline in the Group’s relending supporting small enterprises.
18. Deposits from banks and other financial institutions
Item 31 December 2019 31 December 2018
Money for clearing from domestic
banks
240,890 110,749
General deposits from domestic banks 8,102,936 1,100,013
Money for clearing from domestic
non-banking financial institutions
863,614 991,893
General deposits from domestic
non-banking financial institutions
3,049 2,597,149
Total 9,210,489 4,799,804
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 61 of 186
19. Borrowings from banks and other financial institutions
Item 31 December 2019 31 December 2018
Placements from domestic banks and
other financial institutions 1,850,576 1,500,000
Placements from overseas banks and
other financial institutions 4,290
Total 1,850,576 1,504,290
From banks 1,850,576 1,504,290
Total 1,850,576 1,504,290
20. Financial liabilities designated at fair value through profit or loss
Item 31 December 2019 31 December 2018
Principal-guaranteed wealth management
products issued 13,190,558
Total 13,190,558
Note: Principal-guaranteed wealth management products issued by the Group and financial assets
invested by it constitute a part of financial instrument portfolio managed at fair value, and are
recognized as financial liabilities and financial assets designated at fair value through profit or loss,
respectively. As of 31 December 2019, the balance of the above-mentioned issued
principal-guaranteed wealth management products was zero.
21. Financial assets under repurchase agreements
Item 31 December 2019 31 December 2018
Securities under repurchase agreements:
Financial bonds 1,416,000 1,608,000
Government bonds 15,260,250 4,007,100
Subtotal 16,676,250 5,615,100
Bills under repurchase agreements:
Bank acceptance bills 17,738,392 11,881,138
Subtotal 17,738,392 11,881,138
Total 34,414,642 17,496,238
22. Customer deposits
(1) Customer deposits are presented by deposit type as follows:
Item 31 December 2019 31 December 2018
Demand deposits:
109,526,753 107,711,523
Corporate customers
86,188,086 87,732,106
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 62 of 186
Item 31 December 2019 31 December 2018
Personal customers
23,338,667 19,979,417
Time deposits:
101,465,491 53,773,663
Corporate customers
56,267,196 28,323,277
Personal customers
45,198,295 25,450,386
Margin deposits
9,265,067 7,854,304
Other deposits
30,084,180 19,489,676
Total
250,341,491 188,829,166
Notes: 1. Other deposits mainly include large-value CDs issued and treasury term deposits.
2. For the deposit balance of shareholders holding 5% or more voting shares in the Group, please
refer to Note XV.2(2).
(2) Details of margin deposits received that are included in the customer deposits are presented as
follows:
Item 31 December 2019 31 December 2018
Margin on acceptance bills 6,221,808 5,063,324
Margin on L/C issuance 914,194 346,424
Margin on guarantee 380,821 462,723
Other margins 1,748,244 1,981,833
Total 9,265,067 7,854,304
(3) Customer deposits are presented by geographical distribution as follows:
Item 31 December 2019 31 December 2018
Wuhan 214,752,470 162,757,085
Huangshi 4,073,148 3,317,988
Yichang 6,315,904 4,798,239
Ezhou 2,398,308 1,616,904
Jingmen 1,230,771 1,221,150
Xiangyang 2,459,613 686,210
Jingzhou 5,124,517 4,130,281
Enshi 2,005,738 2,216,791
Shiyan 851,516 1,253,350
Xiaogan 1,660,530 1,140,658
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 63 of 186
Item 31 December 2019 31 December 2018
Xianning 1,036,899 703,838
Huanggang 920,926 460,649
Xiantao 313,258 13,289
Chongqing 7,197,893 4,512,734
Total 250,341,491 188,829,166
23. Payroll payable
(1) Classification of payroll payable
Item Beginning
balance
Increase
during the
period
Decrease
during the
period
Ending
balance
I. Short-term compensation 397,616 1,189,473 1,238,521 348,568
II. Welfare after resignation - Defined
contribution plan 8,430 164,573 169,077 3,926
Total 406,046 1,354,046 1,407,598 352,494
(2) Presentation of short-term compensation
Item Beginning
balance
Increase
during the
period
Decrease
during the
period
Ending
balance
1. Wages, bonus, allowances
and subsidies 302,834 944,008 963,442 283,400
2. Staff benefits 44,282 44,282
3. Social security contributions 38,974 91,233 127,681 2,526
Incl.: Medical insurance 38,644 87,395 123,953 2,086
Industrial injury
insurance 326 528 421 433
Birth insurance 4 3,310 3,307 7
4. Housing provident funds 412 69,130 69,333 209
5. Labor union funds and staff
education funds 55,396 40,820 33,783 62,433
Total 397,616 1,189,473 1,238,521 348,568
(3) Presentation of defined contribution plan
Item Beginning
balance
Increase
during the
period
Decrease
during the
period
Ending
balance
1. Basic endowment insurance 199 89,594 89,548 245
2. Unemployment insurance 115 3,611 3,609 117
3. Enterprise annuity
contribution 8,116 71,368 75,920 3,564
Total 8,430 164,573 169,077 3,926
Note: As at 31 December 2019, payroll payable excluded any payables in arrears.
24. Taxes payable
Category 31 December 2019 31 December 2018
VAT payable 121,226 124,264
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 64 of 186
Category 31 December 2019 31 December 2018
Surcharges payable 13,689 9,961
Property tax payable 3,420 3,216
Land use tax payable 130 293
Land appreciation tax payable 7,868 7,700
Personal income tax payable 11,435 4,587
Corporate income tax payable 2,071
Others 2,311 486
Total 162,150 150,507
25. Bonds payable
Bond name 31 December 2019 31 December 2018
Financial bonds 2,599,324 3,998,701
Tier-2 capital bonds 4,996,409 4,995,998
Interbank CDs 73,178,436 58,413,417
Total 80,774,169 67,408,116
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
16 Hankou Bank MSE
02
22 August 2016 5 years 3.40% 1,500,000 1,499,615
16 Hankou Bank MSE
04
6 September 2016 5 years 3.40% 1,100,000 1,099,709
16 Hankou Bank
Tier-2
23 December 2016 10 years 4.50% 2,000,000 1,998,265
17 Hankou Bank
Tier-2
27 April 2017 10 years 5.00% 3,000,000 2,998,144
19 Hankou Bank
CD001
7 January 2019 12
months
3.40% 1,000,000 967,118
19 Hankou Bank
CD011
17 January 2019 12
months
3.30% 550,000 532,336
19 Hankou Bank
CD013
23 January 2019 12
months
3.23% 900,000 871,316
19 Hankou Bank
CD018
6 March 2019 12
months
3.20% 780,000 755,686
19 Hankou Bank
CD021
7 March 2019 12
months
3.18% 1,200,000 1,162,917
19 Hankou Bank
CD027
21 March 2019 12
months
3.25% 200,000 193,688
19 Hankou Bank
CD030
22 March 2019 12
months
3.27% 1,500,000 1,452,502
19 Hankou Bank
CD032
25 March 2019 12
months
3.23% 500,000 484,356
19 Hankou Bank
CD034
2 April 2019 9
months
3.05% 100,000 97,759
19 Hankou Bank
CD035
2 April 2019 12
months
3.17% 990,000 959,581
19 Hankou Bank
CD036
4 April 2019 12
months
3.15% 1,000,000 969,462
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 65 of 186
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
19 Hankou Bank
CD037
4 April 2019 9
months
3.05% 100,000 97,759
19 Hankou Bank
CD038
9 April 2019 9
months
3.05% 50,000 48,880
19 Hankou Bank
CD039
11 April 2019 9
months
3.10% 180,000 175,888
19 Hankou Bank
CD040
11 April 2019 12
months
3.23% 570,000 552,117
19 Hankou Bank
CD042
12 April 2019 12
months
3.25% 400,000 387,409
19 Hankou Bank
CD044
15 April 2019 12
months
3.25% 70,000 67,796
19 Hankou Bank
CD045
16 April 2019 12
months
3.27% 260,000 251,767
19 Hankou Bank
CD047
17 April 2019 12
months
3.27% 700,000 677,717
19 Hankou Bank
CD048
18 April 2019 12
months
3.30% 180,000 174,234
19 Hankou Bank
CD051
7 May 2019 9
months
3.28% 200,000 195,138
19 Hankou Bank
CD052
7 May 2019 12
months
3.36% 400,000 386,997
19 Hankou Bank
CD053
9 May 2019 9
months
3.25% 240,000 234,259
19 Hankou Bank
CD055
13 May 2019 12
months
3.36% 240,000 232,198
19 Hankou Bank
CD057
14 May 2019 12
months
3.38% 1,500,000 1,450,958
19 Hankou Bank
CD059
17 May 2019 9
months
3.30% 180,000 175,629
19 Hankou Bank
CD060
17 May 2019 12
months
3.38% 330,000 319,211
19 Hankou Bank
CD062
20 May 2019 12
months
3.38% 260,000 251,499
19 Hankou Bank
CD063
20 May 2019 9
months
3.30% 20,000 19,514
19 Hankou Bank
CD065
21 May 2019 12
months
3.40% 570,000 551,257
19 Hankou Bank
CD066
22 May 2019 9
months
3.32% 350,000 341,451
19 Hankou Bank
CD067
24 May 2019 12
months
3.42% 600,000 580,159
19 Hankou Bank
CD069
30 May 2019 9
months
3.40% 100,000 97,500
19 Hankou Bank
CD071
4 June 2019 12
months
3.50% 150,000 144,928
19 Hankou Bank
CD073
12 June 2019 12
months
3.63% 600,000 578,872
19 Hankou Bank
CD075
14 June 2019 12
months
3.72% 200,000 192,827
19 Hankou Bank
CD076
17 June 2019 12
months
3.78% 500,000 481,789
19 Hankou Bank
CD078
18 June 2019 12
months
3.70% 900,000 867,888
19 Hankou Bank 21 June 2019 9 3.55% 1,000,000 974,111
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 66 of 186
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
CD080 months
19 Hankou Bank
CD081
21 June 2019 12
months
3.78% 1,000,000 963,577
19 Hankou Bank
CD082
24 June 2019 9
months
3.55% 500,000 487,056
19 Hankou Bank
CD083
2 July 2019 6
months
3.40% 500,000 491,597
19 Hankou Bank
CD084
2 July 2019 9
months
3.50% 490,000 477,444
19 Hankou Bank
CD085
2 July 2019 12
months
3.65% 1,000,000 964,785
19 Hankou Bank
CD087
4 July 2019 6
months
3.35% 400,000 393,340
19 Hankou Bank
CD088
8 July 2019 9
months
3.40% 980,000 955,588
19 Hankou Bank
CD089
8 July 2019 12
months
3.55% 1,000,000 965,717
19 Hankou Bank
CD090
16 July 2019 6
months
3.20% 500,000 492,084
19 Hankou Bank
CD091
6 August 2019 12
months
3.28% 50,000 48,412
19 Hankou Bank
CD092
7 August 2019 6
months
3.10% 500,000 492,245
19 Hankou Bank
CD093
7 August 2019 12
months
3.28% 490,000 474,356
19 Hankou Bank
CD094
15 August 2019 12
months
3.28% 460,000 445,353
19 Hankou Bank
CD095
20 August 2019 9
months
3.15% 50,000 48,848
19 Hankou Bank
CD096
20 August 2019 12
months
3.28% 70,000 67,777
19 Hankou Bank
CD097
21 August 2019 6
months
3.13% 500,000 492,171
19 Hankou Bank
CD098
22 August 2019 6
months
3.10% 100,000 98,457
19 Hankou Bank
CD099
22 August 2019 12
months
3.28% 200,000 193,632
19 Hankou Bank
CD100
23 August 2019 6
months
3.18% 1,000,000 984,264
19 Hankou Bank
CD101
23 August 2019 12
months
3.35% 750,000 725,690
19 Hankou Bank
CD102
27 August 2019 6
months
3.18% 720,000 708,670
19 Hankou Bank
CD103
27 August 2019 12
months
3.40% 1,000,000 967,118
19 Hankou Bank
CD104
28 August 2019 9
months
3.35% 300,000 292,660
19 Hankou Bank
CD105
3 September 2019 9
months
3.45% 990,000 965,074
19 Hankou Bank
CD106
3 September 2019 12
months
3.45% 280,000 270,662
19 Hankou Bank
CD107
4 September 2019 9
months
3.45% 890,000 867,592
19 Hankou Bank
CD108
4 September 2019 12
months
3.50% 990,000 956,345
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 67 of 186
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
19 Hankou Bank
CD109
5 September 2019 9
months
3.45% 330,000 321,632
19 Hankou Bank
CD110
5 September 2019 12
months
3.50% 850,000 821,180
19 Hankou Bank
CD111
6 September 2019 9
months
3.45% 1,000,000 974,822
19 Hankou Bank
CD112
6 September 2019 12
months
3.50% 1,000,000 966,184
19 Hankou Bank
CD113
12 September 2019 12
months
3.40% 600,000 580,271
19 Hankou Bank
CD114
17 September 2019 12
months
3.40% 1,000,000 967,118
19 Hankou Bank
CD115
20 September 2019 12
months
3.40% 390,000 377,176
19 Hankou Bank
CD116
23 September 2019 12
months
3.40% 360,000 348,162
19 Hankou Bank
CD117
24 September 2019 12
months
3.40% 500,000 483,559
19 Hankou Bank
CD118
10 October 2019 9
months
3.30% 200,000 195,144
19 Hankou Bank
CD119
10 October 2019 12
months
3.35% 920,000 890,100
19 Hankou Bank
CD120
15 October 2019 9
months
3.30% 200,000 195,178
19 Hankou Bank
CD121
15 October 2019 12
months
3.35% 300,000 290,276
19 Hankou Bank
CD122
16 October 2019 9
months
3.35% 450,000 438,990
19 Hankou Bank
CD123
16 October 2019 12
months
3.40% 1,000,000 966,944
19 Hankou Bank
CD124
17 October 2019 3
months
3.10% 190,000 188,499
19 Hankou Bank
CD125
17 October 2019 9
months
3.30% 50,000 48,786
19 Hankou Bank
CD126
23 October 2019 12
months
3.38% 130,000 125,727
19 Hankou Bank
CD127
24 October 2019 12
months
3.40% 350,000 338,461
19 Hankou Bank
CD128
24 October 2019 9
months
3.35% 100,000 97,536
19 Hankou Bank
CD129
24 October 2019 6
months
3.25% 50,000 49,192
19 Hankou Bank
CD130
28 October 2019 6
months
3.30% 500,000 491,884
19 Hankou Bank
CD131
28 October 2019 9
months
3.35% 170,000 165,841
19 Hankou Bank
CD132
29 October 2019 9
months
3.38% 750,000 731,491
19 Hankou Bank
CD133
4 November 2019 3
months
3.20% 250,000 248,005
19 Hankou Bank
CD134
4 November 2019 12
months
3.40% 330,000 319,149
19 Hankou Bank
CD135
5 November 2019 6
months
3.30% 50,000 49,193
19 Hankou Bank 5 November 2019 9 3.40% 100,000 97,518
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 68 of 186
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
CD136 months
19 Hankou Bank
CD137
5 November 2019 12
months
3.43% 150,000 145,026
19 Hankou Bank
CD138
5 November 2019 12
months
3.43% 500,000 483,419
19 Hankou Bank
CD139
6 November 2019 3
months
3.25% 1,000,000 991,897
19 Hankou Bank
CD140
8 November 2019 12
months
3.45% 1,000,000 966,651
19 Hankou Bank
CD141
8 November 2019 9
months
3.40% 200,000 195,036
19 Hankou Bank
CD142
11 November 2019 12
months
3.50% 1,000,000 966,184
19 Hankou Bank
CD143
11 November 2019 9
months
3.45% 50,000 48,741
19 Hankou Bank
CD144
12 November 2019 6
months
3.35% 120,000 118,034
19 Hankou Bank
CD145
12 November 2019 12
months
3.45% 60,000 57,999
19 Hankou Bank
CD146
13 November 2019 12
months
3.50% 120,000 115,921
19 Hankou Bank
CD147
14 November 2019 6
months
3.38% 100,000 98,347
19 Hankou Bank
CD148
14 November 2019 12
months
3.50% 50,000 48,305
19 Hankou Bank
CD149
15 November 2019 9
months
3.45% 40,000 38,993
19 Hankou Bank
CD150
15 November 2019 12
months
3.50% 150,000 144,928
19 Hankou Bank
CD151
18 November 2019 12
months
3.53% 320,000 309,089
19 Hankou Bank
CD152
18 November 2019 9
months
3.48% 50,000 48,730
19 Hankou Bank
CD153
19 November 2019 3
months
3.30% 820,000 813,254
19 Hankou Bank
CD154
19 November 2019 6
months
3.40% 100,000 98,337
19 Hankou Bank
CD155
19 November 2019 9
months
3.48% 80,000 77,969
19 Hankou Bank
CD156
19 November 2019 12
months
3.53% 500,000 482,952
19 Hankou Bank
CD157
19 November 2019 12
months
3.53% 70,000 67,613
19 Hankou Bank
CD158
20 November 2019 9
months
3.50% 1,000,000 974,467
19 Hankou Bank
CD159
20 November 2019 6
months
3.40% 660,000 649,027
19 Hankou Bank
CD160
20 November 2019 3
months
3.30% 700,000 694,241
19 Hankou Bank
CD161
20 November 2019 12
months
3.53% 470,000 453,890
19 Hankou Bank
CD162
21 November 2019 6
months
3.45% 1,000,000 983,133
19 Hankou Bank
CD163
21 November 2019 9
months
3.53% 1,000,000 974,070
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 69 of 186
Bond name Date of issue Term Interest
rate
Total par
value
Ending
balance
19 Hankou Bank
CD164
21 November 2019 12
months
3.55% 1,000,000 965,627
19 Hankou Bank
CD165
22 November 2019 9
months
3.53% 1,000,000 974,253
19 Hankou Bank
CD166
9 December 2019 3
months
3.20% 1,000,000 992,107
19 Hankou Bank
CD167
9 December 2019 6
months
3.35% 1,000,000 983,526
19 Hankou Bank
CD168
10 December 2019 3
months
3.20% 180,000 178,579
19 Hankou Bank
CD169
11 December 2019 3
months
3.25% 500,000 495,992
19 Hankou Bank
CD170
11 December 2019 1 month 3.25% 50,000 49,858
19 Hankou Bank
CD171
12 December 2019 3
months
3.25% 1,000,000 991,984
19 Hankou Bank
CD172
12 December 2019 1 month 3.25% 100,000 99,726
19 Hankou Bank
CD173
13 December 2019 3
months
3.25% 1,000,000 991,984
19 Hankou Bank
CD174
13 December 2019 1 month 3.25% 390,000 388,929
19 Hankou Bank
CD175
13 December 2019 1 month 3.25% 400,000 398,902
19 Hankou Bank
CD176
16 December 2019 3
months
3.25% 1,500,000 1,487,976
19 Hankou Bank
CD177
16 December 2019 1 month 3.25% 650,000 648,216
19 Hankou Bank
CD178
17 December 2019 3
months
3.20% 780,000 773,843
19 Hankou Bank
CD179
18 December 2019 1 month 3.25% 500,000 498,628
19 Hankou Bank
CD180
18 December 2019 3
months
3.20% 150,000 148,816
19 Hankou Bank
CD181
19 December 2019 1 month 3.25% 980,000 977,310
19 Hankou Bank
CD182
20 December 2019 1 month 3.25% 300,000 299,177
19 Hankou Bank
CD183
23 December 2019 3
months
3.20% 1,000,000 992,106
19 Hankou Bank
CD184
24 December 2019 1 month 3.25% 300,000 299,018
19 Hankou Bank
CD185
24 December 2019 3
months
3.18% 1,000,000 992,155
19 Hankou Bank
CD186
27 December 2019 3
months
3.20% 1,000,000 992,106
19 Hankou Bank
CD187
30 December 2019 3
months
2.95% 500,000 496,360
Total 82,590,000 80,774,169
Note: 1) Description on financial bonds:
The Group was approved to issue financial bonds by the official document Y.SH.CH.X.ZH.Y.Z.
[2016] No. 104 issued by the People's Bank of China and the document Y.J.F. [2015] No. 413
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 70 of 186
issued by CBRC in 2016. The details are as follows:
On 22 August 2016, Hankou Bank Co., Ltd. issued 5-year financial bonds with a fixed interest
rate. The bond name is 16 Hankou Bank MSE 02 with a par value of RMB1.5 billion, the issue
expenses of RMB975,000 and an annual interest rate of 3.40%. Interest will be paid regularly
every year.
On 6 September 2016, Hankou Bank Co., Ltd. issued 5-year financial bonds with a fixed interest
rate. The bond name is 16 Hankou Bank MSE 04 with a par value of RMB1.1 billion, the issue
expenses of RMB715,000 and an annual interest rate of 3.40%. Interest will be paid regularly
every year.
(2) Description on tier-2 capital bonds:
The Group was approved to issue tier-2 capital bonds by the official documents
Y.SH.CH.X.ZH.Y.Z. [2016] No. 233 issued by the People's Bank of China and the document
E.Y.J.F. [2016] No. 205 issued by CBRC Hubei Office in 2016. The details are as follows:
On 23 December 2016, Hankou Bank Co., Ltd. publicly issued tier-2 capital bonds with a fixed
interest rate on the interbank bonds market. The bond name is 16 Hankou Bank Tier-2 with a par
value of RMB2.0 billion, the issue expense of RMB3,000,000 and the bond term of 10 years.
These bonds are accompanied with the redemption right of issuer at the end of the fifth year. The
interest rate of these bonds is 4.50% and the interest will be paid regularly every year.
The Group was approved to issue tier-2 capital bonds by the official documents
Y.SH.CH.X.ZH.Y.Z. [2016] No. 233 issued by the People's Bank of China in 2016 and the
document E.Y.J.F. [2017] No. 9 issued by CBRC Hubei Office in 2017. The details are as follows:
On 27 April 2017, Hankou Bank Co., Ltd. publicly issued tier-2 capital bonds with a fixed interest
rate on the interbank bonds market. The bond name is 17 Hankou Bank Tier-2 with a par value of
RMB3.0 billion, the issue expense of RMB2,400,000 and the bond term of 10 years. These bonds
are accompanied with the redemption right of issuer at the end of the fifth year. The interest rate of
these bonds is 5.00% and the interest will be paid regularly every year.
(3) Description on interbank CDs:
The Group issued the document S.L.F. [2014] No. 4 based on the market interest rate pricing
self-discipline mechanism in 2014, deciding to include Hankou Bank as its basic member to issue
interbank CDs. The details are as follows:
On 7 January 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD001 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.7118. Its value date is 8
January 2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 71 of 186
On 17 January 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD011 with a par value of
RMB100 each, totaling RMB550 million, and the issue price of RMB96.7885. Its value date is 18
January 2019 with a term of 1 year and the interest will be paid upon maturity.
On 23 January 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD013 with a par value of
RMB100 each, totaling RMB900 million, and the issue price of RMB96.8130. Its value date is 24
January 2019 with a term of 1 year and the interest will be paid upon maturity.
On 6 March 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD018 with a par value of RMB100
each, totaling RMB780 million, and the issue price of RMB96.8828. Its value date is 7 March
2019 with a term of 1 year and the interest will be paid upon maturity.
On 7 March 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD021 with a par value of RMB100
each, totaling RMB1.2 billion, and the issue price of RMB96.9098. Its value date is 8 March 2019
with a term of 1 year and the interest will be paid upon maturity.
On 21 March 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD027 with a par value of
RMB100 each, totaling RMB200 million, and the issue price of RMB96.8440. Its value date is 22
March 2019 with a term of 1 year and the interest will be paid upon maturity.
On 22 March 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD030 with a par value of
RMB100 each, totaling RMB1.5 billion, and the issue price of RMB96.8335. Its value date is 25
March 2019 with a term of 1 year and the interest will be paid upon maturity.
On 25 March 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD032 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB96.8711. Its value date is 26
March 2019 with a term of 1 year and the interest will be paid upon maturity.
On 2 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD034 with a par value of RMB100
each, totaling RMB100 million, and the issue price of RMB97.7597. Its value date is 3 April 2019
with a term of 9 months and the interest will be paid upon maturity.
On 2 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD035 with a par value of RMB100
each, totaling RMB990 million, and the issue price of RMB96.9274. Its value date is 3 April 2019
with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 72 of 186
On 4 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD036 with a par value of RMB100
each, totaling RMB1.0 billion, and the issue price of RMB96.9462. Its value date is 8 April 2019
with a term of 1 year and the interest will be paid upon maturity.
On 4 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD037 with a par value of RMB100
each, totaling RMB100 million, and the issue price of RMB97.7597. Its value date is 8 April 2019
with a term of 9 months and the interest will be paid upon maturity.
On 9 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD038 with a par value of RMB100
each, totaling RMB50 million, and the issue price of RMB97.7597. Its value date is 10 April 2019
with a term of 9 months and the interest will be paid upon maturity.
On 11 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD039 with a par value of RMB100
each, totaling RMB180 million, and the issue price of RMB97.7157. Its value date is 12 April
2019 with a term of 9 months and the interest will be paid upon maturity.
On 11 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD040 with a par value of RMB100
each, totaling RMB570 million, and the issue price of RMB96.8628. Its value date is 12 April
2019 with a term of 1 year and the interest will be paid upon maturity.
On 12 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD042 with a par value of RMB100
each, totaling RMB400 million, and the issue price of RMB96.8523. Its value date is 15 April
2019 with a term of 1 year and the interest will be paid upon maturity.
On 15 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD044 with a par value of RMB100
each, totaling RMB70 million, and the issue price of RMB96.8523. Its value date is 16 April 2019
with a term of 1 year and the interest will be paid upon maturity.
On 16 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD045 with a par value of RMB100
each, totaling RMB260 million, and the issue price of RMB96.8335. Its value date is 17 April
2019 with a term of 1 year and the interest will be paid upon maturity.
On 17 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD047 with a par value of RMB100
each, totaling RMB700 million, and the issue price of RMB96.8168. Its value date is 18 April
2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 73 of 186
On 18 April 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD048 with a par value of RMB100
each, totaling RMB180 million, and the issue price of RMB96.7970. Its value date is 19 April
2019 with a term of 1 year and the interest will be paid upon maturity.
