RNS Number : 5485A

Shanghai Pudong Development Bank Co

02 June 2021

Annual Report 2020

Shanghai Pudong Development Bank Co., Ltd.
http://www.rns-pdf.londonstockexchange.com/rns/5485A_1-2021-6-2.pdf

Important Notice

1. The Board of Directors, the Board of Supervisors, Directors, Supervisors, and Senior Management members of the Bank warrant that the information presented in this Report is authentic, accurate and complete, contains no false record, misleading statement or material omission, and bear joint and several liability for the information in this Report.

2. This Report was reviewed and approved at the 21^st meeting of the Seventh Board of Directors held in Shanghai on 25 March 2021. Director Zhang Dong did not attend the meeting due to other business arrangements, and entrusted in written Director Wang Hongmei to vote on his behalf. Other Directors attended the meeting in person and cast their exercised their voting rights.

3. The 2020 financial statements prepared by the Bank in accordance with the Accounting Standards for Business Enterprises and the International Financial Reporting Standards have been audited by KPMG Huazhen LLP who issued a standard unqualified opinion.

4. Zheng Yang, Chairman of the Board of Directors, Pan Weidong, President of the Bank, Wang Xinhao, Vice President and Chief Financial Officer, and Pan Peidong, person in charge of accounting institutions, warrant the authenticity, accuracy and completeness of the financial statements in this Report.

5. The profit distribution plan for the reporting period approved by the Board of Directors is as follows: Distributing to all ordinary shareholders cash dividends at RMB4.80 (tax inclusive) per 10 shares based on the total number of ordinary shares on the day of profit distribution and equity registration. As at 31 December 2020, the Bank's ordinary shares totaled 29,352,140,893, based on which the cash dividends to be distributed were calculated in RMB14,089 million (tax inclusive).

6. There was no misappropriation of the Bank's funds by its controlling shareholder or other related parties for non-operating purposes.

7. The Bank provided no external guarantee in violation of the required decision-making process.

8. Risk statement on forward-looking statements: The future plans, development strategies and other prospective description stated in this Report do not constitute substantial warranty of the Bank to the investors; the investors and other related persons shall be fully aware of the risks and understand the difference between plans, estimates and commitments.

9. Notes on material risks: The Bank has no foreseeable material risks. Operating risks facing the Bank mainly include credit risk, market risk, liquidity risk, and operational risk. The Bank has taken various measures to effectively manage and control various operating risks, which are shown in the "Risk Management" under Section IV "Discussion and Analysis of Business Operation".

10. This Report was compiled in the language of both Chinese and English. If there is any discrepancy of understanding between the versions, the Chinese version shall prevail.

 

Contents

Important Notice........................................................................................................... 2

Contents......................................................................................................................... 3

Definitions...................................................................................................................... 4

Section I Messages......................................................................................................... 5

Section II Corporate Profile....................................................................................... 19

Section III Key Indicators........................................................................................... 25

Section IV Discussion and Analysis of Business Operation........................................ 30

Section V Important Matters...................................................................................... 98

Section VI Changes of Ordinary Shares and the Shareholders............................... 110

Section VII Overview of Preference Shares............................................................. 115

Section VIII Convertible Corporate Bonds.............................................................. 119

Section IX Directors, Supervisors, Senior Management Members, Employees, Branches and Outlets      121

Section X Corporate Governance............................................................................. 137

Section XI Financial Report...................................................................................... 152

Section XII Catalogue of Documents for Inspection................................................ 152

 

Definitions

In this Report, unless the context otherwise requires, the following terms shall have the meaning set out below:

SPD Bank, the Company, the Parent Company, the Bank	:	Shanghai Pudong Development Bank Co., Ltd.
The Group	:	Shanghai Pudong Development Bank Co., Ltd. and its affiliated companies
Shanghai Trust	:	Shanghai International Trust Co., Ltd.
SPDB Financial Leasing	:	SPDB Financial Leasing Co., Ltd.
AXA SPDB Investment Managers	:	AXA SPDB Investment Managers Co., Ltd.
SPD Silicon Valley Bank	:	SPD Silicon Valley Bank Co., Ltd.
SPD rural banks	:	The 28 rural banks established by Shanghai Pudong Development Bank Co., Ltd.
SPDB International	:	SPDB International Holdings Limited
Central bank/PBC	:	People's Bank of China
CBIRC	:	China Banking and Insurance Regulatory Commission
CSRC	:	China Securities Regulatory Commission
End of the reporting period	:	31 December 2020
Reporting period	:	From 1 January 2020 to 31 December 2020
Same period of last year	:	From 1 January 2019 to 31 December 2020
End of last year	:	31 December 2019
Comparing periods	:	From 1 January 2019 to 31 December 2019 From 1 January 2018 to 31 December 2018

 

Section I Messages

1.1 Message from Chairman of the Board of Directors

Spring is the best season of a year, with everything coming back to life.

In 2020, China strove to complete the building of a moderately prosperous society in all respects and achieve the goals of the 13th Five-year Plan. It was also a year making the preparations for the 14th Five-year Plan and celebrating the 30th anniversary of opening-up of Pudong, Shanghai. In such an extraordinary year, all of us at SPD Bank spotted early opportunities from crisis and set the stage amid change. As a result, we attained sound business results and came at a new starting point to march towards high-quality development. In the year, the Group saw its total assets approaching RMB8 trillion, and racked up the operating income in RMB196.4 billion, with the net profit standing at RMB58.3 billion. Every step we have taken forward is attributed to the solidarity from tens of millions of customers, the long-term trust and full support from the vast number of shareholders, and the concerted, unremitting efforts of nearly 60,000 employees across the Bank. On behalf of the Board of Directors, I would like to express my heartfelt gratitude to all shareholders, customers, and persons from all walks of life for their long-lasting support and care in the growth and development of SPD Bank. It is all of you who offer a wellspring of motivation that drives our sustained development.

In the past year, we adhered to the leadership of Party building, and continued to raise corporate governance standards on a further consolidated footing, thus achieving tangibly positive results. The overall leadership of the Party was deeper incorporated into the corporate governance practice, so that it could provide driving forces for the continuous improvement of governance efficiency. As a complete set of corporate governance policies kept improving, different governance entities were enabled to play a better role. Closely following up with the regulatory requirements and cross-checking the best corporate governance practices and standards, we put in place a sound, efficient, coordinated, and balanced corporate governance regime.

In the past year, we became keenly aware of general trends of development, aligned ourselves with the world's top-notch standards, moved faster to make strategic planning, and achieved progress towards the critical battles set out in the three-year action plan. In the face of great changes unseen in a century, we persisted in adapting ourselves to changes and made remarkable strides in the implementation of the three-year action plan. We set out an overall strategic goal to "grow into a globally competitive, top-notch joint-stock commercial bank". Taking this as a starting point, we drew up an overarching blueprint for development during the 14th Five-Year Plan period, and took a step further to put forward a more ambitious goal of "reaching the first class in every respect". In the process, we strove to attain development with quality and efficiency significantly improved.

In the past year, we despite numerous difficulties threw ourselves into the COVID-19 response and the reopening of economy. Our efforts to facilitate the implementation of national strategies and transformation/upgrading of the national economy, therefore, yielded positive results. Faced up with the once-in-a-century COVID-19 pandemic, all people at SPD Bank dedicated themselves to their financial missions, showed their selfless care for the public, and overcame the unprecedented difficulties together with all the Chinese people. Specifically, we set up 723 volunteer teams to fully support the fight against the pandemic. We went out all out to meet the requirements for ensuring stability on six key fronts and maintaining security in six key areas, keep increasing asset supply as needed by the real economy, support the implementation of many key regional development strategies on the national level, including the integration of the Yangtze River Delta, the coordinated development of the Beijing-Tianjin-Hebei region, the construction of Guangdong-Hong Kong-Macao Greater Bay Area, and better serve Shanghai's fulfillment of its major tasks related to the "five centers", "four functions", and "three major missions and one major platform". All of these steps gave a full expression of SPD Bank's image as a socially responsible enterprise.

In the past year, we strengthened capital management, worked harder to return shareholders, and safeguarded the rights and interests of stakeholders, all of which produced positive results. We successfully issued Tier 2 capital bonds in RMB80 billion, financial bonds in RMB50 billion, and perpetual bonds in RMB50 billion, with our capital strength further consolidated. The dividends distributed for the year totaled RMB17,611 million, with the cash dividend ratio exceeding 30%. Our Senior Management collectively bought nearly 400,000 shares of the Company for the third time, a move fully demonstrating its confidence in the future development of SPD Bank. The Board of Directors rolled out a series of measures, such as coming up with creative poverty alleviation modes through financial forces, promoting the development of green finance, strengthening consumer protection, enhancing customer experiences, and taking care of employee growth. It worked with all sectors of society to create a community of shared value economically, socially, and environmentally.

In the past year, we built ourselves on rigid risk control, by continuing to establish a comprehensively effective risk compliance and internal control management regime. To be specific, we kept improving the effective governance mechanism that was based on the three lines of defense, pressed ahead with the company-wide comprehensive risk management and rule of law, and implemented a prudently stable risk management culture. We made every effort to reduce risks with such measures as improving risk management capabilities, accelerating non-performing loan (NPL) collection and disposal, strengthening risk mitigation in key fields, and supporting the forward-looking, precise and efficient supply of high-quality assets. With the concept of "one bank" trickling down and permeating across the Bank, the Head Office was allowed to play a better leading role and carry out look-through management, push forward with the compliance system reform and the audit framework at greater depth, and forge a closed-loop management process. As a result, there was a further enhancement to the front-, middle- and back-office coordination as well as the performance in compliance internal control and auditing supervision.

Facing the vast ocean that embraces thousands of streams, let us set sail now that the wind is fair. SPD Bank turns 28 years old, an age full of vigor and vitality. With Shanghai culture in our DNA, we excel in invigorating ourselves with reforms, and attaining development through innovation. Looking to the new year, we, as a flagship company of the Shanghai International Financial Center, will strive to sharpen our core competitiveness, leadership in the industry, and global influence. We will put more emphasis on making overall planning and do our part to serve the big picture. While seeking changes from traditions, we will embark on a journey that leads us to new headway towards the formation of a new development pattern!

Seeking changes from traditions means we should align ourselves with the best corporate governance practice, explore the best corporate governance experience with Chinese characteristics on the premise of sustainable development, and strive to become a high-quality blue chip in the capital market. In 2021, we will continue to further integrate Party leadership into our efforts to improve corporate governance mechanisms. A modern corporate governance regime will come in place, where "Party leadership takes the core, the Board of Directors makes strategic decisions, the Board of Supervisors performs its oversight role independently, and the Senior Management operates as authorized". Under the regime, institutional advantages can be converted into greater governance efficiency. With reference to the ten standards for sound corporate governance, we will be committed to building an excellent board of directors to lead the Company towards high-quality development and enhancing the investor experience. Pursuing a market-based approach, we will share the value we create with investors, determined to become a high-quality, blue-chip enterprise that is built to last in the capital market.

Seeking changes from traditions means we should play the leading role of strategies and get off to a good start in the 14th Five-Year Plan period. In 2021, we will implement the 14th Five-Year Plan of both the state and Shanghai, and actively push forward with the Company's new five-year development plan. Strategic publicity will be enhanced to build a broader consensus on development, maintain strategic determination, and persist in reform and innovation. The strengthened strategic penetration and cooperation will enable us to enter new stages of high-quality development constantly. Taking "serving the implementation of national strategies" as a mission, we will do best to seize the opportunities presented by the country's push for technological innovation and accelerated economic transformation as well as by the massive development of Shanghai and the Yangtze River Delta. In the process, we will further enhance our comprehensive financial service capabilities, with our name card as "a local bank at the Yangtze River Delta" shining through.

Seeking changes from traditions means we should rely on customer experience and digital technology as the two-wheel drive to make superior businesses grow bigger and stronger and cast SPD as a well-known brand unique to ourselves. Since the outbreak of COVID-19 pandemic, digital technology has accelerated its in-depth integration with financial services, and commercial banks have gained pace in going online, intelligent, and digital. In this context, we will move faster to push forward with digital transformation. Bearing in mind a technical vision of "facing all users, running through the entire time domain, providing full services, and realizing complete intelligent connection", we will closely integrate digital technology with every aspect of customer experience. An enterprise-level operation and management structure will be built to achieve the interconnection within banks, between banks and customers, and between banks and partners. A new customer operation model will be forged with ultimate experience at the core, so that we could consolidate the customer base, gain new development advantages, and reshape brand new growth engines.

Seeking changes from traditions means we should reinforce the bottom line mindset and enhance the comprehensive risk management capabilities. In 2021, we will always remain vigilant against potential dangers and crises, follow closely up with changes to the macroeconomic landscape and policies, boost forewarning capabilities against various risks, and draw up contingency plans. All of these steps aim to build up our ability to manage risks in complex environments. By virtue of strengthened collaborative management, we will accelerate the development of a group-oriented, enterprise-level digital risk control system, where three lines of defense could perform their respective duties and collaborate with each other efficiently, a prerequisite to realize comprehensive risk management without any blind spot left.

As the east wind blows, spring comes back again. The calls of the times get ever louder than before. The year 2021 marks the 100th anniversary of the founding of the Communist Party of China and the beginning of the "14th Five-Year Plan" period. It is of particular importance to China as it pursues the modernization drive, following the completion of the building of a moderately prosperous society in all respects. In the year, we will hold high the banner of reform and innovation, summon the strength to overcome any setback and difficulty, and get determined in securing a complete victory. Striding forward on the pathway to the strategic vision of "grow into a globally competitive, top-notch joint-stock commercial bank", we will celebrate the upcoming 100th anniversary of the founding of the Communist Party of China with concrete action and even better performance!

 

Zheng Yang, Party Committee Secretary and Chairman
 

1.2 Message from President

To withstand the continuous impact caused by the COVID-19 pandemic and the complex situation brought about by the severe recession of the world economy, we in 2020 thoroughly implemented the decisions and plans set out by the CPC Central Committee and the State Council as well as the regulatory requirements, adapted ourselves to the new changes and trends arising from the new development pattern, and went all out to realize the strategic goal "develop itself into a first-class joint-stock commercial bank with international competitiveness in all respects, and make itself a pacesetter and pioneer of the high-quality financial development in the new era.

We took the initiative to serve the real economy with quality and efficiency further assured.

Highly aligned with national strategies, we ramped up investment in key areas. Our total assets approached the RMB8 trillion mark, and scale of corporate loans returned to the leading position among joint-stock banks. We answered the call by actively offering innovative services in a wide range of fields such as private enterprises, small and micro businesses, agriculture, rural areas and farmers, poverty alleviation, FinTech, green finance, and free trade. Of these, our medium and long-term loans to the manufacturing sector grew by 55%, a level far exceeding that of general loans. Besides, we prioritized supporting the implementation of many national strategies related to the Yangtze River Delta, Beijing-Tianjin-Hebei Region, and the Guangdong-Hong Kong-Macao Greater Bay Area. With focus put on "customer experience and digital technology" as the two-wheel drive, we managed to enhance our core competitiveness and leadership in the industry.

We used the current momentum to optimize the bank-wide business structure preferentially.

As we adjusted the debt structure at great depth, there was a continuous decline in the cost of liabilities. Our settlement deposits grew fast, after we intensively engaged strategic customers and vigorously expanded the size of such business lines as personal assets under management (AUM), agency payroll service, settlement, and custodian service. Our constant efforts to improve customer management capabilities and iterate business models propelled assets and liabilities towards a further balanced growth. We strove to broaden the sources of non-interest income. While maintaining our traditional advantages in investment banking, payment and settlement, credit card, asset management, custodian service and beyond, we actively developed wealth management business, which expanded the scale of funds under agency sales significantly and helped us gain an increasing market influence.

We laid a solid foundation and kept improving risk management capabilities.

We went all out to reduce risks. The NPL amount and ratio as two important indicators kept declining for four consecutive quarters, thus presenting a trend of continuous improvement. We promoted NPL recovery and disposal on the one hand and business development on the other. When it came to NPLs, multiple measures were adopted to curb downgrades in the asset classification. The annual cash recovery amount and ratio both hit new record highs. We remained at the vanguard of the industry by risk cost and capital utilization efficiency. As to business development, the supply of high-quality assets was increased efficiently and the quality of assets got further consolidated. At the same time, science and technology were allowed to play a better role in enabling comprehensive risk management to go professional and digital.

We made forward-looking innovation to lead the digital transformation drive.

Digital technology is a powerful tool for commercial banks to carry out business, and open banking is an inevitable choice for them to seek transformation and development. The release of the "Panoramic Bank" blue paper, the co-publication of the "Bank of Things" white paper with Huawei, and the establishment the "Open Finance Alliance" altogether marked our development of open banking entered a new stage. We continued to optimize business models: the "countless households" connection project began to produce results, including 566 new API components that were added throughout the year to reach 14,000 customers; the "finance + technology" comprehensive service plan was iterated and refined to cover 36 new scenarios from 17 industries; and technology-enabled applications such as intelligent customer service, remote intelligent banking, digital human, and intelligent risk control were put into more extensive use, with the artificial intelligence (AI) recognition rate reaching 96% and AI services accounted for more than 85% of the total, making us the first bank in the industry to fully realize intelligent voice services over phone calls. We continued to build up scientific and technological strength, by establishing a technological cooperation community with 30 elite IT companies. The total number of technical personnel accounted for nearly 10% of our workforce, and the annual scientific and technological input stood at RMB5,715 million.

The year 2021 marks the start of the 14th Five-Year Plan period. In the year, the landscapes are still severely complicated at home and abroad. Under such a backdrop, we will continue to understand various policies in a forward-looking and accurate way, make dynamic adjustments to strategies, and follow the main business mission of "making featured business stronger, bolstering weak links, consolidating the foundation, and pushing limits". To increase the application of digital technology on all fronts, we will firmly grasp the historical opportunities presented by technical innovation and economic transformation under the new development pattern, and transform ourselves from a resource-dependent bank to a capability-oriented bank that can steal a march to making breakthroughs in serving the big picture of the country.

We focused on national strategies to enhance the service capabilities of "mega finance".

Dedicated to serving the implementation of national strategies, we set eyes on the integration of the Yangtze River Delta, the coordinated development of Beijing-Tianjin-Hebei region, and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, to strengthen the credit resources and comprehensive financial service support, fuel the country's drive for developing modern industries, and promote the optimization and upgrading of the current economic system. Looking into the future, we will rely on the Bank's advantage of wide range of financial licenses, including trust, fund, overseas investment banking, financial leasing, technology banking, and currency broker, among others to increase the group-wide synergy and improve comprehensive financial service capabilities. To shape "a local bank at the Yangtze River Delta" as a shining brand, we will secure a leading position among Chinese joint-stock banks by virtue of the extensive outlet coverage and impressive service capabilities. With the unparalleled courage, we will move faster to transform the home-field advantage into the absolute leading position among market peers. While promoting the high-quality development across the board, we will do our part to elevate the integrated development of the Yangtze River Delta to a new height.
 

We focused on wealth management to enhance the service capabilities of "mega asset management".

In the year, we were committed to building ourselves into the "customers' preferred bank for wealth management". Relying on "intelligence, professionalism, and ingenuity" as a pivot, we put in place an intelligent wealth management system that integrates demand solicitation, investment research & planning, and readily available interactive services. The delivery of the professional wealth management services that were panoramic, seamless and customized was enabled by the adoption of many measures such as strengthening market prediction, gathering leading institutions, leveraging the advantages of the Group, and tapping high-quality products, which was a prerequisite for reasonable planning of the allocation of general asset classes. As the asset management industry entered a new stage of competition, innovation, and mixed operation, we established a "mega asset management" business framework by making forward-looking arrangements in the business field and integrating various licenses available across the Group efficiently. With these steps, we led the industry by total assets under management and edged ourselves into the first echelon of market players by fee-based income from wealth management business. We continued to manage customer groups based on the factor market. Our fixed income, currencies, and commodities (FICC) business maintained a leading position in the market, and a number of transaction volumes ranked No. 1 across the industry. At the same time, we continued to enhance the value of the "SPDB Risk Hedging" brand, to provide customers in the real economy with distinctive value-added services. Moreover, the creation of a smart asset custodian service system ensured we could maintain the leading position as a Chinese commercial bank that possessed the fullest qualifications and the richest product lineups in the asset custodian business.

We focused on distinctive businesses to enhance the service capabilities of "mega investment banking".

Looking to the future, we will fully exploit the "pan-investment banking" mindset to actively integrate various resources including stocks, bonds and loans as well as diverse functions that span multiple markets and connect institutions of all sorts. While developing a wide range of businesses such as merger and acquisition (M&A) financing, bond underwriting, and syndicated loans, we will build up impressive direct investment capabilities, and escort companies throughout their growth process with quality financial services. In the meantime, we will continue to consolidate our advantages in technology innovation and finance. After striking partnerships with more than 70% of the listed companies on the Science and Technology Innovation Board (STAR market), we will shape the most shining brand as a preferred STAR market listing service provider, and combine "equity investment + FinTech" to achieve common growth with listed companies on a greater extent. As the only joint-stock commercial bank of China that has been included as one of the Innovative Cases in China (Shanghai) Pilot Free Trade Zone for ten consecutive times, we will continue to offer the country-leading FTZ-based financial service solutions, and go a step further to serve the high-value customer groups such as advanced manufacturing, cutting-edge industries, and modern services in different regions. In response to the calls of the state, we will thoroughly implement the national strategy to achieve peak carbon emissions and carbon neutrality. To this end, we will tap deep in fields of green and smart manufacturing, green urbanization, green energy, and carbon finance, prioritize supplying green financing services in the Yangtze River Delta and the Yangtze Economic Belt, and support the development of low-carbon economy and green industries in China. Our endeavors to support energy-saving, eco-friendly industries with commercial activities and market mechanisms are aimed to forge ourselves into a low-carbon bank.

We focused on open banking to enhance the service capabilities of "mega ecosystem".

With the accelerated development of the industrial Internet, it is an inevitable choice for banks to upgrade their business model to a stage of ecology-based operation, by integrating themselves into every domain of industrial chains, urban governance and other aspects. The ultimate goal of this process is to achieve symbiotic development within a mega ecosystem. As the pioneer in the industry to put forward the concept of "open banking", we have continued to expand the ecosystem of digital innovation. According to the characteristics of the three major customer groups: retail customers, enterprises, and government agencies, we rolled out the APP + API platform model that allowed us to push back service boundaries, keep informed of customer flow inlets, and conduct intensive customer operation. In the future, we will further build an industry-specific financial service platform and a digitalized social service platform, which are expected to function as our pool of FinTech means and industrial solutions. As part of these platforms, new models will be proposed to help our corporate and institutional customers attain new development. In the meantime, we will move faster to improve an ecosystem-based business platform called "SPD Life Service", to attract the influx of enterprises and merchants, to introduce more types of non-financial services and functions, and to expand the coverage of diverse scenarios. With these moves, the platform is well-positioned to do better in acquiring more active customers for longer periods of time, and in promoting the efficient conversion of platform users to customers loyal to SPD Bank.

SPD Bank will work hard to create an even brighter future, as it did in the past. To this end, we will rely on digital technology and powerful synergy to make sure proper management can penetrate the Bank as a whole. Coupled with the impactful implementation and execution of strategies, all of us at SPD Bank will make concerted, unremitting efforts to create value for society, allow shareholders to further benefit from our value growth, and embark on a new journey to grow into a first-class joint-stock commercial bank in all respects!

 

Pan Weidong, Deputy Party Committee Secretary, Vice Chairman & President
 

1.3 Message from Chairman of the Board of Supervisors

In the face of the severe and complex situations at home and abroad, especially the severe impact of the abrupt COVID-19 outbreak in 2020, the Company thoroughly implemented the decisions and arrangements made by the CPC Central Committee, the State Council, the CPC Shanghai Municipal Committee and the Shanghai Municipal Government. As per the regulatory requirements and the three-year action plan, we spearheaded the efforts to control the pandemic spread and seek for business development. Specifically, the Bank vigorously supported the resumption of work and production, went all out to help ensure stability on six key fronts and maintain security in six key areas, did everything possible to serve the real economy, and took solid moves to push forward various aspects of operation and management work. As a result, hard-won business results were achieved on all fronts.

In 2020, the Board of Supervisors of the Company strove to overcome the adverse effects inflicted by the pandemic. With the support and cooperation of the Board of Directors and the Senior Management, it, abiding by the pertinent laws and regulations, regulatory requirements and the Articles of Association of the Company and following the division of responsibilities for various entities in corporate governance, accurately pinpointed its functional positioning, performed its duties legally and diligently, and oversaw the duty performance by the Board of Directors, the Senior Management and their members as well as the financial, risk, and internal control management. In doing so, it endeavored to get more out of supervision efforts, integrated supervision measures into development, and helped propel the Company towards high-quality development.

In the past year, the Board of Supervisors of the Company held meetings in accordance with the pertinent laws and regulations, with focus put on the Company's strategic planning, capital management, financial reporting, comprehensive risk management, internal control and compliance, remuneration management, and internal auditing, and other major matters related to business management. The convening of these meetings further ensured the legal and compliant operation of the Company.

In the past year, the Board of Supervisors of the Company oversaw the duty performance by the Board of Directors and its members in accordance with the pertinent laws and regulations. Emphasis was placed on the legality of decisions made by the Board of Directors and its members, the Company's development strategies, the implementation of business concepts, and the improvement of the Company's corporate governance system. Consequently, the Company saw its governance capabilities improved.

In the past year, the Board of Supervisors of the Company oversaw the duty performance by the Senior Management and its members in accordance with the pertinent laws and regulations. Emphasis was placed on the implementation of national strategies, regulatory provisions, company-wide strategic planning, and Board decisions by the Senior Management and its members. With these endeavors, the execution and management capabilities of the Company were beefed up.

In the past year, the Board of Supervisors of the Company carried out a tour inspection on the primary-level outlets to supervise and inspect the COVID-19 response, the implementation of the three-year action plan, and the fulfillment of core messages delivered at the annual work conference of the Bank. It came up with a series of working requirements: along with fighting against COVID-19, losing no time to push forward with the three-year action plan and the key tasks for the year, strengthening the group-wide coordination, adhering to the "one legal person" concept and the principle of compliant operation, and boosting the execution power substantially. The purpose of these requirements was set to better boost the development of the regional economy and society.

In the past year, the Board of Supervisors of the Company paid ongoing attention to financial risk forewarning indicators and their improvements, supervised and inspected the forewarnings about financial risks, kept abreast of these forewarning indicators and their improvements, to make sure these indicators can perform better.

In the past year, the Board of Supervisors of the Company followed closely the comprehensive risk management, by carrying related supervision and inspection and keeping abreast of the management status and system optimization, implementation of differentiated policies for different branches, and other aspects. Meanwhile, it required promoting the reform of the comprehensive risk management system given the characteristics of the Company in the current stage, so as to strengthen the comprehensive risk management effectively, give full play to the role of risk management, enhance risk management capabilities, guard against financial risks efficiently, and facilitate high-quality development of the Bank across the board.

In the past year, the Board of Supervisors of the Company focused on the compliance and internal control management. It conducted compliance and internal control-themed supervision and inspection, to become keenly aware of how compliance and internal control was going on and what improvements its management system achieved as well as the work done in money laundering risk management, examination and enhancement of bank-wide policies, and implementation of rectification measures. In doing so, it made sure the business philosophy of compliant operation took root across the Bank, and all employees raised their awareness of compliance risks, thus constantly enhancing the binding force and execution of policies.

In the past year, the Board of Supervisors of the Company took an active interest in FinTech innovation and carried out special surveys on FinTech innovation. It required going all out to implement the three-year action plan, accelerated the progress of digital transformation, led the innovation in digital service models, and strengthened the enabling role of digitalized operation. In the process, it beefed up the ability across four areas: look-through management, customer operation, risk management, and digitalized management of compliance and internal control.

In the past year, the Board of Supervisors of the Company focused on its ability building, by continuing to optimize the supervision and governance system and supervision methods, improving the supervision mechanisms, strengthening learning and exchanges, and increasing coordinated cooperation with departments engaged in auditing, internal control and compliance, risk management among others to generate a supervisory synergy. Thanks to these efforts, the efficiency of supervision got improved.

The road ahead is obstacle-packed and long. However, a bright future still can be expected, as long as you keep going.

The year 2021 marks the beginning of the 14th Five-Year Plan period in China. It also witnesses that the Company standing at a new starting point to attain a new round of high-quality development. Looking to the year, the Board of Supervisors of the Company will thoroughly study and comprehend the core messages delivered at the Fifth Plenary Session of the 19th CPC Central Committee and the Central Economic Work Conference, and implement the decisions and arrangements of the CPC Central Committee, the State Council, the CPC Shanghai Municipal Committee, and the Shanghai Municipal Government. To align itself with advanced standards at home and abroad, it will improve corporate governance practice, conduct supervisory activities in accordance with laws and regulations, and further improve duty performance capabilities. The Board of Supervisors will escort SPD Bank through its next stage of "growing into a globally competitive, top-notch joint-stock commercial bank"!

 

                                            Wang Jianping, Chairman of the Board of Supervisors

 

Section II Corporate Profile

2.1 Company Information

Chinese name	上海浦东发展银行股份有限公司
Chinese name in short	上海浦东发展银行、浦发银行
English name	SHANGHAI PUDONG DEVELOPMENT BANK CO., LTD.
English name in short	SPD BANK
Legal Representative	Zheng Yang
Initial registration date	19 October 1992
Registered & office address	12, Zhongshan Road (E-1), Shanghai 200002 PRC
Uniform Social Credit Code	9131000013221158XC
Financial Institution License Serial Number	B0015H131000001
Website	http://www.spdb.com.cn
Email	bdo@spdb.com.cn
Service hotline	95528

2.2 Contact Information

	Secretary to the Board of Directors	Listing Affairs Representative
Name	Xie Wei	Li Guangming, Wu Rong
Address	Secretariat to the Board of Directors & Supervisors at 12, Zhongshan Road (E-1), Shanghai
Telephone	021-63611226	021-61618888 ex. Secretariat to the Board of Directors & Supervisors
Fax	021-63230807	021-63230807
Email	xw@spdb.com.cn	ligm-hhht@spdb.com.cn, wur2@spdb.com.cn

Note: Due to change of job, Mr. Li Guangming ceased to serve as Listing Affairs Representative of the Bank as of 25 March 2021.

2.3 Information Disclosure and Access Site

Media partners selected for information disclosure	"China Securities Daily", "Shanghai Securities News", "Securities Times"
Website designated by the CSRC to publish this annual report	http://www.sse.com.cn
Annual report prepared at	Secretariat to the Board of Directors & Supervisors

2.4 Stocks

Type	Place of listing	Short name	Code	Short name before change
Ordinary A-share	Shanghai Stock Exchange (SSE)	SPD Bank	600000	-
Preference share		SPDB P 1	360003	-
		SPDB P 2	360008	-
Convertible corporate bond		SPDB Convertible Bond	110059	-

2.5 Other Related Documents

Accounting firm engaged (financial statements prepared as per Accounting Standards for Business Enterprises)	Name	KPMG Huazhen LLP
	Office address	F/8, KPMG Tower, Oriental Plaza, No. 1 East Chang'an Avenue, Dongcheng District, Beijing, China
	Names of signatory accountants	Shi Haiyun, Dou Youming
Accounting firm engaged (financial statements prepared as per International Financial Reporting Standards)	Name	KPMG Huazhen LLP
	Office address	F/8, KPMG Tower, Oriental Plaza, No. 1 East Chang'an Avenue, Dongcheng District, Beijing, China
Sponsor institution performing continuous supervision duties during the reporting period	Name	CITIC Securities Co., Ltd.
	Office address	F/23 CSCES Tower, No. 1568 Century Avenue, Pudong New Area, Shanghai
	Names of sponsor Representatives	Zhu Yu, Jiang Ying
	Period of continuous supervision	15 November 2019 - 31 December 2020
	Name	Guotai Junan Securities
	Office address	F/36, No.669 Xinzha Road, Jing'an District, Shanghai
	Names of sponsor Representatives	Zhu Zhelei, Yu Weijun
	Period of continuous supervision	15 November 2019 - 31 December 2020
Depository of ordinary outstanding shares with restricted sale conditions		China Securities Depository and Clearing Co., Ltd. Shanghai Branch

2.6 Corporate Development Strategy

The Bank takes "serving the implementation of national strategies and the overall development of economy and society" as its paramount mission, keeps up with the trends of how the Chinese economy will transform and upgrade and works hard to serve the new development pattern featuring a strong domestic market and the positive interplay between domestic circulation and international circulation as well as a host of major national strategies such as the integration of Yangtze River Delta, the coordinated development of Beijing-Tianjin-Hebei Region, and the development of Guangdong-Hong Kong-Macao Greater Bay Area. It vigorously supports the key infrastructure projects on the national and regional levels as well as the development of undertakings in favor of people's wellbeing, facilitates the country's development of a modern industry system, boosts the upgrading of the economy system, and constantly gives full play to the credit resources and comprehensive financial services. As a bank headquartered in Shanghai, it greatly supports the city in fulfilling a host of major tasks related to "three major missions and one major platform", "four functions", "five centers", etc. through enhanced innovation in businesses of corporate banking, retail and financial markets, and helps build Shanghai into the central node of the domestic circulation and a strategic link of domestic and international circulations and into a modern international socialist metropolis with worldwide influence.

The Bank proposes the strategic goal of "comprehensively growing into a globally competitive, top-notch joint-stock commercial bank which moves early to secure a leading position in promoting the finance sector toward high-quality development in the new era". Centered on the aforesaid strategy, the Bank puts forward a path of development, which advocates the high-quality development as the main task, puts service as the core, adopts a market-oriented approach, and relies on customer experience and digital technology to enhance the core competitiveness, industry-wide leading edge, and global influence. In pushing forward various strategies and measures continuously, it will strive to become a trustworthy, preferred bank in the eyes of customers, a high-quality blue chip of capital market, an attentive employer who shares development results with employees, a systemically important bank which boasts of operational compliance and causes no worry for regulators, and a respectable and trusted corporate citizen.

2.7 Analysis on Core Competitiveness

In 2020, focusing on the five-year strategic development plan and the strategic goal of "comprehensively building into a globally competitive, top-notch joint-stock commercial bank", the Bank made consistent efforts to improve the quality and efficiency of serving the real economy. Adhering to the general principle of pursuing progress while ensuring stability, it always focused on development as the top priority, harnessed reform and innovation as the key source of momentum, pursued high-quality development as the main task, delivered financial services as its founding mission, adopted a market-based approach, and kept enhancing its core competitiveness, industry leadership and global influence. In particular, since the outbreak of COVID-19, the Bank focused on both pandemic prevention and control and business development, and maintained steady growth in business performance.

The Group owns many financial licenses allowing it to operate in banking, leasing, funds, trust, currency brokerage and overseas investment banking, and is capable of providing customers with comprehensive financial services. It continuously increased efforts for coordinated development across the Group and enhanced the all-round and multi-tier collaboration, thereby improving the quality and efficiency of the Group-wide synergy.

