diff --git "a/China/10.Bank of China_$175.50 B_Financials/2023/results.txt" "b/China/10.Bank of China_$175.50 B_Financials/2023/results.txt"
new file mode 100644--- /dev/null
+++ "b/China/10.Bank of China_$175.50 B_Financials/2023/results.txt"
@@ -0,0 +1,106384 @@
+Honours and Awards
+Forbes
+Ranked 6th in Global 2000
+Global Finance
+Best Global RMB Service Bank
+The Asian Banker
+Ranked 3rd among the Best 20 Offshore RMB
+Bond Issuers
+2016 Best Mobile Phone Banking Application
+Euromoney
+Best Regional Cash Manager in Asia
+The Asset
+Best Bond in Asia
+Best Financial Institution Green Bond in Asia
+Thomson Reuters
+Asian Bank of the Year (2016)
+China Bond House
+SRI Bond of the Year
+China Foreign Exchange Trade System
+Best Market Maker
+WPP Group
+Ranked 11th in BrandZ Top 100 Most
+Valuable Chinese Brands
+World Brand Lab
+Ranked 11th in China's 500 Most Valuable
+Brands
+Hurun Research Institute
+Ranked 8th in Top 200 Brands
+China Banking Association
+Most Socially Responsible Financial Institution
+China News Service
+Most Socially Responsible Enterprise
+Southern Weekly
+Ranked 8th in China Top 500 Companies (2016)
+Outstanding Chinese Enterprise in Social
+Responsibilities
+Ranked 35th in Global 500 (2016)
+Ranked 6th in Top 500 Global Banking Brands
+Ministry of Finance, PRC
+The area including, for the purpose of this report, the
+branches of Heilongjiang, Jilin, Liaoning and Dalian
+The area including, for the purpose of this report, the
+branches of Beijing, Tianjin, Hebei, Shanxi, Inner
+Mongolia and the Head Office
+Offshore preference share(s) in the preference share
+capital of the Bank, with a nominal value of RMB100
+each, which are listed on the Hong Kong Stock Exchange
+and traded in US dollars (Stock Code: 4601)
+The People's Bank of China, PRC
+The People's Republic of China
+Renminbi, the lawful currency of PRC
+State Administration of Foreign Exchange, PRC
+Securities and Futures Ordinance (Chapter 571 of the
+Laws of Hong Kong)
+The Shanghai Stock Exchange
+The area including, for the purpose of this report, the
+branches of Chongqing, Sichuan, Guizhou, Yunnan,
+Shaanxi, Gansu, Ningxia, Qinghai, Tibet and Xinjiang
+3
+Important Notice
+The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
+members of the Bank warrant that the information in this report is authentic, accurate and
+complete, contains no false record, misleading statement or material omission, and jointly and
+severally accept full responsibility for the information in this report.
+The 2016 Annual Report and Annual Results Announcement of the Bank have been reviewed
+and approved at the meeting of the Board of Directors of the Bank held on 31 March 2017. The
+number of directors who should attend the meeting is thirteen, with twelve directors attending the
+meeting in person. Chairman of the Board of Directors TIAN Guoli did not attend the meeting
+because of other important business engagements and appointed Vice Chairman of the Board of
+Directors CHEN Siqing as his authorised proxy to attend and vote on his behalf at the meeting.
+All of the thirteen directors of the Bank exercised their voting rights at the meeting. Some
+supervisors and senior management members of the Bank attended the meeting as non-voting
+attendees.
+The 2016 financial statements prepared by the Bank in accordance with Chinese Accounting
+Standards ("CAS") and International Financial Reporting Standards ("IFRS") have been
+audited by Ernst & Young Hua Ming LLP and Ernst & Young in accordance with Chinese and
+international auditing standards, respectively. Both auditors issued an unqualified opinion.
+Chairman of the Board of Directors TIAN Guoli, President CHEN Siqing, Executive Vice
+President responsible for the Bank's finance and accounting ZHANG Qingsong and General
+Manager of the Accounting and Information Department ZHANG Jianyou warrant the
+authenticity, accuracy and completeness of the financial statements in this report.
+The Board of Directors has recommended a final dividend on ordinary shares for 2016 of
+RMB0.168 per share (before tax), subject to the approval of the forthcoming Annual General
+Meeting scheduled on 29 June 2017. No capitalisation of the capital reserve to share capital is
+proposed in this profit distribution.
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes and no material guarantee business
+that violated the applicable regulations and procedures.
+This report may contain forward-looking statements that involve risks and future plans. These
+forward-looking statements are based on the Bank's own information and information from
+other sources the Bank believes to be reliable. They relate to future events or the Bank's future
+financial, business or other performance and are subject to a number of factors and uncertainties
+that may cause our actual results to differ materially. Any future plans mentioned do not
+constitute a substantive commitment by the Bank to its investors. Investors and people concerned
+should be fully aware of the risks and understand the differences between plans, forecast and
+commitment.
+The Bank is faced with risks arising from changes in the macroeconomic environment and from
+political and economic conditions in different countries and regions as well as risks arising from
+its day-to-day operations, including the risk arising from changes in the credit status of borrowers,
+adverse changes in market prices and operational risk. It shall at the same time meet regulatory
+and compliance requirements. The Bank actively adopts various measures to effectively manage
+all types of risks. Please refer to the section “Management Discussion and Analysis
+Management" for details.
+4
+Risk
+Directors & Boards
+Golden Prize of Round Table for Best
+Board of Directors
+HKICPA
+2016 Best Corporate Governance Award
+Gold Award
+The Banker
+Ranked 4th in Top 1,000 World Banks
+FORTUNE
+The Beijing News
+2016 Best Social Responsibility Bank
+Eastmoney.com
+2012
+2013
+2014 2015
+ROA
+%
+2012
+2013
+2014
+2015
+2016
+2012
+2013
+2014 2015
+2016
+2012
+%
+Cost to income (calculated under
+domestic regulations)
+18.13
+225
+2012 2013
+2014
+2015
+2016
+2012
+2013
+2014 2015
+2016
+2012
+2016
+211,685
+187,060
+485,656
+Most Socially Responsible Bank
+ChinaHR
+Best Employer in Financial Industry in the
+Opinion of Chinese University Students
+Ta Kung Wen Wei Media Group
+China Securities Golden Bauhinia Awards-
+Best Investor Relations Listed Company
+League of American Communications
+Professionals
+Golden Award for 2015 Annual Report
+5
+9
+0.29
+Credit cost
+%
+%
+Net interest margin
+366,176
+Independent director under the listing rules of SSE and the
+Articles of Association, and independent non-executive
+director under the Hong Kong Listing Rules
+2012
+EPS (basic)
+RMB
+407,509
+456,328
+2014
+2015
+473,912
+Financial Highlights
+Operating income
+RMB Million
+Operating profit
+RMB Million
+Profit for the year
+RMB Million
+2013
+Central Huijin Investment Ltd.
+Overseas-listed foreign investment share(s) in the ordinary
+share capital of the Bank, with a nominal value of
+RMB1.00 each, which are listed on the Hong Kong Stock
+Exchange and traded in Hong Kong dollars (Stock Code:
+3988)
+The Stock Exchange of Hong Kong Limited
+Directors, Supervisors and Senior Management Members
+Corporate Governance
+Report of the Board of Directors
+Report of the Board of Supervisors
+Significant Events
+Independent Auditor's Report
+Consolidated Financial Statements
+Reference for Shareholders
+Organisational Chart
+List of Major Branches and Subsidiaries
+2456
+9
+11
+13
+16
+18
+18
+34
+65
+78
+81
+82
+85
+92
+111
+132
+143
+148
+151
+Changes in Share Capital and Shareholdings of Shareholders
+Corporate Social Responsibilities
+Outlook
+Organisational Management, Human Resources Development and Management
+中國銀行
+BANK OF CHINA
+Bank of China Limited
+Stock Code 3988 (Ordinary H-Share)
+4601 (Offshore Preference Share)
+2016 Annual Report
+The print version of the Bank's 2016 Annual Report, to be published in April 2017, will
+supersede this version.
+Introduction
+Bank of China was formally established in February 1912 following the approval of Dr. Sun
+Yat-sen. From 1912 to 1949, the Bank served consecutively as the country's central bank,
+international exchange bank and specialised international trade bank. Fulfilling its commitment
+to serving the public and developing China's financial services sector, the Bank rose to a leading
+position in the Chinese financial industry and developed a good standing in the international
+financial community, despite many hardships and setbacks. After 1949, drawing on its long
+history as the state-designated specialised foreign exchange and trade bank, the Bank became
+responsible for managing China's foreign exchange operations and provided vital support to the
+nation's foreign trade development and economic infrastructure by its offering of international
+trade settlement, overseas fund transfer and other non-trade foreign exchange services. During
+China's reform and opening up period, the Bank seized the historic opportunity presented by
+the government's strategy of capitalising on foreign funds and advanced technologies to boost
+economic development, and became the country's key foreign financing channel by building
+up its competitive advantages in foreign exchange business. In 1994, the Bank was transformed
+into a wholly state-owned commercial bank. In August 2004, Bank of China Limited was
+incorporated. The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock
+Exchange in June and July 2006 respectively, becoming the first Chinese commercial bank to
+launch an A-Share and H-Share initial public offering and achieve a dual listing in both markets.
+In 2016, Bank of China was again designated as a Global Systemically Important Bank, thus
+becoming the sole financial institution from emerging economies to be designated as a Global
+Systemically Important Bank for six consecutive years.
+As China's most internationalised and diversified bank, Bank of China provides a comprehensive
+range of financial services to customers across the Chinese mainland as well as 51 countries and
+regions. The Bank's core business is commercial banking, including corporate banking, personal
+banking and financial markets services. BOC International Holdings Limited, a wholly owned
+subsidiary, is the Bank's investment banking arm. Bank of China Group Insurance Company
+Limited and Bank of China Insurance Company Limited, both wholly owned subsidiaries, run the
+Bank's insurance business. Bank of China Group Investment Limited, a wholly owned subsidiary,
+undertakes the Bank's direct investment and investment management business. Bank of China
+Investment Management Co., Ltd., a controlled subsidiary, operates the Bank's fund management
+business. BOC Aviation Limited, a controlled subsidiary, is in charge of the Bank's aircraft
+leasing business.
+Bank of China has upheld the spirit of “pursuing excellence" throughout its history of over one
+century. With adoration of the nation in its soul, integrity as its backbone, reform and innovation
+as its path forward and “people first" as its guiding principle, the Bank has built up an excellent
+brand image that is widely recognised within the industry and by its customers. Faced with
+new historic opportunities, the Bank will meet its social responsibilities, strive for excellence,
+and make further contributions to achieving the China Dream and the great rejuvenation of the
+Chinese nation.
+Development Strategy
+Core Values
+Pursuing excellence
+Integrity Performance Responsibility Innovation Harmony
+158
+Strategic Goal
+Overall Requirements of the Development Strategy
+To build Bank of China into an excellent bank driven by the pursuit of noble values, a bank that
+shoulders significant responsibility for the nation's revival, a bank that possesses a competitive
+edge in the globalisation process, a bank that leads lifestyle changes through technological
+innovations, a bank that earns customer loyalty through market competition and a bank that
+meets the expectations of shareholders, employees and society in the course of its sustained
+development.
+Contents
+Definitions
+Important Notice
+Honours and Awards
+Financial Highlights
+Corporate Information
+Message from the Chairman
+Message from the President
+Message from the Chairman of the Board of Supervisors
+Management Discussion and Analysis
+Financial Review
+Business Review
+Risk Management
+Serving Society, Delivering Excellence
+2013
+376
+381
+BOC International (China) Limited
+BOC-Samsung Life Ins. Co., Ltd.
+China Banking Regulatory Commission
+The area including, for the purpose of this report, the
+branches of Henan, Hubei, Hunan, Guangdong, Shenzhen,
+Guangxi and Hainan
+The Company Law of PRC
+China Securities Regulatory Commission
+2
+Domestic Preference Share
+Eastern China
+HKEX
+Hong Kong Stock Exchange
+H Share
+Huijin
+Independent Director
+MOF
+Northeastern China
+Northern China
+Offshore Preference Share
+PBOC
+PRC
+RMB
+SAFE
+SFO
+SSE
+Western China
+Domestic preference share(s) in the preference share
+capital of the Bank, with a nominal value of RMB100
+each, which are traded on SSE (Stock Code: 360002,
+360010)
+The area including, for the purpose of this report, the
+branches of Shanghai, Jiangsu, Suzhou, Zhejiang, Ningbo,
+Anhui, Fujian, Jiangxi, Shandong and Qingdao
+Hong Kong Exchanges and Clearing Limited
+The Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited
+Bank of China Investment Management Co., Ltd.
+BOC International Holdings Limited
+BOC Hong Kong (Holdings) Limited, a company
+incorporated under the laws of Hong Kong, the ordinary
+shares of which are listed on the Hong Kong Stock
+Exchange
+Bank of China (Hong Kong) Limited, an authorised
+financial institution incorporated under the laws of
+Hong Kong and a wholly-owned subsidiary of BOCHK
+(Holdings)
+1
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meaning
+set out below:
+The Bank/the Group
+Articles of Association
+A Share
+Basis Point (Bp, Bps)
+BOC Aviation
+BOC Insurance
+BOC Life
+BOCG Insurance
+BOCG Investment
+BOCHK
+BOCHK (Holdings)
+380
+BOCI
+BOCI China
+BOC-Samsung Life
+CBRC
+Central and Southern China
+Company Law
+CSRC
+Bank of China Limited or its predecessors and,
+except where the context otherwise requires, all of the
+subsidiaries of Bank of China Limited
+The performing Articles of Association of the Bank
+Domestic investment share(s) in the ordinary share capital
+of the Bank, with a nominal value of RMB1.00 each,
+which are listed on SSE (Stock Code: 601988)
+Measurement unit of changes in interest rate or exchange
+rate. 1 basis point is equivalent to 0.01 percentage point
+BOC Aviation Limited, a public company limited by
+shares incorporated in Singapore under the Singapore
+Companies Act, the shares of which are listed on the Hong
+Kong Stock Exchange
+Bank of China Insurance Company Limited
+BOC Group Life Assurance Co., Ltd.
+Bank of China Group Insurance Company Limited
+Bank of China Group Investment Limited
+BOCIM
+2014 2015
+Hong Kong Listing Rules
+Non-performing loans to total loans
+28.08
+28.30
+28.57
+30.61
+31.73
+Capital ratios
+10
+Common equity tier 1 capital
+Additional tier 1 capital
+Tier 2 capital
+1,297,421
+103,523
+225,173
+1,197,868
+103,159
+212,937
+1,068,706
+72,923
+250,714
+925,037
+N.A.
+698
+N.A.
+262,768
+N.A.
+Common equity tier 1 capital adequacy
+ratio (%)
+11.37
+11.10
+10.61
+9.69
+N.A.
+Tier 1 capital adequacy ratio (%)
+12.28
+12.07
+9
+11.35
+domestic regulations, %)
+29.83
+0.196
+0.175
+4.46
+4.09
+3.70
+3.31
+2.95
+1.05
+1.12
+1.22
+1.23
+1.19
+12.58
+14.53
+17.28
+18.04
+18.13
+1.83
+2.12
+2.25
+2.24
+2.15
+Non-interest income to operating income
+(%)
+8
+36.98
+30.65
+29.63
+30.41
+Cost to income ratio (calculated under
+9.70
+N.A.
+Capital adequacy ratio (%)
+Allowance for loan impairment losses to
+total loans (%)
+15
+2.87
+2.62
+2.68
+2.62
+2.62
+Exchange rate
+USD/RMB year-end middle rate
+6.9370
+6.4936
+6.1190
+6.0969
+6.2855
+EUR/RMB year-end middle rate
+7.3068
+7.0952
+7.4556
+8.4189
+8.3176
+HKD/RMB year-end middle rate
+0.8945
+0.8378
+0.7889
+0.7862
+0.8108
+7
+2016
+0.29
+0.32
+0.58
+0.63
+14.28
+14.06
+13.87
+12.46
+13.63
+Asset quality
+Non-performing loans to total loans (%)
+=2
+1.46
+1.43
+1.18
+0.96
+0.95
+12
+0.19
+1.46
+1.18
+0.96
+0.95
+Allowance for loan impairment losses to
+non-performing loans (%)
+13
+162.82
+153.30
+187.60
+229.35
+236.30
+Credit cost (%)
+14
+0.91
+1.43
+0.175
+Identified impaired loans to total loans (%) 11
+0.56
+17.28
+14.53
+2013
+2014 2015
+2016
+12.58
+177,198
+179,417
+184,051
+Note: The financial information in this report has been prepared in accordance with IFRS. The data are presented in
+RMB and reflect amounts related to the Group, unless otherwise noted.
+Note
+2016
+2015
+2014
+Unit: RMB million
+2013
+2012
+Results of operations
+Net interest income
+306,048
+Non-interest income
+1
+179,608
+Operating income
+485,656
+Operating expenses
+(175,069)
+328,650
+145,262
+473,912 456,328
+(185,401)
+321,102
+283,585
+2014 2015 2016
+2013
+2012
+2016
+%
+0.50
+2012
+2013
+2014
+2015
+2016
+2012
+2013
+2014 2015
+2016
+2012
+2013
+2014 2015
+256,964
+2016
+230,159
+229,237
+18.04
+Non-interest income to
+operating income
+Allowance for loan impairment
+losses to non-performing loans
+%
+187.60
+153.30
+162.82
+221,515
+ROE
+%
+145,746
+%
+135,226
+163,741
+109,212
+54,755
+48,851
+Financial position
+Total assets
+Loans, gross
+Allowance for loan impairment losses
+Investments
+2
+Total liabilities
+|18,148,889 16,815,597 15,251,382 13,874,299 12,680,615
+9,973,362 9,135,860 8,483,275 7,607,791 6,864,696
+(237,716) (200,665) (188,531) (168,049) (154,656)
+3,972,884 3,595,095 2,710,375 2,403,631 2,272,724
+16,661,797 15,457,992 14,067,954 12,912,822 11,819,073
+12,939,748 11,729,171 10,885,223 10,097,786 9,173,995
+Due to customers
+Capital and reserves attributable to
+equity holders of the Bank
+Per share
+55,934
+Basic earnings per share (RMB)
+Net assets per share (RMB)
+Key financial ratios
+Return on average total assets (%)
+1,411,682
+294,388
+1,304,946
+294,388
+1,140,859 923,916 824,677
+288,731 279,365 279,147
+Return on average equity (%)
+Net interest margin (%)
+34
+567
+0.54
+0.168
+123,924
+0.56
+0.61
+Dividend per share (before tax, RMB)
+51,518
+Share capital
+Total dividend of ordinary shares
+231,571 231,478
+222,412
+Profit before income tax
+187,060
+(59,274)
+229,237 230,159 211,685
+221,515
+212,777
+Operating profit
+(172,314)
+(177,788)
+(48,381)
+N.A.
+(89,072)
+Impairment losses on assets
+407,509 366,176
+(159,729)
+187,673
+(23,510) (19,387)
+Profit for the year
+169,595
+170,845
+164,578
+of the Bank
+156,911
+139,656
+Profit attributable to equity holders
+163,741
+177,198
+179,417
+184,051
+145,746
+Male
+GAO Yingxin
+Year of
+1963
+REN Deqi
+Male
+Male
+CHEN Siqing
+Chairman
+birth Gender Position
+1960
+TIAN Guoli
+1962
+Name
+1960
+Male
+Non-executive Director
+ZHANG
+Non-executive Director
+Male
+Incumbent Directors, Supervisors and Senior Management Members
+Nout WELLINK
+1964
+LI Jucai
+Male
+Vice Chairman and
+President
+Executive Director and
+Executive Vice
+President
+Executive Director and
+Executive Vice
+President
+Non-executive Director
+1954
+Non-executive Director
+Male
+1972
+ZHANG Qi
+Xiangdong
+Male
+1957
+LIU Xianghui
+Basic Information
+7
+91
+Preference Shares
+- Flexible Allocation No. 5 Specific Multi-customer
+Domestic
+Other
+None
+2.00%
+20,000,000
+Bosera Fund ICBC - Bosera - ICBC
+Preference Shares
+Domestic
+Other
+None
+20,000,000
+1943
+2.00%
+Assets Management Plan
+10
+Ping An Life Insurance Company of China, Ltd.
+- proprietary fund
+19,000,000
+No shares of the Bank have been specifically issued to its employees.
+Please refer to Note V.30 to the Consolidated Financial Statements for details of the bonds issued
+by the Bank.
+Issuance of Other Securities
+The funds raised from the issuance of the Offshore Preference Shares and Domestic Preference
+Shares have been fully used to replenish the Bank's additional tier 1 capital and increase its
+capital adequacy ratio.
+Preference shares issued by the Bank contain no contractual obligation to deliver cash or another
+financial asset; or to exchange financial assets or financial liabilities with another entity under
+conditions that are potentially unfavourable to the entity; and preference shares issued are non-
+derivative instruments that will be settled in the entity's own equity instruments, but includes no
+contractual obligation for the entity to deliver a variable number of its own equity instruments.
+The Bank classifies preference shares issued as an equity instrument. Fees, commissions and
+other transaction costs of preference shares issuance are deducted from equity. The dividends on
+preference shares are recognised as profit distribution at the time of declaration.
+During the reporting period, there was no redemption, conversion into ordinary shares or voting
+rights recovery in respect of the preference shares of the Bank.
+Other Information regarding the Preference Shares
+Directors, Supervisors and Senior Management Members
+For the profit distribution policy of the preference shares and the profit distribution arrangement
+during the reporting period, please refer to the section "Report of the Board of Directors".
+90
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action
+among the aforementioned preference shareholders, and between the aforementioned preference
+shareholders and the Bank's aforementioned top ten ordinary shareholders.
+Both Yunnan Branch of China National Tobacco Corporation and China Shuangwei Investment
+Co., Ltd. are wholly-owned subsidiaries of China National Tobacco Corporation. Zhongwei Real
+Estate Co., Ltd. is a subsidiary of China Shuangwei Investment Co., Ltd.
+The Bank of New York Mellon Corporation, acting as the custodian for all the offshore
+preference shareholders that maintain an account with Euroclear and Clearstream as at 31
+December 2016, held 399,400,000 Offshore Preference Shares, representing 100% of the
+Offshore Preference Shares.
+Domestic non- Domestic
+state-owned Preference Shares
+legal person
+None
+1.90%
+Profit Distribution of the Preference Shares
+Male
+Vice President from
+November 2016 and Chief
+LU Zhengfei
+ZHANG Qingsong 1965
+Executive Vice President
+Male
+1962
+XU Luode
+External Supervisor
+Male
+1953
+CHEN Yuhua
+Female Employee Supervisor
+1971
+XIANG Xi
+Employee Supervisor
+Male
+1969
+Male
+LIU Qiang
+1971
+Male
+Male
+National Social Security Fund Portfolio 304
+1964
+PAN Yuehan
+Discipline Committee
+From December 2016
+Secretary of Party
+GAO Zhaogang
+Male
+FAN Dazhi
+From November 2016
+Information Officer from March 2017
+From August 2010 to the date of the
+2019 Employee Delegates' Meeting
+From April 2016 to the date of the
+2019 Employee Delegates' Meeting
+From August 2012 to the date of the
+2019 Employee Delegates' Meeting
+From June 2015 to the date of the
+Annual General Meeting in 2018
+From June 2015
+Term of office
+Executive
+Executive Vice President
+and Chief Information
+Officer
+Executive Vice President
+1964
+Independent Director
+Employee Supervisor
+1959
+1960
+WANG Xiquan
+Female Independent Director
+1973
+Angela CHAO
+Independent Director
+Male
+WANG Changyun 1964
+Yan
+Independent Director
+Male
+LEUNG Cheuk 1951
+Independent Director
+Male
+1963
+Male
+WANG Xueqiang 1957 Male
+Chairman of the Board of
+Supervisors
+Shareholder Supervisor
+LIU Wanming 1958
+DENG Zhiying
+Gender Position
+birth
+Name
+Year of
+93
+93
+Male
+22
+From July 2011 to the date of the
+Annual General Meeting in 2017
+From July 2011 to the date of the
+Annual General Meeting in 2017
+From October 2014 to the date of the
+Annual General Meeting in 2017
+From September 2015 to the date of
+the Annual General Meeting in 2018
+From October 2012 to the date of the
+Annual General Meeting in 2018
+From July 2013 to the date of the
+Annual General Meeting in 2019
+From September 2013 to the date of
+the Annual General Meeting in 2019
+From August 2016 to the date of the
+Annual General Meeting in 2019
+From January 2017 to the date of the
+Annual General Meeting in 2019
+From November 2016 to the date of
+the Annual General Meeting in 2019
+From August 2004 to the date of the
+Annual General Meeting in 2019
+From August 2004 to the date of the
+Annual General Meeting in 2019
+From December 2016 to the date of
+the Annual General Meeting in 2019
+From December 2016 to the date of
+the Annual General Meeting in 2019
+From May 2013 to the date of the
+Annual General Meeting in 2019
+From April 2014 to the date of the
+Annual General Meeting in 2017
+Term of office
+Shareholder Supervisor
+Male
+92
+7
+57.11%
+legal person
+China Investment Securities Co., Ltd.
+33.29%
+China Securities Co., Ltd. ✩
+567
+16
+15
+28.45%
+China International Capital Corporation Limited ✩
+14
+25.03%
+Shenwan Hongyuan Group Co., Ltd. ★
+13
+78.57%
+China Galaxy Financial Holding Co., Ltd.
+12
+100.00%
+17 Jiantou & Zhongxin Assets Management Limited
+70.00%
+18
+Preference Shares
+As at 31 December 2016, no other legal-person shareholder held 10% or more voting shares of
+the Bank (excluding HKSCC Nominees Limited).
+For further details regarding China Investment Corporation, please refer to the information on its
+website (www.china-inv.cn). China Investment Corporation was established in 2007. Please refer
+to the Announcement on Matters Related to the Incorporation of China Investment Corporation
+published on 9 October 2007 by the Bank for relevant information.
+Besides the above companies controlled or held by Huijin, Central Huijin Asset Management Ltd. is a wholly-
+owned subsidiary of Huijin. Central Huijin Asset Management Ltd., established in November 2015 and registered
+in Beijing with registered capital of RMB5 billion, provides asset management business.
+On 30 December 2016, China Securities Co., Ltd. exercised over-allotment option. After its completion on 5
+January 2017, Huijin directly held 32.93% of shares of China Securities Co., Ltd.
+Huijin entered into an equity transfer agreement with China International Capital Corporation Limited ("CICC")
+on 4 November 2016. CICC purchased 100% of shares of China Investment Securities Co., Ltd. through share
+issuance to Huijin. As at the end of 2016, the relevant procedures were still in process. Upon completion of the
+above transaction, Huijin will directly hold 58.58% of the shares of CICC and China Investment Securities Co.,
+Ltd. will be a wholly-owned subsidiary of CICC.
+★ denotes A share listed company and denotes H share listed company.
+100.00%
+4
+2
+1
+Notes:
+88
+88
+14.54%
+Guotai Junan Investment Management Co., Ltd.
+3
+Issuance and Listing of Preference Shares
+China Jianyin Investment Limited
+31.34%
+3
+34.71%
+Industrial and Commercial Bank of China Limited ★✩
+2
+34.68%
+China Development Bank
+1
+capital held by Huijin
+Company name
+No.
+Proportion of the total
+As at 31 December 2016, the basic information of companies directly held by Huijin is as
+follows:
+Central Huijin Investment Ltd. (“Huijin”) is a state-owned investment company established under
+the Company Law on 16 December 2003, with Mr. DING Xuedong as its legal representative.
+Wholly owned by China Investment Corporation, Huijin makes equity investments in key state-
+owned financial institutions, as authorised by the State Council. To the extent of its capital
+contribution, Huijin exercises its rights and fulfils its obligations as an investor on behalf of
+the State, in accordance with applicable laws aimed at preserving and enhancing the value of
+state-owned financial assets. Huijin neither engages in other business activities nor intervenes
+in the daily operation of the key state-owned financial institutions of which it is the controlling
+shareholder.
+Central Huijin Investment Ltd.
+Chief Risk Officer
+Agricultural Bank of China Limited ★✩
+40.03%
+4
+Bank of China Limited ★☆
+New China Life Insurance Company Limited ★☆
+10
+71.56%
+China Reinsurance (Group) Corporation ✩
+9
+73.63%
+China Export & Credit Insurance Corporation
+11
+21.96%
+7
+55.67%
+China Everbright Group Ltd.
+6
+China Construction Bank Corporation ✰✰
+5
+64.02%
+China Everbright Bank Company Limited ★✩
+Preference Shares
+With the approvals of CBRC (Yinjianfu [2014] No. 563) and CSRC (Zhengjianxuke [2014] No.
+938), the Bank made a non-public issuance of RMB39.94 billion (approximately USD6.5 billion)
+Offshore Preference Shares on 23 October 2014 in the offshore market. Such Offshore Preference
+Shares have been listed on the Hong Kong Stock Exchange since 24 October 2014.
+For the terms of issuance of the Offshore Preference Shares and Domestic Preference Shares,
+please refer to the Bank's announcements published on the websites of SSE, HKEx and the Bank.
+22,000,000
+Yunnan Branch of China National Tobacco Corporation
+5
+Preference Shares
+legal person
+Domestic
+State-owned
+None
+3.00%
+30,000,000
+Zhongwei Real Estate Co., Ltd.
+4
+Preference Shares
+legal person
+Domestic
+2.20%
+None State-owned
+Domestic
+legal person
+Domestic
+State-owned
+None
+20,000,000
+China Shuangwei Investment Co., Ltd.
+7
+Preference Shares
+None State-owned
+-personal dividend-005L-FH002SH
+Other
+None
+2.10%
+21,000,000
+China Life Insurance Company Limited - dividend
+6
+Preference Shares
+Domestic
+With the approvals of CBRC (Yinjianfu [2014] No. 562) and CSRC (Zhengjianxuke [2014]
+No.990), the Bank made a non-public issuance of RMB32 billion Domestic Preference Shares
+(First Tranche) on 21 November 2014 in the domestic market. With the approval of SSE
+(Shangzhenghan [2014] No. 818), Domestic Preference Shares (First Tranche) have been traded
+on the Comprehensive Business Platform of SSE since 8 December 2014. The Bank made a
+non-public issuance of RMB28 billion Domestic Preference Shares (Second Tranche) on 13
+March 2015 in the domestic market. With the approval of SSE (Shangzhenghan [2015] No. 377),
+Domestic Preference Shares (Second Tranche) have been traded on the Comprehensive Business
+Platform of SSE since 31 March 2015.
+5.00%
+China National Tobacco Corporation
+Type of
+Number of
+shares
+Percentage
+of total
+Number of
+shares held
+as at the end
+reporting of the reporting
+period
+period
+Changes
+during the
+Bank of New York Mellon Corporation
+1
+Name of preference shareholder
+No.
+Unit: Share
+Top ten preference shareholders as at 31 December 2016:
+Number of preference shareholders as at the end of the last month before the disclosure of this
+report: 48 (including 47 domestic preference shareholders and 1 offshore preference shareholder)
+Number of preference shareholders as at 31 December 2016: 48 (including 47 domestic
+preference shareholders and 1 offshore preference shareholder)
+Number of Preference Shareholders and Shareholdings
+89
+preference
+pledged Type of
+shares
+or frozen
+3
+Preference Shares
+legal person
+Domestic
+None State-owned
+18.01%
+180,000,000
+50,000,000
+China Mobile Communications Corporation
+Preference Shares
+person
+Unknown Foreign legal Offshore
+39.96%
+399,400,000
+preference
+shares
+shareholder
+2
+XIAO Wei
+LI Jun
+Male
+provident fund
+paid
+Position
+Name
+companies or
+other
+Other
+monetary
+and housing
+Remuneration
+medical
+insurance
+shareholding
+by
+remunerated
+Whether
+supplementary
+annuity,
+income
+enterprise
+connected
+FAN Dazhi
+4.22
+37.03
+82.83
+Chief Audit Officer
+XIAO Wei
+81.99 No
+3.30
+23.47
+55.22
+Chief Risk Officer
+PAN Yuehan
+Committee
+No
+-
+Secretary of Party Discipline
+Total parties
+social insurance,
+employer to
+by the
+18.00 No
+18.00
+External Supervisor
+CHEN Yuhua
+5.00 No
+5.00
+Employee Supervisor
+XIANG Xi
+3.75 No
+3.75
+Employee Supervisor
+GAO Zhaogang
+5.00 No
+5.00
+Employee Supervisor
+XU Luode
+Executive Vice President
+43.60
+13.96
+Contribution
+(Unit: RMB ten thousand)
+Remuneration before tax from the Bank in 2016
+95
+4.68 No
+1.05
+3.63
+124.08
+Executive Vice President
+Chief Information Officer
+4.80 No
+1.17
+3.63
+Executive Vice President and
+ZHANG Qingsong
+57.56 No
+LIU Qiang
+No
+GENG Wei
+Secretary to the Board of
+2
+1
+Notes:
+No
+4.84
+1.21
+3.63
+No
+31.75
+9.95
+21.80
+Secretary of Party Discipline
+Committee
+Executive Vice President
+ZHANG Jinliang
+ZHANG Lin
+1.67 No
+In accordance with the government regulations, since 1 January 2015, the Bank remunerates Chairman of the
+Board of Directors, President, Chairman of the Board of Supervisors, executive directors, Secretary of Party
+Discipline Committee and executive vice presidents pursuant to the rules on remuneration reform for central
+enterprises.
+The 2016 final remuneration for Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, executive directors, shareholder supervisors and other senior management remembers is to be
+determined and will be disclosed in an additional announcement by the Bank.
+96
+96
+54
+97
+The Bank incurred RMB 12.3340 million in remuneration to its directors, supervisors and senior management
+members' services in 2016.
+For the starting time of the term of office of the above-mentioned directors, supervisors and senior management
+members, please refer to the section “Basic Information”. Mr. FAN Dazhi began to serve as Secretary of Party
+Discipline Committee of the Bank as of 27 December 2016. Ms. Angela CHAO began to serve as Independent
+Director of the Bank as of 4 January 2017. During the reporting period, Mr. FAN Dazhi and Ms. Angela CHAO
+were not remunerated by the Bank.
+The above persons' remuneration is calculated on the basis of their actual time working as directors, supervisors
+or senior management members of the Bank in 2016. Employee supervisors' remuneration above is paid for their
+service as supervisors of the Bank during the reporting period.
+Some independent directors of the Bank served as independent non-executive directors of other legal entities or
+organisations, which caused such legal entities or organisations to be defined as connected parties of the Bank.
+Save as disclosed above, none of the directors, supervisors or senior management members of the Bank was
+remunerated by the connected parties of the Bank during the reporting period.
+In 2016, Non-executive Directors Mr. ZHANG Xiangdong, Mr. ZHANG Qi, Mr. LIU Xianghui, Mr. LI Jucai, Mr.
+WANG Yong and Mr. WANG Wei were not remunerated by the Bank.
+1.67
+Independent directors receive remuneration in accordance with the resolution of the 2007 Annual General
+Meeting. External supervisors receive remuneration in accordance with the resolution of the 2009 Annual General
+Meeting. Remuneration for shareholder supervisors is in accordance with relevant remuneration scheme of the
+Bank and approved by the shareholders' meeting.
+9
+8
+7
+6
+5
+4
+3
+The Bank remunerates directors, supervisors and senior management members who are employed by the Bank
+with salaries, bonuses, contribution by the employer to social insurance, enterprise annuity, supplementary
+medical insurance and housing provident fund, as well as other monetary income. Independent directors receive
+directors' remunerations and allowances. Other directors are not remunerated by the Bank. Chairman of the Board
+of Directors, executive directors and senior management members do not receive any remuneration from the
+Bank's subsidiaries.
+DENG Zhiying
+Employee Supervisor
+Supervisors
+WANG Yong
+Executive Vice President
+No
+24.24
+6.07
+18.17
+Executive Director and
+ZHU Hexin
+Former Directors, Supervisors and Senior Management Members
+Secretary
+Directors and Company
+114.72 No
+4.58
+31.25
+78.89
+Non-executive Director
+Yes
+WANG Wei
+Non-executive Director
+62.39 No
+17.99
+44.40
+Chairman of the Board of
+Controlling Shareholder of the Bank
+26.67 Yes
+26.67
+LIU Xiaozhong
+Independent Director
+Paul
+Yes
+30.00
+30.00
+Independent Director
+CHOW Man Yiu,
+Yes
+Jackson TAI
+108.71 No
+4.58
+31.50
+94
+Note: No former director, supervisor or senior management member held any share of the Bank during their terms of
+office.
+From July 2014 to January 2016
+From August 2012 to April 2016
+From August 2004 to July 2016
+From March 2011 to September 2016
+From March 2010 to November 2016
+Independent Director
+Chairman of the Board of
+Supervisors
+Male Employee Supervisor
+Female Secretary of Party
+Discipline Committee
+Executive Vice President
+Male
+1969
+ZHANG Jinliang
+1956
+ZHANG Lin
+1956
+LIU Xiaozhong
+Male
+1956
+24
+Remuneration of Directors, Supervisors and Senior Management Members Paid in 2016
+Remuneration before tax from the Bank in 2016
+(Unit: RMB ten thousand)
+Chairman
+TIAN Guoli
+Incumbent Directors, Supervisors and Senior Management Members
+Position
+Name
+shareholding
+companies or
+other
+remunerated
+by
+LI Jun
+Whether
+supplementary
+annuity,
+enterprise
+social insurance,
+employer to
+by the
+Contribution
+medical
+48.44
+Male
+Jackson TAI
+birth
+Name
+Position held before
+Year of
+Former Directors, Supervisors and Senior Management Members
+Directors and Company
+Secretary
+Note: During the reporting period, no director, supervisor or senior management member held any share of the Bank.
+Secretary to the Board of Directors
+from June 2015 and Company
+Secretary from October 2015
+From November 2014
+From April 2016
+Secretary to the Board of
+Male
+1963
+GENG Wei
+Chief Audit Officer
+Gender leaving the post
+Term of office
+ZHU Hexin
+1968
+Paul
+From October 2010 to August 2016
+Independent Director
+Male
+CHOW Man Yiu, 1946
+From July 2013 to September 2016
+From September 2014 to January
+2017
+Non-executive Director
+Non-executive Director
+1950
+Male
+WANG Wei
+Male
+1962
+WANG Yong
+From February 2016 to June 2016
+Executive Director and
+Executive Vice
+President
+Male
+1957
+1960
+17.68
+Vice Chairman and President
+50.00 No
+Yes
+Yes
+Yes
+-
+Yes
+12.98
+Independent Director
+WANG Changyun
+40.00
+Independent Director
+LEUNG Cheuk Yan
+51.39
+Independent Director
+LU Zhengfei
+51.39 Yes
+40.00 No
+12.98 Yes
+Angela CHAO
+72.63
+Shareholder Supervisor
+LIU Wanming
+115.22 No
+4.58
+33.01
+77.63
+50.00
+Shareholder Supervisor
+Supervisors
+5.10 No
+1.06
+4.04
+Chairman of the Board of
+WANG Xiquan
+Independent Director
+WANG Xueqiang
+CHEN Siqing
+Independent Director
+Nout WELLINK
+income
+provident fund
+paid
+connected
+monetary
+and housing
+Remuneration
+Other
+insurance
+13.96
+43.60
+Executive Director and
+REN Deqi
+17.49
+48.44
+Total
+parties
+66.12 No
+65.93 No
+LI Jucai
+Non-executive Director
+LIU Xianghui
+Non-executive Director
+ZHANG Qi
+Non-executive Director
+ZHANG Xiangdong
+Non-executive Director
+Executive Vice President
+59.25
+15.65
+43.60
+Executive Director and
+GAO Yingxin
+Executive Vice President
+57.56 No
+No
+Unless stated otherwise, all interests stated above represented long positions. Save as disclosed
+above, as at 31 December 2016, no other interests (including derivative interests) or short
+positions were recorded in the register maintained by the Bank under section 336 of the SFO.
+2.00%
+Non-executive Director
+CHEN Yuhua
+105
+Employee Supervisor of the Bank since August 2012. Ms. XIANG is currently Deputy General
+Manager and Chief Financial Officer of Jiangsu Branch of the Bank. She previously held the
+following various positions in the Bank, including Deputy General Manager and Chief Financial
+Officer of Suzhou Branch of the Bank from March 2010 to June 2015, a member of the CPC
+Committee, Deputy General Manager and Chief Financial Officer of Suzhou Branch from July
+2005 to March 2010, Assistant to General Manager of the Suzhou Branch from March 2003 to
+July 2005, Deputy General Manager and General Manager of High-tech Industrial Development
+Zone Sub-branch of the Suzhou Branch from October 2000 to July 2005, cadre, deputy group
+chief, section chief, Deputy Director and Deputy General Manager of the International Trade
+Settlement Division of the Suzhou Branch from July 1993 to October 2000. Ms. XIANG
+graduated from the Department of English of East China University of Science and Technology
+in 1993, and obtained an MBA Degree jointly conferred by Fudan University and University of
+Washington in December 2004.
+Employee Supervisor
+XIANG Xi
+Employee Supervisor of the Bank since April 2016. Mr. GAO is currently the General Manager
+of the Human Resources Department of the Bank. Mr. GAO worked in the Organization
+Department of the CPC Central Committee from January 2001 to July 2014, successively serving
+as a Consultant (of deputy head level) of the Office of Enterprise Cadres, the Deputy Head, Head
+and Deputy Inspector of the Bureau Five of Cadres. From December 1998 to January 2001, he
+served as the Deputy Head of Development Research Department of China National Petroleum
+Corporation. Mr. GAO worked in Dagang Oilfield and China National Petroleum Company
+from July 1992 to December 1998. Mr. GAO graduated from Xi'an Shiyou Institute in 1992
+and obtained Doctorate in Management Science and Engineering from Beijing University of
+Technology in 2012.
+Employee Supervisor
+GAO Zhaogang
+Employee Supervisor of the Bank since August 2010. Mr. DENG currently serves as General
+Manager of the Supervisory Department in the Bank's Head Office. Mr. DENG has served as
+Deputy General Manager of the Supervisory Department in the Bank's Head Office from July
+2008 to July 2010. From June 2007 to July 2008, Mr. DENG served as a member of the Party
+Committee and as secretary of the Party Discipline Committee in the Tianjin Branch of the Bank.
+From February 2008 to July 2008, Mr. DENG also served as the Director of the Labour Union
+of the branch. From June 1993 to June 2007, Mr. DENG worked in the Supervisory Office, the
+Inspection and Audit Department and the Supervisory Department of the Bank's Head Office.
+From August 1984 to June 1993, Mr. DENG worked in the Party Discipline Committee. Mr.
+DENG received a Bachelor's degree in History from Nankai University in 1984.
+Employee Supervisor
+External Supervisor
+DENG Zhiying
+Shareholder Supervisor of the Bank since August 2004 and Deputy General Manager of the
+Office of Board of Supervisors since April 2005. Since January 2014, Mr. LIU has served
+as Deputy General Manager of the Audit Department of the Head Office of the Bank. From
+November 2001 to August 2004, Mr. LIU was designated by the State Council to serve as
+Director Supervisor and a Deputy Director General Supervisor at Bank of Communications and
+the Bank respectively. From August 1984 to November 2001, he worked with the National Audit
+Office, Agricultural Development Bank of China and the Central Financial Working Commission.
+Mr. LIU received a Bachelor's degree in Economics from Jiangxi University of Finance and
+Economics in 1984.
+Shareholder Supervisor
+Shareholder Supervisor of the Bank since August 2004 and Head of the Office of Board of
+Supervisors since April 2005. Mr. WANG served as Deputy Director General Supervisor and
+Director General Supervisor of the Bank from July 2003 to August 2004 before the Bank's
+corporate restructuring. Mr. WANG served as Deputy Director General Supervisor at Agricultural
+Development Bank of China from October 2001 to July 2003, and worked with the Central
+Financial Working Commission from October 2000 to October 2001. From November 1996 to
+September 2000, Mr. WANG worked with Hong Kong Gang Ao International (Holdings) Co.,
+Ltd. and Hong Kong Fujian Group Limited in succession. Prior to that, Mr. WANG worked with
+the Ministry of Finance from August 1985 to October 1996. Mr. WANG graduated from China
+Central University of Finance and Economics in 1985 and obtained his Doctorate in Economics
+from Public Finance Institute of the Ministry of Finance in 2008. Mr. WANG is a senior
+accountant and Certified Public Accountant, accredited by the Chinese Institute of Certified
+Public Accountants.
+Shareholder Supervisor
+WANG Xueqiang
+Chairman of the Board of Supervisors of the Bank since November 2016 and Vice Party
+Secretary of the Bank since June 2016. Mr. WANG previously served in several positions at
+Industrial and Commercial Bank of China Limited (“ICBC”) for many years. He served as the
+Executive Vice President of ICBC from September 2012 to July 2016 and Executive Director
+from June 2015 to July 2016. Mr. WANG served as a member of the senior management of ICBC
+from April 2010 to September 2012. Between September 1999 and April 2010, he successively
+served as Deputy Head of the Hebei Branch of ICBC, General Manager of Risk Management
+Department, General Manager of Internal Audit Bureau, and General Manager of Human
+Resource Department. Mr. WANG graduated from Shanxi Institute of Finance and Economics in
+1983 and received a Doctorate degree in Management from Nanjing University in 2009. He holds
+the title of Senior Economist.
+Chairman of the Board of Supervisors
+WANG Xiquan
+Supervisors
+103
+104
+Independent Director of the Bank since January 2017. Ms. CHAO serves as Deputy Chairman of
+Foremost Group where she is responsible for international shipping finance, strategy, chartering
+and ship management and operations. From 1994 to 1996, Ms. CHAO worked in the mergers
+& acquisitions department of Smith Barney, which is now Morgan Stanley Smith Barney. From
+1996 to 1999, Ms. CHAO served as deputy general manager of Foremost Group, and from
+2001 to 2008, Ms. CHAO had successively served as vice president and senior vice president
+of Foremost Group. Since 2008, she has served as deputy chairman of Foremost Group. In
+May 2005, Ms. CHAO was unanimously voted to be BIMCO39's (The Baltic and International
+Maritime Council 39) Counsellor. In September 2005, she was selected as "Eminent Young
+Overseas Chinese" by the Overseas Chinese Affairs Office of the State Council of China. In
+November 2007, she was invited as speaker of World Shipping (China) Summit. In April 2011,
+she became a Founding Member of the Wall Street Journal's Task Force on Women in the
+Economy. Ms. CHAO currently serves on the Boards of The Metropolitan Opera, Museum of
+Modern Art PS1, the UK P&I Marine Insurance Mutual, Foremost Foundation, Shanghai Mulan
+Education Foundation, and she also serves on the Harvard Business School's Board of Dean's
+Advisors, Carnegie-Tsinghua Center for Global Policy Board of Advisors, Lincoln Center
+Global's China Advisory Council, the Chairman's Council of the Metropolitan Museum of Art
+and American Bureau of Shipping Council. In addition, she is also a member of the Council
+on Foreign Relations, serves on the Young Leaders Forum of the National Committee on US-
+China Relations and serves as the member of Shanghai Jiao Tong University's Antai College
+of Economics and Management Advisory Board, and honorary chairperson of the Jiao Tong
+University Alumni Association in America. Ms. CHAO graduated from Harvard College in three
+years in 1994 with a Bachelor's degree in economics (Magna Cum Laude), and received her
+Master of Business Administration degree from Harvard Business School in 2001.
+External Supervisor of the Bank since June 2015. Mr. CHEN served as Vice President of China
+Cinda Asset Management Co., Ltd. from December 2008 to August 2013. Mr. CHEN served
+as Chairman of China Cinda Investment Co., Ltd. from April 2004 to December 2008. Mr.
+CHEN served as Head of the Equity Department of China Cinda Asset Management Company
+and General Manager of China Cinda Investment Co., Ltd from March 2000 to April 2004. Mr.
+CHEN served as President of China Cinda Trust & Investment Company from December 1996
+to March 2000. Mr. CHEN served as Deputy General Manager of the Personnel Department and
+Deputy General Manager of the Personnel & Training Department of China Construction Bank
+(CCB) Head Office from April 1994 to December 1996. Mr. CHEN served as Division Head of
+the Construction Economy Department of CCB Head Office and General Manager of CCB Real
+Estate Consulting Corporation from March 1992 to March 1994. Mr. CHEN served as Deputy
+Head of the Construction Economy Division, Deputy Head of the Real Estate Credit Department
+and Head of a direct sub-branch of CCB Sichuan Branch from August 1986 to March 1992. Mr.
+CHEN graduated from Zhongnan University of Finance and Economics in 1986 and received a
+Master's degree in Economics.
+CHEN Siqing
+107
+Secretary of Party Discipline Committee of the Bank since December 2016. Mr. FAN joined the
+Bank in 2016. He served as Chairman of the Board of Directors of Hua Xia Bank since November
+2016. From August 2007 to November 2016, he served as Director, Vice President, and President
+of Hua Xia Bank. From January 2004 to August 2007, he served as Director and General Manager
+of Beijing Securities Co,.Ltd. From December 1999 to January 2004, Mr. FAN successively
+served as Deputy Head of Beijing Overseas Financing and Investment Management Center,
+Director and Deputy General Manager of Beijing State-owned Assets Management Co.,Ltd. He
+graduated from Dongbei University of Finance and Economics in 1987, and graduated from
+Graduate School of China Academy of Social Sciences with a Doctor's degree in Economics in
+2012. He has the qualification of Senior Accountant.
+Secretary of Party Discipline Committee
+FAN Dazhi
+Executive Vice President of the Bank since November 2016. Mr. LIU joined the Bank in 2016.
+He worked in Agricultural Bank of China (“ABC”) for many years and held various positions.
+He served as General Manager of the Shanghai Branch of ABC from July 2015 to July 2016 and
+also as Executive Deputy Director of Shanghai Management Department of ABC from September
+2015 to July 2016. From June 2005 to June 2015, he successively served as Deputy General
+Manager and General Manager of Business Department, General Manager of Important Client
+Department, and Deputy General of Beijing Branch, General Manager of the Asset-Liability
+Management Department/County Area Capital and Funds Management Center, and also served
+as Chairman of the Board of Supervisors of ABC Financial Leasing Co.,Ltd. He graduated from
+China Agricultural University in 1993 and obtained a Master's degree in Agriculture from China
+Agricultural University in 1997. He holds the title of Senior Economist.
+Executive Vice President
+LIU Qiang
+Executive Vice President of the Bank since November 2016 and Chief Information Officer of the
+Bank since March 2017. Mr. ZHANG joined the Bank in 1990. He served as General Manager
+of the Clearing Department of the Bank from March 2014 to July 2016, and served as General
+Manager of Singapore Branch from December 2011 to June 2014. From March 2006 to December
+2011, he successively served as Deputy General Manager of the Asset-Liability Management
+Department, Deputy General Manager of the Treasury, Director of the Global Markets
+Department, Director (Securities Investment) of the Global Markets Unit, General Manager
+(Securities Investment) of the Global Markets Unit, and also as General Manager of Hong Kong
+Trading Center (Hong Kong Branch) from July 2009 to December 2011. He graduated from
+Graduate School of People's Bank of China with a Master's degree in Economics in 1990. He
+holds the title of Associate Researcher.
+Executive Vice President and Chief Information Officer
+ZHANG Qingsong
+Senior Management Members
+106
+Executive Vice President
+XU Luode
+Please refer to the section "Directors".
+Executive Director and Executive Vice President
+GAO Yingxin
+Please refer to the section "Directors".
+Executive Director and Executive Vice President
+REN Deqi
+Please refer to the section "Directors".
+Vice Chairman and President
+Executive Vice President of the Bank since June 2015. Mr. XU joined the Bank in 2015. From
+August 2013 to April 2015, he served as President of Shanghai Gold Exchange. Mr. XU worked
+as Vice Chairman and President of China Unionpay from August 2007 to August 2013. He also
+worked in the People's Bank of China (“PBOC”) for many years. The positions he held in PBOC
+included Director of the Payment and Settlement Department from October 2003 to August 2007
+and Deputy Director of the General Executive Office from March 1999 to October 2003. Mr.
+XU has been serving as Chairman of Bank of China Consumer Finance Company Limited, Non-
+executive Director of BOC Hong Kong (Holdings) Limited, and Chairman of Expresspay Co.,
+Ltd. since July 2015, October 2015, and April 2016, respectively. Mr. XU graduated from Hunan
+University of Finance and Economics with a Bachelor's Degree in Economics in 1983. He has the
+qualification of Senior Accountant.
+Independent Director
+LIU Wanming
+in 2001, and the "Middle Age Experts with National Outstanding Contribution”, membership of
+"the Program for New Century Excellent Talents” of Ministry of Education in 2004, “Financial
+Support of National Science Fund for Distinguished Young Scholars" in 2007, a member of the
+"New Century National Hundred, Thousand and Ten Thousand Talent Program” in 2013, and
+the "Cheung Kong Distinguished Professor" of Ministry of Education in 2014. He obtained his
+Master degree in economics from RUC in July 1989 and Doctorate in Financial Economics from
+the University of London in January 1999.
+99
+99
+Non-executive Director of the Bank since July 2011. Mr. ZHANG served as a non-executive
+director of China Construction Bank Corporation from November 2004 to June 2010, and served
+as Chairman of the Risk Management Committee under its Board of Directors from April 2005
+to June 2010. From August 2001 to November 2004, Mr. ZHANG worked as Vice President of
+PBOC's Haikou Central Sub-branch and concurrently served in the SAFE as Deputy Director
+General of Hainan Province Branch and Deputy Director General and Inspector of the General
+Affairs Department. Mr. ZHANG served as a member of the Stock Offering Approval Committee
+of CSRC from September 1999 to September 2001. He served as a member of China International
+Non-executive Director
+ZHANG Xiangdong
+Executive Director of the Bank since December 2016 and Executive Vice President of the
+Bank since May 2015. Mr. GAO joined the Bank in 1986. He served as Executive Director and
+Deputy Chief Executive of BOC Hong Kong (Holdings) Limited and Bank of China (Hong
+Kong) Limited from February 2005 to March 2015, as President and Chief Operating Officer of
+BOC International Holdings Limited from July 2004 to February 2005, and as Deputy General
+Manager of the Credit Business Department of the Head Office and Deputy General Manager and
+General Manager of the Corporate Banking Department of the Head Office from September 1996
+to July 2004. Mr. GAO has been serving as a Non-executive Director of BOCHK (Holdings)
+since March 2015 and has been serving as Chairman of BOC International Holdings Limited,
+Bank of China (UK) Limited and Bank of China (Luxembourg) S.A. since August 2015, and
+has been severing as Chairman of BOC International (China) Limited since September 2016.
+Currently, Mr. GAO also serves as Chairman of the Board of Directors of China Culture
+Industrial Investment Fund Co., Ltd. Mr. GAO graduated from East China University of Science
+and Technology in 1986 with a Master's Degree in Engineering. He holds the title of Senior
+Economist.
+Executive Director and Executive Vice President
+GAO Yingxin
+Angela CHAO
+Executive Director and Executive Vice President
+Economic and Trade Arbitration Commission from January 2004 to December 2008. Mr.
+ZHANG graduated from Renmin University of China with a Bachelor's degree in Law in 1986.
+He completed his post-graduate studies in international economic law at Renmin University
+of China in 1988, and was awarded a Master's degree in Law in 1990. Mr. ZHANG holds the
+professional title of senior economist and is qualified to practice law in China.
+REN Deqi
+Vice Chairman of the Board of Directors since April 2014 and President of the Bank since
+February 2014. Mr. CHEN joined the Bank in 1990 and served as Executive Vice President of
+the Bank from June 2008 to February 2014. Mr. CHEN held various positions in the Bank from
+June 2000 to May 2008, including Assistant General Manager and Vice General Manager of the
+Fujian Branch, General Manager of the Risk Management Department of the Head Office and
+General Manager of the Guangdong Branch. Mr. CHEN previously worked in the Hunan Branch
+of the Bank before he was dispatched to the Hong Kong Branch of China and South Sea Bank
+Ltd. as Assistant General Manager. Since December 2011, Mr. CHEN has been serving as a
+Non-executive Director of BOC Hong Kong (Holdings) Limited and Chairman of the Board of
+Directors of BOC Aviation Limited. Mr. CHEN has been serving as Vice Chairman of the Board
+of Directors of BOCHK (Holdings) since March 2014. Mr. CHEN graduated from Hubei Institute
+of Finance and Economics in 1982. He obtained an MBA from Murdoch University, Australia in
+1999. He is a Certified Public Accountant and holds the title of Senior Economist.
+Vice Chairman and President
+CHEN Siqing
+Chairman of the Board of Directors since May 2013. Mr. TIAN joined the Bank in April 2013.
+From December 2010 to April 2013, Mr. TIAN served as Vice Chairman of the Board of
+Directors and General Manager of China CITIC Group. During this period, he also served as
+Chairman of the Board of Directors and Non-executive Director of China CITIC Bank. From
+April 1999 to December 2010, Mr. TIAN served successively as Vice President and President
+of China Cinda Asset Management Company, and Chairman of the Board of Directors of China
+Cinda Asset Management Co., Ltd. From July 1983 to April 1999, Mr. TIAN held various
+positions in China Construction Bank (“CCB”), including sub-branch general manager, deputy
+branch general manager, department general manager of the CCB Head Office, and Executive
+Assistant President of CCB. Mr. TIAN has been serving as Chairman of the Board of Directors
+and a Non-executive Director of BOC Hong Kong (Holdings) Limited since June 2013.
+Mr. TIAN received a Bachelor's Degree in Economics from Hubei Institute of Finance and
+Economics in 1983. He holds the title of Senior Economist.
+Chairman
+TIAN Guoli
+Directors
+Working Experience and Other Positions held by Directors, Supervisors and Senior
+Management Members
+From 1 January 2016 to 23 December 2016, Non-executive Director Mr. ZHANG Xiangdong
+served as Director of the Bank of China Equity Investment Management Division of Banking
+Institutions Department I, Huijin. Save as disclosed above, in 2016, none of the Bank's directors,
+supervisors or senior management members held any position in the shareholding companies of
+the Bank.
+Positions held in Shareholding Companies by Directors, Supervisors and Senior
+Management Members
+98
+ZHANG Qi
+Executive Director of the Bank since December 2016 and Executive Vice President of the
+Bank since July 2014. Mr. REN joined the Bank in 2014. He worked in China Construction
+Bank ("CCB") for many years and held various positions. From October 2013 to May 2014,
+Mr. REN served as General Manager of Risk Management Department of CCB. From August
+2003 to October 2013, Mr. REN successively served as Deputy General Manager of Credit
+Approval Department, General Manager of Risk Control Department, General Manager of Credit
+Management Department, and General Manager of the Hubei Branch of CCB. Mr. REN has been
+serving as a Non-executive Director of BOC Hong Kong (Holdings) Limited since October 2015,
+and President of Shanghai RMB Trading Unit since September 2016. He obtained a Master's
+Degree in Engineering from Tsinghua University in 1988. He holds the title of Senior Economist.
+Non-executive Director of the Bank since July 2011. Mr. ZHANG worked in Central Expenditure
+Division One, Comprehensive Division of the Budget Department, and Ministers' Office of
+the General Office of Ministry of Finance, as well as in the Operation Department of China
+Investment Corporation, serving as Deputy Director, Director and Senior Manager from 2001
+to 2011. Mr. ZHANG studied in the Investment Department and Finance Department of China
+Northeast University of Finance and Economics from 1991 to 2001, and obtained the Bachelor's
+degree, Master's degree and Doctorate in Economics respectively in 1995, 1998 and 2001.
+Non-executive Director
+Independent Director of the Bank since August 2016. Mr. WANG currently serves as professor
+and doctoral supervisor in finance at Renmin University of China ("RUC”). He served as a
+lecturer at RUC from 1989 to 1995 and as a lecturer at Business School, National University
+of Singapore from 1999 to 2005. He served successively as the Chair of Applied Finance
+Department of RUC, Director of China Financial Policy Research Center (a key research base of
+Ministry of Education) and Executive Vice Dean of Hanqing Advanced Institute of Economics
+and Finance at RUC from 2006 to 2016. Mr. WANG is currently also the Vice Chairman
+of China Investment Specialty Construction Association, Director of China Finance Annual
+Meeting Committee, Director of China Finance Association, Deputy Editor of Finance Research
+Quarterly, Deputy Editor of China Finance Research, and Deputy Editor of China Financial
+Review. He also serves as the standing committee member of Beijing Haidian District People's
+Political Consultative Conference, the Central Committee member of China Democratic League,
+the special auditor of State Auditing Administration, the independent non-executive director
+of Hope Commercial Factoring Co., Ltd., Sichuan Star Cable Co., Ltd. and Beijing Haohua
+Energy Resource Co., Ltd. Mr. WANG has received social recognition and prizes including the
+Special Government Allowance of State Council, Best Paper Award of Chicago Board of Trade
+Independent Director
+WANG Changyun
+Independent Director of the Bank since September 2013. He is a former partner of Baker &
+McKenzie, which he joined in July 1987 and from which he retired in June 2011. During 2009
+and 2010, he had served as a part-time member of the Central Policy Unit of The Hong Kong
+Special Administrative Region Government. Mr. LEUNG has been an independent non-executive
+director of MMG Limited, which is listed on The Stock Exchange of Hong Kong Limited, since
+July 2012. Mr. LEUNG graduated from The Chinese University of Hong Kong with a Bachelor
+of Social Science degree (First Class Honours) in 1976, obtained a Master of Philosophy degree
+from The University of Oxford in 1981 and completed his legal study at The College of Law in
+England in 1982. He was admitted to practice as a solicitor in Hong Kong in 1985, in England
+and Wales in 1988, in the Australian Capital Territory in 1989 and in Victoria, Australia in 1991.
+He is a Senior Associate Member of St. Antony's College, Oxford.
+Independent Director
+LEUNG Cheuk Yan
+the "Renowned Expert Training Project" (first batch) of the Ministry of Finance. In 2014, he was
+elected as distinguished professor of Cheung Kong Scholar of the Ministry of Education, PRC.
+He currently serves as an independent non-executive director or an independent supervisor of a
+number of companies listed on the Hong Kong Stock Exchange, including: Independent Non-
+executive Director of Sinotrans Ltd. since September 2004, Independent Non-executive Director
+of Sino Biopharmaceutical Ltd. since November 2005, Independent Non-executive Director of
+China National Materials Co., Ltd. since December 2009, and Independent Supervisor of PICC
+Property and Casualty Co., Ltd. (“PICC P&C”) since January 2011. He was an independent non-
+executive director of PICC P&C from February 2004 to December 2010. Mr. LU graduated from
+Renmin University of China in 1988 with a Master's degree in Economics (Accounting), and
+received his Doctor's degree in Economics (Management) from Nanjing University in 1996.
+101
+Independent Director of the Bank since July 2013. Mr. LU currently serves as the distinguished
+professor of Cheung Kong Scholar of Guanghua School of Management, Peking University. He
+served as the head of the Accounting Department of the School of Business, Nanjing University
+between 1994 and 1999, and the head of the Accounting Department of Guanghua School of
+Management, Peking University between 2001 and 2007, and Associate Dean of Guanghua
+School of Management, Peking University between 2007 and 2014. Mr. LU also currently serves
+as an executive director of the Accounting Society of China and Deputy Director of Financial
+Management Committee, an editorial board member of Accounting Research and Audit Research,
+and a member of the Disciplinary Committee of the Chinese Institute of Certified Public
+Accountants. In 2001, he was elected as a member of “The Hundred People Project of Beijing
+New Century Social Science Theoretical Talent”. In 2005, he was elected to the "New Century
+Excellent Talent Support Plan” of the Ministry of Education, PRC. In 2013, he was elected to
+102
+Independent Director of the Bank since October 2012. Mr. WELLINK served as a member of
+the Executive Board of the Dutch Central Bank (“DNB") for almost 30 years, the last 14 years
+as its President. He retired from DNB on 1 July 2011. DNB is part of the European System of
+Central Banks since 1999, but still holds supervision on national pension funds and insurance
+companies. Since the establishment of the European Monetary Union, Mr. WELLINK served
+as a member of the Governing Council of the European Central Bank (“ECB"). Starting from
+1997, Mr. WELLINK served as a member of the Board of Directors of the Bank for International
+Settlements, which he chaired from 2002 to 2006. From 2006 to 2011, he also chaired the Basel
+Committee on Banking Supervision. From 1997 to 2011, Mr. WELLINK was a member of the
+Group of Ten Central Bank Governors and Governor of the International Monetary Fund. Prior
+to his appointment in 1982 as an executive director of DNB, Mr. WELLINK held several posts
+in the Dutch Ministry of Finance, including as the Treasurer General from 1977 to 1982. After
+studying Dutch law at Leyden University from 1961 to 1968 with a Master's degree obtained,
+Mr. WELLINK obtained a doctor's degree in economics at the Rotterdam Erasmus University
+in 1975. In 2008 he received an honorary doctorate from Tilburg University. From 1988 to
+1998, Mr. WELLINK was an Extraordinary Professor at the Free University in Amsterdam.
+Mr. WELLINK is currently Vice Chairman of Supervisory Board of PricewaterhouseCoopers
+Accountants N.V., and Member of Advisory Board of Systemic Risk Council. Mr. WELLINK
+had served many additional functions in the past, including member of the supervisory board of a
+bank, a re-insurance company and other enterprises on behalf of the Dutch authorities, Chairman
+of the Board of Supervisors of the Netherlands Open Air Museum, member and treasurer of the
+Royal Picture Gallery Mauritshuis and the Westeinde Hospital in The Hague. He was awarded
+a Knighthood in the Order of the Netherlands Lion in 1980 and is Commander of the Order of
+Orange-Nassau since 2011.
+LU Zhengfei
+Independent Director
+Non-executive Director
+Non-executive Director of the Bank since October 2014. Mr. LIU served as the external
+supervisor of China Cinda Asset Management Co., Ltd. from June 2013 to June 2014. He served
+as the non-executive director of China Cinda Asset Management Company from June 2010 to
+June 2013, and non-executive director of China Construction Bank Corporation from September
+2004 to June 2010. From September 1978 to May 1994, he held various positions at the State
+Economic Commission and the State Planning Commission and he worked for half a year at
+the United States Environmental Protection Agency in 1993. From May 1994 to September
+2004, he worked consecutively as the division chief of the Industry and Transportation Group,
+assistant inspector (deputy director-general level) and inspector (director-general level) of the
+Economic and Trade Group under the Office of Central Leading Group on the Financial and
+Economic Affairs. Mr. LIU graduated from Liaoning University in August 1978, and studied the
+senior courses of national economic planning at the Central College of Planning and Statistics of
+Poland from October 1989 to February 1990. He also studied modern economic management at
+Beijing Economic Correspondence University from April 1985 to April 1986. Mr. LIU is a senior
+economist.
+LI Jucai
+Non-executive Director of the Bank since September 2015. Mr. LI served as Party Committee
+Member and Secretary of Party Discipline Committee of the Information Network Center under
+the Ministry of Finance from December 2014 to September 2015. He acted as the specialised
+Deputy Secretary of Party Committee of the Information Network Center under the Ministry
+of Finance from April 2010 to December 2014. From November 1996 to April 2010, he had
+successively been the Deputy Head of the Science Division of the Culture, Education and
+Administration Department, Division Head of the Investment Evaluation Center, Director of
+Administration Office and Head of the Administrative Division of the Information Network
+LIU Xianghui
+Center under the Ministry of Finance. Mr. LI majored in Finance in China Northeast University
+of Finance and Economics and graduated with a Bachelor's degree in 1986. Mr. LI has
+qualification of senior economist.
+Nout WELLINK
+Independent Director
+100
+Mr. REN Deqi began to serve as Executive Director and member of the Connected Transactions
+Control Committee of the Bank as of 8 December 2016.
+Changes in the Bank's directors were as follows:
+Mr. LU Zhengfei began to serve as Chairman of the Personnel and Remuneration Committee of
+the Bank as of 21 September 2016.
+Mr. WANG Yong ceased to serve as Non-executive Director and member of the Strategic
+Development Committee and the Audit Committee of the Bank as of 14 September 2016 due to
+change of job.
+Mr. Jackson TAI ceased to serve as Independent Director and member of the Strategic
+Development Committee, the Audit Committee, the Risk Policy Committee and the Connected
+Transactions Control Committee of the Bank as of 1 September 2016 due to change of job.
+Mr. CHOW Man Yiu, Paul ceased to serve as Independent Director, Chairman of the Personnel
+and Remuneration Committee, and member of the Audit Committee, the Risk Policy Committee
+and the Connected Transactions Control Committee of the Bank as of 18 August 2016 due to the
+fulfilment of his term of office.
+Mr. WANG Changyun began to serve as Independent Director of the Bank as of 18 August 2016,
+and began to serve as a member of the Strategic Development Committee, the Audit Committee,
+the Risk Policy Committee and the Personnel and Remuneration Committee of the Bank as of 21
+September 2016.
+108
+Mr. ZHU Hexin began to serve as Executive Director and member of the Connected Transactions
+Control Committee of the Bank as of 1 February 2016. Mr. ZHU Hexin ceased to serve as
+Executive Director and member of the Connected Transactions Control Committee of the Bank as
+of 1 June 2016 due to change of job.
+Changes in Directors, Supervisors and Senior Management Members
+Chief Audit Officer
+Secretary to the Board of Directors and Company Secretary
+GENG Wei
+Chief Audit Officer of the Bank since November 2014. Mr. XIAO joined the Bank in 1994, and
+served as General Manager of Financial Management Department of the Bank's Head Office
+from November 2009 to November 2014. Mr. XIAO served as Deputy General Manager of the
+Beijing Branch of the Bank from May 2004 to November 2009, and also concurrently served as
+Chief Financial Officer of the Beijing Branch of the Bank from January 2007 to November 2009.
+He successively served as the Assistant General Manager and the Deputy General Manager of the
+Asset-and-Liability Management Department of the Bank's Head Office from December 1999 to
+May 2004, and also served as temporary Deputy General Manager of the Beijing Branch of the
+Bank from November 2002 to May 2004. Mr. XIAO obtained a Doctorate's Degree in Economics
+from Renmin University of China in 1994. He has the qualification of Senior Accountant.
+XIAO Wei
+Chief Risk Officer of the Bank since April 2016. Mr. PAN joined the Bank in 1984. He served as
+General Manager of the Shanghai Branch of the Bank from March 2011 to November 2015 and
+concurrently as Vice President of Shanghai RMB Trading Unit of the Bank from March 2012 to
+November 2015. From April 2009 to March 2011, he served as General Manager of the Suzhou
+Branch of the Bank. He previously served as the Deputy General Manager and Chief Financial
+Officer of the Jiangsu Branch of the Bank. He obtained a Master's Degree from China Europe
+International Business School in 2008.
+Chief Risk Officer
+PAN Yuehan
+In 2016, the Bank convened 3 meetings of the Board of Directors via written resolutions. At
+these meetings, the Board of Directors mainly reviewed and approved the proposals on the
+establishment of the Charity Foundation of the Bank, adjustments to chairman and members of
+the special committees of the Board of Directors, and the Pilot Plan of the Investment and Loan
+Linkage Mechanism of Bank of China, among others.
+Mr. GAO Yingxin began to serve as Executive Director and member of the Risk Policy
+Committee of the Bank as of 8 December 2016.
+Secretary to the Board of Directors of the Bank since June 2015 and Company Secretary of the
+Bank since October 2015. Mr. GENG joined the Bank in 2006. He had assumed various positions
+including the Chief Compliance Officer of the Legal and Compliance Department, Deputy
+General Manager and Chief Compliance Officer of the Risk Management Unit (Compliance
+Management), and Deputy General Manager (in charge of the department's work) and Chief
+Compliance Officer of the Legal and Compliance Department, General Manager of the Board
+Secretariat. Before joining the Bank, he served various positions of Industrial and Commercial
+Bank of China, including the Deputy Division Head, Division Head and Deputy General Manager
+of the Legal Affairs Department, and Deputy Director of the Joint Stock Reform Office. Mr.
+GENG obtained a Doctorate's degree in law from Peking University in 1995.
+Ms. Angela CHAO began to serve as Independent Director and member of the Audit Committee,
+the Risk Policy Committee and the Connected Transactions Control Committee of the Bank as of
+4 January 2017.
+117
+109
+66-75
+female
+other countries
+and regions
+Executive
+12
+13
+Board Composition
+Number of Directors
+116
+The Board of Directors of the Bank is rationally structured and diversified. Currently, the Board
+of Directors comprises thirteen members. Besides the Chairman, there are three executive
+directors, four non-executive directors and five independent directors. The proportion of
+independent directors exceeds one-third of the total number of directors. The Bank's directors
+are elected at the shareholders' meeting, with a term of office of three years starting from
+the date when the Bank receives approval of the appointment from CBRC. A director may
+serve consecutive terms by re-election and re-appointment unless otherwise specified by laws,
+regulations and supervisory requirements. The positions of Chairman and President of the Bank
+are assumed by two persons. For detailed background and an explanation of recent changes of
+the Board members, please refer to the section “Directors, Supervisors and Senior Management
+Members".
+The Board of Directors has set up the Strategic Development Committee, Audit Committee, Risk
+Policy Committee, Personnel and Remuneration Committee and the Connected Transactions
+Control Committee, as well as the US Risk and Management Committee established under the
+Risk Policy Committee, to assist the Board of Directors in performing its functions under the
+authorisation of the Board of Directors.
+The Board of Directors, which is responsible to the shareholders' meeting, is the Bank's decision-
+making body. The Board of Directors exercises the following functions and powers as specified
+by the Bank's Articles of Association: convening shareholders' meetings and implementing
+the resolutions of shareholders' meetings; deciding on the Bank's strategic policies, business
+plans and material investment plans (except for those material investment plans that are subject
+to shareholders' meeting approval as specified in the Articles of Association); formulating the
+annual financial budgets, final accounts and plans for profit distribution and loss making-up of
+the Bank; appointing or dismissing members of special committees and the Senior Management
+of the Bank; reviewing and deciding on the establishment of the Bank's basic administrative
+system, internal management framework and important sub-entities; developing and reviewing
+corporate governance policies of the Bank; taking charge of performance evaluation and
+matters of material reward and punishment for senior management members, and hearing the
+reports of the Senior Management and examining their work, among others. The Board of
+Directors continuously reviews and updates the Articles of Association and the Bank's corporate
+governance policies and systems in accordance with the applicable laws and regulations, relevant
+regulatory requirements and listing rules, and ensures compliance with such policies and systems.
+Composition of the Board of Directors
+Functions and Powers of the Board of Directors
+Board of Directors
+115
+During the reporting period, the Board of Directors has fully implemented the resolutions and
+scheme on the authorisation to the Board of Directors granted by the shareholders' meeting
+passed at the shareholders' meetings, and earnestly carried out the proposals regarding the 2015
+profit distribution plan, the 2016 annual budget for fixed assets investment, the issuance of bonds,
+the appointments of directors and 2016 external auditor and so on.
+Implementation of the Resolutions Passed at the Shareholders' Meeting by the Board of
+Directors
+The Bank issued announcements on the resolutions and legal opinions of the aforementioned
+shareholders' meetings on 7 June 2016 and 18 November 2016 respectively, pursuant to
+regulatory requirements. Please refer to the websites of SSE, HKEx and the Bank.
+All of the aforementioned meetings were convened and held in strict compliance with the relevant
+laws and regulations as well as the listing rules of the Chinese mainland and Hong Kong. The
+Bank's directors, supervisors and senior management members attended the meetings and
+communicated with shareholders on issues of their concern.
+On 18 November 2016, the Bank held its 2016 First Extraordinary General Meeting in Beijing.
+Online voting for A-Share Holders was available. The meeting considered and approved
+7 proposals including the election of Mr. WANG Xiquan to be appointed as shareholders'
+representative supervisor of the Bank, the election of Mr. REN Deqi to be appointed as executive
+director of the Bank, the election of Mr. GAO Yingxin to be appointed as executive director
+of the Bank, the election of Ms. Angela CHAO to be appointed as independent director of the
+Bank, the 2015 remuneration distribution plan for Chairman of the Board of Directors, executive
+directors, Chairman of the Board of Supervisors and shareholders' representative supervisors,
+the establishment of the Charity Foundation of the Bank and the amendments to the Articles of
+Association. The proposal regarding the amendments to the Articles of Association was a special
+resolution.
+On 7 June 2016, the Bank held its 2015 Annual General Meeting in Beijing and Hong Kong
+by way of video conference. Online voting for A-Share Holders was available. This meeting
+considered and approved 11 proposals including the 2015 work report of the Board of Directors,
+the 2015 work report of the Board of Supervisors, the 2015 annual financial statements, the 2015
+profit distribution plan, the 2016 annual budget for fixed assets investment, the appointment
+of Ernst & Young Hua Ming as the Bank's external auditor for 2016, the election of directors,
+independent directors and supervisors of the Bank, the issuance of bonds and the issuance of
+the qualified write-down tier-2 capital instruments. The meeting also heard the 2015 report on
+connected transactions, the 2015 duty report of independent directors and the 2015 report on the
+implementation on the Scheme on the Authorisation to the Board of Directors Granted by the
+Shareholders' Meeting of Bank of China. The proposals regarding the issuance of bonds and the
+issuance of the qualified write-down tier-2 capital instruments were special resolutions.
+Convening of Shareholders' Meeting
+114
+The shareholders' meeting is the body of authority of the Bank. The shareholders' meeting is
+responsible for making decisions on important issues of the Bank, including considering and
+approving the Bank's profit distribution plan, annual financial budget and financial statements,
+changes in the Bank's registered capital, adopting resolutions on matters such as the issue
+of bonds and other securities, merger and division, amending the Articles of Association of
+the Bank, electing directors, electing shareholders' representative supervisors and external
+supervisors and deciding the remunerations of directors and supervisors.
+Functions and Powers of Shareholders' Meeting
+Shareholders' Meeting
+Please refer to the Articles of Association for details of the rights entitled to shareholders. If
+shareholders need to contact the Board of Directors regarding the aforementioned items or for
+other enquiries to the Board of Directors, please refer to the section "Reference for Shareholders
+- Investor Enquiry" for contact details.
+Director
+According to the Articles of Association, any shareholder who holds severally or jointly with
+others 5% or more voting shares of the Bank shall have the right to present enquiries to the
+shareholders' meeting. The Board of Directors, the Board of Supervisors, or other relevant senior
+management personnel shall attend the shareholders' meeting, accept enquiries, and answer or
+explain accordingly.
+11
+10
+Mr. WANG Wei ceased to serve as Non-executive Director and member of the Strategic
+Development Committee and the Risk Policy Committee of the Bank as of 19 January 2017 due
+to change of job.
+Convening of Board Meetings
+Directorship
+with the Bank
+(years)
+Gender
+Age
+Designation Nationality
+0
+1
+2
+Director
+under 3
+under 55
+Independent
+3
+4
+Chinese
+mainland
+5
+male
+6
+Director
+7
+Non-executive
+8
+56-65
+9
+over
+China
+Hong Kong
+Shareholders' Right to Present Enquiries
+In 2016, the Bank convened 8 on-site meetings of the Board of Directors on 19 January, 30
+March, 26 April, 12 May, 8 June, 30 August, 26 October, and 21 December, respectively. At
+these meetings, the Board of Directors reviewed and approved 56 proposals related to the Bank's
+regular reports, the nomination of candidates for the directors, the amendments to the Articles of
+Association, the establishment of asset management company, the issuance of bonds, the dividend
+distribution plan, the establishment of overseas branches and subsidiaries, the liquidity risk
+management policy, the market risk stress test policy, the value at risk policy, the management
+measures on information disclosure suspension and exemption, and so on. It also heard 6 reports
+related to the 2015 report on internal control audit and internal control recommendations by the
+Bank's external auditors, and other matters.
+Shareholders' Right to Propose Resolutions at Shareholders' Meetings
+Board of Directors
+Board Secretariat
+The Bank's corporate governance framework is shown below:
+Corporate Governance Framework
+In 2016, the Bank's corporate governance performance continued to be recognised by the capital
+markets and the wider public. The Bank was granted the 12th "Golden Prize of Round Table"
+for Best Board of Directors of Chinese Listed Companies, the “2016 Best Corporate Governance
+Award Gold Award" by Hong Kong Institute of Certified Public Accountants and the "Best
+Board Secretary of China Securities Golden Bauhinia Awards" by Ta Kung Wen Wei Media
+Group, and other corporate governance awards.
+111
+The Bank highly recognises the importance of the independence of the election of independent
+director. The work of election of independent director is led and promoted by the independent
+director who serves as the Chairman of the Personnel and Remuneration Committee of the
+Board of Directors. Candidates for independent directors are mainly recommended by incumbent
+independent directors and are proposed to the Board of Directors after discussion at the selection
+meetings attended by all independent directors. The selection and engagement procedures
+of independent directors are compliant and independent, which ensure the objective and fair
+duty performance of independent directors and safeguard the overall interests of shareholders
+especially the legitimate rights and interests of minority shareholders.
+The Bank makes great efforts to promote Board diversity. It has formulated the Bank of China
+Limited Board Diversity Policy, which lays out the stance of the Bank on the diversity of the
+Board of Directors and specifies the approaches to realise Board diversity on an on-going basis.
+All Board appointments are made on merit, in the context of the skills and experience the Board
+as a whole requires, and taking into account various aspects of the Board diversity which include
+but not limited to regulatory requirements and gender, age, cultural and educational background,
+geographical location, professional experience, skills, knowledge, and length of service of
+directors, etc. The Bank implements the aforementioned diversity policy and requirements
+throughout the director selection and engagement process.
+The Bank places great emphasis on improving its corporate governance mechanisms. It ensures
+that minority shareholders are properly informed and able to participate and make decisions. The
+annual shareholders' meetings are held in Beijing and Hong Kong by way of video conference,
+allowing shareholders from both the Chinese mainland and Hong Kong to attend in person.
+In addition, online voting for A-Share Holders is available to guarantee the rights of minority
+shareholders. By constantly improving the mechanisms for the smooth operations of the Board of
+Directors, information disclosure and stakeholder engagement, the Bank continuously enhances
+the effectiveness of the Board's work, supports the scientific and highly efficient decision-making
+of the Board and increases the corporate transparency, thus meeting its responsibilities to all of its
+stakeholders, including shareholders, customers, employees and society.
+The Bank continually refines its corporate governance system. Its corporate governance
+normative documents including the Articles of Association are constantly revised to reflect
+regulatory requirements and the Bank's actual development. This includes the implementation on
+the authorisation to the Board of Directors granted by the shareholders' meeting and that to the
+President granted by the Board of Directors. In this way, the Bank has established a system of
+responsibilities based on a clear division of powers and effective checks and balances.
+The Bank takes excellent corporate governance as an important objective. Adhering to the rules
+and regulations governing capital markets and relevant industries, the Bank has made constant
+efforts to improve its corporate governance framework, which comprises the shareholders'
+meeting, the Board of Directors, the Board of Supervisors, and the Senior Management. This
+framework operates smoothly owing to a clear division of duties. All special committees of the
+Board of Directors and the Board of Supervisors have performed their duties and functioned
+effectively, thereby enhancing the Bank's corporate governance capabilities.
+Overview of the Corporate Governance
+Corporate Governance
+Shareholders'
+Meeting
+110
+Mr. LIU Qiang began to serve as Executive Vice President of the Bank as of 16 November 2016.
+Mr. ZHANG Qingsong began to serve as Executive Vice President of the Bank as of 16
+November 2016. Mr. ZHANG Qingsong began to serve as Chief Information Officer of the Bank
+as of 31 March 2017.
+Ms. ZHANG Lin ceased to serve as Secretary of Party Discipline Committee of the Bank as of 5
+July 2016.
+Mr. ZHU Hexin ceased to serve as Executive Vice President of the Bank as of 1 June 2016.
+Mr. ZHANG Jinliang ceased to serve as Executive Vice President of the Bank as of 14 January
+2016.
+Changes in the Bank's senior management members were as follows:
+Mr. CHEN Yuhua began to serve as Chairman of the Financial and Internal Control Supervision
+Committee of the Board of Supervisors of the Bank as of 20 February 2017.
+Mr. WANG Xiquan began to serve as Supervisor, Chairman of the Board of Supervisors and
+Chairman of the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors of the Bank as of 18 November 2016.
+Mr. LI Jun ceased to serve as Supervisor and Chairman of the Board of Supervisors and Chairman
+of the Duty Performance and Due Diligence Supervision Committee of the Board of Supervisors
+of the Bank as of 18 November 2016 due to the reason of age.
+Mr. GAO Zhaogang began to serve as Employee Supervisor of the Bank as of 14 April 2016.
+Mr. GAO Zhaogang began to serve as member of the Duty Performance and Due Diligence
+Supervision Committee of the Board of Supervisors of the Bank as of 20 February 2017.
+Mr. LIU Xiaozhong ceased to serve as Employee Supervisor and member of the Duty
+Performance and Due Diligence Supervision Committee of the Board of Supervisors of the Bank
+as of 14 April 2016 due to the fulfilment of his term of office.
+According to the Articles of Association, any shareholder who holds, individually or in
+aggregate, 3% or more voting shares of the Bank shall have the right to propose a resolution in
+a shareholders' meeting. Any shareholder who holds, individually or in aggregate, 3% or more
+voting shares of the Bank shall have the right to propose and submit in writing to the Board of
+Directors interim proposals 10 days prior to the convening of a shareholders' meeting. When the
+Board of Directors decides not to include such proposals in the meeting's agenda, it shall explain
+and clarify the reasons in the shareholders' meeting. When the proposing shareholders dissent
+with the Board of Directors' decision to exclude such proposals, they may request to call for an
+extraordinary shareholders' meeting by themselves based on the relevant procedures stipulated in
+the Articles of Association.
+Changes in the Bank's supervisors were as follows:
+Mr. FAN Dazhi began to serve as Secretary of Party Discipline Committee of the Bank as of 27
+December 2016.
+Senior Management
+(Executive Committee)
+Mr. PAN Yuehan began to serve as Chief Risk Officer of the Bank as of 20 April 2016.
+The 2016 First Extraordinary General Meeting approved the proposal on the amendments to
+the Articles of Association of the Bank. These amendments are made to reflect the latest status
+of share capital of the Bank and to satisfy the new requirements on corporate governance put
+forward in regulatory rules of Chinese mainland and Hong Kong. The corporate governance
+section of the amendments clarified certain rights and obligations of the shareholders, particularly
+the major shareholders, added and clarified certain requirements on the duties and procedural
+rules of the shareholders' meeting, the Board of Directors and the Board of Supervisors, as
+well as the duty performance by directors and supervisors, made further provisions on the
+shareholders' creation of pledge over the shares of the Bank, and updated the scope of functions
+and responsibilities of the Risk Policy Committee of the Board of Directors of the Bank pursuant
+to relevant regulatory rules. The amendments are still under the approval by CBRC.
+113
+According to the Articles of Association, shareholders individually or in aggregate holding a total
+of 10% or more voting shares of the Bank have the right to make a written request to the Board of
+Directors to convene an extraordinary shareholders' meeting. Two or more shareholders holding
+a total of 10% or more voting shares carrying voting rights of the Bank may sign one or more
+written requests of identical form and substance requesting the Board of Directors to convene a
+meeting of shareholders of different categories and stating the subject of the meeting. If the Board
+of Directors fails to issue a notice of such a meeting within 30 days after receipt of a written
+request for convening an extraordinary shareholders' meeting or a meeting of shareholders of
+different categories submitted by the proposing shareholders, the proposing shareholders may
+by themselves convene the meeting within four months after the Board of Directors received
+the request. The procedures according to which they convene such meeting shall, to the extent
+possible, be identical to the procedures according to which shareholders' meetings are convened
+by the Board of Directors. Where the proposing shareholders convene and hold a meeting because
+the Board of Directors failed to convene such meeting pursuant to a request as mentioned above,
+the reasonable expenses incurred by such shareholders shall be borne by the Bank and shall be
+deducted from the sums owed by the Bank to the negligent directors.
+Shareholders' Right to Convene an Extraordinary Shareholders' Meeting and a Meeting of
+Shareholders of Different Categories
+The Bank highly values the protection of its shareholders' interests and has established and
+maintained an effective and multi-channel shareholder communication platform. This includes
+holding shareholders' meetings and maintaining an investor hotline to ensure that all shareholders
+are treated equally, properly informed and able to participate in and exercise their voting and
+other rights regarding the major issues of the Bank. The Bank independent and completely
+autonomous in all of its business operations. It operates independently and separately from its
+controlling shareholder, Huijin, in respect of its business, personnel, asset, institutional and
+financial matters.
+Shareholders and Shareholders' Rights
+Amendments to the Articles of Association
+112
+During the reporting period, the Bank strictly observed the Corporate Governance Code (the
+"Code") as set out in Appendix 14 to the Hong Kong Listing Rules. Save as disclosed in this
+annual report, during the reporting period, the Bank has complied with all provisions of the Code
+and has substantially complied with most of the recommended best practices set out in the Code.
+During the reporting period, the actual performance of the Bank's corporate governance was
+fully in compliance with the Company Law and the requirements for the governance of listed
+companies set out in the normative documents of CSRC.
+Laundering Committee
+Asset Disposal Committee
+Anti-money
+Internal Control Supervision Committee
+Finance and
+Corporate Governance Compliance
+Duty Performance and
+Board of Supervisors Office
+Strategic Development
+Committee
+Audit Committee
+Risk Policy Committee
+Due Diligence Supervision Committee
+US Risk and
+Personnel and
+Remuneration Committee
+Connected Transactions
+Control Committee
+Audit Department
+Asset and Liability
+Management Committee
+Risk Management and
+Internal Control Committee
+Procurement Review Committee
+IT Management Committee
+Securities Investment and
+Management Committee
+Internet Finance Committee
+Management Committee
+Board of Supervisors
+B༡༠༦, — | , । । ।
+1/1
+11/11
+3/3
+5/5
+55
+1/1
+11/11
+Jackson TAI
+11/11
+11/11
+11/11
+11/11
+11/11
+11/11
+11/11
+1/1
+11/11
+1/2
+7/7
+2/2
+5/5
+11/11
+CHOW Man Yiu, Paul
+2/2
+WANG Wei
+WANG Yong
+3/3
+0/0
+ZHU Hexin
+Former Directors
+7/7
+2/2
+3/3
+7/7
+5/5
+3/3
+7/7
+5/5
+5/5
+5/5
+5/5
+2/2
+1/1
+Audit
+1/1
+Committee
+Directors
+EE SE
+Shareholders' the Board of Development
+Meetings
+Directors
+Personnel and Transactions
+Meetings of Strategic
+Connected
+Number of meetings attended in person/Number of meetings convened during term of office
+Meetings of the Special Committees of the Board of Directors
+During the reporting period, the attendance rate of each director of the shareholders' meetings,
+meetings of the Board of Directors and special committees is given below:
+Directors' Attendance of Shareholders' Meetings, Meetings of the Board of Directors and
+Special Committees
+Duty Performance of Directors
+118
+During the reporting period, the Bank performed self-assessment on internal control in line with
+the Basic Standard for Enterprise Internal Control and its supporting guidelines. No material
+deficiencies were identified in the internal control systems for both the financial reporting and
+non-financial reporting of the Bank. Ernst & Young Hua Ming LLP, as the Bank's external
+auditor for internal control, audited the effectiveness of the Bank's internal controls over financial
+reporting and issued a standard unqualified opinion. The 2016 Internal Control Assessment
+Report of Bank of China Limited and the Auditor's Report on Internal Control issued by Ernst &
+Young Hua Ming LLP have been published on the websites of SSE, HKEx and the Bank.
+The Audit Committee closely monitored the changing economic and financial environment at
+home and abroad, as well as the overall conditions of the Group's internal control function,
+including the establishment and operation of its internal control systems for both financial
+reporting and non-financial reporting. In addition, the committee heard and reviewed, on a regular
+and ad hoc basis, internal audit reports and assessment opinions on internal control, the progress
+in internal control improvements and remediation suggested by external auditors, as well as the
+overall situation regarding the prevention, control and redress of fraud cases and risk events.
+The committee guided and urged the Senior Management to improve the “three lines of defence”
+system of internal control and conducted special research into internal audit effectiveness.
+The Board of Directors attached great importance to the Group's far-reaching internal control
+system and continued to promote its construction. It regularly heard and reviewed Senior
+Management reports concerning implementation of the Guidelines on Internal Control
+of Commercial Banks, bank-wide operational management, risk management, fraud case
+management and internal control system construction and assessment, thus earnestly assuming its
+responsibility to improve and fulfil a sound and effective internal control function.
+The Board of Directors and the Risk Policy Committee have acknowledged the full effectiveness
+of the existing risk management system of the Bank based on their close monitoring and quarterly
+evaluation of the system's effectiveness.
+According to regulatory rules and internal management requirements, the Senior Management
+submits important risk management policies, systems and procedures to the Board of Directors
+and Risk Policy Committee for review and approval. The Risk Policy Committee regularly
+reviews the Group's overall risk status (covering major risk categories such as credit risk, market
+risk, operational risk, liquidity risk, legal and compliance risk and reputational risk) and work
+plan for the next stage and puts forward corresponding work requirements.
+The Board of Directors of the Bank considers a sound risk management system and continuously
+improved independence, specialty, foresight, and initiative of risk management are the basis and
+prerequisite of realising the Bank's strategic goals, ensuring the sound and sustained development
+of banking businesses and creating greater value for shareholders.
+Committee
+Risk Policy
+Committee
+Remuneration Control
+Committee Committee
+0/0
+11/11
+11/11
+11/11
+9/11
+1/2
+ESSSSSSS2255
+WANG Changyun
+LEUNG Cheuk Yan
+0/0
+LU Zhengfei
+LI Jucai
+LIU Xianghui
+ZHANG Qi
+ZHANG Xiangdong
+GAO Yingxin
+REN Deqi
+CHEN Siqing
+TIAN Guoli
+Incumbent Directors
+Nout WELLINK
+1/1
+5
+6/7
+The committee is mainly responsible for reviewing the Bank's risk management strategies,
+substantial risk management policies and procedures and system, and providing the suggestions
+to the Board of Directors; discussing with the Senior Management about the risk management
+procedures and rules, and putting forward relevant suggestions on improvement to make sure
+that the risk management policies, procedures and rules are uniformly abided by in the Bank;
+reviewing the Bank's major risk activities, and exercising its veto power in a reasonable
+manner over any transaction that will or may lead to debts to the Bank and/or expose the Bank
+to market risk in excess of the single transaction risk limit or the accumulated transaction
+risk limit approved by the Risk Policy Committee or the Board of Directors; monitoring
+the implementation of the Bank's risk management strategies, policies and procedures, and
+providing suggestions to the Board of Directors; examining the risk management status and
+re-checking the risk management procedures and rules; regularly hearing and evaluating the
+reports on implementation status of risk management and internal control responsibilities by the
+Senior Management, functional departments and institutions, and putting forward requirements
+on improvement; assessing the material investigation results of risk management matters and
+the Senior Management's response to such results voluntarily or as required by the Board of
+Directors.
+The Risk Policy Committee of the Bank comprises five members, including Executive Director
+Mr. GAO Yingxin, Non-executive Director Mr. LIU Xianghui, Independent Directors Mr. Nout
+WELLINK, Mr. WANG Changyun and Ms. Angela CHAO. Independent Director Mr. Nout
+WELLINK serves as the Chairman of the committee.
+Risk Policy Committee
+123
+In accordance with the Policies of Selection, Rotation and Dismissal for External Auditors of
+Bank of China Limited, the external auditors made a summary audit report and submitted a report
+on their independence compliance to the committee. The Bank's Senior Management appraised
+the external auditors' work. Based on this appraisal, the Audit Committee conducted its own
+assessment on the auditors' performance, effectiveness and independence compliance in 2016. It
+discussed re-engagement matters, and decided to reappoint Ernst & Young Hua Ming LLP as the
+Bank's domestic auditor and internal control auditor for 2017, and to reappoint Ernst & Young
+as the Bank's international auditor for 2017. Such proposals have been submitted to the Board of
+Directors for approval.
+The Audit Committee heard and reviewed reports from the Senior Management concerning
+the Bank's business performance and major financial data. It also requested that the Senior
+Management submit the annual financial statements to the auditors in a timely manner, so
+as to ensure sufficient time for the annual audit. During the audit, the committee maintained
+independent communications with the auditors and arranged independent communications
+between the auditors and the independent directors. At its first meeting of 2017, the Audit
+Committee reviewed and approved the Bank's 2016 financial statements and submitted them to
+the Board of Directors for approval.
+According to the Procedure Rules on the Preparation of Annual Report of the Board Audit
+Committee of Bank of China Limited, prior to the start of audit field work by the auditors, the
+Audit Committee confirmed with the auditors the details of the 2016 audit plan, including areas
+of focus for auditing the 2016 Annual Report, risk assessment and identification methods, the
+application of accounting standards, tests of internal control, compliance and fraud related
+procedures, and the allocation of human resources. In particular, the committee reminded the
+auditors to report any difference of judgment between the auditors and the Senior Management
+during the audit, as well as the process and results of reconciling such differences.
+Moreover, in response to changes in domestic and overseas economic trends, the Audit
+Committee paid close attention to the changes in the Bank's achievements in improving business
+performance and cost-effectiveness control and put forward many important opinions and
+suggestions regarding the improvement of corporate governance mechanism, the enhancement
+of internal audit independence, the amelioration of credit asset quality and the improvement of
+internal control measures.
+The Audit Committee held five meetings in 2016. It mainly reviewed the Bank's quarterly,
+interim and annual financial reports, the annual internal control assessment report, the scheme
+on the adjustment of HR management system of audit line and the proposal on the appointment
+and audit fee of the external auditors for 2017. It also reviewed and approved the 2016 work plan
+and financial budget for internal audit. In addition, it heard the Senior Management response to
+the external auditor's management proposal for 2015, report on the 2016 overseas supervision
+information, reports on internal audit in 2015 and the first half of 2016, report on asset quality
+in the first quarter of 2016, report on internal control progress in 2016, the prevention and
+control of external infringement cases in 2016, report on the internal control audit progress and
+independence compliance of the external auditor in 2016 and report on the audit plan of the
+external auditors for 2017, among others.
+122
+The committee is mainly responsible for reviewing financial reports and other significant
+accounting policies and regulations formulated by the Senior Management; reviewing the
+external auditors' audit opinion on financial reporting, annual audit plan and recommendations
+for management; approving the annual internal audit plan and budget; appraising the duty
+performance and work quality and effect of the external auditors and internal audit and
+monitoring their independence; recommending the engagement, reappointment, replacement
+and audit fee of the external auditors; recommending the appointment and dismissal and
+appraising the performance of the Chief Audit Officer; overseeing the Bank's internal control
+function, reviewing material deficiencies in internal control design and execution by the Senior
+Management and investigating fraud cases; reviewing the employee reporting system and urging
+the Bank to conduct fair investigations and take appropriate measures regarding matters reported
+by the employees.
+The Audit Committee comprises six members, including Non-executive Director Mr. LI Jucai
+and Independent Directors Mr. Nout WELLINK, Mr. LU Zhengfei, Mr. LEUNG Cheuk Yan, Mr.
+WANG Changyun and Ms. Angela CHAO. Independent Director Mr. LU Zhengfei serves as the
+Chairman of the committee.
+Audit Committee
+The Strategic Development Committee held eight on-site meetings and three meetings via written
+resolutions in 2016. At these meetings, it mainly approved the proposal on profit distribution
+for 2015, the dividend distribution plan for preference shares, pilot plan of the investment and
+loan linkage mechanism, the establishment of the asset management company and so on. In
+response to changes in international and domestic economic and financial situations, the Strategic
+Development Committee stepped up its analysis of the operating environment, paid constant
+attention to opportunities and challenges brought about by supply-side structural reform, and
+put forward many important comments and recommendations regarding the implementation of
+the Bank's strategic development plans and improving its transformational development thus
+providing strong support to the scientific decision-making of the Board of Directors.
+The committee is mainly responsible for reviewing the strategic development plans presented
+by the Senior Management, assessing the factors that may affect the strategies of the Bank and
+their implementation, and advising the Board with regard to strategy adjustments; reviewing
+the annual budget, strategic capital allocation (policies on capital structure, capital adequacy
+ratio and risk-reward trade-off), objectives of asset-liability management, IT development and
+other special strategic development plans of the Bank, and advising the Board accordingly;
+coordinating strategies on the overall development of various financial businesses and the
+development of domestic and overseas institutions, and deciding on the setup, cancellation and
+increase or decrease of the Bank's capital of domestic and overseas institutions within its scope
+of authorisation; designing and formulating key investment and financing plans and merger
+and acquisition plans of the Bank; and reviewing the substantial internal reorganisation and
+adjustment plans of the Bank, and advising the Board accordingly.
+121
+The Strategic Development Committee comprises eight members, including Chairman Mr. TIAN
+Guoli, Vice Chairman and President Mr. CHEN Siqing, Non-executive Directors Mr. ZHANG
+Xiangdong, Mr. ZHANG Qi, Mr. LIU Xianghui, Mr. LI Jucai and Independent Directors Mr.
+Nout WELLINK and Mr. WANG Changyun. Chairman Mr. TIAN Guoli serves as the Chairman
+of the committee.
+Strategic Development Committee
+Special Committees of the Board of Directors
+The Risk Policy Committee held five meetings in 2016, at which it mainly reviewed and
+approved the US Risk and Management Committee Charter, stress test policy for market risk,
+liquidity risk management policy, management measures for suspension and exemption of
+information disclosure, country risk limits, market risk limits, and advanced approach to capital
+management. The committee also regularly reviewed the Group risk reports and so on.
+The directors acknowledge that they are responsible for preparing financial statements of the
+Bank that truly represent the operating results of the Bank for each financial year. To the best
+knowledge of the directors, there was no material event or condition during the reporting period
+that might have a material adverse effect on the continuing operation of the Bank.
+In addition, the committee paid close attention to critical risk issues, in response to changes in
+overseas and domestic economic and financial conditions, adjustments of the government's macro
+policies and overall overseas and domestic regulations. The committee offered important opinions
+and recommendations regarding the improvement of the Bank's risk governance mechanism and
+the effective prevention and control of risks, including credit risk, market risk, operational risk,
+legal and compliance risk, liquidity risk and so on.
+In line with the Heightened Standards for Large Banks issued by the US Office of the
+Comptroller of the Currency (OCC), the Board of Directors of the Bank reviewed and approved
+the US Risk and Management Committee Charter, and established the US Risk and Management
+Committee on the basis of the former US Risk Committee under the Risk Policy Committee on
+30 March 2016. The US Risk and Management Committee oversees and manages all the risks
+incurred by the Bank's institutions in the US, and performs the duties of the board of directors of
+the Bank's New York Branch and its special committees.
+Risk Management and Internal Control by the Board of Directors and its Special
+Committees
+127
+The Board of Supervisors is the Bank's supervisory organ and is responsible to the shareholders'
+meeting. As stipulated in the Company Law and the Articles of Association of the Bank, the
+Board of Supervisors is responsible for overseeing the Board of Directors so as to ensure a
+stable operational concept, principles of values and a development strategy suitable for the
+Bank. It supervises the duty performance and due diligence of the Board of Directors, the Senior
+Management and its members as well as the Bank's financial activities, internal control and, risk
+management.
+Functions and Powers of the Board of Supervisors
+Board of Supervisors
+The Connected Transactions Control Committee held three meetings in 2016, at which it mainly
+reviewed and approved the report on connected transactions in 2015 and the report on the
+connected party list, among others. It also reviewed the statement of connected transactions of
+the Bank in 2015 and report on the thematic internal audit of connected transaction management
+of the Group in 2015, among others. During the reporting period, the Connected Transactions
+Control Committee paid constant attention to the development of the Bank's connected
+transaction monitoring system and the transmission of its connected transaction policy.
+Committee members put forward constructive suggestions regarding connected transaction
+policymaking and system development.
+The committee is mainly responsible for administering the connected transactions of the Bank
+in accordance with relevant laws, regulations and normative documents, and formulating
+administrative regulations with regard to connected transactions; confirming the Bank's
+connected parties according to laws, regulations and normative documents, and reporting
+the relevant confirmation to the Board of Directors and the Board of Supervisors; defining
+the connected transactions of the Bank in accordance with laws, regulations and normative
+documents; examining the connected transactions of the Bank pursuant to relevant laws,
+regulations and normative documents, as well as the business principles of justice and fairness;
+and examining information disclosure matters related to significant connected transactions of the
+Bank.
+The Connected Transactions Control Committee comprises four members, including Executive
+Director Mr. REN Deqi, Independent Directors Mr. LU Zhengfei, Mr. LEUNG Cheuk Yan and
+Ms. Angela CHAO. Independent Director Mr. LEUNG Cheuk Yan serves as the Chairman of the
+committee.
+Connected Transactions Control Committee
+126
+According to Articles of Association of the Bank, any shareholder who holds by himself
+or jointly with others 5% or more of the total number of voting shares of the Bank may, by
+submitting a written proposal to the shareholders' meeting, recommend candidates for directors,
+provided the number of candidates nominated shall be in accordance with the provisions of the
+Articles of Association (between 5 and 17) and not exceed the number to be elected. List of
+candidates for directors may be recommended by the Board of Directors within the number of
+candidates stipulated in the Articles of Association, with reference to the diversity policy of the
+Bank and according to the number to be elected. The Personnel and Remuneration Committee
+shall preliminarily review the qualifications and conditions of candidates for directors, and
+refer those qualified candidates to the Board of Directors for further examination. After the
+Board of Directors' approval by resolutions, the candidates shall be referred to shareholders'
+meeting in written proposals. When directors need to be added or filled temporarily, the Board
+of Directors shall raise the proposal and suggest the shareholders' meeting to elect or replace.
+During the reporting period, the Bank appointed directors in strict compliance with the Articles of
+Association.
+The Personnel and Remuneration Committee held five on-site meetings and two meetings by
+written resolutions in 2016. At these meetings, the committee mainly approved proposals on the
+performance evaluation and remuneration distribution plan for the Chairman, executive directors
+and senior management members for 2015, and the implementation plan for performance
+evaluation of the Chairman, the President, the Chairman of the Board of Supervisors and other
+senior management members in 2016, the proposals on nominating Mr. TIAN Guoli, Mr. WANG
+Yong, Mr. LU Zhengfei and Mr. LEUNG Cheuk Yan to be re-appointed as directors of the Bank,
+the proposals on nominating Mr. REN Deqi and Mr. GAO Yingxin as executive directors of the
+Bank, the proposals on appointing Mr. ZHANG Qingsong and Mr. LIU Qiang as executive vice
+presidents of the Bank, the proposals on nominating Mr. WANG Changyun and Ms. Angela
+CHAO as independent director candidates of the Bank, the proposal on adjustments of chairman
+and members of special committees of the Board of Directors, the proposal on appointing
+Mr. GAO Yingxin to be Co-chairman of the US Risk and Management Committee, and the
+proposal on adjustment of secretary of the Strategic Development Committee. The committee
+also reviewed the remuneration distribution plan for the Chairman of the Board of Supervisors
+and shareholder supervisors in 2015. The committee put forward important opinions and
+recommendations on further improving the Bank's performance evaluation management in line
+with regulatory requirements.
+125
+The committee is mainly responsible for assisting the Board of Directors in reviewing the Bank's
+human resources and remuneration strategies and overseeing their implementation; reviewing
+the structure, size and composition of the Board of Directors on an annual basis, and making
+suggestions to the Board regarding the scale and composition of the Board of Directors; studying
+and reviewing the standards and procedures for selecting, nominating and appointing directors,
+members of the Board committees and Senior Management, and making recommendations
+to the Board of Directors; identifying individuals suitably qualified to become directors and
+making recommendations to the Board of Directors on the selection of individuals nominated
+for directorships; performing preliminary review of the candidates for the members of the Senior
+Management and the chairmanship of Board committees, selecting and nominating candidates
+for different Board committees, and reporting to the Board of Directors for approval; reviewing
+and monitoring the remuneration and incentive policies of the Bank; considering and examining
+the remuneration plan of directors, supervisors and senior management members, and making
+recommendations to the Board of Directors; and setting the performance appraisal standards for
+the Senior Management of the Bank, evaluating the performance of the directors, and members of
+the Senior Management, and making recommendations to the Board of Directors.
+The Personnel and Remuneration Committee comprises five members, including Non-executive
+Directors Mr. ZHANG Xiangdong and Mr. ZHANG Qi, Independent Directors Mr. LU Zhengfei,
+Mr. LEUNG Cheuk Yan and Mr. WANG Changyun. Independent Director Mr. LU Zhengfei
+serves as the Chairman of the committee.
+Personnel and Remuneration Committee
+The US Risk and Management Committee put forward important opinions and recommendations
+regarding strengthening prevention and control of risks and compliance based on US regulatory
+dynamics, market changes and the business strategies of US operations.
+In 2016, the US Risk and Management Committee convened five meetings and regularly listened
+to reports on risk management and operation of all the Bank's institutions in the US, latest
+dynamics of US regulators, etc. In addition, the committee reviewed and approved relevant
+framework documents and important policies and regulations of the Bank's institutions in the US
+and the New York Branch.
+The US Risk and Management Committee currently comprises three members, all of which
+are members of the Risk Policy Committee, including Executive Director Mr. GAO Yingxin,
+Independent Directors Mr. Nout WELLINK and Ms. Angela CHAO. Executive Director Mr.
+GAO Yingxin and Independent Director Mr. Nout WELLINK serve as co-chairmen of the US
+Risk and Management Committee.
+124
+The following statement, which sets out the responsibilities of the directors regarding financial
+statements, should be read in conjunction with, but understood separately from, the auditor's
+statement of their responsibilities as set out in the Independent Auditor's Report contained in this
+annual report.
+Responsibility Statement of Directors on Financial Reports
+The guarantee business is one of the Bank's ordinary business activities approved by PBOC and
+CBRC and does not fall within the scope of guarantees as defined in the Circular on Regulating
+Guarantee Businesses of Listed Companies. The Bank has formulated specific management
+measures, operational processes and approval procedures in light of the risks of the guarantee
+business and carried out this business accordingly. The Bank's guarantee business principally
+comprises letters of guarantee. As at 31 December 2016, the outstanding amount of letters of
+guarantee issued by the Bank was RMB1,097.448 billion.
+2/2
+1/1
+1/1
+SEE
+3/3
+4/4
+2/2
+5/5
+SB+ |
+3/3
+7/7
+7/7
+1/1
+2/2
+4/6
+1/1
+11/11
+11/11
+2/3
+Notes:
+1
+Please refer to the section “Directors, Supervisors and Senior Management Members
+Supervisors and Senior Management Members” for changes in directors.
+_
+Pursuant to the provisions and requirements set forth in the circular (ZhengJianFa [2003] No.
+56) issued by CSRC, and according to the principles of justice, fairness and objectivity, the
+Independent Directors of the Bank, Mr. Nout WELLINK, Mr. LU Zhengfei, Mr. LEUNG Cheuk
+Yan, Mr. WANG Changyun and Ms. Angela CHAO have provided the following information
+regarding the Bank's guarantee business:
+Specific Explanation and Independent Opinions of Independent Directors on the Guarantee
+Business of the Bank
+In 2016, the independent directors did not raise any objection to the resolutions of the Board of
+Directors or its special committees.
+In 2016, independent directors put forward constructive recommendations on the Bank's strategic
+management, group risk management, anti-money laundering and development of overseas
+institutions, among others. These recommendations were adopted and diligently implemented by
+the Bank.
+120
+In 2016, the Bank's independent directors attended meetings of the Board of Directors, reviewed
+proposals, participated in discussions and offered their professional opinions independently,
+objectively and diligently, in accordance with the Articles of Association, the Procedural Rules
+for Board of Directors of Bank of China Limited and the Work Rules of Independent Directors of
+Bank of China Limited. Please refer to the section "Directors' Attendance of the Shareholders'
+Meeting, Meetings of the Board of Directors and Special Committees" for the attendance of
+independent directors at meetings.
+For the professional backgrounds and other details of the independent directors, please refer
+to the section “Directors, Supervisors and Senior Management Members". The independent
+directors individually serve as the Chairman of the Audit Committee, Risk Policy Committee,
+Personnel and Remuneration Committee and Connected Transactions Control Committee. As
+stipulated in the relevant domestic regulatory requirements and Rule 3.13 of the Hong Kong
+Listing Rules, the Bank has received the annual confirmation in writing from each independent
+director with regard to their independence. Based on these confirmations and relevant information
+in possession of the Board of Directors, the Bank confirms their independent status.
+Following the appointments of Mr. REN Deqi and Mr. GAO Yingxin as Executive Directors
+of the Bank with effect from 8 December 2016, the number of the members of the Board of
+Directors of the Bank has been changed to thirteen, four of which were independent directors
+(the qualifications of Ms. Angela CHAO to be appointed as Independent Director of the Bank
+were still subject to the approval by CBRC at that time), representing less than one-third of the
+number of members of the Board of Directors of the Bank. Ms. Angela CHAO has begun to serve
+as Independent Director of the Bank with effect from 4 January 2017 as approved by CBRC.
+There are currently five independent directors on the Board of Directors. This exceeds one-third
+of the total number of directors and is in compliance with the quorum requirement specified in the
+Articles of Association and relevant regulatory requirements.
+Independence and Duty Performance of Independent Directors
+6/7
+In 2016, the Board of Directors paid significant attention to enhancing directors' expertise, with
+a special focus on arranging relevant training. All directors of the Bank fully observed Rule
+A.6.5 of the Code as well as PRC regulatory requirements, actively participating in specialised
+training including sessions on internet finance, internationalisation strategy, enterprise M&A
+and reorganisation during reform of state-owned enterprises, key US regulation and supervisory
+expectations, challenges for banks applying the new international accounting standards, among
+others. The Bank also gave special presentations and training to the newly appointed directors in
+2016 regarding its business operations, risk management system and directors' responsibilities.
+The Bank's directors also took it upon themselves to enhance their professional skills in various
+ways, including attending forums and seminars, meeting with domestic and overseas regulators
+and conducting on-site research exercises at the Bank's domestic and overseas branches as well as
+at other advanced international banks.
+119
+Mr. CHOW Man Yiu, Paul was not able to attend the meetings of the Board of Directors on 19 January and 12
+May 2016 due to other important business engagements.
+Mr. WANG Yong was not able to attend the meeting of the Board of Directors on 30 August 2016, the meeting of
+the Audit Committee on 29 August 2016 and the meeting of the Strategic Development Committee on 30 August
+2016 due to other important business engagements.
+Mr. LU Zhengfei was not able to attend the 2016 First Extraordinary General Meeting of the Bank on 18
+November 2016 due to other important business engagements.
+Mr. TIAN Guoli was not able to attend the 2016 First Extraordinary General Meeting of the Bank on 18
+November 2016 and the meetings of the Board of Directors on 30 March and 30 August 2016 due to other
+important business engagements. He authorised another director to attend and vote at the meetings of the Board of
+Directors as his proxy.
+4
+3
+2
+Changes in Directors,
+Training and Expertise Enhancement of Directors
+The Board of Supervisors currently comprises seven members. There are three shareholder
+supervisors (including the Chairman of the Board of Supervisors), three employee supervisors
+and one external supervisor. According to the Articles of Association, a supervisor has a term
+of office of three years and may serve consecutive terms by re-election and re-appointment.
+Shareholder supervisors and external supervisors are elected or replaced by the shareholders'
+meeting.
+Composition of the Board of Supervisors
+Directors' and Supervisors' Service Contracts
+At the Board meeting held on 23 January 2017, the dividend distribution plan for the Bank's
+Domestic Preference Shares (Second Tranche) was approved. The Bank distributed a total of
+RMB1.540 billion (before tax) of dividends on the Domestic Preference Shares (Second Tranche)
+on 13 March 2017, with an annual dividend rate of 5.50% (before tax). The dividend distribution
+plan has been accomplished.
+Cash Dividend Payout for Ordinary Shares and Capitalisation of the Capital Reserve to
+Share Capital for the Past Three Years
+Profit
+attributable to
+Dividend
+per share
+Total dividend
+equity holders
+(before tax)
+Year of dividend
+(before tax)
+(Unit:
+distribution
+(Unit: RMB)
+RMB million)
+of the Bank
+(Unit:
+RMB million)
+Capitalisation
+of the
+capital reserve
+Payout ratio to share capital
+2015
+0.175
+51,518
+170,845
+30%
+2014
+0.190
+55,934
+169,595
+33%
+2013
+0.196
+At the Board meeting held on 30 August 2016, the dividend distribution plans for the Bank's
+Offshore Preference Shares and Domestic Preference Shares (First Tranche) were approved. The
+Bank distributed dividends on the Offshore Preference Shares on 24 October 2016. According to
+the issuance terms of the Offshore Preference Shares, dividends on Offshore Preference Shares
+were denominated in RMB and paid in US dollars converted at a fixed exchange rate, with a
+total of approximately USD439 million (after tax) at an annual dividend rate of 6.75% (after
+tax). The Bank distributed a total of RMB1.920 billion (before tax) of dividends on the Domestic
+Preference Shares (First Tranche) on 21 November 2016, with an annual dividend rate of 6.00%
+(before tax). The dividend distribution plans have been accomplished.
+54,755
+132
+At the 2015 Annual General Meeting held on 7 June 2016, a final dividend on ordinary shares for
+2015 of RMB0.175 per share (before tax) was approved for payment. The A-Share and H-Share
+dividends were distributed to the shareholders separately in June and July of 2016 in accordance
+with relevant regulations. The distribution plan has been accomplished and the actual distributed
+amount was approximately RMB51.518 billion (before tax). No interim dividend on ordinary
+shares was paid for the period ended on 30 June 2016 by the Bank. The Bank did not propose any
+capitalisation of the capital reserve to share capital in 2016.
+128
+During the reporting period, the Senior Management of the Bank held 26 regular meetings,
+at which it discussed and decided upon a series of significant matters, including the Group's
+business development, asset and liability management, risk management, IT system development,
+product innovation, human resources and performance management. It also convened 186
+special meetings to arrange for matters relating to internet finance, corporate banking, personal
+banking, financial markets, process improvement, risk management and internal control, overseas
+development and integrated operations.
+In 2016, in response to business development needs, the Senior Management established the
+Internet Finance Committee, which is responsible for formulating the development strategy
+and the medium and long-term development plans of internet finance and for deliberating and
+determining major issues relating to internet finance. The Senior Management of the Bank
+currently presides over the Asset and Liability Management Committee, the Risk Management
+and Internal Control Committee (which governs the Anti-money Laundering Committee and
+the Asset Disposal Committee), the Procurement Review Committee, the IT Management
+Committee, the Securities Investment and Management Committee and the Internet Finance
+Committee. During the reporting period, all of the committees diligently fulfilled their duties and
+responsibilities as per the powers specified in their committee charters and the rights delegated
+by the Executive Committee, and strived to push forward the sound development of the Bank's
+various operations.
+Securities Transactions by Directors and Supervisors
+Pursuant to domestic and overseas securities regulatory requirements, the Bank formulated and
+implemented the Management Measures on Securities Transactions by Directors, Supervisors
+and Senior Management Personnel of Bank of China Limited (the "Management Rules") to
+govern securities transactions by directors, supervisors and senior management members of the
+Bank. The terms of the Management Rules are more stringent than the mandatory standards set
+out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in
+Appendix 10 to the Hong Kong Listing Rules (the "Model Code”). All directors and supervisors
+confirmed that they have complied with the standards set out in both the Management Rules and
+the Model Code throughout the reporting period.
+Appointment of External Auditors
+Upon approval by the 2015 Annual General Meeting, Ernst & Young Hua Ming LLP was
+reappointed as the Bank's domestic auditor and internal control auditor for 2016 and Ernst &
+Young was reappointed as the Bank's international auditor for 2016.
+Fees paid to Ernst & Young and its member firms for financial statements audit of the Group,
+including those of the Bank's overseas subsidiaries and branches, were RMB213 million for the
+year ended 31 December 2016, of which the fees for internal control audit paid to Ernst & Young
+Hua Ming LLP totalled RMB14 million.
+Ernst & Young and its member firms were not engaged in other significant non-auditing services
+with the Bank in 2016. The Bank paid RMB32.9838 million for non-auditing services to Ernst &
+Young and its member firms in the year.
+129
+Ernst & Young Hua Ming LLP and Ernst & Young have provided audit services to the Bank
+for four consecutive years. Mr. ZHANG Xiaodong and Mr. FENG Suoteng are the certificated
+public accountants who signed the auditor's report on the Bank's financial statements prepared in
+accordance with CAS for the year ended 31 December 2016.
+At the forthcoming 2016 Annual General Meeting, the Board of Directors will tender a resolution
+for review and approval regarding the proposal on engaging Ernst & Young Hua Ming LLP as
+the Bank's domestic auditor and internal control auditor for 2017, providing audit services on its
+financial statements and internal control pursuant to CAS; and engaging Ernst & Young as the
+Bank's international auditor for 2017, providing financial statements audit services pursuant to
+IFRS.
+Investor Relations and Information Disclosure
+In 2016, the Bank enhanced its market communication and promotional efforts and continued to
+promote its differentiated competitive advantages in such areas as the “Belt and Road” initiatives,
+RMB internationalisation and its diversified businesses. As a result, it received positive
+recognition from capital markets. The Bank successfully arranged presentations for its 2015
+annual results and 2016 interim results, as well as road shows in which the Senior Management
+continued to actively explain the Bank's development strategies and operating performance
+to investors from the Chinese mainland, Asia-pacific, Europe and North America. The Senior
+Management also listened earnestly to market concerns and feedback. Such activities were
+warmly welcomed by investors. Through active participations in influential investment forums,
+the Bank increased the frequency of its communications with markets and expanded its investor
+coverage. During the reporting period, the Bank's Senior Management and representatives from
+major business departments had approximately 200 meetings and conversations in varied forms
+with institutional investors and analysts from home and abroad, thus effectively enhancing the
+investment community's understanding of the investment value in the Bank. The Bank continued
+to explore new communication channels, continuously enriching its investor relations webpage on
+the Bank's official website and providing timely and comprehensive responses to enquiries from
+investors via the investor hotline, email, and e-interaction online platform run by SSE, as well as
+other channels. In 2016, the Bank answered over 400 calls on its investor relations hotline, and
+replied nearly 300 enquiries from its investor relations inbox as well as the e-interaction online
+platform run by SSE.
+Faced with the severe economic and financial environment, the Bank continued to strengthen
+communications with its external rating agencies, making continuous efforts to conduct
+multilevel and targeted communications on market concerns such as its risk management,
+liquidity management, capital sufficiency, operating performance and development strategies.
+During the reporting period, the Bank's credit ratings were reaffirmed by the major rating
+agencies like Moody's Investors Service and Fitch Ratings. In December 2016, Standard &
+Poor's Ratings Services upgraded the Bank's Stand-alone credit profile to “bbb+”, and preference
+shares rating to "BB". The Bank continued to maintain the highest level among domestic peers
+for all aspects of its external credit ratings. The Bank's efforts in maintaining the stability and
+making improvement of its credit ratings helped boost investors' confidence, lower financing cost
+and enhance the Bank's market influence.
+130
+In 2016, the Bank prepared and disclosed its regular and provisional reports in strict adherence
+to the principles of truthfulness, accuracy, completeness, timeliness and fairness. It continuously
+enhanced the pertinence, effectiveness and transparency of information disclosure in order to
+guarantee investors' access to relevant information. The Bank earnestly organised compliance
+analysis and information disclosure regarding major projects, thus providing timely, sufficient
+and useful information to investors. It pioneered numerous market-leading best practices,
+ensuring that the investors in the Chinese mainland and Hong Kong are provided with equal
+opportunity to access relevant information. In 2016, the Bank released a total of more than 320
+information disclosure documents on SSE and Hong Kong Stock Exchange.
+The Bank has established a comprehensive and complete information disclosure system and put
+in place clear specifications regarding information disclosure standard and scope of application,
+responsibility and the division of work of the parties concerned, information handling and
+disclosing procedures and internal monitoring measures. In 2016, closely tracking changes in
+regulatory rules and considering its internal management requirements, the Bank timely reviewed
+and revised the Information Disclosure Management Measures of Bank of China Limited and the
+Regular Report Work Management Measures of Bank of China Limited. It also formulated the
+Management Measures on Information Disclosure Suspension and Exemption of Bank of China
+Limited according to regulatory requirements and disclosed it after the review and approval by
+the Board of Directors of the Bank. Moreover, the Bank reexamined and revised its information
+disclosure working procedures in a timely manner, thus further improving the completeness of
+its regulation system and the standardisation of its management work. The Bank completed the
+registration of the insiders and the filing of memoranda on the progress of significant events
+in strict compliance with relevant regulatory requirements and the rules of the Bank. The Bank
+reinforced the principal responsibility system and information correspondent mechanism at the
+Group level, organised information disclosure training and conducted guidance on information
+disclosure obligations, so as to promote the building of a strong compliance culture of
+information disclosure and to improve the initiative and long-term perspective of its information
+disclosure management work.
+—
+In 2016, the Bank continued to receive wide recognitions for its work in investor relations and
+its information disclosure performance. The Bank won the “China Securities Golden Bauhinia
+Awards Best Investor Relations Listed Company" and the Hong Kong “Quam Excellence
+Investor Relations”. The Bank's annual report won a Golden Award in the overall category of the
+annual report competition of the League of American Communications Professionals (LACP). It
+also won a Silver Award in interior design of the Annual Report Competition (ARC).
+131
+Report of the Board of Directors
+The Board of Directors is pleased to present its report together with the audited Consolidated
+Financial Statements of the Bank and its subsidiaries (the "Group") for the year ended 31
+December 2016.
+Principal Activities
+The Bank provides a range of banking and related financial services, including commercial
+banking, investment banking, insurance, direct investment and investment management, fund
+management and aircraft leasing business.
+Major Customers
+During the year, the five largest customers of the Group accounted for less than 30% of the
+interest income and other operating income of the Group.
+Results and Profit Distribution
+The Group's annual results for 2016 are set out in the Consolidated Financial Statements. The
+Board of Directors has recommended a final dividend on ordinary shares for 2016 of RMB0.168
+per share (before tax), subject to the approval of the forthcoming Annual General Meeting
+scheduled on 29 June 2017. If approved, the 2016 final dividend on the Bank's ordinary shares
+will be denominated and declared in RMB and paid in RMB or equivalent Hong Kong dollars.
+The actual amount distributed in Hong Kong dollars will be calculated according to the average
+of the exchange rates announced by PBOC in the week before 29 June 2017 (inclusive), being the
+date of the Bank's Annual General Meeting. The A-Share dividend distribution date is expected
+to be 14 July 2017 and the H-Share dividend distribution date is expected to be 9 August 2017
+in accordance with relevant regulatory requirements and business rules. No capitalisation of the
+capital reserve to share capital is proposed in this profit distribution.
+At the Board meeting held on 19 January 2016, the dividend distribution plan for the Bank's
+Domestic Preference Shares (Second Tranche) was approved. The Bank distributed a total of
+RMB1.540 billion (before tax) of dividends on the Domestic Preference Shares (Second Tranche)
+on 14 March 2016, with an annual dividend rate of 5.50% (before tax). The dividend distribution
+plan has been accomplished.
+In 2016, the Senior Management of the Bank managed the Bank's operations in accordance
+with the powers bestowed upon them by the Articles of Association and the authorisations of
+the Board of Directors, and carried out the Bank's development strategy based on the annual
+performance objectives approved by the Board of Directors. Following the strategic objective
+of "Serving Society, Delivering Excellence", the Senior Management remained focusing on
+“innovation, transformation, mitigation, management and control", and thus continuously
+enhanced the Bank's performance.
+156,911
+ZZZ
+(Second Tranche)
+Formulation and Implementation of Cash Dividend Policy
+Ordinary Shares
+In 2009, the Bank amended the Articles of Association to state that the Bank should maintain the
+continuity and stability of its profit distribution policy.
+In 2013, the Bank amended the Articles of Association related to the cash dividend. This
+amendment clarified the Bank's profit distribution principles, policy and adjustment procedures,
+the consideration process of the profit distribution plan and other matters. The amendment states
+that the Bank shall adopt cash dividend as the priority form of profit distribution. Except under
+special circumstances, the Bank shall adopt cash as the form of dividend distribution where
+there is profit in that year and the accumulated undistributed profit is positive, and that the cash
+distribution of the dividend shall not be less than 10% of the profit after tax attributable to the
+ordinary shareholders of the Bank. The amendment also states that the Bank shall offer online
+voting to shareholders when considering amendments to profit distribution policy and profit
+distribution plan.
+134
+In 2014, the Bank formulated the Shareholder Return Plan for 2014 to 2016 to specify the basic
+principles, shareholder return plan and decision-making and supervisory mechanisms regarding
+the formulation, implementation and amendment of the shareholder return of the Bank.
+The procedure to formulate the aforementioned dividend distribution policy was compliant,
+transparent and complete. The criterion and ratio of the dividend are explicit and clear. The
+independent directors fully expressed their opinions and the legitimate rights and interests of
+minority shareholders were fully respected and protected. The procedure was in line with the
+provisions of the Articles of Association and other rules and regulations.
+The dividend distribution plan for ordinary shares of the Bank has been approved by the
+shareholders' meeting. In 2016, the Bank distributed dividends on ordinary shares for 2015
+in strict compliance with the Articles of Association, its dividend distribution policy and the
+shareholders' meeting resolution on profit distribution.
+Preference Shares
+The preference shareholders of the Bank receive dividend at the specified dividend rate prior to
+the ordinary shareholders. The Bank shall pay the dividend to the preference shareholders in cash.
+The Bank shall not distribute dividends on ordinary shares before all the dividends on preference
+shares have been paid.
+Dividends on the Bank's preference shares will be distributed on an annual basis. The first
+dividend period begins on the date of issuance of the preference shares. Once the preference
+shareholders have received dividends at the specified dividend rate, they shall not be entitled
+to participate in the distribution of the remaining profits of the Bank together with the ordinary
+shareholders.
+The preference share dividend is non-cumulative. If any preference share dividend for any
+dividend period is not paid in full, such remaining amount of dividend shall not be carried
+forward to the following dividend year. The Bank shall be entitled to cancel the payment of any
+dividend of the preference shares, and such cancellation shall not constitute a default. The Bank
+may at its discretion use the funds arising from the cancellation of such dividend payment to
+repay other indebtedness due and payable.
+Dividend payments are independent from the Bank's credit rating, nor do they vary with the
+credit rating.
+The dividend distribution plans for preference shares of the Bank have been approved by the
+Board of Directors. In 2016, the Bank distributed dividends on domestic and offshore preference
+shares in strict compliance with the Articles of Association, the terms of issuance of preference
+shares and the Board of Directors' resolutions on dividend distribution.
+Closure of H-Share Register of Members
+The H-Share register of members of the Bank will be closed from Monday, 10 July to Thursday,
+13 July 2017 (both days inclusive), for the purpose of determining the list of shareholders
+entitled to the proposed final dividends on ordinary shares. In order to qualify for the proposed
+135
+final dividends, the H-Share Holders of the Bank who have not registered the relevant transfer
+documents are required to lodge them, together with the relevant share certificates, with the
+H-Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited, at Rooms
+1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later
+than 4:30 p.m. on Friday, 7 July 2017. The ex-dividend date of the Bank's H Shares will be on
+Thursday, 6 July 2017.
+Donations
+Charitable and other donations made by the Group during the reporting period amounted to
+approximately RMB60.9463 million.
+Share Capital
+As at the latest practicable date prior to the issue of this annual report, the Bank had sufficient
+public float based on publicly available information, in compliance with the minimum
+requirement of the Hong Kong Listing Rules and the waiver granted by the Hong Kong Stock
+Exchange at the time of the Bank's listing.
+Distributable Reserves
+Please refer to Note V.39 to the Consolidated Financial Statements for details of distributable
+reserves of the Bank.
+Fixed Assets
+Please refer to Note V.21 to the Consolidated Financial Statements for details of the fixed assets
+of the Bank.
+Financial Summary
+Please refer to the section "Financial Highlights" for the summary of the annual results, assets
+and liabilities of the Bank for the last five years.
+5.50%
+(before tax)
+35%
+(RMB million, before tax)
+13 March 2017
+Nil
+Nil
+Nil
+133
+Dividend Distribution for Preference Shares
+Types of
+Dividend
+payment date
+preference shares
+Offshore Preference
+Shares
+23 October 2015
+Domestic Preference
+Shares
+23 November 2015
+Total dividend
+439
+(USD million, after tax)
+1,920
+(RMB million, before tax)
+Dividend rate
+6.75%
+(after tax)
+6.00%
+(before tax)
+(First Tranche)
+Domestic Preference
+Shares
+14 March 2016
+1,540
+(RMB million, before tax)
+5.50%
+(before tax)
+(Second Tranche)
+Offshore Preference
+Shares
+Domestic Preference
+Shares
+24 October 2016
+439
+21 November 2016
+(USD million, after tax)
+1,920
+(RMB million, before tax)
+6.75%
+(after tax)
+6.00%
+(before tax)
+(First Tranche)
+Domestic Preference
+Shares
+1,540
+Duty Performance of the Senior Management
+The Senior Management is the executive organ of the Bank. It is headed by the President, with
+executive vice presidents and other senior management members assisting the President's work.
+The main responsibilities of the President include presiding over the Bank's daily administrative,
+business and financial management; organising the implementation of the business plan and
+investment schemes; drafting basic management regulations and specific rules; nominating
+candidates for other senior management members; and reviewing employees' remuneration,
+benefit, reward and punishment measures.
+Functions and Powers of the Senior Management
+Connected Transactions
+137
+During the reporting period, none of the Bank, its holding companies, or any of its subsidiaries
+or fellow subsidiaries was a party to any arrangement that would enable the Bank's directors and
+supervisors, or their respective spouses or children below the age of 18, to benefit by acquiring
+shares in, or debentures of, the Bank or any other body corporate.
+Directors' and Supervisors' Rights to Acquire Shares
+No transaction, arrangement or contract of significance, in relation to the Bank's business to
+which the Bank, its holding companies, or its subsidiaries or fellow subsidiaries was a party and
+in which a director or a supervisor or any entity connected with them was materially interested,
+directly or indirectly, subsisted during the reporting period.
+Directors' and Supervisors' Interests in Transactions, Arrangements and Contracts of
+Significance
+None of the directors or supervisors of the Bank has a service contract with the Bank or its
+subsidiaries that is not determinable within one year or is not determinable without payment of
+compensation other than normal statutory compensation.
+Please refer to the section "Directors, Supervisors and Senior Management Members" for details
+of the remuneration of directors, supervisors and senior management members.
+Under the Hong Kong Listing Rules, transactions between the Bank and its connected persons
+(as defined under the Hong Kong Listing Rules) constitute connected transactions to the Bank.
+Such transactions are monitored and administered by the Bank in accordance with the Hong
+Kong Listing Rules. In 2016, the Bank has engaged in a number of connected transactions
+with its connected persons in the ordinary and usual course of its business. Such transactions
+are exempted from the reporting, annual review, announcement and independent shareholders'
+approval requirements according to the Hong Kong Listing Rules.
+Remuneration Policy of Directors, Supervisors and Senior Management Members
+None of the directors has interests in any business that competes or is likely to compete, either
+directly or indirectly, with the business of the Group.
+Directors' Interests in Competing Businesses of the Bank
+136
+The Board of Supervisors has set up the Duty Performance and Due Diligence Supervision
+Committee and the Finance and Internal Control Supervision Committee to assist in performing
+its authorised duties. The special committees mentioned above are responsible to the Board of
+Supervisors, members of which are supervisors, and each committee shall have at least three
+members.
+Duty Performance of the Board of Supervisors
+In 2016, the Board of Supervisors and its special committees earnestly performed their
+supervisory responsibilities and reviewed relevant proposals through detailed discussion. The
+Board of Supervisors held five meetings and made relevant resolutions. The Duty Performance
+and Due Diligence Supervision Committee held two meetings, while the Finance and Internal
+Control Supervision Committee held four meetings. For the performance of, and supervisory
+opinions from the Board of Supervisors during the reporting period, please refer to the section
+"Report of the Board of Supervisors".
+The Bank has made a clear regulation on the remuneration of directors, supervisors and
+senior management members. The remuneration for Chairman of the Board of Directors,
+President, Chairman of the Board of Supervisors, executive directors, Secretary of Party
+Discipline Committee and executive vice presidents shall be paid in accordance with the rules
+on remuneration reform for central enterprises, which consists of basic annual remuneration,
+performance-based annual remuneration and incentive income linked to term appraisal. The
+remuneration for other senior management members and shareholder supervisors consist of
+basic annual remuneration and performance-based remuneration, and part of performance-based
+remuneration is paid in a deferred manner. Independent directors as well as external supervisors
+and employee supervisors are remunerated by the Bank while non-executive directors are not
+remunerated by the Bank. The Bank remunerates directors, supervisors and senior management
+members who are employed by the Bank with salaries, bonuses, contribution by the employer
+to social insurance, enterprise annuity, supplementary medical insurance and housing provident
+fund, as well as other monetary income.
+Senior Management
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no tax
+is payable in Hong Kong in respect of dividends on H Shares paid by the Bank.
+In accordance with the provisions of the Notice on Issues concerning Withholding the Enterprise
+Income Tax on Dividends Paid by Chinese Resident Enterprises to H-share Holders who
+are Overseas Non-resident Enterprises (Guoshuihan [2008] No. 897) published by the State
+Administration of Taxation of PRC, when Chinese resident enterprises distribute annual
+dividends for 2008 onwards to H-share holders who are overseas non-resident enterprises, the
+enterprise income tax shall be withheld at a uniform rate of 10%.
+140
+In accordance with Chinese tax laws and regulations, the dividends and bonuses received by
+overseas resident individual shareholders from stocks issued by domestic non-foreign investment
+enterprises in Hong Kong are subject to the payment of individual income tax, which shall be
+withheld by the withholding agents. However, overseas resident individual shareholders of stocks
+issued by domestic non-foreign investment enterprises in Hong Kong are entitled to the relevant
+preferential tax treatment pursuant to the provisions in the tax agreements signed between the
+countries in which they are residents and China, or to the tax arrangements between the Chinese
+mainland and Hong Kong and Macau. Accordingly, the Bank generally withholds 10% of the
+dividends to be distributed to the individual H-Share Holders as individual income tax unless
+otherwise specified by the relevant tax laws, regulations and agreements.
+In accordance with the provisions of Article 26.2 of the Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises shall be tax-free.
+In accordance with the Enterprise Income Tax Law of the People's Republic of China and the
+Implementation Rules of the Enterprise Income Tax Law of the People's Republic of China,
+dividend income obtained by non-resident enterprises shall be levied at a preferential enterprise
+income tax rate of 10%.
+In accordance with Article 83 of the Implementation Rules of Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises referred to in Article 26.2 of the Enterprise Income Tax
+Law of the People's Republic of China mean those investment proceeds obtained from direct
+investment of resident enterprises into other resident enterprises, excluding those investment
+proceeds obtained from publicly offered and tradable stocks of resident enterprises held for less
+than 12 months on a continuing basis.
+The tax and tax relief of Shanghai-Hong Kong Stock Connect shall comply with the Notice on
+the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in
+Shanghai and Hong Kong issued jointly by MOF, State Administration of Taxation of PRC, and
+CSRC.
+In accordance with the provisions of the Notice on Implementing Differentiated Individual Income
+Tax Policy for Stock Dividends and Bonuses of Listed Companies (Caishui [2012] No. 85) and the
+Notice on Differentiated Individual Income Tax Policy for Stock Dividends and Bonuses of Listed
+Companies (Caishui [2015] No. 101) issued jointly by MOF, State Administration of Taxation
+of PRC and CSRC, for shares of listed companies obtained by individuals from public offerings
+or the transfer market, where the holding period is less than one month (inclusive), the dividends
+and bonuses shall be counted as taxable income in the full amount; where the holding period is
+more than one month and less than one year (inclusive), 50% of the dividends and bonuses shall
+be counted as taxable income on a provisional basis; and where the holding period exceeds one
+year, the dividends and bonuses shall not be counted as taxable income on a provisional basis.
+The individual income tax rate of 20% shall be applicable for all incomes mentioned above. The
+individual income tax levied on dividends and bonuses obtained by equity investment funds from
+listed companies is also calculated in accordance with the aforementioned rules.
+H-Share Holders
+Domestic Preference Share Holders
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no tax
+is payable in Hong Kong in respect of the dividends on offshore preference shares paid by the
+Bank.
+In accordance with the provisions of the Enterprise Income Tax Law of the People's Republic of
+China and the Implementation Rules of the Enterprise Income Tax Law of the People's Republic
+of China, dividend income from domestic preference shares distributed between qualified resident
+enterprises are non-taxable, and dividend income from domestic preference shares obtained by
+non-resident enterprises shall be levied at a preferential enterprise income tax rate of 10%.
+Offshore Preference Share Holders
+In accordance with Chinese tax laws and regulations, when distributing dividends to overseas
+non-resident enterprises on offshore preference shares, the Bank shall withhold enterprise income
+tax at a rate of 10%.
+A-Share Holders
+Auditors
+Please refer to the section “Corporate Governance
+details of the Bank's external auditors.
+Appointment of External Auditors" for
+141
+Members of the Board of Directors
+Executive Directors: TIAN Guoli, CHEN Siqing, REN Deqi, GAO Yingxin
+Non-executive Directors: ZHANG Xiangdong, ZHANG Qi, LIU Xianghui, LI Jucai
+The individual income tax levied on dividends obtained by individuals from non-public issuance
+of domestic preference shares is calculated in accordance with the relevant Chinese tax laws and
+regulations.
+139
+All proceeds raised from initial public offerings, issuance of subordinated bonds, the rights issue,
+issuances of tier 2 capital bonds and preference shares have been used to replenish the Bank's
+capital and increase the level of capital adequacy.
+Tax and Tax Relief
+Directors' and Supervisors' Interests in Shares, Underlying Shares and Debentures
+To the best knowledge of the Bank, as at 31 December 2016, none of the directors or supervisors
+of the Bank or their respective associates had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (within the
+meaning of Part XV of the SFO) as recorded in the register required to be kept by the Bank
+pursuant to Section 352 of the SFO or as otherwise notified to the Bank and the Hong Kong Stock
+Exchange pursuant to the Model Code as set out in Appendix 10 of the Hong Kong Listing Rules.
+Financial, Business and Family Relations among Directors
+Directors of the Bank are not related to one another with respect to finance, business and family,
+or other material relations.
+Substantial Shareholder Interests
+Please refer to the section “Changes in Share Capital and Shareholdings of Shareholders" for the
+details of the Bank's substantial shareholder interests.
+Management Contracts
+No contract concerning the management or administration of the whole or any substantial part of
+the business of the Bank was entered into or existed during the reporting period.
+Share Appreciation Rights Plan and Share Option Scheme
+Please refer to Note V.34 to the Consolidated Financial Statements for details of the share
+appreciation rights plan and share option scheme of the Group.
+Purchase, Sale or Redemption of the Bank's Securities
+As at 31 December 2016, approximately 17.23 million shares of the Bank were held as treasury
+shares.
+Shareholders of the Bank are taxed in accordance with the following tax regulations and the
+amendments thereof from time to time. They shall enjoy possible tax relief according to the
+actual situation. Shareholders should seek professional advice from their tax and legal advisors.
+The following cited laws, regulations and stipulations are all relevant provisions issued before 31
+December 2016.
+Please refer to the Notes to the Consolidated Financial Statements for details of purchase, sale or
+redemption of the Bank's securities by the Bank and its subsidiaries.
+There are no compulsory provisions for pre-emptive rights requiring the Bank to offer new
+shares to existing shareholders in proportion to their existing shareholdings under the Articles
+of Association. The Articles of Association provide that the Bank may increase its capital by
+public offering, private placing, issuing rights of new shares to existing shareholders or allotting
+new shares to existing shareholders, transferring its capital reserve, issuing convertible bonds,
+or through other means as permitted by laws, administrative regulations and relevant regulatory
+authorities.
+138
+Permitted Indemnity Provision
+As stipulated in the Articles of Association, within the scope permitted under applicable laws,
+administrative regulations and the Articles of Association, the Bank may purchase and maintain
+any liabilities insurance for the Bank's former and incumbent directors. The Bank will indemnify
+every former and incumbent director out of its own assets against any liability incurred when he/
+she served as director of the Bank to the maximum extent permitted by law and administrative
+regulations or alternatively to the extent that it is not prohibited by law and administrative
+regulations unless it is established that the director has not acted honestly or in good faith in
+performing his duties.
+During the reporting period, the Bank renewed its directors' liability insurance to provide
+protection against claims arising from the lawful discharge of duties by the directors, thus
+encouraging the directors to fully perform their duties.
+Equity-linked Agreement
+The Bank has not been engaged in any equity-linked agreement during the reporting period.
+Business Review
+For disclosures of the Bank in respect of business review under paragraph 28 of Appendix 16 to
+the Hong Kong Listing Rules, please refer to sections “Management Discussion and Analysis"
+and "Corporate Social Responsibilities”. The relevant disclosure constitutes part of the Report of
+the Board of Directors.
+Use of Raised Funds
+Independent Directors: Nout WELLINK, LU Zhengfei, LEUNG Cheuk Yan, WANG Changyun,
+Angela CHAO
+For details, please refer to the related announcements on the websites of SSE, HKEX and the
+Bank and the Notes to the Consolidated Financial Statements.
+Pre-emptive Rights
+142
+Meetings of the Board of Supervisors
+TIAN Guoli
+Chairman
+Changes in Directors,
+2
+3
+4
+5
+Mr. LIU Wanming was not able to attend the meeting of the Board of Supervisors in person on 18 November 2016
+due to other important business engagements. He authorised another supervisor to attend and vote at the meeting
+as his proxy.
+Mr. DENG Zhiying was not able to attend the meeting of the Board of Supervisors in person on 27 October 2016
+due to other important business engagements. He authorised another supervisor to attend and vote at the meeting
+as his proxy.
+Mr. GAO Zhaogang was not able to attend the meeting of the Board of Supervisors in person on 27 October 2016
+due to other important business engagements. He authorised another supervisor to attend and vote at the meeting
+as his proxy.
+Mr. LI Jun was not able to attend the meetings of the Board of Supervisors in person on 27 October and 18
+November 2016 due to other important business engagements. He authorised another supervisor to attend and vote
+at the meetings as his proxy.
+143
+In 2016, the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors held one on-site meeting and one meeting by written resolution, at which it reviewed
+and approved the proposal on evaluation opinions on the duty performance of directors and senior
+management members for 2015, the nomination of candidates for supervisors of the Bank, as
+well as other proposals. The Finance and Internal Control Supervision Committee of the Board
+of Supervisors held four on-site meetings, at which it reviewed and approved the Bank's regular
+reports, 2015 profit distribution plan, 2015 internal control assessment report and other proposals.
+Performance of Supervision and Inspection by the Board of Supervisors
+In 2016, the Board of Supervisors made new progress in all working areas. Bearing the big
+picture of the Bank in mind and adhering to the issue-focused approach, it closely followed up
+the Bank's strategic development, operation and management, and risk management dynamics
+and internal control. It highlighted the key aims on supervision and strengthen the actual effects
+of its supervisory activity, intensified investigations into detected problems, developed reports in
+high quality, exercised its supervision functions constructively, and pushed forward the Bank's
+continued stable development, in accordance with the relevant laws and regulations, regulatory
+requirements and the Articles of Association of the Bank.
+Steadily improved the internal supervision mechanism and improved supervision of the
+duty performance of directors and senior management members. The Board of Supervisors
+arranged for supervisors to attend the shareholders' meetings and the meetings of the Board
+of Directors, special committees and the Senior Management. This allowed supervisors to
+stay informed of the major strategic decisions made in these meetings and to keep abreast
+of how major operational and management measures are being implemented, as well as to
+share their supervisory opinions and suggestions on major issues. It gathered and analysed
+the important speeches delivered by directors on the meetings of the Board of Directors and
+its special committees as well as the information on implementation of resolutions and major
+instructions made on the special meetings of the Senior Management, in order to gain an all-
+round understanding of directors' and senior management members' day-to-day duty performance
+and develop the monthly analysis report of senior management members' duty performance and
+alert relevant parties to the major issues that require special attention. The Board of Supervisors
+researched and formulated the Bank's annual performance assessment plan, collected and read
+reports on the annual duty performance of directors and senior management members and
+organised annual duty performance interviews with them. Based on the day-to-day supervision
+as well as duty performance reporting and interviews, it objectively and fairly assessed the duty
+performance of the Board of Directors, the Senior Management and its members and, expressed
+opinions regarding the Bank's annual performance assessment. These assessments were approved
+on the meetings of the Board of Supervisors and reverted back to the Board of Directors, the
+Senior Management and their members in an appropriate manner. As per regulatory requirements,
+such opinions were sent to the CBRC and the assessment results were reported at the Annual
+General Meeting. The duty performance assessment work won the emphasis and support of the
+Board of Directors and the Senior Management. Directors were motivated to work diligently and
+proactively got involved in decision-making and senior management members maintained their
+enthusiasm for work. Additionally, the duty performance assessment further enhanced the Bank's
+corporate governance and provided an important institutional guarantee for its drive to advance
+reform and innovation and secure continued stable development.
+144
+Persistently supervised the Bank's finance, risk management and internal control by
+adhering to issue and risk-focused approaches. First, the Board of Supervisors made concrete
+efforts to carry out the financial supervision, prioritising the legality and compliance of
+financial activities and the authenticity, accuracy and completeness of financial data. The Board
+of Supervisors followed up and learned about the Bank's progress in implementing Group-
+wide development strategies and plans, annual business plans and financial budgets, as well
+as its major issues concerning establishment of overseas institutions, restructuring of certain
+institutions, sales of major assets, bond issuance, distribution of dividends on preference shares
+and connected transactions. It paid adequate attention to the Bank's arrangements and executions
+in terms of strategy, finance and accounting management, streamlined and analysed the Bank's
+financial and accounting data on a monthly basis, and gained an in-depth understanding of the
+bank-wide dynamics in operations and management. Through monthly summary and analysis
+of strategy implementation and financial and accounting management, it pertinently reported
+on problems, explored for causes, gave suggestions, and provided guidance for the Board of
+Directors, the Senior Management and functional department through various forms.
+Second, the Board of Supervisors strengthened the supervision of risk management and internal
+control. It proactively adapted itself to the changes in the operational environment. Aiming
+to enhance the Bank's risk prevention and mitigation abilities, it continuously tracked and
+comprehended the risk profiles in such fields as collateral management, anti-money laundering,
+asset management business, physical precious metals, reconciliation management, and liquidity
+management. It heard and reviewed reports on risk control across the Group, and alerted the
+Board of Directors, the Senior Management and functional departments to the major potential,
+tendentious issues as well as the weak links identified in the relevant work through a variety of
+means including speeches at meetings, supervision letters and face-to-face interaction. Together
+with the Board of Supervisors, the Board of Directors and the Senior Management fulfilled their
+respective responsibilities in risk prevention and control and maintained a firm grip on the risk
+bottom line. The Board of Supervisors received reports regarding the Bank's internal control
+status, internal control assessment and internal control audit, and reviewed reports on internal
+control assessment. Through daily prompts and duty performance interviews, among other means,
+it further urged the internal audit function to reinforce its responsibilities and improve the means
+of audit. With respect to the problems identified in internal and external audits and regulatory
+inspections, it improved analysis and urged the Senior Management and functional departments to
+keep improving the relevant policies, procedures and systems as well as the resource allocation.
+Third, the Board of Supervisors reviewed the problems identified in special surveys of last year.
+With regard to the findings of last year's special surveys concerning anti-money laundering,
+internal control case prevention, small and micro credit business and other aspects, it proceeded
+with the daily supervision and followed up on the implementation of survey opinions and Senior
+Management instructions by the relevant departments, branches and subsidiaries.
+145
+Fourth, the Board of Supervisors earnestly reviewed and oversaw regular reports. It regularly
+communicated on special issues with the accounting and information, financial management,
+credit management, audit and other business departments as well as with external auditors. It
+received reports on the Bank's operations, financial position and, changes in risk assets and
+provisioning, among others. It made suggestions including enhancing risk management and
+control in key areas, rectifying problems identified in internal control audits through intensified
+efforts, managing and controlling concentration risk and risk of renewed loans, putting high-risk
+bonds under efficient oversight and early warning, substantially mitigating the adverse influence
+arising from the decrease of net interest margin, vigorously tapping new initiatives to drive profit
+growth, and strengthening the operation and management of non-performing assets. The Board
+of Directors, the Senior Management and relevant functional departments actively responded to
+these recommended measures, by proactively studying and improving the relevant work.
+Strictly adhered to the Bank's overall requirement for preventing risk and promoting
+development and arranged special surveys. Concentrating on the key areas and links that
+involved the Bank's drive to deepen reform and secure stable development, the Board of
+Supervisors closely tracked the overarching issues and weak links related to bank-wide strategy
+implementation, operation and management and risk management control. It focused on carrying
+out three special surveys on non-performing asset disposal, personal credit risk management and
+asset management business. The survey team made up of supervisors and personnel from relevant
+departments of the Head Office communicated with the relevant Head Office departments and a
+number of branches and institutions through interviews and other means. It heard relevant reports
+from different levels, gathered and collated cases, explored countermeasures, gave multiple
+suggestions, and submitted report on the special surveys to the Board of Directors and the Senior
+Management. The Board of Directors and Senior Management attached high importance and
+recognition to the report, requiring the relevant functional departments to study it earnestly,
+propose measures for improvement and improve the implementation of the rectification. In
+addition, the Senior Management convened a meeting in which the relevant departments reported
+on their progress and develop plans for rectifying the problems raised by the survey report.
+The surveys carried out by the Board of Supervisors played active roles in realising the Bank's
+requirement for preventing risk and promoting development.
+146
+Stuck to stringent, concrete management and pushed forward self-improvement. In line
+with regulatory requirements, the Board of Supervisors amended the sections of the Bank's
+Articles of Association that relate to itself, in an effort to point out the direction for its duty
+performance. It organised and carried out inspections and surveys to communicate with and learn
+about its peers. It visited and held adequate discussions with the Board of Supervisors in multiple
+banks about the functional structure and supervisory functions of the Board of Supervisors
+and its special committees, its dedicated examinations and inspections, the construction of
+the Board of Supervisors and other aspects. The Board of Supervisors closely studied the
+reform and implementation plan of how it could play its role in the new environment, taking
+into consideration organisational, institutional, staffing and policy perspectives. In addition,
+improvements were made with regards to the ideology, work style and competence. The Board
+of Supervisors completed the procedures related to the selection, appointment and resignation
+of its chairman and some of its members. According to regulatory requirements and measures
+for the assessment of supervisors' duty performance, the Board of Supervisors continued to
+conduct self-assessment of its overall duty performance and annual assessment of the individual
+duty performance of supervisors, urging all supervisors to consciously perform their supervisory
+duties as defined by relevant laws, regulations and the Articles of Association. It organised the
+seminars and training courses on supervisory activity in 2016, and arranged supervisors to attend
+the duty performance trainings given by regulators as well as the trainings held by the Board of
+Directors on regulatory rules. Through these trainings, supervisors were expected to improve their
+understanding of the global banking operational dynamics and supervisory trend.
+The Board of Directors and the Senior Management attached great importance to the supervision
+and guidance of the Board of Supervisors, checked and implemented relevant rectifications,
+allocated responsibility for operation and management measures, effectively mitigated potential
+risks and improved operation and management.
+During the reporting period, the Board of Supervisors held no objection to such matters under
+its supervision regarding the Bank's operational and legal compliance, financial position, use of
+raised funds, purchase and sale of assets, connected transactions, internal control and corporate
+information disclosure.
+147
+Please refer to the section “Directors, Supervisors and Senior Management Members
+Supervisors and Senior Management Members" for changes in supervisors.
+On behalf of the Board of Directors
+1
+==
+31 March 2017
+Report of the Board of Supervisors
+In 2016, the Bank convened five on-site meetings of the Board of Supervisors on 30 March, 26
+April, 30 August, 27 October and 18 November. At these meetings, the Board of Supervisors
+reviewed and approved 13 proposals on the Bank's regular reports, 2015 profit distribution plan,
+2015 internal control assessment report, 2015 work report of the Board of Supervisors, 2016 work
+plan of the Board of Supervisors, evaluation opinions on the duty performance of directors and
+senior management members for 2015, the nomination of candidates for supervisors of the Bank
+and election of the Chairman of the Board of Supervisors, among others.
+In 2016, the attendance rate of each supervisor of the meetings of the Board of Supervisors is
+given below:
+Supervisors
+Incumbent Supervisors
+LIU Wanming
+DENG Zhiying
+GAO Zhaogang
+XIANG Xi
+CHEN Yuhua
+Former Supervisors
+Number of meetings attended in person/
+Number of meetings convened during term of office
+1/1
+5/5
+4/5
+4/5
+3/4
+5/5
+5/5
+LI Jun
+LIU Xiaozhong
+2/4
+1/1
+Notes:
+WANG Xiquan
+WANG Xueqiang
+31 March 2017
+The assessment of impairment of loans and advances
+to customers involves significant judgement. The
+Group adopts an individual impairment assessment
+approach for individually significant loans; and
+a collective impairment assessment approach for
+loans not individually significant or not individually
+impaired. Under the collective approach, assessment
+of future cash flows for loan portfolios is based on
+historical loss experience of loans with similar credit
+risk characteristics, with adjustments based on the
+impact from changes of and uncertainties in the
+macro-economic environment. The future cash flows
+of loans without collateral or guarantees, or loans that
+are not adequately collateralised, are subject to higher
+uncertainties.
+Impairment assessment of loans and advances to customers
+Key audit matter
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+151
+assessment involves
+Key audit matters are those matters that, in our professional judgement, were of most significance
+in our audit of the consolidated financial statements of the current period. These matters were
+addressed in the context of our audit of the consolidated financial statements as a whole, and in
+forming our opinion thereon, and we do not provide a separate opinion on these matters. For each
+matter below, our description of how our audit addressed the matter is provided in that context.
+We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit
+of the Consolidated Financial Statements section of our report, including in relation to these
+matters. Accordingly, our audit included the performance of procedures designed to respond to
+our assessment of the risks of material misstatement of the consolidated financial statements. The
+results of our audit procedures, including the procedures performed to address the matters below,
+provide the basis for our audit opinion on the accompanying consolidated financial statements.
+We conducted our audit in accordance with International Standards on Auditing ("ISAs”) issued
+by the International Auditing and Assurance Standards Board. Our responsibilities under those
+standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements section of our report. We are independent of the Group in accordance with
+the Code of Ethics for Professional Accountants (the "Code") issued by the Hong Kong Institute
+of Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
+accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
+appropriate to provide a basis for our opinion.
+Basis for Opinion
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated
+financial position of the Group as at 31 December 2016, and of its consolidated financial
+performance and its consolidated cash flows for the year then ended in accordance with
+International Financial Reporting Standards ("IFRSS”) issued by the International Accounting
+Standards Board ("IASB") and have been properly prepared in compliance with the disclosure
+requirements of the Hong Kong Companies Ordinance.
+We have audited the consolidated financial statements of Bank of China Limited (the "Bank")
+and its subsidiaries (the "Group") set out on pages 160 to 366, which comprise the consolidated
+statement of financial position as at 31 December 2016, and the consolidated income statement,
+the consolidated statement of comprehensive income, the consolidated statement of changes in
+equity and the consolidated statement of cash flows for the year then ended, and notes to the
+consolidated financial statements, including a summary of significant accounting policies.
+Opinion
+(Established in the People's Republic of China with limited liability)
+Key Audit Matters
+Since loan impairment
+judgement and assumptions, and in view of the
+significance of the amount (as at 31 December 2016,
+gross loans and advances to customers amounted to
+RMB9,973,362 million, representing 55% of total
+assets, and impairment allowance for loans and
+advances to customers amounted to RMB237,716
+million), impairment of loans and advances is
+considered a key audit matter.
+Relevant disclosures are included in Note V.18 and
+Note VI.3 to the consolidated financial statements.
+How our audit addressed the key audit matter
+We evaluated the valuation techniques, inputs
+and assumptions through comparison with the
+valuation techniques commonly used in the
+markets, validation of observable inputs using
+external market data, and comparison with
+valuation outcomes obtained from various pricing
+We evaluated and tested the design and operating
+effectiveness of key controls related to valuation
+of financial instruments, independent price
+verification, independent model validation and
+approval.
+How our audit addressed the key audit matter
+As at 31 December 2016, financial assets and
+financial liabilities measured at fair value amounted
+to RMB 1,864,469 million and RMB469,378 million
+respectively, representing 10% and 3% of total
+assets and total liabilities respectively. Financial
+instruments which require significant unobservable
+inputs in estimating fair value, and hence categorised
+within level 3 of the fair value hierarchy, involve
+higher uncertainty in their valuation. As at 31
+December 2016, 3% of financial assets measured at
+fair value were categorised within level 3. Due to
+the significance of financial instruments measured at
+fair value, and the uncertainty in valuation involving
+significant judgement for unlisted equity and fund
+investments, illiquid asset-backed securities, and
+over-the-counter derivatives, valuation of financial
+instruments is considered a key audit matter.
+The Group has applied valuation techniques to
+determine the fair value of financial instruments that
+are not quoted in active markets. These valuation
+techniques, particularly those require significant
+unobservable inputs, usually involve subjective
+judgement and assumptions. With different valuation
+techniques and assumptions applied, the valuation
+results can vary significantly.
+Valuation of financial instruments
+Key audit matter
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+Furthermore, we evaluated and tested the
+design and operating effectiveness of internal
+controls related to disclosures of credit risk and
+impairment allowance.
+152
+We tested the discounted cash flow models
+and the related assumptions used in individual
+impairment assessment by assessing the amount,
+timing and likelihood of estimated future cash
+flows, including cash flows from collateral. We
+compared the assumptions with available external
+information.
+We assessed the collective impairment model and
+considered management's assumptions on the loss
+identification period, migration rate, loss ratio and
+impact of macro-economic changes for various
+types of loan portfolio. We evaluated the Group's
+modification of parameters and assumptions used
+in the collective impairment model, and compared
+them with historical loss data for loan portfolios,
+observable economic data, market information
+and industry trends.
+We adopted a risk-based sampling approach
+in our loan review procedures. We assessed
+the debtors' repayment capacity and evaluated
+the Group's loan classification, taking into
+consideration post-lending investigation reports,
+debtors' financial information, collateral
+valuation reports and other available information.
+We evaluated and tested the effectiveness of
+design and implementation of key controls
+related to the credit approval process, post
+approval credit management, loan grading system,
+collateral monitoring and loan impairment
+assessment, including testing of relevant data
+quality and information systems.
+To the shareholders of Bank of China Limited
+1 Tim Mei Avenue
+Central, Hong Kong
+22/F, CITIC Tower
+Building a better
+working world
+Material Custody, Sub-contracts and Leases
+Major Contracts and the Enforcement thereof
+The Bank had no significant connected transactions during the reporting period. For details of
+the related party transactions as defined by the relevant accounting standards by the end of the
+reporting period, please refer to Note V.44 of the Consolidated Financial Statements.
+Significant Connected Transactions
+157
+Implementation of Stock Incentive Plan and Employee Stock Ownership Plan
+148
+For details, please refer to relevant announcements of the Bank on the websites of SSE, HKEX
+and the Bank.
+BOCHK (as seller) entered into a sale and purchase agreement with Xiamen International
+Investment Limited and the Committee of Jimei Schools (as buyers) in relation to the proposed
+disposal of approximately 70.49% of the total issued shares of Chiyu Banking Corporation
+Limited for a total consideration of HKD7.685 billion on 22 December 2016. The completion of
+the disposal took place on 27 March 2017 in accordance with the terms and conditions of the sale
+and purchase agreement. Upon completion, Chiyu Banking Corporation Limited ceased to be a
+subsidiary of the Bank, BOCHK (Holdings) and BOCHK respectively.
+As part of the Group's strategic restructuring plan in the ASAEN region, on 30 June 2016, the
+Bank (as seller) and BOCHK (as buyer) entered into sale and purchase agreements in relation
+to sale and purchase of the entire issued share capital of Bank of China (Malaysia) Berhad, and
+the entire issued share capital of Bank of China (Thai) Public Company Limited, respectively.
+All the conditions precedent set out in the sale and purchase agreements have been satisfied and
+completion of the both transfers have taken place in accordance with the terms and conditions
+of the sale and purchase agreements. On 28 February 2017, the Bank (as seller) and BOCHK
+(as buyer) entered into sale and purchase agreements in relation to sale and purchase of the
+banking businesses operated by the Bank in Indonesia through Bank of China Limited, Jakarta
+Branch and its eight sub-branches; and the banking businesses operated by the Bank in Cambodia
+through Bank of China Limited, Phnom Penh Branch, Cambodia and its two sub-branches,
+respectively. The completion of each transfer is subject to the satisfaction or waiver of the
+respective conditions precedent including the obtaining of the requisite approvals from domestic
+and overseas regulatory authorities.
+BOCHK (as seller) entered into a sale and purchase agreement with Cinda Financial Holdings
+Co., Limited (as buyer) and China Cinda (HK) Holdings Company Limited (as buyer's guarantor)
+in relation to the disposal of all the issued shares of Nanyang Commercial Bank, Limited on
+18 December 2015. The completion of the disposal took place on 30 May 2016 in accordance
+with the terms and conditions of the sale and purchase agreement. Upon completion, Nanyang
+Commercial Bank, Limited ceased to be a subsidiary of both the Bank and BOCHK (Holdings).
+Material Purchase and Sale of Assets, and Merger and Acquisition
+The Bank was involved in certain litigation and arbitration cases in its regular course of business.
+In addition, because of the scope and scale of the Bank's international operations, the Bank is
+from time to time subject to a variety of claims under the laws of various jurisdictions in which
+the Bank operates such as anti-money laundering. After consulting legal professionals, the Senior
+Management holds that none of the litigation and arbitration cases will have a significant impact
+on the financial position or operating results of the Bank at the current stage.
+Material Litigation and Arbitration
+Significant Events
+During the reporting period, the Bank did not take any significant custody of, sub-contract or
+lease any material business assets from other companies, or allow its material business assets to
+be subject to such arrangements that are required to be disclosed.
+sources.
+Material Guarantee Business
+Other Major Contracts
+EY安永
+Independent Auditor's Report
+150
+For details of the Bank's performance of social responsibility regarding poverty alleviation
+during the reporting period, please refer to the section “Corporate Social Responsibilities” and
+the Bank's 2016 Corporate Social Responsibility Report published on the websites of SSE, HKEX
+and the Bank.
+Performing Social Responsibility of Poverty Alleviation
+During the reporting period, neither the Bank nor its controlling shareholder failed to perform
+effective judgment of the court or pay off any due debt in large amount.
+Integrity of the Bank and its Controlling Shareholder
+During the reporting period, neither the Bank nor any of its directors, supervisors, senior
+management members or controlling shareholder was subject to any investigation, compulsory
+measures or criminal responsibilities by relevant authorities or any investigation, administrative
+punishment or regulatory measures by CSRC, or had material administrative punishment imposed
+on them by other administrative authorities, or were publicly reprimanded by any stock exchange.
+Disciplinary Actions Imposed on the Bank, its Directors, Supervisors, Senior Management
+Members and Controlling Shareholder
+Huijin made a “non-competing commitment” when the Bank launched its IPO. As at 31
+December 2016, Huijin has strictly observed and has not breach such undertaking.
+Undertakings
+149
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes.
+Misappropriation of Funds by Controlling Shareholder and Other Related Parties
+During the reporting period, the Bank had no other major contract that was required to be
+disclosed.
+As approved by PBOC and CBRC, the Bank's guarantee business is an off-balance-sheet item
+in the ordinary course of its business. The Bank operates its guarantee business in a prudent
+manner and has formulated specific management measures, operational processes and approval
+procedures in accordance with the risks of the guarantee business and carries out this business
+accordingly. During the reporting period, save as disclosed above, the Bank did not enter into any
+material guarantee business that is required to be disclosed.
+For
+The Bank approved a long-term incentive policy, including the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan, at the Board meeting and the extraordinary
+shareholders' meeting held in November 2005. To date, the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan have not been implemented.
+Furthermore, we evaluated and tested the design
+and operating effectiveness of internal controls
+related to disclosures of fair value.
+155
+Independent Auditor's Report (Continued)
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+(Continued)
+156
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+•
+•
+•
+Identify and assess the risks of material misstatement of the consolidated financial
+statements, whether due to fraud or error, design and perform audit procedures responsive
+to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
+for our opinion. The risk of not detecting a material misstatement resulting from fraud is
+higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit
+procedures that are appropriate in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the Group's internal control.
+Our objectives are to obtain reasonable assurance about whether the consolidated financial
+statements as a whole are free from material misstatement, whether due to fraud or error, and to
+issue an auditor's report that includes our opinion. Our report is made solely to you, as a body,
+and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+Evaluate the appropriateness of accounting policies used and the reasonableness of
+accounting estimates and related disclosures made by the directors.
+Evaluate the overall presentation, structure and content of the consolidated financial
+statements, including the disclosures, and whether the consolidated financial statements
+represent the underlying transactions and events in a manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the
+entities or business activities within the Group to express an opinion on the consolidated
+financial statements. We are responsible for the direction, supervision and performance of
+the group audit. We remain solely responsible for our audit opinion.
+Hong Kong
+Certified Public Accountants
+Ernst & Young
+The engagement partner on the audit resulting in this independent auditor's report is Choi Kam
+Cheong, Geoffrey.
+From the matters communicated with the Audit Committee, we determine those matters that were
+of most significance in the audit of the consolidated financial statements of the current period and
+are therefore the key audit matters. We describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
+we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits
+of such communication.
+We also provide the Audit Committee with a statement that we have complied with relevant
+ethical requirements regarding independence and to communicate with them all relationships and
+other matters that may reasonably be thought to bear on our independence, and where applicable,
+related safeguards.
+We communicate with the Audit Committee regarding, among other matters, the planned scope
+and timing of the audit and significant audit findings, including any significant deficiencies in
+internal control that we identify during our audit.
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+(Continued)
+Independent Auditor's Report (Continued)
+Conclude on the appropriateness of the directors' use of the going concern basis of
+accounting and, based on the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast significant doubt on the Group's
+ability to continue as a going concern. If we conclude that a material uncertainty exists,
+we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our
+opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to
+continue as a going concern.
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
+in accordance with ISAs will always detect a material misstatement when it exists. Misstatements
+can arise from fraud or error and are considered material if, individually or in the aggregate, they
+could reasonably be expected to influence the economic decisions of users taken on the basis of
+these consolidated financial statements.
+In preparing the consolidated financial statements, the directors of the Bank are responsible for
+assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters
+related to going concern and using the going concern basis of accounting unless the directors
+of the Bank either intend to liquidate the Group or to cease operations, or have no realistic
+alternative but to do so.
+Relevant disclosures are included in Note VI.6 to the
+consolidated financial statements.
+153
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key audit matter
+How our audit addressed the key audit matter
+Structured entities
+The Group has interests in various structured entities,
+such as bank wealth management products, funds and
+trust plans, in conducting financial investments, asset
+management business and credit assets transfers. The
+Group determines whether or not to consolidate these
+structured entities based on the assessment of whether
+the Group has control taking into consideration power
+arising from rights, variable returns, and link between
+power and returns.
+The directors of the Bank are assisted by the Audit Committee in discharging their
+responsibilities for overseeing the Group's financial reporting process.
+The assessment of the Group's control over
+structured entities involves significant judgement on
+factors such as the purpose and design of structured
+entities, its ability to direct the relevant activities,
+direct and indirect beneficial interests and returns,
+performance fee, remuneration and exposure to
+loss from providing credit enhancement or liquidity
+support. Due to the significance of the unconsolidated
+structured entities and the complexity of judgement
+exercised by management, consolidation or non-
+consolidation of structured entities is considered a
+key audit matter.
+Relevant disclosures are included in Note V.47 to the
+consolidated financial statements.
+valuations which used significant
+unobservable inputs, such as unlisted equity
+investments and private equity fund investments,
+we involved our internal valuation specialists
+in assessing the models used, re-performing
+independent valuations, and analysing the
+sensitivities of valuation results to key inputs and
+assumptions.
+We assessed the Group's analysis and conclusions
+on whether or not it controls structured entities
+based on the Group's analysis on its power over
+structured entities, the magnitude and variability
+of variable returns from its involvement with
+structured entities. We also assessed whether
+the Group has legal or constructive obligation to
+absorb any loss of structured entities by reviewing
+relevant term sheets, and whether the Group has
+provided liquidity support or credit enhancement
+to structured entities, as well as the fairness of
+transactions between the Group and structured
+entities.
+The directors of the Bank are responsible for the preparation of the consolidated financial
+statements that give a true and fair view in accordance with IFRSS and the disclosure
+requirements of the Hong Kong Companies Ordinance, and for such internal control as the
+directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+Responsibilities of the Directors for the Consolidated Financial Statements
+In connection with our audit of the consolidated financial statements, our responsibility is to
+read the other information and, in doing so, consider whether the other information is materially
+inconsistent with the consolidated financial statements or our knowledge obtained in the audit
+or otherwise appears to be materially misstated. If, based on the work we have performed, we
+conclude that there is a material misstatement of this other information, we are required to report
+that fact. We have nothing to report in this regard.
+Our opinion on the consolidated financial statements does not cover the other information and we
+do not express any form of assurance conclusion thereon.
+The directors of the Bank are responsible for the other information. The other information
+comprises the information included in the Annual Report, other than the consolidated financial
+statements and our auditor's report thereon.
+Other Information included in the Annual Report
+Independent Auditor's Report (Continued)
+We evaluated and tested the design and operating
+effectiveness of the key controls related to the
+Group's assessment of whether it controls a
+structured entity.
+154
+Furthermore, we evaluated and tested the design
+and operating effectiveness of internal controls
+related to disclosures of unconsolidated structured
+entities.
+Statutory reserves
+(2,345)
+Treasury shares
+(3,854)
+125,714
+V.12
+(86)
+(53)
+V.38.3
+V.39.1
+Other comprehensive income
+Total equity and liabilities
+General and regulatory reserves
+Approved and authorised for issue by the Board of Directors on 31 March 2017.
+16,815,597
+18,148,889
+140,098
+1,357,605
+1,487,092
+Total equity
+52,659
+75,410
+111,511
+V.40
+1,304,946
+1,411,682
+482,181
+560,339
+V.39
+Undistributed profits
+179,485
+193,462
+V.39.2
+Non-controlling interests
+141,972
+16,661,797
+Capital reserve
+V.32
+28,055
+37,982
+Retirement benefit obligations
+V.33
+3,439
+4,255
+Deferred income tax liabilities
+V.35
+4,501
+4,291
+Liabilities classified as held for sale
+V.36
+42,488
+196,850
+Current tax liabilities
+30,281
+27,152
+V.31
+99,714
+99,714
+V.38.4
+Other equity instruments
+294,388
+294,388
+V.38.1
+V.38.2
+Share capital
+Capital and reserves attributable to
+EQUITY
+15,457,992
+The accompanying notes form an integral part of these consolidated financial statements.
+Total liabilities
+383,769
+282,929
+equity holders of the Bank
+TIAN Guoli
+income
+CHEN Siqing
+Director
+As at 31 December 2016
+294,388
+99,714
+141,972
+Other liabilities
+(1,509)
+1,357,605
+52,659
+(86)
+482,181
+179,485
+111,511
+(2,345)
+140,098
+99,714
+(487)
+294,388
+(619)
+(1,268)
+164,578
+23,378
+186,447
+1,738
+136
+14,310
+(14,310)
+15,245
+(15,245)
+(58,236)
+(6,003)
+(64,239)
+33
+33
+5,995
+7,733
+1,371
+Disposal of subsidiaries and other
+Capital injection by non-controlling shareholders
+V.38.3
+General and
+Other
+Total
+interests
+shares
+profits
+controlling
+Treasury
+Non-
+Attributable to equity holders of the Bank
+As at 1 January 2016
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+BANK OF CHINA LIMITED
+163
+Other equity
+comprehensive
+Statutory
+regulatory Undistributed
+Net change in treasury shares
+44
+164
+V.39.3
+Dividends
+V.39.2
+Appropriation to general and regulatory reserves
+Director
+V.39.1
+V.12
+Total comprehensive income
+reserves
+reserves
+instruments Capital reserve
+Share capital
+Note
+Appropriation to statutory reserves
+305
+336
+8.
+222
+Balances with central banks. . . . .
+14.
+13. Cash and due from banks and other financial institutions
+12. Other comprehensive income. . . .
+220
+11. Earnings per share (basic and diluted).
+218
+10. Income tax expense
+217
+Impairment losses on assets.
+9.
+213
+Directors', supervisors' and senior management's emoluments
+8.
+223
+212
+224
+16. Financial assets at fair value through profit or loss
+242
+240
+22. Investment properties.
+21. Property and equipment.
+20. Investment in associates and joint ventures
+236
+232
+Financial investments.
+19.
+Loans and advances to customers
+18.
+228
+226
+225
+17. Derivative financial instruments and hedge accounting.
+15. Placements with and loans to banks and other financial institutions
+Staff costs
+7.
+211
+168
+166
+164
+162
+161
+160
+V.
+IV. TAXATION
+III. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN
+APPLYING ACCOUNTING POLICIES.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+I. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+II. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES.
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.
+CONSOLIDATED STATEMENT OF CASH FLOWS..
+CONSOLIDATED INCOME STATEMENT.
+CONSOLIDATED FINANCIAL STATEMENTS
+CONTENTS
+Consolidated Financial Statements
+169
+202
+207
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1. Net interest income
+Operating expenses
+6.
+210
+Other operating income
+5.
+210
+Net gains on financial investments.
+245
+4
+Net trading gains..
+3.
+209
+(3,854)
+Net fee and commission income
+2.
+208
+209
+Insurance risk.
+23. Other assets
+24. Impairment allowance
+299
+48. Offsetting financial assets and financial liabilities.
+297
+47. Interests in the unconsolidated structured entities
+295
+46. Transfers of financial assets. .
+289
+45. Segment reporting
+280
+44. Related party transactions
+280
+43. Note to the consolidated statement of cash flows
+275
+42. Contingent liabilities and commitments.
+274
+49. The Bank's statement of financial position and changes in equity.
+41. Changes in the consolidation .
+301
+VI. FINANCIAL RISK MANAGEMENT
+Capital management.
+7.
+Fair value..
+6.
+Liquidity risk
+5.
+Market risk.
+4.
+Credit risk
+3.
+Financial risk management framework
+2.
+Overview
+1.
+305
+50. Events after the financial reporting date.
+273
+272
+268
+30. Bonds issued
+254
+29. Due to customers
+253
+Placements from banks and other financial institutions.
+28
+252
+and bank notes in circulation . . . .
+Government certificates of indebtedness for bank notes issued
+27.
+252
+26. Due to central banks . . .
+252
+25. Due to banks and other financial institutions.
+250
+256
+158
+CONTENTS (Continued)
+34.
+38. Share capital, capital reserve, treasury shares and other equity instruments
+39. Statutory reserves, general and regulatory reserves and undistributed profits
+40. Non-controlling interests
+265
+263
+260
+260
+258
+258
+246
+258
+36. Assets and liabilities held for sale
+Deferred income taxes
+33. Retirement benefit obligations.
+32. Current tax liabilities.
+31. Other borrowings.
+35.
+Share appreciation rights plan
+37. Other liabilities
+125,714
+V.39.2
+560,339
+bank notes issued
+Government certificates of indebtedness for
+426,848
+594,048
+V.15
+other financial institutions
+V.27
+Placements with and loans to banks and
+2,271,640
+V.14
+Balances with central banks
+659,982
+V.13
+other financial institutions
+654,378
+2,196,063
+2015
+117,421
+Precious metals
+9,735,646
+V.18
+Loans and advances to customers, net
+82,236
+130,549
+V.17
+91,191
+Derivative financial assets
+124,090
+V.16
+profit or loss
+Financial assets at fair value through
+176,753
+161,417
+119,062
+8,935,195
+As at 31 December
+2016
+Cash and due from banks and
+13,297
+2,396
+Other comprehensive income for the year, net of tax
+13,444
+2,119
+Subtotal
+Total comprehensive income for the year
+336
+Other
+6,896
+15,480
+foreign operations
+- Exchange differences from the translation of
+(361)
+1,898
+Note
+186,447
+Total comprehensive income attributable to:
+ASSETS
+As at 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+BANK OF CHINA LIMITED
+192,714
+161
+192,714
+The accompanying notes form an integral part of these consolidated financial statements.
+10,543
+23,378
+Non-controlling interests
+182,171
+163,069
+Equity holders of the Bank
+186,447
+Financial investments
+V.19
+3,848,794
+Due to central banks
+1,764,320
+1,420,527
+V.25
+Due to banks and other financial institutions
+LIABILITIES
+V.26
+2015
+Note
+As at 31 December
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
+As at 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+16,815,597
+162
+2016
+The accompanying notes form an integral part of these consolidated financial statements.
+867,094
+Bank notes in circulation
+V.29
+Due to customers
+69,160
+107,109
+V.17
+Derivative financial liabilities
+415,709
+447,944
+V.28
+other financial institutions
+Placements from banks and
+91,331
+117,656
+V.27
+302,792
+18,148,889
+Total assets
+181,500
+10,843
+14,059
+V.20
+Investment in associates and joint ventures
+606,710
+395,921
+Property and equipment
+- loans and receivables
+1,843,043
+― held to maturity
+1,078,533
+1,609,830
+- available for sale
+3,476,033
+1,790,790
+V.21
+194,897
+182,031
+189,975
+V.23
+Other assets
+237,937
+50,371
+V.36
+Assets held for sale
+22,246
+34,341
+V.35
+Deferred income tax assets
+23,281
+21,659
+V.22
+Investment properties
+(131)
+associates and joint ventures accounted for
+using the equity method
+6,573
+(15,128)
+Fee and commission expense
+100,905
+98,319
+V.2
+Fee and commission income
+328,650
+V.2
+306,048
+(286,406)
+(260,091)
+V.1
+615,056
+566,139
+V.1
+Net interest income
+2015
+(9,655)
+Net fee and commission income
+37,627
+69,924
+V.5
+Other operating income
+5,765
+12,524
+(8,495)
+V.4
+9,460
+8,496
+V.3
+Net trading gains
+92,410
+88,664
+Net gains on financial investments
+2016
+Note
+Year ended 31 December
+367
+367
+Liquidity ratios and liquidity coverage ratio
+Currency concentrations.
+UNAUDITED SUPPLEMENTARY INFORMATION
+CONSOLIDATED FINANCIAL STATEMENTS.
+1
+370
+II.
+DIFFERENCES BETWEEN IFRS AND CAS
+SUPPLEMENTARY INFORMATION
+366
+363
+355
+347
+I.
+3
+International claims
+371
+Interest expense
+Interest income
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED INCOME STATEMENT
+BANK OF CHINA LIMITED
+159
+$375
+Global systemically importance assessment indicators of commercial banks
+6
+373
+Leverage ratio
+5
+372
+Overdue assets
+4
+Operating income
+12,939,748
+485,656
+Operating expenses
+- Actuarial gains/(losses) on defined benefit plans
+- Other
+Items that will not be reclassified to profit or loss
+Other comprehensive income:
+Profit for the year
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+Subtotal
+BANK OF CHINA LIMITED
+The accompanying notes form an integral part of these consolidated financial statements.
+For details of the dividends paid or proposed, please refer to Note V.39.3.
+0.56
+0.54
+- Diluted
+0.56
+160
+0.54
+Year ended 31 December
+2016
+(147)
+277
+14
+(161)
+259
+18
+179,417
+Note
+184,051
+financial assets
+- Net fair value gains/(losses) on available for sale
+—
+Items that may be reclassified subsequently to profit or loss
+V.12
+2015
+Share of other comprehensive income of
+- Basic
+V.11
+(Expressed in RMB per ordinary share)
+2,334
+897
+V.20
+Share of results of associates and joint ventures
+229,237
+221,515
+Profit before income tax
+Operating profit
+(89,072)
+V.9
+Impairment losses on assets
+(185,401)
+(175,069)
+V.6
+(59,274)
+222,412
+231,571
+Income tax expense
+Earnings per share
+179,417
+184,051
+8,572
+170,845
+164,578
+19,473
+Non-controlling interests
+Equity holders of the Bank
+Attributable to:
+179,417
+184,051
+Profit for the year
+(52,154)
+(38,361)
+V.10
+473,912
+193,462
+11,729,171
+12,589,437
+The accompanying notes form an integral part of these consolidated financial statements.
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+Note
+Year ended 31 December
+2016
+1,357,605
+2015
+Adjustments:
+Impairment losses on assets
+Depreciation of property and equipment
+Amortisation of intangible assets and
+other assets
+222,412
+Cash flows from operating activities
+Profit before income tax
+231,571
+52,659
+482,181
+3,077
+3,077
+(1,545)
+(280)
+276
+(33)
+(86)
+(164)
+294,388
+99,714
+140,098
+(2,345)
+111,511
+179,485
+As at 31 December 2015
+(61)
+89,072
+12,898
+(110,993)
+(105,279)
+Dividends arising from investment securities
+(775)
+(483)
+Net gains on financial investments
+financial investments
+(12,524)
+Interest expense arising from bonds issued
+Accreted interest on impaired loans
+12,183
+10,909
+(2,480)
+(1,329)
+Net changes in operating assets and liabilities:
+(5,765)
+59,274
+Interest income arising from
+(897)
+12,850
+2,793
+2,758
+Net gains on disposal of property and
+equipment, intangible assets and
+other long-term assets
+(2,334)
+(576)
+Net gains on disposal of investment
+in subsidiaries, associates and joint ventures
+(29,083)
+(2,026)
+Share of results of associates and
+joint ventures
+(788)
+(61)
+(64,443)
+(3,497)
+controlling
+reserves
+reserves
+profits
+shares
+interests
+Treasury
+Total
+Total comprehensive income
+V.12
+11,326
+288,731
+71,745
+130,797
+As at 1 January 2015
+(13,671)
+regulatory Undistributed
+comprehensive
+income
+(53)
+75,410
+1,487,092
+The accompanying notes form an integral part of these consolidated financial statements.
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+Statutory
+Attributable to equity holders of the Bank
+General and
+Non-
+Other equity
+Note
+Share capital
+instruments Capital reserve
+Other
+96,105
+159,341
+407,836
+65
+Dividends
+V.39.3
+Net change in treasury shares
+V.38.3
+Capital injection by non-controlling shareholders
+306
+Equity component of convertible bonds
+(1,545)
+(127)
+15,686
+(15,686)
+20,144
+(20,144)
+(60,946)
+Other
+Appropriation to general and regulatory reserves
+165
+V.39.1
+(25)
+42,569
+1,183,428
+170,845
+10,543
+192,714
+Conversion of convertible bonds and capital reserve
+5,657
+10,973
+Capital injection by other equity instruments holders
+V.38.4
+27,969
+16,630
+27,969
+Appropriation to statutory reserves
+Net (increase)/decrease in balances
+with central banks
+(200,508)
+126,827
+150,721
+109,991
+Proceeds from issuance of preference shares
+of the Bank
+27,969
+Proceeds from non-controlling shareholders
+Cash flows from financing activities
+Proceeds from issuance of bonds
+investment
+3,077
+Repayments of debts issued
+(83,560)
+(93,643)
+Cash payments for interest on bonds issued
+(11,654)
+7,733
+(11,445)
+(757,279)
+Net cash outflow from investing activities
+2,150,079
+1,276,488
+V.37
+Increase in investment in subsidiaries,
+associates and joint ventures
+(2,860)
+(246,386)
+(3,390)
+intangible assets and other long-term assets
+(34,247)
+(36,942)
+Purchase of financial investments
+(2,509,672)
+(2,108,179)
+Purchase of property and equipment,
+Dividend payments to equity holders of the Bank
+(58,236)
+(60,946)
+Cash and cash equivalents at end of year
+V.43
+1,019,247
+1,052,078
+The accompanying notes form an integral part of these consolidated financial statements.
+167
+1,148,151
+362,318
+339,911
+350,311
+Other borrowings
+Bonds issued
+at fair value
+11,389,260
+V.30
+1,052,078
+306
+(96,073)
+Dividend payments to non-controlling
+shareholders
+(6,003)
+(3,497)
+Other net cash flows from financing activities
+(714)
+(221)
+Net cash outflow from financing activities
+(1,713)
+(28,715)
+Effect of exchange rate changes on cash and
+cash equivalents
+33,187
+17,827
+Net decrease in cash and cash equivalents
+(32,831)
+financial investments
+at amortised cost
+Proceeds from disposal/maturity of
+109,869
+(122,913)
+Net decrease in due to banks and
+other financial institutions
+(343,437)
+(12,809)
+Net increase in due to central banks
+(134,139)
+451,386
+Net (decrease)/increase in placements from
+banks and other financial institutions
+(155,290)
+225,136
+Net increase in due to customers
+1,248,709
+67,444
+1,028,905
+Net increase in other assets
+(914,251)
+Net increase in due from and placements
+with and loans to banks and
+other financial institutions
+(25,240)
+(31,746)
+Net decrease in precious metals
+(833,615)
+15,256
+Net increase in financial assets at fair value
+through profit or loss
+(1,749)
+(27,772)
+Net increase in loans and advances
+to customers
+17,484
+Net decrease in other borrowings
+(3,129)
+(166)
+Note
+Year ended 31 December
+2016
+2015
+11,201
+12,580
+Proceeds from disposal of investment in
+other long-term assets
+subsidiaries, associates and joint ventures
+7,416
+Dividends received
+1,387
+663
+Interest income received from
+financial investments
+27,857
+Cash flows from investing activities
+Proceeds from disposal of property and
+equipment, intangible assets and
+For the year ended 31 December 2016 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
+Net increase in other liabilities
+117,732
+91,644
+Cash inflow from operating activities
+237,370
+727,777
+Income tax paid
+(55,289)
+(55,683)
+Net cash inflow from operating activities
+182,081
+672,094
+The accompanying notes form an integral part of these consolidated financial statements.
+166
+BANK OF CHINA LIMITED
+94,085
+Cash and cash equivalents at beginning of year
+438,918
+177
+The adoption of the above standards and amendments does not have any significant impact
+on the operating results, financial position and comprehensive income of the Group.
+The amendments clarify that the required interim disclosures must be either in the interim
+financial statements or incorporated by cross-reference between the interim financial
+statements and wherever they are included within the interim financial report (e.g., in the
+management commentary or risk report). The other information within the interim financial
+report must be available to users on the same terms as the interim financial statements and at
+the same time.
+IAS 34 Interim Financial Reporting
+The amendments clarify that market depth of high quality corporate bonds is assessed based
+on the currency in which the obligation is denominated, rather than the country where the
+obligation is located. When there is no deep market for high quality corporate bonds in that
+currency, government bond rates must be used.
+IAS 19 Employee Benefits
+The amendments clarify that a servicing contract that includes a fee can constitute
+continuing involvement in a financial asset. An entity must assess the nature of the fee
+and the arrangement against the guidance in IFRS 7 for continuing involvement in order
+to assess whether the disclosures are required. In addition, the amendments clarify that the
+offsetting disclosure requirements do not apply to condensed interim financial statements,
+unless such disclosures provide a significant update to the information reported in the most
+recent annual report.
+IFRS 7 Financial Instruments: Disclosures
+1.1 Standards, amendments and interpretations effective in 2016 (Continued)
+Basis of preparation (Continued)
+171
+1
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+170
+Assets (or disposal groups) are generally disposed of either through sale or distribution
+to owners. The amendments clarify that changing from one of these disposal methods to
+the other would not be considered a new plan of disposal, rather it is a continuation of the
+original plan. There is, therefore, no interruption of the application of the requirements in
+IFRS 5.
+IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations
+Annual Improvements to IFRSS 2012-2014 cycle:
+The amendments to IAS 16 and IAS 38 clarify that revenue reflects a pattern of economic
+benefits that are generated from operating a business rather than the economic benefits that
+are consumed through use of the asset. As a result, the ratio of revenue generated to total
+revenue expected to be generated cannot be used to depreciate property, plant and equipment
+and may only be used in very limited circumstances to amortise intangible assets.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+The amendments to IFRS 11 require an investor to apply the principles of business
+combination accounting when it acquires an interest in a joint operation that constitutes a
+"business" (as defined in IFRS 3 Business Combinations).
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Revenue from Contracts with
+Financial Instruments
+Insurance Contracts
+Transfers of Investment Property
+Share-based Payment
+Recognition of Deferred Tax Assets
+for Unrealised Losses
+Statement of Cash Flows
+Annual Improvements to
+IFRSS 2014-2016 cycle
+(issued in December 2016)
+IFRS 10 and IAS 28
+Amendments
+IFRS 16
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+IFRIC Interpretation 22
+IFRS 4 Amendments
+IFRS 9
+IFRS 2 Amendments
+IAS 40 Amendments
+IAS 7 Amendments
+IAS 12 Amendments
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2016
+Basis of preparation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+IFRS 15 and Amendments
+The amendments to IAS 1 include narrow-focus improvements in materiality, disaggregation
+and subtotals, notes structure, disclosure of accounting policies and presentation of items of
+other comprehensive income arising from equity accounted investments.
+The amendments to IFRS 10, IFRS 12 and IAS 28 address issues that have arisen in
+applying the investment entities exception under IFRS 10. The amendments to IFRS 10
+clarify that the exception from presenting consolidated financial statements applies to
+a parent entity that is a subsidiary of an investment entity, when the investment entity
+measures all of its subsidiaries at fair value. The amendments also clarify that only a
+subsidiary of an investment entity that is not an investment entity itself and that provides
+support services to the investment entity is consolidated. All other subsidiaries of an
+investment entity are measured at fair value. The amendments to IAS 28 allow the investor,
+when applying the equity method, to retain the fair value measurement applied by the
+investment entity associate or joint venture to its interests in subsidiaries.
+1.1 Standards, amendments and interpretations effective in 2016 (Continued)
+Basis of preparation
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+168
+These consolidated financial statements have been approved by the Board of Directors on 31
+March 2017.
+The consolidated financial statements of the Group have been prepared in accordance
+with International Financial Reporting Standards ("IFRS"). In addition, the consolidated
+financial statements comply with the disclosure requirements of the Hong Kong Companies
+Ordinance.
+The parent company is Central Huijin Investment Limited (“Huijin”), a wholly owned
+subsidiary of China Investment Corporation ("CIC"), which owned 64.02% of the ordinary
+shares of the Bank as at 31 December 2016 (31 December 2015: 64.02%).
+The Bank and its subsidiaries (together the "Group") provide a full range of corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+services to its customers in the Chinese mainland, Hong Kong, Macau, Taiwan and other
+major international financial centres.
+The Bank is licensed as a financial institution by the China Banking Regulatory Commission
+(the "CBRC") No. B0003H111000001 and is issued the business license of legal enterprise
+with Unified Social Credit Code No. 911000001000013428 by the State Administration of
+Industry and Commerce of the PRC. The registered address is No. 1, Fuxingmen Nei Dajie,
+Beijing, China.
+Bank of China Limited (the “Bank”), formerly known as Bank of China, a State-owned joint
+stock commercial bank, was founded on 5 February 1912. From its formation until 1949, the
+Bank performed various functions of a central bank, foreign exchange bank and commercial
+bank specialising in trade finance. Following the founding of the People's Republic of China
+(the "PRC") in 1949, the Bank was designated as a specialised foreign exchange bank.
+Since 1994, the Bank has evolved into a State-owned commercial bank. In this regard, in
+accordance with the Master Implementation Plan for the Joint Stock Reform approved by the
+State Council of the PRC, the Bank was converted into a joint stock commercial bank on 26
+August 2004 and its name was changed from Bank of China to Bank of China Limited. In
+2006, the Bank listed on the Stock Exchange of Hong Kong Limited and the Shanghai Stock
+Exchange.
+GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+I
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+The Bank's principal regulator is the CBRC. The operations in Hong Kong, Macau,
+Taiwan and other countries and regions of the Group are subject to the supervision of local
+regulators.
+Financial assets available for sale, financial assets and financial liabilities at fair value
+through profit or loss (including derivative financial instruments) and investment properties
+are measured at their fair values in the consolidated financial statement. Assets that meet the
+criteria to be classified as held for sale are measured at the lower of their carrying amount
+and fair value less costs to sell. Other accounting items are measured at their historical costs.
+Impairment is recognised if there is objective evidence of impairment of assets.
+The preparation of financial statements in conformity with IFRS requires the use of certain
+critical accounting estimates. It also requires management to exercise its judgement in the
+process of applying the Group's accounting policies. The areas involving a higher degree of
+judgement or complexity, or areas where assumptions and estimates are significant to the
+consolidated financial statements are disclosed in Note III.
+1.1 Standards, amendments and interpretations effective in 2016
+Basis of preparation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+169
+IAS 27 Amendments allow entities to use the equity method to account for investments in
+subsidiaries, joint ventures and associates in their separate financial statements.
+Clarification of Acceptable Methods of Depreciation
+and Amortisation
+Accounting for Acquisitions of Interests in Joint
+Operations
+Disclosure Initiative
+Equity Method in Separate Financial Statements
+Investment Entities: Applying the Consolidation
+Exception
+Annual Improvements to IFRSS
+2012-2014 cycle (issued in
+September 2014)
+IAS 16 and IAS 38 Amendments
+IFRS 11 Amendments
+IAS 1 Amendments
+Amendments
+IFRS 10, IFRS 12 and IAS 28
+IAS 27 Amendments
+On 1 January 2016, the Group adopted the following new standards, amendments and
+interpretations.
+Customers
+Foreign Currency Transactions and
+Advance Consideration
+Leases
+statement.
+Effective for
+annual periods
+In the Bank's statement of financial position, investments in subsidiaries are accounted for
+at cost less impairment. Cost is adjusted to reflect changes in consideration arising from
+contingent consideration amendments, but does not include acquisition-related costs, which
+are expensed as incurred. The dividends or profits declared to distribute by the invested
+entity shall be recognised by the Bank as the current investment income of subsidiaries.
+The Group assesses at each financial reporting date whether there is objective evidence that
+investment in subsidiaries is impaired. An impairment loss is recognised for the amount by
+which the investment in subsidiaries' carrying amount exceeds its recoverable amount. The
+recoverable amount is the higher of the investment in subsidiaries' fair value less costs to
+sell and value in use.
+2.1 Subsidiaries (Continued)
+Consolidation (Continued)
+2
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2.2 Associates and joint ventures
+175
+The excess of the consideration transferred, the amount of any non-controlling interest in the
+acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
+over the fair value of the identifiable net assets acquired is recorded as goodwill. If this is
+less than the fair value of the net assets of the subsidiary acquired in the case of a bargain
+purchase, the difference is recognised directly in the income statement. Goodwill is tested
+annually for impairment and carried at cost less accumulated impairment losses. If there is
+any indication that goodwill is impaired, recoverable amount is estimated and the difference
+between carrying amount and recoverable amount is recognised as an impairment charge.
+Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an
+entity include the carrying amount of goodwill relating to the entity sold.
+The Group uses the acquisition method of accounting to account for business combinations.
+The consideration transferred for the acquisition of a subsidiary is the fair values of the
+assets transferred, the liabilities incurred and the equity interests issued by the Group. The
+consideration transferred includes the fair value of any asset or liability resulting from a
+contingent consideration arrangement. Acquisition-related costs are expensed as incurred.
+Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
+combination are measured initially at their fair values at the acquisition date. On an
+acquisition by acquisition basis, the Group recognises any non-controlling interest in the
+acquiree either at fair value or at the non-controlling interest's proportionate share of the
+acquiree's net assets.
+Subsidiaries are all entities (including corporates, divided parts of associates and joint
+ventures, and structured entities controlled by corporates) over which the Group has control.
+That is the Group controls an entity when it is exposed, or has rights, to variable returns
+from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The existence and effect of potential voting rights that are currently
+exercisable or convertible and rights arising from other contractual arrangements are
+considered when assessing whether the Group controls another entity. Subsidiaries are
+fully consolidated from the date on which control is transferred to the Group. They are
+de-consolidated from the date that control ceases. If the changes of the relevant facts and
+circumstances resulting in the definition of control involved in the changes of relevant
+elements, the Group will re-evaluate whether subsidiaries are controlled.
+2.1 Subsidiaries
+2 Consolidation
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
+transactions between members of the Group are eliminated in full on consolidation. Where
+necessary, accounting policies of subsidiaries have been changed to ensure consistency with
+the policies adopted by the Group.
+BANK OF CHINA LIMITED
+Associates are all entities over which the Group has significant influence but no control or
+joint control, generally accompanying a shareholding of between 20% and 50% of the voting
+rights.
+Investments in associates and joint ventures are initially recognised at cost and are
+accounted for using the equity method of accounting. The Group's "Investment in associates
+and joint ventures” includes goodwill.
+Sale or Contribution of Assets
+between an Investor and its
+Associate or Joint Venture
+Monetary assets and liabilities denominated in foreign currencies at the financial reporting
+date are translated at the foreign exchange rates ruling at that date. Changes in the fair value
+of monetary securities denominated in foreign currency classified as available for sale are
+analysed between translation differences resulting from changes in the amortised cost of the
+security and other changes in the carrying amount of the security. Translation differences
+related to changes in the amortised cost are recognised in the income statement, and other
+changes in the carrying amount are recognised in other comprehensive income. Translation
+differences on all other monetary assets and liabilities are recognised in the income
+Foreign currency transactions are translated into the functional currency using the exchange
+rates prevailing at the dates of the transactions, or the exchange rates that approximate the
+exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses
+resulting from the settlement of such transactions are recognised in the income statement.
+The functional currency of the operations in the Chinese mainland is the Renminbi
+("RMB"). Items included in the financial statements of each of the Group's operations
+in Hong Kong, Macau, Taiwan and other countries and regions are measured using the
+currency of the primary economic environment in which the entity operates (the "functional
+currency"). The presentation currency of the Group is RMB.
+3.1 Functional and presentation currency
+Foreign currency translation
+3
+When the Group ceases to have control or significant influence, any retained interest in
+the entity is re-measured to its fair value, with the change in carrying amount recognised
+in the income statement. The fair value is the initial carrying amount for the purposes of
+subsequently accounting for the retained interest as an associate, joint venture or financial
+asset. In addition, any amounts previously recognised in other comprehensive income are
+reclassified to the income statement.
+The Group treats transactions with non-controlling interests as transactions with equity
+owners of the Group. For purchases from non-controlling interests, the difference between
+any consideration paid and the relevant share acquired of the carrying value of net assets of
+the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests
+are also recorded in equity.
+Joint ventures exist where the Group has a contractual arrangement with one or more parties
+to undertake economic activities which are subject to joint control.
+2.3 Transactions with non-controlling interests
+2
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+176
+The Group assesses at each financial reporting date whether there is objective evidence that
+investments in associates and joint ventures are impaired. Impairment losses are recognised
+for the amounts by which the investments in associates and joint ventures' carrying amounts
+exceed its recoverable amounts. The recoverable amounts are the higher of investments in
+associates and joint ventures' fair value less costs to sell and value in use.
+Unrealised gains on transactions between the Group and its associates and joint ventures
+are eliminated to the extent of the Group's interests in the associates and joint ventures;
+unrealised losses are also eliminated unless the transaction provides evidence of impairment
+of the asset transferred. Accounting policies of associates and joint ventures have been
+changed where necessary to ensure consistency with the policies adopted by the Group.
+Consolidation (Continued)
+174
+3.2 Transactions and balances
+The amendments clarify that the disclosure requirements in IFRS 12, apply to an entity's
+interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint
+venture or an associate) that is classified (or included in a disposal group that is classified)
+as held for sale. The amendments are effective from 1 January 2017.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+172
+IAS 40 Amendments clarify when an entity should transfer property, including property under
+construction or development into, or out of investment property. The amendments state that a
+change in use occurs when the property meets, or ceases to meet, the definition of investment
+property and there is evidence of the change in use. A mere change in management's
+intentions for the use of a property does not provide evidence of a change in use.
+The amendments to IAS 12 clarify that an entity needs to consider whether tax law restricts
+the sources of taxable profits against which it may make deductions on the reversal of that
+deductible temporary difference. Furthermore, the amendments provide guidance on how
+an entity should determine future taxable profits and explain the circumstances in which
+taxable profit may include the recovery of some assets for more than their carrying amount.
+The amendments to IAS 7 require an entity to provide disclosures that enable users of
+financial statements to evaluate changes in liabilities arising from financing activities,
+including both changes arising from cash flows and non-cash changes.
+1
+1 January 2019
+Effective date
+has been deferred
+indefinitely
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2018
+1 January 2017
+or after
+The Group is in the process of assessing the impact of these new standards, amendments and
+interpretations on the consolidated and separate financial statements of the Group and the
+Bank respectively.
+beginning on
+1 January 2018
+Basis of preparation (Continued)
+1 January 2017
+The IASB issued amendments to IFRS 2 Share-based Payment that address three main
+areas: the effects of vesting conditions on the measurement of a cash-settled share-based
+payment transaction; the classification of a share-based payment transaction with net
+settlement features for withholding tax obligations; and accounting where a modification
+to the terms and conditions of a share-based payment transaction changes its classification
+from cash settled to equity settled.
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2016 (Continued)
+IFRS 12 Disclosure of Interests in Other Entities
+IFRS 1 First-time Adoption of International Financial Reporting Standards
+The amendments clarifies that an entity that is a venture capital organisation, or other
+qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to
+measure its investments in associates and joint ventures at fair value through profit or loss. If
+an entity that is not itself an investment entity has an interest in an associate or joint venture
+that is an investment entity, the entity may, when applying the equity method, elect to retain
+the fair value measurement applied by that investment entity associate or joint venture to the
+investment entity associate's or joint venture's interests in subsidiaries. The amendments are
+effective from 1 January 2018.
+IAS 28 Investments in Associates and Joint Ventures
+Annual Improvements to IFRSS 2014-2016 cycle:
+The amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements
+in IFRS 10 and in IAS 28 in dealing with the sale or contribution of assets between an
+investor and its associate or joint venture. The amendments require a full recognition of
+a gain or loss when the sale or contribution between an investor and its associate or joint
+venture constitutes a business. For a transaction involving assets that do not constitute a
+business, a gain or loss resulting from the transaction is recognised in the investor's profit or
+loss only to the extent of the unrelated investor's interest in that associate or joint venture.
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2016 (Continued)
+Basis of preparation (Continued)
+1
+Short-term exemptions for first-time adopters in IFRS 1 were deleted because they have now
+served their intended purpose. The amendment is effective from 1 January 2018.
+(Amount in millions of Renminbi, unless otherwise stated)
+In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which
+reflects all phases of the financial instruments project and replaces IAS 39 Financial
+Instruments: Recognition and Measurement and all previous versions of IFRS 9. The
+standard introduces new requirements for classification and measurement, impairment, and
+hedge accounting.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+The IASB issued amendments to IFRS 4 that address concerns arising from implementing
+the new financial instruments standard, IFRS 9, before implementing the new insurance
+contracts standard that the IASB developing to replace IFRS 4. The amendments
+introduce two options for entities issuing insurance contracts: a temporary exemption from
+applying IFRS 9 and an overlay approach.
+IFRIC Interpretation 22 clarifies that in determining the spot exchange rate to use on initial
+recognition of the related asset, expense or income (or part of it) on the derecognition of
+a non-monetary asset or non-monetary liability relating to advance consideration, the date
+of the transaction is the date on which an entity initially recognises the non-monetary asset
+or non-monetary liability arising from the advance consideration. If there are multiple
+payments or receipts in advance, then the entity must determine a date of the transactions for
+each payment or receipt of advance consideration.
+IFRS 15 was issued in May 2014 and establishes a new five-step model that will apply to
+revenue arising from contracts with customers. Under IFRS 15 revenue is recognised at an
+amount that reflects the consideration to which an entity expects to be entitled in exchange
+for transferring goods or services to a customer. The principles in IFRS 15 provide a more
+structured approach to measuring and recognising revenue. The new revenue standard is
+applicable to all entities and will supersede all current revenue recognition requirements
+under IFRS.
+173
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+IFRS 16 Leases requires lessees to recognise assets and liabilities for most leases. For
+lessors, there is little change to the existing accounting in IAS 17 Leases. The scope of the
+new standard includes leases of all assets, with certain exceptions.
+4.2 Initial recognition
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Available for sale investments are non-derivative financial assets that are either designated
+in this category or not classified in any of the other categories.
+Other financial liabilities are non-derivative financial liabilities that are not classified or
+designated as financial liabilities at fair value through profit or loss.
+(5) Other financial liabilities
+(4) Available for sale investments
+those for which the Group may not recover substantially all of its initial investment,
+other than because of credit deterioration.
+•
+those that the Group upon initial recognition designates as available for sale; or
+A financial asset or financial liability is recognised on trade-date, the date when the Group
+becomes a party to the contractual provisions of the instrument.
+Loans and receivables are non-derivative financial assets with fixed or determinable
+payments that are not quoted in an active market, other than:
+180
+those that the Group intends to sell immediately or in the short term, which are
+classified as held for trading, and those that the Group upon initial recognition
+designates as at fair value through profit or loss;
+FOR THE YEAR ENDED 31 DECEMBER 2016
+4.3 Subsequent measurement
+-
+(3) Loans and receivables
+On de-recognition of a financial asset in its entirety, the difference between the carrying
+amount and the sum of the consideration received and any cumulative gain or loss that had
+been recognised in equity through other comprehensive income is recognised in the income
+statement.
+asset.
+Financial assets are de-recognised when the rights to receive cash flows from the
+investments have expired, or when the Group has transferred substantially all risks and
+rewards of ownership, or when the Group neither transfers nor retains substantially all risks
+or rewards of ownership of the financial asset but has not retained control of the financial
+4.5 De-recognition of financial instruments
+The Group uses the valuation techniques commonly used by market participants to price
+financial instruments and techniques which have been demonstrated to provide reliable
+estimates of prices obtained in actual market transactions. The Group makes use of all
+factors that market participants would consider in setting a price, and incorporates these
+into its chosen valuation techniques and tests for validity using prices from any observable
+current market transactions in the same instruments.
+4.4 Determination of fair value (Continued)
+Financial instruments (Continued)
+For all financial assets and financial liabilities not carried at fair value through profit or
+loss, financial assets are initially recognised at fair value together with transaction costs and
+financial liabilities are initially recognised at fair value net of transaction costs. Financial
+assets and financial liabilities carried at fair value through profit or loss are initially
+recognised at fair value, and transaction costs are expensed in the income statement.
+4
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+181
+The fair value is the price that would be received to sell an asset or paid to transfer a
+liability in an orderly transaction between market participants at the measurement date. The
+fair values of quoted financial assets and financial liabilities in active markets are based
+on current bid prices and ask prices, as appropriate. If there is no active market, the Group
+establishes fair value by using valuation techniques. These include the use of recent arm's
+length transactions, discounted cash flow analysis and option pricing models, and other
+valuation techniques commonly used by market participants.
+4.4 Determination of fair value
+Gains and losses arising from changes in the fair value of available for sale assets are
+recognised in "Other comprehensive income", until the financial asset is de-recognised
+or impaired. At this time the cumulative gain or loss previously recognised in "Other
+comprehensive income” is reclassified from equity to the income statement. Interest on
+available for sale debt instruments calculated using the effective interest method as well
+as dividends on equity instruments of this category when the Group's right to receive such
+payments is established are recognised in the income statement.
+Gains and losses arising from changes in the fair value of the financial assets and financial
+liabilities at fair value through profit or loss category are included in the income statement
+in the period in which they arise. Dividends on equity instruments of this category are
+also recognised in the income statement when the Group's right to receive payments is
+established.
+Financial assets available for sale and financial assets and financial liabilities at fair value
+through profit or loss are subsequently carried at fair value. Financial assets classified
+as loans and receivables and held to maturity and other financial liabilities are carried at
+amortised cost using the effective interest method.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+The Group shall not classify any financial assets as held to maturity if the entity has, during
+the current financial year or during the two preceding financial years, sold or reclassified
+more than an insignificant amount of held to maturity investments before maturity other than
+restricted circumstances such as sales or reclassifications due to a significant deterioration in
+the issuer's creditworthiness or industry's regulatory requirements.
+4.1 Classification
+(2) Held to maturity investments
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+3
+Foreign currency translation (Continued)
+3.2 Transactions and balances (Continued)
+Non-monetary assets and liabilities that are measured at historical cost in foreign currencies
+are translated using the foreign exchange rates at the date of the transaction. Non-monetary
+assets and liabilities that are measured at fair value in foreign currencies are translated using
+the foreign exchange rates at the date the fair value is determined. Translation differences
+on non-monetary financial assets classified as available for sale are recognised in other
+comprehensive income. Translation differences on non-monetary financial assets and
+liabilities held at fair value through profit or loss are recognised as "Net trading gains” in the
+income statement.
+The results and financial positions of all the Group entities that have a functional currency
+different from the presentation currency are translated into the presentation currency as
+follows:
+•
+assets and liabilities for each statement of financial position presented are translated at
+the closing rate at the date of that statement of financial position;
+income and expenses for each income statement are translated at exchange rates at the
+date of the transactions, or a rate that approximates the exchange rates of the date of the
+transaction; and
+all resulting exchange differences are recognised in other comprehensive income.
+On consolidation, exchange differences arising from the translation of the net investment in
+foreign entities, and of deposit taken and other currency instruments designated as hedges
+of such investments are taken to other comprehensive income. When a foreign entity is
+disposed, these exchange differences are recognised in the income statement. The effect
+of exchange rate changes on cash and cash equivalents is presented individually in the
+statement of cash flows.
+178
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Financial liabilities are de-recognised when they are extinguished – that is, when the
+obligation is discharged, cancelled or expires. The difference between the carrying amount
+of a financial liability de-recognised and the consideration paid is recognised in the income
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Held to maturity investments are non-derivative financial assets with fixed or determinable
+payments and fixed maturities that the Group's management has the positive intention and
+ability to hold to maturity and that do not meet the definition of loans and receivables nor
+are designated as at fair value through profit or loss or as available for sale.
+4
+The Group classifies its financial assets into the following four categories: financial assets
+at fair value through profit or loss, held to maturity investments, loans and receivables and
+available for sale investments.
+4.1 Classification (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+179
+the financial instrument contains one or more embedded derivatives, unless the
+embedded derivative(s) does not significantly modify the cash flows or it is clear, with
+little or no analysis, that it would not be separately recorded.
+a group of financial assets, financial liabilities or both is managed and its performance
+is evaluated on a fair value basis in accordance with a documented risk management
+or investment strategy, and information is provided internally on that basis to key
+management personnel; or
+the designation eliminates or significantly reduces a measurement or recognition
+inconsistency that would otherwise arise from measuring the financial assets or
+financial liabilities or recognising the gains and losses on them on different bases; or
+•
+A financial asset or financial liability is classified at fair value through profit or loss at
+inception if it meets either of the following criteria and is designated as such by management
+on initial recognition:
+A financial asset or financial liability is classified as held for trading if it is acquired or
+incurred principally for the purpose of selling or repurchasing it in the near term or if it
+is part of a portfolio of identified financial instruments that are managed together and for
+which there is evidence of recent actual pattern of short-term profit-making. Derivatives
+are also categorised as held for trading unless they are financial guarantee contracts or
+designated and effective as hedging instruments.
+Financial assets and financial liabilities at fair value through profit or loss have two sub-
+categories: financial assets and financial liabilities held for trading, and those designated as
+at fair value through profit or loss at inception.
+(1) Financial assets and financial liabilities at fair value through profit or loss
+The Group determines the classification of its financial assets and financial liabilities at
+initial recognition.
+Financial liabilities are classified into two categories: financial liabilities at fair value
+through profit or loss and other financial liabilities.
+Financial instruments
+statement.
+(1) Assets carried at amortised cost (Continued)
+BANK OF CHINA LIMITED
+4.7 Derivative financial instruments and hedge accounting
+With respect to equity instruments, impairment losses recognised in the income statement
+are not subsequently reversed through the income statement. If there is objective evidence
+that an impairment loss has been incurred on an unquoted equity investment that is not
+carried at fair value because its fair value cannot be reliably measured, the impairment loss
+is not reversed.
+(2) Assets classified as available for sale (Continued)
+4.6 Impairment of financial assets (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Derivatives are initially recognised at fair value on the date a derivative contract is
+entered into and are subsequently remeasured at their fair value. Fair values are obtained
+from quoted market prices in active markets, including recent market transactions, and
+valuation techniques, including discounted cash flow analysis and option pricing models, as
+appropriate. Credit risk valuation adjustments are applied to the Group's over-the-counter
+derivatives to reflect the credit risk of the counterparties and the Group respectively. They
+are dependent on expected future values of exposures for each counterparty and default
+probabilities, etc. All derivatives are carried as assets when fair value is positive and as
+liabilities when fair value is negative.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+BANK OF CHINA LIMITED
+185
+If, in a subsequent period, the fair value of a debt instrument classified as available for
+sale increases and the increase can be objectively related to an event occurring after
+the impairment loss was recognised in the income statement, the previously recognised
+impairment loss is reversed through the income statement.
+If objective evidence of impairment exists for available for sale financial assets, the
+cumulative loss recognised in “Other comprehensive income” is reclassified from equity to
+the income statement and is measured as the difference between the acquisition cost (net of
+any principal repayment and amortisation) and the current fair value, less any impairment
+loss on that financial asset previously recognised in the income statement.
+(2) Assets classified as available for sale
+If, in a subsequent period, the amount of the impairment loss decreases and the decrease
+can be related objectively to an event occurring after the impairment was recognised (such
+as an improvement in the debtor's credit rating), the previously recognised impairment loss
+is reversed by adjusting the allowance account and recognised in the income statement.
+The reversal shall not result in a carrying amount of the financial asset that exceeds what
+the amortised cost would have been had the impairment not been recognised at the date the
+impairment is reversed.
+Estimates of changes in future cash flows for groups of assets should reflect and be
+directionally consistent with changes in related observable data from period to period. The
+methodology and assumptions used for estimating future cash flows are reviewed regularly
+by the Group to reduce any differences between loss estimates and actual loss experience.
+When a financial asset is uncollectible, it is written off against the related allowance for
+impairment after all the necessary procedures have been completed. Subsequent recoveries
+of amounts previously written off are recognised in the income statement.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The best evidence of the fair value of a derivative at initial recognition is the transaction
+price (i.e. the fair value of the consideration given or received) unless the fair value of that
+instrument is evidenced by comparison with other observable current market transactions
+in the same instrument (i.e. without modification or repackaging) or based on a valuation
+technique whose variables include only data from observable markets. When such evidence
+exists, the Group recognises profit or loss on the date of transaction.
+The method of recognising the resulting fair value gain or loss depends on whether the
+derivative is designated and qualifies as a hedging instrument, and if so, the nature of the
+item being hedged. For derivatives not designated or qualified as hedging instruments,
+including those intended to provide effective economic hedges of specific interest rate and
+foreign exchange risks, but do not qualify for hedge accounting, changes in the fair value of
+these derivatives are recognised in "Net trading gains" in the income statement.
+186
+187
+Amounts accumulated in equity are reclassified to the income statement in the same periods
+when the hedged item affects the income statement.
+The effective portion of changes in the fair value of hedging instruments that are designated
+and qualify as cash flow hedges is recognised in “Other comprehensive income”. The
+ineffective portion is recognised immediately in the income statement.
+Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable
+to a particular risk associated with a recognised asset or liability (such as all or some future
+interest payments on variable rate debt) or a highly probable forecast transaction that could
+ultimately affect income statement.
+(2) Cash flow hedge
+If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying
+amount of a hedged item for which the effective interest method is used is amortised to
+the income statement over the period to maturity. If the hedged item is de-recognised, the
+unamortised carrying value adjustment is recognised immediately in the income statement.
+The changes in fair value of hedging instruments that are designated and qualify as fair
+value hedges are recorded in the income statement, together with the changes in fair value of
+the hedged item attributable to the hedged risk. The net result is included as ineffectiveness
+in the income statement.
+statement.
+Fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset
+or liability or an unrecognised firm commitment, or an identified portion of such an asset,
+liability or firm commitment, that is attributable to a particular risk and could affect income
+(1) Fair value hedge
+The Group documents, at inception, the relationship between hedging instruments and
+hedged items, as well as its risk management objective and strategy for undertaking various
+hedge transactions. The Group also documents its assessment, both at hedge inception and
+on an ongoing basis, of whether the derivatives that are used in hedging transactions are
+highly effective in offsetting changes in fair values or cash flows of hedged items. These
+criteria should be met before a hedge can be qualified to be accounted for under hedge
+accounting.
+4.7 Derivative financial instruments and hedge accounting (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Future cash flows in a group of financial assets that are collectively evaluated for
+impairment are estimated on the basis of historical loss experience for assets with credit
+risk characteristics similar to those in the group. Historical loss experience is adjusted on
+the basis of current observable data to reflect the effects of current conditions that did not
+affect the period on which the historical loss experience is based and to remove the effects
+of conditions in the historical period that do not currently exist.