On 7 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD051 with a par value of RMB100
each, totaling RMB200 million, and the issue price of RMB97.5692. Its value date is 8 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 7 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD052 with a par value of RMB100
each, totaling RMB400 million, and the issue price of RMB96.7492. Its value date is 8 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 9 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD053 with a par value of RMB100
each, totaling RMB240 million, and the issue price of RMB97.6078. Its value date is 10 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 13 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD055 with a par value of RMB100
each, totaling RMB240 million, and the issue price of RMB96.7492. Its value date is 14 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 14 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD057 with a par value of RMB100
each, totaling RMB1.5 billion, and the issue price of RMB96.7305. Its value date is 15 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 17 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD059 with a par value of RMB100
each, totaling RMB180 million, and the issue price of RMB97.5719. Its value date is 20 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 17 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD060 with a par value of RMB100
each, totaling RMB330 million, and the issue price of RMB96.7305. Its value date is 20 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 20 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD062 with a par value of RMB100
each, totaling RMB260 million, and the issue price of RMB96.7305. Its value date is 21 May 2019
with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 74 of 186
On 20 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD063 with a par value of RMB100
each, totaling RMB20 million, and the issue price of RMB97.5719. Its value date is 21 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 21 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD065 with a par value of RMB100
each, totaling RMB570 million, and the issue price of RMB96.7118. Its value date is 22 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 22 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD066 with a par value of RMB100
each, totaling RMB350 million, and the issue price of RMB97.5575. Its value date is 24 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 24 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD067 with a par value of RMB100
each, totaling RMB600 million, and the issue price of RMB96.6931. Its value date is 27 May 2019
with a term of 1 year and the interest will be paid upon maturity.
On 30 May 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD069 with a par value of RMB100
each, totaling RMB100 million, and the issue price of RMB97.5001. Its value date is 31 May 2019
with a term of 9 months and the interest will be paid upon maturity.
On 4 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD071 with a par value of RMB100
each, totaling RMB150 million, and the issue price of RMB96.6184. Its value date is 5 June 2019
with a term of 1 year and the interest will be paid upon maturity.
On 12 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD073 with a par value of RMB100
each, totaling RMB600 million, and the issue price of RMB96.4787. Its value date is 13 June 2019
with a term of 1 year and the interest will be paid upon maturity.
On 14 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD075 with a par value of RMB100
each, totaling RMB200 million, and the issue price of RMB96.4134. Its value date is 17 June 2019
with a term of 1 year and the interest will be paid upon maturity.
On 17 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD076 with a par value of RMB100
each, totaling RMB500 million, and the issue price of RMB96.3577. Its value date is 18 June 2019
with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 75 of 186
On 18 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD078 with a par value of RMB100
each, totaling RMB900 million, and the issue price of RMB96.4320. Its value date is 19 June 2019
with a term of 1 year and the interest will be paid upon maturity.
On 21 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD080 with a par value of RMB100
each, totaling RMB1.0 billion, and the issue price of RMB97.4111. Its value date is 24 June 2019
with a term of 9 months and the interest will be paid upon maturity.
On 21 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD081 with a par value of RMB100
each, totaling RMB1.0 billion, and the issue price of RMB96.3577. Its value date is 24 June 2019
with a term of 1 year and the interest will be paid upon maturity.
On 24 June 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD082 with a par value of RMB100
each, totaling RMB500 million, and the issue price of RMB97.4111. Its value date is 25 June 2019
with a term of 9 months and the interest will be paid upon maturity.
On 2 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD083 with a par value of RMB100
each, totaling RMB500 million, and the issue price of RMB98.3194. Its value date is 3 July 2019
with a term of 6 months and the interest will be paid upon maturity.
On 2 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD084 with a par value of RMB100
each, totaling RMB490 million, and the issue price of RMB97.4376. Its value date is 3 July 2019
with a term of 9 months and the interest will be paid upon maturity.
On 2 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD085 with a par value of RMB100
each, totaling RMB1.0 billion, and the issue price of RMB96.4785. Its value date is 3 July 2019
with a term of 1 year and the interest will be paid upon maturity.
On 4 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD087 with a par value of RMB100
each, totaling RMB400 million, and the issue price of RMB98.3349. Its value date is 5 July 2019
with a term of 6 months and the interest will be paid upon maturity.
On 8 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD088 with a par value of RMB100
each, totaling RMB980 million, and the issue price of RMB97.5090. Its value date is 9 July 2019
with a term of 9 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 76 of 186
On 8 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD089 with a par value of RMB100
each, totaling RMB1.0 billion, and the issue price of RMB96.5717. Its value date is 9 July 2019
with a term of 1 year and the interest will be paid upon maturity.
On 16 July 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on the
interbank bond market. The bond name is 19 Hankou Bank CD090 with a par value of RMB100
each, totaling RMB500 million, and the issue price of RMB98.4167. Its value date is 17 July 2019
with a term of 6 months and the interest will be paid upon maturity.
On 6 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD091 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB96.8242. Its value date is 7
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 7 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD092 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB98.4490. Its value date is 8
August 2019 with a term of 6 months and the interest will be paid upon maturity.
On 7 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD093 with a par value of
RMB100 each, totaling RMB490 million, and the issue price of RMB96.8074. Its value date is 8
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 15 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD094 with a par value of
RMB100 each, totaling RMB460 million, and the issue price of RMB96.8158. Its value date is 16
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 20 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD095 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB97.6961. Its value date is 21
August 2019 with a term of 9 months and the interest will be paid upon maturity.
On 20 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD096 with a par value of
RMB100 each, totaling RMB70 million, and the issue price of RMB96.8242. Its value date is 21
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 21 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD097 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB98.4342. Its value date is 22
August 2019 with a term of 6 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 77 of 186
On 22 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD098 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB98.4572. Its value date is 23
August 2019 with a term of 6 months and the interest will be paid upon maturity.
On 22 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD099 with a par value of
RMB100 each, totaling RMB200 million, and the issue price of RMB96.8158. Its value date is 23
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 23 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD100 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB98.4264. Its value date is 26
August 2019 with a term of 6 months and the interest will be paid upon maturity.
On 23 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD101 with a par value of
RMB100 each, totaling RMB750 million, and the issue price of RMB96.7586. Its value date is 26
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 27 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD102 with a par value of
RMB100 each, totaling RMB720 million, and the issue price of RMB98.4264. Its value date is 28
August 2019 with a term of 6 months and the interest will be paid upon maturity.
On 27 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD103 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.7118. Its value date is 28
August 2019 with a term of 1 year and the interest will be paid upon maturity.
On 28 August 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD104 with a par value of
RMB100 each, totaling RMB300 million, and the issue price of RMB97.5534. Its value date is 29
August 2019 with a term of 9 months and the interest will be paid upon maturity.
On 3 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD105 with a par value of
RMB100 each, totaling RMB990 million, and the issue price of RMB97.4822. Its value date is 4
September 2019 with a term of 9 months and the interest will be paid upon maturity.
On 3 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD106 with a par value of
RMB100 each, totaling RMB280 million, and the issue price of RMB96.6651. Its value date is 4
September 2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 78 of 186
On 4 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD107 with a par value of
RMB100 each, totaling RMB890 million, and the issue price of RMB97.4822. Its value date is 5
September 2019 with a term of 9 months and the interest will be paid upon maturity.
On 4 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD108 with a par value of
RMB100 each, totaling RMB990 million, and the issue price of RMB96.6005. Its value date is 5
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 5 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD109 with a par value of
RMB100 each, totaling RMB330 million, and the issue price of RMB97.4643. Its value date is 6
September 2019 with a term of 9 months and the interest will be paid upon maturity.
On 5 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD110 with a par value of
RMB100 each, totaling RMB850 million, and the issue price of RMB96.6094. Its value date is 6
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 6 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD111 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB97.4822. Its value date is 9
September 2019 with a term of 9 months and the interest will be paid upon maturity.
On 6 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD112 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.6184. Its value date is 9
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 12 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD113 with a par value of
RMB100 each, totaling RMB600 million, and the issue price of RMB96.7118. Its value date is 16
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 17 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD114 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.7118. Its value date is 18
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 20 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD115 with a par value of
RMB100 each, totaling RMB390 million, and the issue price of RMB96.7118. Its value date is 23
September 2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 79 of 186
On 23 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD116 with a par value of
RMB100 each, totaling RMB360 million, and the issue price of RMB96.7118. Its value date is 24
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 24 September 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD117 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB96.7118. Its value date is 25
September 2019 with a term of 1 year and the interest will be paid upon maturity.
On 10 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD118 with a par value of
RMB100 each, totaling RMB200 million, and the issue price of RMB97.5719. Its value date is 11
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 10 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD119 with a par value of
RMB100 each, totaling RMB920 million, and the issue price of RMB96.7500. Its value date is 11
October 2019 with a term of 1 year and the interest will be paid upon maturity.
On 15 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD120 with a par value of
RMB100 each, totaling RMB200 million, and the issue price of RMB97.5891. Its value date is 16
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 15 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD121 with a par value of
RMB100 each, totaling RMB300 million, and the issue price of RMB96.7586. Its value date is 16
October 2019 with a term of 1 year and the interest will be paid upon maturity.
On 16 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD122 with a par value of
RMB100 each, totaling RMB450 million, and the issue price of RMB97.5534. Its value date is 17
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 16 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD123 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.6944. Its value date is 17
October 2019 with a term of 1 year and the interest will be paid upon maturity.
On 17 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD124 with a par value of
RMB100 each, totaling RMB190 million, and the issue price of RMB99.2101. Its value date is 18
October 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 80 of 186
On 17 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD125 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB97.5719. Its value date is 18
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 23 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD126 with a par value of
RMB100 each, totaling RMB130 million, and the issue price of RMB96.7132. Its value date is 24
October 2019 with a term of 1 year and the interest will be paid upon maturity.
On 24 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD127 with a par value of
RMB100 each, totaling RMB350 million, and the issue price of RMB96.7031. Its value date is 25
October 2019 with a term of 1 year and the interest will be paid upon maturity.
On 24 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD128 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB97.5360. Its value date is 25
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 24 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD129 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB98.3838. Its value date is 25
October 2019 with a term of 6 months and the interest will be paid upon maturity.
On 28 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD130 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB98.3768. Its value date is 29
October 2019 with a term of 6 months and the interest will be paid upon maturity.
On 28 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD131 with a par value of
RMB100 each, totaling RMB170 million, and the issue price of RMB97.5534. Its value date is 29
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 29 October 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD132 with a par value of
RMB100 each, totaling RMB750 million, and the issue price of RMB97.5321. Its value date is 30
October 2019 with a term of 9 months and the interest will be paid upon maturity.
On 4 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD133 with a par value of
RMB100 each, totaling RMB250 million, and the issue price of RMB99.2020. Its value date is 5
November 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 81 of 186
On 4 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD134 with a par value of
RMB100 each, totaling RMB330 million, and the issue price of RMB96.7118. Its value date is 5
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 5 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD135 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB98.3855. Its value date is 6
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 5 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD136 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB97.5178. Its value date is 6
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 5 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD137 with a par value of
RMB100 each, totaling RMB150 million, and the issue price of RMB96.6837. Its value date is 6
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 5 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD138 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB96.6837. Its value date is 6
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 6 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD139 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB99.1897. Its value date is 7
November 2019 with a term of 3 months and the interest will be paid upon maturity.
On 8 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD140 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.6651. Its value date is 11
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 8 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD141 with a par value of
RMB100 each, totaling RMB200 million, and the issue price of RMB97.5178. Its value date is 11
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 11 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD142 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.6184. Its value date is 12
November 2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 82 of 186
On 11 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD143 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB97.4822. Its value date is 12
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 12 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD144 with a par value of
RMB100 each, totaling RMB120 million, and the issue price of RMB98.3614. Its value date is 13
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 12 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD145 with a par value of
RMB100 each, totaling RMB60 million, and the issue price of RMB96.6651. Its value date is 13
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 13 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD146 with a par value of
RMB100 each, totaling RMB120 million, and the issue price of RMB96.6005. Its value date is 14
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 14 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD147 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB98.3470. Its value date is 15
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 14 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD148 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB96.6094 Its value date is 15
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 15 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD149 with a par value of
RMB100 each, totaling RMB40 million, and the issue price of RMB97.4822. Its value date is 18
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 15 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD150 with a par value of
RMB100 each, totaling RMB150 million, and the issue price of RMB96.6184. Its value date is 18
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 18 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD151 with a par value of
RMB100 each, totaling RMB320 million, and the issue price of RMB96.5904. Its value date is 19
November 2019 with a term of 1 year and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 83 of 186
On 18 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD152 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB97.4609. Its value date is 19
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 19 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD153 with a par value of
RMB100 each, totaling RMB820 million, and the issue price of RMB99.1773. Its value date is 20
November 2019 with a term of 3 months and the interest will be paid upon maturity.
On 19 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD154 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB98.3374. Its value date is 20
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 19 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD155 with a par value of
RMB100 each, totaling RMB80 million, and the issue price of RMB97.4609. Its value date is 20
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 19 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD156 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB96.5904. Its value date is 20
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 19 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD157 with a par value of
RMB100 each, totaling RMB70 million, and the issue price of RMB96.5904. Its value date is 20
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 20 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD158 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB97.4467. Its value date is 21
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 20 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD159 with a par value of
RMB100 each, totaling RMB660 million, and the issue price of RMB98.3374. Its value date is 21
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 20 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD160 with a par value of
RMB100 each, totaling RMB700 million, and the issue price of RMB99.1773. Its value date is 21
November 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 84 of 186
On 20 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD161 with a par value of
RMB100 each, totaling RMB470 million, and the issue price of RMB96.5724. Its value date is 21
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 21 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD162 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB98.3133. Its value date is 22
November 2019 with a term of 6 months and the interest will be paid upon maturity.
On 21 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD163 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB97.4070. Its value date is 22
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 21 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD164 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB96.5627. Its value date is 22
November 2019 with a term of 1 year and the interest will be paid upon maturity.
On 22 November 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD165 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB97.4253. Its value date is 25
November 2019 with a term of 9 months and the interest will be paid upon maturity.
On 9 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD166 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB99.2107. Its value date is 10
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 9 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs on
the interbank bond market. The bond name is 19 Hankou Bank CD167 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB98.3526. Its value date is 10
December 2019 with a term of 6 months and the interest will be paid upon maturity.
On 10 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD168 with a par value of
RMB100 each, totaling RMB180 million, and the issue price of RMB99.2106. Its value date is 11
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 11 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD169 with a par value of
RMB100 each, totaling RMB500 million, and the issue price of RMB99.1984. Its value date is 12
December 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 85 of 186
On 11 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD170 with a par value of
RMB100 each, totaling RMB50 million, and the issue price of RMB99.7167. Its value date is 12
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 12 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD171 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB99.1984. Its value date is 13
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 12 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD172 with a par value of
RMB100 each, totaling RMB100 million, and the issue price of RMB99.7255. Its value date is 13
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 13 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD173 with a par value of
RMB100 each, totaling RMB1.0 billion, and the issue price of RMB99.1984. Its value date is 16
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 13 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD174 with a par value of
RMB100 each, totaling RMB390 million, and the issue price of RMB99.7255. Its value date is 16
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 13 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD175 with a par value of
RMB100 each, totaling RMB400 million, and the issue price of RMB99.7255. Its value date is 16
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 16 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD176 with a par value of
RMB100 each, totaling RMB1.5 billion and the issue price of RMB99.1984. Its value date is 17
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 16 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD177 with a par value of
RMB100 each, totaling RMB650 million and the issue price of RMB99.7255. Its value date is 17
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 17 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD178 with a par value of
RMB100 each, totaling RMB780 million and the issue price of RMB99.2106. Its value date is 18
December 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 86 of 186
On 18 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD179 with a par value of
RMB100 each, totaling RMB500 million and the issue price of RMB99.7255. Its value date is 19
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 18 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD180 with a par value of
RMB100 each, totaling RMB150 million and the issue price of RMB99.2106. Its value date is 19
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 19 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD181 with a par value of
RMB100 each, totaling RMB980 million and the issue price of RMB99.7255. Its value date is 20
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 20 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD182 with a par value of
RMB100 each, totaling RMB300 million and the issue price of RMB99.7255. Its value date is 23
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 23 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD183 with a par value of
RMB100 each, totaling RMB1.0 billion and the issue price of RMB99.2106. Its value date is 24
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 24 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD184 with a par value of
RMB100 each, totaling RMB300 million and the issue price of RMB99.6725. Its value date is 25
December 2019 with a term of 1 month and the interest will be paid upon maturity.
On 24 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD185 with a par value of
RMB100 each, totaling RMB1.0 billion and the issue price of RMB99.2155. Its value date is 25
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 27 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD186 with a par value of
RMB100 each, totaling RMB1.0 billion and the issue price of RMB99.2106. Its value date is 30
December 2019 with a term of 3 months and the interest will be paid upon maturity.
On 30 December 2019, Hankou Bank Co., Ltd. made public issue of zero-coupon interbank CDs
on the interbank bond market. The bond name is 19 Hankou Bank CD187 with a par value of
RMB100 each, totaling RMB500 million and the issue price of RMB99.2719. Its value date is 31
December 2019 with a term of 3 months and the interest will be paid upon maturity.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 87 of 186
26. Other liabilities
Item 31 December 2019 31 December 2018
Outward remittance 10,479 13,982
Other payables 223,160 225,932
Dividend payable 69,489 55,641
Deposits from correspondent
banks
3,378
Interest payable 4,753,593 3,192,044
Deferred income 106,474 93,414
On-lending funds 804,660
Liabilities from continuous
involvement 560,803
Other current liabilities 120,232 62,082
Total 6,648,890 3,646,473
(1) Other payables are presented by content as follows:
Item 31 December 2019 31 December 2018
Amounts pending settlement and
clearing 26,011
78,168
Accrued expenses payable 105,607 99,619
Unclaimed funds 14 3
Others 91,528 48,142
Total 223,160 225,932
Note: Other payables at the end of the year included no amounts owed to corporate shareholders
holding 5% or more voting shares in the Group.
(2) Dividend payable
Main investor 31 December 2019 31 December 2018 Reason for
non-payment
Corporate
shareholders
68,126 54,480 Unclaimed
Natural person
shareholders
1,363 1,161 Unclaimed
Total 69,489 55,641
Note: The 2018 Annual General Meeting of the Group was held on 20 June 2019, at which the
Proposal on 2018 Profit Distribution Plan was reviewed and approved. Based on a total of
4,127,846,000 shares as at 31 December 2018 and a cash dividend of RMB0.11 (pre-tax) per share,
RMB454,063,000 of cash dividend was distributed in total.
(3) Interest payable
Item 31 December 2019 31 December 2018
Interest to transactions with financial
institutions 31,130 26,284
Interest payable on customer deposits 3,754,256 1,897,708
Interest payable and receivable from bonds 965,377 1,150,895
Interest payable on principal-guaranteed
wealth management products 117,157
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 88 of 186
Item 31 December 2019 31 December 2018
Other interest payable 2,830
Total 4,753,593 3,192,044
Changes in interest payable
Item 2019 2018
Beginning balance 3,192,044 3,249,646
Provisioning during the year 8,810,673 7,138,588
Paid during the year 7,249,124 7,196,190
Ending balance 4,753,593 3,192,044
27. Share capital
Name of
investor 31 December 2018
Increase
during the
period
Transfer-out
during the
period 31 December 2019
Non-natural
person
shareholders 3,969,520 3,969,520
Natural person
shareholders 158,326 158,326
Total 4,127,846 4,127,846
Particulars on shareholders holding 5% or more shares of the Group:
Name of shareholder
31 December 2019 31 December 2018
Amount
Shareholding
percentage (%) Amount
Shareholding
percentage (%)
Legend Holdings Ltd. 633,000 15.33 633,000 15.33
Wuhan Iron and Steel Group
Corporation 550,600 13.34 550,600 13.34
Wuhan Development and
Investment Co., Ltd. 337,500 8.18 337,500 8.18
Total 1,521,100 36.85 1,521,100 36.85
28. Capital reserve
Item 31 December 2018 Increase during
the period
Decrease
during the
period
31 December 2019
Share
premium 3,259,204 1,167
3,260,371
Total 3,259,204 1,167 3,260,371
29. Other comprehensive income
Item
Balance
at the
end of
last
year
Amounts generated this year Ending
balance
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 89 of 186
Amoun
ts
generat
ed this
year
before
income
tax
Less: Amount
transferred
into profit or
loss from
other
comprehensiv
e income
recognized in
previous
periods
Less:
Income
tax
expense
Attribut
able to
sharehol
ders of
the
parent
compan
y after
tax
Attrib
utable
to
minori
ty
shareh
olders
after
tax
Other
comprehensive
income that will
be reclassified
into profit or loss
Incl.: Other
comprehensive
income that can
be reclassified
into profit or loss
under equity
method
Gains or losses
on changes in fair
value of
available-for-sale
financial assets
364,218 -54,208 138,160 -48,092 -144,276 219,942
Other
comprehensive
income, total
364,218 -54,208 138,160 -48,092 -144,276 219,942
30. Surplus reserves
Item 31 December 2018
Increase
during the
period
Decrease
during the
period
31 December 2019
Statutory
surplus reserve 1,569,803 236,290 1,806,093
Total 1,569,803 236,290 1,806,093
Notes: (1) In accordance with the Company Law of the People’s Republic of China, the Articles of
Association of the Group and resolutions adopted by the Board of Directors of the Group, the
Group set aside 10% of net profit under Chinese accounting standards as statutory surplus reserve.
Statutory surplus reserve may not be charged further when the Group's total surplus reserves
reached 50% of its share capital. Upon approval by the General Meeting of Shareholders, the
statutory surplus reserve of the Group may be used for loss recovery or conversion to share capital.
After conversion of surplus reserve to share capital, the retained statutory surplus reserve shall not
be less than 25% of share capital.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 90 of 186
(2) The Group set aside 10% of net profit under PRC GAAP as statutory surplus reserve, totaling
RMB236,290,000 in 2019. Statutory surplus reserve was set aside on the basis of annual after-tax
profit. No discretionary surplus reserve was set aside by the Group.
31. General reserve
Item 31 December 2018 Increase
during the
period
Decrease
during the
period
31 December 2019
General
reserve
4,203,355 781,045 4,984,400
Total 4,203,355 781,045 4,984,400
Note: In accordance with the Notice concerning Issuance of the Administrative Measures for
Setting Aside Reserve Funds of Financial Enterprises [C.J. (2012) No. 20], general reserve means
reserve set aside by a financial corporation in proportion to its net profit for the purpose of
covering unidentified possible losses. Setting aside general reserve is deemed profit distribution
and constitutes part of the owners’ equity. General reserve is set aside in proportion to the balance
of assets that assume risks and losses. In principle, the balance of general reserve should not be
lower than 1.5% of the balance of risk assets at the end of the reporting period. If the proportion of
general reserve of financial enterprises to the balance of risk assets at the end of the period is
difficult to reach 1.5%, it can be put in place over years (not exceeding 5 years in principle). On
31 December 2019, the Group set aside general risk reserve of 1.5% of balance of risk assets at the
end of reporting period.
32. Retained profit
Item Distribution policy Amount
Retained profit at 31 December 2018 6,461,342
Add: Adjustments to retained profit at the
year beginning
Retained profit after retrospective
adjustments 6,461,342
Add: Net profit transferred in during the
year 2,416,842
Less: Statutory surplus reserve set aside 10% of net profit 236,290
Appropriation to general risk reserve 781,045
Discretionary surplus reserve set
aside
Common share dividend payable 454,063
Common share dividend converted to
share capital
Retained profit at 31 December 2019 7,406,786
Note: The 2018 Annual General Meeting of the Group was held on 20 June 2019, at which the
Proposal on 2018 Profit Distribution Plan was reviewed and approved. Based on a total of
4,127,846,000 shares as at 31 December 2018 and a cash dividend of RMB0.11 (pre-tax) per share,
RMB454,063,000 of cash dividend was distributed in total.
33. Net interest income
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 91 of 186
Item 2019 2018
Interest income:
1) Balances with central banks 381,665 391,232
2) Deposits with banks and other
financial institutions 9,231 17,894
3) Lendings to banks and other
financial institutions 20,679 23,374
4) Financial assets under reverse
repurchase agreements 225,609 207,643
5) Loans and advances 7,140,676 6,029,831
- Corporate loans and advances 3,978,067 3,769,709
- Personal loans 1,975,364 1,418,636
- Discounted bills 997,031 747,201
- Trade finance 190,214 94,285
6) Bond and other investments 5,026,801 3,862,081
7) Interest income from
principal-guaranteed wealth
management products 298,827
608,038
Total interest income 13,103,488 11,140,093
Interest expense:
1) Borrowings from central banks 27,103 26,892
2) Deposits from banks and other
financial institutions 149,483 167,919
3) Borrowings from banks and
other financial institutions 81,011 76,889
4) Financial assets under
repurchase agreements 559,238 507,083
5) Customer deposits 5,208,992 2,900,925
6) Bonds payable 2,509,790 2,856,411
7) On-lending funds 4,570
8) Interest expense from
principal-guaranteed wealth
management products 270,486
602,469
Total interest expenses 8,810,673 7,138,588
Net interest income 4,292,815 4,001,505
By geographical distribution:
Item 2019 2018
Interest income Interest expense Interest income Interest expense
Wuhan 11,685,272 8,055,171 9,798,595 6,793,480
Ezhou 92,986 57,947 63,106 17,244
Yichang 234,049 128,802 220,292 78,151
Huangshi 191,143 95,277 217,412 44,639
Jingzhou 90,184 89,978 67,422 48,408
Jingmen 80,522 25,160 95,897 18,319
Xiangyang 147,889 13,134 159,159 13,793
Enshi 85,967 42,993 87,973 24,084
Shiyan 54,447 18,139 56,656 9,848
Xiaogan 89,969 31,327 67,547 16,919
Xianning 32,633 12,928 17,860 6,421
Huanggang 14,526 14,721 4,331 5,816
Xiantao 13,984 3,297 1 28
Suizhou 4,522 1,011
Chongqing 285,395 220,788 283,842 61,438
Total 13,103,488 8,810,673 11,140,093 7,138,588
34. Net fee and commission income
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 92 of 186
Item 2019 2018
Fee and commission income:
Settlement fee income 24,296 20,594
Agency service income 467,697 359,478
Bank card service fee income 148,566 93,504
Securities service fee income 99,787 63,897
Loan and guarantee fee income 175,718 83,027
Other fee income 47,456 68,405
Total fee and commission income 963,520 688,905
Fee and commission expenses:
Settlement fee expense 8,326 5,918
Agency service expense 1,407 594
Bank card service fee expenses 15,000 14,477
Bond fee expenses 23,497 14,438
Other fee expenses 27,206 39,734
Total fee and commission expenses 75,436 75,161
Net fee and commission income 888,084 613,744
35. Investment income
Source 2019 2018
Investment income from financial assets designated at fair value
through profit or loss during their holding period -10,313
-12,723
Investment income from long-term equity during the holding period 35,170 24,434
Investment income from available-for-sale financial assets during
their holding period 1,202,334
1,358,392
Total 1,227,191 1,370,103
36. Gains or losses on changes in fair value
Source of gains on fair value changes 2019 2018
Financial assets designated at fair value through profit or
loss -2,072
129,060
Financial liabilities designated at fair value through profit
or loss 37,958
-69,040
Total 35,886 60,020
37. Other operating income and other operating costs
(1) Other operating income
Item 2019 2018
Rental income from properties 6,727 5,221
Others 3,372 2,482
Total 10,099 7,703
(2) Other operating costs
Item 2019 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 93 of 186
Others 70 102
Total 70 102
38. Gain on disposal of assets
Item 2019 2018
Gain on disposal of non-current assets (“-” for
loss) 97 -3,206
Total 97 -3,206
39. Other gains
(1) Classification of other gains
Item 2019 2018 Amount recognized into current-period
non-recurring profit or loss
Government
subsidies 6,951 6,749 6,951
Total 6,951 6,749 6,951
(2) Government subsidies recognized into current-period profit or loss
Subsidy item 2019 2018 Assets/income-related
Subsidy fund for fixed-purpose fees of
financial institutions Income-related
Award for increase in
agriculture-related loans of financial
institutions
578 Income-related
Rental subsidies and tax contribution
award of financial institutions 696 696 Income-related
Policy-related subsidies for
development zones 870 1,157
Income-related
Interest subsidies for poverty
alleviation loans 279 150 Income-related
Government's employment
stabilization subsidies 2,949 3,030 Income-related
Individual income tax refund 50 1,118 Income-related
Subsidy for new establishments 2,000 Income-related
Others 107 20 Income-related
Total 6,951 6,749
Note: (1) According to the notice issued by seven government agencies of Hubei Province,
including the Department of Human Resources and Social Security and the Department of Finance,
on the Implementation Measures for Refund of Unemployment Insurance Premiums in Hubei
Province (E.R.S.F. [2019] No. 30), the enterprises that do not cut staff (with the staff cut ratio
below or equal zero, the same below) or included in the list for over-capacity cuts will be entitled
to a 70% refund of unemployment insurance premiums paid by employers and employees in the
relevant year. Besides, the enterprises with no more than 1,000 insured employees and with a staff
cut ratio below the national surveyed unemployment rate control target, and the enterprises with
more than 1,000 insured employees and with a staff cut ratio below the provincial urban registered
unemployment rate control target, will be entitled to a 50% refund of unemployment insurance
premiums paid by employers and employees in the relevant year.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 94 of 186
(2) According to the Notice on Further Improving the Secured Microloan Policy (E.R.S.F. [2013]
No. 33) issued by the Department of Human Resources and Social Security and the Department of
Finance of Hubei Province and the Wuhan Branch of PBOC, a reward equal 1% of the total
amount of local secured micro loans issued in the year was granted to participating financial
institutions, guarantee organizations, public service organizations for employment and business
startups (including credit communities) and fiscal review organizations.
