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Introduction to China Minsheng Bank

 China Minsheng Banking Corporation Limited (China Minsheng Bank, CMBC, or the Company) was formally established in Beijing on 12 January 1996. It is China’s first national joint-stock commercial bank initiated and founded mainly by non-state-owned enterprises.

 

Over the past 21 years since establishment, along with the rapid growth of China’s economy and the support from customers and various circles of the society, China Minsheng bank has been taking full advantages of “new bank, new mechanism” and has grown from a small bank with only RMB1.38 billion capital into a large-scale commercial bank with over RMB370 billion net tier-one capital, more than RMB5.7 trillion total assets, nearly 3,000 branches, sub-branches and outlets, and around 57 thousand employees. In the Top 1000 World Banks ranking released by The Banker in July 2017, China Minsheng Bank was ranked No.29. In the Global 500 list published by Fortune in July 2017, China Minsheng Bank stood at No. 251.

 

Being a pilot field of China’s banking reform and adhering to the mission of “From the People, For the People”, China Minsheng Bank actively practices reforms and innovations, in an aim to explore development path for China’s modern commercial banks, provide professional and distinctive modern financial services to customers, and create higher market value and investment returns to investors. On 19 December 2000, China Minsheng Bank was listed on the Shanghai Stock Exchange (A share code: 600016). On 26 October 2005, the Company became the first commercial bank in China to complete the Non-tradable Share Reform. On 26 November 2009, the Company was listed on the Hong Kong Stock Exchange (H share code: 01988). By continuing improving corporate governance and promoting reforms and transformations, China Minsheng Bank has achieved outstanding performance and became a respectable listed company that attracts much attention from China’s securities market.

 

As China’s economy entered into “New Normal”, China’s commercial banks have sped up strategic transformations to cope with profound changes in financial markets. In February 2015, China Minsheng Bank formally launched its Phoenix Project, a top-level designed project aiming at all-round reforms and transformations. The Project was fully kicked off in June 2015 and a total of 39 projects had been designed and implemented in succession. As at the end of June 2017, 20 branches were involved in the pilot production of the projects, while 16 projects were promoted throughout the Company.

 

Taking the implementation of the Phoenix Project as main task and in line with the development path of "strengthening corporate business, expanding retail business, optimizing financial markets business, highlighting Internet finance business, promoting integrated operation and streamlining overseas business”, China Minsheng Bank endeavors to become a top-choice bank of non-state-owned enterprises and small business finance, a leading bank in internet finance and wealth management and a “five-good” bank with good customer experience, good operation performance, good asset quality, good talent strength and good brand image.

 

Corporate Banking Segment
China Minsheng Bank strives to build up three business characteristics, namely, a professional commercial bank, a scenario-based transaction bank and a customized investment bank, and continues to improve corporate customer structure, industry distribution and regional layout. In respect of transaction banking, the Company rolls out various innovations in the supply-chain financial service models, settlement and cash management products, value-added deposit products, international settlement and trade finance businesses. In respect of investment banking, the Company focuses on four major industries, namely, medical and health care, culture, entertainment and consumption, high-end manufacturing and information technology, as well as governments and investment institutions. It further expands to sub-markets to explore customers’ demands. As at the end of June 2017, the outstanding balance of corporate loans (including discounted bills) of the Company amounted to RMB1,683,092 million and the balance of corporate deposits was RMB2,438,437 million.

 

In terms of investment banking business, China Minsheng Bank targets on four major business lines, including private placement, M&A and restructuring, pre-IPO financing and industry (government) funds, and has established an investment banking system featuring debt financing and asset securitization as core products. The Company takes the leading position in asset securitization by successfully launching products including “Hong Fu (鸿富)” non-performing assets-backed securities and China’s first security backed by assets of infrastructure PPP projects, first security backed by accounts receivable in the pharmaceutical distribution industry, first security backed by public affordable housing assets and first innovative enterprise accounts receivable ABN in China. In the first half of 2017, total issuance of financing instruments amounted to RMB76, 281 million.

 

In terms of transaction banking business, to satisfy diversified and scenario-based service demands of corporate clients, China Minsheng Bank continues to upgrade its scenario-based service capabilities by setting up a new online corporate financing platform, which demonstrated the initial forming of a new “Internet-based, intelligent and visualized” service model for corporate clients. The Company also continues optimizing financial products, including Cash Pools (现金池) and Bank & Corporate Express (银企直连), to enhance service quality for group customers and long-tail customers, such as medium, small and micro enterprises and innovative enterprises. China Minsheng Bank launched the Cross-border Express (跨境通), a one-stop cross-border integrated financial service solution consisting of five major products, namely, cross-border financing, cross-border fund management, cross-border E+, cross-border synergy and international credit, which strengthened the leading position of the Company in factoring business among peers, and vigorously promoted the application of accounts receivable solutions to specific industries, such as pharmaceuticals, engineering, public utilities and TMT.