+182
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Financial instruments (Continued)
+BANK OF CHINA LIMITED
+183
+any significant change with an adverse effect that has taken place in the technological,
+market, economic or legal environment in which the issuer operates and indicates that
+the cost of investments in equity instruments may not be recovered;
+observable data indicating that there is a measurable decrease in the estimated future
+cash flows from a group of financial assets since the initial recognition of those assets,
+although the decrease cannot yet be identified with the individual financial assets in the
+group, including adverse changes in the payment status of borrowers in the group, an
+increase in the unemployment rate in the geographical area of the borrowers, a decrease
+in property price for the mortgages in the relevant area or national or local economic
+conditions that correlate with defaults on the assets in the group;
+the disappearance of an active market for that financial asset because of financial
+difficulties;
+it becoming probable that the borrower will enter into bankruptcy or other financial re-
+organisation;
+the Group granting to the borrower, for economic or legal reasons relating to the
+borrower's financial difficulty, a concession that the lender would not otherwise
+consider;
+a breach of contract, such as a default or delinquency in interest or principal payments;
+significant financial difficulty of the issuer or obligor;
+•
+•
+The Group assesses at each financial reporting date whether there is objective evidence that
+a financial asset or a group of financial assets excluding those fair valued through profit or
+loss is impaired. A financial asset or a group of financial assets is impaired and impairment
+losses are incurred only if there is objective evidence of impairment as a result of one or
+more events that occurred after the initial recognition of the asset (a “loss event") and that
+loss event has an impact on the estimated future cash flows of the financial asset or group
+of financial assets that can be reliably estimated. Objective evidence that a financial asset or
+group of assets is impaired includes observable data that comes to the attention of the Group
+about the following loss events:
+4.6 Impairment of financial assets
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+4.6 Impairment of financial assets (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+184
+For the purposes of a collective assessment of impairment, financial assets are grouped on
+the basis of similar and relevant credit risk characteristics. Those characteristics are relevant
+to the estimation of future cash flows for groups of such assets by being indicative of the
+debtors' ability to pay all amounts due according to the contractual terms of the assets being
+evaluated.
+(Amount in millions of Renminbi, unless otherwise stated)
+As a practical expedient, the Group may measure impairment on the basis of an instrument's
+fair value using an observable market price.
+Impairment loss for financial assets carried at amortised cost is measured as the difference
+between the asset's carrying amount and the present value of estimated future cash flows
+(excluding future credit losses that have not been incurred) discounted at the financial
+asset's original effective interest rate. The original effective interest rate is computed
+at initial recognition. The carrying amount of the asset is reduced through the use of an
+allowance account and the amount of the loss is recognised in the income statement. For
+financial assets with variable interest rate, the discount rate for measuring any impairment
+loss is the current effective interest rate determined under the contract.
+(1) Assets carried at amortised cost
+The Group first assesses whether objective evidence of impairment exists individually for
+financial assets that are individually significant. If there is objective evidence of impairment,
+the impairment loss is recognised in the income statement. The Group performs a collective
+assessment for all other financial assets that are not individually significant or for which
+impairment has not yet been identified by including the asset in a group of financial assets
+with similar credit risk characteristics and collectively assesses them for impairment.
+other objective evidence indicating impairment of the financial asset.
+a significant or prolonged decline in the fair value of an equity instrument is an
+indicator of impairment in such investments where a decline in the fair value of equity
+instrument below its initial cost by 50% or more; or fair value below cost for one year
+or longer. An impairment is also indicated by a decline in fair value of 20% or more
+below initial cost for six consecutive months or longer or where fair value is below
+initial cost by 30% or more over a short period of time (i.e., one month); or
+•
+4.6 Impairment of financial assets (Continued)
+Financial instruments (Continued)
+4
+The calculation of the present value of the estimated future cash flows of a collateralised
+financial asset reflects the cash flows that may result from foreclosure less costs for
+obtaining and selling the collateral, whether or not foreclosure is probable.
+(Amount in millions of Renminbi, unless otherwise stated)
+WANG Xiquan
+Chairman of the Board of Supervisors
+31 March 2017
+We undertook social responsibilities and made active contributions to the rejuvenation of the
+Chinese nation. Committed to serving SMEs, the Bank hosted 10 worldwide matchmaking events
+successfully, playing a significant role in boosting SME development and deepening international
+economic and trade cooperation. We devoted great energy towards developing inclusive finance
+and provided more support to personal consumption. We earnestly carried out targeted poverty
+alleviation efforts, providing more than RMB72 million in aid to designated areas. This directly
+benefited over 27,000 low-income people. In addition, we also actively served the nation's
+diplomatic strategy by holding the "Belt and Road" international financial communication and
+cooperation seminar, which was widely acclaimed at home and abroad.
+In the coming year, guided by the strategy of “Serving Society, Delivering Excellence", the Board
+of Supervisors will prioritise the pivotal issues and the overall interest of the Bank, strengthen
+awareness of the risk bottom line, focus on prominent problems, fulfil its supervisory role in duty
+performance, finance, internal control and risk management, and continue to communicate and
+interact effectively with the Board of Directors and the Senior Management. It will effectively
+perform the Board of Supervisor's constructive supervisory role in corporate governance and
+make new and greater contributions to the Bank's continued, stable development.
+Telephone: (86) 10-6659 6688
+China, 100818
+No. 1 Fuxingmen Nei Dajie, Beijing,
+Office Address
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+Registered Address
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+Facsimile: (86) 10-6601 6871
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+YU Ke
+Listing Affairs Representative
+E-mail: ir@bankofchina.com
+Facsimile: (86) 10-6659 4568
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+Office Address:
+Company Secretary
+GENG Wei
+Office Address:
+Secretary to the Board of Directors and
+Website: http://www.boc.cn
+Customer Service and Complaint Hotline:
+(86) Area Code-95566
+International auditor
+Level 16, Ernst & Young Tower,
+Oriental Plaza,
+Ernst & Young Hua Ming LLP
+Office Address:
+Domestic auditor
+Auditors
+9
+Hong Kong Legal Advisor
+Allen & Overy
+E-mail: ir@bankofchina.com
+Domestic Legal Advisor
+King & Wood Mallesons
+Website of HKEx for Publication of the
+Annual Report
+http://www.hkexnews.hk
+http://www.sse.com.cn
+Website Designated by CSRC for
+Publication of the Annual Report
+China Securities Journal, Shanghai Securities
+News, Securities Times, Securities Daily
+Selected Newspapers for Information
+Disclosure (A Share)
+Bank of China Tower, 1 Garden Road,
+Central, Hong Kong
+Place of Business in Hong Kong
+Place where Annual Report can be Obtained
+Head Office of Bank of China Limited
+Shanghai Stock Exchange
+CHEN Siqing
+Vice Chairman and President
+TIAN Guoli
+Non-interest income to operating income = non-interest income ÷ operating income × 100%.
+8
+Net interest margin = net interest income ÷ average balance of interest-earning assets × 100%. Average balance is
+average daily balance derived from the Bank's management accounts (unaudited).
+Return on average equity = profit attributable to ordinary shareholders of the Bank ÷ weighted average capital and
+reserves attributable to ordinary shareholders of the Bank × 100%. Calculation is based on No. 9 Preparation and
+Reporting Rules of Information Disclosure of Public Offering Companies Calculation and Disclosure of Return
+on Average Equity and Earnings per Share (Revised in 2010) (CSRC Announcement [2010] No. 2) issued by the
+CSRC.
+Return on average total assets = profit for the year ÷ average total assets × 100%. Average total assets = (total
+assets at the beginning of the year + total assets at year-end) ÷ 2.
+Net assets per share = (capital and reserves attributable to equity holders of the Bank at year-end - other equity
+instruments) number of ordinary shares in issue at year-end.
+7
+9
+6
+4
+Dividend per share is the dividend per ordinary share distributed to ordinary shareholders.
+3
+Investments include financial investments available for sale, debt securities held to maturity, financial investments
+classified as loans and receivables, and financial assets at fair value through profit or loss.
+2
+1 Non-interest income = net fee and commission income + net trading gains/(losses) + net gains/(losses) on financial
+investments + other operating income.
+Notes:
+5
+10
+11
+12
+Legal Representative and Chairman
+("Bank of China”)
+BANK OF CHINA LIMITED
+Registered Name in English
+中國銀行股份有限公司(“中國銀行”)
+Registered Name in Chinese
+Corporate Information
+8
+Allowance for loan impairment losses to total loans = allowance for loan impairment losses at year-end ÷ total
+loans at year-end × 100%. Calculation is based on the data of the Bank's domestic institutions.
+Credit cost = impairment losses on loans ÷ average balance of loans × 100%. Average balance of loans = (balance
+of loans at the beginning of the year + balance of loans at year-end) ÷ 2.
+Allowance for loan impairment losses to non-performing loans = allowance for loan impairment losses at year-end
+÷ non-performing loans at year-end × 100%.
+Identified impaired loans to total loans = identified impaired loans at year-end ÷ total loans at year-end × 100%.
+Non-performing loans to total loans = non-performing loans at year-end ÷ total loans at year-end × 100%.
+In accordance with Capital Rules for Commercial Banks (Provisional) (Y.J.H.L. [2012] No. 1) and related
+regulations, the capital ratios of 2016, 2015 and 2014 are calculated under the advanced approaches, and the
+capital ratios of 2013 are calculated under the non-advanced approaches. The capital ratios of 2012 are calculated
+in accordance with the Regulation Governing Capital Adequacy of Commercial Banks (Y.J.H.L. [2004] No. 2)
+and related regulations. Therefore, the capital ratios of 2016, 2015 and 2014 should not be compared directly with
+those of previous years in this regard.
+Cost to income ratio is calculated in accordance with the Measures of the Performance Evaluation of Financial
+Enterprises (Cai Jin [2016] No. 35) formulated by the MOF.
+15
+14
+13
+Ernst & Young
+17
+Office Address:
+1 Tim Mei Avenue
+In 2016, the Bank faithfully implemented the Government's guidelines, policies and strategic
+arrangements while pursuing its development strategy of "Serving Society, Delivering
+Excellence". Placing emphasis on “innovation, transformation, mitigation, management and
+control", the Bank met its annual development objectives and made a strong start for the 13th
+Five-Year Plan Period.
+Message from the President
+31 March 2017
+TIAN Guoli
+Chairman
+12
+Faced with new circumstances and fresh tasks, we will continue to follow our development
+strategy of "Serving Society, Delivering Excellence". We will pursue internationalised
+development and continued to serve the people and SMEs. We will carry on technological
+innovations, intensify Party and team building, and take concrete steps to perform our social
+responsibilities, so as to reward our shareholders and the public for their trust and support by
+delivering better and better performance!
+At present, the international situation is anything but optimistic. The world economy is becoming
+increasingly complicated, unstable and uncertain. China's economy is at a critical juncture, with
+new growth drivers taking the place of old. While we must clearly recognise that the banking
+industry faces mounting conflicts and difficulties in terms of its operation and management, we
+should also see the silver linings amid the plentiful clouds of uncertainty and instability. China
+will continue to implement the proactive fiscal policy and prudent monetary policy, and will
+deepen the supply-side structural reform. As such, we expect the national economy to maintain
+sustained and solid growth. The in-depth implementation of major national strategies such as the
+"Belt and Road” initiative, the advance of supply-side structural reform and other key reforms,
+the rapid increase of residents' wealth and the extensive application of smart technologies - all of
+these will present rare opportunities for the development of the banking industry.
+At the end of 2016, the Bank's total assets stood at RMB18.15 trillion, its total liabilities
+amounted to RMB16.66 trillion and the equity attributable to shareholders of the Bank was
+RMB1.41 trillion according to International Financial Reporting Standards, representing an
+increase of 7.93%, 7.79% and 8.18% respectively from the prior year-end. The Bank achieved a
+profit for the year of RMB184.1 billion, a year-on-year increase of 2.58%. The Bank's common
+equity tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio stood
+at 11.37%, 12.28% and 14.28%, respectively. The non-performing loan ratio was 1.46%, up 0.03
+percentage point from the prior year-end, which remained within the target range.
+In 2016, the Bank continued to improve the governance architecture and system, enhanced the
+working mechanisms of the Board of Directors, and earnestly fulfilled its responsibilities for all
+stakeholders including shareholders, customers, employees and society, in the effort to achieve
+the best practice in corporate governance. Changes were made to the board composition smoothly
+according to applicable laws and regulations. All Board members worked with diligence and
+commitment to guide and push the Group towards sustained and sound development.
+By daring to reform and make innovations, we won customer loyalty through market competition.
+Drawing on the advantages of internationalised, diversified and professional operations, the Bank
+led its Chinese counterparts in the underwriting of offshore RMB bonds and overseas bonds, as
+well as the issuance of Panda Bonds. We issued the first asset-backed green bond in China and
+acted as underwriter for 12 green bonds, comprising a total amount of RMB15.6 billion, the
+largest in the industry.
+11
+We closely followed the contemporary trends and improved our services through technological
+reform. Applying cutting-edge information technology and Internet thinking, we trialled "smart
+counters" in an effort to reshape the counter procedures in our outlets. Our "Mobile Banking
+3.0" launched successfully and achieved a sharp increase in both the number of customers and
+transaction volumes. We proactively established the “E-BOC” e-finance brand, enriched the four
+product lines of payment, asset management, transaction and financing, and made our financial
+services more efficient. Taking the initiative to adapt to new trends in technological development,
+we actively introduced cutting-edge technologies and continuously enhanced our technological
+output.
+Giving full play to our advantages in internationalisation, we maintained a leading position in the
+globalisation process. Our overseas institutions realised a profit before income tax of USD12.234
+billion, increasing by 39.42% year-on-year and making a greater contribution to the Group's
+profit. The Bank's overseas institutions now cover 51 countries and regions around the world,
+marking a new step in growing our global footprint. Actively supporting such major national
+strategies as the "Belt and Road" initiative and “Going Global" efforts, we strongly pushed
+Chinese enterprises to integrate more quickly into the global industrial chain and value chain.
+We continued to lead in the business of RMB internationalisation, not only being qualified as
+an RMB clearing bank in the United States, but also registering the largest cross-border RMB
+settlement and clearing volumes in the global banking industry, in the endeavour to provide the
+best RMB services for global customers.
+The past year has seen dramatic changes in the global political and economic situation. "Black
+swan" events took place one after another and the financial market experienced serious
+fluctuations. Faced with a complicated and challenging operating environment, the Bank upheld
+its development strategy of "Serving Society, Delivering Excellence". We addressed difficulties
+and challenges with reform and innovation, accelerated business structure adjustment, optimised
+our systems and institutions, and thus promoted the Group to achieve sustained and steady
+development.
+In this beautiful spring season, I am pleased to present our annual results for 2016 to the
+shareholders of the Bank and the public. According to International Financial Reporting
+Standards, the Group achieved a profit for the year of RMB184.1 billion, a year-on-year increase
+of 2.58%. Asset quality was controlled within the target range, and the ratio of allowance for loan
+impairment losses to non-performing loans (NPLs) increased by 9.52 percentage points from last
+year to 162.82%. The Board of Directors has proposed a dividend of RMB0.168 per ordinary
+share for 2016, pending approval by the Annual General Meeting to be held in June 2017.
+Message from the Chairman
+We held fast to the risk bottom line and consolidated foundations through sustained development.
+Attaching greater importance to risk prevention and control, the Bank made continuous efforts
+to consolidate its capital base with a view to supporting sustainable growth. Our capital
+adequacy ratio reached a new high in recent years, the ratio of allowance for loan impairment
+losses to NPLs strengthened against the market trend, and the ability of risk resistance and
+compensation was further enhanced. Stepping up efforts to clear out and eliminate NPLs, we
+made substantial progress in a number of key projects, eliminating more NPLs than ever before.
+We also reinforced our comprehensive risk management capability so as to guarantee sound
+and sustainable operations. This includes the management of consolidated financial statements,
+country risk, liquidity risk, market risk, internal control and compliance, and anti-money
+laundering.
+In 2016, the Bank achieved steady profit growth, driven mainly by the following four factors:
+First, the income structure was further optimised. The Bank realised non-interest income of
+RMB179.6 billion, a year-on-year increase of 23.64%. Non-interest income accounted for 36.98%
+of total income, up 6.33 percentage points from the prior year. Second, operating efficiency
+improved steadily. The cost to income ratio was 28.08%, a year-on-year decrease of 0.22
+percentage point. Third, the international strategy gained pace. The Bank's overseas institutions
+realised a profit before income tax of USD12.234 billion, a year-on-year increase of 39.42%.
+Their contribution to the Group's overall profit before income tax rose by 12.63 percentage points
+from the prior year to 36.27%. Fourth, the Bank made solid progress in its strategic adjustments.
+It completed a number of major projects, including the transfer of shares of Nanyang Commercial
+Bank, Limited, the listing of BOC Aviation, the integration of its Southeast Asian institutions
+and the organisational restructuring in Shandong and Liaoning provinces. In particular, the Bank
+continued to cement its capital base and maintained its capital adequacy ratio above 14% at the
+end of 2016. The ratio of allowance for loan impairment losses to NPLs grew by 9.52 percentage
+points year-on-year to 162.82%, indicating stronger risk resilience against the market trend.
+Over the past year, the Bank has injected stronger impetus into innovation-led development.
+The development of internet finance picked up speed, with the number of registered customers
+increasing by 93% over the prior year and the transaction volumes breaking the RMB2.6
+trillion mark. The Bank launched the “BOC E-Credit” product to provide comprehensive online
+financing services. Its electronic channels were upgraded at a faster pace, including the successful
+launch of the "Mobile Banking 3.0”. “Smart counters” were put into trial operation, significantly
+improving outlets' customer throughput, customer experience and product sales. As part of the
+growing IT outputs, the Bank successfully completed a number of major IT projects, including
+the integration and transformation of overseas information systems in the Americas. The Bank
+also achieved significant milestones in process optimisation, including the launch of its electronic
+seal system and standardisation of outlet workflows.
+In the past year, the Bank deepened business transformation and improved its asset and liability
+structure in order to achieve higher efficiency. Due to customers increased by RMB1.2 trillion,
+up 10.32% from the prior year, while the ratio of average balance of domestic RMB demand
+deposits increased by 3.47 percentage points. Loans and advances to customers added RMB837.5
+In the past year, the Board of Supervisors smoothly completed certain changes in Supervisors
+according to the applicable laws and regulations and the Articles of Association. Mr. LIU
+Xiaozhong ceased to be Supervisor of the Bank and Mr. GAO Zhaogang began to serve as
+Supervisor of the Bank. On behalf of the Board of Supervisors, I would like to take this
+opportunity to express the sincere appreciation to Mr. LIU Xiaozhong for the endeavours and
+contributions he made for the Bank during his tenure and extend a warm welcome to Mr. GAO
+Zhaogang as he joins us.
+16
+Mr. LI Jun ceased to be Supervisor, Chairman of the Board of Supervisors and Chairman of the
+Duty Performance and Due Diligence Supervision Committee of the Board of Supervisors of the
+Bank in 2016 due to reasons of age. During his nearly seven-year tenure, Mr. LI Jun, a senior
+banker, worked with commitment and diligence and made outstanding contributions to the Bank
+in terms of enhancing the operation of the Board of Supervisors, perfecting corporate governance,
+improving risk management and internal control, and promoting the sustained and healthy
+development of the Bank. On behalf of the Board of Supervisors, I would like to pay the highest
+tribute and extend the most heartfelt gratitude to Mr. LI Jun.
+During the past year, the Board of Supervisors was persistent in improving its internal supervision
+mechanism and earnestly supervised the day-to-day duty performance of the Board of Directors,
+the Senior Management and its members. It objectively assessed the annual duty performance of
+the Board of Directors, the Senior Management and its members and urged directors and senior
+management members to enhance their professional competence and duty performance capability
+so that the Board of Directors, the Senior Management and the Board of Supervisors could fully
+utilize their respective functions in strategic decision-making, operation and management and
+supervision. Employing an issue-focused approach, it carried out concrete measures regarding
+financial supervision, scrutinised the Bank's work arrangement and implementation concerning
+strategic, financial and accounting management, oversaw deliberations regarding the preparation,
+review and disclosure of regular reports and provided supervisory opinions. Using a risk-oriented
+approach, it strengthened the monitoring over risk control in priority areas and over the progress
+of major work projects. It investigated into material risk events, alerted the Board of Directors,
+the Senior Management and functional departments to the major potential, tendentious issues and
+weak links identified in the relevant work, thus assisting the Board of Directors and the Senior
+Management in fulfilling their respective risk prevention and risk control responsibilities. By
+reinforcing the supervision over effectiveness of the “three lines of defence" system of internal
+control, it focused on the general risk management and internal control issues identified by
+internal audit reports, and supervised and followed up on the rectification measures so that the
+rectification measures could be implemented properly. It carried out special surveys into the key
+areas and links that involved the Bank's drive to deepen reform and secure stable development
+and put forth supervisory opinions to support the Board of Directors, the Senior Management and
+functional departments in improving their work and perfecting relevant policies and measures.
+All members of the Board of Supervisors faithfully and diligently brought their strengths into
+play by proactively offering opinions and suggestions to the Bank regarding its sound and healthy
+development. The Board of Directors and the Senior Management attached great importance
+to the supervisory opinions issued by the Board of Supervisors, researched on and discussed
+relevant rectifications and arranged the relevant improvement work, thus enhancing operational
+management, risk management and internal control.
+In 2016, the Board of Supervisors made new progress in all working areas. Adhering to the issue-
+focused approach, it strived to proactively assume its responsibilities, closely followed up the
+Bank's strategic development, operation and management, and risk management dynamics and
+internal control. It highlighted the key aims on supervision and strengthened the actual effects
+of its supervisory activity, exercised its supervision functions constructively and pushed forward
+the Bank's continued stable development, in accordance with the relevant laws and regulations,
+regulatory requirements and the Articles of Association of the Bank.
+Message from the Chairman of the Board of Supervisors
+31 March 2017
+President
+CHEN Siqing
+15
+On behalf of the Management, I would like to avail myself of this opportunity to express my
+heartfelt gratitude to our directors and supervisors for your guidance, to all of our employees
+for your hard work, and to our customers, investors and friends for your constant support. We
+will forge ahead and repay the trust and support of our investors, employees and friends with
+better business performance and by working hard towards our strategic goal of "Serving Society,
+Delivering Excellence".
+2017 comes with challenges and opportunities. The Bank will fully implement the guiding
+principles of the 18th National Congress of the CPC, the Third, Fourth, Fifth and Sixth Plenary
+Sessions of the 18th CPC Central Committee and the Central Economic Work Conference. The
+Bank will follow the general principle of “progress with stability”, emphasising steadiness in its
+core work with the aim of achieving sustainable development. First, the Bank will steadfastly
+implement the development strategy of "Serving Society, Delivering Excellence" and make new
+progress in international development, cross-border matchmaking, community banking, targeted
+poverty alleviation and international financial exchange and training. Second, the Bank will
+endeavour to make progress while maintaining stable performance on all fronts. It will make
+progress in structural adjustments while keeping the asset size stable, make progress in liability
+business while keeping asset business stable, make progress in overseas operations while keeping
+domestic businesses stable, make progress in non-interest income while keeping interest income
+stable, make progress in service quality while keeping service base stable, and make progress
+in resolving non-performing assets while keeping asset quality stable. In addition, we will take
+effective measures to further connect on-shore and off-shore markets, integrate on-balance-
+sheet and off-balance-sheet businesses, and synchronise online and offline services, under the
+prerequisite of conforming to domestic and overseas regulatory requirements and policies. Third,
+we will strengthen comprehensive risk management and implement the Central Government's
+arrangements to prevent and control risks more proactively and urgently. We will plug loopholes
+and eliminate problems, parse problems into root causes and symptoms, and adopt classification-
+based solutions to ensure that, as a large state-owned bank, the Bank plays a vital role in
+safeguarding China's financial stability.
+14
+In the past year, the Bank enhanced its Group-wide management so as to create stronger
+momentum for future development. Systems and mechanisms were improved to enhance the
+customer-centric marketing of all products, with the mechanism of collaboration between
+customer and product implemented successfully. The Bank implemented dynamic management
+of assets and liabilities, refined its mechanism for the allocation of expenses and capital, so as to
+achieve greater management refinement and specialisation. The Bank made steadfast efforts in
+internal control and fraud prevention, including risk screening and rectification in key work areas.
+The monetary amount and number of fraud cases fell by 69% and 38% in 2016, respectively.
+The Bank implemented a three-year anti-money laundering (AML) plan and set up AML centres
+in Beijing and Guangdong for the centralised screening of inbound and outbound remittance
+transactions against AML sanctions lists. With its audit supervision strengthened, the Bank
+audited nearly 3,000 domestic and overseas institutions across the major business lines and high-
+risk fields in 2016.
+In the past year, the Bank made strenuous efforts to mitigate risks and thus maintained stable
+asset quality. The Bank stepped up efforts to tackle non-performing assets (NPAs) on an
+intensive, specialised and market-based basis. In 2016, the Bank resolved RMB128.9 billion of
+NPAs, a year-on-year increase of RMB24.5 billion. Thanks to proactive efforts to identify and
+mitigate potential risks, the Bank resolved RMB152.3 billion of corporate overdue loans before
+they became non-performing. As a new method of resolving NPAs, the Bank successfully issued
+China's first NPA-backed corporate securities since the relaunch of the credit asset-backed
+securitisation business. Low-risk business and wealth management business were incorporated
+into aggregate credit management in an effort to strengthen comprehensive risk management and
+unified credit granting. Customer concentration management was strengthened by setting limits
+on Group-wide balances and member shares of credit facilities. Interest rate and foreign exchange
+risk management was intensified in order to reduce the overseas institutions' foreign exchange
+risk and trading costs. The Bank also stepped up liquidity risk management and raised funds by
+various means to allow for business development.
+billion, up 9.17%. The proportion of loans to industries classified as “aggressive growth" and
+"selective growth” rose by 2.3 percentage points. The Bank's loans to small and micro-sized
+enterprises met the "Three No-Less-Than's” objective. Bond investment income surged by 238%
+thanks to the well-timed sale of bonds. The Bank's business transformation efforts were fruitful.
+The proportion of the Bank's comprehensive income from personal banking business rose by
+1.3 percentage points, marking a notable achievement in the Bank's strategy for accelerating the
+development of personal banking. Quickening the pace of its corporate banking transformation,
+the Bank has granted a cumulative total of USD59.4 billion in credit facilities to support the
+building of the "Belt and Road” financial artery. The Bank provided USD14.8 billion of financing
+for cross-border M&A in 2016, ranking first among Asia Pacific banks. The Bank maintained
+a leading edge in global markets business, topping the industry in foreign exchange trading.
+The Bank remains the world's number one bank in terms of cross-border RMB clearing and
+settlement. The “key regions” strategy has also delivered remarkable results, evidenced by a rise
+of 3.6 percentage points in the proportion of total operating income contributed by key regions
+including the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong
+Kong-Macau region.
+13
+10
+22/F, CITIC Tower,
+10
+Continuous Supervision Period
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock Code: 3988
+The Stock Exchange of Hong Kong Limited
+Stock Name: Bank of China
+H Share
+Stock Code: 601988
+Shanghai Stock Exchange
+Stock Name: 中國銀行
+First Tranche
+A Share
+RMB279,147,223,195
+Registered Capital
+B0003H111000001
+Financial Institution Licence Serial Number
+911000001000013428
+Unified Social Credit Code
+Central, Hong Kong
+Securities Information
+From 31 March 2015 to 31 December 2016
+(Second Tranche)
+Stock Name: 中行優1
+Stock Code: 360002
+Stock Name: 中行優2
+CHEN Wei, LIU Guoqiang
+Sponsor Representatives:
+39/F, BOC Building, 200 Mid. Yincheng Road,
+Pudong New Area, Shanghai, China
+Office Address:
+BOC International (China) Limited
+MA Xiaolong, ZHU Jie
+Sponsor Representatives:
+Second Tranche
+No. 8 Zhongxinsan Road, Futian District,
+Shenzhen, Guangdong Prov., China
+Office Address:
+CITIC Securities Company Limited
+Joint Sponsors for Domestic Preference
+Shares
+Stock Code: 4601
+The Stock Exchange of Hong Kong Limited
+Stock Name: BOC 2014 PREF
+Offshore Preference Share
+Stock Code: 360010
+North Tower, Excellence Times Plaza II,
+No. 1 East Chang An Avenue,
+Dongcheng District, Beijing, China
+Certified Public Accountants who signed
+the auditor's report: ZHANG Xiaodong,
+FENG Suoteng
+At each financial reporting date, liability adequacy tests are performed to ensure the
+adequacy of the insurance contract liabilities (including unearned premium in the case of
+non-life insurance contracts). In performing these tests, current best estimates of future
+contractual cash flows and claims handling and administration expenses, as well as
+investment income from the assets backing such liabilities, are used. Any deficiency is
+immediately charged to the income statement and reported as "Operating expenses", with a
+provision established for losses arising from the liability adequacy test.
+197
+BANK OF CHINA LIMITED
+8.3 Operating leases
+When the Group is the lessee under an operating lease, rental expenses are charged to
+"Operating expenses” in the income statement on a straight-line basis over the period of the
+lease.
+When the Group is the lessor under operating leases, the assets subject to the operating lease
+are accounted for as the Group's assets. Rental income is recognised as “Other operating
+income" in the income statement on a straight-line basis over the lease term net of any
+incentives given to lessees.
+9 Investment properties
+Investment properties, principally consisting of office buildings, are held to generate rental
+income or earn capital gains or both and is not occupied by the Group. Investment properties
+are carried at fair value and changes in fair value are recorded in the income statement,
+representing the open market value and other related information determined periodically by
+independent appraisers.
+10 Intangible assets
+Intangible assets are identifiable non-monetary assets without physical substance, including
+computer software and other intangible assets.
+Computer software and other intangible assets are stated at acquisition cost less accumulated
+amortisation and impairment. These costs are amortised on a straight-line basis over their
+estimated useful lives with the amortisation recognised in the income statement.
+The value of intangible assets is reviewed for impairment at each financial reporting date.
+Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
+written down immediately to its recoverable amount.
+The recoverable amount of an intangible asset is the higher of the asset's fair value less costs
+to sell and value in use.
+11 Repossessed assets
+Repossessed assets are initially recognised at fair value plus related costs when they are
+obtained as the compensation for the loans' principal and interest. When there are indicators
+that the recoverable amount is lower than carrying amount, the carrying amount is written
+down immediately to its recoverable amount.
+193
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+12 Employee benefits
+Leases (Continued)
+12.1 Defined contribution plans and Defined benefit plans
+8
+(Amount in millions of Renminbi, unless otherwise stated)
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+7
+Property and equipment (Continued)
+7.3 Construction in progress
+Construction in progress consists of assets under construction or being installed and is stated
+at cost. Cost includes equipment cost, cost of construction, installation and other direct
+costs. Items classified as construction in progress are transferred to property and equipment
+when such assets are ready for their intended use and the depreciation charge commences
+after such assets are transferred to property and equipment.
+8
+Leases
+8.1 Lease classification
+Leases of assets where substantially all the risks and rewards of ownership have been
+transferred are classified as finance leases. Title may or may not eventually be transferred.
+All leases other than finance leases are classified as operating leases.
+8.2 Finance leases
+When the Group is a lessee under finance leases, the leased assets are capitalised initially
+at the fair value of the asset or, if lower, the present value of the minimum lease payments.
+The corresponding liability to the lessor is included in “Other liabilities”. Finance charges
+are charged over the term of the lease using an interest rate which reflects a constant rate of
+return.
+The Group adopts the same depreciation policy for the finance leased assets as those for
+which it has title rights. If the Group can reasonably determine that a lease will transfer
+ownership of the asset to the Group by the end of the lease term, related assets are
+depreciated over their useful life. If there is no reasonable certainty that the Group can
+determine that a lease will transfer ownership of the asset to the Group by the end of the
+lease term, related assets are depreciated over the shorter of the lease term and useful life.
+When the Group is a lessor under finance leases, the present value of the aggregation of the
+minimum lease payment receivable from the lessee, unguaranteed residual value and initial
+direct costs is recognised as a receivable. The difference between the receivable and the
+present value of the receivable is recognised as unearned finance income. Lease income is
+recognised over the term of the lease using an interest rate which reflects a constant rate of
+return.
+192
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+In accordance with the policies of relevant state and local governments, employees
+in Chinese mainland participate in various defined contribution retirement schemes
+administered by local Labour and Social Security Bureaus. Operations in Chinese
+mainland contribute to pension and insurance schemes administered by the local pension
+and insurance agencies using applicable contribution rates stipulated in the relevant local
+regulations. Upon retirement, the local Labour and Social Security Bureaus are responsible
+for the payment of the basic retirement benefits to the retired employees. In addition to these
+basic staff pension schemes, employees in Chinese mainland who retire after 1 January 2004
+can also voluntarily participate in a defined contribution plan established by the Bank (“the
+Annuity Plan"). The Bank contributes to the Annuity Plan based on certain percentages of
+the employees' gross salaries.
+Contributions made by the Group to the retirement schemes described above are recognised
+as “Operating expenses” in the income statement as incurred. Forfeited contributions by
+those employees who leave the schemes prior to the full vesting of their contributions are
+used to reduce the existing level of contributions or retained in the retirement schemes in
+accordance with the requirements of the respective defined contribution plans.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+12 Employee benefits (Continued)
+12.5 Bonus plans
+13
+14
+The Group recognises a liability and an expense for bonuses, taking into consideration
+its business performance and profit attributable to the Bank's equity holders. The Group
+recognises a liability where contractually obliged or where there is a past practice that has
+created a constructive obligation.
+Provisions
+Provisions are recognised when: the Group has a present legal or constructive obligation
+as a result of past events, it is probable that an outflow of resources embodying economic
+benefits will be required to settle the obligation, and a reliable estimate of the amount of the
+obligation can be made. The amount initially recognised as a provision should be the best
+estimate of the expenditure required to settle the present obligation.
+Insurance contracts
+14.1 Insurance contracts classification
+The Group's insurance subsidiaries issue insurance contracts that transfer significant
+insurance risk. The Group performs a significant insurance risk test at the contract initial
+recognition date. Insurance risk is significant if, and only if, an insured event could cause an
+insurer to pay significant additional benefits in any scenario, excluding scenarios that lack
+commercial substance. The Group issues non-life insurance contracts, which cover casualty
+and property insurance risk, and life insurance contracts, which insure events associated
+with human life (for example death, or survival) over a long duration.
+The Group does not separately measure embedded derivatives that itself meet the definition
+of an insurance contract or options to surrender insurance contracts for a fixed amount (or an
+amount based on a fixed amount and an interest rate).
+196
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+All eligible employees in operations in Hong Kong, Macau, Taiwan and other countries and
+regions participate in local defined contribution schemes or defined benefit plans.
+BANK OF CHINA LIMITED
+The total amount to be expensed over the vesting period is determined by reference to the
+fair value of the rights granted, excluding the impact of any non-market vesting conditions.
+Non-market conditions are included in the assumptions about the number of rights that are
+expected to vest. At each financial reporting date, the Group revises its estimates of the
+number of rights that are expected to vest. It recognises the impact of the revision to original
+estimates, if any, as “Operating expenses" in the income statement, with a corresponding
+adjustment to liability.
+The obligations related to the defined benefit plans are calculated by independent actuaries
+using the projected unit credit method at each financial reporting date. The actuarial gains
+or losses are recognised in “Other comprehensive income” immediately when they occur,
+the gains or losses arising from amendments to pension plans are charged or credited to the
+income statement immediately as “Operating expenses" when they occur.
+12.2 Retirement benefit obligations
+The Group pays supplemental retirement benefits to employees in Chinese mainland who
+retired prior to 31 December 2003 and early retirement benefits to those employees who
+accepted an early retirement arrangement.
+Supplemental retirement benefits include supplemental pension payments and medical
+expense coverage.
+194
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+12 Employee benefits (Continued)
+12.2 Retirement benefit obligations (Continued)
+Early retirement benefits have been paid to those employees who accept voluntary
+retirement before the normal retirement date, as approved by management. The related
+benefit payments are made from the date of early retirement to the normal retirement date.
+The liability related to the above supplemental retirement benefit obligations and early
+retirement obligations existing at each financial reporting date is calculated by independent
+actuaries using the projected unit credit method and is recorded as a liability under
+“Retirement benefit obligations” in the statement of financial position. The present value
+of the liability is determined through discounting the estimated future cash outflows using
+interest rates of RMB treasury bonds which have terms to maturity approximating the terms
+of the related liability. The actuarial gains or losses of supplemental retirement benefit are
+recognised in "Other comprehensive income” immediately when they occur. The actuarial
+gains or losses of early retirement benefit obligations and the gains or losses arising
+from amendments to retirement benefit obligations are charged or credited to the income
+statement immediately as “Operating expenses” when they occur.
+12.3 Housing funds
+Pursuant to local government regulations, all employees in Chinese mainland participate
+in various local housing funds administered by local governments. Operations in Chinese
+mainland contribute on a monthly basis to these funds based on certain percentages of the
+salaries of the employees. These payments are recognised as “Operating expenses" in the
+income statement as incurred.
+12.4 Cash-settled share-based compensation
+The related cost of services received from the employees and the liability to pay for such
+services are measured at fair value and recognised over the vesting period as the employees
+render services. Fair value is established at the grant date, re-measured at each financial
+reporting date with any changes in fair value recognised as “Operating expenses" in the
+income statement for the period and de-recognised when the liability is settled.
+195
+14 Insurance contracts (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+191
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.9 Convertible bonds
+Convertible bonds comprise of the liability and equity components. The liability component,
+representing the obligation to make fixed payments of principal and interest, is classified
+as liability and initially recognised at the fair value, calculated using the market interest
+rate of a similar liability that does not have an equity conversion option, and subsequently
+measured at amortised cost using the effective interest method. The equity component,
+representing an embedded option to convert the liability into ordinary shares, is initially
+recognised in “Equity” as the difference between the proceeds received from the convertible
+bonds as a whole and the amount of the liability component. Any directly attributable
+transaction costs are allocated to the liability and equity components in proportion to the
+allocation of proceeds.
+On conversion of the bonds into shares, the amount transferred to share capital is calculated
+as the par value of the shares multiplied by the number of shares converted. The difference
+between the carrying value of the related component of the converted bonds and the amount
+transferred to share capital is recognised in capital surplus under “Capital reserve”.
+4.10 Offsetting financial instruments
+5
+Financial assets and liabilities are offset and the net amount is reported in the statement of
+financial position when there is a current legally enforceable right to set off the recognised
+amounts and there is an intention to settle on a net basis, or realise the asset and settle the
+liability simultaneously.
+Precious metals and precious metals swaps
+Precious metals comprise gold, silver and other precious metals. The Group retains all risks
+and rewards of ownership related to precious metals deposited with the Group as precious
+metals deposits, including the right to freely pledge or transfer, and it records the precious
+metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. Precious metals that are not related to the Group's precious metal market
+making and trading activities are initially measured at acquisition cost and subsequently
+measured at lower of cost and net realisable value. Precious metals that are related to the
+Group's market making and trading activities are initially recognised at fair value and
+subsequent changes in fair value included in “Net trading gains" are recognised in the
+income statement.
+189
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+5 Precious metals and precious metals swaps (Continued)
+BANK OF CHINA LIMITED
+These embedded derivatives separated from the host contract are measured at fair value with
+changes in fair value recognised in the income statement.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.7 Derivative financial instruments and hedge accounting (Continued)
+(2) Cash flow hedge (Continued)
+When a hedging instrument expires or is sold, or the hedge designation is revoked or when
+a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss on
+the hedging instrument existing in equity at that time remains in equity and is reclassified
+to the income statement when the forecast transaction ultimately occurs. When a forecast
+transaction is no longer expected to occur, the cumulative gain or loss existing in equity is
+immediately transferred to the income statement.
+(3) Net investment hedge
+Net investment hedge is a hedge of a net investment in a foreign operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow
+hedges. Any gain or loss on the hedging instrument relating to the effective portion of the
+hedge is recognised directly in other comprehensive income; the gain or loss relating to the
+ineffective portion is recognised immediately in the income statement. Gains and losses
+accumulated in equity are included in the income statement when the foreign operation is
+disposed of as part of the gain or loss on the disposal.
+4.8 Embedded derivatives
+An embedded derivative is a component of a hybrid (combined) instrument that also
+includes a non-derivative host contract with the effect that some of the cash flows of the
+hybrid (combined) instrument vary in a way similar to a stand-alone derivative.
+The Group separates embedded derivatives from the host contract and accounts for these as
+derivatives, if, and only if:
+•
+•
+the economic characteristics and risks of the embedded derivative are not closely
+related to those of the host contract;
+a separate instrument with the same terms as the embedded derivative would meet the
+definition of a derivative; and
+the hybrid (combined) instrument is not measured at fair value with changes in fair
+value recognised in the income statement.
+188
+BANK OF CHINA LIMITED
+6
+Repurchase agreements, agreements to re-sell and securities lending
+Estimated
+useful lives
+Estimated
+residual
+value rate
+Annual
+depreciation
+rate
+Buildings
+15-50 years
+3%
+1.9%-6.5%
+Equipment
+3-15 years
+3%
+6.4%-32.4%
+Motor vehicles
+4-6 years
+3%
+16.1%-24.3%
+7.2 Aircraft
+Aircraft are used in the Group's aircraft operating leasing business.
+Aircraft are depreciated using the straight-line method over the expected useful life of 25
+years, less the years in service at the time of purchase to an estimated residual value rate
+varying from 0% to 15%.
+Type of assets
+Consistent with the substance of the transaction, if the precious metals swaps are
+for financing purpose, they are accounted for as precious metals subject to collateral
+agreements. Precious metals collateralised are not de-recognised and the related
+counterparty liability is recorded in "Placements from banks and other financial
+institutions". If precious metal swaps are for trading purpose, they are accounted for as
+derivative transactions.
+Buildings comprise primarily branch and office premises. The estimated useful lives,
+depreciation rate and estimated residual value rate of buildings, equipment and motor
+vehicles are as follows:
+Gains and losses on disposals are determined by the difference between proceeds and
+carrying amount, after deduction of relevant taxes and expenses. These are included in the
+income statement.
+Securities and bills sold subject to repurchase agreements ("Repos") continue to be
+recognised, and are recorded as “Financial investments". The corresponding obligation is
+included in "Placements from banks and other financial institutions” and “Due to central
+banks". Securities and bills purchased under agreements to re-sell ("Reverse repos") are not
+recognised. The receivables are recorded as "Placements with and loans to banks and other
+financial institutions" or "Balances with central banks", as appropriate.
+The difference between purchase and sale price is recognised as “Interest expense” or
+"Interest income” in the income statement over the life of the agreements using the effective
+interest method.
+Securities lending transactions are generally secured, with collateral taking the form
+of securities or cash. Securities lent to counterparties by the Group are recorded in the
+consolidated financial statements. Securities borrowed from counterparties by the Group
+are not recognised in the consolidated financial statements of the Group. Cash collateral
+received or advanced is recognised as a liability or an asset in the consolidated financial
+statements.
+7
+Property and equipment
+The Group's fixed assets mainly comprise buildings, equipment and motor vehicles, aircraft
+and construction in progress. When the costs attributable to the land use rights cannot be
+reliably measured and separated from that of the building at inception, the costs are included
+in the cost of properties and buildings and recorded in “Property and equipment”.
+The assets purchased or constructed are initially measured at acquisition cost or deemed
+cost, as appropriate. Such initial cost includes expenditure that is directly attributable to the
+acquisition of the assets.
+190
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+7
+Property and equipment (Continued)
+Subsequent costs are included in an asset's carrying amount, only when it is probable that
+future economic benefits associated with the item will flow to the Group and the cost of the
+item can be measured reliably. All other repairs and maintenance costs are charged to the
+income statement during the financial period in which they are incurred.
+Depreciation is calculated on the straight-line method to write down the cost of such assets
+to their residual values over their estimated useful lives. The residual values and useful lives
+of assets are reviewed, and adjusted if appropriate, at each financial reporting date.
+Property and equipment are reviewed for impairment at each financial reporting date. Where
+the carrying amount of an asset is greater than its estimated recoverable amount, it is written
+down immediately to its recoverable amount. The recoverable amount is the higher of the
+asset's fair value less costs to sell and value in use.
+7.1 Buildings, equipment and motor vehicles
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+14.2 Insurance contracts recognition and measurement
+Premiums on non-life insurance contracts are recognised as revenue (earned premiums)
+proportionally over the period of coverage. The portion of premium received on in-force
+contracts that relates to unexpired risks at the financial reporting date is reported as the
+unearned premium liability in “Other liabilities”. Claims and loss adjustment expenses
+are charged to the income statement as “Operating expenses" when incurred based on the
+estimated liability for compensation owed to contract holders or third parties damaged by
+the contract holders. They include direct and indirect claims settlement costs and arise from
+events that have occurred up to the financial reporting date even if they have not yet been
+reported to the Group.
+(1) Non-life insurance contracts
+14.3 Liability adequacy test
+BANK OF CHINA LIMITED
+(2) Life insurance contracts
+Premiums on life insurance contracts are recognised as revenue when they become payable
+by the contract holders. Benefits and claims are recorded as an expense when they are
+incurred. A liability for contractual benefits that are expected to be incurred in the future
+is recorded when premiums are recognised. For certain long-term insurance contracts
+(investment-linked long-term insurance contracts) with embedded derivatives linking
+payments on the contract to units of an investment fund set up by the Group with the
+consideration received from the contract holders, the liability is adjusted for all changes
+in the fair value of the underlying assets, and includes a liability for contractual benefits
+that are expected to be incurred in the future which is recorded when the premiums are
+recognised.
+The Group follows the guidance of IAS 39 to determine when an available for sale or
+held to maturity investment security is impaired and when impairment on a debt security
+is reversed. This determination requires significant judgement. In making this judgement,
+the Group evaluates, among other factors, the duration and extent to which the fair
+value of an investment is less than its cost, the extent to which changes in fair value
+relate to credit events, and the financial health of and near-term business outlook for the
+investee/underlying portfolio, including factors such as industry and sector performance,
+technological innovations, credit ratings, delinquency rates, loss coverage ratios and
+counterparty risk.
+Held to maturity securities
+The Group follows the guidance of IAS 39 on classifying non-derivative financial assets
+with fixed or determinable payments and fixed maturity date as held to maturity. This
+classification requires significant judgement. In making this judgement, the Group evaluates
+its intention and ability to hold such investments to maturity.
+204
+Hong Kong profits tax
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+5
+Provisions
+6
+7
+The Group uses judgement to assess whether the Group has a present legal or constructive
+obligation as a result of past events at each financial reporting date, and judgement is used
+to determine if it is probable that an outflow of resources embodying economic benefits will
+be required to settle the obligation, and to determine a reliable estimate of the amount of the
+obligation and relevant disclosure in the consolidated financial statements.
+Employee retirement benefit obligations
+As described in Note II.12.2 and Note V.33, the Bank has established liabilities in
+connection with benefits payable to certain retired and early retired employees. These
+liabilities are calculated using actuarial assumptions such as discount rates, pension benefit
+inflation rates, medical benefit inflation rates, and other factors. While management
+believes that its assumptions are appropriate, differences in actual experience or changes
+in assumptions may affect other comprehensive income, expenses and employee retirement
+benefit obligations.
+4
+Impairment of available for sale investment securities and held to maturity investment
+securities
+(Amount in millions of Renminbi, unless otherwise stated)
+tenor.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+1 Impairment allowances on loans and advances (Continued)
+2
+The estimate of future cash flows is most significantly related to impaired loans for which
+the impairment loss is assessed individually. Factors affecting this estimate include, among
+other things, the granularity of financial information related to specific borrowers, the
+availability of meaningful information related to industry competitors and the relevance
+of sector trends to the future performance of individual borrowers. China continues to
+experience economic growth and these facts are not as well established as those in more
+developed markets. The effect of these factors requires significant judgement to be applied
+in the estimation of future cash flows. This is especially true in emerging sectors.
+Significant judgement is also applied to the calculation of collectively assessed impairment
+allowances. The Group makes judgements as to whether there is any observable data
+indicating that there is a measurable decrease in the estimated future cash flows from a
+portfolio of loans and advances before the decrease can be identified with an individual loan
+in that portfolio. This evidence may include observable data indicating that there has been
+an adverse change in the payment status of borrowers in a group (e.g. payment delinquency
+or default), or national or local economic conditions that correlate with defaults on assets in
+the Group. Management uses estimates based on historical loss experience for assets with
+similar credit risk characteristics and objective evidence of impairment similar to those in
+the portfolio when estimating expected future cash flows. The methodology and assumptions
+used for estimating both the amount and timing of future cash flows are reviewed regularly
+to reduce any differences between loss estimates and actual loss experience. The Group has
+considered the impact of the changes and uncertainty in the macro-economic environments
+in which the Group operates when assessing the methodology and assumptions used for loss
+estimates and made adjustments where appropriate.
+Fair value of derivatives and other financial instruments
+The Group establishes fair value of financial instruments with reference to a quoted market
+price in an active market or, if there is no active market, using valuation techniques. These
+valuation techniques include the use of recent arm's length transactions, observable prices
+for similar instruments, discounted cash flow analysis using risk-adjusted interest rates, and
+commonly used market pricing models. Whenever possible these models use observable
+market inputs and data including, for example, interest rate yield curves, foreign currency
+rates and option volatilities. The results of using valuation techniques are calibrated
+against industry practice and observable current market transactions in the same or similar
+instruments.
+Taxes
+203
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+2
+Fair value of derivatives and other financial instruments (Continued)
+The Group assesses assumptions and estimates used in valuation techniques including
+review of valuation model assumptions and characteristics, changes to model assumptions,
+the quality of market data, whether markets are active or inactive, other fair value
+adjustments not specifically captured by models and consistency of application of
+techniques between reporting periods as part of its normal review and approval processes.
+Valuation techniques are validated and periodically reviewed and, where appropriate, have
+been updated to reflect market conditions at the financial reporting date.
+With respect to the PRC government obligations related to large-scale policy directed
+financing transactions, fair value is determined using the stated terms of the related
+instrument and with reference to terms determined by the PRC government in similar
+transactions engaged in or directed by the PRC government. In this regard, there are no other
+relevant market prices or yields reflecting arm's length transactions of a comparable size and
+BANK OF CHINA LIMITED
+3
+The Group is subject to income, value-added and business taxes in numerous jurisdictions,
+principally in Chinese mainland and Hong Kong. There are certain transactions and
+activities for which the ultimate tax determination is uncertain during the ordinary course
+of business. The Group has made estimates for items of uncertainty and application of new
+tax legislation taking into account existing tax legislation and past practice, in particular, the
+treatment of supplementary PRC tax applied to results of overseas operations.
+Impairment of non-financial assets
+Chinese mainland
+Corporate income tax
+Value-added tax
+Business tax
+Taxable income
+Taxable added value
+25%
+6%
+Business income
+5%
+City construction and maintenance tax
+Turnover tax paid
+1%-7%
+Education surcharges
+Local education surcharges
+Turnover tax paid
+3%
+Turnover tax paid
+Statutory rates
+Tax basis
+Taxes
+In accordance with the Notice concerning the Nationwide Adoption of Value-added Tax
+in lieu of Business Tax Pilot Tax Collection Policy (Caishui [2016] No. 36) issued by the
+Ministry of Finance of the PRC (the "MOF") and the State Administration of Taxation, the
+financial services provided by the Group within Chinese mainland shall be subject to value-
+added tax instead of business tax from 1 May 2016. The principal income and other taxes to
+which the Group is subject are listed below:
+Non-financial assets are periodically reviewed for impairment and where the carrying
+amount of an asset is greater than its estimated recoverable amount, it is written down
+immediately to its recoverable amount. The recoverable amount is the higher of the asset's
+fair value less costs to sell and value in use.
+205
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+8 Impairment of non-financial assets (Continued)
+Where the final tax outcome of these matters is different from the amounts that were initially
+estimated, such differences will impact the current income tax, deferred income tax, and
+business tax in the period during which such a determination is made.
+When estimating the value in use of aircraft held by subsidiaries, the Group estimates
+expected future cash flows from the aircraft and uses a suitable discount rate to calculate
+present value. The Group obtains valuations of aircraft from independent appraisers for
+which the principal assumptions underlying aircraft value are based on current market
+transactions for similar aircraft in the same location and condition. The Group also uses
+the fair value of aircraft obtained from independent appraisers in its assessment of the
+recoverable amount of intangible assets and the goodwill arising from the purchase of the
+Group's aircraft leasing subsidiary.
+The Group is involved with structured entities in its normal business course, and the Group
+determines whether or not to consolidate those structured entities depending on whether the
+Group has control over them. When assessing control over structured entities, the Group
+takes consideration of power arising from rights it directly owns or indirectly owns through
+subsidiaries (including controlled structured entities), variable returns, and link between
+power and returns.
+The variable returns the Group is exposed to from its involvement with structured entities
+include decision makers' remuneration (such as management fees and performance-related
+fees), as well as other benefits (such as investment income, remuneration and exposure to
+loss from providing credit or liquidity support, and variable returns from transactions with
+structured entities). When assessing whether it controls a structured entity, the Group not
+only considers applicable legal or regulatory requirements, and contractual agreements, but
+also other circumstances where the Group may have obligation to absorb any loss of the
+structured entity.
+The Group reassesses whether it controls a structured entity if facts and circumstances
+indicate that there are changes to one or more of the relevant elements of control.
+206
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+IV TAXATION
+Judgement in assessing control over structured entities
+2%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+202
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+18
+Financial guarantee contracts (Continued)
+Financial guarantees are initially recognised at fair value on the date the guarantee was
+given. Subsequent to initial recognition, the Group's liabilities under such guarantees are
+measured at the higher of the initial measurement less amortisation calculated and the best
+estimate of the expenditure required to settle any financial obligation arising at the financial
+reporting date, any increase in the liability relating to guarantees is taken to the income
+statement. These estimates are determined based on experience of similar transactions,
+historical losses and by the judgement of management.
+19 Fiduciary activities
+20
+The Group acts as a custodian, trustee or in other fiduciary capacities, that result in its
+holding or placing of assets on behalf of individuals, securities investment funds, social
+security funds, insurance companies, qualified foreign institutional investors, annuity
+schemes and other customers. These assets are not included in the statement of financial
+position of the Group, as they are not assets of the Group.
+The Group also administers entrusted loans on behalf of third-party lenders. In this regard,
+the Group grants loans to borrowers, as an intermediary, at the direction of third-party
+lenders, who fund these loans. The Group has been contracted by these third-party lenders
+to manage the administration and collection of these loans on their behalf. The third-party
+lenders determine both the underwriting criteria for and all terms of the entrusted loans,
+including their purposes, amounts, interest rates, and repayment schedule. The Group
+charges a commission related to its activities in connection with the entrusted loans, but
+the risk of loss is borne by the third-party lenders. Entrusted loans are not recognised in the
+statement of financial position of the Group.
+Interest income and expense
+Interest income and expense for all interest-bearing financial instruments, except
+derivatives, are recognised within “Interest income” and “Interest expense" in the income
+statement using the effective interest method. Interest income and expense for derivatives is
+recognised in "Net trading gains” in the income statement.
+199
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+198
+Financial guarantee contracts are contracts that require the issuer to make specified
+payments to reimburse the holder for a loss it incurs because a specified debtor fails to
+make payments when due, in accordance with the terms of a debt instrument. Such financial
+guarantees are given to banks, financial institutions and other bodies to secure customer
+loans, overdrafts and other banking facilities.
+16.5%
+Assessable profits
+207
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+15 Assets and liabilities held for sale
+The Group classifies non-current assets or an asset group as held for sale if their carrying
+amounts are recovered principally through disposal rather than through continuing use. Assets
+and liabilities classified as held for sale are presented separately on the statement of financial
+position. Such non-current assets and disposal groups classified as held for sale are measured
+at the lower of their carrying amount and fair value less costs to sell. Property and equipment
+and intangible assets are not depreciated or amortised once classified as held for sale.
+Treasury shares and preference shares
+Where the Bank or other members of the Group purchase the Bank's ordinary shares,
+"Treasury shares” are recorded at the amount of consideration paid and deducted from total
+equity holders' equity until they are cancelled, sold or reissued. Where such shares are
+subsequently sold or reissued, any consideration received is included in capital and reserves
+attributable to equity holders of the Bank.
+Preference shares issued by the Group contain no contractual obligation to deliver cash or
+another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group; and preference
+shares issued are non-derivative instruments that will be settled in the Group's own equity
+instruments, but includes no contractual obligation for the Group to deliver a variable
+number of its own equity instruments. The Group classifies preference shares issued as
+an equity instrument. Fees, commissions and other transaction costs of preference shares
+issuance are deducted from equity. The dividends on preference shares are recognised as
+profit distribution at the time of declaration.
+17 Contingent liabilities
+18
+A contingent liability is a possible obligation that arises from past events and whose
+existence will only be confirmed by the occurrence or non-occurrence of one or more
+uncertain future events not wholly within the control of the Group. It can also be a present
+obligation arising from past events that is not recognised because it is not probable that
+an outflow of economic resources will be required or the amount of obligation cannot be
+measured reliably.
+Financial guarantee contracts
+16
+BANK OF CHINA LIMITED
+20 Interest income and expense (Continued)
+The effective interest method is a method of calculating the amortised cost of a financial
+asset or a financial liability and of allocating the interest income or interest expense over
+the relevant period. The effective interest rate is the rate that discounts estimated future
+cash payments or receipts through the expected life of the financial instrument or, when
+appropriate, a shorter period to the net carrying amount of the financial asset or financial
+liability. When calculating the effective interest rate, the Group estimates cash flows
+considering all contractual terms of the financial instrument but does not consider future
+credit losses. The calculation includes all amounts paid or received by the Group that are an
+integral part of the effective interest rate, including transaction costs and all other premiums
+or discounts.
+201
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+23 Segment reporting
+The Group reviews the internal reporting in order to assess performance and allocate
+resources. Segment information is presented on the same basis as the Group's management
+and internal reporting.
+24 Comparative figures
+Certain comparative figures have been adjusted to conform with changes in disclosures in
+current year.
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+The Group makes estimates and judgements that affect the reported amounts of assets and
+liabilities within the next financial year. Estimates and judgements are continually evaluated
+and are based on historical experience and other factors, including expectations of future
+events that are believed to be reasonable under the circumstances.
+The Group has taken into consideration the impact of the economic environment on the
+industries and territories in which the Group operates when determining critical accounting
+estimates and judgements in applying accounting policies.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying
+value of assets and liabilities, are set out below. It is possible that actual results may be
+materially different from the estimates and judgements referred below.
+Impairment allowances on loans and advances
+The Group reviews its loans and advances to assess impairment on a periodic basis, unless
+known circumstances indicate that impairment may have occurred as of an interim date.
+In determining whether an impairment loss should be recorded in the income statement, the
+Group makes judgements and assumptions when calculating loan impairment allowances
+related to loans and advances. These allowances, which reflect the difference between the
+carrying amount of a loan, or a portfolio of similar loans, and the present value of estimated
+future cash flows, are assessed individually, for significant loans, and collectively, all
+other loans that are not individually significant or for which impairment has not yet been
+identified by including the loan in a group of loans with similar credit risk characteristics.
+The tax effects of income tax losses available for carrying forward are recognised as an asset
+when it is probable that future taxable profits will be available against which these losses
+can be utilised.
+21
+Deferred income tax liabilities on taxable temporary differences arising from investment in
+subsidiaries, associates and joint ventures are recognised, except where the timing of the
+reversal of the temporary difference can be controlled and it is probable that the difference
+will not reverse in the foreseeable future.
+For deductible temporary differences associated with investment in subsidiaries, associates
+and joint ventures, a deferred tax asset is recognised to the extent that, and only to the extent
+that, it is probable that the temporary difference will reverse in the foreseeable future; and
+taxable profit will be available against which the temporary difference can be utilised.
+Once a financial asset or a group of similar financial assets has been written down as a
+result of an impairment loss, interest income is recognised using the rate of interest used to
+discount the future cash flows for the purpose of measuring the impairment loss.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides to
+its customers. For those services that are provided over a period of time, fee and commission
+income are accrued over that period. For other services, fee and commission income are
+recognised when the transactions are completed.
+22 Income taxes
+Income taxes comprise current income tax and deferred income tax. Tax is recognised in the
+income statement except to the extent that it relates to items directly recognised in Equity. In
+these cases, tax is also directly recognised in Equity.
+22.1 Current income tax
+Current income tax is the expected tax payable on the taxable income for the year, using tax
+rates enacted or substantially enacted at the financial reporting date, and any adjustment to
+tax payable in respect of previous years.
+200
+Deferred tax liabilities shall be recognised for all taxable temporary differences, except
+to the extent that the deferred tax liability arises from the initial recognition of goodwill,
+or the initial recognition of an asset or liability in a transaction which is not a business
+combination, and at the time of the transaction, affects neither accounting profit nor taxable
+profit/(tax loss).
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+22 Income taxes (Continued)
+22.2 Deferred income tax
+Deferred income tax is recognised using the liability method, on temporary differences
+arising between the tax bases of assets and liabilities and their carrying amounts in the
+consolidated financial statements. Deferred income tax is determined using tax rates and
+laws that have been enacted or substantially enacted by the financial reporting date and
+are expected to apply when the related deferred income tax asset is realised or the deferred
+income tax liability is settled.
+The principal temporary differences arise from asset impairment allowances, revaluation of
+certain financial assets and financial liabilities including derivative contracts, revaluation
+of investment properties, depreciation of property and equipment, provisions for pension,
+retirement benefits and salary payables.
+"Deferred income tax assets" are recognised to the extent that it is probable that future
+taxable profit will be available against which deductible temporary differences can be
+utilised except the deferred tax asset arises from the initial recognition of an asset or liability
+in a transaction that is not a business combination and at the time of the transaction, affects
+neither accounting profit nor taxable profit/(tax loss).
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Hong Kong
+Total
+2016
+18,346
+16,166
+Year ended 31 December
+2015
+6
+Operating expenses
+11
+5,177
+Cost of sales of precious metals products
+6,234
+5,723
+Other
+6,401
+4,608
+Total (2)
+Staff costs (Note V.7)
+5,114
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(707)
+11,113
+Settlement and clearing fees
+16,541
+15,426
+Credit commitment fees
+24,215
+24,054
+Bank card fees
+24,481
+24,178
+11,888
+Agency commissions
+2016
+Year ended 31 December
+Net fee and commission income
+2
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2015
+208
+Spread income from foreign exchange business
+7,388
+2016
+Year ended 31 December
+Net trading gains
+3
+92,410
+88,664
+Net fee and commission income
+(8,495)
+(9,655)
+100,905
+7,149
+98,319
+Fee and commission income
+6,958
+7,301
+Other
+3,677
+3,397
+Custodian and other fiduciary service fees
+5,757
+5,701
+Consultancy and advisory fees
+Fee and commission expense
+Included within “Interest income" and "Interest expense" are RMB562,518 million (2015: RMB611,519
+million) and RMB249,103 million (2015: RMB273,306 million) for financial assets and financial liabilities
+that are not at fair value through profit or loss, respectively.
+(2)
+Interest income on "Financial investments and financial assets at fair value through profit or loss" is
+principally derived from debt securities listed on China Domestic Interbank Bond Market and unlisted debt
+securities in Hong Kong, Macau, Taiwan and other countries and regions.
+and other financial institutions
+Due from and placements with and loans to banks
+29,543
+29,831
+Due from central banks
+108,651
+114,399
+at fair value through profit or loss (1)
+Financial investments and financial assets
+435,062
+29,953
+391,956
+Interest income
+2015
+Year ended 31 December
+2016
+Net interest income
+1
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Loans and advances to customers
+41,800
+Subtotal
+566,139
+(1)
+1,387
+2,532
+(included within interest income)
+Interest income accrued on impaired financial assets
+328,650
+306,048
+Net interest income (2)
+(286,406)
+(260,091)
+Subtotal
+(12,068)
+(13,749)
+Bonds issued and other
+(53,050)
+(46,427)
+other financial institutions
+Due to and placements from banks and
+(221,288)
+(199,915)
+Due to customers
+Interest expense
+615,056
+2015
+Net gains from foreign exchange and
+foreign exchange products
+6,221
+210
+This mainly represents the gains on disposal of Nanyang Commercial Bank, Limited ("NCB") for the year.
+37,627
+69,924
+(1)
+Total
+4,975
+5,925
+Other
+620
+BANK OF CHINA LIMITED
+1,134
+Changes in fair value of investment properties
+857
+669
+intangible assets and other assets
+Gains on disposal of property and equipment,
+765
+1,054
+Dividend income
+6,130
+6,737
+(Note V.22)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+(840)
+Less: gross written premiums ceded to reinsurers
+5,884
+5,954
+Gross earned premiums
+Non-life insurance contracts
+10,989
+13,232
+Net insurance premium income
+(8,215)
+(7,495)
+Less: gross written premiums ceded to reinsurers
+19,204
+20,727
+Gross earned premiums
+Life insurance contracts
+2015
+2016
+Year ended 31 December
+(2) Details of insurance premium income are as follows:
+Other operating income (Continued)
+5
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Revenue from sale of precious metals products
+Net insurance premium income
+6,088
+Aircraft leasing income
+4
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+175,069
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+209
+Included in "Net trading gains" above for the year ended 31 December 2016 are gains of RMB520 million
+in relation to financial assets and financial liabilities designated as at fair value through profit or loss (2015:
+losses of RMB3,985 million).
+(1)
+9,460
+Net gains on financial investments
+8,496
+446
+1,687
+Net gains from commodity products
+841
+254
+Net gains from equity products
+(1,884)
+334
+Net gains/(losses) from interest rate products
+10,057
+Total (1)
+Net gains from available for sale
+Net gains from held to maturity
+Other
+Total
+16,166
+18,346
+Insurance premiums (2)
+2,026
+29,083
+joint ventures(1)
+Gains on disposal of subsidiaries, associates and
+2015
+2016
+Year ended 31 December
+5,765
+12,524
+15
+549
+23
+4,674
+5,727
+7,301
+2015
+2016
+Year ended 31 December
+Other operating income
+5
+6,976
+185,401
+Fees
+(2)
+150
+MEI Xingbao
+97
+97
+CHEN Yuhua
+50
+50(3)
+XIANG Xi
+50
+50
+1,604
+228
+1,715
+238
+812
+58
+ཞྲིཎྜ༅ | |
+50(3)
+LIU Xiaozhong
+50(3)
+100
+150
+2,647
+4,797
+636
+ZHU Hexin began to serve as Executive Director of the Bank as of 1 February 2016. REN Deqi began to
+serve as Executive Director of the Bank as of 8 December 2016. GAO Yingxin began to serve as Executive
+Director of the Bank as of 8 December 2016. WANG Changyun began to serve as Independent Director of
+the Bank as of 18 August 2016. Angela CHAO began to serve as Independent Director of the Bank as of
+4 January 2017. Since Angela CHAO did not hold any position at the Bank in 2016, no emoluments were
+disclosed in 2016. WANG Xiquan began to serve as Supervisor and Chairman of the Board of Supervisors
+of the Bank as of 18 November 2016. GAO Zhaogang began to serve as Supervisor of the Bank as of 14
+April 2016.
+A portion of the discretionary bonus payments for executive directors and the chairman of the board of
+supervisors are deferred for a minimum of 3 years contingent upon the future performance in accordance
+with relevant regulations of the PRC authorities.
+The compensation amounts for these directors and supervisors for the year ended 31 December 2015 were
+restated based on the finalised amounts as disclosed in the Bank's announcement dated 30 August 2016.
+The total compensation packages for executive directors and supervisors for the year ended 31 December
+2016 including discretionary bonus have not yet been finalised in accordance with relevant regulations
+of the PRC authorities. The amount of the compensation not provided for is not expected to have any
+significant impact on the Group's 2016 financial statements. The final compensation for the year ended 31
+December 2016 will be disclosed in a separate announcement when determined.
+Employee supervisors' above compensation is paid for serving as the supervisors of the Bank.
+For the years ended 31 December 2016 and 2015, these executive directors of the Bank did not receive any
+fees.
+For the years ended 31 December 2016 and 2015, these non-executive directors of the Bank were not
+remunerated by the Bank.
+(6)
+(5)
+(4)
+1,276
+(3)
+(1)
+8 Directors', supervisors' and senior management's emoluments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+214
+8,747
+667
+(2)
+DENG Zhiying
+LIU Wanming (4)
+1,364
+LI Jucai (¹)
+LIU Xianghui (1)
+WANG Wei (¹)
+WANG Yong (1)
+ZHANG Qi (1)
+ZHANG Xiangdong (1)
+(1)
+384
+27
+75
+SUN Zhijun (1)
+282
+LI Zaohang (4)
+790
+58
+107
+625
+(2)
+CHEN Siqing (4)
+795
+58
+58
+(2)
+ZHU Hexin ceased to serve as Executive Director of the Bank as of 1 June 2016. WANG Yong ceased
+to serve as Non-executive Director of the Bank as of 14 September 2016. WANG Wei ceased to serve
+as Non-executive Director of the Bank as of 19 January 2017. CHOW Man Yiu, Paul ceased to serve
+as Independent Director of the Bank as of 18 August 2016. Jackson TAI ceased to serve as Independent
+Director of the Bank as of 1 September 2016. LI Jun ceased to serve as Supervisor and Chairman of the
+Board of Supervisors of the Bank as of 18 November 2016. LIU Xiaozhong ceased to serve as Supervisor of
+the Bank as of 14 April 2016.
+Independent directors
+Jackson TAI
+WANG Xueqiang (4)
+129
+625
+400
+500
+500
+400
+450
+| | | |
+| | | |
+CHOW Man Yiu, Paul
+|| | ||
+400
+500
+500
+400
+450
+LI Jun (4)
+Supervisors
+LEUNG Cheuk Yan
+LU Zhengfei
+Nout WELLINK
+||||
+215
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,654
+1,644
+Total (1)
+Other
+Subtotal
+1,690
+718
+loans and receivables
+(35)
+(20)
+633
+held to maturity
+946
+available for sale
+Financial investments
+55,872
+86,795
+Subtotal
+25,808
+56,287
+- Collectively assessed
+30,064
+(1)
+30,508
+1,748
+59,274
+26,734
+9,810
+Taxes and surcharges
+13,218
+13,175
+Depreciation and amortisation
+3,592
+3,482
+- Non-life insurance contracts
+10,531
+89,072
+13,322
+Insurance benefits and claims
+40,671
+41,565
+(1)
+General operating and administrative expenses
+80,324
+81,080
+217
+Details of new allowances and reversal of impairment losses on loans and advances and financial
+investments are disclosed in Notes V.18 and V.24, respectively.
+(1)
+Life insurance contracts
+112
+Individually assessed
+2015
+Emoluments of the individuals were within the following bands:
+101
+104
+2
+3
+Contributions to pension schemes and other
+83
+81
+Discretionary bonuses
+16
+Year ended 31 December
+20
+2015
+2016
+Year ended 31 December
+The emoluments payable to the five individuals whose emoluments were the highest in the
+Group for the years ended 31 December 2016 and 2015 respectively are as follows:
+Of the five individuals with the highest emoluments, none of them are directors or
+supervisors whose emoluments are disclosed above.
+Five highest paid individuals
+8 Directors', supervisors' and senior management's emoluments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Basic salaries and allowances
+Loans and advances
+Amounts in RMB
+14,000,001-15,000,000
+2016
+Year ended 31 December
+9 Impairment losses on assets
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+216
+13,000,001-14,000,000
+During the years ended 31 December 2016 and 2015, the Group has not paid any
+emoluments to the directors, supervisors, or senior management as an inducement to join or
+upon joining the Group or as compensation for loss of office.
+1
+2
+3
+1
+1
+1
+2015
+2016
+30,000,001-40,000,000
+16,000,001-20,000,000
+The above five highest paid individuals' emoluments are based on best estimates of
+discretionary bonuses. Discretionary bonuses include portions of payments that are deferred
+to future periods.
+625
+Non-executive directors
+TIAN Guoli (4)
+in kind
+Benefits
+to pension
+schemes
+paid
+RMB'000
+RMB'000
+Remuneration
+Contributions
+For the year ended 31 December 2016
+Details of the directors' and supervisors' emoluments are as follows:
+8 Directors', supervisors' and senior management's emoluments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+80,324
+81,080
+212
+Total
+2,669
+Total
+RMB'000
+RMB'000
+RMB'000
+575
+63
+659
+63
+661
+63
+=མྦུ༤༢
+436
+_ (2)
+GAO Yingxin (4) (5)
+2,838
+436
+112
+484
+(2)
+114
+(2)
+བྱ བ
+REN Deqi (4) (5)
+CHEN Siqing (4)
+TIAN Guoli (4)
+Executive directors
+(2)
+63
+Other
+Reimbursement for cancellation of labour contract
+18
+2,919
+2,908
+54,462
+55,792
+2015
+Year ended 31 December
+2016
+Retirement benefits
+Staff welfare
+Salary, bonus and subsidy
+Staff costs
+7
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+211
+Included in the "Operating expenses" are operating lease expenses of RMB7,368 million and premises and
+equipment related expenses (mainly comprised of property management and building maintenance expenses
+and taxes) of RMB11,977 million (2015: RMB7,104 million and RMB11,770 million, respectively).
+Included in the “General operating and administrative expenses" are principal auditors' remuneration of
+RMB213 million for the year ended 31 December 2016 (2015: RMB214 million), of which RMB59 million
+was for Hong Kong, Macau, Taiwan and other countries and regions of the Group (2015: RMB47 million).
+202
+Social insurance, including:
+Medical
+3,254
+1,911
+1,918
+Labour union fee and staff education fee
+5,428
+5,066
+Housing funds
+223
+203
+Maternity insurance
+163
+7
+102
+413
+325
+Unemployment
+2,060
+2,060
+Annuity
+6,587
+6,585
+Pension
+3,280
+Injury at work
+592
+484
+(2)
+17
+17(3)
+LIU Xiaozhong (0)
+624
+58
+122
+ZHU Hexin (4) (5) (6)
+LI Jun (4) (6)
+180
+180
+2,446
+CHEN Yuhua
+50(3)
+XIANG Xi
+38
+38(3)
+(5)
+GAO Zhaogang
+50
+50(3)
+DENG Zhiying
+1,086
+50
+237
+4,008
+825
+RMB'000
+Total
+RMB'000
+RMB'000
+Benefits
+in kind
+schemes
+Contributions
+to pension
+RMB'000
+RMB'000
+paid
+808
+Fees
+Executive directors
+For the year ended 31 December 2015
+8 Directors', supervisors' and senior management's emoluments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+213
+8,087
+Remuneration
+123
+444
+726
+Jackson TAI (6)
+300
+CHOW Man Yiu, Paul (6)
+130
+WANG Changyun (5)
+400
+LEUNG Cheuk Yan
+514
+LU Zhengfei
+500
+267
+Nout WELLINK
+WANG Wei (1) (6)
+WANG Yong (¹) (6)
+LI Jucai (¹)
+1
+ZHANG Qi (1)
+ZHANG Xiangdong (1)
+Non-executive directors
+242
+25
+182
+Independent directors
+Supervisors
+LIU Xianghui (1)
+||||
+||||
+1,152
+248
+776
+50
+50
+5
+5
+40
+LIU Wanming(4)
+WANG Xueqiang (4)
+128
+267
+||||
+WANG Xiquan (4) (5)
+|||
+500
+||||
+400
+130
+514
+300
+11 Earnings per share (basic and diluted)
+Basic earnings per share
+Basic earnings per share was computed by dividing the profit attributable to the ordinary
+shareholders of the Bank by the weighted average number of ordinary shares in issue during
+the period.
+Profit attributable to equity holders of the Bank
+Less: dividends on preference shares declared
+Year ended 31 December
+2016
+2015
+164,578
+170,845
+(5,012)
+294,376
+Profit attributable to ordinary shareholders of the Bank
+157,860
+165,833
+Weighted average number of ordinary shares in issue
+(in million shares)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(6,718)
+V
+Items not deductible for tax purposes (2)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+293,722
+Income tax expense
+(1,129)
+(1,428)
+Other
+38,361
+6,569
+(Amount in millions of Renminbi, unless otherwise stated)
+6,292
+(1)
+(2)
+Income not subject to tax mainly comprises interest income from PRC Treasury bonds and local
+government bonds, and the tax-free income recognised by the overseas entities in accordance with the local
+tax law.
+Non-deductible items primarily include losses resulting from write-off of certain non-performing loans, and
+marketing and entertainment expenses in excess of the relevant deductible threshold under the relevant PRC
+tax regulations.
+219
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+52,154
+Basic earnings per share (in RMB per share)
+93,881
+0.56
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+11 Earnings per share (basic and diluted) (Continued)
+Diluted earnings per share
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the
+ordinary shareholders of the Bank based on assuming conversion of all potentially dilutive
+shares for the period by the adjusted weighted average number of ordinary shares in issue.
+There was no difference between basic and diluted earnings per share as there were no
+potentially dilutive shares outstanding for the year ended 31 December 2016.
+Year ended 31 December
+2016
+(Amount in millions of Renminbi, unless otherwise stated)
+2015
+165,833
+- 47
+Profit attributable to ordinary shareholders of the Bank
+Add: interest expense on convertible bonds, net of tax,
+for the year
+157,860
+Macau, Taiwan and other countries and regions
+2,589
+Other financial institutions in Hong Kong,
+(10,865)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Weighted average number of ordinary shares in issue (in million shares)
+Issued ordinary shares as at 1 January
+Add: weighted average number of shares from
+conversion of convertible bonds
+Less: weighted average number of treasury shares
+Year ended 31 December
+2016
+2015
+294,388
+288,731
+5,018
+(12)
+(27)
+Weighted average number of ordinary shares in issue
+294,376
+293,722
+220
+0.54
+(20,154)
+Issuers in Chinese mainland
+3,696
+Amount transferred to the income statement
+(3,674)
+2,823
+Less: related income tax impact
+14,096
+(12,920)
+financial assets
+Fair value gains/(losses) on available for sale
+Items that may be reclassified subsequently to
+profit or loss
+(147)
+277
+Subtotal
+(6,786)
+14
+259
+18
+2015
+Year ended 31 December
+2016
+Items that will not be reclassified to profit or loss
+Actuarial gains/(losses) on defined benefit plans
+Other
+Accrual amount of other comprehensive income:
+Other comprehensive income
+12
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(161)
+(4,972)
+Less: related income tax impact
+1,755
+Total
+Subtotal
+336
+1,898
+Other
+6,896
+15,480
+131
+(1,469)
+from other comprehensive income
+6,765
+16,949
+Exchange differences on translation of foreign operations
+Less: net amount transferred to the income statement
+(361)
+(131)
+(1,864)
+Amount transferred to the income statement
+5
+2
+Less: related income tax impact
+1,498
+(133)
+joint ventures accounted for using the equity method
+Share of other comprehensive income of associates and
+6,573
+(15,128)
+1,123
+Income not subject to tax (1)
+2,119
+0.54
+294,376
+2,846
+1,867
+1,980
+4,218
+6,022
+45,860
+37,617
+11,540
+4,556
+25,016
+20,952
+2,305
+2,095
+5,721
+4,213
+2,291
+1,815
+102
+136
+390
+224
+2015
+2016
+As at 31 December
+Total (2) (3)
+Subtotal
+4,216
+48,465
+54,040
+124,090
+221
+Diluted earnings per share (in RMB per share)
+Weighted average number of ordinary shares in issue
+for diluted earnings per share (in million shares)
+640
+shares assuming conversion of all convertible
+bonds (in million shares)
+Add: weighted average number of ordinary
+293,722
+294,376
+Weighted average number of ordinary shares in issue
+(in million shares)
+165,880
+157,860
+Profit used to determine diluted earnings per share
+119,062
+124,090
+227
+Total
+33,451
+34,275
+Unlisted
+53,690
+64,555
+Listed outside Hong Kong (4)
+31,921
+25,260
+Listed in Hong Kong
+Analysed as follows:
+119,062
+294,362
+13,444
+2,396
+13,297
+132,833
+118,166
+1,580,456
+1,723,495
+2015
+As at 31 December
+2016
+(1)
+Total
+Surplus reserves (2)
+Other (3)
+Mandatory reserves
+14 Balances with central banks
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+429,979
+V
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+654,378
+659,982
+223
+Total
+66
+87
+Macau, Taiwan and other countries and regions
+Due from other financial institutions in Hong Kong,
+41,063
+(Amount in millions of Renminbi, unless otherwise stated)
+482,774
+2,271,640
+2,196,063
+100,291
+other countries and regions
+Banks in Hong Kong, Macau, Taiwan and
+214,495
+285,122
+Other financial institutions in Chinese mainland
+118,664
+206,246
+Banks in Chinese mainland
+Placements with and loans to:
+2015
+2016
+As at 31 December
+15 Placements with and loans to banks and other financial institutions
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+224
+This mainly represented balances, other than mandatory reserves and surplus reserves, placed with central
+banks by operations in Hong Kong, Macau, Taiwan and other countries and regions.
+This mainly represented the surplus reserve funds placed with the PBOC by branches in Chinese mainland
+of the Group.
+The Group places mandatory reserve funds with the People's Bank of China (the "PBOC") and the central
+banks of Hong Kong, Macau, Taiwan and other countries and regions where it has operations. As at 31
+December 2016, mandatory reserve funds placed with the PBOC were calculated at 17.0% (31 December
+2015: 17.0%) and 5.0% (31 December 2015: 5.0%) of qualified RMB deposits and foreign currency
+deposits from customers of branches in Chinese mainland of the Bank respectively. The mandatory reserve
+funds placed with the central bank of domestic subsidiaries of the Group is determined by the PBOC. The
+amount of mandatory reserve funds placed with the central banks of other jurisdictions is determined by
+local regulations.
+(3)
+(2)
+(1)
+54,201
+Due from banks in Hong Kong, Macau, Taiwan and
+other countries and regions
+1,377
+6,579
+7,278
+for the previous year
+Changes in amount
+(13,671)
+1,020
+(24,393)
+9,702
+Total
+Other
+of foreign
+operations
+assets
+sale financial
+translation
+available for
+differences on
+gains on
+Exchange
+Fair value
+As at 1 January 2015
+Other comprehensive income attributable to equity holders of the Bank in the consolidated
+statement of financial position:
+12 Other comprehensive income (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+222
+4,345
+Fund investments
+(297)
+As at 1 January 2016
+in Chinese mainland
+Due from other financial institutions
+538,501
+521,567
+Due from banks in Chinese mainland
+73,371
+77,548
+Cash
+2015
+2016
+As at 31 December
+Cash and due from banks and other financial institutions
+13
+(3,854)
+2,239
+(8,223)
+2,130
+As at 31 December 2016
+(1,509)
+1,516
+11,825
+(14,850)
+Changes in amount for the year
+(2,345)
+723
+(20,048)
+16,980
+11,326
+Equity securities
+0.56
+- Corporate
+427,040
+594,248
+Subtotal (1)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Allowance for impairment losses
+10
+Current income tax
+Year ended 31 December
+2016
+2015
+- Chinese mainland income tax
+38,097
+44,376
+Hong Kong profits tax
+4,446
+Income tax expense
+4,210
+(200)
+Total
+Total
+Bills
+Subtotal
+Corporate
+Financial institutions
+- Policy banks
+Governments
+Debt securities
+(192)
+“Placements with and loans to banks and other financial institutions” include balances arising from reverse
+repo agreements and collateralised financing agreements. These are presented by collateral type as follows:
+0.03%
+158
+158
+(1)
+Percentage of impaired placements to total placements
+with and loans to banks and other financial institutions
+Impaired placements
+426,848
+594,048
+0.04%
+225
+- Macau, Taiwan and other countries and
+4,275
+10
+Income tax expense (Continued)
+The tax rate on the Group's profit before tax differs from the theoretical amount that would
+arise using the basic Chinese mainland tax rate of the Bank as follows:
+Profit before income tax
+Year ended 31 December
+2016
+2015
+222,412
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+231,571
+55,603
+57,893
+Taiwan and other countries and regions
+(5,641)
+(4,010)
+Supplementary PRC tax on overseas income
+Loans (1)
+3,689
+Tax calculated at the applicable statutory tax rate
+Effect of different tax rates on Hong Kong, Macau,
+regions taxation
+V
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Adjustments in respect of current income tax
+of prior years
+(1,590)
+273
+Subtotal
+Deferred income tax (Note V.35)
+45,228
+52,077
+(6,867)
+(Amount in millions of Renminbi, unless otherwise stated)
+77
+38,361
+52,154
+The principal tax rates applicable to the Group are set out in Note IV.
+Provision for Chinese mainland income tax includes income tax based on the statutory tax
+rate of 25% of the taxable income of the Bank and each of its subsidiaries established in
+the Chinese mainland, and supplementary PRC tax on overseas operations as determined in
+accordance with the relevant PRC income tax rules and regulations (Note III.7).
+Taxation on profits of Hong Kong, Macau, Taiwan and other countries and regions has been
+calculated on the estimated assessable profits in accordance with local tax regulations at the
+rates of taxation prevailing in the countries or regions in which the Group operates.
+218
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Total
+As at 31 December
+3,218
+2015
+3,547
+1,503
+Fund investments and other
+7,471
+5,567
+Equity securities
+54,004
+68,555
+Subtotal
+3,446
+2,138
+4,886
+- Corporate
+- Financial institutions
+506
+587
+- Public sectors and quasi-governments
+12,646
+2,921
+16,371
+— Financial institutions
+65,022
+Governments
+2016
+other countries and regions
+Issuers in Hong Kong, Macau, Taiwan and
+- Corporate
+- Financial institutions
+- Policy banks
+- Government
+75,625
+Debt securities
+Financial assets designated as at fair value
+16 Financial assets at fair value through profit or loss (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+through profit or loss
+Governments
+226
+Issuers in Hong Kong, Macau, Taiwan and
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+76,630
+1,527
+16
+75,103
+3,162
+151
+9,408
+41,452
+56,696
+other countries and regions
+33,500
+40,853
+110,119
+Financial assets at fair value through profit or loss
+110,119
+2016
+4,044
+As at 31 December
+- Corporate
+19,122
+31,773
+- Financial institutions
+4,525
+- Policy banks
+49
+6,301
+- Public sectors and quasi-governments
+2015
+Debt securities
+Issuers in Chinese mainland
+- Government
+Trading financial assets
+5,151
+3,399
+4,694
+notional
+Included in the derivative financial instruments above are those designated as hedging
+instruments by the Group as follows:
+17 Derivative financial instruments and hedge accounting (Continued)
+17.2 Hedge accounting
+As at 31 December 2016
+As at 31 December 2015
+Contractual/
+Contractual/
+notional
+Fair value
+Liabilities
+amount
+Assets
+Liabilities
+Cross-currency interest rate swaps
+amount
+Assets
+Derivatives designated as hedging
+instruments in fair value hedges
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Fair value
+(Amount in millions of Renminbi, unless otherwise stated)
+405,541
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+9,855
+441
+(279)
+Commodity derivatives and other
+8,456
+(7,542)
+189,905
+7,382
+(6,002)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Total
+7,878,945
+130,549
+(107,109)
+5,995,734
+82,236
+(69,160)
+These exchange rate derivatives primarily include foreign exchange transactions with customers; foreign
+exchange transactions to manage foreign currency exchange risks arising from customers; and foreign
+currency exchange transactions entered into as part of the asset and liability management and funding
+requirements.
+229
+BANK OF CHINA LIMITED
+(1)
+7,718
+81,963
+7.225
+5,550
+122
+Subtotal (2)
+Total
+6,637
+188
+(79)
+1,017
+42
+Interest rate swaps
+(80)
+2,690
+(2,472)
+1,503
+(2,087)
+230
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(225)
+137,997
+(80)
+42
+1,017
+(993)
+Interest rate swaps
+123,642
+2,502
+(1,024)
+73,721
+1.461
+(1,014)
+Subtotal (1)
+131,360
+2,502
+(2,393)
+80,946
+1,461
+(2,007)
+Derivatives designated as hedging
+instruments in cash flow hedges
+Cross-currency interest rate swaps
+1,087
+66
+(79)
+(1,369)
+224
+Currency options
+Equity derivatives
+amount
+Fair value
+notional
+Contractual/
+As at 31 December 2015
+As at 31 December 2016
+Exchange rate derivatives
+17.1 Derivative financial instruments
+17 Derivative financial instruments and hedge accounting (Continued)
+Assets
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+228
+The contractual/notional amounts and fair values of derivative instruments held by the
+Group are set out in the following tables. The contractual/notional amounts of financial
+instruments provide a basis for comparison with the fair values of instruments recognised on
+the statement of financial position but do not necessarily indicate the amounts of future cash
+flows involved or the current fair value of the instruments and, therefore, do not indicate the
+Group's exposure to credit or market risks. The derivative instruments become favourable
+(assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates,
+foreign currency exchange rates, credit spreads, or equity/commodity prices relative to their
+terms. The aggregate fair values of derivative financial assets and liabilities can fluctuate
+significantly from time to time.
+The Group enters into foreign currency exchange rate, interest rate, equity, credit or precious
+metals and other commodity related derivative financial instruments for trading, hedging,
+asset and liability management and on behalf of customers.
+Derivative financial instruments and hedge accounting
+Debt securities traded on the China Domestic Interbank Bond Market are included in “Listed outside Hong
+Kong".
+V
+Liabilities
+Contractual/
+notional
+amount
+Fair value
+(Amount in millions of Renminbi, unless otherwise stated)
+Subtotal
+1
+953
+Currency futures
+(1,710)
+1,727
+225,919
+(3,873)
+2,224
+302,945
+(55,366)
+67,447
+4,516,512
+(86,779)
+109,007
+5,364,363
+cross-currency interest rate swaps (1)
+Currency forwards and swaps, and
+Liabilities
+Assets
+As at 31 December 2016, included in the Group's "Financial assets at fair value through profit or loss" were
+certificates of deposit held of RMB28,737 million (31 December 2015: RMB 17,200 million).
+(4)
+(3)
+5,541
+0.00%-4.26%
+1,779,761
+10,616
+(8,654) 1,051,031
+5,235
+(5,802)
+Interest rate options
+9,910
+18
+(24)
+Interest rate futures
+3,304
+3
+(8)
+2,512
+Subtotal
+1,792,975
+10,637
+(8,686)
+1,053,543
+5,239
+(5,803)
+Interest rate swaps
+12,168
+Interest rate derivatives
+69,174
+0.00%-4.67%
+3,613
+2015
+As at 31 December
+2016
+Coupon rate range
+Carrying value
+17
+As at 31 December 2016, the Group held bonds issued by the MOF and bills issued by the PBOC included
+in "Financial assets at fair value through profit or loss". The carrying value and the related coupon rate
+range on such bonds and bills are as follows:
+There was no significant change during the years ended 31 December 2016 and 2015 and cumulatively, in
+the fair value of the loans that was attributable to changes in the credit risk of the loans.
+(2)
+(1)
+Financial assets at fair value through profit or loss (Continued)
+16
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(90,656)
+4,742,431
+(57,076)
+V
+236
+17 Derivative financial instruments and hedge accounting (Continued)
+As at 31 December
+2016
+Government
+Issuers in Chinese mainland
+Debt securities
+Investment securities available for sale
+19 Financial investments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2015
+BANK OF CHINA LIMITED
+200,665
+40,285
+160,380
+237,716
+51,888
+185,828
+As at 31 December
+1,466
+43
+1,423
+1,869
+235
+96
+505,537
+- Public sectors and quasi-governments
+Policy banks
+58,587
+81,347
+106,867
+160,399
+- Corporate
+- Financial institutions
+18,020
+33,682
+- Public sectors and quasi-governments
+189,310
+272,531
+198,333
+Governments
+Issuers in Hong Kong, Macau, Taiwan and
+129,027
+133,362
+Corporate
+153,622
+174,998
+- Financial institutions
+153,831
+152,188
+22,245
+21,919
+other countries and regions
+1,535,963
+1,773
+(1,329)
+103,777
+13,906
+89,871
+127,436
+188,531
+35,849
+152,682
+200,665
+40,285
+21,500
+105,936
+year
+Reversal
+Impairment losses for the
+As at 1 January
+Total
+Personal
+Total Corporate
+Corporate Personal
+2015
+2016
+Year ended 31 December
+customer type
+18.5 Reconciliation of allowance for impairment losses on loans and advances to customers by
+200,665
+160,380
+- Exchange differences
+(40,551)
+(40,641)
+(368)
+(961)
+(2,480)
+(453)
+(2,027)
+― Unwind of discount on allowance
+1,322
+43
+1,279
+3,343
+64
+(90)
+3,279
+- Recovery of loans and
+Transfer in
+(45,197)
+(8,987)
+(36,210)
+(9,514) (52,476)
+(42,962)
+Write-off and transfer out
+(47,905)
+(201)
+(47,704)
+advances written off
+139,874
+1,029,842
+33,936
+Governments
+other countries and regions
+Issuers in Hong Kong, Macau, Taiwan and
+160,000
+160,000
+China Orient (5)
+12,546
+6,548
+- Corporate
+47,671
+32,579
+- Public sectors and quasi-governments
+- Financial institutions
+1,500
+- Policy banks
+2,500
+- Public sectors and quasi-governments
+90,388
+158,958
+- Government(3) (4)
+Issuers in Chinese mainland
+2015
+As at 31 December
+2016
+Debt securities
+5,000
+loans and receivables
+347
+13,995
+3,476,033
+3,848,794
+237
+Total financial investments (7) (8)
+606,710
+395,921
+loans and receivables
+Total financial investments classified as
+(1,754)
+(2,473)
+Allowance for impairment losses
+324
+278,068
+Investment trusts, asset management plans and other (6)
+330,396
+375,456
+Subtotal of debt securities investments
+8
+1,394
+2
+135
+- Corporate
+- Financial institutions
+11,957
+22,938
+Equity securities
+Financial investments classified as
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+128,292
+42,111
+- Corporate
+70,272
+51,696
+- Financial institutions
+276,054
+231,425
+- Policy banks
+37,548
+30,047
+Issuers in Hong Kong, Macau, Taiwan and
+- Public sectors and quasi-governments
+1,336,609
+Government
+Issuers in Chinese mainland
+Debt securities held to maturity
+1,078,533
+1,609,830
+Total investment securities available for sale (1)
+18,482
+39,931
+Fund investments and other
+30,209
+1,117,213
+19 Financial investments (Continued)
+other countries and regions
+47,728
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+5,668,261
+1,790,790
+1,843,043
+(194)
+(44)
+Total debt securities held to maturity (2)
+Governments
+Allowance for impairment losses
+1,843,087
+33,239
+30,408
+- Corporate
+23,361
+31,185
+Financial institutions
+20,092
+41,878
+- Public sectors and quasi-governments
+84,913
+1,790,984
+60,791
+237,716
+167,623
+BANK OF CHINA LIMITED
+232
+18.2 Analysis of loans and advances to customers by geographical area, industry, collateral type
+and analysis of overdue loans and advances to customers by collateral type is presented in
+Note VI.3.5.
+8,935,195
+9,735,646
+Loans and advances to customers, net
+(200,665)
+(237,716)
+Total allowance for impairment losses
+(139,874)
+(167,623)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+- Collectively assessed
+(70,093)
+- Individually assessed
+Less: allowance for impairment losses
+9,135,860
+9,973,362
+Total loans and advances
+2,765,948
+3,404,393
+Subtotal
+451,238
+466,131
+(60,791)
+- Other
+FOR THE YEAR ENDED 31 DECEMBER 2016
+V
+9,973,362
+145,311
+101,086
+44,225
+9,828,051
+Total loans and advances
+As at 31 December 2016
+as % of total loans
+and advances
+Total
+Subtotal
+assessed
+(Amount in millions of Renminbi, unless otherwise stated)
+assessed
+collectively
+Identified impaired
+loans and advances
+allowance is
+for which
+for which
+allowance is
+Loans and
+advances for
+which allowance
+is collectively
+assessed(¹)
+233
+Identified impaired loans and advances (2)
+18.3 Analysis of loans and advances to customers by collective and individual allowance assessments
+18 Loans and advances to customers (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+individually
+1.46%
+268,923
+- Credit cards
+(3)
+There were no transactions for which cash flow hedge accounting had to be ceased in the years ended 31
+December 2016 and 2015 as a result of the highly probable cash flows no longer being expected to occur.
+For the year ended 31 December 2016, a net gain from cash flow hedges of RMB86 million was recognised
+in “Other comprehensive income” (2015: net gain of RMB26 million), and there was no ineffectiveness for
+the years ended 31 December 2016 and 2015.
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against exposure to
+cash flow variability primarily from foreign exchange rate risk and interest rate risk of placement and loan
+transactions.
+228
+534
+317
+(1,117)
+(89)
+1,651
+2015
+Net investment hedges
+2016
+Cash flow hedges
+(2)
+Ineffectiveness recognised in net trading gains
+― hedged items
+- hedging instruments
+Net gains/(losses) on
+Gains or losses on fair value hedges are as follows:
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against changes in
+fair value of bonds issued and debt securities available for sale arising from changes in foreign currency
+exchange rates and interest rates.
+Fair value hedges
+(1)
+17.2 Hedge accounting (Continued)
+Year ended 31 December
+302,302
+The Group's consolidated statement of financial position is affected by exchange differences between
+the functional currencies of respective holding companies and functional currencies of their branches
+and subsidiaries. The Group hedges such exchange exposures only in limited circumstances. Hedging is
+undertaken using deposits taken in the same currencies as the functional currencies of related branches and
+subsidiaries which are accounted for as hedges of certain net investments in foreign operations.
+231
+2,045,787
+2,635,960
+- Mortgages
+6,369,912
+6,568,969
+263,953
+298,241
+6,105,959
+6,270,728
+2015
+As at 31 December
+2016
+For the year ended 31 December 2016, a net loss from the hedging instrument of RMB1,357 million was
+recognised in "Other comprehensive income” on net investment hedges (2015: net loss of RMB 1,023
+million), and there was no ineffectiveness in the years ended 31 December 2016 and 2015.
+Personal loans
+Discounted bills
+- Loans and advances
+Corporate loans and advances
+18.1 Analysis of loans and advances to customers
+18 Loans and advances to customers
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Subtotal
+Allowance for impairment losses
+(139,957)
+(27,666)
+(19,551)
+(28,865) (52,476)
+(23,611)
+Write-off and transfer out
+(47,905)
+(6,355) (41,550)
+(40,641)
+(30,560)
+(10,081)
+Reversal
+103,777
+(25,646)
+67,358
+188,531
+139,292
+49,239
+200,665
+127,436
+86,847
+40,589
+year
+Impairment losses for the
+139,874
+60,791
+As at 1 January
+36,419
+Total
+(45,197)
+- Recovery of loans and
+70.093
+As at 31 December
+1,466
+1,084
+382
+1,869
+1,309
+560
+- Exchange differences
+(1,329)
+(800)
+Transfer in
+(529)
+(1,219)
+(1,261)
+- Unwind of discount on allowance
+_
+1,322
+136
+1,186
+3,343
+237
+3,106
+advances written off
+(2,480)
+Individually Collectively
+assessed assessed
+Total allowance allowance
+Individually Collectively
+assessed
+assessed
+allowance allowance
+2015
+customers, net
+Loans and advances to
+(200,665)
+1.43%
+9,135,860
+130,237
+(83,135)
+90,674
+(60,791)
+(22,344)
+(117,530)
+Allowance for impairment losses
+39,563
+8,888,093
+9,005,623
+As at 31 December 2015
+9,735,646
+47,552
+30,993
+16,559
+9,688,094
+customers, net
+Loans and advances to
+(237,716)
+(97,759)
+(70,093)
+Total loans and advances
+17,219
+29,883
+47,102
+2016
+Year ended 31 December
+18.4 Reconciliation of allowance for impairment losses on loans and advances to customers by
+individual and collective assessments
+18 Loans and advances to customers (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+234
+collectively (portfolios of individually insignificant homogenous loans which share similar credit risk
+characteristics, including insignificant corporate loans and advances and personal loans which are
+impaired).
+individually (including mainly significant corporate loans and advances over a certain amount which
+are impaired); or
+Identified impaired loans and advances are loans for which objective evidence of impairment exists and
+which have been identified as bearing an impairment loss and assessed either:
+Loans and advances for which allowance is collectively assessed consist of loans and advances which have
+not been specifically identified as impaired.
+(2)
+(1)
+18.3 Analysis of loans and advances to customers by collective and individual allowance
+assessments (Continued)
+Loans and advances to customers (Continued)
+18
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+8,935,195
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+111,232
+Carrying
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+21 Property and equipment (Continued)
+As at 31 December 2016, the net book amount of aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, acquired under finance lease arrangements was RMB673 million
+(31 December 2015: RMB655 million).
+As at 31 December 2016, the net book amount of aircraft leased out by BOC Aviation
+Limited, a subsidiary of the Group, under operating leases was RMB74,140 million (31
+December 2015: RMB62,974 million).
+As at 31 December 2016, the net book amount of aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, that has been pledged for loan facilities was RMB31,904 million
+(31 December 2015: RMB41,622 million) (Note V.31).
+According to the relevant the PRC laws and regulations, after conversion into a joint stock
+limited liability company, the Bank is required to re-register its property and equipment
+under the name of Bank of China Limited. As at 31 December 2016, the process of re-
+registration has not been completed. However, this registration process does not affect the
+rights of Bank of China Limited to these assets.
+The carrying value of buildings is analysed based on the remaining terms of the leases as
+follows:
+Held in Hong Kong
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+As at 31 December
+2015
+on long-term lease (over 50 years)
+3,030
+2,916
+on medium-term lease (10-50 years)
+7,914
+8,505
+2016
+on short-term lease (less than 10 years)
+V
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Net book value
+As at 1 January
+67,385
+17,843
+25,816
+61,153
+172,197
+(Amount in millions of Renminbi, unless otherwise stated)
+As at 31 December
+16,820
+28,879
+63,311
+182,031
+243
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+73,021
+13
+14
+Subtotal
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+22 Investment properties
+Year ended 31 December
+2016
+2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+As at 1 January
+18,653
+Additions
+2,932
+4,263
+Transfer to property and equipment, net (Note V.21)
+Deductions
+(1,669)
+(581)
+23,281
+BANK OF CHINA LIMITED
+73,021
+78,784
+10,957
+11,435
+Held outside Hong Kong
+on long-term lease (over 50 years)
+4,323
+1,934
+on medium-term lease (10-50 years)
+59,365
+56,269
+on short-term lease (less than 10 years)
+4,139
+3,383
+Subtotal
+67,827
+61,586
+Total
+244
+(1,426)
+(437)
+(221)
+(768)
+435
+4,223
+5,823
+As at 31 December
+102,447
+66,288
+29,100
+295
+71,303
+Accumulated depreciation
+As at 1 January
+(26,189)
+(44,373)
+(7,043)
+(77,605)
+Additions
+269,138
+870
+Exchange differences
+(18,874)
+13,607
+10,848
+30,637
+Transfer from/(to) investment properties
+(Note V.22)
+557
+(3)
+554
+Construction in progress transfer in/(out)
+8,194
+816
+(10,875)
+1,865
+(1,943)
+(2,775)
+(125)
+(14,031)
+(3,015)
+(5,292)
+(7,456)
+(12,861)
+(245)
+(202)
+(1,196)
+Additions
+(24)
+(285)
+(309)
+(749)
+Deductions
+24
+62
+91
+Exchange differences
+(12)
+(12)
+As at 31 December
+5
+As at 1 January
+Allowance for impairment losses
+(85,681)
+Deductions
+713
+2,567
+2,313
+5,593
+Transfer to investment properties (Note V.22)
+27
+27
+Exchange differences
+(194)
+(206)
+(435)
+(835)
+As at 31 December
+(28,658)
+(49,468)
+(7,555)
+(2,390)
+(334)
+Fair value changes (Note V.5)
+1,134
+As at 1 January
+Accrued during the year
+Received during the year
+As at 31 December
+(2)
+Accounts receivable and prepayments
+Accounts receivable and prepayments
+Impairment allowance
+The movements of interest receivable are as follows:
+Net value
+77,354
+Year ended 31 December
+2016
+2015
+77,354
+561,670
+(559,188)
+76,814
+613,255
+(612,715)
+79,836
+Total
+6,843
+7,184
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+23 Other assets (Continued)
+(1) Interest receivable
+As at 31 December
+2016
+2015
+Financial investments and financial assets at fair value through
+profit or loss
+47,121
+46,202
+Loans and advances to customers
+25,531
+24,309
+Due from and placements with and loans to banks,
+other financial institutions and central banks
+79,836
+BANK OF CHINA LIMITED
+77,354
+2015
+3
+years
+3,048
+(2,062)
+2,436
+(1,077)
+5,056
+(1,956)
+Over 3 years
+4,601
+Total
+85,886
+(4,397)
+80,560
+(3,854)
+247
+BANK OF CHINA LIMITED
+(1,834)
+From 1 year to
+(943)
+73,523
+85,886
+80,560
+(4,397)
+(3,854)
+81,489
+76,706
+Accounts receivable and prepayments mainly include items in the process of clearing and settlement. The
+analysis of the aging of accounts receivable and prepayments is as follows:
+As at 31 December
+2016
+2015
+Balance
+Impairment
+allowance
+Balance
+Impairment
+allowance
+Within 1 year
+77,782
+(379)
+As at 31 December
+2016
+5,736
+181,500
+246
+2015
+on long-term lease (over 50 years)
+3,774
+3,566
+on medium-term lease (10-50 years)
+9,514
+6,504
+2016
+on short-term lease (less than 10 years)
+13,288
+10,070
+Held outside Hong Kong
+on long-term lease (over 50 years)
+3,337
+4,790
+on medium-term lease (10-50 years)
+Subtotal
+As at 31 December
+Held in Hong Kong
+The carrying value of investment properties is analysed based on the remaining terms of the
+leases as follows:
+620
+Exchange differences
+1,273
+660
+As at 31 December
+21,659
+23,281
+The Group's investment properties are located in active real estate markets, and external
+appraisers make reasonable estimation of fair value using market prices of the same or
+similar properties and other related information from the real estate market.
+Investment properties are mainly held by Bank of China Hong Kong (Holdings)
+Limited ("BOCHK (Holdings)") and Bank of China Group Investment Limited ("BOCG
+Investment"), subsidiaries of the Group. The carrying value of investment properties
+held by BOCHK (Holdings) and BOCG Investment as at 31 December 2016 amounted to
+RMB12,597 million and RMB6,883 million, respectively (31 December 2015: RMB9,334
+million and RMB11,965 million). The valuation of these investment properties as at 31
+December 2016 were principally performed by Knight Frank Petty Limited based on open
+market price and other related information.
+245
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+22 Investment properties (Continued)
+3,965
+189,975
+7,523
+1,069
+Intangible assets (4)
+6,863
+5,750
+Long-term deferred expense
+3,235
+2,949
+Repossessed assets (5)
+8,104
+2,775
+Goodwill (6)
+Other
+2,473
+2,449
+5,625
+6,118
+Total
+2,070
+7,679
+Land use rights (3)
+76,706
+898
+Subtotal
+8,371
+13,211
+Total
+23 Other assets
+21,659
+23,281
+As at 31 December
+2016
+2015
+Interest receivable (1)
+79,836
+77,354
+Accounts receivable and prepayments
+(2)
+81,489
+on short-term lease (less than 10 years)
+446
+Deductions
+250,998
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+19 Financial investments (Continued)
+(7)
+As at 31 December 2016, the Group held bonds issued by the MOF and bills issued by the PBOC included
+in financial investments. The carrying value and the related coupon rate range on such bonds and bills are as
+follows:
+20
+20
+(Amount in millions of Renminbi, unless otherwise stated)
+Carrying value
+As at 31 December
+2016
+2015
+900,817
+955,457
+0.00%-5.41%
+0.00%-5.41%
+(8) Included in the Group's financial investments were certificates of deposit held amounting to RMB76,152
+million as at 31 December 2016 (31 December 2015: RMB118,251 million).
+Coupon rate range
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+26,791
+1,711,302
+1,552,348
+1,593,092
+(1)
+(2)
+(3)
+(4)
+(5)
+(6)
+The Group's accumulated impairment charge on the above available for sale debt securities, equity
+instruments and other as at 31 December 2016 amounted to RMB1,295 million and RMB5,808 million,
+respectively (31 December 2015: RMB1,410 million and RMB4,864 million, respectively).
+In 2016, the Group reclassified certain debt securities with a total carrying value of RMB1,635 million from
+"Investment securities available for sale" to "Investment securities held to maturity" (2015: RMB7,513
+million). The Group had the intention and ability to hold these reclassified debt securities until maturity
+at the date of reclassification. In 2016, the Group reclassified certain debt securities with amortised cost
+of RMB4,243 million from “Investment securities held to maturity" to "Investment securities available
+for sale" due to the implementation of value-added tax reform and management's change of investment
+intention (2015: Nil).
+On 18 August 1998, a Special Purpose Treasury Bond was issued by the MOF with a par value of
+RMB42,500 million maturing on 18 August 2028. This bond was originally issued with an annual coupon
+rate of 7.20% and its coupon rate was restructured to 2.25% per annum from 1 December 2004.
+The Bank underwrites certain Treasury bonds issued by the MOF and undertakes the role of a distributor of
+these Treasury bonds through its branch network earning commission income on bonds sold. The investors
+of these bonds have a right to redeem the bonds at any time prior to maturity and the Bank is committed
+to redeem these Treasury bonds. The balance of these bonds held by the Bank as at 31 December 2016
+amounted to RMB 1,891 million (31 December 2015: RMB2,507 million).
+The Bank transferred certain non-performing assets to China Orient Asset Management Corporation
+(“China Orient”) in 1999 and 2000. On 1 July 2000, China Orient issued a ten-year bond (“Orient Bond”)
+with a par value of RMB160,000 million and interest rate of 2.25% to the Bank as consideration. During the
+year ended 31 December 2010, the maturity of this bond was extended to 30 June 2020 with the other terms
+unchanged. The MOF shall continue to provide funding support for the principal and interest of the Orient
+Bond held by the Bank pursuant to Caijin [2004] No. 87 Notice of the MOF Regarding Relevant Issues
+Relating to the Principal and Interest of Debt Securities of Financial Asset Management Companies Held
+by Bank of China and China Construction Bank.
+This represents the Group's investments in investment trusts and asset management plans which were
+managed by trust companies or securities companies. The underlying assets of these investment trusts and
+asset management plans mainly consist of beneficial rights in financial assets, of which other banks bear the
+payment obligations in the future.
+239
+Investment in associates and joint ventures
+26,561
+Year ended 31 December
+2015
+240
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+20 Investment in associates and joint ventures (Continued)
+10,843
+Investment in associates and joint ventures of the Group comprise of ordinary shares of
+unlisted companies. The carrying amount by principal investees was as follows. Further
+details are disclosed in Note V.44.4.
+2016
+2015
+BOC International (China) Limited
+3,983
+3,759
+BOC & Cinda (Wuhu) Investment Limited Partnership
+2,734
+As at 31 December
+14,059
+As at 31 December
+682
+As at 1 January
+10,843
+14,379
+Additions
+3,277
+3,390
+Disposals
+(666)
+(9,762)
+Share of results, net of tax
+897
+2,334
+Dividends received
+(612)
+(180)
+Exchange differences and other
+320
+2016
+Graceful Field Worldwide Limited
+37,196
+Market
+value
+- Listed in Hong Kong
+7,102
+5,775
+- Listed outside Hong Kong
+1,188
+162
+Unlisted
+Equity, fund and other
+65,577
+Debt securities held to maturity
+- Listed in Hong Kong
+- Listed outside Hong Kong
+Unlisted
+36,990
+26,561
+1,701,213
+1,552,348
+42,754
+343,308
+384,285
+639,331
+Additions
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+19
+Financial investments (Continued)
+Analysed as follows:
+Debt securities
+- Listed in Hong Kong
+- Listed outside Hong Kong
+Unlisted
+As at 31 December
+2016
+2015
+81,136
+47,203
+1,070,542
+104,840
+36,990
+1,701,213
+211,881
+loans and receivables
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+19 Financial investments (Continued)
+Debt securities held to maturity
+BANK OF CHINA LIMITED
+- Listed in Hong Kong
+As at 31 December
+2016
+2015
+value
+Market
+value
+Carrying
+value
+- Listed outside Hong Kong
+3,476,033
+3,848,794
+238
+-
+Unlisted
+395,921
+606,710
+Total
+3,848,794
+3,476,033
+Listed in Hong Kong
+125,228
+79,539
+Listed outside Hong Kong
+2,772,943
+2,191,841
+Unlisted
+950,623
+1,204,653
+Total
+Financial investments classified as
+1,409
+Investment securities available for sale
+CGN Phase I Private Equity Fund Company Limited
+(53,889)
+(8,358)
+(94,018)
+Allowance for impairment losses
+As at 1 January
+(768)
+Additions
+(31,771)
+Deductions
+As at 31 December
+(768)
+(221)
+(437)
+(1,426)
+(32)
+(32)
+Exchange differences
+As at 31 December
+(1,185)
+(624)
+(85,681)
+Additions
+(3,504)
+(6,878)
+(2,516)
+(12,898)
+Deductions
+462
+2,773
+2,337
+5,572
+Transfer to investment properties (Note V.22)
+174
+174
+Exchange differences
+(245)
+(316)
+424
+(7,555)
+424
+(31)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+21 Property and equipment (Continued)
+Year ended 31 December 2015
+Equipment
+and motor Construction
+Buildings
+vehicles
+in
+(Amount in millions of Renminbi, unless otherwise stated)
+progress
+Total
+Cost
+94,323
+62,216
+26,061
+1,306
+68,398
+Aircraft
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(221)
+(76)
+(1,065)
+Net book value
+As at 1 January
+73,021
+16,820
+28,879
+63,311
+182,031
+As at 31 December
+78,784
+15,732
+25,939
+74,442
+194,897
+242
+(31)
+(49,468)
+As at 1 January
+As at 1 January
+As at 31 December 2016, the ability of associates and joint ventures to transfer funds to the
+Group is not restricted.
+241
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+10,843
+21 Property and equipment
+and motor Construction
+Buildings
+vehicles
+in
+progress
+Aircraft
+Total
+Year ended 31 December 2016
+Equipment
+14,059
+Total
+2,459
+(28,658)
+1,186
+Guangdong Small and Medium Enterprises Equity
+1,120
+759
+753
+Cinda & BOC (Anhui) Investment Limited Partnership
+502
+614
+Hong Kong Bora Holdings Limited
+501
+472
+Zhejiang Zheshang Investment Fund Limited Partnership
+488
+360
+Other
+2,497
+Cost
+As at 1 January
+Investment Fund Company Limited
+66,288
+(133)
+(13,047)
+(17,424)
+Exchange differences
+1,039
+445
+1,028
+(2,903)
+4,878
+As at 31 December
+111,323
+69,621
+26,160
+102,447
+82,876
+289,980
+7,390
+(1,341)
+Accumulated depreciation
+1,266
+71,303
+Deductions
+29,100
+269,138
+404
+5,152
+5,349
+18,476
+Additions
+Transfer from investment properties
+(Note V.22)
+1,495
+1,495
+Construction in progress transfer in/(out)
+(9,184)
+639
+29,381
+7,279
+302,792
+271,387
+Other financial institutions in Chinese mainland
+43,353
+107,482
+Banks in Hong Kong, Macau, Taiwan and
+53,721
+116,723
+Other financial institutions in Hong Kong, Macau,
+Taiwan and other countries and regions
+7,962
+15,354
+Total (1)
+other countries and regions
+134,754
+FOR THE YEAR ENDED 31 DECEMBER 2016
+2015
+206,210
+160,533
+447,944
+255,176
+867,094
+415,709
+27 Government certificates of indebtedness for bank notes issued and bank notes in
+circulation
+Bank of China (Hong Kong) Limited (“BOCHK") and Bank of China Macau Branch are
+note issuing banks for Hong Kong Dollar and Macau Pataca notes in Hong Kong and
+Macau, respectively. Under local regulations, these two entities are required to place
+deposits with the Hong Kong and Macau governments, respectively to secure the currency
+notes in circulation.
+Bank notes in circulation represent the liabilities in respect of Hong Kong Dollar notes
+and Macau Pataca notes in circulation, issued respectively by BOCHK and Bank of China
+Macau Branch.
+252
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+28 Placements from banks and other financial institutions
+Placements from:
+As at 31 December
+2016
+Banks in Chinese mainland
+660,884
+Due to customers
+Repurchase debt securities (i)
+3,130,624
+Personal deposits
+2,490,309
+2,092,841
+Subtotal
+6,111,254
+5,223,465
+Time deposits
+- Corporate deposits
+3,100,383
+3,037,783
+Personal deposits
+2,992,051
+2,841,372
+Subtotal
+3,620,945
+- Corporate deposits
+Demand deposits
+At amortised cost
+As at 31 December
+2016
+2015
+116,375
+183,498
+(i)
+Debt securities used as collateral under repurchase agreements were principally government bonds
+and were included in the amount disclosed under Note V.42.2.
+253
+(1) Included in "Placements from banks and other financial institutions" are amounts received from
+counterparties under repurchase agreements and collateral agreements as follows:
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+29
+As at 31 December
+2016
+2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2015
+(46,842)
+As at 31 December
+- Accounts receivable
+and prepayments
+2,421
+2,414
+(988)
+(43)
+50
+3,854
+- Other
+1,206
+253
+(55)
+46
+1,449
+Total
+15
+15
+- Land use rights
+647
+64
+6,092,434
+2,161
+(471)
+1,754
+— Property and equipment
+1,196
+(1)
+285
+12
+1,426
+― Repossessed assets
+1,010
+(200)
+(174)
+11
+(67)
+2016
+201,995
+(49,744)
+Banks in Hong Kong, Macau, Taiwan
+and other countries and regions
+144,915
+183,973
+Other financial institutions in Hong Kong, Macau,
+Taiwan and other countries and regions
+49,912
+22,346
+Total
+26
+Due to central banks
+Foreign exchange deposits
+Other
+Total
+1,420,527
+1,764,320
+1,022,792
+847,818
+Other financial institutions in Chinese mainland
+535,209
+2,043
+216,470
+Included within "Write-off and transfer out" on loans and advances to customers are amounts relating
+to loans and advances write-off, transfer out, recovery of loans and advances written off and unwind of
+discount on allowance.
+251
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+109,018
+(Amount in millions of Renminbi, unless otherwise stated)
+25
+Due to banks and other financial institutions
+Due to:
+As at 31 December
+2016
+2015
+Banks in Chinese mainland
+377,882
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+5,879,155
+4.70%
+Other deposits (¹)
+20,700
+19,365
+Subtotal (7)
+50,672
+49,336
+Other bonds issued
+US Dollar Debt Securities (8)
+RMB Debt Securities (9)
+Other (10)
+Subtotal
+100,021
+67,670
+17,754
+20,104
+22,219
+5.00%
+13 November 2014 13 November 2024
+2014 US Dollar Debt Securities (6)
+29,971
+5,000
+2012 RMB Debt Securities
+Second Tranche (4)
+27 November 2012 29 November 2027
+4.99%
+18,000
+18,000
+12,673
+Subtotal (7)
+119,851
+Tier 2 capital bonds issued
+2014 RMB Debt Securities (5)
+8 August 2014
+11 August 2024
+5.80%
+29,972
+120,564
+5,000
+139,994
+Interbank negotiable
+(5)
+(6)
+(7)
+(8)
+(9)
+Pursuant to the approval by the CBRC and the PBOC, the Group issued tier 2 capital bonds in an amount of
+RMB30 billion in the domestic interbank bond market on 8 August 2014. The bonds have a maturity of 10
+years, with a fixed coupon rate of 5.80%. The Group is entitled to redeem the bonds at the end of the fifth
+year.
+Pursuant to the approval by the CBRC, the PBOC and the National Development and Reform Commission,
+the Group issued tier 2 capital bonds in an amount of USD3 billion in offshore markets on 13 November
+2014. The bonds have a maturity of 10 years, with a fixed coupon rate of 5.00%.
+Subordinated bonds and tier 2 capital bonds are subordinated to all other claims on the assets of the Group,
+except those of the equity holders.
+US Dollar Debt Securities are issued in Hong Kong and Europe between 2012 and 2016 by the Group,
+which due dates ranges from 2017 to 2026.
+RMB Debt Securities are issued in Mainland China, Hong Kong, Europe, North America and other Asia-
+Pacific regions between 2013 and 2016 by the Group, which due dates ranges from 2017 to 2030.
+(10) Other Debt Securities excluding RMB and US dollar are issued in Hong Kong, Europe, Africa and other
+Asia-Pacific regions between 2013 and 2016 by the Group. The due dates ranges from 2017 to 2025.
+(11) The RMB interbank negotiable certificates of deposit issued by the Group in 2015 matured in 2016. For
+the year ended 31 December 2016, the Group issued 27 tranches of RMB interbank negotiable certificates
+of deposit at discount in the domestic interbank bond market, with face value of RMB 100 per certificate of
+deposit. The outstanding balance as at 31 December 2016 was RMB51,088 million, which matures in 2017.
+(12) During the years ended 31 December 2016 and 2015, the Group did not default on any principal, interest or
+redemption amounts with respect to its bonds issued.
+257
+- loans and receivables
+(4) Two subordinated bonds issued on 27 November 2012 in the domestic interbank bond market. The first
+subordinated bond has a maturity of 10 years, with a fixed coupon rate of 4.70%, paid annually. The
+Group is entitled to redeem these bonds on the fifth anniversary. If the Group does not exercise this option,
+the coupon rate of the bonds for the remaining 5-year period shall remain fixed at 4.70%. The second
+subordinated bond has a maturity of 15 years, with a fixed coupon rate of 4.99%, paid annually. The Group
+is entitled to redeem all these bonds on the tenth anniversary. If the Group does not exercise this option, the
+coupon rate of the bonds for the remaining 5-year period shall remain fixed at 4.99%.
+The subordinated bonds issued on 17 May 2011, have a maturity of 15 years, with a fixed coupon rate of
+5.30%, paid annually. The Group is entitled to redeem all the subordinated bonds on the tenth anniversary.
+If the Group does not exercise this option, the coupon rate of the bonds for the remaining 5-year period
+shall remain fixed at 5.30%.
+The subordinated bonds issued on 9 March 2010, have a maturity of 15 years, with a fixed coupon rate of
+4.68%, paid annually. The Group has the option to redeem all of the bonds at face value on 11 March 2020.
+If the Group does not exercise this option, the coupon rate of the bonds for the third 5-year period shall be
+the original coupon rate plus 3.00%, and shall remain fixed until the maturity date.
+The fixed rate portion of the first tranche of the subordinated bonds issued on 6 July 2009 has a maturity of
+15 years, with a fixed coupon rate of 4.00%, paid annually. The Group has the option to early redeem all
+of the bonds at face value on 8 July 2019. If the Group does not exercise this option, the coupon rate of the
+bonds for the remaining 5-year period shall be the original coupon rate plus 3.00%, and shall remain fixed
+until the maturity date.
+certificates of deposit (11)
+51,088
+13,295
+Total bonds issued (12)
+362,318
+282,929
+256
+100,447
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+30 Bonds issued (Continued)
+(1)
+(2)
+(3)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+27 November 2012 29 November 2022
+First Tranche (4)
+2012 RMB Debt Securities
+11,729,171
+254
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+29
+Due to customers (Continued)
+(1)
+(2)
+(3)
+Included in other deposits are special purpose fundings, which represent long-term fundings provided
+in multiple currencies from foreign governments and/or entities in the form of export credit, foreign
+government and other subsidised credit. These special purpose fundings are normally used to finance
+projects with a special commercial purpose in the PRC as determined by the foreign governments or entities
+and the Group is obliged to repay these fundings when they fall due.
+As at 31 December 2016, the remaining maturity of special purpose fundings ranges from 31 days to 37
+years. The interest-bearing special purpose fundings bear floating and fixed interest rates ranging from
+0.03% to 7.92% (31 December 2015: 0.15% to 7.92%). These terms are consistent with those related
+development loans granted to customers.
+Due to customers measured at fair value are structured deposits designated as at fair value through profit or
+loss at inception.
+12,939,748
+Total due to customers (3)
+339,911
+350,311
+327,908
+230,793
+57,841
+55,847
+Total due to customers at amortised cost
+12,589,437
+11,389,260
+There were no significant changes in the Group's credit risk and therefore there were no significant gains or
+losses attributable to changes in the Group's credit risk for the above-mentioned structured deposits during
+the
+years ended 31 December 2016 and 2015.
+At fair value
+- Corporate deposits
+- Personal deposits
+271,885
+274,799
+78,426
+65,112
+Total due to customers at fair value (2)
+Structured deposits
+Due to customers included margin deposits for security received by the Group as at 31 December 2016 of
+RMB339,216 million (31 December 2015: RMB338,385 million).
+255
+BANK OF CHINA LIMITED
+11 March 2025
+4.68%
+24,930
+24,930
+2010 US Dollar Subordinated
+notes issued by BOCHK
+11 February 2010
+11 February 2020
+9 March 2010
+5.55%
+15,921
+2011 RMB Debt Securities (3)
+17 May 2011
+19 May 2026
+5.30%
+32,000
+32,000
+16,634
+Certificates of deposit
+2010 RMB Debt Securities (2)
+24,000
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+30 Bonds issued
+As at 31 December
+Issue date
+24,000
+Maturity
+date
+rate
+2016
+2015
+Subordinated bonds issued
+2009 RMB Debt Securities First
+Tranche (1)
+6 July 2009
+8 July 2024
+4.00%
+Annual
+interest
+194
+650
+(35)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+24 Impairment allowance
+Impairment allowance
+-Placements with and loans
+Decrease
+249
+Write-off
+1 January
+and
+transfer
+Exchange
+As at 31
+December
+2016
+Additions
+Reversal
+out
+differences
+As at
+2016
+The goodwill mainly arose from the acquisition of BOC Aviation Limited in 2006 amounting to USD241
+million (equivalent to RMB 1,671 million).
+2,473
+2,070
+The total book value of repossessed assets disposed of during the year ended 31 December 2016 amounted
+to RMB257 million (2015: RMB580 million). The Group plans to dispose of the repossessed assets held at
+31 December 2016 by auction, bidding or transfer.
+(6)
+Goodwill
+As at 1 January
+Addition through acquisition of subsidiaries
+Deductions
+Exchange differences
+2,449
+As at 31 December
+2016
+2015
+2,449
+1,953
+147
+386
+(262)
+139
+110
+Year ended 31 December
+2,775
+to banks and other
+192
+1,754
+1,114
+(396)
+1
+2,473
+— Property and equipment
+1,426
+32
+(424)
+- loans and receivables
+31
+― Repossessed assets
+647
+54
+(10)
+(58)
+17
+- Land use rights
+15
+15
+1,065
+financial institutions
+44
+(140)
+13
+2
+-Loans and advances to customers (1)
+200,665
+127,436
+(40,641)
+(51,613)
+1,869
+200
+237,716
+10
+― Financial investments
+6,274
+1,012
+(66)
+(508)
+391
+7,103
+― held to maturity
+194
+(20)
+available for sale (Note V.19)
+- Accounts receivable
+(647)
+2,717
+(4)
+Intangible assets
+Cost
+As at 1 January
+Additions
+Deductions
+Exchange differences
+As at 31 December
+Year ended 31 December
+2016
+2015
+8,104
+11,629
+2,291
+2,128
+(117)
+(15)
+58
+37
+13,861
+11,629
+Accumulated amortisation
+9,479
+As at 1 January
+7,679
+899
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+23
+Other assets (Continued)
+(3) Land use rights
+The carrying value of land use rights is analysed based on the remaining terms of the leases as follows:
+972
+Held outside Hong Kong
+2016
+2015
+on long-term lease (over 50 years)
+123
+140
+on medium-term lease (10-50 years)
+6,657
+6,992
+on short-term lease (less than 10 years)
+As at 31 December
+(650)
+(5,879)
+Additions
+23
+Other assets (Continued)
+(5) Repossessed assets
+The Group obtained repossessed assets by taking possession of collateral held as security due to default.
+Such repossessed assets are as follows:
+Commercial properties
+Residential properties
+Other
+Subtotal
+Allowance for impairment
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Repossessed assets, net
+2016
+2015
+1,913
+1,352
+691
+533
+821
+832
+3,425
+As at 31 December
+(4,825)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(1,130)
+(1,032)
+Deductions
+55
+8
+Exchange differences
+(44)
+(30)
+As at 31 December
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(6,998)
+Net book value
+As at 1 January
+5,750
+4,654
+As at 31 December
+6,863
+5,750
+248
+BANK OF CHINA LIMITED
+(5,879)
+and prepayments
+Total
+24 Impairment allowance (Continued)
+to banks and other
+-Placements with and loans
+Impairment allowance
+1,449
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+11
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+250
+255,129
+2,467
+(52,880)
+Decrease
+(41,820)
+216,470
+Total
+4,397
+1,466
+55
+51
+(57)
+95
+(80)
+6980
+(71)
+3,854
+1,137
+(609)
+- Other
+130,892
+Write-off
+94
+and
+-Loans and advances to customers (1)
+188,531
+103,777
+(18)
+(47,905)
+192
+(45,204)
+1,466
+200,665
+3
+― Financial investments
+7,127
+125
+(126)
+(1,299)
+447
+6,274
+― held to maturity
+218
+available for sale (Note V.19)
+As at
+207
+2015
+out differences
+1 January
+transfer
+Exchange
+As at 31
+December
+2015
+Additions
+Reversal
+financial institutions
+Placements from banks and other financial institutions at fair value
+(4)
+Utilised during the year
+Provision for the year, net
+As at 1 January
+The movement of the provision was as follows:
+Total
+2,502
+5,338
+As at 31 December
+Reimbursement for cancellation
+(79,569)
+727
+of labour contract
+12
+Other
+239
+7
+2,669
+(6)
+(2,623)
+13
+285
+Total (i)
+26,158
+80,122
+6,065
+26,711
+(i) There was no overdue payment for staff salary and welfare payables as at 31 December 2016 and
+2015.
+266
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+37 Other liabilities (Continued)
+(3) Provision
+As at 31 December
+2016
+2015
+Allowance for litigation losses (Note V.42.1)
+Other
+860
+3,362
+267
+2016
+Salary, bonus and subsidy
+22,147
+Staff welfare
+54,462
+2,919
+(54,693)
+21,916
+(2,919)
+Social insurance, including:
+Medical
+697
+3,280
+(3,089)
+888
+Pension
+134
+6,587
+(6,563)
+2015
+158
+Payment
+2015
+of labour contract
+Other
+13
+285
+11
+2,838
+(9)
+(2,750)
+15
+373
+Total (i)
+26,711
+81,062
+(79,956)
+27,817
+As at
+As at
+1 January
+31 December
+Accrual
+Year ended 31 December
+Annuity
+2,060
+50
+Labour union fee and
+staff education fee
+Reimbursement for cancellation
+2,865
+1,911
+(1,407)
+3,369
+Certain financial liabilities related to placements from banks and other financial institutions have been
+matched with derivatives as part of a documented risk management strategy to mitigate market risk. By
+designating these financial liabilities at fair value through profit or loss, the movement in their fair values is
+recorded in the income statement. As at 31 December 2016, the fair value of the financial liabilities related
+to placements from banks and other financial institutions was approximately the same as the amount that
+the Group would be contractually required to pay to the holders. There were no significant changes in the
+Group's credit risk and therefore the amounts of changes in fair value of the abovementioned placements
+from banks and other financial institutions that were attributable to changes in credit risk were considered
+not significant during the years ended 31 December 2016 and 2015.
+3,362
+6,065
+(61)
+(289)
+807
+2,992
+2,616
+3,362
+2015
+(5,408)
+24
+5,428
+Housing funds
+(2,062)
+22
+Unemployment
+7
+413
+(413)
+7
+Injury at work
+1
+163
+(163)
+1
+Maternity insurance
+2
+223
+(223)
+2
+30
+2015
+2016
+The movements of interest payable are as follows:
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(77)
+6,867
+262
+22
+Total
+573
+(343)
+(295)
+90
+Pension, retirement benefits and salary payables
+Other temporary differences
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(1,550)
+financial instruments
+value through profit or loss and derivative
+Fair value changes of financial instruments at fair
+1,195
+7,515
+Asset impairment allowances
+2015
+2016
+Year ended 31 December
+35.4 The deferred income tax credit/charge in the income statement comprises the following
+temporary differences:
+17,955
+29,840
+As at 31 December
+(178)
+(395)
+36 Assets and liabilities held for sale
+The major classes of assets held for sale and liabilities classified as held for sale are as
+follows:
+As at 31 December
+Annuity
+Due to banks and other financial institutions
+Liabilities classified as held for sale
+237,937
+50,371
+Total
+9,705
+2,116
+347
+5,299
+44,267
+11,108
+Other assets
+Investment properties
+Financial investments
+138,292
+27,555
+2016
+2015
+Assets held for sale
+Cash and due from banks and other financial institutions
+657
+13,679
+438
+Balances with central banks
+13,433
+Placements with and loans to banks and other
+financial institutions
+3,347
+18,214
+Loans and advances to customers, net
+289
+Other
+(2,546)
+4,580
+Housing funds
+50
+-20
+1
+102
+(101)
+2
+203
+(202)
+3
+5,066
+(5,084)
+32
+Labour union fee and
+staff education fee
+3,369
+1,918
+50/55
+60
+60
+Female
+Male
+Retiring age
+Maternity insurance
+8.0%
+Medical benefit inflation rate
+8.0%-4.0%
+7.0%-3.0%
+- Early retiree
+3,885
+(1,402)
+8.0%
+170
+Injury at work
+(325)
+(77)
+6,867
+Credited/(charged) to the income statement (Note V.10)
+Credited/(charged) to other comprehensive income
+20,756
+17,955
+As at 1 January
+6.0%-4.0%
+5.0%-3.0%
+Normal retiree
+Pension benefit inflation rate
+2.60%
+2.80%
+2.83%
+3.00%
+Early retiree
+- Normal retiree
+Discount rate
+325
+7
+Unemployment
+23
+(2,059)
+2,060
+7
+(575)
+As at 31 December
+3,439
+4,255
+Primary assumptions used:
+As at 31 December
+2016
+2015
+(674)
+(6,573)
+6,585
+158
+2015
+Interest payable (¹)
+Insurance liabilities
+183,516
+174,256
+- Life insurance contracts
+82,166
+72,867
+- Non-life insurance contracts
+8,725
+8,242
+Items in the process of clearance and settlement
+51,838
+37,193
+Salary and welfare payables (2)
+27,817
+26,711
+Other (5)
+1,617
+1,968
+at fair value (4)
+Placements from banks and other financial institutions
+3,362
+2016
+6,065
+7,099
+8,000
+Deferred income
+7,012
+9,990
+Short position in debt securities
+Provision (3)
+58,833
+As at 31 December
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+375
+2,522
+Due to customers
+40,669
+184,957
+Deferred income tax liabilities
+728
+Other liabilities
+360
+6,253
+Total
+Cumulative income recognised in other comprehensive
+income relating to assets held for sale
+263
+42,488
+196,850
+(29)
+228
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+264
+As at 31 December 2015, the Group classified the disposal group of the assets and liabilities
+of NCB as assets and liabilities held for sale. The sale of NCB was completed on 30 May
+2016, refer to Note V.41.
+37 Other liabilities
+In December 2016, BOCHK, a direct wholly-owned subsidiary of BOCHK (Holdings),
+entered into a Sale and Purchase Agreement with Xiamen International Investment Limited
+and the Committee of Jimei Schools in relation to the proposed sale and purchase of 70.49%
+of the total issued shares of Chiyu Bank (the “Proposed Disposal"). The completion of the
+Proposed Disposal is conditional upon the satisfaction of all the conditions precedent set out
+in the Sale and Purchase Agreement.
+36 Assets and liabilities held for sale (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+As at 31 December 2016, the Group's disposal group classified as assets and liabilities
+held for sale mainly included the assets and liabilities held by BOCHK's subsidiary Chiyu
+Banking Corporation Limited (“Chiyu Bank”) and by the subsidiaries of BOCG Investment
+of which the Group planned to dispose.
+50/55
+45,410
+438,918
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+37
+Other liabilities (Continued)
+(2) Salary and welfare payables
+As at
+As at
+1 January
+31 December
+2016
+Accrual
+Payment
+2016
+Salary, bonus and subsidy
+Pension
+985
+(3,157)
+3,254
+888
+Medical
+BANK OF CHINA LIMITED
+Social insurance, including:
+2,908
+Staff welfare
+22,322
+(55,386)
+55,792
+21,916
+(2,908)
+Total
+174,256
+(275,378)
+383,769
+(1)
+Interest payable
+Due to customers
+Due to and placements from banks
+and other financial institutions
+Bonds issued and other
+Total
+356
+As at 1 January
+Accrued during the year
+Paid during the year
+As at 31 December
+265
+As at 31 December
+2016
+2015
+163,878
+(250,831)
+286,406
+260,091
+163,228
+174,256
+2015
+183,516
+2016
+174,256
+183,516
+7,505
+11,099
+9,476
+10,162
+155,652
+Year ended 31 December
+Placements from banks and other financial institutions
+Assumptions regarding future mortality experience are based on the China Life Insurance
+Mortality Table (published historical statistics in China).
+259
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+35 Deferred income taxes (Continued)
+35.3 The movements of the deferred income tax account are as follows:
+Year ended 31 December
+Benefits paid
+213
+(350)
+Net actuarial (gain)/loss recognised
+150
+109
+Interest cost
+4,566
+4,255
+As at 1 January
+As at 31 December 2016 and 2015, there was no significant change in employee retirement
+benefit obligations that was attributable to changes in actuarial assumptions.
+2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+261
+As at 31 December 2016, deferred tax liabilities relating to temporary differences of
+RMB100,428 million associated with the Group's investments in subsidiaries have not been
+recognised (31 December 2015: RMB70,336 million). Refer to Note II.22.2.
+(18,671)
+(3,207) (14,917)
+(2,575)
+Revaluation of property and
+investment properties
+(8,351)
+(1,555) (10,447)
+(2,048)
+Other temporary differences
+Year ended 31 December
+(42,480)
+(7,732)
+Subtotal
+(178,054)
+(39,863) (122,545) (26,804)
+Net
+103,325
+29,840
+59,665
+17,955
+(8,093) (39,164)
+The movements of the net liabilities recognised are as follows:
+Retirement benefit obligations (Continued)
+33
+(525)
+4,832
+Value-added Tax
+31,563
+22,023
+Corporate Income Tax
+2015
+2016
+As at 31 December
+Business Tax
+32 Current tax liabilities
+As at 31 December 2016, these other borrowings had a maturity ranging from 75 days to 10
+years and bore floating and fixed interest rates ranging from 0.90% to 2.95% (31 December
+2015: 0.36% to 2.45%).
+These other borrowings relate to the financing of the aircraft leasing business of BOC
+Aviation Limited, a subsidiary of the Group. These other borrowings are secured by its
+aircraft (Note V.21).
+Other borrowings
+31
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+During the years ended 31 December 2016 and 2015, the Group did not default on any
+principal, interest or redemption amounts with respect to its other borrowings.
+Depreciation of property and equipment
+225
+City Construction and Maintenance Tax
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+258
+As at 31 December 2016, the actuarial liabilities existing in relation to the retirement benefit
+obligations for employees who retired prior to 31 December 2003 and the early retirement
+obligations for employees who early retired were RMB2,261 million (31 December 2015:
+RMB2,635 million) and RMB1,178 million (31 December 2015: RMB1,620 million)
+respectively, using the projected unit credit method.
+37,982
+28,055
+5,996
+Retirement benefit obligations
+Total
+261
+368
+Other
+292
+252
+Education Surcharges
+395
+355
+33
+(5,045)
+2015
+(7,690)
+(22,035)
+(4,291)
+Net
+260
+103,325
+29,840
+59,665
+17,955
+BANK OF CHINA LIMITED
+(4,501)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(1,792) (20,402)
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+35 Deferred income taxes (Continued)
+35.2 Deferred income tax assets/liabilities and related temporary differences, before offsetting
+qualifying amounts, are attributable to the following items:
+As at 31 December
+2016
+2015
+Deferred
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(25,998)
+22,246
+81,700
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+34 Share appreciation rights plan
+In November 2005, the Bank's Board of Directors and equity holders approved and adopted
+a Share Appreciation Rights Plan under which eligible participants including directors,
+supervisors, management and other personnel designated by the Board, will be granted share
+appreciation rights, up to 25% of which will be exercisable each year beginning on the third
+anniversary date from the date of grant. The share appreciation rights will be valid for seven
+years from the date of grant. Eligible participants will be entitled to receive an amount equal
+to the difference, if any, between the average closing market price of the Bank's H shares in
+the ten days prior to the date of grant and the average closing market price of the Bank's H
+shares in the 12 months prior to the date of exercise as adjusted for any change in the Bank's
+equity. The plan provides cash-settled share-based payment only and accordingly, no shares
+will be issued under the share appreciation rights plan.
+No share appreciation rights were granted since the inception of the plan.
+35 Deferred income taxes
+35.1 Deferred income tax assets and liabilities are offset when there is a legally enforceable right
+to offset current tax assets against current tax liabilities and when the deferred income taxes
+are related to the same fiscal authority. The table below includes the deferred income tax
+assets and liabilities of the Group after offsetting qualifying amounts and related temporary
+differences.
+As at 31 December
+2016
+2015
+Deferred
+Deferred
+Temporary
+difference
+tax assets/ Temporary
+(liabilities) difference
+tax assets/
+(liabilities)
+Deferred income tax assets
+Deferred income tax liabilities
+129,323
+34,341
+Deferred
+Temporary
+difference
+3,118
+difference
+12,493
+2,924
+14,004
+Other temporary differences
+290
+1,629
+1,617
+7,318
+other comprehensive income
+Fair value changes of available for sale
+6,922
+27,946
+22,339
+89,688
+derivative financial instruments
+4,871
+at fair value through profit or loss and
+Fair value changes of financial instruments
+4,781
+19,125
+tax assets/ Temporary
+(liabilities)
+2,329
+Subtotal
+investment securities credited to
+69,703
+37,952
+150,865
+Deferred income tax assets
+Asset impairment allowances
+Pension, retirement benefits
+281,379
+30,437
+and salary payables
+19,504
+121,017
+investment securities charged to
+other comprehensive income
+Fair value changes of available for sale
+tax assets/
+(liabilities)
+(9,404)
+182,210
+(37,615)
+(25,216)
+(100,862)
+at fair value through profit or loss and
+derivative financial instruments
+44,759
+Deferred income tax liabilities
+Fair value changes of financial instruments
+BANK OF CHINA LIMITED
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(5) Other
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+37 Other liabilities (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+38
+Quantity
+38.4 Other equity instruments
+For the year ended 31 December 2016, the movements of the Bank's other equity
+instruments were as follows:
+As at
+1 January 2016
+As at
+Increase/(Decrease)
+Quantity
+31 December 2016
+Quantity
+(million Carrying
+shares) amount
+(million Carrying
+shares) amount
+(million
+Carrying
+68,036
+shares)
+Other includes finance lease payments which are principally related to aircraft held by BOC Aviation
+Limited under finance lease.
+Share capital, capital reserve, treasury shares and other equity instruments
+(Continued)
+Within 1 year (inclusive)
+Unrecognised finance charge
+2 years to 3 years (inclusive)
+268
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+38
+Share capital, capital reserve, treasury shares and other equity instruments
+(Continued)
+38.2 Capital reserve
+Share premium
+Other capital reserve
+Total
+As at 31 December
+2016
+2015
+139,921
+2,051
+139,921
+177
+141,972
+140,098
+38.3 Treasury shares
+A wholly-owned subsidiary of the Group holds certain listed shares of the Bank in relation
+to its derivative and arbitrage business. These shares are treated as treasury shares, a
+deduction from equity holders' equity. Gains and losses on sale or redemption of the
+treasury shares are credited or charged to equity. The total number of treasury shares as at 31
+December 2016 was approximately 17.23 million (31 December 2015: approximately 29.69
+million).
+269
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+All A and H shares rank pari passu with the same rights and benefits.
+294,387,791,241 294,387,791,241
+210,765,514,846 210,765,514,846
+83,622,276,395 83,622,276,395
+2015
+Over 3 years
+Total minimum rental payments
+Finance lease payments, net
+As at 31 December
+2016
+2015
+82
+75
+243
+75
+23
+226
+169
+1 year to 2 years (inclusive)
+178
+554
+(43)
+(53)
+474
+501
+38
+Share capital, capital reserve, treasury shares and other equity instruments
+38.1 Share capital
+The Bank's share capital are as follows:
+Domestic listed A shares, par value RMB1.00 per share
+Overseas listed H shares, par value RMB1.00 per share
+Total
+As at 31 December
+2016
+517
+Unit: Share
+64,093
+amount
+Due to banks and other financial institutions
+(7,560)
+Placements from banks and other financial institutions
+Due to customers
+(8,996)
+(189,271)
+Other liabilities
+Net assets disposed
+274
+(8,000)
+28,203
+BANK OF CHINA LIMITED
+10,242
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+41
+Changes in the consolidation (Continued)
+Disposal of investment in subsidiaries(Continued)
+Net cash inflow from disposal of NCB:
+Cash received from disposal of NCB
+Transaction costs
+Cash and cash equivalents held by NCB at the date of disposal
+Net cash inflow from disposal of NCB
+42 Contingent liabilities and commitments
+FOR THE YEAR ENDED 31 DECEMBER 2016
+42.1 Legal proceedings and arbitrations
+Other assets
+Financial investments
+41
+Changes in the consolidation
+Disposal of investment in subsidiaries
+BOCHK, a subsidiary directly wholly owned by BOCHK (Holdings), entered into a Sale and
+Purchase Agreement with Cinda Financial Holdings Co., Limited (as the buyer) and China
+Cinda (HK) Holdings Company Limited (as the buyer's guarantor) in relation to the sale and
+purchase of all the issued shares of NCB on 18 December 2015. The sale was completed in
+accordance with the terms and conditions of the Sale and Purchase Agreement on 30 May
+2016. Upon completion, NCB ceased to be a subsidiary of the Bank and BOCHK (Holdings).
+Gain on disposal of NCB:
+Total consideration
+Net assets disposed
+Transaction costs
+Cumulative other comprehensive income reclassified
+to the income statement
+Gain on disposal
+Net assets of NCB at the date of disposal:
+Year ended
+47,585
+31 December 2016
+(308)
+325
+29,050
+At the date
+of disposal
+Cash and due from banks and other financial institutions
+16,637
+Balances with central banks
+10,279
+Placements with and loans to banks and other financial institutions
+18,484
+Loans and advances to customers, net
+138,803
+57,236
+(28,203)
+Year ended
+31 December 2016
+57,236
+42 Contingent liabilities and commitments (Continued)
+42.4 Capital commitments
+Property and equipment
+As at 31 December
+2016
+2015
+Contracted but not provided for
+61,237
+64,492
+-
+- Authorised but not contracted for
+Intangible assets
+1,967
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2,652
+860
+721
+15
+23
+Investment properties
+- Contracted but not provided for
+Authorised but not contracted for
+13
+148
+1
+Total
+42.5 Operating leases
+(1) Operating lease commitments As lessee
+- Contracted but not provided for
+- Authorised but not contracted for
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(308)
+(34,273)
+22,655
+As at 31 December 2016, the Group was involved in certain litigation and arbitration cases
+in the regular course of its business. In addition, in terms of the range and scale of its
+international operations, the Group may face a variety of legal proceedings within different
+jurisdictions, including issues related to anti-money laundering. As at 31 December 2016,
+provisions of RMB727 million (31 December 2015: RMB860 million) were made based on
+court judgements or the advice of counsel (Note V.37). After consulting legal professionals,
+senior management of the Group believes that at the current stage these legal proceedings
+and arbitrations will not have a material impact on the financial position or operations of the
+Group.
+275
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Contingent liabilities and commitments(Continued)
+42.2 Assets pledged
+Assets pledged by the Group as collateral mainly for placement, repurchase, short positions,
+derivative transactions with other banks and financial institutions and for local statutory
+requirements are set forth in the table below. These transactions are conducted under
+standard and normal business terms.
+Debt securities
+Total
+As at 31 December
+2016
+2015
+804,425
+656
+325,025
+2,052
+805,081
+327,077
+42.3 Collateral accepted
+The Group accepts securities as collateral that are permitted to be sold or re-pledged in
+connection with reverse repurchase and derivative agreements with banks and other financial
+institutions. As at 31 December 2016, the fair value of collateral received from banks
+and other financial institutions accepted by the Group amounted to RMB11,468 million
+(31 December 2015: RMB24,094 million). As at 31 December 2016, the fair value of the
+collateral that the Group had sold or re-pledged, but was obligated to return, was RMB1,098
+million (31 December 2015: Nil). These transactions are conducted under standard terms in
+the normal course of business.
+276
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+Bills
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+38
+Share capital, capital reserve, treasury shares and other equity instruments
+(Continued)
+38.4 Other equity instruments (Continued)
+(2)
+(3)
+Pursuant to the approvals by relevant authorities in China, the Bank issued 6.0% non-cumulative Domestic
+Preference Shares on 21 November 2014, in the aggregate par value of RMB32 billion. Each Domestic
+Preference Share has a par value of RMB 100 and a total number of 320 million Domestic Preference Shares
+were issued.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBRC, the Bank may redeem all or
+part of the Domestic Preference Shares on 21 November 2019 or any dividend payment date thereafter of
+its choosing at the redemption price which is the sum of the par value of the Domestic Preference Share and
+the dividends declared but not yet distributed.
+Pursuant to the approvals by relevant authorities in China, the Bank issued 5.5% non-cumulative Domestic
+Preference Shares on 13 March 2015, in the aggregate par value of RMB28 billion. Each Domestic
+Preference Share has a par value of RMB100 and a total number of 280 million Domestic Preference Shares
+were issued.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBRC, the Bank may redeem all or
+part of the Domestic Preference Shares on 13 March 2020 or any dividend payment date thereafter of its
+choosing at the redemption price which is the sum of the par value of the Domestic Preference Share and
+the dividends declared but not yet distributed.
+Save for such dividend at the agreed dividend payout ratio, the holders of the above
+preference shares shall not be entitled to share in the distribution of the remaining profits
+of the Bank together with the holders of the ordinary shares. The dividends on preference
+shares are non-cumulative. The Bank shall be entitled to cancel any dividend on the
+preference shares, and such cancellation shall not be deemed a default. However, the
+Bank shall not distribute profits to the holders of ordinary shares until resumption of full
+payment of dividends on the preference shares. Upon the occurrence of a trigger event for
+the compulsory conversion of preference shares into ordinary shares per agreement, the
+Bank shall report to the CBRC for review and determination and the Bank will convert the
+preference shares into ordinary shares in whole or in part.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Capital raised from the issuance of the above preference shares, after deduction of
+transaction costs, was wholly used to replenish the Bank's additional tier 1 capital and to
+increase its capital adequacy ratio.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+39 Statutory reserves, general and regulatory reserves and undistributed profits
+39.1 Statutory reserves
+Under relevant PRC laws, the Bank is required to transfer 10% of its net profit to a non-
+distributable statutory surplus reserves. Appropriation to the statutory surplus reserves may
+cease when the balance of such reserves has reached 50% of the share capital. Subject to the
+approval of the equity holders, the statutory surplus reserves can be used for replenishing
+the accumulated losses or increasing the Bank's share capital. The statutory surplus reserves
+amount used to increase the share capital is limited to a level where the balance of the
+statutory surplus reserves after such capitalisation is not less than 25% of the share capital.
+In accordance with a resolution of the Board of Directors dated 31 March 2017, the Bank
+appropriated 10% of the net profit for the year ended 31 December 2016 to the statutory
+surplus reserves, amounting to RMB13,688 million (2015: RMB15,220 million).
+In addition, some operations in Hong Kong, Macau, Taiwan and other countries and regions
+are required to transfer certain percentages of their net profits to the statutory surplus
+reserves as stipulated by local banking authorities.
+39.2 General and regulatory reserves
+271
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+270
+Preference Shares
+(Amount in millions of Renminbi, unless otherwise stated)
+2014 Offshore
+Preference Shares (1)
+399.4
+39,782
+399.4
+39,782
+2014 Domestic
+Preference Shares (2)
+320.0
+31,963
+320.0
+31,963
+2015 Domestic
+Preference Shares (3)
+280.0
+27,969
+-- 280.0
+27,969
+Total
+(1)
+999.4
+999.4
+99,714
+Pursuant to the approvals by the relevant authorities in China, the Bank issued the US Dollar settled non-
+cumulative Offshore Preference Shares in the aggregate par value of RMB39.94 billion on 23 October
+2014. Each Offshore Preference Share has a par value of RMB100 and 399.4 million Offshore Preference
+Shares were issued in total. The initial annual dividend rate is 6.75% and is subsequently subject to reset per
+agreement, but in no case shall exceed 18.07%. Dividends are calculated on the basis of RMB but paid out
+in US Dollars per a fixed exchange rate.
+The Offshore Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBRC, all or part of the Offshore
+Preference Shares may be redeemed at the discretion of the Bank on 23 October 2019 or on any dividend
+payment date thereafter at the redemption price which is the sum of the par value of the Offshore Preference
+Shares and the dividends declared but not yet distributed, as calculated on the basis of RMB but paid out in
+US Dollars per a fixed exchange rate.
+Pursuant to Caijin [2012] No. 20 Requirements on Impairment Allowance for Financial
+Institutions ("Requirement”), issued by the MOF, in addition to the impairment allowance,
+the Bank establishes a general reserve within the equity holders' equity through the
+appropriation of profit to address unidentified potential impairment losses. The general
+reserve as a distribution of profits, being part of the owner's rights and interests, should not
+be less than 1.5% of the aggregate amount of risk assets as defined by the Requirement, and
+the minimum threshold can be accumulated over a period of no more than five years.
+In accordance with a resolution dated 31 March 2017 and on the basis of the Bank's profit
+for the year ended 31 December 2016, the Board of Directors of the Bank approved the
+appropriation of RMB14,505 million (2015: RMB 19,005 million) to the general reserve for
+the year ended 31 December 2016.
+99,714
+272
+2,375
+22,350
+22,363
+7,498
+7,157
+3,675
+3,711
+4,864
+5,049
+6,313
+6,446
+2015
+2016
+As at 31 December
+Total
+Over 3 years
+Between 2 and 3 years
+Between 1 and 2 years
+Within 1 year
+Under irrevocable operating lease contracts, the future minimum lease payments that should
+be paid by the Group are summarised as follows:
+Total
+75,410
+52,659
+273
+The regulatory reserve mainly refers to the reserve amount set aside by BOC Hong Kong
+(Group) Limited (“BOCHK Group”), a subsidiary of the Group, for general banking risks,
+including future losses or other unforeseeable risks. As at 31 December 2016 and 2015,
+the reserve amounts set aside by BOCHK Group were RMB5,712 million and RMB6,651
+million, respectively.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2,959
+Other
+277
+5,640
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+4,658
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+39 Statutory reserves, general and regulatory reserves and undistributed profits
+(Continued)
+39.3 Dividends
+An ordinary share dividend of RMB51,518 million in respect of the profit for the year ended
+31 December 2015 was approved by the equity holders of the Bank at the Annual General
+Meeting held on 7 June 2016 and was distributed during the year.
+An ordinary share dividend of RMB0.168 per share in respect of the profit for the year
+ended 31 December 2016 (2015: RMB0.175 per share), amounting to a total dividend of
+RMB49,457 million based on the number of shares issued as at 31 December 2016 will
+be proposed for approval at the Annual General Meeting to be held on 29 June 2017. The
+dividend payable is not reflected in liabilities of the financial statements.
+Dividends for Preference Shares
+The dividend distribution of Domestic Preference Shares (Second Tranche) amounting
+to RMB1,540 million was approved by the Board of Directors of the Bank at the Board
+Meeting held on 19 January 2016 and the dividend was distributed on 14 March 2016.
+The dividend distribution of Offshore Preference Shares and Domestic Preference Shares
+(First Tranche) was approved by the Board of Directors of the Bank at the Board Meeting
+held on 30 August 2016. The dividend of Offshore Preference Shares amounting to USD487
+million before tax (equivalent to RMB3,258 million) was distributed on 24 October 2016.
+The dividend of Domestic Preference Shares (First Tranche) amounting to RMB1,920
+million was distributed on 21 November 2016.
+Dividends for Ordinary Shares
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+87
+40 Non-controlling interests
+Bank of China Group Investment Limited
+6,335
+60,476
+BOC Hong Kong (Group) Limited
+45,539
+2015
+2016
+As at 31 December
+Non-controlling interests of the subsidiaries of the Group are as follows:
+Tai Fung Bank Limited
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+280
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+Registered capital
+44 Related party transactions (Continued)
+44.2 Transactions with Huijin and companies under Huijin
+Central Huijin Investment Ltd.
+DING Xuedong
+RMB828,209 million
+The Group enters into banking transactions with CIC in the normal course of its business at
+commercial terms.
+Legal representative
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(1) General information of Huijin
+Placements with and loans to banks and
+44 Related party transactions
+Cash and due from banks and other financial institutions
+2015
+Location of registration
+293,410
+217,599
+Balances with central banks
+456,304
+586,733
+other financial institutions
+236,846
+185,606
+Short-term bills and notes
+32,687
+62,140
+Total
+1,019,247
+1,052,078
+44.1 CIC was established on 29 September 2007 with registered capital of RMB1,550
+billion. CIC is a wholly State-owned company engaging in foreign currency investment
+management. The Group is subject to the control of the State Council of the PRC
+government through CIC and its wholly owned subsidiary, Huijin.
+Beijing
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+64.02%
+(84,309)
+13,349
+17,944
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Related party transactions (Continued)
+44.2 Transactions with Huijin and companies under Huijin (Continued)
+(2) Transactions with Huijin (Continued)
+Bonds issued by Huijin
+As at 31 December 2016, the Group held government backed bonds issued by Huijin in the
+carrying value of RMB6,430 million (31 December 2015: RMB6,471 million) which were
+classified as held to maturity and available for sale. These bonds have maturity of not more
+than 30 years and bear fixed interest rates, payable annually. Purchasing of these bonds was
+in the ordinary course of business of the Group, complying with requirements of related
+regulations and corporate governance.
+2016
+(3) Transactions with companies under Huijin
+(57,357)
+75,811
+52,762
+26,442
+64.02%
+Voting rights in the Bank
+Nature
+Principal activities
+Unified Social Credit Code
+(2) Transactions with Huijin
+Wholly State-owned company
+Investment in major State-owned financial
+Capital shares in the Bank
+institutions on behalf of the State Council;
+other related businesses approved
+by the State Council
+911000007109329615
+Due to Huijin
+As at 1 January
+Received during the year
+Repaid during the year
+As at 31 December
+281
+Year ended 31 December
+2015
+17,944
+The Group enters into banking transactions with Huijin in the normal course of its business
+at commercial terms.
+As at 31 December
+V
+Note to the consolidated statement of cash flows
+42 Contingent liabilities and commitments (Continued)
+42.7 Credit commitments
+As at 31 December
+2016
+2015
+Loan commitments (1)
+with an original maturity of less than 1 year
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+179,110
+with an original maturity of 1 year or over
+992,264
+744,650
+Undrawn credit card limits
+673,669
+558,141
+Letters of guarantee issued (2)
+88,629
+1,097,448
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Companies under Huijin include its equity interests in subsidiaries, joint ventures and
+associates in certain other bank and non-bank entities in the PRC. The Group enters into
+banking transactions with these companies in the normal course of business at commercial
+terms which include mainly purchase and sale of debt securities, money market transactions
+and derivative transactions.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+42 Contingent liabilities and commitments (Continued)
+(2) Operating lease commitments As lessor
+The Group acts as lessor in operating leases principally through aircraft leasing undertaken
+by its subsidiary BOC Aviation Limited. Under irrevocable operating lease contracts, as
+at 31 December 2016, the minimum lease payments which will be received by the Group
+under the operating leases for existing aircraft and aircraft yet to be delivered amounted
+to RMB9,212 million not later than one year (31 December 2015: RMB7,001 million),
+RMB37,767 million later than one year and not later than five years (31 December 2015:
+RMB30,115 million) and RMB38,589 million later than five years (31 December 2015:
+RMB30,220 million).
+42.6 Treasury bonds redemption commitments
+The Bank is entrusted by the MOF to underwrite certain Treasury bonds. The investors of
+these Treasury bonds have a right to redeem the bonds at any time prior to maturity and the
+Bank is committed to redeem these Treasury bonds. The MOF will not provide funding for
+the early redemption of these Treasury bonds on a back-to-back basis but will pay interest
+and repay the principal at maturity. The redemption price is the principal value of the bonds
+plus unpaid interest in accordance with the early redemption arrangement.
+As at 31 December 2016, the outstanding principal value of the Treasury bonds sold by the
+Bank under obligation to redeem prior to maturity amounted to RMB46,737 million (31
+December 2015: RMB44,698 million). The original maturities of these Treasury bonds vary
+from 3 to 5 years and management expects the amount of redemption before the maturity
+dates of these bonds through the Bank will not be material.
+278
+BANK OF CHINA LIMITED
+42.5 Operating leases(Continued)
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents
+comprise the following balances with an original maturity of less than three months:
+1,077,070
+331,138
+Credit commitments
+279
+As at 31 December
+2016
+2015
+1,057,647
+1,045,835
+The risk-weighted assets for credit risk of the Group were calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations promulgated by the CBRC under the
+advanced capital measurement approaches. The amounts are determined by the creditworthiness of the
+counterparties, the maturity characteristics of each type of contract and other factors.
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Contingent liabilities and commitments (Continued)
+42.8 Underwriting obligations
+43
+As at 31 December 2016, there was no firm commitment in underwriting securities of the
+Group (31 December 2015: Nil).
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Bank bill acceptance
+Risk-weighted assets for credit risk of credit commitments
+Letters of guarantee issued mainly include financial guarantees and performance guarantees. These
+obligations on the Group to make payment are dependent on the outcome of a future event.
+386,725
+Letters of credit issued
+151,155
+121,720
+Accepted bills of exchange under letters of credit
+119,490
+169,876
+(3)
+Other
+63,222
+Total (3)
+3,589,608
+3,210,033
+(1)
+(2)
+Loan commitments mainly represent undrawn loan facilities agreed and granted to customers.
+Unconditionally revocable loan commitments are not included in loan commitments. As at 31 December
+2016, the unconditionally revocable loan commitments of the Group amounted to RMB255,527 million (31
+December 2015: RMB313,131 million).
+45,334
+The Group's outstanding balances and related interest rate ranges with these companies were
+as follows:
+2016
+2016
+Hong Kong Bora Holdings Limited
+PRC 91340202MA2MRFTW53
+46.83
+46.83
+NA
+Asset management; Investment consulting
+Investment Limited Partnership
+Zhejiang Zheshang Investment
+Hong Kong
+PRC
+ΝΑ
+19.50
+Note (1)
+HKD0.01
+Investment holding
+91330000559679480L
+38.96
+38.96
+NA
+As at 31 December
+Investment
+(1)
+Fund Limited Partnership
+Cinda & BOC (Anhui)
+In accordance with the respective articles of association, the Group has significant influence or joint control over these companies.
+Investment in nuclear power projects and related industries;
+Asset management; Investment consulting
+Investment
+40.00
+NA
+Principal business
+Securities brokerage; securities investment consulting; financial
+advisory services related to securities trading and securities
+investment activities; securities underwriting and sponsorship;
+securities proprietary business; securities asset management;
+securities investment fund sales agency; margin financing and
+securities lending; distribution of financial products; management
+of publicly raised securities investment funds
+Asset management; Investment consulting
+BOC & Cinda (Wuhu) Investment Limited
+Partnership
+PRC 91340202MA2MU5438W
+Graceful Field Worldwide Limited
+BVI
+NA
+80.00
+Note (1)
+USD0.0025
+Investment
+CGN Phase I Private Equity Fund Company
+Limited
+PRC
+91110000717827478Q
+20.00
+20.00
+RMB 100
+Guangdong Small and Medium Enterprises
+Equity Investment Fund Company Limited
+PRC
+91440000564568961E
+40.00
+RMB1,940
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Related party transactions (Continued)
+44.7 Transactions with Connected Natural Persons
+As at 31 December 2016, the Bank's balance of loans to the connected natural persons
+as defined in the Administration of Connected Transactions between Commercial Banks
+and Their Insiders and Shareholders of the CBRC and the Administrative Measures for
+the Disclosure of Information of Listed Companies of the China Security Regulatory
+Commission totalled RMB109 million (31 December 2015: RMB61 million) and RMB11
+million (31 December 2015: RMB18 million) respectively.
+44.8 Balances with subsidiaries
+Mainly included in the following captions of the Bank's statement of financial position are
+balances with subsidiaries:
+As at 31 December
+2016
+2015
+Due from banks and other financial institutions
+Placements with and loans to banks and
+47,406
+32,415
+other financial institutions
+71,543
+64,707
+Due to banks and other financial institutions
+(27,300)
+(58,889)
+Placements from banks and
+other financial institutions
+(98,073)
+(52,888)
+287
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Related party transactions (Continued)
+44.5 Transactions with the Annuity Plan
+Apart from the obligations for defined contributions to Annuity Fund and normal banking
+transactions, no other transactions were conducted between the Group and the Annuity Fund
+for the years ended 31 December 2016 and 2015.
+44.6 Transactions with key management personnel
+Key management personnel are those persons having authority and responsibility for
+planning, directing and controlling the activities of the Group, directly or indirectly,
+including Directors and Executive Officers.
+The Group enters into banking transactions with key management personnel in the normal
+course of business. During the years ended 31 December 2016 and 2015, there were no
+material transactions and balances with key management personnel on an individual basis.
+The key management compensation for the years ended 31 December 2016 and 2015
+comprises:
+Year ended 31 December
+49.00
+2016
+Compensation for short-term employment benefits (¹)
+Compensation for post-employment benefits
+8
+13
+1
+1
+Total
+14
+(1)
+The total compensation package for these key management personnel for the year ended 31 December 2016
+has not yet been finalised in accordance with regulations of the PRC relevant authorities. The amount of
+the compensation not provided for is not expected to have significant impact on the Group's 2016 financial
+statements. The final compensation will be disclosed in a separate announcement when determined.
+286
+BANK OF CHINA LIMITED
+2015
+49.00
+Effective
+equity held
+capital
+(in millions)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Related party transactions (Continued)
+44.3 Transactions with government authorities, agencies, affiliates and other State-controlled
+entities
+44.2 Transactions with Huijin and companies under Huijin (Continued)
+(3) Transactions with companies under Huijin (Continued)
+As at 31 December
+2016
+2015
+BANK OF CHINA LIMITED
+RMB2,500
+Due from banks and other financial institutions
+Placements with and loans to banks and
+other financial institutions
+0.00%-5.50% 0.00%-5.70%
+0.00%-8.30% 0.00%-6.20%
+Financial assets at fair value through profit or loss
+and financial investments
+Due to customers, banks and
+other financial institutions
+Placements from banks and
+other financial institutions
+Interest rate ranges
+282
+2,553
+4,599
+Derivative financial liabilities
+(205,400)
+(71,632)
+Placements from banks and other financial institutions
+(313,280)
+(184,894)
+Due to customers, banks and other financial institutions
+10,533
+12,868
+Loans and advances to customers
+2,542
+7,606
+Derivative financial assets
+389,968
+229,305
+and financial investments
+Financial assets at fair value through profit or loss
+122,169
+106,948
+other financial institutions
+35,668
+117,584
+Due from banks and other financial institutions
+Placements with and loans to banks and
+2015
+Credit commitments
+Loans and advances to customers
+(4,022)
+0.00%-6.74% 0.00%-6.38%
+1.23%-4.75% 0.66%-6.40%
+0.00%-9.50%
+284
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44
+Related party transactions (Continued)
+285
+44.4 Transactions with associates and joint ventures (Continued)
+2,261
+The general information of principal associates and joint ventures is as follows:
+BOC International (China) Limited
+Place of
+incorporation/
+establishment
+Unified Social
+Credit Code
+Voting right
+(%)
+(%)
+PRC
+91310000736650364G
+37.14
+37.14
+Paid-in
+Name
+(8,975)
+(8,270)
+16,845
+Credit commitments
+0.00%-9.50%
+The State Council of the PRC government directly and indirectly controls a significant
+number of entities through its government authorities, agencies, affiliates and other
+State-controlled entities. The Group enters into extensive banking transactions with these
+entities in the normal course of business at commercial terms.
+Transactions conducted with government authorities, agencies, affiliates and other State-
+controlled entities include purchase and redemption of investment securities issued by
+government agencies, underwriting and distribution of Treasury bonds issued by government
+agencies through the Group's branch network, foreign exchange transactions and derivative
+transactions, lending, provision of credit and guarantees and deposit placing and taking.
+283
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+0.00%-6.10% 0.00%-6.25%
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+44.4 Transactions with associates and joint ventures
+The Group enters into banking transactions with associates and joint ventures in the normal
+course of business at commercial terms. These include loans and advances, deposit taking
+and other normal banking businesses. The main outstanding balances with associates and
+joint ventures are stated below:
+As at 31 December
+2016
+2015
+Loans and advances to customers
+2,464
+593
+Due to customers, banks and other financial institutions
+44 Related party transactions (Continued)
+(2,631)
+2
+Investments include financial investments available for sale, debt securities held to maturity, financial investments
+classified as loans and receivables, and financial assets at fair value through profit or loss.
+1
+Notes:
+100.00%
+54,209
+10,909
+199,915
+12,501,297
+Due to customers
+Interest-bearing liabilities
+(103,634) (48,917)
+54,717
+3.96%
+1.60%
+615,056
+566,139
+16,767,348
+Total
+(8,446) (11,847)
+(3,401)
+3.47%
+41,800
+3.38% 15,524,458
+4.02%
+11,388,012
+1.94%
+271,374
+3.78%
+12,183
+322,431
+Bonds issued
+(4,280) (6,216)
+(1,936)
+221,288
+2.01%
+1.84% 2,703,157
+47,993
+2,606,838
+due to central banks
+other financial institutions and
+Due to and placements from banks and
+21,598 (42,971) (21,373)
+Other borrowed funds include bonds issued and other borrowings.
+25
+1,078,533
+In line with China's macroeconomic policies and the financial demands of the real economy, the
+Bank rationally allocated credit extension and expanded its lending scale at a stable and moderate
+pace. The Bank continually improved its credit structure, supported key national investment
+fields, promoted the coordinated development of regional economies and provided credit support
+to a series of national projects, such as the construction of the “Belt and Road” financial artery,
+cross-border capacity transfer and Chinese enterprises” “"Going Global” initiative. The Bank
+strictly controlled credit facilities granted to industries characterised by high pollution, high
+energy consumption and overcapacity. As at the end of 2016, the Group's loans and advances
+to customers amounted to RMB9,973.362 billion, an increase of RMB837.502 billion or 9.17%
+compared with the prior year-end. Specifically, the Group's RMB loans and advances to
+customers totalled RMB7,607.730 billion, an increase of RMB595.863 billion or 8.50% compared
+with the prior year-end, while its foreign currency loans amounted to USD341.017 billion, an
+increase of USD13.927 billion or 4.26%.
+160,000
+China Orient Asset Management Corporation
+7.75%
+278,719
+4.79%
+190,222
+Corporates
+8.15%
+292,978
+7.37%
+4.03%
+292,861
+12.28%
+441,288
+9.81%
+389,774
+Policy banks
+1.73%
+62,293
+1.31%
+52,015
+Public sectors and quasi-governments
+Financial institutions
+160,000
+4.45%
+Subtotal
+120,620
+Corporates
+4.37%
+157,267
+5.47%
+217,554
+Financial institutions
+1.41%
+50,534
+2.27%
+90,101
+Public sectors and quasi-governments
+8.05%
+289,498
+8.62%
+342,698
+Governments
+other countries and regions
+Issuers in Hong Kong, Macau, Taiwan and
+73.62%
+2,646,753
+77.77%
+3,089,599
+39.26%
+Loans and Advances to Customers
+1,411,475
+2,004,727
+40.52%
+1,609,830
+Financial investments available for sale
+3.31%
+119,062
+3.12%
+124,090
+Financial assets at fair value through profit or loss
+% of total
+Amount
+2.71% 1,204,278
+% of total
+Items
+As at 31 December 2016
+Unit: RMB million, except percentages
+As at 31 December 2015
+The classification of the Group's investment portfolio is shown below:
+26
+26
+As at the end of 2016, the Group held investments of RMB3,972.884 billion, an increase of
+RMB377.789 billion or 10.51% compared with the prior year-end. Specifically, the Group's
+RMB investments totalled RMB3,000.935 billion, an increase of RMB167.873 billion or 5.93%
+compared with the prior year-end, while foreign currency investments totalled USD140.111
+billion, an increase of USD22.760 billion or 19.39% compared with the prior year-end.
+The Bank tracked market dynamics, increased its investment in both RMB and foreign currency
+bonds, continuously adjusted its investment structure, properly managed investment portfolio
+duration and struck a balance between risk and return.
+Investments
+The Bank further improved its risk management, paid close attention to changes in the
+macroeconomic situation, strengthened risk identification and management in key areas and made
+more efforts to dispose the non-performing assets, maintaining a relatively stable asset quality.
+As at the end of 2016, the balance of the Group's allowance for loan impairment losses amounted
+to RMB237.716 billion, an increase of RMB37.051 billion compared with the prior year-end.
+The balance of the Group's restructured loans amounted to RMB9.699 billion, an increase of
+RMB4.394 billion compared with the prior year-end.
+Amount
+30.00%
+Debt securities held to maturity
+1,843,043
+Government
+Issuers in Chinese mainland
+Amount % of total
+Amount % of total
+As at 31 December 2016
+Unit: RMB million, except percentages
+As at 31 December 2015
+Debt securities
+Items
+Investments by Issuer Type
+100.00%
+3,595,095
+100.00%
+3,972,884
+Total
+16.88%
+606,710
+9.97%
+395,921
+loans and receivables
+Financial investments classified as
+49.81%
+1,790,790
+46.39%
+50.46%
+29,953
+435,062
+and other financial institutions
+2014
+2013
+19
+2012
+0.0
+5.50
+5.80
+0.8
+6.10
+1.6
+2015
+6.40
+6.70
+3.2
+7.00
+Source: Thomson Reuters EcoWin
+rate index (left axis)
+RMB nominal effective
+RMB real effective
+rate index (left axis)
+2016
+2015
+2014
+2.4
+2016
+RMB loans growth rate (right axis, %)
+RMB deposits growth rate (right axis,%)
+New RMB loans (left axis, RMB trillion)
+M2 growth rate (right axis, %)
+88,664
+commission income
+Including: net fee and
+23.64%
+34,346
+145,262
+179,608
+Non-interest income
+(22,602) (6.88%)
+328,650
+306,048
+Net interest income
+2015 Change Change (%)
+2016
+Items
+Unit: RMB million, except percentages
+The principal components and changes of the Group's consolidated income statement are set out
+below:
+In 2016, the Group achieved a profit for the year of RMB184.051 billion, an increase of 2.58%
+compared with the prior year. Return on average total assets (ROA) was 1.05%, a decrease
+of 0.07 percentage point compared with the prior year. Return on average equity (ROE) was
+12.58%, a decrease of 1.95 percentage points compared with the prior year.
+Income Statement Analysis
+10
+15
+20
+Source: Thomson Reuters EcoWin
+2013
+92,410
+USD/RMB
+(right axis)
+(2012 to 2016)
+2013
+2012
+50
+100
+0
+150
+2
+% 4
+6
+8
+2014
+Benchmark Interest Rates of
+Major Countries/Regions (2012 to 2016)
+Growth of Global and Chinese Economy
+China's banking sector remained stable. Commercial banks implemented the five development
+concepts of innovation, coordination, green development, opening-up and sharing, achieving
+positive results in terms of serving the real economy, optimising business structure, facilitating
+reform and innovation, and strengthening risk control. The banking sector supported supply-
+side structural reform and constantly improved its ability to serve the real economy. It devoted
+greater efforts to developing inclusive finance, supported micro and small-sized enterprises'
+development, and created effective solutions to reduce the financing difficulties and the cost of
+financing. It accelerated innovation in business models, continued to promote the "investment and
+loan linkage mechanism” pilot programme and supported the growth of the new economy and the
+cultivation of new growth drivers. promoted the two-way opening up of the financial industry
+and extended the breadth and depth of overseas financial services. The banking sector reinforced
+its comprehensive risk management capacities, effectively eliminated the credit risk associated
+with sectors plagued by overcapacity and resolutely prevented systemic and regional financial
+risks. As at the end of 2016, the total assets of China's banking industry grew by 15.8% from
+the prior year-end to RMB232.3 trillion, while total liabilities increased by 16% to RMB214.8
+trillion. Commercial banks recorded profit after tax of RMB1.65 trillion, an increase of 3.54%
+compared with the prior year. The outstanding non-performing loans (NPLs) stood at RMB1.5123
+trillion, with an NPL ratio of 1.74%.
+18
+The Chinese government continued to carry out proactive fiscal policy and prudent monetary
+policy. On-going financial reform efforts included the introduction of a macro prudential
+assessment (MPA) system, faster opening up of the inter-bank bond market, the launch of the
+Shenzhen-Hong Kong Stock Connect and the promotion of non-performing asset securitisation
+and trials of debt-for-equity conversion. Monetary credit realised steady growth and financial
+markets functioned smoothly. The broad money supply (M2) grew by 11.3%, 2 percentage points
+lower than the growth rate of the prior year. The balance of RMB loans increased by RMB12.65
+trillion, RMB0.93 trillion more than that of the prior year. The balance of all-system financing
+aggregates was RMB 155.99 trillion, an increase of 12.8% compared with the prior year. The scale
+of bond issuance grew to a total issuance of RMB35.6 trillion, an increase of 55.5% compared
+with the prior year. The SSE composite index dropped by 12.3%, and the floating market value of
+the Shanghai and Shenzhen stock markets declined by 5.9% compared with the prior year.
+China's economy realised moderate but stable performance with sound momentum for growth.
+The country's economic structure continued to be improved, with consumption and service
+sector making greater contributions towards economic growth and enterprises' profits gradually
+improving. Supply-side structural reform was accelerated, the number of new jobs increased
+steadily and inflation remained at a low level. There were also challenges, such as a dearth of
+endogenous growth drivers and fast-rising property prices. In 2016, China's gross domestic
+product (GDP) increased by 6.7%, with the consumer price index (CPI) rising by 2.0%. Total
+retail sales of consumer goods (TRSCG) increased by 10.4%. Total fixed asset investments
+(TFAI) grew by 8.1%. Energy consumption per unit of GDP decreased by 5.0%.
+Global financial markets experienced heightened volatility. Emerging economies faced increasing
+pressures on capital outflows and exchange rate depreciation as a result of Brexit and the US
+Federal Reserve's interest rate hike, etc. The US dollar appreciated strongly against the currencies
+of its major trade partners. Commodity prices experienced a moderate recovery, while the bond
+markets of some developed countries entered an era of “negative interest rates".
+In 2016, the global economy was characterised by sluggish growth and persistent differences
+among various economies' growth patterns. The US economy rallied after a disappointing start.
+The Eurozone economy experienced a mild recovery. Japan's economy grew slowly. Growth in
+some emerging economies slowed due to the effecting factors of external demand and capital
+outflows. The growth rate of international trade was the lowest since 2010, and international
+direct investment fell substantially.
+Economic and Financial Environment
+FINANCIAL REVIEW
+Management Discussion and Analysis
+(2012 to 2016)
+2015
+4.0
+3.5
+Growth of Chinese Money Supply and Loans
+Source: Thomson Reuters EcoWin
+ECB MRO rate
+U.S. federal fund rate
+RMB 1-year deposit rate
+HKD discount rate
+(2012 to 2016)
+Movement of RMB Exchange Rate
+Source: International Monetary Fund (IMF),
+National Bureau of Statistics of China
+Growth rate of Chinese economy
+Growth rate of global economy
+2016
+2015
+2014
+2013
+2012
+2016
+0.0
+0.5
+1.0
+1.5
+% 2.0
+2.5
+3.0
+2012
+(3,746)
+(4.05%)
+Operating income
+Items
+Total
+rate factor
+factor
+interest rate
+expense
+balance
+expense interest rate
+balance
+Interest
+Group
+Volume
+income/
+Average
+Average
+income/
+Average
+Interest
+2015
+2016
+Interest
+income/expense
+Unit: RMB million, except percentages
+Analysis of changes in interest
+Average
+Interest-earning assets
+Loans
+9,705,782 391,956
+Due from and placements with banks
+288
+637
+(349)
+1.31%
+29,543
+2,257,994
+5,748
+19,947 (14,199)
+3.45%
+108,651
+3,145,750
+3.07%
+1.34%
+3,723,928 114,399
+29,831
+2,231,364
+Balances with central banks
+Investments
+(43,106)
+(81,626)
+38,520
+4.88%
+3.04%
+4.04% 8,916,436
+In 2016, the Group achieved a net interest income of RMB306.048 billion, a decrease of
+RMB22.602 billion or 6.88% compared with the prior year. The average balances' and average
+interest rates of the major interest-earning assets and interest-bearing liabilities of the Group, as
+well as the impact of volume and interest rate changes on the interest income and expense², are
+summarised in the following table:
+Net Interest Income and Net Interest Margin
+20
+20
+13,793 (26.45%)
+4,634
+2.58%
+(9,159) (3.96%)
+222,412 231,571
+(38,361) (52,154)
+184,051 179,417
+Income tax expense
+Profit before income tax
+(3.37%)
+(7,722)
+229,237
+221,515
+Operating profit
+50.27%
+(29,798)
+(89,072) (59,274)
+Impairment losses on assets
+(5.57%)
+10,332
+(185,401)
+(175,069)
+Operating expenses
+2.48%
+11,744
+473,912
+485,656
+Profit for the year
+1,106,274
+A detailed review of the Group's principal items in each quarter of 2016 is summarised in the
+following table:
+For the three-month period ended
+(150,663)
+184,996
+(87,017)
+234,765
+Net cash flow from operating activities
+46,619
+46,418
+41,776
+29,765
+of the Bank
+Profit attributable to equity holders
+123,113
+139,506
+107,660
+115,377
+31 March
+2016
+2016
+2016
+2016
+Operating income
+Items
+30 June
+31 December 30 September
+Unit: RMB million
+106,776
+313,210
+Subtotal
+Loans
+54,490
+2.22%
+75,272
+2.35%
+(20,782)
+(13) Bps
+Due to customers
+Corporate demand deposits
+36,762
+Unit: USD million, except percentages
+0.13%
+0.14%
+9,731
+(1) Bp
+Corporate time deposits
+16,602
+1.14%
+19,854
+1.80%
+(3,252)
+(66) Bps
+27,031
+Domestic foreign currency businesses
+(39) Bps
+817,957
+1,381,000
+0.52%
+251,989
+7 Bps
+Personal time deposits
+2,554,838
+2.88%
+2,435,218
+3.37%
+119,620
+(49) Bps
+Other
+336,713
+3.22%
+316,189
+4.09%
+20,524
+(87) Bps
+Total
+9,310,379
+1.89%
+8,492,422
+2.28%
+Personal demand deposits
+0.59%
+24,916
+19,695
+Second, according to the requirements of the Notice concerning the Nationwide Adoption of
+Value-added Tax in lieu of Business Tax Pilot Tax Collection Policy (Caishui [2016] No. 36), all
+of the Bank's institutions in the Chinese mainland started to change from business tax to value-
+added tax (BT-to-VAT) as of 1 May 2016. Accordingly, interest income under VAT was reported
+on a net basis.
+Third, in response to changes in the external environment, the Bank effectively optimised
+existing assets and liabilities and efficiently allocated their increments, resulting in continuous
+improvement to its assets and liabilities structure. In 2016, the proportion of the average balance
+of loans to total interest-earning assets rose by 0.45 percentage point, and the proportion of the
+average balance of investments to total interest-earning assets rose by 1.95 percentage points. The
+proportion of the average balance of demand deposits to RMB deposits in the Group's domestic
+RMB businesses rose by 3.47 percentage points.
+22
+Non-interest Income
+In 2016, the Group reported a non-interest income of RMB179.608 billion, an increase of
+RMB34.346 billion or 23.64% compared with the prior year. Non-interest income represented
+36.98% of operating income.
+Net fee and Commission Income
+The Group earned a net fee and commission income of RMB88.664 billion, a decrease of
+RMB3.746 billion or 4.05% compared with the prior year. Net fee and commission income
+represented 18.26% of operating income. This was primarily because the Bank made great
+efforts to support the national strategy of mass entrepreneurship and innovation and proactively
+fulfilled its social responsibility to support the real economy, and reduced enterprises' operating
+and trading costs. As a result, the Bank's fee and commission income from credit commitment
+business and consultancy and advisory business decreased compared with the prior year. The
+Bank's fee and commission income from settlement and clearing business also shrank due to
+a contraction in overseas trading volumes. On the other hand, the Bank seized opportunities
+to develop its asset management business, continually reinforced its product innovation and
+improved its investment management capability. As a result, the Bank realised a fee income of
+RMB9.169 billion from off-balance-sheet wealth management products business and a fee income
+of RMB4.673 billion from insurance agency business.
+Items
+Group
+Agency commissions
+2016
+First, the PBOC cut RMB benchmark deposit and loan interest rates on five separate occasions
+and removed the floating deposit rate ceiling altogether for commercial banks in 2015. The
+repercussions of these changes continued into 2016.
+Unit: RMB million, except percentages
+2015 Change Change (%)
+24,481
+(303) (1.24%)
+Bank card fees
+24,054
+24,215
+(161)
+(0.66%)
+Settlement and clearing fees
+11,113
+11,888
+24,178
+In 2016, the Group's net interest margin was 1.83%, a decrease of 29 basis points compared
+with the prior year. Specifically, net interest margin of its domestic RMB and domestic foreign
+currency businesses were 2.06% and 0.63% respectively. Major factors that affected the Group's
+net interest margin include:
+Note: "Due to customers - Other" includes structured deposits.
+(24) Bps
+0.05%
+5,221
+2 Bps
+Personal time deposits
+18,711
+0.58%
+15,532
+0.63%
+3,179
+(5) Bps
+Other
+2,120
+2.41%
+2,466
+2.31%
+(346)
+10 Bps
+Total
+99,111
+0.42%
+84,578
+0.66%
+14,533
+0.07%
+(775)
+1,632,989
+(46) Bps
+Due to and placements from banks and other financial institutions and due to central banks include due to and
+placements from banks and other financial institutions, due to central banks and other funds.
+1
+2
+Average balances are average daily balances derived from the Group's management accounts (unaudited).
+The impact on interest income/expense of variances in the volume factor is calculated based on the changes in
+average balances of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+on interest income/expense of variances in interest rate factor is calculated based on the changes in the average
+interest rates of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+relating to the combined changes in both the volume factor and the interest rate factor has been classified as
+changes in interest rate factor.
+21
+The average balances and average interest rates of domestic loans and due to customers, classified
+by business type, are summarised in the following table:
+Unit: RMB million, except percentages
+2016
+2015
+Change
+Balances with central banks include the mandatory reserves, the surplus reserves and other deposits.
+Average
+Average
+balance interest rate
+Average
+balance
+Average
+interest rate
+Average
+balance
+Average
+interest rate
+Domestic RMB businesses
+Loans
+Corporate loans
+4,265,998
+Items
+Investments include available for sale debt securities, held to maturity debt securities, debt securities classified as
+loans and receivables, trading debt securities, debt securities designated at fair value through profit or loss, and
+investment trusts and asset management plans.
+3
+2
+2,052
+(778)
+1,274
+Total
+Net interest income
+Net interest margin
+15,430,566
+260,091
+1.69% 14,362,543
+286,406
+1.99%
+21,714 (48,029)
+(26,315)
+306,048
+328,650
+33,003
+(55,605)
+(22,602)
+1.83%
+2.12%
+(29) Bps
+Notes:
+1
+4.73%
+Personal demand deposits
+4,022,655
+243,343
+5.98%
+497,357
+(120) Bps
+Short term loans within 1 year and others
+2,405,857
+4.14% 2,146,967
+5.35%
+258,890
+(121) Bps
+Due to customers
+4,312,654
+Corporate demand deposits
+0.60% 2,144,678
+0.69%
+411,231
+(9) Bps
+Corporate time deposits
+2,229,930
+2.99%
+2,215,337
+3.45%
+14,593
+2,555,909
+4.78%
+4,810,011
+Medium and long term loans
+(127) Bps
+Personal loans
+2,701,868
+4.42%
+2,234,610
+5.44%
+467,258
+(102) Bps
+Trade bills
+248,002
+3.34%
+202,356
+4.75%
+45,646
+(141) Bps
+Total
+7,215,868
+4.57%
+6,459,621
+5.77%
+756,247
+(120) Bps
+Including:
+6.00%
+2.97%
+(6.52%)
+15,426
+Total
+175,069
+185,401
+(10,332) (5.57%)
+Impairment Losses on Assets
+The Bank continued to improve its comprehensive risk management system and adopted a
+proactive and forward-looking approach to risk management, thus ensuring a relatively stable
+credit asset quality. It stringently implemented a prudent risk provisioning policy and maintained
+an adequate capacity of risk mitigation. In 2016, the Group's impairment losses on loans and
+advances totalled RMB86.795 billion, an increase of RMB30.923 billion or 55.35% compared
+with the prior year. In particular, collectively-assessed impairment losses stood at RMB56.287
+billion, an increase of RMB30.479 billion compared with the prior year, while individually-
+assessed impairment losses stood at RMB30.508 billion, an increase of RMB0.444 billion
+compared with the prior year. Please refer to the section "Risk Management Credit Risk
+Management” and Notes V.9, VI.3 to the Consolidated Financial Statements for more information
+on loan quality and allowance for loan impairment losses.
+24
+14
+Income Tax Expense
+In 2016, the Group incurred income tax of RMB38.361 billion, a decrease of RMB13.793 billion
+or 26.45% compared with the prior year. This was primarily attributable to the increase in bond
+investment, for which the Bank enjoyed a preferential rate of corporate income tax. The Group's
+effective tax rate was 17.25%. Please refer to Note V.10 to the Consolidated Financial Statements
+for the reconciliation of the statutory income tax rate to the effective income tax rate.
+2,304
+Financial Position Analysis
+The principal components of the Group's consolidated statement of financial position are set out
+below:
+Items
+Unit: RMB million, except percentages
+As at 31 December 2015
+Amount % of total
+As at 31 December 2016
+Amount % of total
+Assets
+Loans and advances to customers, net
+9,735,646
+Investments
+3,972,884
+Balances with central banks
+As at the end of 2016, the Group's total assets amounted to RMB18,148.889 billion, an increase
+of RMB1,333.292 billion or 7.93% compared with the prior year-end. The Group's total liabilities
+amounted to RMB16,661.797 billion, an increase of RMB1,203.805 billion or 7.79% compared
+with the prior year-end.
+10,331
+12,635
+Other
+756
+0.94%
+General operating and
+administrative expenses
+41,565
+40,671
+894
+2.20%
+Depreciation and amortisation
+13,175
+13,218
+(43)
+(0.33%)
+Taxes and surcharges
+9,810
+26,734
+(16,924)
+(63.31%)
+Insurance benefits and claims
+16,804
+14,123
+2,681
+18.98%
+2,271,640
+80,324
+53.64% 8,935,195
+21.89% 3,595,095
+12.52% 2,196,063
+21.38%
+2.03%
+Other liabilities
+Total liabilities
+742,166
+16,661,797
+4.45%
+787,638
+5.09%
+27
+27
+100.00%
+2.34%
+100.00% 3,595,095
+Total
+9.58%
+344,267
+2.83%
+112,312
+16.80%
+604,075
+19.40%
+770,973
+Equity instruments and others
+3,972,884
+389,470
+Other borrowed funds
+17.00%
+13.06%
+Due from and placements with banks and
+other financial institutions
+1,176,482
+Other assets
+992,237
+Total assets
+18,148,889
+6.48%
+5.47% 1,081,389
+100.00% 16,815,597
+1,007,855
+5.99%
+6.43%
+100.00%
+Liabilities
+Due to customers
+12,939,748
+77.66% 11,729,171
+75.88%
+Due to and placements from banks and
+other financial institutions and
+due to central banks
+2,590,413
+15.55% 2,627,973
+53.14%
+Credit commitment fees
+81,080
+2015
+(2,586)
+(2.56%)
+Fee and commission expense
+(9,655)
+(8,495) (1,160)
+13.66%
+Net fee and commission income
+88,664
+92,410
+(3,746) (4.05%)
+100,905
+Domestic
+18,278
+16,951
+1,327
+7.83%
+Bank card fees
+20,366
+20,771
+(405)
+(1.95%)
+Settlement and clearing fees
+Agency commissions
+98,319
+Fee and commission income
+4.93%
+16,541
+(1,115)
+(6.74%)
+Consultancy and advisory fees
+5,701
+5,757
+(56)
+(0.97%)
+Spread income from foreign
+exchange business
+7,149
+7,388
+(239)
+(3.23%)
+Custodian and other fiduciary service fees
+3,397
+3,677
+(280)
+(7.61%)
+Other
+7,301
+6,958
+343
+9,613
+Staff costs
+10,237
+(6.10%)
+75,253
+78,445
+(3,192)
+(4.07%)
+Fee and commission expense
+(4,550)
+(3,225)
+(1,325)
+41.09%
+Net fee and commission income
+Fee and commission income
+70,703
+(4,517)
+(6.01%)
+23
+Other Non-interest Income
+The Group realised other non-interest income of RMB90.944 billion, an increase of RMB38.092
+billion or 72.07% compared with the prior year. This was primarily because the Bank completed
+the sale and delivery of Nanyang Commercial Bank, Limited (NCB) and recognised the related
+gain from the investment disposal. Meanwhile, net gains on financial investments realised rapid
+growth compared with the prior year. Please refer to Notes V.3, 4, 5 to the Consolidated Financial
+Statements for detailed information.
+Operating Expenses
+The Bank continued to operate its business prudently. It further optimised its cost structure,
+tightened control over administrative expenses, allocated greater resources to key areas, business
+frontlines and overseas institutions and made greater efforts to support internet finance, RMB
+internationalisation and the construction of smart service outlets, thus continually improving its
+overall input-output efficiency. In 2016, the Group recorded operating expenses of RMB 175.069
+billion, a decrease of RMB10.332 billion or 5.57% compared with the prior year. The Group's
+cost to income ratio (calculated in accordance with domestic regulations) was 28.08%, a decrease
+of 0.22 percentage point compared with the prior year. Please refer to Notes V.6, 7 to the
+Consolidated Financial Statements for detailed information.
+Items
+Unit: RMB million, except percentages
+Change Change (%)
+2016
+75,220
+(18.00%)
+(907)
+5,040
+Credit commitment fees
+7,685
+9,891
+(2,206)
+(22.30%)
+Consultancy and advisory fees
+5,561
+5,677
+(116)
+(2.04%)
+Spread income from foreign
+exchange business
+6,335
+6,556
+(221)
+(3.37%)
+Custodian and other fiduciary service fees
+3,282
+3,322
+(40)
+(1.20%)
+Other
+4,133
+(624)
+22.30%
+100.00%
+15,457,992
+5,675,800
+89,644
+70,452
+913
+2,155
+(1,486)
+328,650
+Fee and commission income
+41,428
+41,356
+14,738
+4,326
+658
+(1,601)
+100,905
+Fee and commission expense
+166,972
+(2,943)
+Net interest income/(expense)
+55,561
+Interest income
+338,078
+186,931
+141,272
+1,228
+2,166
+942
+(286,406)
+(55,561)
+Interest expense
+(171,106)
+(97,287)
+(70,820)
+(315)
+(11)
+(2,428)
+615,056
+Total
+(2,948)
+(1,205)
+13
+9,460
+Net gains on financial investments
+10
+519
+3,771
+295
+(419)
+413
+5,765
+Other operating income
+688
+6,508
+1,263
+307
+16,968
+757
+(753)
+(582)
+9,493
+(1,834)
+(32)
+1,220
+(8,495)
+Net fee and commission income
+38,485
+38,408
+306
+13,985
+(1,834)
+626
+(381)
+92,410
+Net trading gains/(losses)
+76
+573
+3,121
+Elimination
+Other
+Insurance
+(31,513)
+32,059
+(17,298)
+2,366,627
+49,998
+112,474
+162,974
+(84,382)
+(18,072)
+16,661,797
+Intersegment net interest income/(expense)
+21,591
+65,132
+(86,117)
+88
+53
+(747)
+Other segment items:
+Intersegment net fee and commission
+(13,441)
+63,251
+Hong Kong, Macau and Taiwan
+Chinese
+BOCHK
+Other countries
+mainland
+Group
+Other
+(262,336)
+Subtotal
+Elimination
+Interest income
+Interest expense
+Net interest income
+544,487
+38,541
+24,710
+and regions
+income/(expense)
+102
+1,411
+293
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Segment reporting (Continued)
+3,589,608
+As at and for the year ended 31 December 2015
+Personal
+Treasury
+Investment
+banking
+banking
+operations
+banking
+Corporate
+786,268
+2,803,340
+Credit commitments
+17
+Capital expenditure
+3,442
+3,812
+182
+(162)
+131
+(1,324)
+116
+Depreciation and amortisation
+4,891
+6,000
+1,274
+73
+160
+309
+26,424
+3,293
+(353)
+34,107
+15,691
+13,878
+(1,985)
+37,627
+Operating income
+6,178
+1,168
+68
+92
+3,056
+Credit commitments
+2,559,433
+5,046
+650,600
+294
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+46 Transfers of financial assets
+36,898
+15,608
+3,210,033
+The Group enters into transactions in the normal course of business by which it transfers
+recognised financial assets to third parties or to special purpose entities. In some cases
+where these transferred financial assets qualify for derecognition, the transfers may give rise
+to full or partial derecognition of the financial assets concerned. In other cases where the
+transferred assets do not qualify for derecognition as the Group has retained substantially all
+the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+Depreciation and amortisation
+313
+29,382
+(35,228)
+166
+116
+(773)
+Intersegment net fee and commission
+income/(expense)
+495
+(381)
+781
+(1,207)
+Capital expenditure
+3,371
+3,738
+178
+125
+104
+(1)
+54,247
+Repurchase agreements
+The following table analyses the carrying amount of the abovementioned financial assets
+transferred to third parties that did not qualify for derecognition and their associated
+financial liabilities:
+Credit assets transfers
+The Group enters into credit assets transfers in the normal course of business during which it
+transfers credit assets to special purpose entities which in turn issue asset-backed securities
+or fund shares to investors. The Group may acquire some asset-backed securities and fund
+shares at the subordinated tranche level and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to
+derecognise the associated credit assets by evaluating the extent to which it retains the risks
+and rewards of the assets.
+With respect to the credit assets that were securitised and qualified for derecognition,
+the Group derecognised the transferred credit assets in their entirety. The corresponding
+total carrying amount of asset-backed securities held by the Group in the securitisation
+transactions was RMB1,719 million as at 31 December 2016 (31 December 2015: RMB858
+million), which also approximates the Group's maximum exposure to loss.
+For those in which the Group has neither transferred nor retained substantially all the risks
+and rewards of the transferred credit assets, and retained control of the credit assets, the
+transferred credit assets are recognised on the statement of financial position to the extent
+of the Group's continuing involvement. The carrying amount at the time of transfer of
+the original credit assets, which the Group determined that it has continuing involvement
+through acquiring some tranches, was RMB22,721 million for this year (2015: RMB3,385
+million) and the carrying amount of assets that the Group continues to recognise on
+the statement of financial position was RMB3,370 million as at 31 December 2016 (31
+December 2015: RMB614 million).
+296
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+46 Transfers of financial assets(Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+23 July 1992
+47 Interests in the unconsolidated structured entities
+The Group is principally involved with structured entities through financial investments,
+asset management and credit assets transfers. These structured entities generally finance the
+purchase of assets by issuing securities or by other means. The Group determines whether or
+not to consolidate these structured entities depending on whether the Group has control over
+them. The interests held by the Group in the unconsolidated structured entities are set out as
+below:
+Structured entities sponsored by the Group
+In conducting wealth management business in Chinese mainland, the Group established
+various structured entities to provide customers specialised investment opportunities within
+narrow and well-defined objectives. As at 31 December 2016, the balance of the above
+unconsolidated bank wealth management products sponsored by the Group amounted to
+RMB1,176,824 million (31 December 2015: RMB1,107,079 million). For the year ended
+31 December 2016, fee and commission income from wealth management business, which
+includes commission, custodian fee and management fee amounted to RMB9,354 million
+(2015: RMB8,597 million).
+For the purpose of asset-liability management, wealth management products may raise
+short-term financing needs to the Group and other banks. The Group is not contractually
+obliged to provide financing. After internal risk assessment, the Group may enter into
+repurchase and placement transactions with these wealth management products in
+accordance with market principles. For the year ended 31 December 2016, the maximum
+balance of such financing provided by the Group to the unconsolidated wealth management
+products was RMB26,000 million (2015: RMB19,300 million). Such financing provided
+by the Group was included in “Placements with and loans to banks and other financial
+institutions". As at 31 December 2016, the balance of above trading was nil (31 December
+2015: Nil). The maximum exposure to loss of those placements approximated to the carrying
+amount.
+(Amount in millions of Renminbi, unless otherwise stated)
+Transferred financial assets that do not qualify for derecognition mainly include debt
+securities held by counterparties as collateral under repurchase agreements and securities
+lent to counterparties under securities lending agreements. The counterparties are allowed
+to sell or re-pledge those securities in the absence of default by the Group, but have an
+obligation to return the securities at the maturity of the contract. If the securities increase
+or decrease in value, the Group may in certain circumstances require or be required to pay
+additional cash collateral. The Group has determined that the Group retains substantially
+all the risks and rewards of these securities and therefore has not derecognised them. In
+addition, the Group recognises a financial liability for cash received as collateral.
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+assets
+As at 31 December 2016
+Carrying Carrying
+amount of amount of
+transferred associated
+liabilities
+As at 31 December 2015
+Carrying
+amount of
+transferred
+Carrying
+amount of
+associated
+assets
+(Amount in millions of Renminbi, unless otherwise stated)
+liabilities
+45,558
+44,695
+5,170
+4,942
+295
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Repurchase agreements
+As at and for the year ended 31 December 2015
+(18,528)
+Other segment items:
+(1,793)
+60
+(67)
+(959)
+(59,274)
+Operating profit
+90,515
+(14,362)
+50,696
+2,244
+1,139
+6,322
+229,237
+Share of results of associates and joint ventures
+844
+(4)
+78,321
+1,533
+(42,153)
+(185,401)
+Operating expenses
+206,231
+135,652
+98,964
+4,942
+17,120
+13,356
+Impairment losses on assets
+(2,353)
+(73,563)
+(70,594)
+(18,850)
+(2,758)
+(15,914)
+(6,075)
+2,353
+473,912
+Intersegment net interest (expense)/income
+(39)
+Profit before income tax
+7,185,768
+2,960,341
+6,300,439
+77,946
+106,706
+Segment liabilities
+7,907,454
+Total assets
+5,232,341
+64,366
+93,485
+279,010
+7,015
+286,025
+183,047
+(101,568)
+(60)
+(101,628)
+(101,407)
+16,804,754
+10,843
+16,815,597
+15,457,992
+2,078,706
+2,334
+106,706
+Investment in associates and joint ventures
+90,515
+50,696
+78,321
+3,088
+1,135
+7,855
+(39)
+74,058
+3,888
+231,571
+(52,154)
+Profit for the year
+179,417
+Segment assets
+7,185,768
+2,960,341
+6,300,439
+Income tax expense
+In addition, the total carrying amount as at the transfer date of credit assets transferred by
+the Group into the unconsolidated structured entities was RMB31,866 million for the year
+ended 31 December 2016 (2015: RMB12,892 million). For description of the portion of
+asset-backed securities issued by above structured entities and held by the Group, refer to
+Note V.46.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Segment reporting (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+BOC Group Trustee Company
+Limited (4)
+Hong Kong
+1 December
+1997
+HKD200
+77.60
+100.00
+Provision of
+services
+trustee services
+Singapore 25 November
+USD1,158
+70.00
+70.00 Aircraft leasing
+1993
+288
+BANK OF CHINA LIMITED
+BOC Aviation Limited
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Credit card
+66.06
+16 October
+1964
+HKD43,043
+66.06
+100.00
+Commercial
+banking
+Chiyu Banking Corporation Limited (3)
+Hong Kong 24 April 1947
+100.00
+HKD300
+70.49
+Commercial
+banking
+BOC Credit Card (International)
+Limited
+Hong Kong
+9 September
+1980
+HKD480
+46.57
+Hong Kong
+FOR THE YEAR ENDED 31 DECEMBER 2016
+V
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Segment reporting (Continued)
+Geographical segments
+Chinese mainland
+-
+- Corporate banking, personal banking, treasury operations, insurance
+services, etc. are performed in the Chinese mainland.
+(Amount in millions of Renminbi, unless otherwise stated)
+Hong Kong, Macau and Taiwan
+Other countries and regions
+-
+Corporate and personal banking services are provided in
+other countries and regions. Significant locations include New York, London, Singapore and
+Tokyo.
+Business segments
+-
+Corporate banking Services to corporate customers, government authorities and financial
+institutions including current accounts, deposits, overdrafts, loans, trade-related products
+and other credit facilities, foreign exchange, derivative products and wealth management
+products.
+Personal banking
+Corporate banking, personal banking, treasury
+operations, investment banking and insurance services are performed in Hong Kong, Macau
+and Taiwan. The business of this segment is centralised in BOCHK Group.
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Related party transactions (Continued)
+44.8 Balances with subsidiaries (Continued)
+(1)
+(2)
+(3)
+(4)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+These directly held principal subsidiaries are unlisted companies. All holdings are in the ordinary share
+capital of the undertaking concerned, and the ability of the subsidiaries to transfer funds to the Group and
+the Bank is not restricted.
+BOCHK, in which the Group holds a 66.06% equity interest, holds 70.49% of the equity interest of Chiyu
+Bank.
+BOCHK and BOC International Holdings Limited ("BOCI”), in which the Group holds 66.06% and 100%
+of their equity interests, respectively, hold 66% and 34% equity interest of BOC Group Trustee Company
+Limited, respectively.
+For certain subsidiaries listed above, the voting rights ratio is not equal to the effective
+equity held ratio, mainly due to the impact of the indirect holdings.
+45 Segment reporting
+The Group manages the business from both geographic and business perspectives. From the
+geographic perspective, the Group operates in three principal regions: Chinese mainland;
+Hong Kong, Macau and Taiwan; and other countries and regions. From the business
+perspective, the Group provides services through six main business segments: corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+operations.
+Measurement of segment assets, liabilities, income, expenses, results and capital expenditure
+is based on the Group's accounting policies. The segment information presented includes
+items directly attributable to a segment as well as those that can be allocated on a reasonable
+basis. Funding is provided to and from individual business segments through treasury
+operations as part of the asset and liability management process. The pricing of these
+transactions is based on market rates. The transfer price takes into account the specific
+features and maturities of the product. Internal transactions are eliminated on consolidation.
+The Group regularly examines the transfer price and adjusts the price to reflect current
+situation.
+289
+BOCHK (Holdings) is listed on the Stock Exchange of Hong Kong Limited.
+—
+Bank of China (Hong Kong)
+Limited (3) (4)
+Holding
+(%)
+Principal
+business
+Voting right
+Effective
+equity held
+Paid-in
+capital
+(in millions)
+Place of
+Date of
+incorporation incorporation/
+and operation establishment
+Name
+(%)
+The general information of principal subsidiaries is as follows:
+44 Related party transactions (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+44.8 Balances with subsidiaries (Continued)
+100.00
+Directly held (1)
+Hong Kong
+Hong Kong
+Bank of China Group Insurance
+Company Limited
+banking
+Investment
+100.00
+100.00
+HKD3,539
+BOC Hong Kong (Group) Limited
+10 July 1998
+BOC International Holdings Limited (4)
+company
+Holding
+100.00
+100.00
+HKD34,806
+12 September
+2001
+Hong Kong
+company
+100.00
+services
+100.00
+Commercial
+banking
+BOC Insurance Company Limited
+Beijing 5 January 2005
+RMB4,535
+100.00
+100.00
+100.00
+Insurance
+Indirectly held
+BOC Hong Kong (Holdings)
+Limited (2)
+Hong Kong
+12 September
+2001
+HKD52,864
+66.06
+66.06
+services
+Insurance
+GBP250
+Bank of China (UK) Limited
+Bank of China Group Investment
+Limited
+Hong Kong
+18 May 1993
+HKD34,052
+100.00
+100.00
+Investment
+United Kingdom 24 September
+2007
+holding
+Macau
+1942
+MOP1,000
+50.31
+50.31
+Commercial
+banking
+Tai Fung Bank Limited
+Services to retail customers including savings deposits, personal loans,
+credit cards and debit cards, payments and settlements, wealth management products and
+funds and insurance agency services.
+-
+Treasury operations · Consisting of foreign exchange transactions, customer-based interest
+rate and foreign exchange derivative transactions, money market transactions, proprietary
+trading and asset and liability management. The results of this segment include the inter-
+segment funding income and expenses, results from interest-bearing assets and liabilities;
+and foreign currency translation gains and losses.
+12,643
+897
+69,004
+897
+12,386
+(1,986)
+Income tax expense
+Profit for the year
+143,008
+Segment assets
+Investment in associates and joint ventures
+1,193,626
+13,889
+Total assets
+14,341,792
+1,207,515
+3,242,467
+14,059
+3,256,526
+1,812,521
+14,341,792
+(1,261,950)
+Profit before income tax
+Share of results of associates and joint ventures
+(138,639)
+(11,099)
+(31,731)
+(5,987)
+1,288
+Impairment losses on assets
+(86,427)
+898
+(939)
+(842)
+Operating profit
+143,008
+11,745
+68,107
+12,386
+(1,986)
+(1,803)
+Operating expenses (1)
+1,812,521
+Include: non-current assets (2)
+21,058
+22,383
+815
+Depreciation and amortisation
+11,346
+3,245
+Credit commitments
+10,909
+3,062,802
+4,109
+395,982
+236
+481,663
+(350,839)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+128,792
+(1,261,950)
+Capital expenditure
+(795)
+98,685
+Segment liabilities
+13,198,402
+109,091
+1,096,909
+134,635
+2,967,621
+5,522
+1,757,564
+(161)
+(1,261,790)
+(810)
+Other segment items:
+(3,251)
+6,363
+Intersegment net fee and commission income/(expense)
+349
+1,230
+7,348
+1,256
+(4,097)
+Intersegment net interest (expense)/income
+(3,274)
+19,215
+101,641
+Subtotal
+and regions
+Elimination
+Interest income
+Interest expense
+Net interest income
+494,913
+Other
+21,393
+30,231
+(15,691)
+(231,271)
+(16,681)
+(27,344)
+(17,167)
+15,691
+56,686
+263,642
+Other countries
+Hong Kong, Macau and Taiwan
+Investment banking
+Consisting of debt and equity underwriting and financial advisory,
+sales and trading of securities, stock brokerage, investment research and asset management
+services, and private equity investment services.
+Insurance
+services.
+Underwriting of general and life insurance business and insurance agency
+Other operations of the Group comprise investment holding and other miscellaneous
+activities, none of which constitutes a separately reportable segment.
+8,378,306
+290
+Chinese
+mainland
+291
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Segment reporting (Continued)
+As at and for the year ended 31 December 2016
+21
+4,712
+29,342
+13,064
+4,354
+1,646
+Net gains on financial investments
+11,078
+495
+1,424
+22
+787
+Other operating income(1)
+20,155
+12,450
+52,035
+198
+(2,464)
+368,074
+23,783
+Operating income
+2,496
+Net trading gains
+(810)
+Fee and commission income
+75,253
+6,529
+19,312
+5,820
+(2,066)
+Fee and commission expense
+(4,550)
+(1,190)
+(4,826)
+(1,535)
+1,256
+Net fee and commission income
+70,703
+5,339
+14,486
+4,285
+V
+297
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+HKD3,749
+1,053,777
+10,792
+1,064,569
+Include: non-current assets (2)
+99,138
+Segment liabilities
+11,970,984
+22,463
+1,811,943
+1,946,389
+101,458
+972,123
+1,819,844
+(1,068,319)
+1,819,844
+(1,068,319)
+4,702
+1,770,859
+(161)
+3,000,115
+10,843
+3,010,958
+123,921
+2,784,066
+(1,067,917)
+13,053,114
+51
+1
+2,333
+2,334
+Profit before income tax
+176,817
+26,832
+Total assets
+15,544
+Income tax expense
+Profit for the year
+Segment assets
+13,053,114
+1,946,338
+Investment in associates and joint ventures
+42,376
+Share of results of associates and joint ventures
+Other segment items:
+(13,701)
+(430,774)
+3,210,033
+* "
+15,608
+(1)
+(2)
+356,650
+Other operating income includes insurance premium income earned, and operating expenses include insurance benefits and claims.
+Non-current assets include property and equipment, investment properties and other long-term assets.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Segment reporting (Continued)
+292
+Intersegment net interest (expense)/income
+374,238
+209
+Intersegment net fee and commission income/(expense)
+446
+Capital expenditure
+11,030
+2,287
+38
+1,040
+Depreciation and amortisation
+240
+Credit commitments
+837
+238,142
+10,328
+982
+24,619
+2,991
+136,096
+12,615
+1,020
+25,659
+3,828
+1,086
+(625)
+(841)
+11,540
+2,909,919
+As at and for the year ended 31 December 2016
+12,378
+13,211
+(5,037)
+(1,676)
+1,443
+Net fee and commission income
+75,220
+9,514
+(1,567)
+5,215
+3,302
+(841)
+Net trading gains/(losses)
+8,942
+887
+Net gains on financial investments
+14,729
+3,487
+(3,470)
+Fee and commission expense
+(24,741)
+24,741
+282,151
+25,100
+6,638
+31,738
+(3,225)
+14,761
+78,445
+12,984
+6,782
+19,766
+4,978
+(2,284)
+Fee and commission income
+40,042
+1,193
+807
+(20,857)
+(10,513)
+(31,370)
+(4,763)
+(1,125)
+1,125
+Impairment losses on assets
+(150,393)
+(56,409)
+(843)
+(2,095)
+(770)
+Operating profit
+176,817
+26,831
+(1,252)
+(80)
+1,077
+Operating expenses (1)
+73,507
+(289)
+2,270
+8
+Other operating income (1)
+13,819
+12,246
+17,911
+11,717
+129
+(284)
+Operating income
+383,619
+48,940
+24,567
+23,963
+Corporate
+12,378
+Interest income
+(175,069)
+Impairment losses on assets
+(65,651)
+(21,308)
+(828)
+10
+1,812
+(25)
+Operating profit
+80,346
+61,023
+41,314
+2,454
+1,097
+(1,270)
+35,281
+(5,785)
+(2,181)
+41,784
+(1,488)
+Operating income
+211,245
+150,609
+58,644
+(18,887)
+4,625
+42,336
+(1,812)
+Operating expenses
+(65,248)
+(68,278)
+(16,502)
+20,009
+19,696
+Share of results of associates and joint ventures
+(13)
+126,461
+Investment in associates and joint ventures
+4,114
+Total assets
+7,039,052
+Personal
+61,634
+7,219,165
+126,461
+297,078
+10,013
+307,091
+(84,543)
+(68)
+(84,611)
+18,134,830
+18,148,889
+Segment liabilities
+65,748
+413
+7,219,165
+7,039,052
+538
+(41)
+Profit before income tax
+80,346
+61,023
+41,314
+3,475,983
+2,867
+35,819
+(41)
+* *
+Income tax expense
+Profit for the year
+Segment assets
+1,084
+238
+3,475,983
+7,264
+(2,593)
+87,516
+(260,091)
+Net interest income/(expense)
+171,447
+104,544
+(28)
+28,363
+2,686
+(1,760)
+Fee and commission income
+39,751
+41,435
+13,680
+768
+4,351
+(174)
+(89,877)
+844
+banking
+301,759
+banking
+194,421
+Treasury
+operations
+Investment
+banking
+Other
+(124,623)
+Elimination
+942
+2,714
+833
+(87,516)
+Interest expense
+(130,312)
+152,986
+953
+Insurance
+Fee and commission expense
+5,102
+136
+(255)
+1,007
+29
+Net gains on financial investments
+867
+31
+11,677
+33
+411
+Other operating income
+(1,851)
+1,586
+6
+1,610
+366
+(353)
+Net trading gains/(losses)
+(1,022)
+(2,484)
+(59)
+1,498
+Net fee and commission income
+(901)
+36,571
+894
+(3,180)
+(2,484)
+(3,507)
+12,658
+37,928
+3,450
+305
+Financial risk management framework
+The Group's primary risk management objectives are to maximise value for equity holders
+while maintaining risk within acceptable parameters, optimising capital allocation and
+satisfying the requirements of the regulatory authorities, the Group's depositors and other
+stakeholders for the Group's prudent and stable development.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+1
+Overview (Continued)
+3
+The Group has designed a series of risk management policies and has set up controls to
+analyse, identify, monitor and report risks by means of relevant and up-to-date information
+systems. The Group regularly reviews and revises its risk management policies and systems
+to reflect changes in markets, products and emerging best practice.
+The most significant types of risks to the Group are credit risk, market risk and liquidity
+risk. Market risk includes interest rate risk, currency risk and other price risk.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+306
+Within this framework, the Group's senior management has overall responsibility for
+managing all aspects of risks, including implementing risk management strategies, initiatives
+and credit policies and approving internal policies, measures and procedures related to risk
+management. The Risk Management Department, the Credit Management Department,
+the Financial Management Department and other relevant functional departments are
+responsible for monitoring financial risks.
+The Group manages the risks at the branch level through direct reporting from the branches
+to the relevant departments responsible for risk management at the Head Office. Business
+line related risks are monitored through establishing specific risk management teams within
+the business departments. The Group monitors and controls risk management at subsidiaries
+by appointing members of their boards of directors and risk management committees as
+appropriate.
+Credit risk
+The Group takes on exposure to credit risk, which is the risk that a customer or counterparty
+will cause a financial loss for the Group by failing to discharge an obligation. Credit risk is
+one of the most significant risks for the Group's business.
+Credit risk exposures arise principally in lending activities and debt securities investment
+activities. There is also credit risk in off-balance sheet financial instruments, such as
+derivatives, loan commitments, bill acceptance, letters of guarantee and letters of credit.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Overview
+Credit risk (Continued)
+3.1 Credit risk measurement
+The Board of Directors is responsible for establishing the overall risk appetite of the Group
+and reviewing and approving the risk management objectives and strategies.
+1
+BANK OF CHINA LIMITED
+As part of the Group's strategic restructuring plan in the ASAEN region, the Bank (as
+seller) and BOCHK (as buyer) completed the sale and purchase of Bank of China (Thai)
+Public Company Limited on 9 January 2017. On 28 February 2017, the Bank (as seller)
+and BOCHK (as buyer) entered into sale and purchase agreements in relation to sale and
+purchase of the banking businesses operated by the Bank in Indonesia through Bank of
+China Limited, Jakarta Branch and its eight sub-branches; and the banking businesses
+operated by the Bank in Cambodia through Bank of China Limited, Phnom Penh Branch,
+Cambodia and its two sub-branches, respectively. The completion of each equity transfer is
+subject to the satisfaction or waiver of the respective preconditions.
+convertible bonds
+(1) Loans and advances and off-balance sheet commitments
+(60,946)
+(60,946)
+(1,545)
+(1,545)
+As at 31 December 2015
+294,388
+99,714
+138,832
+7,104
+109,215
+172,029
+VI FINANCIAL RISK MANAGEMENT
+390,626
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+50
+Events after the financial reporting date
+Dividend distribution plan of Domestic Preference Shares (Second Tranche)
+The dividend distribution of Domestic Preference Shares (Second Tranche) was approved
+by the Board of Directors of the Bank at the Board meeting held on 23 January 2017. The
+dividend of RMB1,540 million was paid at a rate of 5.5% on 13 March 2017. The dividend
+payable was not reflected in liabilities of the financial statements.
+Issuance of overseas bonds
+On 7 February 2017, the Bank issued USD2 billion notes, which was then listed on 15
+February 2017 on the Stock Exchange of Hong Kong Limited, as part of the Bank's USD20
+billion Medium Term Note Programme. The issuance details had been set out in the Bank's
+announcement dated 14 February 2017.
+Disposal of Chiyu Bank
+The sale of the Group's disposal of issued shares of Chiyu Bank was completed in
+accordance with the terms and conditions of the Sale and Purchase Agreement for a total
+consideration of HKD7.685 billion on 27 March 2017. Upon completion, Chiyu Bank ceased
+to be a subsidiary of the Bank and BOCHK (Holdings).
+Strategic restructuring plan in the ASAEN region
+1,211,908
+Monitoring and measurement of credit risk over loans and advances and off-balance sheet
+credit related exposures are performed by the Credit Management Department, and reported
+to the senior management and the Board of Directors regularly.
+Wealth management plans
+For credit risk arising from off-balance sheet commitments, the Group manages the risks
+according to the characteristics of the products. These mainly include loan commitments,
+guarantees, bill acceptances and letters of credit. Loan commitments, guarantees, bill
+acceptances and standby letters of credit carry similar credit risk to loans and the Group
+takes a similar approach on risk management. Documentary and commercial letters of credit
+are written undertakings by the Group on behalf of a customer authorising a third party to
+draw drafts on the Group up to a stipulated amount under specific terms and conditions
+and are collateralised by the underlying shipment documents of goods to which they relate
+or deposits and are therefore assessed to have less credit risk than a direct loan. Besides,
+the Group monitors the term to maturity of off-balance sheet commitments and those with
+longer-terms are assessed to have greater credit risk than shorter-term commitments.