(3) According to the notice by Wuhan Municipal Bureau of Human Resources and Social Security
and Wuhan Municipal Bureau of Finance on issuing the Measures for the Implementation of an
Employment Stabilization Subsidy in Wuhan City (W.R.S.F. [2015] No. 82), a company that
complies with the regulations and did not lay off employees in the previous year can be granted
the employment stabilization subsidy which is equal to 50% of total unemployment insurance fees
paid by the company and its employees in the previous year; a company that complies with the
regulations but laid off employees in the previous year at a rate lower than the city's registered
unemployment rate can be granted the employment stabilization subsidy which is equal to 40% of
total unemployment insurance fees paid by the company and its employees in the previous year.
(4) According to the notice issued by the Management Commission of Wuhan East Lake
High-tech Development Zone on the Implementation Measures of the East Lake Independent
Innovation Demonstration Zone on Promoting the Development of Specialized Financial Services
Providers for High-Tech SMEs, the East Lake High-tech Development Zone approved and granted
RMB870,000 of subsidy to Technology Finance Service Center of Hankou Bank for 2018 for the
purpose of further enhancing the financing support for high-tech SMEs in the Wuhan East Lake
High-tech Development Zone and enhancing the innovative high-tech finance services.
(5) According to the reply of Xianning Municipal Bureau of Finance to the Request for the
Municipal Government's Approval for Rent Subsidy to Hankou Bank Xianning Branch and Article
3 of the Xianning Municipal Government's Reply to the Request for Policy Support for Hankou
Bank Xianning Branch, which reads that “an annual subsidy equal to 50% of the housing rent will
be granted for three consecutive years in accordance with the Opinions of the Municipal
Government on Accelerating Development of the Hesheng Financial Town (X.Z.B.F. [2016] No.
14)”, Xianning Municipal Bureau of Finance has approved RMB696,000 of rent subsidy to be
granted.
(6) According to the Opinion of CPC Jingmen Committee and Jingmen Municipal Government on
Adhering to the Capital-driven Approach to Leap-frog Development of Jingmen (J.F. [2016] No.
9), the top three banking institutions by growth rate of microloans that met the “Three No Less
Than’s” targets were granted a reward of RMB150,000, RMB100,000 and RMB50,000
respectively. Jingmen Government paid RMB50,000 of award to Jingmen Branch of Hankou
Bank.
(7) According to the Trial Measures for Attracting Banking Institutions to Huanggang City
(H.Z.B.F. [2014] No. 8), a subsidiary of RMB1 million was paid for a bank branch newly
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 95 of 186
established in the city. Huanggang Government paid RMB1,000,000 of award to Huanggang
Branch of Hankou Bank.
(8) According to the Opinion of Suizhou Government on Supporting Faster Development of Real
Economy (S.Z.F. [2017] No. 22), the municipal government undertook to place at least RMB200
million of deposits with the joint-stock commercial bank that opened a local branch and granted a
one-off subsidy of RMB1 million for its office premises. Suizhou Government paid
RMB1,000,000 of award to Suizhou Branch of Hankou Bank.
(9) According to the notice by Zhijiang Municipal Bureau of Human Resources and Social
Security on Application for Subsidies for Employment Stabilization Posts of Enterprises in 2018
(Z.R.S.F. [2018] No. 18) a company that complies with the regulations and did not lay off
employees in the previous year can be granted the employment stabilization subsidy which is
equal to 70% of total unemployment insurance fees paid by the company and its employees in the
previous year; a company that complies with the regulations but laid off employees in the previous
year at a rate lower than the city's registered unemployment rate (2.38%) can be granted the
employment stabilization subsidy which is equal to 50% of total unemployment insurance fees
paid by the company and its employees in the previous year.
(10) According to the Request for Allocating the Subsidies for Lead Manager of the Poverty
Alleviation Microloans in 2018 of the Office of the Yangxin County Leading Group on Financial
Work, subsidies were paid to four banks that met the target set by the county government. Yangxin
Government paid RMB279,000 of award to HB Yangxin Rural Bank, Ltd.
40. Business taxes and surcharges
Item 2019 2018 Rate
Urban maintenance and
construction tax
34,048 24,554 7% of turnover tax payable
Educational surcharges 14,587 10,525 3% of turnover tax payable
Local education
development fee
7,362 5,367 2% of turnover tax payable
Stamp tax 4,518 3,606
Land appreciation tax 168
House property tax 16,899 16,599
Vehicle and vessel use tax 45 54
Land use tax 389 506
Disabled person security 6,107 5,291
Total 84,123 66,502
Note: According to the document E.C.Z.F. [2015] No. 39, Hubei Province suspended the
collection of urban embankment charges from 1 October 2015.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 96 of 186
41. General and administrative expenses
Item 2019 2018
Staff costs 1,354,046 1,208,546
Operating expenses 673,584 678,298
Depreciation of fixed assets 124,190 124,588
Amortization of intangible assets 14,507 12,204
Amortization of long-term deferred expenses 55,998 44,406
Total 2,222,325 2,068,042
42. Impairment losses on assets
Item 2019 2018
Impairment losses/allowance reverse on loans and
advances 2,011,485
2,208,581
Bad debt losses/allowance reverse 68,645 13,903
Allowance for impairment losses/allowance reverse on
receivables investment -8,696
3,094
Impairment losses on repossessed assets 14,610
Total 2,086,044 2,225,578
43. Non-operating income
Item 2019 2018
Settlement fines and penalty income 1,786 910
Income from unclaimed funds 2,535 2,958
Other income 80 3,751
Total 4,401 7,619
44. Non-operating expenses
Item 2019 2018
Expenditure on unclaimed funds 648 551
Donation expense 2,520 1,351
Spending on fines, penalties and damages 4,368 2,735
Others 221 3,105
Total 7,757 7,742
45. Income tax expense
Item 2019 2018
Income tax calculated under tax laws and relevant regulations 3,773 1,390
Add: Deferred income tax expense (gains are presented with “-”) -345,993 -168,007
Income tax expense -342,220 -166,617
Profit before tax 2,076,682 1,715,761
Income tax at statutory rate 519,171 428,940
Tax adjustments:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 97 of 186
Item 2019 2018
Effects of different tax rates applicable to subsidiaries
Effects of adjustments to income taxes for previous periods 58
Effects of tax-free income -880,236 -614,187
Effects of non-deductible costs, expenses and losses 19,287 14,849
Effects of using deductible losses of unrecognized deferred income tax
assets for previous periods -442
Effects of deductible temporary difference or deductible losses of
unrecognized deferred income tax assets for the period
3,723
Other effects
Income tax expense -342,220 -166,617
Note: Income tax expenses fell by 105.39% in 2019 from 2018, mainly due to increase in
tax-exempt income;
46. Supplementary data for the statement of cash flows
(1) Net profit adjusted to cash flows from operating activities
Item 2019 2018
Net profit 2,418,902 1,882,378
Add: Impairment losses on assets 2,086,044 2,225,578
Depreciation of fixed assets and investment properties 124,190 124,588
Amortization of intangible assets 14,507 12,204
Amortization of long-term deferred expenses 55,998 44,406
Losses on disposal of fixed assets, intangible assets and other
long-term assets (gains are presented with “-”)
-97 3,206
Losses on retirement of fixed assets (gains are presented with
“-”)
31
Losses on changes in fair value (gains are presented with “-”) -35,886 -60,020
Investment loss (income is presented with “-”) -1,227,191 -1,370,103
Interest expense on bonds issued 2,509,790 2,856,411
Decrease in deferred income tax assets ((increase is presented
with “-”)
-345,475 -161,263
Increase in deferred income tax liability (decrease is presented
with “-”)
-518 -6,744
Decrease in operating receivables (increase is presented with
“-”) -41,640,454
-22,647,141
Increase in operating payables (decrease is presented with “-”) 71,200,287 29,815,128
Provisioning for estimated liabilities
Net cash flows from operating activities 35,160,128 12,718,628
(2) Net changes in cash and cash equivalents
Item 2019 2018
Cash at the end of the period 913,538 757,835
Less: Cash at the beginning of the period 757,835 570,468
Add: Cash equivalent at the end of the period 25,284,599 9,682,260
Less: cash equivalents at the beginning of the period 9,682,260 12,396,002
Net increase in cash and cash equivalents 15,758,042 -2,526,375
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 98 of 186
(3) Cash and cash equivalents
Item 2019 2018
A. Cash 913,538 757,835
B. Cash equivalents 25,284,599 9,682,260
Incl.: Balances with central banks available for payment 7,378,052 4,159,069
Original maturity no more than three months: Deposits
with banks and other financial institutions 1,879,318 1,012,991
Original maturity no more than three months: Placements
with banks and other financial institutions 5,400,000 500,000
Original maturity no more than three months: Assets
under reverse repurchase agreements 10,627,229 4,010,200
Original maturity no more than three months: Bond
investments
Cash and cash equivalents at the end of the period 26,198,137 10,440,095
(4) Cash received from other operating activities
Item 2019 2018
Income from disposal of repossessed assets 7,750
Rental income 6,727 5,221
Suspense credits and other income 44,617 47,877
Total 51,344 60,848
(5) Cash paid for other operating activities
Item 2019 2018
Non-operating expenses 2,520 2,501
Business promotion, rent and other administrative expenses and other
expenses 992,858 963,902
Total 995,378 966,403
47. Transfer of financial assets
In the credit asset securitization process, the Group transferred credit assets to the structured entity,
which issued asset-backed securities as issuer. The Group held the subordinated tranche of
asset-backed securities and maintained contiguous involvement in transferred credit assets. The
Group will recognize the asset in the balance sheet pursuant to the continuous involvement
procedure of the Group and derecognize other parts.
On 31 December 2019, of the securitization deals in which the Group was continuously involved
to some degree, the securitized credit assets had a par value of RMB3,510,803,000. The Group
continued to recognize assets with a par value of 560,803,000. Assets from continuous
involvement and liabilities from continuous involvement recognized by the Group stood at RMB
560,803,000.
IX. Notes to main items of parent company financial statements
(Amounts in thousands of RMB unless otherwise stated)
1. Cash and balances with central banks
Item 31 December 2019 31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 99 of 186
Item 31 December 2019 31 December 2018
Cash 906,579 750,187
Balances with central banks 30,178,904 26,063,377
Legal reserve 22,702,774 21,795,985
Excess reserve 7,378,052 4,159,069
Public finance reserve 98,078 108,323
Total 31,085,483 26,813,564
Notes: (1) The Bank deposited legal reserve with PBOC, which should not be used for daily
business operation of the Bank.
As at 31 December 2019, the Bank's ratio of legal reserve was:
Item 31 December 2019 31 December 2018
Ratio of RMB legal reserve 10.50% 12%
Ratio of foreign-currency legal
reserve 5%
5%
(2) Excess reserve with central banks is mainly used for fund clearing.
2. Deposits with banks and other financial institutions
Item 31 December 2019 31 December 2018
Clearing deposits with banks and
other financial institutions 522,243 596,064
General deposits with banks and
other financial institutions 1,400,000
Deposits with overseas banks and
other financial institutions 342,257 333,094
Subtotal 2,264,500 929,158
Less: Allowance for bad debts with
banks and other financial institutions
Carrying amount of balances with
banks and other financial institutions 2,264,500 929,158
Note: The 2019 balances with banks and other financial institutions increased by 143.72% over
the 2018 figure due to the increase in general deposits with banks and other financial institutions.
3. Lendings to banks and other financial institutions
Item 31 December 2019 31 December 2018
Placements with domestic banks and
other financial institutions 4,600,000
500,000
Placements with overseas banks and
other financial institutions
Placements with domestic
non-banking financial institutions
800,000
Subtotal 5,400,000 500,000
Less: Allowance for losses on
lendings to banks and other financial
institutions
Carrying amount of lendings to
banks and other financial institutions
5,400,000 500,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 100 of 186
Note: The balance of lendings to banks and other financial institutions for 2019 increased by
980.00% as compared to 2018, due to the structural adjustment in interbank business and the
increase in lendings to banks and other financial institutions.
4. Financial assets designated at fair value through profit or loss
Item 31
December
2019
31
December
2018
Held-for-trading bond investment
(Classified by issuer):
Governments and central banks 1,392,400
Banks and other financial institutions 20,005
Enterprises 410,165 231,536
Subtotal 1,822,570 231,536
Financial assets measured at fair value through profit or loss
(Classified by issuer):
Governments and central banks 77,820
Policy banks 1,296,199
Banks and other financial institutions 5,587,083
Enterprises 5,849,660
Subtotal 12,810,762
Total 1,822,570 13,042,298
Note: As at 31 December 2019, of the held-for-trading bond assets held by the Bank, bonds with a
par value of RMB200,000,000 were pledged for handling pledge-type repurchase business.
5. Financial assets under reverse repurchase agreements
Item 31 December 2019 31 December 2018
Classified by collateral:
Bonds under reverse repurchase
agreements 10,427,229 3,510,200
Incl.: Government bonds 2,220,183 1,300,000
Financial bonds 8,207,046 2,210,200
Bills under reverse repurchase
agreements 200,000
Interbank CDs under reverse repurchase
agreements 500,000
Total financial assets under reverse
repurchase agreements 10,627,229 4,010,200
Less: Allowance for bad debts of financial
assets under reverse repurchase agreements
Carrying amount of financial assets under
reverse repurchase agreements 10,627,229 4,010,200
Classified by counterparty:
Non-banking financial institutions 9,942,229 675,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 101 of 186
Item 31 December 2019 31 December 2018
Banking institutions 685,000 3,335,200
Total financial assets under reverse
repurchase agreements 10,627,229 4,010,200
Less: Allowance for bad debts of
financial assets under reverse repurchase
agreements
Carrying amount of financial assets under
reverse repurchase agreements 10,627,229 4,010,200
6. Loans and advances
(1) Loans and advances by personal and corporate borrowers are presented as follows:
Item 31 December 2019 31 December 2018
Personal loans and advances: 44,086,212 34,969,701
Personal consumption loans 33,123,210 25,125,945
Personal business loans 7,385,990 7,199,368
Credit cards 3,577,012 2,644,388
Corporate loans and advances: 127,857,137 101,594,053
Loans 82,599,448 73,016,020
Discounting 38,488,847 24,369,080
Advances 287,689 379,084
Trade finance 6,481,153 3,829,869
Total loans and advances 171,943,349 136,563,754
Less: Allowance for impairment
losses on loans 5,837,380
4,550,169
Incl.: Individually assessed 2,824,758 1,965,061
Collectively assessed 3,012,622 2,585,108
Carrying amount of loans and
advances 166,105,969
132,013,585
As at 31 December 2019, the Bank did not use the foregoing assets as collateral when entering
into repurchase agreements with other financial institutions.
For the loan balance of shareholders holding 5% or more voting shares in the Bank, please refer to
Note XV.2(1).
(2) Discounting of bills by type:
Item 31 December 2019 31 December 2018
Bank acceptance bills 35,707,210 22,860,292
Commercial acceptance bills 2,781,637 1,508,788
Total 38,488,847 24,369,080
(3) Loans and advances by industry sector:
Item 31 December 2019 31 December 2018
Corporate loans and advances: 127,857,137 101,594,053
Manufacturing 17,675,544 12,840,802
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 102 of 186
Item 31 December 2019 31 December 2018
Wholesale and retail 19,388,815 17,716,136
Transport, storage and post 3,583,918 2,447,049
Farming, forestry, animal husbandry
and fishery 813,755 732,369
Power/heat/gas/water production and
supply 2,070,607 2,617,055
Real estate 19,353,038 14,219,433
Construction 9,066,855 8,900,769
Financial industry 26,351,963 12,743,056
Neighborhood services and others 255,907 112,173
Water, environment and public utility
management 3,689,589 3,968,539
Culture, sports and entertainment 362,703 330,862
Information transmission, computer
service and software 2,231,193 1,566,802
Leasing and commercial services 16,770,354 12,542,110
Mining 719,506 355,387
Others 5,523,390 10,501,511
Personal loans and advances: 44,086,212 34,969,701
Total loans and advances 171,943,349 136,563,754
Less: Allowance for impairment losses on
loans 5,837,380 4,550,169
Incl.: Individually assessed 2,824,758 1,965,061
Collectively assessed 3,012,622 2,585,108
Net carrying amount of loans and
advances 166,105,969 132,013,585
(4) Loans and advances by the mode of guarantee are presented as follows:
Item 31 December 2019 31 December 2018
Unsecured loans 30,678,709 21,066,107
Guaranteed loans 27,030,116 27,101,025
Collateralized loans 114,234,524 88,396,622
- Loans secured by mortgages 63,786,713 55,750,927
- Pledged loans 50,447,811 32,645,695
Total loans and advances 171,943,349 136,563,754
Less: Allowance for impairment
losses on loans 5,837,380 4,550,169
Incl.: Individually assessed 2,824,758 1,965,061
Collectively assessed 3,012,622 2,585,108
Net carrying amount of loans and
advances 166,105,969 132,013,585
(5) Loans and advances by geographical distribution are presented as follows:
Item 31 December 2019 31 December 2018
Wuhan 139,753,193 111,221,758
Ezhou 1,623,659 1,431,151
Yichang 4,673,804 3,677,675
Huangshi 4,415,290 3,858,699
Jingmen 2,256,009 1,960,281
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 103 of 186
Item 31 December 2019 31 December 2018
Xiangyang 2,825,460 1,877,636
Jingzhou 2,264,054 1,344,043
Enshi 1,686,980 1,648,941
Shiyan 870,100 1,052,131
Xiaogan 1,941,566 1,458,275
Xianning 800,727 460,932
Huanggang 390,189 187,564
Xiantao 585,922
Suizhou 229,540
Chongqing 7,626,856 6,384,668
Total loans and advances 171,943,349 136,563,754
Less: Allowance for impairment
losses on loans 5,837,380 4,550,169
Incl.: Individually assessed 2,824,758 1,965,061
Collectively assessed 3,012,622 2,585,108
Net carrying amount of loans and
advances 166,105,969 132,013,585
(6) Overdue loans are presented as follows:
Item 31 December 2019
Overdue for
less than 3
months
Overdue for
3-12 months
Overdue
for 1-3
years
Overdue for
over 3 years
Total
Unsecured loans 9,968 19,446 47,540 30,000 106,954
Guaranteed loans 61,413 189,060 61,659 859,230 1,171,362
Collateralized loans
- Loans secured by
mortgages 288,250 356,843 122,336 437,488 1,204,917
- Pledged loans 10,000 11,445 230,077 251,522
Total loans and
advances 359,631 575,349 242,980 1,556,795 2,734,755
Item
31 December 2018
Overdue for
less than 3
months
Overdue for
3-12 months
Overdue for
1-3 years
Overdue
for over 3
years
Total
Unsecured loans 15,289 15,792 59,336 30,000 120,417
Guaranteed loans 13,919 87,384 213,369 1,057,115 1,371,787
Collateralized loans
- Loans secured by
mortgages
164,481 94,693 294,614 730,014 1,283,802
- Pledged loans 1,564 7,945 25,412 251,355 286,276
Total loans and
advances
195,253 205,814 592,731 2,068,484 3,062,282
(7) Changes in allowance for impairment losses on loans:
Item 31 December 2019 31 December 2018
Beginning balance 4,550,169 4,313,314
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 104 of 186
Item 31 December 2019 31 December 2018
Provisioning during the period 2,005,786 2,168,429
Transfer-out during the period
Write-off during the period 985,997 1,996,770
Reversed during the period 267,422 65,196
- Loans and advances written off in previous
years and recovered during the period 266,847 64,760
- Reversed due to rise in discounted value
- Exchange gains or losses and other
adjustments 575 436
Ending balance 5,837,380 4,550,169
Item 31 December 2019 31 December 2018
Allowance for impairment losses on
corporate loans: 4,972,430 3,732,256
Individually assessed 2,824,758 1,917,642
Collectively assessed 2,147,672 1,814,614
Allowance for impairment losses on
personal loans: 864,950 817,913
Individually assessed 47,419
Collectively assessed 864,950 770,494
Total 5,837,380 4,550,169
(8) Write-off of non-performing loans and off-balance-sheet accrued interest receivable:
Item 2019 2018
Loan principal written off 985,997 1,996,770
Off-balance-sheet accrued interest
receivable written off 444,839 984,967
Total 1,430,836 2,981,737
7. Available-for-sale financial assets
(1) Classification of available-for-sale financial assets
Item 31 December 2019 31 December 2018
Available-for-sale debt instruments
Incl.:
Government bonds 15,682,401 13,134,265
Bonds of policy banks 4,670,576 7,106,676
Bonds of commercial banks and
other financial institutions
805,375 1,058,835
Interbank CDs 589,155
Corporate bonds 2,680,387 3,053,386
Asset-backed securities 311,852 288,616
Securities investment funds 42,106,766 30,047,802
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 105 of 186
Item 31 December 2019 31 December 2018
Purchase of wealth management
products issued by other banks and
others
2,654,996 2,455,936
Subtotal 69,501,508 57,145,516
Equity investment measured at cost 15,582 15,582
Less: Allowance for impairment
losses on available-for-sale financial
assets
Subtotal 15,582 15,582
Carrying amount of
available-for-sale financial assets
69,517,090 57,161,098
(2) Available-for-sale financial assets at fair value at the period end
Classification of available-for-sale financial
assets
Available-for
-sale equity
instruments
Available-for-
sale debt
instruments
Total
Amortized cost 69,208,252 69,208,252
Fair value 69,501,508 69,501,508
Changes in fair value accumulatively recognized
in other comprehensive income
293,256 293,256
Impairment amount set aside
(3) Available-for-sale financial assets at cost at the period end
For the equity investment without quoted price in an active market and its fair value cannot be
reliably measured, the Group measures it at cost and has no disposal plan for relevant equity
investment in the foreseeable future. As at the end of the reporting period, the equity investment
measured at cost is presented as follows:
Name of investee
Book balance
Shareholding
percentage in
investee (%) 31 December
2018
Incre
ase
durin
g the
perio
d
Decr
ease
durin
g the
perio
d
31
December
2019
Wuhan Steel Electricity Co.,
Ltd.
8,030 8,030 0.88
China UnionPay Co., Ltd. 7,152 7,152 0.27
Urban Commercial Bank
Clearing Center 400
400 1.33
Total 15,582 15,582
Name of investee
Allowance for impairment losses Cash
dividend
during the
period
31
December
2018
Increase
during the
period
Decrease
during the
period
31
December
2019
Wuhan Steel Electricity Co., 522
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 106 of 186
Name of investee
Allowance for impairment losses Cash
dividend
during the
period
31
December
2018
Increase
during the
period
Decrease
during the
period
31
December
2019
Ltd.
China UnionPay Co., Ltd. 1,200
Urban Commercial Bank
Clearing Center
Total 1,722
Notes: (1) As at 31 December 2019, available-for-sale financial assets held by the Bank had
not been impaired, so no allowance for impairment losses was set aside for available-for-sale
financial assets.
(2) As at 31 December 2019, the Bank’s available-for-sale financial assets included no bonds
pledged as collaterals.
8. Held-to-maturity investments
Item 31 December 2019 31 December 2018
Government bonds 69,933,057 33,892,122
Financial bonds 5,287,313 4,123,148
Bonds of policy banks 3,173,090 3,213,148
Bank bonds 870,000 910,000
Interbank CDs 1,244,223
Corporate bonds 2,680,864 1,704,626
Other bonds 1,253,800 1,429,174
Total 79,155,034 41,149,070
Less: Allowance for impairment losses
on held-to-maturity investments
Carrying amount of held-to-maturity
investments 79,155,034 41,149,070
Notes: (1) As at 31 December 2019, held-to-maturity bonds held by the Bank had not been
impaired, so no allowance for impairment losses was set aside for held-to-maturity investments.
(2) As at 31 December 2019, of the held-to-maturity financial assets held by the Group, bonds
with a par value of RMB52,643,412,500 were pledged for handling pledge-type repurchase
business, time deposit business of treasury bonds and corporate negotiated deposits.