2.8 Rankings and Awards

Domestic and overseas rankings
Forbes	65th among the "Forbes Global 2000", 16th among Chinese enterprises and 9th among Chinese banks on the list.
The Banker	20th among the "Top 1000 World Banks", 7th among the Chinese-funded banks on the list. 15th among the "Top 500 Banking Brands" and 7th among the Chinese-funded banks on the list; brand value worth USD15,053 million; brand rating of AAA-.
Fortune	220th among the "Fortune Global 500", 58th among Chinese enterprises and 7th among Chinese banks on the list.
Shanghai Enterprise Confederation	6th among 2020 Top 100 Shanghai Enterprises and 4th among 2020 Top 100 Shanghai Service Enterprises
Comprehensive financial service
People's Bank of China	The "Research and Exploration of Building a Data Middle Office under the Data-Driven Mode" and "Automatic Case Generation Project Based on Testing, Analysis and Modeling" won the second prize of the 2019 Banking Technology Development Award. The "Digital Intelligence Sky Eye Risk Control Decision-making System", "New Retail O2O Online Gathering Ecosystem Project", "Smart Retail Customer Marketing Project" and "Cloud-based Original 100 Million-level Traffic E-commerce Payment Link System" won the third prize of the 2019 Banking Technology Development Award.
Shanghai Municipal People's Government	The "Whole-process Intelligent Risk Control Innovation Platform for Retail Banking Wealth and Payment Business" project won the second prize of the 2019 Shanghai Financial Innovation Achievement Award
Shanghai Stock Exchange	Excellent Underwriter of Local Government Bonds and Excellent Underwriter of Financial Bonds of Shanghai Stock Exchange
Shanghai Futures Exchange	2020 Diamond Award for Market Making Business, Special Contribution Award for Market Making Business, Excellent Member Award, Precious Metal Industry Service Award, Excellent Dealer of Standard Warehouse Receipt Platform
Shanghai Gold Exchange	2019 Excellent Member, Best Competitive Trading, Best Innovative Benchmarking Institution, Best Inquiry-based Trading Contribution Institution, Best Inquiry-based Market Development Contribution Institution, Best Special Level Institution of Inquiry-based Trading Institution, and Special Contribution Award for Market Stability during the Pandemic
China Central Depository & Clearing Co., Ltd.	2020 Excellent Asset Custodian
China Foreign Exchange Trade System (National Interbank Funding Center)	2020 Core Dealer, Excellent Dealer in Money Market, Bond Market and Derivatives Market, Excellent Issuer of Interbank Certificates of Deposit, Excellent Asset Management Institution, Contribution to Opening-up Award, Market Innovation Award and X-Repo, X-Swap, X-Lending and iDeal Trading Mechanism Innovation Award
China Banking Association	"Best Performance Award" and "Best Project Award" in the 2020 Syndicated Loan Business Selection, and second prize of "Best Application Achievement Award" in the 2020 FinTech Application Achievement Contest in the Chinese Banking Industry
China Mergers & Acquisitions Association	The M&A Project of Shandong Yingcai University by Yuhua Education won the Best M&A Deal Award
Shanghai Banking Association	"58.com Privatization and M&A Financing Project" and "M&A Integrated Financial Services for M&A of United Family Healthcare by New Frontier" won the Best Investment Banking Case
China Financial Certification Authority	Best FinTech Innovation Application Award, Best Mobile Banking Security Award
The Export-Import Bank of China	"Excellent Underwriter" of RMB Financial Bonds, Contribution Award in Anti-pandemic and Resumption of Work and Production
Agricultural Development Bank	2020 Excellent Underwriter, Best National Commercial Bank, Best Social Responsibility Award, Excellent Secondary Market Maker, Excellent Stock Exchange Underwriter
China Development Bank	2020 Excellent Underwriter in Inter-bank Market, Excellent Underwriter in Stock Exchange Market, Most Socially Responsible Organization - Multi-market Co-development, Most Socially Responsible Organization - Anti-pandemic Pioneer, Best Bidding Performance Institution
The Chinese Banker	"Top 10 Investment Bank Innovation Award" of "2020 China Financial Innovation Award"
Securities Times	Gamma Award for Banking Asset Custody Bank in China
Financial Money	"2020 Gold Market Potential Financial Product - Pension Product" of the 11th Golden Pixiu Award in 2020
Trade Finance	2020 Best Treasury Management Bank
JRJ.com	"Outstanding Corporate Bank Award" in the annual selection of 2020 China Finance Online "Piloting China"
Directors & Boards	Golden Round Table Award - Best Board of Directors
China Business Top 100	The 13th place in the Top 100 Enterprises and the "20-year Special Contribution Award" of China's Top 100 Enterprises
China Financial Advancement Forum	Best Sponsor of the Year in 2020 "Advancement Award" for Real Estate Securitization
	The 2019 Tranche I Asset-backed Note Project of Qilu Transportation Investment Co., Ltd. won the ABS/ABN Award for Outstanding Fee Income Right of the Year
	Puxin Anju Tranche I of 2020 Personal Housing Mortgage Loan Asset-backed Securities Project won the Annual Outstanding RMBS Award
Eastmoney Award	2020 Excellent Family Trust Service Cases, 2020 Best Custodian Bank
Corporate social responsibility
China Banking Association	"Best Green Finance Achievements Award" in 2019 Top 100 Socially Responsible Institution Evaluation of China's Banking Industry, and the Model Unit in 2019 Overall Evaluation of Green Banks
China Banking and Insurance News	"Excellent Communication Case of Social Responsibility" in the 2020 China's Financial Brand Influence Selection
Securities Times	"Social Responsibility Award of China's Listed Companies" in the 14th China's Listed Companies Value Selection
National Business Daily	"Most Responsible Listed Company Award" on the 10th Reputation List of China Listed Companies

2.9 International Credit Ratings as at the End of the Reporting Period

Rating agency	Credit rating	Rating outlook
Moody's	Long-term deposit rating: Baa2 Short-term deposit rating: Prime-2	Stable
Standard & Poor's	Long-term issuer credit rating: BBB Short-term issuer credit rating: A-2	Stable
Fitch Ratings	Long-term issuer default rating: BBB	Stable

 

Section III Key Indicators

3.1 Major Accounting Data and Financial Indicators

In RMB millions	2020 Audited	2019 Audited		Increase/(decrease) compared with the same period of last year (%)		2018 Audited
Major accounting data
Operating income	196,384	190,688		2.99		170,865
Total profit	66,682	69,817		-4.49		65,284
Net profit attributable to the parent company's shareholders	58,325	58,911		-0.99		55,914
Net profit attributable to the parent company's shareholders deducting the non-recurring gains and losses	57,910	57,554		0.62		55,643
Net cash flows from operating activities	126,385	-68,628		N/A		-338,360
Main financial indicators
Basic earnings per share (RMB)	1.88	1.95		-3.59		1.85
Diluted earnings per share (RMB)	1.73	1.92		-9.90		1.85
Basic earnings per share after deducting non-recurring gains and losses (RMB)	1.87	1.90		-1.58		1.84
Net cash flows from operating activities per share (RMB)	4.31	-2.34		N/A		-11.53
Profitability indicators (%)
Weighted ROE	10.81	12.29		Down 1.48 percentage points		13.14
Weighted ROE after deducting non-recurring gains and losses	10.73	12.00		Down 1.27 percentage points		13.08
Returns on average total assets	0.79	0.90		Down 0.11 percentage point		0.91
Fully-diluted ROE	10.46	11.58		Down 1.12 percentage points		12.27
Fully-diluted ROE excl. non-recurring gains and losses	10.38	11.30		Down 0.92 percentage point		12.21
Net interest spread	1.97	2.27		Down 0.30 percentage point		2.06
Net interest margin	2.02	2.34		Down 0.32 percentage point		2.13
Cost-to-income ratio	23.78	22.58		Up 1.20 percentage points		24.90
Cash dividend ratio	25.50	30.80		Down 5.30 percentage points		18.96
Percentage in total operating income (%)
Net interest income to operating income	70.57	75.79		Down 5.22 percentage points		72.06
Non-interest income to operating income	29.43	24.21		Up 5.22 percentage points		27.94
Net income of fee and commission to operating income	17.29	12.99		Up 4.30 percentage points		16.23
In RMB millions	At the end of 2020 Audited	At the end of 2019 Audited		Increase/(decrease) compared with the same period of last year (%)		At the end of 2018 Audited
Scale indicators
Total assets	7,950,218	7,005,929		13.48		6,289,606
Incl.: Total loans	4,533,973	4,025,901		12.62		3,598,474
Total liabilities	7,304,401	6,444,878		13.34		5,811,226
Incl.: Total deposits	4,076,484	3,627,853		12.37		3,227,018
Net assets attributable to the parent company's shareholders	638,197	553,861		15.23		471,562
Net assets attributable to the parent company's ordinary shareholders	528,288	493,945		6.95		441,642
Net assets per share attributable to the ordinary shareholders of the parent company (RMB)	18.00	16.83		6.95		15.05
Asset quality indicators (%)
NPL ratio	1.73	2.03		Down 0.30 percentage point		1.90
Allowance to NPLs	152.77	134.94		Up 17.83 percentage points		156.08
Allowance to total loans	2.64	2.74		Down 0.10 percentage point		2.97

Notes:

(1) Earnings per share, diluted earnings per share, and weighted ROE are calculated according to the Rules for Information Disclosure by Companies Offering Securities to the Public No.9 - Calculation and Disclosure of ROE and Earnings Per Share (Revised in 2010).

Basic earnings per share = net profit attributable to ordinary shareholders of the parent company/weighted average number of ordinary shares outstanding.

Diluted earnings per share = (net profit attributable to ordinary shareholders of the parent company + effect of dilutive potential ordinary shares on net profit attributable to ordinary shareholders of the parent company)/(weighted average number of ordinary shares outstanding + weighted average number of dilutive potential ordinary shares converted into ordinary shares).

Weighted ROE = net profit attributable to ordinary shareholders of the parent company/weighted average net assets attributable to ordinary shareholders of the parent company.

(2) The Bank distributed dividends of RMB825 million and RMB837 million of SPDB P2 and SPDB P1, respectively in March and December 2020. The Bank paid interest of RMB1,419 million on SPDB 2019 Perpetual Bonds in July 2020. When calculating the earnings per share and weighted ROE disclosed in the Report, the Bank considered the impact of the distribution of the preference stock dividends of the two tranches and the payment of interest on perpetual bonds.

(3) Non-recurring gains and losses are calculated based on the definition outlined in CSRS Announcement [2008] No.43 - Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Extraordinary Profit and Loss.

(4) Net assets per share attributable to ordinary shareholders of the parent company = (net assets attributable to shareholders of the parent company - preference shares of other equity instruments and perpetual bonds)/total number of ordinary shares at the end of the period.

(5) Returns on average total assets = net profit/asset average balance, asset average balance = (total assets at the beginning of the period+ total assets at the end of the period)/2.

(6) Fully-diluted ROE = net profit attributable to the parent company's ordinary shareholders during the reporting period/net assets attributable to the parent company's ordinary shareholders as at the end of the reporting period.

(7) Fully-diluted ROE after deducting non-recurring gains and losses = net profit attributable to the parent company's ordinary shareholders during the reporting period after deducting non-operating gains and losses/net assets attributable to the parent company's ordinary shareholders as at the end of the reporting period.

(8) Net interest spread is the difference between average yield of total interest-earning assets and average cost of total interest-bearing liabilities.

(9) Net interest margin = net interest income/average balance of total interest-earning assets.

(10) Cost-to-income ratio = general and administrative expenses/operating income.

(11) Cash dividend ratio = cash dividend amount/net profit attributable to the parent company's ordinary shareholders in the consolidated statements in the bonus year. The ratio is calculated based on 29,352,140,893, the total ordinary shares of the Company as at the end of the reporting period.

(12) Total loans = corporate loans + personal loans + principal balance of discounted bills; total deposits = corporate deposits + personal deposits + principal balance of other deposits.

(13) According to regulatory statistical requirements and industry practices, finance lease receivable is recognized under "loans and advances" from "other assets". According to relevant regulatory requirements of the Ministry of Finance (MOF), the State-owned Assets Supervision and Administration Commission (SASAC), the CBIRC and the CSRC, installment income from credit card is recognized under "interest income" from "fee and commission income". Due to the changes in the presentation criteria for the above items in financial statements, the comparative data of the same period were restated in line with the current criteria.

3.2 Differences between Accounting Data Prepared as per ASBE and IFRS

Since the Group adopted the IFRS 16 Leases on 1 January 2019 for the first time, differences have emerged in the net profit and net assets of the Group for the reporting period between its domestic financial statements prepared as per the Accounting Standards for Business Enterprises (ASBE) and its international financial report prepared pursuant to the International Financial Reporting Standards (IFRS). Related standard explanation can be seen in the "Preparation basis and accounting policy" with respect to international financial statements. Differences in accounting data are displayed as below:

In RMB millions

Accounting standards	Net profit in the period	Net assets as at the end of the period
ASBE	58,993	645,817
IFRS	58,924	645,216
Difference in amount	69	601

 

3.3 Key Financial Data per Quarter of the Group in 2020

In RMB millions

Item	1st quarter (Jan. - Mar.)	2nd quarter (Apr. - Jun.)	3rd quarter (Jul. - Sep.)	4th quarter (Oct. - Dec.)
Operating income	55,424	45,983	47,324	47,653
Total profit	20,706	12,860	18,066	15,050
Net profit attributable to the parent company's shareholders	17,361	11,594	15,787	13,583
Net profit attributable to the parent company's shareholders deducting the non-recurring profit or loss	17,296	11,501	15,753	13,360
Net cash flows from operating activities	92,378	30,959	86,753	-83,705

3.4 Non-recurring Gains and Losses and Amount

In RMB millions

Item	2020	2019	2018
Proceeds from disposal of non-current assets	-8	1,470	51
Government subsidies	720	485	515
Other net non-operating expense	-54	-47	-59
Income tax effect of non-recurring gains and losses	-179	-488	-147
Total	479	1,420	360
Incl.: Non-recurring gains and losses attributable to the parent company's ordinary shareholders	415	1,357	271
Non-recurring gains and losses attributable to minority shareholders	64	63	89

 

Section IV Discussion and Analysis of Business Operation

4.1 Overall Business Operation and Analysis on Competitive Edges of the Bank

4.1.1 Overall Business Operation of the Bank

To withstand the impact caused by the COVID-19 pandemic, since 2020, the Group has actively implemented the national strategies and regulatory requirements, did everything possible to ensure stability on six key fronts and maintain security in six key areas, and kept keenly aware of new changes and new trends presented by the "dual circulation" development pattern. Focused on the goals set out in the three-year action plan, it took high-quality development as one of its main tasks, relied on customer experience and digital technology as the two-wheel drive, and made confident, unremitting efforts to serve the real economy, increase venture capital accrual, and lay a solid foundation for stable development. Therefore, great strides were made in business operation.

Assets and liabilities attained balanced growth.

As at the end of the reporting period, the total assets of the Group posted RMB7,950,218 million, representing an increase of RMB944,289 million or 13.48% over the end of previous year. Of these, the balance of loans in local and foreign currencies stood at RMB4,533,973 million, representing an increase of RMB508,072 million or 12.62% over the end of previous year. The Group's total liabilities amounted to RMB7,304,401 million, an increase of 13.34%, of which the balance of deposits in local and foreign currencies was RMB4,076,484 million, an increase of RMB448,631 million or 12.37% over the end of 2019.

Operating income grew steadily.

During the reporting period, the Group saw its operating income increasing steadily. The Group achieved an operating income of RMB196,384 million, an increase of RMB5,696 million or 2.99% over 2019; a total profit of RMB66,682 million; and net after-tax profits attributable to the parent company's shareholders of RMB58,325 million. In 2020, the average return on assets (ROA) of the Group stood at 0.79%, the weighted average return on equity (ROE) was 10.81%, and the cost-to-income ratio went up 1.20 percentage points to 23.78%, compared with the previous year.

The business structure was optimized continuously.

During the reporting period, the Group took multiple measures to adjust structure and stabilize growth, with remarkable effects produced in this regard. Its three major business segments saw their operating income structure being optimized continuously. Retail banking continued making the largest contribution among all business lines; the net interest income of the Group amounted to RMB138,581 million; and the net non-interest income of the Group posted RMB57,803 million, up 25.21% year on year.

Asset quality continued to improve.

During the reporting period, the Group's credit business operated steadily. The new NPLs grew slower, and risk resolution progressed as scheduled. The NPL ratio at the end of 2020 decliend compared with the year beginning, with asset quality improved. As at the end of the reporting period, based on the five-tier loan classification, the Group's balance of NPLs in the last three categories (namely substandard, doubtful and loss) was RMB78,461 million, a decrease of RMB3,420 million over the end of 2019. The NPL ratio stood at 1.73%, a decrease of 0.30 percentage point over the end of 2019. The NPL coverage ratio posted 152.77%, an increase of 17.83 percentage points from the end of 2019.

Steady progress was made towards conglomeration and internationalization.

During the reporting period, the companies in which the Group invested generated revenue worth RMB11,764 million and net profit worth RMB3,473 million. These companies covered a wide range of business fields such as trust, financial leasing, fund, rural banking, technology banking, overseas investment banking, and currency brokerage. Overseas branches saw their total assets crossing the RMB200 billion mark. Of these, Hong Kong Branch became further influential in the market; Singapore Branch continued offering commodities and other services unique to itself; and London Branch made great efforts to help the Bank operate across different time zones of Asia and Europe.

4.1.2 Analysis on Competitive Edges of the Company

4.1.2.1 Consolidated regional advantages in the Yangtze River Delta

As a national joint-stock bank headquartered in Shanghai, SPD Bank regards serving the Yangtze River Delta as a strategic stronghold for business development. It strives to promote financial reform and opening up and seek innovative development, in the hopes of expanding its home-field advantages in Shanghai to the entire Yangtze River Delta region.

(1) Wide distribution of branches/institutions and a broad customer base

The Company has established seven branches in Shanghai, Nanjing, Hangzhou, Ningbo, Suzhou, Hefei and China (Shanghai) Pilot Free Trade Zone ("Shanghai FTZ") of the Yangtze River Delta, which possessed total assets of nearly RMB2.2 trillion, operated more than 500 business entities in total, and hired over 10,000 employees. Taken together, it secured a leading position among joint-stock banks in the region by both business coverage and service capabilities. Ahead of all peers, the Company set up a management headquarters of the Yangtze River Delta Integrated Development Demonstration Zone, and launched a series of innovative, distinctive financial services such as "Yangtze River Delta Loan", "Yangtze River Delta Bond", "Yangtze River Delta Purchase" and "Yangtze River Delta Chain". As at the end of the reporting period, the Company served more than 360,000 corporate customers and 28 million retail customers in the Yangtze River Delta. Its RMB loans in the region totaled RMB1.38 trillion and outstanding deposits reached RMB1.74 trillion. The Company ranked first among joint-stock banks by outstanding deposits and loans.

(2) Vigorous support for the integrated development of the Yangtze River Delta

Vigorously supporting the building of the STAR Market. Taking the establishment of the STAR Market as an opportunity, the Company worked with various entities such as government organs, securities firms, PE/VCs, and high-tech companies to launch the full-cycle, whole-process, cross-market, intelligent and integrated financial services. As at the end of the reporting period, the Company served more than 40,000 high-tech companies, representing an increase of over 5,000 from the beginning of the year. The loan balance of these companies exceeded RMB240 billion, up 33% from the beginning of the year. Of the companies listed on the STAR Market, more than 70% were customers of the Company.

Strengthening the support for green economy with financial services. The Company fulfilled social responsibilities due to financial enterprises, tapped deep into a wide range of fields such as green and smart manufacturing, green urbanization, green energy, and carbon finance, strengthened product development and innovation, and put focus on the supply of green financing in the Yangtze River Delta and the Yangtze Economic Belt. As at the end of the reporting period, the Company's green credit balance stood at RMB262.8 billion, an increase of RMB37.5 billion from the beginning of the year.

Fully supporting the construction of the Shanghai FTZ New Area. The Company continued to maintain its leading edge over FTZ business in Shanghai. Its outstanding loans granted to enterprises at the Lingang New Area went beyond RMB10 billion. It took the lead in rolling out over 14 innovative businesses in the area, which included the first cross-border RMB facilitation services for the high-quality enterprises that had settled down there, the first deal of full-functional, cross-border and two-way capital pool business, and the first digitalized facilitation services for cross-border payment agencies. The Company topped the comprehensive ranking of core free trade business among joint-stock banks.

4.1.2.2 Advantages in intelligent wealth management services

Relying on "intelligence, professionalism, and ingenuity" as a pivot and upholding the "panoramic bank" blueprint of "facing all users, running through the entire time domain, providing full services, and realizing complete intelligent connection", the Company did the following: building an intelligent wealth management system, releasing the "SPDB Zhuoxin" wealth management brand, and applying a host of cutting-edge FinTech such as AI, big data, cloud computing, blockchain, Internet of Things (IoT), and virtual reality (VR) to various business scenarios represented by customer demand solicitation, investment research & planning, and readily available interactive services, with a view to turning SPD Bank into the "customers' preferred bank for wealth management".

(1) Full-process control enabled by intelligent and digital technologies

Digital product management: Agency products saw their full life cycle management going digital, which consisted of access review, online review, duration monitoring, and automatic notification of risk forewarnings. Digital smart marketing: More than 2,000 retail customer labels (32 sub-categories and seven categories) as well as 360-degree panoramic customer portraits were realized to gain in-depth customer insights. Customer experience sketching and automatic tracking enabled the Company to do active marketing. Profit experience analysis tools were developed to support personalized settings of profit/loss stop and automatic trigger reminders. Digital channel operations: The "smart brain in the hall" concept was put forth to support intelligent perception, smart calculation, and precise service delivery. The mobile banking app was upgraded to deliver a full-chain wealth management experience that supported yield prediction (before investment), daily inquiry into yield (during investment), and yield traceability (after investment). Besides, intelligent operations launched throughout the year also included intelligent voice service, digital human, and 30 real-time trading perceptions. Digital risk control: An intelligent risk control system was put in place to ensure the compliant sales of wealth management business. Compliance requirements such as audio and video recording were embedded into business processes for beforehand control. Furthermore, recordings could support automatic broadcasting and real-time intelligent inspection.

(2) The number of customers and total AUM both reached a higher level.

The Company focused on the building of a panoramic bank to explore customer business models, enabled financial services to reach more customer scenarios, and provided distinctive, high-quality financial services. As at the end of the reporting period, the Company had 118 million retail customers. The balance of personal financial assets under its management (including market value) reached RMB3.13 trillion, maintaining a trend of steady growth. The balance of personal deposits stood at RMB939 billion. The wealth management income hit RMB7.07 billion.

(3) Comprehensive services were delivered to help customers attain steady wealth appreciation.

During the reporting period, the Group prioritized cooperation with leading companies, strengthened its multi-license synergy, developed the agency sales of fund, trust, insurance and other products vigorously, and strove to help customers achieve sustained and steady wealth appreciation. The balance of personal wealth management products stood at RMB992,806 million, and the balance of new net-worth wealth management products as a share of the personal wealth management products surged by 30 percentage points to 67%. As to the fund business, the Company strengthened market research and prediction. It optimized a reserve of selected funds named "Kao Pu Selection", with the funds under management exceeding RMB150 billion and those sold by proxy hitting new highs. The Company, therefore, became increasingly influential in the market. The private banking business improved the integrated and innovative service model, by issuing the Qizhen series of project-based wealth management products. As at the end of the reporting period, private banking products raised funds of RMB45.9 billion; the number of private banking customers approached 24,000; and the financial assets under management from private banking customers totaled nearly RMB470 billion.

4.1.2.3 Fortifying the leading edge in the financial market

The Company continued improving its services to core customers in the financial market business. The upgraded agency businesses/services enabled it to sharpen its market competitiveness in the upstream and downstream segments of the industry chain. Relying on innovative product strategies, it sought to obtain excess yields through differentiated services. With an ecosystem put in place, the Company provided customers in the real economy with high-value or value-added services. In the process, it managed to demonstrate its core competitiveness.

(1) Management of financial institution customers

The Company entered partnerships with over 3,000 target customers, which covered all of the 15 industries. Of which, strategic partners accounted for 68%. The "E Peer" interbank online platform got its service capabilities further enhanced, and many of its functions remained at the forefront of the industry, which included interest rate bond sales, SPDB Connect, and loan prime rate (LPR) swaps. The "Bund 12" interbank exchange platform kept improving. The launch of online live streaming activities managed to further enhance the customer experience. Consequently, the brand became increasingly influential.

(2) Operating characteristics of the financial factor market

The Company accumulatively obtained 67 business qualifications related to the financial factor market. In the financial market, it struck the first brokerage-traded interest rate swap option transaction across the entire market. At the same time, it pioneered the business where fund shares could be used to offset the minimum deposit for RMB interest rate swaps on behalf of customers. In the bill market, the Company participated in the depository and creation of the first standardized bills across the entire market, and took part in building a cross-border trade financing asset transfer platform. In the futures market, the Company actively supported Dalian Commodity Exchange (DCE) in business innovation, and secured many No. 1s in cooperation with the exchange, which included the first standard warehouse receipt transaction of DCE on the over-the-counter integrated service platform, the first bank to apply for a pilot project of DCE's Corporate Risk Management Program in 2020, and the first structured deposit issued to link with DCE's dominant futures contracts.

(3) Relative leading edges in the FICC business

Actively serving the real economy: The Company dealt with as the lead underwriter China's first "Climate Change Response"-themed green financial bonds China Development Bank (CDB) issued in multiple markets, and invested in the world's first carbon-neutral bonds; and made investment in the first small and micro enterprise-oriented financial bonds in the Guangdong-Hong Kong-Macao Greater Bay Area, the first special bonds for the mixed ownership system reform of central enterprises, and the first COVID-19 bond as an underwriter, among others. During the pandemic response, it made vigorous efforts to maintain market stability and support pandemic control enterprises in resuming production. What it had done won the "Award for Special Contribution to Market Stability during the Pandemic Response" from the Shanghai Gold Exchange. Closely capturing opportunities that arose from market swings: The Company accurately predicted and spotted opportunities presented by market swings, intensified strategy formulation and execution efforts, and posted rapid revenue growth in such fields as bonds and commodities. Enhancing the core risk hedging capabilities: The "SPDB Risk Hedging" brand got its core customer service capabilities improved significantly. Relying on superior products including SPDB Merchant Banking, SPDB Connect, and LPR swaps, it put in place a vertical digital operation regime that combined "digitalized customer acquisition and digitalized management" to serve more than 21,000 enterprises of various sorts engaged in the real economy. Strengthening transaction risk management: The Company carried out reverse extreme stress tests in response to the increased market volatility during the reporting period, in a bid to improve the rationality and safety of investment and transaction strategies. Leading the market with pioneering innovation: The Company promoted digital transformation and strengthened program trading; actively advocated the amortized cost fund investment as a means to balance the asset-liability portfolio; and participated in market innovation, launching a dozen of businesses ahead of other market players vigorously.

(4) Full asset management operating licenses and a wide range of products and channels

The Group owns the bank wealth management license (in preparation) as well as asset management licenses held by companies it mainly invests in, which include trust and PE licenses held by Shanghai Trust and its asset management subsidiary, fund and fund asset management licenses held by AXA SPDB Investment Managers, Tullett Prebon SITICO (China) Limited, and its asset management subsidiary, overseas investment banking licenses (investment banking and brokerage) held by SPDB International and its brokerage subsidiary, and overseas asset management licenses held by the asset management subsidiary of SPDB International and the Hong Kong subsidiary of Shanghai Trust.

Types of new products: As at the end of the reporting period, the Company's cash management products maintained at a scale of RMB365 billion; bond investment products totaled more than RMB100 billion; and the "Yueyingli" hybrid regularly-opened bond products were reformed at an accelerated pace, with the scale of new products reaching RMB94 billion. The option-embedded hybrid products were developed in full swing, with the scale exceeding RMB67 billion. Issuance of key products: The cumulative scale of option-embedded products hit RMB67 billion; and pension products rose as hotspots, with brand influence continuing to increase. A total of 26 products were issued, with the scale of products in duration amounting to RMB14.7 billion. A total of 43 project investment products were issued for sales, with the total scale of products in duration exceeding RMB18.6 billion.

(5) Leading the asset custody market

As at the end of the reporting period, the assets under the custody of the Company totaled RMB13.80 trillion, a figure ranking No. 4 of the industry. The custody fee income amounted to RMB3,036 million during the reporting period. The scale of public funds under custody increased by 75% year on year, and the funds under IPO custody stood at RMB379.3 billion, which ranked second in the industry and accounted for 12% of the total IPO size across the industry. The insurance funds and pension funds under custody both increased by more than 50% year on year.

4.1.2.4 Enhancing the advantages of science and technology in empowerment and innovation

The Company accelerated the pace of digital transformation as a move to spot new opportunities and set new stages. Always putting customers in the first place and taking scenarios as the starting point, it vigorously enabled financial services to go "online, digital, intelligent, and ecosystem-based". To render customers and users with more convenient services, the Company rolled out a host of measures, which included expanding offline financial businesses online, building specialized direct selling terminals of financial products, and sharing ecosystem-based financial services.

(1) Digital transformation of customer operation

For retail customers, a virtual business hall was unveiled to realize the online closed-loop marketing of wealth management products. An intelligent marketing project was developed to match user needs with products accurately. The Tianju app was launched, with which users could apply for personal housing mortgage loans online throughout the entire process and post-loan services related to offline retail credit online.

For corporate customers, the Company developed online financing services and expanded online service channels. It opened up new customer service channels with the help of the Internet platforms. Specifically, three standardized products were developed, which were quick loan secured with housing, bank-taxation loan, and online discount. The Company's online banking channel was added with a function, allowing users to apply for renewing loans without repayment of principal online. Big data, electronic signature, Internet, and other technologies were employed to boost the Company's ability to serve customers by online means.

For interbank customers, the Company optimized the "E Peer" interbank interactive marketing platform, by adding new online transaction varieties such as interest rate bond distribution as well as ecosystem and scenario-based functions like live streaming of online salons and interbank Q&A sessions. For professional investment customers, the "E Alliance" professional customer service platform took shape, which included foreign exchange derivatives, precious metal derivatives, and interest rate derivatives. An online custodian service platform was set up for custody customers.

(2) "Panoramic Bank" and "Financial Alliance"

The Company brought the open banking drive into a new stage of development: panoramic bank, where it had a vision of "facing all users, running through the entire time domain, providing full services, and realizing complete intelligent connection", redefined open banking from many dimensions of customer experience, empowerment & credit enhancement, and value co-creation, and provided guidance for the building of a company-wide digitalized customer management system and the innovation in industrial digital finance business.

The Company, along with nine financial institutions in Beijing, Zhejiang, Shanghai, and Anhui, among other places, co-initiated and established an open financial alliance, covering various forms of financial business such as banking, securities, and insurance. Dedicated to facilitating in-depth cooperation among members across many areas such as business sharing, technology empowerment, and ecosystem co-construction, the alliance would help financial institutions to complement each other's advantages and achieve win-win outcomes. As per regulatory instructions, it will make strides in the technical specifications, governance framework, and other aspects of the open banking industry. With its help, the Company will shift its focus from "high-quality development of single entities" to "overall coordinated development."

(3) Innovation laboratory

The Company officially inaugurated its innovation laboratory in February 2018. To date, an ecosystem in favor of joint innovation has taken shape. A total of 12 joint laboratories were founded with Huawei, Baidu, iFlytek, China Mobile, IBM, and other high-tech companies. At the same time, the Company built joint research (innovation) centers with Tsinghua University and Zhejiang University as well as a joint research center for financial cyberspace security with Harbin Institute of Technology, thus forming a new ecosystem conducive to joint scientific research and innovation.

(4) Technology empowerment

Intelligent customer service agent "Xiaopu": The Bank developed the "SPDB Brain" visual and acoustic center. With it, telephone banking could offer scenario-based intelligent services such as natural language-based product recommendation and business consultation as a means of man-machine interaction. Besides, capable of fast learning and iterative optimization, the center could guarantee the constant improvement for the quality of service and experience in the form of human-machine interaction. So far, the speech recognition rate has exceeded 96% and the service rate gone beyond 85%, both of which have few equals in the industry.

Intelligent mobile app version 10.0: Spearheaded by the concept of "minimalist experience", the Company took a step further to build a panoramic bank and a comprehensive financial service platform integrating wealth management and life services. Centered on wealth management, mobile banking subversively reshaped its full-process service experience (before, during and after investment), and launched the AI-enabled interactive digital employee to serve as a "shopping guide" for wealth management products. As more living services became available online, a host of apps aimed to meet people's daily needs like shopping, traveling, medical insurance, and credit information inquiry were rolled out, along with an interactive information community, so as to provide users with services that could cover all kinds of scenarios.

Remote smart banking: To propel virtual banking towards remote and intelligent operation, and strengthen the innovative integration of AI and robotic process automation (RPA) technologies, the Company built an intelligent voice customer service system that could support intelligent incoming and outgoing calls, thus becoming the first bank to fully realize intelligent voice services across the industry. The AI recognition rate was up to 96%, and AI-enabled services accounted for more than 85%, both figures reaching an industry-leading level. Specifically, the system could make 200,000 outgoing calls per day, which was equivalent to the workload of nearly 800 persons. To date, it has been widely used in many scenarios including customer group marketing, product promotion, collection, call margin, and verification of large-amount transactions. The interaction completion rate reached 33%.

SPD Life Service app: Bearing customer needs in mind, the Company embedded financial and non-financial services into clothing, food, housing, transportation, and other scenarios, and launched the SPD Life Service app that provided a full range of services for consumers and empowered businesses. In the face of the abrupt pandemic spread, the app promptly unveiled the mask reservation, body temperature registration, online diagnosis service, and other functions that were urgently needed in the fight against the pandemic. With this move, it helped small and medium-sized enterprises, community service personnel, and individual customers solve their problems, benefiting over 4,800 enterprises resuming operation in more than 150 cities across the country and earning 3.83 million customer visits in total. As at the end of the reporting period, the app had 11 million registered users.

Tianju app: In forming a non-banking ecosystem, the Company rolled out the home scenario-based Tianju app, an online service platform that could integrate a host of functions such house hunting and viewing, mortgage loan application, and special offers. It was aimed to furnish home buyers with closed-loop services throughout the entire process. Since its official promotion, the app dealt with nearly 66,500 pre-applications for mortgage loans.

Intelligent marketing platform: As at the end of 2020, the Company carried out marketing campaigns targeted at a total of 7.58 million agency payroll service customers that were distributed among 21 branches. During the reporting period, the intelligent marketing platform saw its annual average daily net assets increasing by RMB2,365 billion. The wealth management customers, acquired by the platform, brought new assets worth more than RMB30 billion on a monthly average daily basis.

Digital human: The Company launched the first AI-enabled fund trainer in the industry. So far, it has delivered training to more than 18,000 persons. Besides, it also rolled out the personified digital service panel called "Xiaopu Wenwen" to help outlets upgrade their services and marketing activities towards digital and intelligent operation. The mobile banking app was added the "digital human" conversational shopping guide services. Compared with the traditional static web-pages, the new function managed to more than double the recommendation conversion rate. The launch of the H5-version "digital human" identity authentication service could help verify the identities of new customers acquired through the Internet platforms. In addition, the AI-enabled news broadcasting service became available.

Intelligent risk control: The function was applied in a wide range of fields including credit risk, anti-fraud, and anti-money laundering (AML). Data available inside and outside the Company were pooled together to establish a model for identifying corporate group relationships at an accuracy rate of over 72% and for identifying and forewarning customer risks at an accuracy rate of 70%. In terms of retail credit risk control, the "Fabei" independent risk control model strategy was fully applied for open customer groups in diverse scenarios such as installment service over mobile banking and "Fabai payment". The enterprise-level transaction anti-fraud model system was expanded to block fraudulent transactions and recover losses worth more than RMB37 million.

Intelligent outgoing calls: A total of 25.77 million outgoing calls were made by the Company to serve customers in 2020, a figure five times the workload of human agents over the same period. The call completion rate remained above 66%, and the interaction completion rate stayed above 34%, two figures basically on par with the staff service.

(5) IT input

	2020
IT input (In RMB millions)	5,715.09
The number of persons engaged in technological development at the parent company	5,859

4.2 Analysis of Income Statement

During the reporting period, the Group's operating income hit RMB196,384 million, up RMB5,696 million or 2.99% year on year, and the net profits attributable to the parent company's shareholders posted RMB58,325 million, a decrease of 0.99% year on year.

In RMB millions

Item	The reporting period	Same period of last year	Change in amount
Operating income	196,384	190,688	5,696
-Net interest income	138,581	144,523	-5,942
-Net fee and commission income	33,946	24,774	9,172
-Other net income	23,857	21,391	2,466
Operating expenses	129,648	120,824	8,824
-Tax and surcharges	2,117	1,946	171
-General and administrative expenses	46,702	43,052	3,650
-Impairment losses on credit assets and impairment losses on other assets	79,553	74,707	4,846
-Other operating costs	1,276	1,119	157
Net non-operating income and expenses	-54	-47	-7
Total profit	66,682	69,817	-3,135
Income tax expense	7,689	10,311	-2,622
Net profit	58,993	59,506	-513
Net profit attributable to the parent company's shareholders	58,325	58,911	-586
Minority interest income	668	595	73

4.2.1 Operating income

The following table sets out the composition of the Group's operating income and the proportions of each part in the recent three years.

Item	2020 (%)	2019 (%)	2018 (%)
Net interest income	70.57	75.79	72.06
Net fee and commission income	17.29	12.99	16.23
Other net income	12.14	11.22	11.71
Total	100.00	100.00	100.00

Note: According to relevant regulatory requirements of the MOF, the SASAC, the CBIRC and the CSRC, installment income from credit card is recognized under "interest income" from "fee and commission income". Due to the changes in the presentation criteria for the above item in financial statements, the comparative data of the same period were restated in line with the current criteria.

During the reporting period, the Group's total business income was RMB363,099 million, representing a year-on-year increase of RMB8,418 million or 2.37%.

The following table sets out the changes in the total business income.

In RMB millions

Item	Amount	Percentage in total business income (%)	Increase/decrease over the same period of previous year (%)
Loan interest income	215,987	59.48	0.19
Interest income on investment	62,405	17.19	-1.13
Fee and commission income	44,257	12.19	24.59
Interest income on due from and placements with banks and other financial institutions	10,722	2.95	-16.63
Interest income from balance with central bank	5,871	1.62	-5.28
Other income	23,857	6.57	11.53
Total	363,099	100.00	2.37

The following table sets out the geographic distribution of the Group's operating income.

Region	Operating income	Increase/decrease over the same period of previous year (%)	Operating profit	Increase/decrease over the same period of previous year (%)
Head Office	86,386	-2.25	36,274	-4.15
Yangtze River Delta Region	38,009	9.87	22,396	1.02
Pearl River Delta and West Side of Taiwan Strait	12,736	13.05	8,618	133.36
Bohai Rim	15,574	2.87	6,825	Negative in the same period of last year
Central China	15,573	9.82	2,617	-51.80
Western China	9,724	-11.11	-17,619	Negative in the same period of last year
North-eastern China	4,858	0.29	1,529	307.73
Overseas institutions and subsidiaries	13,524	19.13	6,096	12.31
Total	196,384	2.99	66,736	-4.48

Notes: Relevant data of the Head Office and Yangtze River Delta Region in 2019 were restated according to the business structure adjustment in 2020.

For the purpose of the Report, the regions and divisions of the Group are defined as follows:

(1) Head Office: Headquarters (Head Office and institutions directly under it);

(2) Yangtze River Delta: Branches in Shanghai, Jiangsu, Zhejiang and Anhui (Anhui was incorporated into the Yangtze River Delta during the reporting period, so retroactive adjustment was made to data of 2019);

(3) Pearl River Delta and West Side of Taiwan Strait: Branches in Guangdong and Fujian;

(4) Bohai Rim: Branches in Beijing, Tianjin, Hebei and Shandong;

(5) Central China: Branches in Shanxi, Henan, Hubei, Hunan, Jiangxi and Hainan;

(6) Western China: Branches in Chongqing, Sichuan, Guizhou, Yunnan, Guangxi, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Inner Mongolia and Tibet;

(7) North-eastern China: Branches in Liaoning, Jilin and Heilongjiang;

(8) Overseas institutions and subsidiaries: Overseas branches and domestic and overseas affiliates.