+17,148
+3,409
+As at 31 December 2016
+Fund
+loss
+Total
+exposure to
+loans and
+Maximum
+Debt investments
+securities classified as
+held to
+maturity receivables
+for sale
+or loss
+Structured entity type
+available
+15,000
+profit
+Investment
+Financial
+assets at
+fair value
+Financial
+The interests held by the Group in the structured entities sponsored by other financial
+institutions through direct investments are set out as below:
+Structured entities sponsored by other financial institutions
+47 Interests in the unconsolidated structured entities (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Equity component of
+through securities
+In measuring the credit risk of loans and advances to corporate customers, the Group mainly
+reflects the "probability of default” by the customer on its contractual obligations and
+considers the current financial position of the customer and the exposures to the customer
+and its likely future development. For retail customers, the Group uses standard approval
+procedures to manage credit risk for personal loans, and uses credit score-card models,
+which are based on historical default data to measure credit risk for credit cards.
+Investment trusts and
+Asset-backed securitisations
+The Group measures and manages the credit quality of loans and advances to corporate
+and personal customers based on the Guideline for Loan Credit Risk Classification (the
+"Guideline") issued by the CBRC, which requires commercial banks to classify their
+corporate and personal loans into five categories: pass, special-mention, substandard,
+doubtful and loss, among which loans classified in the substandard, doubtful and loss
+categories are regarded as non-performing loans. Off-balance sheet commitments with credit
+exposures are also assessed and categorised with reference to the Guideline. For operations
+in Hong Kong, Macau, Taiwan and other countries and regions, where local regulations and
+requirements are more prudent than the Guideline, the credit assets are classified according
+to local regulations and requirements.
+307
+270,886
+243
+100
+100
+100
+20,702
+20,685
+asset management plans
+Asset-backed securitisations
+Investment trusts and
+Wealth management plans
+15,853
+asset management plans
+4,832
+As at 31 December 2015
+54,797
+54,797
+1,387
+31,838
+21,572
+15,852
+15,852
+15,852
+15,000
+15,000
+20,557
+20,557
+Fund
+Total equity and liabilities
+15,987,985
+19,396
+― at amortised cost
+10,403,693
+11,428,022
+Due to customers
+48,344
+74,549
+Derivative financial liabilities
+5,917
+479,216
+364,149
+Placements from banks and other financial institutions
+7,284
+Bank notes in circulation
+364,428
+813,197
+Due to central banks
+1,746,218
+1,401,155
+Due to banks and other financial institutions
+2015
+As at 31 December
+2016
+LIABILITIES
+11,093,065
+10,089,331
+at fair value
+334,957
+294,388
+294,388
+Share capital
+13,574,770
+14,708,975
+EQUITY
+Total liabilities
+101
+254,157
+283,743
+Other liabilities
+49.1 The Bank's statement of financial position (Continued)
+109
+4,255
+3,439
+Retirement benefit obligations
+34,455
+23,712
+Current tax liabilities
+233,986
+309,616
+Bonds issued
+314,362
+Deferred income tax liabilities
+The Bank's statement of financial position and changes in equity (Continued)
+49
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+96,892
+Investment in subsidiaries
+593,910
+378,426
+loans and receivables
+1,710,303
+1,773,569
+- held to maturity
+688,981
+1,026,700
+94,354
+available for sale
+3,178,695
+Financial investments
+8,027,160
+8,683,440
+Loans and advances to customers, net
+58,178
+85,604
+Derivative financial assets
+56,129
+59,144
+2,993,194
+Other equity instruments
+Investment in associates and joint ventures
+60
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+14,786,678
+15,987,985
+301
+Total assets
+101,986
+106,665
+68
+Other assets
+35,892
+Deferred income tax assets
+1,951
+2,144
+Investment properties
+85,685
+84,962
+Property and equipment
+93,000
+Consolidated structured entities
+24,085
+Financial assets at fair value through profit or loss
+99,714
+Capital reserve
+income
+reserves
+reserves
+profits
+Total
+294,388
+99,714
+138,832
+7,104
+109,215
+172,029
+390,626
+1,211,908
+(11,545)
+136,883
+125,338
+Total comprehensive income
+Appropriation to
+statutory reserves
+Appropriation to general
+and regulatory reserves
+13,760
+reserve
+regulatory Undistributed
+Statutory
+Capital comprehensive
+14,786,678
+Approved and authorised for issue by the Board of Directors on 31 March 2017.
+TIAN Guoli
+Director
+302
+CHEN Siqing
+Director
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+(13,760)
+V
+49
+The Bank's statement of financial position and changes in equity (Continued)
+49.2 The Bank's statement of changes in equity
+303
+As at 1 January 2016
+Other
+Other
+General and
+Share
+equity
+capital instruments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+14,611
+(14,611)
+Dividends
+General and
+Capital comprehensive
+Statutory
+regulatory Undistributed
+reserve
+1,211,908
+1,279,010
+Total equity
+390,626
+440,902
+Other
+Undistributed profits
+186,640
+General and regulatory reserves
+109,215
+122,975
+Statutory reserves
+7,104
+(4,441)
+Other comprehensive income
+138,832
+138,832
+172,029
+99,714
+Other
+equity
+capital instruments
+Total comprehensive income
+(58,236)
+(58,236)
+As at 31 December 2016
+294,388
+99,714
+138,832
+(4,441)
+122,975
+186,640
+440,902
+Share
+1,279,010
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+49
+The Bank's statement of financial position and changes in equity (Continued)
+304
+49.2 The Bank's statement of changes in equity (Continued)
+As at 1 January 2015
+BANK OF CHINA LIMITED
+173,540
+156,155
+Precious metals
+(8,090)
+14,251
+Other assets
+(6,212)
+6,212
+6,212
+Reverse repo agreements
+19,214
+66,258 (40,962) (6,082)
+66,258
+Derivatives
+As at 31 December 2016
+amount
+received
+Net
+collateral
+of financial Financial
+position instruments*
+position
+assets
+financial of financial
+Cash
+6,161
+6,161
+Total
+86,721
+Total
+2,374
+2,374
+(6,934)
+9,308
+Other assets
+(851)
+851
+851
+Reverse repo agreements
+financial position
+12,363
+(19,513)
+32,710
+32,710
+Derivatives
+As at 31 December 2015
+25,375
+(6,082)
+(47,174)
+78,631
+(8,090)
+(834)
+in the statement of
+Amounts not set off
+Amounts
+presented
+in the
+statement
+(346)
+93,868
+152,633
+334,116
+1,070,151
+7,450
+152,199
+159,649
+Conversion of convertible
+bonds and capital reserves
+5,657
+129,404
+10,973
+27,969
+16,630
+27,969
+Appropriation to
+statutory reserves
+I
+15,347
+(15,347)
+Appropriation to general
+and regulatory reserves
+Capital injection by other
+equity instruments holders
+42,869
+71,745
+Total
+statement
+recognised
+amounts of offset in the
+Gross amounts
+Gross
+Financial assets subject to offsetting, enforceable master netting arrangements and similar
+agreements are analysed as below:
+48 Offsetting financial assets and financial liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+288,731
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+298
+33,306
+271,129
+271,129
+33,306
+116
+6,353
+26,837
+reserves
+reserves
+profits
+BANK OF CHINA LIMITED
+(6,934) 35,935
+(20,364)
+(834)
+cash and non-cash collateral have been received/pledged in respect of the transactions
+described above.
+the counterparty has an offsetting exposure with the Group and a master netting or
+similar arrangement (including ISDA master agreement and Global Master Netting
+Agreement) is in place with a right of set off only in the event of default, insolvency or
+bankruptcy, or the offset criteria are otherwise not satisfied; and
+•
+Derivatives and reverse repo/repurchase agreements included in amounts are not set off in
+the statement of financial position where:
+Financial assets and financial liabilities are offset and the net amount is reported in the
+statement of financial position when there is a legally enforceable right to offset the
+recognised amounts and there is an intention to settle on a net basis, or realise the asset and
+settle the liability simultaneously (“the offset criteria”).
+* Including non-cash collateral
+17,255
+(7,535)
+49,357 (24,567)
+(6,934)
+300
+56,291
+756
+756
+(6,934)
+7,690
+Other liabilities
+(4,636)
+4,636
+4,636
+Repurchase agreements
+16,499
+Total
+(7,535)
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2016
+5,777
+7,048
+bank notes issued
+Government certificates of indebtedness for
+425,192
+553,551
+other financial institutions
+Placements with and loans to banks and
+649,628
+2,089,759
+2,188,722
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Balances with central banks
+2015
+As at 31 December
+2016
+other financial institutions
+Cash and due from banks and
+ASSETS
+49.1 The Bank's statement of financial position
+The Bank's statement of financial position and changes in equity
+49
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+656,003
+(19,396)
+(19,931)
+43,965
+collateral
+pledged
+position instruments*
+position
+liabilities
+Financial
+of financial
+Cash
+financial position
+income
+in the statement of
+Net
+Amounts not set off
+Gross
+Gross amounts
+amounts of offset in the
+recognised statement
+financial of financial
+Financial liabilities subject to offsetting, enforceable master netting arrangements and
+similar agreements are analysed as below:
+48 Offsetting financial assets and financial liabilities (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+299
+14,737
+Amounts
+presented
+in the
+statement
+43,965
+amount
+Derivatives
+Derivatives
+As at 31 December 2015
+16,857
+(4,127)
+(61,975)
+82,959
+(8,090)
+91,049
+Total
+581
+As at 31 December 2016
+581
+8,671
+Other liabilities
+(17,211)
+17,211
+17,211
+Repurchase agreements
+16,276
+(44,764) (4,127)
+65,167
+65,167
+(8,090)
+Dividends
+Derivative financial assets
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Corporate loans and advances
+9,973,362
+933,892
+1,220,962
+7,818,508
+to customers
+Total loans and advances
+3,404,393
+30,289
+388,778
+2,985,326
+Personal loans
+5,627,877
+736,681
+745,297
+4,145,899
+Other
+941,092
+166,922
+86,887
+687,283
+As at 31 December 2015
+Trade bills
+Hong Kong,
+Macau and
+to customers
+Total loans and advances
+2,765,948
+26,127
+341,088
+2,398,733
+5,313,145
+615,598
+632,015
+4,065,532
+1,056,767
+194,426
+127,512
+734,829
+Personal loans
+Other
+Trade bills
+Total
+Other
+countries
+and regions
+Taiwan
+mainland
+Chinese
+Corporate loans and advances
+Total
+Other
+countries
+and regions
+1,979,793
+Central and Southern China
+39.77%
+2,863,049
+6.73%
+484,432
+16.09%
+1,158,592
+16.04%
+6.33%
+39.60%
+3,096,019
+Eastern China
+494,595
+Northeastern China
+1,254,192
+Northern China
+Amount % of total
+% of total
+Amount
+2015
+2016
+As at 31 December
+25.32% 1,768,388
+24.57%
+Western China
+993,909
+Taiwan
+mainland
+Macau and
+Chinese
+Hong Kong,
+As at 31 December 2016
+(ii) Analysis of loans and advances to customers by customer type
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+7,199,094
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+315
+100.00% 7,199,094 100.00%
+7,818,508
+to customers
+Total loans and advances
+12.84%
+12.71% 924,633
+(Amount in millions of Renminbi, unless otherwise stated)
+1,100,615
+836,151
+9,135,860
+1.21%
+110,242
+1.08%
+107,372
+Public utilities
+1.85%
+168,631
+1.60%
+159,660
+public utility management
+Water, environment and
+2.01%
+184,112
+1.94%
+193,318
+Construction
+4.07%
+371,581
+3.54%
+352,706
+Mining
+Other
+124,316
+1.25% 104,953
+1.15%
+BANK OF CHINA LIMITED
+317
+9,973,362 100.00% 9,135,860 100.00%
+customers
+Total loans and advances to
+30.28%
+34.13% 2,765,948
+3,404,393
+Subtotal
+4.94%
+3.64%
+2.95%
+302,302
+466,131
+Credit cards
+Other
+22.39%
+26.43% 2,045,787
+2,635,960
+Mortgages
+Personal loans
+69.72%
+65.87% 6,369,912
+Subtotal
+3.03% 268,923
+4.67% 451,238
+Chinese mainland
+332,835
+426,023
+1,632,912
+Manufacturing
+Corporate loans and advances
+% of total
+Amount
+% of total
+Amount
+2015
+2016
+As at 31 December
+Group
+(iii) Analysis of loans and advances to customers by industry
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+316
+16.37%
+Commerce and services
+1,313,693
+13.17%
+Financial services
+4.84%
+442,536
+5.21%
+519,161
+gas and water
+electricity, heating,
+Production and supply of
+8.32%
+760,511
+4.27%
+7.53%
+Real estate
+9.77%
+892,207
+9.91%
+988,773
+postal services
+Transportation, storage and
+14.43%
+18.43%
+1,684,276
+1,318,028
+751,035
+100.00%
+6,568,969
+9,973,362
+Maximum loan-to-value ratio
+Automobiles
+Real estate
+Construction land use rights
+Publicly traded stocks
+PRC financial institution bonds
+PRC Treasury bonds
+Deposit receipt
+Collateral
+The Group has a range of policies and practices intended to mitigate credit risk. The most
+prevalent of these is the taking of security for funds advances (collateral) and guarantees,
+which is common practice. The Group implements guidelines on the acceptability of specific
+classes of collateral. The amount of acceptable collateral at the time of loan origination
+is determined by the Credit Management Department and is subject to loan-to-value ratio
+limits based on type and is monitored on an ongoing basis by the Credit Management
+Department. The principal collateral types for corporate loans and advances are:
+(i) Collateral and guarantees
+(2) Credit risk mitigation policies
+The Group is also exposed to credit risk through investment activities and trading activities.
+Credit limits are established based on type of instruments and the credit quality of
+counterparties, securities issuers and the securities, and set limits are actively monitored.
+(ii) Debt securities and derivatives
+(1) Credit risk limits and controls (Continued)
+3.2 Credit risk limit control and mitigation policies (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+95%
+90%
+85%
+50%
+Relevant policies are included in Note II.4.6.
+3.3 Impairment and provisioning policies
+The Group further restricts its exposure to credit losses by entering into master netting
+arrangements with counterparties with which it undertakes a significant volume of
+transactions. Master netting arrangements do not generally result in the offsetting of assets
+and liabilities in the statement of financial position, as transactions are usually settled on
+a gross basis. However, the credit risk associated with favourable contracts is reduced
+by a master netting arrangement to the extent that if a default occurs, all amounts with
+the customer are terminated and settled on a net basis. The Group's overall exposure to
+credit risk on derivative instruments subject to master netting arrangements can change
+substantially within a short period, as it is affected by each transaction subject to the
+arrangement.
+(ii) Master netting arrangements
+Collateral is also held as part of reverse repurchase agreements. Under such agreements, the
+Group is permitted to sell or repledge collateral in the absence of default by the owner of
+the collateral. Details of collateral accepted and which the Group is obligated to return are
+disclosed in Note V.42.3.
+Collateral held as security for financial assets other than loans and advances is determined
+by the nature of the instrument. Debt securities, treasury and other eligible bills are generally
+unsecured, with the exception of certain asset-backed securities and similar instruments,
+which are secured by portfolios of financial instruments.
+(i) Collateral and guarantees (Continued)
+(2) Credit risk mitigation policies (Continued)
+3.2 Credit risk limit control and mitigation policies (Continued)
+Credit risk (Continued)
+BANK OF CHINA LIMITED
+3
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+311
+For loans guaranteed by a third party guarantor, the Group will assess the guarantor's credit
+rating, financial condition, credit history and ability to meet obligations.
+Mortgages to retail customers are generally collateralised by mortgages over residential
+properties. Other loans are collateralised dependent on the nature of the loan.
+40%
+70%
+70%
+VI FINANCIAL RISK MANAGEMENT (Continued)
+312
+310
+The Head Office also oversees the risk management of the branches in Hong Kong, Macau,
+Taiwan and other countries and regions. In particular, any credit application at these
+branches exceeding the authorisation limits is required to be submitted to the Head Office
+for approval.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+308
+The Group identifies credit risk collectively based on industry, geography and customer
+type. This information is monitored regularly by management.
+Five-category loan classifications and customer credit ratings are determined by Head Office
+and tier 1 branch management under approved delegated authorities. The Bank performs
+centralised review on customer credit ratings and five-category loan classifications on an
+annual basis. Further, five-category loan classifications are re-examined on a quarterly
+basis. Adjustments are made to these classifications and ratings as necessary according to
+customers' operational and financial position.
+The customer credit ratings in the internal model are based on four categories of A, B, C and
+D which are further classified into fifteen grades as AAA, AA, A, BBB+, BBB, BBB-, BB+,
+BB, BB-, B+, B-, CCC, CC, C, and D. Credit grading D equates to defaulted customers
+while the others are assigned to performing customers.
+The Group has developed an internal customer credit rating system, using measurements of
+the probability of default within one year based on regression analysis. These probability of
+default measurements are then mapped to internal credit ratings. The Group performs back
+testing to actual default rates and refines the model according to the results.
+Loss: principal and interest of loans cannot be recovered or only a small portion can be
+recovered after taking all possible measures and resorting to necessary legal procedures.
+Substandard: loans for which borrowers' ability to service loans is apparently in question
+and borrowers cannot depend on their normal business revenues to pay back the principal
+and interest of loans. Certain losses might be incurred by the Group even when guarantees
+are executed.
+Special-mention: loans for which borrowers are still able to service the loans currently,
+although the repayment of loans might be adversely affected by some factors.
+Pass: loans for which borrowers can honour the terms of the contracts, and there is no reason
+to doubt their ability to repay principal and interest of loans in full and on a timely basis.
+The five categories are defined as follows:
+(1) Loans and advances and off-balance sheet commitments (Continued)
+3.1 Credit risk measurement (Continued)
+Credit risk (Continued)
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+100.00% 9,135,860
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Credit risk (Continued)
+Personal loans in the Chinese mainland are originated by the Personal Banking Departments
+at branch level and must be approved by authorised approvers at tier 1 branches level in
+Chinese mainland, except for individual pledged loans and government-sponsored student
+loans, which may be approved by authorised approvers at sub-branches below tier 1 level.
+High risk personal loans such as personal loans for business purposes in excess of certain
+limits must also be reviewed by the Risk Management Department.
+Credit to corporate customers in the Chinese mainland are originated by the Corporate
+Banking Department at Head Office and the Corporate Banking Department at branch level
+and submitted to the Credit Approval Department for due diligence and approval. All credit
+applications for corporate customers must be approved by authorised credit application
+approvers at Head Office and tier 1 branches level in Chinese mainland, except for the low
+risk credit applications which are in accordance with the rules. The exposure to any one
+borrower, including banks, is restricted by credit limits covering on and off-balance sheet
+exposures.
+In order to manage the exposure to credit risk, the Group has adopted credit policies and
+procedures that are reviewed and updated by the Credit Management Department and the
+Credit Approval Department at Head Office. The credit approval process for both corporate
+loans and personal loans can be broadly divided into three stages: (1) credit origination
+and assessment; (2) credit review and approval; and (3) fund disbursement and post-
+disbursement management.
+(i) Loans and advances and off-balance sheet commitments
+(1) Credit risk limits and controls
+The Group manages limits and controls concentrations of credit risk in particular, to
+individual customers and to industries.
+3.2 Credit risk limit control and mitigation policies
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Exposure to credit risk is also managed through regular analysis of the ability of borrowers
+and potential borrowers to meet interest and capital repayment obligations and by changing
+these lending limits where appropriate.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+BANK OF CHINA LIMITED
+309
+The Group has policies to maintain strict control limits on net open derivative positions
+based on notional amount and term. At any time, the amount subject to credit risk is limited
+to the current fair value of instruments that are favourable to the Group (i.e. assets for which
+fair value is positive). The derivative credit risk exposure is managed as part of the overall
+exposure lending limits set for customers and financial institutions. Collateral or other
+security is not usually obtained for credit risk exposures on these financial instruments.
+The Group manages the credit risk within debt securities by monitoring the external credit
+rating, such as Standard & Poor's ratings or their equivalents, of the security, the internal
+credit rating of the issuers of debt securities, and the credit quality of underlying assets of
+securitisation products, including review of default rates, prepayment rates, industry and
+sector performance, loss coverage ratios and counterparty risk, to identify exposure to credit
+risk.
+Credit risk within debt securities arises from exposure to movements in credit spreads,
+default rates and loss given default, as well as changes in the credit of underlying assets.
+(3) Debt securities and derivatives
+The Group manages the credit quality of due from, placements with and loans to banks
+and other financial institutions considering the size, financial position and the internal and
+external credit rating of banks and financial institutions. In response to adverse credit market
+conditions, various initiatives were implemented since 2008 to better manage and report
+credit risk, including establishing a special committee which meets periodically and on an ad
+hoc basis to discuss actions in response to market changes impacting the Group's exposure
+to credit risk, and formulating a watch list process over counterparty names at risk.
+(2) Due from, placements with and loans to banks and other financial institutions
+Management periodically reviews various elements of the Group's credit risk management
+process, in the context of loan portfolio growth, the changing mix and concentration of
+assets, and the evolving risk profile of the credit portfolio. From time to time, in this regard,
+refinements are made to the Group's credit risk management processes to most effectively
+manage the effects of these changes on the Group's credit risk. These refinements include,
+among other things, adjustments to portfolio level controls, such as revisions to lists of
+approved borrowers, industry quotas and underwriting criteria. Where circumstances related
+to specific loans or a group of loans increase the Bank's credit risk, actions are taken, to
+the extent possible, to strengthen the Group's security position. The actions may include
+obtaining additional guarantors or collateral.
+3.1 Credit risk measurement (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Doubtful: loans for which borrowers cannot pay back principal and interest of loans in full
+and significant losses will be incurred by the Group even when guarantees are executed.
+FOR THE YEAR ENDED 31 DECEMBER 2016
+314
+As at 31 December 2016, 46.20% of the Group's total maximum credit exposure is derived
+from loans and advances to customers (31 December 2015: 46.53%) and 18.42% represents
+investments in debt securities (31 December 2015: 18.37%).
+The table above represents a worst case scenario of credit risk exposure of the Group as
+at 31 December 2016 and 2015, without taking into account of any collateral held, master
+netting agreements or other credit enhancements attached. For on-balance sheet assets, the
+exposures set out above are based on net carrying amounts as reported in the statements of
+financial position.
+3.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+(Continued)
+Credit risk (Continued)
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+19,203,600
+21,071,218
+3,210,033
+3,589,608
+313
+Total
+Subtotal
+2,132,963
+2,492,160
+Loan commitments and other credit commitments
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+Total loans and advances
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+to customers
+9.15%
+12.05%
+78.80%
+78.40% 7,199,094
+12.24% 1,100,615
+9.36% 836,151
+933,892
+1,220,962
+Hong Kong, Macau and Taiwan
+1,077,070
+7,818,508
+2015
+Amount % of total
+Amount % of total
+2016
+As at 31 December
+Group
+(i) Analysis of loans and advances to customers by geographical area
+(1) Concentrations of risk for loans and advances to customers
+3.5 Loans and advances
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Chinese mainland
+1,097,448
+Other countries and regions
+sheet items are as follows:
+117,421
+bank notes issued
+Government certificates of indebtedness for
+426,848
+594,048
+other financial institutions
+Placements with and loans to banks and
+581,007
+2,196,063
+2,271,640
+Balances with central banks
+582,434
+Due from banks and other financial institutions
+sheet financial assets are as follows:
+Credit risk exposures relating to on-balance
+2015
+3.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+Credit risk (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+3
+Letters of guarantee issued
+VI FINANCIAL RISK MANAGEMENT (Continued)
+91,191
+Financial assets at fair value through profit or loss
+As at 31 December
+2016
+104,082
+17,481,610
+112,194
+Subtotal
+147,441
+Other assets
+606,710
+395,921
+- loans and receivables
+1,790,790
+1,843,043
+144,039
+15,993,567
+- held to maturity
+82,236
+Loans and advances to customers, net
+9,735,646
+8,935,195
+130,549
+Financial investments
+available for sale
+1,554,675
+1,032,004
+Credit risk exposures relating to off-balance
+237,421
+6,229,020
+9,514,083
+Total
+2,713,972
+1,050
+9,751,504 8,765,683
+Pass
+6,052,761
+2,712,922
+236,184 6,401,135
+1,237 3,350,369
+3,349,132
+6,164,951
+and advances
+Corporate loans
+177,309
+Total
+Special-
+mention
+176,259
+Personal loans
+Pass
+Chinese mainland
+168,056 7,016,824
+7,385,084 221,060 7,606,144 6,848,768
+Total
+Total
+4,665,423
+167,954
+102 2,351,401
+4,670,792 4,497,469
+161 2,935,352 2,351,299
+4,449,893 220,899
+2,935,191
+and advances
+Personal loans
+Corporate loans
+Total
+mention
+Total
+Special-
+Special-
+mention
+Pass
+2015
+2016
+As at 31 December
+8,942,992
+mention
+22,889
+Special-
+2,351,401
+2,713,972 2,935,352
+3,350,369
+6,568,969 6,369,912 4,833,182 4,800,361
+Total
+Subtotal
+- Impaired
+Past due but not impaired
+nor impaired
+- Neither past due
+Personal loans
+Subtotal
+31,746
+103,192
+4,665,423
+4,670,792
+6,229,020
+35,316 49,627
+105,576 112,763
+Collectively assessed impairment allowances are provided on loans and advances neither
+past due nor impaired to estimate losses that have been incurred but not yet specifically
+identified. As part of this assessment, the Group considers information collected as part of
+the process to classify loans and advances under the CBRC regulatory guidelines, as well as
+additional information on industry and portfolio exposure.
+51,520
+116,314
+— Impaired
+25,027
+28,997
+Pass
+27,315
+24,661
+24,443
+2015
+2016
+As at 31 December
+Group
+The Group classifies loans and advances based on regulatory guidance including the
+"Guiding Principles on Classification of Loan Risk Management" issued by the CBRC as
+set out in Note VI.3.1. The loans and advances neither past due nor impaired are classified
+under these principles and guidelines as set out in the table below.
+Loans and advances neither past due nor impaired
+(i)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+320
+9,973,362 9,135,860 7,818,508 7,199,094
+2,985,326 2,398,733
+3,404,393 2,765,948
+21,279
+28,695
+321
+42,196
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+More than
+3 months
+1-3 months
+1 month
+Within
+As at 31 December 2016
+Chinese mainland
+(ii) Loans and advances past due but not impaired (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+322
+62,631
+347
+20,088
+Total
+27,315
+Corporate loans and advances
+Personal loans
+22,156
+7,589
+Past due but not impaired
+23,924
+Corporate loans and advances
+Total
+3 months
+1-3 months
+1 month
+More than
+Within
+As at 31 December 2015
+70,906
+32,303
+38,603
+Total
+21,279
+10,147
+11,132
+- 49,627
+27,471
+BANK OF CHINA LIMITED
+29
+14,925
+As at 31 December 2016
+More than
+3 months
+1-3 months
+1 month
+Within
+Total
+Personal loans
+Corporate loans and advances
+Total
+Personal loans
+Corporate loans and advances
+Group
+The total amount of loans and advances that were past due but not impaired is as follows:
+(ii) Loans and advances past due but not impaired
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Total
+12,361
+28,912
+1
+35,316
+318
+7,727
+27,271
+Total
+More than
+3 months
+1-3 months
+1 month
+Within
+As at 31 December 2015
+76,547
+41
+33,264
+43,242
+25,027
+40
+10,657
+14,330
+51,520
+22,607
+6,401,135
+Personal loans
+- Neither past due
+1.89%
+147,995
+public utility management
+Water, environment and
+2.24%
+161,428
+2.01%
+157,465
+168,608
+Construction
+227,805
+2.57%
+201,186
+Mining
+2.91%
+3.73% 209,285
+291,587
+Financial services
+3.16%
+2.34%
+Public utilities
+98,654
+288,788
+361,328
+Credit cards
+Other
+24.72%
+29.87% 1,779,310
+2,335,210
+Mortgages
+66.68%
+4,800,361
+61.82%
+4,833,182
+Subtotal
+0.39%
+27,836
+0.37%
+29,138
+Other
+1.45%
+104,719
+1.26%
+5.52%
+397,511
+5.30%
+414,180
+Corporate loans and advances
+% of total
+Amount
+% of total
+Amount
+2015
+2016
+As at 31 December
+Chinese mainland
+(iii) Analysis of loans and advances to customers by industry (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+233
+Manufacturing
+3.69% 256,204
+4.62% 363,219
+1,361,631
+1,401,271
+gas and water
+electricity, heating,
+Production and supply of
+6.43%
+462,914
+5.04%
+394,156
+Real estate
+10.83%
+10.83% 779,443
+846,349
+postal services
+Transportation, storage and
+11.94%
+859,541
+11.40%
+890,841
+Commerce and services
+19.47%
+17.42%
+nor impaired
+3.56%
+Subtotal
+43.03% 2,992,839
+9.99%
+3,363,869
+781,392
+Other pledged loans
+immovable assets
+property and other
+Loans secured by
+other secured loans
+Collateralised and
+41.57%
+21.99%
+25.65% 1,925,265
+21.33% 1,583,108
+2,005,701
+1,667,546
+Amount % of total Amount % of total
+2015
+2016
+As at 31 December
+Guaranteed loans
+Unsecured loans
+26.74%
+697,882
+9.70%
+Total loans and advances to
+2015
+Chinese mainland
+2016
+2015
+2016
+Group
+As at 31 December
+Corporate loans and advances
+(2) Analysis of loans and advances to customers by overdue and impaired status
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+100.00%
+319
+7,818,508 100.00% 7,199,094
+customers
+Chinese mainland
+100.00%
+100.00% 9,135,860
+9,973,362
+As at 31 December
+Unsecured loans
+Group
+(iv) Analysis of loans and advances to customers by collateral type
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+318
+7,818,508 100.00% 7,199,094 100.00%
+customers
+Total loans and advances to
+33.32%
+38.18% 2,398,733
+2,985,326
+2016
+5.04%
+2015
+Amount
+customers
+Total loans and advances to
+10.86%
+38.84%
+40.03% 3,548,200
+10.44% 992,421
+3,991,922
+1,041,708
+Other pledged loans
+immovable assets
+property and other
+Loans secured by
+other secured loans
+Collateralised and
+Guaranteed loans
+20.44%
+29.86%
+2,727,927
+29.22%
+20.31% 1,867,312
+2,913,913
+2,025,819
+% of total
+Amount % of total
+31,746
+0.10%
+10,953
+Mortgages
+Personal loans
+2.15%
+79.23%
+103,192
+2.33%
+77.60%
+112,763
+9,675
+Subtotal
+0.41%
+532
+3.45%
+0.69%
+1,006
+Other
+0.29%
+0.23%
+1.91%
+6.66%
+0.41%
+7,118
+0.96%
+28,695 19.75%
+Subtotal
+2.39%
+6.67%
+8,689
+2.51%
+6.24%
+9,066
+Other
+3.37%
+6.63%
+8,636
+3.45%
+6.85%
+9,954
+Credit cards
+0.40%
+5.47%
+299
+24,443
+0.22%
+221
+0.06%
+136
+2
+Financial services
+0.86%
+2.63%
+3,427
+0.73%
+Mining
+2.08%
+electricity, heating, gas and water
+Production and supply of
+0.91%
+3.23%
+4,205
+0.87%
+2.35%
+3,411
+3,018
+4,232
+2.91%
+2.10%
+Public utilities
+0.17%
+0.22%
+282
+0.20%
+0.20%
+295
+and public utility management
+Water, environment
+1.95%
+2.42%
+3,150
+1.80%
+1.95%
+2,832
+Construction
+1.46%
+2.56%
+3,337
+0.15%
+18.77%
+1.02%
+Total for Chinese mainland
+allowance
+allowance
+loans
+assessed
+assessed
+Impaired
+Collectively
+As at 31 December 2015
+Individually
+Net
+47,552
+(70,093)
+145,311
+Total
+706
+(112)
+(1,405)
+2,223
+Other countries and regions
+(27,666)
+Chinese mainland
+127,635
+(59,279)
+327
+V.18.3.
+For description of allowances on identified impaired loans and advances, refer to Note
+47,102
+(22,344)
+(60,791)
+130,237
+Total
+321
+(39)
+(760)
+652
+(78)
+(752)
+1,482
+1,120
+Other countries and regions
+Hong Kong, Macau and Taiwan
+46,129
+(22,227)
+775
+(82)
+(773)
+1,630
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+326
+1.43%
+130,237 100.00%
+1.46%
+145,311 100.00%
+Total
+0.13%
+2.00%
+2,602
+0.18%
+2.65%
+3,853
+Hong Kong, Macau, Taiwan and
+other countries and regions
+1.77%
+1.81% 127,635 98.00%
+97.35%
+141,458
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Real estate
+(Amount in millions of Renminbi, unless otherwise stated)
+3 Credit risk (Continued)
+Hong Kong, Macau and Taiwan
+46,071
+(27,472)
+(67,915)
+141,458
+Chinese mainland
+Net
+allowance
+allowance
+loans
+assessed
+assessed
+Impaired
+Collectively
+As at 31 December 2016
+Individually
+(d) Impaired loans and advances and related allowance by geographical area
+(iii) Identified impaired loans and advances (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Personal loans
+1.01%
+7,878
+% Impaired
+of total loan ratio
+Amount
+2015
+2016
+As at 31 December
+Chinese mainland
+1.43%
+100.00%
+% Impaired
+130,237
+100.00%
+145,311
+Total
+0.13%
+0.86%
+1,120
+0.24%
+1.53%
+1.46%
+Amount
+of total loan ratio
+Northern China
+100.00%
+127,635
+1.81%
+141,458 100.00%
+Total
+1.59%
+11.53%
+1.69%
+23.48%
+1.90%
+1.67%
+6.33%
+1.76%
+15.95%
+1.26% 20,363
+5.33% 8,081
+1.76% 54,508 42.71%
+1.45% 29,970
+1.61% 14,713
+15,863 11.22%
+26,342 18.62%
+54,521 38.54%
+28,774 20.34%
+15,958 11.28%
+Central and Southern China
+Western China
+Eastern China
+Northeastern China
+2,223
+Other countries and regions
+0.13%
+1.14%
+(a) Impaired loans and advances by geographical area
+(iii) Identified impaired loans and advances
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+323
+Collateral held against loans and advances to customers which have been overdue for more
+than 3 months principally includes properties, equipment and cash deposits.
+54,635
+233
+19,525
+34,877
+Total
+22,889
+11,936
+Group
+1.77%
+As at 31 December
+2015
+1,482
+0.13%
+1.12%
+1,630
+Macau and Taiwan
+Hong Kong,
+1.77%
+98.00%
+127,635
+1.81%
+97.35%
+141,458
+Chinese mainland
+of total loan ratio
+Amount
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+2016
+6.05%
+324
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Impaired
+2015
+2016
+As at 31 December
+Chinese mainland
+(c) Impaired loans and advances by geographical area and industry
+(iii) Identified impaired loans and advances (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+Impaired
+3.5 Loans and advances (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+325
+1.77%
+127,635 100.00%
+3 Credit risk (Continued)
+Amount % of total loan ratio
+Amount % of total loan ratio
+Corporate loans and advances
+0.64%
+3.71%
+5.395
+postal services
+Transportation, storage and
+4.14%
+27.30%
+35,561
+3.81%
+23.34%
+33,918
+Commerce and services
+3.17%
+34.08%
+44,385
+4.29%
+40.22%
+58,433
+Manufacturing
+1.81%
+BANK OF CHINA LIMITED
+141,458 100.00%
+1.02%
+Corporate loans and advances
+Personal loans
+of total loan ratio
+Amount
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+2015
+2016
+As at 31 December
+Group
+(b) Impaired loans and advances by customer type
+(iii) Identified impaired loans and advances (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+116,314 80.04% 1.77% 105,576
+28,997 19.96% 0.85% 24,661
+Total
+81.06%
+18.94%
+2.15%
+103,192 80.85%
+24,443 19.15%
+112,763 79.71% 2.33%
+28,695 20.29% 0.96%
+Corporate loans and advances
+Personal loans
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+of total loan ratio
+1.66%
+Amount
+2016
+As at 31 December
+Chinese mainland
+1.43%
+100.00%
+1.46% 130,237
+145,311 100.00%
+Total
+0.89%
+2015
+-
+- Government
+62,293 -- 62,293
+The reporting of risk in relation to bullion is included in foreign exchange risk above.
+Guaranteed loans
+48,645
+19,293
+21,585
+4,595
+94,118
+Collateralised and other secured loans
+― Loans secured by property and
+other immovable assets
+34,906
+21,952
+15,217
+5,406
+77,481
+- Other pledged loans
+7,694
+1,292
+Past due
+90 days 91-360 days
+up to
+Past due
+Past due
+As at 31 December 2015
+214,591
+32,551
+11,139
+58,067
+102,281
+Total
+10,441
+350
+1,105
+43,104
+361 days-
+788
+5,197
+328
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(3) Loans and advances rescheduled
+Rescheduling (referring to loans and other assets that have been restructured and
+renegotiated) is a voluntary or, to a limited extent, court-supervised procedure, through
+which the Group and a borrower and/or its guarantor, if any, rescheduled credit terms as a
+result of deterioration in the borrower's financial condition or of the borrower's inability
+to make payments when due. The Group reschedules a non-performing loan only if the
+borrower has good prospects. In addition, prior to approving the rescheduling of loans, the
+Group typically requires additional guarantees, pledges and/or collateral, or the assumption
+of the loan by a borrower with better repayment ability.
+Rescheduled loans are generally subject to a surveillance period of six months. During
+the surveillance period, rescheduled loans remain as non-performing loans and the Group
+monitors the borrower's business operations and loan repayment patterns. After the
+surveillance period, rescheduled loans may be upgraded to “special-mention” upon review
+if certain criteria are met. If the rescheduled loans fall overdue or if the borrower is unable
+to demonstrate its repayment ability, these loans will be reclassified to “doubtful” or below.
+All rescheduled loans within surveillance period are determined to be impaired as at 31
+December 2016 and 2015.
+As at 31 December 2016 and 2015, within impaired loans and advances, rescheduled loans
+and advances that were overdue for 90 days or less were insignificant.
+329
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+15,530
+11,036
+Unsecured loans
+Total
+Past due
+Past due
+361 days-
+3 years over 3 years
+Risk-weighted assets for CCPs
+Past due
+up to
+Past due
+90 days 91-360 days
+Group
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(4) Overdue loans and advances to customers
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+As at 31 December 2016
+Past due
+3 years over 3 years
+Total
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(4) Overdue loans and advances to customers (Continued)
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(Continued)
+Chinese mainland
+As at 31 December 2016
+Past due
+up to
+Past due
+90 days 91-360 days
+Past due
+361 days-
+3 years over 3 years
+Past due
+Total
+Unsecured loans
+9,815
+15,351
+5,096
+659
+5,357
+15,019
+21,685
+30,431
+other immovable assets
+― Loans secured by property and
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Collateralised and other secured loans
+4,144
+21,306
+18,691
+48,492
+Guaranteed loans
+30,921
+92,633
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+330
+― Loans secured by property and
+Collateralised and other secured loans
+60,087
+4,328
+9,287
+27,470
+other immovable assets
+19,002
+40,517
+2,713
+6,740
+13,626
+17,438
+Unsecured loans
+Guaranteed loans
+Collateral of corporate loans and advances includes land, buildings, equipment and others.
+The fair value of collateral was estimated by the Group with reference to the latest available
+external valuations adjusted for recent experience in disposal of collateral as well as the
+market conditions.
+34,465
+10,135
+179,027
+12,807
+28,422
+65,380
+72,418
+Total
+19,904
+8,572
+2,260
+4,380
+1,513
+-Other pledged loans
+69,851
+5,347
+419
+24,041
+28,471
+103,192
+289,498
+Public sectors and
+quasi-governments
+849
+22,734
+21,779
+5,172
+50,534
+― Financial institutions
+7,042
+4,614
+45,818
+73,998
+25,795
+157,267
+― Corporate
+10,974
+248,395 1,572,016
+447,639
+46,016 604,075
+183,158
+248,295 107,741
+18,865
+3,346
+(1)
+Subtotal
+106,776
+16,875
+35,616
+15,888
+27,423
+Total (1)
+68,372
+24,256
+193,524
+― Corporate
+100
+62,090
+― Financial institutions
+441,288
+399,634
+144,391
+41,654
+quasi-governments
+- Public sectors and
+1,411,475
+1,731
+1,409,744
+337
+― Policy banks
+833,904
+735 137,062
+12,142 112,319
+292,978
+- Governments
+countries and regions
+Taiwan and other
+2,646,753
+102,858
+100 1,464,275 650,746
+92,991
+428,774
+Subtotal
+160,000
+160,000
+- China Orient
+278,719
+9,867
+Issuers in Hong Kong, Macau,
+72,492
+148,874 3,250,828
+334
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+(iii) Identified impaired loans and advances (Continued)
+(e) Within impaired corporate loans and advances, the portions covered and not covered by
+collateral held are as follows:
+Group
+Portion covered
+Portion not covered
+Total
+Fair value of collateral held
+Chinese mainland
+Portion covered
+Total
+Fair value of collateral held
+As at 31 December
+2016
+2015
+73,121
+73,143
+112,763
+31,089
+40,969
+72,103
+71,794
+2015
+3.5 Loans and advances (Continued)
+2016
+24,894
+29,304
+105,576
+116,314
+32,433
+43,193
+As at 31 December
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+81,344
+Currency derivatives
+Risk-weighted assets for default risk
+2015
+As at 31 December
+2016
+The risk-weighted assets for the CCR of derivatives are as follows:
+74,872
+The risk-weighted assets for counterparty credit risk ("CCR") of derivatives of the Group
+were calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+and other relevant regulations promulgated by the CBRC under the advanced capital
+measurement approaches. For derivative transactions, risk-weighted assets for CCR include
+the risk-weighted assets for default risk, the risk-weighted assets for credit valuation
+adjustment ("CVA") and the risk-weighted assets for central counterparties ("CCPs").
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+3.8 Derivatives
+The Group's available for sale and held to maturity debt securities are individually assessed for impairment.
+The Group's accumulated impairment charges on available for sale and held to maturity debt securities as at
+31 December 2016 amounted to RMB1,295 million and RMB44 million, respectively (31 December 2015:
+RMB1,410 million and RMB194 million). The carrying values of the available for sale and held to maturity
+debt securities considered impaired as at 31 December 2016 were RMB507 million and RMB4 million,
+respectively (31 December 2015: RMB1,314 million and RMB296 million).
+Interest rate derivatives
+2,506
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+45,389
+75,387
+Risk-weighted assets for CVA
+3,431
+81,290
+3,547
+3,674
+Commodity derivatives and other
+365
+298
+Equity derivatives
+88,747
+- Other pledged loans
+Portion not covered
+1,082
+333
+4.09
+14.41
+7.91
+6.75
+17.45
+10.31
+VaR
+Total of the Bank's trading
+0.06
+1.32
+0.71
+0.01
+1.56
+0.93
+Commodity risk
+0.09
+3.44
+Foreign exchange risk
+5.24
+9.75
+2.62
+3.86
+155,750 3,860,572
+8.41
+Volatility risk
+0.69
+1.55
+0.29
+0.30
+0.81
+1.81
+284,599 2,317,339 680,207
+422,677
+Total (1)
+— Financial institutions
+4,080
+21,319
+32,917
+31,785
+quasi-governments
+6,396
+― Public sectors and
+4,841
+30,351
+85,990
+221,516
+Governments
+countries and regions
+342,698
+13.32
+2,734
+107,053
+64,741 770,973
+194,523
+284,599 175,160
+51,950
+Subtotal
+120,620
+58,288
+16,817
+9,563
+27,432
+13,769
+- Corporate
+217,554
+43,083
+53,039
+Taiwan and other
+6.98
+16.45
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+335
+The Group obtained assets by taking possession of collateral held as security. Detailed
+information of such repossessed assets of the Group is disclosed in Note V.23.
+3.9 Repossessed assets
+127,887
+164,728
+Total
+1,208
+594
+Total
+Lower
+than A
+A
+The Bank's VaR for the years ended 31 December 2016 and 2015 were calculated on the
+Group's trading positions, excluding those of BOCHK (Holdings) and BOCI.
+7,405
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+Market risk
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3.7 Debt securities (Continued)
+Issuers in Chinese mainland
+As at 31 December 2015
+Unrated
+AAA
+AA
+3 Credit risk (Continued)
+4.1 Overview
+The Group is exposed to market risks from on-balance and off-balance businesses, that
+may cause losses to the Group as a result of adverse changes in market prices of interest
+rate, exchange rate, equities and commodities. Market risk arises from open positions in the
+trading and banking books. Both the Group's trading book and banking book face market
+risks. The trading book consists of positions in financial instruments and commodities that
+are held with trading intent or in order to hedge other elements of the trading book. The
+banking book consists of financial instruments not included in the trading book (including
+those financial instruments purchased with surplus funds and managed in the investment
+book).
+The Board of Directors of the Group takes the ultimate responsibility for the oversight
+of market risk management, including the approval of market risk management policies
+and procedures and the determination of market risk tolerance. Senior management is
+responsible for execution of such policies and ensuring that the level of market risk is within
+the risk appetite determined by the Board, while meeting the Group's business objectives.
+The table below shows the VaR of the trading book by type of risk during the years ended
+31 December 2016 and 2015:
+Unit: USD million
+Year ended 31 December
+2016
+2015
+Average
+The Group utilises stress testing as an effective supplement to the trading book VaR
+analysis. Stress testing scenarios are performed based on the characteristics of trading
+transactions to simulate and estimate losses in adverse and exceptional market conditions.
+To address changes in the financial markets, the Group enhances its market risk
+identification capabilities by continuously modifying and improving the trading book stress
+testing scenarios and measurement methodologies in order to capture the potential impact to
+transaction market prices stemming from changes in market prices and volatility.
+High
+Average
+High
+Low
+The Bank's trading VaR
+Interest rate risk
+10.24
+Low
+6.59
+Accuracy and reliability of the VaR model is verified by daily back-testing of the VaR result
+on trading book. The back-testing results are regularly reported to senior management.
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk management departments are responsible for the identification, measurement,
+monitoring, control and reporting of market risks on a Group basis. Business units are
+responsible for monitoring and reporting of market risk within their respective business
+lines.
+4.2 Market risk measurement techniques and limits
+(1) Trading book
+For the purpose of market risk management in the trading book, the Group monitors trading
+book Value at Risk (VaR) limits, stress testing results and exposure limits and tracks each
+trading desk and dealer's observance of each limit on a daily basis.
+VaR is used to estimate the largest potential loss arising from adverse market movements in
+a specific holding period and within a certain confidence level.
+VaR is performed separately by the Bank and its major subsidiaries that are exposed to
+market risk, BOCHK (Holdings) and BOCI. The Bank, BOCHK (Holdings) and BOCI used
+a 99% level of confidence (therefore statistical probability of 1% that actual losses could
+be greater than the VaR estimate) and a historical simulation model to calculate the VaR
+estimate. The holding period of the VaR calculations is one day. To enhance the Group's
+market risk management, the Group has established the market risk data mart, which enabled
+a group level trading book VaR calculation on a daily basis.
+(1) Trading book (Continued)
+336
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4
+Market risk (Continued)
+BANK OF CHINA LIMITED
+Issuers in Hong Kong, Macau,
+90,101
+485,684
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+331
+169,340
+12,314
+28,069
+64,861
+64,096
+Total
+7,869
+413
+2,175
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(4) Overdue loans and advances to customers (Continued)
+(ii) Analysis of overdue loans and advances by geographical area
+2,616
+5,882
+6,032
+169,340
+205,943
+2015
+91,009 3,089,599
+4,236
+for loans and advances to customers which
+have been overdue for more than 3 months
+Total loans and advances to customers which have
+been overdue for more than 3 months
+Less: total loans and advances to customers which
+have been overdue for less than 3 months
+Percentage
+Subtotal
+Other countries and regions
+Hong Kong, Macau and Taiwan
+Chinese mainland
+Individually assessed impairment allowance
+3,805
+1,045
+65,208
+3 years over 3 years
+Past due
+Past due
+361 days-
+up to Past due
+90 days 91-360 days
+Past due
+As at 31 December 2015
+205,943
+10,510
+42,481
+56,809
+96,143
+Total
+9,897
+350
+1,060
+Total
+Unsecured loans
+16,410
+13,479
+5,337
+10,040
+19,691
+30,140
+other immovable assets
+– Loans secured by property and
+Collateralised and other secured loans
+- Other pledged loans
+57,124
+9,268
+27,455
+16,501
+Guaranteed loans
+39,139
+2,664
+6,586
+3,900
+214,591
+As at 31 December
+2016
+2.15%
+261,020
+128,754
+- Policy banks
+52,015
+52,015
+quasi-governments
+- Public sectors and
+179,027
+6,659
+1,998,068
+-
+― Government
+Total
+than A
+A
+389,774
+AA
+- Financial institutions
+4,419
+2,142,179
+370,727
+Subtotal
+160,000
+160,000
+- China Orient
+190,222
+14,665
+92,341
+10,938
+72,278
+― Corporate
+292,861
+76,344
+125,664
+86,434
+AAA
+2,004,727
+The Group monitors the credit risk of counterparties by collecting and analysing
+counterparty information and establishing credit limits taking into account the nature, size
+and credit rating of counterparties.
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+332
+As at 31 December 2016, the majority of the balances of due from and placements with
+and loans to banks and other financial institutions were with banks in Chinese mainland,
+including policy banks, large-sized and medium-sized commercial banks (Note V.13 and
+Note V.15). As at 31 December 2016, the majority of the credit ratings of the banks in Hong
+Kong, Macau, Taiwan and other countries and regions were above A.
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Unrated
+3.6 Due from and placements with and loans to banks and other financial institutions
+(49,286)
+(51,834)
+106,609
+112,310
+(72,418)
+Banks and other financial institutions comprise those institutions in Chinese mainland, Hong
+Kong, Macau, Taiwan and other countries and regions.
+3.7 Debt securities
+3 Credit risk (Continued)
+Issuers in Chinese mainland
+As at 31 December 2016
+Lower
+1.96%
+The tables below represent an analysis of the carrying value of debt securities by credit or
+issuer rating and credit risk characteristic.
+(102,281)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+As at
+Effect on equity*
+As at
+As at
+As at
+4.4 Foreign currency risk (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+Effect on profit before tax
+BANK OF CHINA LIMITED
+(222,517)
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to
+which the Group had significant exposure. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held
+constant, on profit before tax and equity. A negative amount in the table reflects a potential
+net reduction in profit before tax or equity, while a positive amount reflects a potential
+net increase. Such analysis does not take into account the correlation effect of changes in
+different foreign currencies, any further actions that may have been or could be taken by
+management after the financial reporting date to mitigate the effect of exchange differences,
+nor any consequential changes in the foreign currency positions.
+788,678
+367,465 1,357,605
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+343
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+4.4 Foreign currency risk
+The Group conducts a substantial portion of its business in RMB, with certain transactions
+denominated in USD, HKD and, to a much lesser extent, other currencies. The major
+subsidiary, BOCHK Group, conducts the majority of its business in HKD, RMB and USD.
+The Group endeavours to manage its sources and uses of foreign currencies to minimise
+potential mismatches in accordance with management directives.
+823,814 2,980,466
+Currency
+The Group manages its exposure to currency exchange risk through management of its net
+foreign currency position and monitors its foreign currency risk on trading books using VaR
+(Note VI.4.2). Meanwhile, the Group performs currency risk sensitivity analysis to estimate
+the effect of potential exchange rate changes of foreign currencies against RMB on profit
+before tax and equity.
+4
+Change in
+currency rate
+722,240
+2016
+― held to maturity
+available for sale
+Financial investments
+9,735,646
+212,925
+31,372
+11,866
+190,822
+(3,380,301)
+1,167,127
+7,399,294
+Loans and advances to customers, net
+130,549
+3,740
+12,085
+286
+695
+52,945
+4,507
+56,291
+Derivative financial assets
+124,090
+11
+475
+360
+1,540
+23,527
+47,475
+50,702
+loans and receivables
+Financial assets at fair value through profit or loss
+Assets held for sale
+Other
+416,315
+1,173,827
+733,769
+50,371
+1,239
+179,283
+1,415
+224
+78
+1,213
+229
+2,472
+395,921
+13,995
+838
+29,185
+160,709
+8,860
+125,563
+2,497,719
+10,556
+263,114
+13,415,546
+1,734
+379,354
+1,843,043
+5,090
+516
+720
+1,941
+4,035
+153,896
+1,676,845
+1,609,830
+57,049
+7,609
+87,159
+22,604
+125,060
+894,034
+31 December 31 December 31 December 31 December
+594,048
+255
+345
+The tables below summarise the Group's exposure to foreign currency exchange rate risk as at 31 December 2016 and 2015. The Group's exposure
+to RMB is provided in the tables below for comparison purposes. Included in the table are the carrying amounts of the assets and liabilities of the
+Group along with off-balance sheet positions and credit commitments in RMB equivalent, categorised by the original currencies. Derivative financial
+instruments are included in the net off-balance sheet position using notional amounts.
+4.4 Foreign currency risk (Continued)
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+344
+While the table above indicates the effect on profit before tax and equity of 1% appreciation
+of USD and HKD, there will be an opposite effect with the same amounts if the currencies
+depreciate by the same percentage.
+Effect on other comprehensive income (irrespective of income tax effect)
+*
+1,471
+2,012
+(472)
+(247)
++1%
+HKD
+280
+325
+654
+631
++1%
+USD
+2015
+2016
+2015
+As at 31 December 2016
+47,438
+RMB
+HKD
+3,886
+2,286
+36,454
+123,994
+379,735
+other financial institutions
+Placements with and loans to banks and
+2,271,640
+659,982
+15,707
+31,434
+33,772
+21,640
+32,245
+4,510
+340,513
+1,807,526
+1,700
+15,944
+6,477
+14,324
+107,735
+498,095
+Cash and due from banks and other financial institutions
+Balances with central banks
+Assets
+Total
+Other
+GBP
+JPY
+EURO
+USD
+940,799 15,457,992
+Placements from banks and other financial institutions
+196,850
+654,378
+75,479
+1,827
+361,286
+91,767
+124,019
+Total
+2,064,120
+bearing
+years
+months
+months
+1 month
+interest
+Over
+1 and 5
+5 years
+131,943
+2,196,063
+158,286
+93,349
+4,337,626
+1,900,358
+2,271,591
+82,236
+82,236
+119,062
+14,980
+30,325
+30,615
+20,211
+13,959
+8,972
+426,848
+23,060
+173,974
+71,528
+3 and 12
+1 and 3
+Less than
+Non-
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+505,061 1,487,092
+1,115,017
+127,109
+986,419 2,422,327
+(3,668,841)
+16,661,797
+619,721
+42,488
+3,675
+576,088
+1,010,760
+605
+66,799
+261,311
+Market risk (Continued)
+59,740
+4.3 GAP analysis (Continued)
+Assets
+Between
+Between
+Between
+As at 31 December 2015
+Total assets
+Other
+Assets held for sale
+loans and receivables
+held to maturity
+available for sale
+Financial investments
+Loans and advances to customers, net
+Derivative financial assets
+Financial assets at fair value through profit or loss
+Placements with and loans to banks and other financial institutions
+Balances with central banks
+Cash and due from banks and other financial institutions
+342
+272,531
+8,935,195
+64,132
+5,828
+Bonds issued
+1,221,139
+6,529,728
+Due to customers
+69,160
+69,160
+Derivative financial liabilities
+447,944
+1,318
+415,709
+1,764,320
+182,123
+2,430
+19,335
+129,352
+221,521
+83,282
+27,917
+181,274
+9,235
+237,435
+Liabilities classified as held for sale
+31,314
+11,955
+506,877
+282,929
+11,729,171
+168,254
+3,628
+108,662
+16
+17,017
+129,323
+1,874,576
+2,627,092
+1,587,263
+8,298,939
+Total interest repricing gap
+Total liabilities
+1,581,239
+126,217
+4,999
+12,116
+2,960
+3,689
+9,250
+Other
+2,225,183
+32,987
+33,242
+115,324
+551,909
+80,054
+Due to central banks
+102,277
+206,918
+204,940
+53,237
+39,338
+1,790,790
+532,734
+819,218
+301,202
+91,150
+46,486
+1,078,533
+46,878
+192,482
+455,700
+167,734
+151,607
+606,710
+230,608
+135,688
+39,997
+60,558
+1,170,766
+Due to banks and other financial institutions
+Liabilities
+16,815,597
+687,845
+237,937
+4,873
+679,344
+1,308,264
+918,001
+5,607,558 1,652,059
+2,411,077
+4,918,638
+588
+1,907
+6,006
+443
+21,372
+35,564
+143,152
+647
+567,911
+174,597
+6,443
+16,113
+32,645
+21,686
+510,671
+1,002,165
+1,764,320
+Due to banks and other financial institutions
+Total assets
+16,815,597
+468,230
+91,753
+114,585
+188,922
+1,078,510
+Liabilities
+Due to central banks
+232,832
+170,901
+498
+32,383
+14,438
+6,718
+Derivative financial liabilities
+447,944
+3,979
+4,522
+1,940
+22,310
+13,527
+112,002
+289,664
+Placements from banks and other financial institutions
+415,709
+2,067
+9,909
+2,276,853
+12,596,744
+687,845
+186,713
+1,790,790
+5,494
+584
+362,318
+117
+5,702
+160,191
+1,618,055
+1,078,533
+45,858
+2,647
+65,685
+12,222
+114,358
+261,381
+576,382
+loans and receivables
+591,781
+144
+2,978
+11,949
+1,793
+2,809
+2,057
+109,632
+114,845
+269,996
+Other
+237,937
+3,465
+694
+235
+3,614
+102,090
+44,845
+82,994
+Assets held for sale
+606,710
+2
+held to maturity
+10,993
+69,160
+250,301
+725,409
+2,055,776
+Credit commitments
+20,739
+(18,568)
+(48,410)
+36,718
+81,590
+181,262
+(208,637)
+Net off-balance sheet position
+50,691
+(29,501)
+(100,341)
+63,219
+1,380,821
+22,587
+6,348
+22,980
+(28,023)
+49,757
+67,629
+347
+sources.
+The Group considers liquidity risk management a significant component of asset-liability
+management, and determines the size, structure and duration of assets and liabilities
+consistent with the principle of overall balance between assets and liabilities. The Group
+establishes its liquidity portfolio to mitigate liquidity risk, and to minimise the gaps in the
+amount and duration between the funding sources and the uses of funds. The Group refines
+its financing strategy, taking into consideration of various factors including customer risk
+sensitivity, financing cost and concentration of funding sources. In addition, the Group
+prioritises the development of customer deposits, dynamically adjusts the structure of fund
+sources by market-oriented financing modes, including due to banks and other financial
+institutions, inter-bank borrowing and improve the diversity and stability of financing
+The Bank continued to develop and improve its liquidity risk management system with the
+aim of effectively identifying, measuring, monitoring and controlling liquidity risk at the
+institution and group level, including that of branches, subsidiaries and business lines, thus
+ensuring that liquidity demand is met in a timely manner and at a reasonable cost.
+5.1 Liquidity risk management policy and process
+The liquidity risk means the risk that a commercial bank fails to timely acquire adequate
+funds at a reasonable cost to deal with repayment of debts at maturity, perform other
+payment obligations and meet other fund needs for normal business operation.
+Liquidity risk
+The Group is exposed to equity price risk on its available for sale listed equity securities. As
+at 31 December 2016, a 5 percentage variance in listed equity prices from the year end price
+would impact the fair value of available for sale listed equity positions by RMB415 million
+(31 December 2015: RMB297 million). For those available for sale equities considered
+impaired, the impact would be taken to the income statement. The Group is also exposed
+to commodity risk, mainly related to bullion. The Group manages such risk together with
+foreign exchange risk (Note VI.4.2).
+4.5 Price risk
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,357,605
+14,709
+3,210,033
+Net on-balance sheet position
+15,457,992
+496,253
+71,014
+Liabilities classified as held for sale
+282,929
+3,564
+8,321
+788
+102,956
+167,300
+Bonds issued
+11,729,171
+294,490
+44,191
+45,044
+148,277
+881,340
+1,201,162
+9,114,667
+Due to customers
+Other
+3,986
+74,740
+327,837
+75,136
+63,894
+218,423
+1,178,851
+2,213,634
+11,215,923
+Total liabilities
+551,909
+12,334
+196,850
+3,303
+535
+2,263
+426
+2,463
+144,082
+62,504
+227
+3,909
+39,000
+89,423
+-available for sale
+8,935,195
+186,466
+42,488
+1,224
+215
+76
+253
+362,318
+2,482
+4,189
+12,939,748
+360,471
+60,916
+56,706
+178,965
+14,709
+107,109
+6,726
+2,034
+1,398
+1,415
+15,678
+Credit commitments
+(313,211)
+Net off-balance sheet position
+(3,005)
+64,900
+(1,205)
+(138,057)
+(43,101)
+1,577,209
+Net on-balance sheet position
+16,661,797
+537,560
+92,428
+78,252
+262,516
+1,311,884
+619,721
+12,118
+204
+302,792
+2,978
+2,448
+9,931
+242,546
+610,339
+Due to central banks
+1,420,527
+146,294
+6,685
+15,053
+41,011
+31,258
+394,408
+785,818
+Due to banks and other financial institutions
+Liabilities
+Total assets
+18,148,889
+1,830
+2,249,059
+867,094
+115,806
+7,215
+4,815
+21,877
+771
+3,816
+50,653
+1,000,075
+1,287
+28,398
+7,278
+71,241
+2,540,820
+1,538,408
+137,355
+202,744
+5,044
+341,041
+11,838,337
+Total liabilities
+Other
+Liabilities classified as held for sale
+Bonds issued
+9,744,207
+Due to customers
+3,299
+33,338
+Derivative financial liabilities
+146,285
+Placements from banks and other financial institutions
+Financial investments
+84,443
+861,382
+10,334
+18,831
+52,709
+46,844
+Financial assets at fair value through profit or loss
+426,848
+34,400
+2,655
+580
+32
+30,764
+82,142
+273,947
+other financial institutions
+Placements with and loans to banks and
+25,074
+44,901
+2,908
+17
+81
+119,062
+142,646
+24,824
+9,256
+140,075
+631,308
+1,147,024
+6,840,062
+Loans and advances to customers, net
+82,236
+3,709
+11,200
+312
+438
+35,320
+2,213
+29,044
+Derivative financial assets
+28,358
+20,454
+13,189
+344,446
+346
+4.4 Foreign currency risk (Continued)
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,487,092
+23,304
+3,589,608
+30,351
+2,668
+82,004
+39,121
+7,432
+94,639
+255,971
+4,699
+(64,129)
+As at 31 December 2015
+298,500
+RMB
+HKD
+1,719,641
+Balances with central banks
+654,378
+8,922
+2,374
+7,234
+6,457
+17,314
+64,079
+547,998
+Cash and due from banks and other financial institutions
+Assets
+Total
+Other
+GBP
+JPY
+EURO
+USD
+12,939,748
+2,196,063
+13,319
+52,875
+338
+VaR for each risk factor is the independently derived largest potential loss in a specific
+holding period and within a certain confidence level due to fluctuations solely in that risk
+factor. The individual VaRs did not add up to the total VaR as there was diversification
+effect due to correlation amongst the risk factors.
+BOCI monitors its trading VaR for equity derivatives unit, fixed income unit and global commodity unit
+separately, which include equity risk, interest rate risk, foreign exchange risk and commodity risk.
+BOCHK (Holdings)'s trading VaR for the years ended 31 December 2016 and 2015 was calculated
+including the subsidiaries of NCB, BOC Credit Card (International) Limited and Chiyu Bank. Since NCB
+was disposed of on 30 May 2016, BOCHK (Holdings)'s VaR of the trading book for the year ended 31
+December 2016 only included NCB's VaR for the five-month period ended 30 May 2016.
+(ii)
+(i)
+1.31
+3.74
+2.33
+1.63
+3.44
+2.28
+Total BOCI's trading VaR
+BANK OF CHINA LIMITED
+0.04
+0.08
+0.04
+0.33
+0.11
+Global commodity unit
+0.66
+1.76
+0.95
+0.42
+1.57
+0.84
+Fixed income unit
+0.50
+0.32
+2.29
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+Given the nature of demand deposits, their interest rate fluctuations are less volatile than
+those of other products. Had the impact of yield curves movement on interest expenses
+related to demand deposits been excluded, the net interest income for the next twelve
+months from the reporting date would increase or decrease by RMB12,367 million (2015:
+RMB10,716 million) for every 25 basis points upwards or downwards parallel shift,
+respectively.
+2,566
+(2,566)
+(3,001)
+3,001
+2015
+2016
++ 25 basis points parallel move in all yield curves
+- 25 basis points parallel move in all yield curves
+(Decrease)/increase in
+Net interest income
+As at 31 December
+The table below illustrates the potential impact of a 25 basis points interest rate move on the
+net interest income of the Group. The actual situation may be different from the assumptions
+used and it is possible that actual outcomes could differ from the estimated impact on net
+interest income of the Group.
+(2) Banking book (Continued)
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+FOR THE YEAR ENDED 31 DECEMBER 2016
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+339
+The Group performs sensitivity analysis by measuring the impact of a change in interest
+rates on "Net interest income”. This analysis assumes that yield curves change in parallel
+while the structure of assets and liabilities remains unchanged, and does not take changes
+in customer behaviour, basis risk or any prepayment options on debt securities into
+consideration. The Group makes timely adjustment to the structure of assets and liabilities
+based on changes in the market situation, and controls the fluctuation of net interest income
+within an acceptable level.
+Sensitivity analysis on Net interest income
+The Group assesses interest rate risk in the banking book primarily through an interest rate
+repricing gap analysis. Interest rate repricing gap analysis measures the difference between
+the amount of interest-earning assets and interest-bearing liabilities that must be repriced
+within certain periods. The Group employs the interest rate repricing gap analysis and takes
+impact of the off-balance sheet business into consideration when calculating the indications
+of sensitivity of earnings to changing interest rates. The interest rate gap analysis is set out
+in Note VI.4.3 and also covers the trading book.
+The banking book is exposed to interest rate risk arising from mismatches in repricing
+periods and inconsistent adjustments between the benchmark interest rates of assets and
+liabilities. The Group takes on exposure to interest rate risk and fluctuations in market
+interest rates will impact the Group's financial position.
+(2) Banking book
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+340
+1.35
+2.68
+4.85
+2.67
+1.97
+7.37
+3.71
+Interest rate risk
+VaR (i)
+Low
+High
+Average
+Low
+High
+Average
+1.65
+2015
+Year ended 31 December
+Unit: USD million
+BOCHK (Holdings)'s trading
+(1) Trading book (Continued)
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+176,166
+2016
+0.71
+Foreign exchange risk
+8.05
+1.33
+Equity derivatives unit
+BOCI's trading VaR (ii)
+2.30
+4.95
+3.79
+9.09
+5.92
+trading VaR
+Total BOCHK (Holdings)'s
+0.00
+0.02
+0.00
+4.62
+0.00
+0.03
+Commodity risk
+0.00
+0.05
+0.02
+0.00
+0.74
+0.27
+Equity risk
+1.13
+2.62
+1.70
+3.13
+0.18
+BANK OF CHINA LIMITED
+3.27
+FOR THE YEAR ENDED 31 DECEMBER 2016
+Total assets
+18,148,889
+1,515,821
+1,181,816
+2,024,861
+5,502,675
+2,674,188
+5,249,528
+733,769
+50,371
+395,921
+1,378
+7,052
+726,242
+3,413
+Liabilities
+578
+3
+4,285
+5,630
+5,973
+27,428
+123,788
+234,036
+16,767
+15,611
+4,341
+1,843,043
+578,783
+966,564
+3,536
+216,412
+Due to banks and other financial institutions
+343,246
+1,611,515
+198,432
+60
+2,144
+1,897,752
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2,391,472
+56,063
+6,392
+4,522
+3,080,348
+1,341,350
+27,661
+6,645
+20,804
+1,687,769
+8,918,369
+Total interest repricing gap
+Total liabilities
+15,558
+Other
+25,716
+Liabilities classified as held for sale
+27,287
+Bonds issued
+921,705
+7,405,926
+107,109
+107,109
+Derivative financial liabilities
+302,792
+149
+867,094
+1,420,527
+147,695
+27
+73,590
+11,862
+180,102
+380,647
+61,150
+97,435
+131,312
+62,562
+178,931
+Placements from banks and other financial institutions
+Due to customers
+63,545
+Due to central banks
+58,521
+223,847
+176,032
+Total
+Non-
+interest
+bearing
+Over
+5 years
+Between
+1 and 5
+years
+Between
+3 and 12
+months
+1 and 3
+months
+Less than
+1 month
+Between
+As at 31 December 2016
+Other
+Assets held for sale
+― held to maturity
+available for sale
+Financial investments
+Loans and advances to customers, net
+Derivative financial assets
+Placements with and loans to banks and other financial institutions
+Financial assets at fair value through profit or loss
+Cash and due from banks and other financial institutions
+Balances with central banks
+Assets
+The tables below summarise the Group's exposure to interest rate risks. It includes the Group's assets and liabilities at carrying amounts, categorised
+by the earlier of contractual repricing or maturity dates.
+4.3 GAP analysis
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+1,609,830
+341
+(Amount in millions of Renminbi, unless otherwise stated)
+178,222
+2,020
+-loans and receivables
+1,431
+394,030
+662,649
+245,619
+2,064,238
+175,806
+73,205
+17,739
+9,735,646
+130,549
+130,549
+296,496
+104,586
+4,581,188
+2,056,767
+2,641,864
+124,090
+11,896
+54,745
+30,467
+1,364
+781
+659,982
+2,271,640
+231,961
+9,184
+110,994
+19,636
+79,861
+203,826
+26,742
+594,048
+29,709
+23,198
+224,351
+60,864
+23,466
+67,294
+171,126
+Other financial liabilities
+41,750
+62
+6,660
+6,881
+21,670
+247,772
+Liabilities classified as held for sale
+414,561
+6,629
+6,477
+9,970
+(30)
+14,098
+409
+18,543
+399
+15,639
+872
+3,675
+25,523
+Derivative financial instruments settled
+on a net basis
+16,587,768
+99,214
+1,981,509 1,673,230 3,176,800 2,185,811
+7,471,204
+Total financial liabilities
+250,812
+Derivative cash flow
+20,088
+20,142,872
+305,097
+13,262,496
+Due to central banks
+90,885
+183,745
+97,787
+171,650
+891.758
+170,717
+institutions
+5,796,101
+5,580,158
+1,663,705 3.532.256
+865,487
+20,964
+833,004
+Due to banks and other financial
+173,318
+132,379
+388,036
+352
+23,900
+1,808,556
+2,458,734
+1,348,339
+1,407,034
+6,215,933
+Due to customers
+236
+62,544
+62,893
+179,072
+institutions
+Placements from banks and other financial
+1,435,825
+877,227
+12,777
+Bonds issued
+Derivative financial instruments settled
+20,900
+Total inflow
+Financial assets at fair value
+433,839
+26,064
+178,895
+70,307
+158,573
+through profit or loss
+other financial institutions
+666,014
+2,196,880
+12,582
+136
+26,583
+577,123
+1,580,456
+Placements with and loans to banks and
+Balances with central banks
+14,460
+Loans and advances to customers, net
+1,872,161
+- available for sale
+Financial investments
+10,941,818
+3,994,428
+2,958,049
+8,938
+2,406,538
+41,881
+38,744
+13,328
+990,650
+429,958
+111,302
+50,893
+138,251
+2,035
+369,511
+93,589
+As at 31 December 2015
+5.3 Undiscounted cash flows by contractual maturities (Continued)
+Liquidity risk (Continued)
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Between
+FOR THE YEAR ENDED 31 DECEMBER 2016
+BANK OF CHINA LIMITED
+5,649 5,557,370
+(5,664) (5,548,115)
+258,759
+352
+73,950 1,540,606 1,258,275 2,420,131
+(72,307) (1,534,915) (1,256,284) (2,421,057) (257,888)
+Total outflow
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Between
+Between
+Overdue/
+70,082
+130,775
+22
+other financial institutions
+Cash and due from banks and
+Total
+5 years
+years
+Over
+1 and 5
+1 and 3 3 and 12
+months months
+Less than
+1 month
+demand
+Undated
+On
+on a gross basis
+Total financial assets
+139,009
+5,750
+1,145
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+351
+The tables below present the cash flows of the Group of non-derivative financial assets and
+financial liabilities and derivative financial instruments that will be settled on a net basis
+and on a gross basis by remaining contractual maturities at the financial reporting date. The
+amounts disclosed in the table are the contractual undiscounted cash flow, except for certain
+derivatives which are disclosed at fair value (i.e. discounted cash flows basis). The Group
+also manages its inherent short-term liquidity risk based on expected undiscounted cash
+flows.
+5.3 Undiscounted cash flows by contractual maturities
+(Amount in millions of Renminbi, unless otherwise stated)
+5 Liquidity risk (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,357,605
+3,747,477
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2,009,358
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Liquidity risk (Continued)
+1 and 5
+1 and 3 3 and 12
+months months
+Less than
+1 month
+demand
+Undated
+On
+5
+Overdue/
+Between
+Between
+As at 31 December 2016
+Cash and due from banks
+Non-derivative cash flow
+5.3 Undiscounted cash flows by contractual maturities (Continued)
+Between
+734,148
+(236,711)
+(5,673,516) (1,163,853)
+1,606,338
+2,236,700
+32,987
+35,309
+31,001
+48,191
+77,062
+169,964
+1,211,480
+9,235
+14,405
+69,160
+9,422
+33,636
+7,721
+7,279
+1,349,408
+5,828
+8,874
+5,310,840
+447,944
+2,228
+11,729,171
+71,263
+36,826
+1,940,702
+15,457,992
+186,995
+1,996,436
+2,825,769
+1,625,852
+2,011,489
+6,811,451
+551,909
+196,850
+22
+60,052
+282,929
+110,288
+124,591
+5,265
+74,795
+46.529
+Over
+years
+5 years
+Total
+-loans and receivables
+685,195 2,164,267
+267,465 1,144,917
+52,801
+13,889
+-held to maturity
+1,455
+447,665 1,834,302
+147,292
+49,509
+56,903
+- available for sale
+Financial investments
+142,771
+11,795,270
+302,474 830,459
+4,330
+16,266
+24,228
+17,095
+549
+7,676
+2,946
+17,565
+124,632
+3,800
+Other financial assets
+9,104
+4,234
+5,465
+4,006
+340
+Assets held for sale
+144,179 458,721
+268,263
+41,800
+4,470,367
+45,994
+158,313
+3,255,189
+1,070,564
+781
+46,574
+15,383
+16,847
+448,631
+1,743,459
+668,707
+2,271,675
+Balances with central banks
+182,202
+226,525
+84,820
+172,950
+22
+and other financial institutions
+2,188
+Placements with and loans to banks and
+other financial institutions
+230,363
+433,586
+82,785
+54,286
+Loans and advances to customers, net
+31,095
+30,266
+18,601
+9,113
+11,896
+through profit or loss
+Financial assets at fair value
+602,852
+29,622
+233,774
+109.093
+2,428,493
+31,559
+years
+573,281 212,372
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+354
+6
+Included within "Loan commitments" are amounts relating to loan commitments and undrawn credit card
+limits, refer to Note V.42.7.
+3,300,419
+299,246
+663,954
+2,337,219
+Total
+22,350
+68,036
+(1)
+2,997
+3,280
+Fair value
+Assets and liabilities measured at fair value are classified into the following three levels:
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+355
+The main parameters used in valuation techniques include bond prices, interest rates, foreign
+exchange rates, equity and stock prices, volatilities, correlations, early repayment rates,
+counterparty credit spreads and others, which are all observable and obtainable from the
+open market.
+6.1 Assets and liabilities measured at fair value
+The Group uses valuation techniques or counterparty quotations to determine the fair value
+when it is unable to obtain open market quotation in active markets.
+Level 3: Valuation technique using inputs for the asset or liability that is not based on
+observable market data (unobservable inputs). This level includes equity investments
+and debt instruments with significant unobservable components.
+Level 2: Valuation technique using inputs other than quoted prices included within
+level 1 that are observable for the asset or liability, either directly or indirectly. This
+level includes the majority of the over-the-counter derivative contracts, debt securities
+for which quotations are available from pricing services providers, traded loans and
+issued structured deposits.
+Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
+including equity securities listed on exchange or debt instrument issued by certain
+governments and certain exchange-traded derivative contracts.
+•
+•
+•
+The Group's policy is to recognise transfers between levels of fair value hierarchy as at the
+end of the reporting period in which they occur.
+13,040
+47,596
+17,160
+6,313
+years
+Between
+1 and 5
+Less than
+1 year
+As at 31 December 2015
+3,676,064
+374,116
+Over
+5 years
+825,448
+Total
+64,093
+2
+22,363
+2,752
+13,165
+40,537
+2,476,500
+Total
+Loan commitments (¹)
+1,072,470
+Operating lease commitments
+Capital commitments
+3,210,033
+292,969
+603,318
+2,313,746
+Subtotal
+1,818,613
+229,387
+347,950
+1,241,276
+other financial facilities
+Guarantees, acceptances and
+1,391,420
+63,582
+255,368
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+15,895
+4,883
+― Fund investments and other
+33,936
+23,362
+2,830
+19,153
+7,744
+1,535,963
+1,656
+1,337,577
+196,730
+Debt securities
+—
+- Equity securities
+39,931
+Investment properties
+2,592
+357
+(107,109)
+(9,990)
+(9,150)
+(95,874)
+(840)
+(11,235)
+(350,311)
+(350,311)
+(1,968)
+(1,968)
+Due to customers at fair value
+Short position in debt securities
+Derivative financial liabilities
+financial institutions at fair value
+Placements from banks and other
+Liabilities measured at fair value
+21,659
+19,067
+for sale
+23,554
+Investment securities available
+115,635
+Level 3
+Level 2
+Level 1
+As at 31 December 2016
+6.1 Assets and liabilities measured at fair value (Continued)
+Fair value (Continued)
+Total
+6
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+356
+For certain illiquid debt securities (mainly asset-backed securities), unlisted equity (private
+equity), over-the-counter structured derivatives transactions, unlisted funds and part of
+investment properties held by the Group, the management obtains valuation quotations from
+counterparties or uses valuation techniques to determine the fair value, including discounted
+cash flow analysis, net asset value and market comparison approach, etc. The fair value of
+these financial instruments may be based on unobservable inputs which may have significant
+impact on the valuation of these financial instruments, and therefore, these assets and
+liabilities have been classified by the Group as level 3. The unobservable inputs which may
+have impact on the valuation include weighted average cost of capital, liquidity discount,
+price to book ratio, rental growth, etc. As at 31 December 2016, fair value changes resulting
+from changes in the unobservable inputs were not significant. Management determines
+whether to make necessary adjustments to the fair value for the Group's level 3 financial
+instruments by assessing the impact of changes in macro-economic factors, valuations by
+external valuation agencies and other inputs, including loss coverage ratios. The Group has
+established internal control procedures to control the Group's exposure to such financial
+instruments.
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Assets measured at fair value
+Financial assets at fair value
+through profit or loss
+14,914
+Derivative financial assets
+4,349
+4,349
+Fund investments and other
+7,547
+7,547
+― Equity securities
+6,022
+106,172
+2,709
+98,206
+6,022
+- Loans
+5,257
+- Debt securities
+130,549
+125,094 217,720
+Capital commitments
+Operating lease commitments
+80,652
+110,100
+123,387
+Due to central banks
+1,786,193
+165,323
+84,367
+242,674
+185,851
+1,122,036
+institutions
+Due to banks and other financial
+18,724,693
+4,937,999 5,017,749
+70,309
+3,824,839
+20,826
+Placements from banks and other financial
+Bonds issued
+12,066,191
+14,918
+1,781,907
+2,319,899
+1,390,053 1,240,530
+419,332
+5,318,884
+450,918
+1,462
+28,512
+182,799
+238,145
+institutions
+Due to customers
+1,453,660
+854,328
+935,086
+120,271
+240,346
+215,572
+55,679
+40,185
+-loans and receivables
+672,053
+2,088,932
+1,022,008
+339,288
+77,370
+33,406
+-held to maturity
+1,206,555
+616,860
+Assets held for sale
+8,308
+13,634
+1,701,032
+Total financial assets
+129,761
+30,924 250,590
+1,013
+84
+8.704
+2,090
+15,254
+102,252
+364
+Other financial assets
+77,388
+55,129
+25,417
+39,790
+6,081
+10,827
+42.509
+162,305
+Between
+1 and 5
+Less than
+1 year
+As at 31 December 2016
+The Group's off-balance sheet financial instruments that commit it to extend credit to
+customers and other facilities are summarised in the table below at the remaining period
+to the contractual maturity date. Financial guarantees are also included below at notional
+amounts and based on the earliest contractual maturity date. Where the Group is the lessee
+under operating lease commitments, the future minimum lease payments under non-
+cancellable operating leases, as disclosed in Note V.42.5, are summarised in the table below.
+5.4 Off-balance sheet items
+Liquidity risk (Continued)
+1,318
+5
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+353
+(4,223) (4,899,410)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Over
+5 years
+Total
+Loan commitments (¹)
+3,589,608
+371,362
+771,746
+2,446,500
+Subtotal
+1,744,565
+271,139
+384,629
+1,088,797
+other financial facilities
+Guarantees, acceptances and
+1,845,043
+100,223
+387,117
+1,357,703
+4,237 4,909,317
+6,446
+340,921
+(339,347)
+Total outflow
+6,996
+20,277
+131,021
+Other financial liabilities
+196,952
+22
+5,491
+5,468
+30,883
+48,112
+76,972
+Liabilities classified as held for sale
+347,930
+126,208
+35,495
+18,092
+17,214
+199,091
+Total inflow
+on a gross basis
+Derivative financial instruments settled
+(361) (1,647)
+(975)
+(3,602)
+26
+3,265
+Derivative financial instruments settled
+on a net basis
+Derivative cash flow
+158,362 15,466,607
+1,622,996 2,758,947 2,155,383
+1,998,619
+6,772,300
+Total financial liabilities
+118,046 1,059,809 734,110 2,652,194
+(118,004) (1,058,948) (731,960) (2,646,928)
+27,917
+Non-derivative cash flow
+237,435
+5,432
+4,143
+8,722
+16,193
+5,085
+50,371
+259,332
+4,144
+301,848
+30,690
+45,714
+42,247
+17,644
+733,769
+Total assets
+Liabilities
+36,294
+6,652
+395,921
+127,128
+45,239
+131,697
+256,484
+718,220
+401,293
+1,609,830
+10,623
+45,020
+212,939
+983,275
+591,186
+1,843,043
+1,378
+4,291
+14,221
+14,073
+234,830
+2,132,049
+56,897
+1,022,458
+1,615,977
+85,297
+1,420,527
+11,863
+867,094
+178,624
+62,562
+61,150
+180,941
+380,647
+149
+302,792
+9,443
+6,208,198
+11,081
+21,432
+49,358
+12,953
+2,842
+307
+131,312
+172,626
+170,646
+3,291,324
+4,619,251
+4,600,351
+18,148,889
+Due to banks and other financial institutions
+Due to central banks
+Placements from banks and other financial institutions
+Derivative financial liabilities
+Due to customers
+Bonds issued
+Liabilities classified as held for sale
+Other
+Total liabilities
+Net liquidity gap
+891,046
+166,691
+96,552
+867,479
+107,109
+Other
+-loans and receivables
+Total
+Over
+5 years
+1 and 5
+years
+3 and 12
+months
+Between
+Between
+Between
+1 and 3
+months
+Assets
+Less than
+1 month
+Overdue/
+Undated
+As at 31 December 2016
+The tables below analyse the Group's assets and liabilities into relevant maturity groupings based on the remaining period at the financial reporting
+date to the contractual maturity date. For purposes of the tables set forth, "Loans and advances to customers, net" are considered overdue only if
+principal payments are overdue. In addition, for loans and advances to customers that are repayable by installments, only the portion of the loan that is
+actually overdue is reported as overdue. Any part of the loan that is not due is reported according to residual maturity.
+349
+181,274
+Liquidity risk (Continued)
+5.2 Maturity analysis
+5
+On demand
+Cash and due from banks and other financial institutions
+Balances with central banks
+22
+171,837
+28,593
+229,002
+106,802
+229,651
+other financial institutions
+Placements with and loans to banks and
+2,271,640
+781
+46,569
+15,383
+659,982
+2,020
+178,222
+223,847
+84,034
+16,841
+448,607
+1,743,459
+FINANCIAL RISK MANAGEMENT (Continued)
+Assets held for sale
+VI
+FOR THE YEAR ENDED 31 DECEMBER 2016
+12,310
+31,634
+3,031
+124,090
+130,549
+Loans and advances to customers, net
+52,413
+82,783
+23,369
+410,546
+2,208,527
+2,555,287
+3,423,350
+9,735,646
+Financial investments
+- available for sale
+held to maturity
+1,002,740
+25,495
+28,217
+18,065
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+348
+Assets available to meet all of the liabilities and to cover outstanding loan commitments
+include "Cash and due from banks and other financial institutions”, “Balances with central
+banks", "Placements with and loans to banks and other financial institutions" and "Loans
+and advances to customers, net”, etc. In the normal course of business, a proportion of
+short-term loans contractually repayable will be extended and a portion of short-term
+customer deposits will not be withdrawn upon maturity. The Group would also be able
+to meet unexpected net cash outflows by entering into repurchase and reverse repurchase
+transactions, and by selling securities and accessing additional funding sources.
+5.1 Liquidity risk management policy and process (Continued)
+5 Liquidity risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+594,048
+Financial assets at fair value through profit or loss
+11,896
+Derivative financial assets
+13,239
+8,783
+15,745
+(Amount in millions of Renminbi, unless otherwise stated)
+21,680
+223,724
+7,524,737
+62,855
+87,018
+287,726
+869,988
+535,087
+1,790,790
+-loans and receivables
+16,815,597
+1,355,804
+19,669
+6,882
+68,270
+415,709
+1,764,320
+155,372
+236,929
+83,282
+80,054
+68,261
+182,428
+109,657
+123,381
+19,335
+29,719
+Other
+Assets held for sale
+110,598
+406,547
+918,256
+2,173,435
+2,250,542
+3,025,846
+8,935,195
+Financial investments
+-available for sale
+46,529
+28,557
+116,306
+181,096
+510,301
+195,744
+1,078,533
+-held to maturity
+1,121,330
+49,971
+Net liquidity gap
+Other
+239,203
+293,031
+34,025
+26,729
+47,425
+29,215
+18,217
+237,937
+687,845
+1,940,702
+1,137,935
+847,636
+1,389,141
+3,559,917
+4,005,794
+3,934,472
+Total assets
+24,711
+71,440
+53,170
+Liabilities classified as held for sale
+Bonds issued
+Due to customers
+Derivative financial liabilities
+Placements from banks and other financial institutions
+Due to central banks
+Due to banks and other financial institutions
+39,338
+53,237
+204,616
+207,242
+102,277
+606,710
+10,061
+13,924
+39,762
+24,869
+Total liabilities
+Loans and advances to customers, net
+Liabilities
+119,062
+Between
+As at 31 December 2015
+350
+5.2 Maturity analysis (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+Liquidity risk (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+Between
+FOR THE YEAR ENDED 31 DECEMBER 2016
+1,487,092
+4,461,169
+2,561,345
+39,125
+1,827
+(73,401)
+16,661,797
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Overdue/
+Undated
+On demand
+82,236
+91,767
+69,030
+130,446
+22
+Cash and due from banks and other financial institutions
+Assets
+Total
+Over
+5 years
+1 and 5
+Between
+years
+months
+months
+3 and 12
+1 and 3
+Less than
+1 month
+619,721
+58,268
+139,182
+BANK OF CHINA LIMITED
+819
+80,010
+2,057,906
+69,729
+174,865
+23,998
+426,848
+Financial assets at fair value through profit or loss
+14,460
+42,488
+12,997
+18,787
+32,407
+Derivative financial assets
+13,629
+7,091
+6,845
+44,929
+8,834
+31,682
+908
+2,132,049
+158,256
+8,729
+Placements with and loans to banks and
+362,318
+other financial institutions
+12,939,748
+23,150
+54,615
+214,169
+57,014
+6,428
+136,457
+3,252,199
+1,652,646
+2,380,204
+361,286
+654,378
+2,196,063
+1,319,746
+16,851
+6,679
+34,244
+1,689,378
+136
+26,582
+12,582
+1,580,456
+Balances with central banks
+1,998,395
+(6,502,279) (1,130,916)
+576,307
+As at 31 December
+Foreign currency current assets to foreign
+currency current liabilities
+2016
+2015
+RMB current assets to RMB current liabilities
+45.60%
+48.65%
+52.73%
+Liquidity ratios and liquidity coverage ratio
+The liquidity ratios are calculated in accordance with the relevant provisions of the CBRC.
+Liquidity coverage ratio
+According to the Measures for the Information Disclosure of Liquidity Coverage Ratio of
+Commercial Banks issued by the CBRC, the Group disclosed the information of liquidity
+coverage ratio ("LCR") as follows.
+Regulatory requirements of liquidity coverage ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks
+(Provisional), the commercial banks' LCR should reach 100% by the end of 2018. During
+the transition period, the LCR should reach 70%, 80%, 90% and 100% by the end of 2015,
+2016, 2017 and 2018, respectively. During the transition period, eligible commercial banks
+are encouraged to fulfil the requirements in advance, and banks with LCR already reaching
+100% are encouraged to continuously maintain it at 100% or above.
+The Group's liquidity coverage ratio
+367
+62,02%
+The Group's (2) average value of LCR (3) was 117.17% in the fourth quarter of 2016,
+representing a decrease of 0.37 percentage points over the previous quarter. It was primarily
+due to the decrease in the high-quality liquid assets ("HQLA").
+(1)
+II UNAUDITED SUPPLEMENTARY INFORMATION
+1,182,300
+Additional tier 1 capital
+103,523
+103,159
+Preference shares and related premium
+Eligible portion of minority interests
+1,280,841
+99,714
+3,809
+3,445
+Net tier 1 capital
+1,384,364
+1,285,459
+Tier 2 capital
+225,173
+99,714
+212,937
+Net common equity tier 1 capital
+Investments in common equity tier 1 capital of
+financial institutions with controlling interests
+but outside the scope of regulatory consolidation
+(16,580)
+(15,568)
+Goodwill
+(96)
+(96)
+Other intangible assets (except land use rights)
+Gains on sales related to securitisation transactions
+Direct or indirect investments in own shares
+(9,953)
+(6,498)
+(53)
+(204)
+(86)
+Reserve relating to cash-flow hedge items
+20
+16
+not measured at fair value
+(5,369)
+1
+Tier 2 capital instruments issued and related premium
+Excess loan loss provisions
+153,266
+Capital management (Continued)
+8
+When calculating the capital adequacy ratios, BOCG Investment, Bank of China Insurance Company
+Limited ("BOC Insurance"), Bank of China Group Insurance Company Limited ("BOCG Insurance") and
+Bank of China Group Life Assurance Company Limited ("BOCG Life") were excluded from the scope of
+consolidation in accordance with requirements of the CBRC.
+(2) This mainly represented exchange differences from the translation of foreign operations and fair value
+gains/(losses) on available for sale financial assets.
+Insurance risk
+Insurance contracts are mainly sold in Chinese mainland and Hong Kong denominated in
+RMB and HKD. The risk under any one insurance contract is the possibility that the insured
+event occurs and the uncertainty of the amount of the resulting claim. This risk is inherently
+random and, therefore, unpredictable. The Group manages its portfolio of insurance risks
+through its underwriting strategy and policies, portfolio management techniques, adequate
+reinsurance arrangements and proactive claims handling and processing. The underwriting
+strategy attempts to ensure that the underwritten risks are well diversified in terms of type
+and amount of risk and industry.
+7
+For a portfolio of insurance contracts where the theory of probability is applied to pricing
+and provisioning, the principal risk that the Group faces under its insurance contracts is
+that the actual claims and benefit payments exceed the carrying amount of the insurance
+liabilities. This could occur because the frequency or severity of the claims and benefits are
+greater than estimated. Insurance events are random and the actual number and amount of
+claims and benefits will vary from year to year from the level established using statistical
+techniques.
+366
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+I DIFFERENCES BETWEEN IFRS AND CAS CONSOLIDATED FINANCIAL
+STATEMENTS
+There are no differences in the Group's operating results for the years ended 31 December
+2016 and 2015 or total equity as at 31 December 2016 and 2015 presented in the Group's
+consolidated financial statements prepared under IFRS and those prepared under CAS.
+Uncertainty in the estimation of future benefit payments and premium receipts for long-
+term life insurance contracts arises from the unpredictability of long-term changes in overall
+levels of mortality. In order to assess the uncertainty due to the mortality assumption and
+lapse assumption, the Group conducted mortality rate studies and policy lapse studies in
+order to determine the appropriate assumptions.
+149,406
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+64,572
+45,839
+Eligible portion of minority interests
+11,195
+13,832
+Net capital
+(Amount in millions of Renminbi, unless otherwise stated)
+Risk-weighted assets
+1,498,396
+11,269,592
+10,654,081
+365
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,609,537
+(9,829)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(195)
+Fund investments and other
+5,642
+5,642
+Derivative financial assets
+13,621
+68,615
+82,236
+Investment securities available
+for sale
+—
+Debt securities
+9,338
+117,498
+954
+1,029,842
+- Equity securities
+5,588
+2,352
+22,269
+30,209
+― Fund investments and other
+3,812
+715
+13,955
+911,390
+18,482
+9,338
+4,218
+(7,316)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2016
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+As at 31 December 2015
+Level 1
+― Equity securities
+Level 2
+Total
+Assets measured at fair value
+Financial assets at fair value
+through profit or loss
+- Debt securities
+1,342
+96,991
+1,531
+99,864
+- Loans
+4,218
+Level 3
+(1,613)
+Investment properties
+21,111
+- Debt
+securities
+Debt
+securities
+Equity
+securities
+Fund
+investments
+and other
+As at 1 January 2016
+1,531
+954
+22,269
+13,955
+21,111
+properties
+Total gains and losses
+12
+2
+(177)
+(448)
+1,054
+- other comprehensive income
+(35)
+1,069
+1,974
+Sales
+(10)
+- profit/(loss)
+2,170
+Investment securities available for sale
+fair value
+through
+profit or
+loss
+23,281
+Liabilities measured at fair value
+Placements from banks and other
+financial institutions at fair value
+Due to customers at fair value
+Short position in debt securities
+Derivative financial liabilities
+(1,617)
+(1,617)
+(339,911)
+(339,911)
+(7,012)
+(7,012)
+(9,115)
+Investment
+(60,045)
+358
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+Reconciliation of Level 3 Items
+Financial
+assets at
+(69,160)
+(11,712)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+30,051
+676
+443
+39
+404
+Total gains for the year
+Total
+Year ended 31 December 2015
+Realised Unrealised
+Total
+Year ended 31 December 2016
+Realised Unrealised
+Gains or losses on Level 3 assets and liabilities included in the income statement for the year
+comprise:
+Total gains or losses for the years ended 31 December 2016 and 2015 included in the
+income statement as well as total gains or losses included in the income statement relating
+to financial instruments held as at 31 December 2016 and 2015 are presented in "Net trading
+gains", "Net gains on financial investments” or “Impairment losses on assets” depending on
+the nature or category of the related financial instruments.
+6.1 Assets and liabilities measured at fair value (Continued)
+Fair value (Continued)
+402
+6
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+474
+(38)
+(36)
+2
+359
+in the income statement for assets/liabilities
+held as at 31 December 2015
+Total gains/(losses) for the period included
+21,111
+13,955
+VI FINANCIAL RISK MANAGEMENT (Continued)
+22,269
+1,078
+6.2 Financial assets and liabilities not measured at fair value
+362,318
+Bonds issued (2)
+Financial liabilities
+332,428
+1,790,790 1,853,050 1,835,942
+330,332 374,161
+375,394
+Loans and receivables
+1,843,043
+Held to maturity
+Debt securities (¹)
+Financial assets
+2015
+2016
+The assets and liabilities measured at fair value have been no significant transfers between
+level 1 and level 2 during the year ended 31 December 2016.
+2015
+Carrying value
+2016
+As at 31 December
+The tables below summarise the carrying amounts and fair values of “Debt securities"
+classified as held to maturity and loans and receivables, and "Bonds issued" not presented at
+fair value on the statement of financial position.
+6.2 Financial assets and liabilities not measured at fair value (Continued)
+Fair value (Continued)
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+360
+Financial assets and liabilities not presented at their fair value on the statement of financial
+position mainly represent "Balances with central banks”, “Due from banks and other
+financial institutions", "Placements with and loans to banks and other financial institutions",
+"Loans and advances to customers, net”, “Financial investments" classified as held to
+maturity and loans and receivables, “Due to central banks”, “Due to banks and other
+financial institutions", "Placements from banks and other financial institutions”, and “Due to
+customers" measured at amortised cost, and "Bonds issued".
+Fair value
+282,929 369,686
+954
+29,016
+979
+850
+As at 1 January 2015
+1,054
+(848)
+(181)
+12
+in the income statement for assets/liabilities
+held as at 31 December 2016
+Total gains/(losses) for the period included
+19,067
+19,153
+23,362
+1,656
+19,269
+2,709
+(4,453)
+(5)
+(516)
+(175)
+77
+Transfers into/(out of) Level 3, net
+Other changes
+Settlements
+1,530
+5,285
+401
+1,184
+1,166
+Purchases
+As at 31 December 2016
+1,531
+9,329
+Total gains and losses
+282
+2,933
+Other changes
+83
+(458)
+Transfers into/(out of) Level 3, net
+(1)
+Settlements
+3,893
+3,610
+697
+675
+754
+16,379
+Purchases
+(1,063)
+(251)
+(73)
+Sales
+2,852
+(148)
+3
+- other comprehensive income
+474
+16
+581
+7
+-profit
+(1,852)
+294,821
+As at 31 December 2015
+Debt securities classified as held to maturity and loans and receivables
+31 December
+As at
+As at
+Common equity tier 1 capital adequacy ratio
+Capital management (Continued)
+7
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+364
+The table below summarises the Group's common equity tier 1 capital adequacy ratio, tier 1
+capital adequacy ratio and capital adequacy ratio(1) calculated in accordance with the Capital
+Rules for Commercial Banks (Provisional) and other relevant regulations promulgated by
+the CBRC.
+31 December
+Goodwill, other intangible assets (except land use rights), investments in common equity
+tier 1 capital of financial institutions with controlling interests but outside of the scope of
+regulatory consolidation, significant minority capital investment in tier 2 capital of financial
+institutions that are outside of the scope of regulatory consolidation and other deductible
+items are deducted from common equity tier 1 and tier 2 capital to derive at the regulatory
+capital.
+Additional tier 1 capital, including additional tier 1 capital instruments issued and
+related premium and eligible portion of minority interests;
+Common equity tier 1 capital, including common shares, capital reserve, surplus
+reserve, general reserve, undistributed profits, eligible portion of minority interests and
+others;
+•
+•
+The Group's regulatory capital is managed by its capital management related departments
+and consists of the following:
+Capital management (Continued)
+7
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+363
+Tier 2 capital, including tier 2 capital instruments issued and related premium, excess
+loan loss provisions and eligible portion of minority interests.
+As a Systemically Important Bank, the Group's capital adequacy ratios are required to meet
+the lowest requirements of the CBRC by the end of 2018, that is, the common equity tier 1
+capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should be no
+less than 8.50%, 9.50% and 11.50%, respectively.
+2015
+11.10%
+(1)
+451,585
+526,804
+179,416
+193,338
+111,207
+125,109
+Regulatory deductions
+Eligible portion of minority interests
+Other (2)
+Undistributed profits
+General reserve
+Surplus reserve
+139,572
+11.37%
+139,443
+294,388
+294,388
+Common shares
+1,197,868
+1,297,421
+Common equity tier 1 capital
+Composition of the Group's capital base
+Capital adequacy ratio
+Tier 1 capital adequacy ratio
+14.06%
+14.28%
+12.07%
+12.28%
+Capital reserve
+The Group's capital adequacy ratios are calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations promulgated by the
+CBRC. With the approval of the CBRC, the Group adopts the advanced capital measurement
+approaches, which include Foundation Internal Ratings-based Approach for corporate
+exposures, Internal Ratings-based Approach for retail exposures, Internal Models Approach
+for market risk and Standardised Approach for operational risk. For risk exposures not
+covered by the advanced approaches, the corresponding portion shall be calculated adopting
+non-advanced approaches.
+2016
+Refined management and capital level improvement. Optimise the capital management
+system by sufficiently identifying, calculating, monitoring, mitigating, and controlling
+various types of risks; incorporate capital restraints into the whole process of product
+pricing, resource allocation, structural adjustments, performance evaluation, etc.,
+ensuring that the capital employed is commensurate with the related risks and the level
+of risk management.
+Financial liabilities
+1,853,050
+171,661
+1,620
+1,807,083
+170,041
+Loans and receivables
+45,967
+- Held to maturity
+Debt securities
+Total
+Level 3
+As at 31 December 2016
+Level 2
+Financial assets
+The tables below summarise the fair values of three levels of "Debt securities" classified as
+held to maturity and loans and receivables (excluding the China Orient Bond and Special
+Purpose Treasury Bond), and “Bonds issued” not presented at fair value on the statement of
+financial position.
+Bonds issued
+6.2 Financial assets and liabilities not measured at fair value (Continued)
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+361
+The aggregate fair values are calculated based on quoted market prices. For those bonds where quoted
+market prices are not available, a discounted cash flow model is used based on a current yield curve
+appropriate for the remaining term to maturity.
+Bonds issued
+Fair values of other debt securities are based on market prices or broker/dealer price quotations. Where
+this information is not available, the Bank will perform valuation by referring to prices from valuation
+service providers or on the basis of discounted cash flows models. Valuation parameters include market
+interest rates, expected future default rates, prepayment rates and market liquidity. The fair values of RMB
+bonds are mainly determined based on the valuation results provided by China Central Depository Trust &
+Clearing Co., Ltd.
+The China Orient Bond and Special Purpose Treasury Bond held by the Bank are non-negotiable. As there
+are no observable market prices or yields reflecting arm's length transactions of a comparable size and
+tenor, the fair value is determined based on stated interest rate of the instruments.
+Capital adequacy and regulatory capital are monitored by the Group's management,
+employing techniques based on the guidelines developed by the Basel Committee, as
+implemented by the CBRC, for supervisory purposes. The required information is filed with
+the CBRC on a quarterly basis.
+(2)
+Fair value (Continued)
+Level 1
+Level 1
+BANK OF CHINA LIMITED
+Allocation optimisation and benefit augmentation. Allocate capital properly by
+prioritising the asset businesses with low capital occupancy and high comprehensive
+income, to steadily improve the efficiency and return of capital, achieving the
+reciprocal matchup and dynamic equilibrium among risks, assets and returns.
+Adequate capital and sustainable development. Implement the Scientific Outlook
+on Development thoroughly; follow the lead of the strategic planning of the Group
+development; and maintain the high quality and adequacy of capital as to meet
+regulation requirements, support business growth, and advance the sustainable
+development of the scale, quality and performance of the business in the Group.
+369,686
+The Group follows the principles below with regard to capital management:
+Capital management
+7
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2016
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+362
+Other than the above, the difference between the carrying amounts and fair values of those
+financial assets and liabilities not presented at their fair value on the statement of financial
+position is insignificant. Fair value is measured using a discounted cash flow model.
+294,821
+Bonds issued
+Financial liabilities
+294,821
+As at 31 December 2015
+116
+1,753,796
+129,812
+- Loans and receivables
+82,146
+Held to maturity
+Debt securities
+1,835,942
+129,928
+Financial assets
+Total
+Level 3
+369,686
+Level 2
+Domestic Preference Share (First Tranche)
+601988
+601988.SS
+中國銀行
+601988 CH
+Bloomberg
+Lowest trading
+Shanghai Stock Exchange
+Stock Name
+A Share
+HKD3.44
+Stock Name
+Securities Code
+Reuters
+Shanghai Stock Exchange
+HKD3.77
+中行優1
+360002
+EK6323670
+Offshore Preference Share
+Stock Name
+BOC 2014 PREF
+Hong Kong Stock Exchange 4601
+Reuters
+Bloomberg
+4601.HK
+EK5371647
+price in the year
+H Share
+Bloomberg
+A Share
+To be held on 29 June 2017
+RMB3.44
+To be printed and dispatched to H-Share Holders in
+RMB3.08
+late April 2017
+To be announced no later than 30 August 2017
+The Bank's 2016 Annual General Meeting is scheduled to be held in Beijing and Hong Kong,
+China at 9:30 a.m. on Thursday, 29 June 2017.
+Dividends on Ordinary Shares
+The Board of Directors recommended a final dividend on ordinary shares of RMB0.168 per share
+(before tax), subject to the approval of shareholders at the 2016 Annual General Meeting.
+Securities Information
+Listing and Trading
+The Bank's ordinary shares were listed on the Hong Kong Stock Exchange and SSE on 1 June
+and 5 July 2006 respectively.
+The Bank's Offshore Preference Shares were listed on the Hong Kong Stock Exchange
+on 24 October 2014. The Domestic Preference Shares (First Tranche) were traded on the
+Comprehensive Business Platform of SSE on 8 December 2014. The Domestic Preference Shares
+(Second Tranche) were traded on the Comprehensive Business Platform of SSE on 31 March
+2015.
+Ordinary Shares
+Issued shares: 294,387,791,241 shares (as at 31 December 2016)
+Including:
+RMB4.01
+A Share: 210,765,514,846 shares
+83,622,276,395 shares
+Preference Shares
+Issued shares:
+999,400,000 shares (as at 31 December 2016)
+Including:
+Domestic Preference Share: 600,000,000 shares
+Offshore Preference Share: 399,400,000 shares
+376
+Market Capitalisation
+As at the last trading day in 2016 (30 December for both A Shares and H Shares), the Bank's
+market capitalisation was RMB982.349 billion (based on the closing price of A Shares and H
+Shares on 30 December 2016, and the exchange rate of HKD100 = RMB89.451 as published by
+the SAFE on 30 December 2016).
+Securities Price
+Closing price on
+Highest trading
+30 December 2016
+price in the year
+H Share:
+HKD2.83
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+Stock Name
+1 Total high-quality liquid assets (HQLA)
+High-quality liquid assets
+No.
+The Group's average values of LCR individual line items in the fourth quarter of 2016 are as
+follows:
+The Group's liquidity coverage ratio (Continued)
+Liquidity ratios and liquidity coverage ratio (Continued)
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+368
+119.42%
+118.08%
+Cash outflows
+117.54%
+Average value of LCR
+Quarter
+ended 31
+March
+Quarter
+ended 30
+June
+Quarter
+ended 30
+September
+Quarter
+ended 31
+December
+2016
+The Group's HQLA is comprised of cash, central bank reserves which are able to be drawn
+down under stress scenarios, and debt securities that meet the qualifying criteria for Level
+1 or Level 2 assets pursuant to the Liquidity Risk Management of Commercial Banks
+(Provisional).
+The Group's liquidity coverage ratio (Continued)
+Liquidity ratios and liquidity coverage ratio (Continued)
+1
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+To be announced on 31 March 2017
+117.17%
+H Share
+Total
+Total
+weighted
+value
+Hong Kong Stock Exchange
+Reuters
+Bloomberg
+Bank of China
+3988
+3988.HK
+3988 HK
+Domestic Preference Share (Second Tranche)
+Stock Name
+Shanghai Stock Exchange
+Bloomberg
+377
+中行優2
+360010
+EK8196546
+un-weighted
+value
+7,582,514
+5
+387,200
+3,872,004
+Less stable deposits
+110,906
+2,218,754
+Stable deposits
+3456
+498,106
+6,090,758
+customers, of which:
+Retail deposits and deposits from small business
+2
+3,232,892
+Unsecured wholesale funding, of which:
+Annual General Meeting
+BANK OF CHINA LIMITED
+2016 Annual General Meeting
+(9,571)
+Structural position
+27,971
+147,136
+55,557
+230,664
+*
+The net option position is calculated using the delta equivalent approach as set out in the requirements of
+the CBRC.
+370
+(47,188) (27,810)
+SUPPLEMENTARY INFORMATION
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+3
+International claims
+The Group discloses international claims according to Banking (Disclosure) Rules (L.N.
+160 of 2014). International claims are risk exposures generated from the countries or
+geographical areas where the counterparties take the ultimate risk while considering the
+transfer of the risk, exclude local claims on local residents in local currency. Risk transfer is
+only made if the claims are guaranteed by a party in a country which is different from that
+of the counterparty or if the claims are on an overseas branch of a counterparty whose head
+office is located in another country.
+International claims include “Balances with central banks”, “Due from and placements
+with and loans to banks and other financial institutions", "Government certificates of
+indebtedness for bank notes issued”, “Financial assets at fair value through profit or loss”,
+"Loans and advances to customers” and “Financial investments".
+International claims have been disclosed by major countries or geographical areas. A
+country or geographical area is reported where it constitutes 10% or more of the aggregate
+amount of international claims, after taking into account any risk transfers.
+Banks
+Non-bank
+Official private
+sector
+sector
+Total
+(Amount in millions of Renminbi, unless otherwise stated)
+65,427
+Net long/(short) position
+(2,173)
+Structural position
+32,534
+201,228
+54,047 287,809
+As at 31 December 2015
+Spot assets
+1,038,079
+15,909
+Spot liabilities
+Forward purchases
+4,395,569
+248,416 1,302,404
+(991,084) (266,086) (289,553) (1,546,723)
+408,637
+793,915 5,598,121
+Forward sales
+(4,375,139)
+(205,517)
+(780,544) (5,361,200)
+Net options position*
+(1,998)
+(131)
+(44)
+As at 31 December 2016
+2,831,290
+Asia Pacific
+601,461
+For the purpose of the table below, the entire outstanding balance of "Loans and advances
+to customers" and "Placements with and loans to banks and other financial institutions" are
+considered overdue if either principal or interest payment is overdue.
+4.1 Total amount of overdue loans and advances to customers
+As at 31 December
+Total loans and advances to customers
+which have been overdue
+within 3 months
+between 3 and 6 months
+between 6 and 12 months
+over 12 months
+4
+Total
+within 3 months
+between 3 and 6 months
+between 6 and 12 months
+over 12 months
+Total
+2016
+2015
+102,281
+72,418
+Percentage
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+200,367
+Hong Kong
+15,532
+Other Asia Pacific locations
+125,198
+709,491 1,511,319
+3,188 423,094 441,814
+102,622 343,365 571,185
+Subtotal
+742,191
+306,177 1,475,950 2,524,318
+North and South America
+Other
+64,201
+70,327
+190,282
+51,652
+148,600 403,083
+145,130 267,109
+Total
+876,719
+548,111
+1,769,680 3,194,510
+371
+BANK OF CHINA LIMITED
+Chinese mainland
+Operational deposits (excluding those generated
+78981
+from correspondent banking activities)
+Non-operational deposits (all counterparties)
+Unsecured debt
+(3)
+(2)
+(1) The LCR aims to ensure that commercial banks have sufficient HQLA that can be converted into cash to
+meet the liquidity requirements for at least thirty days under stress scenarios determined by the CBRC.
+The Group's liquidity coverage ratio (Continued)
+2
+Liquidity ratios and liquidity coverage ratio (Continued)
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+When calculating the consolidated LCR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life were excluded from the scope of subsidiary consolidation in accordance with the requirements of the
+CBRC.
+SUPPLEMENTARY INFORMATION
+117.17%
+3,232,892
+2,759,607
+value
+Total adjusted
+917,792
+1,445,530
+157,375
+265,852
+650,669
+BANK OF CHINA LIMITED
+The average values of LCR and individual line items are the simple arithmetic average of month-end values
+in the quarter.
+Currency concentrations
+The following information is computed in accordance with the provisions of the CBRC.
+(24,700) (17,368) 21,063
+63,131
+Net long/(short) position
+(254,529) (1,073,565) (5,767,301)
+(141) (52,517)
+(321,029) (2,065,647)
+4,624,107 569,469 1,023,746 6,217,322
+(4,439,207)
+(515)
+(51,861)
+Net options position*
+Forward sales
+Forward purchases
+353,621 1,689,206
+22,870
+(1,382,623) (361,995)
+Spot liabilities
+1,312,715
+Spot assets
+As at 31 December 2016
+Total
+Other
+HKD
+USD
+Equivalent in millions of RMB
+1,055,528
+109,748
+124,150
+369
+1,200,294
+Credit and liquidity facilities
+3456
+13
+Outflows related to loss of funding on debt
+products
+12
+38,742
+38,742
+Outflows related to derivative exposures and
+other collateral requirements
+11
+134,413
+1,239,036
+10 Additional requirements, of which:
+4,256
+Secured funding
+11,650
+11,650
+1,828,509
+3,530,957
+991,131
+4,039,907
+95,671
+20,203
+14 Other contractual funding obligations
+154,804
+Liquidity coverage ratio (%)
+Total net cash outflows
+23
+22
+Total HQLA
+21
+222
+20 Total cash inflows
+Other cash inflows
+Inflows from fully performing exposures
+822
+19
+18
+securities borrowing)
+17 Secured lending (including reverse repos and
+Cash inflows
+3,677,399
+16 Total cash outflows
+54,530
+3,042,529
+15 Other contingent funding obligations
+155,017
+21,143
+37,864
+44,237
+134,802
+3,986,645
+18 Less: Adjustments for conversion to credit equivalent amounts
+(2,383,967)
+21
+222
+19
+Adjusted off-balance sheet exposures
+1,602,678
+Balance of assets in securities financing transactions
+Off-balance sheet items
+20
+1,384,364
+Adjusted on- and off-balance sheet exposures
+19,604,737
+22
+Leverage ratio
+(1)
+7.06%
+When calculating the consolidated leverage ratio, BOCG Investment, BOC Insurance, BOCG Insurance
+and BOCG Life were excluded from the scope of consolidation in accordance with the Capital Rules for
+Commercial Banks (Provisional).
+374
+Net tier 1 capital
+17
+16
+Agent transaction exposures
+6
+Gross-up for derivative collateral provided where deducted
+from the balance sheet assets
+7
+Less: Deductions of receivable assets for cash variation margin
+provided in derivative transactions
+8
+9
+10
+Less: Exempted CCP leg of client-cleared trade exposures
+Adjusted effective notional amount of written credit derivatives
+Less: Deductible amounts for written credit derivatives
+11
+Total derivative exposures
+222,164
+12
+Accounting balance for securities financing transaction assets
+109,408
+13
+14
+Less: Deducted amounts for securities financing transaction assets
+Counterparty credit risk exposure for securities financing transaction
+assets
+25,394
+15
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+12
+Cross-jurisdictional liabilities
+19,604,737
+1,794,957
+1,485,712
+2,250,654
+432,865,206
+8,206,031
+636,945
+8,144,583
+659,627
+8,890
+2,944,587
+4,031,201
+(1)
+The above indicators are calculated and disclosed in accordance with the Guidelines for the Disclosure
+of Global Systemically Importance Assessment Indicators of Commercial Banks, which are unaudited and
+inconsistent with the disclosures in the financial report.
+375
+Reference for Shareholders
+Financial Calendar for 2017
+2016 Annual Results
+2016 Annual Report
+Cross-jurisdictional claims
+91,757
+11
+10
+6
+Global systemically importance assessment indicators of commercial banks
+The following global systemically importance assessment indicators of commercial banks
+are disclosed in accordance with the Guidelines for the Disclosure of Global Systemically
+Importance Assessment Indicators of Commercial Banks (Yin Jian Fa, [2014] No. 1)
+promulgated by the CBRC.
+No. Indicators (¹)
+2016 value
+1
+Adjusted on-balance and off-balance sheet assets
+2
+Intra-financial system assets
+3
+Intra-financial system liabilities
+4
+Securities and other financing instruments
+5
+Payments settled via payment systems or correspondent banks
+Assets under custody
+Underwritten transactions in debt and equity markets
+8
+Notional amount of over-the-counter derivatives
+9
+Trading and available for sale securities
+Level 3 assets
+2017 Interim Results
+with all derivative transactions
+5
+As at
+31 December 30 September
+As at
+30 June
+2016
+2016
+2016
+As at
+31 March
+2016
+Net tier 1 capital
+1,384,364
+As at
+1,362,159
+1,325,582
+Adjusted on- and
+off-balance sheet assets
+19,604,737
+19,251,144
+19,062,650
+18,497,683
+Leverage ratio
+7.06%
+1,322,016
+The leverage ratios of the Group calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) are as follows(¹):
+Leverage ratio
+5
+54,243
+41,229
+214,591
+179,027
+1.03%
+0.79%
+0.20%
+0.23%
+0.38%
+0.49%
+0.54%
+0.45%
+2.15%
+1.96%
+4.2 Total amount of overdue Placements with and loans to banks and other financial
+institutions
+The total amount of overdue "Placements with and loans to banks and other financial
+institutions" as at 31 December 2016 and 2015 is not considered material.
+372
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+7.08%
+6.94%
+7.17%
+No. Items
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+5
+Leverage ratio (Continued)
+No. Items
+On-balance sheet assets (excluding derivatives and
+As at
+31 December
+2016
+securities financing transactions)
+2
+Less: Tier 1 capital deductions
+17,661,673
+(16,580)
+3
+Total on-balance sheet exposures
+(excluding derivatives and SFTs)
+17,645,093
+4
+Replacement cost associated with all derivative transactions
+(i.e. net of eligible cash variation margin)
+130,407
+(Amount in millions of Renminbi, unless otherwise stated)
+Add-on amounts for potential future exposure associated
+SUPPLEMENTARY INFORMATION
+373
+1
+2
+3456
+Total consolidated assets
+Adjustments that are consolidated for accounting purposes
+but outside the scope of regulatory consolidation
+Adjustments for fiduciary assets
+Adjustments for derivative financial instruments
+5 Adjustments for securities financing transactions
+Adjustments for off-balance sheet exposures
+Other adjustments
+As at
+31 December
+2016
+18,148,889
+(9,953)
+91,615
+24,683
+1,602,678
+(253,175)
+8
+Adjusted on- and off-balance sheet assets
+19,604,737
+BANK OF CHINA LIMITED
+Overdue assets
+BEIJING BRANCH
+CHINA
+EMAIL:
+FAX: (81) 335058868
+TEL: (81) 335058818
+SWIFT: BKCHJPJT
+JAPAN
+BANK OF CHINA
+(MALAYSIA) BERHAD
+www.bankofchina.com/th
+WEBSITE:
+service.th@bankofchina.com
+service.jp@boctokyo.co.jp
+TOKYO 107-0052
+BOC BLDG. 3-4-1 AKASAKA
+TOKYO BRANCH
+JAKARTA BRANCH
+CUSTOMER SERVICE CENTRE:
+service.ph@bankofchina.com
+EMAIL:
+FAX: (63) 28850532
+TEL: (63) 28850111
+SWIFT: BKCHPHMM
+MINATO-KU,
+PHILIPPINES
+WEBSITE:
+GROUND, MEZZANINE, &
+1ST FLOOR PLAZA OSK,
+25 JALAN AMPANG
+50450 KUALA LUMPUR,
+SWIFT: BKCHKRSEXXX
+SEOUL 03188
+KOREA
+41, CHEONG GYE CHEON-RO,
+JONGNO-GU,
+1/2/3F YOUNG POONG BLDG.
+SEOUL BRANCH
+TEL: (60) 323878888
+www.bankofchina.co.id
+WEBSITE:
+service.id@bankofchina.com
+www.bankofchina.com/jp
+FAX: (62) 215201113/215207552
+EMAIL:
+SWIFT: BKCHIDJA
+INDONESIA
+JAKARTA 12920,
+SUDIRMAN KAV. 24
+JALAN JEND.
+11TH FLOOR,
+TAMARA CENTER
+SWIFT: BKCHMYKL
+MALAYSIA
+TEL: (62) 215205502
+PHILAMLIFE TOWER
+8767 PASEO DE ROXAS,
+MAKATI CITY, MANILA
+G/F. & 36/F.
+MANILA BRANCH
+FAX: (852) 28660938
+TEL: (852) 21608800
+service.tw@bankofchina.com
+SWIFT: BKCHTWTP
+TEL: (886) 227585600
+FAX: (886) 227581598
+EMAIL:
+1-4/F, NO. 105, SONGREN ROAD,
+XINYI DIST., TAIPEI CITY,
+TAIWAN
+TAIPEI BRANCH
+WEBSITE: www.taifungbank.com
+EMAIL: tfbsecr@taifungbank.com
+TEL: (853) 28322323
+FAX: (853) 28570737
+MACAU
+WEBSITE: www.boclife.com.hk
+418, ALAMEDA DR. CARLOS,
+d'ASSUMPCAO,
+TEL: (853) 28781828
+FAX: (853) 28781833
+WEBSITE: www.bocmacau.com
+SWIFT: BKCHMOMX
+MACAU
+SOARES,
+BANK OF CHINA BUILDING,
+AVENIDA DOUTOR MARIO
+HONG KONG
+13/F, CITYPLAZA ONE,
+1111 KING'S ROAD,
+TAIKOO SHING,
+BOC GROUP LIFE
+ASSURANCE CO., LTD.
+bocginv_bgi@bocgroup.com
+TAI FUNG BANK LIMITED
+EMAIL: enquiry@boclife.com.hk
+385
+MAJOR BRANCHES AND SUBSIDIARIES IN OTHER COUNTRIES
+EMAIL:
+(66) 26795566
+FAX: (66) 22861020
+TEL: (66) 22861010
+SWIFT: BKCHTHBK
+THAILAND
+SATHORN DISTRICT,
+BANGKOK 10120,
+TUNGMAHAMEK
+179/4 BANGKOK CITY TOWER,
+SOUTH SATHORN ROAD,
+BANK OF CHINA (THAI)
+PUBLIC COMPANY LIMITED
+www.bankofchina.com/sg
+WEBSITE:
+service.sg@bankofchina.com
+EMAIL:
+FAX: (65) 65343401
+TEL: (65) 65352411
+SWIFT: BKCHSGSGXXX
+BANK OF CHINA BUILDING,
+SINGAPORE 049908
+4 BATTERY ROAD,
+SINGAPORE BRANCH
+ASIA-PACIFIC AREA
+TEL: (82) 16705566
+FAX: (60) 321615150
+EMAIL:
+service.my@bankofchina.com
+HOCHIMINH CITY BRANCH
+SWIFT: BKCHLALAXXX
+TEL: (856) 21228888
+NO.A1003-A2003,
+VIENTIANE CENTER,
+KHOUVIENG ROAD,
+NONGCHAN VILLAGE,
+SISATTANAK DISTRICT,
+VIENTIANE CAPITAL,
+LAO P.D.R.
+VIENTIANE BRANCH
+EMAIL: boc@bankofchina.kz
+FAX: (7) 7272585514
+TEL: (7) 7272585510
+SWIFT: BKCHKZKA
+REPUBLIC OF KAZAKHSTAN
+ZHETYSU-2, AUEZOV DISTRICT,
+050063, ALMATY,
+FAX: (856) 21228880
+71B, MICRODISTRICT
+bldbcbgs@mail.notes.bank-of-
+TEL: (973) 17531119
+FAX: (973) 17531009
+EMAIL:
+KINGDOM OF BAHRAIN
+BUILDING 95, ROAD 1702,
+BLOCK 317, MANAMA
+AL JASRAH TOWER,
+DIPLOMATIC AREA
+OFFICE 1502,
+OFFICE
+BAHRAIN REPRESENTATIVE
+FAX: (976) 77195566
+china.com
+EMAIL: service.la@bankofchina.com
+BANK OF CHINA MIDDLE
+EAST (DUBAI) LIMITED
+LEVEL 11 TOWER 2,
+SWIFT: BKCHCNBJ970
+TEL: (86) 0731-82580703
+FAX: (86) 0731-82580707
+POST CODE: 410005
+ZHEJIANG BRANCH
+321 FENG QI ROAD,
+HANGZHOU,
+ZHEJIANG PROV.,
+CHINA
+SWIFT: BKCHCNBJ910
+TEL: (86) 0571-85011888
+FAX: (86) 0571-87074837
+POST CODE: 310003
+SHANDONG BRANCH
+22 LUOYUAN STREET,
+JINAN,
+SHANDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ500
+TEL: (86) 0531-58522000
+FAX: (86) 0531-58522001
+POST CODE: 250000
+GUANGDONG BRANCH
+197-199 DONGFENG XI LU,
+GUANGZHOU,
+GUANGDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ400
+TEL: (86) 020-83398888
+FAX: (86) 020-83348080
+POST CODE: 510180
+ANHUI BRANCH
+HENAN BRANCH
+GUANGXI BRANCH
+387
+FAX: (9714)3880778
+TEL: (9714)3819100
+SWIFT: BKCHAEAD
+P.O. BOX 118842,
+DUBAI, U.A.E.
+AL FATTAN CURRENCY HOUSE
+DUBAI INTERNATIONAL
+FINANCIAL CENTRE
+TEL: (976) 77095566
+FAX: (852) 28772629
+WEBSITE: www.bocgi.com
+EMAIL:
+MONGOLIA
+2 GREAT CHINGGIS
+BANK OF CHINA
+(AUSTRALIA) LIMITED
+BANK OF CHINA
+386
+service.vn@bankofchina.com
+EMAIL:
+FAX: (84) 838219948
+www.bankofchina.com/au
+WEBSITE:
+(HONGKONG) LIMITED
+BRUNEI BRANCH
+service.au@bankofchina.com
+39-41 YORK STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+SYDNEY BRANCH
+SWIFT: BKCHVNVX
+TEL: (84) 838219949
+www.bankofchina.com/kr
+WEBSITE:
+FAX: (82) 23996265
+TIMES SQUARE BUILDING,
+22-36 NGUYEN HUE STREET,
+DISTRICT 1, HOCHIMINH CITY,
+VIETNAM
+GROUND & 11TH FL,
+SWIFT: BKCHAU2SXXX
+TEL: (61) 282355888
+FAX: (61) 292621794
+EMAIL:
+ULAANBAATAR
+REPRESENTATIVE OFFICE
+39-41 YORK STREET,
+CENTRAL TOWER,
+11TH FLOOR
+WEBSITE: www.boc.cn/kh
+EMAIL: service.kh@bankofchina.com
+SWIFT: BKCHKHPP
+TEL: (855) 23988886
+FAX: (855) 23988880
+# 315 ANG DOUNG ST.
+P.O. BOX 110, PHNOM PENH,
+CAMBODIA
+CANADIA TOWER,
+1ST & 2ND FLOOR,
+PHNOM PENH BRANCH
+BRUNEI DARUSSALAM
+SWIFT: BKCHBNBB
+TEL: (673) 2459888
+FAX: (673) 2459878
+KIARONG JAYA KOMPLEK,
+LOT NO. 56244, SIMPANG 22,
+JALAN DATO RATNA,
+KAMPONG KIARONG,
+BANDAR SERI BEGAWAN
+BE1318,
+JSC AB (BANK OF CHINA
+KAZAKHSTAN)
+EMAIL: service.nz@bankofchina.com
+WEBSITE: www.bankofchina.com/nz
+NEW ZEALAND
+SWIFT: BKCHNZ22
+TEL: (64) 99809000
+FAX: (64) 99809088
+LEVEL 17, TOWER 1,
+205 QUEEN STREET,
+AUCKLAND, 1010,
+(NEW ZEALAND) LIMITED
+BANK OF CHINA
+EMAIL: service.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+FAX: (61) 292621794
+TEL: (61) 282355888
+SWIFT: BKCHAU2AXXX
+SYDNEY NSW 2000,
+AUSTRALIA
+KHAAN SQUARE, SBD-8,
+ULAANBAATAR 14200,
+CHINA
+TEL: (852) 22007500
+1 GARDEN ROAD,
+BOC BLDG., 347 RUIJIN
+SOUTH ROAD,
+GUIYANG,
+GUIZHOU PROV.,
+525 TIANSHUI SOUTH ROAD,
+CHENGGUAN DISTRICT,
+LANZHOU,
+GANSU PROV.,
+CHINA
+CHINA
+SWIFT: BKCHCNBJ660
+SWIFT: BKCHCNBJ240
+TEL: (86) 0851-85822419
+FAX: (86) 0851-85825770
+POST CODE: 550002
+TEL: (86) 0931-7825003
+FAX: (86) 0931-7825004
+POST CODE: 730000
+CHONGQING BRANCH
+218 ZHONG SHAN YI ROAD,
+YU ZHONG DISTRICT,
+CHONGQING,
+SWIFT: BKCHCNBJ59A
+TEL: (86) 023-63889234
+FAX: (86) 023-63889217
+POST CODE: 400013
+SHENZHEN BRANCH
+YUNNAN BRANCH
+515 BEIJING ROAD,
+KUNMING,
+YUNNAN PROV.,
+CHINA
+QINGHAI BRANCH
+218 DONGGUAN STREET,
+CHENG DONG DISTRICT,
+XINING,
+QINGHAI PROV.,
+CHINA
+SWIFT: BKCHCNBJ280
+CHINA
+SWIFT: BKCHCNBJ640
+TEL: (86) 0871-63106335
+FAX: (86) 0871-63107516
+POST CODE: 650051
+GANSU BRANCH
+SWIFT: BKCHCNBJ760
+TEL: (86) 0991-2328888
+FAX: (86) 0991-2825095
+POST CODE: 830002
+382
+SICHUAN BRANCH
+SHAANXI BRANCH
+XINJIANG BRANCH
+35 MID. RENMIN ROAD
+(2 DUAN),
+CHENGDU,
+SICHUAN PROV.,
+CHINA
+GUIZHOU BRANCH
+SWIFT: BKCHCNBJ570
+18 TANGYAN ROAD BEIDUAN,
+LIANHU DISTRICT,
+XI'AN,
+SHAANXI PROV.,
+SWIFT: BKCHCNBJ620
+TEL: (86) 029-89593900
+FAX: (86) 029-89592999
+POST CODE: 710077
+1 DONGFENG ROAD,
+URUMQI,
+XINJIANG UYGUR
+AUTONOMOUS REGION,
+CHINA
+TEL: (86) 028-86741950
+FAX: (86) 028-86403346
+(86) 028-86744859
+POST CODE: 610031
+TEL: (86) 0971-8178888
+FAX: (86) 0971-8174971
+POST CODE: 810000
+INTERNATIONAL FINANCE
+BUILDING,
+SWIFT: BKCHCNBJ260
+TEL: (86) 0951-5681501
+FAX: (86) 0951-5681509
+POST CODE: 750002
+383
+TEL: (86) 0512-66595566
+FAX: (86) 0512-65114906
+POST CODE: 215028
+NINGBO BRANCH
+139 YAOHANG STREET,
+NINGBO,
+ZHEJIANG PROV.,
+CHINA
+SWIFT: BKCHCNBJ92A
+TEL: (86) 0574-87196666
+FAX: (86) 0574-87198889
+POST CODE: 315000
+QINGDAO BRANCH
+BANK OF CHINA INSURANCE
+COMPANY LIMITED
+FAX: (86) 0891-6599394
+POST CODE: 850000
+9/10/11F
+XICHENG DISTRICT,
+BEIJING,
+CHINA
+TEL: (86) 010-83260001
+FAX: (86) 010-83260006
+P.O.BOX: 100032
+WEBSITE: WWW.BOCINS.COM
+BANK OF CHINA INVESTMENT
+MANAGEMENT CO., LTD
+BOC INTERNATIONAL
+(CHINA) LIMITED
+39/F, BOC BUILDING
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+TEL: (86) 021-20328000
+FAX: (86)021-58883554
+P.O.BOX: 200120
+NO.110 XIDAN NORTH
+STREET,
+TEL: (86) 0891-6599394
+CHINA
+SWIFT: BKCHCNBJ95B
+2022 JIANSHE ROAD,
+LUOHU DISTRICT, SHENZHEN,
+GUANGDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ45A
+TEL: (86) 0755-22338888
+FAX: (86) 0755-82259209
+POST CODE: 518001
+TIBET BRANCH
+NINGXIA BRANCH
+SUZHOU BRANCH
+113 JINZHU XI LU,
+LHASA,
+TIBET AUTONOMOUS
+REGION,
+CHINA
+SWIFT: BKCHCNBJ900
+39 XINCHANG EAST ROAD,
+JINFENG DISTRICT,
+YINCHUAN,
+NINGXIA HUI
+128 WANGDUN ROAD,
+SUZHOU INDUSTRIAL PARK,
+SUZHOU,
+JIANGSU PROV.,
+AUTONOMOUS REGION,
+CHINA
+SWIFT: BKCHCNBJ740
+TEL: (86) 0898-66562023
+FAX: (86) 0898-66562040
+POST CODE: 570102
+CHINA
+HAINAN PROV.,
+HAIKOU,
+(HOLDINGS) LIMITED
+BOC HONG KONG
+MAJOR BRANCHES AND SUBSIDIARIES IN HONG KONG, MACAU AND TAIWAN
+384
+POST CODE: 361012
+FAX: (86) 0592-5095130
+TEL: (86) 0592-5066417
+WWW.BOC-SAMSUNGLIFE.CN
+WEBSITE:
+BANK OF CHINA GROUP
+INSURANCE COMPANY
+LIMITED
+TEL: (86) 010-8326 2688
+FAX: (86) 010-8326 2777
+P.O.BOX: 100032
+XICHENG DISTRICT,
+BEIJING,
+9/F, NO.110 XIDAN NORTH
+STREET,
+BOC-SAMSUNG LIFE INS.
+CO., LTD.
+WWW.BOCFULLERTONBANK.COM
+TEL: (86) 010-57765000
+Fax: (86) 010-57765550
+P.O.BOX: 100032
+WEBSITE:
+9/F NO.110 XIDAN NORTH STREET,
+XICHENG DISTRICT, BEIJING,
+CHINA
+BANKS
+PREPARATION TEAM OF BOC
+FULLERTON COMMUNITY
+BOCCFCADMIN@BOCCFC.CN
+CHINA
+MACAU BRANCH
+24/F, BANK OF CHINA TOWER,
+1 GARDEN ROAD,
+23/F, BANK OF CHINA TOWER,
+BANK OF CHINA GROUP
+INVESTMENT LIMITED
+WEBSITE: www.bocgins.com
+EMAIL: info_ins@bocgroup.com
+TEL: (852) 28670888
+FAX: (852) 25221705
+HONG KONG
+71 DES VOEUX ROAD
+CENTRAL,
+9/F, WING ON HOUSE,
+TEL: (852) 28101203
+FAX: (852) 25377609
+1 GARDEN ROAD,
+HONG KONG
+7/F, BANK OF CHINA TOWER,
+HONG KONG BRANCH
+WEBSITE: www.bocigroup.com
+EMAIL: info@bocigroup.com
+FAX: (852) 21479065
+TEL: (852) 39886000
+HONG KONG
+26/F, BANK OF CHINA TOWER,
+1 GARDEN ROAD,
+BOC INTERNATIONAL
+HOLDINGS LIMITED
+WEBSITE: www.bochk.com
+FAX: (852) 28105830
+TEL: (852) 28462700
+HONG KONG
+FAX: (86)021-63291789
+P.O.BOX: 200120
+WEBSITE: WWW.BOCCFC.CN
+EMAIL:
+HONG KONG
+TEL: (86) 021-63291680
+BANK OF CHINA CONSUMER
+FINANCE COMPANY LIMITED
+3-1 BUSINESS OUTER RING ROAD,
+ZHENGDONG NEW DISTRICT,
+ZHENGZHOU,
+HENAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ530
+TEL: (86) 0371-87008888
+FAX: (86) 0371-87007888
+POST CODE: 450018
+39 GUCHENG ROAD,
+NANNING,
+GUANGXI ZHUANG
+AUTONOMOUS REGION,
+CHINA
+SWIFT: BKCHCNBJ480
+TEL: (86) 0771-2879316
+FAX: (86) 0771-2813844
+POST CODE: 530022
+FUJIAN BRANCH
+SWIFT: BKCHCNBJ780
+TEL: (86) 0551-62926995
+FAX: (86) 0551-62926993
+POST CODE: 230091
+HUBEI BRANCH
+BOC BLDG., 136 WUSI ROAD,
+FUZHOU,
+FUJIAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ720
+TLX: 92109BOCFJCN
+TEL: (86) 0591-87090999
+FAX: (86) 0591-87090111
+POST CODE: 350003
+677 JIANSHE ROAD,
+WUHAN,
+HUBEI PROV.,
+CHINA
+SWIFT: BKCHCNBJ600
+TEL: (86) 027-85562866
+(86) 027-85562959
+FAX: (86) 027-85562955
+POST CODE: 430022
+29, 31 DATONG ROAD,
+LONGHUA DISTRICT,
+HAINAN BRANCH
+ANHUI PROV.,
+CHINA
+NO.1688, YUNGU ROAD,
+BINHU NEW DISTRICT,
+HEFEI,
+WWW.BOCICHINA.COM
+WEBSITE: WWW.BOCIM.COM
+TEL: (86) 021-38834999
+FAX: (86)021-68873488
+P.O.BOX: 200120
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+45/F, BOC BUILDING
+SWIFT: BKCHCNBJ73A
+CHINA
+ΧΙΑΜΕΝ,
+NO. 40 NORTH HUBIN ROAD,
+BANK OF CHINA BUILDING
+XIAMEN BRANCH
+SWIFT: BKCHCNBJ81A
+TEL: (86) 0411-82586666
+FAX: (86) 0411-82637098
+POST CODE: 116001
+LIAONING PROV.,
+CHINA
+9 ZHONGSHAN SQUARE,
+ZHONGSHAN DISTRICT,
+DALIAN,
+DALIAN BRANCH
+SWIFT: BKCHCNBJ50A
+TEL: (86) 0532-81858000
+FAX: (86) 0532-85818243
+POST CODE: 266071
+CHINA
+SHANDONG PROV.,
+MIDDLE ROAD,
+QINGDAO,
+59 HONGKONG
+ADMINDIV.CHINA@BOCICHINA.COM
+EMAIL:
+1409#, BOC BUILDING
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+WEBSITE:
+HUNAN PROV.,
+(1 DUAN),
+Inspection Department
+Department
+Credit Approval
+Department
+Credit Management
+Department
+Internal Control and
+Legal & Compliance
+Department
+E-finance
+Department
+Risk Management
+Department
+Custody Services
+Department
+Investment Banking and
+Asset Management
+SME Services
+Department
+Personal Banking
+Department
+Wealth Management and
+Private Banking
+Department
+Global Markets
+Department
+Financial Institutions
+Department
+Global Trade Services
+Department
+Corporate Banking
+Department
+Institute of International
+Finance
+Accounting and
+Information Department
+Department
+Human Resources
+Executive Office
+Shanghai RMB
+Trading Unit
+Senior Management
+Shareholders' Meeting
+Head Office Departments
+and Institutions
+Audit Department
+Board Secretariat
+Board of Directors
+Financial Management
+Department
+Treasury
+Bank Card Center
+Data Center
+Security Department
+Head Office Departments
+Department
+Clearing
+Department
+Institutions
+|
+Logistics Office
+L
+וי
+International Finance
+Distribution and Operation
+Management Department
+Information Technology
+Shanghai College of
+I
+Retired Staff Office
+BOC College
+||
+Labor Union Office
+||
+I
+Center
+||
+|| International Statement ||
+Corporate Culture
+Department
+Software Center
+||
+380
+Board of Supervisors
+379
+You may write to the Bank's H-Share Registrar, Computershare Hong Kong Investor Services
+Limited (address: 17M, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong) to
+request the annual report prepared under IFRS or go to the Bank's office address for copies
+prepared under CAS. The Chinese and/or English versions of the annual report are also available
+on the following websites: www.boc.cn, www.sse.com.cn and www.hkexnews.hk.
+Credit Rating (Long Term, Foreign Currency)
+Telephone: (86) 21-3887 4800
+Pudong New Area, Shanghai
+166 East Lujiazui Road,
+36/F, China Insurance Building,
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited
+Domestic Preference Share
+CHANGSHA,
+Telephone: (852) 2862 8555
+Wanchai, Hong Kong
+Standard & Poor's Ratings Services:
+17M, Hopewell Centre,
+183 Queen's Road East,
+H Share
+Telephone: (86) 21-3887 4800
+Pudong New Area, Shanghai
+166 East Lujiazui Road,
+36/F, China Insurance Building,
+Depository and Clearing Corporation Limited
+Shanghai Branch of China Securities
+A Share
+If a shareholder wishes to enquire about share transfers, changes of name or address, or loss of
+share certificates, or to receive other information concerning the shares held, please write to the
+following address:
+Shareholder Enquiry
+Computershare Hong Kong Investor
+Services Limited
+Moody's Investors Service:
+Fitch Ratings:
+Rating and Investment Information, Inc.:
+Other Information
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+Investor Relations Team, Board Secretariat, Bank of China Limited
+8/F, Bank of China Building, 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+Shanghai Stock Exchange Index Series
+CSI Index Series
+FTSE Index Series
+Bloomberg Index Series
+S&P Index Series
+Dow Jones Index Series
+Investor Enquiry
+MSCI Index Series
+Hang Seng Corporate Sustainability Index Series
+Hang Seng Composite Index (HSCI) Series
+Hang Seng China Enterprises Index
+Hang Seng China H-Financial Index
+Hang Seng Index
+Index Constituents
+AAA
+A
+A
+A1
+A
+378
+Dagong Global Credit Rating Co., Ltd. (RMB):
+Should you have any queries about how to obtain copies of this annual report or access the
+document on the Bank's website, please call the Bank's H-Share Registrar at (852) 2862 8688 or
+the Bank's hotlines at (86) 10-6659 2638.
+Note: The Bank holds 37.14% of the equity interest of BOCI China by its wholly-owned subsidiary BOCI.
+Facsimile: (852) 2865 0990
+Institutions in the
+Chinese mainland (10,978)
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+253 SHIFU ROAD,
+SHENHE DISTRICT,
+SHENYANG,
+LIAONING PROV.,
+CHINA
+LIAONING BRANCH
+HEBEI BRANCH
+SWIFT: BKCHCNBJ200
+TEL: (86) 022-27108001
+FAX: (86) 022-23312805
+POST CODE: 300204
+CHINA
+TIANJIN,
+8 YOUYI NORTH ROAD,
+HEXI DISTRICT,
+SHANGHAI BRANCH
+SWIFT: BKCHCNBJ300
+SWIFT: BKCHCNBJ860
+TEL: (86) 0451-53627774
+FAX: (86) 0451-53623330
+POST CODE: 150001
+HEILONGJIANG PROV.,
+HARBIN,
+19 HONGJUN STREET,
+NANGANG DISTRICT,
+HEILONGJIANG BRANCH
+TEL: (86) 0471-4690052
+FAX: (86) 0471-4690001
+POST CODE: 010010
+SWIFT: BKCHCNBJ880
+CHINA
+AUTONOMOUS REGION,
+INNER MONGOLIA
+XIN CHENG DISTRICT,
+HUHHOT,
+CHINA
+TLX: 33062BOCSHCN
+SWIFT: BKCHCNBJ810
+TEL: (86) 024-22810827
+FAX: (86) 024-22857333
+POST CODE: 110013
+TEL: (86) 021-50375566
+FAX: (86) 021-50372911
+POST CODE: 200120
+Board of
+Supervisors Office
+593 MID. FURONG ROAD
+SWIFT: BKCHCNBJ550
+TEL: (86) 0791-86471503
+FAX: (86) 0791-86471505
+POST CODE: 330038
+CHINA
+JIANGXI PROV.,
+NANCHANG,
+HONGGUTAN NEW DISTRICT,
+SWIFT: BKCHCNBJ940
+CHINA
+JIANGSU PROV.,
+NANJING,
+10, LVYIN ROAD,
+148 ZHONG SHAN NAN LU,
+HUNAN BRANCH
+JIANGXI BRANCH
+JIANGSU BRANCH
+381
+POST CODE: 050000
+FAX: (86) 0311-69696692
+TEL: (86) 0311-69696681
+SWIFT: BKCHCNBJ220
+HEBEI PROV.,
+CHINA
+28 ZIQIANG ROAD,
+SHIJIAZHUANG,
+12 XINHUA DAJIE,
+INNER MONGOLIA BRANCH
+TLX: 34116BOCJSCN
+TEL: (86) 025-84207888
+FAX: (86) 025-84206082
+POST CODE: 210005
+FAX: (86) 010-85121739
+POST CODE: 100010
+Taipei Branch
+Tai Fung Bank Limited
+Macau Branch
+BOCI China Note
+Bank of China Consumer
+Finance Company Limited
+BOCIM
+BOC Fullerton Community
+Bank (82 community banks and
+77 sub-branches)
+branches and 10,287
+sub-branches
+BOCG Investment
+Hong Kong Branch
+BOC-Samsung Life
+Branches, subsidiaries and representative
+offices located in 47 countries
+BOCHK
+37 tier-one and direct
+branches, 326 tier-two
+business
+business
+Diversified business
+Diversified business
+Commercial banking
+other countries and regions (578)
+Institutions in Hong Kong,
+Macau, Taiwan and
+TIANJIN BRANCH
+Domestic and Overseas
+Branches and Subsidiaries
+BOC Insurance
+BOCG Insurance
+Commercial banking
+Organisational Chart
+BOC Aviation
+TEL: (86) 010-85122288
+CHINA
+SWIFT: BKCHCNBJ110
+DONGCHENG DISTRICT,
+2 CHAOYANGMEN NEI DAJIE,
+A, C, E KAIHENG CENTER,
+SWIFT: BKCHCNBJ840
+TEL: (86) 0431-88408888
+FAX: (86) 0431-88408901
+POST CODE: 130061
+JILIN PROV.,
+CHINA
+CHANGCHUN,
+699 XI AN DA LU,
+BEIJING,
+186 PINGYANG ROAD,
+XIAODIAN DISTRICT,
+TAIYUAN,
+SHANXI PROV.,
+CHINA
+SWIFT: BKCHCNBJ680
+TEL: (86) 0351-8266016
+FAX: (86) 0351-8266021
+POST CODE: 030006
+MAJOR BRANCHES AND SUBSIDIARIES IN THE CHINESE MAINLAND
+SHANXI BRANCH
+JILIN BRANCH
+1 FUXINGMEN NEI DAJIE,
+HEAD OFFICE
+CHINA
+SWIFT: BKCHCNBJ
+TEL: (86) 010-66596688
+FAX: (86) 010-66016871
+POST CODE: 100818
+WEBSITE: www.boc.cn
+BEIJING,
+List of Major Branches and Subsidiaries
+1,551
+1,406
+34
+Hong Kong, Macau, Taiwan and
+overseas operations
+Subtotal
+419,067
+3,404,393
+367,215
+2,765,948
+353,371
+2,437,679
+Unit: RMB million, except percentages
+Commercial Banking
+Domestic Commercial Banking
+In 2016, the Bank's domestic commercial banking business recorded an operating income of
+RMB359.240 billion, a decrease of RMB18.681 billion or 4.94% compared with the prior year.
+Details are set forth below:
+2016
+2015
+Items
+Amount
+% of total
+4
+1,381
+1,524,131
+2,082,757
+4,021,257
+Amount
+Foreign currency
+336,294
+398,103
+500,208
+Hong Kong, Macau, Taiwan and
+overseas operations
+1,735,787
+Segment Reporting by Geography
+1,569,551
+Subtotal
+6,568,969
+6,369,912
+6,045,596
+Personal loans
+Domestic: RMB
+2,983,945
+2,397,327
+Foreign currency
+% of total
+100.00%
+185,014
+The Bank devoted great efforts to transforming its corporate banking business. It continued to
+promote product innovation, further optimise its customer structure, expand its customer base
+and enhance its diversified operations and the integration of its domestic and overseas operations.
+The Bank strived to improve its global service capability for corporate banking customers,
+thus achieving balanced and steady development of its corporate banking business. In 2016,
+the Bank's domestic corporate banking business realised an operating income of RMB185.014
+billion, an increase of RMB1.086 billion or 0.59% compared with the prior year.
+Corporate Deposits
+The Bank accelerated the development of its corporate liability business, constantly enhanced
+financial service standards and thus realised sustainable growth in corporate deposits. Seizing
+business opportunities arising from key industries, the Bank strengthened the marketing of its
+full product line. It managed to attract more administrative institution customers by improving
+product and service systems aimed at corporate customers engaged in supporting the people's
+livelihood, public finance and social security, education and public health, etc., reporting rapid
+growth in deposits from such institutions. The Bank also actively sought out customers along
+the upstream and downstream of supply chains and industrial chains in order to identify and
+attract more potential customer deposits. In response to the trend of interest rate liberalisation,
+the Bank pursued innovation-led development, reinforced marketing promotion and optimised
+product functions, while at the same time insisting on maintaining the right balance between
+scale and benefit. In addition, seizing business opportunities arising from the rapid expansion of
+direct financing, the Bank stepped up its marketing efforts for cash management and settlement
+products. It also enhanced the corporate banking service functions and service levels of its outlets,
+resulting in an increase in deposit contribution per outlet.
+55
+35
+As at the end of 2016, RMB corporate deposits in the Bank's domestic operations totalled
+RMB5,213.790 billion, an increase of RMB394.940 billion or 8.20% compared with the prior
+year-end. Foreign currency corporate deposits amounted to USD54.543 billion.
+Corporate Loans
+The Bank continued to implement national industrial policies and strengthen its support for the
+real economy. It actively supported key investment areas, provided greater credit support for
+such key areas as technological upgrade of enterprises, technology-driven innovation, high-
+end equipment manufacturing and environmental protection, as well as to the regions of central
+and western China, micro, small and medium-sized enterprises and to traditional infrastructures
+such as railways and water conservation. The Bank constantly optimised its credit structure by
+making better use of new assets and revitalising existing assets, providing credit support for the
+transformation and upgrading of the domestic economy and for international collaboration on
+production capacity. It strictly limited lending to industries characterised by high pollution, high
+energy consumption and overcapacity. The Bank stepped up the transformation of its corporate
+banking service and helped customers to broaden their financing channels so as to meet their
+diversified financing needs. In addition, the Bank also further enhanced the development of green
+finance and improved its system of green financial products and services.
+As at the end of 2016, RMB corporate loans of the Bank's domestic operations totalled
+RMB4,496.888 billion, an increase of RMB94.630 billion or 2.15% compared with the prior year-
+end. Foreign currency corporate loans totalled USD48.478 billion.
+Trade Finance and Services
+The Bank fully leveraged its traditional advantages in trade finance while effectively managing
+and controlling risks. It accelerated innovation in its business model and seized opportunities
+arising from national strategies, thus driving forward stable growth and continuously
+consolidating its market dominance. In 2016, the Group's transaction volume of international
+trade reached USD3.63 trillion. The Bank's domestic institutions retained the leading position
+among peers in providing international trade services and held the leading market share in
+overseas guarantee business.
+The Bank built up its brand reputation as the premier free trade zones (FTZs) financial services
+provider, promoted innovation in commodity-related structured financial services, supported
+the international development strategy pursued by domestic commodity exchanges and pushed
+forward the use of RMB-denominated commodity trading. The Bank took the lead in launching
+new businesses such as OTC bond transactions, RMB currency swaps under separate accounting,
+free trade foreigner (FTF) account opening and fully functional cross-border two-way RMB
+cash pooling in the China (Shanghai) Pilot Free Trade Zone (the “Shanghai FTZ”). The Bank
+took the lead in launching cross-border two-way RMB cash pooling, cross-border RMB under
+individual current accounts and overseas RMB lending in the Guangdong, Tianjin and Fujian
+FTZs. In addition, the Bank accelerated innovation in centralised collection and payment products
+for the local and foreign currency funds of multinational corporations' headquarters and actively
+promoted the adoption of digital documents for international payment.
+36
+In line with national strategies, the Bank actively promoted China's economic and trade
+cooperation along the "Belt and Road" by facilitating business growth of institutions in
+the "Belt and Road" countries. It engaged deeply with the China-Singapore (Chongqing)
+Demonstration Initiative on Strategic Connectivity. To further advance the development of RMB
+internationalisation, the Bank endeavoured to serve as the main channel for cross-border RMB
+fund flows and as a leader in RMB-related financial product and service innovation. In 2016,
+the Group's transaction volume of cross-border RMB payment was over RMB4 trillion, and the
+transaction volume of cross-border RMB payment of the domestic institutions of the Bank was
+over RMB2.35 trillion, maintaining its leading market share. The Bank further improved its
+global RMB clearing network, with the New York Branch authorised as an RMB clearing bank
+in the US. The Bank also actively promoted the use of RMB in emerging sectors and assisted
+foreign financial institutions in issuing Panda Bonds, thus playing an innovative and pioneering
+role in the opening up of China's bond market. It completed the first RMB/ZAR, RMB/KRW,
+RMB/AED and RMB/SAR direct transactions in the interbank foreign exchange market. The
+Bank also continued to release the "BOC Cross-border RMB Index (CRI)”, the “BOC Offshore
+RMB Index (ORI)" and the "BOC OBOR RMB Index (BOC OBORR)", as well as the White
+Paper on RMB Internationalisation, providing more professional support for global clients
+to understand and use RMB. The Bank served as the overall lead bank in the China Foreign
+Exchange Committee, set up in 2016, and as the lead bank of the Retail Foreign Exchange
+and Cross-border RMB Business Working Group under the Committee, with the twin aims of
+improving the foreign exchange market's self-discipline and driving the development of RMB
+internationalisation.
+The Bank received awards granted by prestigious local and international media and professional
+institutions, such as “Best Trade Finance Bank in China”, “Best RMB Internationalisation Bank
+in China", "Best Trade Finance Provider (Domestic)" and "Best Supply Chain Finance Provider
+(Domestic)".
+Cash Management
+Drawing on the strength of its globally integrated operations, the Bank continued to improve
+the functions and related services of its global cash management platform and made greater
+efforts to promote its global cash management business. Grasping the business opportunities
+arising from the centralised operation of cross-border local and foreign currency funds and the
+development of FTZs, the Bank actively expanded its cross-border cash management business
+and maintained a leading market share. The Bank successfully secured the cash management
+business of many large-sized multinational corporations through competitive bids. Its global cash
+management group customer base increased rapidly, with coverage now extending to 43 countries
+and regions across Asia-Pacific, Europe, Africa and the Americas. The Bank introduced the Bank
+Host-to-Host Direct Connection, Swift Direct Connection and Multi-Bank Cash Management
+System services in order to effectively meet the differentiated requirements of the market. It also
+strengthened risk control over its cash management business and improved customer experience.
+The Bank was recognised as the “Best Regional Cash Manager in Asia" by Euromoney and the
+"Best Local Currency Cash Management Bank in China" by Asiamoney.
+37
+4,402,258
+Corporate Banking
+Corporate banking business
+377,921
+359,240
+51.50%
+183,928
+48.67%
+Personal banking business
+133,220
+37.08%
+118,849
+31.45%
+Treasury operations
+37,902
+10.55%
+73,820
+19.53%
+Other
+3,104
+0.87%
+1,324
+0.35%
+Total
+100.00%
+4,496,888
+4.66%
+Corporate loans
+43.52%
+Personal banking business
+150,609
+31.01%
+135,652
+28.62%
+Treasury operations
+58,644
+206,231
+12.08%
+20.88%
+Investment banking and insurance
+24,634
+5.07%
+22,062
+Others and elimination
+40,524
+8.34%
+98,964
+43.50%
+211,245
+Including: Corporate banking business
+32
+The Bank has put in place a sound internal control mechanism for fair value measurement. In
+accordance with the Guidelines on Market Risk Management in Commercial Banks, Regulatory
+Guidelines on Valuation of Financial Instruments in Commercial Banks, CAS and IFRS, with
+reference to the New Basel Capital Accord, and drawing on the best practices of leading
+international banks regarding valuations, the Bank formulated the Valuation Policy of Financial
+Instrument Fair Values of Bank of China Limited to standardise the fair value measurement of
+financial instruments and enable timely and accurate financial information disclosure. Please refer
+to Note VI.6 to the Consolidated Financial Statements for more detailed information related to the
+fair value measurement.
+Other Financial Information
+There are no differences in the equity and profit for the year of the Group prepared in accordance
+with IFRS to those prepared in accordance with CAS. Please refer to Supplementary Information
+I to the Consolidated Financial Statements for detailed information.
+33
+BUSINESS REVIEW
+Operating income for each line of business of the Group is set forth in the following table:
+Unit: RMB million, except percentages
+2016
+2015
+Items
+Amount
+% of total
+Amount % of total
+Commercial banking business
+420,498
+86.59%
+440,847
+93.02%
+11,003
+2.32%
+Total
+485,656 100.00%
+1,310,194 1,213,479
+6,443,206 5,911,172
+Personal deposits
+Domestic: RMB
+4,349,300
+3,982,160
+3,688,329
+Foreign currency
+342,045
+257,439
+198,621
+Hong Kong, Macau, Taiwan and
+overseas operations
+869,441
+759,726
+754,215
+Subtotal
+5,560,786
+4,999,325
+4,641,165
+6,993,213
+Domestic: RMB
+Subtotal
+overseas operations
+473,912
+100.00%
+A detailed review of the Group's principal deposits and loans is summarised in the following
+table:
+Items
+Corporate deposits
+As at
+Unit: RMB million
+As at
+As at
+31 December
+2016
+31 December 31 December
+2015
+2014
+Domestic: RMB
+5,213,790
+4,818,850
+4,431,867
+Foreign currency
+378,368
+314,162
+265,826
+Hong Kong, Macau, Taiwan and
+1,401,055
+49
+Net cash flow from financing activities was an outflow of RMB1.713 billion, a decrease of
+RMB27.002 billion compared with the prior year. This was mainly attributable to the increase of
+proceeds from issuance of bonds compared with the prior year.
+Bond issued by financial institutions in 2016
+Bond issued by financial institutions in 2016
+HKD 3.86% 153,460
+Other 5.01% 199,069
+As at 31 December 2016
+USD 15.59% 619,420
+RMB 75.54% 3,000,935
+Unit: RMB million, except percentages
+Investments by Currency
+4,285 3,302
+70,703 75,220 14,486 14,729
+(138,639) (150,393) (31,731) (31,370) (5,987) (4,763)
+(2,095) (842)
+Impairment losses on assets
+(1,125) 179,608 145,262
+3,150 (3,274)
+6,151
+306,048 328,650
+14,761
+Unit: RMB million, except percentages
+RMB 78.80% 2,833,062
+Top Ten Financial Bonds by Value Held by the Group
+As at 31 December 2015
+(339,911)
+(350,311)
+(10,400)
+(73)
+Short position in debt securities
+(7,012)
+(9,990)
+13,064
+(2,978)
+Annual Rate
+Par Value
+Bond Name
+Unit: RMB million, except percentages
+HKD 3.86% 138,893
+Other 4.06% 145,881
+USD 13.28% 477,259
+Maturity Date
+Due to customers at fair value
+2015
+2015
+7,626
+5.44%
+2019-04-08
+Bond issued by policy banks in 2010
+6,070 Term deposit rate for 1 year +0.52%
+2017-01-26
+Bond issued by financial institutions in 2015
+5,500
+4.95%
+2018-01-19
+(841)
+5,000
+3.30%
+2017-08-10
+5,000
+Bond issued by policy banks in 2014
+|
+2017-06-14
+3.50%
+Elimination
+2016
+2015
+2016
+2015
+2016
+29,342 31,738
+72,299 41,769
+2015
+Other countries
+Group
+2016
+Hong Kong,
+Macau and Taiwan
+Net interest income
+Non-interest income
+Including: net fee and
+commission income
+Operating Expenses
+Items
+Unit: RMB million
+The Group conducts its business activities in Chinese mainland, Hong Kong, Macau, Taiwan and
+other countries. A geographical analysis of profit contribution and the related assets and liabilities
+is set forth in the following table:
+Impairment
+Bond issued by financial institutions in 2016
+20,000
+Chinese mainland
+2016
+263,642 282,151
+104,432 101,468
+(351)
+(1,968)
+(1,617)
+Critical Accounting Estimates and Judgements
+The Bank makes accounting estimates and judgements that affect the reported amounts of
+assets and liabilities of the next financial year. These estimates and judgements are continually
+evaluated and are based on historical experience, expectations of future events that are believed
+to be reasonable under the circumstances and other factors. The management believes that the
+accounting estimates and judgements have properly reflected the Bank's operating environment.
+Please refer to Notes II and III to the Consolidated Financial Statements for more detailed
+information related to the Bank's accounting policies and accounting estimates.
+Fair Value Measurement
+Movement of Financial Instruments Measured at Fair Value
+Opening
+Closing
+Change
+Items
+balance
+balance
+in the year
+Unit: RMB million
+Impact
+on profit
+for the year
+Financial assets at fair value through profit or loss
+Debt securities
+99,864
+Please refer to the section "Business Review" for more detailed information on the Group's
+business segments.
+Total assets of the other countries segment amounted to RMB1,812.521 billion, a decrease of
+RMB7.323 billion or 0.40% compared with the prior year-end, representing 9.34% of the Group's
+total assets. In 2016, this segment recorded a profit before income tax of RMB 12.386 billion,
+an increase of RMB8 million or 0.06% compared with the prior year, representing 5.52% of the
+Group's profit before income tax for the year.
+Total assets of the Hong Kong, Macau and Taiwan segment amounted to RMB3,256.526 billion,
+an increase of RMB245.568 billion or 8.16% compared with the prior year-end, representing
+16.78% of the Group's total assets. In 2016, this segment recorded a profit before income tax of
+RMB69.004 billion, an increase of RMB26.628 billion or 62.84% compared with the prior year,
+representing 30.75% of the Group's profit before income tax for the year.
+31
+88,664 92,410
+1,288
+1,125
+(175,069) (185,401)
+(770)
+(89,072) (59,274)
+Profit before income tax
+106,172
+(1,986)
+Liabilities
+(86,427) (56,409) (1,803)
+143,008 176,817 69,004 42,376 12,386 12,378
+222,412 231,571
+14,341,792 13,053,114 3,256,526 3,010,958 1,812,521 1,819,844 (1,261,950) (1,068,319) 18,148,889 16,815,597
+13,198,402 11,970,984 2,967,621 2,784,066 1,757,564 1,770,859 (1,261,790) (1,067,917) 16,661,797 15,457,992
+As at the end of 2016, total assets³ of the Bank's Chinese mainland segment amounted to
+RMB14,341.792 billion, an increase of RMB1,288.678 billion or 9.87% compared with the prior
+year-end, representing 73.88% of the Group's total assets. In 2016, this segment recorded a profit
+before income tax of RMB143.008 billion, a decrease of RMB33.809 billion or 19.12% compared
+with the prior year, representing 63.73% of the Group's profit before income tax for the year.
+3
+The figures for segment assets, segment profit before income tax and their respective proportions are prior to
+intragroup elimination.
+As at the year-end
+Assets
+6,308
+Loans
+4,218
+(946)
+Fund investments and other
+18,482
+39,931
+21,449
+Derivative financial assets
+82,236
+3,727
+130,549
+1,074
+Derivative financial liabilities
+(69,160)
+(107,109)
+(37,949)
+Placements from banks and
+other financial institutions at fair value
+48,313
+3.40%
+33,936
+Equity securities
+6,022
+1,804
+(327)
+Equity securities
+9,338
+7,547
+(1,791)
+30,209
+Fund investments and other
+4,349
+(1,293)
+Investment securities available for sale
+Debt securities
+1,029,842
+1,535,963
+506,121
+5,642
+2017-05-26
+(810)
+Bond issued by policy banks in 2015
+251,251
+2.67%
+Subtotal
+5,592,158
+54.11%
+5,133,012
+54.45%
+Personal deposits
+Demand deposits
+1,904,292
+18.42%
+1,616,747
+17.15%
+Time deposits
+2,711,679
+26.24%
+2,559,844
+2.51%
+27.16%
+259,434
+24.20%
+55,847
+0.48%
+Total
+12,939,748
+100.00%
+11,729,171
+100.00%
+Domestic
+Corporate deposits
+Demand deposits
+3,046,617
+29.48% 2,599,679
+27.58%
+Time deposits
+2,286,107
+22.12%
+2,282,082
+Structured deposits
+Structured deposits
+75,374
+0.73%
+As at 31 December 2016
+HKD 7.73% 1,000,075
+Other 5.08% 657,058
+As at 31 December 2015
+HKD 7.51% 881,340
+Other 4.54% 532,002
+Equity
+As at the end of 2016, the Group's total equity was RMB1,487.092 billion, an increase of
+RMB129.487 billion or 9.54% compared with the prior year-end. This was primarily attributable
+to the following reasons: (1) In 2016, the Group realised a profit for the year of RMB184.051
+billion. (2) As per the 2015 profit distribution plan approved at the 2015 Annual General Meeting,
+the Bank paid a cash dividend of RMB51.518 billion. (3) The Bank paid a dividend on its
+preference shares of RMB6.718 billion. (4) The listing of BOC Aviation on the Hong Kong Stock
+Exchange gave rise to an increase of RMB7.287 billion in the Group's total equity. Please refer to
+the "Consolidated Statement of Changes in Equity” in the Consolidated Financial Statements for
+detailed information.
+Off-balance Sheet Items
+Off-balance sheet items include derivative financial instruments, contingent liabilities and
+commitments, etc.
+The Group entered into various derivative financial instruments relating to foreign currency
+exchange rates, interest rates, equity, credit, precious metals and other commodities for trading,
+hedging, asset and liability management and on behalf of customers. Please refer to Note V.17
+to the Consolidated Financial Statements for the contractual/notional amounts and fair values of
+derivative instruments.
+Contingent liabilities and commitments include legal proceedings and arbitrations, assets
+pledged, collateral accepted, capital commitments, operating leases, Treasury bonds redemption
+commitments, credit commitments and underwriting obligations, etc. Please refer to Note V.42 to
+the Consolidated Financial Statements for more detailed information on contingent liabilities and
+commitments.
+30
+Cash Flow Analysis
+As at the end of 2016, the balance of the Group's cash and cash equivalents was RMB1,019.247
+billion, a decrease of RMB32.831 billion compared with the prior year-end.
+In 2016, net cash flow from operating activities was an inflow of RMB182.081 billion, a decrease
+of RMB490.013 billion compared with the prior year. This was mainly attributable to the increase
+of net increase in due to customers and the decrease of net changes in due to and placements from
+banks and other financial institutions compared with the prior year.
+Net cash flow from investing activities was an outflow of RMB246.386 billion, a decrease of
+RMB510.893 billion compared with the prior year. This was mainly attributable to the decrease in
+net cash outflow of financial investments.
+USD 11.89% 1,538,408
+USD 10.24% 1,201,162
+RMB 77.71% 9,114,667
+RMB 75.30% 9,744,207
+63,008
+0.67%
+Subtotal
+4,691,345
+Other deposits
+51,398
+Total
+10,334,901
+0.45%
+45.39%
+0.50%
+100.00%
+44.98%
+53,409
+9,426,020
+0.57%
+100.00%
+29
+Due to Customers by Currency
+Unit: RMB million, except percentages
+Unit: RMB million, except percentages
+4,239,599
+57,841
+Other deposits
+1.97%
+Items
+Group
+Corporate deposits
+As at 31 December 2016
+Amount
+% of total
+The principal components of due to customers of the Group and its domestic institutions are set
+out below:
+Unit: RMB million, except percentages
+As at 31 December 2015
+Amount % of total
+3,620,945
+Bond issued by policy banks in 2010
+3,130,624
+26.69%
+Time deposits
+3,100,383
+Demand deposits
+23.96%
+As at the end of 2016, the Group's due to customers amounted to RMB12,939.748 billion, an
+increase of RMB1,210.577 billion or 10.32% compared with the prior year-end. Specifically,
+the Group's RMB due to customers totalled RMB9,744.207 billion, an increase of RMB629.540
+billion or 6.91% compared with the prior year-end, while its foreign currency due to customers
+stood at USD460.652 billion, an increase of USD58.024 billion or 14.41%.
+The Bank aligned itself with the trend towards interest rate liberalisation and the rapid
+development of internet finance, accelerated product and service innovation and thus constantly
+enhanced its financial services offering. As a result, its liability business grew steadily. It further
+improved salary payment agency, payment collection and other basic services, optimised the
+functions of personal certificates of deposit (CDs), steadily expanded its administrative institution
+customer base, solidified its relationships with basic settlement and cash management customers
+and seized such business opportunities as the acceleration of direct financing. As a result, it
+steadily grew its customer base.
+4,750 Term deposit rate for 1 year +0.59%
+4,420
+2020-02-25
+4.10%
+2020-03-24
+Bond issued by financial institutions in 2015
+4,400
+28
+4.00%
+Bond issued by policy banks in 2011
+4,400
+3.83%
+2018-11-24
+Note: Financial bonds refer to the debt securities issued by financial institutions in the bond market, including the bonds
+issued by policy banks, other banks and non-bank financial institutions, but excluding restructured bonds and
+PBOC bills.
+Due to Customers
+2025-12-21
+3,037,783
+27.98%
+Structured deposits
+42.98%
+5,560,786
+Subtotal
+0.56%
+65,112
+25.90%
+4,999,325
+0.61%
+17.84%
+Time deposits
+2,992,051
+23.12%
+2,841,372
+24.22%
+2,092,841
+Structured deposits
+42.62%
+327,908
+271,885
+2.10%
+274,799
+2.34%
+Subtotal
+6,993,213
+Certificates of deposit
+54.04% 6,443,206
+Personal deposits
+Demand deposits
+2,490,309
+19.25%
+230,793
+2.53%
+54.93%
+78,426
+P.O. BOX 118842,
+FINANCIAL CENTRE
+DUBAI INTERNATIONAL
+AL FATTAN CURRENCY HOUSE
+LEVEL 11 TOWER 2,
+(UK) LIMITED
+BANK OF CHINA
+OFFICE
+YANGON REPRESENTATIVE
+BRANCH
+BANK OF CHINA (DHABI)
+service.be@bankofchina.com
+DUBAI, U.A.E.
+FAX: (44) 2076263892
+service.se@bankofchina.com
+SWIFT: BKCHPLPX
+TEL: (48) 224178888
+MILAN BRANCH
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+LUXEMBOURG
+P.O. BOX 721 L-2017,
+LUXEMBOURG
+SWIFT: BKCHLULA
+TEL: (352) 268688300
+FAX: (352) 221795
+EMAIL:
+reception.lu@bankofchina.com
+WEBSITE:
+www.bankofchina.com/lu
+BIRGER JARLSGATAN 28,
+114 34 STOCKHOLM,
+SWEDEN
+SWIFT: BKCHSESS
+TEL: (46) 107888888
+FAX: (46) 107888801
+EMAIL:
+SWIFT: BKCHAEAD
+VIA SANTA MARGHERITA,
+14/16-20121 MILAN,
+ITALY
+SWIFT: BKCHITMM
+TEL: (39) 02864731
+FAX: (39) 0289013411
+WEBSITE:
+www.bankofchina.com/it
+389
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+STOCKHOLM BRANCH
+UL. ZIELNA 41/43,
+00-108 WARSAW,
+POLAND
+service.pt@bankofchina.com
+SWIFT: BKCHPTPL
+FAX: (48) 224178887
+EMAIL:
+service.pl@bankofchina.com
+LUXEMBOURG BRANCH
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+ROTTERDAM BRANCH
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+LISBON BRANCH
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+LUXEMBOURG
+P.O. BOX 114 L-2011,
+LUXEMBOURG
+SWIFT: BKCHLULL
+TEL: (352) 268688300
+FAX: (352) 221795
+EMAIL:
+reception.lu@bankofchina.com
+WEBSITE:
+www.bankofchina.com/lu
+COOLSINGEL 63,
+3012AB ROTTERDAM,
+THE NETHERLANDS
+SWIFT: BKCHNL2RXXX
+TEL: (31) 102175888
+FAX: (31) 102175899
+EMAIL:
+service.nl@bankofchina.com
+RUA DUQUE DE PALMELA
+NO.35,35A E 37;
+1250-097 LISBOA,
+PORTUGAL
+TEL: (351) 210495710
+FAX: (351) 210495738
+EMAIL:
+TEL: (9714)3819100
+DUBLIN 9
+service.ae@bankofchina.com
+FAX: (33) 149701372
+WEBSITE:
+TEL: (33) 149701370
+SWIFT: BKCHFRPP
+TLX: 281 090 BDCSP
+GRANDE ARMEE
+75116 PARIS,
+FRANCE
+23-25 AVENUE DE LA
+www.bankofchina.com/uk
+WEBSITE:
+service.uk@bankofchina.com
+SWIFT: BKCHGB2L
+TEL: (44) 2072828888
+FAX: (44) 2076263892
+EMAIL:
+LONDON EC2R 7DB,
+U.K.
+1 LOTHBURY,
+LONDON BRANCH
+service.tr@bankofchina.com
+EMAIL:
+FAX: (90) 2122798866
+www.bankofchina.com/fr
+388
+FRANKFURT BRANCH
+BANK OF CHINA
+service.de@bankofchina.com
+TEL: (32) 24056688
+EMAIL:
+FAX: (49) 69170090500
+TEL: (49) 691700900
+SWIFT: BKCHBEBB
+20 AVENUE DES ARTS,
+1000, BRUSSELS,
+BELGIUM
+TEL: (90) 2122608888
+SWIFT: BKCHDEFF
+24 60323 FRANKFURT AM MAIN,
+BOCKENHEIMER LANDSTR.
+POLAND BRANCH
+(LUXEMBOURG) S.A.
+BANK OF CHINA
+BRUSSELS BRANCH
+(LUXEMBOURG) S.A.
+GERMANY
+ESENTEPE, BUYUKDERE CD.
+NO: 209 KAT: 21, 34394 4.
+LEVENT, SISLI, ISTANBUL,
+TURKEY
+REPRESENTATIVE OFFICE
+ISTANBUL
+45TH STREET,
+www.bankofchina.com/uk
+WEBSITE:
+service.uk@bankofchina.com
+EMAIL:
+FAX: (32) 22302892
+EMAIL:
+TEL: (44) 2072828888
+BOTATUNG TOWNSHIP,
+SWIFT: BKCHGB2U
+THEIN PHYU ROAD
+MAHABANDOOLA ROAD &
+CORNER OF
+CENTER (UFC),
+UNION FINANCIAL
+1 LOTHBURY,
+08-06, LEVEL 8,
+LONDON EC2R 7DB,
+U.K.
+FAX: (9714)3880778
+EMAIL:
+YANGON,
+TEL: (95) 18610408
+EMAIL:
+abudhabi.ae@bankofchina.com
+PARIS BRANCH
+TEL: (353) 18934173
+REPUBLIC OF IRELAND
+D09 C6X8
+BANK OF CHINA (HUNGARY)
+CLOSE LTD.
+THE CRESCENT BUILDING
+NORTHWOOD, SANTRY
+MYANMAR
+EUROPE
+8 SHENTON WAY #18-01
+SINGAPORE 068811
+TEL: (65) 63235559
+FAX: (65) 63236962
+BOC AVIATION LIMITED
+GROUND FLOOR,
+MANSOUR TOWER,
+AL SALAM STREET,
+P.O. BOX 73098,
+ABU DHABI, U.A.E.
+SWIFT: BKCHAEAA
+TEL: (9712) 4041666
+FAX: (9712) 4041668
+EMAIL:
+BANK OF CHINA
+LTD-ABU DHABI
+(IRELAND) LIMITED
+BOC AVIATION
+service.mm@bankofchina.com
+WEBSITE: www.bocaviation.com
+7 JOZSEF NADOR TER
+U.S.A.
+HUNGARY
+P.O. BOX 30995,
+GRAND CAYMAN KY1-1204
+CAYMAN ISLANDS
+SWIFT: BKCHKYKY
+TEL: (1345) 9452000
+FAX: (1345) 9452200
+EMAIL: bocky@ky.bocusa.com
+390
+PANAMA BRANCH
+AFRICA
+P.O. BOX 0823-01030
+802 WEST BAY ROAD,
+PUNTA PACIFICA
+P.H. OCEANIA BUSINESS PLAZA
+TORRE 2000 PISO 36
+PANAMA CITY,
+REPUBLIC OF PANAMA
+SWIFT: BKCHPAPA
+TEL: (507) 2635522/2169400
+EMAIL: bocpa@pa.bocusa.com
+FAX: (507) 2239960
+BANCO DA CHINA
+BRASIL S.A.
+JOHANNESBURG BRANCH
+14TH-16TH FLOORS,
+ALICE LANE TOWERS,
+15 ALICE LANE, SANDTON,
+JOHANNESBURG,
+SOUTH AFRICA
+SWIFT: BKCHZAJJ
+TEL: (27) 115209600
+CALLE ISAAC HANONO MISSRI
+FAX: (27) 117832336
+COMMERCIAL CENTER
+GRAND CAYMAN BRANCH
+NA FLORENCI 2116/15,
+NOVE MESTO, 11000 PRAHA 1,
+CZECH REPUBLIC
+SWIFT: BKCHCZPPXXX
+TEL: (42) 0225986666
+FAX: (42) 0225986699
+EMAIL:
+service.cz@bankofchina.com
+72, PROSPEKT MIRA,
+MOSCOW, 129110
+RUSSIA
+SWIFT: BKCHRUMM
+GRAND PAVILION
+TEL: (7) 4952585301
+AMERICA
+NEW YORK BRANCH
+1045 AVENUE OF THE AMERICAS,
+NEW YORK, NY 10018,
+1051 BUDAPEST,
+WEBSITE:
+SWIFT: BKCHUS33
+TLX: WU 661723
+TEL: (1212) 9353101
+FAX: (1212) 5931831
+WEBSITE: www.bocusa.com
+FAX: (7) 4957950454
+EMAIL: iboc@boc.ru
+EMAIL:
+service_za@mail.notes.bank-of-
+china.com
+MAURITIUS
+SWIFT: BKCHMUMU
+TEL: (230) 2034878
+FAX: (230) 2034879
+EMAIL: services.mu@bankofchina.com
+CONDOMINIO CAJUEIRO,
+CASA NO. 116, TALATONA,
+LUANDA,
+REPUBLIC OF ANGOLA
+TEL: (244) 222020568
+FAX: (244) 222020568
+MOROCCO
+REPRESENTATIVE OFFICE
+DIAS PIER BUILDING,
+CAUDAN WATERFRONT,
+PORT LOUIS,
+NO.71, ANFA CENTER, 128,
+MAROC
+TEL: (212) 522203779
+FAX: (212) 522273083
+EMAIL: service.ma@bankofchina.com
+TANZANIA
+REPRESENTATIVE OFFICE
+8TH FLOOR, AMANI PLACE,
+OHIO STREET, P.O. BOX 13602,
+DAR ES SALAAM,
+TANZANIA
+TEL: (225) 222112973
+FAX: (225) 222112974
+EMAIL: repoffice.tz@bankofchina.com
+391
+BD D'ANFA & ANGLE
+RUE LAHCEN BASRI,
+CASABLANCA,
+4TH-5TH FLOOR,
+BANK OF CHINA
+(MAURITIUS) LIMITED
+bank-of-china.com
+NAIROBI REPRESENTATIVE
+OFFICE
+MORNING SIDE OFFICE PARK,
+NGONG ROAD,
+P.O. BOX 21357-00505,
+NAIROBI,
+KENYA
+TEL: (254) 203862811
+FAX: (254) 203862812
+EMAIL: service.ke@bankofchina.com
+LUANDA REPRESENTATIVE
+OFFICE
+AVENIDA PAULISTA,
+901-14 ANDAR BELA VISTA
+CEP: 01311-100,
+SAO PAULO, SP,
+BRASIL
+SWIFT: BKCHBRSP
+TEL: (5511) 35083200
+FAX: (5511) 35083299
+PERU REPRESENTATIVE
+OFFICE
+AV. JORGE BASADRE 607,
+OFFICE 701,
+SAN ISIDRO, LIMA,
+PERU
+TEL: (51) 920137238
+EMAIL: service.pe@bankofchina.com
+BANK OF CHINA (ZAMBIA)
+LIMITED
+PLOT NO. 2339,
+KABELENGA ROAD,
+P. O. BOX 34550, LUSAKA,
+ZAMBIA
+SWIFT: BKCHZMLU
+TEL: (260) 211233271
+FAX: (260) 211236782
+EMAIL: executive.zm@mail.notes.
+service.ca@bankofchina.com
+FAX: (1416) 9559880
+EMAIL:
+www.bankofchina.com/de
+PRAGUE BRANCH
+TORONTO BRANCH
+HUNGARIAN BRANCH
+7 JOZSEF NADOR TER,
+1051 BUDAPEST,
+HUNGARY
+SWIFT: BKCHHUHH
+TEL: (36) 14299200
+FAX: (36) 14299202
+WEBSITE: www.boc.cn/hu
+BANK OF CHINA
+SRBIJA A.D. BEOGRAD
+BULEVAR ZORANA
+DINDICA 2A, BELGRADE,
+SERBIA
+TEL: (381) 112018976
+FAX: (381) 112018977
+EMAIL:
+service.rs@bankofchina.com
+6108 ONE FIRST
+CANADIAN PLACE,
+CANADA, M5X 1C8
+SWIFT: BKCHCAT2
+TEL: (1416) 9559788
+BANK OF CHINA (HUNGARY)
+BANK OF CHINA (RUSSIA)
+service.ca@bankofchina.com
+EMAIL:
+100 KING STREET WEST,
+P.O. BOX 241, TORONTO,
+ONTARIO,
+MARKHAM, ONTARIO
+CANADA, L3T 7X8
+SWIFT: BKCHCATT
+CLOSE LTD.
+TEL: (1905) 7716886
+FAX: (1905) 7718555
+SWIFT: BKCHHUHB
+TEL: (36) 14299200
+service.hu@bankofchina.com
+WEBSITE: www.boc.cn/hu
+BANK OF CHINA (HUNGARY)
+CLOSE LTD.
+VIENNA BRANCH
+BOERSEPLATZ 6, A-1010
+FAX: (36) 14299202
+EMAIL:
+AUSTRIA
+SWIFT: BKCHATWWXXX
+TEL: (43) 153666
+FAX: (43) 153666888
+EMAIL:
+service.at@bankofchina.com
+BANK OF CHINA (CANADA)
+50 MINTHORN BOULEVARD
+VIENNA
+SUITE 600,
+Column II: A Leap Forward in Personal Banking
+33.41%
+159.05
+24.61%
+2,726.753
+3,397.818
+212.196
+2015 Change (%)
+Transaction amount of debit cards
+2016
+13.19%
+73.9719
+To implement its strategy of "Serving Society, Delivering Excellence", the Bank devoted
+to build the best retail banking in the Chinese mainland. In 2016, the Bank's personal
+banking business captured market opportunities and made new arrangements in people's
+livelihood finance, wealth finance, consumer finance and cross-border finance, thus
+successfully lifting its overall operation levels of personal banking to new highs.
+83.7278
+Instalment volume of credit cards
+Developing the inclusive finance by continually upgrading the functions of basic
+products and expanding coverage of people's livelihood service areas. To undertake
+its social responsibilities, the Bank carried out account reform required by the PBOC
+for preventing telecommunications and internet scam and rolled out the ATM payment
+delay and scam-prevention reminder functions, with the aim of protecting the safety of
+customers' assets. To meet diverse financial needs of customers, the Bank introduced
+innovative personal deposit products and expanded the negotiable functions of personal
+CDs. The Bank strived to better serve pension customers by issuing a total of 83.7278
+million social security financial IC cards and providing such services as agency payment,
+agency deduction and information enquiry of the social insurance funds, linked loss
+reporting between social security account and financial account and old card replacement
+and new card issuance through its multiple channels. The Bank promoted bank-hospital
+cooperation by partnering with hundreds of hospitals nationwide to provide appointment,
+fee payment and other services through multiple channels both online and offline. The
+Bank has served as the host bank of government-sponsored student loans for central
+government-administered colleges for 12 consecutive years, granting financial aid to 1.6
+million students at more than 400 colleges accumulatively. In addition, the Bank improved
+its agriculture-related financial service capacity, promoted the construction of E Supply
+& Marketing cooperatives online and set up about 10 thousands service stations to assist
+farmers.
+Effectively responding to market changes, the Bank continually strived for innovation-
+driven development, enhanced its core trading capabilities and promoted customer structure
+optimisation, thus registering a stable yet rapid growth in its trading business. Specifically, it sped
+up the construction of the Hong Kong Offshore RMB Trading Centre and the London Trading
+Centre, as well as highlighting its offshore RMB quotation capacity, thereby becoming the top
+pick of other financial institutions for exchange rate enquiries. Thanks to enhanced product
+innovation and business transformation, the Bank became one of the first core trading institutions
+for credit risk mitigation in the domestic interbank market. The Bank was among the first group
+of market makers for the direct trading of 12 currency pairs including RMB/ZAR, RMB/HUF,
+RMB/PLN and RMB/DKK in the interbank foreign exchange market, meaning that the Bank now
+offers direct transactions of 22 foreign currencies against RMB. The Bank became one of the first
+batch of "Shanghai Gold" pricing members. It conducted the first interbank gold enquiry option
+deal, launched an iron ore forward hedging business, completed the first OTC bond transaction
+and handled the first currency swap of RMB against foreign currency on behalf of customers and
+the first FTF foreign exchange business in Shanghai FTZ. Closely following the "Belt and Road"
+initiative, the Bank bolstered its hedging business in emerging markets to help China's "Going
+Global" companies manage their foreign exchange and interest rate risks, conducted Saudi
+Arabian Riyal cash exchange trading and Turkish Lira cash/spot exchange trading businesses
+against RMB, and launched trading in 19 emerging market currencies including the Czech
+Koruna and Mongolian Tugrik, bringing the total number of tradable foreign currencies up to
+47. Following trends in internet finance and big data, the Bank vigorously expanded its online
+transaction business by releasing a comprehensive treasury transaction brand called “E Rong Hui”
+and sharpening the first-mover advantages of its e-trading platforms for corporate customers.
+Actively playing its part in the opening up of domestic financial markets, the Bank promoted
+its agency business in the interbank bond market and foreign exchange market to overseas
+institutional investors and established trading relationships with a number of sovereign agencies
+and international multilateral organisations. The Bank secured the leading market share in foreign
+currency exchange against the RMB.
+Improving wealth finance by fully sharpening product competitiveness and leading
+the market in specialist services. The Bank continually improved its wealth management
+product system, introducing wealth management products such as BOC Zhifu, BOC
+Selected Series, Smart Choice and BOC Strategy, with 7-day BOC Zhifu generating the
+highest yield in the whole market. It enhanced cooperation with specialised agencies and
+provided exclusive products and services to private banking customers. The Bank bolstered
+its customer manager and strategy research teams, thus substantially boosting customer
+service and market forecast abilities. The Bank improved its system of “merchants with
+bonus points" and now has more than 1,200 such merchants across China, satisfying the
+requirements of middle and high-end customers for medical care and health, sports and
+entertainment, culture and charity, travelling and trips abroad.
+cards with financial functions
+47
+42
+The Bank optimised and transformed its asset management business to refocus on the substance
+of asset management business. Building on its competitive advantages in global asset allocation,
+the Bank launched new products, such as BOC Rong Hui, BOC Strategy, BOC Structural-Linked
+Products and BOC Accumulated Asset Series (USD), to fulfil customers' diversified investment
+needs. In 2016, the Bank issued 5,879 wealth management products with a total year-end value
+of RMB1,512.1 billion, including RMB1,176.8 billion of non-principal-guaranteed products and
+RMB335.3 billion of principal-guaranteed products. The Bank also established Private Wealth
+Management Product Centres to provide differentiated products for clients with diverse risk
+appetites. Meanwhile, the Bank expanded its investment targets in the private equity and capital
+markets, broadened investment channels and optimised overall asset allocation to improve asset
+yields. It leveraged the advantage of cross-border integration within the BOC Group to promote
+its overseas asset management business. It established Bank of China Asset Management Centre
+(Asia) and Bank of China Asset Management Centre (Europe), which successfully issued the
+BOC Group's first Undertakings for Collective Investment in Transferable Securities (UCITS)
+fund.
+The Bank grasped opportunities arising from the rapid development of asset management in
+the domestic market, leveraged the competitive advantages of its diversified businesses and
+provided customers with comprehensive, professional and customised investment banking and
+asset management services, including bond underwriting and distribution, asset management and
+financial advisory. To facilitate the building of China's multi-layered capital markets system
+and to support domestic customers' direct financing needs, it underwrote 384 debt financing
+instruments for non-financial enterprises in the domestic open market with a total financing
+amount of RMB348.3 billion. The Bank assisted its overseas customers with financing activities
+in the domestic market and has successfully underwritten 15 Panda Bonds for customers
+including the Canadian Province of British Columbia and the Ministry of Finance of the Republic
+of Poland, etc., becoming the only bank in the Chinese mainland to successfully underwrite Panda
+Bonds issued by enterprises, financial institutions and sovereign institutions around the globe.
+Following the trend of RMB internationalisation, the Bank assisted sovereign and quasi-sovereign
+institutions in offshore RMB bond issuance. It acted as the sole underwriter and bookrunner for
+the Republic of Hungary in its Dim Sum Bond issuance and led the underwriting of Dim Sum
+Bond issued in London for the Ministry of Finance of China. The Bank solidly maintained its
+leading market share among Chinese peers in offshore RMB bond underwriting. Leveraging the
+advantages arising from its globally integrated operations, the Bank assisted its customers with
+cross-border financing services and participated in the underwriting of foreign currency bond
+and offshore RMB bond in overseas market for a number of medium and large-sized enterprises,
+sovereign institutions, financial institutions and international development institutions. The Bank
+participated in the bookrunning of the first offshore USD-denominated sovereign bonds issued by
+Saudi Arabia, which amounted to USD17.5 billion, as the only Chinese underwriter. It captured
+the leading market share as an underwriter of Chinese enterprises' offshore G3 currency (i.e.
+USD, EUR and JPY) bonds.
+Investment Banking and Asset Management
+44
+46
+The Bank strengthened its research and judgment regarding market interest rates and actively
+seized market opportunities arising from interest rate fluctuations to realise bond investment
+gains. The Bank continued to increase the investment of RMB interest rate bonds, narrowed
+its credit risk exposure and rationally adjusted its investment portfolio duration, thus further
+optimising its investment structure. Consistent with national macroeconomic policy, the Bank
+participated in local government bond investment in a market-oriented manner. The Bank tracked
+trends in international bond markets and optimised its foreign currency investment structure,
+preventing interest rate risk and credit risk. Furthermore, the Bank strengthened the centralised
+management of group-wide bond investment.
+The Bank actively aligned itself with the trend towards interest rate and exchange rate
+liberalisation and RMB internationalisation, closely tracked developments in financial markets,
+leveraged its specialised advantages, continued to deepen the adjustment of its business structure
+and enhanced its efforts in financial market innovation, thus further enhancing its influence in
+financial markets.
+Financial Markets Business
+45
+Professionalising cross-border finance and leveraging the Bank's internationalisation
+advantages to realise integrated development at home and abroad. The Bank continued
+to build global service platform and established Singapore Private Bank, marking the
+formation of a private banking business network in Southeast Asia based in Hong Kong,
+Macau and Singapore. The Bank signed a cooperation MOU with Immigration New
+Zealand and was the first in the banking industry to offer a “VIP Service for Applying to
+Visit New Zealand". Deepening cooperation with study abroad agencies and international
+schools, it significantly increased its Canada Guaranteed Investment Certificate (GIC)
+business. The Bank promoted its account opening witness business by improving a series
+of brands relating to studying and working in the US, Singapore, Macau and Australia.
+To improve its overseas personal loan service capabilities, it started to provide housing
+loans from its Luxembourg Branch and engaged in home lending service through Bank
+of China (New Zealand) Limited. The Bank launched the “Global Splendours in One
+Card" and "BOC Overseas E-shopping" for cross-border credit card holders to bring them
+preferential, convenient and high-quality services.
+Strengthening consumer finance by rapidly enlarging business size and enriching
+the product system. To meet people's needs for buying houses, the Bank gave more
+credit to support the people's livelihood improvement. Following new trends in consumer
+finance, it promoted “BOC E-Credit", the first ever “quick loan” product, thus realising
+rapid extension of loans, real-time approval and immediate drawdown. In response to
+developments in internet finance, the Bank enhanced its mobile payment business and
+introduced a series of innovative products. The Bank also vigorously promoted such credit
+card instalment products as Auto Instalments, Cash Instalments, BOC Express Cash and
+Decoration Instalments, set up more than 200 consumer finance centres and more than 300
+featured branches to meet customers' diverse consumption demands.
+Trading
+Cumulative number of social security
+Securities Investment
+53.2818
+As at the end of 2016, the Bank's domestic RMB personal deposits totalled RMB4,349.300
+billion, an increase of RMB367.140 billion or 9.22% compared with the prior year-end. Personal
+foreign currency deposits amounted to USD49.307 billion, maintaining a leading market share.
+11.36%
+The Bank actively responded to external challenges, including interest rate liberalisation and
+internet finance development, leveraged the advantage of comprehensive financial services and
+vigorously expanded fundamental businesses such as salary payment agency, collection and
+payment agency, sweep agency and escrow agency, thus promoting steady growth in its personal
+deposit business. The Bank ramped up innovation in personal deposit products and provided
+customers with deposit products of different terms and types aimed at meeting their diverse
+needs. In line with the PBOC account reform requirement, the Bank was the first to roll out and
+apply Category II and Category III accounts among the domestic banks. It also built a “BOC
+Good Accounts" system, providing customers with more integrated services, a more convenient
+experience, safer protections and more intelligent management. Exploiting its specialised
+advantages in foreign exchange, the Bank continued to optimise its business process to better
+meet customer requirements for opening and using foreign exchange savings, settlement and
+capital accounts and offered a higher-quality account opening witness agency service for cross-
+border customers. It diversified personal foreign currency deposit products, increasing the number
+of foreign currencies offered for personal deposit and withdrawal businesses to 25 and further
+enhancing its competitive advantage in foreign exchange services. The Bank introduced a Turkish
+Lira and Saudi Arabian Riyal banknote exchange business, bringing the number of convertible
+foreign currencies to 33, thus remaining in first position among its peers and also facilitating the
+foreign exchange needs of customers going abroad.
+Personal Deposits
+Seizing development opportunities brought about by the transformation of China's economic
+structure, the Bank closely followed the policies of interest rate and exchange rate liberalisation
+and the reform of RMB settlement accounts, etc., continued to boost product competitiveness and
+further improved customer experience, thus gradually highlighting the strategic importance of
+personal banking. In 2016, the Bank's domestic personal banking business realised an operating
+income of RMB133.220 billion, an increase of RMB14.371 billion or 12.09% compared with the
+prior year.
+Personal Banking
+40
+The Bank further improved the distribution of its institutions in the countries along the
+"Belt and Road". In line with the aim of providing an optimal service network for the
+global operation of China's “Going Global” enterprises, the Bank deems the "Belt and
+Road" regions as the strategic focus of its overseas distribution. As at the end of 2016, the
+Bank had overseas institutions in 50 countries and regions, 19 of which are countries along
+the "Belt and Road", thus establishing a communication bridge not only between the Bank
+and "Going Global” enterprises, but also between China and the people of countries along
+the "Belt and Road".
+The Bank rolled out the "Belt and Road" financial cooperation model on all fronts. To
+improve its efficiency and effectiveness in supporting the "Belt and Road” initiative,
+the Bank devoted greater efforts to cooperation with domestic and international peers,
+as well as exploring innovation in business expansion models. The Bank reinforced
+cooperation with China's financial policy institutions, actively participated in acquisition
+and financing projects along the "Belt and Road” and provided extensive services such as
+account management, settlement and clearing. By cooperating with multilateral financial
+institutions, foreign export credit agencies (ECAs) and foreign banks, it helped to enhance
+the internationalisation and specialisation of project operations. Specifically, the Bank
+joined the International Finance Corporation (IFC) in wrapping up the latter's record-
+breaking largest project and completed the first ever collaboration of investment and loans
+with the Silk Road Fund. The Bank held its second "Belt and Road” international financial
+communication and cooperation seminar in the Philippines to promote communication
+and cooperation with international financial institutions. It compiled the “Belt and Road"
+Country Culture Handbooks, which gives a comprehensive introduction to the political,
+economic, and social environments among the "Belt and Road" countries.
+Leveraging its advantages in cross-border RMB business, the Bank's institutions now
+account for 11 of the world's 23 authorised RMB clearing banks, covering countries along
+the "Belt and Road" including Malaysia and Hungary. This lays a good foundation for the
+Bank to systematically offer all-around clearing cooperation services for “Belt and Road"
+countries.
+The Bank energetically supported “Belt and Road” infrastructure projects and provided
+credit support for merger and acquisition (M&A) and investment of China's "Going
+Global" enterprises in "Belt and Road” countries. In 2016, the Bank granted new credit of
+about USD30.7 billion to the "Belt and Road” countries, resulting in a cumulative total of
+almost USD60.0 billion in credit extended. Through its "Belt and Road" key project base,
+the Bank supported a total of 420 key projects with a combined investment amount of
+approximately USD400.0 billion and intentional support of above USD94.7 billion.
+Dedicated to the strategic goal of "Serving Society, Delivering Excellence", the Bank
+accelerated the building of the financial artery of the “Belt and Road” initiative in line with
+national strategy, in an effort to become the preferred bank for China's "Going Global"
+enterprises, to serve as the main channel for “Belt and Road” related cross-border RMB
+business and to realise a presence in over 50% of countries along the “Belt and Road".
+Column I: Building the Financial Artery of the "Belt and Road" Initiative
+39
+Micro and small-sized enterprise loans statistical standards are executed in accordance with the Guiding Opinions
+on Financial Services for Micro and Small-sized Enterprises in 2014 (Yinjianfa [2014] No. 7).
+In an effort to support the development of China's social security system, the Bank continuously
+increased its pension-related product offerings, promoted product innovation, optimised service
+system functions and developed a comprehensive service system. It provided a range of pension-
+related financial services including enterprise annuities, occupational annuities, social security,
+employee benefit plans, employee stock ownership plans and pension security management
+products, thus enhancing customer satisfaction. As at the end of 2016, the Bank's total number
+of individual pension accounts reached 4.1690 million, an increase of 0.2955 million or 7.63%
+compared with the prior year-end. Assets under custody amounted to RMB157.320 billion, an
+increase of RMB25.520 billion or 19.36% compared with the prior year-end, with the Bank
+serving more than 10,000 clients.
+Pension Business
+4
+As at the end of 2016, the Bank's outstanding loans to micro and small-sized enterprises*
+amounted to RMB1,284.9 billion, an increase of RMB139.2 billion compared with the prior
+year-end. The Bank served 3.11 million SME customers and granted SME loans of RMB1,912.5
+billion.
+The Bank earnestly promoted cross-border investment matchmaking services for SMEs by
+supporting enterprises to access foreign funds and advanced technologies and by boosting
+transformation and upgrading, technological exchanges and cross-border cooperation, so as to
+help domestic SMEs to integrate into the global industrial and value chain. This was highly
+praised by all sectors of society. To date, the Bank has organised 28 cross-border matchmaking
+events across five continents, attracting over 20,000 SMEs from both China and other countries
+and regions. The Ministry of Industry and Information Technology (MIIT) and the Bank jointly
+issued the Five-year Action Plan on Promoting the International Development of Small and
+Medium-sized Enterprises (2016-2020) and the Bank was invited to attend the APEC SME
+Working Group Meeting and the EU-China SME Policy Dialogue. The Bank enhanced risk
+control and compliance management, improved its early-warning mechanism on asset quality
+control and continuously enhanced its capabilities in identifying and mitigating credit risk, thus
+maintaining SME loan quality at a stable and controllable level.
+mechanism” and “cross-border matchmaking”, thus constantly enhancing SME finance services.
+In 2016, loans to micro and small-sized enterprises in the Chinese mainland continued to grow
+stably, with the Bank satisfying the regulatory requirement of the “Three No-Less-Thans” — that
+is, an SME loan growth rate of no less than the average growth rate of domestic loans, a number
+of SME borrowers no less than that of the prior year and a loan approval ratio for SME borrowers
+of no less than that of the prior year. The Bank followed the national development strategies of
+innovation-driven development and supported “mass entrepreneurship and innovation”. Among
+large commercial banks in the Chinese mainland, the Bank was the only one to be included in
+the first batch of the “investment and loan linkage mechanism” pilot programme, and piloted
+"investment and loan linkage mechanism” in the national autonomous innovation demonstration
+zones in five provinces and cities including Beijing, Tianjin, Shanghai, Hubei and Shaanxi.
+In addition, the Bank fully leveraged its advantages in specialised operations, established
+franchising institution specialised in science and technology and set up external expert database,
+so as to support the development of technology and innovation-oriented SMEs. It also reinforced
+business cooperation among BOCG Investment, BOCI China and BOCIM, in a bid to promote the
+linkage of investment and lending in an in-depth manner.
+38
+The Bank comprehensively implemented national policies and measures to support the
+development of small and medium-sized enterprises (SMEs), and endeavoured to develop an
+SME finance service model integrating the "Credit Factory", "investment and loan linkage
+SME Finance
+As at the end of 2016, the Bank ranked first in terms of market share in foreign currency deposits
+from financial institutions. It also led its peers in B-Share clearing business volume. The inbound
+international settlement business volume directed to the Bank by its overseas correspondent banks
+also ranked first in the market. Its third-party custody business continued to grow rapidly and the
+annual fee income from its bancassurance business reached a record high.
+The Bank continued to deepen comprehensive cooperation with various global financial
+institutions, including domestic banks, overseas correspondent banks, non-bank financial
+institutions, overseas central banks, sovereign wealth funds and international financial
+organisations. It enhanced its integrated financial services platform and maintained a leading
+position in terms of financial institution customer coverage. Having established correspondent
+relationships with more than 1,600 financial institutions in 179 countries and regions, the
+Bank provided financial services for multinational institutions and enterprises in fields such
+as international settlement, bond financing, foreign exchange trading, custody and global cash
+management. Closely supporting the national "Belt and Road" initiative, the Bank consolidated
+cooperation with key correspondent banks along the "Belt and Road”. It initiated wide-reaching
+cooperation with emerging international organisations and development institutions such as Asian
+Infrastructure Investment Bank, New Development Bank and Silk Road Fund, participated in the
+investment and financing projects of domestic policy financial institutions along the “Belt and
+Road" and provided extended financial services. The Bank devoted more efforts to expanding
+its cross-border RMB business and thus became the major RMB clearing channel for overseas
+central banks, correspondent banks and exchanges and the preferred bank of Chinese enterprises
+for RMB business. It opened 1,508 cross-border RMB clearing accounts for correspondent banks
+from 119 countries and regions, thus holding a leading position among domestic banks. It also
+promoted the RMB Cross-Border Interbank Payment System (CIPS) and signed cooperation
+agreements for indirect participants with 160 domestic and overseas financial institutions, seizing
+the largest market share in the banking industry. The Bank's custodian service for Qualified
+Foreign Institutional Investors (QFIIs) and RMB Qualified Foreign Institutional Investors
+(RQFIIs) ranked among the top in terms of both customer base and business scale. The Bank
+strengthened cooperation with global sovereign institutions and non-bank financial institutions.
+As a result, the Bank was chosen by four foreign sovereign institutions as their agent in the
+interbank bond market and was appointed by five foreign sovereign institutions as their agent
+for interbank foreign exchange trading. The Bank was selected by China Securities Depository
+and Clearing Corporation Limited as the settlement bank for Southbound Hong Kong Trading
+Link under the Shenzhen-Hong Kong Stock Connect. Hong Kong Securities Clearing Company
+Ltd. authorised the Bank to be the sole settlement bank for the Northbound Shenzhen Trading
+Link. Furthermore, the Bank helped international financial institutions to issue SDR-denominated
+bonds in the domestic interbank market and to issue RMB3.0 billion of green bonds in the
+domestic market, and the Bank conducted strategic cooperation regarding "Belt and Road"
+business.
+Financial Institutions Business
+Personal Loans
+41
+The Bank vigorously implemented national policies aimed at expanding domestic demand,
+promoting new consumption and supporting the real economy by accelerating the healthy
+development of its personal loan business. The Bank strengthened the development of personal
+housing loans, mainly serving the needs of households seeking to buy owner-occupied homes.
+Insisting on prudential operation, the Bank strictly executed a differentiated housing credit
+policy and reinforced risk management practices. It accelerated its consumer finance business
+in response to the trend of consumption upgrade. Based on internet and big data technologies, it
+launched "BOC E-Credit", a whole-process online consumer loan service, boosting its support
+of new consumption. The Bank rationally adjusted the industrial structure of its personal
+441.4327
+2016
+2015
+Change (%)
+Cumulative number of debit cards
+business loans in order to support the financing needs of the real economy. It researched and
+developed distinct service models for different customer segments, such as customers targeted
+according to shopping districts or industrial chains, or those commonly engaged in agriculture-
+related businesses. The Bank continued to improve its government-sponsored student loan
+service, spared no efforts to help low-income students to finish school and assumed its share
+of responsibility for poverty alleviation. The Bank optimised and upgraded its personal loan
+business system by further enriching the self-service functions of e-channels. Fully leveraging its
+globally integrated operations, the Bank provided customers with cross-border financial services
+such as individual loans for overseas study and credit rating certification.
+419.4756
+5.23%
+Cumulative number of
+effective credit cards
+59.3356
+31 December
+The Bank accelerated the development of its wealth management business and enhanced
+its private banking service capabilities. The Bank further cultivated its personal customer
+relationship manager and private banker teams and made unremitting efforts to improve
+customer relationships and customer experience, thereby recording a steady increase in the
+number of middle and high-end customers. It launched precision marketing to attract more high-
+quality existing customers by capitalising on big data technology and its customer relationship
+management system. Taking advantage of its diversified and internationalised operations, the
+Bank expanded its incremental customer base in bulk via internal collaboration across the
+Group with a focus on featured customer groups. The Bank improved its product R&D model,
+enhanced its innovation ability for investment products, established a multi-dimensional product
+shortlisting platform and offered customised discretionary assets management and family trust
+services, with the aim of further building up the competitiveness of its wealth management
+business.
+As at
+Items
+As at
+As at the end of 2016, the Bank's bank card issuance and transaction volumes are set forth below:
+43
+The Bank kept improving its debit card product and service system and secured rapid
+development of its debit card business through product innovation. It pursued the development
+of online debit card business and pushed forward the transformation towards “Internet Plus”, put
+in place UnionPay small-amount password-free quick payment for debit IC cards and introduced
+new mobile payment products, thus offering convenient payment and settlement services for
+customers. Meanwhile, the Bank enhanced the construction of the rights and interests system of
+debit card holders. With the aim of using finance for the convenience and benefit of the people, it
+rolled out the "People's Livelihood Finance" service in a variety of sectors such as social security
+and medical treatment. As at the end of 2016, the Bank had issued social security cards with
+financial functions in nearly 30 provinces (including municipalities directly under the Central
+Government) in cooperation with local Human Resources and Social Security Bureau. These
+deliver comprehensive financial services including convenient channel, collection and payment
+agency in social insurance funds (including pension insurance funds, medical insurance funds,
+unemployment insurance funds, work-related injury insurance funds and maternity insurance
+funds), investment of wealth management products and preferential measures for customers. It
+also issued the "resident health card with financial function” in provinces such as Guangdong,
+Liaoning, Hebei, Guizhou and Sichuan, offering treatment payment and health management
+services across the country to cardholders.
+The Bank actively pushed forward credit card innovation and continually enhanced its credit
+card products in the five categories of wealth, business travel, cross-border, consumer finance
+and urban youth. It promoted key products such as BOC Car Cards, BOC Great Wall Traveller's
+Cards, BOC Multi-Currency Credit Cards and BOC Overseas Student Cards, and issued such
+innovative products as BOC City Fun Platinum Cards, BOC New Oriental Co-branded Cards,
+Sino-US Tourism Year Souvenir Cards, BOC Tencent Video Co-branded Cards, Rio Olympics
+Multi-Currency Cards (Limited Edition), BOC-China Eastern Airlines Co-branded Cards,
+Wonderful Europe Great Wall Traveller's Cards and Great Wall World Elite Credit Cards. With
+the goal of developing inclusive finance, the Bank strived to build up a multi-level system that
+serves people's livelihood and consumption-related financial needs. It energetically expanded its
+featured instalment business lines including Billing Instalments, Decoration Instalments and Cash
+Instalments, and innovatively rolled out a "One Certification Lending" Auto Instalments product.
+In addition, the Bank continually upgraded the functionality of its online services such as the
+official "BOC Credit Card" WeChat account and the "Colourful Life” mobile app, and enriched
+the “Smart Buy” and value-added services provided by the preferential merchant platform.
+The Bank innovatively launched the QR code and other mobile payment products, expanded
+“Internet Plus” customer attracting mode, and diversified the functions of online application,
+online approval and online customer services, so as to provide customers with a comprehensive,
+convenient and safe app experience. The Bank built a stereoscopic credit card marketing system,
+strengthened the promotion of the "BOC VIP Day" among domestic customers, continually
+carried out its “Global Splendours in One Card” and “BOC Overseas E-shopping” campaigns
+for cross-border customers, and promoted the "More Instalments, More Gifts" campaign to
+instalment customers. Moreover, with the aim of improving the customer service experience and
+guided by the goal of providing “efficient, considerate and safe" services, the Bank advanced
+360-degree management of the customer card usage life cycle and refined the structure of
+customer credit limits, thus comprehensively enhancing the quality of its customer services.
+Bank Card
+42
+Wealth Management and the "Excellent Wealth Management Award” from jrj.com.
+As at the end of 2016, the Bank had set up 7,632 wealth management centres, 323 prestigious
+wealth management centres and 36 private banking centres in the Chinese mainland. The Group
+had 95,400 private banking customers and managed over RMB1 trillion of financial assets on
+their behalf. In 2016, the Bank was recognised as the "Best Private Banking Brand in China” by
+Securities Times and won the "Best China Private Bank Most Innovative Performer" from
+To address customer requirements for cross-border financial services, the Bank leveraged the
+advantages arising from its global presence and accelerated the development of its overseas
+private banking channels by establishing the Singapore Branch Private Bank, which helped to
+further improve its global service network and marked a key step forward in the global expansion
+of the Bank's private banking services. In addition, the Bank remained devoted to undertaking its
+social responsibilities and called on customers to join a series of public welfare campaigns such
+as donations for education and auctions for charity.
+Wealth Management and Private Banking
+As at the end of 2016, the total amount of RMB personal loans of the Bank's domestic operations
+stood at RMB2,983.945 billion, an increase of RMB586.618 billion or 24.47% compared with the
+prior year-end. The Bank also maintained a leading market position in personal auto loans and
+sponsored student loans.
+Unit: million cards/RMB billion, except percentages
+31 December
+48
+88
+BOCI China
+Adhering to a robust and aggressive development principle, BOCI China implemented the
+“Synergy + Transition” strategy and pushed forward business development in order to cultivate
+its core competitiveness while focusing on risk compliance. As a result, its industry influence
+increased. It transformed its investment banking business model to "investment bank +
+commercial bank”, “investment bank + investment” and “domestic + overseas". It shifted its
+brokerage business focus towards wealth management, improved the versatility of its branches
+and continually increased its service capability and market share. BOCI China maintained its
+leading position in AUM and successfully issued its first publicly offered fund product.
+57
+BOCG Insurance improved the comprehensiveness of its risk management and effectively
+guarded against business risks. Based on a sound risk management system, it enhanced risk
+control standards and implemented full-scale, full-process and all-staff risk management
+measures. By proactively managing post-underwriting risks, it strengthened the effective
+management of its insurance programmes and reduced various risks at the source.
+BOCG Insurance grasped market trends and increased efforts to promote its e-channels. It
+provided online application and claims services inquiry in respect of travel insurance, home
+comprehensive insurance and motor insurance, etc. through its official website, mobile app
+and WeChat, etc. Sales from its online platforms expanded rapidly. In 2016, the gross written
+premium contributed by online platforms increased by 44.98%.
+BOCG Insurance deepened business linkages within the Group and strengthened cross-
+border cooperation synergies. Giving full play to the advantages arising from the integrated
+and diversified operations of the Group, BOCG Insurance promoted multilevel synergies and
+provided comprehensive combined banking and insurance service solutions to customers. It
+continued to strengthen cooperation with other domestic and international insurance companies,
+effectively widened its sales channels and explored business opportunities in overseas markets.
+BOCG Insurance continuously promoted business restructuring and intensified the expansion of
+its high-quality business. In 2016, it recorded gross written premium for its high-quality business
+of HKD1.240 billion, accounting for 61.76% of total gross written premium, an increase of 8.92
+percentage points compared with the prior year.
+The Bank is engaged in general insurance business in Hong Kong through BOCG Insurance. As
+at the end of 2016, BOCG Insurance reported total assets of HKD7.607 billion and net assets
+of HKD3.875 billion. In 2016, BOCG Insurance recorded gross written premium of HKD2.008
+billion and a profit after tax of HKD103 million. Its gross written premium remained consistently
+at the forefront of the Hong Kong general insurance market.
+The Bank is engaged in securities-related business in the Chinese mainland through BOCI China.
+As at the end of 2016, BOCI China had total assets of RMB42.439 billion and net assets of
+RMB 10.706 billion.
+BOCG Insurance
+BOCIM has been honoured as a "Five-year Sustainable Return Star Fund Company" for four
+consecutive years. Its BOC Steadiness Increased Income Bond Seed Fund was awarded “Golden
+Fund One-year Bond Star Fund" and its BOC Guaranteed Fund was awarded "Three Years
+Continuous Return Guaranteed Star Fund".
+BOCIM's total AUM reached RMB928.0 billion, an increase of 37% compared with the prior
+year. Total AUM for publicly offered funds reached RMB342.1 billion, up by 23% compared
+with the prior year. In addition, BOCIM maintained sound internal control and risk management,
+and greatly enhanced its brand image and market reputation.
+56
+The Bank is engaged in fund management business in the Chinese mainland through BOCIM. As
+at the end of 2016, BOCIM's total assets stood at RMB2.627 billion and its net assets totalled
+RMB1.861 billion. BOCIM realised a profit after tax of RMB1.009 billion, up by 35.62%
+compared with the prior year.
+BOCIM
+BOCI China was awarded ��Best Bond Investment Bank in China”, “Best Refinancing Investment
+Bank" and "Best Securities Company for Institutional Service" by Securities Times, "Three-
+Year Golden Bull Securities Company's Collective Asset Management Plan” by China Securities
+Journal and "Best IPO", "Best Refinancing Project”, “Best Enterprise Bond Project" and "Best
+Financial Advisory Project” by New Fortune.
+Insurance
+The Bank enhanced the quality of its financial advisory services and provided professional
+advisory including financing plans, cross-border finance advisory and restructuring and M&A
+advisory, so as to satisfy customers' multifaceted demands regarding financing and cross-border
+operations. The Bank steadily promoted its credit asset-backed securitisation business and
+stepped up the structural optimisation of its existing assets. It successfully issued three residential
+mortgage-backed securities with a total amount of RMB30.941 billion and two non-performing
+credit asset-backed securities with a total amount of RMB0.916 billion, including the first non-
+performing credit asset-backed securities since the resumption of domestic credit asset-backed
+securitisation business.
+Column III: Leading Best Practices in Green Finance
+The Bank actively seized market opportunities and continuously promoted marketing,
+product innovation, service optimisation and systematic upgrading in its custody business,
+working towards the initial formation of a globally-integrated custody service network. The
+Bank proactively embraced the opportunities arising from prosperous development of assets
+management business and vigorously promoted its custody products such as insurance funds,
+securitisation, industry funds, RQFIIs and overseas institutions in the interbank bond market. It
+mounted a successful bid to become the custody bank for basic endowment insurance funds, and
+its assets under custody continued to expand. The Bank accelerated the construction of its global
+custody network, established and improved its global custody service capacity and set up multiple
+domestic and overseas custody centres in Asia and Europe, becoming the first commercial bank
+in the Chinese mainland to launch an overseas custody system. The Bank is also among the first
+to provide a custody service for clients investing in the Shenzhen-Hong Kong Stock Connect,
+enhancing its capacity to provide a one-stop service for clients' global asset allocation needs. By
+the end of 2016, the Group's assets under custody exceeded RMB8 trillion.
+BOCHK deepened collaborative activities and strengthened cross-border business development.
+By capitalising on the Group's competitive advantage in internal collaboration, BOCHK provided
+leading Chinese mainland enterprises in their expansion into the ASEAN region, as well as
+enterprises in countries along the "Belt and Road”, with a comprehensive range of financial
+solutions. Business support was also extended to non-Chinese and leading local enterprises, and
+business relationships were established with overseas central banks and financial institutions.
+Moreover, by leveraging its advantage in banking product, BOCHK cooperated closely with the
+Group's ASEAN entities to help them expand their business, while raising their influence and
+competitive edge in the ASEAN region. BOCHK pursued its business development in FTZs and
+made use of the Group's collaborative mechanism and platform for cross-border business to
+develop the cross-border financing and cross-border cash pooling business. To meet the growing
+demand among the Chinese mainland customers for overseas asset deployment, BOCHK set up a
+new service model to facilitate two-way customer referral activities.
+BOCHK consolidated its competitive edge in RMB clearing business and developed its key
+business platforms. In 2016, BOCHK successfully joined the CIPS, becoming the only clearing
+bank with both CIPS and the China National Advanced Payment System (CNAPS) as its clearing
+channels. It continued to consolidate and enhance its leading position in the global RMB clearing
+business. BOCHK successfully obtained all business qualifications for Shenzhen-Hong Kong
+Stock Connect and became the sole settlement bank for the Northbound Shenzhen Trading Link
+as well as a provider of cross-border fund settlement services for the Southbound Hong Kong
+Trading Link. At the same time, BOCHK expedited the development of its key business platforms
+with continuous expansion of business scale in key businesses such as credit cards, asset
+management and cash management.
+BOCHK fully implemented its channel integration and strengthened its competitive advantages
+in internet finance. BOCHK leveraged its advantages in branch network and implemented the
+branch transformation project to be more customer-centric. Following changes to the reporting
+structure, functions and duties of its branches, BOCHK was able to optimise its branch service
+offerings to both corporate and personal customers. It deepened the integration of both online and
+offline channels to improve business process. BOCHK remains committed to the development
+of internet finance. It pioneered the blockchain technology application for mortgage property
+valuation and completed the first property valuation case with this application, thereby increasing
+operational efficiency in financial services. BOCHK also actively developed mobile payment
+services with the introduction of services such as mobile banking small value transfers and
+QR code payment. It also stepped up its establishment of the big data platform with enhanced
+overall service capabilities, leading to a continuous rise in the total number of customers using
+e-channels.
+BOCHK was recognised with a number of awards from The Asian Banker, including the
+"Strongest Bank in Asia Pacific and Hong Kong", "Best Cash Management Bank in Hong Kong",
+"Best Retail Bank in Hong Kong”, “Best Transaction Bank in Hong Kong”, “Best Corporate
+Trade Finance Deal in Hong Kong”, “Technology Innovation Awards Best Mobile Social
+Media Engagement Project" and "Wealth Management Business of the Year”. It won the “Best
+SME's Partner Award" from the Hong Kong General Chamber of Small and Medium Business
+for the ninth consecutive year.
+-
+(Please refer to the Annual Report of BOCHK for a full review of BOCHK's business performance.)
+54
+Diversified Business Platforms
+The Bank gave full play to the competitive advantages arising from its diversified business
+platforms and fully implemented the "Belt and Road” initiative by focusing on its specialised
+business areas, deepening business collaboration and promoting cross-selling and product
+innovation, thus enhancing synergies across the Group while providing comprehensive and high
+quality financial services to customers.
+Investment Banking Business
+BOCI
+The Bank is engaged in investment banking through BOCI. As at the end of 2016, BOCI had total
+assets of HKD60.87 billion, net assets of HKD15.73 billion, and realised an operating revenue of
+HKD3.15 billion. BOCI achieved leading positions in multiple core businesses.
+BOCI emphasised a customer-centric approach and improved its customer management system. It
+established Sales, Trading and Research division, further enhancing its overall service capability
+to global institutional customers. BOCI continued to strengthen its research capability and
+expand its research coverage, saw the value of this "think tank” function gradually emerge as
+a consequence. It further explored the business potential of “investment banking + commercial
+banking” dual driving model. BOCI accelerated the implementation of its internationalisation
+strategy, further leveraged the expertise of its Government Services Division and Financial
+Solutions Team, providing comprehensive financial solutions to both domestic and overseas
+customers.
+BOCI's equity financing and financial advisory services recorded solid growth with 15 IPO
+projects, three financial advisory projects and one placement project completed in 2016. BOCI
+also ranked first in Hong Kong's IPO underwriting market in terms of total raised funds. BOCI
+involved in the largest banking M&A transaction in Asia (ex. Japan) and the largest financial
+services M&A transaction in China. BOCI's bond underwriting business maintained a leading
+position while expanding step-by-step worldwide. It provided a one-stop professional bond
+financing services, including bond underwriting, sales support, market making, B&D and fixed
+income research. In 2016, it successfully participated in the underwriting of 66 bond issues. Its
+structure products business also recorded steady growth in 2016.
+As one of the largest brokerage houses in Hong Kong, BOCI maintained its leading position
+in the securities industry, recording a substantial turnover. It strived to expand the business
+related to Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, and
+continuously developed the employee stock option programmes with sufficient project pipelines.
+By paying equal attention to development and compliance, BOCI strengthened and improved
+its private banking products and service platform, thus providing diversified, value-added
+wealth management services to customers. It recorded strong growth in insurance business. In
+addition, its subsidiary, BOCI-Prudential Asset Management Limited, maintained its position
+as the top-ranked service provider in the Hong Kong Mandatory Provident Fund market and the
+Macau pension market, and received official designation as an asset manager for the Mandatory
+Provident Fund Scheme of the Hong Kong Special Administrative Region Government from 2016
+to 2026.