9. Receivables investment
Item 31 December 2019 31 December 2018
Government bonds 29,115 28,088
Asset management plans and fund
trust plans 26,908,233 35,661,360
Asset-backed securities 678,892 200,000
Other investments 1,164 1,164
Total 27,617,404 35,890,612
Less: Allowance for impairment
losses on receivables investment 996,035 1,047,153
Receivables investment 26,621,369 34,843,459
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 107 of 186
Changes in allowance for impairment losses on receivables investment:
Item 31 December 2019 31 December 2018
Beginning balance 1,047,153 1,044,059
Provisioning during the period -51,118 3,094
Transfer-out during the period
Write-off during the period
Reversed during the period
Ending balance 996,035 1,047,153
10. Long-term equity investment
Item 31 December 2019 31 December 2018
Book
balance
Allowance
for
impairmen
t losses
Carrying
amount
Book
balance
Allowance
for
impairmen
t losses
Carrying
amount
Investment in
subsidiaries 71,940
71,940 56,940
56,940
Investment in
associate 822,813
822,813 787,643
787,643
Total 894,753 894,753 844,583 844,583
(1) Investment in subsidiaries
Investee Beginning
balance
Increase
during the
period
Decr
ease
durin
g the
perio
d
Ending
balance
Allowance
for
impairmen
t losses set
aside
during the
period
Ending
balance of
impairment
losses
1. HB Zhijiang Rural
Bank, Ltd.
25,500 25,500
2. HB Yangxin Rural
Bank, Ltd.
31,440 15,000 46,440
Total 56,940 15,000 71,940
(2) Investment in associate
Investee Ending balance
Book balance Allowance for
impairment
losses
Carrying
amount
Aerospace Science & Industry Financial
Leasing Co., Ltd. 822,813
822,813
Total 822,813 822,813
(continued)
Investee Change during the period
Addi Redu Investment Other Other Announced Allow Ot
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 108 of 186
tiona
l
inves
tmen
t
ced
inves
tmen
t
gain or loss
recognized
under equity
method
compreh
ensive
income
adjustme
nts
equity
change
s
payment of
cash
dividend or
profit
ance
for
impair
ment
losses
set
aside
her
s
Aerospace
Science &
Industry
Financial
Leasing Co.,
Ltd.
35,170
Total 35,170
Notes: (1) As at 31 December 2019, the Bank's long-term equity investments had not been
impaired, so no allowance for impairment losses was set aside for long-term equity investments.
(2) As at 31 December 2019, the Bank had no significant restrictions on inward remittance of
gains on and proceeds from disposal of long-term equity investments.
(3) Please refer to Note X.1 and Note X.2 for information on equity stakes in the subsidiaries
and associate.
11. Other assets
Item 31 December 2019 31 December 2018
Deferred expenses 63,030 56,130
Dividend payable 522 522
Other receivables 4,621,114 1,348,460
Long-term deferred expenses 117,006 115,098
Repossessed assets 381,030 223,557
Agency securities 8,690 13,069
Deposits with correspondent banks 9,019
Interest receivable 2,222,052 2,285,189
Assets from continuous involvement 560,803
Others 141,945 22,916
Total 8,125,211 4,064,941
(1) Interest receivable:
Item 31 December 2019 31 December 2018
Interest receivable from bonds 1,864,621 1,504,605
Interest receivable from loans and
advances 327,687 287,780
Interest from transactions with
financial institutions 29,744 27,505
Interest receivable from
principal-guaranteed wealth
management products
465,299
Total 2,222,052 2,285,189
Changes in interest receivable
Beginning balance 2,285,189 1,709,931
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 109 of 186
Item 31 December 2019 31 December 2018
Provisioning during the year 12,955,545 11,076,517
Received during the year 13,018,682 10,501,259
Ending balance 2,222,052 2,285,189
12. Borrowings from central banks
Item 31 December 2019 31 December 2018
Borrowings from central banks 1,650,000
Total 1,650,000
13. Deposits from banks and other financial institutions
Item 31 December 2019 31 December 2018
Money for clearing from domestic
banks 742,689 349,333
General deposits from domestic banks 8,102,935 1,150,013
Money for clearing from domestic
non-banking financial institutions 863,614 991,893
General deposits from domestic
non-banking financial institutions 3,049 2,597,149
Total 9,712,287 5,088,388
14. Borrowings from banks and other financial institutions
Item 31 December 2019 31 December 2018
Placements from domestic banks and
other financial institutions 1,850,576 1,500,000
Placements from overseas banks and
other financial institutions 4,290
Total 1,850,576 1,504,290
15. Financial liabilities designated at fair value through profit or loss
Item 31 December 2019 31 December 2018
Wealth management products issued 13,190,558
Total 13,190,558
16. Financial assets under repurchase agreements
Item 31 December 2019 31 December 2018
Securities under repurchase agreements:
Financial bonds 1,416,000 1,608,000
Government bonds 15,260,250 4,007,100
Subtotal 16,676,250 5,615,100
Bills under repurchase agreements:
Bank acceptance bills 17,738,392 11,881,138
Subtotal 17,738,392 11,881,138
Total 34,414,642 17,496,238
17. Customer deposits
Item 31 December 2019 31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 110 of 186
Item 31 December 2019 31 December 2018
Demand deposits: 109,293,843 107,453,187
Corporate customers 86,011,416 87,530,173
Personal customers 23,282,427 19,923,014
Time deposits: 100,705,929 53,107,200
Corporate customers 56,131,654 28,190,818
Personal customers 44,574,275 24,916,382
Margin deposits received 9,219,896 7,811,302
Other deposits 30,084,180 19,489,625
Total 249,303,848 187,861,314
Notes: 1. Other deposits mainly include large-value CDs issued and treasury term deposits.
2. For the deposit balance of shareholders holding 5% or more voting shares in the Bank,
please refer to Note XV.2.
Details of margin deposits received that are included in the customer deposits are presented
as follows:
Item 31 December 2019 31 December 2018
Margin on acceptance bills 6,221,808 5,063,324
Margin on L/C issuance 914,194 346,424
Margin on guarantee 353,933 419,721
Other margins 1,729,962 1,981,833
Total 9,219,897 7,811,302
Customer deposits are presented by geographical distribution as follows:
Item 31 December 2019 31 December 2018
Wuhan 214,752,470 162,757,085
Ezhou 2,398,308 1,616,904
Yichang 5,710,708 4,187,903
Jingmen 1,230,771 1,221,150
Xiangyang 2,459,612 686,210
Huangshi 3,640,702 2,960,472
Jingzhou 5,124,517 4,130,281
Enshi 2,005,738 2,216,791
Shiyan 851,516 1,253,350
Xiaogan 1,660,530 1,140,658
Xianning 1,036,899 703,838
Huanggang 920,926 460,649
Xiantao 313,258 13,289
Chongqing 7,197,893 4,512,734
Total 249,303,848 187,861,314
18. Other liabilities
Item 31 December 2019 31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 111 of 186
Item 31 December 2019 31 December 2018
Outward remittance 10,479 13,982
Other payables 278,475 222,424
Dividend payable 69,189 55,341
Deferred income 106,474 93,413
Deposits from correspondent
banks 3,378
Interest payable 4,730,646 3,175,376
On-lending funds 804,660
Liabilities from continuous
involvement 560,803
Other current liabilities 106,890 61,291
Total 6,667,616 3,625,205
(1) Interest payable:
Item 31 December 2019 31 December 2018
Interest to transactions with financial
institutions 31,430
27,613
Interest payable on customer deposits 3,731,010 1,879,711
Bond interest payable 965,376 1,150,895
Interest payable on principal-guaranteed
wealth management products
117,157
Other interest payable 2,830
Total 4,730,646 3,175,376
Changes in interest payable
Item 2019 2018
Beginning balance 3,175,376 3,235,474
Provisioning during the year 8,801,711 7,122,266
Paid during the year 7,246,441 7,182,364
Ending balance 4,730,646 3,175,376
19. Net interest income
Item 2019 2018
Interest income:
1) Balances with central banks 380,410 389,858
2) Deposits with banks and other
financial institutions 7,723 9,250
3) Lendings to banks and other
financial institutions 20,678 23,374
4) Financial assets under reverse
repurchase agreements 225,609 207,643
5) Loans and advances 6,975,574 5,984,381
- Corporate loans and advances 3,958,043 3,750,867
- Personal loans 1,830,349 1,392,350
- Discounted bills 996,968 746,879
- Trade finance 190,214 94,285
6) Bond and other investments 5,046,724 3,853,973
7) Interest income from
principal-guaranteed wealth
management products
298,827 608,038
Total interest income 12,955,545 11,076,517
Interest expense:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 112 of 186
Item 2019 2018
1) Borrowings from central banks 25,946 24,878
2) Deposits from banks and other
financial institutions 165,020
172,050
3) Borrowings from banks and
other financial institutions 81,011
76,889
4) Financial assets under
repurchase agreements 559,238
507,083
5) Customer deposits 5,185,650 2,882,486
6) Bonds payable 2,509,790 2,856,411
7) On-lending funds 4,570
8) Interest expense from
principal-guaranteed wealth
management products 270,486
602,469
Total interest expenses 8,801,711 7,122,266
Net interest income 4,153,834 3,954,251
By geographical distribution:
Item 2019 2018
Interest income Interest expense Interest income Interest expense
Wuhan 11,604,451 8,070,711 9,798,595 6,793,480
Ezhou 92,987 57,947 63,106 17,244
Yichang 200,407 112,594 184,759 65,520
Huangshi 157,662 86,983 189,369 40,948
Jingmen 80,522 25,160 95,897 18,319
Xiangyang 147,889 13,134 159,159 13,793
Jingzhou 90,184 89,978 67,422 48,408
Enshi 85,967 42,993 87,973 24,084
Shiyan 54,447 18,139 56,656 9,848
Xiaogan 89,969 31,327 67,547 16,919
Xianning 32,633 12,928 17,860 6,421
Huanggang 14,526 14,721 4,331 5,816
Xiantao 13,984 3,297 1 28
Suizhou 4,522 1,011
Chongqing 285,395 220,788 283,842 61,438
Total 12,955,545 8,801,711 11,076,517 7,122,266
20. Net fee and commission income
Item 2019 2018
Fee and commission income:
Settlement and clearing fee income 24,292 20,590
Agency service income 467,697 359,479
Bank card service fee income 148,547 93,492
Securities service fee income 99,787 63,897
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 113 of 186
Item 2019 2018
Loan and guarantee fee income 175,718 101,237
Other fee income 47,456 50,195
Total fee and commission income 963,497 688,890
Fee and commission expenses:
Settlement fee expense 8,325 5,914
Agency service expense 1,407 594
Bank card service fee expenses 14,899 14,424
Bond fee expenses 23,496 14,438
Other fee expenses 27,205 39,734
Total fee and commission expenses 75,332 75,104
Net fee and commission income 888,165 613,786
21. Investment income
Source 2019 2018
Investment income from financial assets designated at fair value
through profit or loss during their holding period -10,313
-12,723
Investment income from long-term equity during the holding period 35,170 25,334
Investment income from available-for-sale financial assets during
their holding period 1,202,334
1,358,392
Total 1,227,191 1,371,003
22. General and administrative expenses
Item 2019 2018
Staff costs 1,340,107 1,198,573
Operating expenses 659,385 663,756
Depreciation of fixed assets 123,496 124,069
Amortization of intangible assets 14,507 12,158
Amortization of long-term deferred expenses 54,817 43,009
Total 2,192,312 2,041,565
23. Impairment losses on assets
Item 2019 2018
Impairment losses/allowance reverse on loans and
advances 2,005,786 2,168,429
Bad debt losses/allowance reverse 68,510 13,783
Allowance for impairment losses/allowance reverse on
receivables investment -51,118 3,094
Impairment losses on repossessed assets 13,010
Total 2,036,188 2,185,306
24. Supplementary data for the statement of cash flows
(1) Net profit adjusted to cash flows from operating activities
Item 2019 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 114 of 186
Item 2019 2018
Net profit 2,362,903 1,902,527
Add: Impairment losses on assets 2,036,188 2,185,306
Depreciation of fixed assets and investment properties 123,496 124,069
Amortization of intangible assets 14,507 12,158
Amortization of long-term deferred expenses 54,817 43,009
Losses on disposal of fixed assets, intangible assets and
other long-term assets (gains are presented with “-”)
-95 3,206
Losses on retirement of fixed assets (gains are presented
with “-”)
Losses on changes in fair value (gains are presented with
“-”)
-35,886 -60,020
Investment loss (income is presented with “-”) -1,227,191 -1,371,003
Interest expense on bonds issued 2,509,790 2,856,411
Decrease in deferred income tax assets ((increase is
presented with “-”)
-342,481 -158,406
Increase in deferred income tax liability (decrease is
presented with “-”)
-518 -6,744
Decrease in operating receivables (increase is presented
with “-”) -40,778,267
-22,229,795
Increase in operating payables (decrease is presented with
“-”) 71,099,448
29,736,903
Provisioning for estimated liabilities
Net cash flows from operating activities 35,816,711 13,037,621
(2) Net changes in cash and cash equivalents
Item 2019 2018
Cash at the end of the period 906,579 750,187
Less: Cash at the beginning of the period 750,187 563,431
Add: Cash equivalent at the end of the period 25,269,781 9,598,427
Less: cash equivalents at the beginning of the period 9,598,427 12,273,929
Net increase in cash and cash equivalents 15,827,746 -2,488,746
(3) Cash and cash equivalents
Item 2019 2018
A. Cash 906,579 750,187
B. Cash equivalents 25,269,781 9,598,427
Incl.: Balances with central banks available for payment 7,378,052 4,159,069
Original maturity no more than three months: Deposits
with banks and other financial institutions 1,864,500 929,158
Original maturity no more than three months: Placements
with banks and other financial institutions 5,400,000 500,000
Original maturity no more than three months: Assets
under reverse repurchase agreements 10,627,229 4,010,200
Cash and cash equivalents at the end of the period 26,176,360 10,348,614
(4) Cash received from other operating activities
Item 2019 2018
Income from disposal of repossessed assets 7,750
Rental income 6,727 5,221
Suspense credits and other income 89,154 48,589
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 115 of 186
Total 95,881 61,560
(5) Cash paid for other operating activities
Item 2019 2018
Non-operating expenses 2,495 2,458
Business promotion, rent and other administrative expenses and
other expenses 976,813 951,875
Total 979,308 954,333
X. Equity in Other Subjects
1. Equity in subsidiaries
(1) Composition of the enterprise group
Subsidiary
Principa
l place
of
business
Place of registration
Busin
ess
nature
Shareholding
percentage
(%)
Votin
g
right
perce
ntage
(%)
Way
of
acquis
ition Direct
Indir
ect
HB Zhijiang Rural
Bank, Ltd.
Zhijiang
City,
Hubei
Province
34 Tuanjie Road,
Zhijiang City, Hubei
Finan
cial
indust
ry
51 51 Establ
ishme
nt
HB Yangxin Rural
Bank, Ltd.
Yangxin
County,
Hubei
Province
15, Lingyuan
Avenue, Xingguo
Town, Yangxin
County, Hubei
Finan
cial
indust
ry
80 80 Establ
ishme
nt
(2) Important non-wholly-owned subsidiaries
Equity held by minority shareholders of important non-wholly-owned subsidiaries and their
profit or loss is as follows: (Unit: RMB1,000, %)
Subsidiary Shareholding
percentage of
minority
shareholders (%)
Profit or loss
attributable to
minority
shareholders for
the period
Dividend
declared to
minority
shareholders for
the period
Equity balance
of minority
shareholders at
the period end
HB Zhijiang Rural
Bank, Ltd.
49 799 26,230
HB Yangxin Rural
Bank, Ltd.
20 1,261 16,174
(3) Main financial information on important non-wholly-owned subsidiaries
31 December 2019
Item HB Zhijiang Rural Bank,
Ltd.
HB Yangxin Rural Bank,
Ltd.
Cash and balances with central banks 46,006 46,323
Deposits with banks and other
financial institutions
302,865 213,824
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 116 of 186
Item HB Zhijiang Rural Bank,
Ltd. HB Yangxin Rural Bank,
Ltd.
Loans and advances 333,969 292,632
Total assets 693,139 570,336
Borrowings from central banks 15,000 48,000
Customer deposits 605,197 432,446
Total liabilities 639,608 489,467
Paid-up capital 50,000 50,000
Retained profit -7,924 19,713
Total owners' equity 53,531 80,869
31 December 2018
Item HB Zhijiang Rural Bank,
Ltd.
HB Yangxin Rural Bank,
Ltd.
Cash and balances with central banks 56,829 43,150
Deposits with banks and other
financial institutions 251,291 181,196
Loans and advances 329,195 254,222
Receivables investment 30,000
Total assets 678,351 493,122
Borrowings from central banks 50,000
Customer deposits 610,336 357,516
Total liabilities 626,450 415,423
Paid-up capital 50,000 50,000
Retained profit -9,553 17,914
Total owners' equity 51,901 77,699
2. Equity in associates
(1) Basic information on key associate
Name of investee
Principa
l place
of
business
Place of
registration
Business
nature
Shareholding
percentage (%)
Account
ing
treatme
nt
method Direct Indirect
Aerospace Science
& Industry Financial
Leasing Co., Ltd.
Wuhan F/4 & 5, Wealth
Plaza, 18
Jinyinhu Road,
Dongxihu
District, Wuhan
City (11)
Financial
leasing
25 Equity
method
(2) Main financial information on key associate
Item Aerospace Science & Industry Financial
Leasing Co., Ltd.
Ending balance Beginning balance
Bank deposit 1,034,531 749,351
Deposits with banks and other financial
institutions 1,150,000
Financial lease receivable 13,352,512 11,978,903
Total assets 15,423,643 14,702,775
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 117 of 186
Item Aerospace Science & Industry Financial
Leasing Co., Ltd.
Ending balance Beginning balance
Borrowings 10,145,000 8,740,000
Deposits from banks and other financial
institutions 910,000
Total liabilities 12,132,393 11,552,202
Paid-up capital 3,000,000 3,000,000
Retained profit 39,888
Total owners' equity 3,291,250 3,150,573
3. Equity in the structured entities that are not included in the consolidated financial
statement
(1) Equity in the structured entities initiated and established by the third-party institutions
The Group enjoys the equity in the structured entities initiated and established by the
third-party institutions through direct holding of investment. Those structured entities that are not
included in the consolidated financial statement of the Group mainly include investment fund,
wealth management products, special asset management plans and asset-backed financing bonds.
The nature and objective of these structured entities are mainly to manage the investor's assets and
earn the management fee and the financing method is issuing investment products to investors.
Below is the carrying amount of assets and liabilities and maximum loss exposure related to
the equity due to the Group in the structured entities initiated and established by the third-party
institutions through direct holding of investment: (Unit: RMB1,000)
Item
31 December 2019
Carrying amount
Maximum
loss
exposure
Held-to
-maturit
y
investm
ents
Available-f
or-sale
financial
assets
Receivable
s
investment
Financial
assets
measured at
fair value
through
profit or loss
Total
Fund
investment
42,106,766 42,106,766 42,106,766
Asset
management
plans and
fund trust
plans
2,358,475 26,908,233 29,266,708 29,266,708
Asset-backed
securities
893,799 311,851 725,064 1,930,714 1,930,714
Total 893,799 44,777,092 27,633,297 73,304,188 73,304,188
Item
31 December 2018
Carrying amount Maximum
loss
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 118 of 186
Held-to-
maturity
investme
nts
Available-f
or-sale
financial
assets
Receivables
investment
Financial
assets
measured at
fair value
through
profit or loss
Total
exposure
Fund
investment
30,047,802 30,047,802 30,047,802
Wealth
management
products
30,000 12,810,762 12,840,762 12,840,762
Asset
management
plans and
fund trust
plans
1,257,856 35,661,360 36,919,216 36,919,216
Asset-backed
securities
288,616 200,000 488,616 488,616
Total 31,594,274 35,891,360 12,810,762 80,296,396 80,296,396
The maximum loss exposure of wealth management products, fund investment, asset management
plans, fund trust plans and asset-backed financing bond is its amortized cost or fair value on the
reporting date based on its category recognized on the balance sheet.
(2) Equity in the structured entities initiated by the Group but not included in the consolidated
financial statement
A. The structured entities initiated and established by the Group but not included in the
consolidated financial statement are mainly the non-principal-guaranteed wealth management
product issued by the Group. The nature and objective of these structured entities are mainly to
manage the investor's assets and collect the management fee and the financing method is issuing
investment products to investors. The equity due to the Group in the structured entities that are not
included in the consolidated financial statement mainly includes directly holding investment or
charging management fee by managing these structured entities. As at 31 December 2019, the
Group had insignificant carrying amount of assets in the balance sheet due to direct holding of
investment and fee receivable.
As at 31 December 2019, the balance of non-principal-guaranteed asses initiated and established
by the Group but not included in the consolidated financial statement was RMB55,796,218,000.
B. Structured entities initiated and established by the Group but not included in the consolidated
financial statement and where the Group did not enjoy equity from 31 December 2019. In 2019,
the commission and fee income earned by the Group from the non-principal-guaranteed wealth
management products was RMB284,606,000.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 119 of 186
4. Structured entities included in the consolidated financial statement
The structured entities initiated and established by the Group and included in the consolidated
financial statement are mainly the principal-guaranteed wealth management product (Notes VIII.4
and VIII.20) and securitization instruments (Note VIII.47) issued and managed by the Group.
The Group provided liquidity support for structured entities not included in the scope of
consolidation in 2019. (2018: None)
As the Group has power over such structured entities and is entitled to variable return by
participating the relevant activities and capable to influence the return amount through its right on
the investee, the Group has control over such structured entities.
XI. Segmental reporting
The Management of the Group assesses the performance results of corporate banking business,
personal banking business and treasury operation business respectively. Segment income,
operating result and assets presented in the business segments are directly attributable to all
segments and relevant items allocated to segments based on reasonable standards. As a part of
asset and liability management, the Group measures transactions between segments at actual
transaction price. Interest rate is determined by adding a certain interest spread to weighted
average financing cost when funds are allocated across business segments. In addition, there is no
significant income or expenses between business segments. These internal transactions have been
offset in preparing the statements.
Banking services the corporate banking segment provides to corporate customers include
corporate loans, bills issued, trade finance, corporate deposits and remittance.
Banking services the personal banking segment provides to personal customers include retail loans,
savings deposits, credit card business and remittance.
The treasury operation segment includes held-for-trading financial instruments, bond investment,
repurchases and resale and inter-bank lending.
Other businesses refer to those that have not formed a separate segment to be presented or that are
unable to be allocated based on the reasonable standards.
The Management of the Group monitors operating results of all business segments, so as to decide
resources allocated to them and assess their performance.
The preparation of segment information adopts the same accounting policy as the preparation of
financial statements by the Group.
Consolidated:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 120 of 186
2019
Corporate
banking
Personal
banking
Treasury
operation Others Total
I. Operating income 4,035,791 1,918,279 464,489 53,971 6,472,530
Net interest income -
external 3,099,996 -184,875 1,377,691 3 4,292,815
Net interest income -
internal 518,056 1,782,905 -2,300,961
Net interest income 3,618,052 1,598,030 -923,270 3 4,292,815
Net fee and
commission income 411,469 320,065 156,550 888,084
Investment income 1,190,300 36,891 1,227,191
Gains or losses on
changes in fair value 35,886 35,886
Exchange gains or
losses 6,270 184 5,023 11,477
Other net operating
income/expenses 10,029 10,029
Gain on disposal of
assets 97 97
Other gains 6,951 6,951
II. Operating expenses 2,939,477 1,276,688 174,158 2,169 4,392,492
Operating expenses 1,061,034 1,087,253 155,992 2,169 2,306,448
Impairment losses on
assets 1,878,443 189,435 18,166 2,086,044
III. Operating profit 1,096,314 641,591 290,331 51,802 2,080,038
Net non-operating
income/expenses -3,356 -3,356
IV. Total profit 1,096,314 641,591 290,331 48,446 2,076,682
Income tax -- -- -- -- -342,220
V. Net profit -- -- -- -- 2,418,902
31 December 2019
Segment assets 142,645,702 55,435,072 197,544,257 10,114,534 405,739,565
Segment liabilities 162,152,824 91,050,086 127,330,594 3,358,219 383,891,723
2018
Corporate
banking
Personal
banking
Treasury
operation Others Total
I. Operating income 4,128,530 1,523,551 413,509 10,416 6,076,006
Net interest income -
external 3,865,539 159,542 -23,576 4,001,505
Net interest income -
internal -71,403 1,169,831 -1,098,428
Net interest income 3,794,136 1,329,373 -1,122,004 4,001,505
Net fee and
commission income 329,025 193,187 91,532 613,744
Investment income 1,370,103 1,370,103
Gains or losses on
changes in fair value 60,020 60,020
Exchange gains or
losses 5,369 263 13,858 19,490
Other net operating
income/expenses 7,601 7,601
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 121 of 186
Corporate
banking
Personal
banking
Treasury
operation Others Total
Gain on disposal of
assets -3,206 -3,206
Other gains 728 6,021 6,749
II. Operating expenses 2,776,216 1,412,665 158,638 12,603 4,360,122
Operating expenses 1,064,812 901,586 155,543 12,603 2,134,544
Impairment losses on
assets 1,711,404 511,079 3,095 2,225,578
III. Operating profit 1,352,314 110,886 254,871
-2,187 1,715,884
Net non-operating
income/expenses -123 -123
IV. Total profit 1,352,314 110,886 254,871
-2,310 1,715,761
Income tax -- -- -- -- -166,617
V. Net profit -- -- -- -- 1,882,378
31 December 2018
Segment assets 116,804,922 56,231,558 140,964,410 5,295,019 319,295,909
Segment liabilities 133,512,967 70,558,684 94,375,634 806,345 299,253,630
The Bank:
2019
Corporate
banking
Personal
banking
Treasury
operation Others Total
I. Operating income 4,024,905 1,807,543 447,214 55,148 6,334,810
Net interest income -
external 3,089,029 -295,611 1,360,416 4,153,834
Net interest income -
internal 518,056 1,782,905 -2,300,961
Net interest income 3,607,085 1,487,294 -940,545 4,153,834
Net fee and
commission income 411,550 320,065 156,550 888,165
Investment income 1,190,300 36,891 1,227,191
Gains or losses on
changes in fair value 35,886 35,886
Exchange gains or
losses 6,270 184 5,023 11,477
Other net operating
income/expenses 11,527 11,527
Gain on disposal of
assets 95 95
Other gains 6,635 6,635
II. Operating expenses 2,938,746 1,196,514 174,158 2,169 4,311,587
Operating expenses 1,061,034 1,056,204 155,992 2,169 2,275,399
Impairment losses on
assets 1,877,712 140,310 18,166 2,036,188
III. Operating profit 1,086,159 611,029 273,056 52,979 2,023,223
Net non-operating -3,319 -3,319
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 122 of 186
Corporate
banking
Personal
banking
Treasury
operation Others Total
income/expenses
IV. Total profit 1,086,159 611,029 273,056 49,660 2,019,904
Income tax -- -- -- -- -342,999
V. Net profit -- -- -- -- 2,362,903
Segment assets 142,400,778 54,283,709 198,036,309 10,321,173 405,041,969
Segment liabilities 161,785,337 90,463,031 127,751,310 3,308,109 383,307,787
2018
Corporate
banking
Personal
banking
Treasury
operation Others Total
I. Operating income 4,113,439 1,510,909 394,202
11,896 6,030,446
Net interest income -
external 3,850,441 147,628 -43,818 3,954,251
Net interest income -
internal -71,403 1,169,831 -1,098,428
Net interest income 3,779,038 1,317,459 -1,142,246
3,954,251
Net fee and
commission income 329,032 193,187 91,567 613,786
Investment income 1,371,003 1,371,003
Gains or losses on
changes in fair value 60,020 60,020
Exchange gains or
losses 5,369 263 13,858 19,490
Other net operating
income/expenses 9,099 9,099
Gain on disposal of
assets -3,206 -3,206
Other gains 6,003 6,003
II. Operating expenses 2,725,392 1,395,064 158,638 14,103 4,293,197
Operating expenses 1,036,659 901,586 155,543 14,103 2,107,891
Impairment losses on
assets 1,688,733 493,478 3,095 2,185,306
III. Operating profit 1,388,047 115,845 235,564
-2,207 1,737,249
Net non-operating
income/expenses 128 128
IV. Total profit 1,388,047 115,845 235,564
-2,079 1,737,377
Income tax -- -- -- -- -165,150
V. Net profit -- -- -- -- 1,902,527
Segment assets 116,571,229 55,879,472 140,398,987 5,621,695 318,471,383
Segment liabilities 133,133,489 69,952,311 94,325,540 1,090,425 298,501,765
XII. Main Off-balance-sheet Businesses
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 123 of 186
1.Off-balance-sheet businesses refer to all businesses that are not reflected on the balance sheet.