 

4.2.2 Net interest income

During the reporting period, the Group incurred a net interest income of RMB138,581 million.

The following table sets forth the interest income/expenses as well as average yield and costs of the assets and liabilities of the Group during the reporting period.

In RMB millions

	The reporting period			Same period of last year
Interest-earning assets	Average balance	Interest income	Average yield (%)	Average balance	Interest income	Average yield (%)
Loans and advances	4,239,783	215,987	5.09	3,767,467	215,588	5.72
Investments	1,690,594	62,405	3.69	1,557,832	63,120	4.05
Balance with central bank	416,564	5,871	1.41	419,818	6,198	1.48
Due from and placements with banks and other financial institutions	512,825	10,722	2.09	441,748	12,861	2.91
Total	6,859,766	294,985	4.30	6,186,865	297,767	4.81

In RMB millions

	The reporting period			Same period of last year
Interest-bearing liabilities	Average balance	Interest expense	Average cost ratio (%)	Average balance	Interest expense	Average cost ratio (%)
Deposits from customers	3,933,776	82,713	2.10	3,543,080	75,315	2.13
Due to and placements from banks and other financial institutions	1,479,740	32,821	2.22	1,402,875	39,661	2.83
Debt securities issued	1,040,480	32,861	3.16	876,693	31,527	3.60
Due to central bank	248,003	8,009	3.23	202,653	6,741	3.33
Total	6,701,999	156,404	2.33	6,025,301	153,244	2.54

4.2.2.1 Interest income

During the reporting period, the Group generated the interest income of RMB294,985 million and interest income from retail loans of RMB113,497 million.

Interest income from loans and advances

In RMB millions

	The reporting period			Same period of last year
	Average balance	Interest income	Average yield (%)	Average balance	Interest income	Average yield (%)
Corporate loans	2,170,863	92,637	4.27	1,889,081	92,036	4.87
Retail loans	1,715,425	113,497	6.62	1,586,527	113,458	7.15
Discounted bills	353,495	9,853	2.79	291,859	10,094	3.46

Note: Of these, the average yield of general short-term loans and medium and long-term loans was 5.92% and 4.85%, respectively.

Interest income on investment

During the reporting period, the Group's interest income on investment stood at RMB62,405 million. The average yield on investment was 3.69%.

Interest income on due from and placements with banks and other financial institutions

During the reporting period, the Group generated the interest income on due from and placements with banks and other financial institutions totaling RMB10,722 million; and the average yield from such business at 2.09%.

4.2.2.2 Interest expense

Interest expense on deposits from customers

During the reporting period, the Group's interest expense on deposits from customers stood at RMB82,713 million. The average cost ratio reported 2.10%.

The following table sets forth the average balance, interest expense and average cost ratio of corporate deposits and retail deposits at the Group in 2020 and 2019.

 

In RMB millions

	The reporting period			Same period of last year
	Average balance	Interest expense	Average cost ratio (%)	Average balance	Interest expense	Average cost ratio (%)
Corporate customers
Current deposits	1,360,721	15,194	1.12	1,235,440	12,927	1.05
Time deposits	1,468,001	41,872	2.85	1,318,151	38,788	2.94
Retail customers
Current deposits	253,887	828	0.33	223,123	704	0.32
Time deposits	628,723	22,082	3.51	552,973	20,346	3.68

Interest expense on due to and placements from banks and other financial institutions

During the reporting period, the Group's interest expenses on due to and placements from banks and other financial institutions totaled RMB32,821 million, a decrease of 17.25% over the previous year, as a result of the dropping interest rate of interbank funds.

Interest expense on debt securities issued

During the reporting period, the Group recorded interest expenses of RMB32,861 million on debt securities issued, an increase of 4.23% over the previous year.

4.2.3 Net non-interest income

During the reporting period, the Group racked up the net non-interest income in RMB57,803 million, up 25.21% year on year, accounting for 29.43% of operating income, up 5.22 percentage points. Specifically, net fee and commission income rose by 37.02% to RMB33,946 million, and other non-interest income went up by 11.53% to RMB23,857 million.

 

In RMB millions

	The reporting period		Same period of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Net fee and commission income	33,946	58.73	24,774	53.66
Incl.: Fee and commission income	44,257	76.57	35,523	76.95
Fee and commission expenses	-10,311	-17.84	-10,749	-23.29
Profit or loss on investments	18,980	32.84	13,571	29.40
Profit or loss on changes in fair value	2,220	3.84	3,765	8.16
Exchange profit or loss	-215	-0.37	312	0.68
Other business income	2,160	3.74	1,788	3.87
Profit or loss on asset disposal	-8	-0.01	1,470	3.18
Other income	720	1.23	485	1.05
Total	57,803	100.00	46,165	100.00

4.2.3.1 Fee and commission income

During the reporting period, the Group's fee and commission income continued to go up. Such income hit RMB44,257 million, an increase of RMB8,734 million or 24.59% year on year.

In RMB millions

	The reporting period		Same period of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Fees from custodian business and other fiduciary activities	15,415	34.83	11,556	32.53
Fees from bank card business	14,528	32.83	12,742	35.87
Fees from investment banking activities	4,457	10.07	3,631	10.22
Credit commitment fees	2,223	5.02	2,154	6.06
Agency commission	5,078	11.47	2,723	7.67
Settlement and clearing fees	883	2.00	975	2.74
Others	1,673	3.78	1,742	4.91
Total	44,257	100.00	35,523	100.00

4.2.3.2 Profit or loss on investments

During the reporting period, the Group reaped investment profitsof RMB18,980 million, a year-on-year increase of 39.86%.

In RMB millions

	The reporting period		Same period of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Held-for-trading financial assets	15,320	80.72	11,341	83.58
Net profit from bill trading spread	1,623	8.55	2,022	14.90
Creditor's rights investments	433	2.28	-309	-2.28
Other creditor's rights investments	1,118	5.89	-144	-1.06
Other equity instrument investments	45	0.24	44	0.32
Precious metals	1,640	8.63	349	2.57
Derivatives	-1,686	-8.88	-168	-1.24
Investments on long-term equity as calculated by equity method	146	0.77	171	1.26
Other	341	1.80	265	1.95
Total	18,980	100.00	13,571	100.00

4.2.3.3 Profit or loss on changes in fair value

In RMB millions

	The reporting period		Same period of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Derivatives	4,697	211.58	-1,366	-36.28
Hedged bonds	267	12.03	296	7.86
Loans measured at fair value through profit or loss	101	4.55	-54	-1.43
Held-for-trading financial instruments	-545	-24.55	1,843	48.95
Precious metals	-2,485	-111.94	3,122	82.92
Others	185	8.33	-76	-2.02
Total	2,220	100.00	3,765	100.00

4.2.4 General and administrative expenses

During the reporting period, the Group's general and administrative expenses were RMB46,702 million, representing a year-on-year increase of 8.48%. Cost-to-income ratio was 23.78%, representing a year-on-year increase of 1.20 percentage points.

In RMB millions

	The reporting period		Same period of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Employee expenses	27,509	58.90	27,015	62.76
Rental expenses	3,372	7.22	3,140	7.29
Depreciation and amortization expenses	3,212	6.88	2,869	6.66
Others	12,609	27.00	10,028	23.29
Total	46,702	100.00	43,052	100.00

4.2.5 Impairment losses on credit assets and impairment losses on other assets

During the reporting period, the Group adhered to the principle of putting NPLs under stringent classification management, and worked hard to consolidate the foundation of asset quality. Its impairment losses on loans and advances totaled RMB75,022 million, up 7.26% over 2019.

In RMB millions

		The reporting period		Same period of last year
Item of impairment losses		Amount	Percentage (%)	Amount	Percentage (%)
Loans and advances to customers		75,022	94.30	69,947	93.63
Other assets		4,531	5.70	4,760	6.37
Total		79,553	100.00	74,707	100.00

4.2.6 Income tax expense

During the reporting period, the Group incurred an income tax of RMB7,689 million, a decrease of RMB2,622 million or 25.43% over the previous year.

In RMB millions

Item	The reporting period	Same period of last year
Profit before income tax	66,682	69,817
Income tax calculated at China's statutory tax rate	16,671	17,454
Effect of different tax rates applied by subsidiaries	-126	-46
Effect of expenses that are not deductible	497	289
Effect arising from income not subject to tax	-9,486	-7,716
Adjustments on income tax for prior years	133	330
Income tax expense	7,689	10,311

4.3 Analysis of the Balance Sheet

4.3.1 Analysis of assets

As at the end of the reporting period, the total assets of the Group reached RMB7,950,218 million, representing an increase of RMB944,289 million or 13.48%, as compared with the end of previous year.

In RMB millions

	End of the reporting period		End of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Total loans	4,533,973	57.03	4,025,901	57.46
Interest accrued on loans	15,576	0.20	15,028	0.21
Less: Allowance for impairment losses on loans at amortized cost	-119,321	-1.50	-110,179	-1.57
Financial investments	2,302,547	28.96	2,083,547	29.74
Long-term equity investment	2,401	0.03	2,049	0.03
Derivative financial assets	63,589	0.80	38,719	0.55
Cash and deposits with central bank	489,088	6.15	477,853	6.82
Due from and placements with banks and other financial institutions	422,453	5.31	279,235	3.99
Goodwill	6,981	0.09	6,981	0.10
Others	232,931	2.93	186,795	2.67
Total	7,950,218	100.00	7,005,929	100.00

4.3.1.1 Loans to customers

As at the end of the reporting period, the Group's total loans and advances to customers were RMB4,533,973 million, an increase of 12.62% from the end of last year. The ratio of total loans and advances to total assets was 57.05%, representing a decrease of 0.43 percentage point as compared with the end of previous year.

4.3.1.2 Financial investments

In RMB millions

	End of the reporting period		End of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Held-for-trading financial assets	549,149	23.85	505,318	24.25
Creditor's rights investments	1,169,777	50.80	1,074,927	51.59
Other creditor's rights investments	577,786	25.10	497,508	23.88
Other equity instrument investments	5,835	0.25	5,794	0.28
Total	2,302,547	100.00	2,083,547	100.00

Held-for-trading financial assets

In RMB millions

	End of the reporting period		End of last year
Item	Balance	Percentage (%)	Balance	Percentage (%)
Bonds	70,505	12.83	67,719	13.40
Trust and asset management plans	20,294	3.70	65,313	12.93
Fund investments	428,552	78.04	360,856	71.41
Securities income certificate	18,651	3.40	-	-
Equity investments	5,104	0.93	4,306	0.85
Other investments	6,043	1.10	7,124	1.41
Total	549,149	100.00	505,318	100.00

Creditor's rights investments

In RMB millions

	End of the reporting period		End of last year
Item	Balance	Percentage (%)	Balance	Percentage (%)
Bonds	784,693	67.08	687,240	63.93
Trust and asset management plans	372,860	31.87	378,429	35.21
Other creditor's rights instruments	8,130	0.70	2,155	0.20
Accrued interest	16,041	1.37	15,818	1.47
Allowance for impairment losses	-11,947	-1.02	-8,715	-0.81
Total	1,169,777	100.00	1,074,927	100.00

Other creditor's rights investments

In RMB millions

	End of the reporting period		End of last year
Item	Balance	Percentage (%)	Balance	Percentage (%)
Bonds	524,964	90.86	487,435	97.97
Asset management plans	45,011	7.79	2,825	0.57
Accrued interest	7,811	1.35	7,248	1.46
Total	577,786	100.00	497,508	100.00

Other equity instrument investments

In RMB millions

	End of the reporting period		End of last year
Item	Balance	Percentage (%)	Balance	Percentage (%)
Equity	5,018	86.00	4,983	86.00
Other equity investments	817	14.00	811	14.00
Total	5,835	100.00	5,794	100.00

The following table sets out the composition of total bond investments at the Group by issuers.

In RMB millions

	End of the reporting period		End of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Ministry of Finance, local governments and central bank	800,482	58.00	679,616	54.70
Policy banks	312,774	22.66	334,693	26.94
Commercial banks and other financial institutions	122,552	8.88	112,419	9.05
Others	144,354	10.46	115,666	9.31
Total bond investments	1,380,162	100.00	1,242,394	100.00

The following table sets out the top 10 financial bonds held in nominal value.

In RMB millions

The Group	Par value	Annual interest rate (%)	Maturity date	Allowance for impairment losses set aside
Policy bank bonds 2018	15,400	4.98	12 January 2025	1.90
Policy bank bonds 2018	10,430	4.73	2 April 2025	1.35
Policy bank bonds 2017	10,200	4.44	9 November 2022	1.32
Policy bank bonds 2018	9,465	4.04	6 July 2028	0.63
Policy bank bonds 2017	8,430	4.30	21 August 2024	1.09
Policy bank bonds 2019	8,120	3.63	19 July 2026	0.46
Policy bank bonds 2020	8,010	3.43	14 January 2027	1.03
Policy bank bonds 2018	7,000	4.15	26 October 2025	0.90
Policy bank bonds 2019	6,690	3.74	12 July 2029	0.86
Policy bank bonds 2019	6,675	3.42	2 July 2024	0.46

4.3.1.3 Long-term equity investment

As at the end of the reporting period, the balance of long-term equity investment at the Group recorded RMB2,401 million, up 17.18% from the end of last year. Specifically, the investment balance in joint ventures stood at RMB2,127million, up 15.54% over the end of last year. The balance of allowance for impairment losses on long-term equity investment at the Group was zero by the end of reporting period.

4.3.1.4 Derivatives

As at the end of the reporting period, major categories and amounts of derivatives held by the Group are set out in the following table.

In RMB millions

	End of the reporting period			End of last year
	Notional amount	Assets	Liabilities	Notional amount	Assets	Liabilities
Exchange rate derivatives	1,973,523	39,470	39,109	2,571,504	19,833	19,822
Interest rate derivatives	5,399,464	18,260	18,103	5,568,643	13,246	13,434
Precious metal derivatives	210,325	5,122	3,632	182,064	5,432	8,110
Others	14,717	737	302	9,903	208	137
Total		63,589	61,146		38,719	41,503
Derivatives designated as hedging instruments:
Fair value hedges
-Interest rate swap contracts	24,283	56	527	20,096	21	399
-Currency swap contracts	693	-	5	627	8	5
Cash flow hedges
-Interest rate swap contracts	663	-	9	193	-	2
-Currency swap contracts	389	-	47	3,467	59	12
Total		56	588		88	418

4.3.1.5 Goodwill

As per ASBE provisions, the Group conducted the impairment test on the goodwill out of the purchase of Shanghai Trust as at the end of the reporting period. In the test, the Group compared the book value and the recoverable amount of related assets or asset portfolios (including goodwill). If the recoverable amount is lower than the book value, the gap between them shall be booked into profit or loss during the reporting period. The recoverable amount of assets and asset portfolios is calculated through the cash-flow forecast method based on the five-year budget approved by the Senior Management. The cash flow for a longer-than-five-year span shall be calculated with the estimated growth rate. The corresponding asset portfolios encompassed Shanghai International Trust Co., Ltd., China International Fund Management Co., Ltd., Tullett Prebon SITICO (China) Limited, and Shangxin Asset Management Co., Ltd. The impairment test findings suggested that no allowance for impairment losses needed to be set aside during the reporting period. By the end of reporting period, the book value of goodwill at the Group stood at RMB6,981 million.

4.3.2 Analysis of liabilities

As at the end of the reporting period, the total liabilities of the Group reached RMB7,304,401 million, representing an increase of RMB859,523 million or 13.34%, as compared with the end of previous year.

 

In RMB millions

	End of the reporting period		End of last year
Item	Amount	Percentage (%)	Amount	Percentage (%)
Total deposits	4,076,484	55.81	3,627,853	56.29
Interest payable on deposits	45,923	0.63	33,989	0.53
Due to and placements from banks and other financial institutions	1,597,918	21.88	1,390,952	21.59
Debt securities issued	1,140,653	15.62	1,003,502	15.57
Due to central bank	274,346	3.76	233,423	3.62
Held-for-trading financial liabilities	16,057	0.22	23,295	0.36
Derivative financial liabilities	61,146	0.84	41,503	0.64
Others	91,874	1.24	90,361	1.40
Total liabilities	7,304,401	100.00	6,444,878	100.00

4.3.2.1 Composition of total deposits

As at the end of the reporting period, the total deposits of the Group reached RMB4,076,484 million, representing an increase of RMB448,631 million or 12.37%, as compared with the end of previous year.

In RMB millions

	End of the reporting period		End of last year
Item	Balance	Percentage (%)	Balance	Percentage (%)
Current deposits	1,910,460	46.86	1,551,360	42.76
Incl.: Corporate deposits	1,606,179	39.40	1,312,073	36.16
Retail deposits	304,281	7.46	239,287	6.60
Time deposits	2,163,363	53.07	2,074,055	57.17
Incl.: Corporate deposits	1,508,210	37.00	1,477,382	40.72
Retail deposits	655,153	16.07	596,673	16.45
Other deposits	2,661	0.07	2,438	0.07
Total	4,076,484	100.00	3,627,853	100.00

4.3.3 Analysis of changes in shareholders' equity

As at the end of the reporting period, shareholders' equity of the Group was RMB645,817 million, up 15.11% from the end of last year. The equity attributable to the parent company's shareholders recorded RMB638,197 million, an increase of 15.23% over the end of last year; and the retained earnings totaled RMB188,038 million, up 10.14% over the end of last year, which was mainly credited to the net profit increase and profit distribution during the reporting period.

In RMB millions

Item	Share capital	Other equity instruments	Capital reserve	Surplus reserve	General risk reserve	Other comprehensive income	Retained earnings		Total equity attributable to the parent company's shareholders
Opening balance	29,352	62,698	81,760	125,805	76,249	7,267	170,730	553,861
Increase	-	49,993	1	16,934	3,391	-	58,325	128,644
Decrease	-	-	-	-	-	3,291	41,017	44,308
Closing balance	29,352	112,691	81,761	142,739	79,640	3,976	188,038	638,197

In RMB millions

Item	End of the reporting period	End of last year	Increase/decrease over the end of previous year (%)
Share capital	29,352	29,352	-
Other equity instruments	112,691	62,698	79.74
Capital reserve	81,761	81,760	-
Other comprehensive income	3,976	7,267	-45.29
Surplus reserve	142,739	125,805	13.46
General risk reserve	79,640	76,249	4.45
Retained earnings	188,038	170,730	10.14
Total equity attributable to the parent company's shareholders	638,197	553,861	15.23
Minority shareholders' equity	7,620	7,190	5.98
Total equity	645,817	561,051	15.11

4.4 Items with Changes above 30% in the Accounting Statements and Reasons

In RMB millions

Item	End of the reporting period	End of last year	Change (%)	Main reason for the change during the reporting period
Deposits with banks and other financial institutions	151,796	103,755	46.30	The deposits with domestic banks scaled up
Placements with banks and other financial institutions	234,131	172,607	35.64	The placements with domestic non-bank financial institutions scaled up
Precious metals	44,969	30,870	45.67	The self-operated and agency precious metals held scaled up
Derivative financial assets	63,589	38,719	64.23	Change to the valuation of fair value
Financial assets purchased under resale agreements	36,526	2,873	1,171.35	Bonds purchased under resale agreements scaled up
Other assets	92,918	69,653	33.40	Funds to be cleared scaled up
Held-for-trading financial liabilities	16,057	23,295	-31.07	Oversold precious metals scaled down
Derivative financial liabilities	61,146	41,503	47.33	Change to the valuation of fair value
Other equity instruments	112,691	62,698	79.74	New perpetual bonds were issued
Other comprehensive income	3,976	7,267	-45.29	Change to the valuation of other creditor's rights investments

Item	Jan.-Dec. 2020	Jan.-Dec. 2019	Change (%)	Main reason for the change during the reporting period
Net fee and commission income	33,946	24,774	37.02	Fee and commission income from custody and other fiduciary business increased
Profit or loss on investments	18,980	13,571	39.86	Investment income from held-for-trading financial assets and other creditor's rights investments increased
Profit or loss on changes in fair value	2,220	3,765	-41.04	The valuation of precious metals and derivatives changed
Exchange profit or loss	-215	312	-168.91	Exchange rate fluctuated and exchange gains dropped
Profit or loss on asset disposal	-8	1,470	-100.54	Profit from disposal of Dongyin Mansion realized in the same period of last year
Other income	720	485	48.45	Increase of policy subsidies
Impairment losses on other assets	-6	1	-700.00	Decrease in impairment losses on repossessed assets
Other comprehensive income after tax, net	-3,307	2,609	-226.75	Changes in valuation of other creditor's rights investments
Net cash flows generating from operating activities	126,385	-68,628	N/A	Customer deposits and deposits from banks and other financial institutions increased
Net cash flows generated from investing activities	-141,677	-66,973	N/A	Cash paid for investments increased

4.5 Analysis of Loan Quality

4.5.1 Five-tier loan classification

In RMB millions

Five-tier risk classification	End of the reporting period	Percentage (%)	Increase/decrease over the same period of the previous year (%)
Pass	4,338,449	95.69	12.99
Special mention	117,063	2.58	12.29
Substandard	33,191	0.73	-17.27
Doubtful	27,480	0.61	23.78
Loss	17,790	0.39	-9.05
Total	4,533,973	100.00	12.62

In RMB millions

Category	End of the reporting period	Percentage (%)	Increase/decrease over the same period of the previous year (%)
Restructured loans	2,778	0.06	-41.70
Overdue loans	96,894	2.14	10.27

Notes:

1) Restructured loans refer to loans which have been impaired but their contract clauses have been renegotiated.

2) At the Group, a loan shall be entirely classified as overdue, once its principal or interest becomes overdue for one day or longer.

4.5.2 Loan structure and loan quality by product types

As at the end of the reporting period, the proportion of corporate loans was 50.86%, an increase of 2.79 percentage points from the end of previous year; the proportion of personal loans was 39.53%, a decrease of 2.09 percentage points as compared with the end of previous year; and the proportion of discounted bills was 9.61%, a decrease of 0.70 percentage point as compared with the end of the previous year.

In RMB millions

	End of the reporting period				End of last year
Product type	Loan balance	NPLs	NPL ratio (%)	Loan balance		NPLs	NPL ratio (%)
Corporate loans	2,305,787	53,796	2.33	1,935,401		59,528	3.08
General corporate loans	2,248,168	53,596	2.38	1,901,643		59,427	3.13
Trade finance	57,619	200	0.35	33,758		101	0.30
Discounted bills	435,908	437	0.10	415,124		288	0.07
Retail loans	1,792,278	24,228	1.35	1,675,376		22,065	1.32
Personal housing loans	849,193	2,865	0.34	730,260		1,978	0.27
Personal business loans	325,782	4,910	1.51	274,606		3,906	1.42
Credit card and overdraft	372,117	9,375	2.52	421,535		9,715	2.30
Others	245,186	7,078	2.89	248,975		6,466	2.60
Total	4,533,973	78,461	1.73	4,025,901		81,881	2.03

4.5.3 Loan structure and loan quality by industries

In RMB millions

	End of the reporting period			End of last year
	Loan balance	Percentage in total loans (%)	NPL ratio (%)	Loan balance	Percentage in total loans (%)	NPL ratio (%)
Corporate loans	2,305,787	50.86	2.33	1,935,401	48.07	3.08
Manufacturing	392,385	8.65	4.13	337,916	8.39	5.85
Lease and commerce services	361,907	7.98	0.98	264,524	6.57	0.82
Real estate	346,486	7.64	2.07	334,229	8.30	2.63
Wholesale and retail	207,798	4.58	4.85	149,206	3.71	7.42
Water, environment and public utilities management	173,871	3.84	0.17	165,868	4.12	0.36
Construction	160,798	3.55	1.62	140,212	3.48	1.92
Transportation, warehouse and postal services	157,478	3.47	1.22	141,309	3.51	0.58
Production and supply of electricity, heating, gas and water	116,544	2.57	0.88	82,656	2.05	1.36
Financial services	104,093	2.30	0.22	82,782	2.06	-
Mining	95,167	2.10	7.26	81,945	2.04	6.35
Information transmission, software and IT services	58,820	1.30	2.07	39,432	0.98	2.33
Scientific research and technology services	30,262	0.67	3.94	24,016	0.60	1.51
Culture, sports and entertainment	20,221	0.45	1.18	18,843	0.47	0.65
Agriculture, forestry, farming and fishery	20,172	0.44	4.70	27,785	0.69	16.25
Healthcare and social welfare	19,417	0.43	0.01	17,512	0.43	-
Education	15,480	0.34	0.01	11,984	0.30	-
Accommodation and catering	8,285	0.18	1.45	7,294	0.17	14.80
Resident services, repairs and other services	2,357	0.05	3.90	3,497	0.09	2.26
Public administration, social security and social organizations	2,223	0.05	-	1,102	0.03	0.00
Others	12,023	0.27	0.06	3,289	0.08	6.17
Discounted bills	435,908	9.61	0.10	415,124	10.31	0.07
Personal loans	1,792,278	39.53	1.35	1,675,376	41.62	1.32
Total	4,533,973	100.00	1.73	4,025,901	100.00	2.03

4.5.4 Loan structure by geography

In RMB millions

	End of the reporting period		End of last year
Region	Book balance	Percentage (%)	Book balance	Percentage (%)
Head Office	631,123	13.91	647,562	16.08
Yangtze River Delta Region	1,382,670	30.50	1,157,149	28.74
Pearl River Delta and West Side of Taiwan Strait	499,060	11.01	405,925	10.08
Bohai Rim	573,928	12.66	489,848	12.17
Central China	533,569	11.77	465,701	11.57
Western China	557,301	12.29	509,496	12.66
North-eastern China	186,739	4.12	193,224	4.80
Overseas institutions and subsidiaries	169,583	3.74	156,996	3.90
Total	4,533,973	100.00	4,025,901	100.00

4.5.5 Loan structure by collateral types

In RMB millions

	End of the reporting period		End of last year
Item	Book balance	Percentage (%)	Book balance	Percentage (%)
Unsecured loans	1,818,279	40.11	1,636,355	40.65
Guaranteed loans	776,427	17.12	731,908	18.18
Loans secured by mortgages	1,668,955	36.81	1,425,283	35.40
Pledged loans	270,312	5.96	232,355	5.77
Total	4,533,973	100.00	4,025,901	100.00

4.5.6 Loan migration

	2020		2019		2018
Item (%)	Year-end	Average	Year-end	Average	Year-end	Average
Pass loan migration rate	2.90	2.98	3.05	3.10	3.14	3.59
Special-mention loan migration ratio	26.40	33.40	40.40	36.92	33.44	36.74
Substandard loan migration ratio	35.32	43.36	51.39	66.22	81.04	83.92
Doubtful loan migration ratio	10.70	24.82	38.94	48.33	57.72	48.10

4.5.7 Loans of top ten customers

In RMB millions

Customer name		31 December 2020	Percentage (%)
Customer A		10,000	0.22
Customer B		8,086	0.18
Customer C		6,998	0.15
Customer D		6,512	0.14
Customer E		6,500	0.14
Customer F		5,470	0.12
Customer G		5,376	0.12
Customer H		5,367	0.12
Customer I		5,166	0.11
Customer J		5,099	0.11
Total		64,574	1.42

4.5.8 Management of LGFV loans

The Bank constantly improved and enhanced its management of debt financing to local governments, and kept control of key businesses like local government financing vehicles (LGFVs) and local government bonds, according to the requirements of the CBIRC and its own operation and management needs.

First, in strict accordance with the pertinent state polices and regulatory requirements, the Bank implemented classification management of local government debt financing based on the LGFV list.

Second, the Bank forestalled and defused the risks arising from hidden debts of local governments. It put the existing businesses under classified guidance for proper disposal, guarded against new hidden local government debts against rules.

Third, the Bank continued to support financing needs of projects related to people's livelihood, supported follow-up financing of projects under construction, rolled out PPP financing projects and market-based public welfare programs as per related provisions, and participated in the undertaking and investment of quality local government bonds.

Fourth, the Bank strengthened business monitoring and post-lending management, monitored the debt attribute, business scale and concentration of local government debt business, and implement targeted management.

Fifth, the Bank implemented the requirements of laws, regulations and policies concerning local government budget management, debt management, debt limit management, etc., and properly realized the interconnection of key links in the process of debt replacement, which guaranteed its own interests and rights.

During the reporting period, the Bank's LGFV loan business ran stably, with risks being controllable and meeting regulatory requirements.

4.5.9 Year-end NPLs and corresponding measures taken

The balance of substandard, doubtful and loss loans of the Group was RMB78,461 million, a decrease of RMB3,420 million over the end of last year; and the NPL ratio was 1.73%, down 0.30 percentage point over the end of last year.

The Bank adopted the following measures:

First, it increased credit facilities to key industries and regions, ensured credit newly extended was of high quality, exited from those industries under control and contraction and made according adjustment to customers, and accelerated the optimization of the industry structure of credit assets.

Second, it made continuous efforts in industry limit management, implemented mandatory industry limit management on industries with loan granting controlled or reduced, and improved the allocation of asset structure and customer structure through aggregate control and supporting some industries while controlling others.

Third, it intensified efforts in asset quality while reducing NPLs. As at the end of 2020, the proportion of corporate loans overdue for over 60 days and those for 90 days to NPLs were controlled at below 100%.

Fourth, it stepped up efforts to reduce and dispose of NPLs. The Bank effectively overcame the adverse impact of COVID-19, took diversified measures to strengthen cash collection, and strengthened collection and disposal of NPLs in key branches, key fields and key projects, thus effectively improving the effectiveness of NPL disposal.

Fifth, it intensified the risk forewarning management and continued to streamline its structure with solid efforts. The Bank continued to optimize the forewarning mechanism for corporate banking, retail credit, financial market, wealth management/investment and all other business lines, discussed to establish a risk forewarning mechanism among peers, and issued early warnings in a more timely and effective way. At the same time, it pushed forward cash withdrawal, put in place beforehand the management of credit funds and interest to be matured, so as to defuse the potential risk arising from the customers who triggered early warnings, reduce the expected losses, and revitalize the existing assets.

Sixth, it stepped up risk inspection of various businesses from conventional credit business to new-typed business with a widened coverage, monitored business risks based on the penetration principle and tried to solidify the asset quality.

Seventh, it continued to improve the special mechanisms and systems for assets resolution. The Bank actively pushed forward the operation transformation of non-performing assets (NPA), explored the use of online resolution and risk control means, and vigorously overcame the impact of the pandemic. Through these efforts, both the total amount of NPAs disposal and the effect of cash recovery hit record highs. Besides, the Bank capitalized on the guiding role of NPA disposal policies and tools, and intensified the due diligence and recourse of NPAs, strengthened the research and training of subjects on risk mitigation and legal affairs, and thereby continuously consolidated the management foundation and team capacity. It also actively expanded the channels for market-oriented and online merchant attraction, promotion and disposal of NPAs, so as to boost the efficiency of NPA disposal.

Eighth, it built an enterprise-level digital risk control system to make comprehensive risk management more professional and digitalized.

4.5.10 Credit extension to group customers

For group customers, the Bank upheld the principles of "unified credit extension, moderate credit limit and differentiated administration", and continued to strengthen the risk management of group customers. It comprehensively assessed the customers' risks and ability to undertake risks, worked out the overall credit line to group customers reasonably, improved the structure of group customers, prevented the concentration risk, and refined the classification management model for group customers with balance between risk and efficiency. The Bank comprehensively enhanced the risk forewarning capability of group customers, strengthened risk investigation of key businesses, and consolidated the quality and efficiency of group credit extension. It ensured general stability of credit extension to group customers, made sure risks were controllable, and satisfied the regulator's requirements through continuously refining the credit extension management system for group customers, optimizing the credit extension management procedure and stepping up early warning and post-lending management.

4.5.11 Provisions for loan impairment

In RMB millions

The Group	The reporting period	Same period of last year
Opening balance	110,491	106,465
Provision in the year	75,022	69,947
Write-off and disposal in the year	-70,044	-68,004
Recovery of loans and advances written off in previous years	5,648	3,539
Other changes	-1,250	-1,456
Closing balance	119,867	110,491

Note: Description of provisions for loan impairment: The Group assessed the expected credit loss in conjunction with forward-looking information. The method adopted by the measurement of expected credit loss reflected the following elements: the unbiased-probability weighted average amount determined by assessing a series of possible results; the time value of money; the reasonable and well-grounded information on related past events, current conditions and predictions of economic prospects that can be obtained on the balance sheet date without incurring unnecessary extra costs or endeavors.

4.6 Analysis of Other Regulatory Indicators Applicable for Commercial Banks

4.6.1 Capital structure

As calculated based on relevant provisions in the Capital Management Measures for Commercial Banks (Trial) as promulgated by the CBIRC:

In RMB millions

	End of the reporting period		End of last year
Item	The Group	The Bank	The Group	The Bank
Total capital	810,544	790,165	666,724	651,429
Incl.: Core tier-one capital	530,953	513,851	496,289	483,001
Additional tier-one capital	110,385	109,910	60,295	59,916
Tier-two capital	169,206	166,404	110,140	108,512
Capital deduction items	11,685	29,551	11,029	27,008
Incl.: Core tier-one capital deduction items	11,685	29,551	11,029	27,008
Additional tier-one capital deduction items	-	-	-	-
Tier-two capital deduction items	-	-	-	-
Net capital	798,859	760,614	655,695	624,421
Minimum capital requirement (%)	8.00	8.00	8.00	8.00
Requirement for capital reserve and counter-cyclical capital (%)	2.50	2.50	2.50	2.50
Additional capital requirement	-	-	-	-
Risk-weighted assets	5,458,504	5,300,293	4,731,354	4,598,796
Incl.: Credit risk-weighted assets	5,049,472	4,916,607	4,334,610	4,233,697
Market risk-weighted assets	60,419	53,425	60,490	50,184
Operational risk-weighted assets	348,613	330,261	336,254	314,915
Core tier-one capital adequacy (%)	9.51	9.14	10.26	9.92
Tier-one capital adequacy (%)	11.54	11.21	11.53	11.22
Capital adequacy ratio (%)	14.64	14.35	13.86	13.58

Notes:

(1) The above are capital adequacy data and information of the Bank and the Group as measured based on the Capital Management Measures for Commercial Banks (Trial) as promulgated by the CBIRC. Net core tier-one capital = core tier-one capital - core tier-one capital deduction items; net tier-one capital = net core tier-one capital + additional tier-one capital - additional tier-one capital deduction items; net total capital = net tier-one capital + tier-two capital - tier-two capital deduction items.

(2) According to the Regulatory Requirements for Disclosure of Capital Composition of Commercial Banks as promulgated by the CBIRC, the Bank discloses information on capital composition in the reporting period, explanations of relevant items and main features of capital instruments under the special column of investor relations on the official website (www.spdb.com.cn).

(3) Capital instruments enjoying preferential policy for transition period: According to relevant provisions in the Capital Management Measures for Commercial Banks (Trial) as promulgated by the CBIRC, the unqualified tier-two capital instruments issued by commercial banks before 12 September 2010 can enjoy preferential policies, that is, a progressive decreasing of 10% each year since 1 January 2013. At the end of 2012, the book value of unqualified tier-two capital of the Bank was RMB38.6 billion, which was decreased by 10% progressively each year since 2013 to come to RMB7.72 billion as at the end of the reporting period.

4.6.2 Leverage ratio

The leverage ratio indicators of the Group have been calculated in accordance with the Measures for the Administration of the Leverage Ratio of Commercial Banks (Revised) released by the CBIRC. As at the end of the reporting period, the Bank's leverage ratio was 6.69%, up 0.13 percentage point over the end of last year; and that of the Group was 6.97%, up 0.14 percentage point over the end of last year.

 

In RMB millions

	End of the reporting period		End of last year
Item	The Group	The Bank	The Group	The Bank
Net tier-one capital	629,653	594,210	545,555	515,909
Balance of on-and-off-balance sheet assets after adjustment	9,034,899	8,879,389	7,983,704	7,858,498
Leverage ratio (%)	6.97	6.69	6.83	6.56

The Bank discloses detailed information on the leverage ratio for the reporting period under the special column of investor relations on official website of the Bank (www.spdb.com.cn).

4.6.3 Liquidity coverage ratio

In RMB millions

The Group	End of the reporting period
Quality current assets	1,035,652.73
Net cash outflow	783,077.67
Liquidity coverage ratio (%)	132.25

4.6.4 Net stable funding ratio

In RMB millions

The Group	31 December 2020	30 September 2020	30 June 2020	30 March 2020
Net stable funding ratio (%)	105.01	101.88	103.82	101.42
Stable funds available	4,218,134.18	3,943,438.36	3,995,149.18	3,775,228.50
Stable funds needed	4,017,048.46	3,870,826.64	3,847,997.59	3,722,525.61

4.6.5 Other regulatory financial indicators of the Bank for the past three years

		Regulatory standards as at the end of reporting period	Actual value
Item (%)			31 December 2020	31 December 2019	31 December 2018
Capital adequacy ratio (%)		≥10.5	14.35	13.58	13.37
Tier-one capital adequacy ratio (%)		≥8.5	11.21	11.22	10.45
Core tier-one capital adequacy ratio (%)		≥7.5	9.14	9.92	9.73
Asset liquidity ratio (%)	RMB	≥25	46.00	52.18	56.05
	RMB and foreign currency	≥25	45.95	51.61	55.43
Proportion of loans to the single biggest customer to net capital (%)		≤10	1.31	1.48	1.75
Proportion of loans to the top ten customers to net capital (%)		≤50	8.49	8.60	10.18
Allowance to NPLs		≥130	150.74	133.85	156.38
Allowance to total loans ratio		≥1.8	2.59	2.70	2.94

Notes:

(1) In the table, the capital adequacy ratio, liquidity ratio, proportion of loans to the single biggest customer, proportion of loans to the top ten customers, allowance to NPLs, and allowance to total loans ratio are calculated based on data submitted to the regulator, under the data standard of the parent company.