+55
+BOCI recorded steady development of its global commodity business and further strengthened its
+market making capability. It became the first Chinese financial institution to obtain the trading
+membership of Bursa Malaysia. By fully leveraging its self-clearing system, BOCI provided
+clearing services on the London Metal Exchange (LME) and InterContinental Exchange Europe
+(ICE Europe) to other Chinese securities firms. In line with economic and industry trends, it
+comprehensively improved its equity investment business structure and investment portfolio.
+Its Bohai Industrial Investment Fund, China Culture Industrial Investment Fund and BOCI
+Infrastructure Fund all achieved good performance, investing in several landmark projects in
+different industries.
+BOCI was awarded "Best Investment Bank in China" and "Best DCM House in Asia-Pacific"
+by Global Finance, "Best Chinese DCM House in Hong Kong" and "Best FIG Deal" by
+FinanceAsia, "Best Investment Grade Corporate Bond" by AsiaMoney, “Best Investment
+Management Company, Hong Kong" by World Finance, “CAPITAL Merits of Achievements
+in Banking & Finance MPF & ETF" by CAPITAL, “Best Fund Management Company Hong
+Kong 2016" by Global Banking and Finance Review, and "The Most Welcomed Broker in
+Greater China" by Hong Kong Commercial Newspapers.
+53
+BOCHK accelerated the optimisation of its regional distribution and saw regional synergies
+beginning to emerge. BOCHK successfully completed the sale of NCB and pushed forward
+its proposed sale of shares in Chiyu Banking Corporation Limited. Meanwhile, its regional
+development within the ASEAN region proceeded smoothly. It completed the share acquisition
+of Bank of China (Malaysia) Berhad and Bank of China (Thai) Public Company Limited on 17
+October 2016 and 9 January 2017 respectively. On 20 December 2016, BOCHK's first overseas
+institution, the Brunei Branch, formally commenced business, further improving its business
+structure and distribution.
+BOCHK's operating results reached another record high and it maintained leadership in key
+business areas. In 2016, BOCHK effectively improved its income mix and saw its financial
+performance reach a new high. It further optimised its asset and liability structure. The total
+deposits and loans grew rapidly and ahead of the market with a higher market share. The
+proportion of low-cost and interest-free deposits continued to rise. The growth rate of loans and
+deposits outpaced that of market peers. BOCHK's asset quality also outperformed that of its
+peers. In its role as the Asia-Pacific Syndicated Loan Centre, BOCHK diversified its corporate
+finance business and maintained its status as the top mandated arranger in the Hong Kong-Macau
+syndicated loan market for the 12th consecutive year. It cultivated the local market in Hong
+Kong, providing comprehensive financial solutions to industrial and commercial enterprises.
+It maintained its leadership in the UnionPay merchant acquiring and card issuance business in
+Hong Kong. accelerated the acquisition of SMEs, government and institutional customers, and
+introduced a new wealth management service model, achieving continuous growth in the total
+number of middle to high-end customers together with related total assets under management
+(AUM). BOCHK continued to optimise its private banking products and service platform,
+resulting in solid growth in the number of private banking customers.
+In 2016, BOCHK vigorously implemented the Group's strategies, captured development
+opportunities arising in the market and leveraged its own competitive advantages. Its core
+business realised sound growth and key financial indicators remained at solid levels. BOCHK
+actively explored business opportunities in the ASEAN region and saw the strategic value
+of its regional development beginning to emerge. It expedited business transformation and
+technological innovation and continued to refine its business structure to become more customer-
+centric. It optimised its distribution channels and internet finance capabilities in order to enhance
+overall service capabilities. BOCHK continued to sharpen its competitive edge in the RMB
+clearing business and stepped up its efforts in building key business platforms.
+The Bank vigorously implemented the nation's "Green Development" concept and
+continually built a global and multi-dimensional green financial system. The Bank
+successively issued senior green bonds and green covered bonds in the international
+market, the proceeds of which were used to support the development of its domestic green
+credit projects.
+On 5 July 2016, the Bank successfully issued green bonds totalling USD3 billion
+equivalent, denominated in USD, EUR and RMB, in the international market. The bonds,
+covering three tenors and five tranches, were issued through the Luxembourg Branch
+and New York Branch simultaneously and listed on the Luxembourg Stock Exchange
+and Hong Kong Stock Exchange respectively. The bonds conformed to the Green Bond
+Principles, 2016, including related recommended best practices on information disclosure.
+The bonds received “green assurance" and quantitative “green assessment” from the
+international third party, with a score of GB-AAA and a "Dark Green” classification owing
+to assessment of the management mechanism, as well as the actual green projects related
+to the bonds. The bonds were the largest green credit bonds covering the most tranches in
+the international market, and were included in well-recognised green bond indices such as
+the Barclays MSCI Green Bond Index and Bank of America Merrill Lynch Green Bond
+Index. The Bank consequently was awarded the "SRI Bond of the Year" by International
+Financing Review.
+The Bank carried out a pilot programme of green finance innovation in active response
+to the "Green Finance" theme of the G20 Hangzhou Summit. On 3 November 2016,
+the London Branch successfully issued USD500 million green covered bonds in the
+international market. The bonds, listed on the London Stock Exchange, were the first
+covered bonds ever issued by a Chinese bank. The bonds were backed by the onshore green
+assets of the Bank, which provided a guarantee for the payment obligation. The bonds
+were rated "Aa3" by Moody's, the same as China's sovereign rating and one notch higher
+than the Bank's rating (A1), making it the highest international rating for Chinese green
+bonds. The bonds represented “double greenness", both in terms of the use of proceeds
+and the underlying assets in the cover pool. The proceeds of the bonds were allocated to
+the Bank's domestic green credit projects and all of the green assets in the cover pool were
+components of the China Bond-China Climate Aligned Bond Index. The bonds were in
+line with both international and domestic green bond standards and best practices. With
+green structure and cross-border nature, the bonds not only introduced offshore funds to
+high-quality domestic green projects but also connected the domestic green industry with
+international green investors, thus increasing the international market's understanding of
+China's green industry policy and green finance policy as well as promoting the gradual
+merging of China's onshore and offshore green bond markets.
+44
+49
+Village Bank
+BOC Fullerton Community Bank actively implemented national strategies on agriculture, farmers
+and rural areas, with the aim of “focusing on county area development, supporting farmers and
+small-sized enterprises, and growing together with communities”. It is committed to providing
+modern financial services to farmers, micro and small-sized enterprises, individual merchants
+and the wage-earning class, thus promoting the construction of China's "New Countryside". The
+Bank focused its business efforts on agriculture, farmers and rural areas, introducing more than
+50 kinds of products belonging to 10 agricultural categories, i.e. poultry, cattle, aquaculture and
+plants. All products were highly praised by customers.
+BOC Fullerton Community Bank significantly expanded its institutional reach with a focus on
+counties in central and western regions where financial services were previously lacking. As at
+the end of 2016, 82 BOC Fullerton Community Banks and 77 sub-branches had been established
+in 12 provinces (including municipalities directly under the Central Government). In particular,
+78% of BOC Fullerton Community Banks and sub-branches were established in central and
+western regions, and 33% were in official poverty-level counties. BOC Fullerton Community
+Bank has become the largest domestic village bank in terms of total institutions and business
+scope. In 2016, BOC Fullerton Community Bank served 1.048 million customers, an increase
+of 43.56% compared with the prior year-end. The balances of total deposits and loans of these
+banks were RMB20.219 billion and RMB18.511 billion respectively, an increase of 34.08% and
+21.43% compared with the prior year-end, among which loans to farmers and micro and small-
+sized enterprises accounted for 92.52%. The NPL ratio was 1.70% and the ratio of allowance for
+loan impairment losses to NPLs stood at 208.53%.
+BOC Fullerton Community Bank received several prizes including the “Best Innovation
+Award for Financial Model" issued by China Business Journal, the “Outstanding Management
+of Community Banks Award" issued by China Finance and the “2016 Corporate Social
+Responsibility Award” issued by xinhuanet.com.
+Custody Business
+50
+In 2016, the Bank practically implemented national strategies and seized market opportunities
+arising from the construction of the financial artery of the "Belt and Road” initiative, RMB
+internationalisation and Chinese enterprises” “Going Global” initiative. It promoted the
+establishment of overseas institutions in an organised manner and pushed forward the integrated
+development of its domestic and overseas operations, thus continually enhancing its global
+service and support capabilities and sharpening its market competitiveness. As at the end of
+2016, the balance of due to customers and loans of the Bank's overseas commercial banking
+operations amounted to USD372.832 billion and USD308.591 billion respectively. In 2016, the
+Bank's overseas commercial banking achieved a profit before income tax of USD11.329 billion,
+accounting for 33.88% of the Group's total profit before income tax. The Bank continued to
+lead its domestic peers in international business in terms of scale, profitability and the overall
+proportion of its internationalised operations.
+Regarding branch distribution, the Bank closely kept up with customers' financial service needs
+around the globe, accelerated improvements in the distribution of institutions in countries along
+the "Belt and Road" and in emerging markets, and increased outlets in countries with an existing
+BOC presence, so as to provide comprehensive financial services for customers. As at the end of
+2016, overseas institutions of the Bank totalled 578, covering 50 countries and regions across six
+continents, up by four new countries, of which 19 countries are along the "Belt and Road".
+For corporate banking, the Bank tapped into the “Blue Ocean” of cross-border business,
+improving its global hierarchical customer service system and the construction of its cross-border
+financing product and service system. Giving full play to its advantages in overseas business, the
+Bank supported the large-scale cross-border projects of Chinese enterprises, mainly through high-
+end products including syndicated loans, project financing, M&A financing, leverage financing
+and private equity financing. This included projects in global infrastructure construction, energy
+and mineral resources, equipment manufacturing and cooperation to improve production capacity.
+In this way, the Bank assisted both the "Going Global" initiative for Chinese enterprises and the
+“Bringing In” initiative for overseas enterprises, helping them carry out cross-border investment
+and international cooperation in production capacity and supporting the internationalisation of
+overseas enterprises. As a result, the Bank continuously optimised the core customer group of its
+overseas corporate banking business. Strengthening its business cooperation with international
+mainstream banks and policy financial institutions, the Bank committed to provide more financial
+support and deliver better services to the major projects of countries along the "Belt and Road".
+For personal banking, the Bank provided “one-stop” financial services for personal "Going
+Global" customers by leveraging its extensive overseas institutions network. Targeting customers
+studying or working overseas, the Bank offered an account opening witness service in 18
+countries and regions covering North America, Europe, Asia and Australia and built up account
+opening witness service brands such as “Brilliant Tomorrow” in the US, "Golden Age" and "UK
+Manager" in the UK, “Home in Canada”, and “Golden Years” in Australia, continually enhancing
+its integrated service capabilities. The Bank increased its efforts to push forward the development
+of its cross-border payment business and continuously developed a differentiated, multi-feature
+cross-border system for its products and services, thus enhancing the cross-border customer
+experience. It launched the "Traveller's Credit Card + Multi-Currency Credit Card" product
+portfolio in order to diversify its cross-border products offers, and upgraded the “basic cashback
++ products cashback + additional special offers” market system in order to diversify its cross-
+border services. The Bank insisted to differentiated and localised strategies for the development
+of its overseas bank card business, continued to promote the research and development of new
+products including business credit card in Macau and UnionPay credit card in Sydney, and
+expanded cooperation with overseas mainstream and well-known merchants and third-party
+institutions in an in-depth manner. The Bank optimised the structure of its overseas debit card
+system and launched UnionPay dual-currency (RMB and local currency) debit cards and Visa and
+MasterCard single currency debit cards. As at the end of 2016, overseas institutions of the Bank
+that issue debit card products covered 17 countries and regions.
+For financial market business, the Bank continued to leverage the advantages arising from
+its integrated domestic and overseas businesses, expanded the business scope of its overseas
+operations, and delegated authority to RMB clearing banks to perform local primary quotation,
+thus stimulating the development of its offshore RMB trading business. It sped up the
+construction of overseas trading centres with the London Trading Centre bringing all business
+lines' products into operation. It also focused on improving its offshore RMB quotation
+capacity, becoming the top pick of other financial institutions for exchange rate enquiry. It
+conducted forward cross-border RMB purchase and sale business for multinational corporations
+in Frankfurt, New York, Sydney, etc., and provided debt hedging services for China's “Going
+Global" enterprises. The Bank took full advantage of its cross-border operational strengths by
+actively marketing custody services to domestic sovereign investment funds, qualified domestic
+institutional investors (QDII), QFIIS, RQFIIs and overseas institutions with funds invested in
+the interbank bond market, and developed innovative custody services for Shenzhen-Hong Kong
+Stock Connect. Assets under custody for its overseas institutions ranked among the top in the
+industry. The Bank successfully issued green bonds totalling USD3 billion equivalent, the largest
+green credit bond issuance covering the most tranches in the international market. The Bank also
+issued USD500 million green covered bonds, which were the first covered bonds ever issued by a
+Chinese bank.
+For clearing services, the Bank consolidated its position at the leading edge of international
+payments by continuously improving its cross-border RMB clearing capabilities. In 2016, the
+Bank's cross-border RMB clearing transactions totalled RMB311.98 trillion, maintaining first
+place in global markets. The Bank was designated as the local RMB clearing bank in the US,
+thus accounting for 11 of the world's 23 authorised RMB clearing banks, leading its peers. The
+Bank ranked first in terms of the number of CIPS indirect participants, further improving its
+comprehensive settlement services.
+52
+For e-banking, the Bank further expanded the coverage of its overseas channel services and
+promoted its online banking service in Bank of China (Canada), Toronto Branch, Panama Branch
+and Vienna Branch, etc. The Bank further expanded its mobile financial services and promoted
+personal mobile banking services in its 15 overseas institutions including its Tokyo Branch, Bank
+of China (Thai) Public Company Limited, Bank of China (Malaysia) Berhad, Frankfurt Branch
+and Milan Branch. The service functionality of overseas online banking, telephone banking and
+SMS banking was further enhanced.
+BOCHK
+Overseas Commercial Banking
+51
+29,974
+Group
+64
+The Bank boosted the transformation of its IT technical architecture and accelerated the
+building of a distributed private cloud platform. It set up a blockchain research team and
+explored blockchain technology-based application models and scenarios. It also cooperated with
+prestigious domestic universities and professional institutions to establish a joint laboratory for
+financial information security, so as to improve research and application capabilities in new
+information security technologies.
+The Bank steadily rolled out its overseas information system integration and transformation
+project and successfully launched the system in the Americas. It supported information system
+building in newly established overseas institutions, successfully realising version unification,
+centralised deployment and integrated operation and management of overseas institutions in 34
+countries and regions. It was also the first among its domestic peers to establish a 24/7 nonstop
+globally integrated operation and maintenance system. The Bank enhanced the regionally-
+integrated IT service capability of the three overseas information centres in the Americas, Europe
+and Asia Pacific. This enabled the Bank to put in place a firm foundation on which to further
+consolidate and enlarge its internationalised advantages.
+The Bank's IT function actively supported business development. It completed the launch of the
+Global Limit Management System, the upgrading of the Global Cash Management System and
+the promotion of integrated front, middle and back-office processing for treasury operations in
+the Asia Pacific region, all of which strongly supported the Bank's international development.
+Adapting to adjustments in regulatory policies, the Bank launched BT-to-VAT reform and
+PBOC-led personal banking account reform projects, becoming one of the first banks to provide
+online opening services for Category II and Category III accounts. It intensified system building
+for internet finance and was among the first of its peers to launch a mobile payment function. It
+also vigorously pushed forward the implementation of its business process optimisation system,
+effectively improving the experience of internal and external customers.
+Guided by innovations in information technology, the Bank reinforced the establishment of
+its IT governance system and promoted deep integration between business and technology. It
+continually strengthened top-level design and formulated a three-year IT development plan,
+laying out the strategic direction, risk appetite and technical route for IT development. The Bank
+pushed forward IT architecture adjustment by establishing software development sub-centres in
+Xi'an and Hefei, and improved its independent R&D and service capabilities in internet finance
+and in its domestic and overseas institutions.
+Information Technology Development
+63
+63
+The Bank made remarkable achievements in the development of its internet finance business.
+Accelerating its strategy for internet finance development, the Bank established the Internet
+Finance Committee and promoted the sustained development of internet finance based on the
+core tactic of "Scenario Integration and Data Insight”. The Bank enriched product lines covering
+payment, asset management, trading and financing businesses through internet finance models
+and extended its service coverage through scenario building, thus continually enhancing its
+internet finance service capacity. In terms of mobile payment innovation, it launched NFC
+payment products, such as HCE Quick Pass payment-based product, Apple Pay, Samsung Pay,
+etc. Its B2C online payment service grew rapidly and its productivity has increased significantly.
+The Bank pushed forward the building of the BOC financial supermarket, continually diversified
+its online asset management ecosystem and unveiled the innovative “E Rong Hui” mobile fund
+trading service, on which trading volumes exceeded RMB250.0 billion in 2016. The Bank helped
+China's export and foreign trade industries to reorient towards “Internet Plus”, providing service
+solutions for both importing and exporting scenarios. It also delivered match-making services
+for cross-border e-commerce businesses in London, Macau, etc. Moreover, its "BOC Easy-trade
+Cyber-tariff" service maintained a market-leading share for the tenth consecutive year. The Bank
+enhanced its data insight capacity and used big data to realise precision marketing and bank-wide
+risk management. It launched “BOC E-Credit”, a whole-process, online consumption-oriented
+credit product featuring immediate disbursement. The Bank also launched the BOC e-commerce
+platform, including pilot projects in targeted poverty alleviation, cross-border e-commerce and
+other special areas.
+The Bank continually enhanced the service ability and functionality of its e-banking channels
+and fully implemented its mobile finance strategy. It further optimised the functionality of its
+mobile banking, online banking, telephone banking and WeChat banking channels, thus further
+improving customer experience. For mobile banking and online banking, in an effort to build a
+comprehensive mobile financial portal, the Bank conducted an all-round upgrade of its mobile
+banking service by developing new functions such as “e-account opening”, “life insurance
+product sales service”, “BOC E-Credit” and “WMP pledged loan” and upgrading its bill payment
+function. For WeChat banking, the Bank launched three major functions, namely debit card
+binding, loan application and foreign exchange trading. For personal online banking, the Bank
+added a function allowing for the online contracting of foreign exchange option transactions. For
+corporate online banking, the Bank launched loan application and appeal functions for SMEs.
+Regarding self-service equipment, the Bank refined the most frequently used functions of ATMs
+and other self-service terminals. In terms of security authentication, the Bank developed a further
+multi-layer security authentication system and diversified approaches for interim monitoring,
+to further enhance both security and convenience. The Bank consolidated its strength in cross-
+border services by launching an FTZ remittance service and global batch remittance authorisation
+in corporate online banking, further expanding such global cash management services as foreign
+currency transfer and uniform payment, developing a dedicated sub-channel for cross-border
+financial services for personal online banking and launching personal foreign currency remittance
+services for the PAD client of mobile banking and online banking.
+62
+662
+4.42%
+4,297.750
+4,487.556
+32.14%
+5,178.079
+6,842.408
+2.73%
+44
+Audit Committee
+RISK MANAGEMENT
+Based on its status as a Global Systemically Important Bank, the Bank actively responded to the
+"new normal” of economic development and continued to meet external regulatory requirements.
+Adhering to the principles of taking an issues-focused approach and implementing top-level
+design, the Bank pushed forward the establishment of its risk management system in line with its
+business model. The Bank refined its consolidated risk management mechanism and improved
+procedures for product risk management. In addition, it advanced the building of the "three lines
+of defence" in risk management, specifying the outline and responsibilities of each line. The Bank
+implemented advanced capital management approaches in an in-depth manner, actively promoted
+the improvement of its risk measurement model, built its risk management information system at
+a faster pace and integrated its risk database, thus improving its risk reporting capability.
+Directors
+Board of
+Department
+Credit Approval
+Department
+Credit Management
+Department
+Legal Compliance
+Internal Control and
+Executive Office
+Financial Management]
+Management
+Capital
+19,792.780
+Department
+Asset Disposal
+Committee
+Risk Management
+Committee
+Risk Management and
+Internal Control
+Senior Management
+(Executive Committee)
+The US Risk and
+Management Committee
+Risk Policy Committee
+Board of Directors
+The risk management framework of the Bank is set forth below:
+Anti-money Laundering
+Committee
+20,333.010
+5.05%
+129,322.199
+31 December
+2015
+2016
+Items
+31 December
+As at
+Unit: million customers, except percentages
+As at
+The Bank focused on mobile internet in an effort to foster electronic banking habits among its
+customers. The Bank's e-channel customers have become consistently more active and more
+loyal, leading to rapid growth in the volume of mobile banking business. This in turn has
+given strong momentum to its customer service and business development. In 2016, the Bank's
+cumulative e-channel transaction amount reached RMB 160.69 trillion, an increase of 4.72%
+compared with the prior year. The substitution ratio of e-banking channels for outlet-based
+business transactions reached 90.74%. Among this, mobile banking transaction volumes hit
+RMB6.84 trillion, an increase of 32.14% year-on-year, meaning that mobile banking is gradually
+growing into one of the Bank's major customer service channels.
+E-Banking
+2.84%
+Change (%)
+14,045
+11.71%
+32,302
+36,083
+2.87%
+45,506
+46,810
+Change (%)
+2015
+2016
+14,444
+Management
+Senior
+Number of corporate online banking customers
+2.8505
+135,853.067
+Transaction amount of corporate online banking
+Transaction amount of personal e-banking
+Transaction amount of mobile banking
+Transaction amount of self-service banking
+Change (%)
+2015
+2016
+Items
+Unit: RMB billion, except percentages
+5.50%
+105.4931
+3.1408
+111.2993
+18.02%
+79.9885
+94.3995
+Number of mobile banking customers
+9.19%
+122.4606
+133.7110
+Number of personal online banking customers
+10.18%
+Number of telephone banking customers
+31 December
+Related Management
+Departments of the Group
+Domestic
+1.43%
+130,897
+1.46%
+146,003
+NPLs
+100.00%
+9,135,860
+100.00%
+9,973,362
+Total
+0.34%
+30,640
+0.48%
+47,939
+Loss
+0.45%
+41,516
+0.37%
+Pass
+7,387,949
+94.49% 6,854,159
+95.21%
+0.60%
+46,937
+0.56%
+40,612
+0.46%
+35,758
+NPLs
+Total
+Loss
+36,817
+Doubtful
+57,049
+0.75%
+58,763
+Substandard
+3.02%
+217,300
+3.70%
+289,101
+Special-mention
+0.79%
+Doubtful
+0.64%
+58,741
+In terms of personal banking, the Bank enforced regulatory requirements on residential mortgages
+and continued to strictly implement differentiated policies. It improved management policies for
+personal housing loans, personal consumption loans, personal carport loans, overseas personal
+loans and credit card loans. It also strengthened risk control of key products and regions.
+In terms of corporate banking, the Bank further strengthened risk identification and control,
+proactively reduced and exited credit relationships in key fields, strictly controlled the gross
+outstanding amount and portfolio of loans through limit management and prevented and mitigated
+risk from overcapacity industries. It intensified the management of loans to local government
+financing vehicles (LGFVs) and strictly controlled the outstanding balances. In addition, the Bank
+implemented the government's macro-control policies and regulatory measures in the real estate
+sector so as to strengthen the risk management of real estate loans.
+The Bank continuously adjusted and optimised its credit structure. With the aim of advancing
+strategic implementation and balancing risk, capital and return, the Bank stepped up the
+application of the New Basel Capital Accord and improved the management plans of its credit
+portfolios. In line with the government's macro-control measures and the direction of industrial
+policy, the Bank enacted guidelines for industrial lending and continued to push forward the
+building of an industrial policy system so as to optimise its credit structure.
+65
+Taking a customer-centric approach, the Bank further strengthened its unified credit granting
+management. It improved its asset quality monitoring system and intensified post-lending
+management. It further enhanced potential risk identification, control and mitigation mechanisms
+by reinforcing customer concentration control and establishing large borrower risk mitigation
+accountability. The Bank maintained relative stability of asset quality by enhancing the
+supervision of risk analysis and asset quality control in key regions, and strengthening window
+guidance on all business lines.
+Closely tracking changes in macroeconomic and financial conditions, the Bank controlled
+and mitigated risks, promoted development and consolidated the foundations of its credit risk
+management function. In addition, the Bank strengthened credit asset quality management, further
+improved its credit risk management policies, pushed forward adjustments to its credit structure
+and took a proactive and forward-looking stance on risk management.
+Credit Risk Management
+Audit
+Department
+Audit Line
+The Bank strengthened country risk management and incorporated it into its comprehensive risk
+management system. It performed an annual review of country risk ratings and implemented
+limit management of country risk exposures. It constantly optimised the Country Risk Exposure
+Statistical System to assess, monitor, analyse and report its exposures on a regular basis,
+thereby managing the use of limits in a precise manner. The Bank also established a country
+risk monitoring and reporting system covering yearly reporting, quarterly monitoring and the
+timely reporting of material risk events, which made it possible to regularly publish country risk
+analysis reports, provide updates on the country risk monitoring tables, make timely assessments
+of the impact of material country risk events and publish risk prompts. In addition, the Bank
+differentiated the management of potentially high-risk and sensitive countries and regions.
+Subsidiaries.
+Financial Management]
+Chief Audit Officer
+Department
+Task Forces
+7,818,508
+Business
+Departments
+Vertical
+Department
+Risk Management|
+Modes
+Board of Directors
+Management
+The Bank further stepped up the collection of NPAs. It continued to carry forward centralised
+collection through the unified allocation of internal and external collection resources. The Bank
+centrally managed NPA projects and took measures such as continually enhancing hierarchical
+management, reinforcing control of key regions and key customers and promoting advanced
+experience and typical cases regarding NPA mitigation to improve the quality and efficiency
+of disposals. The Bank tapped the potential value of NPAs through multiple measures and
+leveraged its internationalised and diversified business advantages to successfully explore
+innovative means such as NPA securitisation. It adopted policies based on the actual conditions of
+individual enterprises, strengthened restructuring efforts and strived to help enterprises get out of
+difficulty. The Bank actively participated in the study and adjustment of regulatory policies and
+strengthened support to the real economy. It conducted NPA disposal and continued to implement
+accountability measures for losses in compliance with relevant laws and regulations.
+66
+0.61%
+61,247
+Substandard
+2.51%
+229,165
+3.11%
+310,630
+Special-mention
+96.06%
+66
+8,775,798
+9,516,729
+Pass
+0.42%
+Items
+As at 31 December 2016
+Amount % of total
+Unit: RMB million, except percentages
+As at 31 December 2015
+Amount % of total
+Five-category Loan Classification
+As at the end of 2016, the Group's NPLs totalled RMB146.003 billion, an increase of
+RMB15.106 billion compared with the prior year-end. The NPL ratio was 1.46%, up by 0.03
+percentage point compared with the prior year-end. The Group's allowance for impairment
+losses on loans and advances was RMB237.716 billion, an increase of RMB37.051 billion
+compared with the prior year-end. The coverage ratio of allowance for loan impairment losses
+to NPLs was 162.82%, up by 9.52 percentage points from the prior year-end. The NPLs of
+domestic institutions totalled RMB141.458 billion, an increase of RMB13.823 billion compared
+with the prior year-end. Domestic institutions' NPL ratio was 1.81%, up by 0.04 percentage
+point compared with the prior year-end. The Group's outstanding special-mention loans stood
+at RMB310.630 billion, an increase of RMB81.465 billion compared with the prior year-end,
+accounting for 3.11% of total loans and advances, up by 0.60 percentage point from the prior
+year-end.
+The Bank scientifically measured and managed the quality of credit assets based on the
+Guidelines for Loan Credit Risk Classification issued by the CBRC, which requires Chinese
+commercial banks to classify loans into the following five categories: pass, special-mention,
+substandard, doubtful and loss, among which loans classified as substandard, doubtful and loss
+are recognised as NPLs. In order to further refine its credit asset risk management, the Bank used
+a 13-tier risk classification criteria scheme for corporate loans to domestic companies, covering
+on-balance sheet and off-balance sheet credit assets. In addition, the Bank strengthened risk
+classification management of key industries, regions and material risk events, and dynamically
+adjusted classification results. It strengthened the management of loan terms, managed overdue
+loans by the name list system and made timely adjustments to risk classification results, so as to
+truly reflect asset quality. The Guideline for Loan Credit Risk Classification is also applicable to
+the overseas operations of the Bank. However, the Bank classified credit assets in line with local
+applicable rules and requirements if they were stricter.
+95.43%
+31 December
+Domestic and
+Overseas Branches
+As at
+The Bank engages in life insurance business in the Chinese mainland through BOC-Samsung
+Life. As at the end of 2016, BOC-Samsung Life recorded total assets of RMB10.173 billion and
+net assets of RMB1.275 billion. In 2016, it realised written premiums and premium deposits of
+RMB5.377 billion.
+BOC-Samsung Life
+auto insurance premium reform. BOC Insurance accelerated business channel innovation, and
+developed its key customer and e-channels in a coordinated manner. By expanding accident
+insurance and health insurance products through new channels such as “direct mailing +
+telesales”, BOC Insurance recorded a year-on-year growth of 28% in written premiums in 2016.
+After substantially expanding its key customer-related programmes, it accumulatively contracted
+with a total of 216 key customers. BOC Insurance enhanced its comprehensive capacity and was
+granted an "A-” rating by Standard & Poor's.
+58
+In response to the opportunities brought about by the implementation of the "Belt and Road"
+initiative, BOC Insurance accelerated the pace of its overseas business development. Its overseas
+business generated written premiums of RMB155 million, up by 165% compared with the
+prior year. It completed 90 overseas projects in 2016, reporting a total investment and project
+contracting amount of over RMB1.6 trillion. In the meantime, BOC Insurance also supported
+large Chinese "Going Global" enterprises such as China National Petroleum Corporation,
+China Petroleum & Chemical Corporation, China Communications Construction Group, Power
+Construction Corporation of China and China Railway Construction Corporation Limited, and
+operated overseas insurance-related programmes in nearly 60 countries and regions in Asia,
+Africa and South America. Undertaking the social responsibilities, BOC Insurance responded
+immediately and worked tirelessly to handle a variety of insurance claims. BOC Insurance pushed
+forward the reform of commercial auto insurance premiums, with all of its branches receiving
+regulatory acceptance by the China Insurance Regulatory Commission regarding commercial
+The Bank is engaged in property insurance business in the Chinese mainland through BOC
+Insurance. As at the end of 2016, BOC Insurance reported total assets of RMB 12.180 billion and
+net assets of RMB4.881 billion. In 2016, it realised gross written premiums of RMB5.171 billion,
+and a profit after tax of RMB152 million.
+BOC Insurance
+BOC Life received the "Insurance Company of the Year Outstanding Performance" and
+"Saving Plan Excellence Awards" from Bloomberg Businessweek. It also received the “RMB
+Business Outstanding Award - Outstanding Insurance Business” from Hong Kong Wen Wei Po.
+customers.
+BOC Life strengthened collaboration with the Group and maintained its leading position in
+the Hong Kong RMB life insurance market. It leveraged its multiple distribution channels and
+continued to enhance product and service innovation. It launched featured products such as the
+MaxiWealth ULife Insurance Plan, UltraReach Insurance Plan, Cancer Rider and SmartUp Whole
+Life Insurance Plan, so as to further enrich its product portfolio and meet the different needs of
+customers. BOC Life solidified its distribution capabilities so as to enhance service quality to
+customers, achieving stronger growth in its tied agency and broker business. It also opened a new
+customer service centre to provide a one-stop professional and integrated life insurance service to
+The Bank is engaged in life insurance business in Hong Kong through BOC Life. As at the end
+of 2016, BOC Life's total assets amounted to HKD111.186 billion and net assets amounted to
+HKD7.402 billion. In 2016, BOC Life recorded a gross premium income of HKD19.357 billion
+and a profit after tax of HKD1.041 billion.
+BOC Life
+BOCG Insurance geared up promotion of its key product and established a professional brand
+image. It hosted the third "BOCG Insurance Forum" which was well received by the industry.
+In "The Hong Kong Insurance Award 2016", BOCG Insurance was awarded the “Outstanding
+Online Platform Award General Insurance" and the finalist of "Outstanding Training and
+Development Award".
+100.00%
+7,199,094
+100.00%
+141,458
+1.81%
+127,635
+1.77%
+As at
+BOC-Samsung Life accelerated the optimisation of its business portfolio, placing more weight on
+regular premium sales and high-value business. It expanded its distribution channels, including
+adding life insurance sales to BOC online banking, mobile banking and self-service terminals.
+It optimised its customer services by launching an official WeChat account, upgrading the
+functionality of its call centre, and integrating its service hotline into BOC's “95566" call centre.
+It also devoted much more efforts to product innovation, introducing the protection product
+"YuanFu", critical illness insurance “XiangFu”, life insurance “ZunXiangJiaYing” for middle and
+high-end customers, cancer insurance “XiangRui” and accidental fracture insurance “XiangTai"
+for elderly customers.
+_
+67
+Investment Business
+Unit: single item, except percentages
+Self-service bank
+Self-service terminal
+Item
+ATM
+61
+The Bank consistently improved the management and operation of its bank outlets. The Bank
+continued to optimise its outlet performance evaluation system and performance rating system,
+and increased profitability of its low-efficiency outlets. The Bank expanded the range of services
+offered by its outlets and increased the number of marketing personnel in order to improve its
+marketing and servicing capacities. It also reinforced the risk management of all businesses
+and improved comprehensive efficiency in business development of its outlets. The Bank made
+greater efforts to encourage collaborative innovation across channels to embrace the changes
+brought about by the development of internet banking and changes in customer behaviour. It
+launched the Paperless-Counter Project, provided a service to allow companies to fill out their
+corporate internet banking application forms online, optimised the processes of queue number
+calling and customer feedback rating and promoted the transformation of its outlets from
+"transaction-oriented" to "market-oriented”. It also encouraged its branches to differentiate
+themselves with featured services based on their own business environments. A number of
+featured branches were successfully set up, including Fudan University Library-featured Branch
+in Shanghai and Financial Street Library-featured Branch in Beijing, and more featured services
+were developed in 22 branches located in Tianjin and Hebei, etc. As at the end of 2016, the
+domestic commercial banking network (including Head Office, tier-1 branches, tier-2 branches
+and outlets) comprised of 10,651 branches and outlets, domestic non-commercial banking
+institutions totalled 327, and institutions in Hong Kong, Macau, Taiwan and other countries and
+regions totalled 578.
+BOC-Samsung Life was awarded “Life Insurer of Excellent Competitiveness" in the “Financial
+Institutions of Excellent Competitiveness Selection" by China Business Journal. It also received
+“The 7th JinDing Prize Fund Quality Customer Service Award" by National Business
+Daily and "Corporate Citizen Award" in the “2016 Innovation and Development Forum of
+Chinese Insurance Industry”. Its critical illness insurance "XiangFu” and annuity insurance
+"ZunXiang JiaCheng" were awarded "Health Insurance Product of the Year” and “Endowment
+Insurance Product of the Year" respectively by China Insurance News and other media.
+Outlet Development
+As the most internationalised and diversified bank in China, the Bank established specialised
+and diversified service channels and provided comprehensive financial services to customers in
+the Chinese mainland and many other countries and regions. The Bank is committed to further
+developing its physical outlets and electronic service channels in a coordinated manner, and
+providing one-stop services and a consistent customer experience through the integrated functions
+of its different channels. By integrating IT systems and financial services, the Bank streamlined
+its banking services and ensured that a customer accessing the Bank's services from any spot
+would trigger a full response, allowing it to satisfactorily meet customers' needs anytime and
+anywhere.
+Service Channels
+60
+The Bank comprehensively carried out the upgrading of outlets towards smarter functionality
+across its entire network. In doing this, the Bank further specified the functions of different
+departments within each bank outlet, upgraded the on-site service system and increased the
+application of smart devices. It also streamlined the business handling process and standardised
+the sales process to provide a refreshing customer experience and enhance the brand image of
+the Bank. In 2016, a total of 2,683 bank outlets achieved smart functionality and the number of
+smart outlets reached 5,281, accounting for approximately 50% of total domestic outlets, thus
+significantly optimising business processes.
+(Please refer to the Annual Report of BOC Aviation for a full review of BOC Aviation's business performance.)
+60
+The Bank is engaged in direct investment and investment management business through BOCG
+Investment. BOCG Investment's business scope includes private equity investment, fund
+investment and management, real estate investment and management, and non-performing asset
+(NPA) investment. As at the end of 2016, BOCG Investment recorded total assets of HKD87.518
+billion and net assets of HKD54.456 billion. In 2016, it recorded a profit after tax of HKD1.317
+billion.
+59
+BOCG Investment implemented the Group's internationalisation and diversification strategies
+and continued to innovate its business model. It grasped opportunities arising from China's
+new urbanisation plan and plans for infrastructure development in important strategic regions
+by establishing the “Bank of China Urban Development Fund” and “Bank of China Innovative
+Development Fund", thus constantly intensifying its financial synergies within the Group. Taking
+advantage of market opportunities, it exploited potential investments arising from emerging
+industries and successfully completed its investment in Shanghai Lujiazui International Financial
+Asset Exchange Co., Ltd. ("Lufax”) and Shanghai Insurance Exchange, China's first insurance
+exchange. It expanded its overseas real estate investment business and successfully completed
+the acquisition of a property project in Sydney, Australia. It continued to carry forward business
+model transformation from “investment” to “investment management”, resolved non-performing
+assets of the Group in the form of funds, and pushed forward innovative businesses such as
+entrusted investment and asset securitisation. It constantly enhanced its investment value by
+strengthening post-investment management and exit management.
+BOCG Investment
+The Bank is engaged in the aircraft leasing business through BOC Aviation. BOC Aviation is one
+of the world's top five aircraft operating leasing companies and is the largest aircraft operating
+leasing company headquartered in Asia, as measured by the value of owned aircraft.
+On 1 June 2016, BOC Aviation completed the largest-ever IPO by market value of any aircraft
+operating lessor through its public listing on the main board of the HKSE. The successful listing
+has supported BOC Aviation's financial stability, grown its balance sheet, enhanced its standing
+and influence in the aircraft leasing industry, and further promoted the Group's diversification.
+BOC Aviation implemented an active aircraft portfolio management strategy and had sold all
+aircraft older than 10 years of age by 30 June 2016, ahead of schedule. As at the end of 2016,
+BOC Aviation had an average fleet age of 3.2 years (weighted by net book value), maintaining
+one of the youngest aircraft portfolios in the aircraft leasing industry. BOC Aviation actively
+services customer demand, build on its existing order book and invests in new technology
+aircraft to pursue sustainable growth. In 2016, it committed to purchase 25 additional Boeing and
+Airbus aircraft. At the end of the year, BOC Aviation had commitments to acquire 199 aircraft,
+delivering through 2021.
+BOC Aviation continues to maintain its solid financial strength. In 2016, it raised over USD2.7
+billion in debt financing, including USD1.25 billion from two separate benchmark bond offerings
+in the 144A-Regulation S markets and further diversified its debt investor base. BOC Aviation
+has corporate credit ratings of "A-" from Standard & Poor's and Fitch.
+BOC Aviation
+<50
+2.4
+2.3
+2.3
+<10
+Loan concentration ratio of the largest single borrower
+Loan concentration ratio of the ten largest borrowers
+2014
+2015
+Regulatory 31 December 31 December 31 December
+Standard
+127,635
+Indicator
+As at
+As at
+As at
+Unit: %
+The Bank continued to focus on controlling borrower concentration risk and was in full
+compliance with regulatory requirements on borrower concentration.
+In 2016, the Group's impairment losses on loans and advances stood at RMB86.795 billion,
+an increase of RMB30.923 billion compared with the prior year. The credit cost was 0.91%,
+an increase of 0.28 percentage point compared with the prior year. In particular, domestic
+institutions registered impairment losses on loans and advances of RMB85.282 billion, an
+increase of RMB31.955 billion compared with the prior year. The credit cost of domestic
+institutions was 1.14%, an increase of 0.37 percentage point compared with the prior year.
+The Bank makes adequate and timely allowances for loan impairment losses in accordance with
+the principles of prudence and authenticity. Allowances for impairment losses on loans consist
+of individually assessed and collectively assessed allowances. Please refer to Notes II.4 and VI.3
+to the Consolidated Financial Statements for the accounting policy in relation to allowances for
+impairment losses.
+97,057
+6,605,773
+2016
+14.2
+Unit: RMB million, except percentages
+14.7
+10,852
+Customer B
+0.37%
+36,765
+None
+Manufacturing
+Customer A
+% of
+total loans
+loans
+Parties or not
+Industry
+Outstanding
+Related
+The following table shows the top ten individual borrowers as at the end of 2016.
+Please refer to Notes V.18 and VI.3 to the Consolidated Financial Statements for detailed
+information regarding loan classification, the classification of identified impaired loans and
+allowance for loan impairment losses.
+60
+69
+Loan concentration ratio of the ten largest borrowers = total outstanding loans to the top ten borrowers ÷ net
+regulatory capital.
+2
+1 Loan concentration ratio of the largest single borrower = total outstanding loans to the largest single borrower ÷
+net regulatory capital.
+Notes:
+14.0
+501,759
+2,365,632
+86,205
+loans
+loans
+loans
+loans
+Impaired
+Total
+Impaired
+Total
+Impaired
+loans
+RMB
+Total
+loans
+As at 31 December 2015
+As at 31 December 2016
+Group
+Items
+Loans and Identified Impaired Loans by Currency
+88
+68
+97,057
+127,635
+Unit: RMB million
+As at 31 December 2014
+7,607,730
+Foreign currency
+Transportation, storage and
+6,104,014
+112,763
+130,277 6,799,585
+11,181 399,509
+141,458 7,199,094
+7,480,833
+337,675
+7,818,508
+Foreign currency
+Total
+RMB
+Domestic
+99,789
+8,483,275
+130,237
+12,875
+2,144,223
+17,254
+2,123,993
+86,914
+6,339,052
+112,983
+7,011,867
+130,301
+15,010
+145,311 9,135,860
+9,973,362
+Total
+14,872
+None
+0.19%
+0.33%
+Seeking at all times to balance safety, liquidity and profitability, and following regulatory
+requirements, the Bank improved its liquidity risk management system and continually
+upgraded its liquidity management function in a forward-looking and scientific manner. The
+Bank enhanced liquidity risk management at the institution and group level, including that of
+branches, subsidiaries and business lines. The Bank formulated sound liquidity risk management
+policies and contingency plans, periodically re-examined the liquidity risk limit, upgraded the
+early warning system for liquidity risk and strengthened the management of high-quality liquid
+assets, such as bond investments, in order to strike a balance between risk and return. In addition,
+the Bank regularly improved its liquidity stress-testing scheme and performed stress tests on a
+quarterly basis. The stress tests showed that the Bank had adequate payment ability to cope with
+distressed scenarios.
+The Bank continued to develop and improve its liquidity risk management system with the aim
+of effectively identifying, measuring, monitoring and controlling liquidity risk at the institution
+and group level, including that of branches, subsidiaries and business lines, thus ensuring that
+liquidity demand is met in a timely manner and at a reasonable cost.
+Liquidity Risk Management
+In terms of the management of exchange rate risk, the Bank sought to achieve currency matching
+between fund source and application and managed exchange rate risk through timely settlement,
+thus effectively controlling its foreign exchange exposure.
+239
+HKD Other
+(239)
+As at 31 December 2015
+USD
+(191) (90)
+191
+90
+RMB
+(222) (2,046)
+222 2,046
+97
+(97)
+(560)
+560
+(2,316)
+2,316
+Down 25 bps
+Up 25 bps
+Other
+HKD
+As at 31 December 2016
+RMB
+USD
+Items
+Unit: RMB million
+The Bank assessed the interest rate risk in its banking book mainly through analysis of interest
+rate re-pricing gaps, made timely adjustments to the structure of its assets and liabilities based
+on changes in the market situation, and controlled the fluctuation of net interest income at an
+acceptable level. Assuming that the yield curves of all currencies were to shift up or down 25
+basis points in parallel, the Group's banking book sensitivity analysis of net interest income on all
+currencies is as follows5:
+In order to focus on improving credit risk and contagion risk management, the Bank continually
+carried out group-wide risk identification for its bond investments. Moreover, the Bank enhanced
+its risk alert system and introduced innovative risk monitoring techniques by activating a system
+for tracking bond issuers' negative information, all with the aim of enhancing the efficiency
+and accuracy of risk alerts and continually optimising the graded warning and hierarchical
+management of the Group's integrated credit bond risk warning mechanism.
+5
+0
+This analysis is based on the approach prescribed by the CBRC, which includes all off-balance sheet positions.
+This is presented for illustrative purposes only, and is based on the Group's gap position as at the end of 2016
+without taking into account any change in customer behaviour, basis risks or any prepayment options on debt
+securities. The table has only shown the potential impact on the Group's net interest rates moving up or down 25
+basis points. The analysis is based on the Group's audited financial information.
+As at the end of 2016, the Bank's liquidity risk indicators met regulatory requirements, as shown
+in the table below (liquidity ratios apply to the Group's operations and excess reserve ratio
+and interbank ratios apply to the Bank's domestic operations. Major regulatory ratios here are
+calculated in accordance with relevant provisions of domestic regulatory authorities):
+RMB
+Excess reserve ratio
+59.9
+62.0
+52.7
+≥25
+Foreign currency
+49.9
+48.6
+45.6
+≥25
+RMB
+2014
+2015
+2016
+standard
+Major regulatory ratios
+Liquidity ratio
+Regulatory 31 December 31 December 31 December
+Unit: %
+As at
+As at
+As at
+71
+32,776
+70
+In response to changes in the market environment and in line with its business development and
+management requirements, the Bank adopted improvement measures to comprehensively enhance
+the effectiveness of its market risk management system and continuously made its market risk
+management more flexible and forward-looking.
+18,965
+None
+Commerce and services
+Customer F
+public utility management
+0.19%
+18,984
+None
+Water, environment and
+Customer E
+0.20%
+19,751
+None
+Commerce and services
+Customer D
+postal services
+0.31%
+31,297
+None
+Customer C Transportation, storage and
+postal services
+141,458
+Based on its judgement of financial market trends, the Bank actively adjusted its business
+strategies to prevent and control market risk. It upgraded its internal model measurement system
+for market risk and strengthened its data mining and processing ability, thus improving the overall
+accuracy and time-effectiveness of risk measurement. In addition, the Bank established a system
+to evaluate the capacity of its branches in managing market risk and counterparty credit risk, so
+as to enhance risk management and control capacity. The Bank closely tracked new regulatory
+requirements on market risk capital measurement, carried out quantitative estimation and planned
+an implementation route. It also improved requirements for managing the credit risk of central
+counterparties, and reviewed and optimised the risk weight of treasury business products. Please
+refer to Note VI.4 to the Consolidated Financial Statements for detailed information regarding
+market risk.
+Customer G
+None
+Market Risk Management
+0.17%
+16,736
+None
+Mining
+Customer J
+water
+electricity, heating, gas, and
+0.17%
+17,091
+None
+Production and supply of
+Customer I
+postal services
+0.18%
+17,501
+None
+Customer H Transportation, storage and
+postal services
+0.19%
+18,751
+Transportation, storage and
+Balance at the end of the year
+72,721
+(38,844)
+As at the end of 2016, the capital adequacy ratios separately calculated in accordance with
+the Capital Rules for Commercial Banks (Provisional) and the Regulation Governing Capital
+Adequacy of Commercial Banks are listed below:
+Capital Adequacy Ratios
+76
+16
+The Bank continually reinforced its capital management to tap its internal potential. It optimised
+its capital allocation methods, improved its capital budget mechanism, and reinforced capital
+assessment in order to guide all units of the Bank to improve their awareness of capital
+constraints. It continually optimised its on-balance sheet and off-balance sheet asset structures,
+developed capital-lite businesses, reduced the proportion of high-capital-consumption assets,
+properly controlled increases in off-balance sheet risk assets and expanded asset securitisation.
+These methods were effective as the Bank's risk weight decreased year-on-year, while its
+capital adequacy ratio continuously increased and hit a historic high. The Bank continued to
+replenish capital in a prudent manner. The shareholders' meeting approved the issuance of
+qualified write-down tier-2 capital instruments amounting to RMB60.0 billion or equivalent in
+foreign currencies. The Bank will continue to implement its capital replenishment plan so as to
+enhance its capital strength and improve capital structure. The Bank was awarded "Best Capital
+Management Bank" by The Chinese Banker.
+Capital Management
+The Bank enhanced the management of its connected transactions and internal transactions.
+It strengthened the routine monitoring of its connected transactions and strictly controlled
+their risks. It carried out special self-inspections on connected transactions by conducting
+self-evaluation and seeking improvement with regard to regulation implementation, system
+management, data quality and other dimensions. In addition, it implemented internal transaction
+monitoring and reporting, and guided and standardised the operation mechanism of internal
+transaction verification.
+75
+The Bank enhanced group-wide anti-money laundering (AML) management by implementing
+the plan for AML. It enhanced its processes for customer identification and due diligence and
+strengthened its real time control capability. It improved the sanctions aspect of its compliance
+management by improving the policies for sanction management and the sanction list as well as
+its related system functions. The Bank improved the functions of its large-amount and suspicious
+AML transaction system and optimised the new screening models for suspicious transactions.
+It continued to roll out the AML system in its overseas institutions, tailoring the transformation
+and overall optimisation of each system based on the regulatory requirements of each business
+location. It also conducted various forms of training, and implemented AML training plans for all
+employees.
+Capital Adequacy Ratios
+The Bank continually improved its compliance risk governance mechanism to better meet
+compliance risk management requirements. It continued to track compliance risk information
+including regulatory requirements, inspections and evaluations, so as to ensure compliance with
+domestic and overseas regulatory requirements. It monitored and assessed compliance risk and
+adopted a reporting mechanism for compliance risk information and material risk events, hence
+enhancing its compliance risk management capacity.
+The Bank continually improved its operational risk management system. It promoted the
+application of operational risk management tools, using the three major tools of Risk and Control
+Assessment (RACA), Key Risk Indicators (KRI) and Loss Data Collection (LDC) to continually
+identify, assess and monitor operational risks. The Bank enhanced its system supporting
+capability by optimising its operational risk management information system. It continually
+strengthened its business continuity management system and improved operating mechanism. It
+carried out business impact analysis and risk assessment, and launched emergency drills in key
+businesses to enhance the capacity for continuous business operation.
+Operational Risk Management
+The Bank paid close attention to fraud risk prevention and control, proactively identifying,
+assessing, controlling and mitigating risks. In 2016, the Bank succeeded in preventing 89 external
+cases involving RMB624 million.
+The Bank established and implemented a systematic financial accounting policy system
+in accordance with the relevant accounting laws and regulations. Accordingly, the Bank's
+accounting basis was solidified and the level of standardisation and refinement of its financial
+accounting management was further improved. The Bank set criteria for accounting appraisal
+and continued to promote the qualification of accounting groundwork in-depth. The Bank
+continually strengthened the quality management of its accounting information, so as to ensure
+the effectiveness of internal control over financial reporting. The financial statements of the Bank
+were prepared in accordance with the applicable accounting standards and related accounting
+regulations, and the financial position, operational performance and cash flows of the Bank were
+fairly presented in all material respects.
+74
+The Bank continued to implement the Basic Standard for Enterprise Internal Control and its
+supporting guidelines, adhering to the primary goal of ensuring the effectiveness of its internal
+control over financial reporting and the accuracy of its financial information. It also constantly
+improved non-financial internal control. The Bank earnestly implemented the Guidelines for
+Internal Control of Commercial Banks by following the basic principles of "complete coverage,
+checks and balances, prudence and correspondence”, so as to promote internal control governance
+and an organisational structure characterised by a reasonable division of work, well-defined
+responsibilities and clear reporting relationships.
+In order to continually improve its anti-fraud management system, the Bank clarified which
+bodies were responsible for organisational leadership, policy-making and enforcement,
+supervision and inspection and accountability. To secure a comprehensive performance of
+counter-fraud duties, it adhered to the basic principles of fraud case accountability, including
+"inquiry of four accountable subjects into one case”, “both institutional and business-line
+management accountability” and “management two levels higher than the branch-outlet
+accountable where serious fraud occurs", and established the mechanism of “presenting one case
+to five units". The Bank comprehensively enhanced day-to-day internal control management
+by giving full play to the guiding role of the risk management and internal control committee
+in tier-2 branches, and rolling out such practices as “branch outlet head contact" to enhance
+the risk prevention and control capacity of sub-branches and outlets. It also used management
+tools such as on-site examination, off-site monitoring and issue rectification to enhance its
+fraud case prevention and resolution capacity. In addition, the Bank carried out governance of
+internal control cases and used the review mechanism of “Two Strengthen and Two Curbing”,
+investigated risks, rectified problems and held relevant parties accountable.
+The third line of defence rests in the audit and inspection departments of the Bank. The audit
+department is responsible for performing internal audits of the Bank's internal control and risk
+management function in respect of its adequacy and effectiveness. The inspection department
+is responsible for staff non-compliance sanction, investigation of cases and management
+accountability. In 2016, the Bank accelerated the reform of its human resource management
+system for the audit line. It clarified that domestic audit sub-divisions are dispatched institutions
+of the Audit Department of the Head Office, with their personnel dispatched and directly
+managed by the Head Office, so as to further strengthen audit independence. Taking an issue-
+oriented approach that concentrates attention on matters of systemic, emerging trends, concerning
+tendency and importance, the audit department strengthened inspection and monitoring of the
+Bank's high-risk institutions and businesses, the Group's priority areas for risk control and
+fields of special concern to regulators, all with the aim of effectively performing the pre-warning
+and prevention function of internal audit. It actively promoted IT-based audit approaches,
+strengthened off-site technology applications and enhanced on-site examination efficiency.
+It refined mechanisms for rectification management by establishing specific institutions and
+procedures and clearly assigning responsibilities for rectification. It advanced rectification
+management at various levels including grassroots outlets, line management departments and the
+Head Office, so as to facilitate the effective rectification and systematic solution of issues and
+increase the efficiency of the Bank's internal governance and management mechanism.
+73
+Compliance Management
+Unit: RMB million, except percentages
+Items
+Group
+1,142,110
+1,205,826
+1,285,459
+1,384,364
+Net tier 1 capital
+1,042,396
+1,106,112
+1,182,300
+1,280,841
+Net common equity tier 1 capital
+Calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+31 December 31 December
+2015
+2015
+2016
+As at
+31 December
+As at
+Bank
+As at
+2016
+31 December
+As at
+year.
+The internal control and risk management departments of the Bank's institutions at all levels form
+the second line of defence. They are responsible for overall planning, implementing, examining
+and assessing risk management and internal control. They are also responsible for identifying,
+measuring, monitoring and controlling risks. The Group's operational risk monitoring and
+analysis platform is used to realise the regular and automated smart monitoring of major risks,
+helping the Bank to take timely risk prevention and mitigation measures. To enhance business
+processes and systems, the Bank adjusted policies and regulations in a timely manner during the
+The Bank continued to improve the “three lines of defence” mechanism for internal control.
+The first line of defence consists of departments of the Head Office, tier-1 branches, direct
+branches, tier-2 branches and all banking outlets under tier-2 branches (with the exception of
+those departments that form part of the second or third lines of defence). They are the owners of,
+and are accountable for, local risks and controls. They undertake self-control risk management
+functions in the course of their business operations, including the formulation and implementation
+of policies, business examination, the reporting of control deficiencies and the organisation of
+rectification measures.
+The Board of Directors, senior management and their special committees earnestly performed
+their duties regarding internal control and supervision, emphasising early risk warning and
+prevention.
+3-12 months (inclusive)
+1-5 years (inclusive)
+1-3 months (inclusive)
+Up to 1 month
+On demand
+Overdue/undated
+Items
+Liquidity gap analysis is one of the methods used by the Bank to assess liquidity risk. Liquidity
+gap results are periodically calculated, monitored and used for sensitivity analysis and stress
+testing. As at the end of 2016, the Bank's liquidity gap was as follows (please refer to Note VI.5
+to the Consolidated Financial Statements):
+0.4
+0.1
+0.04
+≤8
+0.3
+1.1
+0.05
+≤8
+Interbank borrowings ratio
+Interbank loans ratio
+Inter-bank ratio
+14.6
+19.0
+10.9
+Foreign currency
+Over 5 years
+Net capital
+Total
+31 December 2016
+Internal Control
+Internal Control and Operational Risk Management
+The Bank implemented the policy on reputational risk management, continued to improve
+its reputational risk management system and mechanism, and strengthened the consolidated
+management of reputational risk so as to enhance the reputational risk management capability. It
+attached great importance to the investigation of potential reputational risk factors, strengthened
+daily public opinion monitoring and continually carried out monitoring, identification and pre-
+warning of reputational risks. It established a coordination mechanism between reputational risk
+management departments and liable departments, and dealt appropriately with reputational risk
+events, thus effectively maintaining the brand reputation of the Group. In addition, the Bank
+continued to implement training sessions on reputational risk management so as to enhance
+employees' awareness of reputational risk management and cultivate the reputational risk
+management culture.
+Reputational Risk Management
+72
+Note: Liquidity gap = assets that mature in a certain period – liabilities that mature in the same period.
+1,357,605
+1,487,092
+3,747,477
+4,461,169
+2,009,358
+2,561,345
+734,148
+39,125
+(236,711)
+(73,401)
+(1,163,853)
+(1,130,916)
+1,940,702
+(5,673,516)
+2,132,049
+(6,502,279)
+Unit: RMB million
+As at
+31 December 2015
+As at
+(31,953)
+1,609,537
+1,414,052
+Balance at the beginning of the year
+Group
+2014
+2015
+2016
+Unit: RMB million
+Items
+Movement of Identified Impaired Loans
+In accordance with International Accounting Standard No. 39, loans and advances to customers
+are considered impaired, and allowances are made accordingly, if there is objective evidence
+of impairment resulting in a measurable decrease in estimated future cash flows from loans and
+advances. As at the end of 2016, the Group's identified impaired loans totalled RMB145.311
+billion, an increase of RMB15.074 billion compared with the prior year-end. The identified
+impaired loans to total loans ratio was 1.46%, an increase of 0.03 percentage point compared
+with the prior year-end. For domestic institutions, identified impaired loans totalled RMB141.458
+billion, an increase of RMB13.823 billion compared with the prior year-end. The identified
+impaired loans to total loans ratio of domestic institutions was 1.81%, up by 0.04 percentage
+point compared with the prior year-end. The Bank's operations in Hong Kong, Macau, Taiwan
+and other countries reported identified impaired loans of RMB3.853 billion and the identified
+impaired loans to total loans ratio of 0.18%, representing an increase of RMB1.251 billion and
+0.05 percentage point compared with the prior year-end respectively.
+130,237
+46.94
+44.31
+42.38
+48.25
+36.67
+9.89
+22.07
+19.39
+1.92
+2.22
+46.25
+99,789
+73,119
+Increase during the year
+(56,877)
+Decrease during the year
+58,577
+69,422
+70,700
+Increase during the year
+70,433
+97,057
+127,635
+Balance at the beginning of the year
+Domestic
+99,789
+130,237
+145,311
+Balance at the end of the year
+(33,527)
+(40,877)
+(57,647)
+Decrease during the year
+60,197
+71,325
+3.05
+2014
+2015
+2016
+11.77%
+14.67%
+Capital adequacy ratio
+Core capital adequacy ratio
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks
+14.17%
+14.03%
+14.06%
+14.28%
+Capital adequacy ratio
+12.12%
+11.96%
+12.07%
+12.28%
+Tier 1 capital adequacy ratio
+11.06%
+10.98%
+11.10%
+11.37%
+adequacy ratio
+Common equity tier 1 capital
+1,335,327
+11.38%
+14.45%
+1,498,396
+11.65%
+14.50%
+14.53%
+Unit: %
+Substandard
+Doubtful
+Special-mention
+Pass
+Items
+Migration Ratio
+12
+77
+Please refer to Supplementary Information II.5 to the Consolidated Financial Statements for
+detailed information.
+7.03%
+1,285,459
+18,297,331
+7.06%
+1,384,364
+19,604,737
+31 December 2016 31 December 2015
+Unit: RMB million, except percentages
+As at
+As at
+Adjusted on- and off-balance sheet assets
+Leverage ratio
+Net tier 1 capital
+Items
+As at the end of 2016, the leverage ratio calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) is listed below:
+Leverage Ratio
+Please refer to Note VI.7 to the Consolidated Financial Statements for detailed information.
+11.56%
+2.3
+1.5
+1.3
+Responsibility to the country
+││││
+12.81%
+13.55%
+0.35%
+42.92%
+9.56%
+8.89%
+2.52%
+9.40%
+I
+Information technology
+Other
+☐
+The Bank accelerated the construction of personnel teams, implemented its special personnel
+supplementation plan in key strategic areas, increased staffing in important business areas,
+stepped up efforts in cultivating the international and diversified experience of its personnel
+and reinforced the construction of a talent pool of employees fluent in minority languages.
+In compliance with China's targeted poverty alleviation policy, the Bank assigned cadres for
+79
+88
+80
+eliminating poverty to the certain poverty areas in batches and hired low-income university
+graduates through a special programme within its campus recruitment campaign. The Bank
+ranked first in the “Best Employer in Financial Industry in the Opinion of Chinese University
+Students" for the ninth consecutive year and ranked second in the overall list of the 14th
+"Employers in the Opinion of Chinese University Students".
+The Bank optimised personnel expense allocation and promoted the “broad-band” remuneration
+system in a bid to improve the input-output efficiency of resources. It continued to improve its
+remuneration policies and implement the “position-related and performance-based” remuneration
+distribution principle, in line with corporate governance requirements, operational and
+development strategy and market positioning and talent competition strategy. According to these
+policies, base salary is determined by the job's value and the employee's duty performance, while
+the performance-related bonus is determined by the performance assessment results of the Bank,
+employees' institutions or departments and employees. These remuneration policies apply to all
+employees who sign an employment contract with the Bank.
+The Bank held a "Belt and Road" international financial communication and cooperation
+seminar in the Philippines, thus actively promoting national strategies. The Bank conducted key
+training programmes so as to enhance the professional capabilities of employees with regard to
+the internal control of risk and mitigation of non-performing loans, RMB internationalisation,
+the integrated development of the Beijing-Tianjin-Hebei region, internet finance, interest rate
+liberalisation and green credit. In 2016, the domestic commercial banking institutions of the Bank
+held a variety of training courses, totalling 68,122 sessions with 2,725,361 participants.
+OUTLOOK
+The domestic and international economic situation will remain complicated in 2017. On the
+international front, global economy will continue to stay in complex, unstable and uncertain
+condition and become further divergent in macroeconomic policies. On the domestic front,
+China's economy is in a critical transition period, shifting from old to new growth drivers
+and experiencing structural challenges. Meanwhile, commercial banks will continue to see
+development opportunities from the implementation of China's 13th Five-Year Plan, as supply-
+side structural reform will continue to deepen and the quality of economic growth is expected to
+improve further.
+The Bank will implement national macroeconomic policy, uphold the strategic goal of "Serving
+Society, Delivering Excellence”, maintain the overall theme of seeking progress while ensuring
+stability and make solid progress towards key tasks related to “innovation, transformation,
+mitigation and control”, in pursuit of the sustainable and healthy development of all businesses.
+In 2016, in line with the strategic development plan and annual priorities, the Bank further
+deepened reform of its organisational structure and management mechanism. It reorganised
+institutions in Liaoning and Shandong, so as to enhance market competitiveness in the Bohai
+Rim. The Bank actively responded to “smart channel" development, and optimised its channel
+management functions, providing solid support for the implementation of strategic development
+plan and operational development.
+internal control
+Risk management and
+financial management
+7.13%
+18.68%
+Bachelor degree
+62.78%
+64.45%
+47.71%
+Associate degree
+22.69%
+23.02%
+19.68%
+6.25%
+5.40%
+13.93%
+Other
+Composition of staff
+by job function
+Corporate banking
+Personal banking
+Financial markets
+Cross-marketing and teller
+Operation services and
+Remain confident and endeavour to fulfil five commitments. First, the Bank will persevere
+in international development. It will accelerate the construction of the "Belt and Road” financial
+artery, fully leverage its global operations and traditional advantages and continue to improve its
+international development system while helping domestic enterprises to "Going Global". Second,
+the Bank will persevere in serving the people. Dedicated to a customer-centric approach, the Bank
+will accelerate the improvement of business procedures and comprehensively enhance customer
+experience. Third, the Bank will persevere in serving SMEs. The Bank will optimise the business
+flow of the "Credit Factory", further develop cross-border matchmaking services and encourage
+innovation-driven development. Fourth, the Bank will persevere in technological innovation. The
+Bank will strengthen the guiding role of technology, continue to develop mobile finance, smart
+counters, and e-finance, and promote deeper integration between business and technology. Fifth,
+the Bank will persevere in team building.
+Forge ahead to achieve stability and progress in six aspects. First, the Bank will seek progress
+in structural adjustment while maintaining stable scale in terms of assets. It will continue
+to uphold a prudent operational approach, strengthen capital constraints, pursue structural
+improvements and continuously improve the quality and efficiency of its development. Second,
+the Bank will seek progress in its liability business while maintaining stable asset business.
+Giving balanced consideration to capital and liquidity constraints, the Bank will endeavour
+to achieve stable and moderate credit growth and the RMB loan of its domestic operations is
+expected to increase by 10% in 2017. The Bank will also maintain deposit business as a core
+business, in a bid to provide stable sources of funding for the development of its asset business.
+Third, the Bank will seek progress in its overseas business while maintaining stable in its
+domestic business. It will rely on the Group's overall strengths to seek new opportunities from
+global market development and create new sources of growth. Fourth, the Bank will seek progress
+in building its non-interest income while maintaining stable interest income. It will strengthen the
+balanced management of assets and liabilities, maintain steady growth in interest income, step
+up products and service innovation and sharpen its competitive edge in fee-based business. Fifth,
+the Bank will seek progress in service quality while maintaining stable service fundamentals.
+The Bank will improve service quality and customer experience through product R&D, process
+optimisation and business innovation, so as to further cement its service foundations. Sixth, the
+Bank will seek progress in the mitigation of NPAs while maintaining stable asset quality. The
+Bank will spare no effort to mitigate potential risks and existing NPAs, promote innovative
+practices for NPAs mitigation and increase the efficiency and effectiveness of NPAs disposal.
+81
+Corporate Social Responsibilities
+0.84%
+2.97%
+2,482,887,298(P) H
+0.06%
+0.22%
+180,789,229(S) H
+1.69%
+5.93%
+4,960,736,384 H
+Total
+agent
+approved lending
+corporation/
+0.84%
+2.97%
+2,482,887,298(P) H
+Custodian
+0.00001%
+0.00003%
+28,075 H
+Trustee
+Notes:
+8.28%
+1
+BlackRock, Inc. holds the entire issued share capital of BlackRock Holdco 2 Inc., while BlackRock Holdco 2
+Inc. holds the entire issued share capital of BlackRock Financial Management, Inc. Thus BlackRock, Inc. and
+BlackRock Holdco 2 Inc. are deemed to have equal interests in shares of the Bank as BlackRock Financial
+Management, Inc. under the SFO. BlackRock, Inc. holds a long position of 5,806,249,443 H Shares of the Bank
+through BlackRock Financial Management, Inc. and other corporations controlled by it, including 17,050,000 H
+Shares which are held through derivatives.
+The Bank continued to deeply implement its the development strategy of "Serving Society,
+Delivering Excellence". The Bank was visited by political leaders of many countries including
+the United Kingdom, the Philippines, Peru, Cambodia and Turkey. It also held a “Belt and Road”
+international financial cooperation seminar for Cambodia and the Philippines. The Group's
+loans were largely granted to major programmes and projects that the country supported as
+well as to the key sectors and areas that benefit the people's livelihood. The Bank accelerated
+the construction of the financial artery of the "Belt and Road” initiative and gave significant
+support to projects related to the coordinated development of the Beijing-Tianjin-Hebei economic
+area. The financial business in Shanghai FTZ continued to lead its peers in terms of financial
+innovation and business scale. The Bank held 10 cross-border matchmaking conferences for
+global SMEs and published the Five-year Action Plan for Promoting the Internationalised
+Development of Small and Medium-sized Enterprises together with the Ministry of Industry and
+Information Technology of PRC. It accelerated the building of BOC Fullerton Community Banks.
+Responsibility to shareholders
+Attaching great importance to shareholders' rights, the Bank continuously innovated and
+improved its corporate governance mechanism and proactively promoted the construction of
+the information disclosure system. It maintained a stable external rating, and continued to
+deliver long-term value to shareholders. As of the end of 2016, the Bank's total assets achieved
+RMB18.15 trillion, ranking it among the top global banks. With Stand-alone Credit Profile and
+preference share rating upgraded by Standard & Poor's Rating Services, the Bank's various
+ratings reached the highest level amid Chinese peers. The Bank ranked 35th among the "Global
+500”, up 10 places compared to last year, 4th in "Top 1,000 World Banks” and 6th in the "Top
+500 Global Banking Brands in 2016” with a brand value of USD27.7 billion, up 36% year on
+year.
+Responsibility to customers
+The Bank served as the RMB clearing bank in 11 countries and regions and established an RMB
+clearing network that covers five continents to provide 24x7 service. It was the first Chinese
+bank to set up subsidiaries in 51 foreign countries and regions. Throughout the year, the Bank
+completed RMB311.98 trillion in cross-border RMB clearing and RMB4 trillion in settlement
+volume, maintaining its leading position among global peers. A comprehensive online financial
+services platform was realised through the building of the "E-BOC” e-finance brand. The
+Bank launched "Mobile Banking 3.0", which greatly improved customer experience. With the
+launch of “smart counters", the Bank's smaller outlets largely achieved “immediately business
+handling" for customers, while larger outlets substantially shortened customer waiting time. The
+substitution ratio of e-banking channels for outlet-based business transactions reached 90.74%, up
+2.77 percentage points on a yearly basis.
+82
+62
+Responsibility to employees
+Adhering to the principle of “people first”, the Bank placed high importance on employee needs
+and proactively developed a human resource management model suited to its corporate culture
+and operational management. In addition to offering continuous enhanced trainings, the Bank
+encouraged employees to gain working experience both in its outlets and overseas. The aim is
+to develop inter-disciplinary professional expertise with international profiles and to provide
+employees with the space needed for further career development. The Bank held training
+courses for outstanding local employees overseas on the Bank's history and national education.
+It encouraged employees to work in grassroots and challenging areas. The Bank has topped the
+"Best Employer in Financial Industry in the Opinion of Chinese University Students" ranking
+organised by ChinaHR.com for nine consecutive years.
+Responsibility to the society
+The Bank supported the poverty alleviation work in Yongshou, Changwu, Xunyi and Chunhua
+counties of Xianyang, Shaanxi Province (the "Four North Counties") for the 14th consecutive
+year. In 2016, it formulated the Management Measures for Targeted Poverty Alleviation of
+Bank of China and the 13th Five-Year Plan for Financial Poverty Alleviation of Bank of China
+and drew up and implemented the “Ten One-batch” poverty alleviation programs. It dispatched
+two batches of officials to work in the Four North Counties, and helped households registered
+as living in poverty to increase their incomes. It carried out the Recruitment Program for
+Impoverished College Graduates and recruited more than 100 graduates in need. It organised
+the development of “BOC for Public Welfare", a targeted poverty alleviation platform in which
+people in poverty in the Four North Counties link to the supply side and BOC employees to the
+demand side. The Bank prepared to set up Charity Foundation of the Bank. Fully mobilising
+its own strengths and those of the international community, its customers and its employees, it
+built up a brand for BOC Targeted Poverty Alleviation and explore a path that is sustainable and
+replicable.
+The Bank extended government-sponsored student loans for the 17th consecutive year and
+accumulatively provided RMB22 billion for over 1.7 million financially underprivileged students.
+It supported the Chinese Spring Festival celebrations in Trafalgar Square in London for the 16th
+consecutive year, making the activity the largest one of its kind outside Asia. The Bank sponsored
+the Tan Kah Kee Science Award for the 13th consecutive year to honour Chinese scientists who
+had made original scientific and technological achievements. For the eighth consecutive year,
+it conducted strategic cooperation with the National Center for the Performing Arts. The Bank
+sponsored the Rainbow Bridge programme for the fifth consecutive year, supporting more than
+250 outstanding but financially disadvantaged Chinese and American students to take part in
+cross-border study exchanges. It continued to support the poverty alleviation programmes in
+Xinjiang for the third consecutive year.
+83
+83
+Responsibility to the environment
+The Bank continually improved its credit policies in favor of environmental protection. It
+vigorously enhanced innovations in green financial products and services, actively conducted
+international exchange and cooperation in green finance and successfully issued the first China
+Green Covered Bond. It persisted in green and low-carbon operation and adopted electronic seals
+for all businesses. Furthermore, it fully implemented electronic review and encouraged staff to
+hold meetings by video and telephone conference to reduce resource consumption. The Bank
+won the awards of "Asian Bank of the Year”, “China Bond House" and "SRI Bond of the Year"
+conferred by Thomson Reuters' International Financing Review.
+The Bank's fulfilment of its social responsibilities was widely recognised by the society. In 2016,
+it won the awards including "Most Socially Responsible Financial Institution" from the China
+Banking Association, the "Most Socially Responsible Enterprise" from China News Service and
+the “Outstanding Chinese Enterprise in Social Responsibilities” from Southern Weekly.
+87
+"S" denotes short position, "P" denotes lending pool.
+3
+JPMorgan Chase & Co. holds the entire issued share capital of JPMorgan Chase Bank, N.A. Thus JPMorgan
+Chase & Co. is deemed to have equal interests in shares of the Bank as JPMorgan Chase Bank, N.A. under the
+SFO. JPMorgan Chase & Co. holds a long position of 4,960,736,384 H Shares and a short position of 180,789,229
+H Shares of the Bank through JPMorgan Chase Bank, N.A. and other corporations controlled by it. In the long
+position of 4,960,736,384 H Shares, 2,482,887,298 H Shares are held in the lending pool and 162,206,912 H
+Shares are held through derivatives. In the short position of 180,789,229 H Shares, 180,446,728 H Shares are held
+through derivatives.
+2
+Master degree and above
+by education level
+Composition of staff
+8.42%
+Eastern China
+3,930,025
+20.19%
+3,601
+31.16%
+94,024
+30.43%
+Central and Southern China
+2,861,340
+14.70%
+2,789
+24.13%
+69,092
+22.37%
+Western China
+1,453,868
+7.47%
+1,712
+14.81%
+38,258
+26,019
+8.23%
+951
+3.51%
+Organisational Management
+As at the end of 2016, the Bank had a total of 11,556 institutions worldwide, including 10,978
+institutions in the Chinese mainland and 578 institutions in Hong Kong, Macau, Taiwan and other
+countries. Its domestic commercial banking business comprised 10,651 institutions, including 37
+tier-1 and direct branches, 326 tier-2 branches and 10,287 outlets.
+Geographic Distribution of Organisations and Employees:
+Unit: RMB million/unit/person, except percentages
+Organisations
+Assets
+Employees
+Items
+Total assets
+% of total
+Number
+12.39%
+% of total
+% of total
+Northern China
+5,469,424
+28.09%
+1,925
+16.66%
+58,998
+19.10%
+Northeastern China
+682,682
+Number
+0.11%
+Hong Kong, Macau and Taiwan
+16.73%
+Items
+The Group banking business
+subsidiaries
+Composition of staff
+by age group
+Up to 30
+34.32%
+34.06%
+36.71%
+Between 31 and 40
+24.67%
+24.16%
+29.19%
+Between 41 and 50
+30.99%
+31.94%
+22.47%
+51 and above
+10.02%
+9.84%
+11.63%
+Overseas
+institutions and
+Domestic
+commercial
+As at the end of 2016, the Bank had 308,900 employees. There were 286,391 employees in
+the Chinese mainland, of which 277,966 worked in the Bank's domestic commercial banking
+business. The Bank had 22,509 employees in Hong Kong, Macau, Taiwan and other countries. As
+at the end of 2016, the Bank bore costs for a total of 5,855 retirees.
+Human Resources Development and Management
+440
+3.82%
+17,270
+5.59%
+Other countries
+1,812,521
+9.31%
+138
+1.19%
+5,239
+3,256,526
+1.70%
+Total
+(1,317,497)
+18,148,889
+100.00%
+11,556
+100.00%
+308,900
+100.00%
+Note: The proportion of geographic assets was based on data before intra-group elimination.
+78
+88
+Elimination
+0.39%
+325,820,115 H
+Investment manager
+Type of
+ordinary
+Type of
+shareholder
+pledged
+or frozen
+restrictions
+shares
+period
+period
+No. Name of ordinary shareholder
+to selling
+ordinary
+reporting of the reporting
+shares
+Number of
+Number of
+shares subject
+Percentage of
+total
+Number of
+shares held
+as at the end
+Changes
+during the
+Unit: Share
+Top ten ordinary shareholders as at 31 December 2016:
+Number of ordinary shareholders as at the end of the last month before the disclosure of this
+report: 833,098 (including 633,536 A-Share Holders and 199,562 H-Share Holders)
+Number of ordinary shareholders as at 31 December 2016: 860,471 (including 660,201 A-Share
+Holders and 200,270 H-Share Holders)
+shares
+Number of Ordinary Shareholders and Shareholdings
+1
+-
+0.36%
+1,060,059,360
+Buttonwood Investment Platform Ltd.
+5
+0.61%
+1,810,024,500
+Central Huijin Asset Management Ltd.
+4
+2.58%
+163,611,354 7,604,218,558
+China Securities Finance Co., Ltd.
+3
+27.79%
+(7,155,493) 81,797,876,460
+HKSCC Nominees Limited
+2
+A
+State
+None
+64.02%
+188,461,533,607
+Central Huijin Investment Ltd.
+85
+555
+As at 31 December 2016, none of the Bank's A Shares and H Shares were subject to selling restrictions.
+shares Percentage
+Sub-total
+Others
+reserve
+shares
+shares
+shares Percentage
+Number of
+from surplus
+Bonus
+of new
+Number of
+Shares
+transferred
+Issuance
+As at 31 December 2016
+Increase/decrease during the reporting period
+As at 1 January 2016
+Unit: Share
+Changes in Ordinary Share Capital
+Ordinary Shares
+Changes in Share Capital and Shareholdings of Shareholders
+I.
+Shares subject to selling restrictions
+II. Shares not subject to selling restrictions
+294,387,791,241 100.00%
+2
+As at 31 December 2016, the Bank had issued a total of 294,387,791,241 ordinary shares, including
+210,765,514,846 A Shares and 83,622,276,395 H Shares.
+100.00%
+294,387,791,241
+28.41%
+83,622,276,395
+294,387,791,241 100.00%
+210,765,514,846 71.59%
+-
+1
+Notes:
+I
+294,387,791,241 100.00%
+4. Others
+28.41%
+83,622,276,395
+Overseas listed foreign shares
+3.
+2. Domestically listed foreign shares
+71.59%
+210,765,514,846
+RMB-denominated ordinary shares
+1.
+III. Total Ordinary Shares
+Unknown Foreign legal H
+person
+None State-owned A
+legal person
+A
+188,461,533,607
+Beneficial owner
+Central Huijin Investment Ltd.
+share capital
+capital
+capital
+shares
+(unit: share)
+ordinary
+H-Share
+A-Share
+shares Type of
+Capacity
+(types of interest)
+Name of shareholder
+total issued
+Percentage of
+Percentage of
+total issued
+total issued
+underlying
+Percentage of
+89.42%
+64.02%
+Interest of controlled
+corporations
+1,810,024,500 A
+0.06%
+0.22%
+180,789,229(S) H
+0.73%
+2.57%
+2,152,000,896 H
+Beneficial owner
+JPMorgan Chase & Co.
+1.97%
+6.94%
+Number of
+5,806,249,443 H
+2.55%
+8.99%
+64.63%
+90.28%
+190,271,558,107 A
+7,518,157,041 H
+Beneficial owner
+National Council for
+Social Security Fund
+BlackRock, Inc.
+Total
+0.61%
+0.86%
+Interest of controlled
+corporations
+ORGANISATIONAL MANAGEMENT, HUMAN RESOURCES DEVELOPMENT AND
+MANAGEMENT
+shares held/
+The register maintained by the Bank under section 336 of the SFO recorded that, as at 31
+December 2016, the shareholders indicated in the following table were substantial shareholders
+having interests in shares of the Bank (as defined in the SFO):
+None
+person
+I
+0.11%
+313,708,551
+158,856,026
+HKSCC Limited
+8
+Conservative Investment Portfolio
+0.16%
+477,023,612
+Anbang Life Insurance Co., Ltd. -
+7
+0.18%
+520,357,200
+The Bank of Tokyo-Mitsubishi UFJ Ltd.
+6
+Unknown Foreign legal H
+None State-owned A
+legal person
+legal person
+None State-owned A
+Other
+A
+None Foreign legal A
+208,018,959
+Substantial Shareholder Interests
+86
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action
+among the aforementioned ordinary shareholders.
+HKSCC Limited is the nominee holder who holds securities on behalf of others. The securities
+included the SSE securities acquired by Hong Kong and overseas investors through Shanghai-
+Hong Kong Stock Connect.
+Both Anbang Life Insurance Co., Ltd. and Anbang Property & Casualty Insurance Co., Ltd. are
+subsidiaries of Anbang Insurance Group Co., Ltd.
+Central Huijin Asset Management Ltd. is a wholly-owned subsidiary of Central Huijin Investment
+Ltd.
+HKSCC Nominees Limited acted as the nominee for all the institutional and individual investors
+that maintain an account with it as at 31 December 2016. The aggregate number of the Bank's H
+Shares held by HKSCC Nominees Limited included the number of shares held by the National
+Council for Social Security Fund.
+The number of shares held by H-Share Holders was recorded in the register of members kept at
+the H-Share Registrar of the Bank.
+A
+None Other
+Number of
+0.05%
+China 50 ETF
+10
+Traditional Product
+Ltd.
+Anbang Property & Casualty Insurance Co.,
+9
+A
+person
+Other
+None
+0.07%
+(7,668,100) 156,180,250
+84
+For details of the Bank's corporate social responsibility performance, please refer to the Bank's
+2016 Corporate Social Responsibility Report published on the websites of SSE, HKEx and the
+Bank.
+中國銀行
+35
+68
+81
+85
+86
+89
+96
+19
+116
+148
+154
+156
+164
+404
+408
+409
+137
+1
+19
+14
+Financial Review
+Business Review
+Risk Management
+Organisational Management and Human Resources Development and Management
+Outlook
+Corporate Social Responsibilities
+Changes in Share Capital and Shareholdings of Shareholders
+Directors, Supervisors and Senior Management Members
+17
+Corporate Governance
+Report of the Board of Supervisors
+Significant Events
+Independent Auditor's Report
+Consolidated Financial Statements
+Reference for Shareholders
+Organisational Chart
+List of Major Branches and Subsidiaries
+Report of the Board of Directors
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meaning
+set out below:
+The Bank/the Group
+Domestic investment share(s) in the ordinary share capital
+of the Bank, with a nominal value of RMB1.00 each,
+which are listed on SSE (Stock Code: 601988)
+Measurement unit of changes in interest rate or exchange
+rate. 1 basis point is equivalent to 0.01 percentage point
+BOC Financial Asset Investment Co., Ltd.
+BOC Aviation Limited, a public company limited by
+shares incorporated in Singapore under the Singapore
+Companies Act, the shares of which are listed on the
+Hong Kong Stock Exchange
+Bank of China Insurance Company Limited
+BOC Group Life Assurance Co., Ltd.
+Bank of China Group Insurance Company Limited
+Bank of China Group Investment Limited
+Bank of China (Hong Kong) Limited, an authorised
+financial institution incorporated under the laws of
+Hong Kong and a wholly-owned subsidiary of BOCHK
+(Holdings)
+The performing Articles of Association of the Bank
+BOC Hong Kong (Holdings) Limited, a company
+incorporated under the laws of Hong Kong, the ordinary
+shares of which are listed on the Hong Kong Stock Exchange
+Bank of China Investment Management Co., Ltd.
+BOC International (China) Co., Ltd.
+BOC-Samsung Life Ins. Co., Ltd.
+China Banking and Insurance Regulatory Commission
+The area including, for the purpose of this report, the
+branches of Henan, Hubei, Hunan, Guangdong, Shenzhen,
+Guangxi and Hainan
+The Company Law of PRC
+China Securities Regulatory Commission
+BOC International Holdings Limited
+Bank of China Limited or its predecessors and,
+except where the context otherwise requires, all of the
+subsidiaries of Bank of China Limited
+CSRC
+Company Law
+Articles of Association
+A Share
+Basis Point (Bp, Bps)
+BOC Asset Investment
+BOC Aviation
+BOC Insurance
+BOC Life
+BOCG Insurance
+BOCG Investment
+BOCHK
+BOCHK (Holdings)
+BOCI
+BOCIM
+BOCI China
+BOC-Samsung Life
+CBIRC
+Central and Southern China
+Message from the Chairman of the Board of Supervisors
+2
+Message from the President
+245
+Responsibility, Integrity, Professionalism, Innovation, Prudence, Performance
+Responsibility: To be responsible for the state, society, our customers, our employees, our
+shareholders, and the Bank. We will and we can step forward to perform our responsibilities,
+boldly take on challenges, and carry our missions through.
+- Integrity: To abide by every commitment we have made, keep words consistent with actions,
+have an open mind, and stick to honesty and trustworthiness.
+- Professionalism: To empower ourselves with greater capability and competence, and carry on
+the spirit of craftsmanship to stick on perfection.
+Innovation: To continuously move ahead, and never stand still. The Bank will make daring
+explorations, learn from others, and proactively develop innovative ideas.
+Prudence: To firmly hold the bottom line for risk management, ensure compliance in our
+operations, and abide by the law of development, in a bid to achieve sound development over the
+long term.
+Performance: To maintain benchmarking to market, adopt the result-oriented and focus on
+value-creation, and promote sustainable growth.
+Values
+Honours and Awards
+FORTUNE
+Forbes
+Euromoney
+Asia Money
+Trade Finance
+Finance Asia
+Asian Private Banker
+The Banker
+International Financing Review
+Uphold the Party leadership. We will strengthen Party leadership and Party building at the
+Bank, ensure full and strict governance over the Party organisations at the Bank so as to drive full
+and strict governance over the Bank. We will improve our governance system and enhance our
+governance capabilities, thus providing strong guarantee and strategic support to our objective of
+building a world-class bank in the new era.
+Deliver performance through transformation. Centred on the demands of the real economy
+and the requirement for high-quality development, we will implement in line with the new
+development philosophies, focus on the "three tough battles" and support the supply-side
+structural reform. We will rapidly advance digital technologies, globalised businesses, integrated
+services, asset-light operations, and streamlined organisation, in a bid to effectively prevent
+financial risks and foster a high-quality development model with great capacity for value creation
+and market competitiveness.
+BANK OF CHINA
+Bank of China Limited
+Stock Code 3988 (Ordinary H-Share)
+4601 (Offshore Preference Share)
+2018 Annual Report
+The print version of the Bank's 2018 Annual Report, to be published in April 2019, will
+supersede this version.
+Introduction
+Bank of China is the Bank with the longest continuous operation among Chinese banks. The
+Bank was formally established in February 1912 following the approval of Dr. Sun Yat-sen.
+From 1912 to 1949, the Bank served consecutively as the country's central bank, international
+exchange bank and specialised international trade bank. Fulfilling its commitment to serving
+the public and developing China's financial services sector, the Bank rose to a leading position
+in the Chinese financial industry and developed a good standing in the international financial
+community, despite many hardships and setbacks. After 1949, drawing on its long history as
+the state-designated specialised foreign exchange and trade bank, the Bank became responsible
+for managing China's foreign exchange operations and provided vital support to the nation's
+foreign trade development and economic infrastructure through its offering of international
+trade settlement, overseas fund transfer and other non-trade foreign exchange services. During
+China's reform and opening up period, the Bank seized the historic opportunity presented by
+the government's strategy of capitalising on foreign funds and advanced technologies to boost
+economic development, and became the country's key foreign financing channel by building
+up its competitive advantages in foreign exchange business. In 1994, the Bank was transformed
+into a wholly state-owned commercial bank. In August 2004, Bank of China Limited was
+incorporated. The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock
+Exchange in June and July 2006 respectively, becoming the first Chinese commercial bank to
+launch an A-Share and H-Share initial public offering and achieve a dual listing in both markets.
+Having served the Beijing 2008 Olympic Games, the Bank became the official banking partner of
+the Beijing 2022 Olympic and Paralympic Winter Games in 2017, thus making it the only bank
+in China to serve two Olympic Games. In 2018, Bank of China was again designated as a Global
+Systemically Important Bank, thus becoming the sole financial institution from an emerging
+economy to be designated as a Global Systemically Important Bank for eight consecutive years.
+Enhance strength through reform. The Bank will raise awareness of current and potential
+challenges we face, maintain our strategic focus, and be more courageous in implementing the
+reform. We will promote the reform of mind-set, of the mechanism and of the organisation across
+the Bank, and thus gather the invincible force to push forward our development.
+As China's most globalised and integrated bank, Bank of China has a well-established global
+service network with institutions set up across the Chinese mainland as well as in 57 countries
+and regions. It has established an integrated service platform based on the pillars of its corporate
+banking, personal banking, financial markets and other commercial banking business, which
+covers investment banking, direct investment, securities, insurance, funds, aircraft leasing and
+other areas, thus providing its customers with a comprehensive range of financial services.
+In addition, BOCHK and the Macau Branch serve as local note-issuing banks in their respective
+markets.
+Development Strategy
+Strategic goal
+We will follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for
+the New Era, persistently enable advancement through technology, drive development through
+innovation, deliver performance through transformation and enhance strength through reform, in
+an effort to build Bank of China into a world-class bank in the new era.
+The Bank will realise the strategic goal of “building a world-class bank in the new era" in three
+steps. By 2020, when China completes building a moderately prosperous society in all respects,
+the Bank should achieve the goal of “further strengthening of the development foundation, further
+consolidating advantages of featured businesses, further improving of management system and
+mechanism, and further enhancing of comprehensive strength". By 2035, when the socialist
+modernisation is basically realised, the Bank should leap forward from a big world-class bank
+to a strong world-class bank, and complete in all respects the building of a world-class bank in
+the new era. By 2050, we should build Bank of China into a “financial mainstay" of the strong
+modern socialist China and to be a banner of global financial industry.
+Strategic implications
+Enable advancement through technology. The Bank will embed technological elements into all
+business processes and fields and build a digitalised bank with a premier user experience, ecology
+of diversified scenarios, online & offline coordination, flexible product innovation, efficient
+operations management and intelligent risk control, in a bid to foster new-finance, develop
+"a new ecosystem" and build a new BOC.
+Drive development through innovation. Keeping a close eye on the market trends and
+customer needs, we will accelerate innovation in technology, products and business. By adopting
+innovative and groundbreaking initiatives, we will strive to become a provider of high-quality
+financial services, a builder of connected platforms, a creator of data-driven value and a pioneer
+of intelligent services across the globe.
+Bank of China has upheld the spirit of “pursuing excellence" throughout its history of over one
+century. With adoration of the nation in its soul, integrity as its backbone, reform and innovation
+as its path forward and “people first” as its guiding principle, the Bank has built up an excellent
+brand image that is widely recognised within the industry and by its customers. In face of the
+period of historic opportunities for great achievements, as a large state-owned commercial bank,
+the Bank will follow Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, persistently enable advancement through technology, drive development through innovation,
+deliver performance through transformation and enhance strength through reform, in an effort
+to build BOC into a world-class bank in the new era. It will make a greater contribution to
+developing a modernised economy and to the efforts to realise the Chinese Dream of national
+rejuvenation and the aspirations of the people to live a better life.
+The Asset
+People's Bank of China
+Xinhua News Agency
+Best Lead Bond Underwriter in China
+Triple A Asian Awards
+Best corporate bond
+First Prize for Banking Technology Development
+Excellent Mobile APP in Financial Planning
+2018 Excellent Commercial Bank in Asia
+2018 Best Commercial Bank
+Award for New Intelligent Investment Advisory Product
+Excellence in Private Banking-China Domestic
+Best User Experience of Personal Mobile Banking
+Best Online Bank
+Ranked 14th in BrandZ Top 100 Most Valuable
+Chinese Brands
+Ranked 11th in China's 500 Most Valuable Brands
+Ranked 13th in 2018 Hurun Brand List
+Most Socially Responsible Financial Institution
+Best Employer in Financial Industry in the
+Opinion of Chinese University Students
+Contents
+Definitions
+Important Notice
+Financial Highlights
+Corporate Information
+Message from the Chairman
+Top Ten Innovative Smart Bank Outlets
+Outstanding Contribution in Product Innovation
+Best Inclusive Finance Bank
+Best Transaction Bank
+Best Cash Management Bank
+Best Private Bank for Global Investments in China
+Green Finance Bank with the Best Overseas
+Performance
+21st Century Business Herald
+Financial Times
+Securities Times
+www.cebnet.com.cn
+China Financial Certification Authority
+The Chinese Banker
+Financial Computerization
+Finance.sina.com
+WPP Group
+World Brand Lab
+Hurun Research Institute
+China Banking Association
+ChinaHR
+Ranked 3rd in Top 1000 World Banks
+Ranked 4th in Top 500 Global Banking Brands
+Ranked 46th in Global 500 (2018)
+Ranked 9th in Global 2000
+Best Regional Cash Manager in Asia
+China's Best Overall Corporate and Investment Bank
+China's Best Corporate and Investment Bank for
+DCM Cross-Border
+Best Transaction Bank for Trade Finance
+10
+Domestic Preference Share
+Management Discussion and Analysis
+HKEX
+2015
+2016
+2017
+2018
+2014
+2015
+2016 2017
+2014
+2018
+2015
+2016 2017 2018
+1.18
+1.43
+Non-performing loans to total loans
+2014
+2015
+2014
+Cost to income ratio (calculated under
+domestic regulations)
+105
+1.05
+2014
+2015
+2016
+2017
+2018
+2014
+2015
+2016
+2017 2018
+2014
+2015
+2016
+2017
+2018
+2014
+%
+1.12
+2016
+221,515
+2017
+2014 2015
+227,533
+ROE
+%
+12.24
+2015
+2016 2017
+2018
+12.58
+2014
+2015
+179,417
+184,051
+184,986
+2016
+2017 2018
+Eastern China
+177,198
+221,741
+Non-interest income to
+operating income
+14.53
+2016
+2017
+2018
+2014
+2015
+2016
+2017 2018
+187.60
+153.30
+Allowance for loan impairment
+losses to non-performing loans
+%
+162.82
+159.18
+181.97
+%
+17.28
+2018
+229,237
+192,435
+The Stock Exchange of Hong Kong Limited
+230,159
+Overseas-listed foreign investment share(s) in the ordinary
+share capital of the Bank, with a nominal value of
+RMB1.00 each, which are listed on the Hong Kong Stock
+Exchange and traded in Hong Kong dollars (Stock Code:
+3988)
+Central Huijin Investment Ltd.
+Independent director under the listing rules of SSE and the
+Articles of Association, and independent non-executive
+director under the Hong Kong Listing Rules
+Ministry of Finance, PRC
+The area including, for the purpose of this report, the
+branches of Heilongjiang, Jilin, Liaoning and Dalian
+The area including, for the purpose of this report, the
+branches of Beijing, Tianjin, Hebei, Shanxi, Inner
+Mongolia and the Head Office
+The Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited
+Offshore preference share(s) in the preference share
+capital of the Bank, with a nominal value of RMB100
+each, which are listed on the Hong Kong Stock Exchange
+and traded in US dollars (Stock Code: 4601)
+The People's Republic of China
+State Administration of Foreign Exchange, PRC
+Securities and Futures Ordinance (Chapter 571 of the
+Laws of Hong Kong)
+The Shanghai Stock Exchange
+The area including, for the purpose of this report, the
+branches of Chongqing, Sichuan, Guizhou, Yunnan,
+Shaanxi, Gansu, Ningxia, Qinghai, Tibet and Xinjiang
+3
+Important Notice
+The People's Bank of China, PRC
+The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
+members of the Bank warrant that the information in this report is authentic, accurate and
+complete, contains no false record, misleading statement or material omission, and jointly and
+severally accept full responsibility for the information in this report.
+Hong Kong Exchanges and Clearing Limited
+Domestic preference share(s) in the preference share
+capital of the Bank, with a nominal value of RMB100
+each, which are traded on SSE (Stock Code: 360002,
+360010)
+Hong Kong Listing Rules
+Hong Kong Stock Exchange
+H Share
+Huijin
+Independent Director
+MOF
+Northeastern China
+The area including, for the purpose of this report, the
+branches of Shanghai, Jiangsu, Suzhou, Zhejiang, Ningbo,
+Anhui, Fujian, Jiangxi, Shandong and Qingdao
+Northern China
+PBOC
+PRC
+RMB
+SAFE
+SFO
+SSE
+Western China
+Offshore Preference Share
+The 2018 Annual Report and Annual Results Announcement of the Bank have been reviewed
+and approved at the meeting of the Board of Directors of the Bank held on 29 March 2019. The
+number of directors who should attend the meeting is 14, with 14 directors attending the meeting
+in person. All of the 14 directors of the Bank exercised their voting rights at the meeting. Some
+supervisors and senior management members of the Bank attended the meeting as non-voting
+attendees.
+Renminbi, the lawful currency of PRC
+Chairman of the Board of Directors CHEN Siqing, President LIU Liange, and General Manager
+of the Accounting and Information Department ZHANG Jianyou warrant the authenticity,
+accuracy and completeness of the financial statements in this report.
+RMB
+473,912
+485,656
+483,761
+2016
+2017
+The 2018 financial statements prepared by the Bank in accordance with Chinese Accounting
+Standards ("CAS") and International Financial Reporting Standards ("IFRS") have been
+audited by Ernst & Young Hua Ming LLP and Ernst & Young in accordance with Chinese and
+international auditing standards, respectively. Both auditors issued an unqualified opinion.
+1.22
+Financial Highlights
+Operating income
+RMB Million
+Operating profit
+RMB Million
+Profit for the year
+RMB Million
+ROA
+%
+EPS (basic)
+2015
+2018
+456,328
+2014
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes and no material guarantee business
+that violated the applicable regulations and procedures.
+This report may contain forward-looking statements that involve risks and future plans. These
+forward-looking statements are based on the Bank's own information and information from other
+sources that the Bank believes to be reliable. They relate to future events or the Bank's future
+financial, business or other performance and are subject to a number of factors and uncertainties
+that may cause the actual results to differ materially. Any future plans mentioned do not
+constitute a substantive commitment by the Bank to its investors. Investors and people concerned
+should be fully aware of the risks and understand the differences between plans, forecast and
+commitment.
+The Bank is faced with risks arising from changes in the macroeconomic environment and from
+political and economic conditions in different countries and regions as well as risks arising
+from its day-to-day operations, including the risk arising from changes in the creditworthiness
+of borrowers, adverse changes in market prices and operational risk. It shall at the same time
+meet regulatory and compliance requirements. The Bank actively adopts adequate measures to
+effectively manage all types of risks. Please refer to the section “Management Discussion and
+Analysis Risk Management" for details.
+4
+5
+0.58
+0.63
+The Board of Directors has recommended a final dividend on ordinary shares for 2018 of
+RMB0.184 per share (before tax), subject to the approval of the forthcoming Annual General
+Meeting scheduled on 17 May 2019. No capitalisation of the capital reserve to share capital is
+proposed in this profit distribution.
+Credit cost
+%
+2.12
+19'0
+Net interest margin
+%
+%
+160
+226,274,847(S) H
+0.27%
+0.08%
+3,621,740,964(P) H
+4.33%
+1.23%
+Notes:
+1
+Unless stated otherwise, all interests stated above represented long positions. Save as disclosed
+above, as at 31 December 2018, no other interests (including derivative interests) or short
+positions were recorded in the register maintained by the Bank under section 336 of the SFO.
+BlackRock, Inc. holds the entire issued share capital of BlackRock Holdco 2 Inc., while BlackRock Holdco 2
+Inc. holds the entire issued share capital of BlackRock Financial Management, Inc. Thus BlackRock, Inc. and
+BlackRock Holdco 2 Inc. are deemed to have equal interests in shares of the Bank as BlackRock Financial
+Management, Inc. under the SFO. BlackRock, Inc. holds a long position of 5,924,680,117 H Shares and a
+short position of 1,816,000 H Shares of the Bank through BlackRock Financial Management, Inc. and other
+corporations controlled by it. In the long position of 5,924,680,117 H Shares, 10,128,000 H Shares are held
+through derivatives. In the short position of 1,816,000 H Shares, 1,803,000 H Shares are held through derivatives.
+Citigroup Inc. holds the entire issued share capital of Citicorp LLC, while Citicorp LLC holds the entire issued share
+capital of Citibank, N.A. Thus Citigroup Inc. and Citicorp LLC are deemed to have equal interests in shares of the Bank
+as Citibank, N.A. under the SFO. Citigroup Inc. holds a long position of 4,242,381,579 H Shares and a short position of
+226,274,847 H Shares of the Bank through Citibank, N.A. and other corporations controlled by it. In the long position
+of 4,242,381,579 H Shares, 3,621,740,964 H Shares are held in the lending pool and 348,871,041 H Shares are held
+through derivatives. The total 226,274,847 H Shares in the short position are held through derivatives.
+"S" denotes short position, "P" denotes lending pool.
+91
+Controlling Shareholder of the Bank
+Central Huijin Investment Ltd.
+Central Huijin Investment Ltd. (“Huijin”) is a state-owned investment company established on
+16 December 2003 under the Company Law, with Mr. DING Xuedong as its legal representative.
+Wholly owned by China Investment Corporation (“CIC”), Huijin makes equity investments in
+major state-owned financial institutions, as authorised by the State Council. To the extent of its
+capital contribution, Huijin exercises its rights and fulfils its obligations as an investor on behalf
+of the State, in accordance with applicable laws aimed at preserving and enhancing the value of
+state-owned financial assets. Huijin neither engages in other business activities nor intervenes in
+the daily operation of the major state-owned financial institutions of which it is the controlling
+shareholder.
+As at 31 December 2018, the basic information of companies directly held by Huijin is as
+follows:
+2
+1.44%
+22.28%
+4,242,381,579 H
+0.0003%
+0.0001%
+security interest in
+shares
+Interest of controlled
+620,401,815 H
+0.74%
+0.21%
+corporations
+226,274,847(S) H
+0.27%
+0.08%
+Approved lending
+3,621,740,964(P) H
+4.33%
+1.23%
+agent
+Total
+5.07%
+Proportion of the total
+Shenwan Hongyuan Group Co., Ltd. ★
+Company name
+China Export & Credit Insurance Corporation
+73.63%
+9
+China Reinsurance (Group) Corporation ☆
+71.56%
+10
+New China Life Insurance Company Limited ★☆
+8
+31.34%
+China Jianyin Investment Limited
+100.00%
+12
+| China Galaxy Financial Holding Co., Ltd.
+69.07%
+13
+238,800 H
+11
+19.53%
+China Everbright Bank Company Limited ★☆
+7
+capital held by Huijin
+1
+China Development Bank
+34.68%
+2
+Industrial and Commercial Bank of China Limited ★✩
+34.71%
+3
+Agricultural Bank of China Limited ★✩
+40.03%
+Bank of China Limited ★✩
+64.02%
+China Construction Bank Corporation ✰✰
+57.11%
+6
+China Everbright Group Ltd.
+55.67%
+No.
+Person having a
+shares held/
+0.0006%
+Portfolio (Traditional) with management of
+Changjiang Pension Insurance Co., Ltd.
+10
+ICBCCS SSE 50 Index Exchange Traded Fund 328,458,200 328,458,200
+0.11%
+None
+Other
+Pacific Life Insurance Dividend Equity
+A
+HKSCC Nominees Limited acted as the nominee for all the institutional and individual investors
+that maintain an account with it as at 31 December 2018. The aggregate number of the Bank's
+H Shares held by HKSCC Nominees Limited included the number of shares held by the National
+Council for Social Security Fund.
+Central Huijin Asset Management Ltd. is a wholly-owned subsidiary of Central Huijin Investment
+Ltd.
+HKSCC Limited is the nominee holder who holds securities on behalf of others. The
+securities included the SSE securities acquired by Hong Kong and overseas investors through
+Shanghai-Hong Kong Stock Connect.
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action
+among the aforementioned ordinary shareholders.
+90
+Substantial Shareholder Interests
+The register maintained by the Bank under section 336 of the SFO recorded that, as at
+31 December 2018, the shareholders indicated in the following table were substantial
+shareholders (as defined in the SFO) having interests in shares of the Bank:
+The number of shares held by H-Share Holders was recorded in the register of members kept at
+the H-Share Registrar of the Bank.
+Number of
+A
+None
+person
+8
+China Life Insurance
+266,533,363
+418,701,556
+0.14%
+None
+Other
+Other
+Company Limited-dividend ― personal
+dividend―005L- FH002SH
+9
+China Pacific Life Insurance Co., Ltd. - China
+382,238,605
+382,238,605
+0.13%
+A
+Name of shareholder
+Central Huijin Investment Ltd.
+Capacity
+(types of interest)
+Beneficial owner
+corporations
+Total
+190,271,558,107 A
+90.28%
+64.63%
+National Council for
+Social Security Fund
+BlackRock, Inc.
+Beneficial owner
+0.61%
+6,684,735,907 H
+2.27%
+Interest of controlled
+corporations
+5,924,680,117 H
+7.09%
+2.01%
+1,816,000(S) H
+0.0022%
+7.99%
+0.86%
+1,810,024,500 A
+Interest of controlled
+Number of
+underlying
+shares Type of
+Percentage of
+total issued
+Percentage of
+total issued
+Percentage of
+total issued
+A-Share
+H-Share
+ordinary
+(unit: share) shares
+capital
+capital
+share capital
+188,461,533,607 A
+89.42%
+64.02%
+Citigroup Inc.
+14
+During the reporting period, there was no redemption, conversion into ordinary shares or voting
+rights recovery in respect of the preference shares of the Bank.
+55.68%
+7
+China Shuangwei Investment Co., Ltd.
+20,000,000
+2.00%
+None
+State-owned
+Domestic
+Preference Shares
+legal person
+7
+National Social Security Fund Portfolio 304
+20,000,000
+2.00%
+None
+Other
+Domestic
+Preference Shares
+Preference Shares
+-personal dividend-005LFH002SH
+Other
+Domestic
+legal person
+Preference Shares
+5
+Yunnan Branch of China National Tobacco Corporation
+22,000,000
+2.20%
+Domestic
+None State-owned
+legal person
+Preference Shares
+6
+China Life Insurance Company Limited - dividend
+21,000,000
+2.10%
+None
+Domestic
+7
+Bosera Fund ICBC - Bosera - ICBC - Flexible
+20,000,000
+005L FH002SH is one of both the Bank's top ten ordinary shareholders and top
+ten preference shareholders.
+94
+24
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action
+among the aforementioned preference shareholders, and among the aforementioned preference
+shareholders and the Bank's top ten ordinary shareholders.
+Profit Distribution of Preference Shares
+For the profit distribution policy of the preference shares and the profit distribution arrangement
+during the reporting period, please refer to the section “Report of the Board of Directors”.
+dividend personal
+Other Information regarding the Preference Shares
+The funds raised from the issuance of the Offshore Preference Shares and Domestic Preference
+Shares have been fully used to replenish the Bank's additional tier 1 capital and increase its
+capital adequacy ratio.
+Issuance of Other Securities
+Please refer to Note V.30 to the Consolidated Financial Statements for details of the bonds issued
+by the Bank.
+No shares of the Bank have been specifically issued to its employees.
+95
+95
+Unknown Foreign legal H
+Preference shares issued by the Bank contain no contractual obligation to deliver cash or another
+financial asset; or to exchange financial assets or financial liabilities with another entity under
+conditions that are potentially unfavourable to the entity; and preference shares issued are
+non-derivative instruments that will be settled in the entity's own equity instruments, but includes
+no contractual obligation for the entity to deliver a variable number of its own equity instruments.
+The Bank classifies preference shares issued as an equity instrument. Fees, commissions and
+other transaction costs of preference shares issuance are deducted from equity. The dividends on
+preference shares are recognised as profit distribution at the time of declaration.
+-
+dividend
+As at 31 December 2018, China Life Insurance Company Limited
+2.00%
+None
+Other
+Domestic
+Allocation No. 5 Specific Multi-customer Assets
+Management Plan
+Preference Shares
+10
+Ping An Life Insurance Company of China, Ltd.
+- proprietary fund
+19,000,000
+1.90%
+None
+Domestic non- Domestic
+state-owned
+Preference Shares
+legal person
+The Bank of New York Mellon Corporation, acting as the custodian for all the offshore
+preference shareholders that maintain an account with Euroclear and Clearstream as at
+31 December 2018, held 399,400,000 Offshore Preference Shares, representing 100% of the
+Offshore Preference Shares.
+Both Yunnan Branch of China National Tobacco Corporation and China Shuangwei Investment
+Co., Ltd. are wholly-owned subsidiaries of China National Tobacco Corporation. Zhong Wei
+Capital Holdings Co., Ltd. is a subsidiary of China Shuangwei Investment Co., Ltd.
+State-owned
+None
+3.00%
+30,000,000
+As at 31 December 2018, no other legal-person shareholder held 10% or more voting shares of
+the Bank (excluding HKSCC Nominees Limited).
+During the reporting period, Non-executive Directors of the Bank Mr. ZHANG Xiangdong
+(left the post in June 2018), Mr. ZHAO Jie, Mr. LI Jucai, Ms. XIAO Lihong, Ms. WANG Xiaoya
+and Mr. LIAO Qiang were recommended by Central Huijin Investment Ltd.
+Preference Shares
+Issuance and Listing of Preference Shares
+With the approvals of CBRC (Yinjianfu [2014] No. 563) and CSRC (Zhengjianxuke [2014]
+No. 938), the Bank made a non-public issuance of RMB39.94 billion (approximately
+USD6.5 billion) Offshore Preference Shares on 23 October 2014 in the offshore market.
+Such Offshore Preference Shares have been listed on the Hong Kong Stock Exchange since
+24 October 2014.
+With the approvals of CBRC (Yinjianfu [2014] No. 562) and CSRC (Zhengjianxuke [2014]
+No. 990), the Bank made a non-public issuance of RMB32 billion Domestic Preference Shares
+(First Tranche) on 21 November 2014 in the domestic market. With the approval of SSE
+(Shangzhenghan [2014] No. 818), Domestic Preference Shares (First Tranche) have been traded
+on the Comprehensive Business Platform of SSE since 8 December 2014. The Bank made a non-
+public issuance of RMB28 billion Domestic Preference Shares (Second Tranche) on 13 March
+2015 in the domestic market. With the approval of SSE (Shangzhenghan [2015] No. 377),
+Domestic Preference Shares (Second Tranche) have been traded on the Comprehensive Business
+Platform of SSE since 31 March 2015.
+For the terms of issuance of the Offshore Preference Shares and Domestic Preference Shares,
+please refer to the Bank's announcements published on the websites of SSE, HKEX and the
+Bank.
+For further details regarding China Investment Corporation, please refer to the information on
+its website (www.china-inv.cn). Please refer to the Announcement on Matters Related to the
+Incorporation of China Investment Corporation published on 9 October 2007 by the Bank for
+relevant information of China Investment Corporation.
+93
+Number of Preference Shareholders and Shareholdings
+Number of preference shareholders as at 31 December 2018: 48 (including 47 domestic
+preference shareholders and 1 offshore preference shareholder)
+Number of preference shareholders as at the end of the last month before the disclosure of this
+report: 48 (including 47 domestic preference shareholders and 1 offshore preference shareholder)
+The top ten preference shareholders as at 31 December 2018 are set forth below:
+Unit: Share
+Changes
+Number of
+shares held
+93
+Besides the above companies controlled or held by Huijin, Central Huijin Asset Management Ltd. is a
+wholly-owned subsidiary of Huijin. Central Huijin Asset Management Ltd., established in November 2015 and
+registered in Beijing with registered capital of RMB5 billion, provides asset management business.
+Through public trading on Beijing Financial Assets Exchange, Huijin entered into an equity transfer agreement
+with Haier Group (Qingdao) Financial Holdings Co., Ltd. on 6 June 2018, and transferred 398.5 million domestic
+investment shares of China International Capital Corporation Limited ("CICC"). As at the end of 2018, the
+relevant procedures were still in process. Upon completion of the above transaction, Huijin will directly hold
+46.2% of the shares of CICC.
+★ denotes A share listed company and denotes H share listed company.
+15
+China Securities Co., Ltd. ★☆
+31.21%
+16
+Jiantou & Zhongxin Assets Management Limited
+70.00%
+17
+Guotai Junan Investment Management Co., Ltd.
+14.54%
+3
+Mr. DING Xuedong was transferred to serve as Deputy Secretary General of the State Council (Minister Level).
+He authorised TU Guangshao to function in the capacity of Legal Representation of CIC, Chairman and Legal
+Representative of Huijin. The authorisation came into effect on 2 March 2017, and ceased to be effective upon
+new appointment by the State Council. TU Guangshao currently serves as Vice Chairman and General Manager of
+CIC.
+92
+22
+Notes:
+1
+2
+3
+Percentage
+China International Capital Corporation Limited☆
+during as at the end
+Number
+of shares
+180,000,000
+18.01%
+None State-owned
+Domestic
+legal person
+Preference Shares
+3
+China Mobile Communications Group Co., Ltd.
+China National Tobacco Corporation
+5.00%
+None State-owned
+Domestic
+legal person
+Preference Shares
+4
+Zhong Wei Capital Holdings Co., Ltd.
+50,000,000
+2
+Preference Shares
+person
+the reporting of the reporting
+preference
+pledged
+Type of
+No.
+Name of preference shareholder
+period
+period
+shares
+or frozen
+1
+Bank of New York Mellon Corporation
+399,400,000
+39.96%
+shareholder
+Unknown Foreign legal Offshore
+Type of
+preference
+shares
+of total
+0.18%
+3
+MUFG Bank, Ltd.
+of new
+Bonus
+from surplus
+Number of
+shares Percentage
+shares
+shares
+reserve
+Others
+Subtotal
+shares Percentage
+I.
+Shares subject to selling restrictions
+Number of
+II. Shares not subject to selling restrictions
+RMB-denominated ordinary shares
+210,765,514,846
+294,387,791,241 100.00%
+71.59%
+2. Overseas listed foreign shares
+III. Total Ordinary Shares
+83,622,276,395
+294,387,791,241 100.00%
+28.41%
+-
+Notes:
+-
+294,387,791,241 100.00%
+210,765,514,846
+83,622,276,395 28.41%
+294,387,791,241 100.00%
+71.59%
+As at 31 December 2018, the Bank had issued a total of 294,387,791,241 ordinary shares, including
+210,765,514,846 A Shares and 83,622,276,395 H Shares.
+1.
+Shares
+transferred
+Issuance
+As at 31 December 2018
+520,357,200
+Corporate Social Responsibilities
+In 2018, the Bank assumed its responsibilities as a state-owned commercial bank for serving
+the real economy, developing inclusive finance, improving people's livelihood and supporting
+poverty alleviation. The Bank continually expanded and deepened its practices in fulfilling social
+responsibilities, devoted itself to win-win cooperation with stakeholders and created lasting value
+for the economy, society and environment.
+Responsibility to the country
+The Bank continuously supported the construction of the Belt and Road. As at the end of 2018,
+the Bank followed up on over 600 major projects along the Belt and Road with a total investment
+of approximately USD455 billion and established additional credit lines totalling USD30.7 billion
+for countries along the Belt and Road. In support of the country's major regional strategies,
+its balance of loans to the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt, the Pearl
+River Delta and the Hainan Free Trade Zone rose by 15.1%. The Bank continued to improve its
+credit structure by allocating more credit resources to major industries. Its balance of credit to
+strategic emerging industries stood at RMB447 billion. The Bank issued the Twenty Provisions on
+Supporting Private Enterprises, strengthened credit extension to high-quality private enterprises
+and micro, small and medium-sized businesses and provided private enterprises with broader
+access to financing. Its balance of credit to private enterprises exceeded RMB1.5 trillion. The
+Bank continuously improved its inclusive finance service network and promoted business
+innovation in inclusive finance. Its balance of loans for inclusive finance grew by 12.26%. BOC
+Fullerton Community Bank successfully acquired 27 rural banks from CCB and established
+127 banking corporations in 22 provinces (or municipalities) across the country, further
+expanding the Bank's service network for small and micro businesses, agriculture, rural areas and
+farmers. The Bank provided all-round financial services for the first China International Import
+Expo (CIIE) and held the Exhibitor-Businessman Supply-Demand Matchmaking Conference, at
+which USD4.74 billion worth of cooperation intentions were reached. The Bank also vigorously
+supported construction projects related to the Beijing 2022 Olympic Winter Games and issued
+the Guidelines for Development of the Winter Sports Industry. The Bank will continue to provide
+credit support from 2018 to 2024 to promote winter sports and develop the industry, helping
+30 million families and 100 million people to get involved in winter sports.
+Responsibility to shareholders
+The Bank continued to improve its corporate governance capability and effectively protected
+shareholders' right to be informed, to participate and to make decisions. It kept improving
+its operation mechanisms of the Board of Directors, information disclosure and stakeholder
+engagement. The Bank strictly performed its mission to prevent risks, enhanced its risk
+management capability and market competitiveness and stepped up efforts in credit risk
+prevention and control and disposal of non-performing assets. During the year, its domestic
+branches took the initiative to reduce RMB99.4 billion of potential exposure and cut
+non-performing assets by RMB 152.5 billion. As at the end of 2018, the Bank's total assets
+reached RMB21.27 trillion. Fitch and Moody's upgraded the Bank in terms of Viability Rating/
+Baseline Credit Assessment. Standard & Poor's, Moody's and Fitch all affirmed the Bank's
+ratings at the highest level among major peers. Moreover, the Bank ranked 46th among the
+"Fortune Global 500” by FORTUNE, 3rd in the "Top 1,000 World Banks" by The Banker
+and 13th in the "2018 Hurun Brand List" by Hurun Research Institute with a brand value of
+RMB130.0 billion.
+86
+Responsibility to customers
+The Bank further expanded its cross-border financial services worldwide, strengthened its
+integrated global development and gave full play to its unique strengths. It has now set up
+subsidiaries in 57 countries and regions outside the Chinese mainland, maintaining its position
+as the global leader in cross-border RMB clearing and settlement. The Bank pursued digital
+transformation by enabling advancement through technology and made continuous improvements
+to its financial service capability and to the customer experience. It continuously optimised
+its mobile banking functions, doubling both the number of active users and mobile banking
+transaction volumes. Its overseas mobile banking services now covered 18 countries and regions.
+The Bank pressed forward with the building of its smart outlet service system, with smart
+counters now adopted at all outlets. The mobile smart counters were promoted to break through
+physical boundaries and provide customers with a convenient mobile service experience. Door-
+to-door corporate account opening service was launched to shorten the business process to 30
+minutes. It also introduced a cash version of smart counters, which effectively diverted 70% of
+outlets' cash transactions.
+Responsibility to employees
+The Bank fully guaranteed its employees' legitimate rights and interests, including democratic
+rights, by holding the Employee Delegates' Meeting, fostering employees' sense of ownership
+and unleashing their initiative and creativity. The Bank formulated and implemented its talent
+development plan and training plan and continuously attracted young talent through global
+campus recruitment. As a result, it has topped the “Best Employer in Financial Industry in the
+Opinion of Chinese University Students” ranking organised by ChinaHR.com for 11 consecutive
+years. The Bank strengthened the training of employees and management personnel. Over 100
+excellent middle and senior management personnel were trained through the “1581 Programme”,
+the "Hundred-Talent Programme" and the “Sailing Programme”. In addition, the Bank improved
+its work processes to enhance employees' work-life balance and held various forms of events that
+demonstrated care for employees.
+Responsibility to the society
+In 2018, the Bank undertook a variety of measures to explore financial solutions for poverty
+alleviation, in a bid to implement the decisions and plans of the country for poverty alleviation
+through finance. It raised the bank-wide motivation for poverty alleviation loans and allocated
+more credit resources to poverty alleviation by developing a separate credit plan, introducing the
+due diligence and liability exemption guidelines for poverty alleviation and strengthening related
+internal appraisal and incentive. It also supported the infrastructure, livelihood development
+and industrial poverty alleviation programmes in poverty-stricken areas. At the end of 2018, the
+Bank's poverty alleviation loans registered RMB62.4 billion, an increase of RMB11.5 billion
+or 23% compared with the prior year-end. It established 23 new outlets established in state-
+level impoverished counties and 8 new outlets established in the deeply impoverished “three
+regions, three prefectures", improving its ability of fighting against poverty through financial
+means. In addition, by leveraging its distinctive features, the Bank pushed forward the work
+related to agriculture, rural areas and farmers, established close cooperation with land reclamation
+enterprises in main production areas, and boosted the scale production and intensive development
+of important agricultural products including grain, cotton, natural rubber and oil plants. At the
+end of 2018, the Bank granted agriculture-related loans of RMB1.29 trillion.
+87
+The Bank strengthened funding and assistance towards the goal of targeted poverty alleviation
+in designated impoverished regions, with a focus on industrial poverty alleviation, people's
+livelihood and areas of extreme poverty. It helped obtain over RMB300 million to fund the
+training of over 20,000 financially underprivileged people, which directly benefited nearly
+200,000 members of the registered poverty-stricken population and lifted more than 90,000
+people out of poverty. In 2018, the Bank donated RMB75.09 million, an increase of 36%
+compared with the prior year, to Yongshou, Changwu, Xunyi and Chunhua counties of Xianyang,
+Shaanxi Province, in order to support 112 local projects related to industrial development,
+education and training, health and eldercare and the building of primary-level Party organisations.
+The Bank extended government-sponsored student loans for the 19th consecutive year and has
+now accumulatively granted RMB23.539 billion for over 1.8 million financially underprivileged
+students. In addition, the Bank recruited 291 financially-disadvantaged college students in
+2018 under its separate “Financially Underprivileged Students Recruitment Plan” for campus
+recruitment. It sponsored the Chinese Spring Festival celebration in Trafalgar Square in London,
+the largest celebration outside Asia, for the 18th consecutive year. It also sponsored the Tan Kah
+Kee Science Award for the 15th consecutive year, rewarding young people devoting themselves
+to the country's scientific and technological advancement. For the 10th consecutive year, the
+Bank conducted strategic cooperation with the National Center for the Performing Arts to
+support the development of high-end arts in China. It continued to support poverty alleviation
+programmes in Xinjiang for the 5th consecutive year.
+Responsibility to the environment
+The Bank spared no effort to develop green finance. It accelerated further innovation in green
+finance products and channelled credit resources into energy conservation, environmental
+protection, clean energy and eco-manufacturing. It assisted enterprises in expanding financing
+channels with green bonds and unleashed the positive role of green finance in enhancing
+ecological conservation and economic sustainability. In 2018, the Bank successfully issued the
+Sustainability Bond, the first of its kind to be issued by a Chinese bank in the overseas markets.
+At the end of 2018, its balance of green bonds was RMB632.667 billion, an increase of 17.42%
+compared with the prior year. The Bank established an energy management system and managed
+to reduce energy consumption by formulating water and electricity consumption criteria,
+strengthening day-to-day management and monitoring the functioning of energy-intensive
+equipment. Its office buildings have achieved a domestically advanced level in energy efficiency.
+The Bank's fulfilment of its social responsibilities was widely recognised by the society. In
+2018, it won awards including “Most Socially Responsible Financial Institution in 2018”, “Most
+Socially Responsible Outlet with Special Contribution in 2018”, “Best Social Responsibility
+Manager in 2018” from the China Banking Association, “Most Socially Responsible State-owned
+Listed Company" from the Southern Weekly and “Most Socially Responsible Listed Company
+Dividend Distribution” from the Securities Daily.
+For details of the Bank's corporate social responsibility performance, please refer to the Bank's
+2018 Corporate Social Responsibility Report published on the websites of SSE, HKEX and the
+Bank.
+888
+1
+Changes in Share Capital and Shareholdings of Shareholders
+Changes in Ordinary Share Capital
+As at 1 January 2018
+Increase/decrease during the reporting period
+Unit: Share
+2
+As at 31 December 2018, none of the Bank's A Shares and H Shares were subject to selling restrictions.
+Ordinary Shares
+89
+3
+China Securities Finance Co., Ltd.
+524,896,540
+8,596,044,925
+2.92%
+4
+Central Huijin Asset Management Ltd.
+1,810,024,500
+0.61%
+5
+Buttonwood Investment Platform Ltd.
+6
+HKSCC Limited
+27.82%
+1,060,059,360
+649,609,382
+0.22%
+I
+Unknown Foreign legal H
+None
+person
+State-owned A
+legal person
+None State-owned A
+legal person
+None State-owned A
+legal person
+None Foreign legal A
+person
+88
+7
+152,807,731
+39,723,749 81,911,858,658
+0.36%
+2
+Number of Ordinary Shareholders and Shareholdings
+Number of ordinary shareholders as at 31 December 2018: 736,594 (including 548,563 A-Share
+Holders and 188,031 H-Share Holders)
+HKSCC Nominees Limited
+Number of ordinary shareholders as at the end of the last month before the disclosure of this
+report: 727,085 (including 539,623 A-Share Holders and 187,462 H-Share Holders)
+The top ten ordinary shareholders as at 31 December 2018 are set forth below:
+Unit: Share
+Changes
+during the
+Number of
+shares held
+as at the end
+Percentage of
+total
+Number of
+shares subject
+reporting of the reporting
+ordinary
+to selling
+No. Name of ordinary shareholder
+period
+Number of
+period
+None
+A
+64.02%
+188,461,533,607
+Central Huijin Investment Ltd.
+ordinary
+shares
+1
+Type of
+shares
+pledged
+or frozen
+restrictions
+shares
+Type of
+shareholder
+State
+42.53
+1.69
+Yes
+JIANG Guohua
+Independent Director
+42.53
+54.60
+Yes
+WANG Xiquan
+Chairman of the Board
+No
+14.44
+of Supervisors
+Independent Director
+69.04
+1.69
+Angela CHAO
+Independent Director
+49.30
+Yes
+LIAO Qiang
+LIU Wanming
+Non-executive Director
+Yes
+LU Zhengfei
+55.00
+55.00
+Yes
+LEUNG Cheuk Yan
+Independent Director
+40.00
+40.00
+No
+WANG Changyun
+Independent Director
+49.30
+Yes
+Shareholder Supervisor
+2.54
+22.26
+0.40
+27.25
+No
+XIAO Wei
+Chief Audit Officer
+89.68
+24.36
+4.43
+116.58
+LIU Qiuwan
+Chief Information Officer
+44.84
+8.83
+1.51
+55.18
+Non-executive Director
+No
+78.65
+22.42
+SUN Yu
+4.58
+105.49
+No
+WANG Zhiheng
+Employee Supervisor
+No
+LI Changlin
+LENG Jie
+Executive Vice President
+Employee Supervisor
+Employee Supervisor
+No
+CHEN Yuhua
+External Supervisor
+26.00
+26.00
+No
+No
+WANG Xiaoya
+From December 2016 to June 2018
+Non-executive Director
+From October 2012 to June 2018
+From August 2004 to March 2018
+From August 2010 to December 2018
+From April 2016 to December 2018
+From August 2012 to December 2018
+From November 2016 to September
+2018
+From April 2016 to January 2019
+Secretary to the Board of Directors
+from June 2015 to March 2018 and
+Company Secretary from October
+2015 to March 2018
+Note: Except that Mr. GAO Yingxin held 1,100 H shares of the Bank, no former director, supervisor or senior
+management member held any share of the Bank during their terms of office.
+98
+Remuneration of Directors, Supervisors and Senior Management Members Paid in 2018
+Remuneration before tax from the Bank in 2018
+(Unit: RMB ten thousand)
+Chief Risk Officer
+Secretary to the Board of
+Directors and Company
+Secretary
+Contribution by
+social insurance,
+enterprise
+annuity,
+supplementary
+Whether
+remunerated by
+shareholding
+companies or
+medical
+insurance
+the employer to
+Remuneration
+From July 2011 to June 2018
+No
+Male
+GAO Zhaogang
+1969
+XIANG Xi
+1971
+LIU Qiang
+1971
+From August 2018 to September 2018
+Independent Director
+Shareholder Supervisor
+Employee Supervisor
+Male Employee Supervisor
+Female Employee Supervisor
+Male Executive Vice President
+1964
+Male
+GENG Wei
+1963
+Male
+Term of office
+From December 2016 to January 2018
+PAN Yuehan
+and housing Other monetary
+other connected
+Name
+No
+Executive Vice President
+LIN Jingzhen
+Executive Director and
+36.86
+10.88
+47.74
+Executive Director and
+No
+ZHAO Jie
+Non-executive Director
+Yes
+LI Jucai
+Non-executive Director
+Yes
+XIAO Lihong
+Executive Vice President
+WU Fulin
+No
+23.22
+Position
+paid
+provident fund
+income
+Total
+parties
+Incumbent Directors, Supervisors and Senior Management Members
+CHEN Siging
+Chairman
+54.60
+14.44
+69.04
+No
+LIU Liange
+Vice Chairman and President
+18.20
+5.02
+Yes
+LIU Jiandong
+0.75
+MEI Feiqi
+1
+2
+3
+4
+In accordance with the government regulations, since 1 January 2015, the Bank remunerates Chairman of the
+Board of Directors, President, Chairman of the Board of Supervisors, executive directors, and executive vice
+presidents pursuant to the rules on remuneration reform for central enterprises.
+The 2018 final remuneration for Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, executive directors, shareholder supervisors and other senior management remembers is to be
+determined and will be disclosed in an additional announcement by the Bank.
+The Bank remunerates directors, supervisors and senior management members who are employed by the Bank
+with salaries, bonuses, contribution by the employer to social insurance, enterprise annuity, supplementary
+medical insurance and housing provident fund, as well as other monetary income. Independent directors receive
+directors' remunerations and allowances. Other directors are not remunerated by the Bank. Chairman of the Board
+of Directors, executive directors and senior management members do not receive any remuneration from the
+Bank's subsidiaries.
+Notes:
+Independent directors receive remuneration in accordance with the resolution of the 2007 Annual General
+Meeting. External supervisors receive remuneration in accordance with the resolution of the 2009 Annual General
+Meeting. Remuneration for shareholder supervisors is in accordance with relevant remuneration scheme of the
+Bank and approved by the shareholders' meeting.
+5
+6
+7
+8
+9
+10
+In 2018, Non-executive Directors Mr. ZHAO Jie, Mr. LI Jucai, Ms. XIAO Lihong, Ms. WANG Xiaoya,
+Mr. LIAO Qiang, and Mr. ZHANG Xiangdong were not remunerated by the Bank.
+100
+Mr. SUN Yu's remuneration disclosed in the above table is paid for his service as the Chief Overseas Business
+Officer of the Bank in 2018.
+Company Secretary
+No
+10.56
+47.42
+No
+PAN Yuehan
+Chief Risk Officer
+89.68
+24.35
+of Directors and
+2.54
+No
+GENG Wei
+Secretary to the Board
+14.23
+5.44
+0.46
+20.13
+116.57
+Some independent directors of the Bank served as independent non-executive directors of other legal entities or
+organisations, which caused such legal entities or organisations to be defined as connected parties of the Bank.
+Save as disclosed above, none of the directors, supervisors or senior management members of the Bank was
+remunerated by the connected parties of the Bank during the reporting period.
+The above persons' remuneration is calculated on the basis of their actual time working as directors, supervisors
+or senior management members of the Bank in 2018. Employee supervisors' remuneration above is paid for their
+service as supervisors of the Bank during the reporting period.
+For the starting time of the term of office of the above-mentioned directors, supervisors and senior management
+members, please refer to the section "Basic Information".
+Non-executive Director
+Non-executive Director of the Bank since August 2017. Mr. ZHAO served as Inspector of the
+Agricultural Department of the Ministry of Finance from August 2014 to August 2017. He
+was an Inspector of the Office of Countryside Comprehensive Reform of the State Council
+from September 2008 to August 2014. From December 1991 to September 2008, Mr. ZHAO
+served successively as Chief of Division of Taxation and Chief of Comprehensive Division
+of the Department of Taxation, Deputy Chief of the Department of Taxation, Deputy Chief of
+the Department of Tax System and Regulations of the Ministry of Finance, Chief of Office of
+Panel of Countryside Taxation Reform of the State Council, and Deputy Chief and Inspector
+of Office of Countryside Comprehensive Reform of the State Council. He graduated from
+Jiangxi University of Finance and Economics and Public Institute of the Ministry of Finance in
+August 1982 and July 2005, respectively, with a Bachelor's Degree and a Doctor's Degree.
+LI Jucai
+Non-executive Director
+Non-executive Director of the Bank since September 2015. Mr. LI served as Party Committee
+Member and Secretary of Party Discipline Committee of the Information Network Center under
+the Ministry of Finance from December 2014 to September 2015. He acted as the specialised
+Deputy Secretary of Party Committee of the Information Network Center under the Ministry
+of Finance from April 2010 to December 2014. From November 1996 to April 2010, he had
+successively been the Deputy Head of the Science Division of the Culture, Education and
+Administration Department, Division Head of the Investment Evaluation Center, Director of
+Administration Office and Head of the Administrative Division of the Information Network
+Center under the Ministry of Finance. Mr. LI majored in Finance in China Northeast University
+of Finance and Economics and graduated with a Bachelor's Degree in 1986. Mr. LI has
+qualification of Senior Economist.
+XIAO Lihong
+Non-executive Director
+ZHAO Jie
+Non-executive Director of the Bank since August 2017. Ms. XIAO has been serving as Non-
+executive Director of China Galaxy Securities Company Limited since February 2019, and
+as Director of China Galaxy Financial Holdings Company Limited since October 2018. From
+April 2014 to August 2017, she served as Inspector of the Current Account Management
+Department of the SAFE. She was Deputy Director-General of the Current Account Management
+Department of the SAFE from September 2004 to April 2014, and concurrently as Vice General
+Manager and Party Committee Member of the Beijing Branch of China Construction Bank from
+July 2011 to July 2012. She served successively as Deputy Chief of the Current Account Division
+and the Non-trade Foreign Exchange Management Division of the Supervision and Inspection
+Department, and Chief of the Business Supervision Division of the Current Account Management
+Department of the SAFE from October 1996 to September 2004. She graduated from the China
+Central University of Finance and Economics in August 1988 with a Bachelor's Degree, and from
+the Central University of Finance and Economics and Peking University in September 2003 and
+July 2012, respectively, both with a Master's Degree.
+WANG Xiaoya
+Non-executive Director
+Non-executive Director of the Bank since August 2017. Ms. WANG served as Non-executive
+Director of Industrial and Commercial Bank of China Limited from January 2012 to June 2017.
+From May 2007 to December 2011, she was Deputy Director-General of the Research Bureau
+of the PBOC. She taught at the Central China Normal University where she served as Assistant
+Lecturer and Lecturer from July 1985 to January 1995. She served as Deputy Chief and Chief
+of the Macroeconomic Analysis Division of the Research Bureau of the PBOC from July
+1997 to May 2007, and concurrently as Deputy Mayor of Tongliao City in the Inner Mongolia
+Autonomous Region from October 2005 to February 2007. She received a professional title of
+research fellow in 2005. Ms. WANG was a member of the Post-Doctoral Academic Committee
+and a Post-Doctoral Co-mentor at the Institute of Finance of the PBOC. Currently, she is a
+member of the Academic Committee of the China Institute for Rural Studies of Tsinghua
+University, Invited Researcher of the National Institute of Financial Research of Tsinghua
+University, Doctoral Supervisor of Southwestern University of Finance and Economics and
+Invited Professor at the Graduate School of Chinese Academy of Social Sciences. Ms. WANG
+graduated from the Economics Faculty of Central China Normal University and the Graduate
+School of Chinese Academy of Social Sciences in January 1990 and June 1997 with a Master's
+Degree and a Doctor's Degree, respectively.
+LIAO Qiang
+Non-executive Director
+Non-executive Director of the Bank since September 2018. Mr. LIAO has worked at S&P Global
+Ratings from 2005 to 2018, successively serving as an associate, associate director, director,
+and senior director for the rating agency's financial institution ratings group. He was also the
+Sector Lead and Chief Rating Officer for S&P's Financial Institution Ratings in Greater China, a
+designated Global Voter on S&P's Banking Industry Country Risk Assessment Committees, and
+a member of S&P's Global Industry Focus Team on government-related entity ratings. From 1998
+to 2005, he successively served in the General Division and Institution Management Division of
+the Non-bank Financial Institution Supervision Department of the People's Bank of China and
+the Market Access Division of the Non-bank Financial Institution Supervision Department of
+former China Banking Regulatory Commission. He is also a non-practicing member of Chinese
+Institute of Certified Public Accountants and a member of the academic board of Hongfan
+Institute of Legal and Economic Studies. Mr. LIAO received a Doctor's Degree in Economics
+from the Graduate School of the Chinese Academy of Social Science in 2010, a Master's Degree
+in Monetary Banking from the Institute of Finance of the People's Bank of China in 1998, and a
+Bachelor's Degree in Sociology from Renmin University of China in 1995.
+105
+104
+103
+Executive Director of the Bank since February 2019 and Executive Vice President of the Bank
+since March 2018. Mr. LIN joined the Bank in 1987. He served as Deputy Chief Executive of
+BOC Hong Kong (Holdings) Limited from May 2015 to January 2018, and served as General
+Manager of the Corporate Banking Department of the Bank from March 2014 to May 2015.
+He served as General Manager (Corporate Banking) of the Corporate Banking Unit of the Bank
+from October 2010 to March 2014. Prior to this, he successively served as Deputy General
+Manager of Corporate Banking Department and Corporate Banking Unit of the Bank. Mr. LIN
+has been serving as Chairman of BOC International Holdings Limited since April 2018,
+Chairman of BOC International (China) Co., Ltd. since May 2018, and Non-executive Director of
+BOC Hong Kong (Holdings) Limited since August 2018. He graduated from Xiamen University
+in 1987, and obtained a Master of Business Administration Degree from Xiamen University
+in 2000.
+Executive Director and Executive Vice President
+The Bank incurred RMB11.46 million in remuneration to its directors, supervisors and senior management
+members' services in 2018.
+101
+Positions held in Shareholding Companies by Directors, Supervisors and Senior
+Management Members
+Save as disclosed above, in 2018, none of the Bank's directors, supervisors or senior management
+members held any position in the shareholding companies of the Bank.
+Working Experience and Other Positions held by Directors, Supervisors and Senior
+Management Members
+Directors
+CHEN Siqing
+Chairman
+Chairman of the Board of Directors since August 2017. Mr. CHEN joined the Bank in 1990 and
+served as Vice Chairman of the Bank from April 2014 to August 2017, President of the Bank
+from February 2014 to August 2017, and Executive Vice President of the Bank from June 2008
+to February 2014. Mr. CHEN held various positions in the Bank from June 2000 to May 2008,
+including Assistant General Manager and Vice General Manager of the Fujian Branch, General
+Manager of the Risk Management Department of the Head Office and General Manager of the
+Guangdong Branch. Mr. CHEN previously worked in the Hunan Branch of the Bank before he
+was dispatched to the Hong Kong Branch of China and South Sea Bank Ltd. as Assistant General
+Manager. Mr. CHEN served as Chairman of the Board of Directors of BOC Aviation Limited
+from December 2011 to March 2018. Since December 2011, Mr. CHEN has been serving as
+Non-executive Director of BOC Hong Kong (Holdings) Limited. He served as Vice Chairman
+of the Board of Directors of BOCHK (Holdings) from March 2014 to August 2017, and has
+been serving as Chairman of the Board of Directors of BOCHK (Holdings) since August 2017.
+Mr. CHEN graduated from Hubei Institute of Finance and Economics in 1982. He obtained an
+MBA from Murdoch University, Australia in 1999. He is a Certified Public Accountant and holds
+the title of Senior Economist.
+LIU Liange
+Vice Chairman and President
+Vice Chairman of the Board of Directors since October 2018 and President of the Bank since
+August 2018. Mr. LIU joined the Bank in 2018. He served as Vice Chairman and President of the
+Export-Import Bank of China from July 2015 to June 2018. Mr. LIU served as Vice President of
+the Export-Import Bank of China from March 2007 to February 2015. He also served as Director
+of the African Export-Import Bank from September 2007 to February 2015, Chairman of the
+Board of Supervisors of Sino-Italian Mandarin Capital Partners from March 2009 to June 2015,
+and Chairman of the Board of Directors of Regional Credit Guarantee and Investment Facility
+(Asia) from March 2014 to May 2015. Mr. LIU worked in the People's Bank of China for many
+years, successively serving as Deputy Director-General of the International Department of the
+PBOC, President of the Fuzhou Central Sub-branch of the PBOC and Director of the Fujian
+Branch of the State Administration of Foreign Exchange, Director General of the Anti-Money
+102
+Laundering Bureau (the Security Bureau) of the PBOC. Mr. LIU has been serving as President of
+Shanghai RMB Trading Unit since October 2018 and as Vice Chairman of the Board of Directors
+of BOC Hong Kong (Holdings) Limited since December 2018. He graduated from the Graduate
+School of the People's Bank of China with a Master's Degree in Economics in 1987. He holds the
+title of Senior Economist.
+WU Fulin
+Executive Director and Executive Vice President
+Executive Director of the Bank since February 2019 and Executive Vice President of the Bank
+since December 2018. Mr. WU joined the Bank in 2018. He served as Deputy General Manager
+of China Everbright Group Limited from March 2015 to October 2018. Mr. WU also served as
+Chief Economist of China Everbright Group Limited (and its predecessor) from April 2013 to
+October 2018, Chairman of Sun Life Everbright Life Insurance Company Limited from July 2015
+to October 2018. From September 2009 to March 2017, Mr. WU served as General Manager of
+Strategies Management Department of China Everbright Group Limited (and its predecessor)
+and also served as Equity Director of Everbright Financial Holding Asset Management Company
+Limited from April 2010 to June 2017. He worked in China Everbright Bank for many years, and
+successively served as General Manager of Planning and Treasury Department and the Treasury
+Department of China Everbright Bank, General Manager of Kunming Branch of China Everbright
+Bank, General Manager of Shenzhen Branch of China Everbright Bank, General Manager of
+the Strategies Management Department of China Everbright Bank. He graduated from Fudan
+University with a Doctor's Degree in Economics in 1995. He has qualification of associate
+researcher.
+LIN Jingzhen
+36.86
+Chief Risk Officer
+Executive Vice President
+No
+and housing Other monetary
+other connected
+Name
+Position
+paid
+provident fund
+income
+Remuneration
+parties
+GAO Yingxin
+Executive Director and
+4.10
+1.14
+REN Deqi
+Executive Director and
+24.57
+Former Directors, Supervisors and Senior Management Members
+6.84
+Whether
+remunerated by
+shareholding
+companies or
+medical
+Secretary to the Board
+56.94
+15.27
+3.54
+75.75
+No
+of Directors and
+insurance
+Company Secretary
+99
+Remuneration before tax from the Bank in 2018
+(Unit: RMB ten thousand)
+Contribution by
+the employer to
+social insurance,
+enterprise
+annuity,
+supplementary
+99
+31.41
+No
+Executive Vice President
+29.12
+No
+DENG Zhiying
+Employee Supervisor
+5.00
+5.00
+No
+1959
+GAO Zhaogang
+5.00
+5.00
+No
+XIANG Xi
+Employee Supervisor
+5.00
+5.00
+Employee Supervisor
+7.35
+21.02
+Shareholder Supervisor
+ZHANG Qingsong
+Executive Director and
+36.86
+10.56
+47.42
+No
+Executive Vice President
+ZHANG Xiangdong
+Non-executive Director
+-
+Yes
+Nout WELLINK
+Independent Director
+29.67
+29.67
+No
+WANG Xueqiang
+LIU Qiang
+DENG Zhiying
+Total
+WANG Xueqiang 1957
+1964
+Female Non-executive Director
+LIAO Qiang
+1974
+Male
+Non-executive Director
+LU Zhengfei
+1963
+Male
+Independent Director
+LEUNG Cheuk 1951
+Male
+Independent Director
+Yan
+WANG Changyun 1964
+Male
+Angela CHAO 1973
+Employee Supervisor
+Male
+1973
+WANG Zhiheng
+Male
+1958
+WANG Xiaoya
+LIU Wanming
+1960
+WANG Xiquan
+Independent Director
+Male
+|JIANG Guohua 1971
+Female Independent Director
+Male
+LI Changlin
+1965
+Independent Director
+Executive Vice President
+Male
+Directors, Supervisors and Senior Management Members
+Basic Information
+Incumbent Directors, Supervisors and Senior Management Members
+Year of
+Name
+birth Gender Position
+CHEN Siqing
+No
+1960
+Male
+Chairman
+LIU Liange
+1961
+Male
+WU Fulin
+Female Non-executive Director
+Non-executive Director
+Male
+1964
+LI Jucai
+Vice Chairman and
+President
+Executive Director and
+Executive Vice President
+Executive Director and
+Executive Vice President
+Non-executive Director
+XIAO Lihong
+Male
+ZHAO Jie
+Male
+1965
+LIN Jingzhen
+Male
+1963
+1962
+1962
+5.24
+Male | Employee Supervisor
+From November 2014
+From June 2018
+From February 2019
+Company Secretary from
+2018 and Secretary to the Board of
+Directors from April 2018
+March
+Note: No incumbent director, supervisor or senior management member, except Mr. SUN Yu who held 10,000
+H shares of the Bank, held any share of the Bank.
+97
+57
+Former Directors, Supervisors and Senior Management Members
+Year of
+Name
+birth
+Gender
+Position held before
+leaving the post
+GAO Yingxin
+1962
+Male
+Executive Director and
+Executive Vice President
+REN Deqi
+Executive Director and
+Executive Vice President
+ZHANG
+1957
+Male
+Non-executive Director
+From December 2018 to the date of the
+2021 Employee Delegates' Meeting
+From June 2015 to the date of the
+Annual General Meeting in 2021
+From February 2019
+Xiangdong
+Male
+Nout WELLINK 1943
+Chairman of the Board of
+Supervisors
+Shareholder Supervisor
+Executive Director and
+Executive Vice President
+Male
+1963
+Male
+Term of office
+ZHANG Qingsong 1965
+Chief Risk Officer
+Secretary to the Board of
+1953
+CHEN Yuhua
+Employee Supervisor
+Male
+1963
+birth
+Male
+Gender Position
+Term of office
+From April 2014 to the date of the
+Annual General Meeting in 2020
+From October 2018 to the date of the
+Annual General Meeting in 2021
+From February 2019 to the date of the
+Annual General Meeting in 2021
+From February 2019 to the date of the
+Annual General Meeting in 2021
+From August 2017 to the date of the
+Annual General Meeting in 2020
+From September 2015 to the date of
+the Annual General Meeting in 2021
+From August 2017 to the date of the
+Annual General Meeting in 2020
+From August 2017 to the date of the
+Annual General Meeting in 2020
+From September 2018 to the date of
+the Annual General Meeting in 2021
+From July 2013 to the date of the
+Annual General Meeting in 2019
+From September 2013 to the date of
+the Annual General Meeting in 2019
+From August 2016 to the date of the
+Annual General Meeting in 2019
+From January 2017 to the date of the
+Annual General Meeting in 2019
+From December 2018 to the date of
+the Annual General Meeting in 2021
+From November 2016 to the date of
+the Annual General Meeting in 2019
+From August 2004 to the date of the
+Annual General Meeting in 2019
+From December 2018 to the date of the
+2021 Employee Delegates' Meeting
+From December 2018 to the date of the
+2021 Employee Delegates' Meeting
+96
+96
+Year of
+Name
+Directors and Company
+Secretary
+External Supervisor
+LENG Jie
+1973
+SUN Yu
+LIU Jiandong
+1969
+Male
+MEI Feiqi
+1962
+Male
+LIU Qiuwan
+Male
+Male
+1960
+XIAO Wei
+Male
+1961
+Executive Vice President
+Chief Audit Officer
+Chief Information Officer
+LENG Jie
+LI Changlin
+Employee Supervisor
+Employee Supervisor of the Bank since December 2018. Mr. LI currently serves as General
+Manager of the Credit Approval Department of the Head Office of the Bank and Director of
+Bank of China Group Investment Limited. Mr. LI joined the Bank in September 1984, serving
+successively as Deputy General Manager of the Risk Management Department of the Head
+Office and General Manager of the Credit Approval Division of the Risk Management Unit of the
+Head Office of the Bank. Mr. LI graduated from Central University of Finance and Economics
+(finance major) in 1984.
+110
+Employee Supervisor of the Bank since December 2018. Mr. LENG currently serves as General
+Manager of the Hebei Branch of the Bank. Mr. LENG started working in November 1981
+and joined the Bank in September 1988, serving successively as Deputy General Manager of
+the Shandong Branch, Deputy General Manager of the Shanxi Branch, General Manager of
+the Ningxia Branch and General Manager of the Chongqing Branch of the Bank. Mr. LENG
+graduated from Shandong Institute of Light Industry (economics administration major) in 1999
+and University of Jinan in 2009 (accounting major).
+External Supervisor
+External Supervisor of the Bank since June 2015. Mr. CHEN served as Vice President of China
+Cinda Asset Management Co., Ltd. from December 2008 to August 2013. He previously served
+as Chairman of China Cinda Investment Co., Ltd. from April 2004 to December 2008, Head
+of the Equity Department of China Cinda Asset Management Company and General Manager
+of China Cinda Investment Co., Ltd. from March 2000 to April 2004, and President of China
+Cinda Trust & Investment Company from December 1996 to March 2000. Prior to this, he served
+as Deputy General Manager of the Personnel Department and Deputy General Manager of the
+Personnel & Training Department of China Construction Bank (CCB) Head Office from April
+1994 to December 1996, Division Head of the Construction Economy Department of CCB Head
+Office and General Manager of CCB Real Estate Consulting Corporation from March 1992 to
+March 1994, Deputy Head of the Construction Economy Division, Deputy Head of the Real
+Estate Credit Department and Head of a direct sub-branch of CCB Sichuan Branch from August
+1986 to March 1992. Mr. CHEN graduated from Zhongnan University of Finance and Economics
+in 1986 and received a Master's Degree in Economics.
+Senior Management Members
+LIU Liange
+Vice Chairman and President
+Please refer to the section "Directors"
+WU Fulin
+Executive Vice President
+Please refer to the section "Directors"
+LIN Jingzhen
+Employee Supervisor
+109
+JIANG Guohua
+Employee Supervisor
+Executive Vice President
+LU Zhengfei
+Independent Director
+Independent Director of the Bank since July 2013. Mr. LU currently serves as the distinguished
+professor of Cheung Kong Scholar of Guanghua School of Management, Peking University.
+He served as the head of the Accounting Department of the School of Business, Nanjing
+University between 1994 and 1999, and the head of the Accounting Department of Guanghua
+School of Management, Peking University between 2001 and 2007, and Associate Dean of
+Guanghua School of Management, Peking University between 2007 and 2014. Mr. LU also
+currently serves as an executive director of the Accounting Society of China and Deputy Director
+of Financial Management Committee, an editorial board member of Accounting Research and
+Audit Research, and a member of the Disciplinary Committee of the Chinese Institute of Certified
+Public Accountants. In 2001, he was elected as a member of "The Hundred People Project of
+Beijing New Century Social Science Theoretical Talent”. In 2005, he was elected to the "New
+Century Excellent Talent Support Plan" of the Ministry of Education, PRC. In 2013, he was
+elected to the "Renowned Expert Training Project" (first batch) of the Ministry of Finance. In
+2014, he was elected as distinguished professor of Cheung Kong Scholar of the Ministry of
+Education, PRC. He currently serves as an independent non-executive director or an independent
+supervisor of a number of companies listed on the Hong Kong Stock Exchange, including:
+independent non-executive director of Sino Biopharmaceutical Ltd. since November 2005, and
+Independent Supervisor of PICC Property and Casualty Co., Ltd. (“PICC P&C”) since January
+2011. He was an independent non-executive director of PICC P&C from February 2004 to
+December 2010, an independent non-executive director of Sinotrans Ltd. from September 2004
+to May 2018, and an independent non-executive director of China National Materials Co., Ltd.
+from December 2009 to April 2018. He has served as an independent non-executive director of
+China Nuclear Engineering & Construction Corporation Limited since November 2018. Mr. LU
+graduated from Renmin University of China in 1988 with a Master's Degree in Economics
+(Accounting), and received his Doctor's Degree in Economics (Management) from Nanjing
+University in 1996.
+LEUNG Cheuk Yan
+Independent Director
+Independent Director of the Bank since September 2013. Mr. LEUNG is a former partner of
+Baker & McKenzie, which he joined in July 1987 and from which he retired in June 2011.
+During 2009 and 2010, he had served as a part-time member of the Central Policy Unit of The
+Hong Kong Special Administrative Region Government. Mr. LEUNG has been an independent
+non-executive director of MMG Limited, which is listed on The Stock Exchange of Hong Kong
+Limited, since July 2012. Mr. LEUNG graduated from The Chinese University of Hong Kong
+with a Bachelor of Social Science Degree (First Class Honours) in 1976, obtained a Master of
+Philosophy Degree from The University of Oxford in 1981 and completed his legal study at The
+College of Law in England in 1982. He was admitted to practice as a solicitor in Hong Kong in
+1985, in England and Wales in 1988, in the Australian Capital Territory in 1989 and in Victoria,
+Australia in 1991. He is a Senior Associate Member of St. Antony's College, Oxford.
+106
+WANG Changyun
+Independent Director
+Independent Director of the Bank since August 2016. Mr. WANG currently serves as professor
+and doctoral supervisor in finance at Renmin University of China (“RUC”), and the dean of
+Hanqing Advanced Institute of Economics and Finance, RUC. He served as a lecturer at RUC
+from 1989 to 1995 and as a lecturer at Business School, National University of Singapore
+from 1999 to 2005. He served successively as the Chair of Applied Finance Department of
+RUC, Director of China Financial Policy Research Center (a key research base of Ministry of
+Education) and Executive Vice Dean of Hanqing Advanced Institute of Economics and Finance
+at RUC from 2006 to 2016. Mr. WANG is currently also the Vice Chairman of China Investment
+Specialty Construction Association, Director of China Finance Annual Meeting Committee,
+Director of China Finance Association, Deputy Editor of Finance Research Quarterly, Deputy
+Editor of China Finance Research, and Deputy Editor of China Financial Review. He also serves
+as the standing committee member of Beijing Haidian District People's Political Consultative
+Conference, the Central Committee member of China Democratic League, the special auditor
+of State Auditing Administration, the independent non-executive director of Sunway Co., Ltd.
+(originally named as Sichuan Star Cable Co., Ltd.) and Beijing Haohua Energy Resource Co.,
+Ltd. Mr. WANG has received social recognition and prizes including the Special Government
+Allowance of State Council, Best Paper Award of Chicago Board of Trade in 2001, and the
+"Middle Age Experts with National Outstanding Contribution”, membership of “the Program for
+New Century Excellent Talents” of Ministry of Education in 2004, “Financial Support of National
+Science Fund for Distinguished Young Scholars" in 2007, a member of the "New Century
+National Hundred, Thousand and Ten Thousand Talent Program" in 2013, and the "Cheung Kong
+Distinguished Professor" of Ministry of Education in 2014. He obtained his Master's Degree in
+economics from RUC in July 1989 and Doctorate in Financial Economics from the University of
+London in January 1999.
+Angela CHAO
+Independent Director
+Independent Director of the Bank since January 2017. Ms. CHAO serves as Chairman and
+CEO of Foremost Group, an international shipping company. From 1994 to 1996, Ms. CHAO
+worked in the mergers & acquisitions department of Smith Barney, which is now Morgan
+Stanley Smith Barney. From 1996 to 1999, Ms. CHAO served as deputy general manager of
+Foremost Group, and from 2001 to 2017, Ms. CHAO had successively served as Vice President,
+Senior Vice President and Deputy Chairman of Foremost Group. Since 2018, she has served as
+Chairman and CEO of Foremost Group. In May 2005, Ms. CHAO was unanimously voted to
+be BIMCO39's (The Baltic and International Maritime Council 39) Counsellor. In September
+2005, she was selected as “Eminent Young Overseas Chinese" by the Overseas Chinese Affairs
+Office of the State Council of China. In November 2007, she was invited as speaker of World
+Shipping (China) Summit. In April 2011, she became a Founding Member of the Wall Street
+Journal's Task Force on Women in the Economy. Ms. CHAO currently serves on the Boards of
+The Metropolitan Opera, Museum of Modern Art PS1, the UK P&I Marine Insurance Mutual,
+Foremost Foundation, Shanghai Mulan Education Foundation, and she also serves on the Harvard
+Business School's Board of Dean's Advisors, Carnegie-Tsinghua Center for Global Policy Board
+of Advisors, Lincoln Center Global's China Advisory Council, the Chairman's Council of the
+Employee Supervisor of the Bank since December 2018. Mr. WANG currently serves as General
+Manager of the Human Resources Department of the Head Office of the Bank and Director of
+BOC Aviation Limited, BOC International Holdings Limited and Bank of China Group Insurance
+Company Limited. Mr. WANG joined the Bank in July 1999, serving successively as Deputy
+General Manager of the Human Resources Department of the Head Office, Deputy General
+Manager of the Guangdong Branch and General Manager of the Qinghai Branch of the Bank.
+Mr. WANG graduated and obtained a Master's Degree in Finance from Nankai University in
+1999.
+107
+Independent Director
+Independent Director of the Bank since December 2018. Mr. JIANG serves as Professor of
+Accounting at the Guanghua School of Management, Peking University. Currently he also
+serves as a member of China National MPAcc Education Steering Committee and Associate
+Dean of Peking University Graduate School. Mr. JIANG has successively served as Assistant
+Professor, Associate Professor and Professor of the Accounting Department of Guanghua
+School of Management, Peking University since 2002, during which he successively served as
+Director of the Yenching Academy, Executive Associate Dean and Director of the Yenching
+Academy from 2013 to 2017. From 2007 to 2010, he was a senior investment consultant at
+Bosera Fund Management Company; from 2010 to 2016, he served as independent director of
+Datang International Power Generation Co. Ltd.; from 2011 to 2014, he was an academic advisor
+to the Global Valuation Institute of KPMG International; and from 2014 to 2015, he was a
+member of the Global Agenda Council of the World Economic Forum. Currently he also serves
+as independent director of ZRF Fund Management Company Ltd. and China Merchants Life
+Insurance Company Ltd. Mr. JIANG was named National Leading Talent in Accounting by China
+Ministry of Finance (2012). He was an Elsevier Chinese Most Cited Researcher consecutively
+from 2014 to 2017. He was a member of the 17th Stock Issuance Review Committee of China
+Securities Regulatory Commission. Mr. JIANG graduated from Peking University in 1995 with a
+Bachelor's Degree in Economics, received his Master's Degree in Accounting from Hong Kong
+University of Science and Technology in 1997, and obtained his Doctor's Degree in Accounting
+from the University of California, Berkeley in 2002.
+108
+Supervisors
+WANG Xiquan
+Chairman of the Board of Supervisors
+Chairman of the Board of Supervisors of the Bank since November 2016 and Vice Party
+Secretary of the Bank since June 2016. Mr. WANG previously served in several positions at
+Industrial and Commercial Bank of China Limited (“ICBC”) for many years. He served as the
+Executive Vice President of ICBC from September 2012 to July 2016 and Executive Director
+from June 2015 to July 2016. Mr. WANG served as a member of the senior management of ICBC
+from April 2010 to September 2012. Between September 1999 and April 2010, he successively
+served as Deputy Head of the Hebei Branch of ICBC, General Manager of Risk Management
+Department, General Manager of Internal Audit Bureau, and General Manager of Human
+Resources Department. Mr. WANG graduated from Shanxi Institute of Finance and Economics in
+1983 and received a Doctor's Degree in Management from Nanjing University in 2009. He holds
+the title of Senior Economist.
+LIU Wanming
+Shareholder Supervisor
+Shareholder Supervisor of the Bank since August 2004 and Deputy General Manager of the
+Office of Board of Supervisors since April 2005. Since January 2014, Mr. LIU has served
+as Deputy General Manager of the Audit Department of the Head Office of the Bank. From
+November 2001 to August 2004, Mr. LIU was designated by the State Council to serve as
+Director Supervisor and Deputy Director General Supervisor at Bank of Communications and
+the Bank respectively. From August 1984 to November 2001, he worked with the National Audit
+Office, Agricultural Development Bank of China and the Central Financial Working Commission.
+Mr. LIU received a Bachelor's Degree in Economics from Jiangxi University of Finance and
+Economics in 1984.
+WANG Zhiheng
+Metropolitan Museum of Art and American Bureau of Shipping Council. In addition, she is also a
+member of the Council on Foreign Relations, serves on the Young Leaders Forum of the National
+Committee on US-China Relations and serves as the member of Shanghai Jiao Tong University's
+Antai College of Economics and Management Advisory Board, and honorary chairperson of
+the Jiao Tong University Alumni Association in America. Ms. CHAO graduated from Harvard
+College in three years in 1994 with a Bachelor's Degree in economics (Magna Cum Laude), and
+received her Master of Business Administration Degree from Harvard Business School in 2001.
+Please refer to the section "Directors"
+CHEN Yuhua
+Executive Vice President
+113
+Changes in the Bank's supervisors were as follows:
+Mr. WANG Xueqiang ceased to serve as Shareholder Supervisor and member of the Duty
+Performance and Due Diligence Supervision Committee of the Board of Supervisors of the Bank
+as of 31 March 2018 due to the reason of age.
+Mr. DENG Zhiying ceased to serve as Employee Supervisor and member of the Duty
+Performance and Due Diligence Supervision Committee of the Board of Supervisors of the Bank
+as of 14 December 2018 due to work-related reasons.
+Mr. GAO Zhaogang ceased to serve as Employee Supervisor and member of the Duty
+Performance and Due Diligence Supervision Committee of the Board of Supervisors of the Bank
+as of 14 December 2018 due to work-related reasons.
+Ms. XIANG Xi ceased to serve as Employee Supervisor and member of the Financial and Internal
+Control Supervision Committee of the Board of Supervisors of the Bank as of 14 December 2018
+due to work-related reasons.
+Mr. WANG Zhiheng began to serve as Employee Supervisor of the Bank as of 14 December
+2018, and as member of the Duty Performance and Due Diligence Supervision Committee,
+member of the Financial and Internal Control Supervision Committee of the Board of Supervisors
+of the Bank as of 15 January 2019.
+Mr. LI Changlin began to serve as Employee Supervisor of the Bank as of 14 December 2018,
+and as member of the Duty Performance and Due Diligence Supervision Committee, member
+of the Financial and Internal Control Supervision Committee of the Board of Supervisors of the
+Bank as of 15 January 2019.
+Mr. LENG Jie began to serve Employee Supervisor of the Bank as of 14 December 2018, and
+as member of the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors of the Bank as of 15 January 2019.
+Changes in the Bank's senior management members were as follows:
+Mr. GAO Yingxin ceased to serve as Executive Vice President of the Bank as of 24 January
+2018.
+Mr. GENG Wei ceased to serve as Secretary to the Board of Directors and Company Secretary of
+the Bank as of 2 March 2018.
+Mr. MEI Feiqi began to serve as Company Secretary of the Bank as of 2 March 2018. Mr. MEI
+Feiqi began to serve as Secretary to the Board of Directors of the Bank as of 27 April 2018.
+Mr. LIN Jingzhen began to serve as Executive Vice President of the Bank as of 28 March 2018.
+114
+Mr. REN Deqi ceased to serve as Executive Vice President of the Bank as of 12 June 2018 due to
+change of job.
+Mr. LIU Quiwan began to serve as Chief Information Officer of the Bank while Mr. ZHANG
+Qingsong ceased to concurrently serve as Chief Information Officer of the Bank as of 26 June
+2018.
+Mr. SUN Yu began to serve as Chief Overseas Business Officer of the Bank as of 12 September
+2018. As of 3 February 2019, Mr. SUN Yu began to serve as Executive Vice President and ceased
+to serve as Chief Overseas Business Officer of the Bank.
+Mr. ZHANG Qingsong ceased to serve as Executive Vice President of the Bank as of 18 September
+2018 due to change of job.
+Mr. LIU Qiang ceased to serve as Executive Vice President of the Bank as of 18 September 2018
+due to change of job.
+Mr. WU Fulin began to serve as Executive Vice President of the Bank as of 28 December 2018.
+Mr. PAN Yuehan ceased to serve as Chief Risk Officer of the Bank as of 18 January 2019 due to
+change of job.
+Mr. LIU Jiandong began to serve as Chief Risk Officer of the Bank as of 3 February 2019.
+SUN Yu
+115
+Mr. LIN Jingzhen began to serve as Executive Director and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 3 February 2019.
+Mr. WU Fulin began to serve as Executive Director and member of the Connected Transactions
+Control Committee of the Board of Directors of the Bank as of 3 February 2019.
+Mr. LIU Liange began to serve as President of the Bank as of 27 August 2018.
+Mr. LIU Liange began to serve as Vice Chairman, Executive Director and member of the
+Strategic Development Committee of the Board of Directors of the Bank as of 11 October 2018.
+XIAO Wei
+Executive Vice President of the Bank since February 2019. Mr. SUN joined the Bank in 1998
+and has served as Chief Overseas Business Officer from September 2018 to February 2019. From
+March 2015 to November 2018, Mr. SUN served as General Manager of London Branch of the
+Bank, CEO of Bank of China (UK) Limited, and also served as General Manager of London
+Trading Center of the Bank from December 2015 to November 2018. Mr. SUN previously
+served as Director of Global Financial Markets Department, Director of Financial Markets Unit
+(Client Business), Director of Financial Markets Unit (Securities Investment), Deputy General
+Manager of the Shanghai Branch and General Manager of Global Markets Department of Bank
+of China (Hong Kong) Limited. Mr. SUN has concurrently served as Director of Bank of China
+(UK) Limited since March 2015, as Chairman of the Board of Directors of Bank of China (UK)
+Limited since December 2018, and as Chairman of the Board of Directors of BOC Aviation
+Limited since February 2019. He graduated from Nankai University with a Master's Degree in
+Economics in 1998.
+Mr. JIANG Guohua began to serve as Independent Director and member of the Audit Committee,
+the Personnel and Remuneration Committee and the Connected Transactions Control Committee
+of the Board of Directors of the Bank as of 14 December 2018.
+Chief Audit Officer
+Chief Audit Officer of the Bank since November 2014. Mr. XIAO joined the Bank in 1994, and
+served as General Manager of Financial Management Department of the Bank's Head Office
+from November 2009 to November 2014. Mr. XIAO served as Deputy General Manager of the
+Beijing Branch of the Bank from May 2004 to November 2009, and also concurrently served as
+Chief Financial Officer of the Beijing Branch of the Bank from January 2007 to November 2009.
+He successively served as Assistant General Manager and Deputy General Manager of the Asset-
+Liability Management Department of the Bank's Head Office from December 1999 to May 2004,
+and also served as temporary Deputy General Manager of the Beijing Branch of the Bank from
+November 2002 to May 2004. Mr. XIAO obtained a Doctor's Degree in Economics from Renmin
+University of China in 1994. He has the qualification of Senior Accountant.
+111
+Chief Information Officer
+Chief Information Officer of the Bank since June 2018. Mr. LIU joined the Bank in 1994. He
+served as General Manager of Information Technology Department of the Bank since December
+2014. From September 2009 to December 2014, he served as General Manager of the Software
+Center of the Bank. Mr. LIU previously served as Deputy General Manager of the Ningxia
+Branch and CEO of BOCSOFT Information Industrial (Shenzhen) Co., Ltd. He graduated from
+Xi'an Mining College with a Bachelor's Degree in Engineering in 1982. He holds the title of
+Senior Engineer.
+LIU Jiandong
+Chief Risk Officer
+Chief Risk Officer since February 2019. Mr. LIU joined the Bank in 1991. Since March 2014,
+he has served as General Manager of the Credit Management Department of the Bank. Mr. Liu
+served as General Manager (Investment Banking) of the Corporate Banking Unit of the Bank
+from February 2011 to March 2014. Mr. Liu previously served as Deputy General Manager of
+the Corporate Banking Department and Corporate Banking Unit of the Bank. He graduated from
+Renmin University of China in 1991 with a Bachelor's Degree in Economics, and obtained a
+Master's Degree in Economics from Renmin University of China in 2000.
+MEI Feiqi
+LIU Qiuwan
+Company Secretary of the Bank since March 2018 and Secretary to the Board of Directors since
+April 2018. Mr. MEI joined the Bank in 1998. He has previously served as Deputy General
+Manager of the Beijing Branch of the Bank, General Manager (Wealth Management and Personal
+Banking) of the Personal Banking Unit of the Bank, Spokesman of the Bank and General
+Manager of the Executive Office of the Bank's Head Office. Prior to joining the Bank, he worked
+at the Ministry of Geology and Mineral Resources and the General Office of the State Council.
+He graduated from Chengdu University of Technology with a Bachelor's Degree, and later
+received on-the-job postgraduate education. He holds the title of Senior Economist.
+Mr. ZHANG Qingsong ceased to serve as Executive Director and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 18 September 2018 due to change of job.
+Secretary to the Board of Directors and Company Secretary
+Mr. WANG Changyun began to serve as Chairman of the Risk Policy Committee of the Board of
+Directors of the Bank as of 29 June 2018.
+Mr. Nout WELLINK ceased to serve as Independent Director, member of the Strategic
+Development Committee and the Audit Committee, and Chairman and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 29 June 2018 due to the expiration of his
+term of office.
+Mr. LIAO Qiang began to serve as Non-executive Director and member of the Strategic
+Development Committee and the Personnel and Remuneration Committee of the Board of
+Directors of the Bank as of 29 September 2018.
+Mr. REN Deqi ceased to serve as Executive Director and member of the Connected Transactions
+Control Committee of the Board of Directors of the Bank as of 12 June 2018 due to change of job.
+Mr. ZHANG Xiangdong ceased to serve as Non-executive Director and member of the Strategic
+Development Committee and the Personnel and Remuneration Committee of the Board of
+Directors of the Bank as of 29 June 2018 due to reason of age.
+Changes in the Bank's directors were as follows:
+Changes in Directors, Supervisors and Senior Management Members
+112
+Mr. GAO Yingxin ceased to serve as Executive Director and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 24 January 2018 due to change of job.
+Mr. ZHANG Qingsong began to serve as Executive Director and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 20 August 2018.
+Directors' Attendance of Shareholders' Meetings, Meetings of the Board of Directors and
+Special Committees
+Meetings
+During the reporting period, the attendance rate of each director of the shareholders' meetings,
+meetings of the Board of Directors and special committees is given below:
+Number of meetings attended in person/Number of meetings convened during term of office
+Meetings of the Special Committees of the Board of Directors
+Connected
+Duty Performance of Directors
+Directors
+CHEN Siqing
+Audit
+Committee
+Personnel and Transactions
+Risk Policy Remuneration Control
+Committee Committee Committee
+Incumbent Directors
+2/2
+LIU Liange
+0/0
+123
+ZHAO Jie
+LI Jucai
+Meetings of Strategic
+Shareholders' the Board of Development
+Directors Committee
+During the reporting period, the Bank performed self-assessment on internal control in line with
+the Basic Standard for Enterprise Internal Control and its supporting guidelines. No material
+deficiencies were identified in the internal control systems for both the financial reporting and
+non-financial reporting of the Bank. Ernst & Young Hua Ming LLP, as the Bank's external
+auditor for internal control, audited the effectiveness of the Bank's internal controls over financial
+reporting and issued a standard unqualified opinion. The 2018 Internal Control Assessment
+Report of Bank of China Limited and the 2018 Auditor's Report on Internal Control issued
+by Ernst & Young Hua Ming LLP have been published on the websites of SSE, HKEX and
+the Bank.
+Directorship
+with the Bank
+The Board of Directors attached great importance to the Group's far-reaching internal control
+system and continued to promote its development. It regularly heard and reviewed Senior
+Management reports concerning the implementation of the Guidelines on Internal Control
+of Commercial Banks, bank-wide operational management, risk management, fraud case
+management and internal control system development and assessment, thus earnestly assuming its
+responsibility to improve and deliver a sound and effective internal control function.
+under 55
+XIAO Lihong
+3
+2
+Independent
+Director
+1
+0
+Designation Nationality
+Age
+Gender
+(years)
+Convening of Board Meetings
+In 2018, the Bank convened eleven on-site meetings of the Board of Directors on 19 January,
+2 March, 29 March, 27 April, 31 May, 28 June, 17 July, 28 August, 29 October, 16 November
+and 12 December respectively. At these meetings, the Board of Directors reviewed and approved
+69 proposals related to the Bank's regular reports, the nomination of candidates for the directors,
+the Bank's development strategy, the issuance of bonds, the dividend distribution plan, the
+establishment of overseas branches and subsidiaries, and so on. It also heard nine reports related
+to the 2017 report on internal control audit and internal control recommendations by the Bank's
+external auditors, and other matters.
+In 2018, the Bank convened six meetings of the Board of Directors via written resolutions.
+At these meetings, the Board of Directors mainly reviewed and approved the proposal on the
+establishment of an asset and wealth management subsidiary, among others.
+122
+Risk Management and Internal Control by the Board of Directors and its Special
+Committees
+The Board of Directors of the Bank considers a sound risk management system to be the basic
+prerequisite of realising the Bank's strategic goals. By continuously improving the independence,
+specialisation, foresight, and initiative of its risk management function, the Bank ensures the
+sound and sustainable development of its banking businesses and creates greater value for
+shareholders.
+According to regulatory rules and internal management requirements, the Senior Management
+submits important risk management policies, systems and procedures to the Board of Directors
+and Risk Policy Committee for review and approval. The Risk Policy Committee regularly
+reviews the Group's overall risk status (covering major risk categories such as credit risk,
+market risk, operational risk, liquidity risk, legal and compliance risk and reputational risk) and
+upcoming work plan and puts forward corresponding work requirements.
+The Board of Directors and its Risk Policy Committee have acknowledged the full effectiveness
+of the existing risk management system of the Bank based on their close monitoring and quarterly
+evaluation of the system's effectiveness.
+The Audit Committee under the Board of Directors closely monitored the changing economic
+and financial environment at home and abroad, as well as the overall conditions of the Group's
+internal control function, including the establishment and operation of its internal control systems
+for both financial reporting and non-financial reporting. In addition, the committee heard and
+reviewed, on a regular and ad hoc basis, internal audit reports and assessment opinions on internal
+control, reports on the progress of internal control improvements and remediation suggested by
+external auditors, as well as the overall situation regarding the prevention, control and redress of
+fraud cases and risk events. The committee guided and urged the Senior Management to improve
+the "three lines of defence" system of internal control, and members of the committee conducted
+researches into the independence and effectiveness of the audits of the Bank's comprehensive
+operation platforms.
+WANG Xiaoya
+2/2
+LU Zhengfei
+O
+6/6
+2/2
+ន ន ន ន ន ន ន ន ន ៖
+2/2
+14/17
+9/9
+5/5
+9/10
+17/17
+6/6
+9/9
+2/2
+16/17
+9/9
+6/6
+2/2
+under 3
+2/2
+LIAO Qiang
+1/1
+6/6
+LEUNG Cheuk Yan
+WANG Changyun
+Angela CHAO
+JIANG Guohua
+0/0
+0/0
+Former Directors
+GAO Yingxin
+Nout WELLINK
+0/0
+REN Deqi
+0/0
+ZHANG Qingsong
+0/1
+1/1
+ZHANG Xiangdong
+1/1
+10/10
+1/1
+male
+The Bank places great emphasis on improving its corporate governance operation mechanisms.
+It ensures that minority shareholders are properly informed and able to participate and make
+decisions. The annual shareholders' meetings are held in Beijing and Hong Kong on-site and
+connected by way of video conference, allowing shareholders from both the Chinese mainland
+and Hong Kong to attend in person. In addition, online voting for A-Share Holders is available to
+safeguard the rights and interests of the minority shareholders. The Bank focuses on constantly
+enhancing co-ordination with respect to the operation mechanisms of the Board of Directors,
+information disclosure and stakeholder engagement. It continues to support the Board of
+Directors in functioning more constructively and making scientific and efficient decisions. The
+Bank works to heighten transparency and proactively perform the duties it owes to the relevant
+stakeholders, including shareholders, customers, staff and society.
+5
+IT Management Committee
+Securities Investment and
+Management Committee
+Internet Finance Committee
+Innovation and Product
+Management Committee
+Duty Performance and
+Due Diligence Supervision Committee
+Finance and
+Internal Control Supervision Committee
+Anti-money
+Laundering Committee
+Asset Disposal Committee
+Credit Risk Management and
+Decision-making Committee
+Corporate Governance Compliance
+Asset and Liability
+Management Committee
+Risk Management and
+Internal Control Committee
+Procurement Review Committee
+During the reporting period, the actual performance of the Bank's corporate governance was
+fully in compliance with the Company Law and the requirements for the governance of listed
+companies set out in the normative documents of CSRC.
+117
+Amendments to the Articles of Association
+No amendment was made to the Articles of Association in 2018.
+Shareholders and Shareholders' Rights
+The Bank highly values the protection of its shareholders' interests and has established and
+maintained an effective and multi-channel shareholder communication platform. This includes
+holding shareholders' meetings and maintaining an investor hotline to ensure that all shareholders
+are treated equally, properly informed and able to participate in and exercise their voting and
+other rights regarding the major issues of the Bank. The Bank is independent and completely
+autonomous in all of its business operations. It operates independently and separately from its
+controlling shareholder, Huijin, in respect of its business, personnel, asset, institutional and
+financial matters.
+Shareholders' Right to Convene an Extraordinary Shareholders' Meeting and a Meeting of
+Shareholders of Different Categories
+According to the Articles of Association, shareholders individually or in aggregate holding a total
+of 10% or more voting shares of the Bank have the right to make a written request to the Board of
+Directors to convene an extraordinary shareholders' meeting. Two or more shareholders holding a
+total of 10% or more voting shares of the Bank may sign one or more written requests of identical
+form and substance requesting the Board of Directors to convene a meeting of shareholders
+of different categories and stating the subject of the meeting. If the Board of Directors fails to
+issue a notice of such a meeting within 30 days after receipt of a written request for convening
+an extraordinary shareholders' meeting or a meeting of shareholders of different categories
+submitted by the proposing shareholders, the proposing shareholders may by themselves convene
+the meeting within four months after the Board of Directors receives the request. The procedures
+according to which they convene such meeting shall, to the extent possible, be identical to the
+procedures according to which shareholders' meetings are convened by the Board of Directors.
+Where the proposing shareholders convene and hold a meeting because the Board of Directors
+fails to convene such meeting pursuant to a request as mentioned above, the reasonable expenses
+incurred by such shareholders shall be borne by the Bank and shall be deducted from the sums
+owed by the Bank to the negligent directors.
+118
+During the reporting period, the Bank strictly observed the Corporate Governance Code
+(the "Code") as set out in Appendix 14 to the Hong Kong Listing Rules. Save as disclosed in this
+annual report, during the reporting period, the Bank has complied with all the provisions of the Code
+and has substantially complied with most of the recommended best practices set out in the Code.
+Senior Management
+(Executive committee)
+Audit Department
+US Risk and
+Management Committee
+Corporate Governance
+Overview of Corporate Governance
+The Bank takes excellent corporate governance as an important objective. It has constantly
+pursued the best practice in corporate governance and integrated the Party's leadership with
+improvement of corporate governance. Adhering to the rules and regulations governing capital
+markets and relevant industries, the Bank has made constant efforts to improve its corporate
+governance framework, which comprises the shareholders' meeting, the Board of Directors, the
+Board of Supervisors and the Senior Management. This framework operates smoothly owing
+to a clear division of duties. All special committees of the Board of Directors and the Board of
+Supervisors have performed their duties and functioned effectively, thereby enhancing the Bank's
+corporate governance capabilities.
+The Bank has been working on improving the system of its corporate governance regimes. It has
+continuously followed up and implemented regulatory requirements on capital market, whichever
+is stricter, and has comprehensively and systematically reviewed the Articles of Associations and
+the rules of procedure of each special committee. Upon review by the Board of Directors and the
+Shareholders' Meeting, some terms relating to the authorisation to the Board of Directors granted
+by the Shareholders' Meeting and the authorisation to the President granted by the Board of
+Directors have been updated. The Bank has improved information disclosure rules and enhanced
+the initiative and timeliness of information disclosure.
+15/17
+The Bank makes great efforts to promote Board diversity. It has formulated the Bank of China
+Limited Board Diversity Policy, which lays out the stance of the Bank on the diversity of
+the members of the Board of Directors and the approaches it adopts to realise such diversity
+on an on-going basis. All appointments are made on merit, in the context of the skills and
+experience the Board of Directors as a whole requires, and taking into full consideration and
+from various perspectives the object and requirements for diversity, including but not limited
+to regulatory requirements, gender, age, cultural and educational background, geographical
+location, professional experience, skills, knowledge, and length of service of directors, etc. The
+Bank applies the aforementioned diversity policy and requirements to the director selection and
+engagement process.
+116
+In 2018, the Bank's corporate governance performance continued to be recognised by the capital
+markets and the public. The Bank was granted the 13th “Golden Prize of Round Table" for
+Special Contribution to Board Governance of Chinese Listed Companies.
+Corporate Governance Framework
+The Bank's corporate governance framework is shown below:
+Board Secretariat
+Board of Directors
+Shareholders'
+Meeting
+Board of Supervisors
+Board of Supervisors Office
+Strategic Development
+Committee
+Audit Committee
+Risk Policy Committee
+Personnel and
+Remuneration Committee
+Connected Transactions
+Control Committee
+Shareholders' Right to Propose Resolutions at Shareholders' Meetings
+According to the Articles of Association, any shareholder who holds, individually or in
+aggregate, 3% or more voting shares of the Bank shall have the right to propose a resolution in
+a shareholders' meeting. Any shareholder who holds, individually or in aggregate, 3% or more
+voting shares of the Bank shall have the right to propose and submit in writing to the Board of
+Directors interim proposals 10 days prior to the convening of a shareholders' meeting. When the
+Board of Directors decides not to include such proposals on the meeting agenda, it shall explain
+and clarify the reasons at the shareholders' meeting. When the proposing shareholders dissent
+with the Board of Directors' decision to exclude such proposals, they may request to call for
+an extraordinary shareholders' meeting by themselves based on the procedures stipulated in the
+Articles of Association.
+Shareholders' Right to Present Enquiries
+According to the Articles of Association, any shareholder who holds severally or jointly with
+others 5% or more voting shares of the Bank shall have the right to present enquiries to the
+shareholders' meeting. The Board of Directors, the Board of Supervisors, or other relevant senior
+management members shall attend the shareholders' meeting, accept enquiries, and answer or
+explain accordingly.
+Other countries
+66-75
+13
+and regions
+Executive
+female
+12
+over
+Director
+11
+56-65
+10
+9
+8
+Non-executive
+7
+Directo
+Chinese
+6
+14
+4
+Number of Directors
+For detailed background and an explanation of recent changes to the Board membership, please
+refer to the section “Directors, Supervisors and Senior Management Members”.
+Please refer to the Articles of Association for details of the rights pertaining to shareholders. If
+shareholders need to contact the Board of Directors regarding the aforementioned items or for
+other enquiries to the Board of Directors, please refer to the section "Reference for Shareholders
+Investor Enquiry" for contact details.
+Shareholders' Meeting
+Functions and Powers of Shareholders' Meeting
+The shareholders' meeting is the body of authority of the Bank. The shareholders' meeting is
+responsible for making decisions on the important issues of the Bank, including considering and
+approving the Bank's profit distribution plan, annual financial budget and financial statements,
+changes in the Bank's registered capital, adopting resolutions on matters such as the issue
+of bonds and other securities, merger and division, amending the Articles of Association of
+the Bank, electing directors, electing shareholders' representative supervisors and external
+supervisors and deciding the remunerations of directors and supervisors.
+119
+Convening of Shareholders' Meeting
+On 28 June 2018, the Bank held its 2017 Annual General Meeting in Beijing and Hong Kong
+on-site and connected by way of video conference. A-Share Holders could also cast votes online.
+This meeting considered and approved seventeen proposals including the 2017 work report of the
+Board of Directors, the 2017 work report of the Board of Supervisors, the 2017 annual financial
+report, the 2017 profit distribution plan, the 2018 annual budget for fixed assets investment,
+the appointment of Ernst & Young Hua Ming LLP as the Bank's external auditor for 2018,
+the election of Mr. ZHANG Qingsong to be appointed as Executive Director of the Bank, the
+election of Mr. LI Jucai to be re-appointed as Non-executive Director of the Bank, the election of
+Mr. CHEN Yuhua to be re-appointed as External Supervisor of the Bank, the 2016 remuneration
+distribution plan for the Chairman of the Board of Directors and Executive Directors, the 2016
+remuneration distribution plan for the Chairman of the Board of Supervisors and Shareholder
+Supervisors, the capital management plan of Bank of China for 2017-2020, adjusting the
+authorisation of outbound donation to the Board of Directors by Shareholders' Meeting, the
+issuance of bonds, the issuance of qualified write-down tier 2 capital instruments, the issuance
+of the write-down undated capital bonds, and the election of Mr. LIAO Qiang to be appointed
+as Non-executive Director of Bank of China Limited. The meeting also heard the 2017 report on
+the connected transactions, the 2017 duty report of independent directors and the 2017 report on
+the implementation on the Scheme on the Authorisation to the Board of Directors Granted by
+the Shareholders' Meeting of Bank of China. The proposals regarding the issuance of bonds, the
+issuance of the qualified write-down tier 2 capital instruments and the issuance of the write-down
+undated capital bonds were special resolutions.
+On 14 September 2018, the Bank held its 2018 First Extraordinary General Meeting in Beijing.
+A-Share Holders could also cast votes online. The meeting considered and approved two
+proposals, namely, the election of Mr. LIU Liange to be appointed as Executive Director of the
+Bank and the election of Mr. JIANG Guohua to be appointed as Independent Non-executive
+Director of the Bank.
+The aforementioned meetings were convened and held in strict compliance with the relevant laws
+and regulations as well as the listing rules of the Chinese mainland and Hong Kong. The Bank's
+directors, supervisors and senior management members attended the meetings and communicated
+with shareholders on issues of their concern.
+The Bank issued announcements on the resolutions and legal opinions of the aforementioned
+shareholders' meetings on 28 June 2018 and 14 September 2018 respectively, pursuant to
+regulatory requirements. Please refer to the websites of SSE, HKEX and the Bank.
+Implementation of the Resolutions Passed at the Shareholders' Meeting by the Board of
+Directors
+During the reporting period, the Board of Directors has fully implemented the resolutions passed
+at the shareholders' meetings and the scheme on the authorisation to the Board of Directors
+granted by the shareholders' meeting, and earnestly carried out the proposals regarding the 2017
+profit distribution plan, the 2018 annual budget for fixed assets investment, the issuance of bonds,
+the appointments of directors and 2018 external auditor and so on.
+120
+Board of Directors
+Functions and Powers of the Board of Directors
+The Board of Directors, which is responsible to the shareholders' meeting, is the Bank's decision-
+making body. The Board of Directors exercises the following functions and powers as specified
+by the Bank's Articles of Association: convening shareholders' meetings and implementing
+the resolutions of shareholders' meetings; deciding on the Bank's strategic policies, business
+plans and material investment plans (except for those material investment plans that are subject
+to shareholders' meeting approval as specified in the Articles of Association); formulating the
+annual financial budgets, final accounts and plans for profit distribution and loss making-up of
+the Bank; appointing or dismissing members of special committees and the Senior Management
+of the Bank; reviewing and deciding on the establishment of the Bank's basic administrative
+system, internal management framework and important sub-entities; developing and reviewing
+the corporate governance policies of the Bank; taking charge of performance evaluation and
+matters of material reward and punishment for senior management members, and hearing the
+reports of the Senior Management and examining their work, among others. The Board of
+Directors continuously reviews and updates the Articles of Association and the Bank's corporate
+governance policies and systems in accordance with the applicable laws and regulations, relevant
+regulatory requirements and listing rules, and ensures compliance with such policies and systems.
+Composition of the Board of Directors
+The Board of Directors has set up the Strategic Development Committee, Audit Committee, Risk
+Policy Committee, Personnel and Remuneration Committee and Connected Transactions Control
+Committee, as well as the US Risk and Management Committee established under the Risk Policy
+Committee, to assist the Board of Directors in performing its functions under the authorisation of
+the Board of Directors.
+The Board of Directors of the Bank is rationally structured and diversified. Currently, the Board
+of Directors comprises fourteen members. Besides the Chairman, there are three executive
+directors, five non-executive directors and five independent directors. The proportion of
+independent directors reaches one-third of the total number of directors. The Bank's directors
+are elected at the shareholders' meeting, with a term of office of three years starting from
+the date when the Bank receives approval of the appointment from CBIRC. A director may
+serve consecutive terms by re-election and re-appointment unless otherwise specified by laws,
+regulations, supervisory requirements and the Articles of Association of the Bank. The positions
+of Chairman and President of the Bank are assumed by two persons.
+121
+Board Composition
+9/9
+7/7
+16/17
+2/3
+0/0
+00
+0/0
+IE
+1/1
+Notes:
+1
+Please refer to the section "Directors, Supervisors and Senior Management Members
+Supervisors and Senior Management Members" for changes in directors.
+_
+Changes in Directors,
+2
+Directors who did not attend the meetings of the Board of Directors and its special committees in person have
+authorised other directors to attend and vote at the meetings as their proxy.
+124
+Training and Expertise Enhancement of Directors
+In 2018, the Board of Directors paid significant attention to enhancing directors' expertise, with a
+special focus on arranging relevant training. All directors of the Bank fully observed Rule A.6.5
+of the Code as well as PRC regulatory requirements, actively participating in specialised training
+including sessions on the international economic situation, IT development status and planning,
+the application and outlook of AI in Chinese financial institutions, and smart banking, among
+others. The Bank also gave special presentations and training to the directors newly appointed
+in 2018 regarding its business development, directors' responsibilities and internal control
+assessment. The Bank's directors also took it upon themselves to enhance their professional
+skills in various ways, including writing and publishing professional articles, attending
+forums and seminars, meeting with domestic and overseas regulators and conducting on-site
+research exercises at the Bank's domestic and overseas branches as well as at other advanced
+international banks.
+Independence and Duty Performance of Independent Directors
+There are currently five independent directors on the Board of Directors. This reaches one-third
+of the total number of directors and is in compliance with the quorum requirement specified in the
+Articles of Association and relevant regulatory requirements. For the professional backgrounds
+and other details of the independent directors, please refer to the section "Directors, Supervisors
+and Senior Management Members". Independent directors individually serve as the Chairman
+of the Audit Committee, Risk Policy Committee, Personnel and Remuneration Committee and
+Connected Transactions Control Committee. As stipulated in the relevant domestic regulatory
+requirements and Rule 3.13 of the Hong Kong Listing Rules, the Bank has received the annual
+confirmation in writing from each independent director with regard to their independence. Based
+on these confirmations and relevant information in possession of the Board of Directors, the Bank
+confirms their independent status.
+In 2018, the Bank's independent directors attended meetings of the Board of Directors, reviewed
+proposals, participated in discussions and offered their professional opinions independently,
+objectively and diligently, in accordance with the Articles of Association, the Procedural Rules
+for Board of Directors of Bank of China Limited and the Work Rules of Independent Directors of
+Bank of China Limited. Please refer to the section “Directors' Attendance of the Shareholders'
+Meeting, Meetings of the Board of Directors and Special Committees" for the attendance of
+independent directors at meetings.
+In 2018, independent directors put forward constructive recommendations on capital
+replenishment, strategic planning, group risk management, anti-money laundering and the
+development of overseas institutions, among others. These recommendations were adopted and
+diligently implemented by the Bank.
+In 2018, the independent directors did not raise any objection to the resolutions of the Board of
+Directors or its special committees.
+125
+2/2
+8/9
+8/10
+5/5
+3/3
+9/9
+9/9
+0/0
+2/2
+2/2
+17/17
+17/17
+17/17
+12/17
+|
+9/9
++ $ । । । ।ངྦྲྀ༅ །
+22222
+1/1
+22222
+10/10
+2/3
+2/2
+9/10
+10/10
+| | | | བྷཱུ
+6/6
+4/4
+6/6
+8/9
+Senior Management
+Composition of the Board of Supervisors
+In 2018, the Board of Supervisors and its special committees earnestly performed their supervisory
+responsibilities and reviewed relevant proposals through detailed discussion. The Board of
+Supervisors held four meetings and made relevant resolutions. The Duty Performance and Due
+Diligence Supervision Committee held four meetings, while the Finance and Internal Control
+Supervision Committee held four meetings. For the performance of, and supervisory opinions
+from the Board of Supervisors during the reporting period, please refer to the section "Report of
+the Board of Supervisors".
+Duty Performance of the Board of Supervisors
+The Board of Supervisors has set up the Duty Performance and Due Diligence Supervision
+Committee and the Finance and Internal Control Supervision Committee to assist in performing
+its authorised duties. The special committees mentioned above are made up of supervisors and
+responsible to the Board of Supervisors. Each committee shall have at least three members.
+The Board of Supervisors currently comprises six members. There are two shareholder
+supervisors (including the Chairman of the Board of Supervisors), three employee supervisors
+and one external supervisor. According to the Articles of Association, a supervisor has a term of
+office of three years and may serve consecutive terms by re-election and re-appointment unless
+otherwise specified by laws, regulations, supervisory requirements and the Articles of Association
+of the Bank. Shareholder supervisors and external supervisors are elected or replaced by the
+shareholders' meeting.
+132
+The Connected Transactions Control Committee comprises five members, including Executive
+Director Mr. WU Fulin, Independent Directors Mr. LU Zhengfei, Mr. LEUNG Cheuk Yan,
+Ms. Angela CHAO and Mr. JIANG Guohua. Independent Director Mr. LEUNG Cheuk Yan
+serves as the Chairman of the committee.
+Functions and Powers of the Board of Supervisors
+Board of Supervisors
+The Connected Transactions Control Committee held three meetings in 2018, at which it mainly
+reviewed and approved the report on connected transactions in 2017 and the report on the
+connected party list, among others. It also reviewed the statement of connected transactions of
+the Bank in 2017, among others. During the reporting period, the Connected Transactions Control
+Committee paid constant attention to the development of the Bank's connected party management
+and connected transaction monitoring system. Committee members put forward constructive
+suggestions regarding connected party management and connected transaction monitoring system
+development.
+The committee is mainly responsible for administering the connected transactions of the Bank
+in accordance with relevant laws, regulations and normative documents, and formulating
+administrative regulations with regard to connected transactions; confirming the Bank's connected
+parties according to laws, regulations and normative documents, and reporting the relevant
+confirmation to the Board of Directors and the Board of Supervisors; defining the connected
+transactions of the Bank in accordance with laws, regulations and normative documents;
+examining the connected transactions of the Bank pursuant to relevant laws, regulations and
+normative documents, as well as to the business principles of justice and fairness; and examining
+information disclosure matters related to significant connected transactions of the Bank.
+Connected Transactions Control Committee
+131
+Functions and Powers of the Senior Management
+The Board of Supervisors is the Bank's supervisory organ and is responsible to the shareholders'
+meeting. As stipulated in the Company Law and the Articles of Association of the Bank, the
+Board of Supervisors is responsible for overseeing the Board of Directors so as to ensure the
+establishment of a stable operation principle, value criterion and an appropriate development
+strategy. It supervises the duty performance and due diligence of the Board of Directors, the
+Senior Management and its members as well as the Bank's financial activities, internal control
+and, risk management.
+The Senior Management is the executive organ of the Bank. It is headed by the President,
+with executive vice presidents and other senior management members assisting the President's
+work. The main functions and powers of the President include presiding over the Bank's daily
+administrative, business and financial management; organising the implementation of the
+business plan and investment schemes; drafting basic management regulations and specific
+rules; nominating candidates for other senior management positions; and reviewing employees'
+remuneration, benefit, reward and punishment measures.
+At the forthcoming 2018 Annual General Meeting, the Board of Directors will tender a resolution
+for review and approval regarding the proposal on engaging Ernst & Young Hua Ming LLP as
+the Bank's domestic auditor and internal control auditor for 2019, providing audit services on
+its financial statements and internal control pursuant to CAS; and engaging Ernst & Young as
+the Bank's international auditor for 2019, providing financial statements audit services pursuant
+to IFRS.
+133
+135
+In 2018, the Bank prepared and disclosed its regular and provisional reports in strict adherence
+to the principles of truthfulness, accuracy, completeness, timeliness and fairness. It continuously
+enhanced the pertinence, effectiveness and transparency of information disclosure in order to
+guarantee investors' access to relevant information and ensure that the investors in the Chinese
+mainland and Hong Kong are provided with equal opportunity to access relevant information.
+It carefully organised compliance analysis and disclosure of material events, as well as actively
+exploring voluntary information disclosure to provide more comprehensive and effective
+information to investors.
+In 2018, the Bank continued to expand the depth and breadth of its capital market tracking and
+analysis, further enriched the forms of market communications, improved market communication
+levels and enhanced the initiative and effectiveness of its investor relations activities. The
+Bank successfully arranged its 2017 annual results presentation, 2018 first quarterly results
+teleconference and 2018 interim results presentation. Through holding road shows, participating
+in influential investment forums, meeting visitors (including analysts and investors), as well
+as other measures, the Bank proactively promoted its development strategies and operating
+performance, timely responded to market concerns, and earnestly listened to market feedback.
+During the reporting period, the Bank held approximately 200 meetings for various investors
+and received positive feedback from the market. The Bank continued to optimise electronic
+communication channels, continuously updated the investor relations webpage on its official
+website and provided timely and comprehensive responses to enquiries from investors via
+the investor hotline, email, and e-interaction online platform run by SSE and maintained
+convenient communication with minority shareholders, thus effectively protecting the rights of
+shareholders. Through multi-dimensional and high-quality market communications, the Bank
+actively introduced its strategic promotion and investment value, which played an important
+role in solidifying market and investor confidence. In addition, the Bank further strengthened
+communications with its external credit rating agencies. In 2018, Fitch Ratings upgraded the
+Bank's Viability Rating to “bb+". Moody's Investors Service upgraded the Bank's viability rating
+Baseline Credit Assessment to “baal”, and raised the Bank's preference shares and subordinated
+debt ratings accordingly. At present, the Bank's external ratings are at the highest level among
+comparable domestic peers, which has the positive effect of lowering financing costs and
+enhancing the Bank's market image.
+Investor Relations and Information Disclosure
+According to the Articles of Association of the Bank, any shareholder who holds by himself
+or jointly with others 3% or more of the total number of voting shares of the Bank may, by
+submitting a written proposal to the shareholders' meeting, recommend candidates for directors,
+provided the number of candidates nominated shall be in accordance with the provisions of the
+Articles of Association (between 5 and 17) and not exceed the number to be elected. List of
+candidates for directors may be recommended by the Board of Directors within the number of
+candidates stipulated in the Articles of Association, with reference to the diversity policy of the
+Bank and according to the number to be elected. The Personnel and Remuneration Committee
+shall preliminarily review the qualifications and conditions of candidates for directors, and refer
+those qualified candidates to the Board of Directors for further examination. After the Board of
+Directors' approval by resolutions, the candidates shall be referred to the shareholders' meeting in
+written proposals. When directors need to be added or filled temporarily, the Board of Directors
+shall raise the proposal and make recommendation to the shareholders' meeting to elect or
+replace. During the reporting period, the Bank appointed directors in strict compliance with the
+Articles of Association.
+Ernst & Young Hua Ming LLP and Ernst & Young have provided audit services to the Bank for
+six consecutive years. Mr. YANG Bo and Mr. FENG Suoteng are the certified public accountants
+who signed the auditor's report on the Bank's financial statements prepared in accordance with
+CAS for the year ended 31 December 2018.
+134
+Ernst & Young and its member firms were not engaged in other significant non-auditing services
+with the Bank in 2018. The Bank paid RMB36.0214 million for non-auditing services to Ernst &
+Young and its member firms in the year.
+Fees paid to Ernst & Young and its member firms for financial statements audit of the Group,
+including those of the Bank's overseas subsidiaries and branches, were RMB232 million for the
+year ended 31 December 2018, of which the fees for internal control audit paid to Ernst & Young
+Hua Ming LLP totalled RMB14 million.
+Upon approval by the 2017 Annual General Meeting, Ernst & Young Hua Ming LLP was
+reappointed as the Bank's domestic auditor and internal control auditor for 2018 and Ernst &
+Young was reappointed as the Bank's international auditor for 2018.
+Appointment of External Auditors
+Pursuant to domestic and overseas securities regulatory requirements, the Bank formulated and
+implemented the Management Measures on Securities Transactions by Directors, Supervisors
+and Senior Management Personnel of Bank of China Limited (the "Management Rules") to
+govern securities transactions by directors, supervisors and senior management members of the
+Bank. The terms of the Management Rules are more stringent than the mandatory standards set
+out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in
+Appendix 10 to the Hong Kong Listing Rules (the "Model Code”). All directors and supervisors
+confirmed that they have complied with the standards set out in both the Management Rules and
+the Model Code throughout the reporting period.
+Securities Transactions by Directors and Supervisors
+During the reporting period, the Senior Management (Executive committee) established the
+Innovation and Product Management Committee, which is responsible for reviewing innovation
+and product management policies and rules and studying annual product innovation plans. The
+Senior Management currently presides over the Asset and Liability Management Committee, the
+Risk Management and Internal Control Committee (which governs the Anti-money Laundering
+Committee, the Asset Disposal Committee and the Credit Risk Management and Decision-making
+Committee), the Procurement Review Committee, the IT Management Committee, the Securities
+Investment and Management Committee, the Internet Finance Committee and the Innovation and
+Product Management Committee. During the reporting period, all of the committees diligently
+fulfilled their duties and responsibilities as per the powers specified in their committee charters
+and the rights delegated by the Executive Committee, and pushed forward the sound development
+of the Bank's various operations.
+During the reporting period, the Senior Management of the Bank held 29 regular meetings,
+at which it discussed and decided upon a series of significant matters, including the Group's
+business development, performance management, risk management, IT system development,
+globalised development and integrated operation. It also convened 193 special meetings to
+arrange for matters relating to corporate banking, personal banking, financial markets, product
+innovation, inclusive finance, and data governance.
+Duty Performance of the Senior Management
+The Personnel and Remuneration Committee held seven on-site meetings and three meetings by
+written resolutions in 2018. At these meetings, the committee mainly approved proposals on the
+performance evaluation results and remuneration distribution plan for the Chairman, executive
+directors and other senior management members for 2017, and the performance evaluation
+measures and the 2018 implementation plan for performance evaluation of the Chairman, the
+President, and other senior management members, the proposal on appointing Mr. LIU Liange
+as President of the Bank, the proposals on appointing Mr. LIN Jingzhen and Mr. WU Fulin as
+Executive Vice Presidents of the Bank, the proposal on appointing Mr. LIU Qiuwan as Chief
+Information Officer of the Bank, the proposal on appointing Mr. SUN Yu as Chief Overseas
+Business Officer of the Bank, the proposals on nominating Mr. LIU Liange, Mr. ZHANG
+Qingsong, Mr. WU Fulin, and Mr. LIN Jingzhen as candidates for Executive Directors of the
+Bank, the proposal on nominating Mr. LIU Liange as Vice Chairman of the Bank, the proposal on
+nominating Mr. LI Jucai to be re-appointed as Non-executive Director of the Bank, the proposal
+on nominating Mr. JIANG Guohua as candidate for Independent Non-executive Director of
+the Bank, and the proposal on appointing Mr. MEI Feiqi as Secretary to the Board of Directors
+and Company Secretary of the Bank. The committee put forward important opinions and
+recommendations on further improving the Bank's performance evaluation management in line
+with regulatory requirements.
+In 2018, the Senior Management of the Bank managed the Bank's operations in accordance with
+the powers bestowed upon them by the Articles of Association and the authorisations of the Board
+of Directors. In line with the annual performance objectives approved by the Board of Directors
+and by adhering to the strategic goal of "persistently enabling advancement through technology,
+driving development through innovation, delivering performance through transformation and
+enhancing strength through reform", the Senior Management actively seized development
+opportunities, strived to eliminate bottlenecks, firmly held the bottom line for risk management and
+made solid work progress on all fronts, thus continuously enhancing the Bank's operating results.
+The committee is mainly responsible for assisting the Board of Directors in reviewing the
+Bank's human resources and remuneration strategies and overseeing their implementation;
+reviewing the structure, size and composition of the Board of Directors on an annual basis, and
+making suggestions to the Board regarding the scale and composition of the Board of Directors;
+studying and reviewing the standards and procedures for selecting, nominating and appointing
+directors, members of the Board committees and Senior Management, and making relevant
+recommendations to the Board of Directors; identifying individuals suitably qualified to become
+directors and making recommendations to the Board of Directors on the selection of individuals
+nominated for directorships; performing preliminary review of the candidates for Senior
+Management positions and the chairmanship of Board committees, selecting and nominating
+candidates for different Board committees, and reporting to the Board of Directors for approval;
+reviewing and monitoring the remuneration and incentive policies of the Bank; drafting the
+remuneration plan of directors and senior management members, and making recommendations
+to the Board of Directors; and formulating the performance appraisal standards for the Senior
+Management members of the Bank, and evaluating their performances.
+The committee is mainly responsible for reviewing financial reports and other significant
+accounting policies and regulations formulated by the Senior Management; reviewing the
+external auditors' audit opinion on financial reporting, annual audit plan and recommendations
+for management; approving the annual internal audit plan and budget; appraising the duty
+performance, work quality and effectiveness of the external auditors and internal audit and
+monitoring their independence; recommending the engagement, reappointment, replacement
+and audit fee of the external auditors; recommending the appointment and dismissal and
+appraising the performance of the Chief Audit Officer; overseeing the Bank's internal control
+function, reviewing material deficiencies in internal control design and execution by the Senior
+Management and investigating fraud cases; reviewing the employee reporting system and urging
+the Bank to conduct fair investigations and take appropriate measures regarding matters reported
+by the employees.
+The Audit Committee comprises seven members, including Non-executive Directors Mr. ZHAO
+Jie and Mr. LI Jucai and Independent Directors Mr. LU Zhengfei, Mr. LEUNG Cheuk Yan,
+Mr. WANG Changyun, Ms. Angela CHAO and Mr. Jiang Guohua. Independent Director
+Mr. LU Zhengfei serves as the Chairman of the committee.
+Audit Committee
+The Strategic Development Committee held six on-site meetings and three meetings via written
+resolutions in 2018. At these meetings, it mainly approved the proposal on Development Strategy
+of Bank of China, the profit distribution plan for 2017, the business plan and financial budget
+for 2018, the dividend distribution plan for preference shares, the report on corporate social
+responsibility for 2017, the issuance of the qualified write-down tier 2 capital instruments,
+the issuance of write-down undated capital bonds, the issuance of preference shares, and the
+establishment of asset and wealth management subsidiary and so on. In response to changes
+in international and domestic economic and financial situations, the Strategic Development
+Committee stepped up its analysis of the operating environment, paid constant attention to
+opportunities and challenges, and put forward many important comments and recommendations
+regarding the Bank's strategy implementation and transformational development thus providing
+strong support to the scientific decision-making of the Board of Directors.
+of authorisation; designing and formulating key investment and financing plans and merger
+and acquisition plans of the Bank; and reviewing the substantial internal reorganisation and
+adjustment plans of the Bank, and advising the Board accordingly; reviewing the Bank's green
+credit strategy and its implementation of social responsibilities, and making relevant suggestions
+to the Board; establishing the Bank's strategic development plan and basic management regimes
+with regard to its inclusive finance business, reviewing the annual business plan and assessment
+measures for its inclusive finance business, and supervising the Bank's implementation of
+inclusive finance strategies, policies and regulations.
+126
+The committee is mainly responsible for reviewing the strategic development plans presented
+by the Senior Management, assessing the factors that may affect the strategies of the Bank and
+their implementation, and advising the Board with regard to strategy adjustments; reviewing
+the annual budget, strategic capital allocation (policies on capital structure, capital adequacy
+ratio and risk-reward trade-off), the objectives of asset-liability management, IT development
+and other special strategic development plans of the Bank, and advising the Board accordingly;
+coordinating strategies on the overall development of various financial businesses and the
+development of domestic and overseas institutions, and deciding on the setup, cancellation and
+increase or decrease of capital of the Bank's domestic and overseas institutions within its scope
+The Audit Committee held five on-site meetings and one meeting via written resolutions in 2018.
+It mainly reviewed and approved the 2018 work plan and financial budget for internal audit,
+reviewed the Bank's 2017 financial report, 2018 interim financial report and financial reports
+for the first and third quarters of 2018, the internal control work report for 2017 and the first
+half of 2018, the 2017 internal control assessment report, the audit results on internal control
+The Strategic Development Committee comprises seven members, including Chairman Mr. CHEN
+Siqing, Vice Chairman and President Mr. LIU Liange, Non-executive Directors Mr. LI Jucai,
+Ms. XIAO Lihong, Ms. WANG Xiaoya and Mr. LIAO Qiang and Independent Director Mr. WANG
+Changyun. Chairman Mr. CHEN Siqing serves as the Chairman of the committee.
+Special Committees of the Board of Directors
+The directors acknowledge that they are responsible for preparing financial statements of the
+Bank that truly represent the operating results of the Bank for each financial year. To the best
+knowledge of the directors, there was no material event or condition during the reporting period
+that might have a material adverse effect on the continuing operation of the Bank.
+Responsibility Statement of Directors on Financial Reports
+The guarantee business is one of the Bank's ordinary business activities approved by PBOC and
+CBIRC and does not fall within the scope of guarantees as defined in the Circular on Regulating
+Guarantee Businesses of Listed Companies. The Bank has formulated specific management
+measures, operational processes and approval procedures in light of the risks of the guarantee
+business and carried out this business accordingly. The Bank's guarantee business principally
+comprises letters of guarantee. As at 31 December 2018, the outstanding amount of letters of
+guarantee issued by the Bank was RMB1,070.825 billion.
+Specific Explanation and Independent Opinions of Independent Directors on the Guarantee
+Business of the Bank
+130
+Pursuant to the provisions and requirements set forth in the circular (ZhengJianFa [2003]
+No. 56) issued by CSRC, and according to the principles of justice, fairness and objectivity, the
+Independent Directors of the Bank, Mr. LU Zhengfei, Mr. LEUNG Cheuk Yan, Mr. WANG
+Changyun, Ms. Angela CHAO and Mr. JIANG Guohua have provided the following information
+regarding the Bank's guarantee business:
+Strategic Development Committee
+127
+The following statement, which sets out the responsibilities of the directors regarding financial
+statements, should be read in conjunction with, but understood separately from, the auditor's
+statement of their responsibilities as set out in the Independent Auditor's Report contained in this
+annual report.
+The US Risk and Management Committee put forward important opinions and recommendations
+regarding strengthening the prevention and control of risks and compliance based on US regulatory
+dynamics, market changes and the business development strategies of the Bank's US operations.
+and management proposal, and the proposal on appointment of external auditors and audit fees
+for 2018 and 2019. In addition, it heard the report on the Senior Management response to Ernst
+& Young's management proposal for 2017, reports on internal audit in 2017 and the first half
+of 2018, the report on three-year plan for IT application in audit and implementation progress
+(three times), the 2017 report on the overseas supervision information, the report on progress
+in internal control audit of Ernst & Young in 2017, updates on compliance with the principle
+of independence and the report on 2018 audit plan and self-assessment report, the report on
+asset quality in the first quarter of 2018, and the report on prevention and control of external
+infringement cases in 2017.
+The Personnel and Remuneration Committee comprises six members, including Non-executive
+Directors Ms. WANG Xiaoya and Mr. LIAO Qiang, Independent Directors Mr. LU Zhengfei,
+Mr. LEUNG Cheuk Yan, Mr. WANG Changyun and Mr. JIANG Guohua. Independent Director
+Mr. LU Zhengfei serves as the Chairman of the committee.
+In 2018, the US Risk and Management Committee convened four on-site meetings and six
+meetings via written resolutions. It regularly heard reports regarding the risk management and
+operations of all the Bank's institutions in the US, the latest US regulatory trends and dynamics,
+among others. In addition, the committee reviewed and approved the relevant framework
+documents and important policies and regulations of the Bank's institutions in the US and the
+New York Branch.
+The US Risk and Management Committee is established under the Risk Policy Committee, and it
+oversees and manages all the risks incurred by the Bank's institutions in the US, and performs the
+duties of the board of directors of the Bank's New York Branch and its special committees.
+policies and overall overseas and domestic regulations. The committee expressed important
+opinions and recommendations regarding the improvement of the Bank's risk governance
+mechanism and the effective prevention and control of risks, including credit risk, market risk,
+operational risk, legal and compliance risk, liquidity risk and so on.
+129
+In addition, the committee paid close attention to critical risk issues, in response to changes in
+overseas and domestic economic and financial conditions, adjustments of the government's macro
+The Risk Policy Committee held five on-site meetings and four meetings via written resolutions
+in 2018, at which it mainly reviewed and approved the capital adequacy ratio report, internal
+capital adequacy assessment report, market risk limits, and country risk ratings and limits. The
+committee also regularly reviewed the Group risk reports as well as the progress report on the
+compliance work plan for effective risk data aggregation and risk reporting and so on.
+The US Risk and Management Committee currently comprises four members, all of whom
+are members of the Risk Policy Committee, including Non-executive Directors Mr. ZHAO Jie
+and Ms. XIAO Lihong, Independent Directors Mr. WANG Changyun and Ms. Angela CHAO.
+Independent Director Ms. Angela CHAO serves as the Chairman of the US Risk and Management
+Committee.
+The Risk Policy Committee of the Bank comprises five members, including Executive Director
+Mr. LIN Jingzhen, Non-executive Directors Mr. Zhao Jie and Ms. Xiao Lihong, Independent
+Directors Mr. WANG Changyun and Ms. Angela CHAO. Independent Director Mr. WANG
+Changyun serves as the Chairman of the committee.
+Moreover, in response to changes in domestic and overseas economic trends, the Audit
+Committee paid close attention to developments in the Bank's progress towards improving
+business performance and cost-effectiveness control. Through joint meetings, the committee
+heard the Group risk report and the remediation plan for regulatory statement and CBRIC's
+examination on effectiveness of risk management and internal control, among others, thus
+assisting the Board of Directors in performing its responsibilities and duties. It also put forward
+many important opinions and suggestions regarding the improvement of the corporate governance
+mechanism, the enhancement of internal audit independence, the advancement of IT application
+in audit, the upgrading of credit asset quality and the improvement of internal control measures.
+According to the Procedure Rules on the Preparation of Annual Report of the Board Audit
+Committee of Bank of China Limited, prior to the start of audit field work by the auditors, the
+Audit Committee confirmed with the auditors the details of the 2018 audit plan, including areas
+of focus for auditing the 2018 Annual Report, risk assessment and identification methods, the
+application of accounting standards, tests of internal control, compliance and fraud related
+procedures, and the allocation of human resources. In particular, the committee reminded the
+auditors to report any difference of judgment between the auditors and the Senior Management
+during the audit, as well as the process and results of reconciling such differences.
+The committee is mainly responsible for performing functions and exercising powers in relation
+to comprehensive risk management; reviewing the Bank's risk management strategies, substantial
+risk management policies, and risk management procedures and regimes, and advising the Board
+accordingly; discussing the risk management procedures and regimes with the management and
+making suggestions on how to improve them in order to ensure that the risk management policies,
+procedures and regimes are uniformly adhered to throughout the Bank; reviewing the Group's
+risk data aggregation and risk reporting framework and ensuring that there is adequate resource
+support in place; examining the material risk activities of the Bank and judiciously exercising
+veto power regarding commitments that expose the Bank to credit and/or market risk exceeding
+the individual risk limits approved by the Risk Policy Committee or the Board of Directors or that
+lead to breaches of approved aggregate limits; supervising the implementation status of the Bank's
+risk management strategy, policy and procedure, and advising the Board accordingly; examining
+the Bank's risk management status and reviewing its risk management procedures and regimes;
+regularly evaluating and hearing reports on the implementation of risk management and internal
+control responsibilities by the Bank's management, functional departments and institutions, as well
+as risk data aggregation and risk reporting work, and proposing requirements for improvement;
+supervising the status of the Bank's compliance with laws and regulations; reviewing and
+examining relevant administrative systems related to legal compliance and making suggestions
+which are submitted to the Board for examination and approval, and hearing and examining the
+report on the implementation status of the legal compliance policy of the Bank; assessing the
+material investigation results of risk management matters and the management's response to
+such results (either voluntarily or as required by the Board of Directors); reviewing the Bank's
+consumer rights protection strategy, policy and objective according to the Bank's overall strategic
+development plan, and making relevant suggestions to the Board of Directors; supervising and
+assessing the Bank's consumer rights protection work, and regularly hearing reports on the Bank's
+consumer rights protection efforts; reviewing and approving the Bank's general policy on case
+prevention and control, and defining the management's functions, powers and authorities in
+relation to case prevention and control; putting forth overall requirements on case prevention and
+control, and reviewing related working reports; checking and effectively supervising the Bank's
+case prevention and control work, assessing the effectiveness of case prevention and control, and
+promoting the construction of its case prevention and control management system.
+The Audit Committee heard and reviewed reports from the Senior Management concerning
+the Bank's business performance and primary financial data. It also requested that the Senior
+Management submit the annual financial statements to the auditors in a timely manner, so
+as to ensure sufficient time for the annual audit. During the audit, the committee maintained
+independent communications with the auditors and arranged independent communications
+between the auditors and the independent directors. At its second meeting of 2019, the Audit
+Committee reviewed and approved the Bank's 2018 financial statements and submitted them to
+the Board of Directors for approval.
+Personnel and Remuneration Committee
+In accordance with the Policies of Selection, Rotation and Dismissal for External Auditors of
+Bank of China Limited, the external auditors made a summary audit report and submitted a report
+on their independence compliance to the committee. The Bank's Senior Management appraised
+the external auditors' work. Based on this appraisal, the Audit Committee conducted its own
+assessment on the auditors' performance, effectiveness and independence compliance in 2018. It
+discussed re-engagement matters, and decided to reappoint Ernst & Young Hua Ming LLP as the
+Bank's domestic auditor and internal control auditor for 2019, and to reappoint Ernst & Young
+as the Bank's international auditor for 2019. Such proposals have been submitted to the Board of
+Directors for approval.
+128
+Risk Policy Committee
+To the best knowledge of the Bank, as at 31 December 2018, none of the directors or supervisors
+of the Bank or their respective associates had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (within the
+meaning of Part XV of the SFO) as recorded in the register required to be kept by the Bank
+pursuant to Section 352 of the SFO or as otherwise notified to the Bank and the Hong Kong Stock
+Exchange pursuant to the Model Code as set out in Appendix 10 of the Hong Kong Listing Rules.
+Directors' and Supervisors' Interests in Shares, Underlying Shares and Debentures
+142
+During the reporting period, none of the Bank, its holding companies, or any of its subsidiaries
+or fellow subsidiaries was a party to any arrangement that would enable the Bank's directors and
+supervisors, or their respective spouses or children below the age of 18, to benefit by acquiring
+shares in, or debentures of, the Bank or any other body corporate.
+No transaction, arrangement or contract of significance, in relation to the Bank's business to
+which the Bank, its holding companies, or its subsidiaries or fellow subsidiaries was a party and
+in which a director or a supervisor or any entity connected with them was materially interested,
+directly or indirectly, subsisted during the reporting period.
+Directors' and Supervisors' Interests in Transactions, Arrangements and Contracts of
+Significance
+Directors' and Supervisors' Service Contracts
+Please refer to the section "Directors, Supervisors and Senior Management Members" for details
+of the remuneration of directors, supervisors and senior management members.
+The Bank has formulated a clear regulation on the remuneration of directors, supervisors
+and senior management members. The remuneration for Chairman of the Board of Directors,
+President, Chairman of the Board of Supervisors, executive directors, and executive vice
+presidents shall be paid in accordance with the rules on remuneration reform for central
+enterprises, which consists of basic annual remuneration, performance-based annual remuneration
+and incentive income linked to term appraisal. The remuneration for other senior management
+members and shareholder supervisors consists of basic annual remuneration and performance-
+based remuneration, with part of performance-based remuneration paid in a deferred manner.
+Independent directors as well as external supervisors and employee supervisors are remunerated
+by the Bank while non-executive directors are not remunerated by the Bank. The Bank
+remunerates directors, supervisors and senior management members who are employed by the
+Bank with salaries, bonuses, contribution by the employer to social insurance, enterprise annuity,
+supplementary medical insurance and housing provident fund, as well as other monetary income.
+Remuneration Policy of Directors, Supervisors and Senior Management Members
+None of the directors has interests in any business that competes or is likely to compete, either
+directly or indirectly, with the business of the Group.
+Directors' Interests in Competing Businesses of the Bank
+Directors' and Supervisors' Rights to Acquire Shares
+140
+Under the Hong Kong Listing Rules, transactions between the Bank and its connected persons
+(as defined under the Hong Kong Listing Rules) constitute connected transactions to the
+Bank. Such transactions are monitored and administered by the Bank in accordance with the
+Hong Kong Listing Rules. In 2018, the Bank has engaged in a number of connected transactions
+with its connected persons in the ordinary and usual course of its business. Such transactions
+are exempted from the reporting, annual review, announcement and independent shareholders'
+approval requirements according to the Hong Kong Listing Rules.