They consist of two parts: Off-balance-sheet businesses with contingent risk, i.e. provision of
guarantees for customers' debt service ability and bearing the risk of customer default; and
risk-free off-balance-sheet activities, mainly including settlement and agency services.
2.Contingent risk
(1) Bank’s acceptance bills are commercial drafts for which the applicant applies to the Bank and
which the Bank examines and agrees to accept.
(2) L/C refers to a written guarantee document issued upon request and instruction by the
applicant by the Bank for the beneficiary, whereby a certain amount will be paid based on the
required document within a certain period at the designated place.
(3) Bank guarantee refers to a credit business in which the Bank, upon the request of the applicant
or client, makes a commitment to the beneficiary by issuing a letter of guarantee that the Bank will
fulfill obligation or assume responsibility in accordance with the letter of guarantee if the
applicant fails to perform the obligation or commitment set forth in the contract.
(4) Balances of the Bank's main off-balance-sheet items with contingent risk are as follows
Item 31 December 2019 31 December 2018
Bank acceptance bills 20,488,411 16,233,495
Letters of guarantee issued 1,246,199 1,562,158
Letters of credit issued 5,319,239 2,836,565
Unused limit of credit cards 5,111,886 7,711,760
Unused online loan limit 1,858,695 19,013
Subtotal 34,024,430 28,362,991
Net exposure of main
off-balance-sheet items with
contingent risk
17,786,863 15,238,782
Note: The Group has commitment to loan limits at any time point, including unused credit limits
provided to credit card customers and loan limits contracted.
XIII. Financial Risk Management
In accordance with disclosure requirements set forth in the Accounting Standard for Business
Enterprises No. 37 - Presentation of Financial Instruments, relevant information on credit risk,
market risk, liquidity risk and operational risk in 2019 and 2018 is disclosed by the Group.
Financial risk management mainly discloses risk taken by the Group as well as management and
monitoring of risks, in particular main risks in the use of financial instruments.
Credit risk means the risk that the Bank will sustain a loss if the Bank's customer or counterparty
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 124 of 186
fails to perform contractual obligations.
Market risk means the exposure affected by observable market economic factors, such as
fluctuations in interest rate, exchange rate, stocks and commodities.
Liquidity risk means the risk that the Bank may become unable to pay debts when due in normal
or stagnant market environment.
Operational risk means the financial or reputational loss arising from failure to comply with
systems and procedures or frauds.
The Group has developed a series of policies and procedures to identify the foregoing risks and set
appropriate risk limits and control mechanisms. The Group sets up the Risk Management
Committee and designates a specialized department-the Risk Management Department to take
charge of risk management. Departments responsible for risk management, with their duties well
defined, are relatively independent of business departments taking risks and provides independent
risk reports to the Board of Directors and the Senior Management. The Risk Management
Committee has developed risk management policies and procedures applicable to the Group and
set appropriate risk limits and management mechanisms. In addition to regular meetings, the Risk
Management Committee also holds meetings irregularly according to market conditions to adjust
and modify relevant risk policies and procedures.
i. Credit risk
Credit risk means the possibility of loss the Bank sustains due to default or deteriorated credit
quality of the customer or counterparty. The credit risk the Bank takes is mainly related to loans,
guarantees, bonds and interbank lending.
At present, the Bank adopts a proactive and prudent policy for credit risk and the Board of
Directors assumes the ultimate responsibility for monitoring credit risk management, so as to
ensure that the Bank effectively identifies, assesses, measures, monitors and controls the credit
risk in all areas of business.
As for management of credit assets, the Bank has developed a full set of credit approval policies
and procedures, including credit investigation and declaration, credit examination and approval,
loan issuance, post-disbursement management and NPL management, which are implemented
bank-wide. Meanwhile, in accordance with the Guidelines on Risk-Based Loan Classification
issued by PBOC and the Implementation Opinion on Five-tier Classification of Loan Quality of
Urban Commercial Banks issued by CBRC, the Bank developed the Implementation Rules and
Standards of Hankou Bank for Five-tier Classification of Loan Quality. Based on the five-tier
classification system of CBRC, the Bank classifies loans into five tiers and twelve sub-tiers
according to the borrowers' ability to pay, repayment records, willingness to pay, security, legal
responsibility for loan repayment as well as financial and non-financial indicators of borrowers.
Classifications are adjusted in due time on the basis of real-time classification, regular review and
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 125 of 186
re-classification at appropriate times to improve refined management of credit risk.
1. Maximum credit risk exposures
Below are the maximum credit risk exposures of the Group as at 31 December 2019 and 31
December 2018, regardless of collaterals and other credit enhancement measurements. For balance
sheet items, the risk exposure of financial assets is the carrying amount on the balance sheet date.
Consolidated:
Item 31 December 2019 31 December 2018
Credit risk exposure relating to
on-balance-sheet items:
Balances with central banks 30,264,363 26,155,708
Deposits with banks and other financial
institutions 2,279,318 1,072,991
Lendings to banks and other financial
institutions 5,400,000 500,000
Financial assets designated at fair value
through profit or loss 1,822,570 13,042,298
Derivative financial assets
Financial assets under reverse repurchase
agreements 10,627,229 4,010,200
Loans and advances 166,732,570 132,597,003
- Corporate loans and advances 123,107,907 98,094,706
- Personal loans 43,624,663 34,502,297
Available-for-sale financial assets (excluding
equity investment) 69,501,508 57,145,516
Held-to-maturity investments 79,155,034 41,149,070
Receivables investment 26,625,119 34,873,459
Other financial assets 6,851,536 3,467,648
Subtotal 399,259,247 314,013,893
Risk exposure of off-balance-sheet credit
commitment:
Letters of credit issued 5,319,239 2,836,565
Letters of guarantee issued 1,246,199 1,562,158
Bank acceptance bills 20,488,411 16,233,495
Unused limit of credit cards 5,111,886 7,711,760
Unused online loan limit 1,858,695 19,013
Subtotal 34,024,430 28,362,991
Total 433,283,677 342,376,884
The Bank:
Item 31 December
2019
31 December
2018
Credit risk exposure relating to on-balance-sheet items:
Balances with central banks 30,178,904 26,063,377
Deposits with banks and other financial institutions 2,264,500 929,158
Lendings to banks and other financial institutions 5,400,000 500,000
Financial assets designated at fair value through profit or
loss 1,822,570 13,042,298
Derivative financial assets
Financial assets under reverse repurchase agreements 10,627,229 4,010,200
Loans and advances 166,105,969 132,013,585
- Corporate loans and advances 122,884,707 97,861,797
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 126 of 186
Item 31 December
2019
31 December
2018
- Personal loans 43,221,262 34,151,788
Available-for-sale financial assets (excluding equity
investment) 69,501,508
57,145,516
Held-to-maturity investments 79,155,034 41,149,070
Receivables investment 26,621,369 34,843,459
Other financial assets 6,843,166 3,463,683
Subtotal 398,520,249 313,160,346
Risk exposure of off-balance-sheet credit commitment:
Letters of credit issued 5,319,239 2,836,565
Letters of guarantee issued 1,246,199 1,562,158
Bank acceptance bills 20,488,411 16,233,495
Unused limit of credit cards 5,111,886 7,711,760
Unused online loan limit 1,858,695 19,013
Subtotal 34,024,430 28,362,991
Total 432,544,679 341,523,337
Notes: (1) Financial assets measured at fair value through profit or loss does not include
held-for-trading equity instrument investments;
(2) Available-for-sale financial assets exclude the carrying amount of equity investment.
2. Overdue and impairment of financial assets
Impairment and overdue of loans and advances, deposits with banks and other financial
institutions, lendings to banks and other financial institutions, financial assets under reverse
repurchase agreements, available-for-sale financial assets, held-to-maturity investments and
receivables investment are presented as follows:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 127 of 186
Consolidated:
Item
Loans and advances Deposits
with banks
and other
financial
institutions
Lendings to
banks and
other
financial
institutions
Financial
assets under
reverse
repurchase
agreements
Available-f
or-sale
financial
assets
Held-to-mat
urity
investments
Receivables
investment
Corporate
loans
Personal
loans Total
31 December 2019
Neither overdue nor
impaired 125,235,065 44,076,475 169,311,540 2,279,318 5,400,000 10,627,229 69,517,090 79,155,034 26,817,499
Overdue but not impaired 135,173 138,479 273,652
Impaired 2,731,760 294,225 3,025,985 846,077
Total 128,101,998 44,509,179 172,611,177 2,279,318 5,400,000 10,627,229 69,517,090 79,155,034 27,663,576
Less: Allowance for
impairment losses 4,994,091 884,516 5,878,607 1,038,457
Net value 123,107,907 43,624,663 166,732,570 2,279,318 5,400,000 10,627,229 69,517,090 79,155,034 26,625,119
31 December 2018
Neither overdue nor
impaired 99,333,396 34,743,167 134,076,563 1,072,991 500,000 4,010,200 57,161,098 41,149,070 35,251,535
Overdue but not impaired 67,644 142,405 210,049
Impaired 2,450,246 451,162 2,901,408 669,077
Total 101,851,286 35,336,734 137,188,020 1,072,991 500,000 4,010,200 57,161,098 41,149,070 35,920,612
Less: Allowance for
impairment losses 3,756,580 834,437 4,591,017 1,047,153
Net value 98,094,706 34,502,297 132,597,003 1,072,991 500,000 4,010,200 57,161,098 41,149,070 34,873,459
The Bank:
Item
Loans and advances Deposits
with banks
and other
financial
institutions
Lendings to
banks and
other
financial
institutions
Financial
assets under
reverse
repurchase
agreements
Available-f
or-sale
financial
assets
Held-to-mat
urity
investments
Receivables
investment
Corporate
loans
Personal
loans Total
31 December 2019
Neither overdue nor impaired 125,015,417 43,664,587 168,680,004
2,264,500 5,400,000 10,627,229 69,517,090 79,155,034 26,771,327
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 128 of 186
Overdue but not impaired 126,823 134,030 260,853
Impaired 2,714,897 287,595 3,002,492 846,077
Total 127,857,137 44,086,212 171,943,349 2,264,500 5,400,000 10,627,229 69,517,090 79,155,034 27,617,404
Less: Allowance for
impairment losses 4,972,430 864,950 5,837,380 996,035
Net value 122,884,707 43,221,262 166,105,969 2,264,500 5,400,000 10,627,229 69,517,090 79,155,034 26,621,369
31 December 2018
Neither overdue nor
impaired 99,110,457 34,391,015 133,501,472 929,158 500,000 4,010,200 57,161,098 41,149,070 35,221,535
Overdue but not impaired 57,264 137,989 195,253
Impaired 2,426,332 440,697 2,867,029 669,077
Total 101,594,053 34,969,701 136,563,754 929,158 500,000 4,010,200 57,161,098 41,149,070 35,890,612
Less: Allowance for
impairment losses 3,732,256 817,913 4,550,169 1,047,153
Net value 97,861,797 34,151,788 132,013,585 929,158 500,000 4,010,200 57,161,098 41,149,070 34,843,459
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 129 of 186
(1) The following table presents the five-tier classification of loans and advances that were neither
overdue nor impaired as at 31 December 2019 and 31 December 2018.
Consolidated:
Item 31 December 2019 31 December 2018
Corporate loans 125,235,065 99,333,396
Pass 113,118,822 88,880,693
Special mention 12,116,243 10,452,703
Personal loans 44,076,475 34,743,167
Pass 44,007,412 34,689,289
Special mention 69,063 53,878
Total 169,311,540 134,076,563
The Bank:
Item 31 December 2019 31 December 2018
Corporate loans 125,015,417 99,110,457
Pass 112,910,800 88,667,324
Special mention 12,104,617 10,443,133
Personal loans 43,664,587 34,391,015
Pass 43,610,495 34,344,520
Special mention 54,092 46,495
Total 168,680,004 133,501,472
In addition to the foregoing loans and advances, deposits with banks and other financial
institutions, lendings to banks and other financial institutions, financial assets under reverse
repurchase agreements, available-for-sale financial assets, held-to-maturity investments and
receivables investment that were neither overdue nor impaired were classified as pass as at 31
December 2019 (31 December 2018: Pass).
(2) Overdue but not impaired
The Group holds that overdue loans under this section can be repaid by borrowers' operating
income, guarantor's compensation and disposal of collaterals or sealed-up property, and therefore
are not identified as impaired loans. Financial assets overdue but not impaired are disclosed as
follows by the number of days overdue:
Consolidated:
Item Loans and advances
Corporate loans Personal loans Total
31 December 2019
Overdue for less than 30 days 50,346 95,696 146,042
Overdue for 30 to 60 days 70,417 32,307 102,724
Overdue for 60 to 90 days 14,410 10,476 24,886
Overdue for over 90 days
Total 135,173 138,479 273,652
31 December 2018
Overdue for less than 30 days 44,363 86,736 131,099
Overdue for 30 to 60 days 9,000 25,506 34,506
Overdue for 60 to 90 days 14,281 30,163 44,444
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 130 of 186
Overdue for over 90 days
Total 67,644 142,405 210,049
The Bank:
Item Loans and advances
Corporate loans Personal loans Total
31 December 2019
Overdue for less
than 30 days 42,446 95,235 137,681
Overdue for 30 to 60
days 69,967 28,789 98,756
Overdue for 60 to 90
days 14,410 10,006 24,416
Overdue for over 90
days
Total 126,823 134,030 260,853
31 December 2018
Overdue for less
than 30 days 42,563 86,106 128,669
Overdue for 30 to 60
days 9,000 25,324 34,324
Overdue for 60 to 90
days 5,701 26,559 32,260
Overdue for over 90
days
Total 57,264 137,989 195,253
As at 31 December 2019, the deposits with banks and other financial institutions, lendings to
banks and other financial institutions, financial assets under reverse repurchase agreements,
available-for-sale financial assets, held-to-maturity investments and receivables investment were
not overdue and not impaired.
(3) Impaired financial assets
(i) Impaired loans and advances are classified as follows by the mode of guarantee:
Consolidated:
Item 31 December 2019 31 December 2018
Unsecured loans 97,867 105,918
Guaranteed loans 1,429,254 1,366,758
Collateralized loans 1,498,864 1,428,732
- Loans secured by
mortgages 1,247,342 1,144,020
- Pledged loans 251,522 284,712
Total 3,025,985 2,901,408
The Bank:
Item 31 December 2019 31 December 2018
Unsecured loans 97,867 105,128
Guaranteed loans 1,422,383 1,357,868
Collateralized loans 1,482,242 1,404,033
- Loans secured by
mortgages 1,230,720
1,119,321
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 131 of 186
- Pledged loans 251,522 284,712
Total 3,002,492 2,867,029
As at 31 December 2019, fair value of collateral for impaired corporate loans of the Group was
RMB2,829,829,000 (2018: RMB3,668,763,000).
Personal loans issued by the Group are concentrated on home mortgages and housing
mortgage-backed loans. On 31 December 2019, these loans accounted for about 65.72% of total
personal loans (31 December 2018: 73.14%) The Group strictly followed requirements of PBOC
and CBRC on housing loans. The mortgage rate for home mortgages is capped at 70% to ensure
sufficient collateral value and effective control of credit risk. In the meantime, the Group created
the five-tier classification and rating system for personal loans, with regard to the collateral value,
days overdue, borrowers' ability and willingness to pay and other risk identification factors,
thereby enhancing credit risk management through loan classification.
As at 31 December 2019, the Group set aside RMB194,521,000 (31 December 2018:
RMB285,430,000) as allowance for impairment losses on impaired personal loans (mainly
problem loans left over from history). As at 31 December 2019, fair value of collateral for
impaired personal loans of the Group was RMB553,845,000 (2018: RMB1,436,463,000).
(ii) Other impaired financial assets
The Group has set aside allowance for impairment losses on receivables investment. As at 31
December 2019, RMB609,796,000 (2018: RMB371,342,000) of allowance had been set aside for
impairment on receivables investment.
(4) Renegotiated loans
Renegotiated loans refer to loans for which the loan agreement clauses are adjusted by the Bank
due to deteriorated financial position or inability of the borrower to repay.
As at 31 December 2019, the balance of renegotiated loans of the Group was RMB16,295,067,000
(31 December 2018: RMB15,211,157,000).
3. Investment bonds
The table below presents the ratings assigned by external rating agencies to bonds held by the
Group as at 31 December 2019 and 31 December 2018.
Consolidated:
31 December 2019
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 132 of 186
Item Financial
assets
designated
at fair value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivable
s financial
assets
Held-to-ma
turity
investment
s
Total
RMB medium- and long-term bonds (due in 1 year or above):
AAA 1,715,791 20,747,874 22,463,665
A- to AA+ 1,523,454 809,905 2,333,359
Unrated
- Government bonds 351,214 8,026,836 29,115 47,406,079 55,813,244
- Central bank bills
- Financial bonds of policy
banks
4,170,255 3,173,090 7,343,345
- Interbank CDs
- Local Government bonds 3,415,180 3,415,180
- Bond issued by
government-backed
agencies
100,000 100,000
- Corporate bonds 599,588 1,054,920 1,654,508
Asset-backed securities 725,064 725,064
Fund investment 42,106,766 42,106,766
Asset management plans
and fund trust plans
2,358,474 25,862,487 28,220,961
Wealth management
investment
Subordinated debts
Equity investment 15,582 15,582
Subtotal 351,214 60,516,746 26,616,666 76,707,048 164,191,674
RMB short-term bonds (due within 1 year):
AAA 203,950 203,950
A- to AA+ 10,271 10,271
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 133 of 186
Item Financial
assets
designated
at fair value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivable
s financial
assets
Held-to-ma
turity
investment
s
Total
Unrated
- Government bonds 1,041,186 7,615,228 999,683 9,656,097
- Central bank bills
- Financial bonds of policy
banks
20,005 500,321 520,326
- Interbank CDs 589,155 1,244,223 1,833,378
- Local Government bonds
- Bond issued by
government-backed
agencies
- Corporate bonds 399,894 91,690 204,080 695,664
Asset-backed securities
Fund investment
Asset management plans
and fund trust plans
1,046,910 1,046,910
Wealth management
investment
Subordinated debts
Equity investment
Subtotal 1,471,356 9,000,344 1,046,910 2,447,986 13,966,596
Foreign currency bonds:
AAA
Unrated
- Financial bonds of policy
banks
Subtotal
Total 1,822,570 69,517,090 27,663,576 79,155,034 178,158,270
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 134 of 186
The Bank:
31 December 2019
Item
Financial
assets
designated
at fair
value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivable
s financial
assets
Held-to-m
aturity
investment
s
Total
RMB medium- and long-term bonds (due in 1 year or above):
AAA 1,715,791 20,747,874 22,463,665
A- to AA+ 1,523,454 809,905 2,333,359
Unrated
- Government bonds 351,214 8,026,836 29,115 47,406,079 55,813,244
- Central bank bills
- Financial bonds of
policy banks
4,170,255 3,173,090 7,343,345
- Interbank CDs
- Local Government
bonds
3,415,180 3,415,180
- Bond issued by
government-backed
agencies
100,000 100,000
- Corporate bonds 599,588 1,054,920 1,654,508
Asset-backed securities 678,892 678,892
Fund investment 42,106,766 42,106,766
Asset management plans
and fund trust plans
2,358,474 25,862,487 28,220,961
Wealth management
investment
Subordinated debts
Equity investment 15,582 15,582
Subtotal 351,214 60,516,746 26,570,494 76,707,048 164,145,502
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 135 of 186
Item
Financial
assets
designated
at fair
value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivable
s financial
assets
Held-to-m
aturity
investment
s
Total
RMB short-term bonds (due within 1 year):
AAA 203,950 203,950
A- to AA+ 10,271 10,271
Unrated
- Government bonds 1,041,186 7,615,228 999,683 9,656,097
- Central bank bills
- Financial bonds of
policy banks
20,005 500,321 520,326
- Interbank CDs 589,155 1,244,223 1,833,378
- Local Government
bonds
- Bond issued by
government-backed
agencies
- Corporate bonds 399,894 91,690 204,080 695,664
Asset-backed securities
Fund investment
Asset management plans
and fund trust plans
1,046,910 1,046,910
Wealth management
investment
Subordinated debts
Equity investment
Subtotal 1,471,356 9,000,344 1,046,910 2,447,986 13,966,596
Foreign currency bonds:
AAA
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 136 of 186
Item
Financial
assets
designated
at fair
value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivable
s financial
assets
Held-to-m
aturity
investment
s
Total
Unrated
- Financial bonds of
policy banks
Subtotal
Total 1,822,570 69,517,090 27,617,404 79,155,034 178,112,098
Consolidated:
31 December 2018
Item Financial
assets
designated
at fair value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
RMB medium- and long-term bonds (due in 1 year or above):
AAA 3,299,484 13,696,742 16,996,226
A- to AA+ 1,834,418 460,000 2,294,418
Unrated
- Government bonds 11,355,233 23,762 17,512,902 28,891,897
- Central bank bills
- Financial bonds of
policy banks
6,976,217 3,173,403 10,149,620
- Interbank CDs
- Local Government
bonds
3,415,180 3,415,180
- Bond issued by
government-backed
agencies
100,000 100,000
- Corporate bonds 587,622 654,969 1,242,591
Asset-backed 200,000 200,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 137 of 186
Item Financial
assets
designated
at fair value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
securities
Fund investment 30,047,802 30,047,802
Asset management
plans and fund trust
plans
595,941 26,095,506 26,691,447
Wealth management
investment
Subordinated debts
Equity investment 15,582 15,582
Subtotal 54,712,299 26,319,268 39,013,196 120,044,763
RMB short-term bonds (due within 1 year):
AAA 90,236 751,050 841,286
A- to AA+ 220,963 40,000 260,963
Unrated
- Government bonds 848,109 4,326 699,589 1,552,024
- Central bank bills
- Financial bonds of
policy banks
130,459 39,745 170,204
- Interbank CDs
- Local Government
bonds
405,150 405,150
- Bond issued by
government-backed
agencies
- Corporate bonds 231,536 497,117 200,340 928,993
Asset-backed
securities
Fund investment
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 138 of 186
Item Financial
assets
designated
at fair value
through
profit or
loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
Asset management
plans and fund trust
plans
661,915 9,567,018 10,228,933
Wealth management
investment
12,810,762 - 30,000 12,840,762
Subordinated debts
Equity investment
Subtotal 13,042,298 2,448,799 9,601,344 2,135,874 27,228,315
Foreign currency bonds:
AAA
Unrated
- Financial bonds of
policy banks
Subtotal
Total 13,042,298 57,161,098 35,920,612 41,149,070 147,273,078
The Bank:
31 December 2018
Item
Financial
assets
designated
at fair value
through
profit or loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
RMB medium- and long-term bonds (due in 1 year or above):
AAA 3,299,484 13,696,742 16,996,226
A- to AA+ 1,834,418 460,000 2,294,418
Unrated
- Government bonds 11,355,233 23,762 17,512,902 28,891,897
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 139 of 186
Item
Financial
assets
designated
at fair value
through
profit or loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
- Central bank bills
- Financial bonds of
policy banks
6,976,217 3,173,403 10,149,620
- Interbank CDs
- Local Government
bonds
3,415,180 3,415,180
- Bond issued by
government-backed
agencies
100,000 100,000
- Corporate bonds 587,622 654,969 1,242,591
Asset-backed
securities
200,000 200,000
Fund investment 30,047,802 30,047,802
Asset management
plans and fund trust
plans
595,941 26,095,506 26,691,447
Wealth management
investment
Subordinated debts
Equity investment 15,582 15,582
Subtotal 54,712,299 26,319,268 39,013,196 120,044,763
RMB short-term bonds (due within 1 year):
AAA 90,236 751,050 841,286
A- to AA+ 220,963 40,000 260,963
Unrated
- Government bonds 848,109 4,326 699,589 1,552,024
- Central bank bills
- Financial bonds of
policy banks
130,459 39,745 170,204
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 140 of 186
Item
Financial
assets
designated
at fair value
through
profit or loss
Available-f
or-sale
financial
assets
Receivables
financial
assets
Held-to-mat
urity
investments
Total
- Interbank CDs
- Local Government
bonds
405,150 405,150
- Bond issued by
government-backed
agencies
- Corporate bonds 231,536 497,117 200,340 928,993
Asset-backed
securities
Fund investment
Asset management
plans and fund trust
plans
661,915 9,567,018 10,228,933
Wealth management
investment
12,810,762 12,810,762
Subordinated debts
Equity investment
Subtotal 13,042,298 2,448,799 9,571,344 2,135,874 27,198,315
Foreign currency bonds:
AAA
Unrated
- Financial bonds of
policy banks
Subtotal
Total 13,042,298 57,161,098 35,890,612 41,149,070 147,243,078
3. Credit risk concentration of financial assets
Geographical concentration
Customer loans, financial guarantees and related credit commitments of the Bank are concentrated
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 141 of 186
in China. As at 31 December 2019 and 31 December 2018, financial assets held by the Bank were
concentrated in Chinese mainland.
Industry concentration
As at 31 December 2019 and 31 December 2018, financial assets of the Bank were mainly
composed of loans (including loans and advances) and securities investment (including financial
assets designated at fair value through profit or loss, available-for-sale financial assets, receivables
financial assets and held-to-maturity investment). For industry concentration of these main
financial assets, please refer to Note VIII to the financial statements.
ii. Market risk
Market risk refers to the risk of a loss in a bank's on-balance-sheet or off-balance-sheet business
due to adverse changes in the market price. It mainly includes interest rate risk, exchange rate risk
and stock and commodity price risk.