(2) As per the provisions set out in the Notice on Adjusting Regulatory Requirements for Allowance for Loan Losses at Commercial Banks (Y.J.F. [2018] No.7) issued by the CBIRC, all joint-stock banks shall adopt the regulatory standard of putting their allowance to NPLs and allowance to total loans ratio under differentiated and dynamic adjustment.

4.7 Business Overview of the Bank

4.7.1 Principal business

Approved by the PBC and the CBIRC, the main business of the Bank covers: absorption of public deposits, grant of short-term, middle-term and long-term loans, settlement, bill discounting, issuance of financial bonds, agency issuance, agency cashing and underwriting of governmental bonds, purchase and sale of governmental bonds, interbank borrowing, L/C and L/G services, agency receipt and payment and agency insurance business, safe box business, foreign exchange proceeds deposits, foreign exchange loans, foreign exchange remittance, foreign currency exchange, international clearing, interbank foreign exchange borrowing, acceptance and discounting of foreign exchange instruments, foreign exchange loans, foreign exchange guarantee, settlement and surrendering of exchange, purchase and sale of foreign negotiable securities other than stocks per se or as agent, self-operation of foreign exchange trading, foreign exchange trading on an agency basis, credit inquiry, consultation and attestation, offshore banking, portfolio investment and fund custody, national social security fund custody, and other business approved by the PBC and the CBIRC.

4.7.2 Development of the banking industry

In 2020, the banking sector strived to overcome the impact of the COVID-19 pandemic, steadily responded to various risks and challenges, and continued to maintain sound operation. As at the end of December 2020, the financial institutions across the Chinese banking industry posted total assets of RMB319.7 trillion, representing a year-on-year increase of 10.1%, and total liabilities of RMB293.1 trillion, up 10.2% year on year. In the year, RMB loans increased by RMB19.6 trillion, which was RMB2.8 trillion more than the increment in the previous year. The loans granted to private enterprises and manufacturing grew by RMB5.7 trillion and RMB2.2 trillion, respectively, and the outstanding small and micro enterprise loans in the category of inclusive finance, loans to scientific research and technology services, and loans to information technology services grew by 30.9%, 20.1% and 14.9% year on year, respectively.

In the year, the banking industry stepped up efforts to prevent and control various risks, with major operation and risk indicators staying within a reasonable range. In 2020, the banking sector disposed of RMB3.02 trillion of non-performing assets. As at the end of 2020, the NPL balance stood at RMB3.5 trillion, representing an increase of RMB281.6 billion over the beginning of the year; NPL ratio was 1.92%, a decrease of 0.06 percentage point over the beginning of the year; and the ratio of loans overdue for more than 90 days to NPLs was 76%, down 5.1 percentage points over the beginning of the year. In 2020, commercial banks replenished capital by RMB1.34 trillion through issuing preference shares, perpetual bonds and tier-2 capital bonds, and set aside RMB1.9 trillion of new allowances, an increase of RMB113.9 billion year on year. At the end of 2020, allowance to NPLs was 182.3% and allowance to total loans ratio was 3.5%, both of which remained at a high level. 

4.7.3 Performance of main business lines of the Bank

4.7.3.1 Corporate banking

During the reporting period, adhering to the customer-oriented approach, the Bank deepened the customer operation, worked hard to serve the real economy, and provided all-round financial services for customers including but not limited to commercial credit, transaction banking, investment banking, electronic banking, cross-border business, and offshore business. Meanwhile, it vigorously advanced the ecosystem-based digital operation, strengthened financial innovation, and saw its key business indicators picking up. During the reporting period, its corporate banking business segment reaped a net income in RMB61,894 million. Besides, the Bank continued to push forward the multi-level, classified customer operation, and consolidated the customer base. As at the end of the reporting period, the number of corporate customers reached 1,679,900, an increase of 130,100 over the end of last year.

Strategic customer operation

Strategic customers of the Head Office: As at the end of the reporting period, the outstanding corporate loans of these customers denominated in RMB amounted to RMB497.4 billion; and the outstanding corporate deposits denominated in RMB stood at RMB700.1 billion. The daily average low-cost deposits were RMB414.3 billion.

Strategic customers of branches: As at the end of the reporting period, the daily average corporate deposits of these customers denominated in RMB amounted to RMB312.8 billion, of which the daily average low-cost deposits were RMB236.4 billion. The outstanding corporate loans denominated in RMB totaled RMB297 billion, of which the outstanding mid-to-long-term loans stood at RMB189.7 billion.

Corporate deposits and loans

The Bank further optimized the credit customer structure through vigorously supporting traditional competitive industries, upgraded industries, strategic emerging industries, modern services and green industries but strictly curbing financing to industries with heavy pollution, high energy consumption and overcapacity. As at the end of the reporting period, the total corporate deposits of the Company posted RMB3,103,795 million, representing an increase of RMB322,769 million or 11.61% over the end of the previous year; and its corporate loans (including discounted bills) hit RMB2,662,061 million, representing an increase of RMB374,067 million or 16.35% over the end of the previous year.

Investment banking

During the reporting period, the Bank underwrote 1,534 bonds worth RMB737.5 billion as a lead underwriter, of which debt financing instruments amounted to RMB544.5 million. To be specific, there were 47 financial debts worth RMB44,529 million, and 162 overseas bonds worth RMB36,703 million. To support the national pandemic control efforts, the Company finished 45 deals of anti-pandemic bonds worth RMB20,695 million, of which 2020 Huafa (Anti-COVID-19 Bond) SCP003 was the first anti-COVID-19 bond in China. To serve the implementation of major national strategies, the Company issued the country's first medium term note (MTN) for the SOE mixed-ownership reform (2020 Jiushi MTN001) and first pooled commercial paper for high-tech enterprises in Yangtze River Delta (2020 Yangtze River Delta Technology and Innovation Pooled CP001). To develop inclusive finance, the Company devised and issued its first standardized bill called "SPDB Pu Piao Ying 2020 Standardized Bill (Tranche 1)", which was also one of the first products of its kind across the country. Besides, it also struck multiple deals of risk mitigation tools.

The Company actively answered the calls of the country, and served the implementation of national strategies. It increased credit support for such real economy sectors as manufacturing and green finance, with a view to fulfilling social responsibilities due to financial enterprises. As at the end of the reporting period, the Company's outstanding mid-to-long-term loans granted to the manufacturing sector amounted to RMB101.2 billion, crossing the RMB100 billion mark for the first time. Its balance of green credit was RMB262.8 billion, and the balance of syndicated loans was RMB234,997 million.

 

Transaction banking

The transaction banking segment focused on the core tasks of the Bank, served all sorts of customers at the Company, and pushed forward the digitalization drive across the board. Specifically, it moved fast to help enterprises resume work and production from the COVID-19 shutdown, came on board with the "dual circulation" development pattern, and saw international and domestic trade financing growing despite the bad trade environment. It explored new business forms and models to digitalize service delivery, served the real economy with the industry-leading inclusive finance and technology finance, and made intensive efforts to enrich the transaction banking service brands. During the reporting period, the Company's cross-border RMB receipt and payment business volume exceeded RMB570 billion, a year-on-year increase of 54.27%; its volume of e-channel transactions was RMB58.11 trillion, with the off-counter transaction rate going beyond 99%, and the ratio of corporate businesses conducted via self-service devices to outlets' total business volume exceeding 90%; and the number of active payment and settlement customers of the Company reached over 120,000, a net increase of 20,000 over the same period of the previous year. As at the end of the reporting period, the balance of foreign currencies placed onshore totaled USD6,688 million; the number of core supply chain customers reached 628; and the number of upstream and downstream supply chain customers hit 12,344, of which, upstream and downstream customers of auto finance numbered 1,871.

Inclusive finance

During the reporting period, the Company acted quickly and proactively to help small and micro enterprises overcome the severe shocks caused by the COVID-19 pandemic. It introduced a series of measures to provide inclusive finance services in support of pandemic prevention and control, resumption of work and production, and real economy development. As at the end of 2020, the Company's balance of inclusive loans extended by the standard of "two increases" stood at RMB270,958 million, a net increase of RMB66,869 million or 32.76% from the beginning of the year; and the number of small and micro enterprises receiving the loans extended by the standard of "two increases" hit 187,500, a net increase of 37,500 from the beginning of the year. In the year, the cumulative interest rate of inclusive loans extended by the standard of "two increases" was 4.78%, a decrease of 0.73 percentage point from 2019.

During the reporting period, the Company continued to improve the inclusive finance mechanisms and systems, by thoroughly studying the operating risk characteristics and risk management differences of small and micro enterprises, listing credit plans and risk limits separately, and formulating differentiated industry investment policies. At the same time, a host of measures were rolled out, which included increasing funds transfer pricing (FTP) subsidies, strengthening performance appraisal incentives, standardizing service charges for small and micro enterprises, optimizing the policy where inclusive finance staff who fulfilled their duties would not be held accountable, and implementing the policy on deferred repayment of principal and interest. The purposes of these measures were set to encourage the supply of inclusive loans, empower inclusive businesses to improve quality and efficiency, and help the real economy attain sustainable development.

During the reporting period, the Company continued to digitalize the operation of inclusive finance, upheld the business principles of massive customer acquisition, standardized operation, digital support, and intelligent risk control, and reshaped the online flow of the financing business for small enterprises. First, it strengthened the mobile financial services for small and micro enterprises, by optimizing the dedicated service zone of mobile banking, and iterating the functions of payment settlement, credit line calculation on a trial basis, account opening by appointment, repayment calculation on a trial basis, and others. Second, an online service platform that integrated SPD Hui app, personal loan applet, and quick loan secured with housing (H5 page) was set up to upgrade the digital service model for personal business loan customers. Third, the full coverage of online financing varieties was realized. Many kinds of standardized online products targeted at small and micro enterprises launched throughout the year included online factoring, online forfaiting, bank-taxation loan, online discount, and quick loan secured with housing, with a view to meeting the financing needs of customers at multiple levels under various scenarios. Fourth, innovative FinTech was applied to the industry at greater depth. Starting from the use of blockchain technology, the Company tried to march into different industries and provide them with in-depth services. Meanwhile, the service solutions were upgraded constantly. Fifth, the Company cooperated with a number of high-quality core enterprises or supply chain platforms to carry out online supply chain-based financing business. With this step, it met the financing needs of micro, small and medium customers distributed along the upstream and downstream supply chains of core enterprises in an efficient and convenient way.

International business vehicles

The Company made steady strides in international operations. Relying on overseas branches, FTZ branches, and offshore business presence, it put in place and optimized the international business platform which was integrated at home and abroad. Meanwhile, it actively got aligned with the opening-up strategy of the country, and devoted itself to providing a wide range of financial services as actually needed by the "going global" Chinese enterprises, the Belt and Road Initiative implementation, and the FTZ construction.

In the reporting period, the Bank gripped market opportunities to develop international business vehicles (including offshore, FTZ branches, and overseas branches), with an emphasis placed on developing core customers and accelerating optimization of the business structure. As a result, all international businesses were boosted and had good development. As at the end of the reporting period, total assets of all the international business vehicles amounted to RMB349,683 million. In the reporting period, these vehicles realized business revenues of RMB3,848 million cumulatively.

4.7.3.2 Retail banking

During the reporting period, the Company upheld the customer-centric approach and followed the guidance of panoramic banking to intensify digital operation and enhance the customer experience. Narrowing focus on key and weak business fields, it dug deep into the market potential, and kept arming customer service, product innovation, risk control system, management mechanism, and channel development with digital means. Consequently, it achieved remarkable results in digital empowerment. The net operating income of the business line hit RMB73.3 billion. Hence, the business line continued to be the largest source of revenue across the Company. The retail deposits crossed the RMB900 billion mark, and the retail loans amounted to RMB1.78 trillion. The balance of personal financial assets (including market value) reached RMB3.13 trillion, marking an enhancement to the Company's overall strength. While promoting business growth, the Company upgraded the "four-wheel drive for retail banking" again, consolidated the foundation for the tiered operation of retail customers, and kept fueling the sustainable growth of retail business.

Retail customers and total assets under management

During the reporting period, the Company enhanced its customer operation capabilities and improved its customer services by digital means, in a bid to increase customer satisfaction and sense of gain. It explored customer operation modes, with focus placed on the building of a panoramic bank. The Company promoted the "SPD Life Service" platform, with the number of registered users surging from 1.88 million at the beginning of the year to 11 million by the year-end. Tapping deep into the fields of traveling, life, housing, education, culture and tourism, it enabled financial services to reach more customer scenarios, and provided distinctive, high-quality financial services. With corporate and personal banking further coordinated for joint operation, the Company went all out to expand the agency payroll service. As a result, the size of agency payroll service increased by 27% year on year, maintaining an impressive growth rate. It strengthened consumer protection and personal customer information protection by improving related work systems constantly, built a customer experience monitoring platform, and optimized the service quality monitoring regime. As at the end of the reporting period, the number of retail customers (including debit and credit card customers) went beyond 118 million, and the balance of personal financial assets under its management (including market value) reached RMB3.13 trillion, maintaining a trend of steady growth. The balance of personal deposits stood at RMB939 billion.

Wealth management business

During the reporting period, the Company actively adapted itself to the changed market environment, consolidated the foundation for business development, and rendered customers with professional wealth management services. It focused attention on teaming up with leading companies of different industries, stressed the importance of group-wide coordination, and intensified innovation in product development and sales, to sharpen its competitive edges in the market. At the same time, the Company reinforced market analysis and prediction, adjusted product strategies in a timely manner, and elevated the agency sales of funds, insurances, trusts and other products to new heights. The virtual business hall was launched on a trial basis, to provide front-line teams of staff with standardized means to contact customers under various modes such as multi-point video, scenario-based interaction, user-friendly experience, full-process audio and video recording. The intelligent marketing assistant made its debut, to assist wealth management managers in furnishing customers with wealth management services more accurately and efficiently.

During the reporting period, the Company's balance of personal wealth management products stood at RMB992,806 million, and the balance of new net-worth wealth management products as a share of the personal wealth management products surged by 30 percentage points, making significant headway. The fund business achieved rapid growth. The scale of fund holdings soared by 220% year on year, thus becoming more influential in the market. The wealth management income reached RMB7.07 billion.

 

Retail credit business

During the reporting period, the Company continued to diversify the retail credit product lineup, strengthened the building of digital risk control capabilities, and optimized the business operation mechanisms. As at the end of the reporting period, the Company's total personal loans amounted to RMB1,776,794 million. Of these, the housing mortgage loans totaled RMB841,967 million. The Company rolled out three innovative products: the "SPD Inclusive Tax Loan", an inclusive loan product that was all driven by data, went online throughout the entire process, and supported complete autonomous risk control; the "SPD Fabei", a completely online petty consumer loan product; and the Tianju app, an online service platform that could integrate a host of functions such as house viewing, mortgage loan application, and convenient life services. At the same time, it also made eight post-lending services such as repayment changes and clearance certificates available online around the clock. During the pandemic response, the Company provided preferential loan interest rates for key products, opened green channels for customers who needed to adjust their repayment plans, and set reasonable grace periods for repayment. All of these steps were aimed to help customers, especially small and micro enterprises, to tide over the present difficulties.

Debit card and payment settlement

During the reporting period, the Company worked with over 500 partners to issue co-branded cards and themed cards, by launching the card number and face customization service, and optimizing the online card claiming and mailing service. Meanwhile, it became one of the first banks to promote the payment with cellphone number, payment with facial recognition, OPPO PAY, and VIVO PAY. The move helped to further diversify the card-free payment experience. In the reporting period, the Company cumulatively issued 8,912,900 new debit cards, bringing the total number of debit cards in circulation to 75,296,000. The acquiring business continued to raise service standards and serve the real economy. Specifically, it relied on online and offline channels such as APIs, smart terminals, official accounts, applets, and apps to satisfy the sales and collection needs arising from different industries and digitalize a host of sectors including utility bills payment, transportation, retail, health, and education. In the process, it provided consumers with a convenient and easy-to-use payment experience.

Credit card

During the reporting period, the Company saw all indicators of credit card business growing steadily and keeping various risks under control. As at the end of the reporting period, it had 43.7222 million credit cards in circulation; the number of accounts in circulation stood at 31.574 million; and the balance of credit card overdrafts amounted to RMB372,117 million. During the reporting period, the Company's credit card transactions amounted to RMB2,179,225 million; and the business generated a total income of RMB44,989 million.

During the reporting period, the Credit Card Center acted on the development philosophy of "building a panoramic bank", thoroughly implemented the requirements for taking customer experience and technological empowerment as the two-wheel drive, and vigorously promoted the building of an open ecosystem. APIs, applets, and other means were used to promote the two-way integration of service capabilities under ecosystem-based scenarios and partner scenarios. Consequently, a multi-scenario financial ecosystem came into being, which featured open cooperation, scenario-based driving forces, and collaborated connection. When intensifying data empowerment, the center made full use of big data, cloud computing, AI and other FinTech to upgrade the risk control system and customer management system continuously. It also devised an intelligent decision-making central network that deeply integrated business, data, and technology. Thanks to the network, the center further enhanced its ability to make quantitative operation and management decisions. With respect to the promotion of technological innovation, the center did various aspects of work: building a set of credit card-related intelligent robot systems and applying process robots to a wider range of scenarios. In doing so, it strove to pinpoint the fields of business from which technologies could start to play their driving role. To be specific, the self-developed intelligent collection robot managed to drive the growth of the collection business at the Company. It was nominated for the "Financial Innovation Achievement Awards" of Shanghai. The customer experience was extended to cover the entire card using process. A panoramic view of customer journey was drawn using the card using process as the abscissa and the business contact channel as the ordinate. From the perspective of customers, the center formulated the customer contact experience indicators and standards for each journey, completed the establishment of the customer experience monitoring system, and carried out the follow-up evaluation and continued optimization to realize the normalized, closed-loop experience monitoring, with a view to improving customer satisfaction constantly. The Company was granted with the "Outstanding Contribution Award for Customer Service" by China UnionPay at the 2020 Interbank Service Symposium.

Private banking

During the reporting period, the private banking segment of the Company maintained its core positioning as a "perpetual value creator", and upheld of the brand slogan that read "what can be inherited is more than wealth". Relying on SPD Bank's leading edge in corporate banking and retail banking, the segment pooled together advantages available across the Group to devise a joint service mode that featured investment and financing integration, domestic and foreign integration, and corporate and personal banking integration. It moved faster to improve the high-net-worth customer management system, and endeavored to create a butler-style private banking service system. Under the system, the Company would help high-net-worth individual customers, their families, and family businesses to engage in family wealth management and continuing corporate operations. As at the end of the reporting period, the Company had nearly 24,000 private banking customers, and managed their financial assets worth nearly RMB470 billion.

4.7.3.3 Financial market and financial institution business

In the reporting period, the Company, in line with the regulatory requirements, enhanced the customer operation, stepped up product and business innovation, expanded the business scale, optimized the business structure, and grasped market opportunities to lift their business standards in financial market business, intensify investment & trading ability, and enhance its operating cost-effectiveness and risk control. As at the end of the reporting period, the scale of fund assets operated by the Company reached RMB2.12 trillion. In the reporting period, the Company's financial market business realized a net income of RMB40,873 million.

 

Investment transaction

Interbank business: The Company seized windows of market opportunity to promote robust business development. The asset securitization investment increased in scale steadily. Bond trading: The Company closely followed up with market fluctuations to adjust bond strategies at appropriate time, and seized opportunities for market innovation to yield excess returns. Bill business: The Company continued to make business innovation, push forward the digitalization drive, and accelerated the pace of business transformation. Agency business: The Company worked harder to build the SPDB Risk Hedging brand, released the Blue Book on Market Outlook of SPDB Risk Hedging in 2020, offered market players professional judgments and strategic recommendations, and upgraded the agency business and service. In the meantime, the Company tried to seize the opportunities arising from such market segments as interest rate, exchange rate, precious metals, and commodities, fully exploited its professional competences and market-leading positions, and vigorously developed a host of quite competitive products (including interest rate derivatives, foreign exchange structured products, Foreign Exchange E Alliance, Commodity E Alliance, Interest Rate E Alliance, and SPDB Connect). Besides, it managed to put in place multiple forms of innovative business.

Financial institution business

In the reporting period, the Company, centered on the customer-centric business tenet and spearheaded by the strategy of "being driven by customer management and product operation", continued to cement the network of fund, credit and agency services, spared no effort to frame a network of sale points and digital operations, and raised customer service standards and business efficiency as usual. As at the end of the reporting period, the Company entered partnerships with over 3,000 target customers. It saw the satisfaction rate of customers from major industries staying at a high level. The Company further consolidated its operating characteristics in the financial factor market. The credit customers of various Chinese-funded financial institutions were numbered 452, and the credit structure got further improved. The "E Peer" online interbank platform could better serve and support customers. The total customers of such platform exceeded 2,000. The "Bund 12" interbank exchange platform kept improving, unveiling the online live streaming function. Nearly 50 activities of this kind were carried out throughout the year. Consequently, the brand became increasingly influential.

Asset management

During the reporting period, the Company continued to expand its lineup of products in line with new asset management regulations, so as to guarantee the adequate product supply. Pursing a customer-centric approach, it made every effort to serve customers and meet their diversified needs. Meanwhile, the Company stepped up efforts in standardized asset allocation, and controlled the scale of non-standard investments. It adopted multiple measures to resolve the risk assets under the existing businesses and strengthen risk prevention and control. It nailed down a plan to rectify the existing wealth management business, and beat the targets set for the current phase smoothly. The Company got its application for incorporating a wealth management subsidiary approved, and accelerated the preparations for the opening of the subsidiary. It continued to promote the asset management business towards high-quality development. These efforts achieved fruitful results. As at the end of the reporting period, assets under the Company's management amounted to RMB1.25 trillion. The Company realized fee-based business income of RMB8.6 billion during the reporting period.

Asset custody

During the reporting period, the Company focused on the sustained and steady development of asset custody business. First, it transformed the business structure, by vigorously developing valuation business. Therefore, impressive business results were achieved in multiple fields of key products. Second, the Company was committed to comprehensive risk control. It used digital means to improve the efficiency and accuracy of risk control. Third, it engaged in intensive operations, becoming the first custodian bank of the industry that concentrated all business operations on the Head Office. At the end of the reporting period, the asset custody business had a scale of RMB13.80 trillion. During the reporting period, the business generated a total of RMB3,036 million of custody fee income.

4.7.3.4 Channels and services

Network building

During the reporting period, the Company newly established 94 institutions, including 68 intra-city sub-branches. By extending the coverage of FinTech-enabled services, it ceased operating 60 business institutions. As at the end of the reporting period, it had established 41 tier-one branches and 1,640 banking outlets in 31 provinces, municipalities directly under the central government, and autonomous regions, Hong Kong Special Administration Region, Singapore and London.

Electronic banking

During the reporting period, the Company allowed AI innovation to further play its enabling role, put customer experience in the first place, and reshaped business processes, so as to enhance the user experience and service efficiency, both online and offline. At the same time, it went all out to build a panoramic bank. As to online channels, the Company continued to upgrade the intelligent mobile banking app, by offering a complete set of services for the brand-new caring version and minimalist version of the app. It launched a digital employee to serve as a "shopping guide" who could enhance the full-process service experience for wealth investment (before, during and after investment). The "smart brain in the hall" concept was put forth to replace the traditional passive response service with the active precise service, as a move to improve the service efficiency of outlets. The Company explored the digital "Xiaopu New Outlet" mode to render small and medium enterprises with convenient settlement services, help acquire retail customers, and enhance the intelligent service experience at outlets. From the remote perspective, the Company unveiled intelligent customer service, becoming the first Chinese bank to realize the full coverage of intelligent voice service on its telephone banking. It innovatively uploaded the "Xiaopu E Understanding" media-rich remote service, and rolled out the industry-leading "Smart Xiaopu" AI service. The Company set up a dedicated marketing team, strengthened the application of intelligent outgoing call function, and integrated the industry's most cutting-edge voice recognition and semantic understanding technologies. Its intelligent outgoing call capacity, therefore, had few equals in the industry. Meanwhile, the Company got more out of intelligent outgoing call capabilities, and introduced new business scenarios such as smart collection, bank-enterprise reconciliation, massive account opening verification, AML due diligence, AMA automatic outgoing call marketing to support the bank-wide outgoing call business. At the same time, it studied to bring such advanced FinTechs as graph data, biological recognition, and blockchain into integrated innovation and application, continued to improve intelligent risk control capabilities, and guaranteed the high-quality and healthy development of retail business.

As at the end of the reporting period, the Company had 36.9097 million personal online banking customers, who conducted 103 million transactions in a total amount of RMB5.49 trillion in the reporting period; and it had 49.8233 million personal mobile banking customers who conducted 1,487 million transactions in a total amount of RMB11.41 trillion in the reporting period. The number of personal customers using card-bound internet payment service reached 43.8269 million, up 14.46% year on year, and 2,904 million transactions in a total amount of RMB1.59 trillion were conducted during the reporting period. The Company had 4,902 self-service cash devices in service and 2,924 self-service outlets with the e-channel trading substitution rate up to 99.4%.

Operation support

During the reporting period, the Company, focused on "efficient, direct, intelligent, and shared operation", built a "smart operation +" system on all fronts. First, seeking cross-boundary collaboration to support high-quality business development: The Company served to put in place the key businesses of the corporate banking, retail banking, and financial market segments. It comprehensively reshaped the business flows of agency payroll service and massive account opening, and provided end-to-end solutions for different types of enterprises. It launched flagship personal remittance products including "overseas-studying remittance" and "cross-border agency payroll service", and simplified operations to provide convenient foreign exchange collection and settlement services for employees of Chinese-funded institutions abroad. Second, making proactive, joint efforts to overcome the pandemic-inflicted difficulties: The Company built a bank-wide shared operation pool, made unified scheduling of operations across the Bank, and realized seamless collaboration among different regions, to ensure timely implementation of anti-pandemic payment, financing and other services. It formulated business continuity plans given actual pandemic developments in the places where domestic and overseas branches were located. It rolled out the remote account opening service which required no direct contact, and opened up the emergency channels for agency payroll services and massive account opening services during the pandemic response period. Third, introducing technologies to enhance the intelligent level of operations: The Company introduced RPA, optical character recognition (OCR), and outgoing calls made by robots to routine business operations in place of simply repetitive manual tasks. AI technologies such as natural language processing (NLP) and knowledge graph were used to convert professional knowledge into system intelligence. Fourth, laying a solid foundation to reduce hidden operational risks: The Company created an internal account management platform, and examined and standardized the bookkeeping business scenarios and review processes. It established a big data-enabled account evaluation system, and added online verification, namelist-based scanning, and other management functions into the process, with a view to ensuring that the number of accounts involved in cases could remain at a low level of the industry. Fifth, strengthening self-development by building high-caliber staff teams: The Company continued to promote the building of the "three talent teams", carried out operation marketing on an ongoing basis, facilitated the marketing campaigns of key products across the Bank, and enhanced the value contribution of operating personnel. It organized business skills competitions and operation projects to train an array of competent operators for the Bank. Thanks to these intensified operation services, a total of 45 outlets of the Company were included in the list of Top 1,000 Outlets by China Banking Association throughout the year.

4.7.3.5 Human resources management

During the reporting period, the Company enhanced executive forces, focused on the leading role of Party building and the overall goals set by the human resources management strategy, and provided the organizational and personnel support for the operation and management work across the board. First, centered on the leading role of Party building, it made headway towards high-quality development under the leadership of high-quality Party building efforts. Second, based on the internal and external environments, the three-year human resources action scheme was implemented with effects assured. Third, it acted on the policy for "stabilizing employment" to increase the introduction of talented people, strove to turn out diversified staff members, and built high-caliber talent teams. Fourth, efforts were made to continue optimizing the organizational structure of the Bank and meet the requirements raised by the transformation drive. Fifth, it carried out control over workforce size and structure optimization, improved outlet distribution and increased production capacity. Sixth, emphasis was put on streamlining the official selection mechanism, and building talent echelons, so that the official team could come in a more reasonable age structure and further improve the overall quality. Seventh, steps were taken to improve a host of employee incentive and constraint mechanisms including market-based remuneration management and all-employee performance management. Efforts were also made to strengthen process management and supervision improvement.

4.7.4 Analysis of major holding and participating companies

4.7.4.1 External equity investments

In RMB millions

Investment balance of the Group at the end of the reporting period	12,523
Change of investment balance at the end of the reporting period compared with the previous year	1,185
Change of investment balance at the end of the reporting period (%)	10.45

In RMB millions

	End of the reporting period	End of last year
Investment balance in joint ventures	2,127	1,841
Investment balance in associates	274	208
Other equity investments	10,122	9,289
Total	12,523	11,338

Notes: (1) Joint ventures include AXA SPDB and SPD Silicon Valley Bank;

(2) Associates include China Trust Registration Corporation Limited. Shanghai Trust, a subsidiary of the Bank, sent a director to China Trust Registration Corporation Limited.

(3) Other equity investments mainly include Shenlian International Investment, China UnionPay Co., Ltd., and National Financing Guarantee Fund Co., Ltd.

4.7.4.2 Interests in unlisted financial enterprises

In RMB millions

Investee	Investment balance	Stake in the company (%)	Book value at the end of the period	Profit/loss during the reporting period	Other changes in owner's equity during the reporting period	Accounting item
AXA SPDB Investment Managers Co., Ltd.	974	51.00	1,384	130	-	Long-term equity investment
SPD Silicon Valley Bank	750	50.00	743	-12	-	Long-term equity investment
Shenlian International Investment Co., Ltd.	286	16.50	484	29	-163	Financial investments: Other equity instrument investments
China UnionPay Co., Ltd.	104	3.07	973	16	24	Financial investments: Other equity instrument investments
National Financing Guarantee Fund Co., Ltd.	1,500	3.03	1,500	-	-	Financial investments: Other equity instrument investments
China Trust Protection Fund Co., Ltd.	500	4.35	500	27	-	Financial investments: Held-for-trading financial assets
Shanghai Life Insurance Co., Ltd.	80	1.33	80	-	-	Financial investments: Held-for-trading financial assets
China Trust Registration Corporation Limited	100	3.33	99	-3	-	Long-term equity investment
Total	4,294		5,763	187	-139

Note: Profit/loss during the reporting period refers to the influence of the investment on profit of the Group during the reporting period.

4.7.4.3 Analysis of major investee companies of the Group

(1) Shanghai Trust

Shanghai International Trust Co., Ltd., established in 1981, is one of the earliest trust companies in China. In March 2016, the Bank completed the purchase of Shanghai Trust's equity by issuing ordinary shares to Shanghai Trust's original shareholder, Shanghai International Group Co., Ltd. and became the controlling shareholder of Shanghai Trust. Shanghai Trust has a registered capital of RMB5 billion, in which the Bank holds 97.33% shares. By actively advancing the business transformation, making every effort to cultivate the active management capability and constantly innovating the business and management modes, Shanghai Trust has built up its brand image on the market and witnessed a leading comprehensive strength among trust companies in China.

As at the end of the reporting period, assets under the consolidated management of Shanghai Trust amounted to RMB869,732 million. During the reporting period, Shanghai Trust achieved an operating income of consolidated statement in RMB5,254 million and a net profit of RMB1,620 million.

(2) AXA SPDB Investment Managers

AXA SPDB Investment Managers Co., Ltd. is a fund management joint venture established in August 2007. AXA SPDB Investment Managers has a registered capital of RMB1.91 billion, in which the Bank holds 51% shares. During the reporting period, assets of AXA SPDB Investment Manager scaled up, and the investment performance maintained stable.

As at the end of the reporting period, assets under the management of AXA SPDB Investment Managers reached RMB553,665 million. During the reporting period, AXA SPDB Investment Managers achieved an operating income of RMB970 million and a net profit of RMB303 million.

(3) SPDB Financial Leasing

SPDB Financial Leasing Co., Ltd., established in May 2012, is China's first financial leasing Company integrating financial capital and industry capital. SPDB Financial leasing has a registered capital of RMB5 billion, in which the Bank holds 61.02% shares. Relying on the powerful platforms and advantageous resources of all shareholders, SPDB Financial Leasing is committed to "serving the strategy of domestic giant aircraft", focuses on the development of aviation and shipping, public utilities, energy and electric power, advanced manufacturing, emerging industries and other fields, and is dedicated to providing customers with professional, featured and innovative financial leasing products and services.

As at the end of the reporting period, the total assets of SPDB Financial Leasing reached RMB91,016 million. During the reporting period, SPDB Financial Leasing achieved a net operating income of RMB3,325 million and a net profit of RMB704 million.

(3) SPD Silicon Valley Bank

SPD Silicon Valley Bank Co., Ltd., established in August 2012, is the first bank owning an independent legal person status and committing itself to serving technological innovation enterprises in China and also the first Sino-US bank. SPD Silicon Valley Bank has a registered capital of RMB1.5 billion, in which the Bank holds 50% shares. SPD Silicon Valley Bank devotes itself to serving China's technological innovation enterprises and builds a "technological innovation ecosystem" in China. It strives to become the premier bank of China's technological innovation enterprises and their investors.

As at the end of the reporting period, the total assets of SPD Silicon Valley Bank reached RMB20,915 million. Its operating income was RMB330 million and net profit was RMB2,226 million during the reporting period.

(5) SPDB International

SPDB International Holdings Limited ("SPDB International") was opened officially in Hong Kong in March 2015. SPDB International has licenses of Type 1 "dealing in securities", Type 4 "advising on securities", Type 6 "advising on corporate finance" and Type 9 "asset management" in regulated activities from Hong Kong Securities and Futures Commission and is eligible to act as a listing sponsor in Hong Kong. SPDB International is dedicated to forging itself into a global full-licensed investment banking business platform. Relying on the domestic market and marketing channels, it serves customers' cross-border investment and financing demands and provides them with a full package of whole-process, integrated financial services that cover shares, bonds and loans at home and abroad, as exemplified by listing sponsor, securities sales and trading, asset management, and investment consultation, thus achieving the linkage and complementation of investment banking business and commercial banking business.

As at the end of the reporting period, the total assets of SPDB International reached HKD2,576 million. During the reporting period, it achieved a net profit of HKD1,586 million.

(6) SPD rural banks

SPD rural banks are banking financial institutions with an independent legal person status incorporated by the Bank by actively responding to the national call for supporting agriculture, farmers and rural areas and small and micro enterprises. The Bank incorporated its first SPD rural bank in Mianzhu earthquake-stricken area in Sichuan in 2008. As at the end of the reporting period, a total of 28 SPD rural banks were established in counties across 19 provinces and cities of the nation, two thirds of which are located in central and west areas of China. SPD rural banks are committed to serving agriculture, rural areas and farmers and supporting small and micro enterprises in the county areas, with a focus on farmer households and small and micro enterprises; in terms of market positioning, rural banks adhere to targeting county economy, making efforts and contributions in alleviating the borrowing difficulties of farmers and small and micro enterprises and expanding the reach of financial services to the countryside. In 2020, eight SPD rural banks were named "China's Top 100 Rural Banks".

As at the end of the reporting period, 28 SPD rural banks realized operating income of RMB882 million, and possessed total assets of RMB40.5 billion. Their daily average deposit balance was RMB31.9 billion and loan balance was RMB23.2 billion. They had 1.13 million settlement customers and 50 thousand loan customers. With the agro-related loans and small and micro enterprise loans accounting for over 90% of total loans, SPD rural banks faithfully practiced the inclusive finance policy.

4.8 Other Information Disclosed Pursuant to Regulatory Requirements

4.8.1 Interest receivable

As at the end of the reporting period, the details of interest receivables of the Group can be seen in the note disclosures of various financial assets and liabilities in financial statements.

4.8.2 Repossessed assets and provision for impairment

In RMB millions

	End of the reporting period		End of last year
The Group	Amount	Balance of allowance for impairment losses	Amount	Balance of allowance for impairment losses
Real estate	888	168	772	171
Others	-	-	1	-
Total	888	168	773	171

6.8.3 Financial assets and other assets measured at fair value

The internal control system in connection with measurement of fair value: For financial instruments traded in active markets, the determination of fair value is based on quoted market prices preferentially. For financial instruments not traded in active markets, fair value is determined using appropriate valuation techniques such as valuation model or third-party quotation.

The valuation techniques include the techniques referring to prices used in market transactions recently conducted by all parties being familiar with the situation and making the transaction voluntarily, the current fair value of other financial instruments that are essentially the same, and the discounted cash flow method. The valuation techniques should make use of market parameters as much as possible. However, when there are no market parameters, valuation should be made for credit spread, market volatility and correlation of the counterparty. Variation of these relevant assumptions will have impact on fair value of these financial instruments.

In RMB millions

Items in connection with measurement of fair value	31 December 2019	Profit/loss on changes in fair value during the current period	Accumulated changes of fair value recorded into equity	Impairment accrued during the current period	31 December 2020
Financial assets
1. Precious metals	30,870	-2,420	-	-	44,969
2. Held-for-trading financial assets	505,318	-545	-	-	549,149
3. Derivative financial assets	38,719	24,870	-	-	63,589
4. Loans measured at fair value through profit or loss	3,180	101	-	-	18,280
5. Loans measured at fair value through other comprehensive income	412,935	-	229	319	422,508
6. Other creditor's rights investments	497,508	267	1,250	650	577,786
7. Other equity instrument investments	5,794	-	334	-	5,835
Total financial assets	1,494,324	22,273	1,813	969	1,682,116
Financial liabilities
1. Held-for-trading financial liabilities	23,295	65	-	-	16,057
2. Derivative financial liabilities	41,503	19,643	-	-	61,146
Total financial liabilities	64,798	19,708	-	-	77,203

Note: This table has no consequent articulation.