 

Retail Banking Segment
China Minsheng Bank exerts every effort to build up customer group management system and wealth management system, pushes forward innovations in credit card products and services, as well as deepens strategic transformations of private banking and small business finance. Retail banking business of China Minsheng Bank has realized a rapid and healthy development. As at the end of June 2017, financial assets of retail customers managed by the Company amounted to RMB1,368,573 million, representing an increase of RMB106,560 million as compared with the end of the previous year. Among which, savings deposit amounted to RMB537,991 million, representing an increase of RMB9,794 million as compared with the end of the previous year. Outstanding balance of retail loans amounted to RMB1,007,119 million, representing an increase of RMB117,950 million as compared with the end of the previous year.

 

In terms of small business finance, China Minsheng Bank further advances small business finance strategy to enhance customer group management, optimize asset structure, promote cross-selling between different customer groups and realize transformation and upgrade of development pattern. As at the end of June 2017, the number of small business customers of the Company reached 4,496.2 thousand, representing an increase of 374.9 thousand or 9.10%, as compared with the beginning of the year. In the first half of 2017, a total of RMB209,324 million loans was provided to small and micro enterprises.

 

In terms of credit card business, adhering to the philosophy of maintaining market-oriented operation and pursuing innovations, the credit card business recorded healthy and fast development through innovations in products, marketing and information technology. As at the end of June 2017, the aggregate number of credit cards issued was 32,888.9 thousand and accounts receivable amounted to RMB246,998 million, representing an increase of 19.11% as compared with the end of the previous year. For the first half of 2017, credit card issued totaled at 4,552.5 thousand, transaction volume amounted to RMB726,349 million, representing an increase of 25.26% as compared with the corresponding period of the previous year, and net non-interest income reached RMB9,443 million, representing an increase of 29.30% as compared with the corresponding period of the previous year.

 

In terms of private banking business, based on thorough analysis of customers, China Minsheng Bank establishes its service philosophy of “One Body and Three Wings (一体三翼)”, which majors in wealth management and is featured with “investment banking +”, guided by globalization strategy and supported by “Internet +” . The Company endeavors to provide customers with one-stop professional services, such as wealth management, advisory, exclusive products and non-financial VIP services. As at the end of June 2017, private banking assets under management of the Company reached RMB302,847 million, representing an increase of RMB6,099 million as compared with the end of the previous year.

 

In terms of community finance business, China Minsheng Bank pushes forward the upgrade of business model, optimizes the distribution of community outlets and focuses on the efficiency management of the outlets, in order to improve service quality, create better customer experience and improve productivity of community finance. As at the end of June 2017, there were 1,653 community sub-branches with licenses, representing a decrease of 41 sub-branches as compared with the end of the previous year, while total assets of the community outlets amounted to RMB201,737 million, representing an increase of RMB35,381 million as compared with the end of the previous year, and total number of customers of community outlets reached 5,355.6 thousand, representing an increase of 735 thousand as compared with the end of the previous year.

 

Financial Markets Segment
China Minsheng Bank expands strategic cooperation with financial institution clients by strengthening marketing planning management, continues to enrich offerings of asset management products, explores integrated asset custody services and enhances competitiveness in foreign exchange and precious metal transactions. As at the end of June 2017, liabilities from financial institution clients amounted to RMB1,267,356 million, and wealth management products under management and assets under custody reached RMB1,210,208 million and RMB7,322,309 million, respectively.

 

In terms of financial institutions business, China Minsheng Bank targets on core customers and emphasizes on marketing planning management. FI business realized steady and healthy development by conducting proactive management, improving business structure, enhancing profitability and risk control as well as establishing a FI business IT system effectively. As at the end of June 2017, assets and liabilities in relation to financial institutions business were RMB296,747 million and RMB1,267,356 million, respectively.

 

In terms of wealth management business, China Minsheng Bank puts efforts in expanding both retail and corporate customer bases, forges the brand of “Apex Asset Management”, achieves innovations to support real economy by closely following major national strategies, and protects investors’ interests by building up risk management system covering all aspects of business process. As at the end of June 2017, the existing scale of wealth management products amounted to RMB1,210,208 million.