+Connected Transactions
+Please refer to the section "Financial Highlights” for the summary of the annual results, assets
+and liabilities of the Bank for the last five years.
+Financial Summary
+Please refer to Note V.20 to the Consolidated Financial Statements for details of the fixed assets
+of the Bank.
+Fixed Assets
+Distributable Reserves
+As at the latest practicable date prior to the issue of this annual report, the Bank had sufficient
+public float based on publicly available information, in compliance with the minimum
+requirement of the Hong Kong Listing Rules and the waiver granted by the Hong Kong Stock
+Exchange at the time of the Bank's listing.
+Share Capital
+Charitable and other donations made by the Group during the reporting period amounted to
+approximately RMB87.35 million.
+Donations
+The H-Share register of members of the Bank will be closed from Monday, 27 May to Friday,
+31 May 2019 (both days inclusive), for the purpose of determining the list of shareholders entitled to
+the proposed final dividends on ordinary shares. In order to qualify for the proposed final dividends,
+the H-Share Holders of the Bank who have not registered the relevant transfer documents are
+required to lodge them, together with the relevant share certificates, with the H-Share Registrar of
+the Bank, Computershare Hong Kong Investor Services Limited, at Rooms 1712–1716, 17th Floor,
+Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on Friday,
+24 May 2019. The ex-dividend date of the Bank's H Shares will be on Thursday, 23 May 2019.
+Closure of H-Share Register of Members
+Financial, Business and Family Relations among Directors
+141
+Directors of the Bank are not related to one another with respect to finance, business and family,
+or other material relations.
+For disclosures of the Bank in respect of business review under paragraph 28 of Appendix 16 to
+the Hong Kong Listing Rules, please refer to sections “Management Discussion and Analysis"
+and "Corporate Social Responsibilities”. The relevant disclosure constitutes part of the Report of
+the Board of Directors.
+Please refer to the section “Changes in Share Capital and Shareholdings of Shareholders" for the
+details of the Bank's substantial shareholder interests.
+The dividend distribution plans for preference shares of the Bank have been approved by the
+Board of Directors. In 2018, the Bank distributed dividends on domestic and offshore preference
+shares in strict compliance with the Articles of Association, the terms of issuance of preference
+shares and the Board of Directors' resolutions on dividend distribution.
+145
+In accordance with Chinese tax laws and regulations, the dividends and bonuses received by
+overseas resident individual shareholders from stocks issued by domestic non-foreign investment
+enterprises in Hong Kong are subject to the payment of individual income tax, which shall be
+withheld by the withholding agents. However, overseas resident individual shareholders of stocks
+issued by domestic non-foreign investment enterprises in Hong Kong are entitled to the relevant
+preferential tax treatment pursuant to the provisions in the tax agreements signed between the
+countries in which they are residents and China, or to the tax arrangements between the Chinese
+mainland and Hong Kong and Macao. Accordingly, the Bank generally withholds 10% of the
+dividends to be distributed to the individual H-Share Holders as individual income tax unless
+otherwise specified by the relevant tax laws, regulations and agreements.
+H-Share Holders
+In accordance with the Enterprise Income Tax Law of the People's Republic of China and the
+Implementation Rules of the Enterprise Income Tax Law of the People's Republic of China,
+dividend income obtained by non-resident enterprises shall be levied at a preferential enterprise
+income tax rate of 10%.
+In accordance with Article 83 of the Implementation Rules of Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises referred to in Article 26.2 of the Enterprise Income Tax
+Law of the People's Republic of China mean those investment proceeds obtained from direct
+investment of resident enterprises into other resident enterprises, excluding those investment
+proceeds obtained from publicly offered and tradable stocks of resident enterprises held for less
+than 12 months on a continuing basis.
+In accordance with the provisions of Article 26.2 of the Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises shall be tax-free.
+In accordance with the provisions of the Notice on Implementing Differentiated Individual Income
+Tax Policy for Stock Dividends and Bonuses of Listed Companies (Caishui [2012] No. 85) and the
+Notice on Differentiated Individual Income Tax Policy for Stock Dividends and Bonuses of Listed
+Companies (Caishui [2015] No. 101) issued jointly by MOF, State Administration of Taxation
+of PRC and CSRC, for shares of listed companies obtained by individuals from public offerings
+or the transfer market, where the holding period is less than one month (inclusive), the dividends
+and bonuses shall be counted as taxable income in the full amount; where the holding period is
+more than one month and less than one year (inclusive), 50% of the dividends and bonuses shall
+be counted as taxable income on a provisional basis; and where the holding period exceeds one
+year, the dividends and bonuses shall not be counted as taxable income on a provisional basis.
+The individual income tax rate of 20% shall be applicable for all incomes mentioned above. The
+individual income tax levied on dividends and bonuses obtained by equity investment funds from
+listed companies is also calculated in accordance with the aforementioned rules.
+A-Share Holders
+144
+Shareholders of the Bank are taxed in accordance with the following tax regulations and the
+amendments thereof from time to time. They shall enjoy possible tax relief according to the
+actual situation. Shareholders should seek professional advice from their tax and legal advisors.
+The following cited laws, regulations and stipulations are all relevant provisions issued before
+31 December 2018.
+Tax and Tax Relief
+For details, please refer to the related announcements on the websites of SSE, HKEX and the
+Bank and the Notes to the Consolidated Financial Statements.
+All proceeds raised from initial public offerings, issuance of subordinated bonds, the rights issue,
+issuances of tier 2 capital bonds, preference shares and undated capital bonds have been used to
+replenish the Bank's capital and increase the level of capital adequacy.
+Use of Raised Funds
+Business Review
+The Bank has not been engaged in any equity-linked agreement during the reporting period.
+Management Contracts
+No contract concerning the management or administration of the whole or any substantial part of
+the business of the Bank was entered into or existed during the reporting period.
+Share Appreciation Rights Plan and Share Option Scheme
+Please refer to Note V.34 to the Consolidated Financial Statements for details of the share
+appreciation rights plan and share option scheme of the Group.
+Purchase, Sale or Redemption of the Bank's Securities
+As at 31 December 2018, approximately 22.80 million shares of the Bank were held as treasury
+shares.
+Substantial Shareholder Interests
+Please refer to the Notes to the Consolidated Financial Statements for details of purchase, sale or
+redemption of the Bank's securities by the Bank and its subsidiaries.
+There are no compulsory provisions for pre-emptive rights requiring the Bank to offer new
+shares to existing shareholders in proportion to their existing shareholdings under the Articles
+of Association. The Articles of Association provide that the Bank may increase its capital by
+public offering, private placing, issuing rights of new shares to existing shareholders or allotting
+new shares to existing shareholders, transferring its capital reserve, issuing convertible bonds,
+or through other means as permitted by laws, administrative regulations and relevant regulatory
+authorities.
+143
+Permitted Indemnity Provision
+As stipulated in the Articles of Association, within the scope permitted under applicable laws,
+administrative regulations and the Articles of Association, the Bank may purchase and maintain
+any liabilities insurance for the Bank's former and incumbent directors. The Bank will indemnify
+every former and incumbent director out of its own assets against any liability incurred when
+he/she served as director of the Bank to the maximum extent permitted by law and administrative
+regulations or alternatively to the extent that it is not prohibited by law and administrative
+regulations unless it is established that the director has not acted honestly or in good faith in
+performing his/her duties.
+During the reporting period, the Bank renewed its directors' liability insurance to provide
+protection against claims arising from the lawful discharge of duties by the directors, thus
+encouraging the directors to fully perform their duties.
+Equity-linked Agreement
+Pre-emptive Rights
+Dividend payments are independent from the Bank's credit rating, nor do they vary with the
+credit rating.
+None of the directors or supervisors of the Bank has a service contract with the Bank or its
+subsidiaries that is not determinable within one year or is not determinable without payment of
+compensation other than normal statutory compensation.
+Dividends on the Bank's preference shares will be distributed on an annual basis. The first dividend
+period begins on the date of issuance of the preference shares. Once the preference shareholders
+have received dividends at the specified dividend rate, they shall not be entitled to participate in the
+distribution of the remaining profits of the Bank together with the ordinary shareholders.
+172,407
+30%
+2016
+0.168
+49,457
+164,578
+30%
+2015
+0.175
+51,518
+170,845
+30%
+ZZZ
+Nil
+Nil
+51,812
+0.176
+2017
+Payout ratio to share capital
+At the Board meeting held on 28 August 2018, the dividend distribution plans for the Bank's
+Offshore Preference Shares and Domestic Preference Shares (First Tranche) were approved. The
+Bank distributed dividends on the Offshore Preference Shares on 23 October 2018. According to
+the issuance terms of the Offshore Preference Shares, dividends on Offshore Preference Shares
+were denominated in RMB and paid in US dollars converted at a fixed exchange rate, with a total
+of approximately USD439 million (after tax) at an annual dividend rate of 6.75% (after tax). The
+Bank distributed dividends on the Domestic Preference Shares (First Tranche) on 21 November
+2018, with a total of RMB1.920 billion (before tax) at an annual dividend rate of 6.00%
+(before tax). The dividend distribution plans have been accomplished.
+At the Board meeting held on 25 January 2019, the dividend distribution plan for the Bank's
+Domestic Preference Shares (Second Tranche) was approved. The Bank distributed a total of
+RMB1.540 billion (before tax) of dividends on the Domestic Preference Shares (Second Tranche)
+on 13 March 2019, with an annual dividend rate of 5.50% (before tax). The dividend distribution
+plan has been accomplished.
+Cash Dividend Payout for Ordinary Shares and Capitalisation of the Capital Reserve to
+Share Capital for the Past Three Years
+Profit
+attributable to
+Dividend Total dividend
+per share
+equity holders
+(before tax)
+Nil
+Year of dividend
+(Unit:
+distribution
+(Unit: RMB)
+RMB million)
+of the Bank
+(Unit:
+RMB million)
+Capitalisation
+of the
+capital reserve
+(before tax)
+138
+Dividend Distribution for Preference Shares
+Types of
+6.75%
+(after tax)
+6.00%
+(before tax)
+13 March 2018
+1,540
+(RMB million, before tax)
+5.50%
+(before tax)
+(First Tranche)
+Domestic Preference
+Shares
+439
+(USD million, after tax)
+1,920
+(RMB million, before tax)
+(Second Tranche)
+Offshore Preference
+Shares
+23 October 2018
+21 November 2018
+439
+(USD million, after tax)
+1,920
+(RMB million, before tax)
+6.75%
+(after tax)
+6.00%
+(before tax)
+13 March 2019
+Domestic Preference
+Shares
+(First Tranche)
+Domestic Preference
+Shares
+137
+21 November 2017
+(Second Tranche)
+Offshore Preference
+Shares
+Domestic Preference
+Shares
+preference shares
+Offshore Preference
+Shares
+Dividend
+payment date
+24 October 2016
+Domestic Preference
+Shares
+21 November 2016
+Total dividend
+439
+(USD million, after tax)
+1,920
+(RMB million, before tax)
+23 October 2017
+Dividend rate
+(after tax)
+6.00%
+(before tax)
+(First Tranche)
+Domestic Preference
+Shares
+13 March 2017
+1,540
+(RMB million, before tax)
+5.50%
+(before tax)
+6.75%
+The preference share dividend is non-cumulative. If any preference share dividend for any
+dividend period is not paid in full, such remaining amount of dividend shall not be carried
+forward to the following dividend year. The Bank shall be entitled to cancel the payment of any
+dividend of the preference shares, and such cancellation shall not constitute a default. The Bank
+may at its discretion use the funds arising from the cancellation of such dividend payment to
+repay other indebtedness due and payable.
+Please refer to Note V.38 to the Consolidated Financial Statements for details of distributable
+reserves of the Bank.
+Major Customers
+The Bank has established a comprehensive and complete information disclosure system and put in
+place clear specifications regarding information disclosure standard and the scope of application,
+responsibility and division of work of the parties concerned, as well as information handling and
+disclosure procedures and internal monitoring measures. The Bank carried out the registration and
+submission of insider information in strict compliance with relevant regulatory requirements and
+the rules of the Bank. The Bank reinforced the principal responsibility system and information
+correspondent mechanism at the Group level, organised information disclosure training and
+conducted guidance on information disclosure obligations, so as to promote the building of a
+strong compliance culture of information disclosure and to improve the initiative and long-term
+perspective of its information disclosure management work.
+In 2018, the Bank continued to receive wide recognition for its work in investor relations
+and information disclosure. The Bank won awards including "Quam IR Awards 2017
+The
+Most Remarkable Investor Relations Recognition”, “Overall Top 100 Listed Companies in
+Hong Kong" and "Top 100 Enterprises in China” etc. The Bank's annual report won a Gold
+Award in the overall category of the annual report competition and Technical Achievement
+Award of the League of American Communications Professionals (LACP). It also won a Bronze
+Award in Chairman's/President's letter and an Honour Award in Financial Data of the Annual
+Report Competition (ARC). It also won an Excellence Award for H-Share & Red Chip Entries
+from the Hong Kong Management Association (HKMA).
+136
+Report of the Board of Directors
+The Board of Directors
+pleased to present its report together with the audited Consolidated
+Financial Statements of the Bank and its subsidiaries (the "Group") for the year ended
+31 December 2018.
+Principal Activities
+The Bank provides a range of banking and related financial services, including commercial
+banking, investment banking, insurance, direct investment and investment management, fund
+management and aircraft leasing business.
+During the year, the five largest customers of the Group accounted for less than 30% of the
+interest income and other operating income of the Group.
+Results and Profit Distribution
+The Group's annual results for 2018 are set out in the Consolidated Financial Statements.
+The Board of Directors has recommended a final dividend on ordinary shares for 2018 of
+RMB0.184 per share (before tax), subject to the approval of the forthcoming Annual General
+Meeting scheduled on 17 May 2019. If approved, the 2018 final dividend on the Bank's ordinary
+shares will be denominated and declared in RMB and paid in RMB or equivalent Hong Kong
+dollars. The actual amount distributed in Hong Kong dollars will be calculated according to the
+average of the exchange rates announced by PBOC in the week before 17 May 2019 (inclusive),
+being the date of the Bank's Annual General Meeting. The A-Share dividend distribution date is
+expected to be 3 June 2019 and the H-Share dividend distribution date is expected to be 18 June
+2019 in accordance with relevant regulatory requirements and business rules. No capitalisation of
+the capital reserve to share capital is proposed in this profit distribution.
+1,540
+(RMB million, before tax)
+5.50%
+(before tax)
+At the 2017 Annual General Meeting held on 28 June 2018, a final dividend on ordinary shares
+for 2017 of RMB0.176 per share (before tax) was approved for payment. The A-Share and
+H-Share dividends were distributed to the shareholders separately in July and August of 2018
+in accordance with relevant regulations. The distribution plan has been accomplished and the
+actual distributed amount for ordinary shares was approximately RMB51.812 billion (before tax).
+No interim dividend on ordinary shares was paid for the period ended on 30 June 2018 by the
+Bank. The Bank did not propose any capitalisation of the capital reserve to share capital in 2018.
+Formulation and Implementation of Cash Dividend Policy
+The preference shareholders of the Bank receive dividend at the specified dividend rate prior to
+the ordinary shareholders. The Bank shall pay the dividend to the preference shareholders in cash.
+The Bank shall not distribute dividends on ordinary shares before all the dividends on preference
+shares have been paid.
+Preference Shares
+The dividend distribution plan for ordinary shares of the Bank has been approved by the
+shareholders' meeting. In 2018, the Bank distributed dividends on ordinary shares for 2017
+in strict compliance with the Articles of Association, its dividend distribution policy and the
+shareholders' meeting resolution on profit distribution.
+The procedure to formulate the aforementioned dividend distribution policy was compliant,
+transparent and complete. The criterion and ratio of the dividend are explicit and clear. The
+independent directors fully expressed their opinions and the legitimate rights and interests of
+minority shareholders were fully respected and protected. The procedure was in line with the
+provisions of the Articles of Association and other rules and regulations.
+(Second Tranche)
+distribution of the dividend shall not be less than 10% of the profit after tax attributable to the
+ordinary shareholders of the Bank. The amendment also states that the Bank shall offer online
+voting to shareholders when considering amendments to the profit distribution policy and profit
+distribution plan.
+The Bank considered and approved the Shareholder Return Plan for 2018 to 2020 at the
+2019 First Extraordinary General Meeting on 4 January 2019, specifying the basic principles,
+shareholder return plan and decision-making and supervisory mechanisms regarding the
+formulation, implementation and amendment of the shareholder return of the Bank.
+In 2013, the Bank amended the Articles of Association related to the cash dividend. This
+amendment clarified the Bank's profit distribution principles, policy and adjustment procedures,
+the consideration process of the profit distribution plan and other matters. The amendment states
+that the Bank shall adopt cash dividend as the priority form of profit distribution. Except under
+special circumstances, the Bank shall adopt cash as the form of dividend distribution where
+there is profit in that year and the accumulated undistributed profit is positive, and that the cash
+In 2009, the Bank amended the Articles of Association to state that the Bank should maintain the
+continuity and stability of its profit distribution policy.
+The Bank takes full account of the return to shareholders, and also takes into account the long-
+term interests of the Bank, the overall interests of all its shareholders and the sustainable
+development of the Bank.
+Ordinary Shares
+139
+At the Board meeting held on 19 January 2018, the dividend distribution plan for the Bank's
+Domestic Preference Shares (Second Tranche) was approved. The Bank distributed a total of
+RMB1.540 billion (before tax) of dividends on the Domestic Preference Shares (Second Tranche)
+on 13 March 2018, with an annual dividend rate of 5.50% (before tax). The dividend distribution
+plan has been accomplished.
+In 2018, the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors held three on-site meetings and one meeting by written resolution, at which it
+reviewed and approved the proposals on the evaluation opinions of the Board of Supervisors on
+the duty performance of directors and senior management members for 2017, the nomination of
+Mr. CHEN Yuhua to be re-appointed as candidate for external supervisor of the Bank, the 2017
+remuneration distribution plan for the Chairman of the Board of Supervisors and shareholder
+supervisors, performance management measures for the Chairman of the Board of Supervisors
+and shareholder supervisors (2018 version), and the implementation plan on performance
+management for the Chairman of the Board of Supervisors and shareholder supervisors in
+2018, among others. It also heard reports on the Bank's remuneration management policy and
+remuneration plan for senior management members and the Bank's liquidity risk management.
+The Finance and Internal Control Supervision Committee of the Board of Supervisors held
+four on-site meetings, at which it reviewed and approved the proposals regarding the Bank's
+2017 Annual Report, 2017 profit distribution plan, 2017 internal control assessment report, 2017
+corporate social responsibility report, Report for the First Quarter ended 31 March 2018,
+2018 Interim Report and Report for the Third Quarter ended 30 September 2018, among others.
+149
+Performance of Supervision and Inspection by the Board of Supervisors
+In 2018, guided by the strategic goal of building BOC into a world-class bank in the new era, the
+Board of Supervisors implemented new strategies and planned new moves with a fresh mind-set
+and solid work style, in compliance with relevant laws and regulations, regulatory requirements
+and the Articles of Association of the Bank, and in alignment with the Bank's overall reform and
+development, as well as strategy implementation. It diligently supervised the duty performance,
+financial management, internal control and risk management, added a great deal of insight and
+perspective to its work and played a constructive supervisory role for the Bank's sound development.
+Performed the supervision and assessment of duty performance of directors and senior
+management members in an orderly fashion. First, the Board of Supervisors strictly supervised
+day-to-day duty performance. Supervisors attended the shareholders' meetings, and attended
+the meetings of the Board of Directors and its special committees and meetings of the Senior
+Management as non-voting attendees, as well as hearing reports from related departments. This
+allowed supervisors to stay informed regarding the duty performance of directors and senior
+management members, and to share supervisory opinions and suggestions on major concerns in
+a timely fashion. Supervisors continued to collect and analyse information on the routine duty
+performance of directors and senior management members, centred on the overall strategic focus
+of the Bank, summarised and analysed the duty performance of senior management members on a
+monthly basis, and issued reminders on matters requiring particular attention. Second, it earnestly
+launched annual duty performance assessment. The Board of Supervisors organised interviews
+with directors and senior management members on their duty performance, and formulated annual
+duty performance assessment opinions on the Board of Directors, the Senior Management and their
+members with due regards to routine supervision information. Through review and approval at the
+meeting of the Board of Supervisors, it reported annual assessment results to the Annual General
+Meeting, in addition to duly filing duty performance assessment opinions of the Board of Directors,
+the Senior Management and their members with the CBIRC. The duty performance supervision
+and assessment helped to urge and guide the directors and senior management members to fulfil
+their duties diligently and also enhance the overall level of corporate governance.
+Significant Events
+Deepened the supervision of risk management and internal control. First, the Board of
+Supervisors strengthened the supervision and guidance of risk management, and accelerated
+the improvement of risk control capability. In response to the profound changes in the external
+environment, the Board of Supervisors adhered to its risk supervision duty, stepped up the efforts
+in closely watching, analysing and warning risks, helped the Board of Directors and the
+Senior Management to fulfil their risk management and control responsibilities, and held the
+bottom line of preventing any systematic risk. The Board of Supervisors tracked the Bank's
+regional, industrial and policy risk exposures, stayed abreast of key NPA mitigation, including
+arrangements and implementation, summarised and analysed risk management information on
+a monthly basis, and strengthened the forward-looking analysis, judgment and warning of the
+risk status. Second, the Board of Supervisors strengthened the internal control supervision and
+assessment, and accelerated the improvement of internal control fraud prevention capability. It
+reviewed the Bank's internal control self-assessment report, heard the external auditor's report
+on the Bank's internal control and related management proposals, timely tracked and investigated
+the internal control frauds at the Bank, and reminded the Board of Directors and the Senior
+150
+Management of actively analyse and anticipate the new situations, new circumstances and new
+issues in internal control fraud prevention so as to ensure that the governance of internal control
+fraud prevention becomes more targeted and effective.
+148
+Solidified the efforts in the supervision of strategy and finance. Taking routine finance
+supervision as its basis, the Board of Supervisors conducted regular reporting and review,
+and developed an in-depth understanding of the economic and financial conditions of
+China and the world at large including emerging characteristics of and new developments.
+Through deep analysis, it drilled down into the Bank's updates on business, management
+and strategy implementation, while attaching importance to forethought in supervision. First,
+the Board of Supervisors strengthened the routine supervision of strategy and finance. By
+attending the meetings of the Board of Directors and the Senior Management as non-voting
+attendees, it followed up on the overall implementation progress of the development strategy
+and business management, put forward concerns on related significant issues and offered
+independent, objective comments and suggestions regarding the strategy implementation,
+thus earnestly performing its strategy and finance supervision and assessment function. The
+Board of Supervisors summarised and analysed the Bank's financial and accounting data on
+a monthly basis, combining this with the analyses and study of the macro-economic situation
+and regulatory policies so as to strengthen the forward-looking judgment and early warning
+regarding its financial position. Second, the Board of Supervisors deepened the review and
+supervision of regular reports. The Board of Supervisors and its special committees earnestly
+held meetings, communicated on special issues with related departments and external auditors,
+heard reports regarding the preparation and audit of regular reports, and compared the
+Bank's regular reports with those of other banks for researches. It put forward four letters of
+supervisory recommendations and outlined 18 concerns to the Board of Directors and the Senior
+Management, which were related to the supervision of the progress of strategy implementation,
+profitability enhancement, risk compensation capability strengthening, asset quality control
+improvement, resolving of difficulties in customer bases and funding sources, attending to
+regional risks, increasing the efforts in NPA disposal, shoring up of the deficiencies in credit
+risk management, cultivating new growth points in fee income, promoting bankcard business
+development and advancing the Bank's globalisation strategy. The Board of Directors, the
+Senior Management and related departments paid much attention to the above-mentioned issues,
+carefully referred to and adopted the suggestions by the Board of Supervisors, actively remedied
+the defects and continued to enhance the management level.
+Supervisors who did not attend the meetings of the Board of Supervisors have authorised other supervisors to
+attend and vote at the meetings as their proxy.
+XIANG Xi
+2
+LIU Wanming
+WANG Zhiheng
+LI Changlin
+Number of meetings attended in person/
+Number of meetings convened during term of office
+3/4
+4/4
+0/0
+0/0
+LENG Jie
+0/0
+CHEN Yuhua
+4/4
+Former Supervisors
+WANG Xueqiang
+DENG Zhiying
+GAO Zhaogang
+1/1
+4/4
+4/4
+3/4
+Notes:
+1
+Please refer to the section "Directors, Supervisors and Senior Management Members Changes in Directors,
+Supervisors and Senior Management Members" for changes in supervisors.
+Launched special in-depth surveys. The Board of Supervisors supplemented its day-to-day
+supervision with special surveys. Taking an issue-oriented approach, it organised and launched
+four special surveys on topics of domestic branches RMB deposits, corporate credit risk
+management, integration and development of the Bank's Southeast Asian institutions, and IT
+supporting capacity, thus targeting key points in the Bank's major work arrangements and
+strategy implementation process. The survey teams were led by supervisors and consisted of
+directors and personnel from relevant departments of the Head Office. They held many discussion
+with Head Office departments and the external auditor, visited a number of branch offices
+in order to streamline existing problems, dig into their causes, and widely solicit proposed
+countermeasures, and submitted survey reports. This provided the Board of Directors and the
+Senior Management with an all-round analysis of problems and forward-looking suggestions.
+The Board of Directors and the Senior Management fully recognised the value of the survey
+reports, and mandated management members and relevant departments to carefully study them
+and earnestly rectify the issued identified. The surveys carried out by the Board of Supervisors
+yielded more tangible outcomes in supervision, and further improved the Bank's operations and
+management.
+Actively improved the coordination in supervision. First, the Board of Supervisors created
+innovative methods for interaction between directors and supervisors. It invited directors to
+participate in its surveys, held talks with directors, followed up on the implementation of survey
+results in cooperation with the Board of Directors, held exchange meetings with the Board of
+Directors and the Senior Management and shared training opportunities with each other, thereby
+further strengthening the communication with the Board of Directors and the Senior Management
+and pooling the efforts of the entire governance system. Second, it deepened supervision
+coordination, information sharing and training interaction with the audit and inspection
+departments in order to reduce supervision costs and improve efficiency.
+Strengthened self-improvement. The Board of Supervisors comprehensively fulfilled the
+requirement of strict governance over the Party organisations, consolidated the foundation of
+supervision function, and completed tasks related to the selection, appointment and resignation
+of some of its members. It earnestly carried out, followed up, oversaw and urged the remediation
+of issues identified by the CBIRC in its inspection notifications. A special seminar was held
+to review, discuss the work of the Board of Supervisors and the method to further improve
+and strengthen the work of the Board of Supervisors in light of the current situation and
+strategy implementation of the Bank. The Board of Supervisors organised and completed
+annual duty performance assessments of itself and its members, and urged all its members to
+earnestly perform the duties delegated by the Articles of Association. Special training courses
+were held to improve the supervisors' expertise and duty performance capability. All supervisors
+performed their duties faithfully and diligently, made efforts to sharpen their policy competence
+and duty performance capability, actively attended meetings, earnestly reviewed proposals, heard
+working reports, undertook special surveys and expressed opinions professionally, rigorously and
+independently, thus conscientiously carrying out their supervisory function.
+155
+For announcements regarding other significant events during the reporting period made in
+accordance with the regulatory requirements, please refer to the websites of SSE, HKEX and
+the Bank.
+During the reporting period, Mr. CHEN Yuhua, the external supervisor of the Bank, performed
+his supervisory duty in strict accordance with the provisions of the Articles of Association
+of the Bank. Mr. CHEN personally attended the 2017 Annual General Meeting and the 2018
+First Extraordinary General Meeting, attended all four meetings of the Board of Supervisors,
+attended and chaired four meetings of the Finance and Internal Control Supervision Committee
+of the Board of Supervisors, and attended meetings of the Board of Directors, the Risk Policy
+Committee, the US Risk and Management Committee, and the Audit Committee as a non-voting
+attendee. Mr. CHEN led a special survey regarding RMB deposits of the Bank's domestic
+branches, participated in a special survey regarding corporate credit risk management, visited
+a number of branch offices to learn about the local situation, and guided the completion of
+high-quality survey reports. Mr. CHEN expressed opinions independently and objectively, and
+put forward suggestions for improving profitability, enhancing asset quality control, addressing
+difficulties related to customer bases and funding sources, grasping opportunities from the
+construction of the Hainan free trade port and strengthening the communication between the Head
+Office/branches and outlets, thus playing an active role in promoting the improvement of the
+Bank's corporate governance and management. During the reporting period, Mr. CHEN Yuhua
+worked at the Bank for more than 15 working days.
+For details of the Bank's performance of social responsibility regarding poverty alleviation
+during the reporting period, please refer to the section “Corporate Social Responsibilities” and the
+Bank's 2018 Corporate Social Responsibility Report published on the websites of SSE, HKEX
+and the Bank.
+Performing Social Responsibility for Poverty Alleviation
+During the reporting period, neither the Bank nor its controlling shareholder failed to perform any
+effective judgment of the court or to pay off any due debt of large amount.
+Integrity of the Bank and its Controlling Shareholder
+During the reporting period, neither the Bank nor any of its directors, supervisors, senior
+management members or controlling shareholder was subject to any investigation, compulsory
+measures or accusation of criminal responsibilities by relevant authorities or any investigation,
+administrative punishment or regulatory measures by CSRC, or had material administrative
+punishment imposed on them by other administrative authorities, or were publicly reprimanded
+by any stock exchange.
+Disciplinary Actions Imposed on the Bank, its Directors, Supervisors, Senior Management
+Members and Controlling Shareholder
+Huijin made a “non-competing commitment” when the Bank launched its IPO. As at 31 December
+2018, Huijin has strictly observed and has not breached such undertaking.
+Undertakings
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes.
+Misappropriation of Funds by Controlling Shareholder and Other Related Parties
+During the reporting period, the Bank had no other major contract that was required to be
+disclosed.
+Other Major Contracts
+procedures in accordance with the risks of the guarantee business and carries out this business
+accordingly. During the reporting period, save as disclosed above, the Bank did not enter into any
+material guarantee business that is required to be disclosed.
+154
+Material Litigation and Arbitration
+The Bank was involved in certain litigation and arbitration cases in its regular course of business.
+In addition, because of the scope and scale of the Bank's international operations, the Bank is
+from time to time subject to a variety of claims under the laws of various jurisdictions in which
+the Bank operates. After consulting legal professionals, the Senior Management holds that none
+of the litigation and arbitration cases will have a significant impact on the financial position or
+operating results of the Bank at the current stage.
+Purchase and Sale of Material Assets
+As part of the Group's strategic restructuring plan in the ASEAN region, on 6 November 2017,
+the Bank (as transferor) and BOCHK (as transferee) entered into agreements in relation to the
+transfer of the banking businesses operated by the Bank in Vietnam through Bank of China
+Limited-Hochiminh City Branch and the banking businesses operated by the Bank in the Philippines
+through Bank of China Limited, Manila Branch respectively. The completion of the transfers took
+place on 29 January 2018 in accordance with the respective terms and conditions of the agreements.
+For details, please refer to relevant announcements of the Bank on the websites of SSE, HKEX
+and the Bank.
+Implementation of Stock Incentive Plan and Employee Stock Ownership Plan
+WANG Xiquan
+The Bank approved a long-term incentive policy, including the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan, at the Board meeting and the extraordinary
+shareholders' meeting held in November 2005. To date, the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan have not been implemented.
+The Bank had no significant connected transactions during the reporting period. For details of
+the related party transactions as defined by the relevant accounting standards by the end of the
+reporting period, please refer to Note V.43 of the Consolidated Financial Statements.
+Major Contracts and the Enforcement thereof
+Material Custody, Sub-contracts and Leases
+During the reporting period, the Bank did not take any significant custody of, sub-contract or
+lease any material business assets from other companies, or allow its material business assets to
+be subject to such arrangements that are required to be disclosed.
+Material Guarantee Business
+As approved by PBOC and CBIRC, the Bank's guarantee business is an off-balance-sheet item
+in the ordinary course of its business. The Bank operates its guarantee business in a prudent
+manner and has formulated specific management measures, operational processes and approval
+Significant Connected Transactions
+153
+Incumbent Supervisors
+In 2018, the attendance rate of each supervisor of the meetings of the Board of Supervisors is
+given below:
+151
+The Board of Directors and the Senior Management placed great importance on and offered great
+support to the work of the Board of Supervisors. By holding Executive Committee meetings and
+special meetings or in other forms, they earnestly studied the supervisory reminders of the Board
+of Supervisors, steadfastly pushed forward remediation measures and continually improved the
+overall level of corporate governance.
+In accordance with the regulatory requirements, the Board of Supervisors has put forward
+the following supervision and assessment opinions regarding the duty performance related
+to remuneration management by the Board of Directors and the Senior Management of the
+Bank. During the reporting period, the Bank remained committed to deepening the reform of
+its remuneration distribution mechanism, improved the allocation of resources, developed annual
+remuneration plan in strict accordance with the regulatory requirements and corporate governance
+requirements, strengthened the linkage of remuneration distribution with value creation, business
+transformation and risk management, and promoted the overall coordinated and sustainable
+development. The Bank continued to improve the employee remuneration distribution measures,
+incentivised performance contribution and enhance long-term incentives. The Bank optimised its
+welfare and security system, stepped up remuneration incentives for key posts and core personnel,
+and facilitated talent growth. Remuneration resources were skewed towards outlets by putting in
+place a minimum pay protection system for outlet employees and further strengthening employee
+welfare and security, so as to earnestly enhance employees' sense of ownership, happiness
+and safety.
+In accordance with the regulatory requirements, the Board of Supervisors issued the following
+supervision and assessment opinions regarding duty performance regarding liquidity risk
+management by the Board of Directors and the Senior Management of the Bank. During the
+reporting period, the Bank adhered to the operating principle of balancing safety, liquidity and
+profitability, attached great importance to the liquidity risk management, and constructed and
+continuously optimised the liquidity risk identification, measurement, monitoring and control
+system that is compatible with the scale, nature and complexity of the Bank's businesses. In
+compliance with the requirements of regulatory policies, the Bank revised its liquidity risk
+management policy, reviewed its liquidity risk limits, improved stress testing and emergency
+plans, reinforced liquidity risks management across its domestic and overseas, on-balance sheet
+and off-balance sheet, and domestic and foreign-currency operations, and continuously improved
+its liquidity risk management system. Thanks to these efforts, the Bank's key liquidity risk
+indicators met the requirements of external regulators and the Board of Directors, and its liquidity
+risk prevention capability was enhanced.
+During the reporting period, the Board of Supervisors held no objection to such matters under
+its supervision regarding the Bank's operational and legal compliance, financial position, use of
+raised funds, purchase and sale of assets, connected transactions, internal control and corporate
+information disclosure.
+152
+Working Performance of the External Supervisor
+The tax and tax relief of Shanghai-Hong Kong Stock Connect shall comply with the Notice on
+the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in
+Shanghai and Hong Kong issued jointly by MOF, State Administration of Taxation of PRC,
+and CSRC.
+Domestic Preference Share Holders
+The individual income tax levied on dividends obtained by individuals from non-public issuance
+of domestic preference shares is calculated in accordance with the relevant Chinese tax laws and
+regulations.
+In accordance with the provisions of the Enterprise Income Tax Law of the People's Republic of
+China and the Implementation Rules of the Enterprise Income Tax Law of the People's Republic
+of China, dividend income from domestic preference shares distributed between qualified resident
+enterprises are non-taxable, and dividend income from domestic preference shares obtained by
+non-resident enterprises shall be levied at a preferential enterprise income tax rate of 10%.
+Offshore Preference Share Holders
+In accordance with Chinese tax laws and regulations, when distributing dividends to overseas
+non-resident enterprises on offshore preference shares, the Bank shall withhold enterprise income
+tax at a rate of 10%.
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no
+tax is payable in Hong Kong in respect of the dividends on offshore preference shares paid by
+the Bank.
+Auditors
+Please refer to the section “Corporate Governance
+details of the Bank's external auditors.
+Appointment of External Auditors" for
+In 2018, the Bank convened four on-site meetings of the Board of Supervisors on 29 March,
+27 April, 28 August and 29 October. At these meetings, the Board of Supervisors reviewed
+and approved 16 proposals regarding the Bank's 2017 Annual Report, 2017 profit distribution
+plan, 2017 internal control assessment report, 2017 corporate social responsibility report,
+2017 work report of the Board of Supervisors, 2018 work plan of the Board of Supervisors,
+evaluation opinions of the Board of Supervisors on the duty performance of directors and
+senior management members for 2017, nomination of Mr. CHEN Yuhua to be re-appointed as
+candidate for external supervisor of the Bank, Report for the First Quarter ended 31 March 2018,
+2018 Interim Report, Report for the Third Quarter ended 30 September 2018, performance
+evaluation results for the Chairman of the Board of Supervisors for 2017, 2016 remuneration
+distribution plan for Chairman of the Board of Supervisors and shareholder supervisors, 2017
+remuneration distribution plan for the Chairman of the Board of Supervisors and shareholder
+supervisors, performance management measures for the Chairman of the Board of Supervisors
+and shareholder supervisors (2018 version), implementation plan on performance management for
+the Chairman of the Board of Supervisors and shareholder supervisors in 2018, among others.
+Meetings of the Board of Supervisors
+Report of the Board of Supervisors
+29 March 2019
+Chairman
+On behalf of the Board of Directors
+CHEN Siqing
+Supervisors
+147
+Non-executive Directors: ZHAO Jie, LI Jucai, XIAO Lihong, WANG Xiaoya, LIAO Qiang
+Executive Directors: CHEN Siqing, LIU Liange, WU Fulin, LIN Jingzhen
+Members of the Board of Directors
+The Bank incorporates consumer protection efforts into its corporate governance and corporate
+culture, and integrates consumer protection into its development strategies and operational
+management. It keeps improving the governance structure and policy system for consumer
+protection. Focusing on consumer needs, the Bank has constantly launched new products
+and improved service quality. It attaches great importance to consumer comments, provides
+smooth complaint channels, and improves complaint handling process, hence earnestly
+protecting the legitimate rights and interests of consumers. Dedicated to raising the financial
+literacy of consumers, the Bank has carried out all-round and multifaceted publicity and
+education campaigns.
+Consumer Rights Protection
+146
+Independent Directors: LU Zhengfei, LEUNG Cheuk Yan, WANG Changyun, Angela CHAO,
+JIANG Guohua
+Other Significant Events
+In accordance with the provisions of the Notice on Issues concerning Withholding the Enterprise
+Income Tax on Dividends Paid by Chinese Resident Enterprises to H-share Holders who
+are Overseas Non-resident Enterprises (Guoshuihan [2008] No. 897) published by the State
+Administration of Taxation of PRC, when Chinese resident enterprises distribute annual
+dividends for 2008 onwards to H-share holders who are overseas non-resident enterprises, the
+enterprise income tax shall be withheld at a uniform rate of 10%.
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no tax
+is payable in Hong Kong in respect of dividends on H Shares paid by the Bank.
+16. Derivative financial instruments and hedge accounting.
+245
+17. Loans and advances to customers
+254
+18. Financial investments.
+259
+19. Investment in associates and joint ventures.
+269
+20. Property and equipment.
+21. Investment properties.
+270
+273
+22. Other assets
+274
+244
+Models and parameters Inherently complex
+models are used to measure expected credit
+losses. Modelled parameters have numerous
+inputs and the parameter estimation involves
+many judgements and assumptions.
+24. Due to banks and other financial institutions.
+279
+25. Due to central banks
+280
+26.
+Government certificates of indebtedness for bank notes issued
+and bank notes in circulation. .
+280
+27.
+Placements from banks and other financial institutions.
+281
+28. Financial liabilities held for trading.
+281
+29. Due to customers
+278
+23. Impairment allowance
+15. Placements with and loans to banks and other financial institutions
+243
+3.
+Net trading gains..
+226
+4
+Net gains on financial investments.
+227
+5.
+Other operating income
+227
+6.
+Operating expenses
+228
+7.
+Staff costs
+229
+8.
+Directors', supervisors' and senior management's emoluments
+Balances with central banks. . . .
+14.
+242
+13. Cash and due from banks and other financial institutions
+239
+12. Other comprehensive income. . .
+30. Bonds issued
+238
+236
+10. Income tax expense
+234
+Impairment losses on assets.
+9.
+230
+11. Earnings per share (basic and diluted).
+282
+284
+164
+330
+VI. FINANCIAL RISK MANAGEMENT
+1.
+Overview
+2.
+Financial risk management framework
+3.
+Credit risk
+4.
+Market risk.
+5.
+Liquidity risk
+6.
+Fair value..
+7.
+Capital management.
+8.
+393
+CONSOLIDATED FINANCIAL STATEMENTS.
+DIFFERENCES BETWEEN IFRS AND CAS
+I.
+SUPPLEMENTARY INFORMATION
+392
+326
+389
+374
+363
+332
+331
+331
+Insurance risk. .
+381
+226
+48. The Bank's statement of financial position and changes in equity.
+49. Events after the financial reporting date.
+47. Offsetting financial assets and financial liabilities.
+CONTENTS (Continued)
+Deferred income taxes
+40. Changes in the consolidation.
+31. Other borrowings..
+32. Current tax liabilities.
+33. Retirement benefit obligations.
+34. Share appreciation rights plan
+35.
+36. Other liabilities
+41. Contingent liabilities and commitments.
+286
+287
+287
+288
+289
+292
+294
+322
+46. Interests in the structured entities
+320
+45. Transfers of financial assets
+314
+44. Segment reporting
+324
+305
+305
+42. Note to the consolidated statement of cash flows
+301
+299
+298
+296
+43. Related party transactions
+II.
+Net fee and commission income
+225
+We adopted a risk-based sampling approach in
+our loan review procedures. We assessed the
+debtors' repayment capacity and evaluated the
+Group's loan grading, taking into consideration
+post-lending investigation reports, debtors'
+financial information, collateral valuation reports
+and other available information.
+With the support of our internal credit risk
+modelling experts, we evaluated and tested the
+important parameters of the expected credit loss
+model, management's major judgements and
+related assumptions, mainly focusing on the
+following aspects:
+1. Expected credit loss model:
+Assessed the reasonableness of the expected
+credit loss model methodology and related
+parameters, including probability of default,
+loss given default, risk exposure, and
+significant increase in credit risk;
+Assessed the forward-looking information
+management used to determine expected
+credit losses, including the forecasts
+of macroeconomic variables and the
+assumptions of multiple macroeconomic
+scenarios;
+Evaluated the models and the related
+assumptions used in individual impairment
+assessment and analysed the amount, timing
+and likelihood of management's estimated
+future cash flows, especially cash flows
+from collateral.
+157
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key audit matter
+Impairment assessment of loans and advances to customers
+How our audit addressed the key audit matter
+2. Design and operating effectiveness of key
+controls:
+Evaluated and tested the data and processes
+used to determine expected credit loss,
+including loan business data, internal
+credit rating data, macroeconomic data, as
+well as impairment system computational
+logic, inputs and interfaces among relevant
+systems;
+We evaluated and tested the effectiveness of
+design and implementation of key controls
+related to the credit approval process, post
+approval credit management, loan grading system,
+collateral monitoring and loan impairment
+assessment, including relevant data quality and
+information systems.
+Evaluated and tested key controls over
+expected credit loss models, including
+approval of model changes, ongoing
+monitoring model performance, model
+validation and parameter calibration.
+158
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key audit matter
+Valuation of financial instruments
+The Group has applied valuation techniques to
+determine the fair value of financial instruments that
+are not quoted in active markets including bonds,
+funds, equity investments and over-the-counter
+derivatives. These valuation techniques, particularly
+those requiring significant unobservable inputs,
+usually involve subjective judgement and
+assumptions. Valuation results can vary significantly
+when different valuation techniques and assumptions
+are applied.
+As at 31 December 2018, financial instruments
+measured at fair value of the Group mainly
+included RMB2,250,250 million in financial
+investments, representing 11% of total assets.
+Financial instruments which require significant
+unobservable inputs in estimating fair value,
+and hence categorised within level 3 of the fair
+value hierarchy, involve higher uncertainty in
+their valuation. As at 31 December 2018, 4% of
+financial investments measured at fair value were
+categorised within level 3. Due to the significance
+of financial instruments measured at fair value, and
+the uncertainty in valuation involving significant
+judgement for unlisted equity and fund investments as
+well as illiquid asset-backed securities, valuation of
+these financial instruments is considered a key audit
+matter.
+How our audit addressed the key audit matter
+We evaluated and tested the design and operating
+effectiveness of key controls related to valuation
+of financial instruments, independent price
+verification, and independent model validation
+and approval.
+We evaluated the valuation techniques, inputs
+and assumptions through comparison with the
+valuation techniques commonly used in the
+markets, validation of observable inputs using
+external market data, and comparison with
+valuation outcomes obtained from various pricing
+sources.
+For valuations which used significant
+unobservable inputs, such as unlisted equity
+investments and private equity fund investments,
+we involved our internal valuation specialists
+in assessing the models used, re-performing
+independent valuations, and analysing the
+sensitivities of valuation results to key inputs and
+assumptions.
+We evaluated and tested the design and operating
+effectiveness of internal controls related to
+disclosures of fair value.
+Relevant disclosures are included in Note III.2 and
+Note VI.6 to the consolidated financial statements.
+We evaluated and tested the design and operating
+effectiveness of internal controls related to
+disclosures of credit risk and impairment
+allowance.
+How our audit addressed the key audit matter
+Relevant disclosures are included in Note III.1,
+Note V.17 and Note VI.3 to the consolidated financial
+statements.
+Since loan impairment assessment involves many
+judgements and assumptions, and in view of the
+significance of the amount (as at 31 December
+2018, gross loans and advances to customers
+amounted to RMB11,819,272 million, representing
+56% of total assets, and impairment allowance
+for loans and advances to customers amounted to
+RMB303,781 million), impairment of loans and
+advances is considered a key audit matter.
+Independent Auditor's Report
+EY安永
+Building a better
+working world
+22/F, CITIC Tower
+1 Tim Mei Avenue
+Central, Hong Kong
+To the shareholders of Bank of China Limited
+(Established in the People's Republic of China with limited liability)
+Opinion
+We have audited the consolidated financial statements of Bank of China Limited (the “Bank")
+and its subsidiaries (the “Group") set out on pages 166 to 393, which comprise the consolidated
+statement of financial position as at 31 December 2018, and the consolidated income statement,
+the consolidated statement of comprehensive income, the consolidated statement of changes in
+equity and the consolidated statement of cash flows for the year then ended, and notes to the
+consolidated financial statements, including a summary of significant accounting policies.
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated
+financial position of the Group as at 31 December 2018, and of its consolidated financial
+performance and its consolidated cash flows for the year then ended in accordance with
+International Financial Reporting Standards ("IFRSS") issued by the International Accounting
+Standards Board (“IASB") and have been properly prepared in compliance with the disclosure
+requirements of the Hong Kong Companies Ordinance.
+Basis for Opinion
+We conducted our audit in accordance with International Standards on Auditing ("ISAs”) issued
+by the International Auditing and Assurance Standards Board. Our responsibilities under those
+standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated
+Financial Statements section of our report. We are independent of the Group in accordance with
+the Code of Ethics for Professional Accountants (the “Code”) issued by the Hong Kong Institute
+of Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
+accordance with the Code. We believe that the audit evidence we have obtained is sufficient and
+appropriate to provide a basis for our opinion.
+Key Audit Matters
+Key audit matters are those matters that, in our professional judgement, were of most significance
+in our audit of the consolidated financial statements of the current period. These matters were
+addressed in the context of our audit of the consolidated financial statements as a whole, and in
+forming our opinion thereon, and we do not provide a separate opinion on these matters. For each
+matter below, our description of how our audit addressed the matter is provided in that context.
+We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit
+of the Consolidated Financial Statements section of our report, including in relation to these
+matters. Accordingly, our audit included the performance of procedures designed to respond to
+our assessment of the risks of material misstatement of the consolidated financial statements. The
+results of our audit procedures, including the procedures performed to address the matters below,
+provide the basis for our audit opinion on the accompanying consolidated financial statements.
+156
+Independent Auditor's Report (Continued)
+Individual impairment assessment
+Identifying credit impaired loans requires
+consideration of a range of factors, and
+individual impairment assessments are
+dependent upon estimates of future cash flows.
+judgement is used to create macroeconomic
+forecasts and to consider the impact to expected
+credit losses under multiple economic scenarios
+given different weights;
+Expert
+Forward-looking information
+Significant increase in credit risk
+selection of criteria for identifying significant
+increase in credit risk are highly dependent on
+judgement and may have a significant impact
+on the expected credit losses for loans with
+longer remaining periods to maturity;
+The
+159
+_
+•
+IFRS 9 requires that the impairment measurement
+for financial assets be changed from "incurred loss
+model" to "expected credit loss model”. The Group
+uses a number of models and assumptions in the
+measurement of expected credit losses, for example:
+In 2014, the IASB released IFRS 9 - Financial
+Instruments (hereinafter referred to as "IFRS 9").
+IFRS 9 was adopted by the Group on 1 January 2018.
+Impairment assessment of loans and advances to customers
+Key audit matter
+Key Audit Matters (Continued)
+•
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key audit matter
+162
+Independent Auditor's Report (Continued)
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+(Continued)
+We communicate with the Audit Committee regarding, among other matters, the planned scope
+and timing of the audit and significant audit findings, including any significant deficiencies in
+internal control that we identify during our audit.
+We also provide the Audit Committee with a statement that we have complied with relevant
+ethical requirements regarding independence and to communicate with them all relationships and
+other matters that may reasonably be thought to bear on our independence, and where applicable,
+related safeguards.
+From the matters communicated with the Audit Committee, we determine those matters that were
+of most significance in the audit of the consolidated financial statements of the current period and
+are therefore the key audit matters. We describe these matters in our auditor's report unless law or
+regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
+we determine that a matter should not be communicated in our report because the adverse
+consequences of doing so would reasonably be expected to outweigh the public interest benefits
+of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Leung
+Shing Kit.
+Ernst & Young
+Certified Public Accountants
+Hong Kong
+29 March 2019
+163
+Consolidated Financial Statements
+CONTENTS
+CONSOLIDATED FINANCIAL STATEMENTS
+CONSOLIDATED INCOME STATEMENT.
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.
+CONSOLIDATED STATEMENT OF CASH FLOWS ..
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+I. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+II. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1. Net interest income
+V.
+....
+IV. TAXATION
+224
+221
+Obtain sufficient appropriate audit evidence regarding the financial information of the
+entities or business activities within the Group to express an opinion on the consolidated
+financial statements. We are responsible for the direction, supervision and performance of
+the group audit. We remain solely responsible for our audit opinion.
+175
+172
+170
+168
+167
+166
+III. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN
+APPLYING ACCOUNTING POLICIES.
+174
+2.
+Evaluate the overall presentation, structure and content of the consolidated financial
+statements, including the disclosures, and whether the consolidated financial statements
+represent the underlying transactions and events in a manner that achieves fair presentation.
+Evaluate the appropriateness of accounting policies used and the reasonableness of
+accounting estimates and related disclosures made by the directors.
+How our audit addressed the key audit matter
+Structured entities
+The Group has interests in various structured entities,
+such as bank wealth management products, funds and
+trust plans, in conducting financial investments, asset
+management business and credit assets transfers. The
+Group determines whether or not to consolidate these
+structured entities based on the assessment of whether
+the Group has control taking into consideration power
+arising from rights, variable returns, and link between
+power and returns.
+The assessment of the Group's control over
+structured entities involves significant judgement on
+factors such as the purpose and design of structured
+entities, its ability to direct the relevant activities,
+direct and indirect beneficial interests and returns,
+performance fee, remuneration and exposure to
+loss from providing credit enhancement or liquidity
+support. Due to the significance of the unconsolidated
+structured entities and the complexity of judgement
+exercised by management, consolidation or
+non-consolidation of structured entities is considered
+a key audit matter.
+Relevant disclosures are included in Note III.7 and
+Note V.46 to the consolidated financial statements.
+We evaluated and tested the design and operating
+effectiveness of the key controls related to the
+Group's assessment of whether it controls a
+structured entity.
+We assessed the Group's analysis and conclusions
+on whether or not it controls structured entities
+based on the Group's analysis on its power
+over structured entities, and the magnitude and
+variability of variable returns from its involvement
+with structured entities. We also assessed whether
+the Group has legal or constructive obligation to
+absorb any loss of structured entities by reviewing
+relevant term sheets, and whether the Group has
+provided liquidity support or credit enhancement
+to structured entities, as well as the fairness of
+transactions between the Group and structured
+entities.
+Furthermore, we evaluated and tested the design
+and operating effectiveness of internal controls
+related to disclosures of unconsolidated structured
+entities.
+160
+Independent Auditor's Report (Continued)
+Other Information included in the Annual Report
+The directors of the Bank are responsible for the other information. The other information
+comprises the information included in the Annual Report, other than the consolidated financial
+statements and our auditor's report thereon.
+Our opinion on the consolidated financial statements does not cover the other information and we
+do not express any form of assurance conclusion thereon.
+In connection with our audit of the consolidated financial statements, our responsibility is to
+read the other information and, in doing so, consider whether the other information is materially
+inconsistent with the consolidated financial statements or our knowledge obtained in the audit
+or otherwise appears to be materially misstated. If, based on the work we have performed, we
+conclude that there is a material misstatement of this other information, we are required to report
+that fact. We have nothing to report in this regard.
+Responsibilities of the Directors for the Consolidated Financial Statements
+The directors of the Bank are responsible for the preparation of the consolidated financial
+statements that give a true and fair view in accordance with IFRSS and the disclosure
+requirements of the Hong Kong Companies Ordinance, and for such internal control as the
+directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the directors of the Bank are responsible for
+assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters
+related to going concern and using the going concern basis of accounting unless the directors
+of the Bank either intend to liquidate the Group or to cease operations, or have no realistic
+alternative but to do so.
+Obtain an understanding of internal control relevant to the audit in order to design audit
+procedures that are appropriate in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the Group's internal control.
+Identify and assess the risks of material misstatement of the consolidated financial
+statements, whether due to fraud or error, design and perform audit procedures responsive
+to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
+for our opinion. The risk of not detecting a material misstatement resulting from fraud is
+higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal control.
+•
+•
+•
+•
+Conclude on the appropriateness of the directors' use of the going concern basis of
+accounting and, based on the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast significant doubt on the Group's
+ability to continue as a going concern. If we conclude that a material uncertainty exists,
+we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our
+opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to
+continue as a going concern.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+(Continued)
+Independent Auditor's Report (Continued)
+161
+Our objectives are to obtain reasonable assurance about whether the consolidated financial
+statements as a whole are free from material misstatement, whether due to fraud or error, and to
+issue an auditor's report that includes our opinion. Our report is made solely to you, as a body,
+and for no other purpose. We do not assume responsibility towards or accept liability to any other
+person for the contents of this report.
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+The directors of the Bank are assisted by the Audit Committee in discharging their
+responsibilities for overseeing the Group's financial reporting process.
+Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
+in accordance with ISAs will always detect a material misstatement when it exists. Misstatements
+can arise from fraud or error and are considered material if, individually or in the aggregate, they
+could reasonably be expected to influence the economic decisions of users taken on the basis of
+these consolidated financial statements.
+UNAUDITED SUPPLEMENTARY INFORMATION
+37. Share capital, capital reserve, treasury shares and other equity instruments
+38. Statutory reserves, general and regulatory reserves and undistributed profits
+39. Non-controlling interests
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio .
+1.
+165
+403
+Global systemically importance assessment indicators of commercial banks
+6.
+Leverage ratio
+5.
+400
+401
+4.
+398
+International claims
+3.
+397
+Currency concentrations.
+2.
+Overdue assets. .
+393
+Transfers of Investment Property
+Classification and Measurement of Share-based
+Payment Transactions
+Revenue from Contracts with Customers
+Foreign Currency Transactions and Advance
+Consideration
+Financial Instruments
+Prepayment Features with Negative Compensation
+(issued in December 2016):
+IAS 28
+Insurance Contracts
+Annual Improvements to IFRSS
+2014-2016 Cycle
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018
+IFRS 15 and Amendments
+IFRS 9 Amendments
+IFRS 9
+IFRS 4 Amendments
+IFRS 2 Amendments
+IAS 40 Amendments
+On 1 January 2018, the Group adopted the following new standards, amendments and
+interpretations.
+Investments in Associates and Joint Ventures
+The preparation of financial statements in conformity with IFRSS requires the use of certain
+critical accounting estimates. It also requires management to exercise its judgement in the
+process of applying the Group's accounting policies. The areas involving a higher degree of
+judgement or complexity, or areas where assumptions and estimates are significant to the
+consolidated financial statements are disclosed in Note III.
+IFRIC Interpretation 22
+175
+141,972
+(31,719)
+V.38.1
+Appropriation to general and regulatory reserves
+V.38.2
+Dividends
+V.38.3
+Net change in treasury shares
+V.37.3
+Capital contribution by non-controlling shareholders
+Disposal of subsidiaries and other
+172,407
+As at 31 December 2017
+99,714
+Financial assets at fair value through other comprehensive income, financial assets and
+financial liabilities at fair value through profit or loss (including derivative financial
+instruments) and investment properties are measured at their fair values in the consolidated
+financial statement. Other accounting items are measured at their historical costs.
+Impairment allowance is recognised and measured as relevant policy.
+(3,854)
+125,714
+193,462
+560,339
+(53)
+75,410
+1,487,092
+294,388
+The consolidated financial statements of the Group have been prepared in accordance
+with IFRSS. In addition, the consolidated financial statements comply with the disclosure
+requirements of the Hong Kong Companies Ordinance.
+174
+1
+729,848
+V.42
+Cash and cash equivalents at end of year
+Cash and cash equivalents at beginning of year
+Net increase/(decrease) in cash and
+cash equivalents
+(27,125)
+20,646
+Effect of exchange rate changes on cash and
+cash equivalents
+65,584
+229,337
+Net cash inflow from financing activities
+(49)
+34
+Other net cash flows from financing activities
+(4,508)
+(5,101)
+shareholders
+Dividend payments to non-controlling
+(56,211)
+(60,495)
+958,752
+1,019,247
+1,688,600
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
+(Amount in millions of Renminbi, unless otherwise stated)
+8,224
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Appropriation to statutory reserves
+These consolidated financial statements have been approved by the Board of Directors on
+29 March 2019.
+The parent company is Central Huijin Investment Limited (“Huijin"), a wholly owned
+subsidiary of China Investment Corporation ("CIC"), which owned 64.02% of the ordinary
+shares of the Bank as at 31 December 2018 (31 December 2017: 64.02%).
+Basis of preparation
+The Bank's principal regulator is the CBIRC. The operations in Hong Kong, Macau, Taiwan
+and other countries and regions of the Group are subject to the supervision of local regulators.
+The Bank is licensed as a financial institution by the China Banking and Insurance
+Regulatory Commission (the “CBIRC”) No. B0003H111000001 and is issued the business
+license of legal enterprise with unified social credit code No. 911000001000013428 by the
+State Administration of Industry and Commerce of the PRC. The registered address is No.1,
+Fuxingmen Nei Dajie, Beijing, China.
+Bank of China Limited (the “Bank”), formerly known as Bank of China, a State-owned joint
+stock commercial bank, was founded on 5 February 1912. From its formation until 1949, the
+Bank performed various functions of a central bank, foreign exchange bank and commercial
+bank specialising in trade finance. Following the founding of the People's Republic of China
+(the "PRC") in 1949, the Bank was designated as a specialised foreign exchange bank.
+Since 1994, the Bank has evolved into a State-owned commercial bank. In this regard, in
+accordance with the Master Implementation Plan for the Joint Stock Reform approved by
+the State Council of the PRC, the Bank was converted into a joint stock commercial bank on
+26 August 2004 and its name was changed from Bank of China to Bank of China Limited. In
+2006, the Bank listed on the Stock Exchange of Hong Kong Limited and the Shanghai Stock
+Exchange.
+I GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+173
+The accompanying notes form an integral part of these consolidated financial statements.
+958,752
+The Bank and its subsidiaries (together the "Group") provide a full range of corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+services to its customers in the Chinese mainland, Hong Kong, Macau, Taiwan and other
+major international financial centres.
+V.12
+instruments Capital reserve
+Total
+(415)
+(41,281)
+(753)
+(35,417)
+294,388
+99,714
+141,880
+(28,454)
+141,247
+(87)
+207,402
+(102)
+79,910
+1,541,262
+29,860
+11
+255
+180,086
+15,621
+225,567
+605,277
+16,217
+7,119
+80,663
+V.12
+Appropriation to statutory reserves
+V.38.1
+Appropriation to general and regulatory reserves
+V.38.2
+Dividends
+V.38.3
+Net change in treasury shares
+V.37.3
+1,576,679
+Capital contribution by non-controlling shareholders
+As at 31 December 2018
+294,388
+99,714
+141,880
+(35,573)
+141,334
+207,817
+646,558
+(102)
+Other comprehensive income transferred to retained earnings V.12
+Other
+Total comprehensive income
+(16,217)
+(24,123)
+As at 1 January 2017
+Attributable to equity holders of the Bank
+Other
+General and
+Non-
+Other equity
+comprehensive
+Statutory
+regulatory Undistributed
+171
+Treasury
+Note
+Share capital
+(58,603)
+income
+reserves
+reserves
+profits
+shares
+interests
+controlling
+24,123
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+The accompanying notes form an integral part of these consolidated financial statements.
+(58,603)
+(5,101)
+(63,704)
+34
+34
+20,583
+20,583
+(11)
+1,404
+BANK OF CHINA LIMITED
+1,655
+99,714
+142,135
+1,417
+157,464
+231,525
+686,405
+(68)
+112,417
+1,725,397
+294.388
+Dividend payments to equity holders of the Bank
+investment
+(14,332)
+(144,326)
+financial investments
+Interest income arising from
+(1,162)
+(2,110)
+joint ventures
+Share of results of associates and
+(4,333)
+(148)
+subsidiaries, associates and joint ventures
+Net gains on disposal of investments in
+(606)
+(820)
+other long-term assets
+equipment, intangible assets and
+Net gains on disposal of property and
+3,158
+3,640
+other assets
+(127,360)
+Dividends arising from investment securities
+(264)
+(1,353)
+(8,447)
+Net increase in precious metals
+48,496
+107,814
+other financial institutions
+with and loans to banks and
+Net decrease in due from and placements
+27,192
+188,996
+Amortisation of intangible assets and
+Net decrease in balances with central banks
+(1,989)
+(1,652)
+Accreted interest on impaired loans
+15,799
+21,718
+Interest expense arising from bonds issued
+(2,406)
+(2,817)
+Net gains on financial investments
+Net changes in operating assets and liabilities:
+13,611
+13,403
+Depreciation of property and equipment
+99,714
+294.388
+(709)
+(615)
+281
+(95)
+(188)
+2,152
+2,152
+141,880
+(49)
+(60,719)
+(4,508)
+(56,211)
+(14,450)
+14,450
+(15,808)
+15,808
+(92)
+148,912
+(49)
+(11,459)
+(35,573)
+207,817
+88,161
+99,294
+Total comprehensive income
+222,903
+229,643
+Impairment losses on assets
+Adjustments:
+Profit before income tax
+Cash flows from operating activities
+141,334
+2017
+Note
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CASH FLOWS
+BANK OF CHINA LIMITED
+The accompanying notes form an integral part of these consolidated financial statements.
+1,576,679
+80.663
+(102)
+646,558
+Year ended 31 December
+2018
+(15,693)
+Net increase in financial assets held for trading
+(45,203)
+(3,949)
+(3,246)
+associates and joint ventures
+Increase in investments in subsidiaries,
+2,065,668
+2,425,239
+117,396
+140,366
+financial investments
+Proceeds from disposal/maturity of
+financial investments
+1,750
+499
+5,176
+5,300
+Interest income received from
+Dividends received
+subsidiaries, associates and joint ventures
+Proceeds from disposal of investments in
+Purchase of property and equipment,
+intangible assets and other long-term assets
+(42,149)
+(46,011)
+Cash payments for interest on bonds issued
+(446,896)
+(377,446)
+Repayments of debts issued
+2,152
+20,583
+Proceeds from non-controlling shareholders
+586,789
+664,202
+8,736
+Proceeds from issuance of bonds
+(505,090)
+(182,493)
+Net cash outflow from investing activities
+3,640
+3,798
+Other net cash flows from investing activities
+(2,657,496)
+(2,722,573)
+Purchase of financial investments
+Cash flows from financing activities
+10,273
+2017
+Year ended 31 December
+2018
+1,048,755
+Net increase in due to customers
+198,560
+110,368
+other financial institutions
+Net increase in placements from banks and
+168,638
+(138,637)
+Net(decrease)/increase in due to central banks
+712,389
+4,735
+and other financial institutions
+Net increase in due to banks
+121,362
+(110,167)
+Net (increase)/decrease in other assets
+(985,177)
+(964,105)
+to customers
+Net increase in loans and advances
+298,113
+(63,515)
+Net increase in other borrowings
+3,476
+Note
+other long-term assets
+Cash flows from investing activities
+Proceeds from disposal of property and
+equipment, intangible assets and
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
+BANK OF CHINA LIMITED
+172
+The accompanying notes form an integral part of these consolidated financial statements.
+406,136
+2,133
+662,358
+(38,463)
+(28,515)
+Income tax paid
+444,599
+690,873
+Cash inflow from operating activities
+(2,833)
+4,004
+Net increase/(decrease) in other liabilities
+Net cash inflow from operating activities
+770
+CONSOLIDATED INCOME STATEMENT
+As at 1 January 2018
+N/A
+Net fair value losses on available for sale
+financial assets
+N/A
+(20,641)
+Share of other comprehensive income of
+associates and joint ventures accounted for
+using the equity method
+59
+521
+- Exchange differences from the translation of
+foreign operations
+Other
+12,775
+197
+(16,226)
+324
+Subtotal
+34,503
+(36,022)
+Other comprehensive income for the year, net of tax
+33,132
+(36,074)
+(600)
+debt instruments measured at fair value through
+other comprehensive income
+- Allowance for credit losses on investments in
+N/A
+Other
+Subtotal
+Year ended 31 December
+Note
+2018
+2017
+192,435
+184,986
+V.12
+Total comprehensive income for the year
+(103)
+Items that may be reclassified subsequently to profit or loss
+- Changes in fair value on investments in debt
+instruments measured at fair value through
+other comprehensive income
+(1,216)
+N/A
+(52)
+7
+(1,371)
+(52)
+22,072
+(59)
+225,567
+148,912
+Total comprehensive income attributable to:
+560,463
+2,227,614
+Placements with and loans to banks and
+other financial institutions
+V.15
+1,042,358
+575,399
+bank notes issued
+V.26
+145,010
+2,331,053
+129,350
+181,203
+172,763
+Derivative financial assets
+V.16
+124,126
+94,912
+Loans and advances to customers, net
+V.17
+11,515,764
+Precious metals
+instruments designated at fair value through
+other comprehensive income
+V.14
+439,931
+Equity holders of the Bank
+209,946
+140,688
+Non-controlling interests
+15,621
+8,224
+225,567
+The accompanying notes form an integral part of these consolidated financial statements.
+167
+Balances with central banks
+148,912
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+As at 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+ASSETS
+Cash and due from banks and
+Note
+As at 31 December
+2018
+2017
+other financial institutions
+V.13
+BANK OF CHINA LIMITED
+10,644,304
+- Changes in fair value on investments in equity
+Items that will not be reclassified to profit or loss
+87,208
+88,691
+Net trading gains
+V.3
+6,719
+1,686
+Net gains on financial investments
+V.4
+2,817
+2,406
+Other operating income
+V.5
+47,356
+52,589
+Operating income
+503,806
+483,761
+Operating expenses
+V.6
+Net fee and commission income
+(12,109)
+(12,789)
+Fee and commission expense
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+Interest income
+Interest expense
+Net interest income
+Year ended 31 December
+Note
+2018
+2017
+V.1
+(176,979)
+687,900
+V.1
+(328,194)
+(284,227)
+359,706
+338,389
+Fee and commission income
+V.2
+99,997
+100,800
+622,616
+(173,859)
+Impairment losses on assets
+V.9
+Diluted
+180,086
+172,407
+12,349
+12,579
+192,435
+184,986
+V.11
+0.59
+Basic
+0.56
+0.56
+For details of the dividends paid or proposed, please refer to Note V.38.3.
+The accompanying notes form an integral part of these consolidated financial statements.
+166
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+Profit for the year
+Other comprehensive income:
+0.59
+- Actuarial losses on defined benefit plans
+Earnings per share (in RMB)
+Equity holders of the Bank
+(99,294)
+(88,161)
+Operating profit
+227,533
+221,741
+Share of results of associates and joint ventures
+V.19
+2,110
+1,162
+Non-controlling interests
+Profit before income tax
+222,903
+Income tax expense
+V.10
+(37,208)
+(37,917)
+Profit for the year
+192,435
+184,986
+Attributable to:
+229,643
+Financial investments
+V.18
+5,054,551
+V.37.2
+142,135
+141,880
+Treasury shares
+V.37.3
+(68)
+(102)
+Other comprehensive income
+V.12
+1,417
+(35,573)
+Statutory reserves
+V.38.1
+157,464
+141,334
+General and regulatory reserves
+V.38.2
+231,525
+207,817
+Capital reserve
+99,714
+99,714
+V.37.4
+3,027
+Deferred income tax liabilities
+V.35
+4,548
+4,018
+Other liabilities
+V.36
+298,362
+439,210
+Undistributed profits
+Total liabilities
+17,890,745
+EQUITY
+Capital and reserves attributable to
+equity holders of the Bank
+Share capital
+V.37.1
+294,388
+294,388
+Other equity instruments
+19,541,878
+V.38
+686,405
+646,558
+Attributable to equity holders of the Bank
+Other
+General and
+Non-
+Other equity
+comprehensive
+Statutory
+regulatory Undistributed
+Treasury
+Changes in accounting policies - impact of
+adopting IFRS 9
+controlling
+Share capital
+instruments Capital reserve
+income
+reserves
+reserves
+profits
+shares
+interests
+Total
+Note
+2,825
+As at 31 December 2017
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+1,612,980
+1,496,016
+Non-controlling interests
+V.39
+112,417
+80,663
+Total equity
+1,725,397
+1,576,679
+For the year ended 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+Total equity and liabilities
+19,467,424
+Approved and authorised for issue by the Board of Directors on 29 March 2019.
+The accompanying notes form an integral part of these consolidated financial statements.
+CHEN Siqing
+Director
+169
+LIU Liange
+Director
+BANK OF CHINA LIMITED
+21,267,275
+V.33
+Retirement benefit obligations
+34,521
+Property and equipment
+V.20
+227,394
+205,614
+Investment properties
+V.21
+22,086
+21,026
+Deferred income tax assets
+17,180
+V.35
+46,487
+Other assets
+V.22
+122,226
+217,590
+Total assets
+21,267,275
+The accompanying notes form an integral part of these consolidated financial statements.
+168
+38,204
+19,467,424
+23,369
+Investments in associates and joint ventures
+4,554,722
+- financial assets at fair value through
+profit or loss
+370,491
+193,611
+- financial assets at fair value through other
+comprehensive income
+1,879,759
+N/A
+- financial assets at amortised cost
+V.19
+2,804,301
+- available for sale
+N/A
+1,857,222
+- held to maturity
+N/A
+2,089,864
+loans and receivables
+N/A
+414,025
+N/A
+170
+BANK OF CHINA LIMITED
+Note
+20,372
+Derivative financial liabilities
+V.16
+99,254
+111,095
+Due to customers
+V.29
+14,883,596
+13,657,924
+14,327
+Bonds issued
+782,127
+499,128
+Other borrowings
+V.31
+32,761
+30,628
+Current tax liabilities
+V.32
+27,894
+V.30
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
+As at 31 December 2018 (Amount in millions of Renminbi, unless otherwise stated)
+V.28
+500,092
+As at 31 December
+2018
+2017
+LIABILITIES
+Due to banks and other financial institutions
+V.24
+1,731,209
+1,425,262
+Due to central banks
+V.25
+Financial liabilities held for trading
+907,521
+Bank notes in circulation
+V.26
+145,187
+129,671
+Placements from banks and
+other financial institutions
+V.27
+612,267
+BANK OF CHINA LIMITED
+1,035,797
+Government certificates of indebtedness for
+V.2
+From: Investment securities
+Impairment
+allowances
+Measurement
+category
+The following table reconciles the aggregate opening impairment allowances under IAS 39
+at 31 December 2017 to the impairment allowances under IFRS 9 at 1 January 2018:
+1.1.1.2 The impact of transition from IAS 39 to IFRS 9 on impairment allowances is as follows:
+1.1.1 IFRS 9 Financial Instruments (Continued)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+Basis of preparation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+183
+(7) As at 1 January 2018, the Group re-designated certain bonds issued as financial liabilities at
+FVPL in order to eliminate or significantly reduce accounting mismatches.
+(6) As at 1 January 2018, the Group no longer designated part of customer deposits as financial
+liabilities at FVPL in order to eliminate or significantly reduce accounting mismatches.
+As at 1 January 2018, the Group no longer designated fund investments and certain
+investments in equity instruments as financial assets at FVPL in accordance with IFRS 9.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+Basis of preparation (Continued)
+under IAS 39/IAS 37
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+1.1.1.1 Transition disclosures of the balances in financial statements from IAS 39 to IFRS 9 (Continued)
+(1) As at 1 January 2018, certain debt securities were reclassified to AC out of AFS
+category, after the Group reviewed the contractual cash flows and the business model.
+The fair value of these debt securities held by the Group as at 31 December 2018 was
+RMB262,202 million. The fair value changes over 2018, that would have been recorded in
+other comprehensive income had these instruments continued to be revalued through other
+comprehensive income, would have been gains of RMB8,602 million.
+(2) As at 1 January 2018, certain AFS securities were designated as financial assets at FVPL
+as the Group held related derivatives instruments which can hedge the risk according to the
+risk management strategy of the Group, and these designations can eliminate or significantly
+reduce an accounting mismatch that would otherwise arise.
+(3) As at 1 January 2018, certain debt securities were reclassified to AC from FVPL category,
+after the Group reviewed the contractual cash flows and the business model.
+(4) As at 1 January 2018, certain debt securities were reclassified to FVOCI from FVPL
+category, after the Group reviewed the contractual cash flows and the business model.
+(5) As at 1 January 2018, certain debt securities were no longer designated at FVPL because
+these investments were managed and whose performances were evaluated on a fair value
+basis.
+1.1.1 IFRS 9 Financial Instruments (Continued)
+Re-
+Re-
+ECL
+under IFRS 9
+at 1 January
+252,254
+5,383
+28,309
+280,563
+(268)
+5,109
+HTM investment securities per IAS 39/financial assets at AC under IFRS 9
+Financial investments
+Financial investments
+39
+394
+1,450
+L&R investment securities per IAS 39/financial assets at FVOCI under IFRS 9
+Loans and advances to
+customers
+1,033
+1,033
+1,017
+BANK OF CHINA LIMITED
+customers
+90
+at 31 December 2017
+classification
+measurement
+2018
+L&R investment securities per IAS 39/financial assets at AC under IFRS 9
+Due from banks and other
+financial institutions
+270
+Placements with and loans
+financial institutions
+Loans and advances to
+174
+272
+272
+96
+to banks and other
+FVPL
+17,239
+AC
+1,907
+1,729
+507,866 AC/FVPL
+(designated)
+From: Financial liabilities held
+(7) AC
+5,102
+(15,813)
+From: Bonds issued at AC
+(7)
+Other borrowings
+AC
+30,628
+Financial liabilities held
+for trading
+for trading
+499,128
+AC
+AC/FVPL 13,657,924
+(6) FVPL
+167,329
+(49)
+13,825,204 AC/FVPL
+(359,937)
+To: Derivative financial
+AC
+liabilities
+FVPL
+(49)
+FVPL (designated)
+Bonds issued
+(6)
+359.937
+From: Due to customers at
+AFS investment securities per IAS 39/financial assets at FVOCI under IFRS 9
+Financial investments
+FVPL
+20
+4.018
+1
+133
+4,152
+190.226 (190,226)
+17,890,745
+29,237
+Total liabilities
+1,491 17,921,473
+1.907
+FVPL
+15,813
+1,729
+FVPL
+30,628
+182
+20,372
+liabilities
+Interest payable
+32,177
+(3,153)
+To: Bonds issued at FVPL
+(designated)
+To: Due to banks and other
+financial institutions
+(1,907)
+Deferred income tax
+(1,246)
+Include: Provision
+480,776 (190,226)
+2,941
+29,237
+(238)
+319,549
+29,236
+Other liabilities
+To: Due to customers at AC
+5,492
+906
+(126)
+2,745,002
+N/A
+Financial assets at AC
+Amount Category
+Other
+ECL
+Interest classification
+Amount
+Note Category
+Re-
+Accrued
+IFRS 9
+Re-measurement
+IAS 39
+1.1.1.1 Transition disclosures of the balances in financial statements from IAS 39 to IFRS 9 (Continued)
+1.1.1 IFRS 9 Financial Instruments (Continued)
+Amortised cost
+Fair value through profit or loss
+Fair value through other comprehensive income
+Expected credit losses
+Not applicable
+179
+13,643 2,758,519 AC
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+Basis of preparation (Continued)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+available for sale
+(1)
+Uncertainty over Income Tax
+Treatments
+Effective for
+annual periods
+beginning on or
+after
+1 January 2019
+1 January 2019
+IAS 19 Amendments
+Plan amendment, Curtailment or
+Settlement
+IFRIC Interpretation 23
+1 January 2019
+1 January 2019
+1 January 2020
+IFRS 3 Amendments
+IAS 1 and IAS 8 Amendments
+IFRS 17
+IFRS 10 and IAS 28
+Amendments
+IAS 28 Amendments
+Debt securities held to maturity
+Leases
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2018
+252,601
+(25) 13,848
+From: Debt securities held
+to maturity
+2,102,815
+(368)
+IFRS 16
+(22)
+384,603
+268
+From: Financial assets at FVPL
+(3)
+1
+Basis of preparation (Continued)
+From: Loans and receivables
+Investment securities available for sale
+Loans and receivables
+(17,126)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+To: Loans and advances to
+customers at FVOCI
+L&R
+(179,179)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+From: Loans and advances to
+179,179
+From: Financial assets at FVPL
+5,493
+FVOCI
+FVPL
+Loans and receivables
+L&R
+customers at AC
+414,025
+BANK OF CHINA LIMITED
+321,378
+906
+AFS investment securities per IAS 39/financial assets at FVPL under IFRS 9
+Financial investments
+(1,176)
+Credit commitments
+Others
+Total
+184
+1,176
+29,236
+(134)
+31,182
+593
+267,191
+(5,657)
+59,844
+1,946
+727
+(5,492)
+4,964
+N/A
+21,254
+(1,878,476)
+(1)
+(252,601)
+(1,507,154)
+(13,685)
+AFS 1,857,222
+(105,036)
+2,089,864
+30,178
+(2,120,042)
+N/A
+(2,102,815)
+(101)
+HTM
+(418,989)
+N/A
+FVOCI
+To: Financial assets at AC
+To: Debt instruments at FVOCI
+To: Financial assets at FVPL
+Investment securities available
+for sale
+(384,603)
+(470)
+(33,916)
+N/A
+ECL
+To: Financial assets at AC
+To: Debt instruments at FVOCI
+To: Equity instruments at FVOCI
+Debt securities held to maturity
+To: Financial assets at AC
+To: Debt instruments at FVOCI
+To: Financial assets at FVPL
+Note: L&R
+AFS
+HTM
+AC
+FVPL
+To: Financial assets at FVPL
+Due to customers
+To: Bonds issued at FVPL
+From: Due to customers at
+FVPL (designated)
+From: Loans and receivables
+180
+17,126
+(267)
+98,500
+(25)
+33,916
+(600)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+Basis of preparation (Continued)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+1.1.1 IFRS 9 Financial Instruments (Continued)
+Accrued
+IFRS 9
+has been deferred
+1 January 2020
+1 January 2021
+Effective date
+Sale or Contribution of Assets
+between an Investor and its
+Associate or Joint Venture
+Definition of Material
+Insurance Contracts
+available for sale
+Definition of a Business
+Long-term Interests in Associates and
+IFRSS 2015-2017 Cycle
+(issued in December 2017)
+Annual Improvements to
+Re-measurement
+IAS 39
+1.1.1.1 Transition disclosures of the balances in financial statements from IAS 39 to IFRS 9 (Continued)
+Joint Ventures
+From: Investment securities
+to maturity
+From: Debt securities held
+Financial assets held for
+Financial assets at FVPL-
+available for sale
+From: Investment securities
+13,685
+N/A
+trading and other financial
+Equity instruments at FVOCI
+From: Financial assets at FVPL (4)
+470
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+4,395
+Re-
+assets at FVPL
+13,685 FVOCI
+26,596
+(5)
+(designated)
+From: Financial assets at FVPL
+(149)
+(4)
+13,685
+To: Debt instruments at FVOCI
+(3)
+To: Financial assets at AC
+(892) 318,634 FVPL
+49
+1,038
+FVPL 143,094
+(595)
+Note Category
+Amount Interest classification
+ECL
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+181
+1
+10,079 19,462,735
+19,467,424
+Total assets
+1,523
+(95,396)
+96,919
+Interest receivable
+(14,768)
+(2,671) 57,717
+Basis of preparation (Continued)
+1.1.1 IFRS 9 Financial Instruments (Continued)
+1,425,262
+AC
+Due to banks and other financial
+institutions
+Amount Category
+Other
+ECL
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+Amount Interest classification
+Re-
+Accrued
+IFRS 9
+Re-measurement
+IAS 39
+1.1.1.1 Transition disclosures of the balances in financial statements from IAS 39 to IFRS 9 (Continued)
+Note Category
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+13,901
+tax assets
+(26,596)
+(4)
+634
+To: Financial assets at AC
+assets at FVPL
+trading and other financial
+(4,388)
+To: Financial assets at FVPL-
+Financial assets held for
+75 (34,187)
+50,517
+FVPL
+Financial assets at FVPL
+(designated)
+Amount Category
+Other
+16,405 FVPL
+46,487
+To: Debt instruments at FVOCI
+customers at FVPL
+Include: Deferred income
+FVPL
+94,912
+(2,671) 596,628
+14,035
+680,660 (95,396)
+Other assets
+To: Loans and advances to
+94,912
+Derivative financial assets
+6,536
+available for sale
+(5,493)
+(4,246)
+From: Investment securities
+FVPL
+1
+175,394
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+N/A
+1,512,120
+(1) 1,512,119 FVOCI
+From: Investment securities
+available for sale
+1,507,154
+From: Debt securities held
+to maturity
+101
+1
+Basis of preparation (Continued)
+/FVPL
+10,649,000
+5,493 (28,309)
+27,512
+10,644,304
+L&R
+575,399
+2,914
+(96)
+578,217
+AC
+Government certificates of
+Debt instruments at FVOCI
+indebtedness for bank notes
+L&R
+129,350
+--- - 129,350
+Loans and advances to
+AC
+AC/FVOCI
+customers, net
+issued
+(183)
+(1)
+4,983
+other financial institutions
+AC
+500,092
+873
+3 - - - 500,965
+Derivative financial liabilities
+Placements from banks and
+FVPL
+indefinitely
+1 January 2019
+In January 2016, the IASB issued IFRS 16 Leases, which replaces IAS 17 and IFRIC 4. The
+standard requires that the classifications of finance leases and operating leases be cancelled
+and that lessees recognise right-of-use assets and lease liabilities for all leases (except
+short-term leases and low-value assets leases chosen to be accounted for using a practical
+expedient), and to separately recognise depreciation and interest expense. The Group will
+adopt IFRS 16 from 1 January 2019 and apply the modified retroactive approach without
+restating comparative figures. The Group will not reassess existing contracts and will use the
+practical expedients to leases previously classified as operating leases before 1 January 2019.
+As a lessee, the Group will elect recognition exemption not to recognise the right-of-use assets
+and lease liabilities for short-term leases and lease of low value assets, but recognise lease
+expenses on a straight-line basis over the lease term.
+185
+49
+AC
+111,144 FVPL
+111,095
+L&R
+1,045,033 AC
+- 129,671 AC
+AC
+7,666
+1,246
+1,434,174
+AC
+From: Financial liabilities held
+for trading
+129.671
+FVPL
+AC
+Due to central banks
+AC
+1,035,797
+9,236
+Bank notes in circulation
+1,246
+institutions
+From: Loans and receivables
+Placements with and loans
+In October 2017, the IASB issued amendments to IFRS 9 Financial Instruments. The
+amendments allow financial assets with prepayment features that permit or require a party
+to a contract either to pay or receive reasonable compensation for the early termination of
+the contract to be measured at amortised cost or at fair value through other comprehensive
+income. The amendments are effective for annual reporting periods beginning on or after
+1 January 2019, but earlier application is permitted. The Group adopted IFRS 9 amendments
+from 1 January 2018.
+The Group has not restated comparative information for 2017 for financial instruments in
+the scope of IFRS 9 (refer to the 2017 annual report for the accounting policies related to
+financial instruments of the Group in 2017). Therefore, the comparative information for
+2017 is reported under IAS 39 and is not comparable to the information presented in these
+consolidated financial statements for 2018. Differences arising from the adoption of IFRS 9
+have been recognised directly in shareholders' equity as at 1 January 2018.
+177
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which
+reflects all phases of the financial instruments project. IFRS 9 replaces IAS 39 Financial
+Instruments for annual periods on or after 1 January 2018.
+(Amount in millions of Renminbi, unless otherwise stated)
+1
+Basis of preparation (Continued)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+1.1.1 IFRS 9 Financial Instruments (Continued)
+Classification and Measurement
+In IFRS 9, financial assets are classified into three categories: amortised cost, fair value through
+other comprehensive income and fair value through profit or loss based on the entity's business
+model for managing the financial assets and their contractual cash flow characteristics. In
+addition, investments in equity instruments are required to be measured at fair value through
+profit or loss, unless an option is irrevocably exercised at inception to present changes in fair
+value in other comprehensive income in which case the accumulated fair value changes in other
+comprehensive income will not be recycled to profit or loss in the future. Refer to Note II.4.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Impairment
+1.1.1 IFRS 9 Financial Instruments
+Annual Improvements to IFRSS 2014-2016 Cycle was issued in December 2016. The
+amendments to IAS 28 Investments in Associates and Joint Ventures clarify that an entity
+that is a venture capital organisation, or other qualifying entity, may elect, at initial
+recognition on an investment-by-investment basis, to measure its investments in associates
+and joint ventures at fair value through profit or loss. If an entity that is not itself an
+investment entity has an interest in an associate or joint venture that is an investment entity,
+the entity may, when applying the equity method, elect to retain the fair value measurement
+applied by that investment entity associate or joint venture to the investment entity
+associate's or joint venture's interests in subsidiaries.
+International Accounting Standard (“IAS”) 40 Amendments clarify when an entity should
+transfer property, including property under construction or development, into or out of
+investment property. The amendments state that a change in use occurs when the property
+meets, or ceases to meet, the definition of investment property and there is evidence of the
+change in use. A mere change in management's intentions for the use of a property does not
+provide evidence of a change in use.
+The IASB issued amendments to IFRS 2 that address three main areas: the effects of
+vesting conditions on the measurement of a cash-settled share-based payment transaction;
+the classification of a share-based payment transaction with net settlement features
+for withholding tax obligations; and accounting where a modification to the terms and
+conditions of a share-based payment transaction changes its classification from cash settled
+to equity settled.
+The IASB issued amendments to IFRS 4 that address concerns arising from implementing
+the new financial instruments standard, IFRS 9, before implementing the new insurance
+contracts standard that the IASB is developing to replace IFRS 4. The amendments
+introduce two options for entities issuing insurance contracts: a temporary exemption from
+applying IFRS 9 and an overlay approach.
+IFRS 15 and Amendments establish a new five-step model that will apply to revenue
+arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount
+that reflects the consideration to which an entity expects to be entitled in exchange for
+transferring goods or services to a customer. The principles in IFRS 15 provide a more
+structured approach to measuring and recognising revenue. IFRS 15 does not apply to
+revenue associated with financial instruments, and therefore, will not impact the majority
+of the Group's revenue, including net interest income, net trading gains and net gains on
+financial investments which are covered under IFRS 9.
+International Financial Reporting Interpretations Committee ("IFRIC”) Interpretation 22
+clarifies that in determining the spot exchange rate to use on initial recognition of the related
+asset, expense or income (or part of income) on the derecognition of a non-monetary asset
+or non-monetary liability relating to advance consideration, the date of the transaction is
+the date on which an entity initially recognises the non-monetary asset or non-monetary
+liability arising from the advance consideration. If there are multiple payments or receipts
+in advance, then the entity must determine a date of the transactions for each payment or
+receipt of advance consideration.
+176
+Except for IFRS 9, the adoption of the above standards, amendments and interpretations
+does not have any significant impact on the operating results, financial position and
+comprehensive income of the Group.
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+to banks and other financial
+Basis of preparation (Continued)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+IFRS 9 requires that the measurement of impairment of a financial asset be changed from
+"incurred loss model" to "expected credit loss model" ("ECL model") and this way of
+measurement applies to financial assets measured at amortised cost, debt instruments
+measured at fair value through other comprehensive income, and loan commitments and
+financial guarantee contracts. Refer to Note II.4.6.
+1
+The new hedge accounting model aims to provide a better link among an entity's risk
+management strategy, the rationale for hedging and the impact of hedging on the financial
+statements. Greater flexibility has been introduced to the types of transactions eligible
+for hedge accounting. To remove the risk of any conflict between existing macro hedge
+accounting practice and the new general hedge accounting requirements, IFRS 9 includes an
+accounting policy choice to continue to apply the existing hedge accounting requirements in
+IAS 39. The Group has chosen to adopt the new hedge accounting requirements in IFRS 9
+from 1 January 2018.
+Amount Interest classification
+ECL
+Other
+Amount Category
+Cash and due from banks and
+other financial institutions
+Balances with central banks
+L&R
+Note Category
+L&R
+(272)
+566,741
+AC
+2,228,525
+AC
+Hedge accounting
+6.550
+911
+Re-
+560,463
+2,227,614
+IFRS 9
+178
+Accrued
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+(Amount in millions of Renminbi, unless otherwise stated)
+1.1 Standards, amendments and interpretations effective and have been early adopted by the
+Group in 2018 (Continued)
+1.1.1 IFRS 9 Financial Instruments (Continued)
+1.1.1.1 Transition disclosures of the balances in financial statements from IAS 39 to IFRS 9
+Re-measurement
+A reconciliation between the carrying amounts of the assets under IAS 39 to the balances
+reported under IFRS 9 as of 1 January 2018 is as follows:
+Basis of preparation (Continued)
+IAS 39
+We diligently performed targeted poverty alleviation. We earnestly acted on the decisions and
+deployments made by the CPC Central Committee and the State Council in order to win the tough
+battle against poverty, and made all-out efforts in poverty alleviation. We continuously increased
+our input of financial resources, with our poverty alleviation loans increasing by 23% for the
+year to reach a balance of RMB62.4 billion. We actively brought together all kinds of resources
+at home and abroad to engage in poverty alleviation. The Bank assigned 1,550 management
+personnel to four impoverished counties in Xianyang, Shaanxi, as well as to 1,052 impoverished
+villages across the rest of the country, and provided RMB115 million gratuitous capital to them.
+era.
+We actively improved the quality and efficiency in serving the real economy. The Group's
+total loans and advances to customers during the year increased by RMB922.714 billion over the
+end of the previous year, providing a wellspring of capital for the real economy. We continued to
+adjust and refine our credit structure, with new loans mainly granted to improve the weak links
+in infrastructure and to strategic emerging industries. We resolutely carried out the spirit of the
+symposium on private enterprises, taking the initiative to issue the Twenty Provisions of BOC
+on Supporting Private Enterprises. We enhanced the interaction of investment, loans and bonds,
+and strictly controlled loan pricing and service charges to make financing more accessible and
+affordable for micro and small-sized enterprises. Our loans of inclusive finance increased by
+12.26%, a higher growth rate than the bank-wide average.
+We actively served the supply-side structural reform. We took firm steps to cut overcapacity,
+reduce excess inventory, assist with deleveraging, lower costs and strengthen areas of weakness,
+and our balance of loans to industries with overcapacity continued to fall. We actively practiced
+the concept of “lucid waters and lush mountains are invaluable assets", and our ratio of green
+credit steadily increased. We pushed ahead with “deleveraging" in a proactive and appropriate
+manner, and helped high-potential enterprises facing temporary financial challenges to survive
+their difficulties. In the past year, we carried out market-based debt-for-equity swaps with a total
+volume of RMB43.9 billion. Upholding the belief that houses are for living, not speculation, we
+earnestly implemented the housing finance policies and strictly carried out differentiated credit
+policies.
+We strongly prevented and mitigated risks. We sticked to a "bottom line thinking" approach,
+better combined risk prevention and mitigation with serving the real economy, and consistently
+reinforced the "three lines of defence” in risk management. We stepped up the efforts of risk
+mitigation, with domestic branches disposing RMB152.5 billion of non-performing assets last
+year. We worked hard to perfect our internal risk control system, launched a compliance file
+system for all employees and established the internal control and compliance assessment system.
+We improved our management system and mechanism for consumer protection, resulting
+in our regulatory rating improving for two consecutive years. We thoroughly executed the
+requirement to straighten out banking market disorders, stepped up corrective measures and
+improved the internal control system. We also optimised the Group's institutional system for anti-
+money laundering, counterterrorism and sanction compliance and strengthened the anti-money
+laundering system. The Bank ranked first in the PBOC's rating of domestic commercial banks for
+anti-money laundering work.
+We earnestly served China's all-round opening up. We consistently provided financial
+services for the Belt and Road Initiative, and had accumulatively granted more than USD130.0
+billion credit for projects along the Belt and Road, while maintaining sound asset quality.
+We held two Belt and Road International Financial Exchange & Cooperation Seminars for
+four Central and Eastern European countries and nine African countries, in a bid to deepen
+the economic and trade cooperation and people-to-people exchanges between China and
+those countries. We actively served the first China International Import Expo (CIIE), held the
+Exhibitor-Businessman Supply-Demand Matchmaking Conference, and facilitated the reaching of
+1,258 intentions of cooperation.
+Keeping abreast with the times and pressing ahead resolutely, we pushed forward the
+building of a world-class bank in the new era with solid steps.
+In 2018, guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, we formulated a new development strategy for the Bank, persistently enabled advancement
+through technology, drove development through innovation, delivered performance through
+transformation and enhanced strength through reform, in an effort to build BOC into a world-
+class bank in the new era. In the past year, we adhered to the general principle of pursuing
+progress while ensuring stability, focused on serving the supply-side structural reform, and
+pushed ahead with work related to serving the real economy, preventing and mitigating risks, and
+deepening reform and innovation. By advancing the implementation of our development strategy,
+the Bank made a promising start on its journey towards building a world-class bank in the new
+10
+In this beautiful and vigorous spring season, I am pleased to present our 2018 annual results
+to the shareholders of the Bank and the public. According to International Financial Reporting
+Standards, the Group achieved a profit for the year of RMB192.4 billion, a year-on-year increase
+of 4.03%, and a profit attributable to equity holders of the Bank of RMB180.1 billion, a year-
+on-year increase of 4.45%. The ratio of non-performing loans was 1.42%, down 0.03 percentage
+point from the prior year-end. The allowance for loan impairment losses to non-performing loans
+was up 22.79 percentage points to 181.97% from a year earlier. The Board of Directors has
+proposed a dividend of RMB0.184 per ordinary share for 2018, pending approval by the Annual
+General Meeting to be held in May 2019.
+Stock Name: 中行優2
+9
+Stock Code: 4601
+The Stock Exchange of Hong Kong Limited
+Stock Name: BOC 2014 PREF
+Offshore Preference Share
+Stock Code: 360010
+Second Tranche
+Stock Code: 360002
+Technology played a larger role in enabling advancement and digitalised development
+accelerated. With mobile banking, transaction banking and smart counter as carriers, we
+accelerated the digitalisation across the whole Bank. The number of subscribers to our
+mobile banking business exceeded 140 million and transaction volume exceeded RMB20
+trillion, with customer experience and market reputation significantly improved. We
+completed the three platforms of private cloud, big data and AI, and put into use a string
+of key projects including the intelligent investment advisor, smart customer service, smart
+risk control and quantitative transaction. The integration and transformation of overseas
+information systems was successfully completed, thus achieving unified systems, centralised
+deployments and integrated operation around the globe.
+Stock Name: 中行優1
+Message from the Chairman
+11
+The Bank upgraded its products and services in order to drive development through
+innovation. The number of new products increased 126% year on year, injecting new vitality
+into our business development. The Bank participated in the construction of the financial module
+of "single window" of the customs, and launched an innovative electronic collective letter of
+guarantee service for customs duty payment. It handled the first batch of crude oil futures trading
+and provided a package of related financial services, as well as completing operations for the
+internationalisation of first batch of iron ore futures and the Pure Terephthalic Acid (PTA)
+futures. The Bank released the intelligent investment advisory product “BOC Robot Advisor",
+Performance through transformation resulted in solid progress and ability of value
+creation capacity continued to improve. We made special efforts to optimise our business
+structure, with the contribution of personal banking operating revenue of the Group further
+increasing. Our capital-light businesses developed rapidly, including global businesses
+on behalf of customers and debt capital market. We accelerated the development of our
+global products and worldwide coordinated marketing, thus further enhancing business
+globalisation. We commenced the preparation for a wealth management subsidiary and
+BOC financial leasing, deepening our provision of comprehensive services. We also moved
+steadily ahead with our capital replenishment program and issued RMB80.0 billion of tier 2
+capital bonds.
+First Tranche
+15
+The Bank remained committed to prudent operations and strengthened risk management
+on all fronts. The Group's asset quality was basically stable during the year. Domestic branches
+disposed of non-performing assets of RMB152.5 billion, and outstanding loans and outstanding
+non-performing loans granted to industries with severe overcapacity decreased by RMB10.1
+billion and RMB3.3 billion, respectively. The Europe-Africa collective approval centre was
+established to strengthen the management and control of overseas credit risk. The Bank paid
+close attention to market changes, took strong measures to deal with fluctuations in emerging
+markets, strengthened daily monitoring and pre-warning of bonds, and intensified the proactive
+management of market risk. It reinforced its anti-money laundering system, strengthened the
+construction of branch-level monitoring and analytical centres, and consolidated the compliance
+management of domestic and overseas institutions so as to comprehensively upgrade its level of
+compliance in an all-round manner.
+The Bank continuously improved its management mechanisms in order to enhance strength
+through reform. The Bank developed plans for 11 key fields including information technology,
+corporate finance, personal finance, financial markets, and global operations, and took solid
+steps to implement the Group's strategy. It reformed its incentive and constraint mechanism
+and resource allocation mechanism so as to strengthen value creation. It improved its allocation
+mechanism for staff costs to emphasise long-term performance, and implemented five-year
+thorough personal appraisal for high-ranking employees. It steadily advanced the structural
+reform of the Head Office, and refined the organisational structure of equity investment and
+comprehensive service management, transaction banking, and inclusive finance. The Bank
+improved the management mode and clarified the development strategies of its branches in
+provincial capitals, thus enhancing the competitiveness of those institutions.
+The Bank endeavoured to deliver performance through transformation with the aim of
+supporting high-quality economic development. Relying on its leading advantages in global
+operations, the Bank took the initiative to serve the country's expansion of opening-up. It sped
+up its efforts in free trade zones, becoming one of the first pilot banks in the free trade account
+system of Hainan. It cooperated with China Foreign Exchange Trade System and took the lead
+in launching the CFETS-BOC Traded bond index in Singapore. Steady progress was made in
+its overseas regional management and network. Six Southeast Asian institutions were integrated
+with BOCHK, the professional role of overseas business centres was strengthened, and the
+intensive operation and management was gradually enhanced. The Bank pushed forward its
+comprehensive services, strengthened effective synergy of commercial banking business with
+securities, insurance, funds, and investment banking, providing its customers with efficient
+package services. Thus its comprehensive operation maintained favourable growth momentum.
+The Bank's asset-light strategy yielded excellent results. The development of asset-light
+businesses such as old-age pension accelerated, and the Group's credit risk weight declined by
+1.3 percentage points.
+recording a transactions volume of RMB5.7 billion. It issued the Railway e Card in an effort to
+expand the scenarios in rail transport. In addition, the Bank launched an appointment service for
+online foreign-currency withdrawal for personal customers. It put into operation an integrated
+financial service platform for supply chain, as well as a cloud technology-backed payment
+platform, thus boosting innovation in its product portfolios.
+14
+The Bank persistently enabled advancement through technology, and accelerated the
+construction of a digital bank. The Bank continuously improved the functions of mobile
+banking, with the volume of its mobile banking transactions exceeding RMB20 trillion. It
+accelerated the development of an intelligent outlet service system by setting up smart counters
+at all outlets and promoting mobile and cash-based smart counters, thus greatly improving
+outlet productivity. It launched door-to-door account opening services for corporate customers,
+shortening the handling time to 30 minutes. It established the "Cyber Defense" anti-fraud
+platform based on big data and AI technology. The Bank completed the infrastructure of
+distributed private cloud platform, big data platform, and AI platform to support business
+innovation. It decisively advanced the construction of a “multi-region, multi-centre” IT
+infrastructure, and put the Xi'an Cloud Centre into operation. Our technology service capacity
+continued to improve, and our IT capacity grew 16.6% year on year. It ranked 2nd in the number
+of FinTech invention patent applications in the global financial industry.
+In 2018, the Bank actively responded to changes in the external environment, and achieved
+steady growth. First, our operating income saw a continued increase. The Group's operating
+income reached RMB503.806 billion, up 4.14% year on year. Second, our operating efficiency
+improved steadily. The Group's cost-to-income ratio was 28.09%, down 0.25 percentage point
+from the previous year. Third, our business structure was constantly improved. The contribution
+of personal banking operating revenue of the Group further increased. Overseas business
+maintained favourable growth momentum, and unique strengths were continuously consolidated.
+Notably, the Bank's capacity to offset risk was significantly strengthened. The allowance for loan
+impairment losses to non-performing loans reached 181.97%, an increase of 22.79 percentage
+points compared with the previous year.
+At the end of 2018, the Group's total assets stood at RMB21.27 trillion, its total liabilities
+amounted to RMB19.54 trillion and the equity attributable to shareholders of the Bank was
+RMB1.61 trillion according to International Financial Reporting Standards, representing an
+increase of 9.25%, 9.23% and 7.82% respectively from the prior year-end. The Group achieved a
+profit for the year of RMB192.4 billion, a year-on-year increase of 4.03%. The Bank's common
+equity tier 1 capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio stood
+at 11.41%, 12.27% and 14.97% respectively, all meeting regulatory requirements.
+2018 marked the first year for Bank of China to implement its new development strategy. With
+the aim of building BOC into a world-class bank in the new era, we advanced our work on all
+fronts by persistently enabling advancement through technology, driving development through
+innovation, delivering performance through transformation and enhancing strength through
+reform, and therefore achieved solid performance in the year.
+Message from the President
+29 March 2019
+Chairman
+CHEN Siqing
+13
+The world today is faced with profound changes, never seen before in the past century. The
+external environment for the banking industry has become more severe and complicated.
+Following the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, BOC
+will adhere to the general spirit of seeking progress while maintaining stability and complete the
+work of deepening supply-side structural reform in the financial sector. We will maintain our
+strategic resolve, implement our strategy at still deeper levels, improve our financial services
+offering and prevent financial risks, with the aim of laying a decisive foundation to achieve our
+goals in the first stage of our strategy and celebrate the 70th anniversary of the founding of the
+People's Republic of China by delivering outstanding performance.
+In 2018, the Bank completed the changes of some directors in accordance with relevant laws,
+regulations and the Articles of Association. Mr. LIU Liange began to serve as Vice Chairman and
+Executive Director of the Bank; Mr. WU Fulin and Mr. LIN Jingzhen began to serve as Executive
+Directors of the Bank; and Mr. LIAO Qiang and Mr. JIANG Guohua began to serve as Non-
+executive Director and Independent Director of the Bank respectively. On behalf of the Board
+of Directors, I would like to extend my warm welcome to the new directors and my heartfelt
+gratitude to Mr. REN Deqi, Mr. ZHANG Qingsong, Mr. ZHANG Xiangdong and Mr. Nout
+WELLINK, who have ceased to serve as Directors of the Bank, for their contributions to BOC's
+reform and development.
+12
+Guided by our development strategy, the Bank's operation management reached a new level.
+First, our operating revenues exceeded RMB500.0 billion for the first time, recording the highest
+profits of recent years. Second, the allowance for loan impairment losses exceeded RMB107.0
+billion, demonstrating enhanced ability to offset risk. Third, our capital adequacy ratio continued
+to rise, with our tier 1 capital ranking 3rd among the top 1000 banks worldwide, up one spot
+from the previous year. Fourth, our per-capita and per-outlet profits kept increasing. More
+importantly, these new achievements in operation management strongly invigorated the morale of
+our management personnel and employees. We believe that BOC will reach still greater heights
+as our development strategy is further implemented.
+“Enhancing strength through reform” was implemented across the Bank, alongside
+a constant flow of reforming drive and vigorous development. Taking into account the
+different characteristics of our primary-level outlets, overseas organisations, comprehensive
+operation companies and Head Office departments, we established differentiated
+management measures to further optimise the Group's management and control mechanism.
+We pushed forward the reform of the Head Office's organisational structure in an
+appropriate manner, and improved the management model for inclusive finance, transaction
+banking and comprehensive operations. We improved our incentive and restraint mechanism
+by intensifying market benchmarking and placing greater emphasis on value creation.
+We actively sought out and cultivated excellent young management personnel, hosted
+training classes of the “Hundred-Talent Programme” and the “Sailing Programme”, placed
+management personnel of different age groups in appropriate positions, and encouraged
+them to work in areas with challenging conditions and on the frontline. We carefully
+practiced the CPC's mass line, held the first employees' work meeting in BOC's history, and
+continuously motivated our employees to work with passion and vitality.
+Innovation-driven development yielded abundant results and the product and service
+foundation was continuously consolidated. We steadily promoted the establishment of a
+three-level innovation system, set up the Innovation and Product Management Committee
+under the Executive Committee, and formed the first Head-Office-level innovation R&D
+base in Singapore. A series of our star products were well received in the market, including
+the "BOC Wealth Accumulator”, “Personal Deposit” and “BOC Robot Advisor". We
+launched a campaign to expand our merchant customer base, which secured more than 956
+thousand of new customers and helped to drive an increase in personal deposits and financial
+assets of RMB30.0 billion and RMB52.7 billion respectively.
+Shanghai Stock Exchange
+International Auditor
+Stock Code: 3988
+7890
+0.94
+Domestic Preference Share
+1.05
+1.12
+1.22
+12.06
+12.24
+12.58
+14.53
+17.28
+1.90
+1.84
+1.83
+2.12
+2.25
+10
+Non-interest income to operating income (%)
+28.60
+Net interest margin (%)
+Return on average total assets (%)
+1,304,946
+294,388
+1,140,859
+288,731
+56
+0.59
+0.184
+0.56
+0.54
+0.56
+0.61
+0.176
+0.168
+0.175
+0.19
+5.14
+4.74
+4.46
+4.09
+3.70
+Return on average equity (%)
+1,411,682
+294,388
+30.05
+30.65
+1,297,421
+103,523
+225,173
+1,197,868
+103,159
+1,068,706
+72,923
+212,937
+250,714
+11.41
+11.15
+11.37
+11.10
+10.61
+12.27
+12.02
+12.28
+12.07
+11.35
+14.97
+1,377,408
+105,002
+264,652
+36.98
+1,488,010
+109,524
+347,473
+Tier 1 capital adequacy ratio (%)
+29.63
+Cost to income ratio (calculated under
+domestic regulations, %)
+Capital ratios
+=2
+11
+28.09
+28.34
+28.08
+28.30
+28.57
+12
+Common equity tier 1 capital
+Additional tier 1 capital
+Tier 2 capital
+Common equity tier 1 capital adequacy
+ratio (%)
+Capital adequacy ratio (%)
+14.19
+1,496,016
+294,388
+Key financial ratios
+503,806
+483,761
+485,656
+473,912
+456,328
+Operating expenses
+(176,979)
+(173,859)
+(175,069)
+(185,401)
+(177,788)
+Impairment losses on assets
+(99,294)
+(88,161)
+(89,072)
+(59,274)
+(48,381)
+135,226
+Operating profit
+145,262
+145,372
+Note: The financial information in this report has been prepared in accordance with IFRS¹. The data are presented in
+RMB and reflect amounts related to the Group, unless otherwise noted.
+Note
+2018
+2017
+2016
+Unit: RMB million
+2015
+2014
+Results of operations
+Net interest income
+Non-interest income
+Operating income
+359,706
+338,389 306,048
+328,650
+321,102
+2
+144,100
+179,608
+1,612,980
+294,388
+227,533
+Profit before income tax
+Total assets
+Loans, gross
+Allowance for loan impairment losses
+3
+Investments
+4
+Total liabilities
+21,267,275 19,467,424 18,148,889 16,815,597 15,251,382
+11,819,272 10,896,558 9,973,362 9,135,860 8,483,275
+(303,781) (252,254) (237,716) (200,665) (188,531)
+5,054,551 4,554,722 3,972,884 3,595,095 2,710,375
+19,541,878 17,890,745 16,661,797 15,457,992 14,067,954
+14,883,596 13,657,924 12,939,748 11,729,171 10,885,223
+Due to customers
+Capital and reserves attributable to
+equity holders of the Bank
+Share capital
+Per share
+Basic earnings per share (RMB)
+Dividend per share (before tax, RMB)
+Net assets per share (RMB)
+Financial position
+221,741 221,515 229,237 230,159
+55,934
+49,457
+229,643
+222,903
+Profit for the year
+192,435
+184,986
+222,412 231,571 231,478
+184,051
+179,417 177,198
+Profit attributable to equity holders
+of the Bank
+180,086
+172,407
+164,578
+170,845
+169,595
+Total dividend of ordinary shares
+N.A.
+51,812
+51,518
+14.28
+0.98
+13.87
+Vice Chairman and President
+LIU Liange
+Secretary to the Board of Directors and
+Company Secretary
+MEI Feiqi
+Office Address:
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+Legal Representative and Chairman
+CHEN Siqing
+Facsimile: (86) 10-6659 4568
+Listing Affairs Representative
+YU Ke
+Office Address:
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+Registered Address
+No. 1 Fuxingmen Nei Dajie, Beijing, China
+E-mail: ir@bankofchina.com
+("Bank of China”)
+BANK OF CHINA LIMITED
+Registered Name in English
+12
+13
+14
+15
+16
+17
+Cost to income ratio is calculated in accordance with the Measures of the Performance Evaluation of Financial
+Enterprises (Cai Jin [2016] No. 35) formulated by the MOF.
+The capital ratios are calculated under the advanced approaches and in accordance with Capital Rules for
+Commercial Banks (Provisional) (Y.J.H.L. [2012] No. 1).
+Credit-impaired loans to total loans = credit-impaired loans at year-end ÷ total loans at year-end × 100%. Total
+loans are exclusive of accrued interest when it is used to calculate credit-impaired loans to total loans.
+Non-performing loans to total loans = non-performing loans at year-end ÷ total loans at year-end × 100%. Total
+loans are exclusive of accrued interest when it is used to calculate non-performing loans to total loans.
+Allowance for loan impairment losses to non-performing loans = allowance for loan impairment losses at year-
+end non-performing loans at year-end × 100%. Total loans are exclusive of accrued interest when it is used to
+calculate allowance for loan impairment losses to non-performing loans.
+Credit cost = impairment losses on loans ÷ average balance of loans × 100%. Average balance of loans = (balance
+of loans at the beginning of the year + balance of loans at year-end) ÷ 2. Total loans are exclusive of accrued
+interest when it is used to calculate credit cost.
+Allowance for loan impairment losses to total loans = allowance for loan impairment losses at year-end ÷ total
+loans at year-end × 100%. Calculation is based on the data of the Bank's domestic institutions. Total loans are
+exclusive of accrued interest when it is used to calculate allowance for loan impairment losses to total loans.
+7
+Corporate Information
+Registered Name in Chinese
+中國銀行股份有限公司(“中國銀行”)
+Office Address
+No. 1 Fuxingmen Nei Dajie, Beijing,
+China, 100818
+Telephone: (86) 10-6659 6688
+Facsimile: (86) 10-6601 6871
+Website: http://www.boc.cn
+Ernst & Young
+Office Address:
+22/F, CITIC Tower, 1 Tim Mei Avenue
+Central, Hong Kong
+8
+Unified Social Credit Code
+911000001000013428
+Financial Institution Licence Serial Number
+B0003H111000001
+Registered Capital
+RMB294,387,791,241
+Securities Information
+A Share
+Shanghai Stock Exchange
+Stock Name: 中國銀行
+Stock Code: 601988
+H Share
+The Stock Exchange of Hong Kong Limited
+Stock Name: Bank of China
+No. 1 East Chang An Avenue,
+Dongcheng District, Beijing, China
+Certified Public Accountants who signed
+the auditor's report: YANG Bo,
+FENG Suoteng
+11
+Level 16, Ernst & Young Tower,
+Oriental Plaza,
+Domestic Auditor
+E-mail: ir@bankofchina.com
+14.06
+Place of Business in Hong Kong
+Bank of China Tower, 1 Garden Road,
+Central, Hong Kong
+Selected Newspapers for Information
+Disclosure (A Share)
+China Securities Journal, Shanghai Securities
+News, Securities Times, Securities Daily
+Website Designated by CSRC for
+Publication of the Annual Report
+http://www.sse.com.cn
+Website of HKEX for Publication of the
+Annual Report
+http://www.hkexnews.hk
+Place where Annual Report can be Obtained
+Head Office of Bank of China Limited
+Shanghai Stock Exchange
+Legal Advisor
+King & Wood Mallesons
+Clifford Chance
+Auditors
+Ernst & Young Hua Ming LLP
+Office Address:
+Non-interest income to operating income = non-interest income ÷ operating income × 100%.
+Customer Service and Complaint Hotline:
+(86) Area Code-95566
+Net interest margin = net interest income ÷ average balance of interest-earning assets × 100%. Average balance is
+average daily balance derived from the Bank's management accounts (unaudited).
+162.82
+187.60
+0.95
+0.81
+0.91
+0.63
+0.58
+Allowance for loan impairment losses to
+total loans (%)
+159.18
+17
+2.77
+2.87
+2.62
+2.68
+Exchange rate
+USD/RMB year-end central parity rate
+6.8632
+6.5342
+6.9370
+3.07
+181.97
+56
+16
+10
+Asset quality
+Credit-impaired loans to total loans (%)
+Non-performing loans to total loans (%)
+14
+11
+13
+1.42
+1.45
+1.46
+1.43
+1.18
+1.42
+1.45
+1.46
+1.43
+1.18
+Allowance for loan impairment losses to
+non-performing loans (%)
+15
+Credit cost (%)
+6.4936
+6.1190
+153.30
+7.8473
+6
+Starting on 1 January 2018, the Bank has applied the International Financial Reporting Standard No. 9 Financial
+Instruments (IFRS 9), published by the International Accounting Standard Board, the comparative data of the
+previous reporting period was not restated accordingly.
+Non-interest income = net fee and commission income + net trading gains/(losses) + net gains/(losses) on financial
+investments + other operating income.
+Allowance for loan impairment losses = allowance for loans at amortised cost + allowance for loans at fair value
+through other comprehensive income.
+The investments of 2018 are presented under IFRS 9 which include financial assets at fair value through profit or
+loss, financial assets at fair value through other comprehensive income and financial assets at amortised cost. The
+comparative data of the previous reporting period was not restated accordingly.
+Dividend per share is the dividend per ordinary share distributed to ordinary shareholders.
+5
+Net assets per share = (capital and reserves attributable to equity holders of the Bank at year-end - other equity
+instruments) number of ordinary shares in issue at year-end.
+Return on average total assets = profit for the year
+average total assets × 100%. Average total assets = (total
+assets at the beginning of the year + total assets at year-end) ÷ 2.
+EUR/RMB year-end central parity rate
+9
+=
+Return on average equity profit attributable to ordinary shareholders of the Bank ÷ weighted average capital and
+reserves attributable to ordinary shareholders of the Bank × 100%. Calculation is based on No. 9 Preparation and
+Reporting Rules of Information Disclosure of Public Offering Companies - Calculation and Disclosure of Return
+on Average Equity and Earnings per Share (Revised in 2010) (CSRC Announcement [2010] No. 2) issued by the
+CSRC.
+7
+4
+8
+0.7889
+0.8945
+0.8378
+HKD/RMB year-end central parity rate
+6
+Notes:
+1
+2
+3
+7.4556
+7.0952
+7.3068
+0.8762
+7.8023
+0.8359
+(4) Financial assets at fair value through profit or loss
+A financial asset is measured at fair value through profit or loss unless it is measured
+at amortised cost or at fair value through other comprehensive income, which includes
+financial assets held for trading, financial assets designated as at fair value through profit or
+loss and other financial assets mandatorily measured at fair value through profit or loss in
+accordance with IFRS 9.
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on such financial asset is recognised in profit or loss unless it is part of a hedging
+relationship. Dividends, which the Group is entitled to collect, on equity investments in such
+measurement category are recognised in profit or loss in accordance with IFRS 9.
+194
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+The Group may, at initial recognition, irrevocably designate an investment in equity
+instrument, which is not held for trading, as at fair value through other comprehensive
+income when it meets the definition of an equity instrument under IAS 32 Financial
+Instruments: Presentation. When the equity instrument is derecognised, the cumulative gain
+or loss previously recognised in other comprehensive income shall be reclassified from other
+comprehensive income to undistributed profits under equity. Dividends, which the Group is
+entitled to collect, on equity investments in such measurement category are recognised in
+profit or loss in accordance with IFRS 9. No impairment gains or losses are recognised for
+such equity instruments.
+In the Bank's statement of financial position, investments in subsidiaries are accounted for
+at cost less impairment. Cost is adjusted to reflect changes in consideration arising from
+contingent consideration amendments, but does not include acquisition-related costs, which
+are expensed as incurred. The dividends or profits declared to distribute by the invested
+entity shall be recognised by the Bank as the current investment income of subsidiaries. The
+Group assesses at each financial reporting date whether there is objective evidence that an
+investment in subsidiaries is impaired. An impairment loss is recognised for the amount by
+which the investment in subsidiaries' carrying amount exceeds its recoverable amount. The
+recoverable amount is the higher of the investment in subsidiaries' fair value less costs to
+sell and value in use.
+(3) Investments in equity instruments
+the financial asset is held within a business model whose objective is achieved by both
+collecting contractual cash flows and selling financial assets and
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+193
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Financial instruments (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+4
+Financial instruments (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+4.2.1 Financial assets (Continued)
+(2) Financial assets at fair value through other comprehensive income (Continued)
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on a financial asset measured at fair value through other comprehensive income
+shall be recognised in “Other comprehensive income", except for interests calculated using
+effective interest method, impairment gains or losses and foreign exchange gains and losses.
+When the financial asset is derecognised, the cumulative gain or loss previously recognised
+in other comprehensive income is reclassified from equity to profit or loss. The impairment
+allowances for such financial assets are recognised in other comprehensive income,
+impairment gains or losses are recognised in profit or loss, and not reduce the carrying
+amount of such financial assets in the statement of financial position.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+The Group treats transactions with non-controlling interests as transactions with equity
+owners of the Group. For purchases from non-controlling interests, the difference between
+any consideration paid and the relevant share acquired of the carrying value of net assets of
+the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests
+are also recorded in equity.
+BANK OF CHINA LIMITED
+Consolidation (Continued)
+2.1 Subsidiaries (Continued)
+Consolidation (Continued)
+.
+2
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+188
+All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
+transactions between members of the Group are eliminated in full on consolidation. Where
+necessary, accounting policies of subsidiaries have been changed to ensure consistency with
+the policies adopted by the Group.
+Associates are all entities over which the Group has significant influence but no control or
+joint control, generally accompanying a shareholding of between 20% and 50% of the voting
+rights.
+2.3 Transactions with non-controlling interests
+The excess of the consideration transferred, the amount of any non-controlling interest in the
+acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
+over the fair value of the identifiable net assets acquired is recorded as goodwill. If this is
+less than the fair value of the net assets of the subsidiary acquired in the case of a bargain
+purchase, the difference is recognised directly in the income statement. Goodwill is tested
+annually for impairment and carried at cost less accumulated impairment losses. If there is
+any indication that goodwill is impaired, recoverable amount is estimated and the difference
+between carrying amount and recoverable amount is recognised as an impairment charge.
+Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an
+entity include the carrying amount of goodwill relating to the entity sold.
+Subsidiaries are all entities (including corporates, divided parts of associates and joint
+ventures, and structured entities controlled by corporates) over which the Group has control.
+That is the Group controls an entity when it is exposed, or has rights, to variable returns
+from its involvement with the entity and has the ability to affect those returns through its
+power over the entity. The existence and effect of potential voting rights that are currently
+exercisable or convertible and rights arising from other contractual arrangements are
+considered when assessing whether the Group controls another entity. Subsidiaries are
+fully consolidated from the date on which control is transferred to the Group. They are
+de-consolidated from the date that control ceases. If the changes of the relevant facts and
+circumstances resulting in the definition of control involved in the changes of relevant
+elements, the Group will re-evaluate whether subsidiaries are controlled.
+Joint ventures exist where the Group has a contractual arrangement with one or more parties
+to undertake economic activities which are subject to joint control.
+Investments in associates and joint ventures are initially recognised at cost and are
+accounted for using the equity method of accounting. The Group's “Investment in associates
+and joint ventures" includes goodwill.
+Unrealised gains on transactions between the Group and its associates and joint ventures
+are eliminated to the extent of the Group's interests in the associates and joint ventures;
+unrealised losses are also eliminated unless the transaction provides evidence of impairment
+of the asset transferred. Accounting policies of associates and joint ventures have been
+changed where necessary to ensure consistency with the policies adopted by the Group.
+The Group assesses at each financial reporting date whether there is objective evidence that
+investments in associates and joint ventures are impaired. Impairment losses are recognised
+for the amounts by which the investments in associates and joint ventures' carrying amounts
+exceed their recoverable amounts. The recoverable amounts are the higher of investments in
+associates and joint ventures' fair value less costs to sell and value in use.
+189
+2.2 Associates and joint ventures
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+2
+The Group uses the acquisition method of accounting to account for business combinations.
+The consideration transferred for the acquisition of a subsidiary is the fair values of the
+assets transferred, the liabilities incurred and the equity interests issued by the Group. The
+consideration transferred includes the fair value of any asset or liability resulting from a
+contingent consideration arrangement. Acquisition-related costs are expensed as incurred.
+Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
+combination are measured initially at their fair values at the acquisition date. On an
+acquisition by acquisition basis, the Group recognises any non-controlling interest in the
+acquiree either at fair value or at the non-controlling interest's proportionate share of the
+acquiree's net assets.
+•
+assets and liabilities for each statement of financial position presented are translated at
+the closing rate at the date of that statement of financial position;
+(2) Financial assets at fair value through other comprehensive income
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+191
+On consolidation, exchange differences arising from the translation of the net investment in
+foreign entities, and of deposits taken and other currency instruments designated as hedges
+of such investments are taken to other comprehensive income. When a foreign entity is
+disposed, these exchange differences are recognised in the income statement. The effect
+of exchange rate changes on cash and cash equivalents is presented individually in the
+statement of cash flows.
+all resulting exchange differences are recognised in other comprehensive income.
+income and expenses for each income statement are translated at exchange rates at the
+date of the transactions, or a rate that approximates the exchange rates of the date of the
+transaction; and
+The results and financial positions of all the Group entities that have a functional currency
+different from the presentation currency are translated into the presentation currency as
+follows:
+Non-monetary assets and liabilities that are measured at historical cost in foreign currencies
+are translated using the foreign exchange rates at the date of the transaction. Non-monetary
+assets and liabilities that are measured at fair value in foreign currencies are translated using
+the foreign exchange rates at the date the fair value is determined. Translation differences
+on non-monetary financial assets classified as financial assets at fair value through other
+comprehensive income are recognised in other comprehensive income. Translation
+differences on non-monetary financial assets and liabilities held at fair value through profit
+or loss are recognised as “net trading gains” in the income statement.
+3.2 Transactions and balances (Continued)
+Foreign currency translation (Continued)
+3
+2.1 Subsidiaries
+When the Group ceases to have control or significant influence, any retained interest in
+the entity is re-measured to its fair value, with the change in carrying amount recognised
+in the income statement. The fair value is the initial carrying amount for the purposes of
+subsequently accounting for the retained interest as an associate, joint venture or financial
+asset. In addition, any amounts previously recognised in other comprehensive income are
+reclassified to the income statement.
+3
+Foreign currency translation
+3.1 Functional and presentation currency
+The functional currency of the operations in the Chinese mainland is the Renminbi
+("RMB"). Items included in the financial statements of each of the Group's operations
+in Hong Kong, Macau, Taiwan and other countries and regions are measured using the
+currency of the primary economic environment in which the entity operates (the “functional
+currency"). The presentation currency of the Group is RMB.
+3.2 Transactions and balances
+Foreign currency transactions are translated into the functional currency using the exchange
+rates prevailing at the dates of the transactions, or the exchange rates that approximate the
+exchange rates prevailing at the dates of the transaction. Foreign exchange gains and losses
+resulting from the settlement of such transactions are recognised in the income statement.
+Monetary assets and liabilities denominated in foreign currencies at the financial reporting
+date are translated at the foreign exchange rates ruling at that date. Changes in the fair value
+of monetary securities denominated in foreign currency classified as financial assets at fair
+value through other comprehensive income are analysed between translation differences
+resulting from changes in the amortised cost of the security and other changes in the
+carrying amount of the security. Translation differences related to changes in the amortised
+cost are recognised in the income statement, and other changes in the carrying amount are
+recognised in other comprehensive income. Translation differences on all other monetary
+assets and liabilities are recognised in the income statement.
+190
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+The Group classifies financial assets as subsequently measured at fair value through other
+comprehensive income if both of the following conditions are met:
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Financial instruments
+Such financial assets that the Group holds are subsequently measured at amortised cost.
+That is, the amount at which the financial asset is measured at initial recognition minus the
+principal repayments, plus or minus the cumulative amortisation using the effective interest
+method of any difference between that initial amount and the maturity amount and adjusted
+for any loss allowance.
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+the financial asset is held within a business model whose objective is to hold financial
+assets in order to collect contractual cash flows and
+•
+The Group classifies financial assets as subsequently measured at amortised cost if both of
+the following conditions are met:
+(1) Financial assets at amortised cost
+The assessment of contractual cash flow characteristics is to determine whether the asset's
+contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding. Principal is the fair value of the financial asset at initial recognition. However,
+the principal amount may change over the life of the financial asset (for example, if there are
+repayments of principal). Interest consists of consideration for the time value of money, for
+the credit risk associated with the principal amount outstanding during a particular period of
+time and for other basic lending risks and costs, as well as a profit margin.
+The contractual cash flow characteristics
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+192
+The Group's business model refers to how the Group manages its financial assets in order to
+generate cash flows. For example, financial assets are held within a business model whose
+objective is to hold assets to collect contractual cash flows or within a business model
+whose objective is achieved by both collecting contractual cash flows and selling financial
+assets. If above two situations are not applicable, the business model of the financial assets
+is "other". The Group's assessment of the business model is performed on a financial asset
+portfolio basis, and determined on the basis of scenarios which are reasonably expected to
+occur, taking into account: how cash flows were realised in the past, how the performance
+are evaluated and reported to the entity's key management personnel; the risks that affect the
+performance and the way in which those risks are assessed and managed; and how managers
+of the business are compensated, etc.
+Business model
+The Group classifies financial assets as subsequently measured at amortised cost, fair value
+through other comprehensive income or fair value through profit or loss on the basis of both
+the Group's business model for managing the financial assets and the contractual cash flow
+characteristics of the financial asset.
+4.2.1 Financial assets
+4.2 Classification and Subsequent measurement
+The fair value of a financial instrument at initial recognition is normally the transaction
+price. If the Group determines that the fair value at initial recognition differs from the
+transaction price, and if that fair value is evidenced by a quoted price in an active market
+for an identical asset or liability or based on a valuation technique that uses only data from
+observable markets, the Group recognises the difference between the fair value at initial
+recognition and the transaction price as a gain or loss.
+At initial recognition, the Group measures a financial asset or financial liability at its
+fair value. For a financial asset or financial liability at fair value through profit or loss,
+transaction costs are directly recognised in profit or loss. For other financial asset or
+liability, transaction costs are recognised in the initial measurement.
+The Group recognises a financial asset or financial liability in its statement of financial
+position when the Group becomes a party to the contractual provisions of the instrument,
+which is the trade date.
+4.1 Initial recognition and measurement
+4
+Consolidation
+4.2.1 Financial assets (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+When, and only when, the Group changes the business model for managing financial assets, the
+Group shall reclassify all affected financial assets. Reclassification is applied prospectively from
+the first day of the first reporting period following the change in business model.
+4.2.2 Financial liabilities
+The Group classifies all financial liabilities as subsequently measured at amortised cost,
+except for:
+•
+•
+financial liabilities at fair value through profit or loss. Such liabilities, include financial
+liabilities held for trading and financial liabilities designated as at fair value through
+profit or loss.
+financial liabilities that arise when a transfer of a financial asset does not qualify for
+derecognition or when the continuing involvement approach applies.
+financial guarantee contracts and commitments to provide a loan at a below-market
+interest rate.
+Financial liabilities at fair value through profit or loss held by the Group are subsequently
+measured at fair value. A gain or loss on a financial liability that is measured at fair value is
+recognised in profit or loss unless:
+it is part of a hedging relationship; or
+it is a financial liability designated as at fair value through profit or loss and the Group
+presents the effects of changes in the liability's credit risk in other comprehensive
+income; When such financial liability is derecognised, the cumulative gain or loss
+previously recognised in other comprehensive income is reclassified from other
+comprehensive income to undistributed profits under equity.
+The Group does not reclassify any financial liabilities.
+195
+4.2 Classification and Subsequent measurement (Continued)
+2
+Basis of preparation (Continued)
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2018 (Continued)
+•
+IAS 19 Amendments require entities to use the updated actuarial assumptions to determine
+current service cost and net interest for the remainder of the annual reporting period after
+such an event. The amendments also clarify how the requirements for accounting for a plan
+amendment, curtailment or settlement affect the asset ceiling requirements. The amendments
+do not address the accounting for “significant market fluctuations” in the absence of a plan
+amendment, curtailment or settlement.
+(Amount in millions of Renminbi, unless otherwise stated)
+IFRIC Interpretation 23 clarifies how to apply the recognition and measurement
+requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments.
+The interpretation mainly addresses the following four areas: whether an entity separately
+considers the uncertainty of tax treatments; assumptions adopted by an entity to address
+the examination of tax treatments by taxation authorities; how an entity determines taxable
+profit/(tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and how an
+entity considers changes in facts and circumstances.
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+187
+The Group is considering the impact of IFRS 17 on the consolidated financial statements.
+Except for IFRS 17, the adoption of the above standards, amendments and interpretations
+will have no material impact on the financial statements.
+Annual Improvements to IFRSS 2015-2017 Cycle was issued in December 2017. Those
+amendments affect IFRS 3 Business Combinations, IFRS 11 Joint Arrangements, IAS 12
+Income Taxes and IAS 23 Borrowing Costs.
+The amendments to IFRS 10 and IAS 28 address an inconsistency between the requirements
+in IFRS 10 and in IAS 28 in dealing with the sale or contribution of assets between an
+investor and its associate or joint venture. The amendments require a full recognition of
+a gain or loss when the sale or contribution between an investor and its associate or joint
+venture constitutes a business. For a transaction involving assets that do not constitute a
+business, a gain or loss resulting from the transaction is recognised in the investor's profit or
+loss only to the extent of the unrelated investor's interest in that associate or joint venture.
+IFRS 17 Insurance Contracts replaced IFRS 4 Insurance Contracts. The standard provides
+a general model for insurance contracts and two additional approaches: the variable
+fee approach and the premium allocation approach. IFRS 17 covers the recognition,
+measurement, presentation and disclosure of insurance contracts and applies to all types of
+insurance contracts.
+Amendments to IAS 1 and IAS 8 provide a new definition of materiality. The new definition
+states that information is material if omitting, misstating or obscuring it could reasonably
+be expected to influence decisions made by the primary users of general purpose financial
+statements based on those financial statements. The amendments clarify that materiality
+depends on the nature or magnitude of information. A misstatement of information is
+material if it could reasonably be expected to influence decisions made by the primary users.
+BANK OF CHINA LIMITED
+Basis of preparation (Continued)
+1.2 Standards, amendments and interpretations that are not yet effective and have not been
+early adopted by the Group in 2018 (Continued)
+186
+IAS 28 Amendments clarify that an entity applies IFRS 9 Financial Instruments to long-
+term interests in an associate or joint venture to which the equity method is not applied but
+that, in substance, form part of the net investment in the associate or joint venture (long-term
+interests). Entities must apply the amendments retrospectively, with certain exceptions.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+1
+FOR THE YEAR ENDED 31 DECEMBER 2018
+IFRS 3 Amendments clarify and provide additional guidance on the definition of a business.
+The amendments clarify that for an integrated set of activities and assets to be considered
+a business, it must include, at a minimum, an input and a substantive process that together
+significantly contribute to the ability to create output. A business can exist without
+including all the inputs and processes needed to create outputs. The amendments remove
+the assessment of whether market participants are capable of acquiring the business and
+continue to produce outputs. Instead, the focus is on whether acquired inputs and substantive
+processes together significantly contribute to the ability to create outputs. The amendments
+have also narrowed the definition of outputs to focus on goods or services provided to
+customers, investment income or other income from ordinary activities. Furthermore, the
+amendments provide guidance to assess whether an acquired process is substantive and
+introduce an optional fair value concentration test to permit a simplified assessment of
+whether an acquired set of activities and assets is not a business.
+The method of recognising the resulting fair value gain or loss depends on whether the
+derivative is designated and qualifies as a hedging instrument, and if so, the nature of the
+item being hedged. For derivatives not designated or qualified as hedging instruments,
+including those intended to provide effective economic hedges of specific interest rate and
+foreign exchange risks, but do not qualify for hedge accounting, changes in the fair value of
+these derivatives are recognised in "Net trading gains" in the income statement.
+4.6 Impairment measurement for losses on assets (Continued)
+Derivatives are initially recognised at fair value on the date a derivative contract is
+entered into and are subsequently remeasured at their fair value. Fair values are obtained
+from quoted market prices in active markets, including recent market transactions, or
+valuation techniques, including discounted cash flow analysis and option pricing models, as
+appropriate. Credit risk valuation adjustments are applied to the Group's over-the-counter
+derivatives to reflect the credit risk of the counterparties and the Group, respectively. They
+are dependent on the expected future values of exposures for each counterparty and default
+probabilities, etc. All derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+4.7 Derivative financial instruments and hedge accounting
+The Group monitors the subsequent performance of modified assets. The Group may
+determine that the credit risk has significantly improved after modified, so that the assets are
+moved from Stage 3 or Stage 2 to Stage 1, and the impairment allowance is measured at an
+amount equal to the 12-month ECL instead of the lifetime ECL.
+A modification or re-negotiation of a contract between the Group and a counterparty may
+result in a change to the contractual cash flows without resulting in the derecognition of the
+financial assets. Such restructuring activities include extended payment term arrangements,
+repayment schedule modifications and changes to the interest settlement method. The risk
+of default of such assets after modification is assessed at the reporting date and compared
+with the risk under the original terms at initial recognition, when the modification is not
+substantial and so does not result in derecognition of the original asset. The gross carrying
+amount of the financial asset is recalculated and the related gain or loss is recognised in
+profit and loss. The gross carrying amount of the financial asset is determined based on
+the present value of the renegotiated or modified contractual cash flows discounted at the
+financial asset's original effective interest rate.
+Modification of contractual cash flows
+(Amount in millions of Renminbi, unless otherwise stated)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+204
+203
+Financial instruments (Continued)
+BANK OF CHINA LIMITED
+•
+FOR THE YEAR ENDED 31 DECEMBER 2018
+In addition to a base economic scenario, the Group conducts statistical analysis with experts'
+judgement to determine other possible scenarios and their weights. The Group measures
+the weighted average ECL of 12 months (Stage 1) or life time (Stage 2 and Stage 3). The
+weighted average credit loss above is calculated by multiplying the ECL for each scenario
+by the weight of the corresponding scenario.
+Significant changes in counterparties' credit risk.
+Increase or decrease in the amounts of hedged items or hedging instruments;
+•
+Possible sources of ineffectiveness are as follows:
+The hedge ratio of the hedging relationship is the same as that resulting from the
+quantity of the hedged item that the entity actually hedges and the quantity of the
+hedging instrument that the entity actually uses to hedge that quantity of the hedged
+item. However, that designation shall not reflect an imbalance between the weightings
+of the hedged item and the hedging instrument that would create hedge ineffectiveness
+that could result in an accounting outcome that would be inconsistent with the purpose
+of hedge accounting.
+The effect of credit risk does not dominate the value changes that result from that
+economic relationship; and
+There is an economic relationship between the hedged item and the hedging
+instrument. That means the hedging instrument and hedged item have values that
+generally move in the opposite direction because of the same risk, which is the hedged
+risk.
+The hedging relationship should meet all of the following hedge effectiveness requirements:
+The Group documents, at inception, the relationship between hedging instruments and
+hedged items, as well as its risk management objective and strategy for undertaking hedge
+transactions. When designating a hedging relationship and on an ongoing basis, the Group
+assesses the hedge effectiveness, that is the extent to which changes in the fair value or cash
+flows of the hedging instrument offsets changes in fair values or cash flows of the hedged
+item.
+4.7 Derivative financial instruments and hedge accounting (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The impact of these economic indicators on the PD and the LGD varies according to
+different types of business. The Group applied experts' judgement in this analysis, according
+to the result of experts' judgement, the Group predicts these economic indicators on a
+quarterly basis and determines the impact of these economic indicators on the PD and the
+LGD by conducting regression analysis.
+The disappearance of an active market for that financial asset because of financial
+difficulties;
+Forward-looking information
+The purchase or origination of a financial asset at a deep discount that reflects the
+incurred credit losses;
+It becoming probable that the borrower will enter into bankruptcy or other financial re-
+organisation;
+•
+•
+•
+Definition of credit-impaired financial asset (Continued)
+4.6 Impairment measurement for losses on assets (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+201
+The Group granting to the borrower, for economic or legal reasons relating to the
+borrower's financial difficulty, a concession that the lender would not otherwise
+consider;
+The debtor is more than 90 days overdue for any of the principal, advances, interest or
+investments in corporate bonds of the Group.
+A financial asset becoming credit-impaired may be caused by the combined effect of several
+events, but not a single discrete event. For credit-impaired financial assets, the Group mainly
+evaluate the future cash flow (including the recoverable value of the collateral held) in
+different circumstances on an individual basis. Expected credit losses are measured as the
+differences between the present value of estimated cash flows discounted at the original
+effective interest rate and the asset's gross carrying amount. Any adjustment is recognised in
+profit or loss as an impairment gain or loss.
+Parameters of ECL measurement
+According to whether the credit risk has significantly increased and whether the asset is
+credit-impaired, the Group measures the impairment allowance for different assets with ECL
+of 12 months or the entire lifetime respectively. The key parameters in ECL measurement
+include probability of default (PD), loss given default (LGD) and exposure at default
+(EAD). Based on the current New Basel Capital Accord used in risk management and the
+requirements of IFRS 9, the Group takes into account the quantitative analysis of historical
+statistics (such as ratings of counterparties, manners of guarantees and types of collaterals,
+repayments, etc.) and forward-looking information in order to establish the models for
+estimating PD, LGD and EAD.
+EAD is the amount that the Group should be reimbursed at the time of the default in
+the next 12 months or throughout the entire remaining lifetime.
+LGD refers to the Group's expectation of the extent of the loss resulting from the
+default exposure. Depending on the type of counterparty, the method and priority of the
+recourse, and the type of collaterals, the LGD varies;
+PD refers to the possibility that the debtor will not be able to fulfil its obligations of
+repayment over the next 12 months or throughout the entire remaining lifetime. The
+Group adjusts PD based on the results of the Internal Rating-Based Approach under the
+New Basel Capital Accord, taking into account the forward-looking information and
+removing the prudential adjustment to reflect the debtor's point-in-time (PIT) PD under
+the current macroeconomic environment;
+•
+•
+Relative definitions are listed as follows:
+Parameters of ECL measurement (Continued)
+The assessment of a significant increase in credit risk and the calculation of ECL both
+involve forward-looking information. Based on the analysis of historical data, the Group
+identifies the key macroeconomic indicators that affect the credit risk and ECL of various
+business types, such as GDP, PPI, CPI, Investment in fixed assets, Home price index,
+Aggregate financing to the real economy.
+4.6 Impairment measurement for losses on assets (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+202
+Financial instruments (Continued)
+Financial instruments (Continued)
+205
+Significant financial difficulty of the issuer or obligor;
+The impairment allowances for financial guarantees and loan commitments are presented in
+"Other liabilities-provision".
+4.4 Determination of fair value
+The fair value is the price that would be received to sell an asset or paid to transfer a
+liability in an orderly transaction between market participants at the measurement date. The
+fair values of quoted financial assets and financial liabilities in active markets are based
+on current bid prices and ask prices, as appropriate. If there is no active market, the Group
+establishes fair value by using valuation techniques. These include the use of recent arm's
+length transactions, discounted cash flow analysis and option pricing models, and other
+valuation techniques commonly used by market participants.
+The Group uses the valuation techniques commonly used by market participants to price
+financial instruments and techniques which have been demonstrated to provide reliable
+estimates of prices obtained in actual market transactions. The Group makes use of all
+factors that market participants would consider in setting a price, and incorporates these
+into its chosen valuation techniques and tests for validity using prices from any observable
+current market transactions in the same instruments.
+197
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.5 Derecognition of financial instruments
+Loan commitments are commitments provided by the Group to the customers to grant loans
+under the established contract terms during certain period. The impairment allowance for
+loan commitments is measured using the ECL model.
+Financial assets are derecognised when the rights to receive cash flows from the investments
+have expired, or when a financial asset is transferred, the Group has transferred substantially
+all risks and rewards of ownership, or when the Group neither transfers nor retains
+substantially all risks or rewards of ownership of the financial asset but has not retained
+control of the financial asset.
+4.6 Impairment measurement for losses on assets
+At the financial reporting date, the Group assesses and recognises the relevant impairment
+allowances for financial assets measured at amortised cost, debt instruments measured at fair
+value through other comprehensive income, and loan commitments and financial guarantee
+contracts on the basis of expected credit losses.
+Measurement of ECL
+The ECL is a weighted average of credit losses on financial instruments weighted at the
+risk of default. Credit loss is the difference between all contractual cash flows that are due
+to the Group in accordance with the contract and all cash flows expected to be received by
+the Group discounted at the original effective interest rate, i.e. the present value of all cash
+shortfalls.
+According to the changes of credit risk of financial instruments since the initial recognition,
+the Group calculates the ECL by three stages:
+Stage 1: The financial instruments without significant increases in credit risk after
+initial recognition are included in Stage 1 to calculate their impairment allowance at an
+amount equivalent to the ECL of the financial instruments for the next 12 months;
+Stage 2: Financial instruments that have had a significant increase in credit risk since
+initial recognition but have no objective evidence of impairment are included in Stage
+2, with their impairment allowance measured at an amount equivalent to the ECL over
+the lifetime of the financial instruments;
+Stage 3: Financial assets with objective evidence of impairment at the financial
+reporting date are included in Stage 3, with their impairment allowance measured at an
+amount equivalent to the ECL over the lifetime of the financial instruments.
+198
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+Financial liabilities are derecognised when they are extinguished that is, when the
+obligation is discharged, cancelled or expires.
+Financial guarantees are initially recognised at fair value on the date the guarantee was
+given. Subsequent to initial recognition, the Group's liabilities under such guarantees are
+measured at the higher of the initial measurement less amortisation calculated and the
+impairment allowance determined by the ECL model, and any increase in the liability
+relating to guarantees is taken to the income statement.
+Financial guarantee contracts are contracts that require the issuer to make specified
+payments to reimburse the holder for a loss it incurs because a specified debtor fails to
+make payments when due, in accordance with the terms of a debt instrument. Such financial
+guarantees are given to banks, financial institutions and other bodies to secure customer
+loans, overdrafts and other banking facilities.
+4.3 Financial guarantee contracts and loan commitments
+A breach of contract, such as a default or delinquency in interest or principal payments;
+The Group discontinues hedge accounting prospectively when the hedging instrument
+expires or is sold, terminated or exercised (the replacement or rollover of a hedging
+instrument into another hedging instrument does not constitute an expiration or termination),
+or the hedging relationship ceases to meet the updated risk management objective, or to
+meet other qualifying criteria for hedging accounting.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+4.2.3 Financial assets and financial liabilities held for trading
+A financial asset or financial liability is classified as held for trading if it:
+•
+•
+is acquired or incurred principally for the purpose of selling or repurchasing it in the
+near term; or
+on initial recognition is part of a portfolio of identified financial instruments that are
+managed together and for which there is evidence of a recent actual pattern of short-
+term profit-taking; or
+is a derivative (except for a derivative that is a financial guarantee contract or a
+designated and effective hedging instrument).
+4.2.4 Financial assets and financial liabilities designated as at fair value through profit or loss
+The Group may, at initial recognition, irrevocably designate a financial asset or financial
+liability as measured at fair value through profit or loss, because either:
+it eliminates or significantly reduces a measurement or recognition inconsistency that
+would otherwise arise from measuring assets or liabilities or recognising the gains and
+losses on them on different bases; or
+a portfolio of financial liabilities or financial assets and financial liabilities is managed
+and its performance is evaluated on a fair value basis, in accordance with a documented
+risk management or investment strategy, and information about the portfolio is
+provided internally on that basis to the Group's key management personnel; or
+the financial liability contains one or more embedded derivatives, unless the embedded
+derivative(s) does not significantly modify the cash flows or it is clear, with little or no
+analysis, that it would not be separately recorded.
+196
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+•
+4.6 Impairment measurement for losses on assets (Continued)
+The Group assesses whether or not the credit risk of the relevant financial instruments has
+increased significantly since the initial recognition at each financial reporting date. While
+determining whether the credit risk has significantly increased since initial recognition
+or not, the Group takes into account the reasonable and supportable information that is
+available without undue cost or effort, including qualitative and quantitative analysis
+based on the historical data of the Group, external credit risk rating, and forward-looking
+information. Based on an individual financial instrument or a group of financial instruments
+shared credit risk characteristics, the Group compares the risk of default of financial
+instruments at the financial reporting date with that at the date of initial recognition in order
+to figure out the changes of default risk in the expected lifetime of financial instruments.
+200
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.6 Impairment measurement for losses on assets (Continued)
+Criteria for determining significant increases in credit risk (Continued)
+The Group considers a financial instrument to have experienced a significant increase in
+credit risk when one or more of the following quantitative, qualitative or backstop criteria
+have been met:
+Quantitative criteria
+•
+At the reporting date, the increase in remaining lifetime probability of default is
+considered significant, comparing with the one at initial recognition
+Qualitative criteria
+•
+Significant adverse change in debtor's operation or financial status
+•
+•
+Be listed on the watch-list
+Backstop criteria
+•
+The debtor's contractual payments (including principal and interest) are more than 30
+days past due
+Definition of credit-impaired financial asset
+The standard adopted by the Group to determine whether a financial asset is credit-impaired
+under IFRS 9 is consistent with the internal credit risk management objectives, taking into
+account quantitative and qualitative criteria. When the Group assesses whether the credit
+impairment occurred, the following factors are mainly considered:
+•
+Financial instruments (Continued)
+.
+Criteria for determining significant increases in credit risk
+Modification of contractual cash flows
+Be classified into Special Mention category within five-tier loan classification
+Forward-looking information
+For the previous accounting period, the impairment allowance has been measured at the
+amount equivalent to the ECL over the entire lifetime of the financial instrument. However,
+at the financial reporting date, if the financial instrument no longer belongs to the situation
+of there being a significant increase in credit risk since initial recognition, the Group will
+measure the impairment allowance of the financial instruments on the financial reporting
+date according to the ECL in the next 12 months.
+Measurement of ECL (Continued)
+For purchased or originated credit-impaired financial assets, the Group only recognises the
+cumulative change in lifetime expected credit losses since initial recognition at the financial
+reporting date as impairment allowance. At each financial reporting date, the Group
+recognises in profit or loss the amount of the changes in lifetime expected credit losses as an
+impairment gain or loss.
+•
+The Group measures ECL of a financial instrument in a way that reflects:
+•
+An unbiased and probability-weighted amount that is determined by evaluating a range
+of possible outcomes;
+The time value of money; and
+•
+Reasonable and supportable information that is available without undue cost or effort
+at the reporting date about past events, current conditions and forecasts of future
+economic conditions.
+When measuring ECL, an entity need not necessarily identify every possible scenario.
+However, the Group considers the risk or probability that a credit loss occurs by reflecting
+the possibility that a credit loss occurs and the possibility that no credit loss occurs, even if
+the possibility of a credit loss occurring is very low.
+199
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+•
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+•
+(Amount in millions of Renminbi, unless otherwise stated)
+Parameters for measuring ECL
+•
+•
+Definition of credit-impaired financial assets
+•
+Criteria for judging significant increases in credit risk
+The Group conducted an assessment of ECL according to forward-looking information
+and used a number of models and assumptions in its measurement of expected credit
+losses. These models and assumptions relate to the future macroeconomic conditions
+and borrower's creditworthiness (e.g., the likelihood of default by customers and the
+corresponding losses). The Group uses judgements, assumptions and estimation techniques
+in order to measure ECL according to the requirements of accounting standards such as:
+Measurement of ECL (Continued)
+4.6 Impairment measurement for losses on assets (Continued)
+Financial instruments (Continued)
+4
+207
+a separate instrument with the same terms as the embedded derivative would meet the
+definition of a derivative; and
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+the economic characteristics and risks of the embedded derivative are not closely
+related to those of the host contract;
+FOR THE YEAR ENDED 31 DECEMBER 2018
+•
+BANK OF CHINA LIMITED
+•
+When the Group separates the forward element and the spot element of a forward contract
+and designates as the hedging instrument only the change in the value of the spot element,
+the changes in the value of the forward element of the forward contract shall be recognised
+in other comprehensive income to the extent that it relates to the hedged item. If the hedged
+items are transaction related, the amount accumulated in other comprehensive income shall
+be accounted for similarly to cash flow hedges. If the hedged items are time-period related,
+that amount is amortised on a systematic and rational basis over the period during which the
+hedged items could affect profit or loss, and the amortisation amount is reclassified from
+other comprehensive income to profit or loss as a reclassification adjustment.
+An embedded derivative is a component of a hybrid (combined) instrument that also
+includes a non-derivative host contract with the effect that some of the cash flows of the
+hybrid (combined) instrument vary in a way similar to a stand-alone derivative.
+4.8 Embedded derivatives
+Hedges of net investments in foreign operations are accounted for similarly to cash flow
+hedges. Any gain or loss on the hedging instrument relating to the effective portion of the
+hedge is recognised directly in other comprehensive income; the gain or loss relating to the
+ineffective portion is recognised immediately in the income statement. Gains and losses
+accumulated in equity are reclassified to the income statement when the foreign operation is
+disposed of as part of the gain or loss on the disposal.
+Net investment hedge is a hedge of a net investment in a foreign operation.
+(3) Net investment hedge
+4.7 Derivative financial instruments and hedge accounting (Continued)
+Financial instruments (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+If a hybrid contract contains a host that is a financial asset, the Group applies the
+requirements of classification and measurement to the entire hybrid contract. If a hybrid
+contract contains a host that is not a financial asset, the Group separates the embedded
+derivative from the host contract and accounts for it as a derivative, if, and only if:
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Precious metals comprise gold, silver and other precious metals. The Group retains all risks
+and rewards of ownership related to precious metals deposited with the Group as precious
+metal deposits, including the right to freely pledge or transfer, and it records the precious
+metals received as an asset. A liability to return the amount of precious metals deposited is
+also recognised. Precious metals that are not related to the Group's precious metal market
+making and trading activities are initially measured at acquisition cost and subsequently
+measured at the lower of cost and net realisable value. Precious metals that are related
+to the Group's market making and trading activities are initially recognised at fair value
+and subsequent changes in fair value included in "net trading gains" are recognised in the
+income statement.
+Financial instruments (Continued)
+Repurchase agreements, agreements to re-sell and securities lending
+The liability related to the above supplemental retirement benefit obligations and early
+retirement obligations existing at each financial reporting date is calculated by independent
+actuaries using the projected unit credit method and is recorded as a liability under
+“Retirement benefit obligations" in the statement of financial position. The present value
+of the liability is determined through discounting the estimated future cash outflows using
+interest rates of RMB treasury bonds which have terms to maturity approximating the terms
+of the related liability. The actuarial gains or losses of supplemental retirement benefit are
+recognised in "Other comprehensive income” immediately when they occur. The actuarial
+gains or losses of early retirement benefit obligations and the gains or losses arising
+from amendments to retirement benefit obligations are charged or credited to the income
+statement immediately as "Operating expenses" when they occur.
+6
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+208
+4
+Consistent with the substance of the transaction, if the precious metals swaps are for
+financing purposes, they are accounted for as precious metals subject to collateral
+agreements. Precious metals collateralised are not derecognised and the related counterparty
+liability is recorded in “Placements from banks and other financial institutions”. If precious
+metals swaps are for trading purposes, they are accounted for as derivative transactions.
+Financial assets and liabilities are offset and the net amount is reported in the statement of
+financial position when there is a current legally enforceable right to set off the recognised
+amounts and there is an intention to settle on a net basis, or realise the asset and settle the
+liability simultaneously.
+5
+10
+4.9 Offsetting financial instruments
+If it is unable to measure the embedded derivative separately either at acquisition or at the
+subsequent financial reporting date, the Group will designate the entire hybrid instrument as
+at fair value through profit or loss.
+These embedded derivatives separated from the host contract are measured at fair value with
+changes in fair value recognised in the income statement.
+The hybrid (combined) instrument is not measured at fair value with changes in fair
+value recognised in the income statement.
+•
+4.8 Embedded derivatives (Continued)
+Precious metals and precious metals swaps
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The fair value of the employee services received in exchange for the grant of the
+options under these schemes is recognised as an expense over the vesting period, with a
+corresponding increase in equity. The total amount to be expensed over the vesting period is
+determined by reference to the fair value of the options granted, excluding the impact of any
+non-market vesting conditions. The fair value of the equity instruments is measured at the
+grant date and is not subsequently re-measured. Non-market vesting conditions are included
+in assumptions about the number of options that are expected to become exercisable. At
+each financial reporting date, the Group revises its estimates of the number of options that
+are expected to become exercisable. It recognises the impact of the revision of original
+estimates, if any, as “Operating expenses" in the income statement over the remaining
+vesting period, with a corresponding adjustment to equity.
+The proceeds received net of any directly attributable transaction costs are credited to "Share
+capital" (nominal value) and "Capital reserve" when the options are exercised.
+214
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+12 Employee benefits (Continued)
+12.4 Share-based compensation (Continued)
+(2) Cash-settled share-based compensation schemes
+The related cost of services received from the employees and the liability to pay for such
+services are measured at fair value and recognised over the vesting period as the employees
+render services. Fair value is established at the grant date, re-measured at each financial
+reporting date with any changes in fair value recognised as “Operating expenses" in the
+income statement for the period and derecognised when the liability is settled.
+The total amount to be expensed over the vesting period is determined by reference to the
+fair value of the rights granted, excluding the impact of any non-market vesting conditions.
+Non-market conditions are included in the assumptions about the number of rights that are
+expected to vest. At each financial reporting date, the Group revises its estimates of the
+number of rights that are expected to vest. It recognises the impact of the revision to original
+estimates, if any, as “Operating expenses" in the income statement, with a corresponding
+adjustment to liability.
+12.5 Bonus plans
+13
+The Group recognises a liability and an expense for bonuses, taking into consideration
+its business performance and profit attributable to the Bank's equity holders. The Group
+recognises a liability where contractually obliged or where there is a past practice that has
+created a constructive obligation.
+Provisions
+Provisions are recognised when: the Group has a present legal or constructive obligation
+as a result of past events, it is probable that an outflow of resources embodying economic
+benefits will be required to settle the obligation, and a reliable estimate of the amount of the
+obligation can be made. The amount initially recognised as a provision should be the best
+estimate of the expenditure required to settle the present obligation.
+215
+Securities and bills sold subject to repurchase agreements ("Repos") continue to be
+recognised, and are recorded as “Financial investments". The corresponding obligation is
+included in "Placements from banks and other financial institutions" and "Due to central
+banks". Securities and bills purchased under agreements to re-sell ("Reverse repos") are not
+recognised. The receivables are recorded as "Placements with and loans to banks and other
+financial institutions" or "Balances with central banks", as appropriate.
+(1) Equity-settled share-based compensation schemes
+12.4 Share-based compensation
+Pursuant to local government regulations, all employees in Chinese mainland participate
+in various local housing funds administered by local governments. Operations in Chinese
+mainland contribute on a monthly basis to these funds based on certain percentages of the
+salaries of the employees. These payments are recognised as “Operating expenses” in the
+income statement as incurred.
+12.3 Housing funds
+BANK OF CHINA LIMITED
+206
+When the Group discontinues hedge accounting for a cash flow hedge, if the hedged future
+cash flows are still expected to occur, that amount accumulated in the cash flow hedge
+reserve shall remain in equity. If the hedged future cash flows are no longer expected to
+occur, that amount shall be immediately reclassified from the cash flow hedge reserve to
+profit or loss.
+Amounts accumulated in equity are reclassified to the income statement in the same periods
+when the hedged future cash flows affect profit or loss.
+The effective portion of changes in the fair value of hedging instruments that are designated
+and qualify as cash flow hedges is recognised in “Other comprehensive income”. The
+ineffective portion is recognised immediately in the income statement.
+Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to
+a particular risk associated with all, or a component of, a recognised asset or liability (such
+as all or some future interest payments on variable-rate debt) or a highly probable forecast
+transaction, and could affect profit or loss.
+(2) Cash flow hedge
+If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying
+amount of a hedged item for which the effective interest method is used is amortised to the
+income statement over the period to maturity.
+The changes in fair value of hedging instruments that are designated and qualify as fair
+value hedges are recorded in the income statement, together with the changes in fair value of
+the hedged item attributable to the hedged risk. The net result is included as ineffectiveness
+in the income statement.
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset
+or liability or an unrecognised firm commitment, or a component of any such item, that is
+attributable to a particular risk and could affect profit or loss.
+If a hedging relationship ceases to meet the hedge effectiveness requirement relating to
+the hedge ratio but the risk management objective for that designated hedging relationship
+remains the same, the Group adjusts the hedge ratio of the hedging relationship so that it
+meets the qualifying criteria again.
+4.7 Derivative financial instruments and hedge accounting (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(1) Fair value hedge
+The difference between purchase and sale price is recognised as “Interest expense" or
+"Interest income” in the income statement over the life of the agreements using the effective
+interest method.
+11
+7
+Repossessed assets
+The recoverable amount of an intangible asset is the higher of the asset's fair value less costs
+to sell and value in use.
+The value of intangible assets is reviewed for impairment at each financial reporting date.
+Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
+written down immediately to its recoverable amount.
+Computer software and other intangible assets are stated at acquisition cost less accumulated
+amortisation and impairment. These costs are amortised on a straight-line basis over their
+estimated useful lives with the amortisation recognised in the income statement.
+Intangible assets are identifiable non-monetary assets without physical substance, including
+computer software and other intangible assets.
+10 Intangible assets
+Investment properties, principally consisting of office buildings, are held to generate
+rental income or earn capital gains or both and are not occupied by the Group. Investment
+properties are carried at fair value and changes in fair value are recorded in the income
+statement, representing the open market value and other related information determined
+periodically by independent appraisers.
+Investment properties
+9
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+211
+When the Group is the lessor under operating leases, the assets subject to the operating lease
+are accounted for as the Group's assets. Rental income is recognised as "Other operating
+income" in the income statement on a straight-line basis over the lease term net of any
+incentives given to lessees.
+When the Group is the lessee under an operating lease, rental expenses are charged to
+“Operating expenses” in the income statement on a straight-line basis over the period of the
+lease.
+8.3 Operating leases
+When the Group is a lessor under finance leases, the present value of the aggregation of the
+minimum lease payment receivable from the lessee, unguaranteed residual value and initial
+direct costs is recognised as a receivable. The difference between the receivable and the
+present value of the receivable is recognised as unearned finance income. Lease income is
+recognised over the term of the lease using the effective interest method.
+Repossessed assets are initially recognised at fair value plus related costs when they are
+obtained as the compensation for the loans' principal and interest. When there are indicators
+that the recoverable amount is lower than carrying amount, the carrying amount is written
+down immediately to its recoverable amount.
+212
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+12 Employee benefits (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+213
+Early retirement benefits have been paid to those employees who accept voluntary
+retirement before the normal retirement date, as approved by management. The related
+benefit payments are made from the date of early retirement to the normal retirement date.
+expense coverage.
+The Group adopts the same depreciation policy for the finance leased assets as those for
+which it has title rights. If the Group can reasonably determine that a lease will transfer
+ownership of the asset to the Group by the end of the lease term, related assets are
+depreciated over their useful life. If there is no reasonable certainty that the Group can
+determine that a lease will transfer ownership of the asset to the Group by the end of the
+lease term, related assets are depreciated over the shorter of the lease term and useful life.
+Supplemental retirement benefits include supplemental pension payments and medical
+The obligations related to the defined benefit plans are calculated by independent actuaries
+using the projected unit credit method at each financial reporting date. The actuarial gains
+or losses are recognised in “Other comprehensive income” immediately when they occur,
+the gains or losses arising from amendments to pension plans are charged or credited to the
+income statement immediately as “Operating expenses" when they occur.
+Contributions made by the Group to the retirement schemes described above are recognised
+as “Operating expenses” in the income statement as incurred. Forfeited contributions by
+those employees who leave the schemes prior to the full vesting of their contributions are
+used to reduce the existing level of contributions or retained in the retirement schemes in
+accordance with the requirements of the respective defined contribution plans.
+All eligible employees in operations in Hong Kong, Macau, Taiwan and other countries and
+regions participate in local defined contribution schemes or defined benefit plans.
+In accordance with the policies of relevant state and local governments, employees
+in Chinese mainland participate in various defined contribution retirement schemes
+administered by local Labour and Social Security Bureaus. Operations in Chinese
+mainland contribute to pension and insurance schemes administered by the local pension
+and insurance agencies using applicable contribution rates stipulated in the relevant local
+regulations. Upon retirement, the local Labour and Social Security Bureaus are responsible
+for the payment of the basic retirement benefits to the retired employees. In addition to these
+basic staff pension schemes, employees in Chinese mainland who retire after 1 January 2004
+can also voluntarily participate in a defined contribution plan established by the Bank ("the
+Annuity Plan"). The Bank contributes to the Annuity Plan based on certain percentages of
+the employees' gross salaries.
+12.1 Defined contribution plans and Defined benefit plans
+12 Employee benefits
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+The Group pays supplemental retirement benefits to employees in Chinese mainland who
+retired prior to 31 December 2003 and early retirement benefits to those employees who
+accepted an early retirement arrangement.
+Securities lending transactions are generally secured, with collateral taking the form
+of securities or cash. Securities lent to counterparties by the Group are recorded in the
+consolidated financial statements. Securities borrowed from counterparties by the Group
+are not recognised in the consolidated financial statements of the Group. Cash collateral
+received or advanced is recognised as a liability or an asset in the consolidated financial
+statements.
+When the Group is a lessee under finance leases, the leased assets are capitalised initially at
+the fair value of the asset or, if lower, the present value of the minimum lease payments. The
+corresponding liability to the lessor is included in “Other liabilities”. Finance charges are
+charged over the term of the lease using the effective interest method.
+Leases of assets where substantially all the risks and rewards of ownership have been
+transferred are classified as finance leases. Title may or may not eventually be transferred.
+All leases other than finance leases are classified as operating leases.
+Estimated
+useful lives
+Type of assets
+Buildings comprise primarily branch and office premises. The estimated useful lives,
+depreciation rate and estimated residual value rate of buildings, equipment and motor
+vehicles are as follows:
+7.1 Buildings, equipment and motor vehicles
+Gains and losses on disposals are determined by the difference between proceeds and
+carrying amount, after deduction of relevant taxes and expenses. These are included in the
+income statement.
+Property and equipment are reviewed for impairment at each financial reporting date. Where
+the carrying amount of an asset is greater than its estimated recoverable amount, it is written
+down immediately to its recoverable amount. The recoverable amount is the higher of the
+asset's fair value less costs to sell and value in use.
+Property and equipment (Continued)
+7
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+209
+Depreciation is calculated on the straight-line method to write down the cost of such assets
+to their residual values over their estimated useful lives. The residual values and useful lives
+of assets are reviewed, and adjusted if appropriate, at each financial reporting date.
+Subsequent costs are included in an asset's carrying amount, only when it is probable that
+future economic benefits associated with the item will flow to the Group and the cost of the
+item can be measured reliably. All other repairs and maintenance costs are charged to the
+income statement during the financial period in which they are incurred.
+The assets purchased or constructed are initially measured at acquisition cost or deemed
+cost, as appropriate. Such initial cost includes expenditure that is directly attributable to the
+acquisition of the assets.
+The Group's fixed assets mainly comprise buildings, equipment and motor vehicles, aircraft
+and construction in progress. When the costs attributable to the land use rights cannot be
+reliably measured and separated from that of the building at inception, the costs are included
+in the cost of properties and buildings and recorded in “Property and equipment”.
+Property and equipment
+Estimated
+residual
+value rate
+Annual
+depreciation
+rate
+Buildings
+8.1 Lease classification
+Leases
+8
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+210
+8.2 Finance leases
+Construction in progress consists of assets under construction or being installed and is stated
+at cost. Cost includes equipment cost, cost of construction, installation and other direct
+costs. Items classified as construction in progress are transferred to property and equipment
+when such assets are ready for their intended use and the depreciation charge commences
+after such assets are transferred to property and equipment.
+Aircraft are depreciated using the straight-line method over the expected useful life of
+25 years, less the years in service at the time of purchase to an estimated residual value rate
+varying from 0% to 15%.
+Aircraft are used in the Group's aircraft operating leasing business.
+7.2 Aircraft
+16.1%-24.3%
+3% 1.9%-6.5%
+3% 6.4%-32.4%
+3%
+3-15 years
+4-6 years
+Motor vehicles
+Equipment
+15-50 years
+7.3 Construction in progress
+12.2 Retirement benefit obligations
+12.2 Retirement benefit obligations (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+The Group reviews the internal reporting in order to assess performance and allocate
+resources. Segment information is presented on the same basis as the Group's management
+and internal reporting.
+Segment reporting
+21
+The tax effects of income tax losses available for carrying forward are recognised as an asset
+when it is probable that future taxable profits will be available against which these losses
+can be utilised.
+Deferred income tax liabilities on taxable temporary differences arising from investments
+in subsidiaries, associates and joint ventures are recognised, except where the timing of the
+reversal of the temporary difference can be controlled and it is probable that the difference
+will not reverse in the foreseeable future.
+Deferred tax liabilities shall be recognised for all taxable temporary differences, except
+to the extent that the deferred tax liability arises from the initial recognition of goodwill,
+or the initial recognition of an asset or liability in a transaction which is not a business
+combination, and at the time of the transaction, affects neither accounting profit nor taxable
+profit/(tax loss).
+For deductible temporary differences associated with investment in subsidiaries, associates
+and joint ventures, a deferred tax asset is recognised to the extent that, and only to the extent
+that, it is probable that the temporary difference will reverse in the foreseeable future; and
+taxable profit will be available against which the temporary difference can be utilised.
+20.2 Deferred income tax (Continued)
+20 Income taxes (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Comparative figures
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+219
+The principal temporary differences arise from asset impairment allowances, revaluation of
+certain financial assets and financial liabilities including derivative contracts, revaluation
+of investment properties, depreciation of property and equipment, provisions for pension,
+retirement benefits and salary payables.
+Deferred income tax is recognised using the liability method, on temporary differences
+arising between the tax bases of assets and liabilities and their carrying amounts in the
+consolidated financial statements. Deferred income tax is determined using tax rates and
+laws that have been enacted or substantially enacted by the financial reporting date and are
+expected to apply when the related deferred income tax asset is realised, or the deferred
+income tax liability is settled.
+20.2 Deferred income tax
+Current income tax is the expected tax payable on the taxable income for the year, using tax
+rates enacted or substantially enacted at the financial reporting date, and any adjustment to
+tax payable in respect of previous years.
+20.1 Current income tax
+Income taxes comprise current income tax and deferred income tax. Tax is recognised in the
+income statement except to the extent that it relates to items directly recognised in Equity. In
+these cases, tax is also directly recognised in Equity.
+Income taxes
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Certain comparative figures have been adjusted to conform with changes in disclosures in
+current year.
+22
+22
+1 Impairment loss on loans and advances to customers (Continued)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+221
+The Group applies expert judgements to predict macroeconomic indicators, analyses the
+correlations with modelled parameters such as PD, and makes forward-looking adjustments
+on parameters. At the same time, the Group also needs to estimate the probability of
+occurrence of multiple different macroeconomic scenarios and calculate probability-
+weighted expected credit losses.
+The parameters used by the Group to measure the ECL model, including PD, LGD and
+EAD, each involve numerous judgements and assumptions. The Group made adjustments
+based on the results of the internal rating model of the New Basel Capital Accord and
+considered macroeconomic forecasts information to determine the debtor's PIT PD. When
+estimating the LGD, the Group also needs to make judgements by considering the type
+of counterparty, recourse arrangements, compensation seniority, the type and value of the
+collateral and historical loss data. For off-balance credit commitments and revolving credit
+facilities, judgements are also needed to determine the time period applicable for the EAD.
+When determining whether the credit risk of a loan has significantly increased since initial
+recognition, the Group needs to consider internal and external historical information, current
+conditions and future economic forecasts. The criteria for a significant increase in credit risk
+will be used to determine whether impairment allowance for a loan should be measured as
+equal to lifetime expected credit losses, rather than 12 months expected credit losses.
+The models and assumptions used by the Group in assessing the expected credit losses on
+loans and advances to customers are highly dependent on management's judgement.
+Impairment loss on loans and advances to customers
+1
+Please refer to the 2017 annual report for critical accounting estimates and judgements made
+by the Group in the applying of accounting policies in 2017.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying
+value of assets and liabilities in 2018, are set out below. It is possible that actual results may
+be materially different from the estimates and judgements referred below.
+The Group has taken into consideration the impact of the economic environment on the
+industries and territories in which the Group operates when determining critical accounting
+estimates and judgements in applying accounting policies.
+The Group makes estimates and judgements that affect the reported amounts of assets and
+liabilities within the next financial year. Estimates and judgements are continually evaluated
+and are based on historical experience and other factors, including expectations of future
+events that are believed to be reasonable under the circumstances.
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+220
+The Group earns fee and commission income from a diverse range of services it provides to
+its customers. For those services that are provided over a period of time, fee and commission
+income is accrued in accordance with the terms and conditions of the service agreement.
+For other services, fee and commission income is recognised when the transactions are
+completed.
+Fee and commission income
+For those financial assets that are not purchased or originated credit-impaired financial
+assets but subsequently have become credit-impaired financial assets, the Group calculates
+the interest income by applying the effective interest rate to the amortised cost of the
+financial asset in subsequent reporting periods.
+20
+At each financial reporting date, liability adequacy tests are performed to ensure the
+adequacy of the insurance contract liabilities (including unearned premium in the case of
+non-life insurance contracts). In performing these tests, current best estimates of future
+contractual cash flows and claims handling and administration expenses, as well as
+investment income from the assets backing such liabilities, are used. Any deficiency is
+immediately charged to the income statement and reported as “Operating expenses”, with a
+provision established for losses arising from the liability adequacy test.
+14.3 Liability adequacy test
+14 Insurance contracts (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+216
+Premiums on life insurance contracts are recognised as revenue when they become payable
+by the contract holders. Benefits and claims are recorded as an expense when they are
+incurred. A liability for contractual benefits that are expected to be incurred in the future
+is recorded when premiums are recognised. For certain long-term insurance contracts
+(investment-linked long-term insurance contracts) with embedded derivatives linking
+payments on the contract to units of an investment fund set up by the Group with the
+consideration received from the contract holders, the liability is adjusted for all changes
+in the fair value of the underlying assets, and includes a liability for contractual benefits
+that are expected to be incurred in the future which is recorded when the premiums are
+recognised.
+(2) Life insurance contracts
+Premiums on non-life insurance contracts are recognised as revenue (earned premiums)
+proportionally over the period of coverage. The portion of premium received on in-force
+contracts that relates to unexpired risks at the financial reporting date is reported as the
+unearned premium liability in “Other liabilities”. Claims and loss adjustment expenses
+are charged to the income statement as “Operating expenses" when incurred based on the
+estimated liability for compensation owed to contract holders or third parties damaged by
+the contract holders. They include direct and indirect claims settlement costs and arise from
+events that have occurred up to the financial reporting date even if they have not yet been
+reported to the Group.
+(1) Non-life insurance contracts
+14.2 Insurance contracts recognition and measurement
+The Group does not separately measure embedded derivatives that itself meet the definition
+of an insurance contract or options to surrender insurance contracts for a fixed amount (or an
+amount based on a fixed amount and an interest rate).
+The Group's insurance subsidiaries issue insurance contracts that transfer significant
+insurance risk. The Group performs a significant insurance risk test at the contract initial
+recognition date. Insurance risk is significant if, and only if, an insured event could cause an
+insurer to pay significant additional benefits in any scenario, excluding scenarios that lack
+commercial substance. The Group issues non-life insurance contracts, which cover casualty
+and property insurance risk, and life insurance contracts, which insure events associated
+with human life (for example death, or survival) over a long duration.
+14.1 Insurance contracts classification
+14 Insurance contracts
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+15 Treasury shares and preference shares
+2
+Where the Bank or other members of the Group purchase the Bank's ordinary shares,
+"Treasury shares” are recorded at the amount of consideration paid and deducted from total
+equity holders' equity until they are cancelled, sold or reissued. Where such shares are
+subsequently sold or reissued, any consideration received is included in capital and reserves
+attributable to equity holders of the Bank.
+16 Contingent liabilities
+19
+Interest income and expense (Continued)
+18
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+218
+For those purchased or originated credit-impaired financial assets, the Group calculates the
+interest income by applying the credit-adjusted effective interest rate to the amortised cost of
+the financial asset from initial recognition. The credit-adjusted effective interest rate is that
+exactly discounts the estimated future cash flows through the expected life of the financial
+asset to the amortised cost of a financial asset that is a purchased or originated credit-
+impaired financial asset.
+The effective interest method is used in the calculation of the amortised cost of a financial
+asset or a financial liability and in the allocation and recognition of the interest income or
+interest expense in profit or loss over the relevant period. The effective interest rate is that
+exactly discounts estimated future cash flows through the expected life of a financial asset
+or financial liability to the gross carrying amount of a financial asset or the amortised cost
+of a financial liability. When calculating the effective interest rate, the Group estimates the
+expected cash flows by considering all contractual terms of the financial instrument but does
+not consider expected credit losses. The calculation includes all amounts paid or received
+by the Group that are an integral part of the effective interest rate, transaction costs and all
+other premiums or discounts.
+The "Interest income” and “Interest expense" in the Group's income statement are the
+interest income and expense calculated by using the effective interest method on financial
+assets at amortised cost, financial assets at fair value through other comprehensive income
+and financial liabilities at amortised cost.
+Interest income and expense
+The Group also administers entrusted loans on behalf of third-party lenders. In this regard,
+the Group grants loans to borrowers, as an intermediary, at the direction of third-party
+lenders, who fund these loans. The Group has been contracted by these third-party lenders
+to manage the administration and collection of these loans on their behalf. The third-party
+lenders determine both the underwriting criteria for and all terms of the entrusted loans,
+including their purposes, amounts, interest rates, and repayment schedule. The Group
+charges a commission related to its activities in connection with the entrusted loans, but
+the risk of loss is borne by the third-party lenders. Entrusted loans are not recognised in the
+statement of financial position of the Group.
+The Group acts as a custodian, trustee or in other fiduciary capacities, that result in its
+holding or placing of assets on behalf of individuals, securities investment funds, social
+security funds, insurance companies, qualified foreign institutional investors, annuity
+schemes and other customers. These assets are not included in the statement of financial
+position of the Group, as they are not assets of the Group.
+18
+17 Fiduciary activities
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+217
+A contingent liability is a possible obligation that arises from past events and whose
+existence will only be confirmed by the occurrence or non-occurrence of one or more
+uncertain future events not wholly within the control of the Group. It can also be a present
+obligation arising from past events that is not recognised because it is not probable that
+an outflow of economic resources will be required or the amount of obligation cannot be
+measured reliably.
+Preference shares issued by the Group contain no contractual obligation to deliver cash or
+another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group; and preference
+shares issued are non-derivative instruments that will be settled in the Group's own equity
+instruments, but includes no contractual obligation for the Group to deliver a variable number
+of its own equity instruments. The Group classifies preference shares issued as an equity
+instrument. Fees, commissions and other transaction costs of preference shares issuance
+are deducted from equity. The dividends on preference shares are recognised as profit
+distribution at the time of declaration.
+3
+"Deferred income tax assets" are recognised to the extent that it is probable that future
+taxable profit will be available against which deductible temporary differences can be
+utilised except the deferred tax asset arises from the initial recognition of an asset or liability
+in a transaction that is not a business combination and at the time of the transaction, affects
+neither accounting profit nor taxable profit/(tax loss).
+Fair value of derivatives and other financial instruments
+75,754
+74,476
+Due from and placements with and loans to banks
+and other financial institutions and central banks
+132,167
+144,326
+Financial investments (1)
+414,695
+469,098
+Loans and advances to customers
+Interest income
+2017
+Year ended 31 December
+2018
+Net interest income
+1
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+16.5%
+Assessable profits
+224
+Hong Kong profits tax
+Subtotal
+Hong Kong
+687,900
+Interest expense
+225
+Interest income on “Financial investments” is principally derived from debt securities listed on China
+Domestic Interbank Bond Market and unlisted debt securities in Hong Kong, Macau, Taiwan and other
+countries and regions.
+1,997
+1,652
+338,389
+359,706
+(1)
+(included within interest income)
+Interest income accrued on impaired financial assets
+Net interest income
+(284,227)
+(328,194)
+Subtotal
+(16,471)
+(22,489)
+Bonds issued and other
+The estimation of future cash flows is critical for a credit-impaired loan for which expected
+credit losses are measured on an individual basis. Factors affecting this estimate include,
+among other things, the granularity of financial information related to specific borrowers,
+the availability of meaningful information related to industry competitors and the relevance
+of sector trends to the future performance of individual borrowers and cash flows from the
+sale of collateral.
+(75,707)
+other financial institutions
+Due to and placements from banks and
+(204,794)
+(229,998)
+Due to customers
+622,616
+Local education surcharges
+(62,962)
+2%
+BANK OF CHINA LIMITED
+223
+When estimating the value in use of aircraft held by subsidiaries, the Group estimates
+expected future cash flows from the aircraft and uses a suitable discount rate to calculate
+present value. The Group obtains valuations of aircraft from independent appraisers for
+which the principal assumptions underlying aircraft value are based on current market
+transactions for similar aircraft in the same location and condition. The Group also uses
+the fair value of aircraft obtained from independent appraisers in its assessment of the
+recoverable amount of intangible assets and the goodwill arising from the purchase of the
+Group's aircraft leasing subsidiary.
+Non-financial assets are periodically reviewed for impairment and where the carrying
+amount of an asset is greater than its estimated recoverable amount, it is written down
+immediately to its recoverable amount. The recoverable amount is the higher of the asset's
+fair value less costs to sell and value in use.
+Impairment of non-financial assets
+Where the final tax outcome of these matters is different from the amounts that were initially
+estimated, such differences will impact the current income tax, deferred income tax, and
+value-added tax in the period during which such a determination is made.
+The Group is subject to income, value-added and other taxes in numerous jurisdictions,
+principally in Chinese mainland and Hong Kong. There are certain transactions and
+activities for which the ultimate tax determination is uncertain during the ordinary course
+of business. The Group has made estimates for items of uncertainty and application of new
+tax legislation taking into account existing tax legislation and past practice, in particular, the
+treatment of supplementary PRC tax applied to results of overseas operations.
+Taxes
+As described in Note II.12.2 and Note V.33, the Bank has established liabilities in
+connection with benefits payable to certain retired and early retired employees. These
+liabilities are calculated using actuarial assumptions such as discount rates, pension benefit
+inflation rates, medical benefit inflation rates, and other factors. While management
+believes that its assumptions are appropriate, differences in actual experience or changes
+in assumptions may affect other comprehensive income, expenses and employee retirement
+benefit obligations.
+5
+Employee retirement benefit obligations
+4
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+222
+The Group uses judgement to assess whether the Group has a present legal or constructive
+obligation as a result of past events at each financial reporting date, and judgement is used
+to determine if it is probable that an outflow of resources embodying economic benefits will
+be required to settle the obligation, and to determine a reliable estimate of the amount of the
+obligation and relevant disclosure in the consolidated financial statements.
+Provisions
+With respect to the PRC government obligations related to large policy directed financing
+transactions, fair value is determined using the stated terms of the related instrument and with
+reference to terms determined by the PRC government in similar transactions engaged in or
+directed by the PRC government. In this regard, there are no other relevant market prices or
+yields reflecting arm's length transactions of a comparable size and tenor.
+The Group assesses assumptions and estimates used in valuation techniques including review
+of valuation model assumptions and characteristics, changes to model assumptions, the
+quality of market data, whether markets are active or inactive, other fair value adjustments
+not specifically captured by models and consistency of application of techniques between
+reporting periods as part of its normal review and approval processes. Valuation techniques
+are validated and periodically reviewed and, where appropriate, have been updated to reflect
+market conditions at the financial reporting date.
+The Group establishes fair value of financial instruments with reference to a quoted market
+price in an active market or, if there is no active market, using valuation techniques. These
+valuation techniques include the use of recent arm's length transactions, observable prices
+for similar instruments, discounted cash flow analysis using risk-adjusted interest rates, and
+commonly used market pricing models. Whenever possible these models use observable
+market inputs and data including, for example, interest rate yield curves, foreign currency
+rates and option volatilities. The results of using valuation techniques are calibrated against
+the industry practice and observable current market transactions in the same or similar
+instruments.
+Education surcharges
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+FOR THE YEAR ENDED 31 DECEMBER 2018
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+Turnover tax paid
+(Amount in millions of Renminbi, unless otherwise stated)
+3%
+Turnover tax paid
+1%-7%
+Turnover tax paid
+6%
+Taxable added value
+25%
+Taxable income
+Statutory rates
+Tax basis
+City construction and maintenance tax
+Corporate income tax
+Value-added tax
+The variable returns the Group is exposed to from its involvement with structured entities
+include decision makers' remuneration (such as management fees and performance-related
+fees), as well as other benefits (such as investment income, remuneration and exposure to
+loss from providing credit or liquidity support, and variable returns from transactions with
+structured entities). When assessing whether it controls a structured entity, the Group not
+only considers applicable legal or regulatory requirements, and contractual agreements, but
+also other circumstances where the Group may have obligation to absorb any loss of the
+structured entity.
+The Group reassesses whether it controls a structured entity if facts and circumstances
+indicate that there are changes to one or more of the relevant elements of control.
+The Group is involved with structured entities in its normal business course, and the Group
+determines whether or not to consolidate those structured entities depending on whether the
+Group has control over them. When assessing control over structured entities, the Group
+takes consideration of power arising from rights it directly owns or indirectly owns through
+subsidiaries (including controlled structured entities), variable returns, and link between
+power and returns.
+Judgement in assessing control over structured entities
+IV TAXATION
+The principal income and other taxes to which the Group is subject are listed below:
+Taxes
+Chinese mainland
+173,859
+BANK OF CHINA LIMITED
+2,307
+6,432
+228
+176,979
+Included in the “Operating expenses” are operating lease expenses of RMB7,789 million and premises and
+equipment related expenses (mainly comprised of property management and building maintenance expenses
+and taxes) of RMB 12,262 million (2017: RMB7,472 million and RMB 12,092 million, respectively).
+(1)
+(2)
+Total (2)
+Other
+7,306
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+4,744
+4,676
+Included in the “General operating and administrative expenses" is principal auditors' remuneration of
+RMB232 million for the year ended 31 December 2018 (2017: RMB215 million), of which RMB71 million
+is for Hong Kong, Macau, Taiwan and other countries and regions of the Group (2017: RMB59 million).
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Social insurance
+V
+- Injury at work
+58,242
+Taxes and surcharges
+— Unemployment
+Annuity
+Pension
+- Medical
+Retirement benefits
+Staff welfare
+Salary, bonus and subsidy
+2017
+Year ended 31 December
+2018
+Staff costs
+7
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Cost of sales of precious metal products
+Total
+13,451
+For the year ended 31 December 2018, the government subsidy income from operating activities, as part of
+other operating income, is RMB620 million (2017: RMB1,511 million).
+22,249
+20,965
+5,355
+6,187
+Net insurance premium income
+6,480
+(1,125)
+(1,178)
+Less: gross written premiums ceded to reinsurers
+7,365
+Gross earned premiums
+Non-life insurance contracts
+16,894
+14,778
+56,477
+6
+13,667
+Operating expenses
+2018
+3,661
+3,915
+18,946
+13,093
+Depreciation and amortisation
+Non-life insurance contracts
+Life insurance contracts
+Insurance benefits and claims
+41,235
+42,768
+General operating and administrative expenses (1)
+82,061
+85,391
+Staff costs (Note V.7)
+2017
+Year ended 31 December
+3,583
+7,185
+85
+CHEN Siqing (4)
+Executive directors
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+Total
+in kind
+Benefits
+to pension
+schemes
+paid
+Fees
+Remuneration
+Contributions
+(2)
+For the year ended 31 December 2018
+546
+75
+Net insurance premium income
+369
+(2)
+ZHANG Qingsong (4) (5) (6)
+32
+246
+(2)
+REN Deqi (4) (6)
+41
+_ (2)
+GAO Yingxin (4) (6)
+182
+(2)
+LIU Liange (4) (5)
+690
+69
+3,146
+Details of the directors' and supervisors' emoluments are as follows:
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Housing funds
+215
+243
+- Maternity insurance
+90
+87
+212
+206
+2,060
+2,372
+6,657
+6,835
+3,404
+3,644
+2
+4,628
+8 Directors', supervisors' and senior management's emoluments
+4,692
+1,941
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+82,061
+85,391
+229
+Total
+3,174
+3,512
+Other
+7
+13
+Reimbursement for cancellation of labour contract
+1,925
+Labour union fee and staff education fee
+(6,209)
+Net trading gains
+Less: gross written premiums ceded to reinsurers
+2017
+Year ended 31 December
+2018
+Total (1)
+Net gains from commodity products
+Net gains from equity products
+Net gains from interest rate products
+(4,574)
+foreign exchange products
+50
+3
+88,691
+87,208
+Net fee and commission income
+(12,109)
+Net losses from foreign exchange and
+(2,334)
+9,910
+1,998
+4
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+226
+Included in "Net trading gains" for the year ended 31 December 2018 are losses of RMB1,355 million in
+relation to financial assets and financial liabilities designated as at fair value through profit or loss (2017:
+gains of RMB121 million).
+(1)
+1,686
+6,719
+578
+960
+1,444
+423
+(12,789)
+100,800
+99,997
+Fee and commission expense
+23,310
+20,212
+Agency commissions
+25,798
+29,943
+Bank card fees
+2017
+2018
+Year ended 31 December
+Net fee and commission income
+2
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Settlement and clearing fees
+Net gains on financial investments
+13,670
+Credit commitment fees
+Fee and commission income
+7,054
+8,120
+Other
+5,615
+3,534
+Consultancy and advisory fees
+3,527
+3,597
+Custodian and other fiduciary service fees
+8,083
+7,740
+Spread income from foreign exchange business
+15,090
+13,181
+12,323
+Year ended 31 December
+2018
+2017
+Net gains on derecognition of financial assets at
+fair value through other comprehensive income
+Net gains on derecognition of financial assets
+at amortised cost (1)
+227
+Total
+6,088
+4,566
+Other (2)
+4,333
+148
+and joint ventures
+Gains on disposal of subsidiaries, associates
+771
+919
+(Note V.21)
+Changes in fair value of investment properties
+720
+949
+47,356
+intangible assets and other assets
+52,589
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+23,103
+21,037
+Gross earned premiums
+Life insurance contracts
+2017
+2018
+Year ended 31 December
+(2)
+(1) Details of insurance premium income are as follows:
+Other operating income (Continued)
+5
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+(6,259)
+Gains on disposal of property and equipment,
+1,918
+Total
+(1)
+N/A
+Other
+770
+N/A
+Net gains from debt securities held to maturity
+1,637
+N/A
+available for sale
+Net gains from investment securities
+N/A
+1,117
+N/A
+1,700
+(1)
+1,697
+2,817
+All the net gains on the derecognition of financial assets at amortised cost result from trading for the year
+ended 31 December 2018.
+Dividend income
+8,080
+7,658
+Revenue from sale of precious metals products
+8,651
+10,233
+Aircraft leasing income
+22,249
+20,965
+Insurance premiums (¹)
+2017
+2018
+Year ended 31 December
+Other operating income
+5
+2,406
+2528
+RMB'000
+26
+232
+GAO Yingxin ceased to serve as Executive Director of the Bank as of 24 January 2018. REN Deqi ceased
+to serve as Executive Director of the Bank as of 12 June 2018. ZHANG Qingsong ceased to serve as
+Executive Director of the Bank as of 18 September 2018. ZHANG Xiangdong ceased to serve as Non-
+executive Director of the Bank as of 29 June 2018. Nout WELLINK ceased to serve as Independent
+Director of the Bank as of 29 June 2018. WANG Xueqiang ceased to serve as Shareholder Supervisor of the
+Bank as of 31 March 2018. DENG Zhiying, GAO Zhaogang and XIANG Xi ceased to serve as Employee
+Supervisor of the Bank as of 14 December 2018.
+LIU Liange began to serve as Executive Director of the Bank as of 11 October 2018. ZHANG Qingsong
+began to serve as Executive Director of the Bank as of 20 August 2018. LIAO Qiang began to serve
+as Non-executive Director of the Bank as of 29 September 2018. JIANG Guohua began to serve as
+Independent Director of the Bank as of 14 December 2018. WANG Zhiheng, LI Changlin and LENG Jie
+began to serve as Employee Supervisor of the Bank as of 14 December 2018.
+A portion of the discretionary bonus payments for executive directors and the chairman of the board of
+supervisors are deferred for a minimum of 3 years, which is contingent upon the future performance in
+accordance with relevant regulations of the PRC authorities.
+The compensation amounts for these directors and supervisors for the year ended 31 December 2017 were
+restated based on the finalised amounts as disclosed in the Bank's announcement dated 30 August 2018.
+The total compensation packages for executive directors and supervisors for the year ended 31 December
+2018 including discretionary bonus have not yet been finalised in accordance with the relevant regulations
+of the PRC authorities. The amount of the compensation not provided for is not expected to have any
+significant impact on the Group's 2018 financial statements. The final compensation for the year ended
+31 December 2018 will be disclosed in a separate announcement when determined.
+Employee supervisors' above compensation is paid for serving as the supervisors of the Bank.
+For the years ended 31 December 2018 and 2017, these executive directors of the Bank did not receive any
+fees.
+For the years ended 31 December 2018 and 2017, these non-executive directors of the Bank were not
+remunerated by the Bank.
+(6)
+(5)
+(4)
+(3)
+(2)
+(1)
+BANK OF CHINA LIMITED
+8 Directors', supervisors' and senior management's emoluments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+Contributions to pension schemes and other
+85
+105
+22
+23
+Discretionary bonuses
+Basic salaries and allowances
+2017
+2018
+Year ended 31 December
+The emoluments payable to the five individuals whose emoluments were the highest in the
+Group for the years ended 31 December 2018 and 2017 respectively are as follows:
+Of the five individuals with the highest emoluments, none of them are directors or
+supervisors whose emoluments are disclosed above.
+Five highest paid individuals
+8 Directors', supervisors' and senior management's emoluments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+4
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+DENG Zhiying (6)
+1,702
+243
+1,782
+254
+118
+840
+69
+64
+༔༤+
+141
+1,318
+LIU Wanming (4)
+1,410
+WANG Xueqiang (4) (6)
+GAO Zhaogang (6)
+(Amount in millions of Renminbi, unless otherwise stated)
+XIANG Xi (6)
+50
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+231
+10,005
+812
+622
+5,825
+2,746
+249
+249
+CHEN Yuhua
+50
+50(3)
+50
+50(3)
+50(3)
+707
+3
+Amounts in RMB
+― Individually assessed
+Loans and advances
+9 Impairment losses on assets (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+99,294
+151
+234
+Total
+Other impairment losses on assets
+99,143
+- Collectively assessed
+Subtotal of impairment losses on credit
+Subtotal
+Year ended 31 December 2017
+88,161
+900
+3,236
+235
+Total
+Other
+Subtotal
+2,910
+- Loans and receivables
+Held to maturity
+Available for sale
+326
+84,025
+43,941
+40,084
+Financial investments
+Emoluments of the individuals were within the following bands:
+(10,194)
+346
+Other
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+233
+During the years ended 31 December 2018 and 2017, the Group has not paid any
+emoluments to the directors, supervisors, or senior management as an inducement to join or
+upon joining the Group or as compensation for loss of office.
+The above five highest paid individuals' emoluments are based on best estimates of
+discretionary bonuses. Discretionary bonuses include portions of payments that are deferred
+to future periods.
+| 2
+1
+2017
+Year ended 31 December
+2018
+110
+132
+20,000,001-50,000,000
+16,000,001–20,000,000
+14,000,001-16,000,000
+12,000,001-14,000,000
+FOR THE YEAR ENDED 31 DECEMBER 2018
+1,086
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Credit commitments
+Subtotal
+(46)
+1,132
+- Financial assets at fair value through
+other comprehensive income
+- Financial assets at amortised cost
+107,905
+(764)
+108,669
+Year ended 31 December 2018
+Financial investments
+Subtotal
+- Loans and advances at amortised cost
+Loans and advances at fair value through
+other comprehensive income
+Loans and advances
+9 Impairment losses on assets
+V
+24
+WANG Xiquan (4)
+400
+260
+CHEN Yuhua
+1,055
+690
+75
+78
+186
+83
+786
+69
+546
+(5)
+LI Changlin (5)
+LENG Jie (5)
+WANG Zhiheng
+LIU Wanming (4)
+WANG Xueqiang
+297
+(4) (6)
+210
+352
+2,926
+2,592
+50
+50(3)
+50
+XIANG Xi (6)
+50(3)
+50
+GAO Zhaogang (6)
+50(3)
+291
+61
+DENG Zhiying (6)
+20
+260
+521
+17
+493
+Independent directors
+ZHANG Xiangdong (¹) (6)
+LIAO Qiang (¹) (5)
+WANG Xiaoya (1)
+XIAO Lihong (¹)
+LI Jucai (¹)
+ZHAO Jie (¹)
+Non-executive directors
+475
+56
+314
+36
+52
+6
+232
+LU Zhengfei
+425
+550
+400
+400
+550
+||||
+||||
+|||
+WANG Xiquan (4)
+Supervisors
+297
+Nout WELLINK (6)
+17
+JIANG Guohua (5)
+425
+Angela CHAO
+493
+WANG Changyun
+LEUNG Cheuk Yan
+397
+6,391
+BANK OF CHINA LIMITED
+518
+39
+67
+778
+69
+73
+840
+69
+64
+༄་ཅར
+635
+(2)
+412
+(2)
+636
+95
+(2)
+69
+| | |
+400
+550
+600
+|||
+|||||
+Supervisors
+397
+Angela CHAO
+400
+WANG Changyun
+400
+LEUNG Cheuk Yan
+550
+LU Zhengfei
+600
+799
+230
+བ
+ZHAO Jie (1)
+XIAO Lihong (1)
+ZHANG Xiangdong (¹) (6)
+LI Jucai (1)
+Non-executive directors
+GAO Yingxin (4) (6)
+TIAN Guoli (4)
+REN Deqi (4) (6)
+CHEN Siqing (4)
+Executive directors
+For the year ended 31 December 2017
+8 Directors', supervisors' and senior management's emoluments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+WANG Xiaoya (1)
+707
+BANK OF CHINA LIMITED
+ZHANG Qi (1)
+(2)
+RMB'000
+RMB'000
+Total
+Benefits
+in kind
+to pension
+schemes
+RMB'000
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+RMB'000
+paid
+Fees
+Remuneration
+Contributions
+Nout WELLINK (6)
+Independent directors
+LIU Xianghui (¹)
+WANG Wei (¹)
+1,042,358
+Total
+(52)
+173,295
+165,653
+Weighted average number of ordinary shares in issue
+(in million shares)
+294,373
+294,365
+Basic and diluted earnings per share (in RMB)
+0.59
+0.56
+Weighted average number of ordinary shares in issue (in million shares)
+Issued ordinary shares as at 1 January
+Profit attributable to ordinary shareholders of the Bank
+Less: weighted average number of treasury shares
+238
+Year ended 31 December
+2018
+2017
+294,388
+294,388
+(15)
+(23)
+294,373
+294,365
+Weighted average number of ordinary shares in issue
+(6,754)
+(6,791)
+172,407
+(3,102)
+Income tax expense
+37,208
+37,917
+(1)
+(2)
+Income not subject to tax is mainly comprised of interest income from PRC Treasury bonds and local
+government bonds, and the tax-free income recognised by the overseas entities in accordance with the local
+tax law.
+Non-deductible items primarily include non-deductible losses resulting from the write-off of certain non-
+performing loans, and marketing and entertainment expenses in excess of the relevant deductible threshold
+under the relevant PRC tax regulations.
+237
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+11 Earnings per share (basic and diluted)
+Basic earnings per share was computed by dividing the profit attributable to the ordinary
+shareholders of the Bank by the weighted average number of ordinary shares in issue during
+the reporting period.
+Diluted earnings per share was computed by dividing the adjusted profit attributable to
+the ordinary shareholders of the Bank based on assuming the conversion of all potentially
+dilutive shares for the reporting period by the adjusted weighted average number of ordinary
+shares in issue. There was no difference between basic and diluted earnings per share as
+there were no potentially dilutive shares outstanding for the year ended 31 December 2018.
+Year ended 31 December
+Profit attributable to equity holders of the Bank
+Less: dividends on preference shares declared
+2018
+2017
+180,086
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+through other on available for
+Fair value
+gains/(losses)
+at fair value
+assets
+on financial
+(Losses)/gains
+Other comprehensive income attributable to equity holders of the Bank in the consolidated
+statement of financial position:
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(36,074)
+33,132
+(36,022)
+34,503
+240
+Total
+Subtotal
+Other
+324
+197
+(16,226)
+comprehensive
+(3,881)
+sale financial
+income
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+12 Other comprehensive income
+Accrual amount of other comprehensive income:
+Year ended 31 December
+2018
+2017
+Items that will not be reclassified to profit or loss
+Actuarial losses on defined benefit plans
+Changes in fair value on investments in equity
+instruments designated at fair value through other
+comprehensive income
+(103)
+(59)
+(1,391)
+N/A
+Less: related income tax impact
+175
+N/A
+Other
+(3,854)
+(8,223) 2,239
+2,130
+N/A
+As at 1 January 2017
+Total
+Other
+operations
+assets
+Exchange
+differences on
+translation
+of foreign
+Other
+9,316
+10,977
+Total
+Less: allowance for impairment losses
+Subtotal
+- Corporates
+- Financial institutions
+- Policy banks
+Governments
+Debt securities
+"Placements with and loans to banks and other financial institutions" include balances arising from reverse
+repo agreements and collateralised financing agreements. These are presented by collateral type as follows:
+(1)
+575,399
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+10
+Income tax expense
+Current income tax
+Year ended 31 December
+2018
+2017
+- Chinese mainland income tax
+As at 31 December
+2018
+20,726
+2017
+50,117
+Changes in amount
+245
+The contractual/notional amounts and fair values of derivative instruments held by the
+Group are set out in the following tables. The contractual/notional amounts of financial
+instruments provide a basis for comparison with the fair values of instruments recognised in
+the statement of financial position but do not necessarily indicate the amounts of future cash
+flows involved or the current fair value of the instruments and, therefore, do not indicate the
+Group's exposure to credit or market risks. The derivative instruments become favourable
+(assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates,
+foreign currency exchange rates, credit spreads, or equity/commodity prices relative to their
+terms. The aggregate fair values of derivative financial assets and liabilities can fluctuate
+significantly from time to time.
+The Group enters into foreign currency exchange rate, interest rate, equity, credit or precious
+metals and other commodity-related derivative financial instruments for trading, hedging,
+asset and liability management and on behalf of customers.
+16 Derivative financial instruments and hedge accounting
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+244
+As at 31 December 2018, the Group included the predominant majority of its placements with and loans
+to banks and other financial institutions in Stage 1, and measured the impairment losses based on expected
+credit losses in the next 12 months (12-month ECL).
+(2)
+88,840
+260,597
+88,840
+260,597
+6,252
+737
+23,242
+16,498
+9,229
+52,716
+190,646
+12,775
+37,940
+5,036
+10
+Income tax expense (Continued)
+The tax rate on the Group's profit before tax differs from the theoretical amount that would
+arise using the basic Chinese mainland tax rate of the Bank as follows:
+Year ended 31 December
+2018
+2017
+Profit before income tax
+229,643
+222,903
+Tax calculated at the applicable statutory tax rate
+57,411
+55,726
+Effect of different tax rates for Hong Kong, Macau,
+Taiwan and other countries and regions
+(4,712)
+(4,084)
+Supplementary PRC tax on overseas income
+1,347
+1,055
+Income not subject to tax (1)
+(23,934)
+(20,994)
+Items not deductible for tax purposes (2)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Hong Kong profits tax
+V
+FOR THE YEAR ENDED 31 DECEMBER 2018
+5,297
+- Macau, Taiwan and other countries and
+regions taxation
+5,917
+5,218
+Adjustments in respect of current income tax
+of prior years
+(9,255)
+(3,595)
+Subtotal
+Deferred income tax (Note V.35.3)
+22,424
+44,860
+14,784
+(6,943)
+Total
+37,208
+37,917
+The principal tax rates applicable to the Group are set out in Note IV.
+The provision for Chinese mainland income tax includes income tax based on the statutory
+tax rate of 25% of the taxable income of the Bank and each of its subsidiaries established in
+the Chinese mainland, and supplementary PRC tax on overseas operations as determined in
+accordance with the relevant PRC income tax rules and regulations (Note III.5).
+Taxation on profits of Hong Kong, Macau, Taiwan and other countries and regions has been
+calculated on the estimated assessable profits in accordance with local tax regulations at the
+rates of taxation prevailing in the countries or regions in which the Group operates.
+236
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+(213)
+12 Other comprehensive income (Continued)
+(16,013)
+Other financial institutions in Chinese mainland
+771,007
+355,290
+Banks in Hong Kong, Macau, Taiwan and
+other countries and regions
+83,223
+74,065
+Other financial institutions in Hong Kong,
+Macau, Taiwan and other countries and regions
+11,723
+13,082
+Subtotal (1)
+1,038,319
+575,573
+Accrued interest
+4,404
+N/A
+Less: allowance for impairment losses (2)
+(365)
+(174)
+646
+127
+(68)
+Share of other comprehensive income of associates and
+joint ventures accounted for using the equity method
+Less: related income tax impact
+133,136
+2017
+172,366
+Placements with and loans to:
+2,329,720
+2,227,614
+1,333
+N/A
+2,331,053
+2,227,614
+(1)
+(2)
+The Group places mandatory reserve funds with the People's Bank of China (the "PBOC”) and the
+central banks of Hong Kong, Macau, Taiwan and other countries and regions where it has operations.
+As at 31 December 2018, mandatory reserve funds placed with the PBOC were calculated at 14.0%
+(31 December 2017: 16.5%) and 5.0% (31 December 2017: 5.0%) of qualified RMB deposits and
+foreign currency deposits from customers of branches in Chinese mainland of the Bank respectively. The
+mandatory reserve funds placed with the central bank of domestic subsidiaries of the Group is determined
+by the PBOC. The amount of mandatory reserve funds placed with the central banks of other jurisdictions is
+determined by local regulations.
+This primarily represented the surplus reserve funds placed with the PBOC by branches in Chinese
+mainland and other funds.
+(3)
+This mainly represented balances other than mandatory reserves and surplus reserves placed with the PBOC
+and the central banks in Hong Kong, Macau, Taiwan and other countries and regions.
+243
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+394
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+15 Placements with and loans to banks and other financial institutions
+As at 31 December
+2018
+2017
+Banks in Chinese mainland
+2018
+Year ended 31 December
+12 Other comprehensive income (Continued)
+(804)
+instruments measured at fair value through other
+comprehensive income
+Allowance for credit losses on investments in debt
+N/A
+22,072
+N/A
+345
+Less: related income tax impact
+N/A
+(1,410)
+Amount transferred to the income statement
+N/A
+(5,684)
+Less: related income tax impact
+N/A
+28,821
+comprehensive income
+instruments measured at fair value through other
+Changes in fair value on investments in debt
+Items that may be reclassified subsequently to
+profit or loss
+(52)
+(1,371)
+Subtotal
+N/A
+Less: related income tax impact
+204
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+239
+(20,641)
+N/A
+229
+7
+362,412
+N/A
+(1,397)
+N/A
+Amount transferred to the income statement
+5,438
+N/A
+Less: related income tax impact
+(24,911)
+N/A
+Fair value losses on available for sale financial assets
+N/A
+(600)
+Less: related income tax impact
+671,249
+FOR THE YEAR ENDED 31 DECEMBER 2018
+82,598
+Changes in amount for the year
+21,087
+N/A
+8,725
+59
+124,331
+As at 31 December 2018
+9,395
+N/A
+(10,959)
+(28,454)
+2,981
+241
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+13
+Cash and due from banks and other financial institutions
+Cash
+Due from banks in Chinese mainland
+1,417
+2,922
+(19,684)
+N/A
+12,381
+Exchange differences on translation of foreign operations
+Less: net amount transferred to the income statement
+from other comprehensive income
+521
+59
+(125)
+for the previous year
+N/A
+(20,941)
+(11,461)
+683
+(31,719)
+As at 31 December 2017
+N/A
+(18,811)
+(19,684)
+2,922
+(35,573)
+Impact of adopting IFRS 9
+(11,692)
+18,811
+7,119
+As at 1 January 2018
+(11,692)
+As at 31 December
+2018
+29,871
+76,755
+439,931
+560,463
+As at 31 December 2018, the Group included all due from banks and other financial institutions in Stage 1,
+and measured the impairment losses based on expected credit losses in the next 12 months (12-month ECL).
+242
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+14 Balances with central banks
+Mandatory reserves
+(1)
+Surplus reserves
+(2)
+2017
+Subtotal
+Accrued interest
+Total
+As at 31 December
+2018
+2017
+1,575,873
+1,740,871
+(1)
+Total
+Other (3)
+363,176
+485,057
+75,406
+270,861
+423,479
+Due from other financial institutions
+13,767
+6,738
+Due from banks in Hong Kong, Macau, Taiwan and
+other countries and regions
+75,998
+54,757
+Due from other financial institutions in Hong Kong,
+Macau, Taiwan and other countries and regions
+in Chinese mainland
+N/A
+83
+Subtotal (1)
+Accrued interest
+360,904
+485,057
+2,698
+Subtotal due from banks and other financial institutions
+(426)
+Less: allowance for impairment losses (¹)
+278
+Interest rate derivatives
+Interest rate swaps
+2,443,952
+(22)
+(18,012)
+2,803,583
+10,382
+19,637
+(98,425)
+99,817
+6,995,859
+(75,492)
+237
+8,468,384
+Subtotal
+(8,302)
+5
+80,260
+Interest rate options
+2,486,264
+(44)
+2,376
+7,276
+Equity derivatives
+(8,311)
+10,403
+2,830,131
+(18,095)
+19,680
+Subtotal
+9
+15,239
+(39)
+1
+17,970
+Interest rate futures
+12
+11,309
+42
+(11)
+Personal loans
+1,718
+Assets
+amount
+Fair value
+Notional
+Contractual/
+As at 31 December 2017
+As at 31 December 2018
+16.1 Derivative financial instruments
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(208)
+- Corporate loans and advances
+Liabilities
+Contractual/
+Notional
+amount
+Fair value
+Assets
+Currency futures
+(1,773)
+4,248
+(1,829) 321,625
+2,210
+220,694
+Currency options
+(96,630)
+4
+76,007
+(73,652)
+97,603
+8,245,972
+(1)
+cross-currency interest rate swaps
+Currency forwards and swaps, and
+Exchange rate derivatives
+Liabilities
+6,671,858
+19,302
+24,342
+(498)
+(574)
+1,955
+120,407
+Subtotal (1)
+(574)
+1,955
+120,407
+Interest rate swaps
+Derivatives designated as hedging
+Cross-currency interest rate swaps
+Notional
+amount
+Contractual/
+As at 31 December 2017
+Derivatives designated as hedging
+instruments in fair value hedges
+Included in the derivative financial instruments above are those designated as hedging
+instruments by the Group as at 31 December 2017 as follows:
+The following table sets out the hedge accounting disclosure for the year ended
+31 December 2017.
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+Fair value
+Assets Liabilities
+instruments in cash flow hedges
+Cross-currency interest rate swaps
+2,211
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(622)
+2,108
+127,845
+252
+Total
+(48)
+153
+7,438
+Subtotal (2)
+110
+5,227
+Interest rate swaps
+(48)
+43
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Between
+Between
+3 and 12
+months
+1 and 3
+months
+1 month
+Less than
+Between
+As at 31 December 2018
+contracts
+Foreign exchange forward
+Foreign exchange risk
+Net investment hedges
+The following table sets out the maturity and average exchange rate of the hedging
+instruments mentioned above:
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies: (Continued)
+(2) Net investment hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+1 and 5
+years
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Over
+5 years
+Notional amount
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(459)
+(475)
+16
+31 December 2018
+Year ended
+251
+Amounts of fair value changes on hedging instruments
+recognised in "Other comprehensive income"
+Amounts of forward element amortised to profit or loss
+Net amounts of fair value changes on hedging instruments
+recognised in "Other comprehensive income"
+(ii) Gains or losses from the hedging instruments recognised in "Other comprehensive
+income" on net investment hedges are as follows:
+N/A
+0.17
+TRY/USD
+Average exchange rate of
+- - N/A
+0.06
+ZAR/USD
+Average exchange rate of
+2,157
+- 2,157
+Total
+FOR THE YEAR ENDED 31 DECEMBER 2018
+16 Derivative financial instruments and hedge accounting (Continued)
+(1)
+11,819,272
+(303,508)
+11,515,764
+As at 31 December 2018, loans at fair value through other comprehensive income of the Group were
+discounted bills. The allowance for impairment losses amounted to RMB273 million and was credited to
+other comprehensive income.
+There was no significant change during the year ended 31 December 2018, or cumulatively, in the fair value
+of the loans that was attributable to changes in the credit risk of the loans.
+254
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+31,589
+FOR THE YEAR ENDED 31 DECEMBER 2018
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+17.1 Analysis of loans and advances to customers by general condition (Continued)
+Corporate loans and advances
+Loans and advances
+Discounted bills
+Subtotal
+(Amount in millions of Renminbi, unless otherwise stated)
+11,787,683
+3,530
+11,784,153
+- Discounted bills
+Measured at fair value through other comprehensive income (1)
+—
+Discounted bills
+Subtotal
+Measured at fair value through profit or loss (2)
+- Corporate loans and advances
+Total
+Accrued interest
+Total loans and advances
+Less: allowance for loans at amortised cost
+Loans and advances to customers, net
+(1)
+(2)
+As at 31 December 2018
+7,117,954
+4,440,085
+2,001
+224,113
+Personal loans
+Total loans and advances
+Less: allowance for impairment losses
+- Individually assessed
+For the year ended 31 December 2017, a net gain from the hedging instrument of RMB860 million was
+recognised in "Other comprehensive income” on net investment hedges, and there was no ineffectiveness in
+the
+year
+ended 31 December 2017.
+The Group's consolidated statement of financial position is affected by exchange differences between the
+functional currencies of the Group and functional currencies of its branches and subsidiaries. The Group
+hedges such exchange exposures only in limited circumstances. Hedging is undertaken using deposits taken
+in the same currencies as the functional currencies of related branches and subsidiaries which are accounted
+for as hedges of certain net investments in foreign operations.
+Net investment hedges
+(3)
+There were no transactions for which cash flow hedge accounting had to be ceased in the year ended
+31 December 2017 as a result of the highly probable cash flows no longer being expected to occur.
+For the year ended 31 December 2017, a net loss from cash flow hedges of RMB5 million was recognised
+in "Other comprehensive income", and there was no ineffectiveness for the year ended 31 December 2017.
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against exposure to cash
+flow variability primarily from foreign exchange rate risk and interest rate risk of placement and loans and
+borrowings.
+361
+33
+328
+Year ended 31 December 2017
+Cash flow hedges
+(2)
+Ineffectiveness recognised in net trading gains
+- hedged items
+hedging instruments
+Net gains on
+398
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against changes in fair
+value of bonds issued, debt securities available for sale and loans and borrowings arising from changes in
+foreign currency exchange rates and interest rates.
+Fair value hedges
+253
+16.2 Hedge accounting (Continued)
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+- Collectively assessed
+Total impairment allowance for loans and advances
+Loans and advances to customers, net
+255
+As at 31 December 2017
+6,792,502
+180,199
+6,972,701
+3,923,857
+10,896,558
+(79,316)
+(172,938)
+(252,254)
+10,644,304
+Measured at amortised cost
+17.1 Analysis of loans and advances to customers by general condition
+17 Loans and advances to customers
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Net gains on fair value hedges are as follows:
+250
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+247
+(1,284)
+1,788
+121,898
+liabilities
+(Amount in millions of Renminbi, unless otherwise stated)
+(660)
+financial
+Derivative
+Total
+rate swaps
+Cross-currency interest
+Foreign exchange and
+interest rate risk
+assets/liabilities
+(624)
+4,280
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+N/A
+2.10% 3.34% 2.86% 3.23%
+2.95%
+interest rate
+11,529 71,852 31,904 117,618
+2,127
+206
+Interest rate swaps
+Notional amount
+Average fixed
+Interest rate risk
+Total
+Over
+5 years
+As at 31 December 2018
+Between Between Between
+1 and 33 and 12 1 and 5
+months months
+years
+1 month
+Less
+than
+Fair value hedges
+The following table sets out the maturity and average exchange rate/interest rate information
+of the hedging instruments mentioned above:
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies: (Continued)
+(1) Fair value hedges (Continued)
+16.2 Hedge accounting (Continued)
+1,788
+117,618
+Interest rate swaps
+financial
+246
+The derivative financial instruments above include those designated as hedging instruments by the Group.
+These exchange rate derivatives primarily include foreign exchange transactions with customers; foreign
+exchange transactions to manage foreign currency exchange risks arising from customers; and foreign
+currency exchange transactions entered into as part of the asset and liability management and funding
+requirements.
+(2)
+(1)
+(111,095)
+94,912
+10,112,431
+(99,254)
+124,126
+11,209,791
+Total (2)
+(3,861)
+3,851
+267,139
+(5,459)
+4,392
+247,867
+Commodity derivatives and other
+BANK OF CHINA LIMITED
+Foreign exchange and
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+Line item in the
+statement of
+financial position
+Fair value
+Assets Liabilities
+amount
+Contractual/
+Notional
+As at 31 December 2018
+Interest rate risk
+value hedges
+hedging instruments in fair
+Derivatives designated as
+The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies:
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against
+changes in fair value of bonds issued and financial investments arising from changes in
+foreign currency exchange rates and interest rates. Foreign currency exchange rate risk and
+interest rate risk are usually the primary risks which affect the change in fair value.
+(i)
+(1) Fair value hedges
+The Group has chosen to adopt the new hedge accounting standard in IFRS 9 from 1 January
+2018. The following table sets out the hedge accounting disclosure for the year ended
+31 December 2018.
+16.2 Hedge accounting
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+FOR THE YEAR ENDED 31 DECEMBER 2018
+interest rate risk
+Derivative
+Cross-currency interest
+(2) Net investment hedges
+The Group's consolidated statement of financial position is affected by exchange differences
+between the functional currencies of the Group and functional currencies of its branches
+and subsidiaries. The Group hedges such exchange exposures only in limited circumstances.
+Hedging is undertaken using foreign exchange forward contracts and due to customers
+in the same or exchange-rate related currencies as the functional currencies of the related
+branches and subsidiaries which are accounted for as hedges of certain net investments in
+foreign operations. As at 31 December 2018, the carrying value of such due to customers
+amounted to RMB55,034 million, and the notional amount of foreign exchange forward
+contracts amounted to RMB2, 157 million. There was no ineffectiveness in the year ended 31
+December 2018.
+Under the hedging relationships of designating due to customers and foreign exchange
+forward contracts as hedging instruments, the Group separates the forward element and the
+spot element of a forward contract and designates as the hedging instrument only the change
+in the value of the spot element of the forward contract.
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies:
+Contractual/
+Notional
+amount
+As at 31 December 2018
+Fair value
+16.2 Hedge accounting (Continued)
+Line item in the
+statement of
+Assets Liabilities financial position
+net investment hedging
+instruments
+- Foreign exchange
+2,157
+(68)
+Derivative financial
+liabilities
+Total
+2,157
+Derivatives designated as
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(3,621)
+101,287 (19,259)
+rate swaps
+(1,956)
+834
+(iii) Net gains on fair value hedges are as follows:
+Net gains on
+- hedging instruments
+- hedged items
+Ineffectiveness recognised in net trading gains
+249
+Year ended
+31 December 2018
+192
+115
+307
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+(68
+Bonds issued
+forward contracts
+Financial
+investments
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+660
+248
+N/A
+N/A
+16.2 Hedge accounting (Continued)
+6.04
+N/A
+--- 5.09% 5.50%
+rate of AUD/USD
+Average exchange
+rate of USD/CNY
+interest rate
+Average exchange
+4,280
+341
+--- 3,939
+Notional amount
+Average fixed
+--- 6.48
+(1) Fair value hedges (Continued)
+BANK OF CHINA LIMITED
+101.287
+Bonds issued
+174
+(1,956)
+(15,638)
+Line item in
+the statement
+of financial
+position
+(ii) The following table sets out the details of the hedged items covered by the Group's fair
+value hedging strategies:
+Carrying amount of
+hedged items
+Assets Liabilities
+As at 31 December 2018
+Accumulated amount of
+fair value adjustments
+on the hedged items
+Assets Liabilities
+Foreign currency liabilities
+interest rate risk
+Foreign exchange and
+Financial investments
+Foreign currency liabilities
+Interest rate risk
+Fair value hedges
+Total
+BANK OF CHINA LIMITED
+263
+4,554,722
+5,054,551
+Total financial investments (7) (8) (9)
+Financial assets at fair value through profit or loss
+N/A
+loans and receivables
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Total financial investments classified as
+414,025
+FOR THE YEAR ENDED 31 DECEMBER 2018
+27,306
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+18 Financial investments (Continued)
+As at 31 December
+2018
+2017
+209,996
+Analysed as follows:
+- Listed outside Hong Kong (10)
+35,821
+- Listed in Hong Kong
+(5,383)
+(Amount in millions of Renminbi, unless otherwise stated)
+N/A
+- China Orient (5)
+14,234
+2017
+As at 31 December
+2018
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+262
+2,089,864
+N/A
+Total debt securities held to maturity (6)
+(39)
+N/A
+Less: allowance for impairment losses
+2,089,903
+117,608
+Governments
+N/A
+43,034
+Public sectors and quasi-governments
+N/A
+Financial investments classified as
+40,766
+Corporate
+N/A
+26,517
+N/A
+24,500
+N/A
+- Financial institutions
+Less: allowance for impairment losses
+loans and receivables
+Issuers in Chinese mainland
+Government (3) (4)
+N/A
+Investment trusts, asset management plans and other
+405,174
+N/A
+1,313
+N/A
+- Corporate
+2
+N/A
+Financial institutions
+6,624
+N/A
+Public sectors and quasi-governments
+652
+N/A
+Governments
+other countries and regions
+- Policy banks
+- Financial institutions
+N/A
+199,521
+N/A
+1,500
+Debt securities
+N/A
+― Corporate
+N/A
+5,538
+N/A
+158,806
+Issuers in Hong Kong, Macau, Taiwan and
+31,218
+Unlisted
+6,912
+48,697
+N/A
+- Listed outside Hong Kong (10)
+31,414
+N/A
+- Listed in Hong Kong
+Debt securities held to maturity
+2017
+2018
+As at 31 December
+1,963,925
+18 Financial investments (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+264
+79,583
+N/A
+Unlisted
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+- Unlisted
+N/A
+94,525
+4,554,722
+5,054,551
+265
+Total
+1,019,708
+963,862
+Unlisted
+3,349,928
+3,880,432
+Listed outside Hong Kong (10)
+185,086
+210,257
+Listed in Hong Kong
+4,554,722
+5,054,551
+Total
+414,025
+N/A
+Unlisted
+loans and receivables
+Financial investments classified as
+969
+124,674
+N/A
+N/A
+Unlisted
+N/A
+2,018
+- Listed outside Hong Kong (10)
+N/A
+6,233
+- Listed in Hong Kong
+Equity instruments and other
+N/A
+9,276
+368,595
+1,363,984
+– Listed outside Hong Kong (10)
+Unlisted
+N/A
+other countries and regions
+129,653
+Listed in Hong Kong
+Debt securities
+other comprehensive income
+Financial assets at fair value through
+N/A
+N/A
+Financial assets at amortised cost
+Listed in Hong Kong
+- Listed in Hong Kong
+Equity instruments, fund investments and other
+382,878
+N/A
+Unlisted
+1,267,426
+N/A
+- Listed outside Hong Kong (10)
+119,454
+N/A
+- Listed in Hong Kong
+Debt securities
+Investment securities available for sale
+N/A
+461,317
+N/A
+2,304,434
+N/A
+38,550
+- Unlisted
+- Listed outside Hong Kong (10)
+- Listed outside Hong Kong (10)
+Issuers in Hong Kong, Macau, Taiwan and
+Issuers in Hong Kong, Macau, Taiwan and
+N/A
+Transfer in
+- Unwinding of discount on allowance
+- Exchange differences
+Acquisition of subsidiaries
+As at 31 December
+237,716
+126,683
+(42,658)
+(70,344)
+Recovery of loans and advances written off
+3,546
+Write-off and transfer out
+(1,989)
+818
+252,254
+258
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+18 Financial investments
+Financial assets at fair value through
+(1,518)
+profit or loss
+Reversal
+As at 1 January
+- 1,033
+294
+(1,058)
+4
+As at 31 December
+234
+39
+- 273
+In the year of 2018, the changes of gross carrying amounts of loans and advances to
+customers that have a significant impact on the Group's impairment allowance are mainly
+derived from the credit business in Mainland China, including:
+•
+•
+The domestic branch adjusted the five tier loan classification and customer internal
+rating of loans and advances to customers, and the loans with gross carrying amount
+of RMB139,844 million was transferred from Stage 1 to Stage 2 and Stage 3, and the
+corresponding impairment allowance was increased by RMB32,041 million. The gross
+carrying amount of loans transferred from Stage 2 to Stage 3 was RMB65,455 million,
+with a corresponding increase in impairment allowance of RMB21,567 million. The
+gross carrying amount of the loans transferred from Stage 2 to Stage 1 was RMB47,963
+million, and the corresponding impairment allowance was reduced by RMB8,803
+million. The loans transferred from Stage 3 to Stage 1 and Stage 2 was not significant.