Currently, the Group has further improved the market risk management system and preliminarily
established three lines of defense: front-office, middle-office and back-office. The Financial
Market Department, as the first line of defense for market risk management, assumes the primary
responsibility for the Group's trading-book market risk. Its responsibility includes managing
domestic and foreign currency investment portfolios of the Group, carrying out proprietary and
agency trading, executing market risk management policies and procedures and conducting
identification, measurement, evaluation and control of daily risks. The Planning and Financial
Department is responsible for managing the banking-book market risk, setting the Group's
maturity structure of assets and liabilities and providing suggestions on interest rate adjustment.
The Risk Management Department, under authorization by the Risk Management Committee,
develops the market risk policy and manages the overall exposure to market risk, sets risk limits,
regularly assesses the Group's market risk profile and adjusts the investment strategy for the next
stage according to assessment results.
The Group assesses and measures the position and level of trading-book market risk through
revaluation, sensitivity analysis, bond asset risk classification and stress testing using such
indicators as yield to maturity, duration, convexity and unrealized profit or loss; and it also
assesses and measures the position and level of banking-book market risk through gap analysis,
bond asset risk classification and stress testing. The Group establishes a market risk monitoring
and reporting system for regular and irregular reporting to the Senior Management.
The Group has a treasury operations management system for treasury operations mainly exposed
to market risk and makes continuous improvements in its analysis and real-time monitoring
function.
(1) Currency risk
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 142 of 186
The Group's majority businesses are denominated in RMB, supplemented by a few USD, HKD
and other foreign currencies. Exchange rate changes will affect the financial position and cash
flows of the Group. Given the Group's small volume of foreign currency business, the exchange
rate risk of foreign currencies has an insignificant impact on the Group. The Group controls
currency risk under the principle that assets and liabilities are matched in respect of each currency
as much as possible and currency exposures are monitored on a routine basis.
The table below summarizes foreign currency exposures of the Group's financial assets and
financial liabilities, with the carrying amounts of foreign currency assets, liabilities and
off-balance-sheet credit commitments converted to RMB equivalents.
Consolidated:
31 December 2019
Item RMB RMB
equivalent
of USD
RMB
equivalent
of HKD
RMB
equivalent
of other
currencies
Total
Financial assets
Cash and balances
with central banks
31,134,213 39,977 1,521 2,190 31,177,901
Deposits with banks
and other financial
institutions
1,793,038 422,081 10,169 54,030 2,279,318
Lendings to banks and
other financial
institutions
5,400,000 5,400,000
Financial assets
designated at fair
value through profit or
loss
1,822,570 1,822,570
Financial assets under
reverse repurchase
agreements
10,627,229 10,627,229
Loans and advances 166,076,632 655,938 166,732,570
Available-for-sale
financial assets
69,517,090 69,517,090
Held-to-maturity
investments
79,155,034 79,155,034
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 143 of 186
Item RMB RMB
equivalent
of USD
RMB
equivalent
of HKD
RMB
equivalent
of other
currencies
Total
Receivables
investment
26,625,119 26,625,119
Other financial assets 6,836,719 14,817 6,851,536
Total financial assets 398,987,644 1,132,813 11,690 56,220 400,188,367
Financial liabilities
Borrowings from
central banks
63,000 63,000
Deposits from banks
and other financial
institutions
9,173,312 28,916 8,248 13 9,210,489
Borrowings from
banks and other
financial institutions
1,600,000 244,167 6,409 1,850,576
Financial liabilities
designated at fair
value through profit or
loss
Financial assets under
repurchase
agreements
34,414,642 34,414,642
Customer deposits 249,666,289 642,560 4,657 27,985 250,341,491
Bonds payable 80,774,169 80,774,169
Other financial
liabilities
5,835,495 15,371 13 23 5,850,902
Total financial
liabilities
381,526,907 931,014 12,918 34,430 382,505,269
Net balance sheet
position
17,460,737 201,799 -1,228 21,790 17,683,098
Off-balance-sheet
credit commitments
31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 144 of 186
Item RMB
RMB
equivalent
of USD
RMB
equivalent
of HKD
RMB
equivalent
of other
currencies
Total
Financial assets
Cash and balances
with central banks
26,873,155 37,311 1,073 2,004 26,913,543
Deposits with banks
and other financial
institutions
536,798 493,571 11,058 31,564 1,072,991
Lendings to banks and
other financial
institutions
500,000 500,000
Financial assets
designated at fair
value through profit or
loss
13,042,298 13,042,298
Financial assets under
reverse repurchase
agreements
4,010,200 4,010,200
Loans and advances 132,102,622 494,381 132,597,003
Available-for-sale
financial assets
57,161,098 57,161,098
Held-to-maturity
investments
41,149,070 41,149,070
Receivables
investment
34,873,459 34,873,459
Other financial assets 3,462,759 4,889 3,467,648
Total financial assets 313,711,459 1,030,152 12,131 33,568 314,787,310
Financial liabilities
Borrowings from
central banks
1,700,000 1,700,000
Deposits from banks
and other financial
institutions
4,570,524 221,195 8,072 13 4,799,804
Borrowings from
banks and other
financial institutions
1,500,000 4,290 1,504,290
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 145 of 186
Item RMB
RMB
equivalent
of USD
RMB
equivalent
of HKD
RMB
equivalent
of other
currencies
Total
Financial liabilities
designated at fair
value through profit or
loss
13,190,558 13,190,558
Derivative financial
liabilities
Financial assets under
repurchase
agreements
17,496,238 17,496,238
Customer deposits 188,165,475 629,655 4,340 29,696 188,829,166
Bonds payable 67,408,116 67,408,116
Other financial
liabilities
3,268,751 2,117 16 13,321 3,284,205
Total financial
liabilities
297,299,662 857,257 12,428 43,030 298,212,377
Net balance sheet
position
16,411,797 172,895 -297 -9,462 16,574,933
Off-balance-sheet
credit commitments
The Bank:
31 December 2019
Item RMB RMB
equivalent
of USD
RMB
equivalen
t of HKD
RMB
equivalen
t of other
currencie
s
Total
Financial assets
Cash and balances with
central banks
31,041,795 39,977 1,521 2,190 31,085,483
Deposits with banks and
other financial institutions
1,778,220 422,081 10,169 54,030 2,264,500
Lendings to banks and other
financial institutions
5,400,000 5,400,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 146 of 186
Item RMB RMB
equivalent
of USD
RMB
equivalen
t of HKD
RMB
equivalen
t of other
currencie
s
Total
Financial assets designated at
fair value through profit or
loss
1,822,570 1,822,570
Financial assets under reverse
repurchase agreements
10,627,229 10,627,229
Loans and advances 165,450,031 655,938 166,105,969
Available-for-sale financial
assets
69,517,090 69,517,090
Held-to-maturity investments 79,155,034 79,155,034
Receivables investment 26,621,369 26,621,369
Other financial assets 6,828,349 14,817 6,843,166
Total financial assets 398,241,687 1,132,813 11,690 56,220 399,442,410
Financial liabilities
Borrowings from central
banks
Deposits from banks and
other financial institutions 9,675,110 28,916 8,248 13 9,712,287
Borrowings from banks and
other financial institutions 1,600,000 244,167 6,409 1,850,576
Financial liabilities
designated at fair value
through profit or loss
Financial assets under
repurchase agreements 34,414,642 34,414,642
Customer deposits 248,628,646 642,560 4,657 27,985 249,303,848
Bonds payable 80,774,169 80,774,169
Other financial liabilities 5,867,564 15,371 13 23 5,882,971
Total financial liabilities 380,960,131 931,014 12,918 34,430 381,938,493
Net balance sheet position 17,281,556 201,799 -1,228 21,790 17,503,917
Off-balance-sheet credit
commitments
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 147 of 186
31 December 2018
Item RMB RMB
equivalent
of USD
RMB
equivalen
t of HKD
RMB
equivalen
t of other
currencie
s
Total
Financial assets
Cash and balances with
central banks
26,773,176 37,311 1,073 2,004 26,813,564
Deposits with banks and
other financial institutions
392,965 493,571 11,058 31,564 929,158
Lendings to banks and other
financial institutions
500,000 500,000
Financial assets designated at
fair value through profit or
loss
13,042,298 13,042,298
Financial assets under reverse
repurchase agreements
4,010,200 4,010,200
Loans and advances 131,519,204 494,381 132,013,585
Available-for-sale financial
assets
57,161,098 57,161,098
Held-to-maturity investments 41,149,070 41,149,070
Receivables investment 34,843,459 34,843,459
Other financial assets 3,458,794 4,889 3,463,683
Total financial assets 312,850,264 1,030,152 12,131 33,568 313,926,115
Financial liabilities
Borrowings from central
banks
1,650,000 1,650,000
Deposits from banks and
other financial institutions
4,859,108 221,195 8,072 13 5,088,388
Borrowings from banks and
other financial institutions
1,500,000 4,290 1,504,290
Financial liabilities
designated at fair value
through profit or loss
13,190,558 13,190,558
Financial assets under
repurchase agreements
17,496,238 17,496,238
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 148 of 186
Item RMB RMB
equivalent
of USD
RMB
equivalen
t of HKD
RMB
equivalen
t of other
currencie
s
Total
Customer deposits 187,197,623 629,655 4,340 29,696 187,861,314
Bonds payable 67,408,116 67,408,116
Other financial liabilities 3,252,083 2,117 16 13,321 3,267,537
Total financial liabilities 296,553,726 857,257 12,428 43,030 297,466,441
Net balance sheet position 16,296,538 172,895 -297 -9,462 16,459,674
Off-balance-sheet credit
commitments
(2) Interest rate risk
Interest rate risk refers to the risk of volatility of fair value or future cash flows of financial
instruments due to market interest rate changes.
The interest rate risk of cash flows refers to the risk of volatility of future cash flows of financial
instruments due to market interest rate changes. The interest rate risk of fair value refers to the risk
of volatility of financial instruments' value due to changes in market interest rates.
The interest rate risk exposures of the Group are faced with interest rate risk in fair value and cash
flows due to changes in main market interest rates.
Interest rate fluctuations may either lead to widening interest spread of the Group or result in
narrowing interest spread or even incur a loss due to unexpected changes. The Group mainly
operates business within the interest rate framework of the PBOC. According to historical
experience, PBOC generally adjusts benchmark interest rates of interest-generating loans and
interest-bearing deposits in the same direction (yet maybe in different magnitudes), so the Group
controls its interest rate risk mainly through controlling the maturity distribution of loans and
deposits.
In accordance with PBOC rules, RMB loan interest rates may float upwards or downwards from
the benchmark rate. The RMB benchmark interest rate published by PBOC sets a cap on the RMB
loan interest rate. The discount rate of RMB bills is market-based, subject to a minimum of the
PBOC-specified rediscount rate, and the cap of discount rate shall not exceed the same-period loan
interest rate (including floating).
The Group pays close attention to movements in the interest rates of RMB and foreign currencies,
adjusts RMB and foreign currency deposit and loan rates from time to time to reflect changes in
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 149 of 186
market interest rates and endeavors to prevent interest rate risk.
The table below provides a summary of the Group's interest rate risk exposures. Assets and
liabilities listed in the table are as at the earlier of the repricing date and the maturity date.
Financial assets and liabilities are presented at carrying amount.
Consolidated:
31 December 2019
Item Within 1
month
1 to 3
months
3 to 12
months
1 to 5 years Over 5
years
Interest
free
Total
Financial assets
Cash and
balances
with central
banks
30,166,285 1,011,616 31,177,901
Deposits
with banks
and other
financial
institutions
879,318 1,000,000 400,000 2,279,318
Lendings to
banks and
other
financial
institutions
5,400,000 5,400,000
Financial
assets
designated
at fair value
through
profit or
loss
20,006 399,893 1,051,457 351,214 1,822,570
Financial
assets under
reverse
repurchase
agreements
10,627,229 10,627,229
Loans and
advances 13,786,471 15,880,472 58,222,494 45,422,350 33,420,783 166,732,570
Available-f
or-sale
financial
assets
22,782,310 15,158,210 7,334,387 12,617,933 11,608,668 15,582 69,517,090
Held-to-mat
urity
investments
1,119,774 190,006 8,270,385 34,055,412 35,519,457 79,155,034
Receivables
investment 795,646 622,096 2,479,559 19,843,500 2,884,318 26,625,119
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 150 of 186
Item Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Interest free
Total
Other
financial
assets
493,924 886,381 2,478,676 237,500 2,755,055 6,851,536
Total
financial
assets
86,070,963 34,137,058 80,236,958 112,527,909 83,433,226 3,782,253 400,188,367
Financial liabilities
Borrowings
from central
banks
63,000 63,000
Deposits
from banks
and other
financial
institutions
2,510,489 1,700,000 5,000,000 9,210,489
Borrowings
from banks
and other
financial
institutions
480,814 1,200,000 169,762 1,850,576
Financial
liabilities
designated
at fair value
through
profit or
loss
Financial
assets under
repurchase agreements
33,911,578 503,064 34,414,642
Customer
deposits
119,801,065 11,813,411 33,426,889 85,157,587 142,539 250,341,491
Bonds
payable
8,016,340 21,631,020 43,531,076 2,599,324 4,996,409 80,774,169
Other
financial
liabilities
804,659 5,046,243 5,850,902
Total
financial
liabilities
165,524,945 36,847,495 82,190,727 87,756,911 5,138,948 5,046,243 382,505,269
Total
interest rate
sensitivity gap
-79,453,982 -2,710,437 -1,953,769 24,770,998 78,294,278 -1,263,990 17,683,098
31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 151 of 186
Item Within 1
month
1 to 3
months
3 to 12
months 1 to 5 years Over 5
years
Interes
t free Total
Financial assets
Cash and
balances with
central banks
5,078,843 21,795,985 38,715 26,913,543
Deposits with
banks and
other
financial
institutions
902,991 110,000 60,000 1,072,991
Lendings to
banks and
other
financial
institutions
500,000 500,000
Financial
assets
designated at
fair value
through
profit or loss
1,930,239 4,177,549 6,910,391 24,119 13,042,298
Financial
assets under
reverse
repurchase
agreements
4,010,200 4,010,200
Loans and
advances
9,596,497 13,273,919 49,010,004 36,075,896 24,640,687 132,597,003
Available-for
-sale
financial
assets
8,068,895 3,224,802 21,222,695 13,276,830 11,352,294 15,582 57,161,098
Held-to-matu
rity
investments
70,419 239,186 1,943,334 26,429,777 12,466,354 41,149,070
Receivables
investment
30,000 1,049,868 7,848,021 22,896,504 3,049,066 34,873,459
Other
financial
assets
3,459,634 4,049 3,965 3,467,648
Total
financial
assets
33,147,718 22,079,373 87,494,445 98,703,126 73,304,386 58,262 314,787,310
Financial liabilities
Borrowings
from central
banks
1,700,000 1,700,000
Deposits
from banks
-13,353 1,503,328 3,223,969 17,172 68,688 4,799,804
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 152 of 186
Item Within 1
month
1 to 3
months
3 to 12
months 1 to 5 years Over 5
years
Interes
t free Total
and other
financial
institutions
Borrowings
from banks
and other
financial
institutions
304,290 700,000 500,000 1,504,290
Financial
liabilities
designated at
fair value
through
profit or loss
1,938,738 4,316,581 6,935,239 13,190,558
Financial
assets under
repurchase
agreements
12,466,166 1,911,168 3,118,904 17,496,238
Customer
deposits
118,607,233 8,039,874 29,120,868 32,840,859 220,332 188,829,166
Bonds
payable
6,409,846 12,740,012 40,663,326 2,598,934 4,995,998 67,408,116
Other
financial
liabilities
275,697 1,524,967 1,466,872 16,669 3,284,205
Total
financial
liabilities
139,988,617 30,735,930 86,729,178 35,456,965 5,285,018 16,669 298,212,377
Total interest
rate
sensitivity
gap
-106,840,899 -8,656,557 765,267 63,246,161 68,019,368 41,593 16,574,933
The Bank:
31 December 2019
Item Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Interest free
Total
Financial assets
Cash and
balances
with
central banks
30,080,826 1,004,657 31,085,483
Deposits
with
banks and
other
financial
institution
864,500 1,000,000 400,000 2,264,500
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 153 of 186
Item Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Interest free
Total
s
Lendings
to banks
and other
financial
institutions
5,400,000 5,400,000
Financial
assets
designate
d at fair
value
through
profit or loss
20,006 399,893 1,051,457 351,214 1,822,570
Financial
assets
under
reverse
repurchas
e
agreements
10,627,229 10,627,229
Loans and
advances
13,750,429 15,826,499 57,905,850 45,330,641 33,292,550 166,105,969
Available-
for-sale
financial assets
22,782,310 15,158,210 7,334,387 12,617,933 11,608,668 15,582 69,517,090
Held-to-m
aturity
investments
1,119,774 190,006 8,270,385 34,055,412 35,519,457 79,155,034
Receivabl
es
investmen
t
795,646 622,096 2,521,981 19,843,500 2,838,146 26,621,369
Other
financial assets
489,832 886,381 2,478,676 237,500 2,750,777 6,843,166
Total
financial assets
85,930,552 34,083,085 79,962,736 112,436,200 83,258,821 3,771,016 399,442,410
Financial liabilities
Borrowin
gs from
central
banks
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 154 of 186
Item Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Interest free
Total
Deposits
from
banks and
other
financial
institutions
3,012,287 1,700,000 5,000,000 9,712,287
Borrowin
gs from
banks and
other
financial
institution
s
480,814 1,200,000 169,762 1,850,576
Financial
liabilities
designate
d at fair
value
through
profit or loss
Financial
assets
under
repurchas
e
agreements
33,911,578 503,064 34,414,642
Customer
deposits
119,512,781 11,669,158 33,165,030 84,814,340 142,539 249,303,848
Bonds
payable
8,016,340 21,631,020 43,531,076 2,599,324 4,996,409 80,774,169
Other
financial liabilities
804,660 5,078,311 5,882,971
Total
financial liabilities
165,738,460 36,703,242 81,865,868 87,413,664 5,138,948 5,078,311 381,938,493
Total
interest
rate
sensitivity gap
-79,807,908 -2,620,157 -1,903,132 25,022,536 78,119,873 -1,307,295 17,503,917
31 December 2018
Item Within 1
month
1 to 3
months
3 to 12
months 1 to 5 years
Over 5
years
Interes
t free Total
Financial assets
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 155 of 186
Item Within 1
month
1 to 3
months
3 to 12
months 1 to 5 years
Over 5
years
Interes
t free Total
Cash and
balances with
central banks
5,017,579 21,795,985 26,813,564
Deposits with
banks and
other
financial
institutions
879,158 50,000 929,158
Lendings to
banks and
other
financial
institutions
500,000 500,000
Financial
assets
designated at
fair value
through
profit or loss
1,930,239 4,177,549 6,910,391 24,119 13,042,298
Derivative
financial
assets
Financial
assets under
reverse
repurchase
agreements
4,010,200 4,010,200
Loans and
advances
9,551,239 13,214,148 48,680,541 36,026,062 24,541,595 132,013,585
Available-for
-sale
financial
assets
8,068,895 3,224,802 21,222,695 13,276,830 11,352,294 15,582 57,161,098
Held-to-matu
rity
investments
70,419 239,186 1,943,334 26,429,777 12,466,354 41,149,070
Receivables
investment
1,049,868 7,848,021 22,896,504 3,049,066 34,843,459
Other
financial
assets
3,459,634 4,049 3,463,683
Total
financial
assets
32,987,363 21,959,602 87,104,982 98,653,292 73,205,294 15,582 313,926,115
Financial liabilities
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 156 of 186
Item Within 1
month
1 to 3
months
3 to 12
months 1 to 5 years
Over 5
years
Interes
t free Total
Borrowings
from central
banks
1,650,000 1,650,000
Deposits
from banks
and other
financial
institutions
275,231 1,503,328 3,223,969 17,172 68,688 - 5,088,388
Borrowings
from banks
and other
financial
institutions
304,290 700,000 500,000 1,504,290
Financial
liabilities
designated at
fair value
through
profit or loss
1,938,738 4,316,581 6,935,239 13,190,558
Derivative
financial
liabilities
Financial
assets under
repurchase
agreements
12,466,166 1,911,168 3,118,904 17,496,238
Customer
deposits
118,326,986 8,029,046 28,702,378 32,582,572 220,332 187,861,314
Bonds
payable
6,409,846 12,740,012 40,663,326 2,598,934 4,995,998 67,408,116
Other
financial
liabilities
275,698 1,524,967 1,466,872 3,267,537
Total
financial
liabilities
139,996,955 30,725,102 86,260,688 35,198,678 5,285,018 297,466,441
Total interest
rate
sensitivity
gap
-107,009,592 -8,765,500 844,294 63,454,614 67,920,276 15,582 16,459,674
The Group measured and controlled the interest rate risk mainly through sensitivity analysis. For
the financial assets and liabilities designated at fair value through profit or loss, the Management
believed that the interest rate risk of the Group was not significant. For other financial assets and
liabilities, the Group measured and controlled their interest rate risk mainly through gap analysis.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 157 of 186
Below is the result from the gap analysis on the financial assets and liabilities (except those
designated at fair value through profit or loss) as at 31 December 2019 and 31 December 2018:
Net interest income
31 December 2019 31 December 2018
Consolidate
d
The Bank Consolidate
d
The Bank
Benchmark rate yield moves up by 50
basis points -399,394 -400,618
-545,894 -547,008
Benchmark rate yield moves down by
50 basis points 399,394
400,618 545,894 547,008
The above gap analysis was based on the assumption that financial assets and liabilities (except
those designated at fair value through profit or loss) have static interest rate risk structure.
The sensitivity analysis of net interest income was based on the financial assets and liabilities
(except those designated at fair value through profit or loss) held by the Bank at the end of the
year and estimated influence of interest rate variation on the net interest income within a year. The
above influence on the net interest income did not take into account the influence of relevant
changes on the income tax.
The above analysis is based on the following assumptions: all assets and liabilities re-priced or
matured within a month, after a month but within three months, and after three months but within
one year are re-priced or matured duly; and the yield curve moves parallel with the interest rate
variation.
Due to the above assumption, there might be some difference between the actual change of the
Bank's net interest income due to interest rate variation and the result of sensitivity analysis.
iii. Liquidity risk
Liquidity risk means the risk that the Group is unable to acquire sufficient fund in time or could
not acquire sufficient fund at a reasonable cost to cope with the assets growth or pay matured
debts in spite of its solvency.
The Asset and Liability Management Committee of the Group is responsible for liquidity risk
management of the whole bank, developing the liquidity risk management policy, defining the
liquidity risk monitoring indicators, formulating the contingency plan for liquidity risk, regularly
analyzing and examining execution of indicators, providing suggestions on improving liquidity
risk management and reviewing bank-wide liquidity risk management on a quarterly basis.
