Minsheng Bank recorded a net profit of RMB26,778 million for the first half of the year

28 August 2015-China Minsheng Banking Corp., Ltd. (A share stock code: 600016; H share stock code: 01988, “Minsheng Bank”)  announced its 2015 interim results. In the first half of 2015, the net profit of the Group attributable to equity shareholders of the Bank (including Minsheng Bank and its subsidiaries) amounted to RMB26,778 million, representing an increase of RMB1,208 million, or 4.72%, as compared with the corresponding period of the previous year.

In the first half of 2015, Minsheng Bank further focused on strategic, continuously deepened strategic transformation and actively responded with the challenges brought about by the liberalization of interest rate. Minsheng Bank launched the Phoenix Project (鳳凰計劃) to accelerate the transformation and reform, continuously optimized and adjusted operational structure, reinforced the asset quality management and achieved continuous improvement in profitability.

Continuous Improvement in Profitability and Optimization in Operation Structure

In the first half of 2015, net profit of the Group attributable to equity shareholders of the Bank amounted to RMB26,778 million, representing an increase of RMB1,208 million, or 4.72%, as compared with the corresponding period of the previous year. Return on average assets (annualized) and return on average shareholders’ equity (annualized) were 1.31% and 20.58%, respectively. Basic earnings per share was RMB0.78, representing an increase of RMB0.03, or 4.00%, as compared with the corresponding period of the previous year.

As at the end of June 2015, total assets of the Minsheng Bank Group amounted to RMB4,301,073 million, representing an increase of RMB285,937 million, or 7.12%, as compared with the end of the previous year. Total liabilities amounted to RMB4,012,760 million, representing an increase of 245,380 million, or 6.51%, as compared with the end of the previous year. Total balance of loans and advances to customers amounted to RMB1,949,336 million, representing an increase of RMB136,670 million, or 7.54%, as compared with the end of the previous year. Total balance of deposits from customers amounted to RMB2,632,680 million, representing an increase of RMB198,870 million, or 8.17%, as compared with the end of the previous year. As at the end of June 2015, the impaired loans ratio of the Group was 1.36%, representing an increase of 0.19 percentage point as compared with the end of the previous year. Provision coverage ratio and provision for total loans ratio were 162.13% and 2.20%, respectively. Enhanced risk management and control to maintain overall asset quality.
In addition to the continuous improvement in profitability, the income structure of Minsheng Bank was further optimized, and the net fee and commission income to operating income ratio continued to increase.

In the first half of 2015, operating income of the Minsheng Bank Group amounted to RMB76,612 million, representing an increase of RMB11,660 million, or 17.95%, as compared with the corresponding period of the previous year. The net non-interest income amounted to RMB29,618 million, representing an increase of RMB8,266 million, or 38.71%, as compared with the corresponding period of the previous year, and accounted for 38.66% of the operating income, representing an increase of 5.79 percentage points as compared with the corresponding period of the previous year.

Among the net non-interest income, net fee and commission income amounted to RMB25,145 million, representing an increase of RMB6,707 million, or 36.38%, as compared with the corresponding period of the previous year, and accounted for 32.82% of operating income, representing an increase of 4.43percentage points as compared with the corresponding period of the previous year, mainly due to the rapid increase in fee from bank card services, commission from trust and other fiduciary services, income from agency services and income from investment banking business.

While further optimized the operation structure, Minsheng Bank Group further strengthened cost management and optimized cost management. The cost-to-income ratio of the first of half of 2015 was 27.44%, representing a decrease of 1.76 percentage points as compared with the corresponding period of the previous year.

Significant progress of strategic transformation and steady growth of key businesses

In the first half of 2015, Minsheng Bank took the planning and implementation of Phoenix Plan as the masterstroke, deepened the strategic transformation, optimizing business models and management system, improved the effectiveness of the implementation of strategies, focused on both strategies and customers, and maintained steady growth for all businesses.