+The write-off and disposal of the non-performing loans by the domestic branches
+amounted to RMB92,527 million, resulting in a corresponding reduction of
+RMB79,258 million in impairment allowance for Stage 3 loans.
+The domestic branches transferred out RMB 17,239 million of loans through debt-
+to-equity swap and other methods resulting in a decrease of RMB1,969 million
+impairment allowance in Stage 2 and a decrease of RMB4,927 million in impairment
+allowance for Stage 3 loans.
+Impairment losses for the year
+257
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+•
+The mortgages to retail customers securitisation business of the domestic branches
+transferred out RMB37,949 million of loans, resulting in a decrease of RMB192
+million in the impairment allowance for Stage 1 loans.
+RMB1,387 million of loans were transferred from Stage 3 to Stage 2, of which
+contractual cash flows had been modified but not resulting in derecognition, and
+impairment allowance was still measured as equal to lifetime expected credit losses.
+The gross carrying amount of the loans transferred from Stage 3 or Stage 2 to Stage 1
+due to the modification of the contractual cash flows in this year was not significant.
+Reconciliation of allowance for impairment losses in the year of 2017:
+Year ended
+31 December 2017
+BANK OF CHINA LIMITED
+4
+Financial assets held for trading and other
+profit or loss
+14,575
+3,336
+5,085
+3,504
+Equity instruments
+Fund investments and other
+Total financial assets held for trading and
+other financial assets at fair value
+through profit or loss
+259
+248,877
+- Corporate
+134,109
+4,870
+49,983
+4,115
+345,921
+143,094
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+47,061
+financial assets at fair value through
+- Financial institutions
+23
+Debt securities
+As at 31 December
+2018
+2017
+Issuers in Chinese mainland
+25,226
+10,495
+3,604
+- Public sectors and quasi-governments
+647
+229
+-Policy banks
+946
+33,708
+· Financial institutions
+113,103
+48,503
+Corporate
+50,646
+39,649
+other countries and regions
+Governments
+20,595
+22,214
+- Public sectors and quasi-governments
+12,124
+18 Financial investments (Continued)
+Exchange differences and other
+(854)
+(72,802)
+Transfers to Stage 1
+10,301
+(9,636)
+(665)
+Transfers to Stage 2
+(1,481)
+1,929
+(448)
+Transfers to Stage 3
+(350)
+(39,519) (20,181) (13,102)
+(25,985)
+Impairment losses/(reversal) due to
+stage transformation
+(9,674)
+17,487
+41,136
+48,949
+Changes to contractual cash flows
+due to modifications not
+resulting in derecognition
+(29)
+2,018
+26,335
+(587)
+Reversal
+36,901
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+17.2 Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, industry, collateral type and analysis of overdue loans and advances to customers is
+presented in Note VI.3.5.
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+Reconciliation of allowance for impairment losses in the year of 2018:
+(1) Allowance for loans at amortised cost:
+117,419 280,563
+45,952 127,390
+Year ended 31 December 2018
+ECL
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+As at 1 January
+87,094
+76,050
+Impairment losses for the year
+44,537
+12-month
+(204)
+1,402
+3,929
+303,508
+256
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+(2) Allowance for loans at fair value through other comprehensive income:
+Year ended 31 December 2018
+131,116
+12-month
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+As at 1 January
+829
+204
+Impairment losses for the year
+Reversal
+255
+39
+ECL
+Model/risk parameters adjustment
+76,603
+As at 31 December
+(199)
+3,730
+Write-off and transfer out
+(192)
+(1,969)
+(89,497)
+(91,658)
+Recovery of loans and advances
+written off
+5,413
+5,413
+95,789
+Unwinding of discount on allowance
+(1,652)
+Acquisition of subsidiaries
+359
+29
+296
+684
+Exchange differences and other
+814
+159
+516
+1,489
+(1,652)
+Financial assets at fair value through
+Government
+Financial assets at fair value through
+N/A
+Investment trusts, asset management plans and other
+14,757
+N/A
+Accrued interest
+37,810
+N/A
+Less: allowance for impairment losses
+(7,754)
+N/A
+Total financial assets at amortised cost
+2,759,488
+2,804,301
+261
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+profit or loss (continued)
+18 Financial investments (Continued)
+Investment securities available for sale
+Debt securities
+Issuers in Chinese mainland
+N/A
+As at 31 December
+N/A
+- Corporate
+43,610
+N/A
+- Policy banks
+194,255
+N/A
+Financial institutions
+34,781
+N/A
+- Corporate
+22,539
+N/A
+49,299
+China Orient (5)
+N/A
+Issuers in Hong Kong, Macau, Taiwan and
+other countries and regions
+Governments
+78,075
+N/A
+- Public sectors and quasi-governments
+69,650
+N/A
+Financial institutions
+33,991
+N/A
+153,627
+2018
+2017
+Government
+Equity instruments
+N/A
+38,694
+Fund investments and other
+N/A
+48,770
+Total investment securities available for sale (6)
+N/A
+1,857,222
+Debt securities held to maturity
+Issuers in Chinese mainland
+1,769,758
+Government
+1,609,204
+Public sectors and quasi-governments
+N/A
+36,330
+-Policy banks
+N/A
+226,293
+- Financial institutions
+N/A
+58,033
+Corporate
+N/A
+N/A
+80,079
+N/A
+N/A
+590,988
+Public sectors and quasi-governments
+Policy banks
+N/A
+27,457
+N/A
+278,504
+· Financial institutions
+N/A
+182,759
+Corporate
+N/A
+112,069
+Issuers in Hong Kong, Macau, Taiwan and
+other countries and regions
+Governments
+N/A
+308,985
+Public sectors and quasi-governments
+N/A
+43,914
+- Financial institutions
+Corporate
+N/A
+145,003
+Public sectors and quasi-governments
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Government (3) (4)
+16,463
+4,906
+5,774
+24,570
+34,290
+Loans
+N/A
+5,493
+Equity instruments
+Fund investments
+N/A
+7,977
+3,159
+7,575
+Total financial assets at fair value through
+profit or loss (designated)
+24,570
+50,517
+Total financial assets at fair value through
+profit or loss
+370,491
+193,611
+260
+BANK OF CHINA LIMITED
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+- Corporate
+-
+profit or loss (designated)
+Debt securities (¹)
+As at 31 December
+2018
+2017
+Issuers in Chinese mainland
+2,079,661
+1,756
+219
+- Policy banks
+1,083
+824
+- Financial institutions
+- Financial institutions
+2,314
+Corporate
+966
+6,385
+Issuers in Hong Kong, Macau, Taiwan and
+other countries and regions
+Governments
+2,916
+2,311
+- Public sectors and quasi-governments
+1,494
+3.472
+FOR THE YEAR ENDED 31 DECEMBER 2018
+- Government
+V
+N/A
+- Public sectors and quasi-governments
+37,737
+N/A
+- Financial institutions
+- Corporate
+120,185
+N/A
+95,032
+N/A
+1,862,232
+N/A
+16,298
+N/A
+1,229
+N/A
+Equity instruments
+Other debt instruments
+Total financial assets at fair value through
+other comprehensive income (2)
+1,879,759
+Financial assets at amortised cost
+Debt securities
+Issuers in Chinese mainland
+(Amount in millions of Renminbi, unless otherwise stated)
+265,923
+Governments
+N/A
+Issuers in Hong Kong, Macau, Taiwan and other
+countries and regions
+18 Financial investments (Continued)
+Financial assets at fair value through
+Debt securities
+Issuers in Chinese mainland
+Government
+As at 31 December
+2018
+2017
+570,820
+N/A
+Public sectors and quasi-governments
+41,294
+other comprehensive income
+Policy banks
+N/A
+N/A
+120,344
+Corporate
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+- Financial institutions
+N/A
+262,597
+348,300
+(2)
+12,467
+11,605
+Land use rights (3)
+6,985
+7,230
+Long-term deferred expense
+3,306
+3,105
+Repossessed assets (4)
+2,318
+Goodwill (5)
+2,620
+7,332
+Interest receivable (Note II.1.1.1.1)
+1,422
+96,919
+Other
+Total
+Intangible assets
+10,587
+2,675
+2,481
+8,344
+82,521
+on long-term lease (over 50 years)
+Held outside Hong Kong
+274
+4,136
+3,922
+on medium-term lease (10-50 years)
+4,467
+3,690
+on short-term lease (less than 10 years)
+332
+86,243
+732
+8,935
+Total
+22
+Other assets
+22,086
+21,026
+As at 31 December
+2018
+2017
+Accounts receivable and prepayments (¹)
+Subtotal
+122,226
+Balance
+BANK OF CHINA LIMITED
+78,494
+(371)
+81,458
+(587)
+From 1 year to 3 years
+3,358
+(1,029)
+5,631
+(1,569)
+Over 3 years
+Within 1 year
+4,775
+3,991
+(2,681)
+Total
+86,627
+(4,106)
+91,080
+(4,837)
+275
+12,682
+Additions
+(2,706)
+217,590
+Impairment
+allowance
+Balance
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+22 Other assets (Continued)
+(1) Accounts receivable and prepayments
+Accounts receivable and prepayments
+Impairment allowance
+Net value
+As at 31 December
+Impairment
+allowance
+2018
+86,627
+91,080
+(4,106)
+(4,837)
+82,521
+86,243
+Accounts receivable and prepayments mainly include items in the process of clearing and settlement. The
+analysis of the ageing of accounts receivable and prepayments is as follows:
+As at 31 December
+2018
+2017
+2017
+13,151
+1,094
+(Note V.21)
+271
+205,614
+89,504
+22,305
+15,413
+78,392
+As at 31 December
+BANK OF CHINA LIMITED
+194,897
+25,939
+15,732
+78,784
+As at 1 January
+Net book value
+(1,099)
+(93)
+74,442
+(217)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+8,525
+on medium-term lease (10-50 years)
+3,039
+3,464
+on long-term lease (over 50 years)
+2017
+2018
+FOR THE YEAR ENDED 31 DECEMBER 2018
+As at 31 December
+The carrying value of buildings is analysed based on the remaining terms of the leases as
+follows:
+According to the relevant PRC laws and regulations, after conversion into a joint stock
+limited liability company, the Bank is required to re-register its property and equipment
+under the name of Bank of China Limited. As at 31 December 2018, the process of re-
+registration has not been completed. However, this registration process does not affect the
+rights of Bank of China Limited to these assets.
+As at 31 December 2018, the net book amount of aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, that has been pledged for loan facilities was RMB22,364 million
+(31 December 2017: RMB25,930 million) (Note V.31).
+As at 31 December 2018, the net book amount of aircraft leased out by BOC Aviation
+Limited, a subsidiary of the Group, under operating leases was RMB102,657 million
+(31 December 2017: RMB89,300 million).
+As at 31 December 2018, there were no aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, which was acquired under finance lease arrangements
+(31 December 2017: net book amount RMB608 million).
+20 Property and equipment (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Held in Hong Kong
+(789)
+As at 31 December
+5
+(34,732)
+As at 31 December
+1,202
+573
+368
+261
+Exchange differences
+(56,683)
+45
+(Note V.21)
+Transfer to investment properties
+5,461
+1.381
+3,711
+369
+Deductions
+45
+(10,954)
+(102,369)
+Allowance for impairment losses
+4
+1
+Exchange differences
+122
+109
+4
+9
+Deductions
+(161)
+(130)
+(31)
+Additions
+(1,065)
+(76)
+(221)
+(768)
+As at 1 January
+7,301
+(15,059)
+11,989
+Subtotal
+N/A
+N/A
+Listed in Hong Kong
+Debt securities held to maturity
+N/A
+N/A
+N/A
+31,414
+N/A
+2,304,434
+- Listed outside Hong Kong (10)
+38,550
+- Listed in Hong Kong
+Debt securities at amortised cost
+Market
+value
+Carrying
+value
+38,155
+2,318,733
+Market
+value
+N/A
+31,668
+1,914,595
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+266
+The Bank transferred certain non-performing assets to China Orient Asset Management Corporation
+("China Orient") in 1999 and 2000. On 1 July 2000, China Orient issued a ten-year bond ("Orient Bond")
+with a par value of RMB160,000 million and interest rate of 2.25% to the Bank as consideration. During the
+year ended 31 December 2010, the maturity of this bond was extended to 30 June 2020 with the other terms
+unchanged. The MOF shall continue to provide funding support for the principal and interest of the Orient
+Bond held by the Bank pursuant to Caijin [2004] No. 87 Notice of the MOF Regarding Relevant Issues
+Relating to the Principal and Interest of Debt Securities of Financial Asset Management Companies Held
+by Bank of China and China Construction Bank. As at 31 December 2018, the Bank had received early
+repayments amounting to RMB6,373 million cumulatively.
+The Bank underwrites certain Treasury bonds issued by the MOF and undertakes the role of a distributor of
+these Treasury bonds through its branch network earning commission income on bonds sold. The investors
+of these bonds have a right to redeem the bonds at any time prior to maturity and the Bank is committed
+to redeem these Treasury bonds. The balance of these bonds held by the Bank as at 31 December 2018
+amounted to RMB2,358 million (31 December 2017: RMB2,140 million).
+On 18 August 1998, a Special Purpose Treasury Bond was issued by the Ministry of Finance ("MOF”) with
+a par value of RMB42,500 million maturing on 18 August 2028. This bond was originally issued with an
+annual coupon rate of 7.20% and its coupon rate was restructured to 2.25% per annum from 1 December
+2004.
+N/A 1,963,925
+The Group's accumulated impairment allowance for the debt securities at fair value through other
+comprehensive income as at 31 December 2018 amounted to RMB862 million.
+(5)
+(4)
+(3)
+(2)
+(1) In order to eliminate or significantly reduce accounting mismatches, certain debt securities were designated
+as financial assets at fair value through profit or loss.
+-
+- Listed outside Hong Kong (10)
+The Group exercised its option irrevocably on certain unlisted equity investments, which were classified as
+financial assets at fair value through other comprehensive income. For equity instruments, RMB265 million
+of dividend income was recognised during the year ended 31 December 2018.
+Carrying
+value
+2017
+2018
+79,137
+272
+Total
+68,052
+67,148
+Subtotal
+5,446
+78,392
+5,863
+58,407
+57,087
+on medium-term lease (10-50 years)
+4,199
+4,198
+on long-term lease (over 50 years)
+Held outside Hong Kong
+on short-term lease (less than 10 years)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+As at 31 December
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+21,659
+21,026
+As at 1 January
+2017
+2018
+Year ended 31 December
+21 Investment properties
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+10,340
+(4,550)
+(6,873)
+(3,636)
+(297)
+Exchange differences
+47
+47
+(Note V.21)
+Transfer to investment properties
+7,739
+(293)
+2,763
+567
+Deductions
+(13,403)
+(3,592)
+(6,185)
+(3,626)
+Additions
+4,409
+(102,369)
+(654)
+As at 31 December
+(93)
+(217)
+(770)
+As at 31 December
+4
+15
+Exchange differences
+(1,244)
+Deductions
+(789)
+As at 1 January
+Allowance for impairment losses
+(109,230)
+(12,437)
+(58,752)
+(38,041)
+Additions
+(10,954)
+(56,683)
+(34,732)
+(11,960)
+807
+1,928
+Construction in progress transfer in/out)
+1,665
+1,665
+Transfer from investment properties
+9,225
+37,548
+19,850
+5,715
+321
+309,082
+100,551
+22,522
+72,096
+11,662
+Deductions
+(834)
+(4,712)
+As at 1 January
+Accumulated depreciation
+337,653
+115,153
+30,233
+74,319
+117,948
+As at 31 December
+6,901
+4,896
+637
+413
+955
+Exchange differences
+(17,543)
+(11,181)
+(816)
+(1,099)
+56
+71
+(5)
+(365)
+(3,835)
+(688)
+Deductions
+9,884
+(14,412)
+638
+(8,851)
+3,890
+177
+177
+(Note V.21)
+Transfer from investment properties
+39,985
+21,419
+12,029
+Construction in progress transfer in/out)
+(13,739)
+Exchange differences
+(1,154)
+Additions
+(94,018)
+(8,358)
+(53,889)
+(31,771)
+As at 1 January
+Accumulated depreciation
+309,082
+100,551
+22,522
+72,096
+113,913
+As at 31 December
+(7,321)
+(4,777)
+(890)
+(500)
+6,172
+(Amount in millions of Renminbi, unless otherwise stated)
+365
+289,980
+102,674
+30,016
+15,567
+79,137
+As at 31 December
+205,614
+89,504
+227,394
+22,305
+78,392
+As at 1 January
+Net book value
+(1,029)
+(42)
+(217)
+(1)
+15,413
+270
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+82,876
+26,160
+69,621
+111,323
+As at 1 January
+Cost
+Total
+Aircraft
+progress
+in
+vehicles
+Buildings
+and motor Construction
+Year ended 31 December 2017
+Equipment
+20 Property and equipment (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Additions
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+18 Financial investments (Continued)
+(396)
+(227)
+1,162
+2,110
+(692)
+(5,152)
+3,079
+8,820
+14,059
+17,180
+2017
+2018
+Year ended 31 December
+As at 31 December
+Exchange differences and other
+638
+Dividends received
+(32)
+17,180
+1,504
+CGN Phase I Private Equity Fund Company Limited
+1,285
+1,710
+Zhongxinboda (Wuhu) Investment Limited Partnership
+-
+4,549
+Ying Kou Port Group CORP.
+4,318
+4,553
+BOC International (China) Co., Ltd.
+2017
+2018
+As at 31 December
+The carrying amount of major investment in associates and joint ventures of the Group is as
+follows. Further details are disclosed in Note V.43.4.
+23,369
+Share of results, net of tax
+Disposals
+Additions
+906
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+ECL
+12-month
+Year ended 31 December 2018
+Reconciliation of allowance for impairment losses on financial investments at fair value
+through other comprehensive income:
+7,754
+7,423
+3
+328
+As at 31 December
+--906
+As at 1 January
+during the year
+Impairment losses/ (reversal)
+As at 1 January
+19 Investment in associates and joint ventures
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,349
+BANK OF CHINA LIMITED
+861
+268
+As at 31 December
+2
+Foreign exchange adjustments
+and other
+1 - (46)
+(47)
+862
+Graceful Field Worldwide Limited
+1,374
+1,311
+The Group's investment properties are located in active real estate markets, and external
+appraisers make reasonable estimation of fair value using market prices of the same or
+similar properties and other related information from the real estate market.
+21,026
+22,086
+As at 31 December
+(1,263)
+820
+Exchange differences
+771
+919
+Fair value changes (Note V.5)
+(970)
+(61)
+(222)
+(1,712)
+Transfer to property and equipment, net (Note V.20)
+Deductions
+Investment properties are mainly held by Bank of China Hong Kong (Holdings)
+Limited ("BOCHK (Holdings)") and Bank of China Group Investment Limited ("BOCG
+Investment"), subsidiaries of the Group. The carrying value of investment properties
+held by BOCHK (Holdings) and BOCG Investment as at 31 December 2018 amounted
+to RMB13,371 million and RMB6,668 million, respectively (31 December 2017:
+RMB12,859 million and RMB6,104 million). The valuation of these investment properties
+as at 31 December 2018 were principally performed by Knight Frank Petty Limited based on
+the open market price and other related information.
+273
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Subtotal
+9,688
+10,185
+on medium-term lease (10-50 years)
+2,994
+2,966
+on long-term lease (over 50 years)
+1,051
+2017
+As at 31 December
+Held in Hong Kong
+The carrying value of investment properties is analysed based on the remaining terms of the
+leases as follows:
+21 Investment properties (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+2018
+50
+113,913
+As at 1 January
+4,413
+5,462
+Other
+735
+768
+Investment Fund Company Limited
+Guangdong Small and Medium Enterprises Equity
+793
+876
+Wkland Investments II Limited
+1,227
+Sichuan Lutianhua Co., Ltd.
+2,976
+1,346
+BOC & Cinda (Wuhu) Investment Limited Partnership
+Total
+23,369
+17,180
+As at 31 December 2018, the ability of associates and joint ventures to transfer funds to the
+Group is not restricted.
+Cost
+Total
+Aircraft
+progress
+in
+vehicles
+Buildings
+Additions
+and motor Construction
+20 Property and equipment
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+269
+Year ended 31 December 2018
+Equipment
+and other
+-- 2
+Write off and transfer out
+cost:
+Reconciliation of allowance for impairment losses on financial investments at amortised
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+Foreign exchange adjustments
+As at 1 January
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+267
+(10) Debt securities traded on the China Domestic Interbank Bond Market are included in "Listed outside
+Hong Kong”.
+As at 31 December 2018, RMB1,123 million of impaired debt securities of the Group was classified into
+Stage 3, with the impairment allowance fully accrued; RMB1,755 million of debt securities was classified
+into Stage 2, with an impairment allowance of RMB4 million; and the remaining debt securities at fair value
+through other comprehensive income and debt securities at amortised cost were classified into Stage 1, with
+impairment allowance measured based on 12-month expected credit losses.
+Included in the Group's financial investments were certificates of deposit held amounting to
+RMB280,924 million as at 31 December 2018 (31 December 2017: RMB 160,780 million).
+(9)
+0.00%-5.41%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+BANK OF CHINA LIMITED
+0.00%-5.31%
+Year ended 31 December 2018
+ECL
+Impairment losses/ (reversal)
+104
+53
+(41)
+(41)
+1,132
+1,284
+12-month
+6,559
+4
+428
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+6,127
+986,498
+FOR THE YEAR ENDED 31 DECEMBER 2018
+2017
+981,414
+(150)
+(6)
+(7)
+In 2018, the Group did not reclassify any debt securities.
+during the year
+As at 31 December 2018, the Group held bonds issued by the MOF and bills issued by the PBOC included
+in financial investments. The carrying value (accrued interest excluded) and the related coupon rate range
+on such bonds and bills are as follows:
+Carrying value (accrued interest excluded)
+Coupon rate range
+(8)
+As at 31 December
+2018
+In 2017, the Group reclassified certain debt securities with a total carrying value of RMB5,097 million from
+"Investment securities available for sale" to "Investment securities held to maturity". The Group had the
+intention and ability to hold these reclassified debt securities until maturity at the date of reclassification.
+In 2017, the Group reclassified certain debt securities with amortised cost of RMB364 million from
+"Investment securities held to maturity" to "Investment securities available for sale" due to management's
+change of investment intention.
+5,383
+6,668
+― held to maturity
+44
+39
+― loans and receivables
+2,473
+2,961
+(51)
+Property and equipment
+278
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(473)
+341,562
+2,578
+(88,953)
+(164,745)
+264,039
+1,065
+(288)
+252,254
+387
+Loans and advances to customers
+Impairment allowance
+2017
+and other
+out
+Reversal
+237,716
+2017 Additions
+differences 31 December
+As at
+Exchange
+(61)
+Write-off
+and
+transfer
+Decrease
+24
+23 Impairment allowance (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+126,683
+(42,658)
+(68,787)
+(700)
+Financial investments
+―available for sale
+7,103
+As at
+1 January
+180,554
+Banks in Hong Kong, Macau, Taiwan and
+other countries and regions
+Due to banks and other financial institutions
+Due to:
+As at 31 December
+2018
+2017
+Banks in Chinese mainland
+434,504
+318,660
+Other financial institutions in Chinese mainland
+1,016,374
+895,225
+Banks in Hong Kong, Macau, Taiwan
+and other countries and regions
+193,535
+157,582
+Other financial institutions in Hong Kong, Macau,
+Taiwan and other countries and regions
+79,036
+53,795
+Subtotal
+Accrued interest
+272,510
+(1,353)
+(69,427)
+328,643
+161
+(122)
+1,099
+Repossessed assets
+650
+36
+(17)
+657
+Land use rights
+15
+Total
+15
+6,063
+2,079
+(1,370)
+(210)
+(167)
+6,395
+Total
+255,129
+132,307
+(44,146)
+Other
+307,531
+279
+1,425,262
+907,521
+1,035,797
+26 Government certificates of indebtedness for bank notes issued and bank notes in
+circulation
+Bank of China (Hong Kong) Limited (“BOCHK") and Bank of China Macau Branch are
+note issuing banks for Hong Kong Dollar and Macau Pataca notes in Hong Kong and
+Macau, respectively. Under local regulations, these two entities are required to place
+deposits with the Hong Kong and Macau governments, respectively to secure the currency
+notes in circulation.
+Bank notes in circulation represent the liabilities in respect of Hong Kong Dollar notes
+and Macau Pataca notes in circulation, issued respectively by BOCHK and Bank of China
+Macau Branch.
+280
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+27 Placements from banks and other financial institutions
+Placements from:
+As at 31 December
+2018
+2017
+Banks in Chinese mainland
+268,435
+289,541
+Other financial institutions in Chinese mainland
+29,495
+26,463
+N/A
+10,269
+1,035,797
+897,252
+7,760
+N/A
+1,731,209
+1,425,262
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+25
+1,723,449
+Due to central banks
+Other
+Subtotal
+Accrued interest
+Total
+As at 31 December
+2018
+2017
+204,758
+205,607
+692,494
+830,190
+Foreign exchange deposits
+Total
+2,473
+(139)
+BANK OF CHINA LIMITED
+276
+7,230
+6,985
+Total
+858
+833
+on short-term lease (less than 10 years)
+6,260
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+6,058
+112
+94
+on long-term lease (over 50 years)
+Held outside Hong Kong
+2017
+As at 31 December
+2018
+The carrying value of land use rights is analysed based on the remaining terms of the leases as follows:
+11,605
+12,467
+on medium-term lease (10-50 years)
+6,863
+FOR THE YEAR ENDED 31 DECEMBER 2018
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(837)
+3,332
+3,155
+566
+158
+643
+606
+2,123
+2,391
+(Amount in millions of Renminbi, unless otherwise stated)
+2017
+Repossessed assets, net
+Less: allowance for impairment
+Subtotal
+Other
+Residential properties
+Commercial properties
+The Group obtained repossessed assets by taking possession of collateral held as security due to default.
+Such repossessed assets are as follows:
+(4) Repossessed assets
+22 Other assets (Continued)
+As at 31 December
+2018
+(657)
+11,605
+(3)
+(97)
+6,358
+2,992
+13,861
+19,995
+2017
+2018
+Year ended 31 December
+As at 31 December
+(160)
+Exchange differences
+As at 1 January
+Additions
+Cost
+(2) Intangible assets
+22 Other assets (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Deductions
+Land use rights
+56
+22,946
+As at 31 December
+As at 1 January
+Net book value
+(8,390)
+(10,479)
+51
+(45)
+55
+34
+(64)
+As at 31 December
+Deductions
+(1,498)
+(2,078)
+Additions
+(6,998)
+(8,390)
+As at 1 January
+Accumulated amortisation
+19,995
+Exchange differences
+5,935
+2,318
+The total book value of repossessed assets disposed of during the year ended 31 December 2018 amounted
+to RMB348 million (2017: RMB543 million). The Group plans to dispose of the repossessed assets held at
+31 December 2018 by auction, bidding or transfer.
+Credit commitments
+862
+-2
+(510)
+464
+906
+comprehensive income
+at fair value through other
+7.754
+Property and equipment
+104
+(1,120)
+2,252
+6,559
+―at amortised cost
+Financial investments
+273
+4
+(1,058)
+294
+(41)
+1,033
+Repossessed assets
+11,588
+(907)
+(1,637)
+1,989
+6,629
+10
+15
+Other
+Land use rights
+837
+31,182
+67
+203
+657
+1,029
+1
+(71)
+1,099
+21,354
+366
+(21,782)
+(58)
+2,675
+comprehensive income
+303,508
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+277
+The goodwill mainly arose from the acquisition of BOC Aviation Limited in 2006 amounting to
+USD241 million (equivalent to RMB1,651 million).
+2,481
+2,620
+(129)
+95
+137
+FOR THE YEAR ENDED 31 DECEMBER 2018
+44
+2,481
+2017
+2018
+Year ended 31 December
+As at 31 December
+Addition through acquisition of subsidiaries
+Exchange differences
+As at 1 January
+Goodwill
+(5)
+Other financial institutions in Hong Kong, Macau,
+―at fair value through other
+(Amount in millions of Renminbi, unless otherwise stated)
+23 Impairment allowance
+2,173
+(87,897)
+(138,580)
+247,249
+280,563
+- at amortised cost
+Loans and advances to customers
+2018
+and other
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+out
+2018 Additions
+differences 31 December
+As at
+Exchange
+Write-off
+and
+transfer
+1 January
+As at
+Decrease
+Impairment allowance
+Reversal
+Taiwan and other countries and regions
+372,767
+3,534
+20,502
+19,424
+2017 RMB Debt Securities
+First Tranche (7)
+26 September 2017 28 September 2027
+4.45%
+29,962
+29,960
+2017 RMB Debt Securities
+Second Tranche (8)
+31 October 2017
+2 November 2027
+4.45%
+5.00%
+29,964
+2018 RMB Debt Securities
+First Tranche (9)
+3 September 2018
+5 September 2028
+4.86%
+39,982
+2018 RMB Debt Securities
+Second Tranche (10)
+9 October 2018
+11 October 2028 4.84%
+39,984
+190,366
+109,318
+29,962
+Subtotal (11)
+13 November 2014 13 November 2024
+29,972
+2010 US Dollar Subordinated
+notes issued by BOCHK
+2011 RMB Debt Securities (3)
+2012 RMB Debt Securities
+Second Tranche (4)
+Subtotal (11)
+Tier 2 capital bonds issued
+11 February 2010
+11 February 2020
+5.55%
+N/A
+15,461
+17 May 2011
+19 May 2026
+2014 US Dollar Debt Securities (6)
+5.30%
+32,000
+27 November 2012 29 November 2027
+4.99%
+18,000
+18,000
+98,930
+114,391
+2014 RMB Debt Securities (5)
+8 August 2014
+11 August 2024
+5.80%
+29,972
+32,000
+Other bonds issued (12)
+US Dollar Debt Securities
+RMB Debt Securities
+10,426
+754,863
+499,128
+20,517
+N/A
+775,380
+499,128
+6,747
+N/A
+782,127
+499,128
+(1)
+150,273
+(2)
+(4)
+(5)
+(6)
+(7)
+The fixed rate portion of the first tranche of the subordinated bonds issued on 6 July 2009 has a maturity of
+15 years, with a fixed coupon rate of 4.00%, paid annually. The Bank is entitled to early redeem all of the
+bonds at face value at the end of the tenth year. If the Bank does not exercise this option, the coupon rate
+of the bonds for the remaining 5-year period shall be the original coupon rate plus 3.00%, and shall remain
+fixed until the maturity date.
+The subordinated bonds issued on 9 March 2010, have a maturity of 15 years, with a fixed coupon rate of
+4.68%, paid annually. The Bank is entitled to early redeem all of the bonds at face value at the end of the
+tenth year. If the Bank does not exercise this option, the coupon rate of the bonds for the third 5-year period
+shall be the original coupon rate plus 3.00%, and shall remain fixed until the maturity date.
+The subordinated bonds issued on 17 May 2011, have a maturity of 15 years, with a fixed coupon rate of
+5.30%, paid annually. The Bank is entitled to early redeem all the subordinated bonds at the end of the tenth
+year. If the Bank does not exercise this option, the coupon rate of the bonds for the remaining 5-year period
+shall remain fixed at 5.30%.
+The second subordinated bonds issued on 27 November 2012 have a maturity of 15 years, with a fixed
+coupon rate of 4.99%, paid annually. The Bank is entitled to early redeem all these bonds at the end of the
+tenth year. If the Bank does not exercise this option, the coupon rate of the bonds for the remaining 5-year
+period shall remain fixed at 4.99%.
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 8 August 2014. The bonds have a
+maturity of 10 years, with a fixed coupon rate of 5.80%. The Bank is entitled to redeem the bonds at the end
+of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of USD3 billion on 13 November 2014. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 5.00%.
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 26 September 2017. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.45%. The Bank is entitled to redeem the bond at
+the end of the fifth year.
+285
+(3)
+2017
+2018
+rate
+Other
+Subtotal
+284
+216,750
+173,517
+22,454
+22,869
+76,090
+68,607
+315,294
+264,993
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+30 Bonds issued (Continued)
+Negotiable certificates of deposit (13)
+Subtotal bonds issued at amortised cost
+Bonds issued at fair value (14)
+Subtotal bonds issued
+Accrued interest
+Total bonds issued (15)
+As at 31 December
+4,999
+Issue date
+Maturity interest
+date
+24,930
+24,930
+Annual
+11 March 2025
+As at 31 December
+2018
+2017
+Demand deposits
+- Corporate deposits
+4,178,962
+3,955,206
+Personal deposits
+2,935,661
+2,613,409
+Subtotal
+7,114,623
+6,568,615
+Time deposits
+- Corporate deposits
+3,507,071
+3,213,375
+Personal deposits
+3,148,265
+3,060,245
+Subtotal
+6,655,336
+6,273,620
+Structured deposits (¹)
+Corporate deposits
+246,380
+215,193
+Due to customers
+Personal deposits
+29
+(Amount in millions of Renminbi, unless otherwise stated)
+4.68%
+Subtotal
+Accrued interest
+Total (1)(2)
+(1)
+(2)
+610,460
+500,092
+1,807
+N/A
+612,267
+500,092
+In order to eliminate or significantly reduce an accounting mismatch, certain placements from banks and
+other financial institutions were designated as financial liabilities at FVPL by the Group in 2018. The
+corresponding total carrying amount of the above-mentioned financial liabilities was RMB876 million as at
+31 December 2018, of which the fair value was approximately the same as the amount that the Group would
+be contractually required to pay to the holders.
+Included in "Placements from banks and other financial institutions" are amounts received from
+counterparties under repurchase agreements and collateral agreements as follows:
+Repurchase debt securities (i)
+(i)
+As at 31 December
+2018
+2017
+258,400
+Debt securities used as collateral under repurchase agreements were principally government bonds
+and were included in the amount disclosed under Note V.41.2.
+28
+Financial liabilities held for trading
+As at 31 December 2018 and 2017, financial liabilities held for trading mainly include short
+position in debt securities.
+281
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+338,544
+285,018
+Subtotal
+Included in other deposits is special purpose funding, which represents long-term funding provided in
+multiple currencies by foreign governments and/or entities in the form of export credit, foreign government
+and other subsidised credit. The special purpose funding is normally used to finance projects with a special
+commercial purpose in the PRC as determined by the foreign governments or entities and the Group is
+obliged to repay the funding when it falls due.
+As at 31 December 2018, the remaining maturity of special purpose funding ranges from 46 days to
+35 years. The interest-bearing special purpose funding bears interest at floating and fixed rates ranging
+from 0.15% to 7.92% (31 December 2017: 0.15% to 7.92%). These terms are consistent with the related
+development loans granted to customers.
+Due to customers included margin deposits for security received by the Group as at 31 December 2018 of
+RMB304,388 million (31 December 2017: RMB311,202 million).
+283
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+30
+Bonds issued
+Bonds issued at amortised cost
+Subordinated bonds issued
+2009 RMB Debt Securities First
+Tranche (¹)
+As at 31 December
+Annual
+Issue date
+Maturity
+date
+interest
+2018
+2017
+6 July 2009
+8 July 2024
+4.00%
+24,000
+24,000
+2010 RMB Debt Securities (2)
+157,574
+9 March 2010
+According to risk management policy, in order to match derivatives and reduce market risk, the Group
+designates some structured deposits as financial liabilities at fair value through profit or loss in the
+current period. As at 31 December 2018, the carrying amount of the above-mentioned financial liabilities
+is RMB24,141 million. At the financial reporting date, the fair value of the above-mentioned financial
+liabilities was approximately the same as the amount that the Group would be contractually required to
+pay to the holders. In the year of 2018, there is no significant change in the Group's own credit risk for the
+above structured deposits, so the amount of change in fair value due to the change in own credit risk is not
+significant.
+(3)
+rate
+(1)
+Certificates of deposit
+584,924
+(2)
+Other deposits (2)
+287,808
+377,460
+73,751
+Subtotal due to customers
+14,716,442
+13,657,924
+Accrued interest
+167,154
+N/A
+65,462
+14,883,596
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Total due to customers (3)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+282
+13,657,924
+Due to customers (Continued)
+29
+Other
+528,899
+154,642
+4.19%
+(3) Bps
+374,257
+(54,206)
+3.77%
+1.79%
+Total
+10,404,713
+9,923,205
+1.76%
+2.71%
+481,508
+Unit: USD million, except percentages
+3 Bps
+Domestic foreign currency businesses
+42 Bps
+2,629,645
+284,227
+2,575,439
+5,446
+338,389
+Loans
+15,871
+359,706
+Net interest income
+43,967
+27,332
+16,635
+1.69%
+1.85% 16,855,454
+328,194
+5,919
+0.66%
+1,798,631
+0.62%
+150,143
+4 Bps
+Personal time deposits
+2.68%
+49,355
+19,125
+51,280
+(667)
+Personal time deposits
+0.63%
+20,445
+0.59%
+(1,320)
+4 Bps
+Other
+2,002
+2.30%
+2,308
+2.17%
+(306)
+13 Bps
+Total
+116,964
+21,317
+0.83%
+122,907
+0.05%
+3.08%
+27,714
+27,047
+2.47%
+(1,925)
+61 Bps
+Due to customers
+Corporate demand deposits
+45,065
+0.62%
+43,947
+0.22%
+1,118
+40 Bps
+Corporate time deposits
+29,668
+1.89%
+22,550
+1.33%
+7,118
+56 Bps
+Personal demand deposits
+0.05%
+Net interest margin
+5,828,652
+1.84%
+2,539,755
+Short-term loans within 1 year and others
+24 Bps
+382,165
+4.53%
+5,446,487
+4.77%
+Medium- and long-term loans
+4.06%
+Including:
+435,946
+4.33%
+7,932,461
+4.55%
+8,368,407
+Total
+38 Bps
+(15,651)
+22 Bps
+2,485,974
+3.90%
+53,781
+Personal demand deposits
+1,948,774
+0.49%
+4 Bps
+47,831
+2.73%
+2,206,175
+2.77%
+2,254,006
+Corporate time deposits
+3 Bps
+183,098
+0.62%
+2,914,497
+0.65%
+3,097,595
+Corporate demand deposits
+Due to customers
+16 Bps
+181,448
+4.47%
+165,797
+Trade bills
+Average
+2017
+2018
+Unit: RMB million, except percentages
+The average balances and average interest rates of domestic loans and due to customers, classified
+by business type, are summarised in the following table:
+22
+Average balances are average daily balances derived from the Group's management accounts (unaudited).
+The impact on interest income/expense of variances in the volume factor is calculated based on the changes in
+average balances of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+on interest income/expense of variances in interest rate factor is calculated based on the changes in the average
+interest rates of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+relating to the combined changes in both the volume factor and the interest rate factor has been classified as
+changes in interest rate factor.
+2
+1
+For the calculation of net interest margin, the interest of financial assets and financial liabilities at fair value
+through profit or loss under IFRS 9 is not recognised. Pursuant to the principle of matching returns with assets,
+personal credit card instalment is now categorised under non-interest-earning assets.
+Due to and placements from banks and other financial institutions include due to and placements from banks and
+other financial institutions, due to central banks and other funds.
+Balances with central banks and due from and placements with banks and other financial institutions include
+mandatory reserves, surplus reserves, other placements with central banks and due from and placements with
+banks and other financial institutions.
+In 2018, investments include debt securities at fair value through other comprehensive income, debt securities at
+amortised cost, investment trusts and asset management plans, etc. In the data of the previous reporting period,
+investments included available-for-sale debt securities, held-to-maturity debt securities, debt securities classified
+as loans and receivables, trading debt securities, debt securities designated at fair value through profit and loss,
+investment trusts and asset management plans.
+4
+3
+2
+1
+Notes:
+6 Bps
+Items
+1.90%
+Average
+balance interest rate
+Average
+interest rate
+42 Bps
+197,925
+4.25%
+3,250,322
+4.67%
+3,448,247
+Personal loans
+7 Bps
+253,672
+4.40%
+4,500,691
+4.47%
+4,754,363
+Corporate loans
+Loans
+Domestic RMB businesses
+interest rate
+balance
+Change
+Average Average
+Average
+balance
+5,943
+4.09%
+Note:
+77,836
+77,928
+(92)
+(0.12%)
+Fee and commission expense
+(7,642)
+(7,200)
+(442)
+Fee and commission income
+6.14%
+70,194
+70,728
+(534)
+(0.76%)
+In 2018 non-interest income includes the interest of financial assets and financial liabilities at fair value through
+profit or loss under IFRS 9.
+24
+Other Non-interest Income
+The Group realised other non-interest income of RMB56.892 billion, an increase of
+RMB0.211 billion or 0.37% compared with the prior year. This was primarily attributable to
+the following factors: (1) an increase in net gains from interest rate products compared with the
+prior year following re-classification adjustments under IFRS 9; (2) the recognised gains on the
+investment disposal for selling Chiyu Banking Corporation Limited in 2017;(3) a decrease in net
+gains from foreign exchange derivatives trading compared with the prior year, affected by market
+price fluctuations. Please refer to Notes V.3, 4, 5 to the Consolidated Financial Statements for
+detailed information.
+Net fee and commission income
+4.53%
+190
+4,194
+(10.02%)
+Consultancy and advisory fees
+3,331
+5,415
+(2,084)
+(38.49%)
+Spread income from foreign
+exchange business
+7,088
+7,096
+(8)
+(0.11%)
+Custodian and other fiduciary service fees
+3,474
+3,421
+53
+1.55%
+Other
+4,384
+Operating Expenses
+The Bank continued to operate its business in a prudent manner. It optimised and adjusted its
+cost structure, enhanced investment in technological innovation, seized the market opportunities
+arising from the Olympic Winter Games Beijing 2022, allocated greater resources to key areas,
+business frontlines and overseas institutions, and made greater efforts to support mobile finance,
+RMB internationalisation and the construction of smart service outlets. In 2018, the Group
+recorded operating expenses of RMB 176.979 billion, an increase of RMB3.120 billion or 1.79%
+compared with the prior year. The Group's cost to income ratio (calculated in accordance with
+domestic regulations) was 28.09%, a decrease of 0.25 percentage point compared with the
+prior year. Please refer to Notes V.6, 7 to the Consolidated Financial Statements for detailed
+information.
+Unit: RMB million, except percentages
+Items
+1.45%
+Insurance benefits and claims
+17,008
+22,607
+(5,599)
+(24.77%)
+Other
+13,617
+9,613
+4,004
+41.65%
+Total
+176,979
+173,859
+3,120
+1.79%
+Impairment Losses on Assets
+The Bank continued to improve its comprehensive risk management system and adopted a
+proactive and forward-looking risk management approach, thus ensuring a basically stable credit
+asset quality. It stringently implemented a prudent risk provisioning policy and maintained an
+adequate capacity for risk mitigation. In 2018, the Group's impairment losses on loans and
+advances totalled RMB107.905 billion, an increase of RMB23.880 billion or 28.42% compared
+with the prior year. Please refer to the section “Risk Management - Credit Risk Management"
+and Notes V.9, 17, VI.3 to the Consolidated Financial Statements for more information on loan
+quality and allowance for loan impairment losses.
+25
+68
+(753)
+4,676
+Taxes and surcharges
+Staff costs
+General operating and
+administrative expenses
+2018
+2017
+Change Change (%)
+85,391
+82,061
+3,330
+4.06%
+42,768
+41,235
+1,533
+3.72%
+Depreciation and amortisation
+13,451
+13,667
+(216)
+(1.58%)
+4,744
+34 Bps
+7,513
+Credit commitment fees
+(3,098) (13.29%)
+29,943
+25,798
+4,145
+16.07%
+Settlement and clearing fees
+13,670
+12,323
+23,310
+1,347
+Credit commitment fees
+13,181
+15,090
+(1,909)
+(12.65%)
+Consultancy and advisory fees
+3,534
+5,615
+10.93%
+20,212
+Change Change (%)
+2017
+1
+"Due to customers - Other" includes structured deposits.
+2
+According to the principle of matching income and related assets, personal credit card instalment is classified as
+non-interest-earning asset.
+In 2018, the Group's net interest margin was 1.90%, an increase of 6 basis points compared with
+the prior year. Specifically, the net interest margin of its domestic RMB businesses was 2.11%,
+an increase of 7 basis points compared with the prior year. Major factors that affected the Group's
+net interest margin include:
+First, the Bank continuously improved its asset and liability structure. In response to changes
+in the external environment, the Bank adjusted its existing assets and liabilities and efficiently
+allocated their increments, resulting in continuous improvement to its asset and liability structure.
+In 2018, the proportion of the average balance of domestic RMB medium- and long-term loans
+to domestic RMB loans business increased by 0.99 percentage point compared with the prior
+year. The proportion of the average balance of the domestic RMB demand deposits to domestic
+RMB deposit business increased by 1.00 percentage point compared with the prior year.
+Second, the PBOC reduced reserve requirement ratios. In 2018, the PBOC cut the reserve
+requirement ratios four times, and the applicable RMB deposit reserve requirement ratio of the
+Bank decreased compared with the prior year-end.
+23
+3
+Non-interest Income
+In 2018, the Group reported a non-interest income of RMB144.100 billion³, a decrease of
+RMB1.272 billion or 0.87% compared with the prior year. Non-interest income represented
+28.60% of operating income.
+Net Fee and Commission Income
+The Group earned a net fee and commission income of RMB87.208 billion, a decrease of
+RMB1.483 billion or 1.67% compared with the prior year. Net fee and commission income
+represented 17.31% of operating income. This was primarily attributable to a decrease in income
+from the wealth management business and agency insurance business of domestic commercial
+banks compared to the prior year. At the same time, the Bank followed the trend of fast-paced
+development of consumer finance, and realised a rapid increase in income from credit card
+business and others.
+Unit: RMB million, except percentages
+Items
+Group
+Agency commissions
+Bank card fees
+2018
+(2,081)
+(37.06%)
+Spread income from foreign
+exchange business
+88,691
+(1,483)
+(1.67%)
+Domestic
+Agency commissions
+14,353
+17,074
+511
+(2,721) (15.94%)
+Bank card fees
+26,364
+22,442
+3,922
+17.48%
+Settlement and clearing fees
+12,082
+10,773
+1,309
+12.15%
+87,208
+6,760
+Net fee and commission income
+(12,789) (12,109)
+7,740
+8,083
+(343)
+(4.24%)
+Custodian and other fiduciary service fees
+3,597
+3,527
+70
+1.98%
+Other
+8,120
+7,054
+1,066
+15.11%
+Fee and commission income
+99,997 100,800
+(803)
+(0.80%)
+Fee and commission expense
+(680) 5.62%
+5,408
+The Chinese economy remained stable, and its structure continued to be optimised. The services
+industry maintained a steady and rapid growth and consumption played a greater role in driving
+economic growth. The balance of payments was generally balanced and the price situations kept
+steady. In 2018, China's gross domestic product (GDP) increased by 6.6%, with the consumer
+price index (CPI) rising by 2.1%. Total retail sales of consumer goods (TRSCG) increased by
+9.0%, and total fixed asset investments (TFAI) grew by 5.9%.
+15,799
+(1.87%)
+709
+(37,208) (37,917)
+Income tax expense
+3.02%
+6,740
+229,643 222,903
+Profit before income tax
+2.61%
+5,792
+227,533 221,741
+Operating profit
+12.63%
+(11,133)
+(99,294) (88,161)
+Impairment losses on assets
+1.79%
+(3,120)
+(176,979) (173,859)
+Operating expenses
+4.14%
+Profit for the year
+192,435
+184,986
+7,449
+126,086
+125,396
+124,377
+127,947
+2018
+2018
+2018
+2018
+Operating income
+Items
+20,045
+31 March
+31 December 30 September
+For the three-month period ended
+Unit: RMB million
+A detailed review of the Group's principal items in each quarter of 2018 is summarised in the
+following table:
+4.45%
+7,679
+180,086 172,407
+of the Bank
+Profit attributable to equity holders
+4.03%
+30 June
+483,761
+503,806
+Operating income
+The Chinese government implemented a prudent monetary policy. Adhering to the fundamental
+requirement that the financial sector should serve the real economy, it strengthened financial
+support in this regard, especially for micro and small-sized enterprises and private enterprises.
+In general, financial markets operated smoothly. Market liquidity was kept at a reasonable and
+adequate level, financial institution loans grew fairly rapidly and RMB exchange rates remained
+basically stable and more flexible. The outstanding broad money supply (M2) grew by 8.1%
+year on year. The outstanding RMB loans increased by RMB16.2 trillion, RMB2.6 trillion more
+than that of the prior year. The outstanding all-system financing aggregates was RMB200.8
+trillion, an increase of 9.8% compared with the prior year. Bond issuance expanded to a total of
+RMB43.1 trillion, an increase of 7.5% compared with the prior year. The central parity rate of the
+RMB against the USD fell by 4.8% compared with the prior year-end.
+International financial markets experienced large fluctuations. The US Federal Reserve raised
+interest rates four times and kept reducing its balance sheet, the European Central Bank ceased
+its asset purchase programme, and the central banks of many emerging economies hiked interest
+rates. As a result, global liquidity tightened. In addition, the US Dollar Index rose, the euro and
+the British pound fell against the US dollar, and the currencies of some emerging economies
+rebounded after a sharp drop. The stock markets of major economies reached a high point and
+then declined, while commodity prices fell due to concerns over trade tensions, Fed rate increases
+and the possible peaking of the economic cycle.
+In 2018, the global economy continued its overall recovery, albeit with weakened growth
+momentum and less consistent growth patterns. The US economic recovery recorded solid gains,
+but showed signs of slowing down. The Eurozone's economic recovery weakened, and the
+Japanese economy experienced more fluctuations. The UK economy continued to grow at a slow
+pace, while remaining exposed to the uncertainties brought about by Brexit. The performance of
+emerging economies continued to diverge. In addition, the growth of international trade in goods
+slowed down and international direct investment aggregates decreased.
+FINANCIAL REVIEW
+Management Discussion and Analysis
+WANG Xiquan
+Chairman of the Board of Supervisors
+29 March 2019
+18
+In 2019, the Board of Supervisors will continue to perform the duties endowed by the Articles
+of Association, centred on the Bank's strategic goal of "Building a World-class Bank in the New
+Era". Focused on the supervision of duty performance, financial management, internal control
+and risk management, it will intensify its supervision and assessment of strategy implementation,
+play an active supervisory and advisory role, and make new contributions to the Bank's sustained
+and sound development.
+In the past year, the Board of Supervisors successfully completed changes to its membership
+according to related laws, regulations and the Articles of Association of the Bank. Mr. WANG
+Xueqiang, Mr. DENG Zhiying, Mr. GAO Zhaogang and Ms. XIANG Xi ceased to serve as
+supervisors of the Bank, while Mr. WANG Zhiheng, Mr. LI Changlin and Mr. LENG Jie began
+to serve as supervisors of the Bank. On behalf of the Board of Supervisors, I would like to take
+this opportunity to express my deep gratitude to Mr. WANG Xueqiang, Mr. DENG Zhiying,
+Mr. GAO Zhaogang and Ms. XIANG Xi for their efforts and contributions to the Bank during
+their terms, and extend my warm welcome to Mr. WANG Zhiheng, Mr. LI Changlin and
+Mr. LENG Jie as new members of the Board of Supervisors.
+17
+19
+17
+During the past year, the Board of Supervisors fulfilled its supervisory duties in accordance with
+the law. It carried out the supervision and assessment of the duty performance of directors and
+senior management members in an orderly fashion, urged and guided them to diligently perform
+their duties and raise the overall level of corporate governance. Focused on the Group's strategic
+goal and based on routine financial supervision, the Board of Supervisors conducted regular
+review and reporting, deeply analysed the Bank's operation and management action as well as
+its strategy implementation, exercised solid supervision over strategy and finance, and presented
+suggestions in a timely manner to the Board of Directors, the Senior Management and functional
+departments on the issues requiring close attention. Firmly bearing in mind its responsibility for
+risk supervision, the Board of Supervisors deepened the supervision of risk management and
+internal control, devoted greater effort to enhance the focus, analysis and warning of it. It urged
+the Board of Directors and the Senior Management to perform the duties of risk management and
+internal control and hold the bottom line of preventing any systemic risks. Alongside its day-to-
+day supervision, it gave full play to the supplementary function of special surveys. Targeting key
+topics in strategy implementation, the Board of Supervisors organised special surveys, delved
+into the root causes, and held extensive discussions regarding suggestions for countermeasures. It
+provided comprehensive analysis and targeted opinions and suggestions to the Board of Directors
+and the Senior Management, making the supervision function more effective and promoting the
+improvement of operation management. New methods were created to improve the interaction
+and communication between the directors and supervisors, thus optimising governance system
+synergies. The Board of Supervisors also deepened the coordinated supervision, information
+sharing and interactive training with the auditing and inspection departments in order to make the
+supervision function more cost-effective and efficient.
+In 2018, the Board of Supervisors implemented new strategies and planned new moves with a
+fresh mind-set and solid work style, in compliance with relevant laws and regulations, regulatory
+requirements and the Articles of Association of the Bank, and in alignment with the Bank's
+overall reform and development, as well as strategy implementation. It diligently supervised the
+duty performance, financial management, internal control and risk management, added a great
+deal of insight and perspective to its work, and played a constructive supervisory role for the
+Bank's sound development.
+Message from the Chairman of the Board of Supervisors
+29 March 2019
+LIU Liange
+President
+16
+16
+Heading into my second year with the Bank, I would like to take this opportunity to extend my
+gratitude to the Board of Directors and the Board of Supervisors for their guidance and support,
+to all employees at home and abroad for their hard work, and to our investors and friends from
+all sectors of society for their trust and support. In 2019, under the strong leadership of the
+CPC Central Committee and the State Council, I will work with the management to earnestly
+implement the decisions and plans of the Board of Directors, accept supervision from the Board
+of Supervisors, be honest and pragmatic, and diligently carry out work with innovative spirit.
+Together, we will strive hard with all our efforts to build BOC into a world-class bank in the new
+era, and repay our customers, investors and society for their trust and support with exceptional
+performance.
+In 2019, the Bank will earnestly implement the decisions and arrangements of the CPC
+Central Committee and the State Council on economic and financial work, advance its
+implementation of the development strategy, and strive to take our work to a new level. First,
+we will dedicate ourselves to serving the real economy, moderately accelerate capital spending,
+boost the development of inclusive finance, actively support private economy, increase efforts
+to expand our customer base and liability business in a comprehensive manner, and thus
+improve the quality and efficiency of our development. Second, we will focus on infrastructure
+construction, solidifying the foundation of technology, products and services, and channels,
+driving development through innovation, in order to sustain our development. Third, by
+capitalising on our advantages and characteristics, we will push forward our global operations
+and comprehensive services, and strengthen synergy and cohesion within the Group to enhance
+coordination and efficiency. Fourth, we will guard against financial risks, and continuously
+tighten comprehensive risk management, especially of credit risk, compliance and anti-money
+laundering risk, internal control and operational risk, market risk and liquidity risk, firmly hold
+the bottom line for compliance and risk management, in order to guarantee safe and prudent
+operation.
+3.65%
+Over the past year, the Board of Supervisors comprehensively fulfilled the requirement of strict
+governance over the Party organisations and consolidated the foundation of the supervision
+function. It organised workshops around its activities and discussed how to improve its
+performance in light of the current circumstances and the Bank's strategy implementation. It
+organised training courses for supervisors to enhance their professional competence and duty
+performance capability. All members of the Board of Supervisors carefully fulfilled their duties
+and actively contributed their opinions to the implementation of the Bank's strategy. The Board
+of Directors and the Senior Management paid close attention and gave strong support to the work
+of the Board of Supervisors, carefully studied relevant supervisory reminders it issued, and made
+corrections and improvements accordingly, so as to perfect the Bank's operation management.
+Profit attributable to equity holders
+China's banking sector continued to operate in a sound manner. Banking institutions dedicated
+themselves to serving the real economy, strived to prevent and mitigate financial risks and
+constantly promoted China's two-way opening up policy. Thanks to these comprehensive efforts,
+each project yielded fruitful outcomes. It promoted the development of inclusive finance by
+addressing the difficulties and high costs of financing for micro and small-sized enterprises
+and the private enterprises. The banking sector continuously increased its efforts to tackle
+financial markets disorders, to promote structural deleveraging and to reinforce risk prevention
+and resolution in priority areas. It also vigorously advanced FinTech innovation and improved
+service quality and efficiency. As at the end of 2018, the total assets of China's banking industry
+grew by 6.3% from the prior year-end to RMB268.2 trillion, while total liabilities increased by
+5.9% to RMB246.6 trillion. Commercial banking institutions recorded an aggregate profit of
+RMB1.83 trillion. Outstanding non-performing loans (NPLs) stood at RMB2.03 trillion, with an
+NPL ratio of 1.83%.
+20
+(1.67%)
+(1,483)
+88,691
+87,208
+Including: net fee and commission income
+(0.87%)
+(1,272)
+145,372
+144,100
+Non-interest income
+20
+6.30%
+338,389
+359,706
+Net interest income
+2017 Change Change (%)
+2018
+Items
+Unit: RMB million, except percentages
+The principal components and changes of the Group's consolidated income statement are set out
+below:
+In 2018, the Group achieved a profit for the year of RMB192.435 billion, an increase of
+RMB7.449 billion or 4.03% compared with the prior year. It realised a profit attributable to
+equity holders of the Bank of RMB180.086 billion, an increase of RMB7.679 billion or 4.45%
+compared with the prior year. Return on average total assets (ROA) was 0.94%, and return on
+average equity (ROE) was 12.06%.
+Income Statement Analysis
+21,317
+of the Bank
+Economic and Financial Environment
+44,186
+43,203
+22,081
+3.39%
+622,616
+3.64% 18,360,140
+687,900
+18,886,486
+Total
+(1,278)
+2,778
+65.284
+(4,056)
+75,754
+2.27% 3,468,502
+74,476
+3,282,457
+banks and other financial institutions
+and due from and placements with
+Balances with central banks
+12,159
+5,786
+6,373
+2.18%
+3.08%
+Interest-bearing liabilities
+14,072,677
+26,812
+432,587
+3.74%
+12,844
+10,502
+2,342
+2.17%
+63,634
+2.51% 2,934,718
+76,478
+21,718
+Due to customers
+580,755
+17,696,078
+3,042,646
+other financial institutions
+Due to and placements from banks and
+25,204
+16,319
+8,885
+1.52%
+204,794
+1.63% 13,488,149
+229,998
+Bonds issued
+132,167
+Total
+54,403
+Average
+Average
+income/
+Average
+Interest
+Interest
+Interest
+2017
+2018
+income/expense
+income/
+Analysis of changes in interest
+In 2018, the Group achieved a net interest income of RMB359.706 billion, an increase of
+RMB21.317 billion or 6.30% compared with the prior year. The average balances¹ and average
+interest rates of the major interest-earning assets and interest-bearing liabilities of the Group, as
+well as the impact on interest income/expense of variances in the volume factor and the interest
+factor², are summarised in the following table:
+Net Interest Income and Net Interest Margin
+382,682
+(23,613)
+211,986
+91,303
+Net cash flow from operating activities
+49,001
+3.21% 4,290,094
+60,087
+Unit: RMB million, except percentages
+Average
+21
+rate
+Volume
+3.91%
+414,695
+10,601,544
+4.22%
+19,764
+4,497,016
+34,639
+Investments
+11,107,013
+Loans
+Interest-earning assets
+469,098
+144,326
+expense interest rate
+balance
+balance
+expense
+Items
+factor
+factor
+Total
+interest rate
+35 Deferred income taxes (Continued)
+290
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(208,963) (47,194) (171,729) (37,816)
+154,335
+As at 31 December 2018, deferred tax liabilities relating to temporary differences of
+RMB142,076 million associated with the Group's investments in subsidiaries have not been
+recognised (31 December 2017: RMB111,841 million). Refer to Note II.20.2.
+42,469
+Subtotal
+33,656
+119,028
+Net
+(9,435)
+(1,335)
+35.3 The movements of the deferred income tax account are as follows:
+(Charged)/credited to the income statement (Note V.10)
+2018
+As at 31 December
+144
+33,656
+(97)
+(1,675) (6,968)
+(10,023) (49,939)
+Other
+5,542
+(5,028)
+Year ended 31 December
+(Charged)/credited to other comprehensive income
+(14,784)
+N/A
+11,096
+Impact of adopting IFRS 9
+29,840
+42,469
+As at 31 December of prior year
+2017
+6,943
+(8,775)
+(51,794)
+Deferred income tax liabilities
+properties
+80,850
+327,991
+Subtotal
+3,351
+16,932
+6,889
+30,132
+Other temporary differences
+N/A
+N/A
+1,059
+5,386
+other comprehensive income
+42,469
+Financial assets at fair value through
+7,464
+30,551
+326,064
+80,285
+Financial instruments at fair value through
+profit or loss and derivative
+Revaluation of property and investment
+(3,261)
+N/A
+N/A
+(4,174)
+(3,208) (19,131)
+(18,909)
+Depreciation of property and equipment
+(17,028)
+Other temporary differences
+other comprehensive income
+(2,097)
+(21,688)
+(86,856)
+(8,835)
+(28,114)
+N/A
+N/A
+Available for sale investment securities
+(112,457)
+financial instruments
+Financial assets at fair value through
+35.4 The deferred income tax credit/charge in the income statement comprises the following
+temporary differences:
+Interest payable (Note II.1.1.1.1)
+2018
+31 December
+1 January
+As at
+As at
+Salary and welfare payables
+(1)
+439,210
+298,362
+Total
+66,143
+66,379
+Other
+190,226
+8,680
+9,264
+Deferred income
+2,941
+2018
+Accrual
+Payment
+2018
+181
+(6,825)
+N/A
+6,835
+171
+1,136
+(3,537)
+3,644
+22,010
+1,029
+(57,010)
+58,242
+3,583
+- Pension
+Medical
+Social insurance
+Staff welfare
+22,697
+Salary, bonus and subsidy
+23,929
+Year ended 31 December
+Provision (2)
+30,997
+(14,784)
+Total
+(893)
+(4,137)
+Other temporary differences
+(198)
+(91)
+Pension, retirement benefits and salary payables
+7,279
+(10,337)
+financial instruments
+profit or loss and derivative
+Financial instruments at fair value through
+755
+(219)
+Asset impairment allowances
+2017
+6,943
+291
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Salary and welfare payables (1)
+41,621
+63,647
+Items in the process of clearance and settlement
+9,098
+9,346
+Non-life insurance contracts
+91,618
+28,883
+96,719
+2017
+2018
+As at 31 December
+Insurance liabilities
+36 Other liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Life insurance contracts
+N/A
+FOR THE YEAR ENDED 31 DECEMBER 2018
+26,090
+78
+Net actuarial losses/(gains) recognised
+Benefits paid
+94
+110
+Interest cost
+3,439
+3,027
+As at 1 January
+2017
+2018
+Year ended 31 December
+The movements of the net liabilities recognised are as follows:
+As at 31 December 2018, the actuarial liabilities existing in relation to the retirement benefit
+obligations for employees who retired prior to 31 December 2003 and the early retirement
+obligations for employees who early-retired were RMB2,213 million (31 December
+2017: RMB2,205 million) and RMB612 million (31 December 2017: RMB822 million),
+respectively, using the projected unit credit method.
+34,521
+27,894
+Retirement benefit obligations
+33
+(33)
+(390)
+(473)
+As at 31 December
+- Normal retiree
+Pension benefit inflation rate
+- Early retiree
+Normal retiree
+Discount rate
+2017
+As at 31 December
+2018
+34
+Total
+Primary assumptions used:
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+- Annuity
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+287
+3,027
+2,825
+33 Retirement benefit obligations (Continued)
+650
+589
+Other
+(9)
+The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 3 September 2018. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 4.86%. The Bank is entitled to redeem the bond at the
+end of the fifth year.
+(10) The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 9 October 2018. The bonds have a
+maturity of 10 years, with a fixed coupon rate of 4.84%. The Bank is entitled to redeem the bond at the end
+of the fifth year.
+(11) Subordinated bonds and tier 2 capital bonds are subordinated to all other claims on the assets of the Group,
+except those of the equity holders.
+(12) US Dollar Debt Securities, RMB Debt Securities and other Debt Securities were issued in Mainland China,
+Hong Kong, Macau, Taiwan and other countries and regions between 2013 and 2018 by the Group, with
+dates of maturity ranging from 2019 to 2030.
+(13) The RMB negotiable certificates of deposit issued by the Bank in 2017 matured in 2018. The outstanding
+balance will mature in 2019.
+(14) According to risk management policy, in order to match derivatives and reduce market risk, the Group
+designates some bonds issued as financial liabilities at fair value through profit or loss in the current period.
+As at 31 December 2018, the book value of the above-mentioned bonds issued by the Group is RMB20,517
+million, and the difference between the fair value and the amount that the Group would be contractually
+required to pay to the holders is not significant. In the year of 2018, there is no significant change in the
+Group's credit risk as well as the fair value caused by credit risk of the above financial liabilities.
+(15) During the years ended 31 December 2018 and 2017, the Group did not default on any principal, interest or
+redemption amounts with respect to its bonds issued.
+(8) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 31 October 2017. The bonds have a
+maturity of 10 years, with a fixed coupon rate of 4.45%. The Bank is entitled to redeem the bond at the end
+of the fifth year.
+31
+These other borrowings relate to the financing of the aircraft leasing business of BOC
+Aviation Limited, a subsidiary of the Group. These other borrowings are secured by its
+aircraft (Note V.20).
+As at 31 December 2018, these other borrowings had a maturity ranging from 32 days to 7 years
+and bore floating and fixed interest rates ranging from 2.65% to 4.26% (31 December 2017:
+1.41% to 3.10%).
+During the years ended 31 December 2018 and 2017, the Group did not default on any
+principal, interest or redemption amounts with respect to its other borrowings.
+286
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+Other borrowings
+- Early retiree
+30 Bonds issued (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+285
+282
+Education surcharges
+411
+431
+City construction and maintenance tax
+5,453
+5,966
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Value-added tax
+20,626
+Corporate income tax
+2017
+2018
+As at 31 December
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+27,722
+Available for sale investment securities
+3.28%
+2.90%
+2018
+As at 31 December
+35.2 Deferred income tax assets/liabilities and related temporary differences, before offsetting
+qualifying amounts, are attributable to the following items:
+35 Deferred income taxes (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+289
+42,469
+154,335
+33,656
+119,028
+Net
+(4,018)
+2017
+Deferred
+Deferred
+Temporary
+differences
+104,486
+22,327
+89,473
+derivative financial instruments
+value through profit or loss and
+Financial instruments at fair
+4,673
+18,716
+(24,669)
+4,582
+38,707
+155,379
+45,993
+184,629
+and salary payables
+Asset impairment allowances
+Pension, retirement benefits
+Deferred income tax assets
+tax assets/ Temporary tax assets/
+(liabilities) differences (liabilities)
+18,371
+(4,548)
+(25,729)
+46,487
+In November 2005, the Bank's Board of Directors and equity holders approved and adopted
+a Share Appreciation Rights Plan under which eligible participants, including directors,
+supervisors, management and other personnel designated by the Board, will be granted share
+appreciation rights, up to 25% of which will be exercisable each year beginning on the third
+anniversary date from the date of grant. The share appreciation rights will be valid for seven
+years from the date of grant. Eligible participants will be entitled to receive an amount equal
+to the difference, if any, between the average closing market price of the Bank's H shares
+in the ten days prior to the date of grant and the average closing market price of the Bank's
+H shares in the 12 months prior to the date of exercise as adjusted for any change in the
+Bank's equity. The plan provides cash-settled share-based payment only and accordingly, no
+shares will be issued under the share appreciation rights plan.
+Share appreciation rights plan
+As at 31 December 2018 and 2017, there was no significant change in employee retirement
+benefit obligations that was attributable to changes in actuarial assumptions.
+Assumptions regarding future mortality experience are based on the China Life Insurance
+Mortality Table (published historical statistics in China).
+50/55
+50/55
+60
+60
+No share appreciation rights were granted since the inception of the plan.
+- Female
+8.0%
+8.0%
+Medical benefit inflation rate
+6.0%-3.0%
+5.0%-3.0%
+3.0%
+3.0%
+3.82%
+Retiring age
+Male
+3.92%
+288
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+179,004
+38,204
+144,757
+Deferred income tax assets
+Deferred income tax liabilities
+tax assets/
+(liabilities)
+tax assets/ Temporary
+(liabilities) differences
+Temporary
+differences
+Deferred
+BANK OF CHINA LIMITED
+Deferred
+2018
+As at 31 December
+35.1 Deferred income tax assets and liabilities are offset when there is a legally enforceable
+right to offset current tax assets against current tax liabilities and when the deferred income
+taxes are related to the same fiscal authority. The table below includes the deferred income
+tax assets and liabilities of the Group after offsetting qualifying amounts and the related
+temporary differences.
+35 Deferred income taxes
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+2017
+23
+(3,583)
+(2,085)
+4,692
+32
+3
+(215)
+215
+3
+2
+(90)
+(4,693)
+90
+7
+(212)
+212
+Preference Shares (1)
+399.4
+39,782
+399.4
+39,782
+2
+2014 Domestic
+31
+staff education fee
+(80,993)
+82,059
+27,817
+Total (i)
+536
+16
+(6)
+(3,011)
+3,174
+Labour union fee and
+373
+7
+15
+of labour contract
+Reimbursement for cancellation
+4,368
+(1,442)
+1,925
+3,885
+Other
+Preference Shares (2)
+320.0
+31,963
+2,060
+23
+171
+(6,656)
+6,657
+170
+Housing funds
+-Maternity insurance
+(2,060)
+- Injury at work
+Annuity
+- Pension
+1,029
+(3,360)
+3,404
+985
+― Medical
+Social insurance
+Unemployment
+23
+7
+295
+-- 320.0
+31,963
+2015 Domestic
+Preference Shares (3)
+280.0
+27,969
+-- 280.0
+27,969
+Total
+999.4
+99,714
+999.4
+99,714
+(1)
+(2)
+Pursuant to the approvals by the relevant authorities in China, the Bank issued the US Dollar settled
+non-cumulative Offshore Preference Shares in the aggregate par value of RMB39.94 billion on 23 October
+2014. Each Offshore Preference Share has a par value of RMB100 and 399.4 million Offshore Preference
+Shares were issued in total. The initial annual dividend rate is 6.75% and is subsequently subject to reset per
+agreement, but in no case shall exceed 18.07%. Dividends are calculated on the basis of RMB but paid out
+in US Dollars per a fixed exchange rate.
+The Offshore Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBIRC, all or part of the Offshore
+Preference Shares may be redeemed at the discretion of the Bank on 23 October 2019 or on any dividend
+payment date thereafter at the redemption price which is the sum of the par value of the Offshore Preference
+Shares and the dividends declared but not yet distributed, as calculated on the basis of RMB but paid out in
+US Dollars per a fixed exchange rate.
+Pursuant to the approvals by relevant authorities in China, the Bank issued 6.0% non-cumulative Domestic
+Preference Shares on 21 November 2014, in the aggregate par value of RMB32 billion. Each Domestic
+Preference Share has a par value of RMB 100 and a total number of 320 million Domestic Preference Shares
+were issued.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBIRC, the Bank may redeem all or
+part of the Domestic Preference Shares on 21 November 2019 or any dividend payment date thereafter of
+its choosing at the redemption price which is the sum of the par value of the Domestic Preference Share and
+the dividends declared but not yet distributed.
+28,883
+(3,146)
+There was no overdue payment for staff salary and welfare payables as at 31 December 2018 and 2017.
+(2)
+Quantity
+(million Carrying
+shares) amount
+As at
+31 December 2018
+Quantity
+(million Carrying
+shares) amount
+Preference Shares
+2014 Offshore
+As at 31 December
+Total
+Other capital reserve
+Increase/(Decrease)
+Share premium
+All A and H shares rank pari passu with the same rights and benefits.
+294,387,791,241 294,387,791,241
+210,765,514,846
+83,622,276,395 83,622,276,395
+210,765,514,846
+2017
+2018
+As at 31 December
+Unit: Share
+37.2 Capital reserve
+Total
+1 January 2018
+Quantity
+(million Carrying
+shares) amount
+For the year ended 31 December 2018, the movements of the Bank's other equity
+instruments were as follows:
+2018
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2017
+139,921
+2,214
+139,921
+1,959
+142,135
+141,880
+37.3 Treasury shares
+As at
+A wholly-owned subsidiary of the Group holds certain listed shares of the Bank in relation to
+its derivative and arbitrage business. These shares are treated as treasury shares, a deduction
+from equity holders' equity. Gains and losses on sale or redemption of the treasury shares are
+credited or charged to equity. The total number of treasury shares as at 31 December 2018 was
+approximately 22.80 million (31 December 2017: approximately 31.85 million).
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+37
+Share capital, capital reserve, treasury shares and other equity instruments (Continued)
+37.4 Other equity instruments
+294
+Domestic listed A shares, par value RMB1.00 per share
+Overseas listed H shares, par value RMB1.00 per share
+The Bank's share capital is as follows:
+37.1 Share capital
+Utilised during the year
+Reversal for the year, net
+Impact of adopting IFRS 9
+As at 31 December of prior year
+The movement of the provision was as follows:
+2,941
+22,010
+Total
+Exchange differences and other
+995
+Allowance for litigation losses (Note V. 41.1)
+1,946
+21,354
+Allowance for credit commitments
+2017
+2018
+As at 31 December
+Provision
+656
+As at 31 December
+Year ended 31 December
+2018
+Share capital, capital reserve, treasury shares and other equity instruments
+37
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+293
+2,941
+22,010
+(129)
+(413)
+366
+(2,995)
+(10,120)
+N/A
+29,236
+6,065
+2,941
+2017
+(i)
+2,372
+32 Current tax liabilities
+22,697
+564
+Total (1)
+292
+28,883
+85,306
+(83,192)
+30,997
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+36
+Other liabilities (Continued)
+(1) Salary and welfare payables (Continued)
+As at
+As at
+1 January
+31 December
+2017
+Accrual
+Payment
+2017
+Salary, bonus and subsidy
+Staff welfare
+22,322
+56,477
+(56,102)
+3,146
+17
+(12)
+(3,484)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16
+536
+310
+13
+3,512
+- Unemployment
+7
+206
+(206)
+7
+- Injury at work
+2
+87
+2
+- Maternity insurance
+3
+243
+(243)
+(87)
+Housing funds
+Other
+3
+Reimbursement for cancellation
+4,792
+(1,517)
+1,941
+4,368
+of labour contract
+Labour union fee and
+56
+(4,603)
+4,628
+31
+staff education fee
+Profit for the period
+Operating income
+31 December 2018
+Period from
+acquisition date to
+The financial performance and cash flows of the 26 village banks from the date of
+acquisition until 31 December 2018 are as follows:
+40 Changes in the consolidation (Continued)
+43.1 CIC was established on 29 September 2007 with registered capital of RMB1,550 billion.
+CIC is a wholly State-owned company engaging in foreign currency investment
+management. The Group is subject to the control of the State Council of the PRC
+government through CIC and its wholly owned subsidiary, Huijin.
+The Group enters into banking transactions with CIC in the normal course of its business on
+commercial terms.
+958,752
+1,688,600
+Related party transactions
+Net cash flows for the period
+305
+9
+(Amount in millions of Renminbi, unless otherwise stated)
+(377)
+An analysis of the net inflow of cash and cash equivalents in respect of the acquisition of the
+village banks is as follows:
+Cash and cash equivalents held by the village banks as at the
+acquisition date
+Cash consideration paid on acquisition of the village banks
+Net cash inflow on acquisition of the village banks
+300
+Year ended
+31 December 2018
+3,798
+(1,439)
+2,359
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+43
+8
+Total
+(5)
+56,662
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2018
+2017
+1,102,554
+1,067,636
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+41 Contingent liabilities and commitments (Continued)
+41.8 Underwriting obligations
+As at 31 December 2018, there was no firm commitment in underwriting securities of the
+Group (31 December 2017: RMB570 million).
+42 Note to the consolidated statement of cash flows
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents
+comprise the following balances with an original maturity of less than three months:
+As at 31 December
+2018
+2017
+Cash and due from banks and other financial institutions
+264,526
+279,651
+Balances with central banks
+728,940
+438,711
+Placements with and loans to banks and
+other financial institutions
+638,472
+177,129
+Financial investments
+63,261
+41 Contingent liabilities and commitments
+1,804
+As at 31 December 2018, the Group was involved in certain litigation and arbitration cases
+in the regular course of its business. In addition, in terms of the range and scale of its
+international operations, the Group may face a variety of legal proceedings within different
+jurisdictions. As at 31 December 2018, provisions of RMB656 million (31 December
+2017: RMB995 million) were made based on court judgements or the advice of counsel
+(Note V.36). After consulting legal professionals, the senior management of the Group
+believes that at the current stage these legal proceedings and arbitrations will not have a
+material impact on the financial position or operations of the Group.
+709
+- Authorised but not contracted for
+Investment properties
+25
+47
+Contracted but not provided for
+7
+9
+Total
+67,213
+55,408
+41.5 Operating leases
+(1) Operating lease commitments -As lessee
+Under irrevocable operating lease contracts, the future minimum lease payments that should
+be paid by the Group are summarised as follows:
+934
+Within 1 year
+Between 2 and 3 years
+Over 3 years
+Total
+302
+As at 31 December
+2018
+2017
+6,698
+6,570
+5,071
+4,952
+3,724
+3,597
+Between 1 and 2 years
+- Contracted but not provided for
+As at 31 December
+1,597
+41.2 Assets pledged
+Assets pledged by the Group as collateral mainly for placement, repurchase, short positions,
+derivative transactions with other banks and financial institutions and for local statutory
+requirements are set forth in the table below. These transactions are conducted under
+standard and normal business terms.
+Debt securities
+Bills
+Total
+As at 31 December
+2018
+2017
+990,743
+1,603
+1,119,921
+751
+992,346
+1,120,672
+41.3 Collateral accepted
+The Group accepts securities as collateral that are permitted to be sold or re-pledged in
+connection with reverse repurchase and derivative agreements with banks and other financial
+institutions. As at 31 December 2018, the fair value of collateral received from banks
+and other financial institutions accepted by the Group amounted to RMB27,218 million
+(31 December 2017: RMB32,052 million). As at 31 December 2018, the fair value of
+the collateral that the Group had sold or re-pledged, but was obligated to return, was
+RMB2,631 million (31 December 2017: RMB3,067 million). These transactions are
+conducted under standard terms in the normal course of business.
+301
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+41 Contingent liabilities and commitments (Continued)
+41.4 Capital commitments
+Property and equipment
+Contracted but not provided for
+Authorised but not contracted for
+Intangible assets
+As at 31 December
+2018
+2017
+64,650
+52,839
+41.1 Legal proceedings and arbitrations
+Other liabilities
+304
+The risk-weighted assets for credit risk of the Group were calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations under the advanced capital measurement
+approaches. The amounts are determined by the creditworthiness of the counterparties, the maturity
+characteristics of each type of contract and other factors.
+38.3 Dividends (Continued)
+Dividends for Preference Shares
+The dividend distribution of Domestic Preference Shares (Second Tranche) amounting
+to RMB1,540 million was approved by the Board of Directors of the Bank at the Board
+Meeting held on 19 January 2018 and the dividend was distributed on 13 March 2018.
+The dividend distribution of Offshore Preference Shares and Domestic Preference Shares
+(First Tranche) was approved by the Board of Directors of the Bank at the Board Meeting
+held on 28 August 2018. The dividend of Offshore Preference Shares amounting to
+USD487 million before tax was distributed on 23 October 2018. The dividend of Domestic
+Preference Shares (First Tranche) amounting to RMB1,920 million was distributed on
+21 November 2018.
+39 Non-controlling interests
+Non-controlling interests of the subsidiaries of the Group are as follows:
+As at 31 December
+2018
+2017
+38 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+BOC Hong Kong (Group) Limited
+60,084
+Bank of China Group Investment Limited
+9,440
+8,265
+Tai Fung Bank Limited
+9,034
+8,173
+Other
+6,254
+87,689
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+In addition, some operations in Hong Kong, Macau, Taiwan and other countries and regions
+are required to transfer certain percentages of their net profits to the statutory surplus
+reserves as stipulated by local banking authorities.
+296
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+38 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+38.2 General and regulatory reserves
+Pursuant to Caijin [2012] No. 20 Requirements on Impairment Allowance for Financial
+Institutions (the “Requirement”), issued by the MOF, in addition to the impairment
+allowance, the Bank establishes a general reserve within the equity holders' equity through
+the appropriation of profit to address unidentified potential impairment losses. The general
+reserve as a distribution of profits, being part of the owner's rights and interests, should not
+be less than 1.5% of the aggregate amount of risk assets as defined by the Requirement, and
+the minimum threshold can be accumulated over a period of no more than five years.
+In accordance with a resolution dated 29 March 2019 and on the basis of the Bank's profit
+for the year ended 31 December 2018, the Board of Directors of the Bank approved the
+appropriation of RMB22,352 million (2017: RMB13,282 million) to the general reserve for
+the year ended 31 December 2018.
+The regulatory reserve mainly refers to the reserve amount set aside by BOC Hong Kong
+(Group) Limited (“BOCHK Group"), a subsidiary of the Group, for general banking risks,
+including future losses or other unforeseeable risks. As at 31 December 2018 and 2017,
+the reserve amounts set aside by BOCHK Group were RMB6,448 million and RMB6,433
+million, respectively.
+38.3 Dividends
+Dividends for Ordinary Shares
+An ordinary share dividend of RMB51,812 million in respect of the profit for the year ended
+31 December 2017 was approved by the equity holders of the Bank at the Annual General
+Meeting held on 28 June 2018 and was distributed during the year.
+An ordinary share dividend of RMB0.184 per share in respect of the profit for the year
+ended 31 December 2018 (2017: RMB0.176 per share), amounting to a total dividend of
+RMB54,167 million, based on the number of shares issued as at 31 December 2018 will
+be proposed for approval at the Annual General Meeting to be held on 17 May 2019. The
+dividend payable is not reflected in liabilities of the financial statements.
+297
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+4,141
+In accordance with a resolution of the Board of Directors dated 29 March 2019, the Bank
+appropriated 10% of the net profit for the year ended 31 December 2018 to the statutory
+surplus reserves, amounting to RMB15,946 million (2017: RMB15,147 million).
+Total
+112,417
+Intangible assets
+1
+1
+Deferred income tax assets
+75
+74
+Other assets
+102
+102
+51
+Due to banks and other financial institutions
+(74)
+Due to central banks
+(91)
+(91)
+Due to customers
+(9,762)
+(9,762)
+Deferred income tax liabilities
+(5)
+(74)
+49
+Property and equipment
+7,007
+80,663
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+40 Changes in the consolidation
+On 25 December 2018, the Bank purchased the shares of 26 village banks from China
+Construction Bank and four other companies. The total consideration was RMB1,439 million,
+and the shares acquired for each bank are between 45.90% and 67.05% of the total shares.
+The details of the identifiable assets and liabilities acquired are as follows:
+Acquisition Date
+Carrying
+amount
+Fair value
+Cash and due from banks and other financial institutions
+4,974
+4,974
+Balances with central banks
+1,215
+1,215
+Loans and advances to customers, net
+7,007
+298
+Credit commitments
+Under relevant PRC laws, the Bank is required to transfer 10% of its net profit to
+non-distributable statutory surplus reserves. The appropriation to the statutory surplus reserves
+may cease when the balance of such reserves has reached 50% of the share capital. Subject to
+the approval of the equity holders, the statutory surplus reserves can be used for replenishing
+the accumulated losses or increasing the Bank's share capital. The statutory surplus reserves
+amount used to increase the share capital is limited to a level where the balance of the
+statutory surplus reserves after such capitalisation is not less than 25% of the share capital.
+38 Statutory reserves, general and regulatory reserves and undistributed profits
+840,078
+954,394
+Undrawn credit card limits
+1,147,484
+1,127,891
+with an original maturity of 1 year or over
+188,198
+186,425
+with an original maturity of less than 1 year
+Letters of guarantee issued (2)
+Loan commitments (¹)
+As at 31 December
+2018
+41.7 Credit commitments
+41 Contingent liabilities and commitments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+303
+2017
+As at 31 December 2018, the outstanding principal value of the Treasury bonds sold by
+the Bank under obligation to redeem prior to maturity amounted to RMB52,635 million
+(31 December 2017: RMB49,855 million). The original maturities of these Treasury bonds
+vary from 3 to 5 years and management expects the amount of redemption through the Bank
+prior to the maturity dates of these bonds will not be material.
+1,070,825
+Bank bill acceptance
+Risk-weighted assets for credit risk of credit commitments
+(3)
+Letters of guarantee issued mainly include financial guarantees and performance guarantees. These
+obligations on the Group to make payment are dependent on the outcome of a future event.
+Loan commitments mainly represent undrawn loan facilities agreed and granted to customers.
+Unconditionally revocable loan commitments are not included in loan commitments. As at 31 December
+2018, the unconditionally revocable loan commitments of the Group amounted to RMB254,033 million
+(31 December 2017: RMB240,303 million).
+3,870,632
+3,993,011
+(2)
+(1)
+Total (3)
+1,079,178
+90,230
+Other
+90,175
+98,849
+Accepted bills of exchange under letters of credit
+139,298
+130,625
+Letters of credit issued
+295,991
+256,360
+167,642
+38.1 Statutory reserves
+The Bank is entrusted by the MOF to underwrite certain Treasury bonds. The investors of
+these Treasury bonds have a right to redeem the bonds at any time prior to maturity and the
+Bank is committed to redeem these Treasury bonds. The MOF will not provide funding for
+the early redemption of these Treasury bonds on a back-to-back basis but will pay interest
+and repay the principal at maturity. The redemption price is the principal value of the bonds
+plus unpaid interest in accordance with the early redemption arrangement.
+The Group acts as a lessor in operating leases principally through aircraft leasing
+undertaken by its subsidiary BOC Aviation Limited. Under irrevocable operating lease
+contracts, as at 31 December 2018, the minimum lease payments which will be received
+by the Group under the operating leases for existing aircraft and aircraft yet to be
+delivered amounted to RMB11,753 million not later than one year (31 December 2017:
+RMB10,319 million), RMB47,494 million later than one year and not later than five years
+(31 December 2017: RMB42,237 million) and RMB50,248 million later than five years
+(31 December 2017: RMB47,490 million).
+Goodwill arising on acquisition
+1,482
+Identifiable net assets
+Non-controlling interests
+(1,649)
+(1,649)
+3,132
+3,131
+Total
+(360)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+(360)
+37
+Share capital, capital reserve, treasury shares and other equity instruments (Continued)
+37.4 Other equity instruments (Continued)
+(3)
+Pursuant to the approvals by relevant authorities in China, the Bank issued 5.5% non-cumulative Domestic
+Preference Shares on 13 March 2015, in the aggregate par value of RMB28 billion. Each Domestic Preference
+Share has a par value of RMB100 and a total number of 280 million Domestic Preference Shares were issued.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and having obtained the prior approval of the CBIRC, the Bank may redeem all or
+part of the Domestic Preference Shares on 13 March 2020 or any dividend payment date thereafter of its
+choosing at the redemption price which is the sum of the par value of the Domestic Preference Share and
+the dividends declared but not yet distributed.
+Save for such dividend at the agreed dividend payout ratio, the holders of the above
+preference shares shall not be entitled to share in the distribution of the remaining profits
+of the Bank together with the holders of the ordinary shares. The dividends on preference
+shares are non-cumulative. The Bank shall be entitled to cancel any dividend on the
+preference shares, and such cancellation shall not be deemed a default. However, the
+Bank shall not distribute profits to the holders of ordinary shares until resumption of full
+payment of dividends on the preference shares. Upon the occurrence of a trigger event for
+the compulsory conversion of preference shares into ordinary shares per agreement, the
+Bank shall report to the CBIRC for review and determination and the Bank will convert the
+preference shares into ordinary shares in whole or in part.
+Capital raised from the issuance of the above preference shares, after deduction of
+transaction costs, was wholly used to replenish the Bank's additional tier 1 capital and to
+increase its capital adequacy ratio.
+44
+41.6 Treasury bonds redemption commitments
+Other operating income
+Total consideration
+(2) Operating lease commitments As lessor
+41.5 Operating leases (Continued)
+41 Contingent liabilities and commitments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+21,786
+(87)
+28,093
+12,600
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+299
+1,439
+6,667
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Derivative financial liabilities
+(117,432)
+BANK OF CHINA LIMITED
+2017
+2018
+As at 31 December
+Transaction balances
+The main transactions with subsidiaries are as follows:
+43.8 Transactions with subsidiaries
+As at 31 December 2018, the Bank's balance of loans to the connected natural persons
+as defined in the Administration of Connected Transactions between Commercial Banks
+and Their Insiders and Shareholders of CBIRC and the Administrative Measures for
+the Disclosure of Information of Listed Companies of CSRC totalled approximately
+RMB168 million (31 December 2017: RMB138 million) and RMB21 million (31 December
+2017: RMB5 million) respectively.
+Due from banks and other financial institutions
+43.7 Transactions with Connected Natural Persons
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+311
+The total compensation package for these key management personnel for the year ended 31 December 2018
+has not yet been finalised in accordance with the regulations of the PRC relevant authorities. The amount of
+the compensation not provided for is not expected to have a significant impact on the Group's 2018 financial
+statements. The final compensation will be disclosed in a separate announcement when determined.
+43 Related party transactions (Continued)
+44,911
+30,932
+Placements with and loans to banks and
+1,465
+2017
+2018
+Year ended 31 December
+312
+Interest expense
+Interest income
+(86,316)
+(76,215)
+(112,859)
+(87,797)
+90,913
+127,644
+Transaction amount
+other financial institutions
+Due to banks and other financial institutions
+Placements from banks and
+other financial institutions
+14
+10
+(1)
+Total
+Investment
+Investment holding
+Chemical industry, mainly produces and sells all
+kinds of fertilizers and chemical products
+Asset management; Investment consulting
+Investment
+USD0.00002
+RMB1,578
+40.00
+40.00
+91440000564568961E
+50.00
+50.00
+NA
+PRC
+BVI
+Guangdong Small and Medium Enterprises
+Wkland Investments II Limited
+RMB1,568
+Equity Investment Fund Company Limited
+954
+(1)
+BANK OF CHINA LIMITED
+1
+1
+13
+Compensation for short-term employment benefits (1)
+Compensation for post-employment benefits
+2017
+2018
+Year ended 31 December
+The key management compensation for the years ended 31 December 2018 and 2017
+comprises:
+Key management personnel are those persons having authority and responsibility for
+planning, directing and controlling the activities of the Group, directly or indirectly,
+including Directors and Executive Officers.
+43.6 Transactions with key management personnel
+Apart from the obligations for defined contributions to the Annuity Fund and normal
+banking transactions, no other transactions were conducted between the Group and the
+Annuity Fund for the years ended 31 December 2018 and 2017.
+43.5 Transactions with the Annuity Plan
+43 Related party transactions (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+In accordance with the respective articles of association, the Group has significant influence or joint control over these companies.
+(2,825)
+(2,119)
+BANK OF CHINA LIMITED
+United
+Kingdom
+Bank of China (UK) Limited
+banking
+Commercial
+50.31
+50.31
+MOP1,000
+1942
+Macau
+Tai Fung Bank Limited
+holding
+Investment
+100.00
+100.00
+HKD34,052
+18 May 1993
+Hong Kong
+24 September
+2007
+Bank of China Group Investment
+Limited
+GBP250
+100.00
+Indirectly held
+supporting
+businesses, etc.
+swaps and other
+100.00 Debt-to-equity
+100.00
+RMB 10,000
+16 November
+2017
+Beijing
+BOC Financial Asset Investment
+Company Limited
+services
+Insurance
+100.00
+100.00
+RMB4,535
+Beijing 5 January 2005
+BOC Insurance Company Limited
+Commercial
+banking
+100.00
+16.44
+services
+100.00
+Directly held (1)
+(%)
+(%)
+business
+Voting right
+Principal
+Effective
+equity held
+Paid-in
+capital
+(in millions)
+Place of
+Date of
+incorporation incorporation/
+and operation establishment
+Name
+The general information of principal subsidiaries is as follows:
+43.8 Transactions with subsidiaries (Continued)
+43 Related party transactions (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BOC Hong Kong (Group) Limited
+Insurance
+Hong Kong
+HKD34,806
+100.00
+HKD3,749
+23 July 1992
+Hong Kong
+Bank of China Group Insurance
+Company Limited
+banking
+Investment
+100.00
+100.00
+HKD3,539
+10 July 1998
+Hong Kong
+BOC International Holdings Limited (3)
+company
+Holding
+100.00
+100.00
+12 September
+2001
+16.44
+91510500711880825C
+PRC
+Principal activities
+Wholly State-owned company
+64.02%
+Voting rights in the Bank
+Nature
+64.02%
+Capital shares in the Bank
+Beijing
+Location of registration
+RMB828,209 million
+Registered capital
+Legal representative
+DING Xuedong
+Central Huijin Investment Ltd.
+(1) General information of Huijin
+43.2 Transactions with Huijin and companies under Huijin
+43 Related party transactions (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Unified social credit code
+(Amount in millions of Renminbi, unless otherwise stated)
+(2) Transactions with Huijin
+institutions on behalf of the State Council;
+other related businesses approved
+by the State Council
+33,436
+80,833
+13,349
+12,046
+2017
+2018
+Year ended 31 December
+306
+Interest expense
+Transaction amount
+As at 31 December
+Received during the year
+Repaid during the year
+As at 1 January
+Transaction balances
+Due to Huijin
+The Group enters into banking transactions with Huijin in the normal course of its business
+on commercial terms.
+911000007109329615
+Investment in major State-owned financial
+(83,625)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(4,409)
+(6,499)
+14,368
+Credit commitments
+Transaction amount
+(6,434)
+12,159
+(8,620)
+8,683
+Interest income
+Interest expense
+307
+Year ended 31 December
+2018
+2017
+12,709
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+43 Related party transactions (Continued)
+-0.10%-8.00% -0.25%-8.50%
+0.00%-5.50%
+2017
+As at 31 December
+2018
+0.00%-8.20%
+other financial institutions
+Placements from banks and
+other financial institutions
+Due to customers, banks and
+Loans and advances to customers
+Financial investments
+other financial institutions
+Placements with and loans to banks and
+Due from banks and other financial institutions
+Interest rate ranges
+(3) Transactions with companies under Huijin (Continued)
+43.2 Transactions with Huijin and companies under Huijin (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+BOC Hong Kong (Holdings)
+Limited (2)
+(34,739)
+12,046
+Limited Partnership
+25.50
+25.50
+91340202MA2N9TTA6R
+PRC
+Zhongxinboda (Wuhu) Investment
+RMB20,000
+8.86
+8.86
+91210800121119657C
+PRC
+Ying Kou Port Group CORP.
+Securities brokerage; securities investment consulting; financial
+advisory services related to securities trading and securities
+investment activities; securities underwriting and sponsorship;
+securities proprietary business; securities asset management;
+securities investment fund sales agency; margin financing and
+securities lending; distribution of financial products; management
+of publicly raised securities investment funds
+Terminals and other port facilities services, cargo handling,
+warehousing services, ship and port services, leasing and maintenance
+services of port facilities and equipment and port machinery, etc.
+Asset management; Investment consulting
+Principal business
+NA
+RMB2,500
+Paid-in
+capital
+(in millions)
+CGN Phase I Private Equity Fund
+Company Limited
+(124,456)
+PRC
+20.00
+Sichuan Lutianhua Co., Ltd.
+Limited Partnership
+NA
+49.00
+49.00
+91340202MA2MU5438W
+PRC
+BOC & Cinda (Wuhu) Investment
+USD0.0025
+Note (1)
+80.00
+NA
+BVI
+Graceful Field Worldwide Limited
+Investment in nuclear power projects and related industries; Asset
+management; Investment consulting
+RMB 100
+20.00
+91110000717827478Q
+9,254
+(143,803)
+Due to customers, banks and other financial institutions
+Placements from banks and other financial institutions
+Companies under Huijin include its equity interests in subsidiaries, associates and joint ventures in
+certain other bank and non-bank entities in the PRC. The Group enters into banking transactions with
+these companies in the normal course of business on commercial terms which include mainly the
+purchase and sale of debt securities, money market transactions and derivative transactions.
+(3) Transactions with companies under Huijin
+As at 31 December 2018, the Bank held government backed bonds issued by Huijin with the
+carrying value of RMB18,511 million (31 December 2017: RMB8,560 million). These bonds
+have maturity of not more than 30 years and bear interest at fixed interest rates, payable annually.
+The interest income arising from the bonds was RMB701 million in 2018 (2017: RMB259
+million). Purchasing of these bonds was in the ordinary course of business of the Group,
+complying with the requirements of the related regulations and corporate governance.
+Bonds issued by Huijin
+(2) Transactions with Huijin (Continued)
+43.2 Transactions with Huijin and companies under Huijin (Continued)
+43 Related party transactions (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(341)
+(259)
+2017
+2018
+Year ended 31 December
+In the ordinary course of the business, main transactions that the Group entered into with the
+affiliates of parent company are as follows:
+(164,636)
+Transaction balances
+2018
+10,825
+32,275
+Loans and advances to customers
+4,795
+10,874
+Derivative financial assets
+326,238
+375,075
+Financial investments
+76,983
+98,754
+other financial institutions
+Placements with and loans to banks and
+31,663
+19,184
+Due from banks and other financial institutions
+2017
+As at 31 December
+Hong Kong
+The Group enters into banking transactions with key management personnel in the normal
+course of business. During the years ended 31 December 2018 and 2017, there were no
+material transactions and balances with key management personnel on an individual basis.
+HKD52,864
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+43 Related party transactions (Continued)
+43.4 Transactions with associates and joint ventures
+308
+The Group enters into banking transactions with associates and joint ventures in the normal
+course of business on commercial terms. These include loans and advances, deposit taking
+and other normal banking businesses. In the ordinary course of the business, the main
+transactions that the Group entered into with associates and joint ventures are as follows:
+Loans and advances to customers
+Due to customers, banks and other financial institutions
+Credit commitments
+Transaction amount
+Interest income
+Interest expense
+309
+Transaction balances
+As at 31 December
+Transactions conducted with government authorities, agencies, affiliates and other State-
+controlled entities include purchase and redemption of investment securities issued by
+government agencies, underwriting and distribution of Treasury bonds issued by government
+agencies through the Group's branch network, foreign exchange transactions and derivative
+transactions, lending, provision of credit and guarantees and deposit placing and taking.
+entities
+-
+Treasury operations - Consisting of foreign exchange transactions, customer-based interest
+rate and foreign exchange derivative transactions, money market transactions, proprietary
+trading and asset and liability management. The results of this segment include the inter-
+segment funding income and expenses, results from interest-bearing assets and liabilities;
+and foreign currency translation gains and losses.
+Investment banking
+Consisting of debt and equity underwriting and financial advisory,
+sales and trading of securities, stock brokerage, investment research and asset management
+services, and private equity investment services.
+Insurance
+services.
+Underwriting of general and life insurance business and insurance agency
+The State Council of the PRC government directly and indirectly controls a significant
+number of entities through its government authorities, agencies, affiliates and other State-
+controlled entities. The Group enters into extensive banking transactions with these entities
+in the normal course of business on commercial terms.
+Other Other operations of the Group comprise investment holding and other
+miscellaneous activities, none of which constitutes a separately reportable segment.
+0.00%-6.20% 0.00%-6.20%
+1.45%-6.18% 1.04%-5.51%
+0.00%-6.10% 0.00%-6.10%
+-0.10%-9.50%
+0.00%-9.50%
+43.3 Transactions with government authorities, agencies, affiliates and other State-controlled
+315
+2018
+2017
+763
+The general information of principal associates and joint ventures is as follows:
+Name
+BOC International (China) Co., Ltd.
+Place of
+incorporation/
+establishment
+Unified Social
+Credit Code
+Effective
+equity held
+43.4 Transactions with associates and joint ventures (Continued)
+Voting right
+(%)
+PRC
+91310000736650364G
+37.14
+37.14
+12 September
+2001
+(%)
+Related party transactions (Continued)
+310
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2,823
+(4,709)
+43
+(9,326)
+957
+Year ended 31 December
+2018
+2017
+22
+(204)
+15
+(193)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+Personal banking Services to retail customers including savings deposits, personal loans,
+credit cards and debit cards, payments and settlements, wealth management products and
+funds and insurance agency services.
+-
+43
+-
+services
+BOC Group Trustee Company
+Limited (3)
+Hong Kong
+1 December
+1997
+77.60
+100.00
+Credit card
+Provision of
+BOC Aviation Limited (2)
+Singapore 25 November
+USD1,158
+70.00
+70.00 Aircraft leasing
+1993
+trustee services
+100.00
+66.06
+HKD480
+Corporate banking Services to corporate customers, government authorities and financial
+institutions, including current accounts, deposits, overdrafts, loans, trade-related products
+and other credit facilities, foreign exchange, derivative products and wealth management
+products.
+66.06
+66.06
+Holding
+company
+Bank of China (Hong Kong)
+Limited (3)
+Hong Kong
+16 October
+1964
+HKD43,043
+66.06
+100.00
+Commercial
+banking
+BOC Credit Card (International)
+Limited
+Hong Kong
+9 September
+1980
+313
+BANK OF CHINA LIMITED
+HKD200
+FOR THE YEAR ENDED 31 DECEMBER 2018
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Segment Reporting (Continued)
+Geographical segments
+Chinese mainland
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+- Corporate banking, personal banking, treasury operations, insurance
+services, etc. are performed in the Chinese mainland.
+Hong Kong, Macau and Taiwan
+Corporate banking, personal banking, treasury
+operations, investment banking and insurance services are performed in Hong Kong, Macau
+and Taiwan. The business of this segment is centralised in BOCHK Group.
+Other countries and regions
+-
+Corporate and personal banking services are provided in
+other countries and regions. Significant locations include New York, London, Singapore and
+Tokyo.
+Business segments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+-
+314
+(Amount in millions of Renminbi, unless otherwise stated)
+43 Related party transactions (Continued)
+43.8 Transactions with subsidiaries (Continued)
+(1)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(2)
+(3)
+BOCHK (Holdings) and BOC Aviation Limited are listed on the Stock Exchange of Hong Kong Limited.
+These directly held principal subsidiaries are unlisted companies. All holdings are in the ordinary share
+capital of the undertaking concerned, and the ability of the subsidiaries to transfer funds to the Group and
+the Bank is not restricted.
+For certain subsidiaries listed above, the voting rights ratio is not equal to the effective
+equity held ratio, mainly due to the impact of the indirect holdings.
+44 Segment reporting
+The Group manages the business from both geographic and business perspectives. From the
+geographic perspective, the Group operates in three principal regions: Chinese mainland;
+Hong Kong, Macau and Taiwan; and other countries and regions. From the business
+perspective, the Group provides services through six main business segments: corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+operations.
+The measurement of segment assets, liabilities, income, expenses, results and capital
+expenditure is based on the Group's accounting policies. The segment information presented
+includes items directly attributable to a segment as well as those that can be allocated on
+a reasonable basis. Funding is provided to and from individual business segments through
+treasury operations as part of the asset and liability management process. The pricing of
+these transactions is based on market rates. The transfer price takes into account the specific
+features and maturities of the product. Internal transactions are eliminated on consolidation.
+The Group regularly examines the transfer price and adjusts the price to reflect the current
+situation.
+BOCHK and BOC International Holdings Limited ("BOCI”), in which the Group holds 66.06% and 100%
+of their equity interests, respectively, hold 66% and 34% equity interest of BOC Group Trustee Company
+Limited, respectively.
+63,507
+Operating profit
+(99,294)
+93,297
+58,655
+1,966
+1,142
+8,966
+227,533
+Share of results of associates and joint ventures
+63
+2,110
+375
+(157)
+1,896
+(70)
+985
+Profit before income tax
+63,507
+93,360
+58,658
+(305)
+2,341
+10,862
+3
+(20)
+3,954,150
+(1,348)
+Segment assets
+7,139,973
+(70)
+7,908,168
+66,050
+139,945
+Investments in associates and joint ventures
+4,449
+Total assets
+7,139,973
+3,954,150
+(2,913)
+503,806
+Operating expenses
+(58,987)
+(71,483)
+(17,456)
+(2,949)
+(19,448)
+(9,569)
+2,913
+(176,979)
+Impairment losses on assets
+(88,871)
+(8,751)
+1
+229,643
+161
+(37,208)
+36,820
+43,889
+(79,778)
+54
+(1,146)
+Intersegment net fee and commission
+income/(expense)
+506
+1,362
+95
+(403)
+(1,493)
+258
+(325)
+Capital expenditure
+3,263
+3,618
+178
+130
+81
+34,594
+Depreciation and amortisation
+4,765
+18,840
+6,023
+Intersegment net interest income/(expense)
+Income tax expense
+Other segment items:
+23,369
+21,267,275
+Profit for the year
+192,435
+Segment assets
+7,628,839
+4,438,581
+8,629,971
+65,239
+149,592
+Investments in associates and joint ventures
+143
+4,690
+Total assets
+7,628,839
+4,438,724
+Segment liabilities
+9,435,725
+6,218,896
+8,629,971
+3,574,230
+69,929
+149,592
+50,915
+134,988
+423,944
+18,622
+442,566
+219,223
+(92,260)
+(86)
+(92,346)
+(92,099)
+21,243,906
+19,541,878
+20,610
+(93,535)
+77,459
+Other
+Elimination
+Total
+Interest income
+344,483
+215,904
+203,012
+1,700
+2,731
+3,147
+(83,077)
+687,900
+Interest expense
+(166,474)
+1,622
+(145,573)
+(520)
+(39)
+(5,130)
+83,077
+(328,194)
+Net interest income/(expense)
+178,009
+122,369
+57,439
+Insurance
+1,180
+banking
+banking
+13,477
+1,563
+31,371
+4,966
+(4,232)
+(378)
+(1,446)
+467
+336
+417,939
+461,310
+(421,484)
+16,769
+3,870,632
+(1)
+Other operating income includes insurance premium income earned, and operating expenses include insurance benefits and claims.
+Non-current assets include property and equipment, investment properties and other long-term assets.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+184,986
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Segment reporting (Continued)
+As at and for the year ended 31 December 2018
+Corporate
+Personal
+Treasury
+Investment
+banking
+operations
+2,692
+(1,983)
+359,706
+2,746
+304
+(1,586)
+1,798
+58
+6,719
+Net gains/(losses) on financial investments
+923
+142
+1,705
+48
+(1)
+2,817
+Other operating income
+617
+8,313
+764
+235
+22,823
+17,250
+(2,646)
+47,356
+Operating income
+211,365
+173,531
+901
+2,498
+Net trading gains/(losses)
+87,208
+Fee and commission income
+30,556
+48,729
+16,691
+4,419
+2
+1,901
+(2,301)
+99,997
+Fee and commission expense
+(1,238)
+(6,923)
+4,914
+(1,886)
+(3,369)
+(125)
+1,976
+(12,789)
+Net fee and commission income/(expense)
+29,318
+41,806
+14,805
+3,195
+(3,367)
+1,776
+(325)
+(1,224)
+121
+53,019
+4,421
+52,876
+80,985
+74,011
+Operating profit
+(88,161)
+(846)
+(7)
+(4)
+(3,064)
+(9,147)
+(75,093)
+Impairment losses on assets
+(173,859)
+2,930
+(8,440)
+(24,900)
+(2,374)
+(16,605)
+(69,065)
+(55,405)
+Operating expenses
+483,761
+(2,930)
+18,818
+26,604
+2,640
+5,018
+1,697
+221,741
+transferred
+associated
+assets
+liabilities
+assets
+liabilities
+Repurchase agreements
+108,146
+104,434
+Income tax expense
+222,903
+(53)
+10,316
+1,663
+3,105
+52,876
+80,985
+74,011
+Profit before income tax
+1,162
+(53)
+784
+(34)
+465
+Share of results of associates and joint ventures
+9,532
+associated
+72,545
+204,509
+1,144
+(2,863)
+3,400
+12,105
+39,287
+35,947
+Net fee and commission income/(expense)
+(12,109)
+1,727
+(66)
+(2,863)
+(1,095)
+(1,760)
+(5,262)
+(2,790)
+Fee and commission expense
+100,800
+(2,056)
+1,210
+4,495
+13,865
+44,549
+38,737
+11,820
+1,529
+30,090
+3,907
+124,563
+Fee and commission income
+(329)
+159,197
+88,691
+1,563
+Operating income
+52,589
+(2,674)
+19,483
+23,924
+235
+1,123
+8,559
+1,939
+Other operating income
+2,406
+357
+671
+122
+1,235
+3
+18
+Net gains on financial investments
+1,686
+73
+346
+1,872
+373
+(3,487)
+946
+Net trading gains/(losses)
+91
+transferred
+Carrying
+amount of
+3,064
+818
+(82,098)
+622,616
+Interest expense
+(143,490)
+(90,434)
+(128,679)
+(328)
+(64)
+(3,330)
+82,098
+(284,227)
+Net interest income/(expense)
+165,042
+110,402
+61,569
+888
+3,000
+(2,512)
+338,389
+7,908,168
+70,499
+139,945
+325,825
+12,799
+338,624
+1,216
+Segment liabilities
+190,248
+308,532
+41,864
+17,043
+Credit commitments
+2,859,851
+1,133,160
+3,993,011
+318
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Segment reporting (Continued)
+As at and for the year ended 31 December 2017
+Corporate
+Personal
+Treasury
+banking
+banking
+operations
+Investment
+banking
+Insurance
+Other
+Elimination
+Total
+Interest income
+200,836
+Carrying
+amount of
+8,846,697
+2,960,947
+6,225
+1,525
+94
+113
+870
+36,441
+3,918
+(329)
+45,922
+16,769
+Credit commitments
+2,869,323
+1,001,309
+3,870,632
+319
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Transfers of financial assets
+The Group enters into transactions in the normal course of business by which it transfers
+recognised financial assets to third parties or to special purpose entities. In some cases
+where these transferred financial assets qualify for derecognition, the transfers may give rise
+to full or partial derecognition of the financial assets concerned. In other cases where the
+transferred assets do not qualify for derecognition as the Group has retained substantially all
+the risks and rewards of these assets, the Group continued to recognise the transferred assets.
+Repurchase agreements
+Transferred financial assets that do not qualify for derecognition mainly include debt
+securities held by counterparties as collateral under repurchase agreements and securities
+lent to counterparties under securities lending agreements. The counterparties are allowed
+to sell or re-pledge those securities in the absence of default by the Group, but have an
+obligation to return the securities upon maturity of the contract. If the value of securities
+increases or decreases, the Group may in certain circumstances, require or be required to
+pay additional cash collateral. The Group has determined that the Group retains substantially
+all the risks and rewards of these securities and therefore has not derecognised them. In
+addition, the Group recognises a financial liability for cash received as collateral.
+The following table analyses the carrying amount of the above-mentioned financial assets
+transferred to third parties that did not qualify for derecognition and their associated
+financial liabilities:
+As at 31 December 2018 As at 31 December 2017
+Carrying
+amount of
+Carrying
+amount of
+4,894
+5,826,209
+Depreciation and amortisation
+129
+53,067
+125,765
+161,766
+(83,867)
+(68)
+(83,935)
+(83,706)
+19,450,244
+17,180
+19,467,424
+17,890,745
+Other segment items:
+Intersegment net interest income/(expense)
+27,889
+(80,159)
+54
+(803)
+Intersegment net fee and commission
+income/(expense)
+203
+810
+105
+(385)
+(1,274)
+Capital expenditure
+4,266
+4,719
+226
+141
+1,059
+293,376
+2,553,530
+27,719
+2,332,126
+Credit commitments
+Financial
+98,567
+98,567
+48,613
+49,195
+759
+10,981
+10,981
+8,561
+2,420
+39,237
+39,237
+39,237
+Asset-backed securitisations
+assets at
+fair value
+asset management plans
+Fund investments
+As at 31 December 2018
+loss
+Total
+cost
+income
+or loss
+Structured entity type
+exposure to
+amortised
+profit comprehensive
+Maximum
+assets at
+other
+Investment trusts and
+Financial
+Investment
+Debt investments
+1,307
+33,469
+35,525
+2,014
+Asset-backed securitisations
+7,450
+7,450
+7,134
+316
+asset management plans
+Investment trusts and
+15,000
+15,000
+34,847
+34,847
+26,439
+15,000
+Wealth management plans
+through
+profit
+Structured entity type
+or loss
+securities
+available
+for sale
+securities classified as
+Maximum
+through
+held to
+maturity receivables
+exposure
+Total
+to loss
+As at 31 December 2017
+Fund investments
+8,408
+loans and
+72,315
+Financial
+fair value
+45 Transfers of financial assets (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+320
+58,333
+59,494
+38,831
+6,781
+32,050
+303,945
+48,106
+(31,176)
+Credit assets transfers
+(50,335)
+(18,318)
+(283,189)
+89,166
+38,798
+50,368
+587,134
+Fee and commission income
+Net interest income
+Interest expense
+Interest income
+Elimination
+and regions
+Subtotal
+Other
+(32,017)
+The Group enters into credit asset transfers in the normal course of business during which it
+transfers credit assets to special purpose entities which in turn issue asset-backed securities
+or fund shares to investors. The Group may acquire some asset-backed securities and fund
+shares at the subordinated tranche level, and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to
+derecognise the associated credit assets by evaluating the extent to which it retains the risks
+and rewards of the assets.
+With respect to the credit assets that were securitised and qualified for derecognition,
+the Group derecognised the transferred credit assets in their entirety. The corresponding
+total carrying amount of asset-backed securities held by the Group in the securitisation
+transactions was RMB1,273 million as at 31 December 2018 (31 December 2017:
+RMB1,717 million), which also approximates the Group's maximum exposure to loss.
+For those in which the Group has neither transferred nor retained substantially all the
+risks and rewards of the transferred credit assets, and retained control of the credit
+assets, the transferred credit assets are recognised in the statement of financial position
+to the extent of the Group's continuing involvement. The carrying amount at the time of
+transfer of the original credit assets, which the Group determined that it has continuing
+involvement through acquiring some tranches, was RMB43,080 million for this year
+(2017: RMB35,769 million) and the carrying amount of assets that the Group continues to
+recognise in the statement of financial position was RMB9,639 million as at 31 December
+2018 (31 December 2017: RMB5,768 million).
+fair value
+assets at
+assets at
+Financial
+Financial
+The interests held by the Group in the structured entities sponsored by other financial institutions
+through direct investments are set out as below:
+Structured entities sponsored by other financial institutions
+46.1 Interests in the unconsolidated structured entities (Continued)
+46 Interests in the structured entities (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+322
+In addition, the total carrying amount as at the transfer date of credit assets transferred by the
+Group into the unconsolidated structured entities was RMB163 million for the year ended
+31 December 2018 (2017: RMB15,874 million). For description of the portion of asset-backed
+securities issued by above structured entities and held by the Group, refer to Note V.45.
+321
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+through
+46 Interests in the structured entities
+46.1 Interests in the unconsolidated structured entities
+The interests held by the Group in the unconsolidated structured entities are set out as below:
+Structured entities sponsored by the Group
+In conducting the asset management business in Chinese mainland, the Group established
+various structured entities to provide customers specialised investment opportunities
+within narrow and well-defined objectives, including non-guaranteed wealth management
+products, publicly offered funds and asset management plans, and earned management fee,
+commission and custodian fees in return.
+As at 31 December 2018, the balance of the above unconsolidated bank wealth management
+products sponsored by the Group amounted to RMB1,157,201 million (31 December 2017:
+RMB1,157,736 million). The balance of unconsolidated publicly offered funds and asset
+management plans sponsored by the Group amounted to RMB762,725 million (31 December
+2017: RMB802,405 million).
+For the year ended 31 December 2018, the above-mentioned management fee, commission
+and custodian fee amounted to RMB9,041 million (2017: RMB11,247 million).
+As at 31 December 2018, the balance of interest and commission receivable held by the Group
+in above-mentioned structured entities are not material. For the purpose of asset-liability
+management, wealth management products may require short-term financing from the Group
+and other banks. The Group is not contractually obliged to provide financing. After internal risk
+assessment, the Group may enter into repurchase and placement transactions with these wealth
+management products in accordance with market principles. For the year ended 31 December
+2018, the maximum balance of such financing provided by the Group to the unconsolidated
+wealth management products was RMB122,322 million (2017: RMB31,049 million). Such
+financing provided by the Group was included in “Placements with and loans to banks and
+other financial institutions". As at 31 December 2018, the balance of the above transactions was
+RMB107,000 million (31 December 2017: RMB31,049 million). The maximum exposure to loss
+of those placements approximated to their carrying amount.
+The Group is principally involved with structured entities through financial investments, asset
+management and credit assets transfers. These structured entities generally finance the purchase
+of assets by issuing securities or by other means. The Group determines whether or not to
+consolidate these structured entities depending on whether the Group has control over them.
+Group
+72,315
+The Group's consolidated structured entities mainly consist of open-end funds, private equity
+funds, trusts for assets-backed securities, and special-purpose companies. The Group controls
+these entities because the Group has power over, is exposed to, or has rights to variable returns
+from its involvement with these entities and has the ability to use its power over these entities
+to affect the amount of the Group's returns. Except for providing financial guarantees for the
+companies established solely for financing purpose, the Group does not provide financial or other
+support to the other consolidated structured entities.
+8,681
+Other liabilities
+(22,446)
+22,446
+22,446
+Repurchase agreements
+12,686
+40,691 (25,976) (2,029)
+40,691
+Derivatives
+As at 31 December 2018
+amount
+pledged
+position instruments*
+(8,072)
+position
+collateral
+Financial
+of financial
+Cash
+financial position
+in the statement of
+Amounts not set off
+Amounts
+presented
+in the
+statement
+Gross amounts
+amounts of offset in the
+recognised statement
+financial of financial
+liabilities
+Gross
+Financial liabilities subject to offsetting, enforceable master netting arrangements and
+similar agreements are analysed as below:
+47 Offsetting financial assets and financial liabilities (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+Net
+609
+609
+Total
+325
+cash and non-cash collateral have been received/pledged in respect of the transactions
+described above.
+the counterparty has an offsetting exposure with the Group and a master netting or
+similar arrangement (including ISDA master agreement and Global Master Netting
+Agreement) is in place with a right of setting off only in the event of default,
+insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and
+Derivatives and reverse repo/repurchase agreements included in the amounts are not set off
+in the statement of financial position where:
+Financial assets and financial liabilities are offset and the net amount is reported in the
+statement of financial position when there is a legally enforceable right to offset the
+recognised amounts and there is an intention to settle on a net basis, or realise the asset and
+settle the liability simultaneously (“the offset criteria”).
+* Including non-cash collateral
+8,052
+(619)
+45,196 (36,525)
+(8,814)
+54,010
+Total
+602
+602
+(8,814)
+9,416
+Other liabilities
+71,818
+(8,072)
+63,746
+(48,422)
+(2,029)
+13,295
+(Amount in millions of Renminbi, unless otherwise stated)
+As at 31 December 2017
+32,508
+Repurchase agreements
+12,086
+32,508 (24,439)
+12,086 (12,086)
+(619)
+7,450
+Derivatives
+46.2 Consolidated structured entities
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+4,350
+Reverse repo agreements
+13,376
+(2,891)
+42,257 (25,990)
+42,257
+Derivatives
+As at 31 December 2018
+amount
+received
+Net
+collateral
+Cash
+financial position
+4.350
+in the statement of
+Amounts
+presented
+in the
+statement
+of financial Financial
+position instruments*
+financial of financial
+assets position
+recognised statement
+Gross
+amounts
+Gross
+amounts of offset in the
+Financial assets subject to offsetting, enforceable master netting arrangements and similar
+agreements are analysed as below:
+47 Offsetting financial assets and financial liabilities
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+323
+Amounts not set off
+(4,350)
+Other assets
+11,727
+324
+13,199
+(3,726)
+(34,303)
+51,228
+(8,814)
+60,042
+Total
+5,758
+5,758
+(8,814)
+14,572
+Other assets
+(9,616)
+9,616
+9,616
+Reverse repo agreements
+(8,072)
+3,655
+3,655
+Total
+58,334
+(8,072)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+50,262
+17,031
+As at 31 December 2017
+Derivatives
+35,854
+35,854 (24,687) (3,726)
+7,441
+(30,340) (2,891)
+3,412,867
+mainland
+BOCHK
+9,638
+5,435
+15,073
+4,336
+(1,446)
+Net trading (losses)/gains
+(4,820)
+2,419
+1,704
+4,123
+2,383
+Net gains on financial investments
+821
+980
+70,728
+597
+8
+Other operating income (¹)
+Operating income
+19,045
+17,820
+18,808
+36,628
+129
+(3,213)
+370,704
+61,302
+33,844
+95,146
+22,570
+1,577
+Net fee and commission income
+1,804
+(1,825)
+Interest income
+Interest expense
+Net interest income
+540,129
+43,236
+30,242
+73,478
+(255,199)
+(12,791)
+(22,942)
+(35,733)
+37,780
+(22,066)
+(28,771)
+28,771
+284,930
+30,445
+7,300
+(4,888)
+(1,532)
+(3,356)
+(7,200)
+Fee and commission expense
+(3,250)
+(4,659)
+6,161
+6,967
+12,994
+77,928
+Fee and commission income
+15,714
+37,745
+19,961
+Elimination
+Operating expenses
+(126,351)
+2,181,757
+168
+Total assets
+15,503,536
+Include: non-current assets (2)
+100,449
+Segment liabilities
+14,285,717
+2,181,925
+25,340
+2,001,454
+1,335,266
+16,853
+1,352,119
+121,829
+1,234,264
+3,517,023
+17,021
+3,534,044
+147,169
+3,235,718
+1,911,087
+(1,481,243)
+19,450,244
+159
+1,911,087
+5,590
+1,850,392
+19,467,424
+(161)
+(1,481,082)
+17,890,745
+M
+Other segment items:
+Intersegment net interest (expense)/income
+Intersegment net fee and commission income/(expense)
+(9,245)
+261
+1,657
+Capital expenditure
+14,084
+34
+1,281
+Depreciation and amortisation
+11,467
+(1,481,243)
+Investments in associates and joint ventures
+15,503,377
+Segment assets
+(26,649)
+(16,523)
+(43,172)
+(6,265)
+1,929
+Impairment losses on assets
+(85,286)
+(926)
+(796)
+(1,722)
+(1,153)
+Operating profit
+159,067
+33,727
+16,525
+50,252
+15,152
+Profit for the year
+Income tax expense
+(2,730)
+15,152
+51,414
+17,673
+(1)
+33,741
+Profit before income tax
+1,162
+1,148
+14
+Share of results of associates and joint ventures
+(2,730)
+159,067
+Other countries
+and regions
+Other
+2,859
+17
+(69)
+(52)
+10
+16,129
+14,600
+17,746
+32,346
+234
+Operating income
+393,044
+58,042
+31,932
+Net gains/(losses) on financial investments
+Other operating income (1)
+89,974
+Operating expenses
+(1)
+(131,958)
+(23,322)
+(16,634)
+(39,956)
+(6,967)
+Impairment losses on assets
+(98,872)
+(1,048)
+(66)
+(1,114)
+692
+Operating profit
+23,577
+2,036
+4,766
+2,444
+Chinese
+Hong Kong, Macau and Taiwan
+As at and for the year ended 31 December 2018
+316
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Segment reporting (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+16,930
+77,836
+12,612
+6,691
+19,303
+6,169
+Fee and commission expense
+2,322
+(83)
+Net trading (losses)/gains
+4,367
+14,083
+5,030
+162,214
+9,053
+Net fee and commission income
+(1,802)
+(5,220)
+(1,661)
+(3,559)
+(7,642)
+70,194
+Subtotal
+33,672
+48,904
+Capital expenditure
+10,511
+Depreciation and amortisation
+11,175
+Credit commitments
+3,519,912
+69
+1,042
+1,036
+278,653
+13,534
+1,555
+29,798
+4,449
+102,467
+15,600
+1,624
+(5,591)
+30,840
+5,485
+381,120
+(236)
+513
+383
+(1,436)
+2,066
+462,753
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Segment reporting (Continued)
+As at and for the year ended 31 December 2017
+317
+Hong Kong, Macau and Taiwan
+Chinese
+BOCHK
+Other countries
+mainland
+Group
+(370,774)
+(10,009)
+48
+Intersegment net fee and commission income/(expense)
+Intersegment net interest (expense)/income
+17,302
+Share of results of associates and joint ventures
+10
+Profit before income tax
+162,224
+(12)
+33,660
+2,112
+17,344
+2,100
+51,004
+17,302
+0 | 0 || 1 0 0 ||
+Income tax expense
+Profit for the year
+Segment assets
+Investment in associates and joint ventures
+16,925,075
+7,231
+2,553,366
+164
+Total assets
+Other segment items:
+(161)
+(1,871,581)
+5,837
+1,943,129
+(1,871,742)
+2,009,680
+(1,871,742)
+15,232
+2,009,680
+1,627,527
+15,974
+1,643,501
+143,779
+1,512,393
+Profit for the year
+100,098
+15,625,811
+Segment liabilities
+Include: non-current assets (2)
+16,932,306
+4,180,893
+16,138
+4,197,031
+171,498
+3,844,519
+(37,917)
+138,275
+(22,440)
+1,444,432
+526,127
+222,462
+154,313
+8,596
+138,832
+99,714
+294,388
+As at 31 December 2018
+(61)
+61
+earnings
+29
+(58,603)
+Other comprehensive income
+transferred to retained
+Dividends
+22,440
+regulatory reserves
+(16,038)
+16,038
+Appropriation to general and
+Appropriation to statutory reserves
+177,897
+159,460
+18,437
+Total comprehensive income
+(58,603)
+329
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+profits
+reserves
+reserves
+income
+reserve
+Undistributed
+regulatory
+Statutory
+Capital comprehensive
+equity
+capital instruments
+Share
+General and
+Other
+Other
+Dividends
+Appropriation to general
+and regulatory reserves
+statutory reserves
+Appropriation to
+Total comprehensive income
+As at 1 January 2017
+48.2 The Bank's statement of changes in equity (Continued)
+The Bank's statement of financial position and changes in equity (Continued)
+48
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+1,325,138
+463,809
+200,022
+138,275
+As at 31 December 2017
+48.2 The Bank's statement of changes in equity
+The Bank's statement of financial position and changes in equity (Continued)
+48
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+328
+28
+Director
+LIU Liange
+327
+Director
+CHEN Siqing
+Approved and authorised for issue by the Board of Directors on 29 March 2019.
+18,543,033
+Total equity and liabilities
+1,357,430
+1,444,432
+Total equity
+507,481
+526,127
+Undistributed profits
+200,022
+Share
+Total
+Other
+equity
+capital instruments
+General and
+(9,902)
+138,832
+99,714
+294,388
+(32,292)
+(43,672)
+11,380
+As at 1 January 2018
+impact of adopting IFRS 9
+Changes in accounting policies -
+1,357,430
+507,481
+200,022
+138,275
+(21,282)
+138,832
+99,714
+294,388
+Total
+profits
+reserves
+reserves
+income
+reserve
+regulatory Undistributed
+Statutory
+Capital comprehensive
+Other
+222,462
+294,388
+138,832
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+333
+The Bank implemented a customer credit rating system based on the PD model. The PD
+model uses the principle of logistic regression to predict the PD for customers in the coming
+year. According to the calculated PD value, the risk rating of the customer is obtained
+through the relevant mapping relationship table. The Group conducts back-testing of the
+model according to the customer's actual default each year, so that the model calculation
+results are closer to the objective fact.
+Loss: principal and interest of loans cannot be recovered or only a small portion can be
+recovered after taking all possible measures and resorting to necessary legal procedures.
+Doubtful: loans for which borrowers cannot pay back the principal and interest of loans in
+full and significant losses will be incurred by the Group even when guarantees are executed.
+Substandard: loans for which borrowers' ability to service loans is apparently in question
+and borrowers cannot depend on their normal business revenues to pay back the principal
+and interest of loans. Certain losses might be incurred by the Group even when guarantees
+are executed.
+Special-mention: loans for which borrowers are still able to service the loans currently,
+although the repayment of loans might be adversely affected by some factors.
+Pass: loans for which borrowers can honour the terms of the contracts, and there is no reason
+to doubt their ability to repay the principal and interest of loans in full and on a timely basis.
+The five categories are defined as follows:
+The Group measures and manages the credit quality of loans and advances to corporate
+and personal customers based on the Guideline for Loan Credit Risk Classification (the
+"Guideline"), which requires commercial banks to classify their corporate and personal
+loans into five categories: pass, special-mention, substandard, doubtful and loss, among
+which loans classified in the substandard, doubtful and loss categories are regarded as non-
+performing loans. Off-balance sheet commitments with credit exposures are also assessed
+and categorised with reference to the Guideline. For operations in Hong Kong, Macau,
+Taiwan and other countries and regions, where local regulations and requirements are more
+prudent than the Guideline, the credit assets are classified according to local regulations and
+requirements.
+(Amount in millions of Renminbi, unless otherwise stated)
+(1) Loans and advances to customers and off-balance sheet commitments (Continued)
+Credit risk (Continued)
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+332
+For credit risk arising from off-balance sheet commitments, the Group manages the risks
+according to the characteristics of the products. These mainly include loan commitments,
+guarantees, bill acceptances and letters of credit. Loan commitments, guarantees, bill
+acceptances and standby letters of credit carry similar credit risk to loans and the Group
+takes a similar approach on risk management. Documentary and commercial letters of credit
+are written undertakings by the Group on behalf of a customer authorising a third party to
+draw drafts on the Group up to a stipulated amount under specific terms and conditions
+and are collateralised by the underlying shipment documents of goods to which they relate
+or deposits and are therefore assessed to have less credit risk than a direct loan. Besides,
+the Group monitors the term to maturity of off-balance sheet commitments and those with
+longer-terms are assessed to have greater credit risk than shorter-term commitments.
+The Group mainly measures the credit risk of corporate loans and advances based on the
+PD and financial status of customers' agreed obligations, and considering the current credit
+exposure and possible future development trends. For individual customers, the Group uses
+a standard credit approval process to assess the credit risk of individual loans, and uses a
+scorecard model based on historical LGD to measure the credit risk of credit cards.
+The Credit Management Department is responsible for centrally monitoring and evaluating
+the credit risk of granting loans and advances to customers and off-balance sheet credit
+commitments, and reporting to senior management and the Board of Directors on a regular
+basis.
+(1) Loans and advances to customers and off-balance sheet commitments
+3.1 Credit risk measurement (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Credit risk (Continued)
+335
+In order to manage the exposure to credit risk, the Group has adopted credit policies and
+procedures that are reviewed and updated by the Credit Management Department and
+the Credit Approval Department at the Head Office. The credit approval process for both
+corporate loans and personal loans can be broadly divided into three stages: (1) credit
+origination and assessment; (2) credit review and approval; and (3) fund disbursement and
+post-disbursement management.
+(i) Loans and advances and off-balance sheet commitments
+(1) Credit risk limits and controls
+The Group manages limits and controls concentrations of credit risk in particular, to
+individual customers and to industries.
+3.2 Credit risk limit control and mitigation policies
+The Group has policies to maintain strict control limits on net open derivative positions
+based on the notional amount and term. At any time, the amount subject to credit risk is
+limited to the current fair value of instruments that are favourable to the Group (i.e. assets
+for which fair value is positive). The derivative credit risk exposure is managed as part of
+the overall exposure lending limits set for customers and financial institutions. Collateral
+or other security is not usually obtained for credit risk exposures on these financial
+instruments.
+The Group manages the credit risk within debt securities by monitoring the external credit
+rating, such as Standard & Poor's ratings or their equivalents, of the security, the internal
+credit rating of the issuers of debt securities, and the credit quality of underlying assets
+of securitisation products, including review of default rates, prepayment rates, industry
+and sector performance, loss coverage ratios and counterparty risk, to identify exposure to
+credit risk.
+Credit risk within debt securities arises from exposure to movements in credit spreads,
+default rates and loss given default, as well as changes in the credit of underlying assets.
+(3) Debt securities and derivatives
+3.1 Credit risk measurement (Continued)
+Credit risk (Continued)
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+334
+The Group manages the credit quality of due from, placements with and loans to banks
+and other financial institutions considering the size, financial position and the internal and
+external credit rating of banks and financial institutions. In response to adverse credit market
+conditions, various initiatives were implemented since 2008 to better manage and report
+credit risk, including establishing a special committee which meets periodically and on an ad
+hoc basis to discuss actions in response to market changes impacting the Group's exposure
+to credit risk, and formulating a watch list process over counterparty names at risk.
+(2) Due from, placements with and loans to banks and other financial institutions
+Management periodically reviews various elements of the Group's credit risk management
+process, in the context of loan portfolio growth, the changing mix and concentration of
+assets, and the evolving risk profile of the credit portfolio. From time to time, in this regard,
+refinements are made to the Group's credit risk management processes to most effectively
+manage the effects of these changes on the Group's credit risk. These refinements include,
+among other things, adjustments to portfolio level controls, such as revisions to lists of
+approved borrowers, industry quotas and underwriting criteria. Where circumstances related
+to specific loans or a group of loans increase the Bank's credit risk, actions are taken, to
+the extent possible, to strengthen the Group's security position. The actions may include
+obtaining additional guarantors or collateral.
+The Group identifies credit risk collectively based on industry, geography and customer
+type. This information is monitored regularly by management.
+Five-category loan classifications and customer credit ratings are determined by the Head
+Office and tier 1 branch management under approved delegated authorities. The Bank
+performs centralised review on customer credit ratings and five-category loan classifications
+on an annual basis. Further, five-category loan classifications are re-examined on a quarterly
+basis. Adjustments are made to these classifications and ratings as necessary according to
+customers' operational and financial position.
+The customer credit ratings in the internal model are based on four categories of A, B, C and
+D which are further classified into fifteen grades as AAA, AA, A, BBB+, BBB, BBB-, BB+,
+BB, BB-, B+, B-, CCC, CC, C, and D. Credit grading D equates to defaulted customers
+while the others are assigned to performing customers.
+(1) Loans and advances to customers and off-balance sheet commitments (Continued)
+3.1 Credit risk measurement (Continued)
+3.1 Credit risk measurement
+Credit risk exposures arise principally in lending activities and debt securities investment
+activities. There is also credit risk in off-balance sheet financial instruments, such as
+derivatives, loan commitments, bill acceptance, letters of guarantee and letters of credit.
+The Group takes on exposure to credit risk, which is the risk that a customer or counterparty
+will cause a financial loss for the Group by failing to discharge an obligation. Credit risk is
+one of the most significant risks for the Group's business.
+Credit risk
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,357,430
+507,481
+200,022
+(21,282)
+138,832
+99,714
+294,388
+As at 31 December 2017
+(56,211)
+(56,211)
+(13,382)
+13,382
+(15,300)
+15,300
+134,631
+151,472
+(16,841)
+1,279,010
+440,902
+186,640
+122,975
+(4,441)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+99,714
+49 Events after the financial reporting date
+As part of the Group's strategic restructuring plan in the ASEAN region, on 4 December
+2018, the Bank (as seller) and BOCHK (as buyer) entered into a sale and purchase
+agreement in relation to the sale and purchase of the Bank's ownership of Bank of China
+Limited, Vientiane Branch. The equity transfer was completed on 21 January 2019.
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+331
+The Group manages the risks at the branch level through direct reporting from the branches
+to the relevant departments responsible for risk management at the Head Office. Business
+line related risks are monitored through establishing specific risk management teams within
+the business departments. The Group monitors and controls risk management at subsidiaries
+by appointing members of their boards of directors and risk management committees as
+appropriate.
+Within this framework, the Group's senior management has the overall responsibility
+for managing all aspects of risks, including implementing risk management strategies,
+initiatives and credit policies and approving internal policies, measures and procedures
+related to risk management. The Risk Management Department, the Credit Management
+Department, the Financial Management Department and other relevant functional
+departments are responsible for monitoring financial risks.
+The Board of Directors is responsible for establishing the overall risk appetite of the Group
+and reviewing and approving the risk management objectives and strategies.
+Financial risk management framework
+2
+The most significant types of risks to the Group are credit risk, market risk and liquidity
+risk. Market risk includes interest rate risk, currency risk and other price risk.
+The Group has designed a series of risk management policies and has set up controls to
+analyse, identify, monitor and report risks by means of relevant and up-to-date information
+systems. The Group regularly reviews and revises its risk management policies and systems
+to reflect changes in markets, products and emerging best practice.
+The Group's primary risk management objectives are to maximise value for equity holders
+while maintaining risk within acceptable parameters, optimising capital allocation and
+satisfying the requirements of the regulatory authorities, the Group's depositors and other
+stakeholders for the Group's prudent and stable development.
+Overview
+1
+VI FINANCIAL RISK MANAGEMENT
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+330
+On 25 January 2019, the Bank issued write-down undated capital bonds (the "Bonds") in an
+aggregate amount of RMB40 billion in the domestic interbank bond market with a coupon
+rate of 4.50%. The issuance of the Bonds was completed on 29 January 2019. The funds
+raised from the issuance of the Bonds will be used to replenish the Bank's additional tier-1
+capital.
+Issuance of undated capital bonds
+The dividend distribution of Domestic Preference Shares (Second Tranche) was approved
+by the Board of Directors of the Bank at the Board meeting held on 25 January 2019. The
+dividend of RMB1,540 million was paid at a rate of 5.5% on 13 March 2019. The dividend
+payable was not reflected in liabilities of the financial statements.
+Dividend distribution plan of Domestic Preference Shares (Second Tranche)
+Strategic restructuring plan in the ASEAN region
+General and regulatory reserves
+17,165,879
+154,313
+- held to maturity
+1,193,010
+N/A
+available for sale
+N/A
+2,679,433
+N/A
+financial assets at amortised cost
+1,316,998
+comprehensive income
+financial assets at fair value through other
+109,022
+225,230
+financial assets at fair value through profit or loss
+N/A
+2,028,333
+loans and receivables
+N/A
+2,002
+Investment properties
+83,439
+82,440
+Property and equipment
+140,000
+127,192
+Consolidated structured entities
+226
+7,317
+Investments in associates and joint ventures
+106,404
+111,884
+Investments in subsidiaries
+402,951
+3,733,316
+2,025
+4,221,661
+9,443,898
+413,600
+2017
+138,275
+other financial institutions
+Cash and due from banks and
+ASSETS
+Balances with central banks
+48.1 The Bank's statement of financial position
+48
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+The Bank's statement of financial position and changes in equity
+1,958,832
+513,836
+2,129,262
+Placements with and loans to banks and
+10,157,694
+Loans and advances to customers, net
+72,055
+96,497
+Derivative financial assets
+166,687
+175,333
+Precious metals
+7,141
+8,060
+bank notes issued
+Government certificates of indebtedness for
+585,638
+1,099,001
+other financial institutions
+Financial investments
+Deferred income tax assets
+As at 31 December
+2018
+47,933
+Other liabilities
+121
+Deferred income tax liabilities
+3,027
+2,825
+Retirement benefit obligations
+126,520
+28,413
+Current tax liabilities
+423,485
+704,886
+Bonds issued
+11,981,597
+12,999,376
+23,826
+113
+281,662
+Total liabilities
+17,098,601
+38,208
+Statutory reserves
+(21,282)
+8,596
+Other comprehensive income
+138,832
+138,832
+99,714
+99,714
+Other equity instruments
+294,388
+294,388
+Share capital
+EQUITY
+15,808,449
+Due to customers
+89,647
+Capital reserve
+Derivative financial liabilities
+The Bank's statement of financial position and changes in equity (Continued)
+48
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+48.1 The Bank's statement of financial position (Continued)
+BANK OF CHINA LIMITED
+18,543,033
+326
+134,019
+43,312
+Other assets
+74,855
+17,165,879
+LIABILITIES
+Total assets
+2017
+As at 31 December
+2018
+2,642
+Financial liabilities held for trading
+586,749
+Placements from banks and other financial institutions
+7,462
+973,120
+537,448
+6,231
+Bank notes in circulation
+Due to central banks
+1,476,244
+1,721,071
+847,493
+8,237
+Due to banks and other financial institutions
+6.03%
+39.18%
+Central and Southern China
+2,499,434
+26.95% 2,242,985
+9,273,549
+Western China
+12.88% 1,094,997
+517,581
+12.76%
+Total
+26.13%
+1,194,287
+Northeastern China
+1,364,869
+15.70%
+5.41%
+39.06% 3,362,753
+3,622,159
+Eastern China
+501,420
+1,456,249
+Northern China
+Amount % of total
+% of total
+Amount
+100.00%
+2017
+2018
+15.90%
+8,583,185 100.00%
+3.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+(Continued)
+BANK OF CHINA LIMITED
+Total
+As at 31 December
+339
+3,993,011
+3,870,632
+24,548,515
+22,682,894
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+341
+Credit risk (Continued)
+As at 31 December 2018, 46.91% of the Group's total maximum credit exposure is derived
+from loans and advances to customers (31 December 2017: 46.93%) and 20.09% represents
+investments in debt securities (31 December 2017: 19.58%).
+340
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Subtotal
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The table above represents a worst case scenario of credit risk exposure of the Group as
+at 31 December 2018 and 2017, without taking into account any collateral held, master
+netting agreements or other credit enhancements attached. For on-balance sheet assets, the
+exposures set out above are based on net carrying amounts as reported in the statement of
+financial position.
+Chinese mainland
+882,791
+100.00% 10,896,558
+- Other pledged loans
+47.32% 3,755,618
+9.52%
+789,888
+43.76%
+9.20%
+Total
+9,273,549
+100.00% 8,583,185 100.00%
+345
+998,290
+Other countries and regions
+78.67%
+12.86%
+1,515,844
+Hong Kong, Macau and Taiwan
+4,388,094
+9,273,549
+Amount % of total
+Amount % of total
+2017
+2018
+As at 31 December
+Group
+(i) Analysis of loans and advances to customers by geographical area
+(1) Concentrations of risk for loans and advances to customers
+Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, industry, collateral type and analysis of overdue loans and advances to customers is
+presented below:
+3.5 Loans and advances
+3 Credit risk (Continued)
+2,791,454
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Chinese mainland
+100.00%
+immovable assets
+28.18%
+11,787,683
+Total
+8.94%
+12.29%
+78.77%
+8,583,185
+1,339,149
+8.47% 974,224
+5,082,489
+Other pledged loans
+1,231,352
+43.12% 4,410,349
+10.45% 1,067,355
+40.47%
+9.80%
+11,787,683
+18.86%
+100.00% 10,896,558
+Total
+Chinese mainland
+Unsecured loans
+Guaranteed loans
+Collateralised and
+other secured loans
+- Loans secured by
+property and other
+As at 31 December
+2018
+Amount % of total
+2017
+Amount % of total
+2,585,343
+1,417,321
+27.88% 2,418,477
+15.28% 1,619,202
+100.00%
+2,922,186
+Other
+countries
+and regions
+1,079,178
+PRC financial institution bonds
+Construction land use rights
+Real estate
+Automobiles
+Maximum loan-to-value ratio
+95%
+90%
+85%
+50%
+70%
+70%
+50%
+Mortgages to retail customers are generally collateralised by mortgages over residential
+properties. Other loans are collateralised depending on the nature of the loan.
+Publicly traded stocks
+337
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.2 Credit risk limit control and mitigation policies (Continued)
+(2) Credit risk mitigation policies (Continued)
+(i) Collateral and guarantees (Continued)
+For loans guaranteed by a third party guarantor, the Group will assess the guarantor's credit
+rating, financial condition, credit history and ability to meet obligations.
+Collateral held as security for financial assets other than loans and advances is determined
+by the nature of the instrument. Debt securities, treasury and other eligible bills are generally
+unsecured, with the exception of certain asset-backed securities and similar instruments,
+which are secured by portfolios of financial instruments.
+Collateral is also held as part of reverse repurchase agreements. Under such agreements, the
+Group is permitted to sell or repledge collateral in the absence of default by the owner of
+the collateral. Details of collateral accepted and which the Group is obligated to return are
+disclosed in Note V.41.3.
+(ii) Master netting arrangements
+The Group further restricts its exposure to credit losses by entering into master netting
+arrangements with counterparties with which it undertakes a significant volume of
+transactions. Master netting arrangements do not generally result in the offsetting of assets
+and liabilities in the statement of financial position, as transactions are usually settled on
+a gross basis. However, the credit risk associated with favourable contracts is reduced
+by a master netting arrangement to the extent that if a default occurs, all amounts with
+the customer are terminated and settled on a net basis. The Group's overall exposure to
+credit risk on derivative instruments subject to master netting arrangements can change
+substantially within a short period, as it is affected by each transaction subject to the
+arrangement.
+BANK OF CHINA LIMITED
+338
+PRC Treasury bonds
+Collateral
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.2 Credit risk limit control and mitigation policies (Continued)
+(1) Credit risk limits and controls (Continued)
+(i)
+Loans and advances and off-balance sheet commitments (Continued)
+Credit to corporate customers in the Chinese mainland is originated by the Corporate
+Banking Department at the Head Office and the Corporate Banking Department at branch
+level and submitted to the Credit Approval Department for due diligence and approval.
+All credit applications for corporate customers must be approved by the authorised credit
+application approvers at the Head Office and tier 1 branch level in the Chinese mainland,
+except for the low risk credit applications which are in accordance with the rules. The
+exposure to any one borrower, including banks, is restricted by credit limits covering on and
+off-balance sheet exposures.
+Personal loans in the Chinese mainland are originated by the Personal Banking Departments
+at branch level and must be approved by authorised approvers at tier 1 branch level in the
+Chinese mainland, except for individual pledged loans and government-sponsored student
+loans, which may be approved by authorised approvers at sub-branches below tier 1 level.
+High risk personal loans such as personal loans for business purposes in excess of certain
+limits must also be reviewed by the Risk Management Department.
+The Head Office also oversees the risk management of the branches in Hong Kong, Macau,
+Taiwan and other countries and regions. In particular, any credit application at these
+branches exceeding the authorisation limits is required to be submitted to the Head Office
+for approval.
+Deposit receipt
+Exposure to credit risk is also managed through regular analysis of the ability of borrowers
+and potential borrowers to meet interest and capital repayment obligations and by changing
+these lending limits where appropriate.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.2 Credit risk limit control and mitigation policies (Continued)
+(1) Credit risk limits and controls (Continued)
+(ii) Debt securities and derivatives
+The Group is also exposed to credit risk through investment activities and trading activities.
+Credit limits are established based on type of instruments and the credit quality of
+counterparties, securities issuers and the securities, and set limits are actively monitored.
+(2) Credit risk mitigation policies
+(i) Collateral and guarantees
+The Group has a range of policies and practices intended to mitigate credit risk. The most
+prevalent of these is the taking of security for funds advances (collateral) and guarantees,
+which is common practice. The Group implements guidelines on the acceptability of specific
+classes of collateral. The amount of acceptable collateral at the time of loan origination
+is determined by the Credit Management Department and is subject to loan-to-value ratio
+limits based on type and is monitored on an ongoing basis by the Credit Management
+Department. The principal collateral types for corporate loans and advances are:
+336
+Loan commitments and other credit commitments
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+173,892
+financial assets at fair value through other
+comprehensive income
+1,862,232
+(1) Concentrations of risk for loans and advances to customers (Continued)
+N/A
+- financial assets at amortised cost
+2,804,301
+N/A
+- available for sale
+- held to maturity
+N/A
+1,788,517
+279,472
+N/A
+- loans and receivables
+N/A
+414,025
+Other assets
+88,012
+189,328
+Subtotal
+20,555,504
+18,812,262
+Credit risk exposures relating to off-balance
+sheet items are as follows:
+Letters of guarantee issued
+1,070,825
+2,089,864
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+financial assets at fair value through profit or loss
+10,644,304
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.3 Impairment measurement for losses on assets
+Refer to Note II 4.6 for relevant policies.
+3.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+As at 31 December
+2018
+2017
+Credit risk exposures relating to on-balance
+sheet financial assets are as follows:
+Due from banks and other financial institutions
+363,176
+Balances with central banks
+Financial investments
+2,331,053
+Placements with and loans to banks and
+other financial institutions
+1,042,358
+575,399
+Government certificates of indebtedness for
+bank notes issued
+145,010
+129,350
+Derivative financial assets
+124,126
+94,912
+Loans and advances to customers, net
+11,515,764
+485,057
+2,227,614
+(ii) Analysis of loans and advances to customers by customer type
+62.33% 6,972,701
+Corporate loans and advances
+2.03%
+239,397
+Construction
+3.10%
+338,316
+2.72%
+320,369
+Mining
+2.62%
+285,598
+3.38%
+398,478
+Financial services
+5.51%
+5.50% 599,896
+648,849
+gas and water
+electricity, heating,
+Production and supply of
+As at 31 December 2018
+820,922
+7.77%
+915,793
+Real estate
+9.70%
+10.03% 1,056,755
+1,182,411
+207,201
+1.90%
+Water, environment and
+public utility management
+Subtotal
+4.48%
+3.43%
+28.10%
+29.72% 3,061,553
+3.62% 374,297
+4.33% 488,007
+426,338
+510,184
+Other
+Credit cards
+3,503,563
+Mortgages
+Personal loans
+63.99%
+Macau and
+Taiwan
+postal services
+7,347,598
+1.32%
+143,379
+1.34%
+157,879
+Other
+1.08%
+1.07% 117,419
+125,917
+Public utilities
+1.48%
+160,941
+1.42%
+167,811
+Subtotal
+Transportation, storage and
+14.29%
+15.46%
+Personal loans
+831,222
+828,592
+4,448,138
+Other
+864,749
+104,817
+107,817
+652,115
+Trade bills
+Corporate loans and advances
+As at 31 December 2017
+11,787,683
+3,482,932
+998,290
+9,273,549
+4,440,085
+49,119
+455,949
+3,935,017
+1,003,616
+6,343,982
+820,255
+964,102
+4,559,625
+128,916
+95,793
+778,907
+Total
+1,515,844
+4,440,085
+402,740
+6,107,952
+3,923,857
+1,685,179
+1,557,095
+14.21%
+12.86%
+1,516,354
+Commerce and services
+1,674,340
+Manufacturing
+Corporate loans and advances
+% of total
+Amount
+Amount % of total
+2017
+2018
+As at 31 December
+38,185
+Group
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+342
+974,224 10,896,558
+1,339,149
+8,583,185
+Total
+(iii) Analysis of loans and advances to customers by industry
+37.67% 3,923,857
+7.53%
+Total
+9,273,549
+40.58%
+42.43% 3,482,932
+3,935,017
+Total
+Subtotal
+4.33%
+371,287
+4.20%
+360,699
+4.43%
+3.99%
+411,145
+369,708
+Other
+100.00% 8,583,185 100.00%
+Credit cards
+34.01% 2,750,946
+3,154,164
+Mortgages
+Personal loans
+59.42%
+57.57% 5,100,253
+5,338,532
+Subtotal
+0.38%
+32,510
+1.23%
+1.16% 105,675
+0.34%
+31,272
+32.05%
+Other
+344
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Trade bills
+- Other
+Personal loans
+Total
+Hong Kong,
+Chinese
+mainland
+immovable assets
+36.01%
+- Loans secured by
+18.09%
+31.64%
+30.84% 3,447,319
+15.59% 1,971,535
+3,636,400
+1,837,442
+BANK OF CHINA LIMITED
+2017
+Amount % of total
+2018
+As at 31 December
+other secured loans
+Collateralised and
+Unsecured loans
+Guaranteed loans
+Group
+(iv) Analysis of loans and advances to customers by collateral type
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Amount % of total
+107,201
+property and other
+1.75%
+1,009,087
+postal services
+Transportation, storage and
+13.28%
+15.98%
+13.98% 1,371,246
+12.19% 1,140,012
+1,130,498
+Commerce and services
+1,296,509
+Manufacturing
+% of total
+2017
+2018
+Amount % of total Amount
+As at 31 December
+Corporate loans and advances
+Chinese mainland
+(iii) Analysis of loans and advances to customers by industry (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+343
+11,787,683 100.00% 10,896,558 100.00%
+Public utilities
+10.88% 918,214
+10.70%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+469,358
+Real estate
+1.70%
+157,594
+149,964
+Water, environment and
+2.02%
+173,373
+2.17%
+200,982
+Construction
+2.01%
+1.92% 172,973
+178,471
+Mining
+public utility management
+145,652
+1.70%
+4.69%
+electricity, heating,
+gas and water
+504,348
+Production and supply of
+487,941
+2.73%
+5.44%
+253,212
+5.06% 402,693
+5.68%
+Financial services
+Chinese mainland
+2,720
+1,454
+(1,407)
+1,313
+Other countries and regions
+459
+Total
+166,952
+(131,116)
+35,836
+As at 31 December 2017
+(995)
+1,813
+1,861
+(105,682)
+48,526
+Hong Kong, Macau and Taiwan
+Other countries and regions
+(991)
+(1,209)
+822
+652
+Total
+157,882
+(107,882)
+50,000
+154,208
+Hong Kong, Macau and Taiwan
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+(128,714)
+166,952
+353
+100.00%
+1.42% 157,882 100.00%
+1.45%
+352
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+34,064
+3 Credit risk (Continued)
+(iii) Impaired loans and advances (Continued)
+(d) Impaired loans and advances and related allowance by geographical area
+Allowance
+for
+Impaired
+loans
+impairment
+losses
+Net
+As at 31 December 2018
+Chinese mainland
+162,778
+3.5 Loans and advances (Continued)
+BANK OF CHINA LIMITED
+Total
+FOR THE YEAR ENDED 31 DECEMBER 2018
+collateral held
+139,108
+129,959
+135,421
+126,588
+48,353
+37,501
+45,404
+35,975
+Collateral of corporate loans and advances includes land, buildings, equipment and others.
+The fair value of collateral was estimated by the Group with reference to the latest available
+external valuations adjusted for recent experience in disposal of collateral as well as the
+market conditions.
+354
+Fair value of
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(3) Loans and advances rescheduled
+Rescheduling (referring to loans and other assets that have been restructured and
+renegotiated) is a voluntary or, to a limited extent, court-supervised procedure, through
+which the Group and a borrower and/or its guarantor, if any, rescheduled credit terms as a
+result of deterioration in the borrower's financial condition or of the borrower's inability
+to make payments when due. The Group reschedules a non-performing loan only if the
+borrower has good prospects. In addition, prior to approving the rescheduling of loans, the
+Group typically requires additional guarantees, pledges and/or collateral, or the assumption
+of the loan by a borrower with better repayment ability.
+Rescheduled loans are generally subject to a surveillance period of six months. During
+the surveillance period, rescheduled loans remain as non-performing loans and the Group
+monitors the borrower's business operations and loan repayment patterns. After the
+surveillance period, rescheduled loans may be upgraded to “Special-mention” upon review
+if certain criteria are met. If the rescheduled loans fall overdue or if the borrower is unable
+to demonstrate its repayment ability, these loans will be reclassified to "Doubtful” or below.
+All rescheduled loans within the surveillance period were determined to be impaired as at
+31 December 2018 and 2017.
+As at 31 December 2018 and 2017, within impaired loans and advances, rescheduled loans
+and advances that were overdue for 90 days or less were insignificant.
+355
+Total
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+48,869
+50,972
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+(iii) Impaired loans and advances (Continued)
+(e) Within the impaired corporate loans and advances, the portions covered and not covered by
+collateral held are as follows:
+Group
+As at
+As at
+Chinese mainland
+As at
+49,078
+As at
+2018
+2017
+2018
+2017
+Portion covered
+88,150
+78,987
+86,343
+77,719
+Portion not covered
+50,958
+31 December 31 December 31 December 31 December
+0.16%
+11,941
+3,674
+97.67%
+97.50% 1.76% 154,208
+162,778
+Chinese mainland
+of total loan ratio
+Amount
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+2017
+2018
+As at 31 December
+Group
+(a) Impaired loans and advances by geographical area
+1.80%
+(iii) Impaired loans and advances
+Hong Kong,
+2,720
+100.00%
+1.42% 157,882
+100.00%
+166,952
+Total
+0.19%
+1.18%
+1,861
+0.14%
+1.15%
+1,813
+0.18%
+0.15%
+1.63%
+0.87%
+1,454
+Other countries and regions
+Macau and Taiwan
+1.45%
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3 Credit risk (Continued)
+55,767
+16,101
+39,666
+Total
+22,982
+32,785
+10,893
+12,089
+5,208
+27,577
+As at 31 December 2018
+Corporate loans and advances
+Personal loans
+Total
+3 months
+1 month 1-3 months
+More than
+As at 31 December 2017
+3.5 Loans and advances (Continued)
+Corporate loans and advances
+9,370
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+349
+Collateral held against loans and advances to customers which have been overdue for more
+than 3 months principally includes properties, equipment and cash deposits.
+49,648
+18,992
+30,656
+Total
+21,563
+9,622
+Personal loans
+- 28,085
+18,715
+Chinese mainland
+As at 31 December
+2018
+82.31%
+17.69%
+139,108 83.32% 1.89% 129,959
+27,844 16.68% 0.63% 27,923
+Corporate loans and advances
+Personal loans
+of total loan ratio
+Amount
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+2017
+2018
+As at 31 December
+Group
+(b) Impaired loans and advances by customer type
+(iii) Impaired loans and advances (Continued)
+1.86%
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+0.71%
+166,952
+Personal loans
+Corporate loans and advances
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+of total loan ratio
+Amount
+2017
+2018
+As at 31 December
+Chinese mainland
+1.45%
+100.00%
+1.42% 157,882
+100.00%
+Total
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+18.31%
+32,565 21.12%
+28,244
+1.58%
+8.09%
+23,053 14.16%
+40,580 24.93%
+56,423 34.66%
+28,114 17.28%
+14,608 8.97%
+Western China
+Central and Southern China
+Eastern China
+Northeastern China
+Northern China
+of total loan ratio
+Amount
+% Impaired
+% Impaired
+of total loan ratio
+Amount
+2017
+2.07%
+6.29%
+1.56%
+55,365 35.90%
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+350
+1.80%
+100.00%
+Within
+1.76% 154,208
+Total
+1.20%
+8.49%
+1.11%
+24,948 16.18%
+1.12%
+1.22% 13,086
+1.65%
+162,778 100.00%
+Chinese mainland
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+346
+11,787,683 10,896,558 9,273,549 8,583,185
+4,440,085 3,923,857 3,935,017 3,482,932
+27,620
+21,563
+22,982
+27,357
+25,197
+27,923
+27,826
+27,844
+3,433,749
+3,870,737 3,884,678
+4,384,415
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Total
+3 Credit risk (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+274,150 7,164,061 6,549,415
+1,129 4,384,415 3,868,720
+6,889,911
+4,383,286
+Personal loans
+Corporate loans
+and advances
+Total
+Special-
+mention
+Pass
+Total
+2017
+2018
+Special-
+mention
+Pass
+As at 31 December
+Group
+The Group classifies loans and advances based on the Guideline and other relevant
+regulatory principles, as set out in Note VI.3.1. The loans and advances neither past due nor
+impaired are classified under these principles and guidelines as set out in the table below.
+(i) Loans and advances neither past due nor impaired
+3.5 Loans and advances (Continued)
+Subtotal
+- Impaired
+Past due but not impaired
+Chinese mainland
+2018
+2017
+2018
+Group
+As at 31 December
+Corporate loans and advances
+(2) Analysis of loans and advances to customers by overdue and impaired status
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2.33%
+2017
+Neither past due
+nor impaired
+7,164,061
+nor impaired
+Neither past due
+-
+Personal loans
+7,347,598 6,972,701 5,338,532 5,100,253
+Subtotal
+126,588
+261,697 6,811,112
+2,017 3,870,737
+28,085
+4,945,580
+5,170,326
+6,811,112
+31,630
+129,959
+139,108
+- Impaired
+44,429
+- Past due but not impaired
+32,785
+135,421
+135,421 83.19%
+27,357 16.81%
+Total
+275,279 11,548,476 10,418,135
+9,572
+21,934
+Corporate loans and advances
+As at 31 December 2017
+72,255
+20,874
+51,381
+Total
+27,826
+44,429
+11,476
+16,350
+9,398
+35,031
+As at 31 December 2018
+Corporate loans and advances
+Personal loans
+124
+Total
+31,630
+14,727
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+348
+56,827
+137
+20,029
+36,661
+Total
+25,197
+13
+10,457
+Personal loans
+More than
+3 months
+1 month 1-3 months
+Within
+236,318 5,170,326 4,705,978
+266 3,884,678 3,433,452
+4,934,008
+3,884,412
+Personal loans
+Corporate loans
+and advances
+Total
+mention
+Pass
+Total
+Special-
+2017
+2018
+Special-
+mention
+Pass
+As at 31 December
+Chinese mainland
+263,714 10,681,849
+239,602
+4,945,580
+297 3,433,749
+Total
+Group
+The total amount of loans and advances that were past due but not impaired is as follows:
+(ii) Loans and advances past due but not impaired
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+11,273,197
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+347
+8,379,329
+239,899
+236,584 9,055,004 8,139,430
+8,818,420
+FOR THE YEAR ENDED 31 DECEMBER 2018
+2.54% 126,588 82.09% 2.48%
+0.70% 27,620 17.91% 0.79%
+(ii) Loans and advances past due but not impaired (Continued)
+162,778 100.00%
+9,636
+Credit cards
+0.35%
+6.14%
+9,700
+0.32%
+6.12%
+10,225
+Mortgages
+Personal loans
+2.48%
+80.18%
+126,588
+2.54%
+81.12%
+135,421
+Subtotal
+11.29%
+2.33%
+3,671
+11.35%
+2.13%
+3,549
+5.77%
+Other
+2.34%
+5.80%
+4,174
+other countries and regions
+Hong Kong, Macau, Taiwan and
+1.80%
+97.67%
+1.76% 154,208
+97.50%
+162,778
+Total for Chinese mainland
+0.79%
+17.49%
+27,620
+0.70%
+27,357 16.38%
+Subtotal
+2.36%
+5.55%
+8,766
+2.03%
+4.49%
+7,496
+Other
+2.54%
+9,154
+0.23%
+0.15%
+242
+196
+0.05%
+0.08%
+127
+Financial services
+0.38%
+1.16%
+1,833
+0.39%
+1.17%
+4.46%
+0.74%
+8,518
+5.40%
+0.93%
+Real estate
+4,370
+2.62%
+0.93%
+5,624
+3.56%
+1.40%
+Production and supply of
+0.12%
+0.13%
+Mining
+5,494
+0.15%
+0.10%
+159
+Public utilities
+0.22%
+0.21%
+329
+0.78%
+0.73%
+1,223
+and public utility management
+2.50%
+Water, environment
+1.82%
+2,872
+1.21%
+1.45%
+2,423
+Construction
+3.51%
+3.84%
+6,065
+3.08%
+3.29%
+1.66%
+electricity, heating, gas and water
+1,952
+Total
+Chinese mainland
+Corporate loans and advances
+Manufacturing
+70,092
+Commerce and services
+41.98%
+23.11%
+5.41% 66,281
+3.41% 30,957
+41.98%
+4.83%
+19.61%
+0.17%
+2.72%
+Transportation, storage and
+postal services
+7,453
+Amount % of total loan ratio
+Amount % of total loan ratio
+38,579
+Impaired
+Impaired
+1.80%
+351
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+1.76% 154,208 100.00%
+3.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by overdue and impaired status (Continued)
+(iii) Impaired loans and advances (Continued)
+(c) Impaired loans and advances by geographical area and industry
+As at 31 December
+2018
+2017
+3 Credit risk (Continued)
+3,910
+147,742
+39,669
+191,321
+10,661
+84,541
+19,962
+66,600
+54,522
+654,770
+775,892
+426,214
+3,825,793
+181,126
+92,211
+115,164
+196
+52,064
+39,951
+86,721
+― Financial institutions
+519,245
+519,245
+― Policy banks
+64,016
+64,016
+- Public sectors and quasi-governments
+2,403,536
+2,403,536
+-Government
+Issuers in Chinese mainland
+As at 31 December 2017
+4,868,593
+331,208
+4,076,586
+460,799
+803,116
+77,678
+659,618
+65,820
+153,056
+24,663
+142,150
+117,569
+93,956
+― Corporate
+377,196
+6,773
+370,423
+Total
+Subtotal
+- Corporate
+- Financial institutions
+- Public sectors and quasi-governments
+- Governments
+other countries and regions
+Issuers in Hong Kong, Macau, Taiwan and
+3,657,241
+114,526
+3,171,023
+371,692
+Subtotal
+158,806
+158,806
+- China Orient
+188,811
+20,570
+106,092
+62,149
+322,827
+10,824
+59
+41,763
+Total loans and advances to customers which
+(71,356)
+(84,754)
+Less: total loans and advances to customers which have
+been overdue for less than 3 months
+1.86%
+1.87%
+Percentage
+have been overdue for more than 3 months
+202,842
+Subtotal
+3,991
+11,340
+5,773
+7,972
+193,078
+200,639
+219,951
+135,197
+131,486
+(5) Loans and advances three-staging exposure
+49,788
+49,788
+Substandard
+11,274,849
+342,363
+342,358
+Special-mention
+91,017
+11,183,826
+Pass
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+12-month ECL
+As at 31 December 2018
+Loans and advances to customers by five-tier loan classification and three-staging analysed
+as follows:
+2017
+As at 31 December
+2018
+Other countries and regions
+Hong Kong, Macau and Taiwan
+-Other pledged loans
+70,193
+6,978
+19,140
+19,153
+24,922
+other immovable assets
+― Loans secured by property and
+Collateralised and other secured loans
+90,017
+4,656
+30,836
+25,985
+28,540
+Guaranteed loans
+29,150
+2,083
+1,150
+Doubtful
+748
+589
+(ii) Analysis of overdue loans and advances by geographical area
+(4) Overdue loans and advances to customers (Continued)
+3.5 Loans and advances (Continued)
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+357
+193,078
+14,306
+57,777
+57,106
+63,889
+Total
+3,718
+1,231
+49,341
+49,341
+Loss
+Subtotal
+153,627
+153,627
+China Orient
+191,690
+24,364
+102,771
+64,555
+- Corporate
+496,675
+229,166
+179,041
+88,468
+– Financial institutions
+484,992
+484,992
+― Policy banks
+394,979
+84,364
+3,416,968
+4,065,477
+129,934
+3,022
+108,739
+56,824
+51,915
+366,602
+11,252
+355,291
+4,433,133
+Total
+Subtotal
+― Corporate
+- Financial institutions
+Public sectors and quasi-governments
+Governments
+other countries and regions
+Issuers in Hong Kong, Macau, Taiwan and
+253,530
+174,719
+84,364
+2,654,129
+3.6 Due from and placements with and loans to banks and other financial institutions
+3 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+358
+through profit or loss.
+The above table does not include loans and advances to customers measured at fair value
+11,784,153
+166,952
+433,375
+11,183,826
+Total
+67,812
+67,812
+Banks and other financial institutions comprise those institutions in the Chinese mainland,
+Hong Kong, Macau, Taiwan and other countries and regions.
+- Public sectors and quasi-governments
+The Group monitors the credit risk of counterparties by collecting and analysing
+counterparty information and establishing credit limits taking into account the nature, size
+and credit rating of counterparties.
+359
+2,650,164
+3,965
+Government
+Issuers in Chinese mainland
+As at 31 December 2018
+Total
+A to AAA Lower than A
+Unrated
+The Group adopts a credit rating approach to manage the credit risk of the debt securities by
+referring to both internal and external credit rating. The carrying amounts (accrued interest
+excluded) of the debt investments analysed by external credit rating at the financial reporting
+date are as follows:
+3.7 Debt securities
+Credit risk (Continued)
+3
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+As at 31 December 2018, the majority of the balances of due from and placements with and
+loans to banks and other financial institutions were banks and other financial institutions in
+the Chinese mainland (Note V.13 and Note V.15), the majority of the internal credit ratings
+of these banks and other financial institutions were above A.
+360
+362
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+High
+Average
+2017
+2018
+Year ended 31 December
+Unit: USD million
+(1) Trading book (Continued)
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+Low
+FOR THE YEAR ENDED 31 DECEMBER 2018
+BANK OF CHINA LIMITED
+364
+The reporting of risk in relation to bullion is included in foreign exchange risk above.
+The Bank's VaR for the years ended 31 December 2018 and 2017 were calculated based on
+the Group's trading positions, excluding those of BOCHK (Holdings) and BOCI.
+12.43
+23.89
+17.44
+13.92
+26.28
+19.87
+VaR
+Total of the Bank's trading
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+0.14
+Average
+Low
+0.33
+0.03
+0.90
+0.20
+Equity risk
+1.60
+6.97
+4.00
+1.37
+3.45
+2.30
+Foreign exchange risk
+High
+2.47
+5.70
+1.65
+5.50
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4
+Market risk
+3.37
+Interest rate risk
+VaR
+BOCHK (Holdings)'s trading
+10.61
+0.75
+3.92
+0.13
+2017
+2018
+Year ended 31 December
+Unit: USD million
+The table below shows the VaR of the trading book by type of risk during the years ended
+31 December 2018 and 2017:
+The Group utilises stress testing as an effective supplement to the trading book VaR
+analysis. Stress testing scenarios are performed based on the characteristics of trading
+transactions to simulate and estimate losses in adverse and exceptional market conditions.
+To address changes in the financial markets, the Group enhances its market risk
+identification capabilities by continuously modifying and improving the trading book stress
+testing scenarios and measurement methodologies in order to capture the potential impact to
+transaction market prices stemming from changes in market prices and volatility.
+The accuracy and reliability of the VaR model is verified by daily back-testing of the
+VaR results in the trading book. The back-testing results are regularly reported to senior
+management.
+(1) Trading book (Continued)
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Average
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+363
+VaR is performed separately by the Bank and its major subsidiaries that are exposed to
+market risk, BOCHK (Holdings) and BOCI. The Bank, BOCHK (Holdings) and BOCI used
+a 99% level of confidence (therefore, statistical probability of 1% that actual losses could
+be greater than the VaR estimate) and a historical simulation model to calculate the VaR
+estimate. The holding period of the VaR calculations is one day. To enhance the Group's
+market risk management, the Group has established the market risk data mart, which enabled
+a group level trading book VaR calculation on a daily basis.
+VaR is used to estimate the largest potential loss arising from adverse market movements in
+a specific holding period and within a certain confidence level.
+For the purpose of market risk management in the trading book, the Group monitors trading
+book Value at Risk (VaR) limits, stress testing results and exposure limits and tracks each
+trading desk and dealer's observance of each limit on a daily basis.
+(1) Trading book
+4.2 Market risk measurement techniques and limits
+Market risk management departments are responsible for the identification, measurement,
+monitoring, control and reporting of market risks on a Group basis. Business units are
+responsible for the monitoring and reporting of market risk within their respective business
+lines.
+The Board of Directors of the Group takes the ultimate responsibility for the oversight
+of market risk management, including the approval of market risk management policies
+and procedures and the determination of market risk tolerance. Senior management is
+responsible for execution of such policies and ensuring that the level of market risk is within
+the risk appetite determined by the Board, while meeting the Group's business objectives.
+The Group is exposed to market risks from on-balance and off-balance businesses, that
+may cause losses to the Group as a result of adverse changes in market prices of interest
+rate, exchange rate, equities and commodities. Market risk arises from open positions in the
+trading and banking books. Both the Group's trading book and banking book face market
+risks. The trading book consists of positions in financial instruments and commodities
+that are held with trading intent or in order to hedge other elements of the trading book.
+The banking book consists of financial instruments not included in the trading book
+(including those financial instruments purchased with surplus funds and managed in the
+investment book).
+4.1 Overview
+FOR THE YEAR ENDED 31 DECEMBER 2018
+1.25
+High
+High
+5.55
+1.14
+Commodity risk
+0.11
+1.21
+0.35
+0.11
+0.71
+0.38
+Volatility risk
+6.12
+17.70
+Low Average
+10.67
+17.66
+10.19
+Foreign exchange risk
+9.61
+17.58
+14.54
+12.24
+23.85
+17.26
+Interest rate risk
+The Bank's trading VaR
+Low
+4.99
+0.09
+Commodity risk
+0.40
+4,597,745
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.8 Derivatives
+The risk-weighted assets for counterparty credit risk ("CCR") of derivatives of the Group
+were calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+and other relevant regulations under the advanced capital measurement approaches. For
+derivative transactions, risk-weighted assets for CCR include the risk-weighted assets for
+default risk, the risk-weighted assets for credit valuation adjustment ("CVA") and the risk-
+weighted assets for central counterparties ("CCPs").
+The risk-weighted assets for the CCR of derivatives are as follows:
+As at 31 December
+2018
+361
+2017
+Currency derivatives
+54,280
+70,498
+Interest rate derivatives
+2,888
+4,228
+Equity derivatives
+233
+314
+Commodity derivatives and other
+3,334
+3,343
+Risk-weighted assets for default risk
+60,735
+1,752
+Total
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.7 Debt securities (Continued)
+The carrying amounts (accrued interest excluded) of the debt investments analysed by
+external credit rating and expected credit loss are as follows:
+As at 31 December 2018
+12-month ECL
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+4,595,993
+Stage 3
+420,982
+414
+421,396
+3,905,218
+158
+-
+3,905,376
+Lower than A
+269,793
+1,180
+-
+270,973
+Unrated
+A to AAA
+78,383
+Risk-weighted assets for CVA
+51,107
+0.65
+1.86
+1.25
+Fixed income unit
+0.50
+1.48
+0.94
+0.16
+2.04
+0.64
+Equity derivatives unit
+BOCI's trading VaR (1)
+1.17
+3.47
+6.39
+3.07
+5.84
+4.21
+trading VaR
+Total BOCHK (Holdings)'s
+0.07
+0.26
+0.16
+6,570
+0.11
+1.24
+10.43
+2.40
+0.63
+Global commodity unit
+92,338
+Risk-weighted assets for CCPs
+10,220
+1,573
+Total
+3.9 Repossessed assets
+122,062
+172,294
+The Group obtained assets by taking possession of collateral held as security. Detailed
+information of such repossessed assets of the Group is disclosed in Note V.22.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+365
+VaR for each risk factor is the independently derived largest potential loss in a specific
+holding period and within a certain confidence level due to fluctuations solely in that risk
+factor. The individual VaRs was not added up to the total VaR as there was a diversification
+effect due to correlation amongst the risk factors.
+(i) BOCI monitors its trading VaR for equity derivatives unit, fixed income unit and global commodity unit
+separately, which include equity risk, interest rate risk, foreign exchange risk and commodity risk.
+1.53
+3.58
+2.43
+1.24
+3.85
+2.18
+Total BOCI's trading VaR
+0.08
+0.65
+0.32
+0.17
+0.52
+0.29
+BANK OF CHINA LIMITED
+11,220
+Chinese mainland
+Unsecured loans
+17,810
+4,101
+75,543
+- Other pledged loans
+22,109
+2,209
+1,882
+1,090
+27,290
+Total
+84,754
+70,489
+52,403
+12,305
+21,596
+219,951
+Unsecured loans
+11,986
+11,716
+6,678
+2,087
+32,467
+Guaranteed loans
+28,988
+26,042
+31,416
+4,674
+91,120
+Collateralised and other secured loans
+― Loans secured by property and
+As at 31 December 2017
+other immovable assets
+32,036
+― Loans secured by property and
+9,277
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+3.5 Loans and advances (Continued)
+(4) Overdue loans and advances to customers
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+Group
+Past due
+up to
+Past due
+90 days 91-360 days
+other immovable assets
+361 days-
+Past due
+3 years over 3 years
+As at 31 December 2018
+Unsecured loans
+11,682
+16,415
+7,353
+2,016
+37,466
+Guaranteed loans
+18,927
+30,269
+25,358
+5,098
+79,652
+Collateralised and other secured loans
+Total
+28,583
+Past due
+19,300
+6.875
+1,994
+33,388
+Guaranteed loans
+15,425
+30,202
+25,072
+5,062
+75,761
+Collateralised and other secured loans
+― Loans secured by property and
+other immovable assets
+25,972
+21,476
+15,652
+17,203
+68,739
+-Other pledged loans
+17,865
+2,063
+1,795
+1,028
+Total
+68,129
+69,393
+50,945
+12,172
+200,639
+19,443
+As at 31 December 2017
+4,088
+8,867
+22,751
+As at 31 December 2018
+74,312
+Unsecured loans
+6,986
+- Other pledged loans
+1,799
+956
+639
+4,943
+Total
+71,356
+58,157
+58,943
+14,386
+202,842
+356
+1.549
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+361 days-
+3 years over 3 years
+BANK OF CHINA LIMITED
+Past due
+Chinese mainland
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(Continued)
+(4) Overdue loans and advances to customers (Continued)
+Past due
+up to
+Past due
+90 days 91-360 days
+3.5 Loans and advances (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Total
+(Amount in millions of Renminbi, unless otherwise stated)
+Past due
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3 Credit risk (Continued)
+Liabilities
+21,267,275
+Due to banks and other financial institutions
+759,492
+1,879,759
+2,804,301
+373,506
+777,864
+19,639
+Due to central banks
+870,105
+1,623,516
+50,792
+5,714,813
+18,968
+3,702,263
+5,570,657
+Total assets
+1,532,834
+1,192,874
+2,071,988
+7,554
+22,683
+338.223
+301,633
+Other
+Placements from banks and other financial institutions
+306,782
+78,810
+1,481,846
+Derivative financial liabilities
+465,590
+Bonds issued
+19,861
+1,405,144
+45,983
+36,307
+2,184,293
+15,328
+276,288
+8,862,771
+(7,669,897)
+2,071,988
+7,314
+7,368,721
+612,267
+1,417
+58,135
+123,223
+429,492
+907,521
+Due to customers
+8,071
+104,114
+172,280
+1,731,209
+49,271
+186,252
+314,126
+143,392
+1,038,168
+Net liquidity gap
+Total liabilities
+Other
+157,466
+2,001
+4,357
+428,041
+7,326
+31,240
+5,961
+49,485
+6,074
+16,707
+50,286
+32,874
+560,463
+2,227,614
+Placements with and loans to banks and
+other financial institutions
+388,211
+114,812
+23,750
+9,034
+2,462
+90
+37,040
+575,399
+Derivative financial assets
+44,950
+8,065
+31,285
+18,267
+1,349,078
+99,061
+12,145
+2,073,366
+13,599
+142,024
+248,995
+1,810,377
+Balances with central banks
+120,021
+71,630
+16,456
+comprehensive income
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+366
+The Group performs sensitivity analysis by measuring the impact of a change in interest
+rates on "Net interest income”. This analysis assumes that yield curves change in parallel
+while the structure of assets and liabilities remains unchanged, and does not take into
+consideration changes in customer behaviour, basis risk, etc.. The Group makes timely
+adjustment to the structure of assets and liabilities based on changes in the market situation,
+and controls the fluctuation of net interest income within an acceptable level.
+Sensitivity analysis on Net interest income
+The Group assesses interest rate risk in the banking book primarily through an interest rate
+repricing gap analysis. Interest rate repricing gap analysis measures the difference between
+the amount of interest-earning assets and interest-bearing liabilities that must be repriced
+within certain periods. The Group employs the interest rate repricing gap analysis and takes
+impact of the off-balance sheet business into consideration when calculating the indications
+of sensitivity of earnings to changing interest rates. The interest rate gap analysis is set out
+in Note VI.4.3 and also covers the trading book.
+financial assets at amortised cost
+The banking book is exposed to interest rate risk arising from mismatches in repricing
+periods and inconsistent adjustments between the benchmark interest rates of assets and
+liabilities. The Group takes on exposure to interest rate risk and fluctuations in market
+interest rates that will impact the Group's financial position.
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Assets
+Cash and due from banks and other financial institutions
+368,772
+(2) Banking book
+33,305
+668,153
+3,073
+119,794
+2,145,073 5,613,781
+3,146,270
+Loans and advances to customers, net
+124,126
+124,126
+Derivative financial assets
+1,042,358
+4,449
+45,694
+2,331,053
+215,118
+619
+225,933
+2,085
+98,129
+749
+Placements with and loans to banks and other financial institutions
+2,113,231
+439,931
+80,110
+3,356
+115,397
+29,873
+211,195
+53,241
+437,605 11,515,764
+Financial investments
+financial assets at fair value through profit or loss
+Liabilities
+21,267,275
+759,492
+750,643
+1,787,431
+2,804,301
+39,314
+1,879,759
+38,843
+360,876
+777,123
+3,661
+1,291,096
+2,568,068 6,721,170 2,609,094
+6,290,416
+Cash and due from banks and other financial institutions
+Balances with central banks
+Total assets
+Other
+370,491
+97,223
+96,195
+75,423
+44,898
+406,442
+789,385
+283,575 1,605,967
+83,459
+14,863
+37,327
+172,122
+112,091
+financial assets at fair value through other comprehensive income
+financial assets at amortised cost
+19,425
+5,188
+17,434
+Assets
+Non-
+interest
+bearing
+(2) Banking book (Continued)
+4.2 Market risk measurement techniques and limits (Continued)
+Market risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+1,725,397
+5,382,216
+3,238,374
+(54,305)
+(591,520)
+(651,459)
+19,541,878
+525,904
+58,212
+188,441
+782,127
+117,491
+323,057
+66,329
+2,476,439
+14,883,596
+9,665
+2,010,860
+2,740,128
+196,535
+76,623
+3,756,568
+99,254
+The table below illustrates the potential impact of a 25 basis points interest rate move on the
+net interest income of the Group. The actual situation may be different from the assumptions
+used and it is possible that actual outcomes could differ from the estimated impact on net
+interest income of the Group.
+(Decrease)/increase in
+net interest income
+As at 31 December
+2018
+2017
+Over
+5 years
+years
+Between
+1 and 5
+Between
+3 and 12
+months
+Between
+1 and 3
+months
+1 month
+Less than
+As at 31 December 2018
+368
+4.3 GAP analysis
+Market risk (Continued)
+Total
+The tables below summarise the Group's exposure to interest rate risk. It includes the Group's assets and liabilities at carrying amounts, categorised by
+the earlier of contractual repricing or maturity dates.
+VI
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+367
+Given the nature of demand deposits, their interest rate fluctuations are less volatile than
+those of other products. Had the impact of yield curves movement on interest expenses
+related to demand deposits been excluded, the net interest income for the next twelve
+months from the reporting date would increase or decrease by RMB13,733 million (2017:
+RMB12,279 million) for every 25 basis point upward or downward parallel shift,
+respectively.
+4,193
+4,136
+(4,193)
+(4,136)
++ 25 basis points parallel move in all yield curves
+- 25 basis points parallel move in all yield curves
+FINANCIAL RISK MANAGEMENT (Continued)
+40
+12,779
+4,928
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Liquidity risk
+The liquidity risk means the risk that a commercial bank fails to acquire adequate funds in a
+timely manner and at a reasonable cost to deal with repayment of debts at maturity, perform
+other payment obligations and meet other fund needs for normal business operation.
+5.1 Liquidity risk management policy and process
+The Bank continued to develop and improve its liquidity risk management system with the
+aim of effectively identifying, measuring, monitoring and controlling liquidity risk at the
+institution and group level, including that of branches, subsidiaries and business lines, thus
+ensuring that liquidity demand is met in a timely manner and at a reasonable cost.
+The Group considers liquidity risk management a significant component of asset-liability
+management, and determines the size, structure and duration of assets and liabilities
+consistent with the principle of overall balance between assets and liabilities. The Group
+establishes its liquidity portfolio to mitigate liquidity risk, and to minimise the gaps in
+the amount and duration between the funding sources and the uses of funds. The Group
+refines its financing strategy, taking into consideration various factors including customer
+risk sensitivity, financing cost and concentration of funding sources. In addition, the Group
+prioritises the development of customer deposits, dynamically adjusts the structure of fund
+sources by market-oriented financing modes, including due to banks and other financial
+institutions, inter-bank borrowings and improves the diversity and stability of financing
+sources.
+Assets available to meet all of the liabilities and to cover outstanding loan commitments
+include "Cash and due from banks and other financial institutions”, “Balances with central
+banks", "Placements with and loans to banks and other financial institutions”, “Loans and
+advances to customers, net", etc. In the normal course of business, a proportion of short-
+term loans contractually repayable will be extended and a portion of short-term customer
+deposits will not be withdrawn upon maturity. The Group would also be able to meet
+unexpected net cash outflows by entering into repurchase transactions, and by selling
+securities and accessing additional funding sources.
+374
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+The tables below analyse the Group's assets and liabilities into relevant maturity groupings based on the remaining period at the financial reporting
+date to the contractual maturity date. For purposes of the tables set forth, "Loans and advances to customers, net" are considered overdue only if
+principal payments are overdue. In addition, for loans and advances to customers that are repayable by instalments, only the portion of the loan that is
+actually overdue is reported as overdue. Any part of the loan that is not due is reported according to residual maturity.
+As at 31 December 2018
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+5
+1,576,679
+(6,514)
+3,870,632
+79,769
+(40,135)
+95,045
+14,188
+(12,165)
+44,472
+10,050
+9,497
+14,243
+499,128
+661,447
+283,466
+95,358
+107,128
+605,164
+17,890,745
+Net on-balance sheet position
+1,741,518
+(166,672)
+Liquidity risk (Continued)
+5.2 Maturity analysis
+(149,731)
+Net off-balance sheet position
+(420,313)
+195,069
+319,073
+(11,672)
+37,339
+(36,371)
+Credit commitments
+2,556,398
+811,938
+245,575
+107,154
+20,268
+1,261
+375
+On
+demand
+231,633
+58,427
+1,042,358
+Derivative financial assets
+10,055
+22,259
+Loans and advances to customers, net
+69,539
+154,707
+397,574
+30,528
+1,086,838
+38,686
+2,478,055
+18,634
+3,036,778
+3,964
+4,292,273
+124,126
+11,515,764
+Financial investments
+financial assets at fair value through profit or loss
+93,524
+16,772
+32,788
+71,133
+52,863
+103,411
+92,855
+659,399
+44
+other financial institutions
+Less than
+1 month
+Between
+1 and 3
+months
+Between
+Between
+3 and 12
+months
+1 and 5
+years
+Over
+5 years
+Total
+Assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+21
+Overdue/
+Undated
+178,645
+30,365
+116,636
+3,356
+1,588,770
+511,244
+216,281
+2,087
+12,329
+342
+439,931
+2,331,053
+Placements with and loans to banks and
+110,908
+445
+20,318
+38,006
+1,497
+held to maturity
+1,935,833
+138,678
+3,627
+1,693
+696
+1,196
+8,141
+2,089,864
+-loans and receivables
+405,080
+Other
+298,863
+14,543,676
+1,960
+135,600
+2,452,549
+419
+6,566
+414,025
+175,535
+1,228,519
+1,354
+1,102
+1,546
+196,010
+1,857,222
+68,996
+5,944
+63,946
+94,912
+Loans and advances to customers, net
+8,101,830
+1,157,714
+794,625
+217,660
+7,962
+50,856
+313,657
+10,644,304
+Financial investments
+810,010
+financial assets at fair value through profit or loss
+55,073
+available for sale
+1,080,354
+449,628
+26,513
+154,809
+1,133
+1,043
+429
+14
+193,611
+33,545
+109,406
+303,734
+132,697
+121,316
+17,110
+16,789
+7,220
+500,092
+35
+4,932
+3,049
+111,095
+Due to customers
+10,236,329
+Bonds issued
+10,720
+800
+222,119
+347,577
+1,614,422
+208,402
+82,908
+Total liabilities
+12,802,158
+2,619,221
+1,079,702
+786
+213,516
+1,378,250
+192,313
+64,989
+55,956
+414,213
+13,657,924
+Other
+4,895
+1,690
+Derivative financial liabilities
+684,933
+19,467,424
+Total assets
+Liabilities
+Due to banks and other financial institutions
+855,661
+329,466
+30,276
+35,616
+Due to banks and other financial institutions
+Due to central banks
+70,458
+779,483
+16,865
+4,514
+7,301
+571
+154,163
+1,425,262
+2,779
+1,035,797
+Placements from banks and other financial institutions
+290,531
+150,748
+6,974
+231,585
+1,011,125
+As at 31 December 2017
+181,766
+371
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+4.4 Foreign currency risk (Continued)
+The tables below summarise the Group's exposure to foreign currency exchange rate risk as at 31 December 2018 and 2017. The Group's exposure
+to RMB is provided in the tables below for comparison purposes. Included in the table are the carrying amounts of the assets and liabilities of the
+Group along with off-balance sheet positions and credit commitments in RMB equivalent, categorised by the original currencies. Derivative financial
+instruments are included in the net off-balance sheet position using notional amounts.
+372
+As at 31 December 2018
+RMB
+USD
+HKD
+EURO
+JPY
+GBP
+Other
+Total
+Assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+308,697
+While the table above indicates the effect on profit before tax and equity of the
+1% appreciation of USD and HKD, there will be an opposite effect with the same amounts if
+the currencies depreciate by the same percentage.
+Effect on other comprehensive income (irrespective of income tax effect).
+*
+2,067
+Market risk (Continued)
+4.4 Foreign currency risk (Continued)
+As at
+Effect on profit before tax
+As at
+Effect on equity*
+As at
+As at
+Currency
+Change in
+currency rate
+2018
+31 December 31 December 31 December
+2018
+79,058
+2017
+USD
++1%
+521
+536
+527
+351
+HKD
++1%
+(338)
+(410)
+2,199
+31 December
+2017
+4
+17,818
+1,855,438
+RMB
+As at 31 December 2017
+373
+4.4 Foreign currency risk (Continued)
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,725,397
+31,621
+3,993,011
+101,501
+(40,626)
+93,430
+44,054
+10,425
+111,092
+223,494
+794,823
+2,715,693
+Credit commitments
+51,797
+(49,526)
+19,415
+21,144
+USD
+HKD
+EURO
+JPY
+280,029
+40,625
+39,770
+5,694
+36,838
+1,575
+47,950
+20,647
+30,403
+439,931
+2,331,053
+Placements with and loans to banks and
+other financial institutions
+6,442
+878,861
+30,994
+7,636
+3,094
+283
+27,587
+1,042,358
+Derivative financial assets
+financial assets at fair value through other
+Total
+Other
+GBP
+93,903
+355,983
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+57,433
+196,795
+1,234,167
+572,907
+2,089,864
+4,708
+3,827
+12,448
+253,350
+137,293
+2,399
+414,025
+4,108
+1,444
+123
+1,145
+803,190
+810,010
+5,541,444
+2,595,369
+6,068,496
+2,443,953
+1,211,467
+28,562
+1,857,222
+71,962
+418,807
+177,809
+2,227,614
+207,146
+76,046
+575,399
+94,912
+94,912
+2,869,571
+2,142,963 5,139,321
+84,639
+48,280
+1,606,695 19,467,424
+359,530
+19,498
+44,177
+57,501
+19,681
+33,035
+19,719
+193,611
+111,201
+174,862
+306,200
+774,190
+10,644,304
+(Amount in millions of Renminbi, unless otherwise stated)
+Liabilities
+839,840
+37,795
+34,095
+1,807
+73,697
+111,095
+185,699
+111,095
+13,657,924
+(4,094,774)
+759,471 2,866,623
+364,842
+1,137,770
+499,128
+605,520 661,447
+1,063,948 17,890,745
+542,747 1,576,679
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4
+Market risk (Continued)
+4.4 Foreign currency risk
+The Group conducts a substantial portion of its business in RMB, with certain transactions
+denominated in USD, HKD and, to a much lesser extent, other currencies. The major
+subsidiary, BOCHK Group, conducts the majority of its business in HKD, RMB and USD.
+The Group endeavours to manage its sources and uses of foreign currencies to minimise
+potential mismatches in accordance with management directives.
+The Group manages its exposure to currency exchange risk through the management of its
+net foreign currency position and monitors its foreign currency risk on trading books using
+VaR (Note VI.4.2). Meanwhile, the Group performs currency risk sensitivity analysis to
+estimate the effect of potential exchange rate changes of foreign currencies against RMB on
+profit before tax and equity.
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to
+which the Group had significant exposure. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held
+constant, on profit before tax and equity. A negative amount in the table reflects a potential
+net reduction in profit before tax or equity, while a positive amount reflects a potential
+net increase. Such analysis does not take into account the correlation effect of changes in
+different foreign currencies, any further actions that may have been or could be taken by
+management after the financial reporting date to mitigate the effect of exchange differences,
+nor any consequential changes in the foreign currency positions.
+370
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2,079,111
+284,818
+5,163
+1,711,282
+2,443,803
+40,302
+8,002
+3,201,873
+205,871
+Due to central banks
+385,348
+Placements from banks and other financial institutions
+375,004
+131,064
+74,776
+149,615
+510,280
+49,871
+68,320
+9,087
+161,616
+1,425,262
+18
+Due to banks and other financial institutions
+1,035,797
+500,092
+Derivative financial liabilities
+Due to customers
+7,947,067
+Bonds issued
+Other
+Total liabilities
+Total interest repricing gap
+67,225
+21,734
+9,636,218
+1,332,278
+72,688
+19,221
+1,835,898
+441
+313,145
+520,806
+Net off-balance sheet position
+5 years
+years
+months
+months
+1 month
+Over
+1 and 5
+3 and 12
+1 and 3
+Less than
+Non-
+Between
+Between
+Between
+Total assets
+Other
+loans and receivables
+held to maturity
+available for sale
+financial assets at fair value through profit or loss
+Financial investments
+Loans and advances to customers, net
+Derivative financial assets
+interest
+bearing
+Total
+259,468
+74,565
+11,515,764
+335,864
+124,126
+2,772
+5,237
+65,563
+12,637
+201,731
+923,070
+1,146,207
+8,830,692
+Loans and advances to customers, net
+Placements with and loans to banks and other financial institutions
+37
+29,945
+17,913
+67,601
+1,586
+457
+95,641
+196,566
+2,047,762
+560,463
+77,174
+1,880
+147,376
+621
+Financial investments
+Balances with central banks
+Assets
+Other
+Bonds issued
+1,354,989 2,668,074
+8,515,651
+Due to customers
+99,254
+612,267
+1,807
+99,254
+1,417
+57,583
+122,663
+428,797
+Placements from banks and other financial institutions
+Derivative financial liabilities
+907,521
+10,274
+8,071
+456,671
+156,600
+275,905
+Due to central banks
+1,731,209
+176,128
+49,045
+Total liabilities
+Total interest repricing gap
+91,311
+17,849
+369
+4.3 GAP analysis (Continued)
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+634,430 1,725,397
+1,250,620
+Cash and due from banks and other financial institutions
+438,202 3,176,283 276,084
+1,153,001 19,541,878
+525,904
+782,127
+14,883,596
+384,592
+6,747
+474,199
+105
+35,125
+5,246
+40,476
+2,333,010
+1,960,185
+311,777
+2,515
+179,233
+1,560
+3,544,887
+157,934
+24,535
+2,129,866
+10,340,638
+(4,050,222)
+(795,575)
+- financial assets at fair value through profit or loss
+financial assets at fair value through other
+56,988
+447,679
+191,501
+Other
+Bonds issued
+11,256,454
+Due to customers
+99,254
+2,447
+5,059
+46
+678
+26,366
+14,104
+50,554
+Derivative financial liabilities
+612,267
+5,308
+5,411
+11,242
+12,669
+39,642
+271,303
+266,692
+Placements from banks and other financial institutions
+1,716,821
+252,059
+84,330
+1,202,357
+6,682
+230,918
+194,439
+48,465
+2,327
+(17,505)
+(11,271)
+(146,856)
+(484,117)
+2,231,848
+Net on-balance sheet position
+19,541,878
+617,275
+75,403
+86,368
+304,129
+907,521
+1,567,274
+13,901,515
+Total liabilities
+782,127
+525,904
+15,597
+15,025
+1,323
+480
+9,793
+14,883,596
+408,713
+46,334
+58,478
+1,852
+2,989,914
+238,495
+1
+170,184
+148,481
+213,438
+Other
+2,804,301
+17,451
+1,456
+746
+1,879,759
+75,501
+3,023
+8,573
+30,629
+3,450
+116,376
+3,496
+229,300
+2,548,402
+financial assets at amortised cost
+453,918
+1,191,739
+comprehensive income
+370,491
+16
+2,011
+72,981
+185,113
+568
+1,244
+2,097
+7,049
+434
+5,461
+26,758
+246,540
+628,327
+Due to central banks
+14,270
+40,090
+34,551
+404,757
+1,060,308
+1,731,209
+Due to banks and other financial institutions
+21,267,275
+718,776
+127,200
+68,863
+292,858
+1,420,418
+2,505,797
+16,133,363
+Total assets
+759,492
+208,551
+Liabilities
+370,491
+30,131
+168,986
+38,694
+27,900
+3,592
+7,202
+- Equity instruments
+850 1,769,758
+1,595,125
+173,783
+- Debt securities
+for sale
+Investment securities available
+94,912
+-
+85,104
+9,808
+Derivative financial assets
+11,690
+429
+2,058
+9,203
+Fund investments and other
+8,029
+8,029
+- Equity instruments
+5,493
+5,493
+- Loans
+Fund investments and other
+4,246
+17,054
+27,470
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+384
+(111,095)
+(104,341)
+(6,754)
+(17,219)
+(14,191)
+(3,028)
+(1,907)
+168,399
+(1,907)
+(1,246)
+(1,246)
+(372,767)
+Due to customers at fair value
+Bonds issued at fair value
+Short position in debt securities
+Derivative financial liabilities
+at fair value
+and other financial institutions
+Due to and placements from banks
+fair value
+Financial liabilities measured at
+21,026
+18,597
+2,429
+Investment properties
+48,770
+(372,767)
+2,594
+161,542
+4,263
+(876)
+at fair value
+and other financial institutions
+Due to and placements from banks
+fair value
+76,774
+151,510
+2,066
+Balances with central banks
+1,754,965
+429,447
+15,013
+6,737
+(876)
+21,487
+Placements with and loans to banks and
+other financial institutions
+186,941
+95,728
+Loans and advances to customers, net
+Financial investments
+76,835
+109,160
+386,278
+1,128,147
+219,492
+2,843,559 3,683,179
+89,453
+57
+5,188,628
+591,671
+13,415,786
+570,787
+2,227,649
+6
+Due to customers at fair value
+(24,141)
+Debt securities
+through profit or loss
+Financial assets at fair value
+fair value
+Financial assets measured at
+Total
+Level 3
+As at 31 December 2017
+Level 2
+Level 1
+6.1 Assets and liabilities measured at fair value (Continued)
+Fair value (Continued)
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(24,141)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+383
+(99,254)
+(90,326)
+(8,928)
+(14,327)
+(11,685)
+(2,642)
+Short position in debt securities
+Derivative financial liabilities
+(20,517)
+(20,517)
+Bonds issued at fair value
+FOR THE YEAR ENDED 31 DECEMBER 2018
+financial assets at fair value through
+Fair value (Continued)
+Reconciliation of Level 3 items
+Sales
+(2,037)
+(951)
+28
+other comprehensive income
+592
+194
+(359)
+14
+36
+196
+-profit/(loss)
+Total gains and losses
+19,067
+19,153
+23,362
+1,656
+2,709
+As at 1 January 2017
+and other
+Fund
+investments
+Debt Equity
+securities instruments
+Debt
+Fund
+securities investments
+Investment
+properties
+Investment securities available for sale
+at fair value through
+profit or loss
+Financial assets
+(307)
+(357)
+(439)
+(3,395)
+592
+(371)
+36
+196
+Total gains/(losses) for the period
+included in the income statement
+for assets/liabilities held as at
+31 December 2017
+As at 31 December 2017
+18,597
+27,470
+27,900
+850
+429
+2,594
+(759)
+535
+752
+I
+(3)
+(198)
++།
+Other changes
+Transfers out of Level 3, net
+Settlements
+668
+13,555
+5,535
+393
+Purchases
+(968)
+(293)
+2,677
+98
+(273)
+556
+2,678
+98
+(273)
+6
+-profit/(loss)
+Total gains and losses
+18,597
+4,695
+1,405
+27,899
+23,205
+3,034
+―other comprehensive income
+As at 1 January 2018
+securities
+and other
+Securities instruments
+Equity
+instruments
+Debt
+Fund
+investments
+Debt Equity
+properties
+Investment
+Financial assets at fair value through
+other comprehensive income
+Financial assets
+at fair value through
+profit or loss
+financial
+assets
+Derivative
+and other
+6.1 Assets and liabilities measured at fair value (Continued)
+(911)
+(538)
+6
+for assets/liabilities held as at
+31 December 2018
+Total gains/(losses) for the period
+included in the income statement
+80
+68
+21
+19,838
+5,364
+1,422
+34,512
+43,089
+8,417
+6
+Sales
+35
+As at 31 December 2018
+80
+Other changes
+Transfers out of Level 3, net
+Settlements
+711
+1,588
+5,681
+20,324
+5,582
+Purchases
+(61)
+(1,767)
+(5)
+385
+profit or loss
+- available for sale
+Total
+2,717,712
+878,724
+351,390
+3,947,826
+(1) Included within "Loan commitments" are amounts relating to loan commitments and undrawn credit card
+limits, refer to Note V.41.7.
+380
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value
+6.1 Assets and liabilities measured at fair value
+Assets and liabilities measured at fair value are classified into the following three levels:
+•
+•
+•
+Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
+including equity securities listed on exchanges or debt instruments issued by certain
+governments and certain exchange-traded derivative contracts.
+Level 2: Valuation techniques using inputs other than quoted prices included within
+Level 1 that are observable for the asset or liability, either directly or indirectly.
+This level includes the majority of the over-the-counter (“OTC") derivative contracts,
+debt securities for which quotations are available from pricing services providers,
+discounted bills, etc.
+Level 3: Valuation techniques using inputs for the asset or liability that is not based on
+observable market data (unobservable inputs). This level includes equity investments
+and debt instruments with significant unobservable components.
+The Group's policy is to recognise transfers between levels of the fair value hierarchy as at
+the end of the reporting period in which they occur.
+The Group uses valuation techniques or counterparty quotations to determine the fair value
+when it is unable to obtain open market quotation in active markets.
+The main parameters used in valuation techniques include bond prices, interest rates, foreign
+exchange rates, equity and stock prices, volatilities, correlations, early repayment rates,
+counterparty credit spreads and others, which are all observable and obtainable from the
+open market.
+381
+BANK OF CHINA LIMITED
+21,786
+55,408
+2
+2,720
+12,496
+40,279
+40,385
+67,213
+Total
+2,762,579
+864,898
+460,840
+4,088,317
+As at 31 December 2017
+Loan commitments (1)
+1,588,385
+462,722
+124,653
+2,175,760
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Guarantees, acceptances and
+1,107,630
+363,227
+224,015
+1,694,872
+Subtotal
+2,696,015
+825,949
+348,668
+3,870,632
+Operating lease commitments
+6,570
+Capital commitments
+15,127
+other financial facilities
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+47,061
+Fund investments and other
+10,730
+4,741
+34,512
+49,983
+Derivative financial assets
+11,655
+112,465
+124,126
+Loans and advances to customers
+227,643
+227,643
+43,089
+Financial assets at fair value through
+- Debt securities
+121,859
+1,738,951
+1,422
+1,862,232
+- Equity instruments and other
+6,592
+5,571
+5,364
+17,527
+Investment properties
+2,248
+19,838
+other comprehensive income
+26,828
+104
+- Equity instruments
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+For certain illiquid debt securities (mainly asset-backed securities), unlisted equity (private
+equity), OTC structured derivatives transactions and unlisted funds held by the Group,
+management obtains valuation quotations from counterparties or uses valuation techniques
+to determine the fair value, including the discounted cash flow analysis, net asset value
+and market comparison approach, etc. The fair value of these financial instruments may be
+based on unobservable inputs which may have a significant impact on the valuation of these
+financial instruments, and therefore, these assets and liabilities have been classified by the
+Group as Level 3. Management determines whether to make necessary adjustments to the
+fair value for the Group's Level 3 financial instruments by assessing the impact of changes
+in macro-economic factors, valuations by external valuation agencies and other inputs,
+including loss coverage ratios. The Group has established internal control procedures to
+control the Group's exposure to such financial instruments.
+382
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+3,868
+As at 31 December 2018
+Level 2
+Level 3
+Total
+Financial assets measured at
+fair value
+Financial assets at fair value
+through profit or loss
+Debt securities
+3,448
+261,582
+8,417
+273,447
+-
+Level 1
+19,853
+Capital commitments
+8,464
+Due to central banks
+180,336
+205,979
+132,329
+523,492
+76,111
+9,733
+1,439,658
+1,051,869
+Placements from banks and other financial
+institutions
+375,607
+75,416
+50,727
+479
+502,229
+Due to customers
+6,665,373
+1,468,636
+1,315,115
+Bonds issued
+Other financial liabilities
+188,633
+46,187
+23,186
+43,512
+3,057
+2,580,018
+55,235
+10,635
+1,910,944
+41,272
+158,269
+206,113
+194,129
+805,036
+85,441
+- held to maturity
+19,669 44,803 58,605 31,468
+76,924 124,877 358,881 974,366
+30,419 52,093 252,884 1,427,553
+43,157 217,555
+496,165 2,116,654
+681,592 2,444,541
+-loans and receivables
+2,515
+20
+5,650
+4,778
+21,524 286,238
+Other financial assets
+3,189
+132,283
+13,981,358
+16,818
+4,004
+480
+157,883 478,608
+2,254 161,460
+Total financial assets
+1,942,819
+839,896
+909,142
+1,536,369
+3,931,946 6,494,803
+6,569,736
+22,224,711
+Due to banks and other financial
+institutions
+2,432
+369,592
+38,245
+552,771
+5
+Liquidity risk (Continued)
+5.4 Off-balance sheet items
+The Group's off-balance sheet financial instruments that commit it to extend credit to
+customers and other facilities are summarised in the table below at the remaining period to the
+contractual maturity date. Financial guarantees are also included below at notional amounts
+and based on the earliest contractual maturity date. Where the Group is the lessee under
+operating lease commitments, the future minimum lease payments under non-cancellable
+operating leases, as disclosed in Note V.41.5, are summarised in the table below.
+Less than
+1 year
+Between
+1 and 5
+years
+Over
+5 years
+Total
+As at 31 December 2018
+Loan commitments (1)
+1,603,299
+527,815
+137,596
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2,268,710
+other financial facilities
+1,125,754
+283,767
+314,780
+1,724,301
+Subtotal
+2,729,053
+811,582
+452,376
+3,993,011
+Operating lease commitments
+6,698
+12,931
+Guarantees, acceptances and
+28,093
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+28,951
+9,466
+263,928
+Total financial liabilities
+7,839,378
+2,313,724 1,775,542
+3,378,376 2,395,810
+88,983 17,791,813
+Derivative cash flow
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+on a gross basis
+Total inflow
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Total outflow
+(2,690)
+(5,403)
+(18,442)
+907
+501
+(21,955)
+78,712 2,022,405 1,432,624
+(77,976) (2,022,972) (1,430,796)
+2,712,400
+(2,705,044)
+319,113
+(318,204)
+9,986 6,575,240
+(9,990) (6,564,982)
+379
+BANK OF CHINA LIMITED
+3,172
+22,086
+Financial liabilities measured at
+587,293
+Liabilities
+Due to banks and other financial institutions
+Due to central banks
+Placements from banks and other financial institutions
+Derivative financial liabilities
+Due to customers
+Bonds issued
+19,467,424
+Other
+Net liquidity gap
+804,976
+188,365
+204,621
+156,040
+180,088
+205,278
+Total liabilities
+4,901,425
+5,313,002
+3,623,089
+Other
+276,194
+301,560
+46,920
+2,981
+42,772
+10,749
+252,602
+140,635
+65,593
+58,666
+18,305
+414,025
+810,010
+Total assets
+2,213,972
+1,016,871
+914,563
+1,484,502
+131,064
+510,280
+1,425,262
+1,035,797
+7,896,813
+2,343,795
+1,796,712
+3,459,181
+2,262,050
+132,194
+17,890,745
+2,213,972
+(6,879,942)
+(1,429,232)
+(312,210)
+163,908
+3,050,952
+4,769,231
+1,576,679
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+661,447
+4,659
+499,128
+111,095
+375,004
+74,776
+49,871
+441
+500,092
+5,574
+6,664,703
+19,442
+25,130
+49,274
+9,323
+241,472
+1,413,948
+45,773
+95,985
+1,287,316
+41,671
+32,134
+2,493,635
+42,755
+157,326
+1,758,935
+333,211
+79,793
+2,352
+39,387
+35,718
+54,737
+13,657,924
+2,399
+loans and receivables
+2,089,864
+1 month
+months
+months
+years
+Over
+5 years
+Total
+Assets
+Cash and due from banks and other financial institutions
+21
+Balances with central banks
+1,754,965
+167,943
+429,424
+168,678
+15,003
+74,565
+6,735
+147,376
+21,487
+1 and 5
+1,880
+3 and 12
+Less than
+171,430
+21
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Liquidity risk (Continued)
+5.2 Maturity analysis (Continued)
+376
+As at 31 December 2017
+Between
+Between
+Between
+Overdue/
+Undated
+On
+demand
+1 and 3
+FOR THE YEAR ENDED 31 DECEMBER 2018
+560,463
+2,227,614
+other financial institutions
+54,336
+25,002
+33,154
+193,611
+available for sale
+85,346
+74,857
+117,797
+314,233
+839,773
+425,216
+1,857,222
+held to maturity
+26,361
+43,894
+189,622
+1,242,694
+42,528
+Placements with and loans to banks and
+18,738
+financial assets at fair value through profit or loss
+Derivative financial assets
+Loans and advances to customers, net
+75,194
+8,791
+109,153
+186,151
+16,222
+356,974
+90,770
+19,854
+1,042,606
+213,567
+36,575
+2,569,551
+84,854
+10,449
+57
+575,399
+3,021
+94,912
+2,797,082
+3,693,744
+10,644,304
+Financial investments
+19,853
+(Amount in millions of Renminbi, unless otherwise stated)
+71,260
+9,087
+5 Liquidity risk (Continued)
+2,770,079
+210,560
+7,936
+2,159,790
+9,959
+15,071,004
+362,609
+139,539
+859,063
+30,083
+9,715
+299,956
+Total financial liabilities
+8,801,497
+2,154,553 2,059,599
+3,706,592 2,615,533
+159.213 19,496,987
+Derivative cash flow
+Derivative financial instruments settled
+on a net basis
+614,857
+VI FINANCIAL RISK MANAGEMENT (Continued)
+1,509
+429,704 124,123
+1,407,351 1,354,994
+99,898
+7,037
+1,038,230
+143,665
+Due to central banks
+172,289
+104,338
+315,386 187,753
+158,161 470,743
+52,826
+8.716
+1,737,860
+914.247
+Placements from banks and other financial
+institutions
+Due to customers
+7,368,831
+Bonds issued
+Other financial liabilities
+222,147
+46,457
+23,038
+59,521
+institutions
+on a gross basis
+Total outflow
+Between
+Between
+Between
+Overdue/
+On
+Undated
+demand
+Less than
+1 month
+1 and 3 3 and 12
+months
+1 and 5
+Over
+months
+years
+5 years
+Total
+Cash and due from banks and
+other financial institutions
+As at 31 December 2017
+Total inflow
+Non-derivative cash flow
+5 Liquidity risk (Continued)
+2,659
+2,135
+7,101
+5,020
+(120)
+516
+17,311
+79,242 2,831,895 1,618,108 3,116,519
+(79,178) (2,830,917) (1,612,726) (3,112,216)
+368,456
+(367,680)
+7,805 8,022,025
+(7,784) (8,010,501)
+378
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5.3 Undiscounted cash flows by contractual maturities (Continued)
+Due to banks and other financial
+Derivative financial instruments settled
+4.052,062 7,085,252
+1 and 5
+Over
+years
+5 years
+Total
+and other financial institutions
+21
+178,651
+111.218
+30,532
+118.297
+3,696
+Balances with central banks
+1,588,770
+511,244
+216,643
+2,099
+Less than
+1 month
+demand
+Undated
+On
+7,585,350 24,544,784
+5.3 Undiscounted cash flows by contractual maturities
+The tables below present the cash flows of the Group of non-derivative financial assets and
+financial liabilities and derivative financial instruments that will be settled on a net basis
+and on a gross basis by the remaining contractual maturities at the financial reporting date.
+The amounts disclosed in the tables are the contractual undiscounted cash flows, except
+for certain derivatives which are disclosed at fair value (i.e. discounted cash flows basis).
+The Group also manages its inherent short-term liquidity risk based on expected
+undiscounted cash flows.
+377
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+12,329
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5.3 Undiscounted cash flows by contractual maturities (Continued)
+Non-derivative cash flow
+Cash and due from banks
+As at 31 December 2018
+Between
+Between
+Between
+Overdue/
+5 Liquidity risk (Continued)
+342
+1 and 3 3 and 12
+months months
+442,415
+2,331,427
+139,717 435,169
+-financial assets at fair value through
+other comprehensive income
+16,496
+72,228
+-financial assets at amortised cost
+2,032
+15,587
+Other financial assets
+763
+148,184
+13,867
+121,707 459,033 986,895 433,630 2,089,989
+82,033 356,737
+1,853,204 897,790 3,207,383
+926
+3,930
+210
+4,740 172,620
+Total financial assets
+1,773,195
+992,807
+1,527,193
+75,588
+76,304
+1,528,925
+95,839
+Placements with and loans to banks and
+other financial institutions
+48
+660,424
+33,180
+Loans and advances to customers, net
+71,503
+420,408 1,162,609
+154,728
+60,246
+1,054,659
+6,109,473 14,811,122
+Financial investments
+financial assets at fair value through
+profit or loss
+93,562
+16,818
+238,102
+2,787,330 4,105,071
+% of total
+Amount
+Commercial banking business
+The Bank has put in place a sound internal control mechanism for fair value measurement.
+In accordance with the Guidelines on Market Risk Management in Commercial Banks, the
+Regulatory Guidelines on Valuation of Financial Instruments in Commercial Banks, CAS and
+IFRS, with reference to the New Basel Capital Accord, and drawing on the best practices of
+leading international banks regarding valuations, the Bank formulated the Valuation Policy
+of Financial Instrument Fair Values of Bank of China Limited to standardise the fair value
+measurement of financial instruments and enable timely and accurate financial information
+disclosure. Please refer to Note VI.6 to the Consolidated Financial Statements for more detailed
+information related to the fair value measurement.
+91.77%
+436,251
+% of total
+462,355
+Amount
+Other Financial Information
+2017
+2018
+Unit: RMB million, except percentages
+Operating income for each line of business of the Group is set forth in the following table:
+BUSINESS REVIEW
+34
+There are no differences in the equity and profit for the year of the Group prepared in accordance
+with IFRS to those prepared in accordance with CAS. Please refer to Supplementary Information
+I to the Consolidated Financial Statements for detailed information.
+90.18%
+Items
+Including: Corporate banking business
+Treasury operations
+41.96%
+15,927
+Others and elimination
+6.54%
+31,622
+5.07%
+25,524
+Investment banking and insurance
+15.00%
+211,365
+72,545
+77,459
+32.91%
+159,197
+34.44%
+173,531
+Personal banking business
+42.27%
+204,509
+15.37%
+(35)
+Debt securities
+(17,219)
+29,214
+94,912
+124,126
+Derivative financial assets
+N.A.
+48,770
+N.A.
+Fund investments and other
+6
+N.A.
+38,694
+N.A.
+Equity instruments
+N.A.
+1,769,758
+N.A.
+3.16%
+Investment securities available for sale
+N.A.
+2,892
+Derivative financial liabilities
+(111,095)
+(14,327)
+Short position in debt securities
+(41)
+(18,610)
+(1,907)
+(20,517)
+Bonds issued at fair value
+348,626
+(99,254)
+(372,767)
+Due to customers at fair value
+(6)
+370
+(1,246)
+(876)
+other financial institutions at fair value
+Due to and placements from banks and
+11,841
+(24,141)
+15,888
+17,527
+Total
+1,735,787
+1,872,448
+2,009,066
+overseas operations
+Hong Kong, Macao, Taiwan and
+336,294
+338,379
+280,878
+Subtotal
+Foreign currency
+4,761,874
+5,057,654
+Domestic: RMB
+Corporate loans
+5,560,786
+5,831,228
+6,422,470
+Subtotal
+4,496,888
+869,441
+7,347,598
+6,568,969
+Income Tax Expense
+35
+419,067
+3,404,393
+440,925
+3,923,857
+4,440,085
+Subtotal
+505,068
+overseas operations
+6,972,701
+Hong Kong, Macao, Taiwan and
+1,250
+1,177
+Foreign currency
+2,983,945
+3,481,682
+3,933,840
+Domestic: RMB
+Personal loans
+1,381
+969,807
+1,093,892
+overseas operations
+5,213,790
+5,495,494
+5,884,433
+Domestic: RMB
+Corporate deposits
+Items
+31 December
+2016
+31 December
+2017
+Foreign currency
+2018
+Unit: RMB million
+As at
+As at
+As at
+A detailed review of the Group's principal deposits and loans is summarised in the following table:
+100.00%
+483,761
+100.00%
+503,806
+31 December
+453,815
+436,458
+378,368
+Hong Kong, Macao, Taiwan and
+342,045
+310,253
+302,256
+Foreign currency
+4,349,300
+4,551,168
+5,026,322
+Domestic: RMB
+Personal deposits
+6,993,213
+7,383,774
+7,932,413
+Subtotal
+1,401,055
+1,451,822
+1,594,165
+overseas operations
+Hong Kong, Macao, Taiwan and
+3.28%
+In 2018, the Group incurred income tax of RMB37.208 billion, a decrease of RMB0.709 billion
+or 1.87% compared with the prior year. The Group's effective tax rate was 16.20%, representing
+a decrease of 0.81 percentage point compared with the prior year. This was primarily attributable
+to an increase in bond investment, for which the Bank enjoyed a preferential rate of corporate
+income tax. Please refer to Note V.10 to the Consolidated Financial Statements for the
+reconciliation of statutory income tax expense to effective income tax expense.
+Financial Position Analysis
+As at the end of 2018, the Group's total assets amounted to RMB21,267.275 billion, an increase
+of RMB 1,799.851 billion or 9.25% compared with the prior year-end. The Group's total liabilities
+amounted to RMB19,541.878 billion, an increase of RMB1,651.133 billion or 9.23% compared
+with the prior year-end.