The table below presents the distribution of cash flows in the remaining maturity of financial
assets and financial liabilities of the Group, except for derivative financial instruments. The
remaining maturity is the period from the balance sheet date to the maturity date specified in the
contract. Amounts of financial liabilities under each time period are contract cash flows that are
not discounted; amounts of financial assets under each time period are cash flows anticipated to be
recovered.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 158 of 186
Consolidated:
31 December 2019
Item Repayable
on demand
Within 1
month
1 to 3
months
3 to 12
months
1 to 5 years Over 5
years
Overdue/un
limited
term
Total
Financial assets
Cash and balances
with central
banks
8,291,590 22,886,311 31,177,901
Deposits
with banks and other
financial
institutions
874,558 4,760 1,000,000 400,000 2,279,318
Lendings to banks and
other
financial institutions
5,400,000 5,400,000
Financial assets
designated at
fair value
through
profit or loss
20,006 399,893 1,121,700 280,971 1,822,570
Financial
assets under reverse
repurchase
agreements
10,627,229 10,627,229
Loans and advances
13,788,396 18,968,747 58,234,102 45,432,366 33,423,600 2,763,966 172,611,177
Available-for-sale
financial
assets
22,782,310 15,158,210 7,334,387 12,617,933 11,608,668 15,582 69,517,090
Held-to-mat
urity investments
1,098,074 259,896 8,200,495 34,077,112 35,519,457 79,155,034
Receivables investment
795,645 772,055 2,521,981 19,843,500 2,885,483 844,912 27,663,576
Other financial
assets
464,291 2,713,875 1,021,954 2,478,676 237,500 1,346 6,917,642
Total financial
assets
(Expected
maturity)
9,630,439 57,230,295 37,580,755 80,291,341 112,489,382 83,437,208 26,512,117 407,171,537
Financial liabilities
Borrowings from central
banks
63,000 63,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 159 of 186
Item Repayable on demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Overdue/unlimited
term
Total
Deposits
from banks
and other
financial institutions
1,104,505 1,405,984 1,700,000 5,000,000 9,210,489
Borrowings from banks
and other
financial
institutions
480,814 1,200,000 169,762 1,850,576
Financial
liabilities
designated at fair value
through
profit or loss
Financial
assets under
repurchase
agreements
33,911,578 503,064 34,414,642
Customer
deposits
101,891,347 17,909,718 11,813,411 33,426,889 85,157,587 142,539 250,341,491
Bonds payable
8,016,340 21,631,020 43,531,076 2,599,324 4,996,409 80,774,169
Other financial
liabilities
27,153 594,958 1,648,087 3,580,704 5,850,902
Total financial
liabilities
(Contract
maturity)
103,023,005 62,319,392 38,495,582 85,771,431 87,756,911 5,138,948 382,505,269
Liquidity
exposure
-93,392,566 -5,089,099 -914,827 -5,480,090 24,732,471 78,298,260 26,512,117 24,666,268
31 December 2018
Item Repayabl
e on demand
Within 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Over 5
years
Overdue/un
limited term
Total
Financial assets
Cash and
balances with
central banks
4,916,904 21,996,639 26,913,543
Deposits with
banks and other
financial
institutions
902,991 110,000 60,000 1,072,991
Lendings to banks and
other
financial institutions
500,000 500,000
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 160 of 186
Item Repayable on
demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Overdue/unlimited
term
Total
Financial
assets
designated at
fair value through
profit or loss
2,161,776 4,167,326 6,689,077 24,119 13,042,298
Financial assets under
reverse
repurchase
agreements
4,010,200 4,010,200
Loans and
advances
2,908,350 9,581,656 13,273,919 49,010,004 36,075,896 26,338,195 137,188,020
Available-for
-sale financial
assets
12,859,004 4,710,921 1,979,795 13,296,620 24,299,176 15,582 57,161,098
Held-to-maturity
investments
22,539 170,000 1,943,334 26,546,843 12,466,354 41,149,070
Receivables
investment
674,619 30,000 1,049,868 7,848,021 22,896,504 3,421,600 35,920,612
Other
financial
assets
3,463,388 4,260 3,467,648
Total
financial assets
(Expected
maturity)
3,582,969 37,948,458 23,486,294 68,030,231 98,839,982 66,525,325 22,012,221 320,425,480
Financial liabilities
Borrowings from central
banks
1,700,000 1,700,000
Deposits from banks
and other
financial
institutions
-13,353 1,503,328 3,223,969 17,172 68,688 4,799,804
Borrowings
from banks and other
financial
institutions
304,290 700,000 500,000 1,504,290
Financial liabilities
designated at
fair value
through profit or loss
1,938,738 4,316,581 6,935,239 13,190,558
Financial assets under
repurchase
agreements
12,466,166 1,911,168 3,118,904 17,496,238
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 161 of 186
Item Repayable on
demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Overdue/unlimited
term
Total
Customer
deposits
118,607,233 8,039,874 29,120,868 32,840,859 220,332 188,829,166
Bonds
payable
6,409,846 12,740,012 40,663,326 2,598,934 4,995,998 67,408,116
Other
financial
liabilities
274,398 1,524,994 1,471,920 12,893 3,284,205
Total
financial liabilities
(Contract
maturity)
139,987,318 30,735,957 86,734,226 35,469,858 5,285,018 298,212,377
Liquidity exposure
3,582,969 -102,038,860 -7,249,663 -18,703,995 63,370,124 61,240,307 22,012,221 22,213,103
The Bank:
31 December 2019
Item Repayable
on demand
Within 1
month
1 to 3
months
3 to 12
months
1 to 5 years Over 5
years
Overdue/un
limited
term
Total
Financial assets
Cash and balances
with central
banks
8,284,631 22,800,852 31,085,483
Deposits
with banks
and other financial
institutions
864,500 1,000,000 400,000 2,264,500
Lendings to banks and
other
financial
institutions
5,400,000 5,400,000
Financial
assets designated at
fair value
through
profit or loss
20,006 399,893 1,121,700 280,971 1,822,570
Financial
assets under
reverse repurchase
agreements
10,627,229 10,627,229
Loans and advances
13,750,429 18,929,123 57,905,850 45,330,641 33,292,550 2,734,756 171,943,349
Available-for-sale
financial
assets
22,782,310 15,158,210 7,334,387 12,617,933 11,608,668 15,582 69,517,090
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 162 of 186
Item Repayable on demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years Over 5 years
Overdue/unlimited
term
Total
Held-to-mat
urity
investments
1,098,074 259,896 8,200,495 34,077,112 35,519,457 79,155,034
Receivables
investment
795,645 772,055 2,521,981 19,843,500 2,839,311 844,912 27,617,404
Other
financial assets
464,032 2,706,470 1,021,954 2,478,676 237,500 640 6,909,272
Total financial
assets
(Expected
maturity)
9,613,163 57,180,163 37,541,131 79,963,089 112,387,657 83,259,986 26,396,742 406,341,931
Financial liabilities
Borrowings from central
banks
Deposits from banks
and other
financial
institutions
1,606,303 1,405,984 1,700,000 5,000,000 9,712,287
Borrowings from banks
and other
financial
institutions
480,814 1,200,000 169,762 1,850,576
Financial
liabilities
designated at
fair value through
profit or loss
Financial assets under
repurchase
agreements
33,911,578 503,064 34,414,642
Customer
deposits
101,658,435 17,854,346 11,669,158 33,165,030 84,814,340 142,539 249,303,848
Bonds
payable
8,016,340 21,631,020 43,531,076 2,599,324 4,996,409 80,774,169
Other
financial liabilities
26,011 645,596 1,648,074 3,563,290 5,882,971
Total financial
liabilities
(Contract
maturity)
103,290,749 62,314,658 38,351,316 85,429,158 87,413,664 5,138,948 381,938,493
Liquidity
exposure
-93,677,586 -5,134,495 -810,185 -5,466,069 24,973,993 78,121,038 26,396,742 24,403,438
31 December 2018
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 163 of 186
Item Repayable on
demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Overdue/unlimited
term
Total
Financial assets
Cash and balances with
central banks
4,909,256 21,904,308 26,813,564
Deposits with banks and other
financial
institutions
879,158 50,000 929,158
Lendings to
banks and other financial
institutions
500,000 500,000
Financial assets designated at
fair value
through profit
or loss
2,161,776 4,167,326 6,689,077 24,119 13,042,298
Financial assets
under reverse repurchase
agreements
4,010,200 4,010,200
Loans and advances
2,862,480 9,551,239 13,214,148 48,680,541 36,026,062 26,229,284 136,563,754
Available-for-sale financial
assets
12,859,004 4,710,921 1,979,795 13,296,620 24,299,176 15,582 57,161,098
Held-to-maturit
y investments
22,539 170,000 1,943,334 26,546,843 12,466,354 41,149,070
Receivables
investment
674,619 1,049,868 7,848,021 22,896,504 3,421,600 35,890,612
Other financial
assets
3,459,634 4,049 3,463,683
Total financial
assets
(Expected maturity)
3,537,099 37,852,806 23,366,312 67,640,768 98,790,148 66,416,414 21,919,890 319,523,437
Financial liabilities
Borrowings
from central
banks
1,650,000 1,650,000
Deposits from
banks and other financial
institutions
275,231 1,503,328 3,223,969 17,172 68,688 5,088,388
Borrowings from banks and
other financial
institutions
304,290 700,000 500,000 1,504,290
Financial
liabilities
designated at fair value
1,938,738 4,316,581 6,935,239 13,190,558
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 164 of 186
Item Repayable on
demand
Within 1 month
1 to 3 months
3 to 12 months
1 to 5 years
Over 5 years
Overdue/unlimited
term
Total
through profit
or loss
Financial assets under
repurchase
agreements
12,466,166 1,911,168 3,118,904 17,496,238
Customer
deposits
118,326,986 8,029,046 28,702,378 32,582,572 220,332 187,861,314
Bonds payable 6,409,846 12,740,012 40,663,326 2,598,934 4,995,998 67,408,116
Other financial
liabilities
275,698 1,524,967 1,466,872 3,267,537
Total financial
liabilities
(Contract maturity)
139,996,955 30,725,102 86,260,688 35,198,678 5,285,018 297,466,441
Liquidity exposure
3,537,099 -102,144,149 -7,358,790 -18,619,920 63,591,470 61,131,396 21,919,890 22,056,996
iv. Operational risk
Operational risk is defined as the risk that causes losses through imperfect or faulty internal
procedures, employees and IT systems as well as external incidents, including internal fraud,
external fraud, employment policy and workplace safety, customers (products) and business
activities, damage to physical assets, information technology systems, settlement execution and
process management.
The Risk Management Department of the Group is responsible for developing the operational risk
management policy and supervising its execution. Based on work done previously, the Group has
mainly carried out the following work in relation to operational risk management:
The Operational Risk Management Policy of Hankou Bank was developed and submitted to the
Board of Directors for discussion. The policy sets out the Group's basic principles and
management strategies for operational risk management and points out the direction of the Group's
operational risk management in coming years.
The operational risk incident monitoring and reporting procedures were revised and improved to
clarify the reporting line for operational risk incidents and the duties for operational risk
management; the four-tier account system for operational risk incidents was developed according
to the New Basel Capital Accord, regulatory guidelines and the Bank's particularities. The Group
tried to classify operational risk incidents by incident types, product lines and driving factors, with
the aim of gradually improving the quality of operational risk incident monitoring.
The operational risk management of information technology systems was further enhanced. On the
one hand, the Information Technology Risk Management Policy of Hankou Bank was developed
and submitted to the Board of Directors, providing basic standards and direction for information
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 165 of 186
technology risk management. On the other hand, the Group steadily pushed forward the
information technology risk assessment, safeguarded security of information systems and
gradually improved the structure of information technology management to prevent information
technology risk.
The annual plan for internal control inspection was developed to set out items, content and timing
of internal control inspection of all business lines in the year. In the reporting period, the Group
strictly conducted inspections as planned, detected internal control loopholes in a timely manner,
corrected internal control problems, implemented internal control measures and improved internal
control procedures.
1.Fair value of financial assets and financial liabilities
(1) Fair value of financial instruments
The table below presents fair values of financial instruments, including the fair values of financial
assets and financial liabilities whose carrying amounts are different from fair values, but does not
reflect the fair values of financial assets and financial liabilities whose carrying amounts are
consistent with fair values, and the fair values of non-financial assets or liabilities (such as fixed
assets).
Item
31 December 2019 31 December 2018
Carrying
amount Fair value Carrying amount Fair value
Financial assets
Held-to-maturity
investments
79,155,034
80,314,134 41,149,070 41,741,539
There are no market prices or market interest rates for some financial assets or financial liabilities
held or issued by the Group. Therefore, their fair values are calculated by the Group using the
valuation models, including the cash flow discounting analysis model. Values estimated by the
Group using these techniques are subject to significant impact of model selection and internal
assumptions, such as the amount and inflow time of future cash flows, discount rate, volatility and
credit risk. In addition, only observable data are used where possible for valuation models, but the
Group still needs to estimate such factors as credit risk of both parties to transactions, market
volatility and correlation. Changes in assumptions concerning the foregoing factors will affect the
assessment of fair value of financial instruments.
Below are methods and important assumptions the Group uses to determine the fair values of
financial assets and financial liabilities listed in the table above.
a. Cash and balances with central banks, deposits with banks and other financial institutions,
lendings to banks and other financial institutions, deposits from banks and other financial
institutions and borrowings from banks and other financial institutions.
Since the maturity dates of the above financial assets and liabilities are within one year, their
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 166 of 186
carrying amount is close to their fair value.
b. Loans and advances and receivables investment
Loans and advances and receivables investment are presented at the value net of allowance for
impairment losses, with the fair value being estimated to be the present value of cash flows
expected to be received in the future discounted at the current market interest rate.
c. Customer deposits and deposits from banks and other financial institutions
The fair values of check accounts, savings accounts and short-term money market deposits are the
amount payable to customers on demand. The fair value of fixed-rate deposits without quoted
market price is calculated using the cash flow discounting model, with the discount rate being the
current time deposit interest rate similar to that for the remaining maturity.
d. Repurchase and reverse repurchase agreements
Repurchase and reverse repurchase agreements mainly involve bills, loans and bond investment.
Specifically, financial assets under reverse repurchase agreements are presented at the value net of
allowance for impairment losses, with the fair value being estimated to be the present value of
cash flows expected to be received in the future discounted at the current market interest rate.
Repurchase agreements are short-term financing arrangements, with the fair value approximate to
carrying amount.
e. Bonds payable
The fair value of bonds payable is calculated at quoted market price. If the quoted market price is
unavailable, the fair value should be calculated using the cash flow discounting model, with the
discount rate being the current market interest rate for similar bonds with similar remaining
maturity.
(2) Financial instruments at fair value are classified into three tiers:
First tier: Quoted prices of the same assets or liabilities in an active market, including securities
traded on exchanges and some government bonds.
Second tier: Valuation techniques - all directly or indirectly use observable input values other than
quoted market prices of assets or liabilities in the first tier, including the majority of OTC
derivative contracts and bonds whose prices (including CCDC valuation and CCDC settlement
price) are acquired from the website of the price provider or the China Central Depository Trust &
Clearing Co. Ltd. (“CCDC”).
Third tier: Valuation techniques - use any input values not based on observable market data
(non-observable input values), mainly OTC structured credit derivatives.
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 167 of 186
If the publicly quoted market price is unavailable, the Group determines the fair value of financial
instruments using some valuation techniques or inquiry.
For financial instruments held by the Group, main parameters of valuation techniques used include
bond price, interest rate, exchange rate, equity and stock prices, volatility and correlation of price
and options, advance repayment ratio and credit spread of counterparties, all of which are
observable and available in an open market.
Third-tier financial instruments of the Group are mainly composed of OTC structured credit
derivatives. The Management has assessed the impact of changes in macro-economic factors and
other input values to decide whether or not to make necessary adjustments to the fair value of
third-tier financial instruments. The Group has established relevant internal control procedures to
monitor and restrict the Group's exposures to such financial instruments.
The table below presents the valuation techniques or methods for financial instruments measured
at fair value:
Item First tier Second
tier
Third tier Total
31 December 2019
Financial assets designated at fair value
through profit or loss
1,822,570 1,822,570
Derivative financial assets
Available-for-sale financial assets 69,501,508 15,582 69,517,090
Subtotal 71,324,078 15,582 71,339,660
Derivative financial liabilities
Financial liabilities designated at fair
value through profit or loss
31 December 2018
Financial assets designated at fair value
through profit or loss
9,107,604 3,934,694 13,042,298
Derivative financial assets
Available-for-sale financial assets 57,145,516 15,582 57,161,098
Subtotal 66,253,120 3,950,276 70,203,396
Derivative financial liabilities
Financial liabilities designated at fair
value through profit or loss
13,190,558 13,190,558
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 168 of 186
XIV. Capital Management
Capital management of the Group, centered on capital adequacy ratio and return on capital, aims
to strike a balance between expansion and profitability, capital size and structural optimization as
well as the optimal capital size and return on capital in line with the development plan.
The Group calculated capital adequacy ratios in accordance with the Regulation Governing
Capital of Commercial Banks (Provisional) issued by CBRC on June 2012. According to
requirements, credit risk weighted assets for the reporting period are measured at the weighted
approach, market risk weighted assets are measured at the standardized approach and operational
risk weighted assets are measured at the basic indicator approach.
As at 31 December 2019, the Group's core tier-1 capital adequacy ratio, tier-1 capital adequacy
ratio and capital adequacy ratio are as follows: (Unit: RMB1,000)
Item 31 December 2019
Core tier-1 capital:
Valid portion of paid-up capital 4,127,846
Valid portion of capital reserve 3,260,371
Surplus reserves 1,806,093
General risk reserve 4,984,400
Retained profit 7,406,786
Other comprehensive income 219,942
Valid portion of minority interests 42,404
Total core tier-1 capital 21,847,842
Total deducted items 22,437
Net other intangible assets (excluding land use rights) after deducting
relevant deferred tax liabilities
22,437
Net deferred tax assets that rely on future profitability excluding those
arising from temporary differences
Investment in core tier-1 capital instruments issued by financial
institutions that are under control but not subject to consolidation
Threshold deduction items
Additional tier-1 capital:
Valid portion of minority interests 1,291
Others
Total additional tier-1 capital 1,291
Tier-2 capital:
Valid portion of tier-2 capital instruments and related premium 4,996,409
Surplus provision for loan impairment 2,579,199
Valid portion of minority interests 3,142
Others
Total tier-2 capital 7,578,750
Total deducted items
Threshold deduction items
Net capital
Net core tier-1 capital 21,825,405
Net tier-1 capital 21,826,696
Total net capital 29,405,446
Item 31 December 2019
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 169 of 186
Item 31 December 2019
Credit risk weighted assets
On-balance-sheet risk weighted assets 193,508,229
Off-balance-sheet risk weighted assets 15,406,870
Total credit risk weighted assets: 208,915,099
Market risk weighted assets 556,703
Operational risk weighted assets 11,421,716
Total risk weighted assets after application of capital bottom line: 220,893,518
Core tier-1 capital adequacy ratio (%) 9.88%
Tier-1 capital adequacy ratio (%) 9.88%
Capital adequacy ratio (%) 13.31%
XV. Related Parties and Connected Transactions
1.Related parties of the Bank and related party relationship:
In accordance with the Company Law, the Accounting Standard for Business Enterprises No. 36:
Disclosure of Related Parties, the Administrative Measures for the Connected Transactions
between the Commercial Banks and Their Insiders and Shareholders issued by CBRC and the
Administrative Measures for Related Party Transactions of Hankou Bank Co., Ltd., the Bank's
related parties include related natural persons and related legal persons or other organizations.
The related natural persons of the Bank include the insiders of the Bank; major natural person
shareholders of the Bank, and close relatives of the Bank’s insiders and major natural person
shareholders; the related legal persons of the Bank or holding natural person shareholders,
directors and key executives of other organizations related to the Bank. The related legal persons
or other organizations exclude the legal persons or other organizations that can be directly,
indirectly or jointly controlled or be greatly influenced by the Bank’s insiders, major natural
person shareholders and their close relatives; and other natural persons who have a significant
influence on the Bank.
Related legal persons and other organizations of the Bank include major non-natural shareholders
of the Bank; legal persons or other organizations directly or indirectly controlled by the same
enterprise as the Bank; legal persons or other organizations directly or indirectly controlled, or
under common control by or subject to significant influence of the Bank's insiders and major
natural person shareholders as well as their close relatives; other legal persons or other
organizations who may directly, indirectly or jointly control the Bank or have a significant
influence on the Bank; and the Bank's subsidiaries and associate.
(1) Information on the shareholders holding 5% or more shares of the Bank:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 170 of 186
Sharehol
der
company
Rela
ted
part
y
relat
ions
hip
Company type Place of registration
Leg
al
Repr
esen
tativ
e
Busi
ness
natu
re
Registered
capital (Unit:
RMB1,000)
Legend
Holdings
Corporati
on
Shar
ehol
der
Other limited
company (listed)
Room 1701, 17F,
Building 1, Yard 2,
Kexueyuan South
Road, Haidian
District, Beijing
Nin
g
Min
Inve
stme
nt
2,356,231
Wuhan
Iron and
Steel
Group
Corporati
on
Shar
ehol
der
Limited liability
company (sole
proprietorship of
legal person
invested or
controlled by a
non-natural person)
999 Youyi Road,
Wuhan City, Hubei
Province
Zho
u
Zho
ngm
ing
Inve
stme
nt
4,739,610
Wuhan
Develop
ment and
Investme
nt Co.,
Ltd.
Shar
ehol
der
Limited liability
company (sole
proprietorship of
legal person
invested or
controlled by a
non-natural person)
F20 & 21, Xinhe
Building, No. 618,
Jianshe Avenue,
Jiang'an District,
Wuhan City, Hubei
Province
Tan
g
Wu
Inve
stme
nt
3,000,000
Note 1: Legend Holdings Corporation changed its legal representative from Liu Chuanzhi to Ning
Min on 9 January 2020.
Note 2: Wuhan Iron and Steel Group Corporation is the new name after name change on 15
November 2017, and its predecessor is Wuhan Iron and Steel (Group) Corporation. The company
type was changed to a limited liability company (sole proprietorship of legal person invested or
controlled by a non-natural person), and its legal representative was changed to Guo Bin. The
legal representative was changed from Guo Bin to Zhou Zhongming on 22 August 2019.
Note 3: Wuhan Development and Investment Co., Ltd changed its legal representative from Xiong
Wei to Tang Wu on 17 August 2018. The type of market entity was changed on 28 March 2019. It
was changed from a limited liability company (solely state-owned) to a limited liability company
(sole proprietorship of legal person invested or controlled by a non-natural person).
(2) As at 31 December 2019, names and shareholding status of shareholders holding 5% or more
shares of the Bank are as follows:
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 171 of 186
Shareholder
company
Shares
(’000)
Shareholdin
g
percentage
(%)
Voting right
percentage (%)
Ultimate
controller
of the
Bank
Unified Social Credit
Code
Legend
Holdings
Corporation
633,000 15.33 15.33 911100001011122986
Wuhan Iron
and Steel
Group
Corporation
550,600 13.34 13.34 914201001776819133
Wuhan
Development
and
Investment
Co., Ltd.
337,500 8.18 8.18 91420100717953714H
(3) Shares (or interests) held by the shareholders with a 5% or more stake in the Bank and
changes thereof
Company Beginning
balance
Increase during
the period
Decrease during
the period
Ending balance
Amount
(RMB1,
000)
Percen
tage
(%)
Amoun
t
(RMB
1,000)
Perce
ntage
(%)
Amoun
t
(RMB
1,000)
Perce
ntage
(%)
Amount
(RMB1,
000)
Percen
tage
(%)
Legend Holdings
Corporation
633,000 15.33 633,000 15.33
Wuhan Iron and
Steel Group
Corporation
550,600 13.34 550,600 13.34
Wuhan
Development and
Investment Co.,
Ltd.
337,500 8.18 337,500 8.18
(4) Information disclosure concerning subsidiaries of the Bank:
Subsidiar
y
Typ
e
Com
pany
type
Pla
ce
of
reg
istr
atio
n
Le
gal
Re
pr
es
ent
ati
ve
Bus
ine
ss
nat
ure
Regi
stere
d
capit
al
(RM
B10,
000)
Com
bined
share
holdi
ng
perce
ntage
(%)
Combin
ed
percenta
ge of
voting
shares
held (%)
Unified Social Credit
Code
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 172 of 186
Subsidiar
y
Typ
e
Com
pany
type
Pla
ce
of
reg
istr
atio
n
Le
gal
Re
pr
es
ent
ati
ve
Bus
ine
ss
nat
ure
Regi
stere
d
capit
al
(RM
B10,
000)
Com
bined
share
holdi
ng
perce
ntage
(%)
Combin
ed
percenta
ge of
voting
shares
held (%)
Unified Social Credit
Code
HB
Zhijiang
Rural
Bank,
Ltd.
Cont
rolle
d
subs
idiar
y
a
joint-
stock
com
pany
Hu
bei
Yi
n
Zu
oy
in
Fin
anc
ial
ind
ustr
y
5,000 51% 51% 9142050058549827XY
HB
Yangxin
Rural
Bank,
Ltd.
Cont
rolle
d
subs
idiar
y
a
joint-
stock
com
pany
Hu
bei
Zo
u
Li
ho
ng
Fin
anc
ial
ind
ustr
y
5,000 80% 80% 91420200594244829H
Note 1: HB Zhijiang Rural Bank, Ltd. changed its legal representative from Ba Jun to Yin Zuoyin
on 5 September 2019.
Note 2: HB Yangxin Rural Bank, Ltd. changed its legal representative from Ba Jun to Zou Lihong
on 28 October 2019.
(5) The Bank's associates
Information on the associate:
Associa
te name
Co
mp
any
type
Comp
any type
Pla
ce
of
reg
istr
ation
Leg
al
Rep
rese
ntative
Bus
ines
s
nature
Registered
capital
(RMB10,000)
Combin
ed
sharehol
ding
percentage (%)
Combined
percentag
e of
voting
shares held (%)
Unified Social Credit
Code
Aerospa
ce
Science
&
Industry
Financi
al
Leasing
Co., Ltd.
Ass
ociate
Other
limite
d
liabili
ty
companies
Hu
bei
Li
Do
ngfeng
Fin
anci
al
ind
ustr
y
300,000 25% 25% 91420112MA4KTG0Q7G
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 173 of 186
(6) Other related parties
Other related parties include legal persons or other organizations directly or indirectly controlled
by the same enterprise as the Bank; legal persons or other organizations directly or indirectly
controlled, or under common control by or subject to significant influence of the Bank's insiders as
well as their close relatives; and other legal persons or other organizations who may directly,
indirectly or jointly control the Bank or have a significant influence on the Bank.
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Wuhan Credit Risk Management Financing
Guarantee Co., Ltd. 914201007179583631
Wuhan State-owned Assets Management Co.,
Ltd. 91420100177758917D
Good First Group Co., Ltd. 91310000612260305J
Lenovo Group Limited 0450816 Registered in
Hong Kong
Nanming Co., Ltd. 0209070 Registered in
Hong Kong
Legend Holdings (Tianjin) Ltd. 911201165864155792
Legend Capital Co., Ltd. 911101087263402318
Beijing Junlian VC Center (Limited
Partnership) 911100007642185019
Beijing Huaxia Liantong Management
Consulting Co., Ltd. 91110108597716270M
Beijing Huaxia Lianhe Auto Network
Technology Co., Ltd. 91110108775453830B
Beijing Legend Star VC Co., Ltd. 91110108697673095D
Duilong Deqing Xingchen VC Co., Ltd. 91120116589752466M
Raycom Real Estate Development Co., Ltd. 911101087263421223
Reycom Property Investment Limited 91110108790650314X
Raycom Real Estate Holdings Limited 91440300791710104J
Joyvio Group Co., Ltd. 911101085960368637
Zeny Supply Chain Co., Ltd. 91110108051437499P
Levima Group Co., Ltd. 91110108593846502N
Zhengqi Financial Holding Co., Ltd. 91340100054499919H
Taikang Bybo Medical Group Co., Ltd. 91440400714842859E
Tibet Dongfang Qihui Investment Co., Ltd. 91540126396977765P
Tibet Dazi Lianke Investment Co., Ltd. 91540126718788968F
Tibet Lianheng Medical Investment Co., Ltd. 91540126MA6T19YC97
Tibet Cola Technological Development Co.,
Ltd. 91540195MA6T1GP96K
Beijing Legend Star Investment Management
Co., Ltd. 91110108MA001H6E1G
Shanghai Weimin Hospital Investment
Management Co., Ltd. 91310107560111550E
JC International Finance & Leasing Co., Ltd. 91310000MA1FL0E14K
Legend Insurance and Investment Group
Limited 911100000535983410
Hefei Guozheng Tech Microlending Co., Ltd. 913401006836186347
Anhui Zhengqi Finance & Leasing Co., Ltd. 91340100058470291H
JC (Beijing) Asset Management Co., Ltd. 91110111MA00BJNQ8A
Anhui Zhidao Investment Co., Ltd. 91340100065204899D
Zhengqi Supply Chain Management Co., Ltd. 91420105MA4KPPMK04
Zhengqi International Commercial Factoring 91340100MA2MQ07M70
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 174 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Co., Ltd.