4.8.4 Entrusted asset management, asset securitization and various agency and custody businesses as well as their profit or loss within the reporting period

4.8.4.1 Review on wealth management business in the reporting period

The Bank focused on enhancing meticulous management standards, kept improving the structure of products, and vigorously promoted the research, development and innovation of wealth management products. Such measures as enriching cash management products, transforming net-value products at a faster pace, launching products exclusive to well-divided customer groups, and forging consumer wealth management brands were adopted to promote the wealth management business towards stable, sound development. During the reporting period, the wealth management business reaped an income of RMB7.07 billion.

 

4.8.4.2 Asset securitization and its profit or loss in the reporting period

During the reporting period, the Bank actively facilitated credit asset securitization to further intensify active management of assets and liabilities by means of asset securitization. Throughout the year, it issued eight credit asset securitization projects, and underwrote 60 asset securitization projects totaling RMB34,376 million as the lead underwriter.

4.8.4.3 Custody business and its profit or loss in the reporting period

During the reporting period, the Bank carried out customer funds custody, trust custody, security investment funds custody, special QDII assets custody, insurance funds custody, custody for fund separately managed account (SMA) products, custody for assets of securities companies, custody for assets of futures companies, private fund custody, direct equity custody, custody for banks' wealth management products, enterprise annuity and benefit scheme custody. As at the end of the reporting period, the asset custody business had a scale of RMB13.80 trillion. During the reporting period, the business generated a total of RMB3,036 million of custody fee income.

4.8.4.4 Funds and securities (agency) business and its profit or loss in the reporting period

In terms of agency funds and securities business, the Bank selected key funds as partners, and constructed a reserve of selected funds named "Kao Pu Selection". It focused on marketing open-ended public fund products, G-smart Investment, Pu Fa Bao, and SMA business of standard asset funds. A non-interest income of RMB1,576 million was achieved from fund agency business with retail customers in the reporting period.

As for the agency insurance business, the Bank actively transformed its installment insurance business. During the reporting period, it generated a paid-in premium income of RMB1,325 million.

As to the retail precious metal business, the Bank rolled out the gold trading training camp, and optimized the Jin Pin Hui trading community platform on the mobile banking app. During the reporting period, it generated a non-interest income of RMB366 million.

4.8.5 Off-balance-sheet items that might exert material impact on financial position and business performance of the Bank

In RMB millions

The Group	End of the reporting period	End of last year
Credit commitments	1,368,531	1,182,694
Incl.: Bank's acceptance bill	553,527	473,598
Letters of credit issued	176,517	162,473
Letters of guarantee issued	112,564	88,940
Credit card and loan commitments	525,923	457,683
Operating lease commitments	9,769	9,243
Capital commitments	13,887	11,703

4.9 Discussion and Analysis on Future Development

4.9.1 Management measures in 2021

The Bank will earnestly implement the decisions and plans made by the CPC Central Committee and the State Council as well as regulatory requirements, uphold the general principle of pursuing progress while ensuring stability, actively serve the needs of real economy, and resolutely forestall financial risks. Focusing on the main business line, the Bank will move ahead with digital building across the board and embark on a new journey of building a top-notch joint-stock commercial bank in an all-round way.

-     Improving strengths, shoring up weaknesses and consolidating the foundation for high-quality development. Leveraging on its business advantages, the Bank will put in a great deal of efforts to build featured brands such as technological innovation, free trade and green finance. It will make up for business shortcomings and focus on key regions, key customer groups and products. Besides, the Bank will continue to invest in quality assets, improve inclusive finance and other services, and consolidate the foundation for high-quality development.

-     Strengthening coordination and collaboration to enhance the synergy of customer operation. From the perspective of customers, the Bank will strengthen all-round and multi-level collaboration within the Group, break barriers and strengthen integration, so as to accelerate the reform of operating models.

-     Continuing to intensify capacity building and enhance the business competence of the team. The Bank will focus on improving the research, business and digital capabilities of its employees to further improve the quality and efficiency of operation.

-     Pushing forward digital building in an all-round way and accelerating the development of a new model for customer expansion. The Bank will upgrade the structure of its operation and management platform, strengthen data governance, improve customer ecosystem and continuously better its customer management system.

-     Focusing on improving asset quality and enhancing comprehensive risk management capability. The Bank will continue to reduce risks, strengthen comprehensive risk management and accelerate the reconstruction of a new model of risk management and control. It will also further enhance the effectiveness of compliance and internal control management.

-     Continuing to consolidate basic management and improve the bank-wide development. The Bank will strengthen the basic management of assets, liabilities and operations, push forward the steady operation of the wealth management subsidiary and the establishment of a FinTech subsidiary, continue to deepen the group-wide and international operations, and perform sound pandemic prevention and control.

4.9.2 Possible risks

Impacted by the pandemic, there is still a lack of momentum in global economic growth. Given disruptions to economic recovery, major overseas economies may still adopt accommodative policies to support economic growth in 2021, and it is difficult to significantly improve the geopolitical landscape in the short term.

In terms of domestic economy, two major factors may lead to a declining growth rate in 2021. The first factor is base effect. As the economic growth rate in the first quarter of 2020 experiences an unusual low, the base effect may lead to a high GDP growth rate in the first quarter of 2021. In the second quarter and beyond, GDP growth rate will continue to decline due to the base effect. The second factor is the gradual withdrawal of accommodative policies. From a counter-cyclical perspective, the interim accommodative special measures introduced in 2020 in response to the pandemic may be gradually withdrawn in 2021, and the impact on the economy will emerge in the second half of the year.

In terms of regulatory environment, regulatory policies will attach more importance to balancing the relationship between risk prevention, stable growth and financial innovation. Commercial banks will take more effective measures in comprehensive risk management, and strict implementation of the concentration management policies on real estate loans and rules for the financing management of key real estate enterprises. In particular, 2021 is the last year of the transition period for the new asset management rules, and areas such as the intensified supervision on institutions that failed to dispose of existing wealth management assets will face more prudent regulatory requirements, which requires commercial banks to accelerate the transformation of business model and improve the quality and efficiency of development.

4.10 Risk Management

4.10.1 Risks facing the Bank

As a special enterprise engaged in currencies and credit, the Bank faces the following major risks in operation: credit risk, liquidity risk, market risk (including interest rate risk and exchange rate risk, etc.), operational risk (including settlement risk, technical risk, and system risk, etc.) as well as compliance risk, legal risk, IT risk, strategic risk, reputational risk, country risk, etc.

4.10.2 Statement on credit risk

4.10.2.1 Policy making

First, the Bank formulated the 14th five-year plan for risk management and the three-year action plan for the risk management line of the Head Office, made comprehensive plans for the strategic objectives and key measures for risk management in the next five years, and implemented the three-year action plan.

Second, the Bank formulated the new three-year risk appetite for 2021-2023 on the Head Office level, and guided all subsidiaries and overseas branches to compile their respective risk appetites. Thanks to these efforts, policies were put in place in light of actual business needs, and there formed a "1+3+7" framework of risk appetite policies that covered every aspect of the Group.

Third, the Bank established a three-level credit policy system, to standardize the overall credit supply, industry policies and customer lists. It formulated the annual credit granting policy, continuously improved credit policies to support the fight against the virus, and refined the criteria for selecting leading enterprises under differentiated policies for different branches.

Fourth, the Bank organized efforts to implement differentiated policies for different branches and put such policies under regular management, made decisions from actual conditions, and instructed credit supply in a precise way. It released the list of leading enterprises of all branches under differentiated policies for different branches, and adjusted the list in the middle of the year. It gave more policy support to the listed leading enterprises in terms of customer access, approval and authorization, industry limit, and other aspects.

Fifth, the Bank exploited the rigid constraints of industry limits, allowed policies to play their guiding roles efficiently, and implemented the "mandatory + instructive" industry limit management on all fronts.

4.10.2.2 Credit extension management

First, the Bank followed national strategies and plans, and performed its due social responsibilities as a commercial bank.

Second, the Bank closely followed up with the macro economic and financial situation, earnestly implemented the requirements set forth by financial regulators, and prudentially conducted credit approval to protect the asset quality and security. As a result, it achieved concreted results in adjusting the credit structure.

Third, the Bank developed a more intensive credit approval system, better implemented its risk policies and risk appetite, and further standardized its credit approval criteria.

Fourth, the Bank achieved remarkable results in basic credit management, refined relevant management, made steady progress in approval quality, and secured a leading position among joint-stock banks in terms of timeliness of approval.

Fifth, the Bank made consistent efforts in credit extension, promoted the optimal allocation of credit resources, delivered professional services in guiding customer selection and risk prediction, and ensured the smooth implementation of quality projects.

Sixth, the Bank provided multi-level, diversified credit training programs to enhance the competence of credit teams across the board.

Seventh, the Bank kept conducting onsite inspections on credit extension management of its branches and sub-branches, effectively enhancing the quality and compliance control over credit business.

4.10.2.3 Risk forewarning

First, the Bank continuously refined its risk forewarning mechanism, strengthened screening and cross-warning management of credit business of key risk-bearing customers from the corporate banking, retail banking, interbank business, wealth management, and consolidated subsidiaries, and improved the joint risk forewarning mechanism for credit business. The Bank strengthened look-through risk monitoring and forewarning for assets recognized back onto balance sheet in the rectification of wealth management business. It carried out special inspections on overseas branches and consolidated institutions and systematic monitoring on key risk areas, verified and supplemented online and offline results, and advanced to build a digital risk control system covering the whole Group.

Secondly, the Bank continued to improve the risk forewarning management platform, improved and applied automated forewarning rules, established a post-assessment mechanism for risk forewarning, and made risk forewarning more comprehensive, effective and timely.

Thirdly, the Bank strengthened the sharing and effective application of forewarning information, enhanced the sharing of risk forewarning information among business lines such as corporate credit, proprietary trading and asset management, and stepped up effective collaboration between risk forewarning and links of credit process, risk classification, credit rating, and credit inspection.

Fourth, the Bank continued to reduce and exit loans to customers who triggered forewarnings, further optimizing the credit structure.

4.10.2.4 Asset resolution

The Bank made greater efforts in collecting and resolving NPLs, striving to increase the efficiency of disposing of risk-bearing loans.

First, the Bank exercised the list-based classification management of loans, intensified the supervision and management of risk resolution regarding NPLs of key branches, key businesses and key projects, and managed all risk-bearing customers with accurately tailored policies.

Second, the Bank made full use of diversified disposal means such as cash recovery, debt-to-equity swap, debt repayment with non-cash assets, debt restructuring, loss write-off, asset securitization, risk elimination and exit, and developed the debt liquidation plan for each account and further advanced the implementation.

Third, the Bank accelerated the transformation of NPA management and disposal, actively promoted and guided the bank-wide change of NPA disposal mode, built a market-oriented disposal platform, and developed and applied big data inspection tools. It also continued to push forward the requirements for due diligence and recourse management, and effectively improved the performance of NPL disposal.

4.10.3 Statement on liquidity risk

The objectives of liquidity risk management of the Bank are set to get adequate funds on time and at reasonable cost as needed by the repayment of matured debts, the performance of other payment obligations and the satisfaction of fund needs arising from normal business with a view to ensuring liquidity safety; and to lower liquidity cost and achieve the balance between the total amount and structure of assets/liabilities and the balance between liquidity and profitability through proactive management.

During the reporting period, the Bank kept layered, beforehand, and balanced management of liquidity risk in line with the principle of aggregate balance and structural equilibrium. It carried out real-time monitoring on daily position accounts in local and foreign currencies, made centralized allocation of positions in local and foreign currencies, and established a pre-declaration mechanism for large-amount positions to monitor the total liquidity level. It prepared a cash flow gap table on a daily basis, used the gap management method to predict cash flow gap changes in on-and-off-balance sheet items in the future, and dynamically conducted on- and off- balance sheet liquidity risk assessment. The Bank also, based on its own liquidity risk appetite and risk limit requirements, made smooth and dynamic adjustments to liquidity gaps in advance through active financing arrangements and asset & liability portfolios, thus to realize a gross balance and structure equilibrium in the business development and effectively meet the requirements for liquidity management goals.

During the reporting period, the Bank kept a close eye on the macro-economic changes, kept abreast of the regulation effects of credit policies and monetary policies, timely adjusted the direction, size and structure of cash flow gap, and actively prevented liquidity risk based on its own structure of asset and liability and general capital balance, thereby realizing a sound business operation and keeping the liquidity at a reasonable and balanced level. A host of specific strategies were adopted. First, multiple measures were adopted to promote the significant growth of general deposits, consolidate the liability base, and improve the quality of liabilities. Second, efforts were made to coordinate and promote active liability instruments such as financial bonds and to increase the sources of long-term stable funds. Third, more steps were taken to strengthen macro-economic research and prediction as well as dynamic forecast of liquidity profile across the Bank, to accurately allocate assets and liabilities, to optimize the asset and liability term structure in a rolling manner, and to strengthen active risk management. Fourth, continuous efforts were made to optimize the daily liquidity management of treasury, improve the position pre-declaration mechanism, raise the position pre-declaration standards, intensify daytime position monitoring, and ensure reserve security. Fifth, regular stress tests and emergency drills were carried out to improve the ability to address liquidity risk events. Sixth, the management information system was improved to raise the accuracy and timeliness of liquidity risk measurement, and support management decision-making. The Bank prevented liquidity risk through the above-mentioned measures.

As at the end of the reporting period, the proportion of liquidity available across the Group calculated by the regulatory standards was 46.03%; the proportion of liquidity available across the Bank was 45.95%; the RMB excess reserve ratio stood at 3.63%, up 0.51 percentage point over the end of last year; the liquidity coverage ratio of the Group posted 132.25%, and the liquidity coverage ratio of the Bank was 131.61%, up 9.45 percentage points over the end of last year. In brief, the overall liquidity was appropriate and robust.

4.10.4 Market risk management conditions

In 2020, the Bank nailed down the 2020 market risk limit based on the market risk appetite for 2019-2021. During the reporting period, the Bank closely tracked market risk exposures and market changes at home and abroad, intensified new product review and transaction strategy tracking evaluation of transaction business, and stepped up the monitoring of market risk limit, transaction authorization, credit limit, transaction behaviors, profit/loss forewarning etc. Consequently, the Bank managed to keep the market risk monitoring indicators within the scope of risk appetite. The stress test results showed that under an extreme unfavorable scenario, the Bank would face certain negative influences, which were within the controllable range.

During the reporting period, the Bank paid close attention to the impacts brought by the regulatory policies and monetary policies at home and abroad, COVID-19 and international geopolitical events, continued to improve its capabilities of market situation analysis, market risk measurement and transaction strategy evaluation, strengthened market risk management, and protected transaction business from being negatively impacted by any major events in the financial market. First, the Bank established a new product management mechanism for transaction business and improved the new product risk review and evaluation procedures. Second, it continued to develop related systems and boost the ability to measure complex derivatives. Third, it implemented as scheduled the project aimed to align itself with the new standardized approach to market risk according to Basel III, and established a new standardized approach-based measurement system in line with the requirements of Basel III and domestic regulators, so as to comprehensively improve and optimize the market risk policy system and management process. Fourth, it refined the market risk data platform, improved the market risk calculation engine, and built a high-level market risk management foundation.

As at the end of the reporting period, the Bank's consolidated market risk capital was RMB4,834 million under the standardized approach, and capitals occupied by general risk and specific risks are as follows.

In RMB millions

		General risk capital					Specific risk capital	Total
	Date	Interest rate risk	Exchange rate risk	Options risk	Commodity risk	Stock risk
31 December 2020		1,333.60	1,709.60	38.77	1,138.99	21.51	591.04	4,833.51

4.10.5 Statement on operational risk

Operational risk refers to the risk of losses caused by an imperfect or problematic internal procedure, staff or IT system and external events. Operational risk includes legal risk but excludes strategy risk and reputational risk.

In 2020, with increasing external fraud risk and regulatory punishments as well as increasingly rich and complicated businesses and business procedures, the Bank witnessed mounting operational risk. Pursuant to regulatory requirements, the Bank started to carry forward the consulting program on the new standardized approach to operational risk of Basel III, and was committed to building a new standardized approach capital system for operational risk. During the reporting period, relevant departments and branches developed corrective measures to address some key risk indicators with abnormal changes. At the same time, the Bank carried out onsite inspections and trainings for primary-level institutions, and put forth suggestions for rectifying the problems identified in the inspections. Operational risk was controllable in large.

4.10.6 Statement on other risks

4.10.6.1 Compliance risk

Centered on the corporate strategies, the Bank closely focused on the main task of high-quality development, optimized systems and mechanisms, consolidated management foundation, and improved management capabilities. Focusing on key regulatory concerns and internal risk links, the Bank continued to improve working measures, prevention and control measures and digital management means, further strengthened the compliance awareness and improved the quality and efficiency of compliance management. The Bank's compliance risk management was in an overall good shape.

4.10.6.2 AML

Responding to frequent external money laundering risks, the Bank continuously cemented the management foundation, defined the responsibilities of institutions, and achieved positive results. It stimulated all employees' awareness of AML compliance through AML assessment, and effectively identified and controlled money laundering risks by establishing the management framework for AML, anti-terrorist financing and anti-tax evasion, controlling risks in the areas with frequent occurrence of money laundering, applying cutting-edge technologies, and carrying out institutional money laundering assessment. Besides, the Bank strengthened AML publicity in conjunction with hotspot issues and well fulfilled its social responsibilities.

4.10.6.3 Legal risk

The Bank strictly implemented the requirements of corporate governance according to law, paid attention to changes in external laws and regulations, timely assessed and revised its internal management policies, and strengthened the identification and prevention of legal risks in innovative businesses and key areas. It strengthened the identification, prevention, handling and management of legal risks, attached importance to increase the digital application in legal risk management, and conducted the legal risk management with quality and effect better assured. It also continued to promote the legal publicity and education, strove to enhance the awareness of governance by law among all employees, and assumed the responsibilities for popularizing laws vigorously.

4.10.6.4 IT risk

The Bank made continuous efforts to improve its IT risk management mechanisms, and enhanced the identification and prevention of IT risk through multiple special IT risk assessments and continuous monitoring of IT risk events and indicators.

4.10.6.5 Business continuity management

In response to the pandemic, the Bank strengthened business continuity management, strictly implemented various pandemic prevention and control measures across the Bank, and timely opened the standby business site in Zhangjiang of the Head Office to enhance the resilience of business operation. The Bank did not incur any business interruption event due to the pandemic.

4.10.6.6 Strategic risk

Sticking to the strategic management model of "strategy - planning - budget - appraisal", the Bank increased the leading role of strategies in the development, and closely followed two main lines of risk control and income guarantee in work. Overall, the Bank's strategic mentality fitted well with the situation changes and national strategies, with increasing force of strategy execution and ability to control strategic risk. The strategic risk was kept steady and controllable in the period.

 

4.10.6.7 Reputational risk

The Bank maintained highly sensitive to public opinions, persistently improved its reputational risk management mechanism, intensified a full-course management of reputational risk, and leveraged digital platforms to realize systematic reputation management. Besides, it intensified new media management and application, and improved the building of We-Media communication matrix, thus continuously raising the scale and influence of positive publicity. During the reporting period, the reputational risk was controllable with a steady trend.

4.10.6.8 Country risk

During the reporting period, as country risk increased significantly across the world, country risk exposures of the Bank rose rapidly, making management more difficult. The Bank effectively improved the efficiency of country risk monitoring, reasonably controlled the exposures to key countries and further optimized the allocation of cross-border asset portfolios by strengthening the control over country limits, intensifying the monitoring and forewarning efforts, implementing the special investigation mechanism for foreign-related risks, and upgrading system management tools. As at the end of the reporting period, country risk exposures of the Bank remained in a steady state with a sound structure. Related quotas were performed in a satisfactory way, and the country risk was controllable in general.

4.11 Significant Impacts of Changes in Interest Rate, Exchange Rate, Tax Rate, and New Policies and Regulations on Commercial Banks' Operation and Profitability

First, the interest rate liberalization reform achieved further progress. In 2020, the PBC continued to deepen the interest rate liberalization reform, promoted the application of LPR, and pushed forward the conversion of pricing benchmark of existing floating-rate loans. All of these moves worked together to lower down the financing cost facing the real economy. In 2021, the PBC is expected to further unclog the monetary policy transmission mechanism, and cut down the comprehensive financing cost significantly by continuously deepening the reform. Against such a backdrop, commercial banks are expected to continuously strengthen the research and prediction of interest rate trends, and improve the asset and liability management capabilities in addition to intensifying services for the real economy.

Second, the market-based RMB exchange rate formation mechanism was further improved. In 2020, as the PBC further deepened the market-oriented reform of exchange rate, and strengthened the guidance of market expectations, RMB exchange rate presented a clearer characteristic of two-way fluctuation, and market expectations maintained stable. In 2021, the world will still remain under the uncertain political and economic situation, and the two-way fluctuation of RMB exchange rate will become normal. Commercial banks need to be alert to the exchange rate risks brought about by the impact of uncertain events, further build up their ability in exchange rate risk management, and win more space for related business lines to further develop.

Third, intensified tax cut and fee reduction, the direct allocation of central government funding and other macro policies benefited more economic entities. In 2020, in response to the pandemic, China pushed ahead with policies to ease enterprises' difficulties such as tax cut and fee reduction as well as the direct allocation of central government funding, which helped to reduce new burden of enterprises by RMB2.5 trillion, and strongly supported the pandemic prevention control and the reopening of the economy. In 2021, the Chinese government will continue pursuing the proactive fiscal policy, implement the tax reduction and fee reduction policy with intensified efforts, in the hope of bolstering the steady and sustainable development of economy. The improvement in the tax environment not only does good to business operations, but also offers a strong guarantee for commercial banks to provide financial services properly.

4.12 Proceeds from Fund-raising Activities

On 23 September 1999, the Bank publicly issued 400 million RMB ordinary shares, with issuing price per share of RMB10, and after the issuing cost was deducted, the fund actually raised was RMB3.955 billion.

On 8 January 2003, the Bank issued additional 300 million ordinary shares, with issuing price per share of RMB8.45, and after the issuing cost was deducted, the fund actually raised was RMB2.494 billion.

On 16 November 2006, the Bank issued 439,882,697 more RMB ordinary shares, with issuing price per share of RMB13.64, and after the issuing cost was deducted, the fund actually raised was RMB5.91 billion.

On 21 September 2009, the Bank privately issued 904,159,132 RMB ordinary shares, with issuing price per share of RMB16.59, and after the issuing cost was deducted, the fund actually raised was RMB14.827 billion.

On 14 October 2010, the Bank privately issued 2,869,764,833 RMB ordinary shares, with issuing price per share of RMB13.75, and after the issuing cost was deducted, the fund actually raised was RMB39.199 billion.

On 28 November 2014, the Bank privately issued 150 million preference shares, with carrying value per share of RMB100, and after the issuing cost was deducted, the fund actually raised was RMB14.960 billion.

On 3 March 2015, the Bank privately issued 150 million preference shares, with carrying value per share of RMB100, and after the issuing cost was deducted, the fund actually raised was RMB14.960 billion.

On 18 March 2016, the Bank issued 999,510,332 RMB ordinary shares to purchase 97.33% shares of Shanghai Trust, with issuing price per share of RMB16.36 and a consideration of RMB16.352 billion.

On 4 September 2017, the Bank privately issued 1,248,316,498 ordinary shares, with issuing price per share of RMB11.88, and after the issuing cost was deducted, the fund actually raised was RMB14.817 billion.

On 12 July 2019, the Bank finished issuing the 2019 Undated Additional Tier 1 Capital Bonds of Shanghai Pudong Development Bank Co., Ltd. in RMB30 billion in the national interbank bond market, and after the issuing cost was deducted, the funds actually raised were RMB29.996 billion.

On 1 November 2019, the Bank finished issuing the A share convertible corporate bonds. The total proceeds amounted to RMB50 billion and the net funds stood at some RMB49.912 billion after deducting the issuance expense. On 15 November 2019, the above mentioned A share convertible bonds were listed on SSE (stock name: SPDB Convertible Bond, stock code: 110059).

On 23 November 2020, the Bank finished issuing the 2020 Undated Additional Tier 1 Capital Bonds of Shanghai Pudong Development Bank Co., Ltd. in the national interbank bond market, with the issuance amount of RMB50 billion. After deduction of issuance expenses, the proceeds amounted to RMB49,993 million.

 

Section V Important Matters

5.1 Plan on Ordinary Shares' Profit Distribution or Capitalization of the Capital Reserve

5.1.1 Making and implementation of cash bonus policy

In order to further implement the requirements of regulators including the CSRC and SSE in respect of cash bonus of listed companies, and truly protect the legitimate interests of investors, the Articles of Association of the Bank defines the basic principle, specific policies, decision making procedure, the organization and implementation of profit distribution and the profit distribution policy changes, and states that the Bank's cash bonus scheme shall meet relevant rules of the regulators, and except for special cases, the accumulated distribution of profit from the cash bonus in the past three years shall be no less than 30% of yearly average distributable profit realized in the past three years.

The Bank's decision making procedure for profit distribution met relevant requirements in the Articles of Association of the Bank and resolutions made on the shareholders' meeting, and the cash bonus' criteria and proportions were clear and well defined, and all Independent Directors expressed opinions on the profit distribution scheme. The Bank also listened to the opinions and claims of minority shareholders through various forms. The profit distribution scheme considered the industry features, development stage, profitability, and capital needs of the Bank, as well as the investors' requirements for sharing the Bank's growth, and development achievements and obtaining reasonable return on investment.

5.1.2 Plan or scheme of the Bank for ordinary shares' dividend distribution and for conversion of capital reserve to ordinary shares in past three years

In RMB millions

Bonus year	Number of bonus shares per 10 shares	Number of dividend payout per 10 shares (RMB) (tax inclusive)	Number of capital increase per 10 shares	Amount of cash bonus (tax inclusive)	Net profit attributable to the parent company's ordinary shareholders in the consolidated statements in the bonus year	Cash dividend rate (%)
2020	-	4.80	-	14,089	55,244	25.50
2019	-	6.00	-	17,611	57,186	30.80
2018	-	3.50	-	10,273	54,189	18.96

Note: The 2020 profit distribution plan can be implemented only when it is approved by the shareholders' meeting.

Cash dividend rate = cash dividend amount/net profit attributable to the parent company's ordinary shareholders in the consolidated statements in the bonus year. The rate is calculated based on 29,352,140,893, the total ordinary shares of the Company as at the end of the reporting period.

 

5.1.3 2020 profit distribution plan of the Bank

The audited 2020 accounting statement showed that, the Bank realized a total net profit of RMB55,176 million, and after deducting the dividends on SPDB P 1 and SPDB P 2 of RMB1,662 million and on perpetual bonds of RMB1,419 million issued in the year, the actual profit distributable to ordinary shareholders this year would be RMB52,095 million.

The Bank proposed the 2020 profit distribution plan as follows:

(1) To withdraw discretionary surplus reserve at 30% of after-tax profit of the year, RMB16,553 million in total;

(2) Pursuant to the Administrative Measures for Reserve Provisioning of Financial Enterprises issued by the Ministry of Finance, a financial enterprise which undertakes the deposit and loan business shall set aside a certain portion of its after-tax net profit as general reserve, and the balance of general reserve shall not be lower than 1.5% of the closing balance of risk assets in principle. Pursuant to the above provision, the Bank set side RMB11 billion for general reserve in 2020.

(3) To distribute to all ordinary shareholders cash dividends at RMB4.8 (tax inclusive) per 10 shares based on the total number of ordinary shares on the day of profit distribution and equity registration.

As at 31 December 2020, the Bank's ordinary shares totaled 29,352,140,893, based on which the cash dividends to be distributed were calculated in RMB14,089 million (tax inclusive).

5.2 Issuing of Capital Bonds during the Reporting Period

5.2.1 Tier 2 Capital Bonds

On 3 August 2020, the Bank finished issuing the 2020 Tranche 1 Tier 2 Capital Bonds in the national interbank bond market upon the approval of the CBIRC and PBC. The bonds issued came in a size of RMB40 billion, and were divided into two types. Type 1 are 10-year fixed-interest-rate bonds, with the issuer's conditional redemption right at the end of the fifth year. The bonds were in size of RMB32 billion with a coupon rate of 3.87%. Type 2 are 15-year fixed-interest-rate bonds, with the issuer's conditional redemption right at the end of the 10^th year. The bonds were in size of RMB8 billion with a coupon rate of 4.18%. All funds raised by the bonds shall be used to replenish tier 2 capital of the Bank as per applicable laws and the approval of the regulators.

On 17 September 2020, the Bank finished issuing the 2020 Tranche 2 Tier 2 Capital Bonds in the national interbank bond market upon the approval of the CBIRC and PBC. The bonds issued came in a size of RMB40 billion, and were divided into two types. Type 1 are 10-year fixed-interest-rate bonds, with the issuer's conditional redemption right at the end of the fifth year. The bonds were in size of RMB30 billion with a coupon rate of 4.27%. Type 2 are 15-year fixed-interest-rate bonds, with the issuer's conditional redemption right at the end of the 10^th year. The bonds were in size of RMB10 billion with a coupon rate of 4.52%. All funds raised by the bonds shall be used to replenish tier 2 capital of the Bank as per applicable laws and the approval of the regulators.

 

5.2.1 Undated Capital Bonds

On 23 November 2020, the Bank finished issuing the 2020 Undated Capital Bonds in the national interbank bond market upon the approval of the CBIRC and PBC. The bonds issued came in a size of RMB50 billion, with a coupon rate of 4.75% in the first five years (which can be adjusted for once every five years) and the redemption right exercisable on the interest dates of the fifth and following years.

All funds raised by the bonds shall be used to replenish the additional tier 1 capital of the Bank as per applicable laws and the approval of the regulators.

5.3 Issuing of Financial Bonds during the Reporting Period

On 29 April 2020, the Bank finished issuing the 2020 Tranche 1 Financial Bonds in the national interbank bond market upon the approval of the CBIRC and PBC. The bonds issued came in a size of RMB50 billion. These 3-year fixed rate bonds had a coupon rate of 2.08%. All funds raised by the bonds were used to meet the needs of asset and liability allocation of the Bank, diversify the sources of funds, optimize the maturity structure of liabilities and promote the steady development of its business in line with applicable laws and approval of regulators.

5.4 Handling of Equity of Invested Enterprises

Pursuant to the Measures on Further Expanding the Opening-up of the Financial Industry issued by the Financial Stability and Development Committee of the State Council and the arrangements of the CSRC, the restriction on the foreign share ratio of fund management companies is lifted nationwide as of 1 April 2020. During the reporting period, Shanghai Trust, a controlled subsidiary of the Company, received a notice from J.P. Morgan Asset Management, stating that J.P. Morgan Asset Management intended to acquire the remaining shares of China International Fund Management Co., Ltd. ("CIFM") held by Shanghai Trust.

CIFM was established in 2004, with 51% equity held by Shanghai Trust and 49% held by J.P. Morgan Asset Management (UK) Limited.

In order to implement the national initiative of opening up the financial industry and optimize the Group's development strategy, the Bank initiated the communication and negotiation, valuation, listing and other relevant matters in relation to the above equity transfer in compliance with regulatory requirements, the requirements for state-owned assets management and the Articles of Association based on the business principle of mutual benefits.

5.5 Change to Registered Capital during the Reporting Period

As the convertible corporate bonds of the Bank "SPDB Convertible Bond" entered the conversion period on 6 May 2020, the total share capital of ordinary shares of the Bank increased to 29,352,140,893 as at the end of the reporting period. The relevant change in registered capital is subject to the approval of the CBIRC.

 

5.6 No Fund Occupied during the Reporting Period

5.7 Appointment of and Termination of Relationship with Accounting Firms

In RMB10,000

Whether a new accounting firm is appointed:	No
Name of the accounting firm	KPMG Huazhen LLP
Remuneration for the accounting firm	570
Years for audit of the accounting firm	1 year

In RMB10,000

	Name	Remuneration
Accounting firm for internal control audit	KPMG Huazhen LLP	145

5.8 The Bank Had No Bankruptcy Reorganization during the Reporting Period

5.9 Influences of Changes in Accounting Policies on the Bank

In December 2019, the Ministry of Finance notified to issue the Interpretation No. 13 on the Accounting Standards for Business Enterprises (hereinafter referred to as "Interpretation No. 13") and required the enterprises which practiced the Accounting Standards for Business Enterprises shall implement the Interpretation No. 13 from 1 January 2020. As per requirements of the Ministry of Finance, the Bank put into operation the Interpretation No. 13 on the prescribed date and adjusted relevant contents of its accounting policies.

Interpretation No. 13 further clarified the judgement of related parties such as the enterprise and other members of the enterprise group to which it belongs, and the judgement of whether a combination of operating activities or assets obtained in an enterprise merger constitutes a business. The adoption of Interpretation No. 13 has no material impact on the financial position and operating performance of the Group.

5.10 Major Litigation and Arbitration

As at the end of the reporting period, the Bank as a plaintiff had 18,544 pending proceedings, which involved an amount of RMB42,478 million. As at the end of the reporting period, the Bank as a defendant (including the third person) had 339 pending proceedings, which involved an amount of RMB8,457 million.

 

5.11 Related-party Transactions

5.11.1 Overview of related-party transactions

According to relevant provisions in the Administrative Measures on Related-party Transactions of Commercial Banks and Insiders and Shareholders, the Interim Measures for the Equity Management of Commercial Banks, and the Accounting Standards for Business Enterprises issued by the CBIRC as well as relevant provisions governing related-party transactions formulated by the CSRC and SSE, there were no related parties that were controlled by the Bank during the reporting period.

In the reporting period, the Bank further consolidated its related-party transaction management, identified related parties on a dynamic basis, and built a database of related-party transactions. It optimized the related-party transaction review procedure, pushed refined management of related-party transactions, and stepped up daily monitoring, statistics and analysis of related-party transactions to ensure the standardization of related-party transactions and compliance of information disclosure. Transactions between the Bank and its related parties observed the principles of integrity and equity, powerfully promoting the synergy of the Bank, other companies under the Group and related shareholders.

5.11.2 Conditions of material related-party transactions

Counterparty	Transaction type	Amount	Approved by	Main contents of transactions
Bailian (Group) Co. Ltd.	Credit extension	RMB9 billion		The Third Meeting of the Seventh Board of Directors agreed to grant a comprehensive credit line of RMB9 billion to Bailian Group, without granting unsecured loans and with conditions no more favorable than those for similar transactions with non-related parties and a term of two years.
Shanghai International Trust Co., Ltd SPDB Financial Leasing Co., Ltd. SPDB International Holdings Limited		RMB3 billion RMB13.3 billion (or equivalent currency) HKD8 billion (or equivalent currency)	Board of Directors	The Fifth Meeting of the Seventh Board of Directors agreed to grant a comprehensive credit line of RMB3 billion to Shanghai International Trust Co., Ltd., a comprehensive credit line of RMB13.3 billion (or equivalent currency) to SPDB Financial Leasing Co., Ltd., and a comprehensive credit line of HKD8 billion (or equivalent currency) to SPDB International Holdings Limited, with conditions no more favorable than those for similar transactions with non-related parties and a term of one year.
Shanghai Jiushi (Group) Co., Ltd		RMB24.5 billion		The Ninth Meeting of the Seventh Board of Directors agreed to grant a comprehensive credit line of RMB24.5 billion to Shanghai Jiushi (Group) Co., Ltd., without granting unsecured loans and with conditions no more favorable than those for similar transactions with non-related parties. The credit line is valid until 3 December 2021.
Shenergy Group Co., Ltd.		RMB20 billion		The 14th Meeting of the Seventh Board of Directors agreed to grant a comprehensive credit line of RMB20 billion to Shenergy Group Co., Ltd., without granting unsecured loans and with conditions no more favorable than those for similar transactions with non-related parties. The credit line is valid until 6 August 2021.
Shanghai International Group Co., Ltd.		RMB8.04 billion and HKD500 million		The 16th Meeting of the Seventh Board of Directors agreed to grant Shanghai International Group Co., Ltd. a comprehensive credit line of RMB8.04 billion and HKD500 million, without granting unsecured loans and with conditions no more favorable than those for similar transactions with non-related parties and a term of one year.
Guotai Junan Securities Co., Ltd. Haitong Securities Co., Ltd.		RMB24.6 billion RMB21.5 billion		The 18th Meeting of the Seventh Board of Directors agreed to grant a comprehensive credit line of RMB24.6 billion and RMB21.5 billion to Guotai Junan Securities Co., Ltd. and Haitong Securities Co., Ltd., respectively, with conditions no more favorable than those for similar transactions with non-related parties and a term of one year.

5.11.3 Related natural persons and transaction balance

Related natural persons of the Bank include its Directors, Supervisors, Senior Management members of both the Head Office and the branches, other persons with authority to decide on or participate in credit extension and asset transfer and their close relatives, as well as directors, supervisors, senior management members and the like of the Bank's related legal entities (substantial shareholders).

As at the end of the reporting period, related-party transactions between the Bank and its related natural persons were as follows:

In RMB millions

	End of the reporting period
Number of related natural persons	18,531
Balance of related-party transactions	2,271

5.11.4 Material related-party transactions with joint outward investment

In the reporting period, the Bank made no material related-party transactions with joint outward investment.