+3,588,353
+Demand deposits
+Corporate deposits
+Domestic
+100.00%
+13,657,924
+100.00%
+14,883,596
+Total
+0.48%
+65,462
+1.62%
+240,905
+Others
+2.76%
+377,460
+1.93%
+287,808
+Certificates of deposit
+42.69%
+5,831,228
+43.15%
+6,422,470
+Subtotal
+1.15%
+157,574
+2.28%
+30.19% 3,368,630
+31.05%
+Time deposits
+2,520,127
+1.43%
+155,076
+2.79%
+331,064
+Structured deposits
+25.01%
+2,714,253
+22.59%
+2,685,026
+Time deposits
+18.36%
+1,992,092
+19.45%
+338,544
+2,312,488
+Personal deposits
+54.67%
+5,931,952
+53.32%
+6,338,248
+Subtotal
+1.86%
+201,916
+1.93%
+229,768
+Structured deposits
+21.76%
+21.20% 2,361,406
+Demand deposits
+Structured deposits
+22.41%
+3,060,245
+Items
+The principal components of due to customers of the Group and its domestic institutions are set
+out below:
+As at the end of 2018, the Group's due to customers amounted to RMB14,883.596 billion, an
+increase of RMB1,225.672 billion or 8.97% compared with the prior year-end. Specifically,
+the Group's RMB due to customers totalled RMB11,256.454 billion, an increase of
+RMB 1,020.125 billion or 9.97% compared with the prior year-end, while its foreign currency due
+to customers stood at USD528.491 billion, an increase of USD4.847 billion or 0.93%.
+29
+29
+The Bank aligned itself with the trend towards interest rate liberalisation, accelerated product
+and service innovation and thus enhanced its financial services offering. As a result, its liability
+business grew steadily. It further improved salary payment agency, payment collection and
+other basic services, optimised the functions of personal certificates of deposit (CDs), steadily
+expanded its administrative institution customer base and solidified its relationships with basic
+settlement and cash management customers. As a result, it achieved steady growth in customer
+deposits.
+Due to Customers
+Note: Financial bonds refer to debt securities issued by financial institutions in the bond market, including the bonds
+issued by policy banks, other banks and non-bank financial institutions, but excluding restructured bonds and
+PBOC bills.
+2022-04-17
+4.02%
+7,845
+Bond issued by policy banks in 2017
+2019-04-08
+Group
+5.44%
+Bond issued by policy banks in 2014
+2023-01-24
+4.99%
+8,962
+Bond issued by policy banks in 2018
+2020-04-19
+3.98%
+9,309
+Bond issued by policy banks in 2017
+2025-04-02
+4.73%
+9,320
+Bond issued by policy banks in 2018
+8,566
+Subtotal
+Corporate deposits
+Unit: RMB million, except percentages
+As at 31 December 2017
+Amount % of total
+21.15%
+3,148,265
+Time deposits
+19.13%
+2,613,409
+19.72%
+2,935,661
+Demand deposits
+Personal deposits
+54.07%
+53.30% 7,383,774
+7,932,413
+Subtotal
+As at 31 December 2018
+Amount % of total
+1.58%
+1.66%
+246,380
+Structured deposits
+23.53%
+3,213,375
+23.56%
+3,507,071
+Time deposits
+28.96%
+3,955,206
+28.08%
+4,178,962
+Demand deposits
+215,193
+5,328,578
+44.83%
+4,861,421
+2018
+Change
+31 December 31 December
+As at
+As at
+Impact
+on profit
+for the year
+Unit: RMB million
+Financial assets at fair value through profit or loss
+Items
+Movement of Financial Instruments Measured at Fair Value
+Fair Value Measurement
+33
+The Bank makes accounting estimates and judgements that affect the reported amounts of
+assets and liabilities of the next financial year. These estimates and judgements are continually
+evaluated and are based on historical experience, expectations of future events that are believed
+to be reasonable under the circumstances and other factors. The management believes that the
+accounting estimates and judgements have properly reflected the Bank's operating environment.
+Please refer to Notes II and III to the Consolidated Financial Statements for more detailed
+information related to the Bank's accounting policies and accounting estimates.
+2017
+Critical Accounting Estimates and Judgements
+Total assets of the other countries and regions segment amounted to RMB2,009.680 billion,
+an increase of RMB98.593 billion or 5.16% compared with the prior year-end, representing
+8.68% of the Group's total assets. In 2018, this segment recorded a profit before income tax of
+RMB17.302 billion, an increase of RMB2.150 billion or 14.19% compared with the prior year,
+representing 7.51% of the Group's profit before income tax for the year.
+Total assets of the Hong Kong, Macao and Taiwan segment amounted to RMB4, 197.031 billion,
+an increase of RMB662.987 billion or 18.76% compared with the prior year-end, representing
+18.14% of the Group's total assets. In 2018, this segment recorded a profit before income tax
+of RMB51.004 billion, a decrease of RMB0.410 billion or 0.80% compared with the prior year,
+representing 22.12% of the Group's profit before income tax for the year.
+32
+The figures for segment assets, segment profit before income tax and their respective proportions are prior to
+intragroup elimination.
+4
+As at the end of 2018, total assets of the Bank's Chinese mainland segment amounted to
+RMB16,932.306 billion, an increase of RMB1,428.770 billion or 9.22% compared with the prior
+year-end, representing 73.18% of the Group's total assets. In 2018, this segment recorded a profit
+before income tax of RMB 162.224 billion, an increase of RMB3.157 billion or 1.98% compared
+with the prior year, representing 70.37% of the Group's profit before income tax for the year.
+16,932,306 15,503,536 4,197,031 3,534,044 2,009,680 1,911,087 (1,871,742) (1,481,243) 21,267,275 19,467,424
+15,625,811 14,285,717 3,844,519 3,235,718 1,943,129 1,850,392 (1,871,581) (1,481,082) 19,541,878 17,890,745
+Liabilities
+Profit before income tax
+As at the year-end
+Assets
+(99,294) (88,161)
+(887) (2,730) 229,643 222,903
+(176,979) (173,859)
+1,929
+87,208 88,691
+Please refer to the section "Business Review” for more detailed information on the Group's
+business segments.
+(1,446)
+in the year
+273,447
+Equity instruments and other
+46
+N.A.
+N.A.
+1,862,232
+Debt securities
+comprehensive income
+Financial assets at fair value through other
+739
+N.A.
+N.A.
+227,643
+Loans and advances to customers
+Debt securities
+38,293
+49,983
+Fund investments and other
+39,032
+8,029
+47,061
+(164)
+N.A.
+5,493
+N.A.
+Equity instruments
+Loans
+105,048
+168,399
+11,690
+2020-01-06
+(1,436)
+1,902
+162,224 159,067 51,004 51,414 17,302
+Off-balance sheet items include derivative financial instruments, contingent liabilities and
+commitments, etc.
+Off-balance Sheet Items
+As at the end of 2018, the Group's total equity stood at RMB 1,725.397 billion, an increase of
+RMB148.718 billion or 9.43% compared with the prior year-end. This was primarily attributable
+to the following factors: (1) starting on 1 January 2018, the Group applied IFRS 9, which
+caused total equity to decrease RMB35.417 billion; (2) in 2018, it realised a profit for the year
+of RMB192.435 billion, among which the profit attributable to equity holders of the Bank was
+RMB180.086 billion; (3) as per the 2017 profit distribution plan approved at the 2017 Annual
+General Meeting, the Bank paid a cash dividend of RMB51.812 billion; (4) the Bank paid
+a dividend on its preference shares of RMB6.791 billion. Please refer to the "Consolidated
+Statement of Changes in Equity" in the Consolidated Financial Statements for detailed
+information.
+Equity
+Other 5.33% 727,471
+HKD 7.90% 1,079,702
+USD 11.82% 1,614,422
+As at 31 December 2017
+RMB 74.95% 10,236,329
+Unit: RMB million, except percentages
+Other 4.76% 707,964
+HKD 8.08% 1,202,357
+USD 11.53% 1,716,821
+The Group entered into various derivative financial instruments relating to foreign currency
+exchange rates, interest rates, equity, credit, precious metals and other commodities for trading,
+hedging, asset and liability management and on behalf of customers. Please refer to Note V.16
+to the Consolidated Financial Statements for the contractual/notional amounts and fair values of
+derivative instruments.
+As at 31 December 2018
+Unit: RMB million, except percentages
+Due to Customers by Currency
+30
+Note: "Others" are inclusive of accrued interest in 2018.
+100.00%
+0.53%
+58,045
+10,851,418
+1.85%
+100.00%
+11,886,795
+Total
+219,969
+Others
+44.80%
+RMB 75.63% 11,256,454
+(6,265)
+692 (1,153)
+15,152
+Contingent liabilities and commitments include legal proceedings and arbitrations, assets
+pledged, collateral accepted, capital commitments, operating leases, Treasury bonds redemption
+commitments, credit commitments and underwriting obligations, etc. Please refer to Note V.41 to
+the Consolidated Financial Statements for more detailed information on contingent liabilities and
+commitments.
+Cash Flow Analysis
+(6,967)
+4,367
+70,194 70,728 14,083 15,073
+(131,958) (126,351) (39,956) (43,172)
+(98,872) (85,286) (1,114) (1,722)
+Impairment losses on assets
+Operating expenses
+commission income
+Including: net fee and
+144,100 145,372
+(4,659)
+359,706 338,389
+2017
+Group
+2018
+2017
+31
+Elimination
+2018
+Other countries and
+regions
+2017 2018
+37,745 16,930
+57,401 6,647
+Hong Kong,
+Macao and Taiwan
+2018
+284,930 38,831
+85,774 51,143
+2017
+Chinese mainland
+2018
+303,945
+89,099
+Net interest income
+Non-interest income
+Items
+Unit: RMB million
+The Group conducts its business activities in the Chinese mainland, Hong Kong, Macao, Taiwan
+and other countries and regions. A geographical analysis of profit contribution and the related
+assets and liabilities is set forth in the following table:
+Segment Reporting by Geography
+Net cash flow from financing activities was an inflow of RMB229.337 billion, an increase of
+RMB163.753 billion compared with the prior year. This was mainly attributable to the increase of
+proceeds from issuance of bonds compared with the prior year.
+Net cash flow from investing activities was an outflow of RMB182.493 billion, a decrease of
+RMB322.597 billion compared with the prior year. This was mainly attributable to the increase of
+proceeds from financial investment compared with the prior year.
+In 2018, net cash flow from operating activities was an inflow of RMB662.358 billion, an
+increase of RMB256.222 billion compared with the prior year. This was mainly attributable to
+the increase in the net increase of balances with customer deposits and due to banks and other
+financial institutions and a net decrease of balances with due to central banks, whereas it was a
+net increase in the prior year.
+As at the end of 2018, the balance of the Group's cash and cash equivalents was
+RMB1,688.600 billion, an increase of RMB729.848 billion compared with the prior year-end.
+2017
+15,714
+6,856 (2,789)
+N.A.
+3.54%
+Bond issued by policy banks in 2017
+Items
+As at 31 December 2018
+As at 31 December 2017
+Unit: RMB million, except percentages
+The classification of the Group's financial investment portfolio is shown below:
+27
+27
+As at the end of 2018, the Group held investments of RMB5,054.551 billion, an increase of
+RMB499.829 billion or 10.97% compared with the prior year-end. Specifically, the Group's
+RMB investments totalled RMB3,978.636 billion, an increase of RMB447.963 billion or
+12.69% compared with the prior year-end, while foreign currency investments totalled
+USD156.766 billion, an increase of USD45 million or 0.03% compared with the prior year-end.
+The Bank tracked financial market dynamics, increased its bond investments and continuously
+improved its investment structure.
+100.00%
+10,896,558
+100.00%
+N.A.
+N.A.
+0.26%
+31,589
+11,819,272
+36.01%
+3,923,857
+37.57%
+4,440,085
+63.99%
+6,972,701
+62.17%
+7,347,598
+Amount % of total
+As at 31 December 2017
+As at 31 December 2018
+Amount % of total
+Amount
+% of total
+Amount
+Financial assets at fair value through profit or loss
+loans and receivables
+Financial investments classified as
+45.88%
+2,089,864
+N.A.
+N.A.
+Debt securities held to maturity
+40.78%
+1,857,222
+N.A.
+N.A.
+Investment securities available for sale
+N.A.
+Investments
+N.A.
+2,804,301
+Financial assets at amortised cost
+N.A.
+N.A.
+37.19%
+1,879,759
+comprehensive income
+Financial assets at fair value through other
+4.25%
+% of total
+193,611
+7.33%
+370,491
+55.48%
+Total Loans
+Accrued interest
+Personal Loans
+Liabilities
+100.00%
+5.03%
+980,328
+5.45%
+6.61% 1,060,456
+4.51%
+100.00% 19,467,424
+21,267,275
+Total assets
+960,373
+Other assets
+1,405,534
+other financial institutions
+Due from and placements with banks and
+Due to customers
+11.44%
+54.68%
+10,644,304
+54.15%
+23.77% 4,554,722
+10.96% 2,227,614
+2,331,053
+Balances with central banks
+5,054,551
+11,515,764
+Loans and advances to customers, net
+Investments
+Assets
+Unit: RMB million, except percentages
+As at 31 December 2017
+Amount % of total
+As at 31 December 2018
+Amount % of total
+Items
+The principal components of the Group's consolidated statement of financial position are set out
+below:
+23.40%
+N.A.
+14,883,596
+13,657,924
+Items
+Corporate Loans
+Unit: RMB million, except percentages
+The Bank further improved its risk management, paid close attention to changes in the
+macroeconomic situation, strengthened risk identification and management in key areas and made
+greater efforts to dispose of non-performing assets (NPAs), thus maintaining a basically stable
+asset quality. As at the end of 2018, the balance of the Group's allowance for loan impairment
+losses amounted to RMB303.781 billion, an increase of RMB51.527 billion compared with the
+prior year-end. The balance of the Group's restructured loans amounted to RMB 10.002 billion, an
+increase of RMB 1.865 billion compared with the prior year-end.
+In line with China's macroeconomic policies and the financial demands of the real economy,
+the Bank rationally allocated credit extension and expanded its lending scale at a stable and
+moderate pace. It continuously improved its credit structure, and proactively supported the
+credit needs of key regions and industries. The Bank strictly controlled credit facilities granted
+to industries characterised by high pollution, high energy consumption and overcapacity. It also
+continued to implement a differentiated residential mortgage loan policy and steadily expanded
+its personal loan business. As at the end of 2018, the Group's loans and advances to customers
+amounted to RMB11,819.272 billion, an increase of RMB922.714 billion or 8.47% compared
+with the prior year-end. Specifically, the Group's RMB loans and advances to customers totalled
+RMB9,095.562 billion, an increase of RMB770.549 billion or 9.26% compared with the prior
+year-end, while its foreign currency loans amounted to USD396.857 billion, an increase of
+USD3.305 billion or 0.84% compared with the prior year-end. Please refer to Note V.17 to the
+Consolidated Financial Statements for detailed information.
+Loans and Advances to Customers
+26
+Notes: "Other borrowed funds" includes bonds issued and other borrowings.
+100.00%
+17,890,745
+100.00%
+19,541,878
+Total liabilities
+4.15%
+76.16%
+741,914
+592,397
+Other liabilities
+2.96%
+529,756
+16.55%
+16.64% 2,961,151
+4.17%
+814,888
+Other borrowed funds
+3,250,997
+due to central banks
+other financial institutions and
+Due to and placements from banks and
+76.34%
+3.03%
+N.A.
+414,025
+9.09%
+As at 31 December 2018
+USD 14.64% 740,206
+RMB 78.71% 3,978,636
+Unit: RMB million, except percentages
+Investments by Currency
+28
+Note: "Equity instruments and others" includes accrual interest.
+100.00%
+4,554,722
+100.00%
+5,054,551
+2.67%
+121,589
+Other 2.83% 142,856
+3.68%
+17.03%
+775,892
+15.89%
+803,116
+2.53%
+115,164
+3.03%
+153,056
+Total
+Equity instruments and others
+Subtotal
+Corporates
+4.20%
+185,958
+191,321
+HKD 3.82% 192,853
+Top Ten Financial Bonds by Value Held by the Group
+2027-09-08
+4.39%
+11,100
+Bond issued by policy banks in 2017
+2020-04-19
+3.88%
+12,662
+Bond issued by policy banks in 2017
+2025-01-12
+4.98%
+14,012
+Bond issued by policy banks in 2018
+I
+Unit: RMB million, except percentages
+2019-10-20
+15,363
+Bond issued by policy banks in 2016
+Impairment Allowance
+Maturity Date
+Annual Rate
+Par Value
+Bond Name
+Unit: RMB million, except percentages
+HKD 4.07% 185,368
+Other 4.24% 193,342
+USD 14.17% 645,339
+RMB 77.52% 3,530,673
+As at 31 December 2017
+2.65%
+N.A.
+3.46%
+Financial institutions
+11.40%
+519,245
+9.59%
+484,992
+Policy banks
+1.40%
+64,016
+1.67%
+84,364
+Public sectors and quasi-governments
+52.77%
+2,403,536
+52.51%
+Financial institutions
+2,654,129
+Issuers in the Chinese mainland
+Amount % of total
+Amount % of total
+As at 31 December 2018
+Unit: RMB million, except percentages
+As at 31 December 2017
+Debt securities
+Items
+Investments by Issuer Type
+100.00%
+4,554,722
+100.00%
+5,054,551
+Total
+Government
+174,719
+496,675
+322,827
+2.02%
+92,211
+2.15%
+108,739
+Public sectors and quasi-governments
+8.28%
+377,196
+7.25%
+366,602
+Governments
+other countries and regions
+Issuers in Hong Kong, Macao, Taiwan and
+80.30%
+9.83%
+3,657,241
+4,065,477
+Subtotal
+3.49%
+158,806
+3.04%
+153,627
+China Orient Asset Management Corporation
+4.15%
+188,811
+3.79%
+191,690
+Corporates
+7.09%
+80.43%
+9,729
+4,336
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+For a portfolio of insurance contracts where the theory of probability is applied to pricing
+and provisioning, the principal risk that the Group faces under its insurance contracts is
+that the actual claims and benefit payments exceed the carrying amount of the insurance
+liabilities. This could occur because the frequency or severity of the claims and benefits are
+greater than estimated. Insurance events are random and the actual number and amount of
+claims and benefits will vary from year to year from the level established using statistical
+techniques.
+Insurance contracts are mainly sold in the Chinese mainland and Hong Kong denominated in
+RMB and HKD. The risk under any one insurance contract is the possibility that the insured
+event occurs and the uncertainty of the amount of the resulting claim. This risk is inherently
+random and, therefore, unpredictable. The Group manages its portfolio of insurance risks
+through its underwriting strategy and policies, portfolio management techniques, adequate
+reinsurance arrangements and proactive claims handling and processing. The underwriting
+strategy attempts to ensure that the underwritten risks are well diversified in terms of type
+and amount of risk and industry.
+Insurance risk
+This mainly represented exchange differences from the translation of foreign operations and gains/(losses)
+on financial assets at fair value through other comprehensive income.
+When calculating the capital adequacy ratios, BOCG Investment, Bank of China Insurance Company
+Limited ("BOC Insurance"), Bank of China Group Insurance Company Limited ("BOCG Insurance") and
+Bank of China Group Life Assurance Company Limited ("BOCG Life") were excluded from the scope of
+consolidation in accordance with the requirements of the CBIRC.
+(2)
+(1)
+8
+Capital management (Continued)
+7
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+3,043
+3,065
+220
+453
+673
+There were no significant transfers for the financial instruments measured at fair value
+between Level 1 and Level 2 during the year ended 31 December 2018.
+6.2 Financial assets and liabilities not measured at fair value
+Financial assets and liabilities not presented at fair value in the statement of financial
+position mainly represent "Balances with central banks”, “Due from banks and other
+financial institutions”, “Placements with and loans to banks and other financial institutions",
+"Due to central banks”, “Due to banks and other financial institutions”, “Loans and
+advances to customers measured at amortised cost", "Financial investments measured at
+amortised cost", "Placements from banks and other financial institutions at amortised cost",
+"Due to customers at amortised cost", and "Bonds issued at amortised cost".
+386
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Uncertainty in the estimation of future benefit payments and premium receipts for long-term
+life insurance contracts arises from the unpredictability of long-term changes in overall
+levels of mortality. In order to assess the uncertainty due to the mortality assumption and
+lapse assumption, the Group conducted mortality rate studies and policy lapse studies in
+order to determine the appropriate assumptions.
+392
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+393
+Since 2017, the Group measured the LCR on a day-to-day consolidated basis (2). In the fourth
+quarter of 2018, the Group measured 92-day LCR on this basis, with average ratio standing
+at 139.66% (3), representing an increase of 5.93 percentage points over the previous quarter,
+which was primarily due to the increase in the high-quality liquid assets ("HQLA").
+The Group's liquidity coverage ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks
+issued by CBIRC, the commercial banks' LCR should reach 100% by the end of 2018.
+During the transition period, the LCR should be no lower than 90%. During the transition
+period, eligible commercial banks are encouraged to fulfil the requirements in advance,
+and banks with LCR already reaching 100% are encouraged to continuously maintain it
+at 100% or above.
+Regulatory requirements of liquidity coverage ratio
+According to the Measures for the Information Disclosure of Liquidity Coverage Ratio of
+Commercial Banks, the Group disclosed the information of liquidity coverage ratio
+("LCR") as follows.
+Liquidity coverage ratio
+The liquidity ratios are calculated in accordance with the relevant provisions of the CBIRC.
+6
+56.93%
+Foreign currency current assets to foreign
+currency current liabilities
+47.09%
+58.71%
+RMB current assets to RMB current liabilities
+2017
+2018
+As at 31 December
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION
+There are no differences in the Group's operating results for the years ended 31 December
+2018 and 2017 or total equity as at 31 December 2018 and 2017 presented in the Group's
+consolidated financial statements prepared under IFRS and those prepared under CAS.
+I DIFFERENCES BETWEEN IFRS AND CAS CONSOLIDATED FINANCIAL
+STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+54.78%
+Fair value (Continued)
+6.2 Financial assets and liabilities not measured at fair value (Continued)
+The tables below summarise the carrying amounts and fair values of "Debt securities at
+amortised cost" and "Bonds issued" not presented at fair value as at 31 December 2018,
+and the carrying amounts and fair values of debt securities held to maturity, debt securities
+classified as loans and receivables, and “Bonds issued" not presented at fair value as at
+31 December 2017.
+The China Orient Bond and Special Purpose Treasury Bond held by the Bank are non-negotiable. As there
+are no observable market prices or yields reflecting arm's length transactions of a comparable size and
+tenor, the fair value is determined based on the stated interest rate of the instruments.
+Fair values of other debt securities are based on market prices or broker/dealer price quotations. Where
+this information is not available, the Bank will perform valuation by referring to prices from valuation
+service providers or on the basis of discounted cash flow models. Valuation parameters include market
+interest rates, expected future default rates, prepayment rates and market liquidity. The fair values of RMB
+bonds are mainly determined based on the valuation results provided by China Central Depository &
+Clearing Co., Ltd.
+(2)
+Bonds issued
+The aggregate fair values are calculated based on quoted market prices. For those bonds where quoted
+market prices are not available, a discounted cash flow model is used based on a current yield curve
+appropriate for the remaining term to maturity.
+387
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+499,039
+6.2 Financial assets and liabilities not measured at fair value (Continued)
+Financial assets
+Level 1
+As at 31 December 2018
+Level 2
+Level 3
+Total
+Debt securities at amortised cost
+2,534,891
+2,237
+2,610,183
+Financial liabilities
+Bonds issued
+Level 1
+758,805
+The tables below summarise the fair values of three levels of "Debt securities at amortised
+cost" (excluding the China Orient Asset Management Corporation Bond and Special
+Purpose Treasury Bond), and “Bonds issued" not presented at fair value as at 31 December
+2018, and the fair values of three levels of "Debt securities” classified as held to maturity,
+loans and receivables (excluding the China Orient Asset Management Corporation Bond
+and Special Purpose Treasury Bond), and "Bonds issued" not presented at fair value as at
+31 December 2017.
+The Group's liquidity coverage ratio (Continued)
+499,128
+761,610
+Financial assets
+As at 31 December 2018
+Carrying
+value Fair value
+As at 31 December 2017
+Carrying
+value
+Fair value
+Debt securities
+at amortised cost (1)
+2,795,740
+2,806,772
+N/A
+N/A
+Debt securities
+held to maturity
+766,005
+N/A
+2,089,864
+2,039,533
+Debt securities
+classified as
+loans and receivables
+N/A
+N/A
+405,112
+397,269
+Financial liabilities
+Bonds issued (2)
+(1)
+Debt securities at amortised cost
+N/A
+The Group's HQLA is comprised of cash, central bank reserves which are able to be drawn
+down under stress scenarios, and debt securities that meet the qualifying criteria for Level 1
+or Level 2 assets pursuant to the Rules on Liquidity Risk Management of Commercial Banks
+by the CBIRC.
+2018
+Quarter
+ended 31
+December
+Total HQLA
+122
+21
+Total cash inflows
+Other cash inflows
+Inflows from fully performing exposures
+20
+20
+89
+19
+18
+17 Secured lending (including reverse repos and
+securities borrowing)
+Cash inflows
+22 Total net cash outflows
+5,725,469
+53,666
+2,340,343
+15 Other contingent funding obligations
+54,521
+54,521
+Other contractual funding obligations
+14
+99,844
+1,207,600
+Credit and liquidity facilities
+13
+2,838
+2,838
+16 Total cash outflows
+products
+23 Liquidity coverage ratio (%)
+120,789
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Fair value (Continued)
+6.1 Assets and liabilities measured at fair value (Continued)
+Total gains or losses for the years ended 31 December 2018 and 2017 included in the
+income statement as well as total gains or losses included in the income statement relating
+to financial instruments held as at 31 December 2018 and 2017 are presented in “Net trading
+gains”, “Net gains on financial investments” or “Impairment losses on assets” depending on
+the nature or category of the related financial instruments.
+Gains or losses on Level 3 assets and liabilities included in the income statement for the
+comprise:
+year
+Year ended 31 December 2018
+Realised Unrealised
+Total
+395
+Year ended 31 December 2017
+Realised Unrealised
+Total gains for the year
+22
+139.66%
+3,976,211
+2,851,749
+value
+Total adjusted
+2,873,720
+3,429,076
+1,892,741
+1,981,892
+871,426
+1,326,395
+109,553
+Total
+7,200
+Outflows related to loss of funding on debt
+1,790,120
+6,604,613
+3,976,211
+value
+value
+Total
+weighted
+un-weighted
+Total
+2 Retail deposits and deposits from small business
+customers, of which:
+Cash outflows
+1 Total high-quality liquid assets (HQLA)
+High-quality liquid assets
+No.
+The Group's average values of LCR individual line items in the fourth quarter of 2018 are as follows:
+484,171
+The Group's liquidity coverage ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+394
+117.81%
+126.55%
+133.73%
+139.66%
+Average value of LCR
+Quarter
+ended 31
+March
+Quarter
+ended 30
+June
+Quarter
+ended 30
+September
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+12
+3456
+Stable deposits
+1,790,120
+other collateral requirements
+Outflows related to derivative exposures and
+11
+1,892,802
+3,000,558
+Additional requirements, of which:
+10
+5,516
+Secured funding
+33,677
+33,677
+Unsecured debt
+78981
+2,092,826
+Non-operational deposits (all counterparties)
+1,108,290
+4,491,419
+from correspondent banking activities)
+Operational deposits (excluding those generated
+3,234,793
+8,309,190
+Unsecured wholesale funding, of which:
+320,457
+3,204,573
+Less stable deposits
+163,714
+3,400,040
+3,784,094
+766,005
+73,055
+Level 2
+Undistributed profits
+Surplus reserve
+General reserve
+Eligible portion of minority interests
+Other(2)
+156,711
+140,692
+231,416
+207,693
+637,609
+As at 31 December 2017
+28,229
+26,280
+(765)
+(38,586)
+Regulatory deductions
+(22,241)
+(21,320)
+Goodwill
+Other intangible assets (except land use rights)
+Direct or indirect investments in own shares
+Reserve relating to cash-flow hedge items not
+measured at fair value
+Investments in common equity tier 1 capital of
+financial institutions with controlling interests
+but outside the scope of regulatory consolidation
+Net common equity tier 1 capital
+140,176
+(182)
+140,422
+294,388
+Common equity tier 1 capital adequacy ratio
+Tier 1 capital adequacy ratio
+Capital adequacy ratio
+As at
+As at
+31 December
+31 December
+2018
+2017
+11.41%
+11.15%
+12.27%
+12.02%
+14.97%
+14.19%
+Composition of the Group's capital base
+Common equity tier 1 capital
+1,488,010
+1,377,408
+Common shares
+294,388
+Capital reserve
+(138)
+(12,078)
+(11,259)
+82,093
+63,672
+Eligible portion of minority interests
+9,191
+9,384
+Regulatory deductions
+(416)
+(412)
+Significant minority capital investment in tier 2
+capital of financial institutions that are outside
+of the scope of regulatory consolidation
+Net capital
+Risk-weighted assets
+(416)
+(412)
+1,922,350
+1,725,330
+12,841,526
+12,157,771
+391
+BANK OF CHINA LIMITED
+Excess loan loss provisions
+191,596
+256,189
+Tier 2 capital instruments issued and related premium
+(68)
+(102)
+4
+(9,913)
+(9,825)
+1,465,769
+1,356,088
+Additional tier 1 capital
+109,524
+105,002
+Capital management (Continued)
+Preference shares and related premium
+99,714
+Eligible portion of minority interests
+9,810
+5,288
+Net tier 1 capital
+1,575,293
+1,461,090
+Tier 2 capital
+347,473
+264,652
+99,714
+7
+606,765
+2,039,533
+195,963
+Capital adequacy and regulatory capital are monitored by the Group's management,
+employing techniques based on the guidelines developed by the Basel Committee, as
+implemented by the CBIRC, for supervisory purposes. The required information is filed with
+the CBIRC on a quarterly basis.
+The Group's capital adequacy ratios are calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations. With the approval of
+the CBIRC, the Group adopts the advanced capital measurement approaches, which include
+Foundation Internal Ratings-based Approach for corporate exposures, Internal Ratings-based
+Approach for retail exposures, Internal Models Approach for market risk and Standardised
+Approach for operational risk. For risk exposures not covered by the advanced approaches,
+the corresponding portion shall be calculated adopting non-advanced approaches.
+As a Systemically Important Bank, the Group's capital adequacy ratios are required to meet
+the lowest requirements of the CBIRC by the end of 2018, that is, the common equity tier 1
+capital adequacy ratio, tier 1 capital adequacy ratio and capital adequacy ratio should be no
+less than 8.50%, 9.50% and 11.50%, respectively.
+389
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+7
+Capital management (Continued)
+The Group's regulatory capital is managed by its capital management related departments
+and consists of the following:
+•
+Common equity tier 1 capital, including common shares, capital reserve, surplus
+reserve, general reserve, undistributed profits, eligible portion of minority interests and
+others;
+Additional tier 1 capital, including additional tier 1 capital instruments issued and
+related premium and eligible portion of minority interests;
+Tier 2 capital, including tier 2 capital instruments issued and related premium, excess
+loan loss provisions and eligible portion of minority interests.
+Goodwill, other intangible assets (except land use rights), investments in common equity
+tier 1 capital of financial institutions with controlling interests but outside of the scope of
+regulatory consolidation, significant minority capital investment in tier 2 capital of financial
+institutions that are outside of the scope of regulatory consolidation and other deductible
+items are deducted from common equity tier 1 and tier 2 capital to derive at the regulatory
+capital.
+The table below summarises the Group's common equity tier 1 capital adequacy ratio, tier 1
+capital adequacy ratio and capital adequacy ratio(1) calculated in accordance with the Capital
+Rules for Commercial Banks (Provisional) and other relevant regulations.
+390
+Refined management and capital level improvement. Optimise the capital management
+system by sufficiently identifying, calculating, monitoring, mitigating, and controlling
+various types of risks; incorporate capital restraints into the whole process of product
+pricing, resource allocation, structural adjustments, performance evaluation, etc.,
+ensuring that the capital employed is commensurate with the related risks and the level
+of risk management.
+BANK OF CHINA LIMITED
+Allocation optimisation and benefit augmentation. Allocate capital properly by
+prioritising the asset businesses with low capital occupancy and high comprehensive
+income, to steadily improve the efficiency and return of capital, achieving the
+reciprocal matchup and dynamic equilibrium among risks, assets and returns.
+The Group follows the principles below with regard to capital management:
+38,194
+Loans and receivables
+2,001,046
+193,250
+293
+2,713
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Financial liabilities
+Bonds issued
+499,039
+499,039
+Other than the above, the difference between the carrying amounts and fair values of those
+financial assets and liabilities not presented at their fair value in the statement of financial
+position is insignificant. Fair value is measured using a discounted cash flow model.
+388
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2018
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+7
+Capital management
+Adequate capital and sustainable development. Follow the lead of the strategic planning
+of the Group development; and maintain the high quality and adequacy of capital as
+to meet regulation requirements, support business growth, and advance the sustainable
+development of the scale, quality and performance of the business in the Group.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+•
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2018
+Level 3
+Total
+Debt securities
+Held to maturity
+Financial assets
+SUPPLEMENTARY INFORMATION
+Leverage ratio
+11,233,344
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+401
+22,700,133
+Adjusted on- and off-balance sheet assets
+8
+Adjusted on-balance and off-balance sheet assets
+(338,697)
+93,418
+1,571,429
+BANK OF CHINA LIMITED
+116,621
+6.94%
+(1)
+1,857,785
+When calculating the consolidated leverage ratio, BOCG Investment, BOC Insurance, BOCG Insurance
+and BOCG Life were excluded from the scope of consolidation in accordance with the Capital Rules for
+Commercial Banks (Provisional).
+2018 value
+402
+No. Indicators (1)
+The following global systemically importance assessment indicators of commercial banks
+are disclosed in accordance with the Guidelines for the Disclosure of Global Systemically
+Importance Assessment Indicators of Commercial Banks (Yin Jian Fa, [2014] No. 1).
+6 Global systemically importance assessment indicators of commercial banks
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+1
+9,663,845
+1,931,660
+3,289,094
+3
+Intra-financial system liabilities
+4
+Securities and other financing instruments
+5
+Payments settled via payment systems or correspondent banks
+6
+22
+Assets under custody
+7
+Underwritten transactions in debt and equity markets
+8
+Intra-financial system assets
+Notional amount of over-the-counter derivatives
+9
+Trading and available for sale securities
+10
+Level 3 assets
+11
+Cross-jurisdictional claims
+12
+Cross-jurisdictional liabilities
+(1)
+22,700,133
+1,984,614
+584,485,591
+22,700,133
+assets
+1,575,293
+2018
+6
+Gross-up for derivative collateral provided where deducted
+from the balance sheet assets
+7
+Less: Deductions of receivable assets for cash variation margin
+provided in derivative transactions
+8
+Less: Exempted CCP leg of client-cleared trade exposures
+9
+10
+Adjusted effective notional amount of written credit derivatives
+Less: Deductible amounts for written credit derivatives
+31 December
+As at
+116,761
+On-balance sheet assets (excluding derivatives and
+Leverage ratio (Continued)
+5
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+11
+Total derivative exposures
+240,747
+12
+Accounting balance for securities financing transaction assets
+260,207
+13
+14
+Less: Deducted amounts for securities financing transaction assets
+Counterparty credit risk exposure for securities financing transaction
+No. Items
+Adjusted on- and off-balance sheet exposures
+with all derivative transactions
+5
+1,571,429
+Net tier 1 capital
+Adjusted off-balance sheet exposures
+222
+21
+20
+19
+4,243,221
+(2,671,792)
+18 Less: Adjustments for conversion to credit equivalent amounts
+354,015
+Balance of assets in securities financing transactions
+Off-balance sheet items
+17
+17
+Add-on amounts for potential future exposure associated
+15 Agent transaction exposures
+-
+securities financing transactions)
+2
+Less: Tier 1 capital deductions
+20,556,183
+(22,241)
+3
+Total on-balance sheet exposures
+(excluding derivatives and SFTs)
+20,533,942
+4
+Replacement cost associated with all derivative transactions
+(i.e. net of eligible cash variation margin)
+123,986
+93,808
+(9,913)
+Net stable funding ratio
+2018
+4 Overdue assets
+For the purpose of the table below, the entire outstanding balance of "Loans and advances
+to customers" and "Placements with and loans to banks and other financial institutions" are
+considered overdue if either principal or interest payment is overdue.
+4.1 Total amount of overdue loans and advances to customers
+As at 31 December
+2018
+2017
+Total loans and advances to customers
+which have been overdue
+within 3 months
+84,754
+71,356
+between 3 and 6 months
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+24,673
+between 6 and 12 months
+45,816
+37,955
+over 12 months
+64,708
+73,329
+Total
+Percentage
+within 3 months
+between 3 and 6 months
+between 6 and 12 months
+over 12 months
+20,202
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+Available stable funding
+Required stable funding
+Total
+As at 31 December 2017
+Asia Pacific
+Chinese mainland
+695,126
+188,160
+Hong Kong
+14,442
+-
+Other Asia Pacific locations
+80,331
+775,963 1,659,249
+461,546 475,988
+84,812 307,773 472,916
+Subtotal
+789,899
+272,972
+1,545,282 2,608,153
+North and South America
+46,815
+Other
+70,518
+172,661
+51,318
+167,913 387,389
+183,639 305,475
+Total
+907,232
+496,951 1,896,834 3,301,017
+399
+Total
+219,951
+202,842
+0.72%
+1,542,039
+1,486,972
+1,470,837
+22,700,133 22,556,634 21,764,394
+21,671,433
+6.94%
+sector
+sector
+937,778
+Banks
+Non-bank
+private
+6.84%
+6.83%
+6.79%
+No. Items
+1
+2
+3
+345
+7
+Total consolidated assets
+Adjustments that are consolidated for accounting purposes
+but outside the scope of regulatory consolidation
+Adjustments for fiduciary assets
+Adjustments for derivative financial instruments
+Adjustments for securities financing transactions
+Adjustments for off-balance sheet exposures
+Other adjustments
+As at
+31 December
+1,575,293
+21,267,275
+As at
+31 March
+31 December 30 September
+0.65%
+0.21%
+0.19%
+0.39%
+0.35%
+0.55%
+0.67%
+1.87%
+1.86%
+4.2 Total amount of overdue Placements with and loans to banks and other financial
+institutions
+The total amount of overdue "Placements with and loans to banks and other financial
+institutions" as at 31 December 2018 and 2017 is not considered material.
+400
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+5
+Leverage ratio
+The leverage ratios of the Group calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) are as follows(¹):
+Net tier 1 capital
+Adjusted on- and
+off-balance sheet assets
+Leverage ratio
+2018
+As at
+As at
+As at
+30 June
+28,866
+3
+4,470,366
+USD
+Equivalent in millions of RMB
+Other
+The following information is computed in accordance with the provisions of the CBIRC.
+Currency concentrations
+2
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+396
+(1) When calculating the consolidated NSFR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life were excluded from the scope of consolidation in accordance with the requirements of the CBIRC.
+125.60%
+10,964,878
+3,440,512
+13,771,501
+Value
+Closing price on
+31 December 2018
+HKD3.38
+Highest trading
+price in the year
+RMB4.87
+Highest trading
+price in the year
+HKD4.96
+Lowest trading
+HKD
+Total
+As at 31 December 2018
+Spot assets
+Spot liabilities
+52,685
+Structural position
+5,094
+(33,751) (13,218)
+52,063
+Net long/(short) position
+750,992 1,195,354 8,059,734
+(409,454) (1,245,872) (7,147,373)
+(258) (1,885) (43,001)
+(40,858)
+Net options position*
+(5,492,047)
+Forward sales
+price in the year
+RMB3.42
+(52,215)
+4,826,149
+(4,524,308)
+Forward sales
+Forward purchases
+1,158,457 20,384
+(1,354,531) (378,404)
+Spot liabilities
+Spot assets
+As at 31 December 2017
+70,141 342,713
+6,113,388
+Forward purchases
+3,679,148 1,488,089 1,445,560 6,612,797
+(4,207,568) (1,863,120) (1,406,375) (7,477,063)
+Net options position*
+219,887
+Lowest trading
+price in the year
+H Share
+Domestic Preference Share (Second Tranche)
+Stock Name
+Shanghai Stock Exchange
+Bloomberg
+405
+中行優2
+As at 31 December 2018, the Group's (1) NSFR was 125.60%, which met the regulatory
+requirement.
+Available stable funding refers to sum of products of carrying value of an institution's
+capital and liabilities with associated available stable funding factors. Required stable
+funding refers to sum of products of carrying value of an institution's assets and off-balance
+sheet exposures with associated required stable funding factors.
+Net stable funding ratio = available stable funding/required stable funding × 100%
+The formula for calculating the NSFR is:
+The net stable funding ratio ("NSFR") is introduced to ensure commercial banks have
+sufficient stable funding to meet the requirements of assets and off-balance sheet exposures.
+According to the Rules on Liquidity Risk Management of Commercial Banks, NSFR should
+be no less than 100% from 1 July 2018.
+Net stable funding ratio
+The average of LCR and the averages of all related individual items are the day-end simple arithmetic
+averages of figures.
+When calculating the consolidated LCR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life were excluded from the scope of consolidation in accordance with the requirements of the CBIRC.
+(3)
+(2)
+(1) The LCR aims to ensure that commercial banks have sufficient HQLA that can be converted into cash to
+meet the liquidity requirements for at least thirty days under stress scenarios determined by the CBIRC.
+The Group's liquidity coverage ratio (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+3988 HK
+3988.HK
+3988
+Bank of China
+中國銀行
+601988
+Stock Name
+Hong Kong Stock Exchange
+601988.SS
+Reuters
+601988 CH
+Bloomberg
+Domestic Preference Share (First Tranche)
+Stock Name
+Shanghai Stock Exchange
+HKD3.20
+Bloomberg
+360002
+EK6323670
+Indicators
+Offshore Preference Share
+Stock Name
+BOC 2014 PREF
+Hong Kong Stock Exchange 4601
+Reuters
+Bloomberg
+4601.HK
+EK5371647
+中行優1
+EK8196546
+360010
+54,341
+Official
+International claims (Continued)
+The Bank's ordinary shares were listed on the Hong Kong Stock Exchange and SSE on 1 June
+and 5 July 2006 respectively.
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+398
+753,642 1,923,497 3,497,582
+820,443
+Total
+145,386 429,333
+234,936 366,436
+224,329
+77,159
+Listing and Trading
+Other
+59,618
+North and South America
+1,543,175 2,701,813
+452,154
+706,484
+Subtotal
+28 December 2018
+RMB3.61
+701,782 1,728,242
+469,543 487,737
+371,850 485,834
+Closing price on
+Reuters
+Issued shares: 294,387,791,241 shares (as at 31 December 2018)
+Including:
+A Share: 210,765,514,846 shares
+H Share:
+83,622,276,395 shares
+Preference Shares
+Issued shares:
+Including:
+999,400,000
+shares (as at 31 December 2018)
+Domestic Preference Share: 600,000,000 shares
+Offshore Preference Share: 399,400,000 shares
+404
+Market Capitalisation
+As at the last trading day of 2018 (28 December for A Shares and 31 December for H Shares),
+the Bank's market capitalisation was RMB1,008.516 billion (based on the closing price of
+A Shares on 28 December 2018 and H Shares on 31 December 2018, and the exchange rate of
+HKD100 = RMB87.62 as published by the SAFE on 28 December 2018).
+Securities Price
+A Share
+H Share
+Securities Code
+A Share
+Stock Name
+Shanghai Stock Exchange
+Bloomberg
+33,887
+80,097
+Other Asia Pacific locations
+Structural position
+(4,489)
+53,552 (41,012) (17,029)
+Net long/(short) position
+450,791 1,629,632
+(378,637) (2,111,572)
+655,260 1,174,088 6,655,497
+(338,715) (1,250,349) (6,113,372)
+463 (12,922) (64,674)
+Securities Information
+The Board of Directors recommended a final dividend on ordinary shares of RMB0.184 per share
+(before tax), subject to the approval of shareholders at the 2018 Annual General Meeting.
+Dividends on Ordinary Shares
+The Bank's 2018 Annual General Meeting is scheduled to be held in Beijing and Hong Kong,
+China at 9:30 a.m. on Friday, 17 May 2019.
+To be announced no later than 30 August 2019
+To be held on 17 May 2019
+To be printed and dispatched to H-Share Holders in
+late April 2019
+To be announced on 29 March 2019
+Annual General Meeting
+2019 Interim Results
+2018 Annual General Meeting
+2018 Annual Results
+2018 Annual Report
+Financial Calendar for 2019
+Reference for Shareholders
+403
+The above indicators are calculated and disclosed in accordance with the Guidelines for the Disclosure
+of Global Systemically Importance Assessment Indicators of Commercial Banks, which are unaudited and
+inconsistent with the disclosures in the financial report.
+35,084 206,661
+67,696
+309,441
+*
+1
+18,193
+Hong Kong
+418,266
+608,194
+Chinese mainland
+Asia Pacific
+As at 31 December 2018
+Total
+Non-bank
+Official private
+sector
+sector
+Ordinary Shares
+Banks
+International claims include “Balances with central banks”, “Due from and placements
+with and loans to banks and other financial institutions", "Government certificates of
+indebtedness for bank notes issued", "Financial assets at fair value through profit or loss",
+"Loans and advances to customers” and “Financial investments".
+The Group discloses international claims according to Banking (Disclosure) Rules
+(L.N. 160 of 2014). International claims are risk exposures generated from the countries
+or geographical areas where the counterparties take the ultimate risk while considering the
+transfer of the risk, exclude local claims on local residents in local currency. Risk transfer is
+only made if the claims are guaranteed by a party in a country which is different from that
+of the counterparty or if the claims are on an overseas branch of a counterparty whose head
+office is located in another country.
+International claims
+3
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+397
+The net option position is calculated in accordance with the relevant provision of the CBIRC.
+International claims have been disclosed by major countries or geographical areas. A
+country or geographical area is reported where it constitutes 10% or more of the aggregate
+amount of international claims, after taking into account any risk transfers.
+The Bank's Offshore Preference Shares were listed on the Hong Kong Stock Exchange
+on 24 October 2014. The Domestic Preference Shares (First Tranche) were traded on the
+Comprehensive Business Platform of SSE on 8 December 2014. The Domestic Preference Shares
+(Second Tranche) were traded on the Comprehensive Business Platform of SSE on 31 March
+2015.
+MAJOR BRANCHES AND SUBSIDIARIES IN HONG KONG, MACAO AND TAIWAN
+412
+BOC HONG KONG
+(HOLDINGS) LIMITED
+24/F, BANK OF CHINA TOWER,
+WEBSITE: www.bocins.com
+HONG KONG, CHINA
+TEL: (852) 28462700
+FAX: (852) 28105830
+8/F, NO. 110 XIDAN NORTH STREET,
+XICHENG DISTRICT,
+BEIJING,
+WEBSITE: www.bochk.com
+26/F, BANK OF CHINA TOWER,
+POST CODE: 100032
+FAX: (86) 010-83260006
+TEL: (86) 010-83260001
+POST CODE: 100032
+EMAIL: bocfi@bocfi.com
+TEL: (86) 010-83262479
+FAX: (86) 010-83262478
+CHINA
+BOC INTERNATIONAL
+HOLDINGS LIMITED
+1 GARDEN ROAD,
+FAX: (65) 65343401
+HONG KONG, CHINA
+TEL: (66) 22861010
+FAX: (66) 22861020
+SWIFT: BKCHTHBK
+THAILAND
+BANGKOK 10120,
+SATHORN DISTRICT,
+TUNGMAHAMEK
+179/4 BANGKOK CITY TOWER,
+SOUTH SATHORN ROAD,
+BANK OF CHINA (THAI)
+PUBLIC COMPANY LIMITED
+EMAIL: service.my@bankofchina.com
+WEBSITE: www.bankofchina.com/my
+SWIFT: BKCHMYKL
+TEL: (60) 323878888
+FAX: (60) 321615150
+MALAYSIA
+GROUND, MEZZANINE, &
+1ST FLOOR PLAZA OSK,
+25 JALAN AMPANG
+50450 KUALA LUMPUR,
+BANK OF CHINA
+(MALAYSIA) BERHAD
+SEOUL BRANCH
+www.bankofchina.com/jp
+WEBSITE:
+service.jp@boctokyo.co.jp
+EMAIL:
+FAX: (81) 335058868
+TEL: (81) 335058818
+SWIFT: BKCHJPJT
+CUSTOMER SERVICE CENTRE:
+(66) 26795566
+JAPAN
+EMAIL: service.th@bankofchina.com
+WEBSITE: www.bankofchina.com/th
+CANADIA TOWER,
+KOREA
+SEOUL 03188
+JONGNO-GU,
+41, CHEONG GYE CHEON-RO,
+1/2/3F YOUNG POONG BLDG.
+EMAIL: service.vn@bankofchina.com
+FAX: (84) 2838219948
+TEL: (84) 2838219949
+SWIFT: BKCHVNVX
+VIETNAM
+HOCHIMINH CITY,
+22-36 NGUYEN HUE STREET,
+DISTRICT 1,
+GROUND & 11TH FL, TIMES
+SQUARE BUILDING,
+BANK OF CHINA
+(HONGKONG) LIMITED
+HOCHIMINH CITY BRANCH
+WEBSITE: www.bankofchina.com/kh
+phnombd@mail.notes.bank-of-china.com
+TEL: (855) 23988886
+FAX: (855) 23988880
+EMAIL:
+SWIFT: BKCHKHPP
+P.O. BOX 110, PHNOM PENH,
+CAMBODIA
+#315 ANG DOUNG ST.
+1ST & 2ND FLOOR,
+BANK OF CHINA
+(HONGKONG) LIMITED
+PHNOM PENH BRANCH
+TOKYO 107-0052
+BOC BLDG. 3-4-1 AKASAKA
+MINATO-KU,
+TOKYO BRANCH
+9/F, WING ON HOUSE,
+71 DES VOEUX ROAD
+CENTRAL,
+BANK OF CHINA GROUP
+INSURANCE COMPANY
+LIMITED
+FAX: (852) 25377609
+TEL: (852) 28101203
+HONG KONG, CHINA
+7/F, BANK OF CHINA TOWER,
+EMAIL: service.tw@bankofchina.com
+WEBSITE: www.bankofchina.com/tw
+1-5/F, NO. 105, SONGREN ROAD,
+XINYI DIST., TAIPEI CITY,
+TAIWAN, CHINA
+SWIFT: BKCHTWTP
+TEL: (886) 227585600
+FAX: (886) 227581598
+TAIPEI BRANCH
+EMAIL: enquiry@boclife.com.hk
+WEBSITE: www.boclife.com.hk
+13/F, CITYPLAZA ONE,
+1111 KING'S ROAD,
+TAIKOO SHING,
+HONG KONG, CHINA
+TEL: (852) 21608800
+FAX: (852) 28660938
+BOC GROUP LIFE
+ASSURANCE CO., LTD.
+FAX: (852) 28772629
+EMAIL: bocginv_bgi@bocgroup.com
+WEBSITE: www.bocgi.com
+TEL: (852) 22007500
+HONG KONG, CHINA
+23/F, BANK OF CHINA TOWER,
+1 GARDEN ROAD,
+BANK OF CHINA GROUP
+INVESTMENT LIMITED
+HONG KONG BRANCH
+EMAIL: info@bocigroup.com
+WEBSITE: www.bocigroup.com
+FAX: (852) 21479065
+TEL: (852) 39886000
+HONG KONG, CHINA
+TEL: (852) 28670888
+FAX: (852) 25221705
+EMAIL: info_ins@bocgroup.com
+WEBSITE: www.bocgins.com
+MACAU BRANCH
+BANK OF CHINA BUILDING,
+AVENIDA DOUTOR MARIO
+SOARES.
+www.bankofchina.com/sg
+WEBSITE:
+service.sg@bankofchina.com
+EMAIL:
+BOC FINANCIAL ASSET
+INVESTMENT CO., LTD.
+TEL: (65) 67795566
+SWIFT: BKCHSGSGXXX
+SINGAPORE
+BANK OF CHINA BUILDING,
+4 BATTERY ROAD,
+1 GARDEN ROAD,
+SINGAPORE BRANCH
+MAJOR BRANCHES AND SUBSIDIARIES IN OTHER COUNTRIES
+413
+EMAIL: tfbsecr@taifungbank.com
+WEBSITE: www.taifungbank.com
+MACAO, CHINA
+TEL: (853) 28322323
+FAX: (853) 28570737
+418, ALAMEDA DR. CARLOS,
+d'ASSUMPCAO,
+TAI FUNG BANK LIMITED
+EMAIL: bocmo@bocmacau.com
+WEBSITE: www.bankofchina.com/mo
+TEL: (853) 88895566
+FAX: (853) 28781833
+SWIFT: BKCHMOMX
+MACAO, CHINA
+ASIA-PACIFIC AREA
+TEL: (86) 010-8326 2688
+FAX: (86) 010-8326 2777
+POST CODE: 100032
+WEBSITE: www.boc-samsunglife.cn
+139 YAOHANG STREET,
+NINGBO,
+9/F, NO. 110 XIDAN NORTH
+STREET,
+SWIFT: BKCHCNBJ970
+TEL: (86) 0731-82580703
+FAX: (86) 0731-82580707
+POST CODE: 410005
+HUNAN PROV.,
+CHINA
+CHANGSHA,
+593 MID. FURONG ROAD
+(1 DUAN),
+HUNAN BRANCH
+SWIFT: BKCHCNBJ550
+TEL: (86) 0791-86471503
+FAX: (86) 0791-86471505
+POST CODE: 330038
+JIANGXI PROV.,
+CHINA
+NANCHANG,
+HONGGUTAN NEW DISTRICT,
+10, LVYIN ROAD,
+JIANGXI BRANCH
+SWIFT: BKCHCNBJ740
+TEL: (86) 0898-66778001
+FAX: (86) 0898-66562040
+POST CODE: 570102
+HAINAN PROV.,
+CHINA
+HAIKOU,
+LONGHUA DISTRICT,
+29, 31 DATONG ROAD,
+HAINAN BRANCH
+SWIFT: BKCHCNBJ600
+TEL: (86) 027-85569726
+FAX: (86) 027-85562955
+POST CODE: 430022
+HUBEI PROV.,
+CHINA
+677 JIANSHE ROAD,
+WUHAN,
+HUBEI BRANCH
+SWIFT: BKCHCNBJ720
+TEL: (86) 0591-87090999
+FAX: (86) 0591-87090111
+POST CODE: 350003
+FUJIAN PROV.,
+CHINA
+GUANGDONG BRANCH
+SICHUAN BRANCH
+35 MID. RENMIN ROAD
+(2 DUAN),
+CHENGDU,
+TEL: (86) 0871-63191216
+QINGHAI PROV.,
+CHINA
+XINING,
+218 DONGGUAN STREET,
+CHENG DONG DISTRICT,
+QINGHAI BRANCH
+SWIFT: BKCHCNBJ640
+YUNNAN PROV.,
+CHINA
+515 BEIJING ROAD,
+KUNMING,
+YUNNAN BRANCH
+410
+SWIFT: BKCHCNBJ240
+TEL: (86) 0851-85822419
+FAX: (86) 0851-85863981
+POST CODE: 550002
+BOC BLDG., 136 WUSI ROAD,
+FUZHOU,
+GUIZHOU PROV.,
+CHINA
+BOC BLDG., 347 RUIJIN
+SOUTH ROAD,
+GUIZHOU BRANCH
+SWIFT: BKCHCNBJ400
+TEL: (86) 020-83338080
+FAX: (86) 020-83347666
+POST CODE: 510180
+CHINA
+1-19TH FLOOR NO. 197 &
+1-11TH FLOOR, 14-19TH FLOOR
+NO. 199 DONGFENG XI ROAD
+YUEXIU DISTRICT,
+GUANGZHOU,
+GUANGDONG PROV.,
+SWIFT: BKCHCNBJ500
+TEL: (86) 0531-58522001
+FAX: (86) 0531-58522000
+POST CODE: 250000
+SHANDONG PROV.,
+CHINA
+22 LUOYUAN STREET,
+JINAN,
+SHANDONG BRANCH
+SWIFT: BKCHCNBJ570
+TEL: (86) 028-86741950
+FAX: (86) 028-86403346
+POST CODE: 610031
+SICHUAN PROV.,
+CHINA
+GUIYANG,
+FUJIAN BRANCH
+SWIFT: BKCHCNBJ480
+TEL: (86) 0771-2879602
+FAX: (86) 0771-2813844
+POST CODE: 530022
+CHINA
+SWIFT: BKCHCNBJ810
+TEL: (86) 024-22810827
+FAX: (86) 024-22857333
+POST CODE: 110013
+253 SHIFU ROAD,
+SHENHE DISTRICT,
+SHENYANG,
+LIAONING PROV.,
+CHINA
+LIAONING BRANCH
+HEBEI BRANCH
+SWIFT: BKCHCNBJ200
+TEL: (86) 022-27108002
+FAX: (86) 022-23312805
+POST CODE: 300204
+CHINA
+TIANJIN,
+8 YOUYI NORTH ROAD,
+HEXI DISTRICT,
+TEL: (86) 021-50375566
+FAX: (86) 021-50372911
+POST CODE: 200120
+SWIFT: BKCHCNBJ300
+CHINA
+JIANGSU BRANCH
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+AUTONOMOUS REGION,
+INNER MONGOLIA
+XIN CHENG DISTRICT,
+HUHHOT,
+12 XINHUA DAJIE,
+TIANJIN BRANCH
+FAX: (86) 010-85121739
+POST CODE: 100010
+TEL: (86) 010-85121491
+SWIFT: BKCHCNBJ110
+CHINA
+BANK OF CHINA
+(HONGKONG) LIMITED
+SWIFT: BKCHCNBJ880
+TEL: (86) 0471-4690052
+FAX: (86) 0471-4690001
+POST CODE: 010010
+SWIFT: BKCHCNBJ280
+148 ZHONG SHAN NAN LU,
+NANJING,
+CHINA
+GUANGXI ZHUANG
+AUTONOMOUS REGION,
+39 GUCHENG ROAD,
+NANNING,
+SWIFT: BKCHCNBJ530
+TEL: (86) 0371-87008888
+FAX: (86) 0371-87007888
+POST CODE: 450018
+CHINA
+HENAN PROV.,
+ZHENGZHOU,
+3-1 BUSINESS OUTER RING ROAD,
+ZHENGDONG NEW DISTRICT,
+SWIFT: BKCHCNBJ780
+TEL: (86) 0551-62926995
+FAX: (86) 0551-62926993
+POST CODE: 230091
+ANHUI PROV.,
+CHINA
+HEFEI,
+NO. 1688, YUNGU ROAD,
+BINHU NEW DISTRICT,
+JIANGSU PROV.,
+GUANGXI BRANCH
+ANHUI BRANCH
+409
+SWIFT: BKCHCNBJ910
+TEL: (86) 0571-85011888
+FAX: (86) 0571-87074837
+POST CODE: 310003
+321 FENG QI ROAD,
+HANGZHOU,
+ZHEJIANG PROV.,
+CHINA
+ZHEJIANG BRANCH
+SWIFT: BKCHCNBJ840
+TEL: (86) 0431-88408888
+FAX: (86) 0431-88408901
+POST CODE: 130061
+699 XI AN DA LU,
+CHANGCHUN,
+JILIN PROV.,
+CHINA
+JILIN BRANCH
+SWIFT: BKCHCNBJ220
+TEL: (86) 0311-69696681
+FAX: (86) 0311-69696692
+POST CODE: 050000
+28 ZIQIANG ROAD,
+SHIJIAZHUANG,
+HEBEI PROV.,
+CHINA
+SWIFT: BKCHCNBJ940
+TLX: 34116BOCJSCN
+TEL: (86) 025-84207888
+FAX: (86) 025-84200407
+POST CODE: 210005
+HENAN BRANCH
+XICHENG DISTRICT,
+BEIJING,
+CHINA
+FAX: (86) 0871-63175573
+POST CODE: 650051
+FAX: (86) 0971-8174971
+POST CODE: 810000
+NORTH HUBIN ROAD,
+XIAMEN,
+CHINA
+BUILDING
+INTERNATIONAL FINANCE
+XIAMEN BRANCH
+WEBSITE: www.bocfullertonbank.com
+POST CODE: 100032
+TEL: (86) 010-57765000
+FAX: (86) 010-57765550
+9/F, NO. 110 XIDAN NORTH STREET,
+XICHENG DISTRICT, BEIJING,
+CHINA
+PREPARATION TEAM
+OF BOC FULLERTON
+COMMUNITY BANKS
+TEL: (86) 021-38834999
+FAX: (86) 021-68873488
+POST CODE: 200120
+WEBSITE: www.bocim.com
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+45/F, BOC BUILDING
+BANK OF CHINA INVESTMENT
+MANAGEMENT CO., LTD.
+TEL: (86) 0411-82586666
+FAX: (86) 0411-82637098
+POST CODE: 116001
+SWIFT: BKCHCNBJ81A
+LIAONING PROV.,
+CHINA
+9 ZHONGSHAN SQUARE,
+ZHONGSHAN DISTRICT,
+DALIAN,
+DALIAN BRANCH
+411
+SWIFT: BKCHCNBJ50A
+TEL: (86) 0532-85979700
+FAX: (86) 0532-67755601
+POST CODE: 266071
+59 HONGKONG
+MIDDLE ROAD,
+QINGDAO,
+SHANDONG PROV.,
+CHINA
+QINGDAO BRANCH
+SWIFT: BKCHCNBJ73A
+TEL: (86) 0592-5317519
+FAX: (86) 0592-5095130
+POST CODE: 361012
+HEBEI XIONGAN BRANCH
+BOC-SAMSUNG LIFE INS.
+CO., LTD.
+www.bocichina.com
+WEBSITE:
+admindiv.china@bocichina.com
+EMAIL:
+POST CODE: 200120
+TEL: (86) 021-20328000
+FAX: (86) 021-58883554
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+39/F, BOC BUILDING
+BOC INTERNATIONAL
+(CHINA) CO., LTD.
+SWIFT: BKCHCNBJ92A
+TEL: (86) 0574-87196666
+FAX: (86) 0574-87198889
+POST CODE: 315000
+FAX: (86) 021-63291789
+POST CODE: 200120
+EMAIL: boccfcadmin@boccfc.cn
+WEBSITE: www.boccfc.cn
+1409#, BOC BUILDING
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+BANK OF CHINA CONSUMER
+FINANCE COMPANY LIMITED
+CHINA
+XICHENG DISTRICT,
+BEIJING,
+STREET,
+NO.110 XIDAN NORTH
+9/10/11F
+BANK OF CHINA INSURANCE
+COMPANY LIMITED
+SWIFT: BKCHCNBJ220
+TEL: (86) 0312-5988023
+FAX: (86) 0312-5988023
+POST CODE: 071700
+HEBEI PROV.,
+CHINA
+149 LUOSA STREET,
+RONGCHENG,
+TEL: (86) 021-63291680
+ZHEJIANG PROV.,
+CHINA
+NINGBO BRANCH
+SWIFT: BKCHCNBJ95B
+TEL: (86) 0512-65113558
+FAX: (86) 0512-65114906
+POST CODE: 215028
+TEL: (86) 029-89593900
+SWIFT: BKCHCNBJ620
+CHINA
+SHAANXI PROV.,
+XI'AN,
+LIANHU DISTRICT,
+18 TANGYAN ROAD BEIDUAN,
+SHAANXI BRANCH
+POST CODE: 850000
+FAX: (86) 0891-6835311
+TEL: (86) 0891-6835311
+39 XINCHANG EAST ROAD,
+JINFENG DISTRICT,
+SWIFT: BKCHCNBJ900
+TIBET AUTONOMOUS
+REGION,
+113 JINZHU XI LU,
+LHASA,
+TIBET BRANCH
+SWIFT: BKCHCNBJ45A
+TEL: (86) 0755-22331155
+FAX: (86) 0755-82259209
+POST CODE: 518001
+CHINA
+GUANGDONG PROV.,
+2022 JIANSHE ROAD,
+LUOHU DISTRICT,
+SHENZHEN,
+BUILDING,
+INTERNATIONAL FINANCE
+SHENZHEN BRANCH
+NINGXIA BRANCH
+CHINA
+TEL: (86) 0971-8178888
+YINCHUAN,
+AUTONOMOUS REGION,
+JIANGSU PROV.,
+CHINA
+SUZHOU,
+SUZHOU INDUSTRIAL PARK,
+128 WANGDUN ROAD,
+SUZHOU BRANCH
+SWIFT: BKCHCNBJ59A
+TEL: (86) 023-63889234
+FAX: (86) 023-63889217
+POST CODE: 400013
+218 ZHONG SHAN YI ROAD,
+YU ZHONG DISTRICT,
+CHONGQING,
+CHINA
+CHONGQING BRANCH
+TEL: (86) 0931-7825004
+FAX: (86) 0931-7825004
+POST CODE: 730000
+SWIFT: BKCHCNBJ660
+CHINA
+NINGXIA HUI
+GANSU PROV.,
+GANSU BRANCH
+FAX: (86) 0991-2825095
+POST CODE: 830002
+SWIFT: BKCHCNBJ760
+TEL: (86) 0991-2328888
+FAX: (86) 029-89592999
+POST CODE: 710077
+CHINA
+XINJIANG UYGUR
+AUTONOMOUS REGION,
+1 DONGFENG ROAD,
+URUMQI,
+XINJIANG BRANCH
+FAX: (86) 0951-5681509
+POST CODE: 750002
+SWIFT: BKCHCNBJ260
+TEL: (86) 0951-5681708
+CHINA
+525 TIANSHUI SOUTH ROAD,
+CHENGGUAN DISTRICT
+LANZHOU,
+JAKARTA BRANCH
+1 GARDEN ROAD,
+TEL: (82) 16705566
+Tier-one and direct
+branches, tier-two
+branches and
+sub-branches
+Institutions
+Shanghai College of
+International Finance
+Logistics Office
+||
+I
+BOC College
+||
+Retired Staff Office
+||
+Center
+Labor Union Office
+Integrated business
+Commercial banking
+business
+business
+|| International Settlement |
+Integrated business
+Commercial banking
+Software Center I
+Data Center
+I
+Institutions in Hong Kong,
+Macao, Taiwan and
+other countries and regions
+Bank Card Center
+Institutions in the
+Chinese mainland
+Institute of International
+Finance
+Organisational Chart
+Domestic and Overseas
+Branches and Subsidiaries
+BOC Fullerton
+Community Bank
+BOC Insurance
+BOCHK
+BOC-Samsung Life
+Department
+E-finance
+Department
+Distribution and Operation
+Management Department
+Information Technology
+Risk Management
+Department
+Credit Approval
+Department
+Credit Management
+Department
+Internal Control and
+Legal & Compliance
+Department
+Custody Services
+Investment Banking and
+Asset Management
+Department
+Global Markets
+Department
+Wealth Management and
+Private Banking
+Department
+SME Services
+Department
+Personal Banking
+Department
+Department
+Global Transaction
+Banking Department
+Financial Institutions
+Corporate Banking
+Department
+Accounting and
+Information Department
+Equity Investment and
+Subsidiary Management
+Department
+Treasury
+Board of
+Supervisors Office
+Financial Management
+Department
+Executive Office
+Shanghai RMB
+Trading Unit
+BOCG Insurance
+BOCG Investment
+Hong Kong Branch
+BOC Aviation
+Taipei Branch
+Branches, subsidiaries and
+representative offices
+Tai Fung Bank Limited
+Macau Branch
+Finance Company Limited
+BOC Asset Investment
+Bank of China Consumer
+BOCI China Note
+BOCIM
+Human Resources
+Department
+Office of the Leading
+Group for Comprehensively
+Deepening Reform
+Board of Supervisors
+Senior Management
+Head Office Departments
+and Institutions
+Fitch Ratings:
+Moody's Investors Service:
+Standard & Poor's Ratings Services:
+Credit Rating (Long Term, Foreign Currency)
+Telephone: (86) 21-3887 4800
+Pudong New Area, Shanghai
+166 East Lujiazui Road,
+3/F, China Insurance Building,
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited
+Domestic Preference Share
+Facsimile: (852) 2865 0990
+Telephone: (852) 2862 8555
+Wanchai, Hong Kong
+Rating and Investment Information, Inc.:
+183 Queen's Road East,
+Services Limited
+Computershare Hong Kong Investor
+H Share
+Telephone: (86) 21-3887 4800
+Pudong New Area, Shanghai
+166 East Lujiazui Road,
+3/F, China Insurance Building,
+Depository and Clearing Corporation Limited
+Shanghai Branch of China Securities
+A Share
+If a shareholder wishes to enquire about share transfers, changes of name or address, or loss of
+share certificates, or to receive other information concerning the shares held, please write to the
+following address:
+Shareholder Enquiry
+SWIFT: BKCHKRSEXXX
+17M Floor, Hopewell Centre,
+Department
+Clearing
+Department
+Dagong Global Credit Rating Co., Ltd. (RMB):
+A
+Audit Department
+Board Secretariat
+Board of Directors
+Shareholders' Meeting
+408
+407
+Should you have any queries about how to obtain copies of this annual report or access the
+document on the Bank's website, please call the Bank's H-Share Registrar at (852) 2862 8688 or
+the Bank's hotlines at (86) 10-6659 2638.
+You may write to the Bank's H-Share Registrar, Computershare Hong Kong Investor Services
+Limited (address: 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong)
+to request the annual report prepared under IFRS or visit the Bank's office address for copies
+prepared under CAS. The Chinese and/or English versions of the annual report are also available
+on the following websites: www.boc.cn, www.sse.com.cn and www.hkexnews.hk.
+Other Information
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+8/F, Bank of China Building, No. 1 Fuxingmen Nei Dajie, Beijing, China
+Telephone: (86) 10-6659 2638
+Investor Relations Team, Board Secretariat, Bank of China Limited
+Investor Enquiry
+406
+Shanghai Stock Exchange Index Series
+CSI Index Series
+Bloomberg Index Series
+S&P Index Series
+Dow Jones Index Series
+MSCI Index Series
+Hang Seng Corporate Sustainability Index Series
+Hang Seng Composite Index (HSCI) Series
+Hang Seng China Enterprises Index
+Hang Seng China H-Financial Index
+Hang Seng Index
+Index Constituents
+A
+A
+A1
+FTSE Index Series
+Security Department
+Corporate Culture
+Department
+AAA
+Note: The Bank holds 37.14% of the equity interest of BOCI China through its wholly-owned subsidiary BOCI.
+39-41 YORK STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+SWIFT: BKCHAU2AXXX
+TEL: (61) 282355888
+FAX: (61) 292621794
+EMAIL: service.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+BANK OF CHINA
+(NEW ZEALAND) LIMITED
+LEVEL 17, TOWER 1, 205
+QUEEN STREET,
+AUCKLAND, 1010,
+NEW ZEALAND
+SWIFT: BKCHNZ22
+TEL: (64) 99809000
+FAX: (64) 99809088
+EMAIL: service.nz@bankofchina.com
+WEBSITE: www.bankofchina.com/nz
+BANK OF CHINA LIMITED
+AUCKLAND BRANCH
+LEVEL 17, TOWER 1, 205
+QUEEN STREET,
+AUCKLAND, 1010,
+BANK OF CHINA
+(AUSTRALIA) LIMITED
+NEW ZEALAND
+SWIFT: BKCHNZ2A
+FAX: (64) 99809088
+EMAIL: service.nz@bankofchina.com
+JSC AB (BANK OF CHINA
+KAZAKHSTAN)
+71B, MICRODISTRICT
+ZHETYSU-2,
+AUEZOV DISTRICT, 050063,
+ALMATY,
+REPUBLIC OF KAZAKHSTAN
+SWIFT: BKCHKZKA
+TEL: (7727) 2585510
+FAX: (7727) 2585514
+EMAIL: boc@bankofchina.kz
+VIENTIANE BRANCH
+NO. A1003-A2003,
+VIENTIANE CENTER,
+KHOUVIENG ROAD,
+NONGCHAN VILLAGE,
+SISATTANAK DISTRICT,
+VIENTIANE CAPITAL,
+LAO P.D.R.
+SWIFT: BKCHLALAXXX
+TEL: (856) 21228888
+FAX: (856) 21228880
+TEL: (64) 99809000
+EMAIL: service.la@bankofchina.com
+WEBSITE: www.bankofchina.com/la
+EMAIL: service.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+39-41 YORK STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+Head Office Departments
+FAX: (82) 23996265
+WEBSITE: www.bankofchina.com/kr
+TAMARA CENTER
+11TH FLOOR,
+JALAN JEND.
+SUDIRMAN KAV. 24
+JAKARTA 12920,
+INDONESIA
+SWIFT: BKCHIDJA
+TEL: (62) 215205502
+FAX: (62) 215201113/215207552
+EMAIL: service.id@bankofchina.com
+WEBSITE: www.bankofchina.co.id
+414
+MANILA BRANCH
+28/F. THE FINANCE CENTER
+26TH STR. COR. 9TH AVE.,BGC
+TAGUIG CITY, METRO
+SWIFT: BKCHAU2SXXX
+TEL: (61) 282355888
+FAX: (61) 292621794
+MANILA PHILIPPINES
+TEL: (63) 22977888
+FAX: (63) 28850532
+EMAIL: customerservice_
+ph@mail.notes.bank-of-china.com
+BANK OF CHINA
+(HONGKONG) LIMITED
+BRUNEI BRANCH
+SIMPANG 22, JALAN DATO
+RATNA,
+KAMPONG KIARONG,
+BANDAR SERI
+BEGAWAN BE1318,
+BRUNEI DARUSSALAM
+SWIFT: BKCHBNBB
+TEL: (673) 2459888
+FAX: (673) 2459878
+SYDNEY BRANCH
+SWIFT: BKCHPHMM
+KARACHI BRANCH
+KIARONG JAYA KOMPLEK,
+LOT NO. 56244,
+DOLMEN CITY, HC-3, BLOCK 4,
+SCHEME 5, CLIFTON,
+45TH STREET, BOTATUNG
+TOWNSHIP,
+YANGON, MYANMAR
+TEL: (95) 18610408
+EMAIL: service.mm@bankofchina.com
+BEIJING,
+DONGCHENG DISTRICT,
+2 CHAOYANGMEN NEI DAJIE,
+SHANGHAI BRANCH
+INNER MONGOLIA BRANCH
+A,C,E KAIHENG CENTER,
+BEIJING BRANCH
+SWIFT: BKCHCNBJ860
+TEL: (86) 0451-53636890
+FAX: (86) 0451-53624147
+POST CODE: 150001
+ROAD & THEIN PHYU ROAD
+CHINA
+19 HONGJUN STREET,
+NANGANG DISTRICT,
+HARBIN,
+HEILONGJIANG BRANCH
+186 PINGYANG ROAD,
+XIAODIAN DISTRICT,
+TAIYUAN,
+SHANXI PROV.,
+CHINA
+SHANXI BRANCH
+TEL: (86) 010-66596688
+FAX: (86) 010-66016871
+POST CODE: 100818
+WEBSITE: www.boc.cn
+SWIFT: BKCHCNBJ
+CHINA
+BEIJING,
+1 FUXINGMEN NEI DAJIE,
+HEAD OFFICE
+MAJOR BRANCHES AND SUBSIDIARIES IN THE CHINESE MAINLAND
+5TH FLOOR, CORPORATE
+OFFICE BLOCK,
+List of Major Branches and Subsidiaries
+HEILONGJIANG PROV.,
+CORNER OF MAHABANDOOLA
+SWIFT: BKCHCNBJ680
+TEL: (86) 0351-8266016
+FAX: (86) 0351-8266021
+POST CODE: 030006
+08-06, LEVEL 8, UNION
+PAKISTAN
+KARACHI,
+FINANCIAL CENTER (UFC),
+SWIFT: BKCHPKKA
+TEL: (92) 2133110688
+FAX: (92) 2133110600
+EMAIL: services.pk@bankofchina.com
+WEBSITE: www.bankofchina.com/pk
+415
+NO. 40, YORK STREET
+COLOMBO 001
+SRI LANKA
+SWIFT: BKCHLKLX
+TEL: (94) 0112195566
+FAX: (94) 0112118800
+EMAIL: service.lk@bankofchina.com
+BANK OF CHINA LIMITED
+MUMBAI BRANCH
+41-B,4TH FLOOR,
+4 NORTH AVENUE,
+MAKER MAXITY,
+COLOMBO BRANCH
+INDIA
+BANDRA KURLA COMPLEX,
+BANDRA EAST,
+MUMBAI,
+service.mn1 @bankofchina.com
+YANGON REPRESENTATIVE
+OFFICE
+MONGOLIA
+TEL: (976) 77095566
+FAX: (976) 77195566
+EMAIL:
+SBD-8,
+11TH FLOOR CENTRAL TOWER,
+SUKHBAATAR SQUARE-2,
+ULAANBAATAR 14200,
+REPRESENTATIVE OFFICE
+ULAANBAATAR
+bocmumbai@bankofchina.com
+SWIFT: BKCHINBB
+TEL: (0091) 2268246666
+FAX: (0091) 2268246667
+EMAIL:
+THE CRESCENT BUILDING
+NORTHWOOD, SANTRY
+DUBLIN 9
+BOC AVIATION
+D09 C6X8
+bank-of-china.com
+EMAIL: dublinbranch@mail.notes.
+FAX: (353) 14767868
+(IRELAND) LIMITED
+TEL: (353) 14767888
+BANK OF CHINA (UK)
+LIMITED DUBLIN BRANCH
+DUBLIN 2, D02 DY27, IRELAND
+FIFTH FLOOR, STYNE HOUSE,
+UPPER HATCH STREET,
+www.bankofchina.com/uk
+EMAIL: service.uk@bankofchina.com
+WEBSITE:
+TEL: (44) 2072828888
+FAX: (44) 2076263892
+1 LOTHBURY,
+REPUBLIC OF IRELAND
+LONDON EC2R 7DB,
+U.K.
+SWIFT: BKCHGB2U
+SWIFT: BKCHIE2D
+TEL: (353) 18934173
+FRANKFURT BRANCH
+PARIS BRANCH
+service.de@bankofchina.com
+EMAIL:
+7 JOZSEF NADOR TER,
+1051 BUDAPEST,
+FAX: (49) 69170090500
+TEL: (49) 691700900
+SWIFT: BKCHDEFF
+GERMANY
+24 60323 FRANKFURT AM MAIN,
+BOCKENHEIMER LANDSTR.
+416
+www.bankofchina.com/fr
+SWIFT: BKCHFRPP
+TLX: 281 090 BDCSP
+75116 PARIS,
+FRANCE
+GRANDE ARMEE
+23-25 AVENUE DE LA
+POLAND BRANCH
+(LUXEMBOURG) S.A.
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+BANK OF CHINA
+TEL: (33) 149701370
+FAX: (33) 149701372
+WEBSITE:
+HUNGARY
+GRAND CAYMAN BRANCH
+TEL: (36) 14299200
+SWIFT: BKCHCAT2
+TEL: (1416) 9559788
+FAX: (1416) 9559880
+EMAIL:
+service.ca@bankofchina.com
+GRAND PAVILION
+COMMERCIAL CENTER
+802 WEST BAY ROAD,
+P.O. BOX 30995,
+GRAND CAYMAN KY1-1204
+CAYMAN ISLANDS
+SWIFT: BKCHKYKY
+TEL: (1345) 9452000
+FAX: (1345) 9452200
+EMAIL:
+gcb@mail.notes.bank-of-china.com
+NOVE MESTO, 11000 PRAHA 1,
+CZECH REPUBLIC
+SWIFT: BKCHCZPPXXX
+NEW YORK BRANCH
+WEBSITE:
+TEL: (42) 0225986666
+CANADA, M5X 1C8
+SWIFT: BKCHHUHH
+TORONTO, ONTARIO,
+TORONTO BRANCH
+FAX: (36) 14299202
+WEBSITE:
+www.bankofchina.com/hu
+BANK OF CHINA
+SRBIJA A.D. BEOGRAD
+BULEVAR ZORANA
+DINDICA 2A, BELGRADE,
+SERBIA
+TEL: (381) 112018976
+FAX: (381) 112018977
+EMAIL:
+service.rs@bankofchina.com
+WEBSITE:
+www.bankofchina.com/rs
+BANK OF CHINA (RUSSIA)
+72, PROSPEKT MIRA,
+MOSCOW, 129110
+RUSSIA
+SWIFT: BKCHRUMM
+FAX: (7495) 7950454
+TEL: (7495) 2585301
+BANK OF CHINA (HUNGARY)
+CLOSE LTD.
+PRAGUE BRANCH
+NA FLORENCI 2116/15,
+EMAIL: iboc@boc.ru
+WEBSITE: www.boc.ru
+AMERICA
+6108 ONE FIRST CANADIAN PLACE,
+100 KING STREET WEST,
+P.O. BOX 241,
+www.bankofchina.com/de
+VIENNA BRANCH
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+service.at@bankofchina.com
+EMAIL:
+TEL: (43) 153666800
+FAX: (43) 153666888
+SWIFT: BKCHATWWXXX
+VIENNA
+AUSTRIA
+BOERSEPLATZ 6, A-1010
+BANK OF CHINA (HUNGARY)
+CLOSE LTD.
+CLOSE LTD.
+BANK OF CHINA (HUNGARY)
+www.bankofchina.com/it
+WEBSITE:
+FAX: (39) 0289013411
+TEL: (39) 02864731
+SWIFT: BKCHITMM
+ITALY
+14/16-20121 MILAN,
+VIA SANTA MARGHERITA,
+MILAN BRANCH
+417
+WEBSITE:
+www.bankofchina.com/pt
+www.bankofchina.com/at
+SUITE 600,
+FAX: (42) 0225986699
+EMAIL:
+HUNGARIAN BRANCH
+WEBSITE: www.bankofchina.com/hu
+service.hu@bankofchina.com
+EMAIL:
+FAX: (36) 14299202
+TEL: (36) 14299200
+SWIFT: BKCHHUHB
+HUNGARY
+1051 BUDAPEST,
+7 JOZSEF NADOR TER,
+www.bankofchina.com/ca
+WEBSITE:
+service.ca@bankofchina.com
+EMAIL:
+FAX: (1905) 7718555
+TEL: (1905) 7716886
+SWIFT: BKCHCATT
+50 MINTHORN BOULEVARD
+MARKHAM, ONTARIO
+CANADA, L3T 7X8
+BANK OF CHINA (CANADA)
+WEBSITE:
+service.pt@bankofchina.com
+SWIFT: BKCHPTPL
+TEL: (351) 210495710
+FAX: (351) 210495738
+EMAIL:
+www.bankofchina.com/nl
+WEBSITE:
+service.nl@bankofchina.com
+COOLSINGEL 63,
+3012AB ROTTERDAM,
+THE NETHERLANDS
+SWIFT: BKCHNL2R
+TEL: (31) 102175888
+FAX: (31) 102175899
+EMAIL:
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+ROTTERDAM BRANCH
+www.bankofchina.com/lu
+WEBSITE:
+service.lu@bankofchina.com
+FAX: (352) 221795
+EMAIL:
+SWIFT: BKCHLULA
+TEL: (352) 268688
+LUXEMBOURG
+P.O. BOX 721 L-2017,
+LUXEMBOURG
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+www.bankofchina.com/lu
+WEBSITE:
+service.lu@bankofchina.com
+FAX: (352) 221795
+EMAIL:
+SWIFT: BKCHLULL
+TEL: (352) 268688
+P.O. BOX 114 L-2011,
+LUXEMBOURG
+LUXEMBOURG
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+BRUSSELS BRANCH
+20 AVENUE DES ARTS,
+1000, BRUSSELS,
+BELGIUM
+SWIFT: BKCHBEBB
+TEL: (32) 24056688
+NO. 35, 35A E 37;
+1250-097 LISBOA,
+PORTUGAL
+RUA DUQUE DE PALMELA
+LISBON BRANCH
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+www.bankofchina.com/se
+WEBSITE:
+service.se@bankofchina.com
+FAX: (46) 107888801
+EMAIL:
+SWIFT: BKCHSESS
+TEL: (46) 107888888
+LUXEMBOURG BRANCH
+BIRGER JARLSGATAN 28,
+114 34 STOCKHOLM,
+SWEDEN
+www.bankofchina.com/pl
+WEBSITE:
+service.pl@bankofchina.com
+SWIFT: BKCHPLPX
+TEL: (48) 224178888
+FAX: (48) 224178887
+EMAIL:
+UL. ZIELNA 41/43,
+00-108 WARSAW,
+POLAND
+www.bankofchina.com/be
+WEBSITE:
+service.be@bankofchina.com
+FAX: (32) 22302892
+EMAIL:
+BANK OF CHINA
+(LUXEMBOURG) S.A.
+STOCKHOLM BRANCH
+service.cz@bankofchina.com
+REPRESENTATIVE OFFICE
+U.S.A.
+TEL: (225) 222112973
+FAX: (225) 222112974
+EMAIL:
+repoffice.tz@bankofchina.com
+420
+(UK) LIMITED
+BANK OF CHINA
+WEBSITE: www.bocaviation.com
+FAX: (65) 63236962
+8 SHENTON WAY #18-01
+SINGAPORE 068811
+TEL: (65) 63235559
+BOC AVIATION LIMITED
+bldbcbgs@mail.notes.bank-of-china.com
+TEL: (973) 17531119
+FAX: (973) 17531009
+EMAIL:
+ROAD 1702, BLOCK
+317, MANAMA
+KINGDOM OF BAHRAIN
+AL JASRAH TOWER,
+DIPLOMATIC AREA
+BUILDING 95,
+OFFICE 1502,
+BAHRAIN REPRESENTATIVE
+OFFICE
+EMAIL: service.tr@bankofchina.com
+TEL: (90) 2122608888
+FAX: (90) 2122798866
+TANZANIA
+TURKEY
+DAR ES SALAAM,
+8TH FLOOR, AMANI PLACE,
+P.O. BOX 21357-00505,
+NAIROBI,
+KENYA
+TEL: (254) 203862811
+FAX: (254) 203862812
+EMAIL:
+service.ke@bankofchina.com
+MOROCCO
+REPRESENTATIVE OFFICE
+NO. 71, ANFA CENTER, 128,
+1045 AVENUE OF THE AMERICAS,
+NEW YORK, NY 10018,
+RUE LAHCEN BASRI,
+CASABLANCA,
+MAROC
+TEL: (212) 522203779
+FAX: (212) 522273083
+EMAIL:
+service.ma@bankofchina.com
+TANZANIA
+OHIO STREET, P.O. BOX 13602,
+BUYUKDERE CAD.NO: 209,
+TEKFEN TOWER K.21,
+34394 4. LEVENT/SISLI/
+ISTANBUL
+service.qa@bankofchina.com
+TEL: (974) 44473681/44473682
+FAX: (974) 44473696
+EMAIL:
+FAX: (90) 2122798866
+TEL: (90) 2122608888
+SWIFT: BKCHTRISXXX
+34394 4. LEVENT/SISLI/
+ISTANBUL
+TURKEY
+TEKFEN TOWER K.21,
+BUYUKDERE CAD.NO: 209,
+EMAIL: service.ae@bankofchina.com
+FAX: (971) 43880778
+TEL: (971) 43819100
+SWIFT: BKCHAEADXXX
+DUBAI, U.A.E
+P.O. BOX 118842,
+FINANCIAL CENTRE
+DUBAI INTERNATIONAL
+AL FATTAN CURRENCY HOUSE
+LEVEL 11 TOWER 2,
+EUROPE
+BANK OF CHINA TURKEY A.S.
+BANK OF CHINA (DUBAI)
+BRANCH
+EMAIL: contact@bankofchina.com.tr
+WEBSITE: www.bankofchina.com.tr
+LONDON BRANCH
+1 LOTHBURY,
+LONDON EC2R 7DB,
+SWIFT: BKCHQAQA
+P.O BOX: 5768
+AL FUNDUQ, STREET NO. 814,
+DOHA, QATAR
+24TH FLOOR, ALFARDAN
+TOWERS-OFFICE TOWER,
+BUILDING NO. 12, ZONE 61,
+QATAR FINANCIAL CENTRE
+BRANCH
+abudhabi.ae@bankofchina.com
+FAX: (971) 24180996
+EMAIL:
+SWIFT: BKCHAEAA
+TEL: (971) 24180999
+AL REEM ISLAND,
+P.O. BOX 73098,
+ABU DHABI, U.A.E.
+NGONG ROAD,
+UNIT 8-11, 46F, ADDAX
+COMMERCIAL TOWER,
+www.bankofchina.com/uk
+WEBSITE:
+service.uk@bankofchina.com
+ISTANBUL REPRESENTATIVE
+OFFICE
+EMAIL:
+FAX: (44) 2076263892
+TEL: (44) 2072828888
+SWIFT: BKCHGB2L
+U.K.
+BANK OF CHINA
+LTD-ABU DHABI
+MORNING SIDE OFFICE PARK,
+BD D'ANFA & ANGLE
+NAIROBI REPRESENTATIVE
+EMAIL: servicios@mx.bocusa.com
+WEBSITE:
+www.bankofchina.com/mx
+PERU REPRESENTATIVE
+OFFICE
+JOHANNESBURG BRANCH
+14TH-16TH FLOORS,
+ALICE LANE TOWERS,
+15 ALICE LANE, SANDTON,
+JOHANNESBURG,
+SOUTH AFRICA
+SWIFT: BKCHZAJJ
+TEL: (27) 115209600
+FAX: (27) 117832336
+EMAIL:
+bocjhb@mail.notes.bank-of-china.com
+WEBSITE: www.bankofchina.com/za
+OFFICE
+901-14 ANDAR BELA VISTA
+CEP: 01311-100,
+SAO PAULO, SP,
+BRASIL
+SWIFT: BKCHBRSP
+TEL: (55) 1135083200
+FAX: (55) 1135083299
+EMAIL:
+ouvidoria@boc-brazil.com
+WEBSITE:
+www.bankofchina.com/br
+FAX: (52) 5552078705
+BANCO DA CHINA
+BRASIL S.A.
+bocpanama@cwpanama.net
+EMAIL:
+SWIFT: BKCHUS33
+TEL: (1212) 9353101
+FAX: (1212) 5931831
+WEBSITE: www.bocusa.com
+418
+PANAMA BRANCH
+P.O. BOX 0823-01030
+PUNTA PACIFICA
+P.H. OCEANIA BUSINESS PLAZA
+BANK OF CHINA
+AGENCIA EN CHILE
+TORRE 2000 PISO 36
+REPUBLIC OF PANAMA
+SWIFT: BKCHPAPA
+BANK OF CHINA MÉXICO,
+S.A. INSTITUCIÓN DE BANCA
+MÚLTIPLE
+PASEO DE LA REFORMA
+243, PISO24, COLONIA
+CUAUHTÉMOC, CIUDAD
+DE MÉXICO,
+MÉXICO
+SWIFT: BKCHMXMX
+TEL: (507) 2169400
+FAX: (507) 2239960
+TEL: (52) 5541705800
+PANAMA CITY,
+ANDRÉSBELLO 2457,
+PISO16, PROVIDENCIA,
+SANTIAGO, CHILE
+SWIFT: BKCHCLRM
+TEL: (56) 227157800
+FAX: (56) 227157898
+EMAIL:
+AVENIDA PAULISTA,
+WEBSITE:
+LUANDA BRANCH
+VIA S10 NO. 701,
+CONDOMINIO BELAS
+BUSSINESS PARK,
+TORRE CUANZA SUL 8
+ANDAR,
+LUANDA,
+REPUBLIC OF ANGOLA
+SWIFT: BKCHAOLU
+EMAIL: executive.zm@mail.notes.
+servicios@cl.bocusa.com
+bank-of-china.com
+WEBSITE:
+www.bankofchina.com/zm
+FAX: (244) 923165717
+EMAIL:
+service.ao@bankofchina.com
+WEBSITE:
+www.bankofchina.com/ao
+419
+WEBSITE: www.bankofchina.com/mu
+services.mu@bankofchina.com
+TEL: (244) 923165700
+FAX: (230) 2034879
+EMAIL:
+www.bankofchina.com/cl
+AV. JORGE BASADRE 607,
+OFFICE 701,
+SAN ISIDRO, LIMA,
+PERU
+TEL: (51) 920137238
+EMAIL: service.pe@bankofchina.com
+BANK OF CHINA
+(ZAMBIA) LIMITED
+PLOT NO. 2339,
+KABELENGA ROAD,
+P. O. BOX 34550, LUSAKA,
+ZAMBIA
+AFRICA
+TEL: (260) 211233271
+FAX: (260) 211236782
+BANK OF CHINA
+(MAURITIUS) LIMITED
+4TH-5TH FLOOR,
+DIAS PIER BUILDING,
+CAUDAN WATERFRONT,
+PORT LOUIS,
+MAURITIUS
+SWIFT: BKCHMUMU
+TEL: (230) 2034878
+SWIFT: BKCHZMLU
+9.76%
+92.8136
+101.8742
+8.85%
+14.03%
+525.7446
+31 December
+2017
+482.9971
+97.0406
+110.6573
+Cumulative number of debit cards
+Cumulative number of credit cards
+Cumulative number of social security
+cards with financial functions
+2018
+Change (%)
+Transaction amount of debit cards
+7.78%
+2017
+4,220.180
+Change (%)
+40.78%
+Transaction amount of credit cards
+Instalments volume of credit cards
+1,619.555
+1,495.036
+8.33%
+279.132
+258.990
+45
+2018
+5,941.075
+Items
+48.67%
+As at
+Cash Management
+The Bank was named “Best Transaction Bank” and “Best Trade Finance Bank" by FinanceAsia,
+and received the “Best Bank in Cross-border RMB Business" award from the China Banking
+Association for its expertise in the trade finance sector.
+The Bank made steady progress in expanding its Free Trade Zone (FTZ) business. It exerted its
+best efforts to support the construction of Hainan FTZ, closely tracked the policy opportunities
+brought about by the deepening of FTZ reform and provided a full range of quality financial
+services for key projects and customers in FTZs, thus continuing to provide the industry-leading
+FTZ business. It involved in the whole-process modelling of the financial services "Single
+Window", and developed such functions as tax payment, reservation for account opening and
+online letter of guarantee application. The Bank was the first domestic bank to introduce a
+centralised tax payment e-guarantee and realised the digitalised transmission of guarantee data
+with customs. With the solid foothold of its four commodity business centres in Shanghai,
+Singapore, London and New York, the Bank expanded the reach of its transactional and
+structured commodity financing businesses. The Bank pushed forward the digital transformation
+of its supply chain finance, thus its online financing business volume continued to grow. The
+Bank participated in the development and implementation of the “Blockchain Forfaiting Trading
+Platform" and the “Digital Bills Trading Platform”, which effectively enhanced trading safety
+and efficiency. It researched and developed downstream supply chain financing solutions and
+made breakthroughs in such scenarios as financing for dealers on e-commerce platforms. The
+Bank successfully launched a project to connect with the Shanghai Commercial Paper Exchange
+Corporation Ltd., laying a systemic foundation for trading in commercial paper. In addition, it
+improved account opening efficiency and customer experience by streamlining the processes of
+making reservations for account opening and opening accounts with mobile applications.
+Paper on RMB Internationalisation, providing comprehensive and professional support to help
+global customers understand and use RMB.
+The Bank pushed forward RMB internationalisation in an orderly manner. It acted as a leader
+in cross-border RMB-related product and service innovation, and as the main channel for
+RMB cross-border flows. In 2018, the Group's transaction volume of cross-border RMB payment
+reached RMB5.95 trillion, among which RMB3.99 trillion was undertaken by the Bank's
+domestic institutions, thus maintaining the largest market share. The Bank promoted the use
+of RMB in emerging sectors. It supported the Shanghai International Energy Exchange, the
+Dalian Commodity Exchange and the Zhengzhou Commodity Exchange to successfully list
+crude oil futures and internationalise iron ore futures and Pure Terephthalic Acid (PTA) futures,
+respectively, while providing related financial services for domestic and foreign investors,
+thus helping RMB to enter the commodity trading and pricing system. The Bank launched
+RMB promotional events in countries such as Hungary, Pakistan and Cambodia, in a bid to
+expand the use of RMB in countries along the Belt and Road. The Bank also continued to publish
+the "BOC Cross-border RMB Index (CRI)”, “BOC Offshore RMB Index (ORI)" and the White
+37
+The Bank fully leveraged its traditional advantages in trade finance, accelerated business model
+innovation and effectively managed its business risks, thus boosting the sound development
+of trade finance business and continuously consolidating its market dominance. In 2018, the
+Group's international trade transaction volumes reached USD4.63 trillion. The Bank's domestic
+institutions retained the largest market share in international trade services and held the leading
+position among peers in cross-border guarantee business. The Bank actively followed the
+country's opening up strategy and provided all-round services for the first China International
+Import Expo (CIIE).
+Drawing on the strength of its integrated global operations, the Bank continuously improved its
+global cash management service capability, won a number of bids for the cash management service
+contracts of multinational corporations and quickly expanded the group customer base for cash
+management. It sped up the promotion of cash management products and provided customers
+with integrated services such as centralised fund management and information classification and
+accounting. The Bank catered to "Going Global” enterprises' needs for global information sharing
+and fund operation, and supported administrative institutions in their financial management
+reform. It completed China's first SWIFT Direct Connection cross-border remittance business,
+"SWIFT-Global Payments Innovation (GPI)”, and promoted Bank Host-to-Host Direct Connection
+abroad for the first time. To fulfil customers' needs for multi-channel, multi-segment and one-
+stop capital management services, the Bank carried out on-going improvements to its "Global
+Cash Management Platform+” integrated product system, which enabled greater connectivity of
+the Global Cash Management Platform, SWIFT Direct Connection, Bank Host-to-Host Direct
+Connection, Multi-Bank Cash Management System and trading data applications. The Bank was
+recognised as "Best Regional Cash Manager in Asia" by Euromoney for the third consecutive year
+and "Best Cross-border Cash Management Bank” by Asiamoney for the second straight year. As a
+result, "BOC Global Cash Management” has become an increasingly influential brand.
+Trade Finance and Services
+The Bank continued to strengthen its support for the real economy. It deeply implemented the
+requirements on supply-side structural reform, actively supported key investment fields and
+assisted in the transformation and upgrading of the domestic economy. It provided stronger
+credit support for infrastructure projects and introduced innovative service models for the private
+economy and private enterprises. The Bank focused on addressing the demands of major projects
+concerning social welfare and people's livelihood, and allocated more resources to key regions
+such as the Beijing-Tianjin-Hebei region, the Guangdong-Hong Kong-Macao Greater Bay
+Area, the Yangtze Economic Belt, and the Hainan Pilot Free Trade Zone (the “Hainan FTZ”).
+It also strengthened its support for the business development of key sectors, such as advanced
+manufacturing, Internet Plus, artificial intelligence (AI), rural revitalisation, and the Olympic
+Winter Games.
+Corporate Loans
+As at the end of 2018, RMB corporate deposits in the Bank's domestic operations totalled
+RMB5,884.433 billion, an increase of RMB388.939 billion or 7.08% compared with the prior
+year-end. Foreign currency corporate deposits amounted to USD66.123 billion, a slight decrease
+of USD0.673 billion or 1.01% compared with the prior year-end.
+36
+The Bank achieved stable growth in corporate deposits by seizing business opportunities arising
+from key industries, continuously improving its product functions and strengthening marketing
+efforts for its settlement and cash management products. It expanded its corporate customer base
+by improving the hierarchical management of its customers and its service system. The Bank
+managed to attract more administrative institutional customers by improving its products and
+services for those engaged in industries relating to public finance and social security, education
+and public health, thus achieving rapid growth in deposits from such institutions. It also actively
+sought out customers along the upstream and downstream of supply chains and industrial chains
+in order to achieve higher growth in potential customer deposits. In addition, the Bank enhanced
+the service functions of its outlets so as to improve their customer service capabilities and
+increase their contribution to the Bank's deposits.
+Corporate Deposits
+As at the end of 2018, RMB corporate loans of the Bank's domestic operations totalled
+RMB5,057.654 billion, an increase of RMB295.780 billion or 6.21% compared with the
+prior year-end. Foreign currency corporate loans totalled USD40.925 billion, a decrease of
+USD10.861 billion or 20.97% compared with the prior year-end.
+38
+Financial Institutions Business
+The Bank continued to deepen comprehensive cooperation with various global financial
+institutions, including domestic banks, overseas correspondent banks, non-bank
+financial institutions, overseas central banks, sovereign wealth funds and international financial
+organisations. It built its integrated financial services platform and maintained a leading position
+in terms of financial institution customer coverage. The Bank has established correspondent
+relationships with around 1,600 institutions in 178 countries and regions, thus providing
+multinational institutions and enterprises with financial services such as international settlement,
+bond financing, foreign exchange trading, investment custody and global cash management.
+Closely following the implementation of the Belt and Road Initiative, the Bank consolidated
+cooperation with key correspondent banks in countries and regions along the Belt and Road.
+It continued to deepen its wide-reaching cooperation with organisations and development
+institutions such as Asian Infrastructure Investment Bank, New Development Bank and the Silk
+Road Fund, participated in the investment and financing projects of domestic policy financial
+institutions and provided extensive financial services. By making increased efforts to expand
+its cross-border RMB business, the Bank became the major RMB clearing channel and the
+main cooperating bank for overseas central banks and other sovereign institutions, commercial
+banks and exchange houses. To date, it has opened 1,462 cross-border RMB clearing accounts
+for correspondent banks from 117 countries and regions, thus holding a leading position among
+domestic banks. It also promoted the RMB Cross-Border Interbank Payment System (CIPS) and
+signed cooperation agreements for indirect participants with 251 domestic and overseas financial
+institutions, seizing the largest market share among its peers. The Bank's custodian service
+for Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional
+Investors (RQFII) and its agency service for overseas central banks and other sovereign
+institutions ranked among the top in the industry in terms of both customer base and business
+scale. The Bank signed a memorandum of strategic cooperation with the Astana International
+Financial Centre of Kazakhstan. It was one of the first banks designated by the Shanghai
+International Energy Exchange Co., Ltd. to act as a margin depository bank for crude oil futures,
+and by the Dalian Commodity Exchange and Zhengzhou Commodity Exchange to act as a margin
+depository bank for foreign currencies. It was also the only bank to participate in the pilot stage
+of the H-shares "full circulation" programme.
+The Bank further expanded its network in countries along the Belt and Road. As
+at the end of 2018, the Bank's overseas institutions covered 56 countries and regions,
+including 23 countries along the Belt and Road, representing the broadest Chinese bank
+presence both globally and along the Belt and Road. In 2018, BOC Colombo Branch and
+Bank of China (Turkey) Limited commenced operation, further expanding the Bank's
+network in countries along the Belt and Road.
+The Bank continued to implement the national Belt and Road Initiative and strongly
+supported the building of the Belt and Road. It strived to become the preferred bank
+for China's "Going Global” enterprises, foreign “Bringing In” enterprises and local
+enterprises along the Belt and Road, and refined its institutional network in countries
+along the Belt and Road. It supported key cooperative projects along the Belt and Road
+in line with market principles, served as the main channel for Belt and Road related
+RMB internationalisation business, and took the lead in directing global financial resources
+into the Belt and Road countries and regions.
+Column I: Strengthening support for the Belt and Road Initiative
+40
+Inclusive finance loans granted to micro and small-sized enterprises are measured in accordance with the Circular
+on Promoting the High-quality Development of Banks' Financial Services for Micro and Small-sized Enterprises
+in 2018 (Y.J.B.F. [2018] No. 29).
+5
+Centred on the development of China's social security system, the Bank continuously extended
+its pension business coverage, promoted product innovation and developed a comprehensive
+service system with optimised functions. It provided a range of pension-related financial
+services including enterprise annuities, occupational annuities, employee benefit plans, employee
+stock ownership plans and pension security management products, thus enhancing customer
+satisfaction. Having already been designated to act as a custodian and account manager for
+enterprise annuities, the Bank became qualified to also act as a trustee of enterprise annuity funds,
+and successfully signed its first trustee contract for enterprise annuities. As a result, its annuity
+service scope further expanded. As at the end of 2018, the total number of individual pension
+accounts held by the Bank reached 5.0119 million, an increase of 0.4959 million or 10.98%
+compared with the prior year-end. Assets under custody amounted to RMB221.158 billion, an
+increase of RMB28.918 billion or 15.04% compared with the prior year-end, with the Bank
+serving more than 15,000 clients.
+Pension Business
+The Bank continued to provide SME cross-border matchmaking services to promote connectivity
+across the globe. As the sole integrated banking service provider for the First CIIE, the
+Bank successfully hosted the Expo's Exhibitor-Businessman Supply-Demand Matchmaking
+Conference. In 2018, the Bank held nine cross-border trade and investment conferences in
+Kuala Lumpur, Malaysia; Santa Fe, New Mexico, US; Zhengzhou, Henan Province; Jieyang,
+Guangdong Province; Dalian, Liaoning Province; Qingdao, Shandong Province; Guangzhou,
+Guangdong Province and Shanghai. It has held 50 cross-border matchmaking events since 2014,
+attracting the participation of 30,000 enterprises from 87 countries and regions internationally. It
+played an active role in promoting the upgrading of the domestic industrial structure, furthering
+international economic and trade cooperation, and implementing the Belt and Road Initiative.
+Moreover, the Bank steadily promoted the "investment and loan linkage mechanism” pilot
+programme, furthered cooperation with governments at all levels and commercial institutions
+in pilot areas, and developed a comprehensive financial service system for technologically
+innovative enterprises.
+"five specialised operating mechanisms”. The Bank designated all of its outlets as the basic
+service outlets for inclusive finance, and selected 162 outlets in the demonstration areas of the
+"Made in China 2025” programme as the key outlets from which to launch its inclusive finance
+credit business. As at the end of 2018, the Bank's outstanding inclusive finance loans granted
+to micro and small-sized enterprises³ reached RMB304.2 billion, representing a year-on-year
+growth of over 12.26%, more rapid than that of the Bank's total loans. The number of micro and
+small-sized customers stood at 380,000, an increase compared with the prior year. The average
+interest rate of micro and small-sized enterprises' inclusive finance loans granted in the year was
+5.27%. Meanwhile, the Bank enhanced risk control and compliance management, improved its
+early warning mechanism on asset quality control, strengthened the whole-process management
+of loans to micro and small-sized enterprises, and continuously enhanced its capabilities
+in identifying and mitigating credit risk, thus maintaining the quality of loans to micro and
+small-sized enterprises at a stable and controllable level.
+39
+The Bank implemented special resource allocation and provided comprehensive policy support
+for inclusive finance. It refined its inclusive finance structure, established a sound service system,
+promoted the launch of a bank-wide organisational structure for inclusive finance and built the
+The Bank proactively explored solutions to the difficulties and high costs of financing for micro
+and small-sized enterprises. It endeavoured to increase inclusive finance loans with a focus on the
+relatively weak groups among micro and small-sized enterprises, thus further strengthening its
+financial support for the key areas of inclusive finance.
+Inclusive Finance
+As at the end of 2018, the Bank ranked first in terms of market share in foreign currency deposits
+from financial institutions, and had further increased its market share in terms of the number of
+third-party custody customers with outstanding balances.
+The Bank made great efforts to expedite the transformation of its corporate banking
+business. It further consolidated its corporate customer base, continuously optimised its
+customer and business structure and improved its global service capabilities for its corporate
+banking customers, thus achieving steady development in its corporate banking business.
+In 2018, the Bank's domestic corporate banking business realised an operating income of
+RMB183.739 billion, an increase of RMB5.871 billion or 3.30%.
+The Bank steadily pushed forward credit issuance and project expansion. The Bank
+followed up on over 600 major Belt and Road related projects as at the end of 2018. From
+2015 to 2018, the Bank granted more than USD130 billion of credit support to countries
+along the Belt and Road.
+Corporate Banking
+365,470
+183,739
+Corporate banking business
+% of total
+Amount
+% of total
+Amount
+47.45%
+Items
+2018
+Unit: RMB million, except percentages
+The Bank is dedicated to three missions: serving the real economy, preventing financial risks,
+and deepening financial reform. It continued to seek progress while maintaining stability
+in its business and pushed forward the implementation of its development strategy. Each
+business sector realised moderate growth, and the overall operating profit maintained its steady
+progress. In 2018, the domestic commercial banking business achieved an operating income of
+RMB387.243 billion, an increase of RMB21.773 billion or 5.96% compared with the prior year.
+Details are summarised in the table below:
+Domestic Commercial Banking
+Commercial Banking
+31 December
+2017
+177,868
+Personal banking business
+153,589
+100.00%
+387,243
+Total
+1.07%
+3,927
+0.53%
+2,060
+Other
+11.60%
+42,379
+12.36%
+47,855
+38.66%
+141,296
+39.66%
+100.00%
+The Bank continuously promoted RMB internationalisation. The Bank continued to
+improve its cross-border RMB clearing system in an effort to enhance the quality and
+efficiency of clearing services and to promote RMB development in local markets. In 2018,
+the volume of RMB clearing transactions carried out by the Bank's institutions along the
+Belt and Road surpassed RMB5 trillion, leading its global peers by market share. The
+issuance of RMB-denominated sovereign bonds boosted the cross-border use of RMB in
+the countries along the Belt and Road.
+Treasury operations
+As at the end of 2018, the Bank had set up 7,993 wealth management centres, 1,082 prestigious
+wealth management centres and 44 private banking centres in the Chinese mainland. The Group
+managed RMB1.4 trillion of financial assets on behalf of its private banking customers. In 2018,
+the Bank was recognised as “Best Private Bank for Global Investment Exposure in China” and
+"Best Private Bank for International Network in China" by Asiamoney; awarded “Best Private
+Banking China Domestic" by Asian Private Banker; rated as "Best Domestic Private Bank
+Most Innovative Performer” and “Best Domestic Private Bank Asset Management" by Wealth;
+and won Ying Hua Awards for "Best Distributor for Mutual Fund" and "Excellence In Distributor
+for Private Equity” from China Fund. The “BOC Robot Advisor" intelligent investment advisory
+service won the "2018 Rising Star Award for Robot Advisor" from Securities Times.
+The Bank launched its Belt and Road financial cooperation model on all fronts.
+The Bank entered into partnership with the governments of Serbia, Myanmar and
+Singapore, signed a memorandum of understanding with the Department of Finance of
+the Republic of the Philippines, signed a memorandum of strategic cooperation with the
+Astana International Financial Centre of Kazakhstan and signed the Memorandum of
+Understanding on Cooperation in Panda Bond Issuance with the Hungarian Development
+Bank. The Bank helped worldwide enterprises to expand third-party markets along the
+Belt and Road via such bilateral corporate cooperation platforms as the China-UK, China-
+France and China-Italy entrepreneurial committees.
+Personal Banking
+The Bank always puts customers at the centre of its business. In 2018, it innovated and improved
+its personal banking product and service system and endeavoured to enhance the capability of its
+online, scenario-based and smart services. It grasped development opportunities in cross-border
+business, consumer finance and wealth management so as to continuously enhance the market
+competitiveness of its personal banking business. As at the end of 2018, the Bank's domestic
+personal banking business realised an operating income of RMB153.589 billion, an increase of
+RMB 12.293 billion, or 8.70% compared with the prior year.
+Personal Deposits
+In response to the trend of interest rate liberalisation, the Bank intensified innovation in its
+personal deposit products, providing customers with products of different terms and types, thus
+satisfying differentiated customers' needs. It further expanded its payment agency business by
+classifying its customer groups and improving the connectivity between corporate and personal
+businesses. It also provided payment agency customers with a package of integrated service
+solutions, including account opening, salary payment, consumption and investment. The Bank
+launched an online margin business embedded with multiple transaction scenarios. It also adopted
+the "BOC Wealth Accumulator" service model for micro and small-sized businesses, providing
+them with convenient services based on integrated payment, and thereby built a closed loop for
+fund flows. It further developed its foreign exchange services by increasing the number of foreign
+currencies offered by its personal deposit and withdrawal businesses to 25 and the number of
+convertible foreign currencies available to customers to 39, thus maintaining its leading position
+among its peers. Leveraging on its advantage in foreign currency business, the Bank provided
+services for a number of large events, including the first CIIE. It also launched cash exchange
+reservation service on all electronic channels including mobile banking and online banking to
+further improve customer experience.
+As at the end of 2018, the Bank's domestic RMB personal deposits totalled RMB5,026.322 billion,
+an increase of RMB475.154 billion or 10.44% compared with the prior year-end. Personal foreign
+currency deposits amounted to USD44.040 billion, maintaining a leading market share.
+42
+The Bank actively expanded its foreign exchange product offering. The Bank promoted
+foreign exchange products for countries along the Belt and Road, including multi-
+currency spot and forward foreign exchange trading, swaps and options, so as to help
+enterprises manage exchange rate risk. It now has the capability to provide quotations for
+52 currencies of the emerging market countries, and 29 currencies of countries along the
+Belt and Road. The Bank also participated in direct RMB-minor-currency trading in the
+interbank foreign exchange market, and completed the first RMB-THB direct transaction in
+the interbank foreign exchange market as one of the first market makers.
+Personal Loans
+The Bank implemented the national policies of supporting the real economy, expanding domestic
+demands and promoting consumption by steadily enhancing its personal loan business. It actively
+put into practice the state's regulatory policies on real estate and continued to implement a
+differentiated residential mortgage loan policy, with a particular focus on serving the needs of
+households seeking to buy owner-occupied homes for the first time, and thus maintained the
+sound development of its residential mortgage loan business. The Bank accelerated its consumer
+finance business through deepening the application of internet and big data technologies, as well
+as improving its risk management and control models. It continued to promote its featured "BOC
+E-Credit" product, a whole-process online consumer loan service, realising a rapid growth rate.
+The Bank proactively developed inclusive finance services and refined its development strategies
+for personal business loans by providing specialised service models for customer segments,
+including private enterprises, micro and small-sized business owners, and customers targeted
+according to shopping districts or industry chains, those commonly engaged in agriculture-related
+businesses, start-up businesses or poverty alleviation efforts. It continued to grant government-
+sponsored student loans and enhanced its development-oriented student services, securing its
+leading market position in government-sponsored student loans.
+As at the end of 2018, the total amount of RMB personal loans of the Bank's domestic operations
+stood at RMB3,933.840 billion, an increase of RMB452.158 billion or 12.99% compared with the
+prior year-end.
+41
+Wealth Management and Private Banking
+43
+cross-border customer marketing mechanism and achieved positive results in providing integrated
+cross-border services to personal customers in the Guangdong-Hong Kong-Macao Greater
+Bay Area. It promoted the development of its private banking business, improved the structure
+of its domestic private banking centres and refined the network of its domestic and overseas
+private banks, so as to create a global private banking service platform. The Bank strengthened
+innovation in products and services by introducing discretionary asset management with
+investment only in debt instruments and offshore family trust products to better serve the needs of
+its high-net-worth customers.
+As at
+Bank Card
+Closely following changes in markets and customer demand patterns, the Bank continuously
+refined its product and service system and endeavoured to create a preferred credit card brand
+targeting the medium-to-high end, cross-border, female and young customer segments. It took
+the lead in launching the BOC Greater Bay Area Credit Card to facilitate the interconnectivity
+of the Guangdong-Hong Kong-Macao Greater Bay Area. The Bank rolled out the Great Wall
+Ice and Snow Credit Card to promote winter sports and the nationwide fitness campaign. It
+also issued the BOC Better Life Credit Card to meet customers' need for quality family life.
+To satisfy the personalised demands of different customer groups, the Bank rolled out new
+products such as the BOC Lady Credit Card, BOC Zan Credit Card, BOC American Express
+Cross-border Alliance Credit Card, Great Wall Monet World Credit Card, UEFA Champions
+League-themed Credit Card, and World Cup-themed Credit Card. Following trends in online
+finance, it launched innovative BOC digital credit cards and promoted a “connected scenarios
+and FinTech" service mode in order to build internet-based customer acquisition scenarios. The
+Bank accelerated the innovation and upgrading of its instalments product system by promoting
+such products as “YiFenXiang” instalments (an automatic instalments plan), "Youke" instalments
+(a premium customer instalments plan) and an automobile-add-ons financial service, as well as
+a flexible repayment function. Moreover, the Bank continued with its pilot projects for applying
+instalments services to second-hand automobiles, auto financial lease, weddings, and maternity.
+In recognition of its achievements, it won the title of "2018 Best Auto Credit Card Instalments
+Service Bank" at the China Auto Golden Engine Awards. The Bank integrated its payment
+service mode and built the “BOC Smart Payment” brand. It promoted the "aggregate payment”
+offline acquiring product and provided an online check-out product featuring “one-point access,
+overall acceptance". It improved the "BOC Smart Merchant" service platform by providing
+full-process, one-stop comprehensive financial services for merchants. To improve the merchant
+value-added service system, the Bank launched a platform with discounted merchants and
+44
+electronic vouchers, carried out merchant 020 precision marketing campaigns, and built a
+closed-loop consumption ecology. It continued to develop 360-degree customer life cycle
+maintenance, strengthened customer group analysis based on big data, and supported precision
+marketing and dynamic limit management.
+In line with the PBOC's requirements on account reform and the mobile finance convenience
+project, the Bank pushed forward the online and offline issuance and use of debit cards, and
+expanded the application scope for Type II and Type III personal bank accounts. It continued to
+improve its customer experience by streamlining its business procedures for account opening and
+cancellation, loss reporting and replacement of debit cards. The Bank expanded the scenarios-
+based applications of mobile payment and promoted online financial services for segments,
+such as campuses, cross-border businesses, social security, medical treatments, and railway
+transportation. It strengthened its "BOC E-Campus” mobile application and formed a dual
+platform business model with Tencent WeiXiao to serve its customers on campuses. The Bank
+won the bid to issue credit cards for the government-sponsored studying abroad programme, and
+expanded the value-added services of the Great Wall Cross-border International Debt Card, thus
+providing its cardholders with more convenient and more secure cross-border services. It issued
+social security cards with financial functions in nearly 30 provinces (including municipalities
+directly under the Central Government) in cooperation with local Human Resources and Social
+Security Bureaux, and issued electronic social security cards as per the standards required by the
+Ministry of Human Resources and Social Security. These products delivered diverse financial
+services, including collection and payment agency of social insurance (namely, pension insurance
+funds, medical insurance funds, unemployment insurance funds, work-related injury insurance
+funds and maternity insurance funds), exclusive wealth management products and fee discounts
+for customers, as well as non-financial value-added services such as doctor appointment booking,
+discount coupons and doctor lectures. It also issued a resident health card with financial functions
+in provinces such as Guangdong, Liaoning, Hebei, Guizhou, Sichuan and Jiangxi, offering
+cardholders medical treatment payment and health management services, both online and offline,
+across the country. In addition, the Bank launched the Changsha-Zhuzhou-Xiangtan Inter-city
+Railway e-Card in Hunan, with which customers can enter and exit stations and take trains simply
+by scanning a QR code using a mobile application.
+As at the end of 2018, the Bank's bank card issuance and transaction volumes are set forth below:
+Unit: million cards/RMB billion, except percentages
+The Bank enhanced its wealth management and private banking services by meeting customer
+demands and accelerating business innovation and transformation. To implement the strategy
+of enabling advancement through technology, the Bank developed the Investment Product
+Distribution Platform to integrate its investment product distribution architecture and effectively
+improve its integrated and intelligent distribution capabilities. It launched “BOC Robot Advisor",
+an intelligent investment advisory service, introduced an online assets diagnosis function and
+improved its asset allocation tools. Using big data, the Bank carried out targeted marketing
+campaigns with the help of growing customer information tags and further completed client
+marketing loops. In order to develop a professional asset allocation decision-making system,
+it constructed a market-wide product selection platform, established an Asset Allocation
+Committee and published asset allocation strategy reports. The Bank also transformed its
+marketing approach, continued to carry out customer group marketing campaigns by providing
+customised service packages for customer groups including staff of Chinese embassies and
+consulates stationed abroad, and promoted product and service integration. It further developed
+its differentiated customer service system by adjusting customer grading, constructing a unified
+customer benefits platform and increasing its customer loyalty rewards redemptions choices.
+As a result, customer loyalty was continuously enhanced. Moreover, the Bank continued to
+improve the management and incentive mechanisms for its relationship managers, thus achieving
+significant progress in cultivating teams of wealth management managers, private bankers and
+investment advisors, which in turn steadily improved its professional services. It made full use of
+the BOC Wealth and Investment Academy to build a multifaceted talent development system, and
+used both internal and external resources to expand its talent pool. The Bank further improved its
+investors. In addition, the Bank actively participated in the building of a foreign exchange self-
+regulatory mechanism, adopted the Foreign Exchange Code across the board, and successfully
+passed the annual assessment of its implementation of the foreign exchange self-regulatory
+mechanism.
+Drawing strength from its integrated global trading, sales, risk management and system, the
+Bank further enhanced its integrated global service capacity by strengthening business support
+from the Head Office and its overseas trading centres to its regional branches. Leveraging its
+advantages in professional quotation and its priority focus on compliance, the Bank steadily met
+interbank customers' demands. In line with the financial demands of the real economy, the Bank
+consolidated its chain services in order to comprehensively satisfy customers' needs for hedging
+against risks relating to exchange rates, interest rates and commodity prices. It put equal emphasis
+on agent trading and market-making quotation services, and established an integrated marketing
+mechanism to allow foreign institutional investors to invest in the domestic interbank market,
+thereby enhancing the Bank's ability to provide quotation and services for foreign institutional
+Investment Bank and Asset Management
+The Bank accelerated the construction of an integrated global financial markets business system
+founded on the three core product lines of interest rates, exchange rates and commodities.
+It endeavoured to build a new customer-centric, market-oriented and product-based service
+model and improved quantitative trading capabilities so as to serve the real economy. The
+Bank continued to outperform its peers in market share of foreign currency exchange against
+RMB business. It offered cash trading rates for six further foreign currencies, including the Czech
+Koruna and Hungarian Forint, thus bringing the number of currency pairs available for exchange
+up to 39. The Bank also consolidated its leading edge in emerging market trading products
+under the Belt and Road Initiative. It increased the total number of tradable foreign currencies
+to 63, among which 52 are currencies of emerging economies and 29 are currencies of countries
+along the Belt and Road. It stepped up efforts in product innovation so as to further sharpen its
+market competitiveness. Together with the China Foreign Exchange Trading System & National
+Interbank Funding Centre, it introduced the "CFETS-BOC Traded Bond Index” and released it on
+the China Foreign Exchange Trade System and Singapore Exchange successively, thus vigorously
+pushing forward the opening up of China's bond market and RMB internationalisation.
+Financial Markets Business
+The Bank strengthened its research and judgment regarding market interest rates while
+proactively seizing market opportunities. It also rationally adjusted the duration of its investment
+portfolio and further optimised its investment structure. Consistent with national macroeconomic
+policies, the Bank supported the economic development of local governments and actively
+participated in local government bond investment. Following trends in global bond markets, the
+Bank optimised its foreign currency investment portfolio and managed to prevent interest rate risk
+and credit risk.
+Securities Investment
+To further enhance its influence in financial markets, the Bank closely tracked market
+developments and actively aligned itself with trends towards interest rate and exchange rate
+liberalisation and RMB internationalisation. It leveraged its professional advantages, continued to
+deepen adjustments to its business structure, enhanced its efforts in financial market innovation
+and made steady progress in compliance with international regulatory requirements.
+The Bank leveraged the competitive advantages of its international and diversified operations and
+focused on serving the real economy. It provided customers with comprehensive, professional
+and customised investment banking and asset management solutions, including professional
+financial products and services for bond underwriting and distribution, asset management, asset
+securitisation and M&A and restructuring advisory. To facilitate the construction of China's
+multi-layered capital markets system and to support customers' direct financing needs, the Bank
+underwrote debt financing instruments for non-financial institutions in the China interbank bond
+market of a total amount of RMB379.179 billion. The Bank's underwriting business for financial
+institutions was greatly boosted, with its financial bond underwriting volume and market share
+continuing to improve. It maintained the leading market share among all commercial banks in
+the interbank market in terms of asset securitisation underwriting. The Bank enhanced its cross-
+border competitiveness. It assisted offshore issuers such as the Republic of the Philippines and
+the government of the Emirate of Sharjah and Hungary in issuing Panda Bonds. It held the
+leading market share in Panda Bond business. The Bank also supported the MOF's issuance
+of USD3.0 billion of sovereign bonds by acting as a joint lead manager and joint book runner,
+thus further completing the yield curve of foreign currency-denominated sovereign bonds and
+facilitating the establishment of the pricing benchmark for China's foreign currency-denominated
+bonds. It captured the leading market share as an underwriter of Chinese enterprises' offshore
+G3 currency (i.e. USD, EUR and JPY) bonds. The Bank also made efforts to develop green
+finance by participating as lead underwriter in a number of important green bond programmes,
+including the issuance of the first green building Panda Bond and the first quasi-sovereign Euro
+floating rate green bond. Proactively exploring financial solutions for poverty alleviation, the
+Bank acted as the lead underwriter for the first central state-owned enterprise special poverty
+alleviation notes, issued by China Three Gorges Corporation, with part of the proceeds being used
+for hydropower projects. Moreover, strongly supporting private enterprise financing, the Bank
+carried out the first batch of Bond-Financing Support Tools for Private Enterprises among Large
+State-owned Commercial Banks and providing boost for the private enterprises direct-financing.
+As a result, the Bank was awarded “China Bond House" by IFR Asia, "China's Best Corporate
+and Investment Bank” and “China's Best CIB for Debt Capital Markets Cross-Border" by
+Asiamoney, "Best China Onshore DCM Bank”, “Best Panda Bond Underwriter” and “Best China
+International G3 Currency DCM Underwriter" by Caixin, and "Best Financial Institution Bond",
+"Best Panda Bond” and “Best Green Bond" by FinanceAsia. As such, the brand influence of
+BOC Debt Capital Markets was continuously enhanced.
+46
+46
+Trading
+The Bank steadily promoted the development and transformation of its asset management
+business. It increased its launch frequency and marketing efforts for Net Value products,
+offering various Net Value products such as "BOC Accumulated Asset Series
+Everyday", "BOC Strategy
+-
+-
+51
+Overseas Commercial Banking
+In 2018, the Bank continued to promote the establishment of overseas institutions and pushed
+forward the integrated development of its domestic and overseas operations, thus further
+enhancing its global service and support capabilities and sharpening its market competitiveness.
+As at the end of 2018, the Bank's overseas commercial banking customer deposits and loans
+totalled USD433.444 billion and USD365.282 billion, respectively. In 2018, the Bank's
+overseas commercial banking business achieved a profit before income tax of USD8.926 billion,
+accounting for 25.78% of the Group's total profit before income tax.
+Regarding branch distribution, the Bank closely tracked customers' financial service needs
+around the globe, accelerated improvements in institutional network in countries along the Belt
+and Road and further increased outlets in countries with an existing BOC presence, thus further
+improving its global service network. As at the end of 2018, the overseas institutions of the Bank
+totalled 548, covering 56 countries and regions around the globe, with three new countries added
+during the year.
+For corporate banking business, by giving full play to the advantages arising from its integrated
+commercial and investment banking operations, the Bank provided a full spectrum of premium,
+efficient, tailor-made and comprehensive financial services for “Going Global” and “Bringing In”
+customers, "Fortune Global 500” enterprises and local corporate customers. It further improved
+its globalised customer service system and continually enhanced its middle and high-end products
+and services. Through core products including syndicated loans, project financing, cross-border
+M&A, export credit, global cash management and letters of guarantee, the Bank provided great
+support to key projects related to infrastructure construction, energy resource development
+and overseas industrial parks, with the aim of providing sound financial services for the Belt
+and Road Initiative, promoting international cooperation in production capacity and helping
+enterprises achieve sustainability in their foreign investments and operations.
+52
+BOC Fullerton Community Bank expedited the construction of its institutional distribution
+network, thus supporting financial development in county areas. Having already acquired
+shares in village banks held by China Development Bank, it successfully acquired shares in
+27 village banks held by China Construction Bank, further expanding its business scale and
+providing stronger support for the development of China's central and western regions and
+county economies. As at the end of 2018, BOC Fullerton Community Bank controlled 125 village
+banks and 142 sub-branches in 22 provinces (including municipalities directly under the Central
+Government) through self-establishment and acquisition. BOC Fullerton Community Bank
+has become the largest domestic village bank group in terms of total institutions and business
+scope. It also continuously improved its product and service system to further expand its
+customer base and business scale. As at the end of 2018, the registered capital of BOC Fullerton
+Community Bank amounted to RMB7.524 billion, with its total assets and net assets standing at
+RMB60.332 billion and RMB10.040 billion respectively. The balances of total deposits and loans
+of these banks stood at RMB38.939 billion and RMB39.257 billion respectively, an increase of
+38.37% and 43.16% compared with the prior year-end. The NPL ratio was 2.42%, and the ratio of
+allowance for loan impairment losses to NPLs was 237.80%. In 2018, BOC Fullerton Community
+Bank achieved a profit for the year of RMB0.674 billion.
+For personal banking business, the Bank provided one-stop financial services for personal "Going
+Global" customers by leveraging its extensive overseas institutional network. It continued to
+expand its overseas account opening witness service, which now covers 18 countries and regions
+in North America, Europe, Asia and Oceania. The Bank enhanced its services for customers
+studying abroad by launching such brands as “Brilliant Tomorrow” in the US, "Golden Age"
+and "UK Manager” in the UK, “Home in Canada” in Canada, "Golden Years" in Australia, "Sail
+in Lion City" in Singapore and “Splendid Life” in Macao. It built up its cross-border marketing
+ecosystem, consolidated marketing resources across platforms, improved the availability of
+cross-border credit card services and established a star rating system for cross-border credit
+card customers, so as to provide customers with preferential, convenient and quality cross-
+border credit card services, thus enhancing the brand influence of its cross-border business.
+It expanded its overseas credit card issuance and acquiring business, developed new products
+such as BOC Qoo10 Credit Card and BOC Miles Credit Card in Singapore, and Greater Bay
+Area Credit Card in Macao, and supported its overseas branches in developing integrated online
+and offline merchant acquiring business, thus further enhancing its influence in local payment
+markets. It optimised the framework of its overseas debit cards and issued UnionPay, Visa and
+MasterCard debit cards in 19 countries and regions. In addition to withdrawal, consumption
+and other basic functions, it introduced new features including contactless payment, non-card
+payment and 3D secure payment, which can be used via multiple channels including domestic and
+overseas counters, online banking and mobile banking, thereby better satisfying the world-wide
+consumption demands of overseas customers.
+For clearing services, the Bank continuously improved its cross-border RMB clearing capabilities
+and consolidated its position at the leading edge of international payments. It was authorised to
+serve as the RMB clearing bank in Japan, which means that it now accounts for 12 of the world's
+25 authorised RMB clearing banks and continues to lead its peers. It also ranked first in terms
+53
+of the number of CIPS indirect participants. In 2018, the Bank's cross-border RMB clearing
+transactions totalled RMB389 trillion, an increase of 11% year-on-year, securing first place in
+the global market. It launched the Bank of China Group Remittance product in order to offer an
+exclusive and efficient remittance channel for the Group's customers, thus enhancing customer
+experience in the field of cross-border remittance and maintaining its position as the market
+leader.
+For e-banking, the Bank further expanded the coverage of its overseas channel services. It
+released the upgraded international version of its mobile banking service, increasing the
+availability of overseas mobile banking services to 18 countries and regions, and overseas
+online banking services to 46 countries and regions. It added mobile banking services in the Lao
+language and now enables its overseas e-channels to provide services in 13 languages. Its cross-
+border corporate online banking services expanded to include overseas services such as precious
+metal clearing service, global financial resources transferring service and corporate online
+banking GPI transferring service. It constructed overseas bank-enterprise connection channels
+to serve key global customers. As a result, the Bank continued to lead its peers in cross-border
+business.
+BOCHK
+In 2018, BOCHK remained committed to its strategy of building a top-class, full-service and
+internationalised regional bank, and adhered to its philosophy of stable, long-term and sustainable
+development. It fully leveraged its competitive advantages and steadily pushed forward its
+business priorities. Its core businesses realised satisfactory growth, with major financial
+indicators remaining at solid levels. It improved its integrated regional business model and
+promoted the integration of its Southeast Asian entities, achieving steady growth in its Southeast
+Asian business. BOCHK remained committed to expanding cross-border business development
+and drove forward the development of the Guangdong-Hong Kong-Macao Greater Bay Area
+with the aim of becoming the area's first-choice bank. In pursuit of full-service development,
+BOCHK accelerated the construction of its diversified business platforms. Moreover, it sped up
+FinTech innovations and product research so as to drive its digital development. At the end of
+the year, BOCHK's issued share capital was HKD52.864 billion. Its total assets amounted to
+HKD2,952.903 billion and net assets reached HKD284.907 billion. Its profit for the year was
+HKD32.584 billion.
+For financial markets business, the Bank fully leveraged its advantages in integrated global
+operations and actively engaged in RMB futures market-making on the exchanges in Singapore,
+South Korea and Dubai, in line with the national opening up strategy. As a result, it enhanced its
+capacity for customer base expansion in Asia, Europe and Oceania, further optimised its product
+line structure for exchange rates, interest rates and commodities, and continuously improved
+its business scale and profitability. The Bank seized opportunities arising from the two-way
+opening up of capital markets and exerted every effort to market custody services to "Going
+Global" and "Bringing In” customers. It sped up efforts to shape its global customer service
+network and enhanced its global custody service capability, as well as the local and cross-border
+customer custody service capabilities of its key overseas institutions. It actively innovated its
+capital market connectivity service mechanisms and accomplished the integration of its cross-
+border custody service processes. On 2 November, the Bank successfully obtained a custody
+license from the UK's Prudential Regulation Authority, making it the first Chinese bank qualified
+to conduct custody business in the UK. At the end of 2018, the Bank had the largest market
+share among domestic peers in cross-border custody, reaching 28.44%. The Bank also made
+active efforts to build bridges to international capital markets. It successfully issued the Belt and
+Road-themed bonds with a total volume equivalent to USD3.2 billion, the first Guangdong-Hong
+Kong-Macao Greater Bay Area-themed bonds worth USD1.8 billion equivalent, green bonds
+worth USD1.4 billion equivalent, and the first Sustainability Bond issued by a Chinese bank in
+the overseas markets with an amount of USD400 million equivalent.
+BOC Fullerton Community Bank actively implemented the national strategy of rural revitalisation
+with the aim of “focusing on county area development, supporting farmers and small-sized
+enterprises, and growing together with communities”. It is committed to providing modern
+financial services to county micro and small-sized enterprises, individual merchants, the
+wage-earning class and farmers, thus promoting the construction of a beautiful countryside with a
+pleasant living environment.
+Village Bank
+50
+Le Xiang
+Steady Wealth Creation” and “BOC Wise Wealth Creation”. The
+Bank explored new investment and operational methods to better suit the transformation and
+48
+development of its Net Value products, strengthened its investment and trading capabilities,
+optimised asset allocation and effectively improved its investment yields. It developed innovative
+asset management informational system structures and improved system functions, so as to
+provide enhanced IT support for business development. In 2018, the Bank issued 8,071 wealth
+management and structured deposit products with a total year-end value of RMB1,718.1 billion.
+The Bank enhanced its financial advisory service system by further enriching its service content.
+Leveraging the advantages arising from coordination between the Head Office and branches
+and the integration of its domestic and overseas operations, the Bank provided customers with
+professional advisory services such as strategy advice, target recommendation, transaction
+structuring, valuation analysis and financing scheme design, as well as services covering the
+whole transaction process. The Bank steadily promoted its credit asset-backed securitisation
+business and optimised the structures of its existing assets. It successfully issued four residential
+mortgage-backed securities with a total amount of RMB37.949 billion and non-performing credit
+asset-backed securities with a total amount of RMB 163.88 million.
+Custody Business
+The Bank strived to enhance the overall competitiveness of its custody business by expanding
+mutual fund custody, strengthening pension fund custody, refining cross-border custody and
+optimising banking wealth management custody. Seizing opportunities arising from the two-way
+opening up of China's capital markets, the Bank became the first Chinese commercial bank
+to obtain the pilot depository qualifications for Chinese Depository Receipt (CDR). It pushed
+forward advancement through technology and system building, and led the market in launching
+a depository system alongside the CDR and Shanghai-London Stock Connect programmes. In
+addition, it improved the accounting, valuation and investment supervision functions of its global
+custody system and rolled out a non-securities custody business system and a new version of its
+online custody service, thus further enhancing its global custody service capabilities. The Bank
+won bids for occupational pension custody schemes in Xinjiang and Shandong, as well as for the
+issuance of the first local government debt ETF in the Chinese mainland. It was granted "Best
+QDII Mandate" and "Best QDII Custodian" by The Asset, securing its position as customers'
+preferred bank for cross-border investment. At the end of 2018, the Group's assets under custody
+stood at approximately RMB10 trillion, and the scale of its cross-border custody business ranked
+top among Chinese banks.
+49
+49
+Column III: Financially supporting the Olympic Winter Games Beijing 2022
+As the Official Banking Partner of the Olympic and Paralympic Winter Games Beijing
+2022, the Bank spared no efforts to support the preparations for Beijing 2022 by improving
+its financial services and carrying out marketing and promotion.
+The Bank provided all-around financial services for Beijing 2022. The Bank firmly
+supported the construction for Beijing 2022 by providing bank credit for projects such
+as the National Speed Skating Oval, the venue construction in Yanqing, and the Sports
+Injuries Treatment Centre. The Bank also provided comprehensive financial services
+including account management, settlement and exchange, foreign exchange risk prevention
+and control, and letters of guarantee for Beijing 2022. In addition, it established the Beijing
+Olympics Winter Games Sub-branch.
+The Bank financially supported the promotion of the Olympic Winter Games Beijing
+2022 and the development of related industries. The Bank has published the Bank of
+China Action Plan for Beijing 2022 and Winter Sports. It actively implemented this plan
+for promoting Beijing 2022, raising the public profile of winter sports and developing the
+related industry. Through the medium of financial products, the Bank provided a unique
+channel for consumers to understand and connect to the Olympic Winter Games. It released
+licensed precious metal products themed on Beijing 2022 for sale across the Bank, acting
+as the sole banking distributor of such products. In addition, the Bank issued more than
+five million BOC Winter Sports-themed Debit Cards and Credit Cards, which provide
+cardholders with discounts for winter sports equipment, venues and trainings.
+The Bank promoted the Olympic Winter Games Beijing 2022 in diverse ways. On
+23 June 2018, the Bank participated in events to celebrate the 32nd Olympic Day 2018 by
+hosting interactive running, skiing and skating activities, as well as Olympic cultural camps
+in Beijing, Harbin and Shenzhen. It was the first time winter sports had been included in
+the celebrations of Olympic Days, and the events received a positive response. The Bank
+also innovatively promoted Beijing 2022 online by joining with the Beijing Organising
+Committee for the 2022 Olympic and Paralympic Winter Games in producing a short
+film series, titled “Beijing 2022 Inside Stories”. To further assist in promoting the Winter
+Olympic Games Beijing 2022, these short films were broadcast on the official publicity
+channels of Beijing 2022 and the Bank. By participating in the Olympic Expo 2018 and
+the World Winter Sports (Beijing) Expo 2018, the Bank shared its progress in Beijing
+2022-related financial services, popularised public awareness of the Olympics Winter
+Games and promoted the Olympic spirit.
+50
+Delivering all-round financial services. The Bank rendered a full package of services
+including remittance, multi-currency exchange, account opening, bank card and mobile
+banking, thus satisfying customers' diversified financial service needs.
+Successfully holding themed events. During the first CIIE, the Bank successfully
+hosted the Fifth Meeting of the China-Italy Business Forum, the plenary sessions of the
+China-Mexico High-level Entrepreneurial Group and the "RMB Boosts Cross-border Trade
+and Investment Facilitation” Theme Forum, contributing to economic and trade exchange
+and cooperation between China and foreign parties.
+47
+Deeply involved in attracting exhibitors and businesses. Leveraging its extensive
+overseas institutional network, the Bank has assisted in hosting Expo promotion and
+exhibitor attraction events for the first CIIE in 16 countries since the second half of
+2017, reaching over 1,400 overseas customers. BOC domestic branches played an active
+role in attracting domestic business by assisting provincial and municipal commercial
+administrations with group procurement promotional events and by delivering all-round
+financial services to domestic procurers participating in the CIIE.
+555
+Facilitating supply-demand matchmaking. In November 2018, cooperating with the
+China International Import Expo Bureau and the National Exhibition and Convention
+Centre (Shanghai), the Bank undertook the Exhibitor-Businessman Supply-Demand
+Matchmaking Conference of the first CIIE. At the conference, 1,178 foreign exhibitors
+from over 30 industries held one-on-one talks with 2,462 businesspeople from the Chinese
+mainland, resulting in 1,258 agreements of cooperative intention and 601 enterprises
+proposing onsite inspection plans.
+BOCHK integrated its Southeast Asian entities and saw effective regional synergies begin
+to emerge. BOCHK successfully completed the acquisition of the Vietnam Business and the
+Philippines Business of the Bank in January 2018 and also entered into an agreement with the
+Bank in relation to the transfer of BOC Vientiane Branch on 4 December 2018 and subsequently
+completed the transfer on 21 January 2019. BOCHK's Southeast Asian entities now operate
+in Thailand, Malaysia, Vietnam, the Philippines, Indonesia, Cambodia, Brunei and Laos. It
+accelerated the logical integration of its Southeast Asian entities and comprehensively enhanced
+their capability levels for credit risk management, internal control and compliance. It pushed
+forward the development of its regional management transformation, reinforced resource support
+to its Southeast Asian entities and implemented differentiated development strategies among
+those entities. BOCHK continuously enriched its product and service portfolios for these entities
+so as to expand into local mainstream markets. It focused on major clients and projects, actively
+developing business with institutional clients and promoting RMB products and treasury business.
+Regional synergies were further enhanced through integrated marketing, resulting in continuous
+expansion of customer base and business scale.
+businesses. Adhering to its customer-centric philosophy, it enhanced the scenario-based and
+comprehensive application of its products and services to improve the competitiveness of its
+financial services. It catered to the different needs of individual clients and provided exclusive
+and premium services for its mid- to high-end clients, which led to continuous growth in the
+total number of mid- to high-end customers. In addition, it actively promoted the development
+of inclusive finance by accelerating the upgrading of its products and services to individual
+customers, thus establishing an all-round service capability to meet the basic necessities of
+customers' daily lives. It maintained its leadership in UnionPay card issuing and cardholder
+spending business in Hong Kong.
+Column II: Delivering all-round services to the first CIIE
+BOCHK strengthened collaboration within the Group and actively expanded its cross-
+border business. It continued to capitalise on its competitive edges in the Chinese mainland
+and Hong Kong, and strengthened its collaboration with other entities of the Group to gradually
+enrich its product range in the Greater Bay Area across four major aspects of cross-border
+activities: people flow, commodities flow, fund flow and information flow in order to further
+increase its market share and enhance its market influence. It promoted the construction of
+the Guangdong-Hong Kong-Macao Greater Bay Area. The organisation of the Guangdong-
+Hong Kong-Macao Greater Bay Area Financial Summit Forum further enhanced cross-border
+collaborations and elevated the Group's brand image in the Greater Bay Area. It also launched the
+"Guangdong-Hong Kong Business Registration and Banking Services Connect” to provide cross-
+border business registration for SMEs in Hong Kong to assist their development in the Greater
+Bay Area. By establishing branches and automated banking services in Hong Kong's major cross-
+border transportation termini, including Hong Kong International Airport, West Kowloon Rail
+Station of the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-
+Macao Bridge, it fully expanded its service network for cross-border customers. It accelerated the
+mutual access of cross-border services and mutual brand recognition so as to meet the demand
+of customers from Guangdong, Hong Kong and Macao for financial services, including account
+opening, payment services, wealth management and financing, thus helping to build the Greater
+Bay Area into a high-quality lifestyle destination that is ideal for living, working and travelling.
+As a result, it achieved an encouraging increase in the number of cross-border customers.
+54
+Driven by a strong sense of responsibility and mission, the Bank gave full play to its
+advantages in globalised and integrated operations in support of the country's opening up
+strategy by actively participating in the preparation and hosting of the CIIE. It served the
+CIIE both as its integrated banking service provider and as the account-opening bank and
+strategic partner for the China International Import Expo Bureau.
+BOCHK continued to develop its core market in Hong Kong and outperformed its peers in
+key business areas. The growth of its total customer deposits and loans was above the market
+average. Its asset and liability structure was further optimised, with asset quality outperforming
+the local market. Moreover, it diversified its corporate finance business and successfully arranged
+a number of significant syndicated loans, project finance deals and debt issuances. As a result,
+BOCHK remained the top mandated arranger in the Hong Kong-Macao syndicated loan market
+for the 14th consecutive year. It also maintained its leading market position as the main receiving
+bank for IPOs in Hong Kong for the eighth consecutive year. BOCHK deepened business
+relationships with commercial customers in Hong Kong and helped them to establish a convenient
+and effective financial service platform so as to mutually enhance market competitiveness and
+penetration. It further reinforced its business relationships with governmental and institutional
+customers and expedited the regional development of its cash pooling and treasury centre
+BOCHK expedited digital development and promoted innovation in FinTech. BOCHK
+strengthened 020 integration and remained committed to becoming a customer-centric
+digital bank. As a result, both the total number of customers using e-channels and the number
+of e-channel transactions continued to rise. BOCHK continued to enhance its cross-border
+payment and collection services with the launch of the BoC Pay, the first one-stop cross-border
+payment mobile application to support UnionPay QR code payment and added-value services
+for customers in both the Chinese mainland and Hong Kong. It also launched BoC Bill, the
+first comprehensive collection platform in Hong Kong to support UnionPay QR code payment,
+providing merchants with comprehensive collection services through different collection
+channels. In support of the Faster Payment System (FPS) introduced by the Hong Kong Monetary
+Authority (HKMA), it provided HKD and RMB real-time interbank transfer and cross-platform
+merchant collection services for personal and corporate customers. It enhanced iService to
+support branch personnel and its cloud-based call centre with mobile terminals, leading to a
+notable improvement in the overall productivity of its service network. The promotion of finger
+vein authentication services provided customers with a more convenient identity authentication
+process. BOCHK also enhanced the development of a new smart branch model and launched
+a new customer service process. With the aim of building a green bank, it continued to
+enhance paperless business operations and digital information in order to reduce the adverse
+environmental impact.
+BOCHK elevated its competitive edge in financial markets and accelerated the development
+of its diversified business platforms. Actively responding to market changes, BOCHK promoted
+business diversification and conducted stringent risk management and control measures. It
+strengthened its trading system infrastructure and refined its electronic trading platform in
+order to improve its trading capability. It also enhanced the development of innovative treasury
+products and enriched its product and service portfolios, which led to continuous growth in
+market competitiveness and customer base, and a relatively rapid growth in customer-driven
+business. Leveraging its leading position in the banknote market, BOCHK actively developed
+its banknote business in the Asia Pacific region and further reinforced its competitive edge in
+the wholesale banknotes business. Its bond underwriting business was satisfactory as it assisted
+corporates and institutions to successfully issue a number of USD, EUR and RMB-denominated
+green bonds. Capitalising on the collaborative synergy of its diversified business platforms,
+BOCHK continued to boost the development of its business platforms, including life insurance,
+asset management, custody and trust services as well as securities and futures, to provide
+customers with whole-value-chain financial services and forge new competitive advantages.
+65
+The Bank continuously enriched its internet finance products. Based on market and customer
+demand, the Bank offered leading products such as online payment, financial supermarket, “BOC
+E-Credit", "BOC E Rong Hui” and “BOC Easy-trade Cyber-tariff”. It promoted the development
+of online payments, and became the first bank to connect to, conduct transactions on, and switch
+directly-connected transactions to the online clearing platform. It also introduced the pioneering
+cross-border UnionPay QR code payment product. The Bank has built a one-stop financial
+supermarket to integrate Group-wide resources. It offers 18 categories of investment and wealth
+management products covering bank wealth management, funds distribution, precious metals, foreign
+exchange, etc. Focusing on data and scenarios, the Bank endeavoured to expand the customer base
+and enrich the customer acquisition scenarios of “BOC E-Credit”. It established an innovation
+and incubation mechanism for online financing, and developed a credit risk assessment model for
+personal customers based on consumer behaviours and scenario data. The Bank maintained its
+competitive advantages in tariff business. Cooperating with the General Administration of Customs
+and PBOC, it became the first bank in the industry to pilot and launch the "Single Window" model
+for tax payment and electronic letter of guarantee for tariff payments services nation-wide. The
+"BOC Easy-trade Cyber-tariff" business continued to lead its peers in market share.
+Following a "Mobile First" strategy, the Bank built a mobile portal for its integrated financial
+services. Its new mobile banking offers approximately 200 types of financial services, further
+improving its functions and user experience. The Bank's mobile banking portal also created
+customised services by leveraging new technologies such as AI, big data and biometric
+identification. The Bank introduced new features to its mobile banking service including
+facial recognition and authentication, speech recognition search, gesture login, and rolled out
+intelligent investment advisor and smart customer service functions, etc. As a result, it improved
+the intelligent service levels of its mobile banking. The Bank provided featured services such
+as cross-border finance, integrated finance, mobile payment and asset management, as well
+as functions including digital credit cards, Visa Express and reservation of foreign currency
+banknotes. To increase customer interactions and customer stickiness, the Bank utilised
+webcasting for mobile banking by building BOC Live Platform. It also created more security
+authentication methods for its mobile banking services, promoting SIM Key and Mobile Key on
+a pilot basis. The Bank further improved the service functions of its online banking, telephone
+banking, WeChat banking and SMS banking, thus creating better customer experience.
+82.68%
+10,965.139
+-
+20,031.165
+33.13%
+22,591.912
+30,076.152
+Transaction amount of personal e-banking
+14.54%
+165,881.831
+190,007.123
+Transaction amount of corporate online banking
+2017 Change (%)
+Transaction amount of mobile banking
+BOCHK was awarded "Strongest Bank in Asia Pacific and Hong Kong", "Best Trade Finance
+Bank in Hong Kong” and “Best Corporate Trade Finance Deal in Hong Kong” from The Asian
+Banker, "Best Bank for CSR in Hong Kong” from Asiamoney, “Hong Kong Domestic Cash
+Management Bank of the Year”, “Gold and Precious Metals Bank of the Year Hong Kong”,
+"Service Innovation of the Year Hong Kong", "Mobile Banking Initiative of the Year
+Hong Kong" and "Digital Banking Initiative of the Year Hong Kong" from Asian Banking
+and Finance, "Best Hong Kong Deal” from FinanceAsia and "Best SME's Partner Gold Award"
+from the Hong Kong General Chamber of Small and Medium Business. Its issuance of additional
+tier 1 capital securities during the year also received the “Best Hong Kong Deal" award from
+FinanceAsia.
+58
+BOCIM
+58
+BOCI China was awarded "Top Ten Asset Securitisation Investment Banks", "Excellent
+Emerging Investment Bank”, “Five-star Green Bond Programme”, “Excellent Asset Management
+Broker”, “Top Ten Innovative Asset Management/Fund Products” and “Excellent Fixed-income
+Investment Team" by Securities Times, "Avant-garde Customer Services Delivered by Chinese
+Institutions” by International Financial News and “Most Valuable Golden Bull Analyst” by
+China Securities Journal.
+BOCI China endeavoured to push forward business transformation and outperform its peers.
+Deepening the synergistic advantages of “investment bank + commercial bank”, “investment
+bank investment” and “domestic + overseas" in its investment banking business. BOCI
+China shifted its investment banking focus towards transaction-driven comprehensive financial
+services, shifted its asset management business focus towards active management. In 2018,
+it ranked ninth for both stock and bond underwriting scale, and seventh and eighth for asset
+under management (AUM) and income respectively. BOCI China pushed forward its brokerage
+business transformation with a focus towards wealth management, while improving the versatility
+of its branches. As a result, BOCI China continually increased its service capability and market
+influence.
+The Bank is engaged in securities-related business in the Chinese mainland through BOCI China.
+As at the end of 2018, the registered capital, total assets and net assets of BOCI China were
+RMB2.500 billion, RMB47.200 billion and RMB12.045 billion, respectively. It realised a profit
+for the year of RMB706 million in 2018.
+BOCI China
+BOCI received a number of awards from respected media organisations, including "Best
+Corporate & Investment Bank”, “Best Private Bank, Hong Kong - High Net Worth Individuals",
+"Best Overall Chinese Bank for BRI”, “Best Bond House", "Base Metals House of the Year,
+Asia", "Innovation House of the Year, Asia" and "Mutual Funds Equity-Hong Kong
+Outstanding Performer", and "MPFS (10 Years) Equity-Global - Outstanding Performer".
+-
+BOCI seized opportunities arising from capital market developments in the Chinese mainland,
+strengthened cross-border business cooperation, explored high-quality projects in line with
+industry development trends and increased RMB equity investment. In addition, it established a
+new benchmark in the global commodities market by launching the "BOCI China Commodities
+Index", and boosted the internationalisation of China's futures market by completing the first
+offshore trades of Chinese domestic crude oil and iron ore futures.
+ranked service provider in the Hong Kong Mandatory Provident Fund (MPF) and Macao Pension
+Fund businesses. BOCI further enriched its investment fund offering and actively participated
+in the Mainland-Hong Kong Mutual Recognition of Funds (MRF) scheme to provide quality
+services to Chinese mainland investors.
+57
+BOCI steadily upgraded its brokerage and trading system with the aid of big data and AI
+technologies, thus strengthening its cross-selling and improving its targeted marketing and
+customer services. To keep ahead of market trends, BOCI launched callable bull/bear contracts,
+thereby solidifying its leading positions in terms of brokerage and equity derivatives business
+in Hong Kong. It improved its asset management business structure with a focus on providing
+differentiated investment products and services for its clients. Moreover, it offered a full range
+of comprehensive wealth management and inheritance solutions and private banking investment
+products, and continuously improved its service and system platforms in a bid to consolidate
+its leading position and competitive advantages among Chinese-funded private banks. BOCI-
+Prudential Asset Management Limited, a subsidiary of BOCI, maintained its position as a top-
+BOCI made solid progress in providing integrated cross-border services for global clients. It
+actively explored opportunities in the Southeast Asian market, strengthened its development in
+M&A business and leveraged its structural advantages in government services and its financial
+solution expert panel to promote cross-border cooperation with the Group's branches and
+subsidiaries. In addition, it achieved steady progress in its equity underwriting and financial
+advisory businesses, including assisting Qingdao Haier's IPO, which was the first Chinese
+D-share to be listed on the China Europe International Exchange in Frankfurt. BOCI's bond
+issuance and underwriting businesses continued to maintain leading positions in the market.
+Deeply rooted in Hong Kong and Macao, BOCI leveraged its competitive edges in the Chinese
+mainland and continued to expand its sales network globally. Keeping abreast of market changes,
+it further improved its value and influence as a think tank in terms of research capability.
+BOCI actively captured strategic opportunities arising from the Belt and Road Initiative, Chinese
+enterprises' "Going Global" efforts, mixed ownership reform of state-owned enterprises and the
+development of the Guangdong-Hong Kong-Macao Greater Bay Area. It continuously strengthened
+its marketing efforts, reinforced internal controls and enhanced risk management practices.
+With the aims of serving the real economy and supporting private enterprises, BOCI strived to
+improve its core businesses and strengthened its integrated “investment banking + commercial
+banking" services.
+The Bank is engaged in investment banking business through BOCI. As at the end of 2018, BOCI
+had an issued share capital of HKD3.539 billion, total assets of HKD64.058 billion, and net assets
+of HKD18.483 billion. In 2018, BOCI realised a profit for the year of HKD1.607 billion. BOCI
+holds leading positions in a number of its core businesses.
+BOCI
+Investment Banking Business
+The Bank is engaged in fund management business in the Chinese mainland through BOCIM.
+As at the end of 2018, BOCIM's registered capital amounted to RMB100 million, its total assets
+stood at RMB4.060 billion and its net assets totalled RMB3.020 billion. Its profit for the year
+reached RMB973 million.
+By steadily expanding its asset management business and implementing sound internal controls
+and risk management, BOCIM achieved continuous growth in profitability, improved its brand
+and market reputation and further enhanced its comprehensive strengths. As at the end of 2018,
+BOCIM'S AUM reached RMB769.2 billion. In particular, its public-offered funds reached
+RMB401.1 billion and its non-monetary public-offered funds reached RMB 187.6 billion.
+The Bank gave full play to the competitive advantages inherent in its integrated operations and
+actively seized opportunities arising from the Belt and Road Initiative and the development of
+China's multi-layered capital markets. By focusing on its specialised business areas, deepening
+business collaboration and promoting cross-selling and product innovation, it provided
+comprehensive and high-quality financial services to customers.
+(Please refer to the results report of BOCHK for a full review of BOCHK's business performance and related information.)
+56
+Comprehensive Operation Platforms
+BOCG Insurance
+Insurance
+61
+BOC-Samsung Life continued to enhance its cross-selling and collaborative service capabilities
+within the Group. It realised a year-on-year increase of 96% in group insurance premiums
+brokered by the Bank, and a year-on-year increase of 105% in premiums insuring BOC credit
+card clients. It expanded its customer service channels by launching new branches in seven
+regions including Suzhou, Jiangsu, and Zhongshan, Guangdong. BOC-Samsung Life also
+constructed a comprehensive life insurance service portal on the BOC mobile banking platform
+and provided a physical examination service at the Samsung Medical Centre for high-end clients.
+It upgraded its mobile sales system and service platforms and launched a new core system for
+group insurance, improving its automatic underwriting efficiency by nearly 60% and increasing
+the proportion of after-sale service processes conducted via the WeChat official account by
+The Bank is engaged in life insurance business in the Chinese mainland through BOC-Samsung
+Life. As at the end of 2018, BOC-Samsung Life's registered capital stood at RMB1.667 billion,
+total assets amounted to RMB 14.805 billion and net assets amounted to RMB1.291 billion. In
+2018, BOC-Samsung Life recorded written premiums and premium deposits of RMB7.204 billion
+and a profit for the year of RMB35 million.
+BOC-Samsung Life
+Thanks to a sound risk condition and steady operations, BOC Insurance received an “A”
+regulatory rating for the ninth consecutive quarter, and also maintained an “A-” rating and
+"stable" outlook from Standard & Poor's in recognition of the remarkable enhancement in its
+overall capabilities. It received “Outstanding Insurance Brand” award in the 2018 leading in
+China Awards organised by JRJ.com, as well as being recognised as “2018 Excellent Competitive
+Property Insurance Company" by China Business. Its customs bond insurance product won the
+"Innovative Insurance Product” award at Hexun's 2018 China's Financial Annual Champion
+Awards.
+Following national strategies, BOC Insurance paid attention to market trends and customer needs,
+remained committed to serving the real economy and continued to improve its comprehensive
+financial services. It actively responded to the Belt and Road Initiative by supporting large
+domestic enterprises in their “Going Global” efforts. It maintained a leading position in overseas
+insurance business, covering nearly 30 industries in more than 70 countries and regions including
+Asia, Africa and South America. It pioneered customs bond insurance to make customs clearance
+more convenient for import enterprises. BOC Insurance supported enterprises' technological
+innovations by being an authorized insurer in the pilot program of the insurance compensation
+mechanism for the first (set of) major technical equipment, so as to facilitate equipment
+improvement. It supported regional development strategies and assisted in the development
+of Guangdong-Hong Kong-Macao Greater Bay Area by providing insurance services for the
+Hong Kong-Zhuhai-Macao Bridge. In addition, it assumed its share of social responsibility by
+joining the single-purpose pre-paid card performance bond insurance pool and the China Urban
+and Rural Residential Building Earthquakes Catastrophe Insurance Pool for Chinese urban and
+rural residential buildings. BOC Insurance handled various insurance claims in an efficient and
+dedicated manner. It launched a timely emergency mechanism to deal with natural disasters and
+major accidents. It also ensured fast claim handling in order to effectively support customers in
+restoring production and continuously enhance the customer experience.
+60
+The Bank is engaged in property insurance business in the Chinese mainland through BOC
+Insurance. As at the end of 2018, BOC Insurance reported registered capital of RMB4.535 billion,
+total assets of RMB 12.606 billion and net assets of RMB3.969 billion. In 2018, it realised gross
+written premiums of RMB6.050 billion, and a profit for the year of RMB205 million.
+BOC Insurance
+BOC Life achieved sound financial performance. Moody's Investors Service upgraded its
+insurance financial strength rating by one notch to A1, which reflects BOC Life's track record of
+solid profitability, solvency ratio and capital strength.
+BOC Life increased the application of innovative technology and effectively enhanced customer
+experience. It launched an innovative AI chatbot service to provide customers with information
+about insurance, payments, claims, etc. In an effort to develop the younger customer segment,
+BOC Life promoted its electronic policy services and launched “eClaims” to provide customers
+with convenient and efficient claim assessment services. In line with the FPS introduced by the
+HKMA, BOC Life was among the first batch of insurance companies in Hong Kong to apply its
+instant payment functions for premium collection and claims payment.
+BOC Life proactively broadened its multiple distribution channels and developed innovative
+products and value-added services. Meeting differentiated customers' needs, BOC Life launched
+the revamped "SmartUp Plus Whole Life Insurance Plan" and the new “SmartGuard Critical
+Illness Plan" to increase the value of new business. It introduced a new annuity product "Smart
+Immediate Annuity Plan" to cater to customers' demands in annuity product and retirement
+protection. As part of its innovation in distribution platforms, BOC Life gained a foothold in the
+insurance product platforms of renowned internet companies so as to attract more customers from
+the mobile segment. It launched its first critical illness product “AlongPro Critical Illness Plan”
+on these online platforms as well as on the BOC Life official website. 2018 marked the 20th
+anniversary of BOC Life. It rolled out a series of promotional programmes to raise awareness of
+its life insurance business and further strengthen its brand image.
+The Bank is engaged in life insurance business in Hong Kong through BOC Life. As at the
+end of 2018, BOC Life's issued share capital was HKD3.538 billion, total assets amounted to
+HKD132.415 billion and net assets amounted to HKD8.317 billion. Its profit for the year was
+HKD854 million.
+BOC Life
+Taking its strategy, market conditions, regulations and technology into consideration, BOCG
+Insurance continued to improve its organisational structure in accordance with the management
+principles governing customers, products and channels. It also made a concerted effort to
+establish a full-scale, whole-process and all-staff risk management system so as to ensure the
+sound function of the “three lines of defence” for internal control. BOCG Insurance strengthened
+its risk management early warning mechanism, which effectively reduced the impacts of natural
+disasters including Typhoon Mangkhut. Moreover, it reinforced its risk appetite management for
+insurance underwriting, reinsurance and investment, and efficiently enhanced risk compliance
+awareness, all of which led to more professional risk management.
+59
+Upholding the strategic philosophy of "advancing development through technology, featured
+businesses, innovation and market-oriented approaches" and the market development strategy
+of "deepen services in Hong Kong, refine business approach in the Chinese mainland, reach
+out to overseas markets and widen brand awareness”, BOCG Insurance continuously deepened
+cooperation with other insurance companies. It seized market opportunities through reinsurance
+channels, thus expanding its business coverage from regional to international. It also promoted
+the upgrade of its core business system and its new official website, and adopted membership
+management of customers, thus further improving customer experience.
+BOCG Insurance actively served the Belt and Road Initiative and the development of the
+Guangdong-Hong Kong-Macao Greater Bay Area. Through strengthened collaboration with the
+Group's institutions, it secured a contract for all-risk property insurance with the Vientiane World
+Trade Centre in Laos and a contract for third-party liability insurance covering cars passing over
+the Hong Kong-Zhuhai-Macao Bridge, representing new breakthroughs in collaboration formats
+that have enhanced its integrated financial service capacity.
+The Bank is engaged in general insurance business in Hong Kong through BOCG Insurance.
+As at the end of 2018, BOCG Insurance reported issued share capital of HKD3.749 billion,
+total assets of HKD8.563 billion and net assets of HKD4.002 billion. In 2018, BOCG Insurance
+recorded gross written premiums of HKD2.344 billion and a profit for the year of HKD21
+million. It remained at the forefront of the Hong Kong general insurance market in terms of gross
+written premium.
+nearly 20%. Moreover, BOC-Samsung Life strengthened its product development capability and
+introduced a specific illness insurance product “AiJiaBao”, which strengthened the protection
+function of its product line.
+In 2018, BOCIM won "the 20th Anniversary of Fund Industry Best Fixed Income Fund
+Manager" from China Fund, as well as the “Gold Fund” Top Fund Company Award from
+Shanghai Securities News and other prestigious awards.
+BOC-Samsung Life was awarded “2018 China's Insurance Annual Champion Awards-Excellent
+Foreign Insurance Company” by National Business Daily. Its lifetime critical illness insurance
+product "Xiang You" and life insurance product "ZunXiangJiaYing II" won the "Health Products
+of the Year Award” and “Life Insurance Products of the Year Award” respectively at the 2018
+Insurance Product Innovation Forum held by China Insurance News.
+BOCG Investment
+2018
+The Bank pushed forward the construction of its next-generation intelligent outlets, featuring
+smart counters. Led by the popularisation and upgrading of smart counters, it endeavoured to
+transform its outlets' service model from transaction-processing to value-creating. In 2018, the
+Bank completed nine smart counter upgrades and rolled out 41 categories of service scenarios
+63
+with 186 sub-categories. Smart counters provide an intelligent service system covering basic
+finance, targeted sales, online and offline coordination, cross-border features and corporate
+banking. At the same time, the Bank installed smart counters in all of its banking outlets in the
+Chinese mainland, further increasing the Bank's smart service capability and coverage. Mobile
+counters covers 36 tier-1 branches in the Chinese mainland with the aim of encouraging a
+proactive approach to acquiring customers beyond the boundary of the outlet hall, thus expanding
+the Bank's financial service coverage and transforming its operation model. The Bank piloted
+corporate account opening via mobile counters. It extended its services, including corporate
+account opening, product enabling and online services, to off-premises marketing scenarios
+for the first time. As a result, the launch of mobile counters further improved the Bank's basic
+customer and account service capabilities. The Bank also piloted a cash version of smart counters.
+Taking RMB banknotes as the starting point, these smart counters provide a one-stop smart cash
+service integrating multiple mediums, denominations and transaction options for customers. The
+cash-based smart counters represented a breakthrough in solving the "last mile” problem in the
+migration of counter-based services.
+The Bank optimised its outlet performance assessment system and carried forward the
+classification and differentiated development of its outlets. It also extended its service channels
+and improved financial services in county areas. The Bank consistently refined the operational
+management of its outlets and adjusted the authority and responsibilities of outlet employee
+positions. It improved outlets' marketing service approaches to improve customer experience and
+strengthened the risk management of each outlet business line, thus enhancing comprehensive
+operational efficiency.
+As at the end of 2018, the Bank's domestic commercial banking network (including Head Office,
+tier-1 branches, tier-2 branches and outlets) comprised 10,726 branches and outlets. Its
+domestic non-commercial banking institutions totalled 467, and the number of its institutions in
+Hong Kong, Macao, Taiwan and other countries and regions totalled 548.
+Service Channels
+(Please refer to the BOC Aviation Annual Report for a full review of its business performance.)
+Committed to pursuing sustainable growth, BOC Aviation continued to implement its proactive
+business strategy and steadily promoted its standing in the aircraft leasing industry. Actively
+supporting the Belt and Road Initiative, it had leased more than 75% of its aircraft to airlines of
+Belt and Road countries and regions, as well as airlines based in the Chinese mainland, Hong
+Kong, Macao and Taiwan, as of 31 December 2018. Actively targeting customer demand, the
+company took delivery of 55 aircraft, including five aircraft that airline customers purchased
+at delivery, all of which have been placed on long-term leases, as its owned fleet continued to
+expand. During the 2018 year, BOC Aviation signed 92 leases for future deliveries and added 17
+new customers. The company consistently sought to optimise its asset structure and improve its
+sustainable development. It sold 34 owned and seven managed aircraft in 2018, leaving it with an
+average owned fleet age of three years (weighted by net book value) as at 31 December 2018, one
+of the youngest aircraft portfolios in the aircraft leasing industry.
+The Bank is engaged in the aircraft leasing business through BOC Aviation. BOC Aviation is one
+of the world's leading aircraft operating leasing companies and is the largest aircraft operating
+leasing company headquartered in Asia, as measured by the value of owned aircraft. As at
+31 December 2018, BOC Aviation recorded issued share capital of USD1.158 billion, total assets
+of USD18.256 billion and net assets of USD4.199 billion. It recorded a profit for the full year of
+USD620 million.
+BOC Aviation
+Leasing Business
+conducting the conversion. BOC Asset Investment established a subsidiary company engaged in
+private equity investment funds and successfully launched its first debt-to-equity private equity
+investment fund. The company also explored a new approach to market-oriented debt-for-equity
+conversion business by completing the first project in China to convert non-listed non-public
+joint-stock companies into preferred shares.
+62
+BOC Asset Investment actively implemented the national strategy of deepening supply-side
+structural reform. It conducted debt-for-equity conversions based on both market-oriented and
+law-based principles, with the aim of improving enterprises' business operations and helping
+them to reduce leverage ratios and improve market value. In 2018, the market-oriented debt-for-
+equity conversion business of BOC Asset Investment reached RMB43.861 billion. Seventeen
+director-supervisors were appointed to participate in the corporate governance of the enterprises
+The Bank is engaged in debt-for-equity conversion and related business in the Chinese mainland
+through BOC Asset Investment. As at the end of 2018, the registered capital of BOC Asset Investment
+was RMB 10.000 billion, with its total assets and net assets standing at RMB21.172 billion and
+RMB10.107 billion respectively. Its profit for the year totalled RMB234 million.
+BOC Asset Investment
+BOCG Investment effectively implemented the Group's overall development strategies and
+steadily pushed forward its business transformation from “investment” to “investment +
+investment management”. It focused on opportunities arising from new industries and new
+business types and formats, and completed investments in a number of major projects.
+It actively participated in the development of the Guangdong-Hong Kong-Macao Greater Bay
+Area, and initiated the establishment of the Greater Bay Area Homeland Development Fund.
+In the course of diversifying its financing channels, BOCG Investment issued RMB1.0 billion
+and RMB2.0 billion of Panda Bonds in the Shanghai Stock Exchange and domestic interbank
+bond market respectively in 2018. In line with the Group's targeted poverty alleviation
+initiatives, it completed the initial stage of capital injection in the Xianyang City CP Group
+Pig-Farming Project. BOCG Investment achieved sustainable development through strengthening
+post-investment management and exit management.
+The Bank is engaged in direct investment and investment management business through BOCG
+Investment. BOCG Investment's business scope includes private equity investment, fund
+investment and management, real estate investment and management and NPA investment. As
+at the end of 2018, BOCG Investment recorded issued share capital of HKD34.052 billion, total
+assets of HKD116.299 billion and net assets of HKD61.264 billion. In 2018, it recorded a profit
+for the year of HKD3.892 billion.
+Investment Business
+Items
+166.2361
+0.35%
+31 December
+As at
+As at
+Unit: million customers, except percentages
+64
+Pursuing innovation-driven development in internet finance, the Bank realised rapid growth in
+its mobile banking business with enriched functions and improved user experience. The Bank's
+internet finance business ranking rose significantly in evaluations made by authorities
+and mainstream media. In 2018, the Bank's substitution ratio of e-banking channels for
+outlet-based business transactions reached 93.99%. Its e-channel transaction amount reached
+RMB223.53 trillion, an increase of 16.18% year on year. Among this, mobile banking transaction
+volumes reached RMB20.03 trillion, an increase of 82.68% year on year, making mobile banking
+the online trading channel with the most active customers.
+Internet Finance
+(43.57%)
+31,239
+17,627
+60.42%
+16,235
+26,044
+(1.84%)
+42,507
+41,723
+Change (%)
+2017
+2018
+31 December
+31 December
+As at
+Self-service terminal
+Smart Counter
+Items
+ATM
+Unit: single item, except percentages
+As at
+Outlet Development
+31 December
+Unit: RMB billion, except percentages
+The Bank has established professional and diversified service channels and provides
+comprehensive financial services to customers in the Chinese mainland and many other countries
+and regions. Centred on enhancing customer experience, the Bank pushed forward its service
+channel integration and outlet transformation so as to attract more customers and drive stronger
+economies of scale. As a result, it cultivated an ecosystem wherein online and offline channels are
+integrated and financial and non-financial scenarios are seamlessly connected.
+115.3257
+12.34%
+26.00%
+Number of telephone banking customers
+113.7678
+147.9722
+113.3691
+13.86%
+3.4169
+3.8905
+Number of corporate online banking customers
+Number of personal online banking customers
+Change (%)
+2017
+2018
+Items
+145.3118
+Number of mobile banking customers
+2.20
+100.00%
+NPLs
+162,778
+1.76%
+154,208
+1.80%
+Migration Ratio
+Items
+Pass
+Special-mention
+Substandard
+Doubtful
+Unit: %
+2018
+Department
+Credit Approval
+Department
+1.97
+3.05
+23.70
+20.37
+19.39
+51.89
+2016
+Board of Directors
+Department
+↓
+Vertical
+Management
+modes
+Risk Management
+2017
+Financial Management
+Control Supervision
+Risk Policy Committee
+Following a technology and innovation-driven strategy, the Bank continuously improved its IT
+governance and promoted the integrated development of the Group's information technology.
+These improvements actively facilitated the implementation of the Group's strategy.
+The Bank successfully completed its overseas information system integration and transformation
+project, an effort which lasted for six years and covered 50 countries and regions on six
+continents. Through this system, the Bank realises global coverage with one core system,
+information system version unification, centralised deployment and integrated operation and
+management. The Bank launched key projects including mobile banking, smart counters,
+transaction banking, smart customer service, intelligent investment advisor, intelligent customer
+management, consumer finance, a quantitative trading platform, a smart risk control system and a
+scenario-based financial ecosystem, thus supporting its business development and promoting the
+Group's digital transformation.
+The Bank followed a technical development route that gives equal emphasis to centralised and
+distributed architectures, so as to push forward the strategic transformation of its technical
+architecture. It established three new technology platforms: cloud computing, big data and
+AI. These platforms are the foundations for the network-based, intelligent and ecological
+management of the Bank's business and operations. It also made substantial breakthroughs in
+disaster-recovery backup and high availability architecture, laying a foundation for the long-term
+development of the Bank's IT capacity. Adapting to development trends in the digital era, the
+66
+Bank boosted the transformation of its IT systems and mechanisms by establishing its first global
+innovation and R&D base in Singapore and launching an international version of its mobile
+banking service.
+The Bank conducted research into the applications of such novel technologies as AI, biometric
+identification, and blockchain technology. The research focused on applying such technologies
+to prevent and control risks, enhance customer experience, strengthen business transactions,
+and improve security operations, etc. Adhering to the principle that FinTech innovation should
+essentially serve business development, the Bank closely tracked developments in core FinTech
+applications, explored scenario-based applications, and pushed forward the integration of
+innovative technologies within its businesses. It launched a forfaiting trading platform designed
+and developed jointly with other banks based on blockchain technology. The Bank deepened
+the application of AI technologies to conduct research and development of its foreign exchange
+price forecast model and intelligent SWIFT routing model. It also explored the application of
+deep learning technology to improve its modelling result, in order to enhance the reliability of its
+forecasting.
+Column IV: Pushing forward innovation-driven development
+Focusing on the Group's development strategy and adhering to the strategy of driving
+development through innovation, the Bank endeavoured to consolidate the foundation of
+its products and services, improve customer experience and facilitate the integration of
+technological innovation and business innovation.
+Strengthening top-level design and building an innovation management system. The
+Bank continued to optimise its innovation mechanism and established an Innovation and
+Product Management Committee. In November 2018, the Bank established its first global
+innovation and R&D base in Singapore. Drawing on its advantages in overseas financial
+services, it focused on investment and financing services for cross-border customers, trade
+finance, cross-border clearing and RMB internationalisation, thus driving efforts to build
+BOC into a world-class bank in the new era.
+Intensifying innovation in products and services based on customer needs. The Bank
+endeavoured to build landmark products by emphasising the promotion of "BOC Robot
+Advisor", "Corporate Options on Commodities" and "Sustainability Bonds". Many
+of the Bank's products and achievements received market recognition and provincial
+or ministerial awards, including those in such areas as the Belt and Road initiative,
+cross-border finance, green finance, inclusive finance and digital banking.
+Fostering an innovation-friendly atmosphere and incentivising employee innovation.
+The Bank built a diversified and multi-faceted programme of innovation activities,
+including innovation forums, innovation contests, themed “innovation months", annual
+innovation selection and other campaigns, thus effectively stimulating employees'
+enthusiasm for innovation. The Bank also stepped up efforts to cultivate innovative
+personnel, establishing a three-tier system whereby innovation-focused employees are
+classified as innovation experts, innovation talent and young innovation specialists.
+67
+RISK MANAGEMENT
+The Bank continued to improve its risk management system in line with the Group's strategies.
+To ensure compliant operations, it implemented local and overseas regulatory requirements,
+carried out in-depth rectification and accountability for regulatory initiatives such as the
+governance of market disruptions, on-site efficiency examination of risk management, as well as
+internal control and quarterly regulatory notifications. It also pushed forward compliance efforts
+in effective risk data aggregation and risk reporting. The Bank also optimised its comprehensive
+risk governance structure, enhanced the Group's consolidated management capabilities and
+refined the risk assessment process for new products. It promoted the implementation of
+advanced capital management approaches, accelerated the upgrading and application of its risk
+measurement model, and improved its risk-weighted asset (RWA) measurement detailed rules.
+At the same time, the Bank sped up the construction of its risk management information system,
+with its Global Limit Control System being awarded “First Prize for Banks' Technological
+Progress" by the PBOC. It strengthened its risk data governance, improved its risk data standards
+and risk reporting capability, and earnestly promoted the application of big data and other new
+technologies in risk management.
+The risk management framework of the Bank is set forth below:
+Board of Directors
+Audit Committee
+Board of Supervisors
+CAO of Head Office
+Information Technology Development
+8,583,185
+The Bank further leveraged FinTech to enhance the fundamental service capacity of its internet
+finance business. It established an enterprise-level concurrent risk control system and a whole-
+process internet finance risk management and control system that covers pre-event, concurrent
+and post-event risk control. The Bank further enhanced its big data analysis capabilities by
+building a customer tag service system. This system covers both corporate and personal
+customers, and has allowed the Bank to construct targeted service of data mining, data analysis,
+marketing strategy and outcome feedback. The Bank also rolled out the main functions of its
+new-generation customer service programme, building a cross-channel, cross-scenario and cross-
+platform intelligent customer contact centre. It also introduced a video-based online global expert
+service, thus constantly improving its smart customer service capability. The Bank upgraded its
+corporate mobile banking by adding biometric identification, account management, electronic
+reconciliation and comprehensive transfer functions, and by launching online corporate account
+opening, corporate group insurance and proactive marketing for wealth management products.
+Internal Control Committee
+Credit Management
+Department
+Internal Control And
+Department
+Legal & Compliance
+Executive Office
+Department
+Financial Management
+IT Department
+Capital Management
+Risk Management
+departments of the Group
+Management
+Board of Supervisors
+Related management
+Senior
+Board of Directors
+Senior Management
+(Executive Committee)
+Asset Disposal Committee
+Credit Risk Management
+and Decision Committee
+Committee
+Anti-money Laundering
+The Bank enriched its service scenarios to improve customer stickiness. Using mobile banking
+as a unified portal, the Bank reinforced external scenario cooperation, attracted more quality
+merchants to its “Life Channel” and provided more cross-border services, branch-featured
+services as well as other value-added services. The Bank launched the E-BOC scenario expansion
+platform. It embedded its products into internet scenarios to deliver public services such as online
+account opening, inter-bank transfer, and risk evaluation. It also released scenario-based financial
+services, including Precious Metals Savings and reservation of foreign currency banknotes,
+together with partners.
+100.00%
+9,273,549
+Total
+70
+Five-category Loan Classification
+Items
+Unit: RMB million, except percentages
+As at 31 December 2018 As at 31 December 2017
+Amount
+% of total
+Amount % of total
+Group
+70
+Pass
+Substandard
+Doubtful
+Loss
+Total
+NPLs
+11,278,379
+95.68%
+10,421,064
+95.64%
+Special-mention
+The loans and advances to customers in "Risk Management Credit Risk Management" section are exclusive of
+accrued interest.
+6
+As at the end of 2018, the Group's NPLs6 totalled RMB166.941 billion, an increase of
+RMB8.472 billion compared with the prior year-end. The NPL ratio was 1.42%, down by
+0.03 percentage point compared with the prior year-end. The Group's allowance for impairment
+losses on loans and advances was RMB303.781 billion, an increase of RMB51.527 billion
+compared with the prior year-end. The coverage ratio of allowance for loan impairment losses
+to NPLs was 181.97%, up by 22.79 percentage points from the prior year-end. The NPLs of
+domestic institutions totalled RMB162.778 billion, an increase of RMB8.570 billion compared
+with the prior year-end. Domestic institutions' NPL ratio was 1.76%, down by 0.04 percentage
+point compared with the prior year-end. The Group's outstanding special-mention loans stood
+at RMB342.363 billion, an increase of RMB25.338 billion compared with the prior year-end,
+accounting for 2.90% of total loans and advances, down by 0.01 percentage point from the prior
+year-end.
+Finance and Internal
+Diligence Supervision
+Duty Performance and Due
+Committee
+Audit -----
+Audit line
+Department
+Credit Risk Management
+Closely tracking changes in macroeconomic and financial conditions, the Bank controlled and
+mitigated credit risks. It adjusted the structure, promoted the development and consolidated the
+foundations of its credit risk management function. In addition, the Bank strengthened credit asset
+quality management, pushed forward the optimisation of its credit structure, further improved
+its credit risk management policies and took a proactive and forward-looking stance on risk
+management.
+Business
+departments
+Domestic and
+overseas branches
+Task forces
+68
+80
+Taking a customer-centric approach, the Bank further strengthened its unified credit granting
+management and enhanced full-scope centralised credit risk management. It improved its
+long-acting credit management mechanism and asset quality monitoring system and further
+enhanced potential risk identification, control and mitigation mechanisms by intensifying post-
+lending management and reinforcing customer concentration management and control. The
+Bank enhanced the supervision of risk analysis and asset quality control in key regions and
+strengthened window guidance on all business lines. In order to effectively strengthen the
+management and control of customer concentration risk, the Bank constructed the management
+policies of large exposures, which specified the management structure, working process and
+measurement rules, etc.
+The Bank continuously adjusted and optimised its credit structure. With the aim of advancing
+strategic implementation and balancing risk, capital and return, it stepped up the application of
+the New Basel Capital Accord and improved the management plans of its credit portfolios. In
+line with the government's macro-control measures and the direction of industrial policy, the
+Bank enacted guidelines for industrial lending and continued to push forward the building of an
+industrial policy system so as to optimise its credit structure.
+In terms of corporate banking, the Bank further strengthened risk identification and control,
+proactively reduced and exited credit relationships in key fields, strictly controlled the gross
+outstanding amount and use of loans through limit management and prevented and mitigated
+risk from overcapacity industries. It intensified the management of loans to local government
+financing vehicles (LGFVs) and strictly controlled the outstanding balances. In addition, the
+Bank implemented the government's macro-control policies and regulatory measures in the real
+estate sector so as to strengthen the risk management of real estate loans. In terms of personal
+banking, the Bank improved unified credit granting management for personal customers and
+revised management policies for unsecured start-up loans, small-amount loans for poverty
+alleviation, and loans mortgaged against rural contracted land management rights or farmers'
+housing property rights, thus supporting the development of its inclusive finance business. It
+kept improving management policies for personal online loans and credit card overdrafts, in
+order to prevent the risks of excessive credit and cross-infection. The Bank enforced regulatory
+requirements and continued to strictly implement differentiated policies on residential mortgages.
+It also strengthened the risk control of key products and regions.
+The Bank strengthened country risk management. It performed an annual review of country risk
+ratings and implemented limit management and control of country risk exposures. It pushed
+forward the production and launch of the new Country Risk System, realised timely tally of
+country risk exposure at the Group level and assess, monitor, analyse and report its exposures
+on a regular basis. The Bank also established a country risk monitoring and reporting system
+covering "yearly reporting and the timely reporting of material risk events", which made it
+possible to regularly publish country risk analysis reports within the Group and make timely
+assessments of the impact of material country risk events. In addition, the Bank adopted
+differentiated management of potentially high-risk and sensitive countries and regions. By
+concentrating its net exposures to country risk in countries and regions that are relatively low or
+low, the Bank contained its overall country risk at a reasonable level.
+69
+60
+The Bank further stepped up the collection of NPAs. It re-allocated internal and external
+collection resources, and continued to adopt centralised and tiered management of NPA projects.
+It reinforced the supervision of key regions and key projects, in order to improve the quality and
+efficiency of disposals. The Bank proactively explored the application of “Internet Plus” in NPA
+collection, and diversified its disposal channels. In addition, it adopted policies based on the
+actual conditions of individual enterprises and took multiple measures where necessary. It gave
+full play to the role of creditor committee and enhanced the application of debt-for-equity swaps
+and restructuring efforts to help enterprises get out of difficulties, with the aim of realising mutual
+benefit for the Bank and the enterprises, and to support the real economy.
+The Bank scientifically measured and managed the quality of credit assets based on the
+Guidelines for Loan Credit Risk Classification, which requires Chinese commercial banks to
+classify loans into the following five categories: pass, special-mention, substandard, doubtful and
+loss, among which loans classified as substandard, doubtful and loss are recognised as NPLs. In
+order to further refine its credit asset risk management, the Bank used a 13-tier risk classification
+criteria scheme for corporate loans to domestic companies, covering on-balance sheet and off-
+balance sheet credit assets. In addition, the Bank strengthened risk classification management of
+key industries, regions and material risk events, and dynamically adjusted classification results.
+It strengthened the management of loan terms, managed overdue loans by the name list system
+and made timely adjustments to risk classification results, so as to truly reflect asset quality.
+The overseas institutions of the Bank operated in line with the Guidelines for Loan Credit
+Risk Classification or the local applicable rules and requirements on credit risk classification,
+whichever is stricter.
+342,363
+2.90%
+317,025
+2.91%
+94.83%
+Special-mention
+291,933
+3.15%
+288,857
+3.37%
+Substandard
+Subsidiaries
+0.52%
+57,659
+0.67%
+Doubtful
+47,536
+0.51%
+43,370
+0.51%
+Loss
+66,961
+0.72%
+53,179
+0.62%
+8,140,120
+1 Committee
+95.10%
+Pass
+49,788
+0.42%
+59,265
+0.54%
+49,341
+0.42%
+45,404
+0.42%
+67,812
+0.58%
+53,800
+0.49%
+11,787,683
+100.00%
+10,896,558
+100.00%
+166,941
+1.42%
+158,469
+1.45%
+Domestic
+8,818,838
+48,281
+(7,669,897)
+36.67
+electricity, heating, gas and
+water
+Customer H
+Commerce and services
+No
+20,185
+0.17%
+Customer I
+Transportation, storage and
+No
+18,350
+0.16%
+postal services
+Customer J
+Production and supply of
+NNN
+No
+16,521
+0.14%
+electricity, heating, gas and
+water
+73
+Market Risk Management
+In response to changes in the market environment, the Bank continued to refine its market risk
+management system in order to effectively control its market risk.
+The Bank actively adapted to changes in its business and the market by improving its market
+risk appetite transmission mechanism and refining its model for the Group's market risk limit
+management. It conducted forward-looking research and judgment regarding market risks and
+cross-financial risks in order to improve its counterparty credit risk management process and
+mechanism, thus bolstering its risk warning and mitigation capabilities. The Bank enhanced the
+accuracy of its risk measurement and improved its risk quantification capability by continuously
+advancing the construction of its market risk data mart and management system, and by
+studying and applying advanced risk measurement approaches. Please refer to Note VI.4 to the
+Consolidated Financial Statements for detailed information regarding market risk.
+The Bank strengthened risk management of the Group's bond investments by closely tracking
+market volatility and changes in regulatory policy. Based on the market and business needs,
+it has shortened its response time to risks and made timely adjustments and refinements to its
+investment policies. In response to high default rates in the bond market, the Bank has improved
+the effectiveness of risk inspections and strengthened risk management and control in major
+areas.
+0.17%
+The Bank assessed the interest rate risk in its banking book mainly through analysis of interest
+rate re-pricing gaps, made timely adjustments to the structure of its assets and liabilities based on
+changes in the market situation, and controlled the fluctuation of net interest income within an
+acceptable level. Assuming that the yield curves of all currencies were to shift up or down by 25
+basis points in parallel, the Group's sensitivity analysis of net interest income on all currencies is
+as follows:
+20,523
+21,519
+Transportation, storage and
+postal services
+Customer D
+Commerce and services
+Customer E
+Customer F
+Transportation, storage and
+postal services
+Manufacturing
+Customer G
+Production and supply of
+Parties or not
+Outstanding
+loans
+Unit: RMB million, except percentages
+Related
+% of
+total loans
+ZZ ZZ Z Z Z
+No
+68,632
+0.58%
+No
+43,176
+0.37%
+35,011
+0.30%
+25,312
+0.21%
+23,868
+0.20%
+No
+0.18%
+7
+Unit: RMB million
+Items
+On demand
+Up to 1 month
+1-3 months (inclusive)
+3-12 months (inclusive)
+1-5 years (inclusive)
+Over 5 years
+Total
+As at
+31 December 2018
+Unit: RMB million
+As at
+31 December 2017
+2,071,988
+(651,459)
+(591,520)
+2,213,972
+(6,879,942)
+(1,429,232)
+(312,210)
+(54,305)
+3,238,374
+5,382,216
+1,725,397
+163,908
+3,050,952
+4,769,231
+1,576,679
+Note: Liquidity gap = assets that mature in a certain period – liabilities that mature in the same period.
+75
+US Risk and
+Management Committee
+Overdue/undated
+Items
+Liquidity gap analysis is one of the methods used by the Bank to assess liquidity risk. Liquidity
+gap results are periodically calculated, monitored and used for sensitivity analysis and stress
+testing. As at the end of 2018, the Bank's liquidity gap was as follows (please refer to Note VI.5
+to the Consolidated Financial Statements):
+52.7
+Up 25 bps
+Down 25 bps
+As at 31 December 2018
+As at 31 December 2017
+RMB USD HKD Other RMB USD HKD Other
+(3,520) (670) 328 (274) (3,503) (563) 360 (487)
+3,520 670 (328) 274 3,503 563 (360) 487
+In terms of exchange rate risk management, the Bank sought to achieve currency matching
+between fund source and application and managed exchange rate risk through timely settlement
+and hedging, thus effectively controlling its foreign exchange exposure.
+This analysis is based on the approach prescribed by the CBIRC, which includes all off-balance sheet positions.
+74
+Liquidity Risk Management
+The Bank endeavoured to develop a sound liquidity risk management system with the aim of
+effectively identifying, measuring, monitoring and controlling liquidity risk at the institution
+and Group level, including that of branches, subsidiaries and business lines, thus ensuring that
+liquidity demand is met in a timely manner and at a reasonable cost.
+Adhering to an appropriate balance of safety, liquidity and profitability, and following regulatory
+requirements, the Bank improved its liquidity risk management in a forward-looking and
+scientific manner. The Bank enhanced liquidity risk management at the institution and Group
+level, including that of branches, subsidiaries and business lines. It formulated sound liquidity
+risk management policies and contingency plans, periodically re-examined liquidity risk limits,
+upgraded the early warning system for liquidity risk and strengthened the management of high-
+quality liquid assets, in order to strike an appropriate balance between risk and return. In addition,
+the Bank regularly improved its liquidity stress-testing scheme and performed stress tests on a
+quarterly basis. The stress tests showed that the Bank had adequate payment ability to cope with
+distressed scenarios.
+As at the end of 2018, the Group's liquidity risk indicator met regulatory requirements. The
+Group's liquidity ratio is shown in the table below (in accordance with relevant provisions of
+domestic regulatory authorities):
+As at
+As at
+Unit: %
+As at
+Customer C
+Ratio
+2018
+31 December
+2017
+31 December
+2016
+Liquidity ratio RMB
+≥25
+58.7
+47.1
+45.6
+Foreign currency
+≥25
+54.8
+56.9
+Regulatory 31 December
+standard
+postal services
+Transportation, storage and
+Customer B
+141,458
+127,635
+Increase during the year
+80,680
+69,854
+70,700
+Decrease during the year
+(72,110)
+(57,104)
+(56,877)
+Balance at the end of the year
+162,778
+154,208
+141,458
+Loans and Credit-Impaired Loans by Currency
+Unit: RMB million
+As at 31 December 2018
+As at 31 December 2017
+As at 31 December 2016
+Total
+Items
+loans
+Impaired
+loans
+Total
+loans
+Impaired
+loans
+Total
+154,208
+Balance at the beginning of the year
+Domestic
+145,311
+33.57
+31.98
+44.31
+In accordance with IFRS 9, the Bank assesses expected credit losses (ECL) with forward-
+looking information and makes relevant allowances. In particular, it makes allowances for assets
+classified as stage 1 and assets classified as stage 2 and stage 3 according to ECL of 12 months
+and ECL of the entire lifetime of the asset, respectively. As at the end of 2018, the Group's
+stage 1, stage 2 and stage 3 loans totalled RMB11,183.826 billion, RMB433.375 billion and
+RMB166.952 billion respectively, accounting for 94.90%, 3.68% and 1.42% of total loans.
+As at the end of 2018, the Group's credit-impaired loans totalled RMB166.952 billion, an
+increase of RMB9.070 billion compared with the prior year-end. The credit-impaired loans to
+total loans ratio was 1.42%, a decrease of 0.03 percentage point compared with the prior year-
+end. For domestic institutions, credit-impaired loans totalled RMB 162.778 billion, an increase
+of RMB8.570 billion compared with the prior year-end. The credit-impaired loans to total loans
+ratio of domestic institutions was 1.76%, down by 0.04 percentage point compared with the prior
+year-end. The Bank's operations in Hong Kong, Macao, Taiwan and other countries and regions
+reported credit-impaired loans of RMB4.174 billion and a credit-impaired loans to total loans
+ratio of 0.17%, representing an increase of RMB500 million and an increase of 0.01 percentage
+point compared with the prior year-end respectively.
+71
+Movement of Credit-Impaired Loans
+Items
+Unit: RMB million
+2018
+2017
+2016
+Group
+loans
+Balance at the beginning of the year
+145,311
+130,237
+Increase during the year
+83,009
+71,573
+72,721
+Decrease during the year
+(73,939)
+(59,002)
+(57,647)
+Balance at the end of the year
+166,952
+157,882
+157,882
+57.97
+Impaired
+loans
+RMB
+As at
+As at
+Unit: %
+As at
+Regulatory 31 December 31 December 31 December
+Indicators
+Standard
+2018
+2017
+2016
+Loan concentration ratio of the largest single borrower
+Loan concentration ratio of the ten largest borrowers
+Notes:
+<10
+3.6
+3.8
+2.3
+<50
+15.3
+17.4
+14.2
+1
+2
+Loan concentration ratio of the largest single borrower = total outstanding loans to the largest single
+borrower net regulatory capital.
+Loan concentration ratio of the ten largest borrowers = total outstanding loans to the top ten borrowers ÷ net
+regulatory capital.
+Please refer to Notes V.17 and VI.3 to the Consolidated Financial Statements for detailed
+information regarding loan classification, stage determination, credit-impaired loans and
+allowance for loan impairment losses.
+The following table shows the top ten individual borrowers as at the end of 2018.
+Industry
+Customer A
+Manufacturing
+The Bank continued to focus on controlling borrower concentration risk and was in full
+compliance with regulatory requirements on borrower concentration.
+72
+In 2018, the Group's impairment losses on loans and advances stood at RMB107.905 billion,
+an increase of RMB23.880 billion compared with the prior year. The credit cost was 0.95%, an
+increase of 0.14 percentage point compared with the prior year. Specifically, domestic institutions
+registered impairment losses on loans and advances of RMB106.850 billion, an increase of
+RMB25.481 billion compared with the prior year. The credit cost of domestic institutions was
+1.20%, an increase of 0.21 percentage point compared with the prior year.
+The Bank makes adequate and timely allowances for loan impairment losses based on the
+expected credit loss module in accordance with the principles of authenticity and forward looking
+approach. Please refer to Notes II.4 and VI.3 to the Consolidated Financial Statements for the
+accounting policy in relation to allowances for impairment losses.
+9,074,501
+Foreign currency
+2,713,182
+Total
+11,787,683
+151,313 8,325,013
+15,639 2,571,545
+166,952 10,896,558
+145,605
+7,607,730
+130,301
+12,277
+2,365,632
+15,010
+157,882
+Group
+9,973,362
+Domestic
+RMB
+Foreign currency
+Total
+8,991,494
+282,055
+9,273,549
+151,292 8,243,556
+11,486 339,629
+162,778 8,583,185
+145,540
+7,480,833
+130,277
+8,668
+154,208
+337,675
+11,181
+7,818,508
+141,458
+145,311
+Risk Management and
+555
+698,381
+92,847
+30.62%
+3,595
+18.98%
+4,401,655
+Eastern China
+8.07%
+25,040
+8.11%
+952
+3.01%
+Northeastern China
+19.85%
+29.94%
+61,524
+2,089
+29.99%
+6,956,012
+Northern China
+% of total
+Number
+% of total
+Number
+% of total
+Total assets
+Items
+Employees
+Organisations
+17.80%
+Central and Southern China
+3,268,088
+14.09%
+100.00%
+21,267,275
+Total
+(1,926,264)
+Elimination
+1.86%
+1.07%
+126
+8.66%
+2,009,680
+Other countries and regions
+5.98%
+18,555
+3.59%
+422
+18.10%
+4,197,031
+Hong Kong, Macao and Taiwan
+12.24%
+37,970
+14.71%
+1,727
+7.17%
+1,662,692
+Western China
+22.06%
+68,416
+24.10%
+2,830
+Assets
+11,741
+Unit: RMB million/unit/person, except percentages
+As at the end of 2018, the Bank had a total of 11,741 institutions worldwide, including 11,193
+institutions in the Chinese mainland and 548 institutions in Hong Kong, Macao, Taiwan and other
+countries and regions. Its domestic commercial banking business comprised 10,726 institutions,
+including 38 tier-1 and direct branches, 353 tier-2 branches and 10,334 outlets.
+14.97%
+14.19%
+14.92%
+14.04%
+Calculated in accordance with the Regulation Governing Capital Adequacy of Commercial Banks
+Core capital adequacy ratio
+Capital adequacy ratio
+11.63%
+15.01%
+11.69%
+14.56%
+10.96%
+14.53%
+11.39%
+14.36%
+Please refer to Note VI.7 to the Consolidated Financial Statements for detailed information.
+Capital adequacy ratio
+Leverage Ratio
+Unit: RMB million, except percentages
+As at
+As at
+31 December 2018 31 December 2017
+Items
+Net tier 1 capital
+Adjusted on- and off-balance sheet assets
+Leverage ratio
+1,575,293
+22,700,133
+6.94%
+1,461,090
+20,927,313
+6.98%
+Please refer to Supplementary Information II.5 to the Consolidated Financial Statements for
+detailed information.
+80
+60
+ORGANISATIONAL MANAGEMENT AND HUMAN RESOURCES DEVELOPMENT
+As at the end of 2018, the leverage ratio calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) is listed below:
+11.77%
+11.96%
+12.02%
+Organisational Management
+AND MANAGEMENT
+Reputational Risk Management
+2017
+31 December 31 December
+2017
+Calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+Net common equity tier 1 capital
+1,465,769
+1,356,088
+1,251,056
+1,180,299
+Net tier 1 capital
+1,575,293
+1,461,090
+1,350,770
+1,280,013
+Net capital
+1,922,350
+1,725,330
+1,683,893
+1,526,537
+Common equity tier 1 capital
+adequacy ratio
+11.41%
+11.15%
+11.08%
+10.85%
+Tier 1 capital adequacy ratio
+12.27%
+The geographic distribution of organisations and employees of the Bank was set forth below:
+100.00%
+5,767
+100.00%
+Group
+As at
+31 December
+2018
+As at
+Bank
+As at
+As at
+31 December
+2018
+85
+2019 is an important year for the realisation of the Phase I target of the Bank's development
+strategy. Focused on its strategic goal of building a world-class bank in the new era, the
+Bank will further increase its support for the real economy and facilitate the execution of its
+strategy with great determination and effort. Through comprehensive efforts, it will lay the
+foundation for realising the Phase I target of its development strategy. First, it will dedicate
+to serving the real economy and improve its development quality and effectiveness. The
+Bank will continue to increase its support for the real economy. It will achieve high-quality
+development while serving the overall development of China by increasing resource investment,
+leveraging its unique characteristics and capturing development opportunities. The Bank's
+domestic RMB-denominated loan portfolio is expected to grow by approximately 10% in 2019.
+Second, it will focus on infrastructure construction and solidify its development foundations.
+Following a strategic and issue-oriented approach, the Bank will strive to push forward outlet
+transformation, upgrade its operational capacities and optimise its comprehensive operational
+models, in order to lay a solid foundation for enhancing its overall customer service and
+operational management capabilities. Third, it will focus on strengthening its unique advantages
+and increasing development cooperation. The Bank will strive to continuously improve its
+overall competitiveness by pursuing business globalisation and service integration, accelerating
+the refinement of related systems and mechanisms, and further consolidating its traditional
+advantages. Fourth, it will focus on preventing and mitigating financial risks and safeguard the
+development bottom line. The Bank will combine serving the real economy with financial risk
+prevention and mitigation. In order to safeguard its business development, it will adhere to the
+bottom line thinking, continuously improve its comprehensive risk management system, optimise
+its management mechanisms and consolidate management responsibilities. Fifth, it will focus
+on system and mechanism deficiencies and thus release its growth potential. The Bank will
+reinforce the optimisation of its systems and mechanisms, and continue to push forward strategy,
+communications and cultural development. As a result, it will further stimulate the enthusiasm of
+all employees and harness their combined efforts to advance its reform and development.
+The banking sector will face a complicated operating environment in 2019. The growth drivers of
+the global economy will weaken, international financial markets will remain at risk of fluctuation,
+and the functioning of the economy will be subject to a number of uncertainties. That said,
+Chinese economic growth will remain stable during this period of important strategic opportunity,
+with cross-border finance demonstrating high development potential and many other factors
+creating favourable conditions for sound growth in the banking sector.
+OUTLOOK
+84
+The Bank has formulated an allocation mechanism for total remuneration, the distribution of total
+remuneration of branches is linked to the completion of comprehensive benefits of branches,
+taking full consideration of risk factors so as to focus on risk-adjusted value creation and enhance
+long-term performance. The Bank continued to improve the internal remuneration distribution
+structure, and allocate more remuneration resources to the primary-level institutions and
+employees to effectively boost the driving forces powering sustainable development of the Bank.
+Bank may recover part or all of the performance remuneration paid within the corresponding
+period, and stop the payment of the part that has not been paid. The benefits mainly include
+social insurance, housing provident fund, enterprise annuity and other non-cash remuneration,
+which are managed in accordance with local regulatory policies. The Bank's remuneration policy
+applies to all employees who have established a labor contract relationship with the Bank, with no
+exceptions beyond the remuneration policy.
+83
+The Bank's remuneration distribution follows the principle of “remuneration by post, paying by
+performance", and employee remuneration consists of basic salary, performance remuneration
+and benefits. Among them, the basic salary depends on the post value and the ability of
+employees to perform their duties; performance remuneration depends on performance evaluation
+results of the Group, the institution or department of the employee and the employee, and is
+linked to performance, risk, internal control, ability and other factors. Deferred payment is
+required for more than 40% of performance remuneration of personnel who are responsible for
+major risk management and control, with not less than 3 years of the period of deferred payment.
+If the risk loss within the responsibility is excessively exposed during the term of service, the
+The Bank's remuneration policy is in line with corporate governance requirements, business
+development strategies, market positioning and talent competition strategies. The Board of
+Directors of the Bank has set up the Personnel and Remuneration Committee to assist the Board
+of Directors in reviewing the Bank's human resources and remuneration strategies. Independent
+director serves as the Chairman of the Committee. Please refer to the section “Corporate
+Governance-Special Committees of the Board of Directors" for details of the work progress of
+the Personnel and Remuneration Committee. Based on the human resources and remuneration
+strategies determined by the Board of Directors, the Senior Management of the Bank is
+responsible for formulating rules and regulations for remuneration management.
+In active response to national strategies, the Bank leveraged its characteristic advantages in
+globalised operations. It held Belt and Road International Financial Exchange & Cooperation
+Seminars for four Central and East European countries and nine African countries. It refined
+its personnel expense allocation mechanism, and promoted the overall implementation of the
+Broad Band Salary System so as to enhance the input-output efficiency of its resources. In
+addition, the Bank actively held special training sessions on topics, such as the development
+of key areas, including the Beijing-Tianjin-Hebei region, the Guangdong-Hong Kong-Macao
+Greater Bay Area, the Yangtze River Economic Belt and Hainan FTZ, as well as important
+fields including poverty alleviation, inclusive finance, internal risk control and disposal of NPLs,
+technology innovation, and business process improvement. In 2018, the domestic commercial
+banking institutions of the Bank held a variety of training courses, totalling 86,980 sessions with
+2,966,118 participants.
+The Bank vigorously strengthened its human resources and cultivated management professionals
+by carrying out the “Hundred-Talent Programme” and “Sailing Programme” and by continuously
+training internationalised and comprehensive talented personnel. It reinforced the development of
+its professional personnel resources, enhanced the allocation of FinTech and innovative personnel
+and built a talent pool of employees fluent in minority languages. Following national targeted
+poverty alleviation strategies, the Bank implemented a special recruitment plan for impoverished
+college students and designated management personnel to poverty-stricken areas, so as to
+ensure tangible poverty alleviation results. The Bank sat atop the ranking for “Best Employer in
+Financial Industry in the Opinion of Chinese University Students” for the 11th consecutive year.
+and established the Equity Investment and Subsidiary Management Department to strengthen
+group-level management over its integrated enterprises. Moreover, the Bank enhanced the
+competitiveness of branches in provincial capitals by further specifying their management modes
+and development strategies.
+82
+In 2018, in line with the Group's strategies and annual priorities, the Bank further deepened
+reform of its organisational structure and management mechanism, and rebuilt its customer
+and product service system based on customer demands and experience. It improved the
+organisational structure for inclusive finance, established the SME Services Department at the
+Head Office, and reinforced the support for micro and small-sized enterprises, so as to enhance
+its inclusive finance service capabilities. The Bank further refined its product and service system
+for corporate banking, and set up the Global Transaction Banking Department at the Head Office
+to provide integrated, scenario-based, and smart transaction banking services for corporate
+banking customers. It refined the globalised, integrated financial group management structure,
+10.04%
+Other
+310,119
+38.64%
+Cross-marketing and teller
+Items
+Information technology
+Unit: RMB million, except percentages
+As at the end of 2018, the capital adequacy ratios separately calculated in accordance with
+the Capital Rules for Commercial Banks (Provisional) and the Regulation Governing Capital
+Adequacy of Commercial Banks are listed below:
+The Bank earnestly implemented regulatory requirements on reputational risk management,
+continued to enhance its reputational risk management system and mechanism and strengthened
+the consolidated management of reputational risk, so as to enhance the overall reputational risk
+management level of the Group. It attached great importance to the investigation and pre-warning
+of potential reputational risk factors, further improved its routine public opinion monitoring
+capability, conducted reputational risk identification, assessment and reporting, established
+a coordination mechanism between reputational risk management departments and liable
+departments and dealt appropriately with reputational risk events, thus effectively maintaining
+the brand reputation of the Group. In addition, the Bank continued to roll out reputational
+risk training so as to enhance employees' awareness and foster a culture of reputational risk
+management across the Group.
+Internal Control and Operational Risk Management
+Internal Control
+The Board of Directors, senior management and their special committees earnestly performed
+their duties regarding internal control and supervision, emphasising early risk warning and
+prevention, so as to improve the Group's level of compliance operation.
+The Bank continued to adopt the "three lines of defence" mechanism for internal control. The
+first line of defence consists of business departments and all banking outlets. They are the owners
+of, and are accountable for, local risks and controls. They undertake self-directed risk control
+and management functions in the course of their business operations, including formulating
+and implementing policies, conducting business examination, reporting control deficiencies and
+organising rectifications.
+The internal control and risk management departments of the Bank's institutions at all levels
+form the second line of defence. They are responsible for the overall planning, implementing,
+examining and assessing of risk management and internal control, as well as for identifying,
+measuring, monitoring and controlling risks. They led the first line of defence to enhance its use
+of the Group's operational risk monitoring and analysis platform. Through regular monitoring
+of material risks, the Bank identified and mitigated risks in a timely manner and promoted the
+optimisation of business processes and systems.
+The third line of defence rests in the audit and inspection departments of the Bank. The audit
+department is responsible for performing internal audit of the Bank's internal control and
+risk management in respect of its adequacy and effectiveness. The inspection department
+is responsible for staff non-compliance sanctions, investigation of cases and management
+accountability. The Bank continuously strengthened education and raised employees' awareness
+of moral hazards. It reinforced employee behaviour management, seriously investigated internal
+fraud cases and strictly pursued accountability according to the basic principles of “inquiry
+of four accountable subjects into one case”, “both institutional and business-line management
+accountability” and “management two levels higher than the branch-outlet accountable where
+serious fraud occurs". The Bank also continued to push forward the reform of its human resource
+76
+16
+management system for the audit line, and further intensified the vertical management of its audit
+function. It enhanced audit team-building, accelerated the implementation of the three-year plan
+for IT applications in audit, reinforced the use of IT-based audit approaches and further advanced
+circulatory monitoring. Taking an issue-oriented approach, the Bank focused on comprehensive
+audits of its institutions and special audits of its businesses. It strengthened audits and inspections
+of high-risk institutions and businesses, as well as fields prioritised by the Group and of special
+concern to regulators. Focused on systemic, trend, emergence and importance issues, it brought
+the audit function forward in its business process, so as to practically perform its internal audit
+function. It re-examined and optimised rectification procedures in order to improve rectification
+quality and efficiency, urged the effective rectification of audit findings, and thereby continually
+improved the Bank's internal governance and control mechanism.
+Rigorously implementing the requirements of the CBIRC regarding further rectification of market
+disruption in the banking sector, the Bank organised bank-wide risk inspections to actively
+identify and mitigate risks. It launched a staff compliance file system to reinforce behaviour
+management and foster a compliance culture. In addition, the Bank developed an internal control
+and compliance management evaluation system so as to enhance the routine management and
+control of its branches.
+The Bank continued to implement the Basic Standard for Enterprise Internal Control and its
+supporting guidelines, adhering to the primary goal of ensuring the effectiveness of its internal
+control over financial reporting and the accuracy of its financial information. It also constantly
+improved non-financial internal control. The Bank earnestly implemented the Guidelines for
+Internal Control of Commercial Banks by following the basic principles of "complete coverage,
+checks and balances, prudence and correspondence”, so as to promote internal control governance
+and an organisational structure characterised by a reasonable delegation of work, well-defined
+responsibilities and clear reporting relationships.
+The Bank established and implemented a systematic financial accounting policy framework in
+accordance with relevant accounting laws and regulations. Accordingly, its accounting basis was
+solidified and the level of standardisation and refinement of its financial accounting management
+was further improved. The Bank has endeavoured to further the qualification of accounting
+groundwork and establish the long-term accounting management mechanism since 2018. It
+continuously strengthened the quality management of its accounting information, so as to ensure
+the internal control effectiveness over financial reporting. The financial statements of the Bank
+were prepared in accordance with the applicable accounting standards and related accounting
+regulations, and the financial position, operational performance and cash flows of the Bank were
+fairly presented in all material respects.
+The Bank paid close attention to fraud risk prevention and control, proactively identifying,
+assessing, controlling and mitigating risks. In 2018, the Bank succeeded in preventing 229
+external cases involving RMB180 million.
+77
+72
+Operational Risk Management
+The Bank continuously improved its operational risk management system. It promoted the
+application of operational risk management tools, including Risk and Control Assessment
+(RACA), Key Risk Indicators (KRI) and Loss Data Collection (LDC), etc., to identify, assess and
+monitor operational risks, thus continuously improving its risk management measures. The Bank
+enhanced its system support capability by optimising its operational risk management information
+system. It strengthened its business continuity management system, optimised its operating
+mechanism to enhance its business operating sustainability, carried out disaster recovery drills
+and improved the Group's capacity for continuous business operation.
+Compliance Management
+The Bank continuously improved its compliance risk governance mechanism and management
+process to ensure the stable and sound development and sustainable operation of the Group. It
+strengthened the construction of the anti-money-laundering (AML) system, integrated resources
+for monitoring and analysis, and refined the AML policies and rules system. It pushed forward
+system and model building and improved the system functions. The Bank reinforced sanction
+compliance management. It made timely amendments to sanction compliance policies, improved
+sanction procedures and standardised list maintenance, due diligence, judgment, handling and
+strengthened sanctions compliance monitoring and management. It drove forward overseas
+compliance management and improved its cross-border compliance management system
+by tracking global regulatory trends, regulatory inspection and evaluation as well as other
+compliance risk information in a timely manner, by implementing the requirements of regulators,
+and by improving its overseas compliance management capabilities. It delivered the All
+Employee AML Training Plan by conducting various forms of AML training, so as to enhance all
+employees' compliance awareness and abilities.
+The Bank enhanced the management of its connected transactions and internal transactions. It
+stepped up efforts in the management of connected parties and consolidated the foundation of its
+connected transaction management. It strengthened the routine monitoring and examination of
+connected transactions and strictly controlled their risks. In addition, it continuously implemented
+internal transaction monitoring and reporting, guided and standardised the operation mechanism
+for internal transaction verification, and initiated the construction of an internal transaction
+management system, thereby improving the technological capabilities of its internal transaction
+management.
+78
+88
+Capital Management
+Adhering to the principle of value creation, the Bank continuously strengthened its capital
+management system to ensure bank-wide capital sufficiency and a relatively strong risk
+mitigation capability, thus further improving its capital efficiencies and value creation
+capabilities.
+The Bank persevered in pursuing the concept of high-quality development and heightened
+awareness of value creation. It improved its capital budget allocation mechanism, established
+a remuneration allocation system linked to value creation, and strengthened the management
+of capital assessment. It optimised its on-balance sheet and off-balance sheet asset structures,
+developed capital-light businesses, reduced the risk weighting of capital and reasonably
+controlled increases in off-balance sheet risk assets, so as to enhance value contribution.
+The Bank replenished its capital via external financing in a proactive and prudent manner. It
+successfully issued a total of RMB80.0 billion of tier 2 capital bonds in the domestic market,
+which effectively increased its capital adequacy. As at the end of 2018, the Bank's capital
+adequacy ratio had significantly increased, further consolidated its capital base. The Bank will
+continue to optimise its capital management, promote high-quality development of all of its
+businesses and constantly create value for shareholders.
+12
+79
+Capital Adequacy Ratios
+Capital Adequacy Ratios
+0.37%
+2.54%
+9.24%
+Composition of Staff
+11.40%
+11.35%
+11.36%
+51 and above
+20.20%
+30.63%
+29.42%
+Between 41 and 50
+31.74%
+29.96%
+30.16%
+Between 31 and 40
+36.66%
+by Education Level
+28.06%
+Up to 30
+by Age Group
+Composition of Staff
+subsidiaries
+The Group banking business
+institutions and
+Overseas
+Domestic
+commercial
+Items
+Composition of Staff by Age Group and Education Level
+As at the end of 2018, the Bank had 310,119 employees. There were 285,797 employees in
+the Chinese mainland, of which 274,263 worked in the Bank's domestic commercial banking
+business. The Bank had 24,322 employees in Hong Kong, Macao, Taiwan and other countries and
+regions. As at the end of 2018, the Bank bore costs for a total of 5,493 retirees.
+Human Resources Development and Management
+81
+Note: The proportion of geographic assets was based on data before intra-group elimination.
+29.06%
+Financial markets
+Master's degree and above
+8.09%
+9.90%
+financial management
+Risk and internal control
+management
+15.40%
+Personal banking
+Operation services and
+banking business
+Items
+banking business
+13.87%
+Corporate banking
+Items
+9.45%
+Domestic
+commercial
+Composition of Staff by Job Function (Domestic Commercial Banking Business)
+Domestic
+commercial
+4.44%
+19.85%
+Bachelor's degree
+65.67%
+10.93%
+51.77%
+Associate degree
+67.49%
+19.98%
+17.45%
+Other
+5.19%
+19.69%
+DEFINITIONS
+INTRODUCTION
+HONOURS AND AWARDS
+CORPORATE CULTURE CONCEPT SYSTEM
+OUTLINE OF 14TH FIVE-YEAR DEVELOPMENT PLAN (2021-2025) AND
+LONG-RANGE OBJECTIVES THROUGH THE YEAR 2035
+IMPORTANT NOTICE
+FINANCIAL HIGHLIGHTS
+MANAGEMENT DISCUSSION AND ANALYSIS
+MESSAGE FROM THE CHAIRMAN
+MESSAGE FROM THE PRESIDENT
+MESSAGE FROM THE CHAIRWOMAN OF THE BOARD OF SUPERVISORS
+FINANCIAL REVIEW
+BUSINESS REVIEW
+OVERVIEW OF STRATEGIC PROGRESS
+Contents
+CORPORATE INFORMATION
+4
+20
+Ranked 3rd in the List of Brands with Most
+Historical and Cultural Heritage in China
+Best and Most Attractive Employer for College
+Student
+Our Values
+Provide Excellent Service
+Innovate with Prudence
+Uphold Openness and Inclusiveness
+Collaborate for Mutual Growth
+3
+Honours and Awards
+The Banker
+FORTUNE
+Global Finance
+Asiamoney
+IFF
+The Asian Banker
+FinanceAsia
+The Asset
+Build a First-Class Global Banking Group
+Our Vision
+Bridge China and the World for the Common Good
+Our Mission
+COMMERCIAL BANKING IN THE CHINESE MAINLAND
+Stock Code: 3988 (Ordinary H-Share)
+4619 (Offshore Preference Share)
+Bank of China Limited
+1912-2022
+BANK OF CHINA
+BOC
+中國銀行
+Shanghai Futures Exchange
+Introduction
+As China's most globalised and integrated bank, Bank of China has institutions across the
+Chinese mainland as well as 62 countries and regions, and BOCHK and the Macau Branch
+serve as local note-issuing banks in their respective markets. The Bank has a well-established
+global service network and an integrated service platform based on the pillars of its corporate
+banking, personal banking, financial markets and other commercial banking business, which
+covers investment banking, direct investment, securities, insurance, funds, aircraft leasing, asset
+management, financial technology, financing leasing and other areas, thus providing its customers
+with financial solutions featuring one-click access, global response and integrated services.
+Bank of China embodies a noble sense of duty and commitment. Over its 110 years history, the
+Bank constantly cared about the nation, dedicated to contribute to the country, and continued
+to strive for prosperity of the country and rejuvenation of the nation. Being deeply rooted in
+people and committed to providing excellent services, it has fulfilled its responsibilities of
+delivering financial services for the people, bringing benefits and convenience to the people,
+and improving the living standards of the people. Keeping the common good in mind and
+advocating openness and inclusiveness, the Bank has mobilised domestic and overseas resources
+to serve the two-way interactions between China and the world. It has always followed the
+law, innovated with prudence, and upheld the spirit of integrity and innovation to strengthen
+the Bank. As a large state-owned commercial bank on a new journey towards fully building
+a modern socialist country, the Bank, under the guidance of Xi Jinping Thought on Socialism
+with Chinese Characteristics for a New Era, will carry forward the Bank's century-old tradition
+of pursuing excellence, take full, accurate and comprehensive implementation of the new
+development philosophy, contribute to the new development pattern; consciously uphold the
+mission of “Bridge China and the World for the Common Good”; practice the values of “provide
+excellent service, innovate with prudence, uphold openness and inclusiveness, collaborate for
+mutual growth", take the strategic approach of “invigorate, adapt to change and drive for major
+breakthroughs”, and thus strive to build a first-class global banking group, promote higher-
+standard opening-up and high-quality economic and social development, and make an even
+greater contribution to realising the Chinese Dream of national rejuvenation.
+1
+Outline of 14th Five-Year Development Plan (2021-2025)
+and Long-Range Objectives through the Year 2035
+Under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, the Bank will set foot in the new development stage, take full, accurate and comprehensive
+implementation of the new development philosophy, contribute to the new development pattern.
+With reform and innovation as the fundamental driver and meeting people's growing needs for
+a better life as the fundamental purpose, the Bank will adhere to the general principle of seeking
+progress while maintaining stability, deepen the supply-side structural reform in the financial
+sector, accelerate the comprehensive digital transformation, and promote high-quality and
+sustainable development and high-standard opening-up. The Bank will fulfill its responsibility
+and mission as a large state-owned bank, focus on serving the real economy, and continue to
+promote technology finance, green finance, inclusive finance, cross-border finance, consumer
+finance, wealth finance, supply chain finance and county-level finance. The Bank will strengthen
+risk awareness, stick to the bottom-line thinking, and strengthen prudence and compliance in
+operation. The Bank will maintain a systematic concept and accelerate the building of a strategic
+development pattern with its domestic commercial banking services as the business mainstay and
+its globalised operations and diversified business platforms as two growth engines. The Bank will
+take the strategic approach of “invigorate, adapt to change and drive for major breakthroughs",
+and thus strive to build a first-class global banking group.
+2
+Corporate Culture Concept System
+Bank of China is the bank with the longest continuous operation among Chinese banks. Formally
+established in February 1912, the Bank served consecutively as the country's central bank,
+international exchange bank and specialised international trade bank. After 1949, drawing
+on its long history as the state-designated specialised foreign exchange and trade bank, the
+Bank became responsible for managing China's foreign exchange operations and offering
+international trade settlement, overseas fund transfer and other non-trade foreign exchange
+services. Restructured into a wholly state-owned commercial bank in 1994, the Bank provides
+various financial services, and has developed into a large commercial bank delivering services
+in local and foreign currencies and featuring complete business varieties and strong strength.