In the first half of 2015, Minsheng Bank organized its business around strategic customers, transaction banking and institutional financing business with the internet from an investment banker's perspective. It also targeted at customers base in upstream and downstream, crucial elements markets and e-commerce platforms of core customers, sped up the transformation of its growth structure and secured healthy development of the corporate banking business. As at the end of June 2015, Minsheng Bank had 613.6 thousand customers with outstanding corporate deposit balances, representing an increase of 66.6 thousand or 12.18% comparing with the beginning of the year. Minsheng Bank had 10,724 non-state-owned enterprises ("NSOE") customers with outstanding loan balances, and outstanding general loans of NSOEs amounted to RMB672,434 million. In the domestic corporate banking business segment, the number of NSOE customers with outstanding loan balances and general loan balances accounted for 75.40% and 59.60%, respectively.

In the first half of 2015, Minsheng Bank emphasized on transformation of retail business, it has optimised its resource, implemented professional customer base operation, grasped market opportunities and rigorously promoted key operations such as wealth management and consumer credit. Customer scale and financial assets continued to increase. As at the end of June 2015, the number of non-retail customers reached 22,666.6 thousand, representing an increase of 2,882.2 thousand as compared with the end of last year. Financial assets of individual customers managed by Minsheng Bank amounted to RMB1,095,882 million, representing an increase of RMB22,859 million compared with the end of the previous year. Among which, saving deposits amounted to RMB540,769 million, representing an increase of RMB9,141 million compared with the end of the previous year. As at the end of June 2015, the balance of consumer credit was RMB130,709 million, representing an increase of RMB37,707 million, or 40.54% compared with the end of last year.

In the first half of 2015, Minsheng Bank persisted in its "Small Business Finance Strategy". With the framework of “sustaining scale, refining structure and increasing income”, Minsheng Bank adjusted its product portfolio, promoted cross selling and enhanced the overall development of small business customers. As at the end of June 2015, the outstanding loans to small and micro enterprises of Minsheng Bank amounted to RMB402,676 million and the number of small and micro enterprise customers reached 3,442.7 thousand in total. Minsheng Bank granted loans to small and micro enterprises of aggregate RMB230,203 million in the first half of 2015, proactively support the development of real economy. In the first half of 2015, the community finance 2.0 project was put to trial with the aim of further exploring and perfecting the community finance business model. As at the end of June 2015, the community outlets (including self-service banks with full banking functions) in operation amounted to 4,808, of which 841 community sub-branches obtained license from regulatory authorities. The balance of financial assets under community finance projects and the number of effective customers amounted to RMB128,095 million and over 480 thousand, respectively.

In the first half of 2015, Minsheng Bank continued to explore various needs of customers by constructing business platform of personal high-end credit approval channels, overseas trust business, and trust asset management service platform, together with unique high-end non-financial services and family office business model, to successfully secure high-net-worth and ultra-high-net-worth customers to enjoy its all-round stewardship services. As at the end of June 2015, the private banking financial assets under the management of Minsheng Bank amounted to RMB255,832 million, representing an increase of RMB25,436 million, or 11.04%, as compared with the end of the previous year. In the first half of 2015, the net non-interest income of private banking business was RMB1,684 million, representing an increase of RMB631 million, or 59.92%, as compared with the corresponding period of the previous year.  

In the first half of 2015, Minsheng Bank captured opportunities under the national policy “Internet Plus” (互聯網+), and focused on the innovation of internet financial products and services such as mobile banking, direct banking, online payment and online banking with continuous improvement in customers’ experience. As at the end of June 2015, the number of individual mobile banking customers was 16,036.6 thousand, representing an increase of 3,015.4 thousand as compared with the end of the previous year. The number of transactions in the first half of 2015 amounted to 151 million, representing an increase of 124.18% as compared with the corresponding period of the previous year. The transaction turnover amounted to RMB2.77 trillion, representing an increase of 127.33% as compared with the corresponding period of the previous year. The activeness of customer transactions was in the leading position among peers .As at the end of June 2015, the number of direct banking customers was 2,155.9 thousand and total application amount for “Ru Yi Bao” (如意寶) was RMB512,910 million.

In the second half of 2015, Minsheng Bank will focus on the implementation of the Phoenix Project by further enhancing strategies, optimizing business models and management system, responding effectively to the liberalization of interest rate, infrastructural construction, revitalizing its competitive advantages and remolding an upgraded Minsheng Bank.