Anhui Zhengqi Supply Chain Management
Co., Ltd. 913401003487344786
Shenzhen Chengzheng Technology
Microlending Co., Ltd. 91440300311875007D
Gain Cold Chain (Wuhan) Co., Ltd. 91420111070513020L
Gain Food (Wuhan) Co., Ltd. 914201110520409443
Better Sun Educational Group Corp. Registered
overseas
Zeny Supply Chain (Tianjin) Co., Ltd. 91120118MA05RXCX5F
Dongpinbang (Tianjin) Supply Chain Co.,
Ltd. 91120118MA05T75A2K
Motorola (Wuhan) Mobile Technology
Communication Co., Ltd. 91420100597900924B
Lenovo Mobile Inc. 91350200705499032F
Wuhan Guozheng Microlending Co., Ltd. 91420105MA4KY5CAXM
Tibet Liantou Qihui Enterprise Management
Limited 91540125MA6T4WFN78
Shenzhen Lenovo Technology Park Co., Ltd. 91440300727178731X
Yuxiang (Guangzhou) Investment Co., Ltd. 91440101MA59TDAK5Y
Shanghai Sanyu Educational Management
Co., Ltd. 91310112744910816X
Zeny Supply Chain (Jilin) Co., Ltd. 91220294598844477R
Lenovo (Tianjin) Commercial Factoring Co.,
Ltd. 91120118MA05P2FX9A
Hony Capital (Tianjin) Co., Ltd. 91120116673716847F
CAR Inc. F0020650 Registered not in
Hong Kong
Lakala Payment Co., Ltd. 91110108770425654N
Wenkang Group Co., Ltd. 911101086646244493
Eastern Air Logistics Co., Ltd. 91310000766454452W
Bluefocus Intelligent Communications Group
Co., Ltd. 91110000744727456H
Huawen Food Co., Ltd. 91430600559532577G
Hebei Hengshui Laobaigan Liquor Co., Ltd. 911311007216760190
China Baowu Iron and Steel Group Corp. 91310000132200821H
Wuhan Iron & Steel Group Echeng Iron &
Steel Co., Ltd. 9142070070691922XN
Wuhan Iron and Steel Resources Group
Corporation 91420100711992632A
Wuhan Iron and Steel Green City
Construction and Development Co., Ltd. 914201008777484103
Wuhan Iron and Steel Jiangbei Group
Corporation 9142010072575458XJ
Baosight Software (Wuhan) Co., Ltd. 91420100737504908J
Wuhan Iron and Steel Heavy Industries Group
Corporation 91420100711943873D
Wuhan Steel Electricity Co., Ltd. 91420100300050720E
Wuhan Iron and Steel Group Finance Co., Ltd. 91420107300271101E
Wuhan Iron and Steel Group Refractory
Material Co., Ltd. 914201007119198229
Wuhan Iron and Steel Group Xiangyang
Heavy Equipment and Material Co., Ltd. 91420607706882770F
Wisco Logistics Co., Ltd. 9142010771192818X1
Wuhu Weishike Material Technology Co., Ltd. 9134020066144360X4
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 175 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Taicang Wisco Distribution Co., Ltd. 91320585755868596U
Guangxi Iron and Steel Group Company
Limited 9145000078213554XP
Wisco Brazil Metallurgy Investment Co., Ltd. Registered
overseas
Shanghai Wisco Steel Processing Co., Ltd. 91310110564797983D
Wisco (Beijing) New Materials Research Co.,
Ltd. 91110114562075688U
Wuhan International Resources Development
Investment Co., Ltd. 1462440
Registered in
Hong Kong
Wisco Modern City Services (Wuhan) Group
Corporation 91420107063009416B
Wisco Asset Management Co., Ltd. 9142010708196293XU
Qinhuangdao Beidaihe Beihuayuan Sea View
Hotel Co., Ltd. 91130304692065664A
Baoshan Iron & Steel Co., Ltd. 91310000631696382C
Wuhan Iron and Steel Co., Ltd. 91420100MA4KQ8JQX5
Wuhan Pingmei Wugang Unite Coking
Chemical Co., Ltd. 91420107711961422L
Wisco Hanyang Steelworks 91420100177688752B
Baosteel Huangshi Coated and Galvanized
Co., Ltd. 91420200615435780U
Wisco Industrial Company 91420107177661541Y
Wisco Packaging Materials Plant 91420107177683791D
Wisco Maintenance Services Company 914201071776833966
Wisco Industrial Jinyuan Materials Industrial
Development Co., Ltd. 91420107717910394K
Wisco Industrial Jinyuan Furnace Charge Co.,
Ltd. 914201077282775555
Wuhan Gangye Xincheng Maintenance
Services Co., Ltd. 914201077310504588
Wuhan Fire-resistant Metallurgical Powder
Plant 91420107177680611R
Wuhan Wugang Jiaoyun Guangda Motor
Transport Co., Ltd. 9142010717768804XB
Wuhan ABC International-Wisco Fund
Management Co., Ltd. 91420107MA4KNY8J7N
Wuhan Wisco Industrial Investment Fund
Management Co., Ltd.
91420107303637615H
Wuhan WISCO Good Life Service Co., Ltd. 91420107725755507J
WISCO-MCC Industrial Technology Service
Co., Ltd. 91420107MA4L0L8F4A
Wisco Hainan Co., Ltd. 91460000201285006X
Wuhan Qingqing Education Management Co.,
Ltd. 91420107MA4L0XMJ9P
Wuhan Iron and Steel Green City Technology
and Development Co., Ltd. 91420107744752096L
Wisco Second Staff Hospital 12420000MB1362521D
Wuhan Iron and Steel Industrial Commerce
Co., Ltd. 914201071777276199
Wugang Wulongquan Mine Industry Co., Ltd. 91420115717903071P
China Resources WISCO (Hubei) Hospital
Management Co., Ltd. 914201000705015803
China Resources-WISCO General Hospital 12420000MB0M080027
Wuhan Financial Holdings (Group) 91420100778164444G
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 176 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Wuhan Jinkong New-Energy Vehicle Lease
Co., Ltd. 9142010034720626XD
Wuhan Yangluo Development Co., Ltd. 914201007119145110
Wuhan Trade State-owned Holding Group
Co., Ltd. 91420100724692452X
Wuhan Transportation Construction and
Investment Co., Ltd. 91420100717995703T
Yangtze River Economic United Development
(Group) Co., Ltd. 914201023000248722
Food Logistics Industry in Wuhan Economic
Development Investment Co., Ltd. 9142011779632291XB
Wuhan Financial Assets Exchange Co., Ltd. 91420100581846716M
Wuhan Yangtze Jiashi Trade Co., Ltd. 914201000705406788
Wuhan Yangtze Financial Services Co., Ltd. 91420100070528070P
Wuhan Rongwei Escort Security Service Co.,
Ltd. 91420100717921448A
Hubei Financial Leasing Co., Ltd. 91420100333576905P
Wuhan Financial Holdings Energy (Group)
Co., Ltd. 91420103MA4KLFK72L
Guotong Trust Co., Ltd. 91420100441385161G
Wuhan Youyi Non-Staple Food Commerce
Co., Ltd. 914201007310420798
Wuhan Non-Staple Food Commercial
Reserves Co., Ltd. 914201043000938353
Wuhan Yangtze Shaou Vegetable Oil Co., Ltd. 91420106731070950W
Wuhan Yangtze Shaou Oils Trading Co., Ltd. 91420100347194158A
Hubei Yujiatou Group Co., Ltd. 91420000707090070E
Wuhan Shengshi Boyang Investment
Management Co., Ltd. 91420102077711150E
Wuhan Xinneng Properties Co., Ltd. 91420100711958856G
Wuhan Xinneng Industrial Development Co.,
Ltd. 91420100300244170U
Wuhan Kaicheng Mining Investment Co., Ltd. 9142011207050495XJ
Huaneng Wuhan Power Generation Co., Ltd. 9142010030024252XQ
Wuhan Yijing Jiangnan Properties Co., Ltd. 91420115691853554F
Wuhan Xinneng Yijing Investment
Management Co., Ltd. 91420103333462182D
Wuhan Kaidaxin Equity Investment
Management Co., Ltd. 91420100MA4KNBDW2F
Wuhan Nanhua High Speed Ship Engineering
Co., Ltd. 9142010074143034XA
Wuhan High-tech Thermal Power Co., Ltd. 91420100271931552L
Wuxin Investment Holding (Shenzhen) Co.,
Ltd. 91440300MA5DE7UC2W
Wuhan Credit Risk Management Co., Ltd. 91420100MA4KMTK5X2
Wuhan Yangtze Communications Industry
Group Co., Ltd. 9142000030019146XY
Wuhan Micro Credit Co., Ltd. 9142010068234394XA
Wuhan Investment & Development
(Overseas) Co., Ltd. 91420100MA4KL86R82
Wuhan Industrial State-owned Investment
Co., Ltd. 91420100725751370N
Wuhan Construction and Investment Co., Ltd. 91420100177738326R
Wuhan Tianli Industrial Co., Ltd. 91420100300059290A
Wuhan Energy Conservation Investment Co., 91420100300055695K
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 177 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Ltd.
Wuhan Yangtze Optical Communications
Industry Group Co., Ltd. 91420100177728574C
Wuhan Venture Financing Guarantee Co., Ltd. 9142010075181358XC
Wuhan Jiayuan Micro Electric Technology
Co., Ltd. 914201007119948223
Wuhan Electrical Power Development Co.,
Ltd. 91420100177737606H
Wuhan Credit Investment Group Co., Ltd. 91420100574904121T
Wuhan Credit Financing Guarantee (Group)
Co., Ltd. 91420100551953860C
Wuhan SME Credit Financing Guarantee Co.,
Ltd. 914201007179318817
Wuhan Credit Development Investment
Management Co., Ltd. 91420100555030457N
Wuhan Chengsheng Pawnbrokers Co., Ltd. 91420100685441748L
Wuhan Zhengda Logistics Co., Ltd. 91420104748311132L
Wuhan Jinkong Modern Supply Chain
Management Co., Ltd. 91420117MA4L09CF7A
Wuhan Huahan Investment Management Co.,
Ltd. 91420104707122757K
Wuhan Dongchuang Financing Guarantee
Co., Ltd. 91420100675812330C
Easyhome New Retail Group Co Ltd. 91420100177691433G
Wuhan Department Store Group Co., Ltd. 91420100300251645N
Wuhan Guochuang Innovative Investment
Co., Ltd. 91420100MA4KMDDK43
Wuhan Guochuang Financial Services Co.,
Ltd. 914201006823410122
Wuhan Xinke Investment Co., Ltd. 914201007310404288
Wuhan Huahan Real Estate Group
Corporation 91420100077740218U
Wuhan Xinxing Pharmaceutical Technology
Co., Ltd. 91420115725785183H
Wuhan Selline Group Co., Ltd. 91420100799790313Q
Zhongbai Holdings Group Co., Ltd. 91420100177682019R
Wuhan Hantong Investment Co., Ltd. 91420100675828770A
Wuhan Donghu Creative Technology
Investment Co., Ltd. 91420100717945693P
Wuhan Guochuang Capital Investment Co.,
Ltd. 914201000591964661
Wuhan Optics-Valley Finance Leasing Co.,
Ltd. 91420100594515713T
Zhongbai Warehouse Supermarket Co. Ltd. 91420100300085552P
Zhongbai Warehouse Xiaogan Shopping Mall
Co. Ltd. 91420900757001726X
Wuhan Zhongbai Department Store Co., Ltd. 91420100761236122K
Zhongbai Supermarket Co. Ltd. 91420100300209391H
Wuhan Zhongbai Electric Appliances Co.,
Ltd. 91420104MA4KM4TU3T
Shanghai Optics-Valley Finance Leasing Co.,
Ltd. 91310115MA1K3QPQ6M
Wuhan Huayu Custody Co., Ltd. 91420100755100739X
Wuhan Pharmaceutical Industry Base
Investment Co., Ltd. 91420115741409591M
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 178 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Gongxiao Zhongbai Payment Co., Ltd. 91420100724685252G
Wuhan Big Data Development Co., Ltd. 91420100MA4KQKAN0B
Wuhan Zhongtian Huigou E-commerce
Services Co., Ltd. 914201063034850848
Wuhan Haier Electric Appliance Co. Ltd. 91420100177721700H
Tianfeng Securities Co., Ltd. 91420100711894442U
Wuhan Sports Development Investment Co.,
Ltd. 914201005519741785
Wuhan Donghu Changrui Investment
Management Co., Ltd. 91420100059166611G
Optical Valley Venture Capital PE Fund
Management Co., Ltd. 91420100574902425R
Wuhan Intelligence Industrial Equity
Investment Fund Management Co., Ltd. 91420100086600903D
Wuhan Donghu Huake Investment
Management Co., Ltd. 91420100303555783H
Wuhan Donghu Guolong Equity Investment
Fund Management Co., Ltd. 91420100MA4KNXP31D
Wuhan Hantang High-tech Agricultural
Technology Co., Ltd. 91420100052022623X
Bio-industry Wuhan Optical Valley Venture
Capital Fund Limited 9142010069186494XR
Hubei Tianqian Asset Management Co., Ltd. 91420100MA4KQ3N84R
Wuhan Kaiyuan Technology Venture
Investment Co., Ltd. 91420100722706240Q
Wuhan Huahan Shuncheng Property
Management Co., Ltd. 914201040668207306
Wuhan Huaxin Management Co., Ltd. 91420100616434595T
Hubei Jingchu Grain and Oil Co., Ltd. 9142000008234667XQ
Hubei Zhongbai Huitong Department Store
Co., Ltd. 91421300MA48W7BF85
Hubei Yonghui Zhongbai Supermarket Co.,
Ltd. 91420104MA4KU9YA95
Hubei Central Department Store Co., Ltd. 91421023MA4945JD5N
Tianjin Fuxin Datang Investment Co., Ltd. 91120116562679959A
Tibet Fuju Investment Co., Ltd. 91540195MA6T1A2K32
Xiamen Xindi Industry Co., Ltd. 91350200705403758T
Xiamen Rongyin Trade Co., Ltd. 91350200612313921N
Xiamen Hongfu Trade Co., Ltd. 91350205769270800B
Xiamen Fuxin Yintai Investment Co., Ltd. 91350200664711075P
Tianjin Tangmen Investment Co., Ltd. 91120116562686315R
Tianjin Tangmei Investment Co., Ltd. 91120116562686307Y
Xiamen Fuxin Real Estate Co., Ltd. 91350200612013750K
Xiamen Tangren Property Management Co.,
Ltd. 91350203260143438Y
Guizhou Tangshengmei Trade Co., Ltd. 91510700MA6242QX2L
Jinan Qilibao Market Co., Ltd. 91370112779710670Y
Shanghai Newgenco Biotechnology Co., Ltd. 913101157034143223
Guizhou Jintongda Trade Co., Ltd. 91522620580672638F
Xi’an Tangmei Property Management Co.,
Ltd. 91610104MA6TX1FF56
Guiyang Yunyan Xindi Properties Co., Ltd. 915201036707202930
Newgen (Shanghai) Biotech Co., Ltd. 91310115MA1H7ABF2G
Good First Financial Holding Co., Ltd. 91350921574717561A
Xiamen Fuxin Photoelectric Integration Co., 91350200260087894D
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 179 of 186
Name of other related party Unified Social Credit Code
or Company Code
Remarks
Ltd.
Jiangxin Xindi Investment Co., Ltd. 91360100787297097D
Nanchang Guangmao Fruits Co., Ltd. 91360121309253014U
Xiamen Fuxin Culture Equity Investment
Management Co., Ltd. 91350203079388430H
Nanchang Zhuomei Gardening Co., Ltd. 91360121309243836R
Hua’an Fumei Bio-agriculture Co., Ltd. 91350629MA31LJMP4W
Xiamen Hexin Guarantee Co., Ltd. 91350200671272840T
Zhejiang Fuxu Trade Co., Ltd. 91330102MA2CFT7U2E
Jinan Qilibao Trade Co., Ltd. 91370112MA3DM40R69
Guiyang Xindi Weiye Properties Co., Ltd. 91520103MA6E2AHX76
Nanjing Xindi Property Services Co., Ltd. 91450103794323492H
Xiamen University Electronic Information
Technology Co., Ltd. 91350200612332065C
Zhong Ou Fund Management Co., Ltd. 91310000717866389C
Ruihua Certified Public Accountants (LLP) 9111010856949923XD
Beijing Water Business Doctor Co., Ltd. 91110000634358477D
Shanghai Zhongping Guoyu Asset
Management Co., Ltd. 91310107MA1G06LE8W
Shanghai AJ Trust Co., Ltd. 91310000132202077A
CMBC Capital Holdings Limited F0008826 Registered not in
Hong Kong
Digiwin Software Co., Ltd. 91310000734084709Q
Hundsun Electronics Co., Ltd. 913300002539329145
Tianjin Huitong Information Technology
Partnership (LLP) 91120118MA05LNHQXP
Wuhan Shunxin Steel Mould Manufacturing
Co., Ltd. 91420116568373854B
Hubei Ruitong Tianyuan Law Firm 31420000F996627231
Wuhan Smart Subway Technology Co., Ltd. 91420100MA4KLPEG59
Note 1: Wuhan Credit Risk Management Financing Guarantee Co., Ltd. is the new name after
name change on 3 January 2020, and its predecessor is Wuhan Credit Risk Management Co., Ltd.;
Note 2: Duilong Deqing Xingchen VC Co., Ltd. is the new name after name change on 30 October
2018, and its predecessor is Tianjin Legend Star VC Co., Ltd.;
Note 3: Taikang Bybo Medical Group Co., Ltd. is the new name after name change on 12 March
2020, and its predecessor is Bybo Medical Group Co., Ltd.;
Note 4: Baosight Software (Wuhan) Co., Ltd. is the new name after name change on 24 October
2019, and its predecessor is Wuhan Iron and Steel Engineering Technology Group Corporation;
Note 5: Wuhan WISCO Green City Technology Development Co., Ltd. is the new name after
name change on 27 May 2019, and its predecessor is Wuhan Iron and Steel Engineering
Technology Group Communications Corporation;
Note 6: Wuhan Venture Financing Guarantee Co., Ltd. is the new name after name change on 3
January 2020, and its predecessor is Wuhan Venture Guarantee Co., Ltd.;
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 180 of 186
Note 7: Wuhan Credit Financing Guarantee (Group) Co., Ltd. is the new name after name change
on 23 December 2019, and its predecessor is Wuhan Credit Guarantee (Group) Co., Ltd.;
Note 8: Wuhan SME Credit Financing Guarantee Co., Ltd. is the new name after name change on
20 December 2019, and its predecessor is Wuhan SME Credit Guarantee Co., Ltd.;
Note 9: Easyhome New Retail Group Co Ltd. is the new name after name change on 23 December
2019, and its predecessor is Wuhan Zhongnan Commercial (Group) Co., Ltd.;
Note 10: Optical Valley Venture Capital PE Fund Management Co., Ltd. is the new name after
name change on 21 May 2019, and its predecessor is Optical Valley Venture Capital Fund
Management Co., Ltd.;
2.Main connected transactions of the Bank in the reporting period
The Bank's connected transactions conform to laws, regulations, national accounting standards
and relevant banking regulatory requirements, observe commercial principles and are based on
conditions that are more favorable than those offered to non-connected transactions in similar
transactions.
(1) Balance of loans
Category 31 December 2019 31 December 2018
Shareholders holding 5% or more shares of
the Bank
Legend Holdings Corporation and its
related companies 570,034 215,000
Wuhan Iron and Steel Group
Corporation and its related companies 668,000 688,224
Wuhan Development Investment Co.,
Ltd. and its related companies 1,709,684 468,250
Other non-natural-person related parties 1,088,575 931,892
Natural-person related parties
Directors, Supervisors and Senior
Executives
Others 23,972 33,200
(2) Balance of deposits
Category 31 December 2019 31 December 2018
Shareholders holding 5% or more shares of
the Bank
Legend Holdings Corporation and its
related companies
640,564 179,932
Wuhan Iron and Steel Group
Corporation and its related companies
178,063 1,326,677
Wuhan Development Investment Co.,
Ltd. and its related companies
2,197,422 735,810
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 181 of 186
Category 31 December 2019 31 December 2018
Other non-natural-person related parties 2,652,358 2,285,768
Natural-person related parties
Directors, Supervisors and Senior
Executives
5,149 7,952
Others 61,108 40,092
(3) Loan interest income
Category 31 December 2019 31 December 2018
Shareholders holding 5% or more shares of
the Bank
Legend Holdings Corporation and its
related companies
25,794 16,731
Wuhan Iron and Steel Group
Corporation and its related companies
28,268 34,021
Wuhan Development Investment Co.,
Ltd. and its related companies
39,164 27,270
Other non-natural-person related parties 42,883 42,478
Natural-person related parties
Directors, Supervisors and Senior
Executives
Others 3,582 1,323
(4) Deposit interest expense
Category 31 December 2019 31 December 2018
Shareholders holding 5% or more shares of
the Bank
Legend Holdings Corporation and its
related companies 3,626 2,813
Wuhan Iron and Steel Group
Corporation and its related companies 10,214 8,842
Wuhan Development Investment Co.,
Ltd. and its related companies 21,329 7,357
Other non-natural-person related parties 33,838 18,633
Natural-person related parties
Directors, Supervisors and Senior
Executives 4 10
Others 58 49
(5) Off-balance-sheet positions, net
Category 31 December 2019 31 December 2018
Shareholders holding 5% or more shares of
the Bank
Legend Holdings Corporation and its
related companies
467,008 522,946
Wuhan Iron and Steel Group
Corporation and its related companies
203,086 108,071
Wuhan Development Investment Co.,
Ltd. and its related companies
14,977 -3,750
Other non-natural-person related parties 358,930 277,920
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 182 of 186
(6) Remunerations paid to key executives
The Bank had 22 key management members as at 31 December 2019, and 23 key management
members as at 31 December 2018. The remunerations paid to them are as follows:
Related party 31 December 2019 31 December 2018
Key executives 6,492 7,927
XVI. Commitments
1.Capital expenditure commitments
Capital commitments mean capital expenditure commitments including equity investment,
equipment purchase and system development. The Management of the Group believes that future
profitability will meet the foregoing commitments.
Below are capital expenditure commitments as at 31 December 2019:
Contract price Paid Unpaid
System software 119,596 25,582 94,014
Below are capital expenditure commitments as at 31 December 2018:
Contract price Paid Unpaid
System software 111,183 27,214 83,969
2.Leasing commitments
Property leasing commitments mainly reflect rental payable for business premises and office
buildings to be rented of the Group as needed.
Rentals set forth in lease agreements:
Item 31 December 2019 31 December 2018
Within 1 year (inclusive) 173,852 168,889
1-3 years (inclusive) 182,988 215,033
Over 3 years 75,176 176,534
Total 432,016 560,456
3.Certificate government bonds
The Group acts as an agent of the Ministry of Finance to issue the certificate government bonds.
Holders of certificate government bonds may request earlier redemption of certificate government
bonds, with the redemption amount being the principal amount of certificate government bonds
plus interest accrued up to the date of redemption. As at 31 December 2019, the accumulated
balance of certificate government bonds issued by the Group as an agent but unmatured and
unredeemed was RMB1,078,426,000. As at 31 December 2018, the accumulated balance of
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 183 of 186
certificate government bonds issued by the Group as an agent but unmatured and unredeemed was
RMB1,078,329,000.
XVII. Contingencies
1. Pending actions and disputes
As at 31 December 2019, pending lawsuits with the Group as defendant involved a total amount of
RMB19,087,300 (31 December 2018: RMB7,462,900). Hearings on relevant cases are not held
yet.
2. Contingent liabilities
Repossessed assets without title deeds that were obtained by the credit cooperative, the
predecessor of the Bank before the joint-stock reform, exposed the Bank to lawsuit risk possibly
because of some legal defects.
XVIII. Other Significant Matters
None
XIX. Supplementary Data
1.List of non-recurring gains or losses
(Gains are presented in positive numbers, losses are presented in negative numbers)
Item 2019
i. Gains/losses on disposal of non-current assets, including the offset part of
allowance for impairment losses on assets set aside
97
ii. Over-power approval, absence of formal approval documents, or incidental tax
rebates and exemptions
iii. Government subsidy recognized in the current profit or loss, excluding the
government subsidy closely relating to the Company's normal business operation,
complying with national policies and enjoyed by the Company at a fixed amount or
quantity according to certain standards
6,951
iv. Fund occupation charges on non-financial companies recorded in profit or loss
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 184 of 186
Item 2019
v. Gains generated when the investment cost of acquiring subsidiaries, affiliates and
joint ventures is lower than the fair value of net identifiable assets of the investee
available upon acquisition
vi. Gains or losses on exchange of non-monetary assets
vii. Gains or losses on investment or asset management by agents
viii. Allowance for impairment losses on assets against force majeure, e.g. natural
disaster
ix. Gains or losses on debt restructuring
x. Business restructuring expenses, e.g. employee placement expenses and
integration expenses
xi. Gains or losses on the obviously unfair transaction price in excess of fair value
xii. Net gains or losses on business combination involving entities under the same
control from the beginning of the year to the combination date
xiii. Gains or losses on contingencies irrelevant to normal business operations of the
Company
xiv. Gains or losses on changes in the fair value of financial assets designated at fair
value through profit or loss and financial liabilities designated at fair value through
profit or loss and investment income from disposal of financial assets designated at
fair value through profit or loss, financial liabilities designated at fair value through
profit or loss and available-for-sale financial assets, exclusive of valid hedging
transactions relating to normal business operations of the Bank
xv. Reverse of allowance for impairment losses on receivables individually tested
for impairment
xvi. Gains or losses on external entrusted loans
xvii. Gains or losses on changes in the fair value of investment properties
subsequently measured at fair value
xviii. Effects of one-off adjustments to profit or loss under tax and accounting laws
and regulations on the profit or loss
xix. Income from custody fees on entrusted operations
xx. Recovery of loans written off in previous years during the year 272,839
xxi. Other non-operating income and expenses -3,356
xxii. Other gains or losses that meet the definition of non-recurring gains or losses
Subtotal 276,531
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 185 of 186
Item 2019
xxiii. Income tax effects of non-recurring gains or losses 70,766
xxiv. Effects of minority interests 2,231
Total 203,534
The Group calculates the non-recurring gains or losses in accordance with the Explanatory
Announcement on Information Disclosure for Companies Offering Securities to the Public No. 1 -
Non-recurring Gains or Losses [2008] issued as CSRC Announcement [2008] No. 43.
Gains or losses on changes in the fair value of financial assets designated at fair value through
profit or loss and the investment income from disposal of financial assets designated at fair value
through profit or loss and available-for-sale financial assets are normal business operations of the
Group and not considered as non-recurring.
2.ROE and earnings per share:
ROE and earnings per share are calculated in accordance with the Compilation Rules for
Information Disclosure by Companies Offering Securities to the Public No. 9 - Calculation and
Disclosure of Return on Equity and Earnings per Share (as revised in 2010) issued by CSRC:
2019
Weighted
average
ROE (%)
Earnings per share
(RMB/share)
Basic
earnings
per share
Diluted
earnings
per share
Net profit attributable to common shareholders of the
Company 11.55 0.59 0.59
Net profit attributable to common shareholders of the
Company net of non-recurring gains or losses 10.58 0.54 0.54
2018
Weighted
average
ROE (%)
Earnings per share
(RMB/share)
Basic
earnings
per share
Diluted
earnings
per share
Net profit attributable to common shareholders of the
Company 9.96 0.46 0.46
Net profit attributable to common shareholders of the
Company net of non-recurring gains or losses 9.70 0.45 0.45
XX. Events after the balance sheet date
Hankou Bank Co., Ltd. Notes to 2019 Financial Statements
Page 186 of 186
The COVID-19 virus started to spread across the country in January 2020. The Group
strengthened its support for the outbreak containment work in accordance with the Notice on
Further Strengthening Financial Support for Preventing and Controlling the COVID-19 Epidemic
jointly issued by the People’s Bank of China, the Ministry of Finance, China Banking and
Insurance Regulatory Commission, China Securities Regulation Commission and the State
Administration of Foreign Exchange.
COVID-19 will have certain impact on business activities and overall economic performance in
some provinces, including Hubei, and some industries and affect the quality and return on credit
assets and investment assets of the Group. The level of impact depends on the containment and
duration of the epidemic and the implementation of regulation policies. The assessment is
underway on the release date of this Report.
Legal representative: Chen
Xinmin
Person in charge of accounting:
Ruan Xuzhou
Head of accounting
department: Li Daquan
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