5.12 Disclosure of Undertakings by the Bank or its Shareholders Holding above 5% of Shares on the Designated Newspapers or Websites

In August 2017, the Bank issued non-public shares to Shanghai International Group Co., Ltd. and Shanghai Guoxin Investment Development Co., Ltd. The two companies undertook and agreed that the underlying shares they subscribed were subject to a lock-up period of 36 months, and they wouldn't trade such shares publicly or transfer the underlying shares or the shares derived from the underlying shares by any means within the lock-up period. The lockup period of the above shares subject to restricted sales expired on 4 September 2020, and became tradable.

5.13 Punishment and Rectification Imposed on Listed Companies and Their Directors, Supervisors, Senior Management Members, Controlling Shareholders, De Facto Controllers and Buyers

During the reporting period, neither the Bank nor any of its Directors, Supervisors, Senior Management members, shareholders holding more than 5% of the shares, or largest shareholder was subject to any investigation by competent authorities, coercive measures taken by judicial authorities or disciplinary inspection departments, transfer to judicial authorities or investigation for criminal responsibility, investigation or administrative penalty by the CSRC, restricted access to the market, identification as unqualified, penalty by other administrative authorities or public reprimand by the stock exchanges. During the reporting period, the Bank was not subject to any administrative supervision measures by the CSRC or its agencies or request for rectification within a time limit.

5.14 During the reporting period, the Bank has not implemented any stock ownership incentive plan, employee stock ownership plan or other employee incentive plans

5.15 Major Contracts and Their Execution

i. Major custody, contracting and leasing matters: during the reporting period, there was no major custody, contracting or leasing matter.

ii. Major guarantee: during the reporting period, the Bank had no other major guarantee matters required to be disclosed, other than financial guarantee business within the business scope as approved by the CBIRC.

iii. Other major contracts (including guarantee, etc.) and the execution: during the reporting period, various business contracts of the Bank were executed normally, without any major contract dispute.

5.16 Major Entrusted Wealth Management Affairs

During the reporting period, the Bank incurred no entrusted wealth management affairs outside the scope of normal business.

5.17 Material Assets Acquisition, Sale or Disposal and Enterprise Merger

For details on handling of shares of China International Fund Management Co., Ltd. by the Bank's controlled subsidiary Shanghai Trust, please refer to "5.4 Handling of Equity of Invested Enterprises".

Save as the above, during the reporting period, there was no other material assets acquisition, sale or disposal or enterprise merger at the Bank.

5.18 Write-off of Loss Loans of the Bank during the Reporting Period

During the reporting period, based on the Administrative Measures of SPDB on Write-off of Asset Losses, the total amount of loss loan assets as approved by the Bank's Board of Directors and imposed with accounting treatment for write-off was RMB68,009 million. According to the principle of "account cancellation, case recording and existence of right", the Bank continued to maintain the right of recourse to minimize the credit fund loss.

5.19 Active Performance of Social Responsibility

5.19.1 Poverty alleviation by the listed company

5.19.1.1 Precision poverty alleviation planning

Spearheaded by the concept of "systematization, innovation and diversification", the Bank has actively performed its responsibilities due to a corporate citizenship and continued to refine the mechanism of poverty alleviation through financial services, while tapping deep into financial services for many years. Following the principles of "pinpointing position accurately, devising differentiated policies for different villages, advancing step by step, and striving for concreted results", it exploits its financial expertise, and proposes innovative poverty alleviation modes with financial services. Upholding the overall strategy of precision poverty alleviation substantially, it proceeds from actual conditions of different places, rolls out multiple measures, and tries to reduce poverty fundamentally by offering skill trainings and education, expanding the sales of local products and driving the development of industries. In brief, the Bank goes to extraordinary lengths to win the tough battle for precision poverty alleviation.

5.19.1.2 Summary of precision poverty alleviation in 2020

Starting from the poverty alleviation through industry development, the Bank pulled together to fight a tough battle, put in place proper policies, and kept optimizing the long-standing aid mechanism. It helped poverty-stricken villages shake off poverty, and enabled them to lead well-off life on their own. At the same time, the Bank kept pushing forward the standardization of public welfare donations, and organized many charitable activities in a wide range of fields such as supporting the old and raising the young, helping the poor, medical treatment and public health, and cultural education. Specifically, it actively carried out public welfare initiatives like "Dream Chasing Fireflies Initiative" for 1000 Pediatric Staff Training, "Eyes for the World" Program for Children's Vision Recovery Operation, and "Carefree Plan" for Children's Healthcare Insurance. To sum up, the Bank took the initiative to assume social responsibilities with a sincere heart, and practiced the tenet of improving the people's wellbeing with financial forces.

During the reporting period, the Bank implemented 45 precision poverty alleviation projects, and donated anti-poverty funds totaling RMB21,908,200. To be specific, it conducted 39 poverty alleviation programs at designated sites with an input of RMB14,533,600, so as to help the related provinces and cities accomplish their poverty alleviation tasks. Some examples of these projects included the "100 Enterprises Aiding 100 Villages" program, a twining aid initiative in Wenshan City, Yunnan Province, the comprehensive aid program for villages in Jinshan District, Shanghai, and the industry aid program targeted at Sihong County, Jiangsu Province. Besides, the Bank continued three poverty alleviation programs through healthcare with an input of RMB7,173,100. They were the "Dream Chasing Fireflies Initiative" for 1000 Pediatric Staff Training, and the "SPDB Care for Guzhang - Tour of Light" public-spirited program. Furthermore, the Bank carried out three poverty alleviation programs through education, with an input of RMB201,500, and supported the "Hope Project 1+1". With its charitable efforts, the Bank contributed to the sustainable development of the Chinese society and economy, and strove to shape itself as a respectable and trustworthy corporate citizen.

5.19.1.3 Precision poverty alleviation projects by the listed company in 2020

In RMB10,000

Indicator	Details
1. Poverty alleviation through education	20.15
Funding for poor students
2. Poverty alleviation through healthcare	717.31
Input to improve healthcare resources of poverty-stricken areas
3. Social poverty alleviation	1,453.36
Amount of precision poverty alleviation input
4. Other projects
Input
Total	2,190.82

5.19.1.4 Subsequent precision poverty alleviation plan

The Bank resolutely implemented the decisions and plans of the CPC Central Committee, continuously integrated comprehensive poverty alleviation with rural revitalization through consistent efforts in poverty alleviation. It continuously consolidated the achievements of poverty alleviation, prevented reemergence of poverty and new poverty, and promoted the upgrading from poverty alleviation through industry development to industrial revitalization. Focusing on stabilizing farmers' income and reducing poverty, the Bank promoted sustainable rural development, gave full play to the advantages of professional financial services, accelerated the modernization of agriculture and rural areas, and realized the all-round revitalization of rural areas.

5.19.2 Social responsibilities

The Bank released the first corporate social responsibility report in the Chinese banking industry in 2006, and has released such report for 16 consecutive years. The Bank incorporated such responsibilities into the development strategies and plans. Following the tenet, objectives, standards and fields of social responsibilities, it assumed economic responsibilities with innovative thinking, performed social responsibilities with a sincere heart, and undertook environment protection responsibilities in pursuit of low-carbon development. In brief, the Bank made continuous efforts to get the work related to social responsibilities done properly on all fronts. Sticking to the leading role of Party building and bearing the fundamental purpose of finance, the Bank carried out risk management on a solid footing, safeguarded the economic development, gave back to society, fulfilled its responsibilities for customers, shareholders, employees and the public, and promoted itself and stakeholders towards sustainable development.

In terms of economic responsibilities, it actively served the implementation of many major national strategies such as the coordination of Beijing-Tianjin-Hebei Region, the integrated development of Yangtze River Delta, and the construction of Guangdong-Hong Kong-Macao Greater Bay Area, boosted the mutual-beneficial cooperation under the Belt and Road Initiative, and stepped up the FTZ, cross-border and other financial innovation. It took the initiative to help Shanghai build "five centers" and "four brands", put the strategies related to "three major tasks and one major platform" into operation vigorously, and moved faster to transform towards digital operation, with a view to better serving the real economy and practicing the inclusive finance. As to social responsibilities, the Bank kept coming up with innovative approaches to public welfare practice, managed employee volunteers on a regular, institution-based basis, by conducting the day of volunteer event attended by all employees for 14 consecutive years, fostered a responsibility culture with unique to itself, thus gaining socially responsible competitiveness with its own characteristics. When it came to environmental responsibilities, the Bank vigorously developed low-carbon business, advocated eco-friendly concepts, boosted innovation in green finance, and got itself fully integrated into the national building of pilot zones for green finance reform and innovations.

Social contribution value per share of the Group during the reporting period:

Year	2020	2019	2018
Social contribution value per share (in RMB, based on weighted average)	9.22	9.22	9.02

Note: Social contribution value per share = earnings per share + (tax amount + employee expenses + interest expenditure + total amount of public welfare input)/weighted average of ordinary shares issued to the public during the reporting period.

5.20 Efforts the Bank Made to Fight against COVID-19

Since the coronavirus outbreak, the Bank has attached high importance to the pandemic control and the economic stimulation. On 22 January 2020, the Bank convened a plenary video conference to make arrangements for pandemic control, recruited an pandemic prevention and control steering group, and responded to the guiding principles and requirements put forth by the central and local governments swiftly. In addition to making vigorous arrangements and taking concrete efforts, it rolled out a host of targeted measures promptly, which produced sound effects.

The Head Office, branches and subsidiaries donated money to help fight the virus. As at the end of the reporting period, the Bank and enterprises invested by the Group donated RMB30.16 million in cash and materials, and the employees donated RMB8.64 million to help Wuhan, purchase anti-pandemic materials for medical institutions and care for medical staff. All these actions demonstrated the Bank's corporate responsibilities and helped build up the image of an excellent corporate citizen.

The Bank saw some results achieved in its transformation towards digital operation over recent years getting fully demonstrated in the fight against the COVID-19 pandemic. In terms of business operation, all personal businesses other than those which have to be handled face to face as required by regulators went online. For customer service, as the first of its kind realizing the full coverage of intelligent voice services, the Bank rolled out the AI-enabled customer service, a move that saved customer service staff from working together substantially. In terms of marketing, AMA smart marketing robot made its debut. It can launch online marketing activities automatically, thus protecting the delivery of customer service from interruption during the special period of time.

Under this particular circumstance, the Bank adopted special credit policies and service modes to support enterprises in their operation and rendering personal customers with financial services. First, it promptly adjusted some credit policies for corporate customers by optimizing the internal review/approval procedures substantially, and supported enterprises in their development in the bond market vigorously. Second, it provided grace period flexibilities for some personal customers who were short of money or inconvenient to make repayment during the coronavirus outbreak. Third, it made full use of its platform services and functions to fulfill social responsibilities. The SPD Benefit-series reservation registration service went live on the SPD Bank APP, benefiting for more than 150 cities nationwide. The free online diagnosis service was unveiled, and has been used by nearly 4 million person-times.

Besides, the Bank participated in constructing all sorts of financial factor markets vigorously. After the coronavirus outbreak, it served as a market maker in precious metal, commodity, bond, interest rate derivative, foreign exchange, and money markets, and played an active role in maintaining the steady market order.

 

Section VI Changes of Ordinary Shares and the Shareholders

6.1 Overview of Equity Capital

6.1.1 Changes of ordinary shares

Number of shares

	Before Change		Change		After change
	Quantity	Percentage (%)	Shares converted from convertible bonds	Lifting of restricted shares	Quantity	Percentage (%)
I. Shares with restricted sale conditions
1. Shares held by the state	-	-	-	-	-	-
2. Shares held by state-owned legal persons	1,248,316,498	4.25	-	-1,248,316,498	-	-
3.Other domestically held shares	-	-	-	-	-	-
4. Shares held by foreign shareholders	-	-	-	-	-	-
II. Floating shares without restricted sale conditions
1.RMB ordinary shares	28,103,763,899	95.75	+60,496	+1,248,316,498	29,352,140,893	100.00
2. Others	-	-	-	-	-	-
III. Total ordinary shares	29,352,080,397	100.00	-	-	29,352,140,893	100.00

6.1.2 Changes of restricted shares

As at the end of the reporting period, changes to restricted ordinary shares at the Bank are as follows:

Number of shares

Shareholder name	Opening number of restricted shares	Number of restricted ordinary shares lifted in the reporting period	Closing number of restricted shares	Reason for restricted sale	Starting date of circulation
Shanghai International Group Co., Ltd.	842,003,367	842,003,367	-	Getting involved in the additional private placement, and not available for transfer within 36 months	4 September 2020
Shanghai Guoxin Investment Development Co., Ltd.	406,313,131	406,313,131	-		4 September 2020

6.2 Shareholder Information

6.2.1 Total number of shareholders

Accounts

Total number of ordinary shareholders as at the end of reporting period	221,395
Total number of ordinary shareholders as at the end of the month before the annual report disclosure day	200,882
Total number of preference shareholders with voting rights recovered as at the end of the reporting period	0
Total number of preference shareholders with voting rights recovered as at the end of the month before the annual report disclosure day	0

6.2.2 Overview of shares held by the top ten shareholders and the top ten shareholders of circulating shares (or shareholders without restricted sale conditions) as at the end of the reporting period

Overview of shareholding by top ten shareholders				Number of shares
Shareholder name		Increase/decrease during the reporting period	Number of shares by the end of the reporting period		Percentage (%)	Number of shares with restricted sale conditions	Number of pledged or frozen shares
Shanghai International Group Co., Ltd.			6,331,322,671		21.57	-	-
China Mobile Communication Group Guangdong Limited			5,334,892,824		18.18	-	-
Funde Sino Life Insurance Co., Ltd. － Conventional			2,779,437,274		9.47	-	-
Funde Sino Life Insurance Co., Ltd. － Capital			1,763,232,325		6.01	-	-
Shanghai Sitico Assets Management Co., Ltd.			1,395,571,025		4.75	-	-
China Securities Finance Corporation Limited			1,307,994,759		4.46	-	-
Funde Sino Life Insurance Co., Ltd. － Universal H			1,270,428,648		4.33	-	-
Shanghai Guoxin Investment Development Co., Ltd.			945,568,990		3.22	-	-
Hong Kong Securities Clearing Company Limited		-12,374,735	492,055,356		1.68	-	-
Central Huijin Asset Management Ltd.			398,521,409		1.36	-	-	6,331,322,671	21.57	-	-
Statement on the connected relations or concerted action relations of the aforesaid shareholders	1.        Shanghai International Group Co., Ltd. is the controlling company of Shanghai Sitico Assets Management Co., Ltd. and Shanghai Guoxin Investment Development Co., Ltd. 2.       Funde Sino Life Insurance Co., Ltd. － Conventional, Funde Sino Life Insurance Co., Ltd. － Capital and Funde Sino Life Insurance Co., Ltd. － Universal H are under the name of the same legal person. 3.       Connected relations or concerted action relations of the aforesaid shareholders apart from the situations mentioned above are unknown to the Bank.

Note: Funde Sino Life Insurance Co., Ltd. saw its shareholder qualification subject to the approval of the CBIRC.

6.2.3 Overview of controlling shareholders and de facto controllers

The Bank had no controlling shareholders or de facto controllers.

The largest consolidated shareholder of the Bank was Shanghai International Group Co., Ltd., which was not changed during the reporting period. As at the end of the reporting period, Shanghai International Group Co., Ltd. and its controlling subsidiaries held 29.67% shares of the Bank on a consolidated basis.

Shanghai International Group Co., Ltd. was founded on 20 April 2000 with a registered capital of RMB30,000 million. Its registered address is No. 511 Weihai Road, Jing'an District, Shanghai, and its legal Representative is Yu Beihua. Its uniform social credit number is 91310000631757739E, and its business scope covers investment with finance business as the main direction and non-finance business as the supporting part, capital operation and asset management, financial research, social and economic consulting, etc.

Block diagram for property right and controlling relations between the Bank and its largest consolidated shareholder

6.2.4 Other legal-person shareholders holding more than 10% shares of the Bank as at the end of the reporting period

1. Funde Sino Life Insurance Co., Ltd., a limited liability company, was founded on 4 March 2002 with a registered capital of RMB11,752,005,497. Its registered address is 27, 28, 29 and 30/F Life Insurance Tower, No. 1001 Fuzhong Road I, Futian District, Shenzhen and its legal representative is Fang Li. Its unified social credit code is 91440300736677639J. Business scope includes personal accident insurance, personal fixed-term death insurance, personal mixed life insurance, personal whole life insurance, personal annuity insurance, personal short-term health insurance, personal long-term health insurance, group accident bodily injury insurance, group fixed term life insurance, group whole life insurance, group annuity insurance, group short-term health insurance, group long-term health insurance, other life insurances as approved by the CBIRC, reinsurance for the above insurances, concurrent-business insurance agency (by virtue of business license), and funds application businesses as approved by the CBIRC.

2. China Mobile Communication Group Guangdong Limited ("Guangdong Mobile"), a limited liability company (sole proprietorship of a foreign-invested enterprise as a legal person), was founded on 13 January 1998 with a registered capital of RMB5,594,840,700. Its registered address is Global Building, No. 11 Zhujiang West Road, Pearl River New City, Tianhe District, Guangzhou, and its legal representative was Wei Ming. Its unified social credit code is 91440000707653099T. Business scope of Guangdong Mobile includes mobile communication business in Guangdong (including voice, data and multimedia); IP telephone and internet access; design, investment and construction of mobile communications, IP telephone and internet network; installation, engineering construction and maintenance of facilities of mobile communications, IP telephone and internet; system integration, roaming settlement, technology development, technical services and equipment sales in connection with mobile communications, IP telephone and internet; sale and rent of mobile phone terminal equipment, IP telephone equipment, internet equipment and spare parts, and after-sale services for them; satellite international private line service, internet data transmission service, and international data communication service; domestic communications facility service business; domestic very small-aperture terminal (VSAT) ground station communication service, and network custody business; online data processing and transaction processing business, domestic internet-based virtual private network services, internet data center services; information services (including mobile information services and internet information services; internet information services excluding news, publishing, education, healthcare, pharmaceuticals, medical devices, electronic bulletin services, etc.); fixed networked-based local call service, fixed network-based domestic long-distance call service, fixed network-based international call service, public telegram and user telegraph service, professional wireless access (including 26GHz wireless access service and 3.5GHz wireless access service; 3.5GHz wireless access service not covering Guangzhou) (the above business types involving licensing operation shall be operated with licenses); design, production, release, agency of domestic and foreign advertising of all sorts; collection of water, electricity, and gas fees; ticketing agency service; sale of general merchandize, household appliances, electronic products, computers and accessories, wearable equipment, communication equipment and accessories, etc.; provision of professional trainings (excluding academic education and vocational trainings); provision of conference services; leasing of venues, self-owned houses, and counters; food and beverage services: production and sales of Chinese food, western food and other ancillary services; and hotel-related services: provision of accommodation and other commercial services.

 

Section VII Overview of Preference Shares

7.1 Issuance and Listing of Preference Shares in Recent Three Years as at the End of the Reporting Period

In 10,000 shares

Code of preference share	Abbreviation of preference share	Issuance date	Issuance price (RMB)	Nominal dividend rate (%)	Number of issued shares	Listing date	Trade volume of listing	Date of delisting
360003	SPDB P 1	28 November 2014	100	5.58	15,000	18 December 2014	15,000	-
360008	SPDB P 2	06 March 2015	100	4.81	15,000	26 March 2015	15,000	-

Notes: (1) On 3 December 2019, SPDB P 1's nominal dividend rate was adjusted, and that rate for the second five years is 5.58%, which consists of 3.02% as the yield rate arithmetic mean of five-year government bond issued during the 20 trading days before the repricing date of the second dividend rate adjustment period (excluding the repricing date) and the fixed premium of 2.56%. The nominal dividend rate would be adjusted once every five years according to change of the benchmark interest rate.

(2) SPDB P 2's nominal dividend rate for the first five years is 5.50%, which consists of 3.26% as the yield rate arithmetic mean of five-year government bond issued during the 20 trading days before the repricing date of the second dividend rate adjustment period (excluding the repricing date) and the fixed premium of 2.24%. The nominal dividend rate would be adjusted once every five years according to change of the benchmark interest rate. On 11 March 2020, SPDB P 2's nominal dividend rate was adjusted, and that rate for the second five years is 4.81%.

7.2 Overview of Shareholders of Preference Shares

7.2.1 Total number of shareholders of preference shares

	Code	Abbreviation	Total number of shareholders (accounts)
Total number of shareholders of preference shares as at the end of the reporting period	360003	SPDB P 1	34
	360008	SPDB P 2	17
Total number of shareholders of preference shares at the end of the month before the date of annual report disclosure	360003	SPDB P 1	35
	360008	SPDB P 2	18

7.2.2 Shareholding of the top ten shareholders of preference shares and top ten shareholders of preference shares without sale restriction conditions as at the end of the reporting period

 

7.2.2.1 SPDB P 1

Number of shares

Shareholder name		Number of shares held at the end of the period	Percentage (%)
CICC － CICC ABC Ruichi No. 1 Collective Asset Management Plan		18,004,545	12.00
BOCOM Schroder Asset Management Co., Ltd.－ BOCOM Schroder Asset Management Zhuoyuan No. 2 Collective Asset Management Plan		11,540,000	7.69
Ping An Life Insurance of China － Universal personal insurance		11,470,000	7.65
Ping An Life Insurance of China － Personal insurance bonus		11,470,000	7.65
Ping An Property & Casualty Insurance Company of China Ltd. － Ordinary insurance product		11,470,000	7.65
Maxwealth Fund － Bank of Ningbo Co., Ltd.		11,470,000	7.65
Beijing Tiandi Fangzhong Asset Management － Bank of Nongbo －Bank of Ningbo Co., Ltd.		8,410,000	5.61
Bosera Funds － Flexible Allocation No. 5 Specific Multiple Customer Asset Management Plan		7,645,455	5.10
BOCOM Schroder Asset Management Co., Ltd.－ BOCOM Schroder Asset Management Zhuoyuan No. 1 Collective Asset Management Plan		7,600,000	5.07
Taikang Life Insurance Co., Ltd. － Personal insurance bonus － 019L－ FH002 Hu		5,770,000	3.85
Statement on whether there is connected relation among the top ten shareholders of preference shares and between the above shareholders and the top ten shareholders of ordinary shares, and whether they are persons acting in concert	1. Ping An Life Insurance of China － Universal personal insurance, Ping An Life Insurance of China － Personal insurance bonus and Ping An Property & Casualty Insurance Company of China Ltd. － Ordinary insurance product are persons acting in concert. 2. Connected relations or concerted action relations of the aforesaid shareholders apart from the situations mentioned above are unknown to the Bank.

 

7.2.2.2 SPDB P 2

Number of shares

Shareholder name		Number of shares held at the end of the period	Percentage (%)
People's Insurance Company of China － Conventional － Ordinary insurance product － 008C － CT001 Hu		34,880,000	23.25
Ping An Life Insurance of China － Personal insurance bonus		20,360,000	13.57
Ping An Life Insurance of China － Self-owned funds		19,500,000	13.00
Ping An Life Insurance of China － Universal personal insurance		19,500,000	13.00
Bank of China Shanghai Branch		10,460,000	6.97
Maxwealth Fund － Bank of Ningbo Co., Ltd.		10,460,000	6.97
Ping An Property & Casualty Insurance Company of China Ltd. － Conventional － Ordinary insurance product		10,460,000	6.97
BOCOM Schroder Asset Management Co., Ltd. － BOCOM － BOCOM Schroder Asset Management Zhuoyuan No. 2 Collective Asset Management Plan		6,970,000	4.65
CITIC Securities － PSBC － CITIC Securities Xingchen No. 28 Collective Asset Management Plan		4,840,000	3.23
Zhonghai Trust Co., Ltd. － Zhonghai Priority Income No. 2 Funds Trust		3,050,840	2.03
Statement on whether there is connected relation among the top ten shareholders of preference shares and between the above shareholders and the top ten shareholders of ordinary shares, and whether they are persons acting in concert	1. Ping An Life Insurance of China － Personal insurance bonus, Ping An Life Insurance of China － Self-owned funds, Ping An Life Insurance of China － Universal personal insurance and China Ping An Property & Casualty Insurance Co., Ltd. － Conventional are persons acting in concert. 2. Connected relations or concerted action relations of the aforesaid shareholders apart from the situations mentioned above are unknown to the Bank.

7.3 Distribution of Dividends on Preference Shares

7.3.1 Distribution of dividends on preference shares during the reporting period

On 29 February 2020, the Bank disclosed the Announcement on Distribution of Dividends on Preference Shares (Tranche II). The equity registration date for distribution in this tranche of preference shares' dividends is 10 March 2020, and the ex-dividend date is 10 March 2020. The start date of interest accrual for dividend distribution is 11 March 2020 and the date of dividend distribution is 11 March 2020. Based on the nominal dividend rate 5.50% of SPDB P 2, the cash dividend to be distributed per share would be RMB5.50 (tax inclusive), and the total dividends would be RMB825 million (tax inclusive).

On 19 November 2020, the Bank disclosed the Announcement on Distribution of Dividends on Preference Shares (Tranche I). The equity registration date for distribution in this tranche of preference shares' dividends is 2 December 2020, and the ex-dividend date is 2 December 2020. The start date of interest accrual for dividend distribution is 3 December 2020 and the date of dividend distribution is 3 December 2020. Based on the nominal dividend rate 5.58% of SPDB P 1, the cash dividend to be distributed per share would be RMB5.58 (tax inclusive), and the total dividends would be RMB837 million (tax inclusive).

7.3.2 Distribution of dividends on preference shares in the recent three years

In RMB100 millions

Year	Distribution amount of dividends on preference shares	Remarks
2020	16.62	Dividend distribution of SPDB P 1 and SPDB P 2
2019	17.25	Dividend distribution of SPDB P 1 and SPDB P 2
2018	17.25	Dividend distribution of SPDB P 1 and SPDB P 2

7.4 Repurchase and Conversion of Preference Shares of the Bank during the Reporting Period

The Bank had no repurchase and conversion of preference shares during the reporting period.

7.5 Voting Rights on Preference Shares Recovered during the Reporting Period

The Bank had no voting rights on preference shares recovered during the reporting period.

7.6 Adjustments to Nominal Dividend Rates of Preference Share during the Reporting Period

As per the Prospectus of Shanghai Pudong Development Bank Co., Ltd. for Private Issuance of Preference Shares (hereinafter referred to as "the Prospectus"), the 150 million preference shares the Bank issued privately on 11 March 2015 shall apply a nominal dividend yield subject to phase-specific adjustment, i.e., every five years constitutes a dividend rate adjustment period.

SPDB P 2 saw the repricing date of the second dividend rate adjustment period falling on 11 March 2020. The nominal dividend rate is the benchmark interest rate on the repricing date plus the fixed premium determined on the initial pricing date. The benchmark interest rate of the repricing date is 2.57%, that is, the arithmetic mean (rounded to 0.01%) of the five-year government bonds' yield in the yield curve of the ChinaBond interbank fixed rate government bonds published (on www.chinabond.com.cn) by China Central Depository & Clearing Co., Ltd. for 20 trading days before the repricing date (11 March 2020). The fixed premium is 2.24%, as determined on the initial pricing date. Therefore, after the adjustment of the benchmark interest rate on the repricing date, SPDB P 2 in the second dividend rate adjustment period carries the benchmark interest rate of 2.57%, the fixed premium of 2.24%, and the nominal dividend rate of 4.81%. The interest date fell on 11 March 2020 and the interest shall be paid annually.

 

Section VIII Convertible Corporate Bonds

8.1 Overview

On 1 November 2019, the Bank finished issuing the A share convertible corporate bonds (hereinafter referred to as "the convertible bonds"). The proceeds amounted to RMB50 billion and the net funds stood at some RMB49,912 million after deducting the issuance expense. On 15 November 2019, the above mentioned A share convertible bonds were listed on SSE (stock name: SPDB Convertible Bond, stock code: 110059). The converted shares are referred to as "SPDB Converted Shares" with the stock code of 190059.

8.2 Convertible Bond Holders and Guarantors during the Reporting Period

Number of convertible bond holders as at the end of reporting period	68,271
Guarantor of convertible bonds of the Bank	None
Top ten convertible bond holders	Nominal value of bonds held at the end of reporting period			Percentage of bonds held (%)
China Mobile Communication Group Guangdong Limited		9,085,323,000	18.17
Shanghai International Group Co., Ltd.		3,284,968,000	6.57
SAIC Finance Co., Ltd.		1,064,967,000	2.13
Shanghai Sitico Assets Management Co., Ltd.		560,857,000	1.12
China Merchants Bank Co., Ltd. － Hongde Zhiyuan Hybrid Securities Investment Fund		546,991,000	1.09
Shanghai Guoxin Investment Development Co., Ltd.		500,000,000	1.00
Generali China Life Insurance Co., Ltd. － Traditional product		330,814,000	0.66
Bank of China Limited		268,186,000	0.54
Bank of China Limited － Bosera Macro Return Bond Securities Investment Fund		265,291,000	0.53
Aeon Life Insurance Company, Ltd. － Insurance bonus		241,749,000	0.48

8.3 Changes in Convertible Bonds during the Reporting Period

As at 31 December 2020, a total of RMB901,000 of SPDB Convertible Bonds had been converted into ordinary shares of the Bank, and the cumulative number of converted shares was 60,496, accounting for 0.0002% of the total issued ordinary shares of the Bank before the conversion of SPDB Convertible Bonds. The amount of SPDB Convertible Bonds that have not been converted into shares was RMB49,999,099,000, accounting for 99.9982% of the total amount of SPDB Convertible Bonds issued.

8.4. Previous Adjustments of Conversion Price

The Bank distributed profit for ordinary A shares for 2019 on 23 July 2020. Pursuant to the Prospectus of Shanghai Pudong Development Bank Co., Ltd for Public Issuance of Convertible Corporate Bonds as well as the pertinent laws and regulations, if the Bank's equity changes as it distributes cash dividends after the issuance of convertible bonds, the conversion price of convertible bonds shall be adjusted accordingly. Therefore, after the profit distribution, the initial conversion price of SPDB Convertible Bonds was adjusted from RMB15.05 per share to RMB14.45 per share as of 23 July 2020 (ex-dividend date).

The adjustments to conversion prices are as follows:

Date of conversion price adjustment	Conversion price after adjustment	Disclosure date	Disclosed on	Notes on conversion price adjustment
RMB15.05 per share	RMB14.45 per share	16 July 2020	China Securities Journal, Shanghai Securities News, Securities Times, SSE website, the Bank's website	Adjusted due to profit distribution for ordinary shares for 2019
Latest conversion price as at the end of the reporting period		RMB14.45 per share

8.5 The Bank's Outstanding Debts, Creditworthiness and Availability of Cash for Repayment of Debts in Future Years

In accordance with the applicable provisions in the Administrative Measures for the Issuance of Securities by Listed Companies, the Administrative Measures for the Issuance and Trading of Corporate Bonds, and the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, the Bank entrusted Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. (hereinafter referred to as "Shanghai Brilliance" for short) to rate the credit standing of the convertible bonds issued in October 2019. Shanghai Brilliance issued the Credit Rating Report of Shanghai Pudong Development Bank Co., Ltd on A Share Convertible Corporate Bonds, indicating the corporate credit rating at AAA with a stable prospect and the credit rating of the SPDB Convertible Bond as AAA. The Bank managed to remain stable in all aspects of operation, as exemplified by the reasonable asset structure, the basically steady liabilities, and the robust credit position. In future years, cash inflow brought by the income from normal operations, realization of current assets, and others will constitute the principal cash sources for the Bank's debt service.

 

Section IX Directors, Supervisors, Senior Management Members, Employees, Branches and Outlets

9.1 Basic Information on Directors, Supervisors and Senior Management Members

9.1.1 Incumbent Directors, Supervisors, Senior Executives as at the end of the reporting period

Name	Position	Gender	Year of birth	Tenure	Number of shares newly bought in the reporting period (in 10,000)	Number of shares held as at the end of the reporting period (in 10,000)	Remuneration received from the Bank (before-tax) during the reporting period (in RMB10,000)
Zheng Yang	Party Committee Secretary, Chairman, Executive Director	Male	1966	16 December 2019 - the end of tenure			79.86
Pan Weidong	Deputy Party Committee Secretary, Vice Chairman, Executive Director, President	Male	1966	16 December 2019 - the end of tenure	8.00	20.00	108.97
Chen Zheng'an	Deputy Party Committee Secretary, Executive Director	Male	1963	16 December 2019 - the end of tenure			86.30
Liu Yiyan	Executive Director, Vice President, CRO	Male	1964	16 December 2019 - the end of tenure	7.39	17.74	93.37
Guan Wei	Non-executive Director	Female	1971	16 December 2019 - the end of tenure
Wang Hongmei	Non-executive Director	Female	1961	16 December 2019 - the end of tenure
Zhang Dong	Non-executive Director	Male	1969	16 December 2019 - the end of tenure
Wang Zhe	Independent Director	Male	1960	16 December 2019 - the end of tenure			31.00
Zhang Ming	Independent Director	Male	1958	16 December 2019 - the end of tenure			28.00
Yuan Zhigang	Independent Director	Male	1958	16 December 2019 - the end of tenure			31.00
Henry Cai	Independent Director	Male	1954	16 December 2019 - the end of tenure			26.00
Wu Hong	Independent Director	Male	1956	16 December 2019 - the end of tenure			0
Liu Xinyi	Director to be Appointed	Male	1965	16 December 2019 - the end of tenure	5.60	21.60
Dong Guilin	Director to be Appointed	Male	1963	30 December 2020 - the end of tenure
Wang Jianping	Chairman of the Board of Supervisors, External Supervisor	Male	1960	30 December 2020 - the end of tenure
Sun Wei	Shareholder Supervisor	Male	1970	16 December 2019 - the end of tenure
Cao Yijian	Shareholder Supervisor	Male	1976	16 December 2019 - the end of tenure
Li Qingfeng	Shareholder Supervisor	Male	1971	16 December 2019 - the end of tenure
Wu Jian	External Supervisor	Male	1968	16 December 2019 - the end of tenure			28.00
Wang Yuetang	External Supervisor	Male	1963	16 December 2019 - the end of tenure			28.00
Li Guangming	Employee Supervisor	Male	1963	29 December 2020 - the end of tenure			350.67
Zhang Baoquan	Employee Supervisor	Male	1965	29 December 2020 - the end of tenure			428.59
He Weihai	Employee Supervisor	Male	1967	16 December 2019 - the end of tenure			428.59
Jiang Fangping	Head of Discipline Inspection and Supervision Office at SPD Bank	Male	1966	Since August 2019			71.86
Wang Xinhao	Vice President, CFO	Male	1967	16 December 2019 - the end of tenure	6.00	17.10	90.88
Cui Bingwen	Vice President, Chief Legal Advisor	Male	1969	16 December 2019 - the end of tenure	4.90	14.87	85.68
Xie Wei	Vice President, Secretary to the Board of Directors	Male	1971	16 December 2019 - the end of tenure	5.20	15.80	90.88

Notes:

(1) In July 2020, the Bank received the Reply of the CBIRC on the Qualifications of Ms. Wang Hongmei and Mr. Zhang Dong of Shanghai Pudong Development Bank (Y.B.J.F. [2020] No. 417), and the CBIRC approved the qualifications of Ms. Wang Hongmei and Mr. Zhang Dong for Directors of the Bank. The above directors started to perform their duties after their qualifications were approved by the CBIRC.

(2) In August 2020, the Bank received the Reply of the CBIRC on the Qualifications of Mr. Chen Zheng'an and Mr. Liu Yiyan of Shanghai Pudong Development Bank (Y.B.J.F. [2020] No. 514), and the CBIRC approved the qualifications of Mr. Chen Zheng'an and Mr. Liu Yiyan for Executive Directors of the Bank. The above directors started to perform their duties after their qualifications were approved by the CBIRC.

(3) In December 2020, the Bank received the Reply of the CBIRC on the Qualifications of Mr. Wu Hong of Shanghai Pudong Development Bank (Y.B.J.F. [2020] No. 888), and the CBIRC approved the qualifications of Mr. Wu Hong for Independent Director of the Bank. Mr. Wu Hong started to perform his duties after his qualifications were approved by the CBIRC.

(4) In December 2020, the 2020 First Extraordinary Shareholders' Meeting of the Bank elected Mr. Dong Guilin as Director of the Bank, and his tenure is the same as that of the Seventh Board of Directors. Mr. Dong Guilin started to perform his duties after his qualifications were approved by the regulatory authority.

(5) According to regulatory requirements, the application for qualifications of directors to be appointed of the Bank and the off-office audit of some directors to be appointed of the Bank are being handled, and they will start to perform their duties after their qualifications are approved by the CBIRC.

(6) On 29 December 2020, the First Meeting of the Third Employee Representative Assembly of the Bank elected Mr. Li Guangming and Mr. Zhang Baoquan as Employee Supervisors of the Seventh Board of Supervisors of the Bank, and their tenures are the same as that of the Seventh Board of Supervisors.

(7) On 30 December 2020, the 2020 First Extraordinary Shareholders' Meeting of the Bank elected Mr. Wang Jianping as Supervisor of the Bank, with the same tenure as that of the Seventh Board of Supervisors.

9.1.2 Directors, Supervisors and Senior Management members leaving office

Name	Position	Gender	Year of birth	Tenure	Remuneration received from the Bank (before-tax) during the reporting period (in RMB10,000)
Liu Peifeng	Former Non-executive Director	Male	1969	16 December 2019 - 14 December 2020
Sun Jianping	Former Chairman of the Board of Supervisors	Male	1957	16 December 2019 - 29 June 2020
Zhang Yilin	Former Employee Supervisor	Male	1960	16 December 2019 - 15 September 2020	374.11
Wu Guoyuan	Former Employee Supervisor	Male	1961	16 December 2019 - 29 December 2020	380.40
Xu Haiyan	Former Vice President	Female	1960	16 December 2019 - 13 May 2020	44.60

Notes:

(1) On 13 May, 2020, the Bank received a resignation letter from Vice President Ms. Xu Haiyan. Due to retirement, Ms. Xu Haiyan submitted her resignation from the position of Vice President. According to the Articles of Association of the Bank, the resignation letter shall take effect as of the date when it is received by the Board of Directors of the Bank.