 

In terms of asset custody business, China Minsheng Bank continuously improves cooperation platform and has achieved rapid growth in custodies of trust assets, insurance funds, securities investment funds and asset management funds under the management of securities firms. As at the end of June 2017, total assets under custody amounted to RMB7,322,309 million, total pension under custody amounted to RMB48,411 million, and the number of corporate annuity accounts under management was 170.7 thousand.

 

In terms of precious metals and foreign exchange trading, in the first half of 2017, the on-floor trading volume of gold and silver amounted to 1,168.72 tons and 954.67 tons, respectively, with total transaction amount of RMB 337,488 million, which made the Company the sixth largest traders at the Shanghai Gold Exchange and one of the most important bulk gold importers in the mainland of China. In the first half of 2017, the transaction volume of domestic spot foreign exchange settlement amounted to USD289,079 million, representing an increase of 154.94% as compared with the corresponding period of the previous year. The transaction volume of forward foreign exchange settlement and RMB foreign exchange swap amounted to USD339,392 million, representing an increase of 39.67% as compared with the corresponding period of the previous year.

 

Internet Finance Segment
China Minsheng Bank actively applies cutting-edge fintech in an innovative manner to expand layout in the online payment market. Based on two major systems of “Internet payment + mobile payment”, the Company made innovations in online financial platforms, products and services, such as direct bank, mobile banking, online payment, WeChat banking and online banking, which further improved customer experience and brought the market share of the Company to the first echelon among peers. As at the end of June 2017, the number of direct bank customers reached 7,098.3 thousand, and the total subscription amount of Ru Yi Bao (如意宝) amounted to RMB1,717,433 million. The number of mobile banking customers reached 27,984.0 thousand, representing an increase of 3,232.6 thousand as compared with the end of the previous year. The number of personal online banking customers was 17,445.7 thousand, representing an increase of 1,200.5 thousand as compared with the end of the previous year. In the first half of 2017, the number of mobile banking transactions was 229 million, representing an increase of 13.93% as compared with the corresponding period of the previous year, with a transaction volume of RMB4.68 trillion, representing an increase of 20.62% as compared with the corresponding period of the previous year. The number of personal online banking transactions was 971 million, with a transaction volume of RMB5.29 trillion. The Company ranks top in the banking industry in terms of customer transaction activity.

 

Overseas Business Segment
China Minsheng Bank comprehensively deepens globalization strategy by steadily expanding overseas layout and leveraging advantages in cross-border synergy, aiming at providing integrated and comprehensive financial services to customers. As at the end of June 2017, total assets and total liabilities of the Hong Kong Branch of the Company amounted to HKD183,764 million and HKD183,272 million, respectively. In the first half of 2017, net profit of the Hong Kong Branch reached HKD751.0 million, representing an increase of 35.32% as compared with the corresponding period of the previous year. As at the end of June 2017, total assets of CMBC International, a wholly-owned subsidiary and an investment bank in Hong Kong, reached RMB10,731 million. In the first half of 2017, CMBC International realized net profit of RMB77 million, representing an increase of RMB158 million as compared with the corresponding period of the previous year.

 

In the past 21 years, China Minsheng Bank navigated the tide of China’s economic and financial reforms and transformations and achieved continuous growth both in asset scale and profits by integrating resources, practicing innovations and transformations and blazing the trails. As at the end of June 2017, total assets of the Company reached RMB5,767,209 million. In the first half of 2017, the Company realized net profit attributable to equity shareholders of the Company of RMB28,088 million.

 

In the past 21 years, the idea of "Minsheng Bank serves the public and people's livelihood, the public attaches to Minsheng Bank" took deep roots in the Company. Aiming at becoming an important participator and propeller of financial institutions feeding back to the society, China Minsheng bank maintained distinctive service features, devoted more efforts to inclusive finance and green finance, deeply participated in targeted poverty alleviation, medical care and education, and actively innovated cultural public welfare.


Looking forward, aiming at achieving its grand vision of becoming a time-honored bank and adhering to the core values of “integrity, win-win cooperation, taking people as the foremost, and pursuit of excellence”, the development philosophy of “taking customers as the center, markets as the guide and innovations as the driving force” and the development direction of being a light asset-based and digitalized international group, China Minsheng Bank will press ahead with reforms and innovations, speed up strategic transformation, and spare no efforts to become a role model in China’s banking sector to create more value to customers and bring higher return to investors.

 

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