(2) On 29 June 2020, the Bank received a resignation letter from Chairman of the Board of Supervisors Mr. Sun Jianping. Due to retirement, Mr. Sun Jianping submitted his resignation from the positions of Chairman of the Board of Supervisors, member of the Nomination Committee and member of the Supervision Committee of the Board of Supervisors. According to the Articles of Association of the Bank, the resignation letter shall take effect as of the date when it is received by the Board of Directors of the Bank.

(3) On 15 September 2020, the Bank received a resignation letter from Employee Supervisor Mr. Zhang Yilin. Due to retirement, Mr. Zhang Yilin submitted his resignation from the positions of Supervisor and member of the Supervision Committee of the Board of Supervisors. According to the Articles of Association of the Bank, the resignation letter shall take effect as of the date when it is received by the Board of Directors of the Bank.

(4) On 14 December 2020, the Bank received a resignation letter from Director Mr. Liu Peifeng. Due to change of job, Mr. Liu Peifeng submitted his resignation from the positions of Director and member of the Strategy Committee (Inclusive Finance Development Committee) of the Board of Directors. According to the Articles of Association of the Bank, the resignation letter shall take effect as of the date when it is received by the Board of Directors of the Bank.

(5) On 29 December 2020, the Bank received a resignation letter from Employee Supervisor Mr. Wu Guoyuan. Due to the reason of age, Mr. Wu Guoyuan submitted his resignation from the positions of Supervisor and member of the Nomination Committee of the Board of Supervisors. According to the Articles of Association of the Bank, the resignation letter shall take effect as of the date when it is received by the Board of Directors of the Bank.

9.1.3 Remuneration received by Directors, Supervisors and Senior Management members after the assessment and confirmation by competent agencies in 2019

Name		Position	Period of remuneration	Remuneration payable (in RMB10,000) (1)		Employer's contribution to social security, enterprise annuity, supplemental medical insurance and housing allowance (2)	Other monetary income (noted with specific items and listed separately) (3)	Total (4)= (1)+(2)+(3)
Zheng Yang		Party Committee Secretary, Chairman, Executive Director	Aug.-Dec. 2019		47.53	7.33	0.00	54.86
Pan Weidong		Deputy Party Committee Secretary, Vice Chairman, Executive Director, President	Jan.-Dec. 2019		237.02	21.88	0.00	258.90
Chen Zheng'an		Deputy Party Committee Secretary, Executive Director	Jan.-Dec. 2019		102.66	17.11	0.00	119.77
Liu Yiyan		Executive Director, Vice President, CRO	Jan.-Dec. 2019		221	21.41	0.00	242.41
Wu Guoyuan		Former Employee Supervisor	Jan.-Dec. 2019		367.91	20.81	0.00	388.72
Zhang Yilin		Former Employee Supervisor	Jan.-Dec. 2019		473.30	19.57	0.00	492.87
He Weihai		Employee Supervisor	Jan.-Dec. 2019		445.67	19.49	0.00	465.16
Jiang Fangping		Head of Discipline Inspection and Supervision Office at SPD Bank	Aug.-Dec. 2019		42.76	7.16	0.00	49.92
Wang Xinhao		Vice President, CFO	Jan.-Dec. 2019		221	21.41	0.00	242.41
Cui Bingwen		Vice President, Chief Legal Advisor	Jan.-Dec. 2019		208	16.22	0.00	224.22
Xie Wei		Vice President	Jan.-Dec. 2019		221	21.41	0.00	242.41
Gao Guofu		Former Chairman	Jan.-Nov. 2019		104.56	16.05	0.00	120.61
Liu Xinyi		Former Vice Chairman, President	Jan.-Nov. 2019		238.32	20.90	0.00	259.22
Xu Haiyan		Former Vice President	Jan.-Dec. 2019		208	20.93	0.00	228.93

9.1.4 Main work experience and service information of Directors, Supervisors and Senior Management members

9.1.4.1 Directors

Zheng Yang, male, born in 1966, has a Doctorate degree, and is a Senior Economist. He previously served as Chief of the Research Division of the Economic Laws and Regulation Department of the State Economic and Trade Committee, Chief of the Development Division and Chief of the Tendering Division VII of China National Tendering Center of Mach. & Elec. Equipment, Deputy Director of Capital Account Management Department, Sate Administration of Foreign Exchange (SAFE), Party Committee Member and Deputy General Manager of PBC Shanghai Branch and Deputy Head of SAFE Shanghai Branch, Party Committee Member and Deputy Head of PBC Shanghai Head Office and Director of the Foreign Exchange Management Department of the PBC Shanghai Head Office (concurrently), Deputy Secretary of the CPC Shanghai Municipal Committee for Financial Work and Director of the Shanghai Financial Service Office, Secretary of CPC Shanghai Municipal Committee for Financial Work and Director of the Shanghai Financial Service Office, and Secretary of CPC Shanghai Municipal Committee for Financial Work and Director of Shanghai Municipal Financial Regulatory Bureau (Shanghai Financial Work Bureau). He currently works as Party Committee Secretary and Chairman of SPD Bank, and Chairman of SPD Silicon Valley Bank Co., Ltd.

Pan Weidong, male, born in 1966, has a Master's degree and is a Senior Economist. He previously served as Deputy Manager of Corporate Business Department I of Ningbo Securities Company, General Manager of Asset and Finance Department of SPD Bank Ningbo Branch, Director of SPD Bank Beilun Office, Deputy General Manager of Ningbo Branch, General Manager of SPD Bank's Product Development Department, General Manager and Party Leadership Group Secretary of SPD Bank Kunming Branch, Chief of the Financial Institutions Service Division of Shanghai Municipal Financial Service Office (temporary post), Party Committee Member, Assistant General Manager and Deputy General Manager of Shanghai International Group, Party Committee Secretary and Chairman of Shanghai International Trust Co., Ltd., and Party Committee Member, Executive Director, Vice President and CFO of SPD Bank. He currently works as Deputy Party Committee Secretary, Vice Chairman and President of SPD Bank, and Chairman of Shanghai International Trust Co., Ltd.

Chen Zheng'an, male, born in 1963, has a Bachelor's degree. He previously served as Party Leadership Group Member, Deputy Procurator General and Member of Procuratorial Committee of Shanghai Jing'an Procuratorate, Deputy Secretary of Party Working Committee, Director of the Office and Secretary of Party Working Committee of Shimen Er Lu of Shanghai Jing'an District, Party Leadership Group Secretary and Director of Shanghai Jing'an Real Estate Bureau, deputy district governer, Party Committee Standing Member and Head of the Organization Department of Shanghai Jinshan District, Deputy Secretary of CPC Shanghai Municipal Committee for Financial Work, and Discipline Committee Secretary and Vice Chairman of the Board of Supervisors of SPD Bank. He currently works as Deputy Party Secretary and Executive Director of SPD Bank and President of SPDB University.

Liu Yiyan, male, born in 1964, has a Doctorate degree, and is a Senior Economist. He previously served as Party Committee Member and Vice President of Bank of Communications Changchun Branch, Party Committee Secretary and General Manager of SPD Bank Changchun Branch, and General Manager of Personal Banking Headquarters of SPD Bank, General Manager of Human Resources Department of SPD Bank, and Head of the Risk Department at the Head Office of SPD Bank. He currently works as Party Committee Member, Executive Director, Vice President, and CRO of SPD Bank.

Liu Xinyi, male, born in 1965, has a Master's degree, and is a Senior Economist. He previously served as Deputy Head (in overall charge) of the SPD Bank Airport Sub-branch, Party Committee Member and Deputy General Manager of SPD Bank Shanghai Headquarters and Chief of Financial Institutions Service Division and Assistant Director of Shanghai Municipal Financial Service Office (temporary posts), Vice President of SPD Bank and Party Committee Secretary and General Manager of SPD Bank Shanghai Headquarters, Vice President of SPD Bank and Party Committee Secretary and Head of its Shanghai Branch, Vice President and CFO of SPD Bank, Deputy Party Committee Secretary and President of Shanghai Guosheng Group Co., Ltd., Deputy Party Committee Secretary, Vice Chairman and President of SPD Bank, and Chairman of SPD Silicon Valley Bank. He currently serves as Deputy Party Committee Secretary, Director and President of Shanghai International Group Co., Ltd.

Guan Wei, female, born in 1971, has a Master's degree, and is a Senior Accountant. She previously served as Assistant Manager of the Financial Management Department at Shanghai Shentong Metro Group Co., Ltd., Deputy Manager and Manager of the Financial Management Department, Discipline Inspection Commission Member, Manager of the Auditing and Supervision Department, and Member of the Board of Supervisors at Shanghai Jiushi (Group) Co., Ltd., Party Branch Secretary and General Manager of Shanghai City Tour Card Development Co., Ltd., CFO of Shanghai Land (Group) Co., Ltd., and CFO of Shanghai International Group Co., Ltd. She currently works as Vice President and CFO of Shanghai International Group Co., Ltd.

Wang Hongmei, female, born in 1961, has a Doctorate degree, and is a Professor-level Senior Engineer. She previously served as Deputy Director of the Economic and Technological Development Research Center at the former Ministry of Posts and Telecommunications, General Manager of the Development Strategy Department and Director of the Reform Office at China Mobile Communications Group Co., Ltd., and Secretary General of China Mobile Charity Foundation. She currently works as Senior Manager of the Development Strategy Department (General Manager Level) at China Mobile Communications Group Co., Ltd. and Director of China Mobile Equity Fund Management Co., Ltd.

Zhang Dong, male, born in 1969, is an MBA graduate and Economist. He previously served as Deputy General Manager of Xuzhou Branch at China Mobile Group Jiangsu Company Limited (in overall charge), General Manager and Party Committee Secretary of Lianyungang Branch at China Mobile Group Jiangsu Company Limited, General Manager of the Human Resources Department at China Mobile Group Jiangsu Company Limited, Director, Deputy General Manager and Party Leadership Group Member of China Mobile Group Hainan Company Limited, and Director, Deputy General Manager and Party Leadership Group Member of China Mobile Group Jiangsu Company Limited. He currently works as General Manager of the Marketing Department at China Mobile Communications Group Co., Ltd.

Dong Guilin, male, born in 1963, has a Master's degree, and is a Senior Economist. He previously served as Deputy Manager of Jiangsu Cigarette Sales Company, Chief of the Cigarette Sales Management Division of Jiangsu Tobacco Company, and Secretary of Party Leadership Group, President and Manager of Suzhou Tobacco Bureau (Company). He currently works as Party Leadership Group Member and Deputy General Manager of Jiangsu Tobacco Bureau (Company).

Wang Zhe, male, born in 1960, is an MBA graduate and Economist. He previously served as Deputy Head of PBC General Administration Department, Manager of Shenzhen Center of China Gold Coin Incorporation, Deputy General Manager of China CITIC Bank Shenzhen Branch, Chairman of Dapeng Securities, Deputy General Manager of China Gold Coin Incorporation, General Manager, Party Committee Secretary and Chairman of Shanghai Gold Exchange and Party Committee Secretary of China Foreign Exchange Trade System. He currently works as Secretary-General of Association of Shanghai Internet Financial Industry, Vice President of Shanghai Financial Association, External Supervisor of China Everbright Bank Company Limited, and Independent Director of Boill Healthcare Holdings Limited.

Zhang Ming, male, born in 1958, has a Doctorate degree, and is a Certified Public Accountant (CPA). He previously served as Deputy Dean of School of Accountancy of Shanghai University of Finance and Economics. He currently works as Professor, Doctorate Supervisor and Senior Researcher of School of Accountancy of Shanghai University of Finance and Economics, Vice President of Shanghai Commercial Accounting Institute, Member of many academic institutions such as Accounting Society of China, Banking Accounting Society of China, Accounting Society of Shanghai, Member of the Academic Council of Accounting Society of China, Independent Director of Haitong Securities Co., Ltd., Independent Director of National Silicon Industry Group Co., Ltd., Director of Shanghai Shensi Enterprise Development Co., Ltd., and Director of Wuxi Zhenhua Auto Parts Co., Ltd.

Yuan Zhigang, male, born in 1958, has a Doctorate degree, and is a Specially Engaged Professor of "Changjiang Scholars" launched by the Ministry of Education. He previously served as Dean of School of Economics of Fudan University. He currently works as Professor and Doctorate Supervisor of School of Economics of Fudan University, Director of Employment and Social Security Research Center of Fudan University, Director of the Academic Council of the Faculty of Economics and Management at East China Normal University, Expert Member of the Shanghai Advisory Committee on Decision-Making, Advisor to Fujian Provincial People's Government, Expert Member of the Decision-making Advisory Committee of People's Government of Guangxi Zhuang Autonomous Region, Independent Director of JIC Trust Co., Ltd., External Supervisor of Bank of Shanghai Co., Ltd., and Independent Director of Sunac China Holdings Limited.

Henry Cai, male, born in 1954, has a Bachelor's degree. He previously served as Director of the General Office at Sinopec Shanghai Petrochemical Company Limited, Member of the Chinese Enterprise Going Public Abroad Steering Group under the State Commission for Economic Restructuring of the State Council, Chairman of the Joint Conference for Secretaries to the Boards of Directors of Chinese H-share Enterprises, Managing Director of Peregrine Investments Holdings Limited, Asian head of Swiss Bank Corporation (SBC), and Asian head of Deutsche Bank (DB). He currently works as Chairman of AGIC Capital, Independent Director of China Eastern Airlines Co., Ltd., and Independent Director of China COSCO Shipping Corporation Limited.

Wu Hong, male, born in 1956, has a Doctorate degree. He previously served as Dean of the College of Economic Laws at East China University of Political Science and Law, Vice President of China Association of Banking Law, Member of China Commercial Law Society, Head of Financial Law Study Society, Shanghai Law Society, Deputy Head of Shanghai International Commercial Law Institute, Member of the National Judicial Examination Proposition Committee, Advisory Consultant to the Shanghai Municipal People's Congress Standing Committee for Legislation, and Member of Shanghai Consumer Council. He currently works as Professor and Doctorate Supervisor of East China University of Political Science and Law, Independent Director of Zhejiang Tailong Commercial Bank, Independent Director of Orient Securities Co., Ltd., and Independent Director of Western Leadbank FMC.

9.1.4.2 Supervisors

Wang Jianping, male, born in 1960, has a Bachelor's degree, and is an MBA graduate, Economist, and CPA. He previously served as Chief of the Budget Division and Chief of the Urban Economic Development Division of the Shanghai Municipal Bureau of Finance, Director and Party Leadership Group Secretary of Shanghai Municipal Administration of State (Local) Taxation Pudong New Area Bureau, Deputy Director of Shanghai Municipal Development & Reform Commission, Director and Party Leadership Group Secretary of Shanghai Municipal Bureau of Statistics, and Director and Party Leadership Group Secretary of Shanghai Municipal Bureau of Auditing (Deputy Head of the Eighth Inspection Group of the CPC Central Committee from February to May 2018). He currently works as Chairman of the Board of Supervisors of SPD Bank.

Sun Wei, male, born in 1970, has a Master's degree. He previously served as Deputy General Manager of Shanghai Faiveley Transport Vehicle Equipment Co., Ltd., Manager of Industry Development Department of Shanghai Electric Group Company Limited, Assistant General Manager and Deputy General Manager of Shanghai Rail Traffic Equipment Co., Ltd., General Manager of Screen Door Engineering Company under Shanghai Rail Traffic Equipment Co., Ltd., Deputy Head and Head of Strategic Planning Department of Shanghai Electric (Group) Corp., and Head of Industry Development Department of Shanghai Electric Group Company Limited. He currently works as Vice President of Bailian Group Co., Ltd.

Cao Yijian, male, born in 1976, has a Master's degree, and is an Economist. He previously served as Manager of the Asset Management Department at Shanghai Huipu Technology Investment Co., Ltd., Assistant Manager, Deputy Manager and Manager of Asset Operation Department of Shanghai Qiangsheng Group Co., Ltd., Manager of the Asset Operation Department at Shanghai Jiushi Real Estate Co., Ltd., Deputy General Manager of the Investment Development Department of Shanghai Jiushi Corporation Co., Ltd., and Deputy General Manager of the Investment Development Department at Shanghai Jiushi (Group) Co., Ltd. He currently works as General Manager of the Investment Development Department at Shanghai Jiushi (Group) Co., Ltd.

Li Qingfeng, male, born in 1971, has a Master's degree. He previously served as General Manager of Shanghai Jiuheng Futures Brokerage Limited, and Chief Economist, Deputy General Manager and Deputy Secretary of General Party Branch of Shanghai Jiulian Group Limited. He currently works as Party Committee Secretary and Chairman of Shanghai Jiulian Group Limited and General Manager of Shanghai Petroleum Exchange.

Wu Jian, male, born in 1968, has a Master's degree. He previously served as Assistant Economist of Shanghai Price Bureau at Shanghai Planning Committee, and Legal Advisor to Mcdonald's China Development Company. He currently works as Board Chairman and Chairman of Joint Conference at Duan & Duan, Member of Council of the Shanghai Lawyers Association, Independent Director of Pramerica Fosun Life Insurance Co., Ltd., Independent Director of ORG Technology Co., Ltd., Director of INESA (Group) Co., Ltd., and Director of YEIG (Shanghai) Energy Development Co., Ltd. Besides, he is also a Deputy to the 15th Shanghai Municipal People's Congress.

Wang Yuetang, male, born in 1963, has a Doctorate degree in Management (Accounting), and is a Chinese CPA, and Specially Engaged Professor of "Changjiang Scholars" launched by the Ministry of Education. He previously served as Instructor of Business School, Yangzhou University, Senior Researcher of Faculty of Business, Lingnan University, and Visiting Scholar to Cornell University. He currently works as Dean, Professor in Accounting and Doctoral Supervisor of Nanjing University Business School, Deputy Head of Jiangsu Association of Accounting, Executive Member of China Empirical Accounting Research Society, External Director of Jiangsu Guoxin Investment Group Limited, Independent Director of Holly Futures Co., Ltd., and Independent Director of Nanjing Central Emporium (Group) Stocks Co., Ltd.

Li Guangming, male, born in 1963, a Party member, has a Master's degree, and is a Senior Economist, and Senior Engineer. He previously served as General Manager of No. 2 Sub-branch of Hohhot Branch of China Construction Bank ("CCB"), Party Committee member and Deputy General Manager of CCB Hohhot Branch, Deputy Secretary of the Party Committee and Deputy General Manager (in overall charge) of the Banking Department of CCB Inner Mongolia Branch, Secretary of the Party Committee and Head of Hohhot Branch of SPD Bank, Director of the Party Committee Office, Director of the Publicity Department of the Party Committee, Director of the General Office, and Director of the Secretariat to the Board of Directors & Supervisors of SPD Bank. He currently works as Chairman of SPD Bank Labor Union, Director of the Party Committee Office, Director of the Publicity Department of the Party Committee, and Director of the General Office of SPD Bank.

Zhang Baoquan, male, born in 1965, a Party member, has a Master's degree, and is a Senior Economist. He previously served as Deputy General Manager (in overall charge) of Tianjin Free Trade Zone Branch, Deputy General Manager of Development Zone Branch and Deputy General Manager (in overall charge) of Beichen Sub-branch, General Manager of International Business Department, Head of International Business Division and General Manager of Market Development Department II of Tianjin Branch of Industrial and Commercial Bank of China (ICBC), Party Leadership Group Secretary and Deputy General Manager of Tianjin Branch, Party Leadership Group Secretary and General Manager of Qingdao Branch, Deputy Director of Beijing Representative Office, Director of Beijing Approval Center of the Risk Management Unit of the Head Office, General Manager of Beijing Approval Center of the Credit Approval Department of the Head Office, Party Committee member and Deputy General Manager of Beijing Branch, General Manager of the Credit Management Department and Director of the Business Approval Center of the Head Office of SPD Bank. He currently works as CRO and General Manager of the Risk Management Department at SPD Bank.

He Weihai, male, born in 1967, has a Master's degree, and is an Economist, and Certificated Internal Auditor (CIA). He previously served as Deputy General Manager of Beilun District Sub-branch (Bonded Area/Development Area) of CCB Ningbo Branch, Deputy General Manager of CMB Ningbo Sub-branch, General Manager of Jiangbei Sub-branch, General Manager of Zhongxing Sub-branch, and General Manager of the Marketing Management Department at SPD Bank Ningbo Branch, Executive Auditor in Public Reserve Business of the Internal Auditing Department and General Manager of the Trade and Cash Management Department at SPD Bank, Party Committee Secretary and General Manager of SPD Bank Wenzhou Branch, and Party Committee Secretary and General Manager of SPD Bank Hangzhou Branch. He currently works as Party Committee Secretary and General Manager of SPD Bank Nanjing Branch.

9.1.4.3 Senior Management members

Pan Weidong, ditto

Jiang Fangping, male, born in 1966, has a Master's degree, and is a Senior Economist, and Procurator Level III. He previously served as Deputy Chief of Investigation Division II and Deputy Chief of Investigation Division I of the Anti-corruption Bureau at the People's Procuratorate of Shanghai Municipality, Deputy Director of Office V to Shanghai Municipal Discipline Inspection Commission and Supervisory Commission, Director of Office I to Shanghai Municipal Discipline Inspection Commission and Supervisory Bureau, Director of Office II to Shanghai Municipal Discipline Inspection Commission and Supervisory Commission, Head of the Discipline Inspection Group Dispatched by Shanghai Municipal Discipline Inspection Commission at Shanghai Municipal Commission of Commerce, Party Leadership Group Member of Shanghai Municipal Commission of Commerce, Head of the Discipline Inspection Group at Shanghai Municipal CPC Committee of SASAC Dispatched by Shanghai Municipal Discipline Inspection Commission, and Member of Shanghai Municipal CPC Committee of SASAC. He currently works as Party Committee Member of SPD Bank and Head of the Discipline Inspection and Supervision Office at SPD Bank dispatched by Shanghai Municipal Discipline Inspection Commission and Supervisory Commission.

Liu Yiyan, ditto

Wang Xinhao, male, born in 1967, has a Doctorate degree. He previously served as General Manager of the Asset Management Department, General Manager of the Customer Managers' Department and General Manager of the Corporate Banking Department of China Everbright Bank Dalian Branch, Party Leadership Group Member and Deputy General Manager of SPD Bank Dalia Branch, Party Committee Secretary and General Manager of SPD Bank Dalian Branch, Party Committee Secretary and General Manager of SPD Bank Shanghai Branch, and Party Committee Secretary and General Manager of SPD Bank Shanghai FTZ Branch. He currently works as Party Committee Member, Vice President and CFO of SPD Bank, Chairman of SPDB International Holdings Limited, Party Committee Secretary and Chairman of SPDB Financial Leasing Co., Ltd., and Vice Chairman of SPD Silicon Valley Bank Co., Ltd.

Cui Bingwen, male, born in 1969, has a Doctorate degree, and is a Senior Economist. He previously acted as Deputy Head of Jinxi Sub-branch, Deputy Head (in overall charge) of Dongli Sub-branch of ICBC Tianjin Branch, Head of the Human Resources Department, General Manager of the Corporate Banking Department, Party Committee Member, Head Assistant, Deputy General Manager, Party Committee Secretary and General Manager of SPD Bank Tianjin Branch, Party Committee Secretary and General Manager of SPD Bank Beijing Branch and concurrently General Manager of the Group Customer Department and General Manager of the Financial Markets Department (Beijing) of SPD Bank Head Office. He currently works as Party Committee Member, Vice President and Chief Legal Advisor of SPD Bank.

Xie Wei, male, born in 1971, has a Master's degree, and is a Senior Economist. He previously acted as General Manager of Corporate Banking Department of CCB Henan Branch, Party Committee Secretary and General Manager of CCB Xuchang Branch, General Manager of Development Management Department of Corporate and Investment Banking Headquarters of SPD Bank, Deputy General Manager of Corporate and Investment Banking Headquarters of SPD Bank and concurrently General Manager of Investment Banking Department, Development Management Department and Key Client Department, Party Committee Secretary and General Manager of SPD Bank Fuzhou Branch, General Manager of SPD Bank Treasury Headquarters, General Manager of SPD Bank Asset Management Department, and General Manager of SPD Bank Financial Markets Department. He currently works as Party Committee Member, Vice President, Secretary to the Board, and Director of Financial Market Business of SPD Bank, and Chairman of AXA SPDB Investment Managers Co., Ltd.

9.2 Overview of Service in the Shareholders

Name	Name of shareholder	Current position
Liu Xinyi	Shanghai International Group Co., Ltd.	Deputy Party Committee Secretary, Director, President
Guan Wei	Shanghai International Group Co., Ltd.	Vice President, CFO
Wang Hongmei	China Mobile Communications Group Co., Ltd.	Senior Manager of Development Strategy Department (General Manager Level)
Zhang Dong	China Mobile Communications Group Co., Ltd.	General Manger of Marketing Department
Dong Guilin	China National Tobacco Corporation Jiangsu Company	Party Leadership Group Member, Deputy General Manager
Sun Wei	Bailian Group Co., Ltd.	Vice President
Cao Yijian	Shanghai Jiushi (Group) Co., Ltd.	General Manager of Investment Development Department
Li Qingfeng	Shanghai Jiulian Group Limited	Party Committee Secretary, Chairman

 

9.3 Overview of Service in Other Entities

Name	Name of entity	Current position
Wang Zhe	Association of Shanghai Internet Financial Industry	Secretary General
	Shanghai Financial Association	Vice Chairman
	China Everbright Bank Company Limited	External Supervisor
	Boill Healthcare Holdings Limited	Independent Director
Zhang Ming	Shanghai University of Finance and Economics	Professor, Doctorate Supervisor and Senior Researcher of School of Accountancy
	Shanghai Business Accounting Society	Vice President
	Haitong Securities Co., Ltd.	Independent Director
	National Silicon Industry Group Co., Ltd.	Independent Director
	Shanghai Shensi Enterprise Development Co., Ltd.	Director
	Wuxi Zhenhua Auto Parts Co., Ltd.	Director
Yuan Zhigang	Fudan University	Professor, Doctoral Supervisor of School of Economics, Fudan University
	East China Normal University	Director of the Academic Council of the Faculty of Economics and Management
	JIC Trust Co., Ltd.	Independent Director
	Bank of Shanghai Co., Ltd.	External Supervisor
	Sunac China Holdings Limited	Independent Director
Henry Cai	AGIC Capital	Chairman
	China Eastern Airlines Co., Ltd.	Independent Director
	China COSCO Shipping Corporation Limited	Independent Director
Wu Hong	Shanghai Pudong Development Group Finance Co., Ltd.	Independent Director
	Zhejiang Tailong Commercial Bank	Independent Director
	Orient Securities Co., Ltd.	Independent Director
	Western Leadbank FMC	Independent Director
Sun Wei	Shanghai Bailian Li'an Foods Co., Ltd.	Chairman
	Shanghai Baiji Foods Co., Ltd.	Chairman
	Shanghai No. 1 Pharmacy Co., Ltd.	Vice Chairman
	Shanghai Industrial Development Co., Ltd.	Vice Chairman
Cao Yijian	Shanghai Public Transportation Card Company Limited	Director
	Shanghai Jiushi Investment Co., Ltd.	Executive Director
	Haitong Securities Co., Ltd.	Supervisor
Li Qingfeng	Shanghai Petroleum Exchange Ltd.	General Manager
Wu Jian	Duan & Duan	Board Chairman, Chairman of Joint Conference
	Pramerica Fosun Life Insurance Co., Ltd.	Independent Director
	ORG Technology Co., Ltd.	Independent Director
	INESA (Group) Co., Ltd.	Director
	YEIG (Shanghai) Energy Development Co., Ltd.	Director
Wang Yuetang	Nanjing University	Dean, Professor in Accounting of Business School
	Jiangsu Guoxin Investment Group Limited	External Supervisor
	Holly Futures Co., Ltd.	Independent Director
	Nanjing Central Emporium (Group) Stocks Co., Ltd.	Independent Director

9.4 Remuneration of Directors, Supervisors and Senior Management Members

Decision-making procedure for remunerations for Directors, Supervisors, and Senior Management members	Remunerations for Directors, Supervisors, and Senior Management members shall be reviewed by the Nomination and Remuneration Appraisal Committee under the Board of Directors, and be submitted to the Board of Directors for approval.
Basis for remunerations for Directors, Supervisors and Senior Management members	Directors, Supervisors, Senior Management members as leaders in state-owned enterprises will be included in the corresponding remuneration management system, and their remunerations will be appraised and decided by the competent department based on the assessment results. Other staff will be subject to the remuneration distribution plan of the Bank as approved by the Board of Directors and its Nomination and Remuneration Appraisal Committee.
Remunerations payable to Directors, Supervisors and Senior Management members	The appraisal for Directors, Supervisors and Senior Management members receiving remunerations has not completed, so the remunerations during the reporting period are not the remunerations to be distributed as approved in the appraisal.
Total remunerations actually received by all Directors, Supervisors and Senior Management members as at the end of the reporting period	The final competent department in charge of remunerations for Directors, Supervisors and Senior Management members is under confirmation, and the total remunerations paid by the Bank at present is RMB27.1476 million (before-tax).

9.5 Information on Employees of the Parent Company and Main Subsidiaries

9.5.1 Information on employees

Person

Total in-service employees of the parent company	59,051
Total in-service employees of main subsidiaries	2,635
Total in-service employees	61,686
Retired employees in the parent company and main subsidiaries	1,523
Incl.: Disciplines of employees of the parent company
Senior Management members	321
Banking staff	52,871
Technical staff	5,859
Incl.: Education level of employees in the parent company
Junior college and vocational school	9,336
Bachelor's degree	38,321
Master's degree and Doctorate degree	11,484

9.5.2 Remuneration policy

During the reporting period, the Bank actively advanced the building of an internationalized remuneration system and improved the remuneration mechanism for overseas institutions and persons dispatched to foreign countries. It advanced remuneration management of subsidiaries according to requirements for conglomeration development and continued to improve the incentive mechanism linking performance growth with professional post performance remuneration. The Bank intensified accountability management and effectively exerted the effect of restraining risks with deferred remuneration payment.

9.6 Level-to-level Administration of the Bank, and the Quantity and Regional Distribution of Branches at All Levels

The Bank implements a first-class legal entity system and adopts a mechanism of Head Office and branches. According to principles of economic efficiency and economic divisions and based on the layout of commercial banks across the nation, the Bank successively established branches and sub-branches in medium and large cities, and important central cities in coastal areas, the northeast, the central and west areas. As at the end of the reporting period, the Bank had a total of 1,640 branches and sub-branches, which are shown in detail in the following table:

Region	Institution name	Address	Number of employees (Person)	Total assets (RMB1 million)	Number of organs under its jurisdiction
Head Office	Head Office	No. 12, Zhongshan Dongyi Road, Shanghai	8,452	3,741,913	1,639
	Credit Card Center	SPD Bank Building, No. 588 Pudong South Road, Shanghai	11,672	362,211	-
	Sub-total		20,124	4,104,124	1,639
Yangtze River Delta Region	Shanghai Branch	No. 588 Pudong South Road, Shanghai	4,394	1,030,137	185
	Hangzhou Branch	No. 129 Yan'an Road, Hangzhou	2,712	382,699	101
	Ningbo Branch	No. 21 Jiangxia Street, Ningbo	1,287	117,789	40
	Nanjing Branch	No. 90, Zhongshan East Road, Nanjing	2,991	374,424	110
	Hefei Branch	No. 2608 Hangzhou Road, Binhu New Area, Hefei	1,087	102,461	38
	Suzhou Branch	No. 718, Zhongyuan Road, Industrial Park, Suzhou	892	110,657	31
	Shanghai Free Trade Zone Branch	Floor 22, SPD Bank Building, No. 588 Pudong South Road, Shanghai	38	73,783	-
	Sub-total		13,401	2,191,950	505
Pearl River Delta and West Side of Taiwan Strait	Guangzhou Branch	No. 12, Zhujiang West Road, Tianhe District, Guangzhou	2,080	248,308	69
	Shenzhen Branch	No. 333, Liyuan Road, Sun'gang Sub-district, Luohu District, Shenzhen	1,611	317,223	45
	Fuzhou Branch	No. 222, Hudong Road, Fuzhou	728	54,222	58
	Xiamen Branch	No. 666-1 Xiahe Road, Xiamen	273	15,905	15
	Sub-total		4,692	635,658	187
Bohai Rim	Beijing Branch	No. 18, Taipingqiao Avenue, Xicheng District, Beijing	1,928	510,277	77
	Tianjin Branch	Block D, No. 9+ Binshui Avenue, Hexi District, Tianjin	1,237	177,296	36
	Ji'nan Branch	No. 139, Heihuquan West Road, Ji'nan	1,284	72,477	62
	Qingdao Branch	No. 188 Haier Road, Laoshan District, Qingdao	821	77,133	31
	Shijiazhuang Branch	101 Fangbei Shopping Mall, No. 133 Yuhua East Road, Chang'an District, Shijiazhuang	753	62,548	31
	Sub-total		6,023	899,731	237
Central China	Zhengzhou Branch	No. 299, Jinshui Road, Zhengzhou	1,904	246,651	90
	Wuhan Branch	No. 218 Xinhua Road, Jianghan District, Wuhan	939	80,660	42
	Taiyuan Branch	No. 5, Qingnian Road, Taiyuan	886	79,478	54
	Changsha Branch	No. 102, Chazishan East Road, Binjiang New Town, Changsha	960	87,746	51
	Nanchang Branch	No. 1402, Hongguzhong Avenue, Nanchang	670	63,304	33
	Haikou Branch	No. 26, Yusha Road, Haikou	183	8,968	6
	Sub-total		5,542	566,807	276
Western China	Chongqing Branch	No. 78, Star Avenue, High-tech Park, Northern New District, Chongqing	694	91,370	24
	Kunming Branch	No. 156, Dongfeng West Road, Kunming	709	56,905	36
	Chengdu Branch	No. 22 East II Section, 2nd Ring Road, Chenghua District, Chengdu	711	71,688	22
	Xi'an Branch	No. 6 Jinye Road, High-tech Zone, Xi'an	1,057	109,980	49
	Nanning Branch	No. 22, Jinpu Road, Nanning	574	86,838	22
	Urumqi Branch	No. 379, Xinhua South Road, Urumqi	462	31,420	19
	Hohhot Branch	Block B Dongfang Junzuo, No. 18 Chilechuan Street, Saihan District, Hohhot	571	32,050	26
	Lanzhou Branch	No. 101, Guangchang South Road, Lanzhou	483	35,128	29
	Guiyang Branch	East Tower 4, Eastern Zone, Financial Business District, Part B of Zhongtian Exhibition Town, Guanshanhu District, Guiyang	362	37,899	17
	Xining Branch	Yanan Building, 1-7 No. 1 Weibo Lane, Chengxi District, Xining	222	8,970	7
	Yinchuan Branch	No. 51, Xinhua East Street, Xingqing District, Yinchuan	177	6,250	5
	Lhasa Branch	No. 1 Commerce Building, No. 48 Beijingzhong Road, Chengguan District, Lhasa	123	5,226	1
	Sub-total		6,145	573,724	257
North-eastern China	Dalian Branch	No. 45, Huizhan Road, Shahekou District, Dalian	897	88,039	55
	Shenyang Branch	No. 326 Fengtian Street, Shenhe District, Shenyang	689	49,001	27
	Harbin Branch	No. 226, Hongqi Street, Nangang District, Harbin	682	51,008	32
	Changchun Branch	No. 3518, Renmin Street, Changchun	483	40,894	23
	Sub-total		2,751	228,942	137
Overseas	Hong Kong Branch	Floor 30, SPD Bank Tower, No. 1, Hennessy Road, Hong Kong	253	167,356	-
	Singapore Branch	12 Marina Boulevard, #34-01, MBFC Tower 3, Singapore	80	24,745	-
	London Branch	19th floor, 1 Angel Court London, EC2R 7HJ	40	10,403	-
	Sub-total		373	202,504	-
Aggregate adjustment				-1,605,148	40
Total			59,051	7,798,292	1,639

Note: The total number of employees, total assets and total number of institutions under the jurisdiction do not include that of the holding subsidiaries.

 

Section X Corporate Governance

10.1 Basic Situation of Corporate Governance

During the reporting period, the Bank further improved the corporate governance structure, learned from mature international corporate governance experience, tried to build a reasonable equity structure, and defined the responsibility boundaries of all entities of the corporate governance to realize the equalization and maximization of interests of all stakeholders, thus protecting interests of the depositors, winning returns for shareholders, creating values to society, and striving to build itself into a modern financial service provider with adequate capital, strict internal control, safe operation, good benefits and core competitive edge.

On 19 June 2020, the Shareholders' Meeting adopted the Proposal on Revision of the Articles of Association, which further normalized the corporate governance practice and equity management of the Bank according to the governance standards and requirements for listed companies. The revision of the Articles of Association was approved by the CBIRC.

10.1.1 Shareholders and Shareholders' Meeting

The Bank convoked and convened shareholders' meetings according to provisions in the Articles of Association of the Bank and the Procedural Rules for Shareholders' Meeting. In 2020, the Bank held two shareholders' meetings, passed 12 resolutions, and listened to three reports, ensuring that shareholders had rights to know, participate in and vote for major matters of the Bank, and that all shareholders enjoyed equal status and all shareholders could fully exercise their own rights.

10.1.2 Directors and Board of Directors

As at the end of the reporting period, the Seventh Board of Directors of the Bank had 12 Directors, including four Executive Directors, three Shareholder Directors, and five Independent Directors. All the Independent Directors are influential professionals in economics, finance, accounting, legal and other fields. During the reporting period, the Board of Directors held 16 meetings, including seven onsite meetings and nine meetings via communication means. On these meetings, 76 resolutions were passed and 37 special reports were reviewed.

The Board of Directors of the Bank has established four special committees, namely, the Strategy Committee (Inclusive Finance Development Committee), the Audit Committee, the Nomination and Remuneration Appraisal Committee, and the Risk Management Committee (Consumer Protection Committee). The four special committees convened 24 meetings. Of these, the Strategy Committee (Inclusive Finance Development Committee) held six meetings, the Audit Committee held five meetings, the Nomination and Remuneration Appraisal Committee held three meetings, and the Risk Management Committee (Consumer Protection Committee) held ten meetings. A total of 68 resolutions were made and eight reports were heard on these meetings. Leveraging on their extensive knowledge, experience and professional ethics, the Bank's Directors promoted the organic integration of the Party's leadership and corporate governance, conducted in-depth research on major issues, and made science-based, pragmatic and efficient decisions on corporate governance, strategic planning, serving the real economy, capital replenishment, risk prevention, profit distribution, anti-money laundering, regulatory rectification, internal control audit, asset disposal, incentives and constraints. They made a lot of efforts in supervising effective duty performance of the Senior Management and the completeness and accuracy of financial report of the Bank, thus ensuring that the Bank obeys laws, regulations, rules and effectively protecting the legitimate rights and interests of the shareholders, concerning and maintaining the benefits of depositors and other stakeholders and effectively performing the trusteeship.

10.1.3 Supervisors and the Board of Supervisors

As at the end of the reporting period, the Seventh Board of Supervisors of the Bank had nine supervisors, including three Shareholder Supervisors, three External Supervisors and three Employee Supervisors. The Board of Supervisors has set up the Nomination Committee and the Supervision Committee.

During the reporting period, the Board of Supervisors held 15 meetings, at which 95 proposals were reviewed and approved and 24 reports were reviewed. 124 out of the 125 Supervisors attended the meeting in person, with an attendance rate of 99.2%. The Board of Supervisors has two special committees, namely, the Nomination Committee and the Supervision Committee. During the reporting period, the Nomination Committee held three meetings and the Supervision Committee held seven meetings. A total of 29 proposals were reviewed and two reports were heard. The Board of Supervisors and its special committees focused on the duty performance of Directors and Senior Management members, strategic planning and its implementation, capital management, financial report, annual profit distribution plan, comprehensive risk management, write-off of asset losses, internal control and compliance, remuneration management, internal audit and other major operation and management matters. The Supervisors were diligent and devoted to their work, leveraged their professional strengths, earnestly performed their supervisory duties and put forward opinions and suggestions.

10.1.4 Senior Management

As at the end of the reporting period, the Bank's Senior Management had one President and four Vice Presidents (concurrently serving as CRO, CFO, Chief Legal Advisor and Secretary to the Board of Directors, respectively). Under the leadership of the Board of Directors, the Senior Management of the Bank observed the principle of good faith and prudently and diligently exercised its duties within its range of authority. In 2020, the Bank implemented the decisions and plans made by the CPC Central Committee and the State Council as well as regulatory requirements, and closely followed tasks to ensure stability on six key fronts and maintain security in six key areas. Through concerted efforts, the Bank worked hard to overcome the difficulties and advance pandemic prevention and control and business development in a coordinated way. It fulfilled the objectives of the three-year action plan in advance in terms of asset size, operating income and other major indicators of the Group, and continuously improved its industrial position and social influence. The Bank's Senior Management has established the Asset and Liabilities Management Committee, the Risk Control Committee and the Information Technology Management Committee under it.

10.1.5 Information disclosure and transparency

The Bank truly, accurately, completely and timely disclosed relevant information in strict accordance with laws, regulations, the Articles of Association of the Bank and information disclosure rules of the Bank, and ensured that all shareholders have equal opportunity to acquire such information. During the reporting period, the Bank completed four times of disclosure by periodic report, 84 times of disclosure by temporary announcement, and made timely announcements on resolutions passed by the Board of Directors, Board of Supervisors and Senior Management of the Bank and major matters such as the implementation of profit distribution. On 22 January 2020, the Bank disclosed 2019 Preliminary Earnings Estimate, which helped shareholders understand the operation and financial position of the Bank on a timely basis. This is the 15th consecutive year for the Bank to disclose the Preliminary Earnings Estimate in the first month of a year.

10.2 Brief Introduction to Shareholders' Meeting

During the reporting period, the Bank held one annual general meeting and one extraordinary shareholders' meeting.

Number of session	Date	Query index of the website designated for publishing the resolutions	Disclosure date for publishing the resolutions
2019 Annual General Meeting	19 June 2020	http://www.sse.com.cn	20 June 2020
First Extraordinary Shareholders' Meeting in 2020	30 December 2020		31 December 2020

 

10.3 Performance of Duties by Directors

10.3.1 Attendance of Directors at Board meetings

Director name	Independent Director Y/N	Overview of attendance at Board meetings						Number of attendance times at shareholders' meetings
		Number of required attendance times at board's meetings	Number of attendance times in person	Number of attendance times via communication means	Number of attendance times by proxy	Number of absence times	No attendance in person for two consecutive times Y/N
Zheng Yang	No	16	16	9	0	0	No	2
Pan Weidong	No	16	16	9	0	0	No	2
ChenZheng'an	No	6	5	3	1	0	No	2
Liu Yiyan	No	6	5	3	1	0	No	2
Guan Wei	No	16	16	9	0	0	No	2
Wang Hongmei	No	7	7	4	0	0	No	2
Zhang Dong	No	7	6	4	1	0	No	2
Wang Zhe	Yes	16	15	9	1	0	No	2
Zhang Ming	Yes	16	16	9	0	0	No	2
Yuan Zhigang	Yes	16	16	9	0	0	No	2
Henry Cai	Yes	16	15	9	1	0	No	2
Wu Hong	Yes	1	1	1	0	0	No	1

Number of Board meetings held in the year	16
Incl.: Number of onsite meetings	7
Number of meetings held via communication means	9
Number of meetings held onsite with attendance via communication means	0

10.3.2 Objection raised by Independent Directors against relevant matters of the Bank

During the reporting period, the Independent Directors of the Bank did not raise objection against any proposal on Board meetings in the year.

10.3.3 Performance of duties by Independent Directors

As at the end of the reporting period, the Board of Directors of the Bank had five Independent Directors, which constituted more than one third of the members of the Board of Directors. The Risk Management Committee (Consumer Protection Committee), the Nomination and Remuneration Appraisal Committee, and the Audit Committee were all chaired by Independent Directors. In 2020, the Board of Directors held 16 meetings, and the rate of attendance of Independent Directors in person exceeded 98%. The special committees of the Board of Directors held 24 meetings, and Independent Directors actively attended meetings of the special committees, who played a great role. During the reporting period, one Independent Directors' Meeting was held, with one resolution passed, and the Independent Directors expressed 14 special independent opinions. With the attitude of being responsible for all shareholders, all these Independent Directors carefully performed their duties of good-faith and diligence, protected the overall interests of the Bank and the legitimate rights and interests of minority shareholders from being impaired, and exerted positive role for scientific decision making by the Board of Directors.

10.3.4 Independent opinions of Independent Directors about external guarantees

According to relevant provisions and requirements in the CSRC Zh.J.F. [2003] No.56 Document, and with the attitude of justice, fairness and objectiveness, the Independent Directors examined the Group's external guarantees. As at 31 December 2020, the Group's external guarantee business was approved by the PBC and CBIRC, and the external guarantee business was one of its normal businesses. The Articles of Association of the Bank clearly defines the approval authority, specific management measures, operating flow and approval procedure based on the risk features of the guarantee business, thus effectively controlling risks of such business.

All external guarantees of the Group are of normal off-balance sheet business, and the condition of off-balance-sheet liabilities is as follows:

In RMB millions

Item	End of the reporting period	End of last year
Bank's acceptance draft	553,527	473,598
Letters of credit issued	176,517	162,473
Letters of guarantee issued	112,564	88,940
Credit card and loan commitments	525,923	457,683

The Group made no special guarantee to related parties. During the reporting period, the Group prudently implemented regulations of Zh.J.H. [2003] No.56 Document and made no guarantee violating laws or regulations.

10.4 Duty Performance of the Special Committees of the Board of Directors

The Board of Directors of the Bank has established four special committees, namely, the Strategy Committee (Inclusive Finance Development Committee), the Audit Committee, the Nomination and Remuneration Appraisal Committee, and the Risk Management Committee (Consumer Protection Committee).

10.4.1 Strategy Committee (Inclusive Finance Development Committee)

As at the end of the reporting period, the Strategy Committee (Inclusive Finance Development Committee) of the Bank consisted of five Directors, including Mr. Zheng Yang (Chairman), Mr. Pan Weidong, Ms. Guan Wei, Ms. Wang Hongmei, and Mr. Yuan Zhigang.

During the reporting period, the Strategy Committee (Inclusive Finance Development Committee) held six meetings, at which it reviewed 19 proposals including the Working Rules of the Strategy Committee (Inclusive Finance Development Committee) of the Board of Directors, the Proposal on the Development Plan for Sub-branch-level Institutions in 2020, the Proposal on the Three-year Action Plan, the Proposal on the Equity Disposal of Investee Enterprises, the Proposal on Asset and Liability Management Policy for 2020, the 2019 Corporate Social Responsibility Report, the Report on Deposit and Use of Raised Funds in 2019, the Proposal on Investment in National Green Development Fund, the Proposal on Revisions to the Articles of Association and the Proposal on the Establishment of A Financial Asset Investment Company Limited. Besides, it also reviewed the Analysis Report on Strategy Implementation in the First Half of 2020.

10.4.2 Nomination and Remuneration Appraisal Committee

As at the end of the reporting period, the Nomination and Remuneration Appraisal Committee of the Bank consisted of six directors, including Mr. Yuan Zhigang (Chairman), Mr. Zheng Yang, Mr. Chen Zheng'an, Ms. Wang Hongmei, Mr. Wang Zhe, and Mr. Henry Cai.

During the reporting period, the Nomination and Remuneration Appraisal Committee held three meetings, at which it considered a total of 8 proposals, including the Proposal on Nominating Director Candidates, the Proposal on Appointing the Chief Legal Advisor, the Proposal on the Appraisal of Duty Performance by Senior Management Members (Professional Managers) in 2019 and the Proposal on Remuneration of Senior Management Members in 2019.

10.4.3 Risk Management Committee (Consumer Protection Committee)

As at the end of reporting period, the Risk Management Committee (Consumer Protection Committee) consisted of five directors, including Mr. Wang Zhe (Chairman), Mr. Liu Yiyan, Mr. Zhang Ming, Mr. Henry Cai, and Mr. Wu Hong.

During the reporting period, the Risk Management Committee (Consumer Protection Committee) convened ten meetings, at which it considered 28 proposals which included the Proposal on Write-off of Asset Losses, the Proposal on Authorization for the Write-off of Asset Losses in 2020, the Proposal on Comprehensive Credit Extension to Major Investee Enterprises in 2020, the Proposal on Determining Related Parties in 2020, the Proposal on Amendments to the Anti-money Laundering Management Measures, the Proposal on the Working Rules for Chief Risk Officer and the Proposal on the Working Rules for Chief Legal Advisor. Besides, it also heard the Report on the Review of the Rectification of Market Chaos in 2020.

10.4.4 Audit Committee

As at the end of the reporting period, the Audit Committee of the Bank consisted of six directors, including Mr. Zhang Ming (Chairman), Ms. Guan Wei, Mr. Zhang Dong, Mr. Wang Zhe, Mr. Yuan Zhigang, and Mr. Wu Hong.

During the reporting period, the Audit Committee convened five meetings, at which it considered 13 proposals which included the Proposal on the 2019 Annual Report and Its Abstract, the Proposal on the 2019 Final Accounts and 2020 Financial Budget, the Proposal on 2019 Profit Distribution, the Proposal on the 2019 Internal Control Assessment Report, the Proposal on 2020 Q1 Report, the Proposal on 2020 Interim Report and Its Abstract, the Proposal on 2020 Q3 Report, the Proposal on the Working Rules for Chief Audit Officer, and the Capital Adequacy Ratio Report on the First Half of 2020. Besides, it also heard fix reports including the Report on the Bank Operation in 2019.

10.5 Duty Performance of Supervisors

As at the end of the reporting period, the Seventh Board of Supervisors of the Bank had nine Supervisors, including three Shareholder Supervisors, three Employee Supervisors and three External Supervisors (including Chairman of the Board of Supervisors).

In 2020, the Board of Supervisors acted as per the pertinent laws and regulations, regulatory provisions, and the Articles of Association of the Bank. It kept keenly aware of its positioning, fulfilled duties diligently according to law, supervised the performance of duties of the Board of Directors, the Senior Management and its members as well as financial, risk and internal control management, and strove to get more out of its supervisory initiatives. The Supervisors diligently performed their responsibilities based on applicable laws and regulations and the Articles of Association of the Bank. No acts that would impair the interests of shareholders were identified during the reporting period.

During the reporting period, the Board of Supervisors held 15 meetings, adopted 95 resolutions of all sorts, and reviewed 24 special reports. Its special committees convened ten meetings where 29 proposals were considered and adopted. The average rate of attendance of supervisors in person reached 99.2%, a level meeting the regulatory provision that "a supervisor shall attend personally at least two thirds of the meetings of the Board of Supervisors each year". The Board of Supervisors mainly focused on major operation and management matters including the duty performance of Directors and Senior Management members, strategic plan and its implementation, capital management, financial report, annual profit distribution plan, comprehensive risk management, write-off of asset losses, internal control and compliance, remuneration management and internal audit. All Supervisors considered and reviewed all proposals and reports in earnest, and independently voiced their opinions and suggestions.

During the reporting period, the Board of Supervisors actively carried out primary-level surveys and inspections. It surveyed and inspected six tier-one branches, two tier-2 branches, eight Head Office departments, three domestic subsidiaries and ten sub-branches in Shanghai, and held a total of 35 special meetings. In the first half of 2020, the Board of Supervisors conducted a survey in Ningbo and Taizhou Branch under its jurisdiction. In the survey, it inspected and urged the implementation of the three-year action plan and guiding principles of the Bank's annual work conference, and pushed the operating institution to improve its operation and management capabilities, thereby contributing to local economic and social development. The Board of Supervisors visited sub-branches of Shanghai Branch to inspect and supervise the implementation of pandemic prevention and control and key tasks of the three-year action plan, and required that the institutions shall spare no effort to implement the three-year action plan while ensuring sound pandemic prevention and control. In the second half of 2020, the Board of Supervisors organized more than ten surveys, paying close attention to the implementation of regulatory requirements and risk and internal control management requirements. It clearly required that the relationship between supervision and development should be properly handled, and required to firmly establish the concept of compliant operation and uphold legal and compliant operation. In December 2020, the Bank organized some Directors and Supervisors to visit Shanghai Trust for inspection to learn about the operation of the subsidiary and its implementation of the Group strategy. Through the inspection, the Supervisors acquired a deep understanding of the operation status, group collaboration and relevant effect of Shanghai Trust, and put forward opinions and suggestions.

During the reporting period, the Board of Supervisors organized evaluation of duty performance by the Board of Directors, the Senior Management and its members, and Supervisors in the year. In accordance with the Guidelines on Work of the Board of Supervisors of Commercial Bank as well as the Bank's Implementation Rules for Evaluation of Duty Performance by Directors, the Measures for Evaluation of Duty Performance by Supervisors, and other pertinent policies and rules, it evaluated how the Directors, Supervisors and Senior Management members performed their duties in 2019, and produced the Report on Duty performance by Directors, Supervisors and Senior Management Members in 2019, which was presented to the CBRIC in time after being reviewed and approved at the 8th Meeting of the Seventh Board of Supervisors, and reported to shareholders on the Shareholders' Meeting.

During reporting period, the Board of Supervisors carried out the annual corporate supervision evaluation. According to the Management Measures for Relevant Reports of the (Board of) Directors and (Board of) Supervisors of Enterprises under the Regulation of State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government and the Catalogue of Duty Performance of Expatriate Chairman of the Board of Supervisors and Expatriate Supervisors of State-Owned Enterprises under Shanghai Municipal People's Government (Version 2020), it organized the evaluation of the business results and financial position of the Bank, and produced the Supervisory Evaluation Report of Shanghai Pudong Development Bank based on its proposal review, survey, inspection and supervision, which was submitted to State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government after being reviewed and approved at the 9th Meeting of the Seventh Board of Supervisors.

During the reporting period, the Board of Supervisors paid attention to the improvement of the comprehensive risk management system. It organized the supervision and inspection of comprehensive risk management to understand the overall situation of risk management and the improvement of the comprehensive risk management system. It proposed to push forward the reform of the comprehensive risk management system based on the Bank's current characteristics, better play the role of risk management and promote high-quality development of the Bank.

During the reporting period, the Board of Supervisors valued the upgrading of the compliance and internal control management system. It organized special supervision and inspection on compliance and internal control to understand the overall situation of compliance and internal control, the improvement of the internal control and compliance management system, the progress in policy streamlining and improvement and the implementation of rectification across the Bank. All these efforts helped improve the Bank's culture of prudence, build up the philosophy of prudent operation, enhance the awareness of compliance risk, and continuously enhance the binding force and execution of policies.

During the reporting period, the Board of Supervisors supervised the implementation of differentiated policies for different branches in risk management. It held special survey meetings to understand the differentiated management of credit policies in different regions and branches and the consistency between policy orientation and implementation, promoted the continuous improvement and effective implementation of differentiated policies for different branches, and enhanced the quality of business development.

During the reporting period, the Board of Supervisors attached importance to FinTech innovation. It held special meetings to hear the reports on FinTech innovation progress, and proposed to go all out to implement the three-year action plan, push forward the building of a digital bank, and enhance the IT driving force in agile R&D, data operation and technological innovation. It also strengthened IT application in look-through management and risk prevention and control, and promoted the digitalization of comprehensive risk management, compliance and internal control management, thus fully enhancing the risk prevention and control capability.

During the reporting period, the Board of Supervisors paid attention to the financial risk warning indicators and their improvement. It organized the supervision and inspection of financial risk early warning to understand the overall situation of financial risk early warning, the lighting of financial risk early warning indicators and the arrangement of financial risk early warning plan, and further improve the financial risk indicators.

10.6 Duty Performance of the Special Committees of the Board of Supervisors

The Board of Supervisors of the Bank has established the Nomination Committee and the Supervision Committee.

10.6.1 Nomination Committee

As at the end of reporting period, the Nomination Committee of the Board of Supervisors consisted of four supervisors, including Mr. Wu Jian (Chairman), Mr. Wang Jianping, Mr. Sun Wei, and Mr. Wang Yuetang.

During the reporting period, the Nomination Committee held three meetings, at which it considered seven proposals including the Report on the Evaluation of Duty Performance by Directors in 2019, the Report on the Evaluation of Duty Performance by Supervisors in 2019, the Report on the Evaluation of Duty Performance by Senior Management Members in 2019, the Proposal on the Appraisal of Duty Performance by Senior Management Members (Professional Managers) in 2019, the Proposal on Remuneration of Senior Management Members in 2019, the Proposal on Nominating Supervisor Candidates, and the Proposal on the Responsibility Agreement for the Appraisal Objectives of Senior Management Members (Professional Managers) for 2020.

10.6.2 Supervision Committee

As at the end of reporting period, the Supervision Committee of the Board of Supervisors consisted of four Supervisors, including Mr. Wang Yuetang (Chairman), Mr. Wang Jianping, Mr. Cao Yijian, and Mr. Wu Jian.

During the reporting period, the Supervision Committee convened seven meetings, at which it considered 22 proposals including the Proposal on the 2019 Annual Report and Its Abstract, the Proposal on the Management Measures for Large-amount Fund Risk Control, the Proposal on the Report on Anti-money Laundering Work in 2019 and the Proposal on Amendments to the Working Rules of the Supervision Committee of the Board of Supervisors.

10.7 Independence of the Bank from the Controlling Shareholders in Terms of Business, Personnel, Assets, Organization and Finance

The Bank has no controlling shareholder. The largest consolidated shareholder of the Bank was Shanghai International Group Co., Ltd. Shanghai International Group Co., Ltd. and its controlling subsidiaries held 29.67% shares of the Bank on a consolidated basis. Shanghai International Group Co., Ltd. and the Bank were totally independent in assets, personnel, finance, organization and business. Important decisions of the Bank were made and implemented by the Bank independently, and large shareholders did not occupy funds of the Bank by any means or require the Bank to provide guarantee for others.

	Independent and integral or not	Description	Influence on the Bank	Improvement measures
Business independence and integrity	Yes	The Bank runs business independently and features a complete business structure.	-	-
Personnel independence and integrity	Yes	The Bank remains independent in terms of labor, personnel, salary management, and other aspects. President, Vice Presidents, Secretary to the Board of Directors, CFO, and other Senior Management members all are paid by the Bank. None of them receives salaries from the largest shareholder unit.	-	-
Asset independence and integrity	Yes	The Bank possesses the independent premise and supporting facilities.	-	-
Institutional independence and integrity	Yes	The Bank has set up a complete organizational structure. The Board of Directors, the Board of Supervisors, functional departments and other bodies can operate independently, none of which is affiliated to any functional departments of the largest shareholder.	-	-
Financial independence and integrity	Yes	The Bank has its independent financial department, and has formulated the independent accounting system and financial management policies.	-	-

10.8 Establishment and Implementation of Performance Appraisal and Incentive Mechanisms for Senior Management Members during the Reporting Period

In 2020, proceeding from its actual conditions, the Bank continued to act on the requirements set out in the Work Plan on the Pilot Remuneration System Reform for Professional Managers at State-owned Enterprises of Shanghai Municipal Government, completed the 2019 assessment and evaluation of duty performance and remuneration allocation for professional managers and other managerial personnel nominated and managed by the Bank.

10.9 Internal Control Self-appraisal Report

The Bank prepared the 2020 Internal Control Appraisal Report and disclosed it on SSE's website www.sse.com.cn. Based on the identification of material deficiencies in the internal control over financial reporting of the Bank, the Bank's internal control over financial reporting contained no material deficiencies as at the base date of internal control appraisal report. In the opinions of the Board of Directors, the Bank has maintained effective internal control over financial reporting in all material aspects in accordance with the requirements of rules and regulations on enterprise internal control. Based on the identification of materials deficiencies in the internal control over non-financial reporting, the Bank's internal control over non-financial reporting contained no material deficiencies as at the base date of internal control appraisal report.

10.10 Relevant Information about Internal Control Audit Report

The Bank prepared and disclosed the 2020 Internal Control Appraisal Report. KPMG Huazhen LLP audited the effectiveness of the internal control over financial reporting of the Bank as of 31 December 2020, and issued the Internal Control Audit Report. Full text of the above report has been published on SSE's website www.sse.com.cn.

10.11 Investor Relations Management

During the reporting period, in response to COVID-19, the Bank applied new investor management modes, and actively promoted investment value through publicity efforts. Upholding the spirit of "efficiency, precision, collaboration, and compliance", it organized investor meetings through online meeting, teleconference, etc., and played the role as a window of capital market to the outside world. It held annual results announcement via internet, updated domestic and overseas investors, market players and shareholders on its strategic plan, operation and management, and social responsibility among other aspects in an objective, comprehensive, timely, and accurate way, and vigorously served as a bridge between the listed company and its shareholders to enhance its information transparency, improve the value transmission mechanism, and protect the rights and interests of investors. In active response to the call of regulatory agencies, the Bank strengthened the investor education, thus raising the awareness of right protection and the sense of responsibility among investors and shareholders, and helping them develop the concept of rational investment and value-oriented investment.

10.12 Index for Information Disclosure

During the reporting period, the Bank disclosed the following information on journals designated by the CSRC including China Securities Journal, Shanghai Securities News and Securities Times, and the SSE website (www.sse.com.cn):

Items	Date of publication
Legal Opinions of Shanghai United Law Firm on the 2020 First Extraordinary Shareholders' Meeting of Shanghai Pudong Development Bank Co., Ltd	31-Dec-20
Announcement on Changes in Employee Supervisors of the Bank	31-Dec-20
Announcement on Resolutions Made on the 2020 First Extraordinary Shareholders' Meeting	31-Dec-20
Announcement on Resolutions Made on the 17th Meeting of the Seventh Board of Supervisors	30-Dec-20
Announcement on Related Party Transactions with Guotai Junan Securities Co., Ltd.	30-Dec-20
Prior Approval of Independent Directors on Related Party Transactions	30-Dec-20
Announcement on Resolutions Made on the 18th Meeting of the Seventh Board of Directors	30-Dec-20
Independent Opinions of Independent Directors on Related Party Transactions	30-Dec-20
Materials for the 2020 First Extraordinary Shareholders' Meeting	23-Dec-20
Announcement on the Approval of Qualifications of Independent Directors by the CBIRC	23-Dec-20
Announcement on Remuneration of Senior Management Members in 2019	18-Dec-20
Independent Opinions of Independent Directors on the Nomination of Director Candidates	15-Dec-20
Notice on Convening the 2020 First Extraordinary Shareholders' Meeting	15-Dec-20
Announcement on Resolutions Made on the 17th Meeting of the Seventh Board of Directors	15-Dec-20
Announcement on Resignation of Director of the Bank	15-Dec-20
Announcement on the Completion of Issuance of Undated Capital Bonds	25-Nov-20
Announcement on Dividend Distribution for Preference Shares in the First Tranche	19-Nov-20
Announcement on Resolutions Made on the 16th Meeting of the Seventh Board of Supervisors	13-Nov-20
Announcement on Related Party Transactions with Shanghai International Group Co., Ltd.	13-Nov-20
Announcement on Resolutions Made on the 16th Meeting of the Seventh Board of Directors	13-Nov-20
Prior Approval of Independent Directors on Related Party Transactions	13-Nov-20
Independent Opinions of Independent Directors on Related Party Transactions	13-Nov-20
Full Text of 2020 Q3 Report	31-Oct-20
Main Text of 2020 Q3 Report	31-Oct-20
Announcement on Resolutions Made on the 15th Meeting of the Seventh Board of Directors	31-Oct-20
Announcement on Resolutions Made on the 15th Meeting of the Seventh Board of Supervisors	31-Oct-20
Announcement on Approval of the Issuance of Undated Capital Bonds by the PBC	24-Oct-20
Announcement on Interest Payment for SPDB Convertible Bonds in 2020	22-Oct-20
Announcement on Resolutions Made on the 14th Meeting of the Seventh Board of Directors	15-Oct-20
Announcement on Related Party Transactions with Shenergy Group Co., Ltd.	15-Oct-20
Independent Opinions of Independent Directors on Related Party Transactions	15-Oct-20
Announcement on Resolutions Made on the 14th Meeting of the Seventh Board of Supervisors	15-Oct-20
Prior Approval of Independent Directors on Related Party Transactions	15-Oct-20
Announcement on Results of Conversion of Convertible Bonds to Shares and Changes in Shares	12-Oct-20
Announcement on Approval of the Issuance of Undated Capital Bonds by the CBIRC	19-Sep-20
Announcement on Completion of the Issuance of the Second Tranche of Tier 2 Capital Bonds in 2020	19-Sep-20
Announcement on Resignation of Employee Supervisor	16-Sep-20
Announcement on Redemption of Tier-2 Capital Bonds	11-Sep-20
Review Opinions of CITIC Securities Co., Ltd. and Guotai Junan Securities Co., Ltd. Concerning the Listing and Circulation of Non-public Shares Subject to Restrictions on Sales in 2017 of Shanghai Pudong Development Bank Co., Ltd.	01-Sep-20
Announcement on the Listing and Circulation of Non-public Shares Subject to Restrictions on Sales in 2017	01-Sep-20
2020 Interim Report	29-Aug-20
Announcement on Resolutions Made on the 13th Meeting of the Seventh Board of Directors	29-Aug-20
Abstract of 2019 Interim Report	29-Aug-20
Capital Adequacy Ratio Report for  H1 2020	29-Aug-20
Announcement on Resolutions Made on the 13th Meeting of the Seventh Board of Supervisors	29-Aug-20
Announcement on the Approval of Qualifications of Executive Director by the CBIRC	21-Aug-20
Announcement on Approval of Establishment of SPDB Wealth Management Co., Ltd.	13-Aug-20
Announcement on Completion of the Issuance of Tier-2 Capital Bonds in 2020	04-Aug-20
Assessment Indicators for Global Systemically Important Banks in 2019	25-Jul-20
Announcement on Resolutions Made on the 12th Meeting of the Seventh Board of Supervisors	25-Jul-20
Announcement on Resolutions Made on the 12th Meeting of the Seventh Board of Directors	25-Jul-20
Announcement on Purchase of Shares of the Bank by the Directors to be Appointed	21-Jul-20
Announcement on the Approval of Issuance of Tier-2 Capital Bonds by the PBC	18-Jul-20
Announcement of the Bank on Purchase of Its Stocks by Its Senior Management Members	17-Jul-20
Announcement on Adjusting the Conversion Price of Convertible Corporate Bonds according to the 2019 Profit Distribution Plan	16-Jul-20
Announcement of the Bank on Purchase of Its Stocks by Its Senior Management Members	16-Jul-20
Announcement on the Implementation of Dividend Distribution for Ordinary Shares in 2019	16-Jul-20
Indicative Announcement on the Implementation of Dividend Distribution for Ordinary Shares in 2019 and the Continuous Suspension of Share Conversion of SPDB Convertible Bonds.	10-Jul-20
Announcement on the Approval of Qualifications of Director by the CBIRC	09-Jul-20
Announcement on Unloading Convertible Corporate Bonds of the Bank by the Largest Shareholder and Its Persons Acting in Concert	08-Jul-20
Announcement on Results of Conversion of Convertible Bonds to Shares and Changes in Shares	03-Jul-20
Announcement on the Approval of Issuance of Tier-2 Capital Bonds by the CBIRC	01-Jul-20
Announcement on Resolutions Made on the 11th Meeting of the Seventh Board of Supervisors	30-Jun-20
Announcement on Resignation of Chairman of the Board of Supervisors of the Bank	30-Jun-20
Announcement on Resolutions Made on the 11th Meeting of the Seventh Board of Directors	30-Jun-20
Announcement on the Track Rating Results of Convertible Corporate Bonds in 2020	25-Jun-20
Tracking Rating Report on Publicly Issued Convertible Corporate Bonds	25-Jun-20
Announcement on Resolutions Made on the 2019 Annual General Meeting	20-Jun-20
Legal Opinions on the 2019 Annual General Meeting	20-Jun-20
Announcement on Resolutions Made on the 10th Meeting of the Seventh Board of Supervisors	19-Jun-20
Announcement on Resolutions Made on the 10th Meeting of the Seventh Board of Directors	19-Jun-20
Indicative Announcement on Convening the 2019 Annual General Meeting	17-Jun-20
Materials for the 2019 Annual General Meeting	11-Jun-20
Announcement on Resolutions Made on the ninth Meeting of the Seventh Board of Directors	29-May-20
Announcement on Related Party Transactions with Shanghai Jiushi (Group) Co., Ltd.	29-May-20
Independent Opinions of Independent Directors on Related Party Transactions	29-May-20
Notice on Convening the 2019 Annual General Meeting	29-May-20
Announcement on Resolutions Made on the Ninth Meeting of the Seventh Board of Supervisors	29-May-20
Prior Approval of Independent Directors on Related Party Transactions	29-May-20
Announcement on Resignation of Vice President of the Bank	14-May-20
Announcement on Completion of the Issuance of the First Tranche of Financial Bonds in 2020	30-Apr-20
Announcement on Conversion of SPDB Convertible Bonds into Shares	28-Apr-20
Independent Limited Assurance Report on Key Data in the 2019 Corporate Social Responsibility Report	27-Apr-20
Financial Statements and Auditor's Report for 2019	25-Apr-20
Announcement on Amendments to the Articles of Association	25-Apr-20
Comparison Table on Amendments to the Procedural Rules for the Board of Supervisors of Shanghai Pudong Development Bank Co., Ltd.	25-Apr-20
2019 Corporate Social Responsibility Report	25-Apr-20
2019 Audit Report on Internal Control	25-Apr-20
2019 Annual Report	25-Apr-20
Report of CITIC Securities Co., Ltd. and Guotai Junan Securities Co., Ltd. on Continuous Supervision of Public Issuance of Convertible Corporate Bonds by Shanghai Pudong Development Bank Co., Ltd. in 2019	25-Apr-20
Announcement of 2019 Profit Distribution Plan	25-Apr-20
2020 Q1 Report (Main Text)	25-Apr-20
2019 Work Report of Independent Directors	25-Apr-20
Comparison Table on Amendments to the Procedural Rules for the Board of Directors of Shanghai Pudong Development Bank Co., Ltd.	25-Apr-20
Independent Opinions of Independent Directors	25-Apr-20
Announcement on Re-engagement of Accounting Firm	25-Apr-20
2020 Q1 Report (Full Text)	25-Apr-20
Special Explanation on the Occupation of Non-operating Funds and Other Related Fund Transactions in 2019	25-Apr-20
Report on Duty Performance of the Audit Committee of the Board of Directors in 2019	25-Apr-20
Report on Deposit and Use of Raised Funds in 2019	25-Apr-20
Abstract of 2019 Annual Report	25-Apr-20
Announcement on Resolutions Made on the Eighth Meeting of the Seventh Board of Supervisors	25-Apr-20
Special Report on Deposit and Actual use of Raised Funds in 2019 and Assurance Report	25-Apr-20
Announcement on Resolutions Made on the Eighth Meeting of the Seventh Board of Directors	25-Apr-20
Special Verification Report of CITIC Securities Co., Ltd. and Guotai Junan Securities Co., Ltd. on the Deposit and Actual Use of Raised Funds of Shanghai Pudong Development Bank Co., Ltd. in 2019	25-Apr-20
2019 Internal Control Assessment Report	25-Apr-20
Announcement on Approval of Issuance of Financial Bonds	22-Apr-20
Announcement on Resolutions Made on the Seventh Meeting of the Seventh Board of Directors	11-Apr-20
Announcement on Resolutions Made on the Seventh Meeting of the Seventh Board of Supervisors	11-Apr-20
Indicative Announcement on Equity Disposal of Investee Enterprises	04-Apr-20
Announcement on Resolutions Made on the Sixth Meeting of the Seventh Board of Directors	21-Mar-20
Announcement on Resolutions Made on the Sixth Meeting of the Seventh Board of Supervisors	21-Mar-20
Announcement on Adjusting the Nominal Dividend Rate of the Second Tranche of Preference Shares	12-Mar-20
Announcement on Resolutions Made on the Fifth Meeting of the Seventh Board of Directors	29-Feb-20
Prior Approval of Independent Directors on Related Party Transactions	29-Feb-20
Announcement on Resolutions Made on the Fifth Meeting of the Seventh Board of Supervisors	29-Feb-20
Independent Opinions of Independent Directors on Related Party Transactions	29-Feb-20
Announcement on the Implementation of Dividend Distribution for the Second Tranche of Preference Shares	29-Feb-20
Announcement on Resolutions Made on the Fourth Meeting of the Seventh Board of Supervisors	04-Feb-20
Announcement on Resolutions Made on the Fourth Meeting of the Seventh Board of Directors	04-Feb-20
Prior Approval of Independent Directors on Related Party Transactions	22-Jan-20
Independent Opinions of Independent Directors on Related Party Transactions	22-Jan-20
Announcement on Resolutions Made on the Third Meeting of the Seventh Board of Supervisors	22-Jan-20
Announcement on Related Party Transactions with Bailian Group Co., Ltd.	22-Jan-20
Announcement of 2019 Preliminary Earnings Estimate	22-Jan-20
Announcement on Resolutions Made on the Third Meeting of the Seventh Board of Directors	22-Jan-20
Announcement on Resolutions Made on the Second Meeting of the Seventh Board of Directors	02-Jan-20
Announcement on Resolutions Made on the Second Meeting of the Seventh Board of Supervisors	02-Jan-20

 

Section XI Financial Report

11.1 2020 Financial Statements and Audit Report Prepared Based on ASBE (See the Appendix)

11.2 2020 Financial Statements and Audit Report Prepared Based on IFRS (See the Appendix)

11.3 Supplementary Data

Return on equity and earnings per share calculated based on No. 9 Rules for Preparation of Information Disclosure Documents by Companies Offering Securities to the Public published by the CSRC:

	Return on equity (%)		Earnings per share (RMB)
Profit in the reporting period	Fully diluted	Weighted average	Basic	Fully diluted
Net profit attributable to the parent company's ordinary shareholders	10.46	10.81	1.88	1.73
Net profit attributable to the parent company's ordinary shareholders deducting the non-recurring profit or loss	10.38	10.73	1.87	1.72

Section XII Catalogue of Documents for Inspection

12.1 Accounting Statements Bearing Signatures and Stamps of the Legal Representative, the President, the CFO and the Person in Charge of the Accounting Institution

12.2 Original of the Audit Report Bearing Stamp of the Accounting Firm as well as Signature and Stamp of the CPAs

12.3 Originals of all Articles and Announcements Disclosed by the Bank during the Reporting Period on Shanghai Securities News, Securities Times, and China Securities Journal

12.4 2020 Internal Control Assessment Report of SPD Bank and 2020 Corporate Social Responsibility Report of SPD Bank

Chairman: Zheng Yang

Board of Directors of Shanghai Pudong Development Bank Co., Ltd.

25 March 2021

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