+The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange in
+2006, becoming the first Chinese bank to launch an A-Share and H-Share initial public offering
+and achieve a dual listing in both markets. The Bank is the official banking partner of the
+Beijing 2008 Summer Olympics and the Beijing 2022 Winter Olympics, thus making it the only
+bank in China to serve two Olympic Games. In 2011, Bank of China became the first financial
+institution from an emerging economy to be designated as a Global Systemically Important Bank,
+a designation it has now maintained for 11 consecutive years. With its growing international
+status, competitiveness and comprehensive strengths, the Bank has marched forward into the
+ranks of the world's large banks. In 2022, Bank of China, in celebration of its 110th anniversary
+of establishment, is striving to form a strategic landscape with its domestic commercial banking
+services as the business mainstay, its globalised operations and diversified business platforms as
+the two growth engines, accelerate the building of a first-class global banking group and working
+hard to write a new chapter in its history of more than hundred years.
+China Banking Association
+China Banking Association, China
+Association of Small and
+Medium Enterprises
+China Internet Information Center
+Annual Award
+Institutional
+China's Best Investment Advisory Service
+2021 FinTech Innovation Award
+ESG Financing Institution of the Year
+Best Debt House-Asia
+Best Sustainable Finance Issuer
+Global Green Finance Awards
+Shanghai Futures Exchange Gold Award for
+Market Making Business
+Outstanding Inclusive Finance Bank of the Year
+Best Bank with Responsible Investment
+Best Bank in Wealth Management
+2021 Most Influential Digitalised Bank
+IDC Financial Industry Technology Application
+Scenario Innovation Award
+Best Corporate Mobile Banking Award
+Best Board of Directors for Investor Relations
+Annual Report Gold Award
+Ranked 6th in the List of Chinese Brands with
+Best Value
+Outstanding Contribution Award of the
+Intermediary Business Professional Committee
+Excellent Case of Financial Services for Micro,
+Small and Medium-sized Enterprises
+2021 Forbes China's Most Popular Employers
+for College Students
+Best Transaction Bank for Supply Chain Finance
+Best Green Bond Bank
+Sina
+CBN
+Caijing
+IDC
+CFCA
+Securities Times
+LACP
+Interbrand
+Best Bank for Domestic Debt Capital Market
+Hurun Research Institute
+Forbes
+Ranked 4th in Top 1,000 World Banks
+Ranked 4th in Top 500 Global Banking Brands
+Ranked 39th in Global 500 (2021)
+Best Private Bank
+Best Sustainable Finance Bank
+Best Transaction Bank for Trade Finance
+ChinaHR.com
+GLOBALISED OPERATION
+H Share
+SERVICE CHANNELS
+Huijin
+IFRS
+BOC International Holdings Limited
+Bank of China Investment Management Co., Ltd.
+BOC International (China) Co., Ltd., a company
+incorporated in the Chinese mainland, the ordinary shares
+of which are listed on the Shanghai Stock Exchange
+BOC Financial Leasing Co., Ltd.
+BOC-Samsung Life Ins. Co., Ltd.
+BOC Wealth Management Co., Ltd.
+Chinese Accounting Standards
+China Banking and Insurance Regulatory Commission
+The area including, for the purpose of this report, the
+branches of Henan, Hubei, Hunan, Guangdong, Shenzhen,
+Guangxi and Hainan
+The Company Law of PRC
+China Securities Regulatory Commission
+The area including, for the purpose of this report, the
+branches of Shanghai, Jiangsu, Suzhou, Zhejiang, Ningbo,
+Anhui, Fujian, Jiangxi, Shandong and Qingdao
+Hong Kong Exchanges and Clearing Limited
+2021 Annual Report
+Hong Kong Stock Exchange
+Hong Kong Listing Rules
+HKEX
+Bank of China Group Investment Limited
+Bank of China (Hong Kong) Limited, an authorised
+financial institution incorporated under the laws of
+Hong Kong and a wholly-owned subsidiary of BOCHK
+(Holdings)
+BOC Hong Kong (Holdings) Limited, a company
+incorporated under the laws of Hong Kong, the ordinary
+shares of which are listed on the Hong Kong Stock
+Exchange
+6
+BOCI
+BOCIM
+BOCI China
+The Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited
+BOCL
+BOC Wealth Management
+CAS
+CBIRC
+Central and Southern China
+Company Law
+CSRC
+Eastern China
+BOC-Samsung Life
+Bank of China Group Insurance Company Limited
+The Stock Exchange of Hong Kong Limited
+Central Huijin Investment Ltd.
+State Administration of Foreign Exchange, PRC
+Securities and Futures Ordinance (Chapter 571 of the
+Laws of Hong Kong)
+The Shanghai Stock Exchange
+The area including, for the purpose of this report, the
+branches of Chongqing, Sichuan, Guizhou, Yunnan,
+Shaanxi, Gansu, Ningxia, Qinghai, Tibet and Xinjiang
+8
+Important Notice
+The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
+members of the Bank warrant that the information in this report is authentic, accurate and
+complete, contains no false record, misleading statement or material omission, and jointly and
+severally accept full responsibility for the information in this report.
+The 2021 Annual Report and Annual Results Announcement of the Bank have been reviewed
+and approved at the meeting of the Board of Directors of the Bank held on 29 March 2022. The
+number of directors who should attend the meeting is 14, with 14 directors attending the meeting
+in person. All of the 14 directors of the Bank exercised their voting rights at the meeting. The
+supervisors and senior management members of the Bank attended the meeting as non-voting
+attendees.
+The 2021 financial statements prepared by the Bank in accordance with CAS and IFRS have
+been audited by PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers in
+accordance with Chinese and international auditing standards, respectively. Both auditors issued
+an unqualified opinion.
+Legal Representative and Chairman of the Board of Directors of the Bank LIU Liange, Vice
+chairman of the Board of Directors and President of the Bank LIU Jin, who is also responsible
+for the Bank's finance and accounting, and General Manager of the Financial Management
+Department WU Jianguang, warrant the authenticity, accuracy and completeness of the financial
+statements in this report.
+The Board of Directors has recommended a final dividend on ordinary shares for 2021 of
+RMB2.21 per ten shares (before tax), subject to approval in the forthcoming 2021 Annual
+General Meeting. No capitalisation of the capital reserve to share capital is proposed in this profit
+distribution.
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes and no material guarantee business
+that has violated the applicable regulations and procedures.
+This report may contain forward-looking statements that involve risks and future plans. These
+forward-looking statements are based on the Bank's own information and information from other
+sources that the Bank believes to be reliable. They relate to future events or the Bank's future
+financial, business or other performance and are subject to a number of factors and uncertainties
+that may cause the actual results to differ materially. Any future plans mentioned do not
+constitute a substantive commitment by the Bank to its investors. Investors and people concerned
+should be fully aware of the risks and understand the differences between plans, forecast and
+commitment.
+The Bank is faced with risks arising from changes in the macroeconomic environment and from
+political and economic conditions in different countries and regions as well as risks arising from
+its day-to-day operations, including the risk arising from changes in the credit status of borrowers,
+adverse changes in market prices and operational risk. It shall at the same time meet regulatory
+and compliance requirements. The Bank actively adopts adequate measures to effectively manage
+all types of risks. Please refer to the section “Management Discussion and Analysis Risk
+Management" for details.
+9
+Renminbi, the lawful currency of PRC
+The People's Republic of China
+The People's Bank of China, PRC
+The area including, for the purpose of this report, the
+branches of Beijing, Tianjin, Hebei, Shanxi, Inner
+Mongolia and the Head Office
+International Financial Reporting Standards
+7
+Independent Director
+MOF
+Northeastern China
+Northern China
+PBOC
+Overseas-listed foreign investment share(s) in the ordinary
+share capital of the Bank, with a nominal value of
+RMB1.00 each, which are listed on the Hong Kong Stock
+Exchange and traded in Hong Kong dollars (Stock Code:
+3988)
+PRC
+SAFE
+SFO
+SSE
+Western China
+Independent director under the listing rules of SSE and the
+Articles of Association, and independent non-executive
+director under the Hong Kong Listing Rules
+Ministry of Finance, PRC
+The area including, for the purpose of this report, the
+branches of Heilongjiang, Jilin, Liaoning and Dalian
+RMB
+COMPREHENSIVE OPERATION
+BOC Group Life Assurance Co., Ltd.
+BOC Fullerton Community Bank
+108
+KEY ISSUES OF CONCERN TO THE CAPITAL MARKET
+113
+OUTLOOK
+118
+ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES
+120
+CHANGES IN SHARES AND SHAREHOLDINGS OF SHAREHOLDERS
+131
+SIGNIFICANT EVENTS
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT MEMBERS
+CORPORATE GOVERNANCE
+REPORT OF THE BOARD OF DIRECTORS
+REPORT OF THE BOARD OF SUPERVISORS
+INDEPENDENT AUDITOR'S REPORT
+CONSOLIDATED FINANCIAL STATEMENTS
+HUMAN RESOURCES DEVELOPMENT AND MANAGEMENT
+ORGANISATIONAL MANAGEMENT,
+CAPITAL MANAGEMENT
+RISK MANAGEMENT
+INFORMATION TECHNOLOGY DEVELOPMENT
+1
+23469
+10
+13
+15
+23
+REFERENCE FOR SHAREHOLDERS
+43
+70
+22222222F5226
+77
+87
+90
+93
+106
+43
+Bank of China Insurance Company Limited
+ORGANISATIONAL CHART
+139
+BOC Fullerton Community Bank
+BOC Insurance
+BOC Life
+BOCG Insurance
+BOCG Investment
+BOCHK
+BOCHK (Holdings)
+Bank of China Limited or its predecessors and,
+except where the context otherwise requires, all of the
+subsidiaries of Bank of China Limited
+The performing Articles of Association of the Bank
+Domestic investment share(s) in the ordinary share capital
+of the Bank, with a nominal value of RMB1.00 each,
+which are listed on SSE (Stock Code: 601988)
+Measurement unit of changes in interest rate or exchange
+rate. 1 basis point is equivalent to 0.01 percentage point
+BOC Financial Asset Investment Co., Ltd.
+BOC Aviation Limited, a public company limited by
+shares incorporated in Singapore under the Singapore
+Companies Act, the shares of which are listed on the Hong
+Kong Stock Exchange
+BOC Consumer Finance Co., Ltd.
+BOC Financial Technology Co., Ltd.
+BOC Financial Technology
+BOC Consumer Finance
+BOC Aviation
+BOC Asset Investment
+157
+178
+189
+195
+197
+209
+452
+LIST OF MAJOR BRANCHES AND SUBSIDIARIES
+456
+5
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meaning
+set out below:
+The Bank/the Group
+Articles of Association
+A Share
+Basis Point (Bp, Bps)
+457
+The print version of the Bank's 2021 Annual Report, to be published in April 2022, will
+supersede this version.
+66
+Substandard
+Board of
+First Line of Defense
+Management and Responsible Departments of Domestic and Overseas Branches and Comprehensive Operation Subsidiaries
+Defense
+Third Line of
+Audit Department
+Chief Audit Officer
+Supervisors
+Board of
+Executive Office
+Second Line of Defense
+Risk Management
+Department
+Department
+Credit Management
+Department
+Compliance Management
+Internal Control and Legal &
+Department
+Credit Approval
+Department
+Asset & Liability Management
+Internal Control Committee
+Directors
+Audit Committee
+Management
+Senio:
+Branches &
+Items
+Five-category Loan Classification
+95
+Total loans and advances to customers in the "Risk Management Credit risk management" section are
+exclusive of accrued interest.
+6
+As at the end of 2021, the Group's NPLs totalled RMB208.792 billion, an increase of RMB1.519
+billion compared with the prior year-end. The NPL ratio was 1.33%, a decrease of 0.13
+percentage point compared with the prior year-end. The Group's allowance for impairment losses
+on loans and advances was RMB390.541 billion, an increase of RMB21.922 billion compared
+with the prior year-end. The coverage ratio of allowance for loan impairment losses to NPLs was
+187.05%, an increase of 9.21 percentage points compared with the prior year-end. The NPLs
+of the Bank's institutions in the Chinese mainland totalled RMB 193.030 billion, an increase of
+RMB3.045 billion compared with the prior year-end. The NPL ratio of the Bank's institutions
+in the Chinese mainland was 1.49%, a decrease of 0.16 percentage point compared with the
+prior year-end. The Group's outstanding special-mention loans stood at RMB210.813 billion, a
+decrease of RMB53.781 billion compared with the prior year-end, and accounted for 1.35% of
+total loans and advances, down by 0.52 percentage point from the prior year-end.
+The Bank scientifically measured and managed the quality of credit assets based on the
+Guidelines for Loan Credit Risk Classification, which requires Chinese commercial banks to
+classify loans into the following five categories: pass, special-mention, substandard, doubtful and
+loss, among which loans classified as substandard, doubtful and loss are recognised as NPLs. In
+order to further refine its credit asset risk management, the Bank used a 13-tier risk classification
+criteria scheme for corporate loans to companies in the Chinese mainland, covering on-balance
+sheet and off-balance sheet credit assets. In addition, the Bank strengthened risk classification
+management of key industries, regions and material risk events, and dynamically adjusted
+classification results. It strengthened the management of loan terms, managed overdue loans by
+the name list system and made timely adjustments to risk classification results, so as to truly
+reflect asset quality.
+24
+94
+The Bank stepped up efforts in the mitigation of NPAs, consolidated asset quality, and prevented
+and resolved financial risks. It continued to adopt the tiered and classified management of NPA
+projects to drive for major breakthroughs and improve the quality and efficiency of disposal.
+The Bank expanded disposal channels, and applied the pilot regulatory policy on NPA transfer,
+achieved breakthroughs in single corporate transfers and batch individual transfers. It also
+intensified the securitisation of non-performing personal and bank card assets, with disposals
+reaching a record high.
+In terms of corporate banking, the Bank further strengthened risk identification, control and
+mitigation in key fields, strictly controlled the aggregate amount and orientation of loans through
+limit management, and prevented and mitigated risk associated with projects in high energy
+consumption and high carbon emission industries. In addition, it implemented the government's
+macro-control policies and regulatory measures in the real estate sector to strengthen the risk
+management of real estate loans. In terms of personal banking, the Bank improved its personal
+credit approval mechanism, strengthened authorisation management, and refined approver
+management. It set strict access standards, enhanced process monitoring and prevented excessive
+credit risk and the cross-spreading of risks while supporting the development of its personal credit
+business.
+The Bank strengthened its unified credit granting management and enhanced full-scope
+centralised credit risk management. It continuously improved its long-acting credit management
+mechanism and asset quality monitoring system, strengthened the control of customer
+concentration risk, and further upgraded the effectiveness of potential risk identification, control
+and mitigation. The Bank enhanced the supervision of risk analysis and asset quality control in
+key focus regions, and strengthened the window guidance, inspection and post-assessment on its
+business lines. In addition, it constantly identified, measured and monitored large exposures in
+line with related large exposure management requirements.
+The Bank continuously optimised its credit structure. Aiming to advance strategic implementation
+and balance risk, capital and return, it pushed forward the establishment of an industrial policy
+system, formulated industry guidelines for credit granting, and improved the management scheme
+for its asset portfolios. In line with the 14th Five-year Plan of the country and that of the Bank,
+as well as requirements for the development of the "Eight Priority Areas for Enhancing Financial
+Services Capabilities”, the Bank highlighted the four segments of scientific and technological
+innovation, domestic demand expansion, regional coordination and infrastructure construction.
+It also focused on the ten pillars of strategic emerging industries, new infrastructure, advanced
+manufacturing, digital economy, people's livelihood consumption, modern services, rural
+revitalisation, new urbanisation, traditional infrastructure and traditional manufacturing.
+93
+93
+Closely monitoring changes in macroeconomic and financial conditions, the Bank pushed forward
+the optimisation of its credit structure, improved its credit risk management policies, strengthened
+credit asset quality management and took a more proactive and forward-looking stance on risk
+management.
+Credit Risk Management
+Subsidiaries
+of the Group
+Management Departments
+Unit: RMB million, except percentages
+Risk Management and
+US Risk and Management Committee
+Committed to enhancing its competitiveness in “technology + ecosystem + experience + data"
+in the digital economy era, the Bank accelerated its digital transformation, cultivated new
+technology-led growth drivers, and created new financial services patterns. In 2021, the number
+of employees in the IT line of the Bank stood at 12,873, accounting for 4.20% of the total, of
+which 8,189 were employees of domestic commercial banks, accounting for 3.07% of the total.
+These employees had an average age of 37, with 94% holding Bachelor's degrees or above. The
+Bank invested RMB 18.618 billion in information technology during the year.
+Information Technology Development
+(16.76%)
+1.27%
+31,960
+32,367
+33,314
+27,729
+Change (%)
+2020
+2021
+31 December
+31 December
+As at
+Unit: single item, except percentages
+As at
+Smart counter
+Items
+ATM
+As at the end of 2021, the Bank's commercial banking network in the Chinese mainland
+(including Head Office, tier-1 branches, tier-2 branches and outlets) comprised 10,382 branches
+and outlets. Its comprehensive operation institutions in the Chinese mainland totalled 520, and
+the number of its institutions in Hong Kong (China), Macao (China), Taiwan (China) and other
+countries and regions totalled 550.
+The Bank enhanced its enterprise-level intensive operation capacity. It upgraded its intensive
+operations platform and rolled it out across its domestic branches, improved the production lines
+in its operation centres, completed the first batch of business centralisation, and sped up the
+development of an intensive and shared smart operation service system.
+system and developed featured outlet development plans based on local conditions. It also built
+outlets with unique features based on the "Eight Priority Areas for Enhancing Financial Services
+Capabilities”, including technology finance, green finance, inclusive finance and cross-border
+services, etc., as well as demonstration outlets for education, sports and elderly services. It
+refined its differentiated outlet resource allocation strategy, and improved outlets' capabilities for
+integrating into scenario-based ecosystems and realising value creation.
+The Bank adapted to FinTech development trends by strengthening top-level design. It formulated
+the 14th Five-Year Plan of BOC for FinTech in accordance with the strategic requirements for
+all-round digital transformation contained in the Group's 14th Five-Year Plan. Based on the main
+priorities of "consolidating foundational support, empowering business development and laying
+out future capabilities", the plan took data as the driving force and FinTech as the means to
+transform the traditional commercial banking mode, and promoted the reshaping of the Group's
+marketing, products, channels, operations, services, risk control and management, thus building
+the "Digital BOC".
+Chief Risk Officer
+90
+The Bank improved its technological governance structure to push forward transformation
+and development in a coordinated manner. It set up the Financial Digitalisation Committee
+to push forward the development of the Group's digitalisation, FinTech, data governance, IT
+risk management system, etc. To optimise the layout of its R&D institutions, BOC Financial
+Technology set up R&D bases in Wuhan, Hubei Province; Chengdu, Sichuan Province; and
+Hainan Province in 2021, so as to support the development of key regions and shoulder
+responsibility for the implementation of scenarios such as "finance + industry" and "finance +
+government affairs".
+Risk Policy Committee
+President
+Product Management
+Departments
+Departments
+Customer Relationship
+Responsible Vice Presidents
+Strategic Development Committee
+Board of Directors
+The risk management framework of the Bank is set forth below:
+The Bank continued to improve its risk management system in line with the Group's strategies
+and refine its risk management structure, mechanism, process, tools and foundations, thus
+ensuring the sustainable and robust operation of the Group. Anticipating how risk management
+will develop over the next three to five years, the Bank formulated the Group's 14th Five-year
+Plan and action scheme for the Group's risk management. In addition, it followed regulatory
+requirements and responded positively to the implementation of Basel III and international
+benchmark interest rate reform. It also enhanced rectification accountability to ensure compliance
+in operations. The Bank intensified the risk control of overseas institutions and comprehensive
+operation companies and facilitated the development of the “Two Engines". It continuously
+investigated major potential risks, established a multi-tier smart risk control and early warning
+system, and enhanced its capabilities in identifying, warning, discovering and disposing of
+risks at an earlier stage. Furthermore, the Bank launched risk data governance and accelerated
+the digital transformation of risk management. It actively carried out special campaigns on risk
+culture, in order to cultivate a risk culture that supports its sustainable development.
+RISK MANAGEMENT
+22
+92
+Six of the Bank's technological achievements won PBOC Financial Technology Development
+Awards, among which the overseas distributed core banking project was granted the first prize.
+The cumulative number of patent applications reached 4,569, with 194 patents granted in 2021,
+placing the Bank first among its domestic peers in terms of patent quality, influence and R&D
+capability.
+The Bank deepened the application of new technologies and highlighted the value of
+technological transfer. It further enriched its enterprise-level AI technology service system
+and built the five platforms of machine learning, biometrics, voice recognition, robotics and
+knowledge base, which were widely applied in business areas such as intelligent operations,
+intelligent marketing, intelligent investment and intelligent risk control. The data governance
+framework was basically completed, realising “unified data, unified architecture and unified
+ecosystem". The Bank's data lake and data warehouse have now accumulated about 15PB of data
+assets, and it provided analyst platforms, unified data portals and other services. The Bank's data
+analysis and mining capabilities achieved a closer fit to the frontline requirements of business
+and customer services, and the potential of data elements was further realised. The blockchain
+technology platform continued to be upgraded and 15 patents were granted, supporting business
+applications such as cross-border settlement, trade finance, people's livelihood, poverty
+alleviation and bond issuance. Moreover, the Bank applied advanced technologies such as 5G
+messaging, foreign language translation and service robots in innovative ways to support the
+smart and green Winter Olympics.
+The Bank built an open financial ecosystem and promoted business model innovation. Focusing
+on cross-border facilitation, education, sports, silver economy and other scenarios related to
+people's livelihood, it reached over 100 million users in total. Moreover, it launched the "BOC
+Cross-border Services” APP and "BOC Compass" applets for non-residents, further consolidating
+the special advantages of its cross-border ecosystem. The BOC University for the Elderly was
+launched, attracting a total of 800,000 views, making a positive contribution to serving elderly
+customers. The total number of headquarters-level merchants linked to the Bank's mobile
+banking service continuously increased. The growth rate of monthly active transaction users
+ranked top among major peers.
+91
+The Bank accelerated technological empowerment to improve the quality and development pace
+of its businesses. It launched its Mobile Banking Version 7.0, developed the features of “finance
++ scenario", "technology + care”, “intelligent + professional” and “global + panorama”, and
+built an integrated marketing service platform, thus creating a closed-loop digital marketing
+system. The BOC Intelligent Global Transaction Banking service platform (iGTB platform), an
+online, intelligent and open portal offering integrated financial services for corporate banking
+customers, began to take shape, realising online processing for cross-border remittance, supply
+chain finance and other services. The Bank continued to enrich its online inclusive finance
+products, with its online inclusive financing balance growing more than 26 times compared with
+the prior year-end. Its quantitative trading platform was certified as a qualified trading institution
+by the Foreign Exchange Trade System, and precious metals, foreign exchange settlement, cash
+securities and RMB interest rate swap (IRS) businesses were put into operation through the
+platform. To prevent and mitigate telecom and online fraud, the Bank continued to optimise the
+risk monitoring and interception model of its "Cyber Defence" smart risk control and prevention
+system for bank accounts involved in fraud, with an average daily monitoring volume of
+hundreds of millions of transactions. A centralised operations platform was promoted across the
+Bank, realising the unified sharing of processes, data and risk control, with business processing
+efficiency increasing by more than 60%. The mobile office platform “BOC Messaging" had 280
+thousand users and supported 217 applications, realising online organisation, communication
+and processes, and significantly improving the capacity of the Bank's online collaborative office
+function.
+The Bank developed the new IT infrastructure to enhance its digital foundations. It made
+every effort to promote the OASIS project, strengthened the top-level design of enterprise-
+level business architecture and IT architecture, and established the concept of enterprise-level
+middle office development. In addition, it improved capacity for Group-wide sharing and reuse,
+and enhanced support for both strategic objectives and agile responses related to business
+development, product innovation and market changes. The feasibility studies, business modelling,
+and IT development and testing of the first group of projects in the first phase were completed,
+with the Bank now having entered the production preparation stage. Significant progress was
+made in the development of basic technology platforms, with many of them put into production,
+including the independently developed enterprise-level distributed technology platform "Hong
+Hu", the DevOps cloud platform "Fu Yao", the smart operation and maintenance platform “Jiu
+Tian", the mobile development framework "Han Hai” and the big data development framework
+"Xing Han". As a result, the fundamental support capacity, independent control capacity and
+agile development capacity of the Bank's scientific and technological strengths were significantly
+improved, and preliminary achievements were made in the transformation towards a platform-
+based, service-oriented and standardised IT framework.
+90
+83.68
+As at 31 December 2021
+Amount
+Total
+0.37%
+43,034
+0.65%
+83,516
+Loss
+0.27%
+31,078
+0.43%
+55,923
+Doubtful
+1.01%
+115,873
+0.41%
+53,591
+Substandard
+1.94%
+222,751
+1.34%
+12,953,259
+173,561
+100.00%
+100.00%
+21.45
+32.66
+32.91
+Special-mention
+1.40
+1.21
+1.18
+Pass
+2019
+2020
+2021
+Items
+Unit: %
+Migration Ratio
+1.65%
+189,985
+1.49%
+193,030
+NPLs
+11,501,791
+As at 31 December 2020
+Special-mention
+11,089,055
+0.88%
+125,118
+0.39%
+61,790
+1.87%
+264,594
+1.35%
+210,813
+Special-mention
+96.67%
+13,711,518
+97.32%
+15,255,389
+Doubtful
+Substandard
+Group
+Pass
+% of total
+Amount
+% of total
+60,718
+96.41%
+0.39%
+0.24%
+97.17%
+12,586,668
+Pass
+Chinese mainland
+1.46%
+207,273
+1.33%
+208,792
+NPLs
+100.00%
+14,183,385
+100.00%
+15,674,994
+Total
+0.34%
+48,332
+0.55%
+86,284
+Loss
+33,823
+24.68
+heating, gas and water
+Total
+1.72%
+2,319
+0.95%
+894
+0.66%
+861
+2.17%
+45.98% 157,767
+0.76% 243,268
+1.39% 136,444 0.96%
+1.32% 39,670 0.28%
+2.20% 6,521,932
+0.52% 4,979,859
+2.42%
+32,218
+0.65%
+Hong Kong (China),
+Macao (China),
+Taiwan (China) and
+other countries and
+regions
+Total of the Group
+2,721,735 17.36% 15,762
+15,674,994 100.00% 208,792
+0.58% 2,681,594 18.91%
+1.33% 14,183,385 100.00%
+35.11%
+295,183 1.88% 2,257
+159,284 1.02% 2,215
+46,175 0.30%
+608
+7,490,879 47.79% 164,796
+5,462,380 34.85% 28,234
+Personal loans
+Loans and Credit-impaired Loans by Currency
+0.43%
+0.04% 487,488
+3.44%
+42
+0.01%
+2.92% 163,193
+1.15%
+4,537
+2.78%
+3,406 1.28% 218,541
+1.54%
+3,806
+1.74%
+Water conservancy,
+environment and
+public utility
+administration
+Public utilities
+Others
+17,288
+207,273 1.46%
+0.64%
+97
+57
+Balance at the end of the year
+208,792
+207,273
+178,235
+Chinese mainland
+Balance at the beginning of the year
+189,985
+169,951
+162,778
+Increase during the year
+77,098
+86,209
+88,658
+Decrease during the year
+(74,053)
+(66,175)
+(81,485)
+Balance at the end of the year
+193,030
+(83,587)
+2,374
+(71,354)
+Decrease during the year
+The Bank continued to optimise the credit structure and stepped up efforts to support the real
+economy. As at the end of 2021, loans for transportation, storage and postal services industry
+totalled RMB 1,578.645 billion, an increase of RMB265.188 billion or 20.19% compared with the
+prior year-end. Loans for manufacturing industry totalled RMB1,549.639 billion, an increase of
+RMB219.861 billion or 16.53% compared with the prior year-end. The NPL ratios of commerce
+and services industry and manufacturing industry decreased by 1.12 percentage points and 0.69
+percentage point respectively.
+In accordance with IFRS 9, the Bank assesses expected credit losses with forward-looking
+information and makes relevant allowances. In particular, it makes allowances for assets
+classified as Stage 1 and assets classified as Stage 2 and Stage 3 according to the expected
+credit losses over 12 months and the expected credit losses over the entire lifetime of the asset,
+respectively. As at the end of 2021, the Group's Stage 1 loans totalled RMB 15,207.789 billion,
+accounting for 97.04% of total loans; Stage 2 loans totalled RMB255.214 billion, accounting for
+1.63% of total loans; and Stage 3 loans totalled RMB208.186 billion, accounting for 1.33% of
+total loans.
+As at the end of 2021, the Group's credit-impaired loans totalled RMB208.792 billion, an
+increase of RMB1.519 billion compared with the prior year-end. The credit-impaired loans
+to total loans ratio was 1.33%, a decrease of 0.13 percentage point compared with the prior
+year-end. Credit-impaired loans of the Bank's institutions in the Chinese mainland totalled
+RMB 193.030 billion, an increase of RMB3.045 billion compared with the prior year-end. The
+credit-impaired loans to total loans ratio of the Bank's institutions in the Chinese mainland
+was 1.49%, a decrease of 0.16 percentage point compared with the prior year-end. The Bank's
+operations in Hong Kong (China), Macao (China), Taiwan (China) and other countries and
+regions reported credit-impaired loans of RMB 15.762 billion and a credit-impaired loans to total
+loans ratio of 0.58%, a decrease of RMB1.526 billion and 0.06 percentage point, respectively,
+compared with the prior year-end.
+98
+Movement of Credit-impaired Loans
+Items
+Unit: RMB million
+2021
+2020
+2019
+Group
+Balance at the beginning of the year
+207,273
+178,235
+166,952
+Increase during the year
+86,583
+100,392
+94,870
+(85,064)
+3.91%
+2.00% 554,626
+4.19% 13,173
+3.19%
+201
+161,473 1.03% 4,717
+266,775 1.70%
+Total
+2,947,557
+Foreign currency
+12,727,437
+RMB
+Group
+Items
+Impaired
+loans
+15,674,994
+Total loans
+As at 31 December 2020
+Impaired
+loans
+Total loans
+Impaired
+loans
+Total loans
+As at 31 December 2021
+Unit: RMB million
+40.86
+Doubtful
+As at 31 December 2019
+170,103 11,313,067
+38,689 2,870,318
+208,792 14,183,385
+164,072
+43,201
+207,273 13,034,189
+10,125,083
+In 2021, the Group's impairment losses on loans and advances stood at RMB98.298 billion, a
+decrease of RMB5.332 billion compared with the prior year. The credit cost was 0.66%, down
+0.10 percentage point compared with the prior year. Specifically, the Bank's institutions in the
+Chinese mainland registered impairment losses on loans and advances of RMB95.308 billion,
+an increase of RMB1.723 billion compared with the prior year. The credit cost of the Bank's
+institutions in the Chinese mainland was 0.78%, down 0.08 percentage point compared with the
+prior year.
+The Bank makes timely and adequate allowances for loan impairment losses based on the
+expected credit loss (ECL) module in accordance with the principles of authenticity and forward-
+lookingness. Please refer to Notes II.4 and VI.2 to the Consolidated Financial Statements for the
+accounting policy in relation to allowances for impairment losses.
+169,951
+10,302,408
+20,143
+260,716
+149,808
+10,041,692
+161,651
+28,334
+189,985
+170,102 11,245,545
+22,928 256,246
+193,030 11,501,791
+330,198
+12,953,259
+Foreign currency
+Total
+12,623,061
+RMB
+Chinese mainland
+178,235
+27,703
+2,909,106
+150,532
+23.06
+189,985
+28.62
+96
+Transportation,
+storage and
+postal services
+Real estate
+687,186
+1,578,645 10.07%
+4.38%
+18,073
+34,694
+1.14% 1,313,457
+5.05% 639,777 4.51%
+9.26%
+14,276 1.09%
+29,952 4.68%
+Production and
+supply of electricity,
+99
+657,020
+Financial services
+500,380
+Mining
+Construction
+56,696 4.26%
+9.38%
+3.57% 1,329,778
+55,341
+96
+Distribution of Loans and NPLs by Industry
+Unit: RMB million, except percentages
+As at 31 December 2021
+As at 31 December 2020
+Loans % of total
+NPLs NPL ratio
+Loans % of total
+NPLs NPL ratio
+18.76
+169,951
+Corporate Loans
+Commerce and services
+Manufacturing
+1,589,119 10.14%
+1,549,639 9.89%
+30,111
+1.89% 1,395,690
+9.83%
+42,010
+3.01%
+Chinese mainland
+Transportation, storage and
+As at
+The Bank continued to focus on controlling borrower concentration risk and was in full
+compliance with regulatory requirements on borrower concentration.
+Notes:
+14.5
+13.9
+12.8
+<50
+3.2
+2.8
+2.3
+<10
+Loan concentration ratio of the largest single borrower
+Loan concentration ratio of the ten largest borrowers
+2019
+2020
+2021
+Standard
+Indicators
+Regulatory 31 December 31 December 31 December
+Unit: %
+As at
+1.
+2.
+Loan concentration ratio of the largest single borrower = total outstanding loans to the largest single borrower ÷
+net capital.
+Loan concentration ratio of the ten largest borrowers = total outstanding loans to the top ten borrowers ÷ net
+capital.
+Transportation, storage and
+Customer D
+Manufacturing
+Customer C
+Commerce and services
+Customer B
+0.39%
+60,766
+As at
+No
+loans
+Parties or not
+postal services
+Customer A Transportation, storage and
+Industry
+Unit: RMB million, except percentages
+Related Outstanding
+The following table shows the top ten individual borrowers as at the end of 2021.
+Please refer to Notes V.17 and VI.2 to the Consolidated Financial Statements for detailed
+information regarding loan classification, stage determination, credit-impaired loans and
+allowance for loan impairment losses.
+% of
+total loans
+7.85%
+Customer E
+54.5
+Net tier 1 capital
+Items
+As at the end of 2021, the leverage ratio calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) is listed below:
+Leverage Ratio
+Please refer to Note VI.6 to the Consolidated Financial Statements for detailed information.
+16.47%
+Adjusted on- and off-balance sheet assets
+16.91%
+16.53%
+Capital adequacy ratio
+13.10%
+13.32%
+13.19%
+13.32%
+16.22%
+Tier 1 capital adequacy ratio
+Leverage ratio
+2,173,731
+28,425,377
+Employees
+Organisations
+Assets
+Unit: RMB million/unit/person, except percentages
+The geographic distribution of the organisations and employees of the Bank is set forth below:
+As at the end of 2021, the Bank had a total of 11,452 institutions worldwide, including 10,902
+institutions in the Chinese mainland and 550 institutions in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions. Its commercial banking business in the Chinese
+mainland comprised 10,382 institutions, including 38 tier-1 and direct branches, 371 tier-2
+branches and 9,972 outlets.
+31 December 2021
+In 2021, focusing on the national “big picture” and the Group's 14th Five-Year Plan, the Bank
+further advanced the reform of its organisational structure and management mechanism. It
+optimised the functional structure of its inclusive finance business, integrated the functions of
+corporate and personal inclusive finance, and set up the Rural Revitalisation Finance Department
+to continuously improve the quality and efficiency of its financial services for the real economy.
+The Bank further pushed forward digital transformation and continuously improved the working
+mechanism and resource guarantee for enterprise-level architecture establishment, strategic
+scenario-building and e-CNY operation, so as to drive high-quality development through
+innovation. In addition, the Bank optimised its comprehensive risk management system, refined
+the functions, responsibilities and operating mechanism of its comprehensive risk management,
+accelerated the digital transformation of risk management, and further improved the effectiveness
+of the Group's comprehensive risk management.
+ORGANISATIONAL MANAGEMENT, HUMAN RESOURCES
+DEVELOPMENT AND MANAGEMENT
+107
+Please refer to Supplementary Information II.5 to the Consolidated Financial Statements for
+detailed information.
+7.70%
+7.65%
+Unit: RMB million, except percentages
+As at
+As at
+31 December 2020
+1,992,621
+25,880,515
+Organisational Management
+Items
+10.99%
+11.28%
+2020
+2021
+2020
+No
+42,968
+0.27%
+Net common equity tier 1 capital
+No
+0.26%
+No
+40,600
+0.26%
+No
+35,320
+41,403
+11.06%
+1,843,886
+1,563,789
+11.30%
+adequacy ratio
+Common equity tier 1 capital
+2,162,054
+2,391,365
+2,451,055
+1,704,778
+2,698,839
+1,719,467
+1,883,294
+1,992,621
+2,173,731
+Net tier 1 capital
+1,441,977
+Net capital
+0.23%
+Total assets
+Number
+8.05%
+2,292,838
+Other countries and regions
+6.35%
+19,445
+3.67%
+130
+420
+4,625,924
+Taiwan (China)
+Macao (China) and
+Hong Kong (China),
+12.23%
+37,450
+16.25%
+14.84%
+1.13%
+1.95%
+The Bank formulated the 14th Five-Year Plan for Talent Development of Bank of China in an
+effort to align with the nation's and the Bank's 14th Five-Year Plans. Focusing on strategic tasks
+such as "One Mainstay, Two Engines”, “Eight Priority Areas for Enhancing Financial Services
+Capabilities", digital transformation, comprehensive risk management and culture development,
+it laid out a plan for talent development and the continued deep reform of personnel development
+systems and mechanisms, in order to stimulate the vitality of employees. It formulated and
+implemented the “Hundred, Thousand and Ten Thousand Talent Programme” for fostering young
+officials, focusing efforts on training, selecting and appointing young officials thus supporting
+their growth. It vigorously strengthened team building for science and technology personnel
+and increased the pool of versatile personnel who were fluent in both science and technology
+and business. It continued to consolidate the features and advantages of its international and
+comprehensive personnel pool and strengthened the training of personnel with minority-language
+abilities. Implementing the national strategic plan of prioritising employment, the Bank initiated
+a global campus recruitment programme and continued to expand the scale of its recruitment
+so as to ensure stable employment for college graduates. In addition, the Bank selected and
+dispatched officials to carry out targeted assistance in Xianyang, Shaanxi Province, for the
+purpose of consolidating and expanding the achievements of poverty alleviation and promoting
+rural revitalisation in a comprehensive manner.
+Human Resources Development and Management
+108
+Note: The proportion of geographic assets was based on data before intra-group elimination.
+100.00%
+306,322
+5,969
+100.00%
+100.00%
+26,722,408
+Total
+(1,746,349)
+Elimination
+Z Z Z Z
+11,452
+% of total
+1,699
+2,076,633
+899
+3.11%
+884,049
+Northeastern China
+20.49%
+62,774
+postal services
+18.11%
+28.26%
+8,044,867
+Northern China
+% of total
+Number
+% of total
+2,074
+7.29%
+23,606
+Eastern China
+Western China
+21.53%
+65,983
+23.98%
+2,746
+15.20%
+7.71%
+4,327,271
+29.74%
+91,095
+30.42%
+3,484
+21.84%
+6,217,175
+Central and Southern China
+postal services
+Customer F
+Transportation, storage and
+(300,183)
+70,657
+3,330,756
+2,895,333
+7,845,192
+6,930,444
+(143,909)
+2,350,553
+-
+Note: Liquidity gap = assets that mature in a certain period – liabilities that mature in the same period.
+102
+Reputational Risk Management
+The Bank earnestly implemented regulatory requirements on reputational risk management,
+continued to enhance its reputational risk management system and mechanism and strengthened
+the consolidated management of reputational risk, so as to enhance its overall reputational risk
+management capabilities. It attached great importance to the investigation and pre-warning
+of potential reputational risk factors, strengthened public opinion monitoring, continued to
+conduct reputational risk identification, assessment and reporting, and dealt appropriately
+with reputational events, thus effectively protecting its brand reputation. In addition, the Bank
+continued to roll out reputational risk management training so as to enhance employees'
+awareness and foster a culture of reputational risk management.
+Internal Control and Operational Risk Management
+2,162,837
+Internal Control
+(685,992)
+(364,383)
+Overdue/undated
+On demand
+Up to 1 month
+1-3 months (inclusive)
+3-12 months (inclusive)
+1-5 years (inclusive)
+(693,580)
+Over 5 years
+As at
+Unit: RMB million
+As at
+31 December 2021
+2,111,462
+31 December 2020
+2,036,554
+(8,932,662)
+(9,586,299)
+Total
+Items
+The Board of Directors, senior management and their special committees earnestly performed
+their duties regarding internal control and supervision while emphasising early risk warning and
+prevention, thus improving the Group's level of operational compliance.
+The internal control and risk management departments of the Bank's institutions at all levels
+form the second line of defence. They are responsible for the overall planning, implementing,
+examining and assessment of risk management and internal control, as well as for identifying,
+measuring, monitoring and controlling risks. They lead the first line of defence to enhance its use
+of the Group's operational risk monitoring and analysis platform, and are responsible for handling
+employee violations and management accountability. Through regular monitoring of material
+risks, the Bank identified and mitigated risks in a timely manner and promoted the optimisation of
+its business processes and systems.
+The Bank's capital management objectives are to ensure reasonable capital adequacy, support
+the implementation of the Group's strategies, resist various risks including credit risk, market
+risk and operational risk, ensure the compliance of the Group and related institutions with capital
+regulatory requirements, promote the Group's transformation towards capital-light business
+development and improve its capital use efficiency and value creation capabilities.
+To achieve the above objectives, the Bank formulated a capital management plan for the 14th
+Five-year Plan period which was approved by the Shareholders' Meeting. Focusing on the
+"One Mainstay, Two Engines" strategy and the "Eight Priority Areas for Enhancing Financial
+Services Capabilities", the capital management plan clarified the principles, objectives and
+measures of medium- and long-term capital management. In accordance with regulatory
+policies, the Bank regularly carried out its internal capital adequacy assessment process, revised
+its capital management rules, and continuously improved its capital management governance
+structure. It improved the economic capital budget and assessment mechanism, strengthened
+the application of value creation indicators in resource allocation, and heightened the Group's
+awareness of capital saving and value creation in order to enhance its capability for endogenous
+capital accumulation. The Bank expanded the application of advanced approaches of capital
+measurement, optimised its on- and off-balance sheet asset structure, strived to reduce capital
+consumption, actively developed capital-light businesses, and reasonably controlled the risk
+weight of assets. The Bank replenished capital through external financing channels in a prudent
+manner in order to consolidate its capital base, strengthened researching and planning on policies
+on total loss-absorbing capacity, and prepared for those policies' implementation.
+In 2021, the Bank successfully issued RMB70.0 billion of undated capital bonds and RMB75.0
+billion of tier 2 capital bonds, further enhancing its capital strength. It reinforced the management
+of existing capital instruments and redeemed RMB28.0 billion of domestic preference shares,
+effectively reducing the cost of capital. The Bank continually reinforced internal management,
+with RWA growing at a slower pace than total assets. As at the end of 2021, the Group's capital
+adequacy ratio reached 16.53%, an increase of 0.31 percentage point from the end of 2020,
+remaining at a robust and reasonable level in compliance with the objectives of the Group's 14th
+Five-Year Plan. The Bank shall, as per the principle of attaching equal importance to endogenous
+accumulation and external replenishment, increase the cohesion of strategic planning, capital
+replenishment, and performance assessment, continue to enhance risk resistance, and better
+support the development of the real economy.
+106
+Capital Adequacy Ratios
+As at the end of 2021, the capital adequacy ratios calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) are listed below:
+CAPITAL MANAGEMENT
+Group
+As at
+As at
+As at
+As at
+31 December
+31 December 31 December
+Unit: RMB million, except percentages
+Bank
+The Bank continued to adopt the "Three Lines of Defence" mechanism for internal control. The
+first line of defence consists of business departments and all banking outlets. They are the owners
+of, and are accountable for, local risks and controls. They undertake self-directed risk control
+and management functions in the course of their business operations, including formulating
+and implementing policies, conducting business examination, reporting control deficiencies and
+organising rectifications.
+Facing the extremely complicated international political and economic situation, the Bank
+continued to strengthen country risk management in strict accordance with regulatory
+requirements and based on business development needs. It optimised the rules for country risk
+rating and limit determination, and made country rating and limit management more science-
+based and efficient. It also strengthened country risk monitoring, improved country risk analysis
+and reporting, and enhanced the country risk management system. The Bank actively pushed
+forward the provisioning of country risk allowances and enhanced its ability to offset country
+risk. Country risk exposures were mainly concentrated in countries and regions with low and
+relatively low country risk, and the overall country risk was controlled at a reasonable level.
+The Bank incorporates country risk into its comprehensive risk management system in strict
+accordance with regulatory requirements. It manages and controls country risk through a series of
+management tools, including country risk rating, country risk limit, statistics and monitoring of
+country risk exposures, and provisioning of allowances.
+The third line of defence rests in the audit department of the Bank. The audit department is
+responsible for performing internal audits of the Bank's internal control and risk management in
+respect of its adequacy and effectiveness. Adhering to the risk-oriented principle and focusing
+on the implementation of national policies, regulatory requirements and the Group's strategies,
+the audit department concentrated its efforts on the main responsibilities of audit supervision,
+closely monitored material potential risks and weak links, and carried out audit inspections as
+scheduled. It carried out audits in a more forward-looking and proactive manner, and improved
+the capabilities of the first and second lines of defence for preventing problems, hence nipping
+problems in the bud. The audit department attached equal importance to problem revelation and
+rectification supervision. It further improved its rectification supervision mechanism for audit
+findings, strengthened the tracking, inspection and prioritised supervision of audit findings
+103
+rectification, and promoted the application of audit results and the improvement of rectification
+quality and efficiency. The Bank also stepped up overall audit planning, deepened audit system
+reform, continued to enhance audit team building and promoted IT applications in audit, thus
+further reinforcing the efficiency of audit supervision.
+The Bank devoted great efforts to internal control and case prevention management, consolidated
+the liabilities of primary responsible parties and took multiple control measures. It consistently
+improved internal control rules, processes and systems, formulated the policy and measures
+for case prevention management, and refined the management measures for internal control
+inspection. It also stepped up efforts in the building of its internal control inspection team,
+organised Bank-wide risk screening, and carried out the campaign of "Year for Improving
+Internal Control and Compliance Management", thereby continuously improving its internal
+control and compliance management. The Bank also focused on the rectification of issues and
+findings, conducted warning and education activities on a regular basis, raised employees'
+compliance awareness and fostered an internal control compliance culture.
+The Bank continued to implement the Basic Standard for Enterprise Internal Control and its
+supporting guidelines, and implemented the Guidelines for Internal Control of Commercial Banks
+by following the basic principles of "complete coverage, checks and balances, prudence and
+correspondence", so as to promote internal control governance and an organisational structure
+characterised by a reasonable delegation of work, well-defined responsibilities and clear reporting
+lines.
+The Bank established and implemented a systematic financial accounting policy framework in
+accordance with relevant accounting laws and regulations. As such, its accounting basis was
+solidified and the level of standardisation and refinement of its financial accounting management
+was further improved. From 2019 to 2021, the Bank endeavoured to implement sound accounting
+standards and establish a long-term accounting management mechanism. It continuously
+strengthened the quality management of its accounting information to ensure internal control
+effectiveness over financial reporting. The financial statements of the Bank were prepared in
+accordance with the applicable accounting standards and related accounting regulations, and the
+financial position, operational performance and cash flows of the Bank were fairly presented in
+all material respects.
+105
+The Bank paid close attention to fraud risk prevention and control, proactively identifying,
+assessing, controlling and mitigating risks. In 2021, the Bank succeeded in preventing 127
+external cases involving RMB79.03 million.
+Operational Risk Management
+The Bank continuously improved its operational risk management system. It promoted the
+application of operational risk management tools, including Risk and Control Assessment
+(RACA), Key Risk Indicators (KRI), Loss Data Collection (LDC), etc., carried out the
+identification, assessment and monitoring of operational risk, and further standardised its
+operational risk reporting mechanism, thus continuously improving its risk management
+measures. The Bank enhanced its IT system support capabilities by optimising its operational
+risk management information system. It strengthened its business continuity management system,
+optimised its operating mechanism, enhanced its business continuity policies, and performed
+business impact analysis. The Bank also refined contingency plans, carried out business
+continuity drills, proactively addressed the COVID-19 pandemic and improved the Group's
+business continuity capacity.
+Compliance Management
+The Bank continuously improved its compliance risk governance mechanism and management
+process to ensure the Group's sound operation and sustainable development. It improved its
+anti-money laundering (AML) and sanctions compliance management mechanism, strengthened
+refined management, optimised institutional money laundering risk assessment, and reinforced
+transaction monitoring and reporting. It further enhanced its system and model building and
+improved system functionality. The Bank continuously strengthened the establishment of a long-
+term robust management framework for overseas institutions compliance and consolidated its
+compliance management foundations, thus enhancing the compliance management capabilities
+of its overseas institutions. It improved its AML and sanction compliance training management
+mechanism and conducted various forms of compliance training, so as to enhance all employees'
+compliance awareness and abilities.
+The Bank enhanced the management of its connected transactions and internal transactions. It
+continuously improved the management of connected parties and consolidated the foundation of
+its connected transaction management. It strengthened the routine monitoring and examination of
+connected transactions and strictly controlled their risks. In addition, it continuously strengthened
+its internal transaction management mechanism, implemented internal transaction monitoring and
+reporting. It was also committed to improving its connected transaction monitoring system and
+internal transaction management system, and thereby enhanced IT applications in compliance
+management.
+Country Risk Management
+104
+Liquidity gap analysis is one of the methods used by the Bank to assess liquidity risk. Liquidity
+gap results are periodically calculated, monitored and used for sensitivity analysis and stress
+testing. As at the end of 2021, the Bank's liquidity gap was as follows (please refer to Note VI.4
+to the Consolidated Financial Statements):
+60.4
+58.6
+0.15%
+22,294
+0.14%
+No
+22,000
+0.14%
+23,566
+Market Risk Management
+100
+The Bank followed regulatory requirements and advanced the implementation of the new
+regulatory rules for market risk. It strengthened its market judgement and analysis, and made its
+risk management more flexible, proactive and forward-looking. It strengthened the transmission
+of the market risk appetite mechanism, actively pushed forward risk authorisation management,
+and optimised the mode of limit management. In addition, the Bank intensified efforts in the
+development of a market risk management system, optimised risk measurement models, and
+improved intelligent and refined risk management. It also actively carried out risk investigation
+and strengthened the overall management and control of the Group's market risk. It improved the
+emergency planning system and enhanced its capacity to handle market risk emergencies. Please
+refer to Note VI.3 to the Consolidated Financial Statements for detailed information regarding
+market risk.
+The Bank improved the market risk limit system for its bond investment business and
+strengthened cross-risk management. It continued to strengthen risk control of its securities
+investment activities, bolstered the early warning of domestic bond market default risks and the
+tracking of the Chinese offshore USD bond market, and enhanced its post-investment monitoring
+and early-warning capabilities.
+In terms of exchange rate risk management, the Bank sought to achieve currency matching
+between fund source and application. It controlled its foreign exchange exposure through
+currency conversion and hedging, thus maintaining its exchange rate risk at a reasonable level.
+Management of Interest Rate Risk in the Banking Book
+Based on the principles of “matching, comprehensiveness and prudence”, the Bank strengthened
+the management of interest rate risk in the banking book (IRRBB). The Bank's IRRBB
+management strategy is to control risks within an acceptable level by considering factors such as
+the Bank's risk appetite and risk profile, as well as macro-economic and market conditions, so as
+to achieve a reasonable balance between risk and return and thus maximise shareholder value.
+In response to changes in the market environment, the Bank continued to refine its market risk
+management system in order to control its market risk.
+The Bank assessed the interest rate risk in the banking book mainly through the analysis of
+interest rate repricing gaps. Based on changes in the market situation, it made timely adjustments
+to the structure of its assets and liabilities, optimised its internal and external pricing strategy or
+implemented risk hedging. Assuming that the yield curves of all currencies were to shift up or
+down by 25 basis points in parallel, the Group's sensitivity analysis of net interest income on all
+currencies is as follows?.
+Z Z Z
+Customer J
+No
+31,246
+0.20%
+postal services
+Customer G
+Transportation, storage and
+Real estate
+No
+0.16%
+postal services
+Customer H Transportation, storage and
+postal services
+Customer I
+Manufacturing
+24,300
+7
+Unit: RMB million
+Items
+Ratio
+Regulatory 31 December
+standard
+2021
+31 December
+2020
+31 December
+2019
+Unit: %
+As at
+Liquidity ratio RMB
+49.6
+2021
+54.6
+Foreign currency
+≥25
+69.9
+≥25
+As at
+As at
+As at the end of 2021, the Group's liquidity risk indicator met regulatory requirements. The
+Group's liquidity ratio is shown in the table below (in accordance with the relevant provisions of
+regulatory authorities in the Chinese mainland):
+Up 25 bps
+Down 25 bps
+As at 31 December 2021
+RMB USD HKD Other
+(3,846) (816) 160 151
+3,846 816 (160) (151)
+As at 31 December 2020
+RMB USD
+(3,405) (921)
+3,405 921
+HKD
+16
+Other
+203
+(16)
+(203)
+The Bank attached great importance to the reform of interest rate benchmarks, proactively
+participated in the establishment of the global benchmark rate market by capitalising on its
+advantages in globalised operations, and took a crucial part in the invention and promotion of
+alternative benchmark rate products. It also pressed ahead with the transition of remaining LIBOR
+contracts as scheduled by strengthening customer communication, and the overall transition risk
+is under effective control.
+This analysis includes interest-sensitive off-balance sheet positions.
+101
+Liquidity Risk Management
+The Bank endeavoured to develop a sound liquidity risk management system with the aim of
+effectively identifying, measuring, monitoring and controlling liquidity risk at the institution
+and Group level, including that of branches, subsidiaries and business lines, thus ensuring that
+liquidity demand is met in a timely manner and at a reasonable cost.
+Adhering to an appropriate balance of safety, liquidity and profitability, and following regulatory
+requirements, the Bank improved its liquidity risk management in a forward-looking and
+scientific manner. It enhanced liquidity risk management at the institution and Group level,
+including that of branches, subsidiaries and business lines. It formulated sound liquidity risk
+management policies and contingency plans, periodically re-examined liquidity risk limits,
+upgraded the early warning system for liquidity risk, and strengthened the management of high-
+quality liquid assets in order to strike an appropriate balance between risk and return. In addition,
+the Bank regularly improved its liquidity stress-testing scheme and performed stress tests on a
+quarterly basis. The test results indicated that the Bank had adequate payment ability to cope with
+distressed scenarios.
+109
+31 December
+Items
+70.64%
+10.55%
+8.67%
+23.34%
+Bachelor's degree
+68.48%
+53.78%
+Associate degree
+16.92%
+17.23%
+14.79%
+Other
+4.05%
+3.46%
+8.09%
+Composition of Staff by Job Function (Commercial banking business in the Chinese mainland)
+Commercial
+banking
+Commercial
+banking
+business in the
+Chinese mainland
+Items
+business in the
+Chinese mainland
+Corporate banking
+16.26% Operation services and
+financial management
+7.61%
+Personal banking
+Master's degree and above
+18.86%
+by Education Level
+13.12%
+As at the end of 2021, the Bank had 306,322 employees. There were 280,908 employees in the
+Chinese mainland, of which 267,037 worked in the Bank's commercial banking business in the
+Chinese mainland. The Bank had 25,414 employees in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions. As at the end of 2021, the Bank bore costs for a
+total of 4,934 retirees.
+Composition of Staff by Age Group and Education Level
+Items
+Composition of Staff
+Commercial
+banking
+Overseas
+institutions and
+business in the
+The Group Chinese mainland
+affiliated
+companies
+by Age Group
+Up to 30
+21.87%
+20.59%
+30.55%
+Between 31 and 40
+36.87%
+36.74%
+37.80%
+Between 41 and 50
+23.83%
+24.60%
+18.53%
+51 and above
+17.43%
+18.07%
+Composition of Staff
+Risk and internal control
+management
+Items
+Financial markets
+114
+III. Digital Transformation
+As the tide of digitalisation surges forward, now is the time for transformation and
+change. In 2021, the Bank released the Group's 14th Five-Year Plan, which made
+digital transformation central to how its business development mode will evolve during
+the current period. It also formulated two important action plans for fintech and data
+strategy, respectively. The Financial Digitalisation Committee has carried out its routine
+responsibilities for coordinating and advancing the Group's digitalised development,
+financial technology and data governance. By innovating its service models, enriching
+customer experience and reducing operating costs, the comprehensive digital transformation
+of the Bank has been continuously deepened across a number of aspects.
+First, the Bank's online business system continued to mature, driving improvement in
+service quality and efficiency. In transaction banking, an integrated financial service
+platform for corporate customers was launched, with services such as cross-border
+remittance and supply chain financing now available online. Online inclusive financial
+products such as mortgage loans, foreign trade loans and preferential loans for farmers
+were released. The E-Cooperation global enterprise ecosystem provided all-round and
+24/7 cross-border matchmaking services for global enterprises. The Bank launched Mobile
+Banking Version 7.0 and promoted the iteration of basic and frequently-used functions as
+well as improved accessibility for the elderly, so as to provide customers with a frictionless,
+360-degree convenient banking experience. The “Cyber Defence” smart risk control and
+prevention system was refined, and artificial intelligence models were applied to enhance
+the safety of online financial services.
+Second, the Bank's diversified scenario ecosystem highlighted BOC's core strengths and
+gave full play to the value of opening-up and sharing. The basic platform for strategic
+scenarios was further developed, and the promotion of innovation application across the
+Bank's businesses was steadily accelerated. The Bank launched the "BOC Cross-Border
+Go" app and "BOC Compass" mini-programme to serve cross-border customers. It built
+platforms themed on "smart campus” and alumni public welfare, and launched "Baby
+Money Box" to help children develop good saving habits. It connected into nearly 1,500
+sports stadiums, and its "Winter Sports with BOC” campaign became increasingly popular.
+The BOC University for the Elderly and the public service platform of mutual aid for the
+elderly helped make the lives of the elderly more colourful. E-CNY payment allowed
+customers to meet a variety of daily needs such as ordering takeaway meals, paying
+electricity bills, charging public transport cards and buying licensed products of the Beijing
+2022 Winter Olympic Games.
+115
+Third, digital operation and management was integrated into the Bank's day-to-day routines
+to improve the efficiency of organisational synergies. The Bank created digital management
+tools directly penetrating to outlets, put into operation a digital management platform
+and a unified staff channel for outlets, and launched smart screens in outlet halls. It built
+a comprehensive operations platform to promote electronic flows, an “assembly line”
+approach to operations and standardised management, thus enhancing business processing
+efficiency by more than 60%. A total of 217 mobile office platform applications were made
+available to employees, promoting online communication, processes and management, and
+enhancing the Bank's agile response capabilities.
+9.05%
+In 2022, guided by the Group's 14th Five-Year Plan, centered on the driver of
+comprehensive digital transformation, the Bank will focus on building the "two pillars"
+of enterprise-level business architecture and enterprise-level IT architecture, and strive for
+breakthroughs in the “three main lines" of empowering business development, consolidating
+basic support, and planning for future capabilities. Centring on changes in customer demand
+and industrial upgrading and transformation. It will enhance the competitiveness of key
+products, promote the green and efficient operation of financial technology, and accelerate
+the scaled integration and application of new technologies, thus writing a new chapter for
+the "SMART BOC+” brand, building up momentum and energy towards the high-quality
+development of the Group, and contributing to the development of a digital China.
+IV. Globalised Development
+In 2021, the Bank embraced the new development stage and delivered on the “One
+Mainstay, Two Engines" strategy through more efficient policy execution and further
+advancement in globalised operations. In serving China's new development paradigm and
+higher-level opening up, the Bank tapped into new business opportunities and improved our
+capacity to offer financial services around the world. As a result, the Bank's development
+plan during the 14th Five-Year period was set off to a good start.
+116
+Looking into 2022, the international political and economic landscapes are undergoing
+profound evolution. Spillover effects of the US Federal Reserve's policy of shrinking the
+balance sheet and raising interest rates will exacerbate turbulence in the global financial
+market, and emerging market countries are facing the impact of overlapping factors such as
+heavy debt burden, high external dependence and recurring pandemic. Uncertainties in the
+external environment will persist for a long time to come. From the domestic perspective,
+the general principle of prioritising stability while pursuing progress and the long-term
+positive fundamentals will remain unchanged. At the same time, however, the economy
+is still facing certain downward pressure, and uncertainties affecting the quality of bank
+assets still exist. The Bank will continue to better integrate the prevention and diffusion of
+financial risks with serving the real economy, intensify risk identification and control in key
+areas, and make forward-looking judgement and take multiple measures to do its best in
+credit risk control. The asset quality of the Group is expected to remain relatively stable.
+The Bank continued to optimise its global network, expanding overseas presence to 62
+countries and regions outside Chinese mainland, including 41 Belt and Road members. Last
+year witnessed the opening of the Yangon Branch in Myanmar, Hanoi Representative Office
+in Vietnam and Geneva Branch in Switzerland. In managing its international network, the
+Bank further improved the matrix-based approach combining Regionalised Management
+and Integrated Operation. BOCHK, boasting network in nine Southeast Asian countries,
+worked to take regional integration further with fruitful results, as testified by the rising
+market influence of these branches and subsidiaries and their growing capacity to serve
+customers and support local economies. Institutions in Europe, Africa and the Middle East
+also advanced Regionalised Management and business consolidation as planned, leading
+to greater synergy, higher quality and efficiency in this region. Integrated Operation was
+steadily carried out, and our competence and capacity to serve global clients continued to
+To drive business growth, the Bank recognised and acted on opportunities in cross-border
+trade and investment, such as those emerged in the nation's high-quality “Bringing In” and
+"Going Global" initiatives. In addition, we rode the trend of China's two-way opening up
+of the financial sector, the development of financial factor market. The Bank also promoted
+green finance, cross-border finance, wealth management and supply chain finance in
+overseas markets, thus elevating our ability to provide global services. The Bank categorised
+its overseas institutions strategically based on their historical status and market positions,
+and adopted a market-by-market strategy to reflect their respective business goals and
+operational priorities. In line with the Group's new “One Mainstay, Two Engines” strategy,
+the Bank further coordinated its services at home and abroad to better support our clients in
+their globalised endeavours. Taking it a bottom line to ensure workplace safety, the Bank
+did its best to protect the physical and psychological well-being of its employees and keep
+its institutions safe, thus maintaining business continuity around the world.
+Looking into 2022, the global economic situation is becoming more complex and severe
+and our overseas operations face both opportunities and challenges. It is all the more
+important for our overseas network to place greater emphasis on stability while pursuing
+growth. While positioning themselves to better address risks in the financial markets,
+overseas institutions will bolster their balance sheets through proper and timely asset and
+liability management, to seize opportunities for growth and maintain steady improvement in
+operating efficiency.
+117
+OUTLOOK
+In 2022, the banking industry will face a complicated operating environment. From an
+international perspective, the global economic situation is becoming more complex and severe,
+with the pandemic, inflation and developed economies' monetary policy adjustments acting
+as three major sources of global economic uncertainty. From a domestic perspective, despite
+pressures from demand contraction, supply shocks and weakening expectations for economic
+development, the economic fundamentals that will sustain long-term growth and the favourable
+conditions for fostering a new pattern of development remain unchanged. The major economic
+indicators will continually keep within an appropriate range.
+The year 2022 marks the 110 anniversary of the Bank's establishment, the Bank will adhere to
+place an utmost priority on stability and pursue progress while ensuring stability, apply the new
+development philosophy fully, faithfully and comprehensively, and support the creation of the
+new development pattern. It will uphold the philosophy of serving the country through financial
+services, fulfil its responsibilities as a large bank, continue to invigorate, adapt to change and
+drive for major breakthroughs, steadily push forward the implementation of the 14th Five-Year
+Plan, and thus making sustained progress in its new journey towards building a first-class global
+banking group.
+First, the Bank will actively integrate into the big picture of national development and serve the
+real economy. Focusing on promoting high-quality development, the Bank will serve supply-
+side structural reform of the financial sector, concentrate efforts on developing the "Eight
+Priority Areas for Enhancing Financial Services Capabilities", and further improve the quality
+and efficiency of its support to the real economy. It will serve the nation's innovation-driven
+development strategy, increase the scale of loans granted to strategic emerging industries, support
+for green and low-carbon development, and accelerate the innovation and application of green
+credit products. It will increase financial support for new infrastructure and new urbanisation
+initiatives as well as major projects, optimise the supply of wealth finance products and services,
+strengthen the building of scenarios related to people's livelihood, and support the national
+plan of ensuring the supply of goods and materials and major agricultural products as well as
+agricultural modernisation. In 2022, the Bank's RMB loans in the Chinese mainland are expected
+to grow by approximately 10%.
+Second, the Bank will continue to improve its development pattern and sharpen its comprehensive
+services capabilities. It will give full play to the dominant position of domestic commercial
+banks, enhancing resources and institutional support, actively making innovations in products and
+services, so as to enhance market competitiveness. It will continue to consolidate its distinctive
+advantages and improve its market-by-market strategies for overseas institutions, steadily
+advance globalisation by shifting focus from quantitative growth to qualitative improvement.
+It will strengthen and enhance its integrated operations, give full play to the advantages of
+commercial banking, investment banking, direct investment, wealth management, insurance,
+leasing and other comprehensive financial services, in order to sharpen its market competitiveness
+capabilities and improve its contribution to the Group. It will accelerate the building of “One
+Mainstay, Two Engines", and strive to satisfy our customers by ensuring that they are able to
+access the Bank's global resources and services at any point of contact.
+118
+Third, the Bank will accelerate digital transformation and enhance the new momentum of
+development. It will speed up the implementation of Enterprise Architecture, deepen the
+integration of business with science and technology, and substantially improve scientific and
+technological response speed and output efficiency. It will rapidly advance the integrated
+development of a strategic scenario ecosystem and strengthen the integration of financial products
+and scenarios, so as to widen industry coverage and penetration. It will accelerate the building
+of mobile banking and online banking, promote smart operations and outlet transformation, and
+establish online and offline channels featuring intelligent interaction, distinctive services and
+diverse scenarios, in a bid to constantly improve service quality and efficiency.
+Fourth, the Bank will forestall and defuse financial risks and reinforce its development protection
+network. It will deepen the establishment of a comprehensive risk management system and
+improve its multi-tier early-warning system in order to drive business development in a safe and
+stable manner. It will accurately identify major risks in the context of the new situation, improve
+risk prevention and control mechanisms, and maintain stable asset quality. It will continue to
+concentrate on the establishment of a long-term compliance mechanism for internal control
+in order to prevent cases of financial risk and anti-money laundering and carry out special
+governance in key areas. It will closely guard against information technology risk and improve
+its emergency response effectiveness. Moreover, it will upgrade its mechanisms for safeguarding
+consumers' rights and interests, so as to deliver better protection.
+119
+grow.
+In recent years, the Bank has actively responded to the changes in internal and external
+situations and taken multiple measures to effectively prevent and defuse risks, with its
+asset quality remaining at a high level among its peers. As at the end of 2021, the Group's
+outstanding non-performing loans (NPLs) stood at RMB208.792 billion, an increase of
+RMB1.519 billion compared with the prior year-end; while its NPL ratio was 1.33%, down
+0.13 percentage point compared with the prior year-end. Outstanding special mention loans
+registered RMB210.813 billion, a decrease of RMB53.781 billion compared with the prior
+year-end; the special mention loans accounted for 1.35% of the total, a decrease of 0.52
+percentage point compared with the prior year-end. Overdue loans were RMB167.737
+billion, down RMB11.647 billion compared with the prior year-end; the overdue rate was
+1.07%, a decrease of 0.19 percentage point compared with the prior year-end. The main risk
+indicators improved stably, and the asset quality remained healthy and steady.
+Fourth, the Bank's digital infrastructure capacity was continuously consolidated to promote
+technological data empowerment. The Oasis project, a next-generation enterprise-level
+technology platform, was successfully put into operation. The Bank's data governance
+framework was basically completed, and its data assets continued to realise greater value.
+Emerging technology platforms continued to be iterated and upgraded, injecting new
+momentum for business development. Furthermore, the Bank improved its mechanism
+for tackling key innovation problems and promoted the application and R&D of new
+technologies, the replication and scaling of key achievements, and the securing of a leading
+position in industry rankings. A total of six awards for fintech development and 194 patents
+were granted in 2021, all of which exceeded the previous years' level.
+In 2022, the Bank will continue to implement the requirements of the national 14th Five-
+Year Plan, focus on serving the real economy, seize business opportunities in key areas,
+and maintain reasonable growth in loans while preventing credit risks. It will serve national
+strategies by continuously improving its corporate credit structure and strengthening its
+support for key areas such as green credit, strategic emerging industries, manufacturing,
+private enterprises and rural revitalisation. Moreover, it will increase inclusive finance
+support for micro and small enterprises, vigorously develop technology finance, and step
+up its support for “specialised, refined, featured and innovative" enterprises within the
+advanced manufacturing industries, as well as micro and small enterprises engaged in
+scientific and technological innovation. It will put in place improved industry policies
+and supporting resources, further enhance its credit selection and allocation capabilities
+for industries, regions, customers and projects, strengthen its market competitiveness in
+corporate banking and build a high-quality development model for its corporate banking
+business, thus continuously stimulating the vitality of a wide range of market players.
+0.35%
+Information technology
+3.07%
+II. Asset Quality
+34.91%
+Other
+9.89%
+Remuneration
+The Bank continuously improved its incentive and constraint mechanism, established an
+assessment mechanism combining “annual assessment + long/short-cycle assessment" and
+"performance assessment + value assessment”, strengthened its assessment of employees'
+contributions to serving the real economy, developing inclusive finance and supporting private
+enterprises, and guided the establishment of an appropriate perspective on performance.
+110
+The Bank's remuneration policy is in line with corporate governance requirements, business
+development strategies, market positioning and talent competition strategies. The Board of
+Directors of the Bank has set up the Personnel and Remuneration Committee to assist it in
+reviewing the Bank's human resources and remuneration strategies. An independent director
+serves as the Chairman of the Committee. Please refer to the section “Corporate Governance
+Special Committees of the Board of Directors” for details of the work progress of the Personnel
+and Remuneration Committee. Based on the human resources and remuneration strategies
+determined by the Board of Directors, the senior management of the Bank is responsible for
+formulating rules and regulations for remuneration management.
+The Bank's remuneration distribution policy follows the principle of “remuneration by post,
+payment by performance”. Employee remuneration consists of basic salary, performance-based
+remuneration and benefits. Basic salary is determined by the value of the position and the ability
+of employees to perform their duties. Performance-based remuneration depends on performance
+evaluation results of the Group, the institution or department of the employee, and the employee,
+and is linked to performance, risk, internal control, ability and other factors. Deferred payment
+is required for more than 40% of the performance-based remuneration of personnel who are
+responsible for the Group's major risk management and control functions, with a deferred
+payment period of not less than three years. The Bank has formulated and implemented a
+recourse and recovery mechanism for performance-based remuneration of senior management
+members and personnel in key posts. If risk losses falling within such employees' remit and
+responsibility are clearly exposed during the term of service, the Bank may recover part or all of
+the performance-based remuneration paid within the corresponding period, and stop the payment
+of the part that has not been paid. Benefits mainly include social insurance, housing provident
+fund, enterprise annuity and other non-cash remuneration, and are managed in accordance
+with local regulatory policies. The Bank's remuneration policy applies to all employees who
+have established a labour contract relationship with the Bank, with no exceptions beyond the
+remuneration policy.
+The Bank has formulated an allocation mechanism for total remuneration. The distribution
+of total remuneration resources to branches is linked to their completion of comprehensive
+contribution goals, taking full consideration of risk factors so as to focus on risk-adjusted
+value creation and enhance long-term performance. The Bank continued to improve its internal
+remuneration distribution structure and allocated more remuneration resources to primary-level
+institutions and employees in order to effectively boost the driving force that fuels the sustainable
+development of the Bank.
+Cross-marketing and teller
+Staff Education and Training
+111
+113
+According to the PBOC statistics
+The financial industry is responsible for providing high-quality financial services to support
+economic and social development as well as people's productivity and livelihoods. Closely
+aligning with prevailing trends, the Bank has given full play to its financial strengths
+as a major state-owned bank in terms of serving national strategies and supporting the
+development of the real economy. In 2021, the Bank took multiple measures to earnestly
+implement the requirements of “ensuring stability on six fronts and security in six areas”,
+made comprehensive efforts to serve the real economy, and enhanced support to key areas
+such as inclusive finance, green finance, strategic emerging industries and manufacturing.
+Upholding the concept of “innovation, coordination, green development, opening up
+and sharing", it supported the development of major projects, key regions, and new
+infrastructure and new urbanisation initiatives; assisted in building a new development
+pattern of “dual circulations reinforcing each other”, and applied its professional strengths to
+"financing" and "intelligence".
+Serve the Real Economy
+As at the end of 2021, the balance of domestic RMB corporate loans was RMB7,161.416
+billion, up RMB895.085 billion or 14.28% from the beginning of the year. Both the
+increment and the growth rate achieved a record high compared to previous years. The
+balance of inclusive loans granted to micro and small enterprises under the CBIRC target of
+"two no-less-than and two control" amounted to RMB881.5 billion, up RMB305.9 billion
+or 53.15% compared with the prior year-end, ranking first among the four major domestic
+banks. Specifically, the balance of inclusive loans granted to micro and small enterprises
+was RMB516.2 billion, an increase of RMB207.5 billion or 67.2% from the prior year-end.
+In terms of industry, the Bank actively supported the high-quality development of key areas
+such as green finance, strategic emerging industries, manufacturing and private enterprises.
+The balance of new green loans granted to corporate customers grew by RMB419.7 billion
+or 45.86% from the beginning of the year, ranking first among the four major peers. The
+balance of financial instruments used for carbon emission reduction was RMB27.1 billion
+and the balance of loans granted for clean and efficient utilisation of coal was RMB2.5
+billion. In addition, according to CBIRC statistics, compared with the beginning of the
+year, the balance of loans granted to strategic emerging industries grew by RMB299.3
+billion or 135%, and medium and long-term loans to manufacturing industries increasing
+by RMB129.1 billion or 28.8%. The balance of loans granted to private enterprises was
+RMB2.44 trillion, up RMB326.8 billion or 15.46% over the prior year-end. The accumulated
+total of new private enterprise loans was RMB2.69 trillion, accounting for 41.57% of total
+accumulated new corporate loans, an increase of 1.44 percentage points compared with the
+prior year-end.
+KEY ISSUES OF CONCERN TO THE CAPITAL MARKET
+8
+112
+The Bank determined its priorities for education and training according to the 14th Five-Year
+Plan of the country and the Bank, formulating and implementing the 14th Five-Year Plan
+for Education and Training and thus making a fresh start for the new period. To empower
+employees and the Group, it established a Bank-wide training system that reflects the Bank's
+strategies and growth performance targets, with a focus on strategic mission training, core
+competence and key personnel training, qualifications and post competence training, and daily
+business training. Efforts were made to promote training methods such as action learning and
+case-based teaching, and to implement training programmes for accelerated leadership reform,
+core professional abilities and talent cultivation for digitalised development. The Bank carried
+out learning activities under the brands of "BOC Lecture Hall”, “Staff Learning Day”, “New
+Employee Development Community", and so on. To empower customers and society, the training
+programmes of "School of Smart Government Services", "Rural Revitalisation School" and
+"New Finance School" were launched for local government officials, people working in rural
+revitalisation industries and corporate customers. The governance and management mechanisms
+for education and training were improved, teaching staff and training resources were enhanced,
+and the digital transformation of education and training was expedited, allowing the Bank to
+accelerate the construction of an education and training system befitting a first-class global
+banking group. In addition, the Bank's online training capability was further strengthened against
+the backdrop of COVID-19 prevention and control. On an accumulative basis, the Bank's online
+training platform offered more than 25,000 courses, and the employees' total online learning time
+reached 9.35 million hours.
+I.
+Finance
+Management Department
+Department (Rural
+Inclusive Finance
+Department)
+Banking Department
+Global Transaction
+Corporate Banking
+Man
+Department
+Asset & Liability
+Chaired by President
+Credit Management
+Green Finance Team
+------
+Board Secretariat
+Risk Policy
+Committee
+Regularly review the Bank's
+environmental and social risk
+management and other topics
+Management and Functional Departments
+Executive Office
+Institute of Bank of China¦
+Revitalisation
+Department
+Department
+1,534,060
+Consumer Finance
+Product R&D Center
+Environmental and Social Responsibilities
+In 2021, the Bank actively undertook its responsibilities and missions as a major state-owned
+bank and integrated environmental, social and governance (ESG) concepts into all facets of its
+business management. Committed to deepening reform on all fronts and promoting business
+transformation, it made continuous efforts to strengthen the adaptability, competitiveness and
+inclusiveness of its financial services, and effectively enhanced its capabilities and performance
+in terms of serving the economic, social and environmental development, with the aim of creating
+value together with stakeholders while achieving high-quality and sustainable development.
+Environment Responsibilities
+Governance Structure
+The Bank has placed great importance on green finance, and continuously improved its
+governance structure. In early 2021, the Bank set up the Steering Group for Green Finance and
+Industrial Planning and Development at the Group level that is led by the Chairman of the Board
+of Directors. In 2021, four Steering Group meetings were organised to study and communicate
+the national green finance policies and review the Group's major green finance strategies and
+policies. The Board of Directors regularly reviewed issues related to green finance, guided and
+supervised major green finance tasks. It also heard the report on green finance development
+in 2020, reviewed and approved the Bank's 14th Five-Year Plan for Green Finance, covering
+the development of green finance business, environmental and social risk management and
+the Bank's green performance. The Bank incorporated green development, the environmental
+and social risk management and other factors into the performance appraisal system for senior
+staff, and allocated resources for green finance business to ensure the efficacy of green finance
+management. The Green Finance Committee was set up under the Executive Committee, with
+the President acting as the committee chairman, to advance the green finance work. The Bank
+continuously strengthened the building of a professional team, and created full-time/part-time
+green finance roles or set up teams in each branch/subsidiary.
+Secretariat
+Strategic Development
+Committee
+Regularly review the
+green finance strategy and
+☐ Digital Personal Banking
+its implementation
+Board of Directors
+Senior Management
+(Executive Committee)
+Green Finance Committee
+Bank Card Center
+Department
+Asset Management
+Investment banking and
+Department
+Global Markets
+Department
+Business/Product Departments
+Information Technology
+Department
+Department
+Credit Approval
+Management Department
+Distribution and Operation i
+Paper manufacturers
+Petrochemicals
+Chemicals
+Cement
+Steel
+Non-ferrous metals
+Thermal power generation
+Civil aviation
+Coal
+■Petrochemicals
+The Bank is committed to green operation. It strengthened management to save energy and
+reduce its consumption, and decreased the use of water, power, paper, oil and other resources in
+work, hence raising energy efficiency. As the exclusive official banking partner of 2022 Beijing
+Winter Olympics, the Bank implemented the “Green Olympics" concept and realised carbon
+neutralisation in delivering financial services.
+The Bank has completed the operation emission calculation10, covering over 11,000 branches and
+comprehensive operation companies in the Chinese mainland and 62 countries and regions. The
+calculated data will be used to support the carbon neutralisation plan for operation of the BOC
+Group and is shown below¹¹:
+10
+11
+Indicators
+2021
+2020
+■Paper manufacturers
+■Chemicals
+■Non-ferrous metals ■Thermal power generation
+Brown credits
+<10%
+Others Coal
+■Cement Steel
+■Civil aviation
+>90%
+BOCI underwrote 24 overseas green and
+sustainable development bonds for whole
+year 2021, with the amount exceeding
+USD8 billion in equivalent
+Environmental performance of the Bank's green credits:
+Environmental performance of green credits in 2021
+Equivalent to emission reduction standard coal in equivalent (10 thousand tons)
+CO₂ equivalent emission reduction (10 thousand tons)
+COD emission reduction (10 thousand tons)
+Ammonia nitrogen emission reduction (10 thousand tons)
+Sulfur dioxide emission reduction (10 thousand tons)
+Nitrogen oxides emission reduction (10 thousand tons)
+Water saving (10 thousand tons)
+11,702
+25,380
+67
+52
+1,385
+1,374
+12,992
+In 2021, the credit of brown industries' takes less than 10% of the total domestic corporate credit,
+a decrease of over 5 percentage points from 2017.
+9
+Refer to the eight emission control industries that have been included and are to be included in the carbon market
+as per national standards and the coal industry, specifically, coal, thermal power generation, steel, petrochemicals,
+chemicals, non-ferrous metals, cement, paper making and civil aviation.
+123
+Others
+2019
+129
+In 2021, the COVID-19 pandemic was basically under control in the Chinese mainland, with
+high clusters and sporadic outbreaks in some areas across the country. In comparison, overseas
+outbreaks continued to occur frequently, with the prevention and control situation remaining grim
+and complex. The Bank continued to improve its business continuity management system, and
+formulated the Distribution and Operation Business Continuity Plan of Bank of China Limited
+(Version 2021), which standardised its procedures and requirements for response, disposal and
+recovery in the event of interruptions to its channels and operations, clarified the management
+responsibilities of branches, required daily monitoring as well as efficient epidemic prevention
+and control in local outlets during major events or statutory holidays. To reduce the risks
+associated with the pandemic, the Bank implemented a national centralised transaction processing
+service for corporate loan transactions. Through the development of relevant systems, the
+transaction processing workload of pandemic-affected branches could be directly undertaken by
+other branches, thus effectively ensuring continuity in credit operation.
+Responding to challenges of the pandemic
+The Bank followed the requirements of national strategy, formulated and released the inclusive
+finance plan for the 14th Five-Year Plan period, and comprehensively optimised the service
+system for inclusive finance. In 2021, taking digital and inclusive finance as the bellwether, the
+Bank launched the "Inclusive Loan” brand, which leverages big data, intelligent risk control
+and other technologies to develop a series of online products. This allowed for online automated
+operation of inclusive finance loans and provided micro and small-sized enterprises with
+"contactless" online application, drawdown and repayment services, matching their needs for
+short-term, small, frequent and prompt financing. For micro and small-sized enterprises engaged
+in science and technology innovation, pandemic prevention and control, and rural industries,
+the Bank created an innovative “MSE Benefit Loan” service plan to review and ratify the short-
+term working capital loans, as part of its efforts to support the stable and healthy development of
+micro and small-sized enterprises. Keeping a close eye on regulatory policies and industry trends,
+it also pushed forward the development of online personal inclusive loan products for individual
+businesses, micro and small business owners and innovative entrepreneurs. By working with local
+human resources and social security departments, employment guidance centres, science and
+technology innovation industrial parks and other relevant institutions, the Bank sought to provide
+financial support to individuals with capital needs for business start-ups or re-employment.
+Expanding inclusive finance
+125
+As at the end of 2021, the Bank had established overseas institutions in 62 countries and
+regions, including 41 countries and regions along the Belt and Road. It followed up with more
+than 700 major overseas projects in countries along the Belt and Road accumulatively, and
+granted a variety of credit facilities exceeding USD223.0 billion to countries along the route
+accumulatively. At the same time, the Bank actively developed RMB internationalisation
+products, cultivated the RMB offshore market, and provided diversified services such as RMB
+settlement, investment and financing for domestic and foreign customers. The Group recorded a
+cross-border RMB settlement volume of RMB11.26 trillion for the year, up 22.36% year on year,
+and a clearing volume of RMB632 trillion, up 34% year on year.
+Leveraging the unique advantages of its global services, the Bank made use of various open
+platforms to build cross-border financial channels, scaled up support for imports and exports,
+and promoted the integration and innovation of global factors and resources, as part of its
+efforts to boost the smooth flow of capital and trade between China and the world. In 2021,
+the Bank deepened its implementation of the national policy of “ensuring stable foreign trade"
+by increasing its input to stabilise foreign trade, and optimising its credit policy to expand the
+coverage of its credit insurance financing, with the international settlement volume of domestic
+institutions reaching USD3.32 trillion, representing a year-on-year increase of 38.9%. In light of
+new business patterns in foreign trade such as cross-border e-commerce, the Bank pushed forward
+the online, intelligent and digital development of cross-border finance, upgraded the "BOC Cross-
+border E-commerce Connect” product, and provided inclusive payment and collection services
+for the import and export of cross-border e-commerce, recording total financial settlement
+volumes of over RMB140.0 billion for the whole year. It launched the "BOC Cross-Border
+E-Procurement Express" to provide online convenient foreign exchange collection and settlement
+services for enterprises engaged in procurement and trade. The Bank also successfully hosted the
+Trade and Investment Matchmaking Conference of the Forth China International Import Expo
+(CIIE), which attracted over 1,400 Chinese and foreign enterprises from 55 countries and regions
+and reached nearly 300 cooperation intentions.
+Promoting global integration
+Guided by its corporate mission of "Bridge China and the World for the Common Good", the
+Bank focused on the key areas of economic and social development, continuously innovated
+financial business models, optimised the supply of finance, and served to build the new
+development pattern featuring dual circulations with financial power, so as to meet the people's
+growing needs for a better life. At the same time, the Bank assumed its share of responsibility
+for building an inclusive and happy society, deepened its efforts in paired assistance and public
+charity, and worked with relevant parties to build a better home for all.
+Social Responsibilities
+124
+Statistics caliber is in accordance with Corporate Social Responsibility Report of Bank of China Limited for 2021
+(Environmental Social Governance).
+The GHG Protocol formulated by the World Resources Institute and the World Business Council for Sustainable
+Development classifies corporate carbon emissions into scopes 1, 2 and 3. The Bank's operational control covers
+scopes 1 and 2 of the GHG Protocol.
+5.12
+4.89
+4.99
+Greenhouse gas emissions intensity per FTE
+(tCO2e/FTE)
+2,825,765
+1,587,180
+2,717,945
+1,512,554
+As at the end of 2021, the balance of the Bank's inclusive loans for micro and small-sized
+enterprises under the target of “two no-less-than and two control” amounted to RMB881.5
+billion, an increase of 53.15% from the beginning of the year. The number of loan customers
+was 620,000, an increase of 32% compared with the beginning of the year. The balance of online
+personal business loans reached RMB11.726 billion, up 563.61% from the beginning of the year.
+BOCG Investment invested in eight
+green projects during the year, with the
+balance of investments totaling
+RMB11.1 billion
+Improving people's wellbeing
+126
+In 2021, in response to extreme weather and flood disasters in Henan, Shanxi and Shaanxi
+provinces, the Bank took immediate actions to donate funds and support rescue efforts, while
+continuing to provide financial services to disaster-hit areas, making its contribution to flood
+control, relief and post-disaster reconstruction. After the disaster hit Henan Province, the Bank
+donated RMB20 million to the province on July 26. Through the “Bank of China Philanthropy"
+platform, the Bank launched five fundraising activities, with 4,459 people donating RMB377.1
+thousand. After the floods in Shanxi and Shaanxi provinces, it launched three charity fundraising
+activities, with more than 6,800 people donating RMB915.6 thousand.
+The Bank actively promoted the public service platform of mutual aid for the elderly, advocated
+the mutual pension concept and model of “saving time of assisting the elderly to exchange for
+pension services". It helped local governments to foster a cultural norm of caring for the elderly,
+improved the voluntary service system, and standardised urban and community governance,
+thus improving wellbeing and happiness among the elderly. As at the end of 2021, the Bank had
+cooperated with more than 70 government departments, enterprises, social organisations and
+universities, reaching more than 210,000 elderly people and volunteers with a total service time
+of more than 5,800 hours.
+128
+The "Bank of China Philanthropy”, established by BOC, is an online fundraising information platform for
+charitable organisations selected by the Ministry of Civil Affairs of the PRC.
+12
+Upholding the principles of "serving society, contributing to society and repaying society”, the
+Bank actively cooperated with charitable social organisations and organised various charitable
+fundraising activities by relying on public welfare vehicles such as BOC Charity Foundation,
+the "Bank of China Philanthropy”12 platform and Zhongyi Shanyuan, for the purpose of
+mobilising warm-hearted people from the Bank and wider society to participate in poverty
+alleviation and public welfare undertakings. In 2021, the “Bank of China Philanthropy” platform
+actively explored the integrated development of online public welfare and the Bank's financial
+businesses, with a focus on poverty alleviation, flood relief, rural revitalisation, talent cultivation
+in universities, education aid, elderly care and so on. Moreover, the Bank participated in 188
+public welfare programmes initiated by 73 organisations, raising a total of RMB17.3631 million
+(including the Bank's matching funds), with nearly 160,000 people involved in donations, further
+gathering the warm hearts of the Bank's staff, customers and institutions as well as the general
+public. The BOC Charity Foundation and the “Bank of China Philanthropy” platform also jointly
+launched the "BOC Love” campaign, introducing ten charity programmes from six charitable
+organisations to the four counties in Xianyang. A total of 66 thousand people from the public
+society participated in the campaign, bringing in RMB6.40 million of donations.
+Contributing to public welfare
+In 2021, the Bank's external customer satisfaction rate reached 93%, the same as last year. The
+number of customer complaints reached 148 thousand, a decrease of 21.1% year on year. The
+complaint handling completion rate stood at 100%. In addition, the total amount of suspicious
+transactions intercepted by the Bank's “Cyber Defence" system during the year surpassed
+RMB15.070 billion.
+•
+Practising its "customer-centric” operation and management concept, the Bank fully integrated
+consumer protection into its corporate culture, effectively fulfilled its responsibilities and
+obligations to protect the rights and interests of financial consumers, and promoted the healthy
+development of business through ensuring consumer rights and interests, thus enhancing
+customer satisfaction. In terms of complaint management, the Bank continuously fulfilled
+its responsibilities, streamlined its service processes, improved customer service experience
+and effectively protected the legitimate rights and interests of consumers, with the number of
+complaints declining. In terms of the education and publicity of financial knowledge, the Bank
+launched publicity and education activities in various interesting forms themed on “3.15 Rights
+Responsibilities •Risks, Financial Consumer Rights Day”, the “Promoting Financial Knowledge,
+Protecting Personal Wealth”, the “Financial Knowledge Popularisation" and the “Month of
+Financial Knowledge Popularisation" as well as regular consumer publicity and education
+campaigns through online and offline channels such as official website, WeChat official account
+and outlets, which were recognised by regulatory authorities and consumers.
+Ensuring the rights and interests of customers
+127
+The Bank actively implemented national requirements for consolidating and expanding the
+effective connection of achievements of poverty alleviation and rural revitalisation and leveraged
+its financial strength to promote rural revitalisation of areas under the paired assistance projects.
+As the designated entity for providing paired assistance to the four counties of Yongshou, Xunyi,
+Chunhua and Changwu in Xianyang, Shaanxi Province (the "four counties in Xianyang"), the
+Bank followed the guiding principles of General Secretary Xi Jinping's important speeches and
+instructions on rural revitalisation and paired assistance, implemented the decisions and plans
+of the CPC Central Committee and the State Council on all fronts, strictly implemented the
+requirements of shaking off no responsibilities, policies, assistance and regulations even when
+poverty has been shaken off, and made every effort to provide paired assistance to the four
+counties in Xianyang, with all tasks progressing steadily. In 2021, the Bank directly invested
+and introduced RMB 107 million of anti-poverty grant funding to the four counties in Xianyang,
+implemented nearly 100 various assistance projects, including livelihood projects, industrial
+assistance and infrastructure construction, organised training courses for 28.9 thousand primary-
+level officials, rural revitalisation leaders and professional and technical personnel from the four
+counties in Xianyang, and purchased or sold RMB177 million worth of agricultural products of
+the poverty-stricken areas, directly benefiting over 30,000 people.
+•
+Fully capitalising on the strategic opportunities arising from rural revitalisation, the Bank
+formulated the Action Plan for Rural Revitalisation of Bank of China and the Action Plan for
+the Business Development of County-level Finance of Bank of China, established the Rural
+Revitalisation Finance Department at the Head Office, and optimised the organisational
+structure for rural revitalisation in its domestic institutions. It accelerated the allocation of
+professional personnel, and actively participated in the county-level economic development
+and the building of a rural financial service system, aiming to boost rural revitalisation through
+sustained financing flows. Making full use of its advantages in integrated operations, the Bank
+established a rural financial service system featuring “unity in diversity”. Within this system,
+BOC Fullerton Community Bank has set up 126 village banks nationwide in line with its
+development philosophy of "focusing on county area development, supporting farmers and
+small-sized enterprises”, becoming the largest domestic village bank group in terms of number
+of institutions and business scope. The Bank also made huge efforts to innovate products and
+services and launched the "Inclusive Loan • New Agriculture Connect", "Inclusive Loan
+Farmland Loan” and “Inclusive Loan MSE Benefit Loan" service programmes, focusing on
+supporting new agricultural business entities as well as enterprises engaged in high-standard
+farmland construction and agricultural product processing with diversified and multi-level
+financial services. As at the end of 2021, the balance of the Bank's agriculture-related loans
+stood at RMB1,740.8 billion, up 15.8% from the beginning of the year. The balance of inclusive
+agriculture-related loans registered RMB 188.8 billion, up 46% from the beginning of the year.
+Boosting rural revitalisation
+As at the end of 2021, the balance of the Bank's loans granted to the education sector was
+RMB35.116 billion, with a growth rate of 26.43%. The balance of loans granted to the healthcare
+sector posted RMB46.83 billion, with a growth rate of 14.91%. The total number of electronic
+social security cards issued by the Bank amounted to 8.2999 million.
+Total energy consumption (MWh)
+Greenhouse gas emissions (tCO2e)
+2,754,463
+BOC Wealth Management issued 30 green
+finance themed products, with the product
+balance exceeding RMB 12.9 billion
+BOC Insurance launched 9 environmental
+pollution liability insurance products,
+with total committed liability at around
+RMB8.3 billion
+Data Standards and
+Systems
+Industrial Policies
+businesses
+Risks weight policies for green finance and other
+industries
+Management Plan for Credits Granted to "Two Highs
+social risks
+Two-list management requirements for environmental and
+Industries
+Policies on Credit Approval Authority for Relevant
+Strengthen the management of green credit contracts
+Environmantal and
+Social Risk Management
+Administrative Measures for Mortgage and Pledge of
+Carbon Emission Permit
+Credit Policy for the L
+Battary Industry
+Guidelines on Industry
+Industry Asset Portfolio
+Credit Orientation
+Management Plan
+71
+Industrial
+e Lithium-ion Power
+Bank of China Action Plan for Reaching the Goal of "Peak Carbon Emissions and Carbon Neutrality"
+14th Five-Year Plan for Green Finance
+Policy system
+Department
+Risk Management
+Department
+Subsidiary Management
+Equity Investment and
+Asset
+Management Department
+Digital Asset
+Globalisation Office
+Domestic branches
+Comprehensive operation companies
+Set up the institution's green finance committee or working group, team or full-time/part-time personnel engaged in relevant work
+Overseas institutions
+120
+Strategy and Policy Systems
+With the aim to achieve the national goal of "peak carbon emissions and carbon neutrality”, the
+Bank established a “1+1+N” green finance policy system and conducted the in-depth analysis
+over green finance development associated opportunities and challenges faced by the Bank. It
+developed the 14th Five-Year Plan of Bank of China for Green Finance, which put forward four
+strategic objectives, namely, striving to become the bank of choice for green finance services,
+achieving leapfrog development of green finance business, properly managing environmental and
+social risks, and formulating the carbon neutrality action plan for operation and asset portfolios,
+as so to create a "One Body with Two Wings" pattern for green finance. The Bank rolled out
+Bank of China Action Plan for Reaching the Goal of "Peak Carbon Emissions and Carbon
+Neutrality", setting detailed roadmaps in 15 aspects including organisational structure, business
+development strategy, product innovation, green operation, stress test, international cooperation,
+capacity building and technology empowerment, to form a solid basis of green finance policy
+system with multiple pillars. Furthermore, the Bank enhanced support for green finance in
+terms of differentiated authorisation, innovative mitigation methods, optimisation of risk weight
+and economic capital management, green approval channel and preferential price application.
+It formulated credit management policies to target high energy consumption and high carbon
+emission ("Two Highs") industries in China, strengthened credit structural adjustment, and
+put restrictions on blind expansions of projects in "Two Highs" industries. The Bank also took
+stringent management and control measures on financing new coal mining and coal-fired power
+projects outside of China, and ceased to provide financing for those projects from Q4 2021,
+except for contracted projects.
+Z
+Green Credit
+Operating Procedures for Statistical Table on
+Catalogue
+Standards for Classification of Green Industry Guidance
+Risk Classification System
+Requirement for Labeling of Environmental and Social
+Business Development
+Policies
+Vehicle Manufacturing Industry
+Credit Policy for New Energy Whole
+Environment Treatment Industry
+Credit Policy for Water and Water
+Generation Industry
+Credit Policy for Photovoltaic Power
+maintained at a good level
+Completion Progress
+An increase of
+RMB500 billion,
+overfulfilling the phased goal
+with the 2021 balance of
+green credits reaching
+RMB 1,408.6 billion
+(CBIRC statistics)
+Year-on-year growth of
+57% (CBIRC statistics)
+Year-on-year growth of over
+60%
+Non-performing ratio of green
+credits was lower than 0.5%
+(CBIRC statistics), lower
+than the overall NPL ratio
+of the Group level
+Green bonds
+Other Indicators
+Investment No. 1
+ranking first on NAFMII's list of
+investors with green bonds in 2021
+Undertaking
+No. 1
+The amount of domestic green
+bonds underwritten reached
+RMB129.4 billion, ranking
+first among commercial banks
+The amount of overseas green
+bonds underwritten reached
+USD23.4 billion, ranking
+first among Chinese institutions on
+Bloomberg's ranking of the
+world's offshore green bonds
+Most active
+Issuance
+A total of USD10.7 billion
+equivalent green bonds were issued
+overseas. making the Bank the most
+active Chinese green bond issuer
+The amount of BOC Financial
+Leasing green assets is RMB 10.6 billion,
+about 28% of its total leasing assets
+BOC Asset Investment invested
+RMB27.9 billion in green industries,
+accounting for over 40% in its investment
+portfolio
+Assets quality was
+BOCIM issued the BOX SHCH 0-5 Year
+ADBC Bond Index fund, with the amount
+reaching RMB5.1 billion
+Annual average growth rate
+of personal green
+consumption credits by
+domestic operations
+Balance of green credits
+increase on a yearly
+basis
+Manufacturing Industry
+Credit Policy for Wind Power Equipment
+Credit Policy for Hydropower Industry
+development of green credit
+Carbon emission reduction supporting tools boost the
+Subsidy Right
+Guidelines on Financing against Renewable Energy
+for Green Finance of Overseas Institutions
+Working Requirements
+Inclusive Loan Carbon Loan Service Plan
+Promote high-quality development of green finance
+Increase green credit granting
+Strategic Evaluation Plan for Serving Ecological Progress
+Guidelines on Green Credit of Bank of China
+Domestic branches, major overseas institutions and comprehensive operating companies formulated green finance strategies or work plans
+121
+Environmental Risk Management
+The Bank intensified efforts in the identification, analysis, mitigation, control and reporting of
+environmental and climate risks, amended the Comprehensive Risk Management Policy of Bank
+of China Limited, and incorporated environmental and climate risks into the comprehensive risk
+management system. It comprehensively reviewed and streamlined the environmental and social
+risks of business processes, covering target customer access, business initiation, due diligence,
+credit approval, contract management and duration management. Restrictive requirements for
+environmental and social risk management were added in the credit policies on 71 industries such
+as agriculture, forestry, animal husbandry and fisheries, mining and metallurgical industry, oil
+and gas, rail transit and material manufacturing, prohibiting credit support for projects that would
+damage biodiversity.
+The Bank adopted stratified management for corporate customers according to their
+environmental and social risk levels, and imposed stricter assessment and review measures
+over high-risk customers. It formulated the List of Environmental and Social Risk Compliance
+Documents and the Checklist of Potential Compliance Risks for medium and high-risk customers,
+imposing higher project assessment standards over aspects of climate change and energy
+management, cultural heritage preservation, labor conditions and community environmental
+health management, biodiversity and sustainable resource protection. It also adopted the "One
+Vote Veto System” to stop credit support for projects that failed in national environmental
+impact assessment and other relevant standards. It carried out regular internal control compliance
+inspections to review and evaluate customers' environmental and social risk levels and green
+credit labels. It also strengthened the communication with stakeholders, strictly complied with
+local laws and regulations on environmental protection, and integrated eco-environmental cost,
+risks and other factors into the management procedure to lower environmental and social risks.
+BOC Zhejiang Branch has established an ESG assessment system to integrate customers' ESG
+assessment results into due diligence, project review etc. BOC Wealth Management and BOCI
+both incorporated ESG factors into their project screening, review and other relevant procedures
+as a reference for investment.
+The Bank participated in stress tests on climate risk organised by the PBOC, and evaluated the
+potential impact of transition under the goal of “peak carbon emissions and carbon neutrality”
+on credit assets. The results show that the credit risks of customers in thermal power generation,
+steel and cement industries increased under the stress scenario, and the impact on capital
+adequacy is controllable. The Bank's overseas institutions successively conducted stress tests.
+Bank of China (UK) Limited integrated the stress test in the climate risk scenario into the 2021
+ICAAP report; BOCHK completed stress tests on transition risks and physical risks for several
+industries; Singapore Branch, Frankfurt Branch and Sydney Branch also have commenced work
+relating to climate risk stress test.
+122
+Performance of Green Finance
+The Bank's major green finance targets and the performance in 2021 are shown below:
+14th Five-Year Plan Period
+Objectives
+RMB 1 trillion
+Providing financial support
+of no less than RMB f
+trillion for green industries
+No less than 30%
+striving for 60%
+To support people's need for a better life, the Bank continuously increased its credit support
+for transportation infrastructure, government-subsidised housing, education, health, elderly care
+and other areas concerning people's livelihood, following the principles of legal compliance
+and commercial sustainability. It proactively directed real estate-related credit resources
+towards government-subsidised housing, and provided comprehensive financial support to
+eligible educational, healthcare and elderly care institutions. The Bank piloted the convenient
+demonstration project of mobile payment and introduced more customer-friendly services for bus
+transport scenarios, enabling fare payment via mobile banking code scanning in 46 cities/regions.
+It also launched the convenient Railway e-Card service, with the total number of Railway e-Cards
+issued in the Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area and Hainan
+Free Trade Zone amounting to 1.18 million (total number of Railway e-Cards issued nationwide
+as at the end of December 2021). At the same time, the Bank gave full play to its FinTech
+advantages to facilitate financial support for people in the areas of education, medical care and
+daily payments, and worked with renowned partners to expand special life service modules in
+areas such as medical care, catering, housing, travelling, entertainment and learning, so as to
+enrich its ecosystem of people-focused life scenarios and help the general public to enjoy better
+lives.
+The Bank was committed to preventing integrity risk, resolutely punished corruption, established
+a sound monitoring and restraint mechanism for key areas such as credit management, non-
+performing loan disposal and centralised procurement, and kept a tough anti-corruption stance.
+It deepened the building of a long-effect anti-corruption mechanism, adhered to the principle of
+"not daring to corrupt, not being able to corrupt and not wanting to corrupt”, promoted Bank-
+wide special prevention and control, stepped up the investigation and punishment of violations
+of laws and disciplines, and improved the mechanism of power restriction. Carrying forward its
+excellent clean culture of “loftiness, clean and determination”, the Bank extensively carried out
+the cultivation of an integrity culture, continuously conducted warning education, held special
+warning education conferences, and compiled and published typical cases, thus consolidating the
+ideological foundation of the whole staff to resist corruption and prevent degeneration.
+From June 2021 to the date of the
+Annual General Meeting in 2024
+From June 2020 to the date of the
+Annual General Meeting in 2023
+From February 2019 to the date of the
+Annual General Meeting in 2024
+From August 2017 to the date of the
+Annual General Meeting in 2023
+From August 2017 to the date of the
+Annual General Meeting in 2023
+From July 2019 to the date of the
+Annual General Meeting in 2022
+From June 2020 to the date of the
+Annual General Meeting in 2023
+From August 2016 to the date of the
+Annual General Meeting in 2022
+From January 2017 to the date of the
+Annual General Meeting in 2022
+From December 2018 to the date of
+the Annual General Meeting in 2024
+From September 2019 to the date of
+the Annual General Meeting in 2022
+From July 2020 to the date of the
+Annual General Meeting in 2022
+From September 2020 to the date of
+the Annual General Meeting in 2022
+The number of shares held by HKSCC Nominees Limited is the aggregate number of the Bank's H Shares it held
+as the nominee for all the institutional and individual investors that maintain accounts with it as at 31 December
+2021, including the number of shares held by the National Council for Social Security Fund.
+3
+Central Huijin Asset Management Ltd. is a wholly-owned subsidiary of Central Huijin Investment Ltd.
+4
+5
+6
+The number of shares held by HKSCC Limited is the aggregate number of the A Shares it held as the nominee
+holder who holds securities on behalf of others, including the number of SSE securities acquired by Hong Kong
+and overseas investors through Shanghai-Hong Kong Stock Connect.
+Beijing Yuantong Xinhai Trading Co., Ltd. is a wholly-owned subsidiary of Beijing Dadi Yuantong Group Co.,
+Ltd. As at 31 December 2021, Beijing Dadi Yuantong Group Co., Ltd. held 152,000,037 ordinary shares of the
+Bank, including 147,000,000 ordinary shares of the Bank held through investor credit account. Beijing Yuantong
+Xinhai Trading Co., Ltd. held 133,000,000 ordinary shares of the Bank, all of which were held through investor
+credit account.
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action among the
+aforementioned ordinary shareholders.
+133
+Substantial Shareholder Interests
+The number of shares held by H-Share Holders was recorded in the register of members kept at the H-Share
+Registrar of the Bank.
+The register maintained by the Bank under section 336 of the SFO recorded that, as at 31
+December 2021, the shareholders indicated in the following table were substantial shareholders
+having interests in shares of the Bank (as defined in the SFO):
+shares held/
+Number of
+Name of shareholder
+Central Huijin Investment Ltd.
+Capacity
+(types of interest)
+Beneficial owner
+underlying
+shares Type of
+Percentage of
+Percentage of
+Percentage of
+total issued
+total issued
+Number of
+2
+1
+Notes:
+(377,295,920)
+335,393,250
+0.11%
+None
+Other
+A
+9
+Beijing Dadi Yuantong Group Co., Ltd.
+152,000,037
+152,000,037
+0.05%
+None
+Domestic non- A
+state-owned
+legal person
+10
+Beijing Yuantong Xinhai Trading Co., Ltd.
+133,000,000
+133,000,000
+0.05%
+None
+Domestic non- A
+state-owned
+legal person
+132
+total issued
+ordinary
+(unit: share) shares
+A Shares
+3
+Unless stated otherwise, all interests stated above represented long positions. Save as disclosed above, as at 31
+December 2021, no other interests (including derivative interests) or short positions were recorded in the register
+maintained by the Bank under section 336 of the SFO.
+134
+Controlling Shareholder of the Bank
+Central Huijin Investment Ltd.
+Central Huijin Investment Ltd. (“Huijin”) is a state-owned investment company established on
+16 December 2003 under the Company Law, with Mr. PENG Chun as its legal representative.
+Wholly owned by China Investment Corporation ("CIC"), Huijin makes equity investments in
+major state-owned financial institutions, as authorised by the State Council. To the extent of its
+capital contribution, Huijin exercises its rights and fulfills its obligations as an investor to major
+state-owned financial institutions on behalf of the State, in accordance with applicable laws aimed
+at preserving and enhancing the value of state-owned financial assets. Huijin neither engages in
+other business activities nor intervenes in the daily operation of the major state-owned financial
+institutions of which it is the controlling shareholder.
+As at 31 December 2021, the basic information of companies directly held by Huijin is as
+follows:
+Proportion of the total
+No.
+Company name
+capital held by Huijin
+1
+China Development Bank
+34.68%
+Industrial and Commercial Bank of China Limited ★✩
+34.71%
+3
+Agricultural Bank of China Limited ✩✩
+40.03%
+Bank of China Limited ★☆
+64.02%
+5
+China Construction Bank Corporation ✰✰
+57.11%
+6
+"S" denotes short position.
+China Life Insurance Company Limited -
+traditional general insurance product
+―005L CT001SH
+2
+1
+H Shares
+shares
+188,461,533,607 A
+89.42%
+64.02%
+Interest of controlled
+corporations
+1,810,024,500 A
+0.86%
+0.61%
+Total
+National Council for
+Social Security Fund
+BlackRock, Inc.
+Beneficial owner
+190,271,558,107 A
+5,798,893,213 H
+90.28%
+64.63%
+6.93%
+1.97%
+Interest of controlled
+corporations
+4,928,555,441
+5,735,000 (S) H
+H
+5.89%
+1.67%
+0.01%
+0.002%
+Notes:
+BlackRock, Inc. holds the entire issued share capital of BlackRock Holdco 2 Inc., while BlackRock Holdco
+2 Inc. holds the entire issued share capital of BlackRock Financial Management, Inc. Thus BlackRock,
+Inc. and BlackRock Holdco 2 Inc. are deemed to have equal interests in shares of the Bank as BlackRock
+Financial Management, Inc. under the SFO. BlackRock, Inc. held a long position of 4,928,555,441 H Shares
+and a short position of 5,735,000 H Shares of the Bank through BlackRock Financial Management, Inc. and
+other corporations controlled by it. In the long position of 4,928,555,441 H Shares, 8,736,000 H Shares were
+held through derivatives. In the short position of 5,735,000 H Shares, 2,466,000 H Shares were held through
+derivatives.
+8
+China Pacific Life Insurance Dividend Equity
+Portfolio (Traditional) with management of
+Changjiang Pension Insurance Co., Ltd.
+A
+294,387,791,241 100.00%
+210,765,514,846 71.59%
+2. Overseas listed foreign shares
+83,622,276,395
+28.41%
+III. Total Ordinary Shares
+294,387,791,241 100.00%
+-
+294,387,791,241 100.00%
+210,765,514,846
+71.59%
+-
+83,622,276,395 28.41%
+294,387,791,241 100.00%
+Notes:
+1
+As at 31 December 2021, the Bank had issued a total of 294,387,791,241 ordinary shares, including
+210,765,514,846 A Shares and 83,622,276,395 H Shares.
+2
+As at 31 December 2021, none of the Bank's A Shares and H Shares were subject to selling restrictions.
+131
+Number of Ordinary Shareholders and Shareholdings
+The number of ordinary shareholders as at 31 December 2021 was 728,790, including 553,596
+A-Share Holders and 175,194 H-Share Holders.
+The number of ordinary shareholders as at the end of the last month before the disclosure of this
+report was 705,350, including 530,665 A-Share Holders and 174,685 H-Share Holders.
+The top ten ordinary shareholders as at 31 December 2021 are set forth below:
+Unit: Share
+Changes
+during the
+Number of
+shares held
+as at the end
+1. RMB-denominated ordinary shares
+Number of
+II. Shares not subject to selling restrictions
+-
+Attaching great importance to the integrity building and anti-corruption supervision of its
+overseas institutions, the Bank established a leading mechanism for integrity risk prevention
+and control and corruption governance in its overseas institutions. The overseas institutions
+strengthened their anti-corruption efforts and risk prevention and control in the light of the actual
+situation in local countries and regions. It enhanced education and supervision, and continuously
+promoted a strong atmosphere of integrity and compliance in its overseas institutions. Moreover,
+it established and improved the supervision system for the integrity of its overseas institutions,
+introduced management measures, stepped up efforts of supervision and promoted the
+implementation of the requirements of building a clean bank.
+For details of the Bank's environmental, social and governance performance, please refer to the
+Corporate Social Responsibility Report of Bank of China Limited for 2021 (Environmental Social
+Governance).
+130
+Changes in Shares and Shareholdings of Shareholders
+Ordinary Shares
+Changes in Ordinary Shares
+As at 1 January 2021
+Increase/decrease during the reporting period
+Unit: Share
+As at 31 December 2021
+Issuance
+Shares
+transferred
+of new
+Bonus
+from surplus
+Number of
+Number of shares
+Percentage
+shares
+shares
+reserve
+Others
+Subtotal
+shares Percentage
+I. Shares subject to selling restrictions
+-
+China Everbright Group Ltd.
+Percentage of
+total
+reporting of the reporting
+period
+Central Huijin Asset Management Ltd.
+1,810,024,500
+0.61%
+None
+State-owned
+A
+legal person
+5
+HKSCC Limited
+255,524,716
+1,067,361,975
+0.36%
+None Foreign legal A
+6
+MUFG Bank, Ltd.
+520,357,200
+0.18%
+person
+Unknown Foreign legal H
+person
+7
+China Pacific Life Insurance Co., Ltd. -
+382,238,605
+0.13%
+None Other
+4
+No. Name of ordinary shareholder
+legal person
+None State-owned
+ordinary
+period
+shares
+Number of
+shares subject
+to selling
+restrictions
+shares
+pledged,
+labelled or Type of
+Type of
+frozen
+shareholder
+1
+Central Huijin Investment Ltd.
+188,461,533,607
+64.02%
+None
+State
+ordinary
+shares
+A
+2
+HKSCC Nominees Limited
+(52,922,305) 81,849,088,685
+27.80%
+Unknown Foreign legal H
+person
+3
+China Securities Finance Co., Ltd.
+(654,880,040) 7,941,164,885
+2.70%
+A
+Intensifying Efforts in Anti-Corruption and Building a Clean Bank
+63.16%
+Evergrowing Bank Co., Limited
+Domestic
+Preference Shares
+Notes:
+1
+2
+3
+The Bank of New York Mellon Corporation, acting as the custodian for all the offshore preference shareholders
+that maintain accounts with Euroclear and Clearstream as at 31 December 2021, held 197,865,300 Offshore
+Preference Shares, representing 100% of the Offshore Preference Shares.
+As at 31 December 2021, "China Life Insurance Company Limited ― traditional general insurance product-
+005L CT001SH" is one of both the Bank's top ten ordinary shareholders and top ten preference shareholders.
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action among the
+aforementioned preference shareholders, or among the aforementioned preference shareholders and the Bank's top
+ten ordinary shareholders.
+137
+Profit Distribution of Preference Shares
+Other
+For the profit distribution policy of the preference shares and the profit distribution arrangement
+during the reporting period, please refer to the section “Report of the Board of Directors”.
+On 15 March 2021, the Bank redeemed all 280,000,000 shares of the Domestic Preference
+Shares (Second Tranche) issued on 13 March 2015. For details, please refer to the Bank's
+announcements published on the websites of SSE, HKEX and the Bank.
+Other Information regarding the Preference Shares
+During the reporting period, there was no conversion into ordinary shares or voting rights
+recovery in respect of the preference shares of the Bank.
+Preference shares issued by the Bank contain no contractual obligation to deliver cash or another
+financial asset; or to exchange financial assets or financial liabilities with another entity under
+conditions that are potentially unfavourable to the entity. Preference shares issued are non-
+derivative instruments that will be settled in the entity's own equity instruments, but includes no
+contractual obligation for the entity to deliver a variable number of its own equity instruments.
+The Bank classifies preference shares issued as an equity instrument. Fees, commissions and
+other transaction costs arising from preference shares issuance are deducted from equity. The
+dividends on preference shares are recognised as profit distribution at the time of declaration.
+The funds raised from the issuance of the Domestic Preference Shares and Offshore Preference
+Shares have been fully used to replenish the Bank's additional tier 1 capital and increase its
+capital adequacy ratio.
+Issuance of Other Securities
+Please refer to Note V.30 to the Consolidated Financial Statements for details of bonds issued by
+the Bank.
+No shares of the Bank have been specifically issued to its employees.
+138
+Directors, Supervisors and Senior Management Members
+Basic Information
+Exercising Redemption Rights of Preference Shares
+None
+2.50%
+30,000,000
+Other
+Domestic
+BOCOM Schroder Asset Management Zhuoyuan
+Preference Shares
+No. 2 Collective Asset Management Plan
+8
+Postal Savings Bank of China Co., Ltd.
+40,000,000
+3.34%
+None
+State-owned
+Domestic
+legal person
+Preference Shares
+9
+Shanghai Tobacco Group Co., Ltd.
+30,000,000
+2.50%
+None State-owned
+Domestic
+legal person
+Preference Shares
+9
+Ping An Life Insurance Company of China - universal
+―individual universal insurance
+(7,000,000)
+Incumbent Directors, Supervisors and Senior Management Members
+Incumbent Directors
+Year of
+Name
+Male
+Independent Director
+Angela CHAO
+1973
+Female Independent Director
+JIANG Guohua
+1971
+Male
+Independent Director
+Martin Cheung
+1957
+Male
+Independent Director
+Kong LIAO
+CHEN Chunhua
+1964
+Female Independent Director
+CHUI Sai Peng
+1960
+Male
+Independent Director
+Jose
+139
+Term of office as Director
+From October 2018 to the date of the
+Annual General Meeting in 2024
+WANG Changyun 1964
+None
+Non-executive Director
+1963
+birth
+Gender Position
+LIU Liange
+1961
+Male
+Chairman
+LIU Jin
+1967
+Male
+WANG Wei
+1963
+Male
+LIN Jingzhen
+1965
+Male
+XIAO Lihong
+1965
+Vice Chairman and
+President
+Executive Director and
+Executive Vice President
+Executive Director and
+Executive Vice President
+Female Non-executive Director
+WANG Xiaoya
+1964
+Female Non-executive Director
+ZHANG Jiangang 1973
+Male
+Non-executive Director
+CHEN Jianbo
+Male
+4.54%
+54,400,000
+BOCOM Schroder Asset Management - BOCOM -
+Guotai Junan Investment Management Co., Ltd.
+14.54%
+135
+Notes:
+1
+★ denotes A share listed company and denotes H share listed company.
+2
+Besides the above companies controlled or held by Huijin, Central Huijin Asset Management Ltd. is a wholly-
+owned subsidiary of Huijin. Central Huijin Asset Management Ltd., established in November 2015 and registered
+in Beijing with registered capital of RMB5 billion, provides asset management business.
+For further details regarding China Investment Corporation, please refer to the information on
+its website (www.china-inv.cn). Please refer to the Announcement on Matters Related to the
+Incorporation of China Investment Corporation published on 9 October 2007 by the Bank for
+relevant information of China Investment Corporation.
+As at 31 December 2021, no other legal-person shareholder held 10% or more voting shares of
+the Bank (excluding HKSCC Nominees Limited).
+Non-executive Directors Ms. XIAO Lihong, Ms. WANG Xiaoya, Mr. ZHANG Jiangang, and Mr.
+CHEN Jianbo were recommended by Huijin, shareholder of the Bank.
+Preference Shares
+Issuance and Listing of Preference Shares in the Past Three Years
+With the approvals of CBIRC (Yinbaojianfu [2019] No. 387) and CSRC (Zhengjianxuke
+[2019] No. 1051), the Bank made a non-public issuance of RMB73 billion Domestic Preference
+Shares (Third Tranche) on 24 June 2019 in the domestic market. With the approval of SSE
+(Shangzhenghan [2019] No. 1164), Domestic Preference Shares (Third Tranche) have been traded
+on the Comprehensive Business Platform of SSE since 17 July 2019. The Bank made a non-
+public issuance of RMB27 billion Domestic Preference Shares (Fourth Tranche) on 26 August
+2019 in the domestic market. With the approval of SSE (Shangzhenghan [2019] No. 1528),
+Domestic Preference Shares (Fourth Tranche) have been traded on the Comprehensive Business
+Platform of SSE since 17 September 2019.
+With the approvals of CBIRC (Yinbaojianfu [2019] No. 630) and CSRC (Zhengjianxuke [2020]
+No. 254), the Bank made a non-public issuance of USD2.820 billion Offshore Preference Shares
+(Second Tranche) on 4 March 2020 in the offshore market. The Offshore Preference Shares
+(Second Tranche) have been listed on the Hong Kong Stock Exchange since 5 March 2020.
+For the terms of issuance of the Domestic Preference Shares and Offshore Preference Shares,
+please refer to the Bank's announcements published on the websites of SSE, HKEX and the
+Bank.
+136
+Number of Preference Shareholders and Shareholdings
+The number of preference shareholders as at 31 December 2021 was 68, including 67 domestic
+preference shareholders and 1 offshore preference shareholder.
+The number of preference shareholders as at the end of the last month before the disclosure of
+this report was 70, including 69 domestic preference shareholders and 1 offshore preference
+shareholder.
+The top ten preference shareholders as at 31 December 2021 are set forth below:
+Unit: Share
+Number of
+Changes shares held
+during as at the end
+the reporting of the reporting
+Percentage
+of total
+preference
+No. Name of preference shareholder
+13.30%
+1
+China Galaxy Asset Management Co., Ltd.
+15 China Securities Co., Ltd. ★✩
+53.95%
+8
+China Export & Credit Insurance Corporation
+73.63%
+9
+China Reinsurance (Group) Corporation ✩
+71.56%
+10
+New China Life Insurance Company Limited ★☆
+31.34%
+11
+China Jianyin Investment Limited
+100.00%
+12
+China Galaxy Financial Holding Co., Ltd.
+69.07%
+13
+Shenwan Hongyuan Group Co., Ltd. ★☆
+20.05%
+14
+China International Capital Corporation Limited ★✩
+40.11%
+16
+17
+567
+30.76%
+7
+Bosera Fund ICBC - Bosera - ICBC - Flexible
+Allocation No. 5 Specific Multi-customer Assets
+Management Plan
+period
+9.97%
+None
+Other
+Domestic
+Preference Shares
+5
+China Life Insurance Company Limited - traditional
+(3,000,000)
+70,000,000
+5.84%
+None Other
+Domestic
+-general insurance product-005L - CT001SH
+Preference Shares
+6
+Jiangsu International Trust Corporation Limited - JSITC
+54,540,000
+54,540,000
+4.55%
+None
+Other
+Domestic
+― He Xiang Tian Li No.1 Collective Capital Trust Plan
+Preference Shares
+7
+119,460,000
+period
+(10,000,000)
+119,460,000
+4
+shares
+200,000,000
+16.70%
+or frozen
+None
+Number
+of shares
+pledged Type of
+shareholder
+Type of
+preference
+shares
+Other
+Domestic
+Preference Shares
+2
+Bank of New York Mellon Corporation
+197,865,300
+16.52%
+Unknown Foreign legal Offshore
+person
+Preference Shares
+3
+CCB Trust Co., Ltd. - "Qian Yuan-Ri Xin Yue Yi"
+Open-ended Wealth Management Single Fund Trust
+133,000,000
+11.10%
+None
+Other
+Domestic
+Preference Shares
+Hwabao Trust Co., Ltd. - Hwabao Trust - Baofu
+Investment No.1 Collective Capital Trust Plan
+(4,980,000)
+Year of
+Incumbent Supervisors
+26.00
+External Supervisor
+ZHENG Zhiguang
+No
+26.00
+26.00
+External Supervisor
+JIA Xiangsen
+No
+5.00
+5.00
+Employee Supervisor
+LENG Jie
+No
+0.83
+0.83
+Employee Supervisor
+ZHOU Hehua
+No
+0.83
+0.83
+Employee Supervisor
+WEI Hanguang
+of Supervisors
+No
+82.09
+20.15
+61.94
+Chairwoman of the Board
+26.00
+ZHANG Keqiu
+No
+External Supervisor
+93.17
+Secretary to the Board
+MEI Feiqi
+No
+81.11
+1.40
+14.49
+65.22
+Chief Audit Officer
+ZHUO Chengwen
+No
+121.51
+2.00
+21.67
+97.84
+Chief Risk Officer
+LIU Jiandong
+No
+31.39
+8.16
+23.23
+Executive Vice President
+WANG Zhiheng
+No
+56.45
+14.64
+41.81
+Executive Vice President
+CHEN Huaiyu
+HUI Ping
+21.67
+Yes
+45.00
+ZHANG Jiangang
+Yes
+Non-executive Director
+WANG Xiaoya
+Yes
+Non-executive Director
+XIAO Lihong
+Executive Vice President
+No
+NO
+75.23
+19.49
+55.74
+Executive Director and
+LIN Jingzhen
+Executive Vice President
+No
+75.24
+19.50
+55.74
+Executive Director and
+WANG Wei
+No
+61.58
+15.13
+46.45
+Vice Chairman and President
+LIU Jin
+No
+Non-executive Director
+45.00
+Yes
+Non-executive Director
+Independent Director
+CHUI Sai Peng Jose
+Yes
+50.00
+50.00
+Independent Director
+CHEN Chunhua
+LIAO
+Yes
+45.00
+45.00
+Independent Director
+Martin Cheung Kong
+Yes
+60.00
+60.00
+Independent Director
+JIANG Guohua
+Yes
+45.00
+45.00
+Independent Director
+Angela CHAO
+Yes
+60.00
+60.00
+Independent Director
+WANG Changyun
+Yes
+CHEN Jianbo
+82.09
+5.42
+No
+Executive Director and Executive Vice President
+WANG Wei
+144
+Vice Chairman of the Board of Directors of the Bank since June 2021 and President of the Bank
+since April 2021. Mr. LIU joined the Bank in 2021. Prior to that, Mr. LIU served as Executive
+Director of China Everbright Group from December 2019 to March 2021, President of China
+Everbright Bank from January 2020 to March 2021, and Executive Director of China Everbright
+Bank from March 2020 to March 2021. From September 2018 to November 2019, he worked
+at China Development Bank as its Executive Vice President. Mr. LIU had worked in Industrial
+and Commercial Bank of China (ICBC) for many years, serving as Deputy General Manager of
+its Shandong Branch, Vice Chairman, Executive Director, General Manager of ICBC (Europe)
+and General Manager of ICBC Frankfurt Branch, General Manager of the Investment Banking
+Department of its Head Office, and General Manager of its Jiangsu Branch. Mr. LIU began to
+serve as Vice Chairman and Non-executive Director of the Board of Directors of BOC Hong
+Kong (Holdings) Limited and Bank of China (Hong Kong) Limited as of August 2021. He
+graduated from Shandong University in 1993 with a Master of Arts degree. He holds the title of
+Senior Economist.
+Vice Chairman and President
+LIU Jin
+Chairman of the Board of Directors of the Bank since July 2019. Mr. LIU joined the Bank in
+2018, and served as Vice Chairman of the Board of Directors of the Bank from October 2018
+to July 2019 and President of the Bank from August 2018 to June 2019. He served as Vice
+Chairman and President of the Export-Import Bank of China from July 2015 to June 2018. Mr.
+LIU served as Vice President of the Export-Import Bank of China from March 2007 to February
+2015. He also served as Director of the African Export-Import Bank from September 2007
+to February 2015, as Chairman of the Board of Supervisors of Sino-Italian Mandarin Capital
+Partners from March 2009 to June 2015, and as Chairman of the Board of Directors of Regional
+Credit Guarantee and Investment Facility (Asia) from March 2014 to May 2015. Mr. LIU worked
+in the PBOC for many years, successively serving as Deputy Director-General of the International
+Department of the PBOC, President of the Fuzhou Central Sub-branch of the PBOC and Director
+of the Fujian Branch of the State Administration of Foreign Exchange, Director General of the
+Anti-Money Laundering Bureau (the Security Bureau) of the PBOC. Mr. LIU served as President
+of Shanghai RMB Trading Unit from October 2018 to November 2019, Vice Chairman of the
+Board of Directors of BOC Hong Kong (Holdings) Limited from December 2018 to July 2019.
+He has been serving as Chairman of the Board of Directors of BOC Hong Kong (Holdings)
+Limited since July 2019. He graduated from the Graduate School of the People's Bank of China
+with a Master's Degree in Economics in 1987. He holds the title of Senior Economist.
+LIU Liange
+Chairman
+Directors
+Biographies of Directors, Supervisors and Senior Management
+Members
+Save as disclosed above, in 2021, none of the Bank's directors, supervisors or senior management
+members held any position in the shareholding companies of the Bank.
+Positions Held in Shareholding Companies by Directors, Supervisors
+and Senior Management Members
+143
+The Bank incurred RMB 13.2304 million in remuneration to its directors, supervisors and senior management
+members' services in 2021.
+For the starting time of the term of office of the above-mentioned directors, supervisors and senior management
+members, please refer to the section "Basic Information".
+The above persons' remuneration is calculated on the basis of their actual time working as directors, supervisors
+or senior management members of the Bank in 2021. Employee supervisors' remuneration above is paid for their
+service as supervisors of the Bank during the reporting period.
+Some independent directors of the Bank served as independent non-executive directors of other legal entities or
+organisations, which caused such legal entities or organisations to be defined as connected parties of the Bank.
+Save as disclosed above, none of the directors, supervisors or senior management members of the Bank was
+remunerated by the connected parties of the Bank during the reporting period.
+In 2021, Non-executive Directors Mr. ZHAO Jie, Ms. XIAO Lihong, Ms. WANG Xiaoya, Mr. ZHANG Jiangang
+and Mr. CHEN Jianbo were not remunerated by the Bank.
+The remuneration for independent directors is determined based on the resolutions of the 2007 Annual General
+Meeting and the 2019 Second Extraordinary General Meeting. The remuneration for external supervisors is
+determined based on the resolutions of the 2009 Annual General Meeting.
+The Bank remunerates directors, supervisors and senior management members who are employed by the Bank
+with salaries, bonuses, and employer contribution to social insurance, enterprise annuity, supplementary medical
+insurance and housing provident fund, as well as other monetary income. Independent directors receive directors'
+remunerations and allowances. Other directors are not remunerated by the Bank. Chairman of the Board of
+Directors, executive directors and senior management members do not receive any remuneration from the Bank's
+subsidiaries.
+The 2021 final remuneration for Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, executive directors and other senior management members is to be determined and will be disclosed
+in an additional announcement by the Bank.
+In accordance with the government regulations, since 1 January 2015, the Bank remunerates Chairman of the
+Board of Directors, President, Chairman of the Board of Supervisors and Executive Vice Presidents pursuant to
+the rules on remuneration reform for central enterprises.
+9.
+8.
+7.
+6.
+5.
+4.
+3.
+Executive Director of the Bank since June 2020 and Executive Vice President of the Bank
+since December 2019. Mr. WANG joined the Bank in 2019. He served as Executive Director
+and Executive Vice President of Agricultural Bank of China (“ABC”) from February 2018 to
+November 2019, and began to serve as Executive Vice President of ABC from December 2013
+and as a member of senior management of ABC from December 2011. Mr. WANG previously
+served in several positions in ABC, including Deputy General Manager of Ningxia Branch,
+Deputy General Manager of Gansu Branch, General Manager of Gansu Branch, General Manager
+of Xinjiang Branch, General Manager of Xinjiang Production and Construction Corps Branch,
+General Manager of the Office of ABC, General Manager of Hebei Branch, General Manager
+of the Internal Control and Compliance Department, General Manager of the Human Resources
+Department and Chief Officer of the Sannong Business. Mr. WANG graduated from Shaanxi
+Institute of Finance and Economics in 1983, and from Southwestern University of Finance and
+Economics with a Doctor's Degree in Economics in 2015. He holds the title of Senior Economist.
+2.
+LIN Jingzhen
+Executive Director of the Bank since February 2019 and Executive Vice President of the Bank
+since March 2018. Mr. LIN joined the Bank in 1987. He served as Deputy Chief Executive of
+BOC Hong Kong (Holdings) Limited from May 2015 to January 2018, as General Manager of
+the Corporate Banking Department of the Bank from March 2014 to May 2015, and as General
+Manager (Corporate Banking) of the Corporate Banking Unit of the Bank from October 2010
+to March 2014. Prior to this, he successively served as Deputy General Manager of Corporate
+Banking Department and Corporate Banking Unit of the Bank. Mr. LIN served as Chairman of
+BOC International Holdings Limited from April 2018 to December 2020. He has been serving as
+Chairman of BOC International (China) Co., Ltd. since May 2018, and Non-executive Director of
+BOC Hong Kong (Holdings) Limited since August 2018. He graduated from Xiamen University
+in 1987, and obtained a Master of Business Administration Degree from Xiamen University in
+2000.
+Independent Director
+CHEN Chunhua
+Independent Director of the Bank since September 2019. Mr. LIAO was called to the Bar in
+England and Wales in 1984 and was called to the Bar in Hong Kong in 1985 and is a practicing
+barrister in Hong Kong. He has been serving as a Member of the Legislative Council of the Hong
+Kong Special Administrative Region since 2012. Mr. LIAO has also been serving as a Steward
+of the Hong Kong Jockey Club since April 2013, an Independent Non-executive Director of
+Hang Lung Group Limited since November 2014, and Chairman of the Advisory Committee on
+Corruption of the Independent Commission Against Corruption since January 2019. Mr. LIAO
+was appointed as a Non-Official Member of the Executive Council of the Hong Kong Special
+Administrative Region in November 2016. He was appointed as Justice of the Peace in 2004,
+was awarded the Silver Bauhinia Star in 2014 and was awarded the Gold Bauhinia Star in 2019.
+He is elected as Deputy of the Hong Kong Special Administrative Region to the 11th, 12th and
+13th National People's Congress of the People's Republic of China. Mr. LIAO previously served
+as Chairman of the Anti-Money Laundering and Counter Terrorist Financing Review Tribunal
+and Chairman of The Hong Kong Council for Accreditation of Academic and Vocational
+Qualifications. He graduated from University College London with a Bachelor of Economic
+Science (Hons) Degree in 1982 and a Master of Laws Degree in 1985.
+Independent Director
+Martin Cheung Kong LIAO
+148
+Independent Director of the Bank since December 2018. Mr. JIANG serves as Professor of
+Accounting at the Guanghua School of Management, Peking University. Currently he also
+serves as a member of China National MPAcc Education Steering Committee and Associate
+Dean of Peking University Graduate School. Mr. JIANG has successively served as Assistant
+Professor, Associate Professor and Professor of the Accounting Department of Guanghua
+School of Management, Peking University since 2002, during which he successively served as
+Director of the Yenching Academy, Executive Associate Dean and Director of the Yenching
+Academy from 2013 to 2017. From 2007 to 2010, he was a senior investment consultant at
+Bosera Fund Management Company; from 2010 to 2016, he served as independent director of
+Datang International Power Generation Co. Ltd.; from 2011 to 2014, he was an academic advisor
+to the Global Valuation Institute of KPMG International; and from 2014 to 2015, he was a
+member of the Global Agenda Council of the World Economic Forum. Currently he also serves
+as independent director of ZRF Fund Management Company Ltd. and China Merchants Life
+Insurance Company Ltd. Mr. JIANG was named National Leading Talent in Accounting by China
+Ministry of Finance (2012). He was an Elsevier Chinese Most Cited Researcher consecutively
+from 2014 to 2017. He was a member of the 17th Stock Issuance Review Committee of China
+Securities Regulatory Commission. Mr. JIANG graduated from Peking University in 1995 with a
+Bachelor's Degree in Economics, received his Master's Degree in Accounting from Hong Kong
+University of Science and Technology in 1997, and obtained his Doctor's Degree in Accounting
+from the University of California, Berkeley in 2002.
+Independent Director
+JIANG Guohua
+Independent Director of the Bank since January 2017. Ms. CHAO serves as Chair and CEO of
+Foremost Group, an international shipping company. From 1994 to 1996, Ms. CHAO worked in
+the mergers & acquisitions department of Smith Barney, which is now Morgan Stanley Smith
+Barney. From 1996 to 1999, Ms. CHAO served as deputy general manager of Foremost Group,
+and from 2001 to 2017, Ms. CHAO had successively served as Vice President, Senior Vice
+President and Deputy Chairman of Foremost Group. Since 2018, she has served as Chairman and
+CEO of Foremost Group. In May 2005, Ms. CHAO was unanimously voted to be BIMCO39's
+(The Baltic and International Maritime Council 39) Counsellor. In September 2005, she was
+selected as "Eminent Young Overseas Chinese" by the Overseas Chinese Affairs Office of
+the State Council of China. In November 2007, she was invited as speaker of World Shipping
+(China) Summit. In April 2011, she became a Founding Member of the Wall Street Journal's
+Task Force on Women in the Economy. Ms. CHAO currently serves on the Boards of The
+Metropolitan Opera, Foremost Foundation, Shanghai Mulan Education Foundation, and she also
+serves on the Harvard Business School's Board of Dean's Advisors, Carnegie-Tsinghua Center
+for Global Policy Board of Advisors, the Chairman's Council of the Metropolitan Museum of
+Art and American Bureau of Shipping Council. In addition, she is also a member of the Council
+on Foreign Relations, serves on the Young Leaders Forum of the National Committee on US-
+China Relations and serves as the member of Shanghai Jiao Tong University's Antai College
+of Economics and Management Advisory Board, and honorary chairperson of the Jiao Tong
+University Alumni Association in America. Ms. CHAO graduated from Harvard College in three
+years in 1994 with a Bachelor's Degree in Economics (Magna Cum Laude), and received her
+Master of Business Administration Degree from Harvard Business School in 2001.
+Angela CHAO
+Independent Director
+147
+Independent Director of the Bank since August 2016. Mr. WANG currently serves as professor
+and doctoral supervisor in finance at Renmin University of China ("RUC"). He served as a
+lecturer at RUC from 1989 to 1995 and as a lecturer at Business School, National University
+of Singapore from 1999 to 2005. He served successively as the Chair of Applied Finance
+Department of RUC, Director of China Financial Policy Research Center (a key research base
+of Ministry of Education) and Executive Vice Dean and Dean of Hanqing Advanced Institute
+of Economics and Finance at RUC from 2006 to 2016. Mr. WANG is currently also the Vice
+Chairman of China Investment Specialty Construction Association, Director of China Investment
+Association, Director of China Finance Association, Deputy Editor of Finance Research
+Quarterly, Deputy Editor of China Finance Research, and Deputy Editor of China Financial
+Review. He also serves as the Central Committee member of China Democratic League, the
+special auditor of State Auditing Administration, the independent non-executive director of
+Sunway Co., Ltd. (originally named as Sichuan Star Cable Co., Ltd.) and Beijing Haohua Energy
+Resource Co., Ltd. Mr. WANG has received social recognition and prizes including the Special
+Government Allowance of State Council, Best Paper Award of Chicago Board of Trade in
+2001, and the "Middle Age Experts with National Outstanding Contribution”, membership of
+"the Program for New Century Excellent Talents” of Ministry of Education in 2004, "Financial
+Support of National Science Fund for Distinguished Young Scholars" in 2007, a member of the
+"New Century National Hundred, Thousand and Ten Thousand Talent Program” in 2013, and
+the "Cheung Kong Distinguished Professor” of Ministry of Education in 2014. He obtained his
+Master's Degree in Economics from RUC in July 1989 and Doctorate in Financial Economics
+from the University of London in January 1999.
+Independent Director
+WANG Changyun
+Non-executive Director of the Bank since June 2020. Mr. CHEN served as Non-executive
+Director of Agricultural Bank of China Limited from January 2015 to June 2020. He previously
+served as Assistant Research Fellow and Deputy Division Chief, Institute of Development of
+the Rural Policy Research Office of the Secretariat of the CPC Central Committee and the Rural
+Development Research Center of the State Council; Division Chief and Research Fellow of the
+Development Research Center of the State Council; and Director-General of the General Office
+of the Central Leading Group for Financial and Economic Affairs and the Office of Central
+Rural Work Leading Group. He once led and participated in research and technical assistance
+projects sponsored by the World Bank, Asian Development Bank, European Union, United
+Nations Development Programme, United Nations Industrial Development Organization and
+other international institutions. He also hosted a number of research projects in cooperation with
+institutions in the U.S. and Japan, etc. He had multiple appointments as a consulting expert by the
+World Bank, Asian Development Bank and other institutions. Besides, he was a Visiting Scholar
+at Brandeis University, and a Visiting Research Fellow at Institute of Developing Economies in
+Japan and Asian Development Bank Institute. He received a PhD in Management from Renmin
+University of China in May 2005.
+Non-executive Director
+CHEN Jianbo
+146
+Non-executive Director of the Bank since July 2019. Mr. ZHANG served as member of the Party
+Committee, Secretary of Party Discipline Committee, Deputy Secretary-General, and Chairman
+of the Financial Evaluation Committee of the China Appraisal Society from May 2016 to July
+2019. From August 2014 to May 2016, Mr. ZHANG served as Deputy Secretary-General of the
+China Appraisal Society. From September 2000 to August 2014, he worked in the Department
+of Personnel and Education of the Ministry of Finance, successively serving as the Principal
+Staff Member, Deputy Director and Director. From November 1998 to September 2000, Mr.
+ZHANG served as a cadre of the editorial office of the State Assets Management of the Ministry
+of Finance. From July 1995 to November 1998, he served as a cadre of the former State-owned
+Assets Administration Bureau. Mr. ZHANG graduated from the China Youth University of
+Political Studies in July 1995 with a Bachelor's Degree in Law, and obtained a Master's Degree
+in Management from the Graduate School of the Chinese Academy of Fiscal Sciences of the
+Ministry of Finance in December 2002. He holds the title of Senior Economist.
+Non-executive Director
+ZHANG Jiangang
+Non-executive Director of the Bank since August 2017. Ms. WANG has been serving as Non-
+executive Director of China Reinsurance (Group) Corporation since August 2019. She served
+as Non-executive Director of Industrial and Commercial Bank of China Limited from January
+2012 to June 2017. From May 2007 to December 2011, she was Deputy Director-General of the
+Research Bureau of the PBOC. She taught at the Central China Normal University where she
+served as Assistant Lecturer and Lecturer from July 1985 to January 1995. She served as Deputy
+Chief and Chief of the Macroeconomic Analysis Division of the Research Bureau of the PBOC
+from July 1997 to May 2007, and concurrently as Deputy Mayor of Tongliao City in the Inner
+Mongolia Autonomous Region from October 2005 to February 2007. She received a professional
+title of research fellow in 2005. Ms. WANG was a member of the Post-Doctoral Academic
+Committee and a Post-Doctoral Co-mentor at the Institute of Finance of PBOC. Currently, she
+is a member of the Academic Committee of the China Institute for Rural Studies of Tsinghua
+University, Invited Researcher of the National Institute of Financial Research of Tsinghua
+University and Doctoral Supervisor of Southwestern University of Finance and Economics. Ms.
+WANG graduated from the Economics Faculty of Central China Normal University and the
+Graduate School of Chinese Academy of Social Sciences in January 1990 and June 1997 with a
+Master's Degree and a Doctor's Degree, respectively.
+Non-executive Director
+WANG Xiaoya
+145
+Non-executive Director of the Bank since August 2017. Ms. XIAO was Non-executive Director
+of China Galaxy Asset Management Co., Ltd. from December 2020 to September 2021, Non-
+executive Director of China Galaxy Financial Holdings Company Limited from October 2018
+to September 2021 and Non-executive Director of China Galaxy Securities Company Limited
+from February 2019 to June 2021. She served as Inspector of the Current Account Management
+Department of the SAFE from April 2014 to August 2017. She was Deputy Director-General of
+the Current Account Management Department of the SAFE from September 2004 to April 2014,
+and concurrently as Vice General Manager and Party Committee Member of the Beijing Branch
+of China Construction Bank from July 2011 to July 2012. She served successively as Deputy
+Chief of the Current Account Division and the Nontrade Foreign Exchange Management Division
+of the Supervision and Inspection Department, and Chief of the Business Supervision Division
+of the Current Account Management Department of the SAFE from October 1996 to September
+2004. She graduated from the China Central University of Finance and Economics in August
+1988 with a Bachelor's Degree, and from the Central University of Finance and Economics and
+Peking University in September 2003 and July 2012, respectively, both with a Master's Degree.
+Non-executive Director
+XIAO Lihong
+Executive Director and Executive Vice President
+120.26
+1.
+No
+6.83
+1.67
+5.16
+Vice Chairman and President
+WANG Jiang
+Former Directors, Supervisors and Senior Management Members
+parties
+Total
+income
+provident fund
+paid
+Position
+Name
+other connected
+and housing Other monetary
+Remuneration
+shareholding
+companies or
+Remunerated by
+insurance
+medical
+enterprise
+annuity,
+supplementary
+social insurance,
+contribution to
+Employer
+(Unit: RMB ten thousand)
+Remuneration before tax from the Bank in 2021
+142
+Company Secretary
+of Directors and
+No
+Notes:
+ZHAO Jie
+Yes
+101.56
+2.00
+18.03
+81.53
+Chief Information Officer
+LIU Qiuwan
+No
+50.13
+12.97
+37.16
+Executive Vice President
+ZHENG Guoyu
+No
+4.58
+4.58
+Employee Supervisor
+LI Changlin
+No
+2.50
+2.50
+Employee Supervisor
+WANG Zhiheng
+of Supervisors
+No
+6.83
+1.67
+5.16
+Chairman of the Board
+WANG Xiquan
+Non-executive Director
+20.15
+61.94
+Chairman
+Name
+birth
+Gender Position
+LIU Jin
+1967
+Male
+Vice Chairman, President
+WANG Wei
+1963
+Male
+LIN Jingzhen
+1965
+Male
+CHEN Huaiyu 1970
+Year of
+Male
+Male
+1969 Male
+Male
+1962
+Male
+Executive Director and
+Executive Vice President
+Executive Director and
+Executive Vice President
+Executive Vice President
+Executive Vice President
+Chief Risk Officer
+Chief Audit Officer
+Secretary to the Board of
+Directors and Company
+Secretary
+Term of office as Senior
+Management Member
+From April 2021
+From December 2019
+From March 2018
+From April 2021
+From August 2021
+| From February 2019
+From May 2021
+Company Secretary from March
+2018 and Secretary to the Board of
+Directors from April 2018
+Note: No incumbent director, supervisor or senior management member held any share of the Bank.
+140
+Former Directors, Supervisors and Senior Management Members
+WANG Zhiheng 1973
+LIU Jiandong
+ZHUO Chengwen 1970
+MEI Feiqi
+Year of
+Incumbent Senior Management Members
+From December 2018 to the date
+of the 2024 Employee Delegates'
+Meeting
+Name
+birth
+Independent Director of the Bank since July 2020. Ms. CHEN is currently professor of the
+National School of Development at Peking University and Dean of BIMBA Business School
+of the National School of Development at Peking University. She is also a visiting professor of
+the School of Business at National University of Singapore. From 2000 to 2003, she was Vice
+Dean of the College of Business Administration at South China University of Technology. From
+2003 to 2004, she served as President of Shandong Liuhe Group. From 2006 to 2008, she served
+as Executive Dean of the School of Economics and Commerce at South China University of
+Technology. From 2006 to 2016, she served as an expert on the decision-making consultation for
+the Guangzhou Municipal Government. Ms. CHEN has served as a non-executive director of SPT
+Energy Group Inc. (HK01251) (since 2013). She was an independent director of China Merchants
+Fund Management Co., Ltd., Welling Holding Limited, Guangzhou Zhujiang Brewery Co.,
+Ltd. and Shunde Rural Commercial Bank, and she once served as the joint chairman and chief
+executive officer of New Hope Liuhe Co., Ltd., a director of the Yunnan Baiyao Holding Ltd. and
+a non-executive director of Vtron Group Co., Ltd. Ms. CHEN obtained a Bachelor's Degree of
+engineering in radio technology from South China Institute of Technology in 1986 and became a
+post-doctoral candidate in business administration of the Nanjing University Business School in
+2005.
+ZHANG Keqiu
+1964
+WEI Hanguang
+1971
+Female Chairwoman of the Board
+of Supervisors
+Female Employee Supervisor
+ZHOU Hehua
+1975
+Male
+Employee Supervisor
+LENG Jie
+1963
+From May 2019 to the date of the
+Annual General Meeting in 2022
+From May 2019 to the date of the
+Annual General Meeting in 2022
+From February 2022 to the date of the
+Annual General Meeting in 2025
+Male
+JIA Xiangsen
+1955
+Male
+External Supervisor
+ZHENG Zhiguang 1953
+Male
+External Supervisor
+HUI Ping
+1960
+Male
+External Supervisor
+Term of office as Supervisor
+From January 2021 to the date of the
+Annual General Meeting in 2024
+From November 2021 to the date
+of the 2024 Employee Delegates'
+Meeting
+From November 2021 to the date
+of the 2024 Employee Delegates'
+Meeting
+Employee Supervisor
+Position held before
+Gender Position
+birth
+From May 2019 to September 2021
+From June 2018 to October 2021
+Note:
+1.
+No former director, supervisor or senior management member held any share of the Bank during their terms of
+office.
+2.
+Please refer to the above table for the term of office of Mr. WANG Jiang as former Executive Director of the
+Bank. His term of office as former President of the Bank started from December 2019.
+141
+Remuneration of Directors, Supervisors and Senior Management
+Members Paid in 2021
+Remuneration before tax from the Bank in 2021
+(Unit: RMB ten thousand)
+Employer
+contribution to
+social insurance,
+enterprise
+annuity,
+supplementary
+medical
+insurance
+Remunerated by
+Name
+LIU Liange
+Incumbent Directors, Supervisors and Senior Management Members
+parties
+Total
+income
+Executive Vice President
+Chief Information Officer
+provident fund
+Position
+Name
+other connected
+and housing Other monetary
+Remuneration
+shareholding
+companies or
+paid
+Male
+149
+LIU Qiuwan
+1961
+leaving the post
+Term of office
+WANG Jiang
+1963
+Male
+Vice Chairman and
+From January 2020 to February 2021
+ZHAO Jie
+1962
+Male
+President
+Non-executive Director
+From August 2017 to March 2022
+WANG Xiquan
+Gender
+Male
+Male
+1967
+ZHENG Guoyu
+From December 2018 to November
+2021
+1960
+Employee Supervisor
+Employee Supervisor
+Male
+From December 2018 to June 2021
+LI Changlin
+Male
+1973
+WANG Zhiheng
+From November 2016 to January
+2021
+Chairman of the Board of
+Supervisors
+1962
+153
+Chief Risk Officer since February 2019. Mr. LIU joined the Bank in 1991. From March 2014
+to February 2019, he served as General Manager of the Credit Management Department of the
+Bank. Mr. LIU served as General Manager (Investment Banking) of the Corporate Banking
+Unit of the Bank from February 2011 to March 2014. Mr. LIU previously served as Deputy
+General Manager of the Corporate Banking Department and Corporate Banking Unit of the Bank.
+He graduated from Renmin University of China in 1991, and obtained a Master's Degree in
+Economics from Renmin University of China in 2000.
+Chief Risk Officer
+LIU Jiandong
+Executive Vice President of the Bank since August 2021. Mr. WANG joined the Bank in 1999.
+He served as General Manager of Beijing Branch of the Bank from May 2021 to January 2022,
+Employee Supervisor of the Bank from December 2018 to June 2021, General Manager of the
+Human Resources Department of the Head Office of the Bank from July 2018 to December 2020,
+and General Manager of Qinghai Branch of the Bank from July 2015 to September 2018. Prior to
+that, Mr. WANG served as Deputy General Manager of the Human Resources Department of the
+Head Office of the Bank and Deputy General Manager of Guangdong Branch of the Bank. Mr.
+WANG graduated and obtained a Master's Degree in Finance from Nankai University in 1999.
+Executive Director and Executive Vice President
+WANG Zhiheng
+Executive Vice President of the Bank since April 2021. Mr. CHEN joined the Bank in 1997.
+He served as General Manager of Bank of China Sydney Branch, Director of Bank of China
+(Australia) Limited, and Director of Bank of China (New Zealand) Limited from November 2017
+to February 2021. Prior to that, Mr. CHEN served as Assistant General Manager and Credit Risk
+Officer of Guangdong Branch of the Bank, Standing Deputy General Manager, General Manager
+and Executive Director of Bank of China (Hungary) Limited, as well as General Manager of Bank
+of China Hungarian Branch successively. He concurrently served as Chairman of BOC Aviation
+Limited since April 2021 and as President of Shanghai RMB Trading Unit since May 2021.
+Mr. CHEN graduated from Beijing Foreign Studies University in 1992 and obtained a Master's
+Degree in Economics from University of International Business and Economics in 1999.
+Executive Vice President
+CHEN Huaiyu
+Please refer to the section "Directors"
+ZHUO Chengwen
+Executive Vice President
+Chief Audit Officer
+Changes in the Bank's directors were as follows:
+MEI Feiqi
+Secretary to the Board of Directors and Company Secretary
+Secretary to the Board of Directors since April 2018. Mr. MEI joined the Bank in 1998. He
+has previously served as Deputy General Manager of the Beijing Branch of the Bank, General
+Manager (Wealth Management and Personal Banking) of the Personal Banking Unit of the Bank,
+Spokesman of the Bank and General Manager of the Executive Office of the Bank's Head Office.
+Prior to joining the Bank, he worked at the Ministry of Geology and Mineral Resources and the
+General Office of the State Council. He graduated from Chengdu University of Technology with
+a Bachelor's Degree, and later received on-the-job postgraduate education. He holds the title of
+Senior Economist.
+154
+Changes in Directors, Supervisors and Senior Management Members
+Mr. WANG Jiang ceased to serve as Vice Chairman, Executive Director and member of the
+Strategic Development Committee of the Board of Directors of the Bank as of 5 February 2021
+due to a change of job.
+Mr. LIU Jin began to serve as Vice Chairman, Executive Director and member of the Strategic
+Development Committee of the Board of Directors of the Bank as of 16 June 2021.
+Mr. ZHAO Jie ceased to serve as Non-executive Director, member of the Audit Committee,
+member of the Risk Policy Committee and member of the Personnel and Remuneration
+Committee of the Board of Directors of the Bank as of 15 March 2022 due to a change of job.
+Changes in the Bank's supervisors were as follows:
+Mr. WANG Xiquan ceased to serve as Chairman of the Board of Supervisors, Shareholder
+Representative Supervisor and Chairman of the Duty Performance and Due Diligence Supervision
+Committee of the Board of Supervisors of the Bank as of 18 January 2021 due to reason of age.
+Ms. ZHANG Keqiu began to serve as Chairwoman of the Board of Supervisors, Shareholder
+Representative Supervisor and Chairwoman of the Duty Performance and Due Diligence
+Supervision Committee of the Board of Supervisors of the Bank as of 18 January 2021.
+Mr. WANG Zhiheng ceased to serve as Employee Supervisor, member of the Duty Performance
+and Due Diligence Supervision Committee of the Board of Supervisors and member of the
+Finance and Internal Control Supervision Committee of the Board of Supervisors of the Bank as
+of 24 June 2021 due to the reason of work.
+LIN Jingzhen
+Chief Audit Officer of the Bank since May 2021. Mr. ZHUO joined the Bank in 1995. He served
+as Chief Risk Officer of BOC Hong Kong (Holdings) Limited from November 2019 to February
+2021, Mr. ZHUO served as Chief Executive and Executive Director of BOCG Insurance from
+June 2016 to November 2019, and as General Manager of the Financial Management Department
+of the Bank from December 2014 to June 2016. Prior to that, Mr. ZHUO served as Deputy
+General Manager of New York Branch, Deputy General Manager of the Financial Management
+Department of the Bank, and Chief Financial Officer of BOC Hong Kong (Holdings) Limited.
+He concurrently served as General Manager of the Audit Department of the Bank since January
+2022. Mr. ZHUO graduated from Peking University with a Master's Degree in Economics in
+1995, and obtained a Master's Degree in Business Administration from the City University of
+New York in 2005. He has the qualification of Certified Public Accountant.
+Mr. LI Changlin ceased to serve as Employee Supervisor, member of the Duty Performance and
+Due Diligence Supervision Committee of the Board of Supervisors and member of the Finance
+and Internal Control Supervision Committee of the Board of Supervisors of the Bank as of 18
+November 2021 due to the expiration of his term of office.
+151
+Please refer to the section "Directors"
+Supervisors
+ZHANG Keqiu
+Chairwoman of the Board of Supervisors
+Chairwoman of the Board of Supervisors of the Bank since January 2021. Ms. ZHANG
+previously served in several positions at Agricultural Bank of China for many years. She served
+as Executive Director and Executive Vice President of Agricultural Bank of China from April
+2019 to November 2020. She served as Executive Vice President of Agricultural Bank of China
+from July 2017. From June 2015 to April 2018, she served as Secretary to the Board of Directors
+of Agricultural Bank of China. Before that, she successively served as General Manager of the
+Asset and Liability Management Department, General Manager of the Financial Accounting
+Department and Chief Financial Officer of Agricultural Bank of China. She graduated from
+Nankai University in 1988 with a Master's Degree in Economics. In addition, she holds the title
+of Senior Accountant.
+150
+WEI Hanguang
+Employee Supervisor
+Employee Supervisor of the Bank since November 2021. Ms. WEI currently serves as General
+Manager of the Human Resources Department of the Head Office of the Bank. Ms. WEI is also
+a director of BOC International Holdings Limited, Bank of China Group Investment Limited and
+BOC Aviation Limited. She joined the Bank in July 1994, and used to serve as Deputy General
+Manager of the Human Resources Department of the Head Office, Executive Deputy Director
+of Office of the Leading Group for Comprehensively Deepening Reform and Deputy General
+Manager of the Human Resources Department of the Head Office of the Bank, and General
+Manager of the Human Resources Department of the Head Office of the Bank. She graduated
+from Tsinghua University and obtained a Master's Degree in Business Administration.
+ZHOU Hehua
+Employee Supervisor
+Employee Supervisor of the Bank since November 2021. Mr. ZHOU currently serves as General
+Manager of the Credit Approval Department of the Head Office of the Bank. He joined the Bank
+in August 1997, and used to serve as Assistant to General Manager of Shanghai Branch, Deputy
+General Manager of Shanghai Branch, and Deputy General Manager of Fujian Branch and
+General Manager of Xiamen Branch of the Bank. He graduated from China Europe International
+Business School and obtained a Master's Degree in Business Administration.
+LENG Jie
+Employee Supervisor
+Employee Supervisor of the Bank since December 2018. Mr. LENG currently serves as General
+Manager of Hebei Branch of the Bank. Mr. LENG started working in November 1981 and joined
+the Bank in September 1988, serving successively as Deputy General Manager of Shandong
+Branch, Deputy General Manager of Shanxi Branch, General Manager of Ningxia Branch and
+General Manager of Chongqing Branch of the Bank. Mr. LENG graduated from Shandong
+Institute of Light Industry (economics administration major) in 1999 and University of Jinan in
+2009 (accounting major).
+JIA Xiangsen
+External Supervisor
+External Supervisor of the Bank since May 2019. Mr. JIA had successively worked in the PBOC
+and Agricultural Bank of China (“ABC”). From December 1983 to April 2008, Mr. JIA served as
+Deputy Director of the PBOC Fengtai District Office, and held such positions at ABC as Deputy
+Head of Beijing Fengtai Sub-branch, Deputy Division Chief at Beijing Branch, Head of Beijing
+Dongcheng Sub-branch, Deputy General Manager of Beijing Branch, General Manager of the
+Corporate Banking Department of the ABC Head Office, and General Manager of Guangdong
+Branch. From April 2008 to March 2010, Mr. JIA served as Principal of Audit Office of ABC.
+From March 2010 to March 2014, he was concurrently Chief Auditor and Principal of the Audit
+Office of ABC. Mr. JIA currently serves as Independent Director of China Life Pension Company
+Limited. Mr. JIA received his Master's Degree in Monetary Banking from the Chinese Academy
+of Social Sciences. He holds the title of Senior Economist.
+Ms. WEI Hanguang began to serve as Employee Supervisor of the Bank as of 18 November
+2021 and began to serve as member of the Duty Performance and Due Diligence Supervision
+Committee of the Board of Supervisors as of 3 December 2021.
+ZHENG Zhiguang
+External Supervisor
+External Supervisor of the Bank since May 2019. Mr. ZHENG had successively worked in the
+PBOC and Industrial and Commercial Bank of China Limited (“ICBC”). From March 1979
+to August 2004, Mr. ZHENG served as Deputy Section Chief of the PBOC Shanghai Luwan
+District Office, and held such positions at ICBC as Deputy Division Chief of Shanghai Luwan
+Office, Division Chief at Shanghai Branch, and Deputy General Manager of Shanghai Branch.
+From September 2004 to August 2009, he served as Head of Shanghai Sub-bureau of ICBC
+Internal Audit Bureau. From September 2009 to January 2013, he served as General Manager of
+the Precious Metal Business Department of ICBC. From 2013 to 2014, he served as Director of
+ICBC International Holdings Limited and Chairman of the Board of Supervisors of ICBC-AXA
+Assurance Co., Ltd. Mr. ZHENG received his MBA Degree from Fudan University. He holds the
+title of Senior Economist.
+HUI Ping
+External Supervisor
+External Supervisor of the Bank since February 2022. Mr. Hui had successively worked for the
+PBOC and the Industrial and Commercial Bank of China (“ICBC”). Mr. Hui joined and worked
+for Qingjian County sub-branch of PBOC Shaanxi Branch in December 1980, joined and worked
+for Qingjian sub-branch of ICBC Shaanxi Branch in August 1986. From May 1994 to December
+2010, he held various positions at ICBC Shaanxi Branch, including, among others, secretary at
+deputy director level of the office, deputy director of the office and director of the office, the head
+of Shaanxi Xianyang Branch, deputy general manager of Shaanxi Branch, and general manager
+of Shaanxi Branch of ICBC. From December 2010 to June 2015, Mr. Hui served as general
+manager of the internal control and compliance department of the ICBC Head Office. From June
+2015 to April 2019, Mr. Hui served as deputy secretary of party discipline committee, director of
+the discipline enforcement department of the ICBC Head Office. From April 2019 to July 2020,
+Mr. Hui served as deputy head of the discipline inspection and supervision group dispatched to
+ICBC by the CPC Central Commission for Disciplinary Inspection and the State Committee of
+Supervisory. From September 2015 to September 2020, Mr. Hui concurrently served as employee
+supervisor of ICBC. He graduated from Xiamen University with a Doctor's Degree in Finance.
+He holds the title of Senior Economist.
+Senior Management Members
+LIU JIN
+Vice Chairman and President
+Please refer to the section "Directors"
+WANG Wei
+Executive Director and Executive Vice President
+152
+Mr. ZHOU Hehua began to serve as Employee Supervisor of the Bank as of 18 November
+2021 and began to serve as member of the Duty Performance and Due Diligence Supervision
+Committee of the Board of Supervisors and member of the Finance and Internal Control
+Supervision Committee of the Board of Supervisors as of 3 December 2021.
+The Bank takes excellent corporate governance as an important objective. It has constantly
+pursued the best practice in corporate governance and integrated the Party's leadership with
+improvement of corporate governance. Adhering to the rules and regulations governing capital
+markets and relevant industries, the Bank has made constant efforts to improve its corporate
+governance framework, which comprises the shareholders' meeting, the Board of Directors, the
+Board of Supervisors and the Senior Management. This framework operates smoothly owing
+to a clear division of duties. All special committees of the Board of Directors and the Board of
+Supervisors have performed their duties and functioned effectively, thereby enhancing the Bank's
+corporate governance capabilities.
+155
+Senior Management
+(Executive Committee)
+Asset and Liability
+Management Committee
+Risk Management and
+Internal Control Committee
+Centralised Procurement
+Management Committee
+Securities Investment and
+Management Committee
+Innovation and Product
+Management Committee
+Integrated Operation
+Coordination Committee
+Asset Management
+Business Committee
+Consumer Protection Committee
+Domestic Branch Development and
+Coordination Committee
+Green Finance Committee
+Overseas Work
+Coordination Committee
+Financial Digitalisation Committee
+Duty Performance and
+Due Diligence Supervision Committee
+Financial and
+Internal Control Supervision Committee
+Anti-Money
+Audit Department
+Laundering Committee
+Asset Disposal Committee
+Corporate Governance Compliance
+During the reporting period, the actual performance of the Bank's corporate governance was fully
+in compliance with laws, administrative regulations, and the requirements for the governance of
+listed companies of CSRC.
+During the reporting period, the Bank strictly observed the Corporate Governance Code (the
+"Code") as set out in Appendix 14 to the Hong Kong Listing Rules. Save as disclosed in this
+annual report, during the reporting period, the Bank has complied with all the provisions of the
+Code and has substantially complied with most of the recommended best practices set out in the
+Code.
+Amendments to the Articles of Association
+No amendment was made to the Articles of Association in 2021.
+158
+Shareholders and Shareholders' Rights
+The Bank highly values the protection of its shareholders' interests and has established and
+maintained an effective and multi-channel shareholder communication platform. This includes
+holding shareholders' meetings and maintaining an investor hotline to ensure that all shareholders
+are treated equally, properly informed and able to participate in and exercise their voting and
+other rights regarding the major issues of the Bank. The Bank is independent and completely
+autonomous in all of its business operations. It operates independently and separately from its
+controlling shareholder, Huijin, in respect of its business, personnel, asset, institutional and
+financial matters.
+Shareholders' Right to Convene an Extraordinary Shareholders' Meeting
+and a Meeting of Shareholders of Different Categories
+According to the Articles of Association, shareholders individually or in aggregate holding a total
+of 10% or more voting shares of the Bank have the right to make a written request to the Board of
+Directors to convene an extraordinary shareholders' meeting. Two or more shareholders holding a
+total of 10% or more voting shares of the Bank may sign one or more written requests of identical
+form and substance requesting the Board of Directors to convene a meeting of shareholders
+of different categories and stating the subject of the meeting. If the Board of Directors fails to
+issue a notice of such a meeting within 30 days after receipt of a written request for convening
+an extraordinary shareholders' meeting or a meeting of shareholders of different categories
+submitted by the proposing shareholders, the proposing shareholders may by themselves convene
+the meeting within four months after the Board of Directors receives the request. The procedures
+according to which they convene such meeting shall, to the extent possible, be identical to the
+procedures according to which shareholders' meetings are convened by the Board of Directors.
+Where the proposing shareholders convene and hold a meeting because the Board of Directors
+fails to convene such meeting pursuant to a request as mentioned above, the reasonable expenses
+incurred by such shareholders shall be borne by the Bank and shall be deducted from the sums
+owed by the Bank to the negligent directors.
+Shareholders' Right to Propose Resolutions at Shareholders' Meetings
+According to the Articles of Association, any shareholder who holds, individually or in
+aggregate, 3% or more voting shares of the Bank shall have the right to propose a resolution in
+a shareholders' meeting. Any shareholder who holds, individually or in aggregate, 3% or more
+voting shares of the Bank shall have the right to propose and submit in writing to the Board of
+Directors interim proposals 10 days prior to the convening of a shareholders' meeting. When the
+Board of Directors decides not to include such proposals on the meeting agenda, it shall explain
+and clarify the reasons at the shareholders' meeting. When the proposing shareholders dissent
+with the Board of Directors' decision to exclude such proposals, they may request to call for
+an extraordinary shareholders' meeting by themselves based on the procedures stipulated in the
+Articles of Association.
+159
+Credit Risk Management and
+Decision-making Committee
+Management Committee
+US Risk and
+Risk Policy Committee
+Changes in the Bank's senior management members were as follows:
+Mr. WANG Jiang ceased to serve as President of the Bank as of 5 February 2021 due to a change
+of job.
+Mr. CHEN Huaiyu began to serve as Executive Vice President of the Bank as of 19 April 2021.
+Mr. LIU Jin began to serve as President of the Bank as of 26 April 2021.
+Mr. ZHUO Chengwen began to serve as Chief Audit Officer of the Bank as of 18 May 2021.
+Mr. WANG Zhiheng began to serve as Executive Vice President of the Bank as of 17 August
+2021.
+Mr. ZHENG Guoyu ceased to serve as Executive Vice President of the Bank as of 24 September
+2021 due to a change of job.
+Mr. LIU Qiuwan ceased to serve as Chief Information Officer of the Bank as of 25 October 2021
+due to the reason of age.
+The Board of Directors of the Bank considered and approved the proposal regarding the
+appointment of Ms. ZHAO Rong as Chief Business and Management Officer of the Bank. Such
+appointment is subject to the approval by regulatory authorities.
+The Board of Directors of the Bank considered and approved the proposal regarding the
+appointment of Ms. MENG Qian as Chief Information Officer of the Bank. Such appointment is
+subject to the approval by regulatory authorities.
+156
+Corporate Governance
+Overview of Corporate Governance
+The Bank has been working on improving its corporate governance structure, policies and
+procedures. It persistently followed up and implemented regulatory requirements on capital
+market, always choosing to adhere to the strictest available standards. It re-examined and self-
+inspected its corporate governance policies, and comprehensively and systematically reviewed the
+Articles of Associations and the rules of procedure of each special committee.
+The Bank places great emphasis on improving its corporate governance operation mechanisms.
+It ensures that minority shareholders are properly informed and able to participate and make
+decisions. The annual shareholders' meeting is held on-site, and online voting for A-Share
+Holders is available to safeguard the rights and interests of the minority shareholders. The
+Bank focuses on constantly enhancing coordination with respect to the operation mechanisms
+of the Board of Directors, information disclosure and stakeholder engagement. It continues to
+support the Board of Directors to function more constructively and make scientific and efficient
+decisions. The Bank works to heighten transparency and proactively perform its duties to the
+relevant stakeholders, including shareholders, customers, staff and society.
+The Bank makes great efforts to promote Board diversity. It has formulated the Bank of China
+Limited Board Diversity Policy, which lays out the stance of the Bank on the diversity of
+the members of the Board of Directors and the approaches it adopts to realise such diversity
+on an on-going basis. All appointments are made on merit, in the context of the skills and
+experience the Board of Directors as a whole requires, and taking into full consideration and
+from various perspectives the object and requirements for diversity, including but not limited
+to regulatory requirements, gender, age, cultural and educational background, geographical
+location, professional experience, skills, knowledge, and length of service of directors, etc. The
+Bank applies the aforementioned diversity policy and requirements to the director selection and
+engagement process.
+In 2021, according to the Announcement on Carrying out Special Campaigns on Governance of
+Listed Companies (CSRC Announcement [2020] No. 69) and the Notice of Special Self-inspection
+on Governance of Listed Companies (CSRC Beijing Office [2020] No. 628), the Bank carried out
+special self-inspection on corporate governance and has not found any problems that need to be
+rectified in accordance with the foregoing regulations.
+In 2021, the Bank's corporate governance performance continued to be recognised by the capital
+markets and the public. It won a number of awards including "Best Company for Investor
+Relations", "Best Board of Directors for Investor Relations" and "Best Secretary to the Board for
+Investor Relations" of the 12th Pegasus Award of China's Listed Companies Investor Relations.
+157
+Corporate Governance Framework
+Board Secretariat
+Board of Directors
+Shareholders'
+Meeting
+Board of Supervisors
+Board of Supervisors Office
+Strategic Development
+Committee
+Corporate Culture and
+Consumer Protection Committee
+Audit Committee
+Mr. HUI Ping began to serve as External Supervisor of the Bank as of 17 February 2022 and
+began to serve as member of the Duty Performance and Due Diligence Supervision Committee of
+the Board of Supervisors and member of the Finance and Internal Control Supervision Committee
+of the Board of Supervisors as of 7 March 2022.
+Personnel and
+Remuneration Committee
+Connected Transactions
+Control Committee
+CHUI Sai Peng Jose
+Independent Director
+Independent Director of the Bank since September 2020. Mr. CHUI is currently the President of
+CAA City Planning & Engineering Consultants Ltd. of Macao, and Da Chang (Zhuhai) Concrete
+Pile Co., Ltd., CEO of Parafuturo de Macau Investment and Development Ltd., and Chairman
+of Board of Directors of Macao Young Entrepreneur Incubation Centre. He is also the Deputy
+of the Macao SAR to the 13th National People's Congress, Deputy of Legislative Assembly of
+the Macao SAR, and member of the Economic Development Committee of the Macao SAR. In
+addition, he serves as a member of the National Committee of China Association for Science
+and Technology, Vice-President of Board of Directors of Macao Chamber of Commerce,
+Vice-President of General Assembly of the Macao Association of Building Contractors and
+Developers, President of Association of Macao Engineering Consultant Companies. Mr.
+CHUI served as the President of Hou Kong Junior Chamber in 1994 and President of Junior
+Chamber International Macao, China in 1999. He was the President of Committee for Building
+Appraisal of the Macao SAR from 2002 to 2015. He served as member and Vice-President of
+the Committee of Cultural Industries of the Macao SAR from 2010 to 2016. Currently he serves
+as Non-Executive Director of Luso International Banking Ltd. and Board Member of Macao
+Science Center. Mr. CHUI is a registered Urban Planner and Civil Engineer of Macao. He is also
+a registered Civil Engineer and Structural Engineer (Senior Engineer Level) of California, USA.
+Mr. CHUI received his Bachelor's Degree in Civil Engineering from University of Washington
+in 1981, and received his Master's Degree in Civil Engineering from University of California,
+Berkeley in 1983. He graduated from Tsinghua University in 2002 with a Doctor's Degree in
+Urban Planning.
+Number of Directors
+14
+Other countries
+and regions
+13
+Executive
+12
+Director
+Hong Kong.
+Macao and Taiwan
+Over 60
+Female
+f China
+Board Composition
+The Strategic Development Committee comprises ten members, including Chairman Mr. LIU
+Liange, Vice Chairman and President Mr. LIU Jin, Non-executive Directors Ms. XIAO Lihong,
+Ms. WANG Xiaoya, Mr. ZHANG Jiangang and Mr. CHEN Jianbo and Independent Directors
+Mr. WANG Changyun, Mr. JIANG Guohua, Mr. Martin Cheung Kong LIAO and Ms. CHEN
+Chunhua. Chairman Mr. LIU Liange serves as the Chairman of the committee.
+Over!
+10
+9
+Non-executive
+8
+Director
+55-60
+7
+6
+5
+Chinese
+mainland
+11
+For detailed background and an explanation of recent changes to the Board membership, please
+refer to the section "Directors, Supervisors and Senior Management Members”.
+The Board of Directors of the Bank is rationally structured and diversified. Currently, the Board
+of Directors comprises fourteen members. Besides the Chairman, there are three executive
+directors, four non-executive directors and six independent directors. The proportion of
+independent directors reaches one-third of the total number of directors. The Bank's directors
+are elected at the shareholders' meeting, with a term of office of three years starting from
+the date when the Bank receives approval of the appointment from CBIRC. A director may
+serve consecutive terms by re-election and re-appointment unless otherwise specified by laws,
+regulations, supervisory requirements and the Articles of Association of the Bank. The positions
+of Chairman and President of the Bank are assumed by two persons.
+161
+6/7
+7/7
+7/7
+1/1
+0/1
+0/1
+2/2
+Shareholders' Right to Present Enquiries
+According to the Articles of Association, any shareholder who holds severally or jointly with
+others 5% or more voting shares of the Bank shall have the right to present enquiries to the
+shareholders' meeting. The Board of Directors, the Board of Supervisors, or other relevant senior
+management members shall attend the shareholders' meeting, accept enquiries, and answer or
+explain accordingly.
+Please refer to the Articles of Association for details of the rights pertaining to shareholders. If
+shareholders need to contact the Board of Directors regarding the aforementioned items or for
+other enquiries to the Board of Directors, please refer to the section "Reference for Shareholders
+Investor Enquiry" for contact details.
+Shareholders' Meeting
+Functions and Powers of Shareholders' Meeting
+The shareholders' meeting is the body of authority of the Bank. The shareholders' meeting is
+responsible for making decisions on the important issues of the Bank, including considering and
+approving the Bank's profit distribution plan, annual financial budget and financial statements,
+changes in the Bank's registered capital, adopting resolutions on matters such as the issuance
+of bonds and other securities, merger and division, amending the Articles of Association of
+the Bank, electing directors, electing shareholders' representative supervisors and external
+supervisors and deciding the remunerations of directors and supervisors.
+Convening of Shareholders' Meeting during the Reporting Period
+On 18 January 2021, the Bank held its 2021 First Extraordinary General Meeting on-site
+in Beijing on 18 January 2021. A-Share Holders could also cast votes online. The meeting
+considered and approved proposals, including the election of Ms. ZHANG Keqiu to be appointed
+as Shareholder Representative Supervisor of the Bank, the 2019 remuneration distribution plan
+for Chairman of the Board of Directors and Executive Directors, and the 2019 remuneration
+distribution plan for Chairman of the Board of Supervisors and Shareholder Representative
+Supervisors. All the proposals were ordinary resolutions.
+On 20 May 2021, the Bank held its 2020 Annual General Meeting on-site in Beijing. A-Share
+Holders could also cast votes online. The meeting considered and approved 15 proposals,
+including the 2020 work report of the Board of Directors, the 2020 work report of the Board of
+Supervisors, the 2020 annual financial report, the 2020 profit distribution plan, the 2021 annual
+budget for fixed assets investment, the appointment of the Bank's external auditor for 2021, the
+2020 annual remuneration distribution plan for External Supervisors, the election of Mr. LIU
+Liange to be re-appointed as Executive Director of the Bank, the election of Mr. LIU Jin to be
+appointed as Executive Director of the Bank, the election of Mr. LIN Jingzhen to be re-appointed
+as Executive Director of the Bank, the election of Mr. JIANG Guohua to be re-appointed as
+Independent Non-executive Director of the Bank, the application for provisional authorisation of
+outbound donations, the bond issuance plan, the issuance of write-down undated capital bonds
+and the issuance of qualified write-down tier 2 capital instruments. The meeting also heard
+the report on the connected transactions for 2020, the duty report of independent directors for
+2020, and the report on the implementation of the Scheme on the Authorisation to the Board
+of Directors Granted by the Shareholders' Meeting of Bank of China Limited for 2020. The
+160
+proposals regarding the bond issuance plan, the issuance of write-down undated capital bonds and
+the issuance of qualified write-down tier 2 capital instruments were special resolutions, while the
+rest of the proposals were ordinary resolutions.
+The aforementioned meetings were convened and held in strict compliance with the relevant laws
+and regulations as well as the listing rules of the Chinese mainland and Hong Kong. The Bank's
+directors, supervisors and senior management members attended the meetings and communicated
+with shareholders on issues of their concern.
+The Bank issued announcements on the resolutions and legal opinions of the aforementioned
+shareholders' meeting on 18 January 2021 and 20 May 2021 respectively, pursuant to regulatory
+requirements. Please refer to the websites of SSE, HKEX and the Bank.
+Implementation of the Resolutions Passed at the Shareholders' Meeting by
+the Board of Directors
+During the reporting period, the Board of Directors has fully implemented the resolutions passed
+at the shareholders' meeting and the scheme on the authorisation to the Board of Directors
+granted by the shareholders' meeting, and earnestly carried out the proposals regarding the 2020
+profit distribution plan, the 2021 annual budget for fixed assets investment, the bond issuance
+plan, the appointments of directors and 2021 external auditor, and so on.
+Board of Directors
+The Board of Directors, which is responsible to the shareholders' meeting, is the Bank's decision-
+making body. The Board of Directors exercises the following functions and powers as specified
+by the Bank's Articles of Association: convening shareholders' meetings and implementing
+the resolutions of shareholders' meetings; deciding on the Bank's strategic policies, business
+plans and material investment plans (except for those material investment plans that are subject
+to shareholders' meeting approval as specified in the Articles of Association); formulating the
+annual financial budgets, final accounts and plans for profit distribution and loss recovery of
+the Bank; appointing or dismissing members of special committees and the Senior Management
+of the Bank; reviewing and deciding on the establishment of the Bank's basic administrative
+system, internal management framework and important sub-entities; developing and reviewing
+the corporate governance policies of the Bank; taking charge of performance evaluation and
+matters of material reward and punishment for senior management members, and hearing the
+reports of the Senior Management and examining their work, among others. The Board of
+Directors continuously reviews and updates the Articles of Association and the Bank's corporate
+governance policies and systems in accordance with the applicable laws and regulations, relevant
+regulatory requirements and listing rules, and ensures compliance with such policies and systems.
+Composition of the Board of Directors
+The Board of Directors has set up the Strategic Development Committee, Corporate Culture
+and Consumer Protection Committee, Audit Committee, Risk Policy Committee, Personnel and
+Remuneration Committee and Connected Transactions Control Committee, as well as the US
+Risk and Management Committee established under the Risk Policy Committee, to assist the
+Board of Directors in performing its functions under the authorisation of the Board of Directors.
+14/14
+7/7
+山-
+1/8
+The guarantee business is one of the Bank's ordinary business activities approved by PBOC and
+CBIRC. The Bank has formulated specific management measures, operational processes and
+approval procedures in light of the risks of the guarantee business and carried out this business
+accordingly. The Bank's guarantee business principally comprises letters of guarantee. As at
+31 December 2021, the outstanding amount of letters of guarantee issued by the Bank was
+RMB1,086.152 billion.
+Responsibility Statement of Directors on Financial Reports
+The following statement, which sets out the responsibilities of the directors regarding financial
+statements, should be read in conjunction with, but understood separately from, the auditor's
+statement of their responsibilities as set out in the Independent Auditor's Report contained in this
+annual report.
+The directors acknowledge that they are responsible for preparing financial statements of the
+Bank that truly represent the operating results of the Bank for each financial year. To the best
+knowledge of the directors, there was no material event or condition during the reporting period
+that might have a material adverse effect on the continuing operation of the Bank.
+Special Committees of the Board of Directors
+Strategic Development Committee
+The committee is mainly responsible for reviewing the strategic development plans presented by
+the Senior Management, assessing the factors that may affect the strategies of the Bank and their
+implementation, and advising the Board with regard to strategy adjustments; reviewing the annual
+budget, strategic capital allocation, the objectives of asset-liability management, IT development
+and other special strategic development plans of the Bank, and advising the Board accordingly;
+coordinating strategies on the overall development of various financial businesses and the
+development of domestic and overseas institutions, and deciding on the setup, cancellation
+and increase or decrease of capital of the Bank's domestic and overseas institutions within
+its scope of authorisation; designing and formulating key investment and financing plans and
+merger and acquisition plans of the Bank; and reviewing the substantial internal reorganisation
+and adjustment plans of the Bank, and advising the Board accordingly; reviewing the Bank's
+166
+green credit strategy and making relevant suggestions to the Board; establishing the Bank's
+strategic development plan and basic management regimes with regard to inclusive finance
+business, reviewing the annual business plan and assessment measures of the inclusive finance
+business, and supervising the Bank's implementation of inclusive finance strategies, policies and
+regulations.
+In 2021, the Strategic Development Committee held six on-site meetings on 28 January, 30
+March, 29 April, 30 August, 29 October and 13 December, respectively, and two meetings via
+written resolutions. At these meetings, it mainly reviewed the proposals on Outline of 14th Five-
+Year Development Plan (2021-2025) and Long-Range Objectives through the Year 2035 for Bank
+of China, Green Financial Plan, Plan for Data Strategy, Inclusive Finance Plan, Fintech Plan,
+Capital Management Plan, the business plan and financial budget of Bank of China for 2021, the
+profit distribution plan of Bank of China for 2020, the issuance of write-down undated capital
+bonds, the issuance of qualified write-down tier 2 capital instruments, the dividend distribution
+plan of offshore preference shares, the bond issuance plan, and an application for a special
+external donation limit for targeted support.
+In addition, in response to changes in international and domestic economic and financial
+situations, the Strategic Development Committee stepped up its analysis of the prevailing
+opportunities and challenges, and put forward many important comments and recommendations
+regarding the Bank's efforts to implement its Development Plan, accelerating the pace of
+transformation, and improving the quality and efficiency in serving the real economy, thus
+providing strong support to the scientific decision-making of the Board of Directors.
+Corporate Culture and Consumer Protection Committee
+Pursuant to the relevant provisions and requirements of CSRC and SSE, and according to the
+principles of justice, fairness and objectivity, the Independent Directors of the Bank, Mr. WANG
+Changyun, Ms. Angela CHAO, Mr. JIANG Guohua, Mr. Martin Cheung Kong LIAO, Ms. CHEN
+Chunhua and Mr. CHUI Sai Peng Jose have provided the following information regarding the
+Bank's guarantee business:
+The Corporate Culture and Consumer Protection Committee comprises six members, including
+Chairman Mr. LIU Liange, Non-executive Directors Ms. WANG Xiaoya and Mr. CHEN Jianbo,
+and Independent Directors Mr. JIANG Guohua, Ms. CHEN Chunhua and Mr. CHUI Sai Peng
+Jose. Independent Director Ms. CHEN Chunhua serves as the Chairwoman of the committee.
+167
+In 2021, the Corporate Culture and Consumer Protection Committee held four on-site meetings
+on 30 March, 30 August, 29 October and 30 December respectively, at which it reviewed and
+approved the 2020 Corporate Social Responsibility Report of Bank of China and the 2020 Work
+Report and 2021 Work Plan for Consumer Protection and the Consumer Protection Policy of
+Bank of China Limited. In addition, it heard the Report on Consumer Complaints in the First
+Quarter of 2021 and the Corporate Culture Building Plan of Bank of China Limited, etc.
+Audit Committee
+The Audit Committee comprises six members, including Non-executive Director Mr. ZHANG
+Jiangang and Independent Directors Mr. WANG Changyun, Ms. Angela CHAO, Mr. JIANG
+Guohua, Mr. Martin Cheung Kong LIAO and Mr. CHUI Sai Peng Jose. Independent Director Mr.
+JIANG Guohua serves as the Chairman of the committee.
+The committee is mainly responsible for reviewing financial reports and other significant
+accounting policies and regulations formulated by the Senior Management; reviewing the
+external auditors' audit opinion on financial reporting, annual audit plan and recommendations
+for management; approving the annual internal audit plan and budget; appraising the duty
+performance, work quality and effectiveness of the external auditors and internal audit and
+monitoring their independence; recommending the engagement, reappointment, replacement
+and audit fee of the external auditors; recommending the appointment and dismissal and
+appraising the performance of the Chief Audit Officer; overseeing the Bank's internal control
+function, reviewing material deficiencies in internal control design and execution by the Senior
+Management and investigating fraud cases; reviewing the employee reporting system and urging
+the Bank to conduct fair investigations and take appropriate measures regarding matters reported
+by the employees.
+In 2021, the Audit Committee held six on-site meetings on 27 January, 16 March, 26 March, 28
+April, 27 August and 28 October, respectively, and one meeting via written resolutions. It mainly
+reviewed and approved the 2021 priorities, project plan and financial budget for internal audit,
+and reviewed the Bank's 2020 financial report, 2021 interim financial report and financial reports
+for the first and third quarters of 2021, the internal control work report for 2020 and the first
+half of 2021, the 2020 internal control assessment report, and the audit results on internal control
+and management proposal. In addition, it heard the report on the Senior Management response
+to Ernst & Young's management proposal for 2020, reports on internal audit in 2020 and the
+first half of 2021, the special report on IT application in audit, the 2020 report on the overseas
+supervision information, the report on the progress of the internal control audit of Ernst & Young
+in 2020, updates on compliance with the principle of independence, the audit plan for 2021
+of PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers, the report on asset
+quality in the first quarter of 2021, and the report on the prevention and control of external cases
+in 2020.
+168
+Moreover, in response to changes in domestic and overseas economic and financial trends, the
+Audit Committee paid close attention to developments in the Bank's progress towards improving
+business performance and cost control. The committee heard the Group risk report and the
+report on asset quality, among others, thus assisting the Board of Directors in performing its
+responsibilities and duties. It also put forward many important opinions and suggestions regarding
+the improvement of the corporate governance mechanism, the enhancement of internal audit
+independence, the advancement of IT application in audit, the upgrading of credit asset quality
+and the improvement of internal control measures.
+According to the Procedure Rules on the Preparation of Annual Report of the Board Audit
+Committee of Bank of China Limited, prior to the start of audit field work by the auditors, the
+Audit Committee confirmed with the auditors the details of the 2021 audit plan, including areas
+of focus for auditing the 2021 Annual Report, risk assessment and identification methods, the
+application of accounting standards, tests of internal control, compliance and fraud related
+procedures, and the allocation of human resources. In particular, the committee reminded the
+auditors to report any difference of judgement between the auditors and the Senior Management
+during the audit, as well as the process and results of reconciling such differences.
+The Audit Committee heard and reviewed reports from the Senior Management concerning
+the Bank's business performance and primary financial data. It also requested that the Senior
+Management submit the annual financial statements to the auditors in a timely manner, so
+as to ensure sufficient time for the annual audit. During the audit, the committee maintained
+independent communications with the auditors and arranged independent communications
+between the auditors and the independent directors. At its second meeting of 2022, the Audit
+Committee reviewed and approved the Bank's 2021 financial statements and submitted them to
+the Board of Directors for approval.
+In accordance with the Policies of Selection, Rotation and Dismissal for External Auditors of
+Bank of China Limited, the external auditor for 2021 made a summary report and submitted a
+report on their compliance with the principle of independence to the committee.
+169
+The committee is mainly responsible for reviewing and advising the Board of Directors on
+the Bank's corporate culture development plans and policies, etc., and supervising their
+implementation, urging the Senior Management to examine and assess the implementation
+of the Bank's values, and pushing forward the refinement and elaboration, promotion and
+popularisation, education and training, and implementation of the Bank's value concepts system;
+urging the management to build a corporate culture work evaluation system, and overseeing and
+assessing the development and implementation of the Bank's corporate culture; reviewing the
+employee code of conduct and urging the management to put in place a matching implementation
+mechanism; reviewing and advising the Board of Directors on the Bank's consumer protection
+strategies, policies and objectives, etc., and overseeing and evaluating the Bank's consumer
+protection work; reviewing and advising the Board of Directors on the Bank's environmental,
+social and governance (ESG) development plans, policies and reports; identifying, assessing and
+managing important ESG-related matters and building an appropriate and effective ESG risk
+management and internal control system; regularly hearing the reports on the Bank's corporate
+culture building, ESG and consumer protection work; and other duties delegated by the Board of
+Directors.
+2/7
+Specific Explanation and Independent Opinions of Independent Directors on the
+Guarantee Business of the Bank
+In 2021, independent directors held no objection to proposals of the meetings of the Board of
+Directors and special committees.
+1001
+8/8
+0/3
+6/8
+2/3
+8/8
+3/3
+8/8
+8/8
+3/3
+18
+8/8
+165
+8/8
+1.
+2.
+Mr. LIU Jin, Mr. WANG Wei, Mr. ZHANG Jiangang, Mr. WANG Changyun, Ms. Angela CHAO, Mr. JIANG
+Guohua, Mr. Martin Cheung Kong LIAO, Ms. CHEN Chunhua and Mr. CHUI Sai Peng Jose, all of whom were
+unable to attend the Meetings of the Board of Directors and Meetings of the Special Committees of the Board of
+Directors in person, had appointed other Directors to attend and exercise their voting rights on their behalf.
+During the reporting period, three directors have abstained from voting or voted against related proposals.
+Director ZHANG Jiangang proposed that a few clauses of Management Measures for Financial Services in
+Response to Emergencies should be further refined according to the requirements of the regulatory measures.
+Director XIAO Lihong proposed that regarding the Internal Capital Adequacy Assessment Report, there was room
+for improvement in the comprehensive risk management capability and policy due to the rather weak foundation.
+Director ZHAO Jie proposed that a project plan should be further refined according to the business environment.
+164
+Training and Expertise Enhancement of Directors
+In 2021, the Board of Directors paid significant attention to enhancing directors' expertise, with
+a special focus on arranging relevant training. All directors of the Bank fully observed Rule
+A.6.5 of the Code as well as PRC regulatory requirements, actively participating in specialised
+training including sessions on artificial intelligence enabling future business, the current state
+of international financial market development and the opportunities and challenges facing the
+global development of commercial banks, anti-money laundering policy interpretation and
+sanction violation case analysis, green finance and the digital economy. The Bank's directors also
+took it upon themselves to enhance their professional skills in various ways, including writing
+and publishing professional articles, attending forums and seminars, meeting with domestic
+and overseas regulators, and conducting on-site research exercises at the Bank's domestic and
+overseas branches as well as at other advanced banks.
+Independence and Duty Performance of Independent Directors
+There are currently six independent directors on the Board of Directors. This reaches one-
+third of the total number of directors and is thus in compliance with the quorum requirement
+specified in the Articles of Association and relevant regulatory requirements. For the professional
+backgrounds and other details of the independent directors, please refer to the section "Directors,
+Supervisors and Senior Management Members". Independent directors individually serve as
+the Chairman of the Corporate Culture and Consumer Protection Committee, Audit Committee,
+Risk Policy Committee, Personnel and Remuneration Committee and Connected Transactions
+Control Committee. As stipulated in the relevant domestic regulatory requirements and Rule 3.13
+of the Hong Kong Listing Rules, the Bank has received the annual confirmation in writing from
+each independent director with regard to their independence. Based on these confirmations and
+relevant information in possession of the Board of Directors, the Bank confirms their independent
+status.
+In 2021, the Bank's independent directors attended meetings of the Board of Directors, reviewed
+proposals, participated in discussions and offered their professional opinions independently,
+objectively and diligently, in accordance with the Articles of Association, the Procedural Rules
+for Board of Directors of Bank of China Limited and the Work Rules of Independent Directors of
+Bank of China Limited. Please refer to the section “Directors' Attendance of the Shareholders'
+Meeting, Meetings of the Board of Directors and Special Committees" for the attendance of
+independent directors at meetings.
+In 2021, independent directors put forward constructive recommendations on the Bank's 14th
+Five-Year Plan, corporate culture building, comprehensive risk management, globalised and
+integrated operations, green finance and FinTech, among others. These recommendations were
+adopted and diligently implemented by the Bank.
+3/3
+6/7
+Functions and Powers of the Board of Directors
+6/7
+Former Directors
+2
+Under 55
+1
+0
+Designation Nationality
+Age
+Gender
+Directorship
+with the Bank
+-
+(years)
+Convening of Board Meetings
+In 2021, the Bank convened ten on-site meetings of the Board of Directors and reviewed and
+approved 84 proposals on 28 January, 16 March, 30 March, 29 April, 2 July, 30 August, 28
+September, 29 October, 13 December and 27 December respectively. The proposals covered
+matters such as the Bank's regular reports, the nomination of candidates for directorships, the
+appointment of senior management members, the issuance of bonds, and profit distribution, etc. It
+also heard 20 reports related to the anti-money laundering work, strategy implementation, country
+risk management, green finance development and other matters.
+CHUI Sai Peng Jose
+In 2021, the Bank convened four meetings of the Board of Directors via written resolutions. At
+these meetings, the Board of Directors mainly reviewed and approved the proposals regarding
+donation to disaster relief in Henan Province, among others.
+Risk Management and Internal Control by the Board of Directors and its
+Special Committees
+The Board of Directors of the Bank considers a sound risk management system to be the basic
+prerequisite of realising the Bank's strategic goals. By continuously improving the independence,
+specialisation, foresight, and initiative of its risk management function, the Bank ensures the
+sound and sustainable development of its banking businesses and creates greater value for
+shareholders.
+According to regulatory rules and internal management requirements, the Senior Management
+submits important risk management policies, rules and procedures to the Board of Directors and
+Risk Policy Committee for review and approval. The Risk Policy Committee regularly reviews
+the Group's overall risk status (covering major risk categories such as credit risk, market risk,
+operational risk, liquidity risk, legal and compliance risk and reputational risk) and upcoming
+work plan and puts forward corresponding work requirements.
+The Board of Directors and its Risk Policy Committee have acknowledged the full effectiveness
+of the existing risk management system of the Bank based on their close monitoring and quarterly
+evaluation of the system's effectiveness.
+The Board of Directors attached great importance to the Group's far-reaching internal control
+system and continued to promote its development. It regularly heard and reviewed Senior
+Management reports concerning the implementation of the Guidelines on Internal Control
+of Commercial Banks, bank-wide operational management, risk management, fraud case
+management and internal control system development and assessment, thus earnestly assuming its
+responsibility to improve and deliver a sound and effective internal control function.
+The Audit Committee under the Board of Directors closely monitored the changing economic
+and financial environment at home and abroad, as well as the overall conditions of the Group's
+internal control function, including the establishment and operation of its internal control systems
+for both financial reporting and non-financial reporting. In addition, the committee heard and
+reviewed, on a regular and ad hoc basis, internal audit reports and assessment opinions on internal
+control, reports on the progress of internal control improvements and remediation suggested by
+external auditors, as well as the overall situation regarding the prevention, control and redress of
+fraud cases and risk events.
+During the reporting period, the Bank performed self-assessment on internal control in line with
+the Basic Standard for Enterprise Internal Control and its supporting guidelines. No material
+deficiencies were identified in the internal control systems for both the financial reporting and
+non-financial reporting of the Bank. PricewaterhouseCoopers Zhong Tian LLP, as the Bank's
+external auditor for internal control, audited the effectiveness of the Bank's internal controls
+over financial reporting and issued a standard unqualified opinion. The 2021 Internal Control
+Assessment Report of Bank of China Limited and the 2021 Auditor's Report on Internal Control
+issued by PricewaterhouseCoopers Zhong Tian LLP have been published on the websites of SSE,
+HKEX and the Bank.
+163
+Duty Performance of Directors
+Directors' Attendance of Shareholders' Meetings, Meetings of the Board of Directors
+and Special Committees
+During the reporting period, the attendance rate of each director of the shareholders' meetings,
+meetings of the Board of Directors and special committees is given below.
+Number of meetings attended in person/Number of meetings convened during term of office
+Meetings of the Special Committees of the Board of Directors
+3
+162
+WANG Jiang
+CHEN Chunhua
+JIANG Guohua
+Independent
+Under 3
+Male
+4
+Corporate
+Culture and
+Connected
+Shareholders' the Board
+Directors
+Meetings
+of Directors
+Meetings of Strategic
+Development
+Committee
+Consumer
+Protection
+Committee
+Audit
+Committee
+Martin Cheung Kong LIAO
+Risk Policy Remuneration
+Committee Committee Committee
+Incumbent Directors
+LIU Liange
+2/2
+3/4
+LIU Jin
+WANG Wei
+LIN Jingzhen
+XIAO Lihong
+WANG Xiaoya
+ZHANG Jiangang
+CHEN Jianbo
+WANG Changyun
+Angela CHAO
+Personnel and Transactions
+Control
+ZHAO Jie
+Director
+8/8
+2/2
+14/14
+8/8
+Notes:
+13/14
+7/8
+1/2
+12/14
+2/2
+13/14
+7/8
+4/4
+2/2
+8/8
+13/14
+2/2
+12/14
+7/8
+3/4
+2/2
+12/14
+3/4
+8/8
+8/8
+III ∞ ∞ ∞ ∞ ∞
+8/8
+। । । । | |➢ |➢S➢ཇཱ ༔S
+ཙཾ | | | |ཟུ་ཟུ|༑ཟུ་ཚཝ
+7/8
+14/14
+4/4
+4/4
+2/2
+2/2
+2/2
+2/2
+ន ន ន ន ន ន ន ន ន ន ន ន ន
+13/14
+0/0
+5/7
+4/4
+8/8
+13/14
+14/14
+14/14
+8/8
+2/2
+14/14
+2/2
+8/8
+8/8
+Year of dividend
+(before tax)
+Major Customers
+At the Bank's 2020 Annual General Meeting held on 20 May 2021, a final dividend on ordinary
+shares for 2020 of RMB1.97 per 10 shares (before tax) was approved for payment. The A-Share
+and H-Share dividends were distributed to the shareholders in June 2021 in accordance with
+relevant regulations. The distribution plan has been accomplished and the actual distributed
+amount for ordinary shares was approximately RMB57.994 billion (before tax). No interim
+dividend on ordinary shares was paid for the period ended on 30 June 2021 by the Bank. The
+Bank did not propose any capitalisation of the capital reserve to share capital in 2021.
+The Bank's annual results for 2021 are set out in the Consolidated Financial Statements. The
+Board of Directors has recommended a final dividend on ordinary shares for 2021 of RMB2.21
+per 10 shares (before tax), subject to the approval of the forthcoming 2021 Annual General
+Meeting. If approved, the 2021 final dividend on the Bank's ordinary shares will be denominated
+and declared in RMB and paid in RMB or equivalent Hong Kong dollars. The actual amount
+distributed in Hong Kong dollars will be calculated according to the average of the exchange
+rates of HKD to RMB announced by PBOC in the week before the date of the Bank's Annual
+General Meeting. The A-Share dividend distribution date is expected to be 15 July 2022 and the
+H-Share dividend distribution date is expected to be 10 August 2022 in accordance with relevant
+regulatory requirements and business rules. No capitalisation of the capital reserve to share
+capital is proposed in this profit distribution.
+attributable to
+equity holders
+On 30 August 2020, the dividend distribution plan for the Bank's Domestic Preference Shares
+(Second Tranche) was approved by the Board. The Bank distributed a total of RMB1.540 billion
+(before tax) of dividends on the Domestic Preference Shares (Second Tranche) on 15 March
+2021, with an annual dividend rate of 5.50% (before tax). The dividend distribution plan has been
+accomplished.
+During the year, the five largest customers of the Group accounted for less than 30% of the
+interest income and other operating income of the Group.
+Total dividend
+The Board of Directors is pleased to present its report together with the audited Consolidated
+Financial Statements of the Bank and its subsidiaries (the "Group") for the year ended 31
+December 2021.
+Profit
+Cash Dividend Payout for Ordinary Shares and Capitalisation of the
+Capital Reserve to Share Capital for the Past Three Years
+At the Board meeting held on 29 October 2021, the dividend distribution plan for the Bank's
+Offshore Preference Shares (Second Tranche) was approved. The Bank distributed dividends on
+the Offshore Preference Shares (Second Tranche) on 4 March 2022. According to the Bank's
+issuance terms of the Offshore Preference Shares (Second Tranche), dividends on Offshore
+Preference Shares (Second Tranche) were paid in US dollars, with a total of approximately
+USD101.5 million (after tax) at an annual dividend rate of 3.60% (after tax). The dividend
+distribution plan has been accomplished.
+At the Board meeting held on 29 April 2021, the dividend distribution plans for the Bank's
+Domestic Preference Shares (Third and Fourth Tranche) were approved. The Bank distributed a
+total of RMB3.285 billion (before tax) of dividends on the Domestic Preference Shares (Third
+Tranche) on 28 June 2021, with an annual dividend rate of 4.50% (before tax). The Bank
+distributed a total of RMB1.1745 billion (before tax) of dividends on the Domestic Preference
+Shares (Fourth Tranche) on 30 August 2021, with an annual dividend rate of 4.35% (before tax).
+The dividend distribution plans have been accomplished.
+At the Board meeting held on 30 October 2020, the dividend distribution plan for the Bank's
+Offshore Preference Shares (Second Tranche) was approved. The Bank distributed dividends on
+the Offshore Preference Shares (Second Tranche) on 4 March 2021. According to the Bank's
+issuance terms of the Offshore Preference Shares (Second Tranche), dividends on Offshore
+Preference Shares (Second Tranche) were paid in US dollars, with a total of approximately
+USD102 million (after tax) at an annual dividend rate of 3.60% (after tax). The dividend
+distribution plan has been accomplished.
+The Bank provides a range of banking and related financial services, including commercial
+banking, investment banking, direct investment, securities, insurance, fund management, aircraft
+leasing, asset management, financial technology business and financial leasing.
+Principal Activities
+Report of the Board of Directors
+177
+178
+In 2021, the Bank continued to enhance its work in investor relations and information disclosure,
+receiving wide market recognition. It won a number of awards including “Best Investor
+Relations", "Best Board of Directors for Investor Relations" and "Best Secretary to the Board for
+Investor Relations" of the 12th Pegasus Award of China's Listed Companies Investor Relations
+from Securities Times. The Bank's annual report won a “Gold Award in the Overall Category
+of the Annual Report Competition" of the League of American Communications Professionals
+(LACP). It also won "Honors in Chairman's/President's letter" of the Annual Report Competition
+(ARC).
+Dividend
+per share
+Results and Profit Distribution
+Pursuant to domestic and overseas securities regulatory requirements, the Bank formulated and
+implemented the Management Measures on Securities Transactions by Directors, Supervisors
+and Senior Management Personnel of Bank of China Limited (the "Management Rules") to
+govern securities transactions by directors, supervisors and senior management members of the
+Bank. The terms of the Management Rules are more stringent than the mandatory standards set
+out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in
+Appendix 10 to the Hong Kong Listing Rules (the "Model Code”). All directors and supervisors
+confirmed that they had complied with the standards set out in both the Management Rules and
+the Model Code throughout the reporting period.
+In 2021, the Bank prepared and disclosed its regular and provisional reports in strict adherence
+to the principles of truthfulness, accuracy, completeness, conciseness and clarity. It continuously
+enhanced transparency and optimised its information disclosure, focusing on the demands of
+investors. It continuously enhanced the pertinence and effectiveness of information disclosure
+in order to guarantee investors' access to relevant information. Through concise and clear
+language, investors are provided with equal opportunity to access accurate information. The
+Bank has established a comprehensive and complete information disclosure system and put in
+place clear specifications regarding information disclosure standard and the scope of application,
+responsibility and division of work of the parties concerned, as well as information handling
+and disclosure procedures and internal monitoring measures. During the reporting period, in
+accordance with the regulatory provisions and based on the Bank's information disclosure
+practices, it has reviewed and revised its Bank of China Limited Information Disclosure Policy.
+It carefully organised compliance analysis and disclosure of material events, as well as actively
+exploring and steadily promoting voluntary information disclosure. The Bank reinforced the
+principal responsibility system and information correspondent mechanism, and promoted the
+building of a professional team and a strong compliance culture of information disclosure, so
+as to improve the initiative and long-term perspective of its information disclosure management
+work. It also carried out the registration and submission of insider information according to
+relevant regulatory requirements and the rules of the Bank.
+In 2021, the Connected Transactions Control Committee held three on-site meetings on 26
+March, 27 August and 28 October, respectively. It mainly reviewed the report on connected
+transactions in 2020, the report on the CBIRC's Rules on Connected Transactions of Banking
+and Insurance Institutions (exposure draft), and the report on the impact of the Personal
+Information Protection Law on the Bank's connected transactions management, among others. It
+also approved the report on the connected party list, among others. During the reporting period,
+the Connected Transactions Control Committee paid constant attention to the transmission of the
+Bank's policies and system development for connected transactions, and put forward constructive
+suggestions in that regard.
+The committee is mainly responsible for administering the connected transactions of the Bank in
+accordance with relevant laws, regulations and supervisory rules, and formulating administrative
+regulations with regard to connected transactions; confirming the Bank's connected parties
+according to laws, regulations and normative documents, and reporting the relevant confirmation
+to the Board of Directors and the Board of Supervisors; defining the connected transactions of the
+Bank in accordance with laws, regulations and normative documents; examining the connected
+transactions of the Bank pursuant to relevant laws, regulations and normative documents, as well
+as the business principles of justice and fairness; and examining information disclosure matters
+related to significant connected transactions of the Bank.
+The Connected Transactions Control Committee comprises five members, including Executive
+Director Mr. WANG Wei, Independent Directors Ms. Angela CHAO, Mr. JIANG Guohua, Mr.
+Martin Cheung Kong LIAO and Mr. CHUI Sai Peng Jose. Independent Director Mr. Martin
+Cheung Kong LIAO serves as the Chairman of the committee.
+Connected Transactions Control Committee
+172
+According to the Articles of Association of the Bank, any shareholder who holds by himself
+or jointly with others 3% or more of the total number of voting shares of the Bank may,
+by submitting a written proposal to the shareholders' meeting, recommend candidates for
+directorships, provided the number of candidates nominated shall be in accordance with the
+provisions of the Articles of Association (between 5 and 17) and not exceed the number to be
+elected. List of candidates for directorships may be recommended by the Board of Directors
+within the number of candidates stipulated in the Articles of Association, with reference to
+the diversity policy of the Bank and according to the number to be elected. The Personnel
+and Remuneration Committee shall undertake a preliminary review of the qualifications and
+conditions of candidates for directorships, and refer those qualified candidates to the Board of
+Directors for further examination. After the Board of Directors' approval by resolutions, the
+candidates shall be referred to the shareholders' meeting in written proposals. When directorships
+need to be added or filled temporarily, the Board of Directors shall raise the proposal and make
+recommendation to the shareholders' meeting to elect or replace. During the reporting period, the
+Bank appointed directors in strict compliance with the Articles of Association.
+In 2021, the Personnel and Remuneration Committee held six on-site meetings on 16 March, 26
+March, 28 April, 2 July, 27 August and 28 October, respectively, and two meetings by written
+resolutions. At these meetings, the committee mainly reviewed the performance evaluation results
+and remuneration distribution plan for the Chairman, Executive Directors and senior management
+members for 2020, the 2021 implementation plan for performance evaluation of the Chairman,
+President and other senior management members, the nomination of Mr. LIU Liange and Mr. LIN
+Jingzhen to be re-appointed as Executive Directors of the Bank and Mr. JIANG Guohua to be
+re-appointed as Independent Non-executive Directors of the Bank, the appointment of Mr. LIU
+Jin as President of the Bank, the nomination of Mr. LIU Jin as candidate for Executive Director
+of the Bank and the appointment of Mr. LIU Jin as member of the Strategic Development
+Committee of the Board of Directors of the Bank, the appointment of Mr. CHEN Huaiyu as
+Executive Vice President of the Bank, the appointment of Mr. WANG Zhiheng as Executive Vice
+President of the Bank, the appointment of Mr. ZHUO Chengwen as Chief Audit Officer of the
+Bank, and the nomination of Mr. E Weinan as candidate for Independent Non-executive Director
+of the Bank, the nomination of Mr. Giovanni TRIA as candidate for Independent Non-executive
+Director of the Bank, the nomination of Mr. Jean-Louis EKRA as candidate for Independent Non-
+executive Director of the Bank and the nomination of Mr. HUANG Binghua as candidate for
+Non-executive Director of the Bank.
+171
+The committee is mainly responsible for assisting the Board of Directors in reviewing the
+Bank's human resources and remuneration strategies and overseeing their implementation;
+reviewing the structure, size and composition of the Board of Directors on an annual basis,
+and making suggestions to the Board regarding the scale and composition of the Board of
+Directors; studying and reviewing the standards and procedures for selecting, nominating and
+appointing directors, members of the Board committees and Senior Management, and making
+relevant recommendations to the Board of Directors; identifying individuals suitably qualified
+to become directors and making recommendations to the Board of Directors on the selection
+of individuals nominated for directorships; performing preliminary review of the candidates
+for Senior Management positions and the chairmanship of Board committees, selecting and
+nominating candidates for different Board committees, and reporting to the Board of Directors
+for approval; reviewing, supervising the implementation of and monitoring the remuneration and
+incentive policies of the Bank; drafting the remuneration distribution plan of directors and senior
+management members, and making recommendations to the Board of Directors; and formulating
+the performance appraisal standards for senior management members of the Bank, and evaluating
+their performances.
+The Personnel and Remuneration Committee comprises six members, including Non-executive
+Director Ms. WANG Xiaoya, Independent Directors Mr. WANG Changyun, Mr. JIANG Guohua,
+Mr. Martin Cheung Kong LIAO, Ms. CHEN Chunhua and Mr. CHUI Sai Peng Jose. Independent
+Director Mr. CHUI Sai Peng Jose serves as the Chairman of the committee.
+(before tax)
+(Unit:
+Personnel and Remuneration Committee
+In 2021, the US Risk and Management Committee convened eight meetings via written
+resolutions. It regularly reviewed reports regarding the risk management and operations of all of
+the Bank's institutions in the US, the latest US regulatory trends and dynamics, among others. In
+addition, the committee reviewed and approved the relevant framework documents and important
+policies of all the institutions of the Bank in the US according to regulatory requirements.
+The US Risk and Management Committee currently comprises three members, all of whom are
+members of the Risk Policy Committee, including Non-executive Director Ms. XIAO Lihong,
+Independent Directors Mr. WANG Changyun and Ms. Angela CHAO. Independent Director Ms.
+Angela CHAO serves as the Chairwoman of the US Risk and Management Committee.
+The US Risk and Management Committee is established under the Risk Policy Committee. It
+oversees and manages all the risks incurred by the Bank's institutions in the US, and performs the
+duties of the board of directors of the Bank's New York Branch and its special committees.
+In addition, the committee paid close attention to critical risk issues arising from changes
+in overseas and domestic economic and financial conditions, as well as adjustments to the
+government's macro policies and overall overseas and domestic regulations. The committee
+expressed important opinions and recommendations regarding the improvement of the Bank's risk
+governance mechanism and the effective prevention and control of all kinds of risks.
+170
+In 2021, the Risk Policy Committee held seven on-site meetings on 27 January, 29 March, 28
+April, 29 June, 26 August, 28 September and 27 October, respectively, and one meeting via
+written resolutions. The Committee mainly considered the comprehensive risk management
+policy, Group risk appetites statement, trading book market risk limits, liquidity risk management
+policy, polices for interest rate risk in the banking book, data governance policy, case prevention
+management policy, management measures for reputation risk, capital adequacy ratio report,
+internal capital adequacy assessment report and anti-money laundering work report. The
+committee also regularly reviewed the Group risk reports and other agendas.
+The committee is mainly responsible for performing functions and exercising powers in relation
+to comprehensive risk management; reviewing the Bank's risk management strategies, substantial
+risk management policies, and risk management procedures and regimes, and advising the Board
+accordingly; discussing the risk management procedures and regimes with the management and
+making suggestions on how to improve them in order to ensure that the risk management policies,
+procedures and regimes are uniformly adhered to throughout the Bank; reviewing the Group's
+risk data aggregation and risk reporting framework and ensuring that there is adequate resource
+support in place; examining the material risk activities of the Bank and judiciously exercising
+veto power regarding commitments that expose the Bank to credit and/or market risk exceeding
+the individual risk limits approved by the Risk Policy Committee or the Board of Directors or
+that lead to breaches of approved aggregate limits; supervising the implementation status of the
+Bank's risk management strategy, policy and procedure, and advising the Board accordingly;
+examining the Bank's risk management status and reviewing its risk management procedures
+and regimes; regularly evaluating and hearing reports on the implementation of risk management
+and internal control responsibilities by the Bank's management, functional departments and
+institutions, as well as risk data aggregation and risk reporting work, and proposing requirements
+for improvement; supervising the status of the Bank's compliance with laws and regulations;
+reviewing and examining relevant basic management policies related to legal compliance
+and making suggestions which are submitted to the Board for examination and approval, and
+hearing and examining the report on the implementation status of the legal compliance policy
+of the Bank; assessing the material investigation results of risk management matters and the
+management's response to such results (either voluntarily or as required by the Board of
+Directors); reviewing and approving the Bank's general policy on case prevention and control,
+and defining the management's functions, powers and authorities in relation to case prevention
+and control; setting out overall requirements on case prevention and control, and reviewing
+related working reports; checking and effectively supervising the Bank's case prevention and
+control work, assessing the effectiveness of case prevention and control, and promoting the
+building of its case prevention and control management system.
+The Risk Policy Committee of the Bank comprises five members, including Executive Director
+Mr. LIN Jingzhen, Non-executive Directors Ms. XIAO Lihong and Mr. CHEN Jianbo,
+Independent Directors Mr. WANG Changyun and Ms. Angela CHAO. Independent Director Mr.
+WANG Changyun serves as the Chairman of the committee, and Non-executive Director Ms.
+XIAO Lihong serves as the Vice Chairwoman of the committee.
+Risk Policy Committee
+Board of Supervisors
+176
+Functions and Powers of the Board of Supervisors
+173
+In 2021, the Bank kept tracked of market dynamics in a timely manner, actively conducted
+market communication, and continued to build a professional and efficient investor relations
+management practice. It held its annual and interim results briefing via live-streaming platform
+and proactively held two quarterly results presentations online, reaching a wide range of domestic
+and overseas investors of various types and bringing significant efforts and results in investor
+communication. The Bank conducted in-depth communication with institutional investors,
+completing over 170 communication activities of various forms. This included attending
+seminars held by investment banking institutions, holding online non-deal roadshow and thematic
+meetings, and conducting daily communication etc., while making meeting records for reference.
+The Bank also attached high importance to minority investor services. It professionally answered
+investor hotline and email inquiries, promptly responded to inquires from “e-interaction online
+platform" run by SSE, continued to organise the open day for investors via the roadshow platform
+run by SSE, and actively participated in the special event of the 3rd “5.15 National Investor
+Protection Promotion Day” organised by the Listed Companies Association of Beijing. The
+Bank's external ratings remained unchanged with a stable prospect.
+Investor Relations and Information Disclosure
+PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers have provided audit
+services to the Bank for one year. Ms. Ho Shuk Ching Margarita, Mr. Zhu Yu, Mr. Li Dan are the
+certified public accountants who signed the auditor's report on the Bank's financial statements
+prepared in accordance with CAS for the year ended 31 December 2021.
+175
+Fees paid to PricewaterhouseCoopers and its member firms for financial statements audit of
+the Group, including those of the Bank's overseas subsidiaries and branches, were RMB173
+million for the year ended 31 December 2021, of which the fees for internal control audit paid to
+PricewaterhouseCoopers Zhong Tian LLP totalled RMB12 million. The Bank paid RMB 12.5781
+million for non-auditing services to PricewaterhouseCoopers and its member firms in the year.
+Upon approval by the 2020 Annual General Meeting, PricewaterhouseCoopers Zhong Tian
+LLP was appointed as the Bank's domestic auditor and internal control auditor for 2021, and
+PricewaterhouseCoopers was appointed as the Bank's international auditor for 2021.
+Appointment of External Auditors
+Securities Transactions by Directors and Supervisors
+During the reporting period, the former Procurement Review Committee under the Senior
+Management (Executive Committee) was renamed Centralised Procurement Management
+Committee, which is responsible for the decision-making management of centralised procurement
+activities. The Senior Management presided over the Asset and Liability Management
+Committee, the Risk Management and Internal Control Committee (which governs the Anti-
+money Laundering Committee, the Asset Disposal Committee and the Credit Risk Management
+and Decision-making Committee), the Centralised Procurement Management Committee, the
+Securities Investment and Management Committee, the Innovation and Product Management
+Committee, the Integrated Operation Coordination Committee, the Asset Management Business
+Committee, the Consumer Protection Committee, the Domestic Branch Development and
+Coordination Committee, the Green Finance Committee, the Overseas Work Coordination
+Committee and the Financial Digitalisation Committee. During the reporting period, all of the
+committees diligently fulfilled their duties and responsibilities as per the powers specified in their
+committee charters and the rights delegated by the Executive Committee, and pushed forward the
+sound development of the Bank's various operations.
+During the reporting period, the Senior Management of the Bank held 24 regular meetings,
+at which it focused on key operational areas and discussed and decided upon a series of
+significant matters, including the Group's business development, performance management,
+risk management, audit supervision, IT development, product and service innovation, integrated
+operation, globalised development, inclusive finance and scenario building. It also held special
+meetings to study and make plans for the Group's corporate banking, personal banking, financial
+markets, channel building, smart operations, compliance management and data governance.
+174
+During the reporting period, the Senior Management of the Bank managed the Bank's operations
+in accordance with the powers bestowed upon it by the Articles of Association and the
+authorisations of the Board of Directors. Closely adhering to the strategic goal of "Building a
+First-class Global Banking Group” and to the annual performance objectives approved by the
+Board of Directors, the Senior Management emphasised on invigorating, adapting to change and
+driving for major breakthroughs. It accelerated the implementation of various tasks within the
+Bank's development strategy, and ensured steady improvement in the Group's operating results.
+Duty Performance of the Senior Management
+The Senior Management is the executive organ of the Bank. It is headed by the President,
+with executive vice presidents and other senior management members assisting the President's
+work. The main functions and powers of the President include presiding over the Bank's daily
+administrative, business and financial management; organising the implementation of the
+business plan and investment schemes; drafting basic management regulations and specific
+rules; nominating candidates for other senior management positions; and reviewing employees'
+remuneration, benefit, reward and punishment measures.
+Functions and Powers of the Senior Management
+Senior Management
+In 2021, the Board of Supervisors and its special committees earnestly performed their
+supervisory responsibilities and reviewed relevant proposals through detailed discussion. The
+Board of Supervisors held four on-site meetings and three meetings by written resolution, and
+made relevant resolutions. The Duty Performance and Due Diligence Supervision Committee held
+four on-site meetings and three meetings by written resolution, while the Finance and Internal
+Control Supervision Committee held four on-site meetings and one meeting by written resolution.
+For the performance of and supervisory opinions from the Board of Supervisors during the
+reporting period, please refer to the section "Report of the Board of Supervisors".
+Duty Performance of the Board of Supervisors
+The Board of Supervisors has set up the Duty Performance and Due Diligence Supervision
+Committee and the Finance and Internal Control Supervision Committee to assist in performing
+its authorised duties.
+The Board of Supervisors currently comprises seven members. There is one shareholder
+supervisor (the Chairwoman of the Board of Supervisors), three employee supervisors and
+three external supervisors. According to the Articles of Association, a supervisor has a term of
+office of three years and may serve consecutive terms by re-election and re-appointment unless
+otherwise specified by laws, regulations, supervisory requirements and the Articles of Association
+of the Bank. Shareholder supervisors and external supervisors are elected or replaced by the
+shareholders' meeting, while employee supervisors are elected or replaced by the Employee
+Delegates' Meeting.
+Composition of the Board of Supervisors
+The Board of Supervisors is the Bank's supervisory organ and is responsible to the shareholders'
+meeting. As stipulated in the Company Law and the Articles of Association of the Bank, the
+Board of Supervisors is responsible for overseeing the work of the Board of Directors so as to
+ensure the establishment of a prudent operational principle, value criterion and an appropriate
+development strategy. It supervises the duty performance and due diligence of the Board of
+Directors, the Senior Management and its members as well as the Bank's financial activities, risk
+management and internal control.
+distribution
+216,559
+RMB million)
+(Unit: RMB)
+179
+30%
+187,405
+56,228
+0.191
+2019
+Nil
+30%
+192,870
+57,994
+Nil
+2020
+Nil
+30%
+65,060
+0.221
+2021
+Payout ratio to share capital
+of the Bank
+(Unit:
+RMB million)
+Capitalisation
+of the capital
+reserve
+0.197
+In accordance with Chinese tax laws and regulations, the dividends and bonuses received by
+overseas resident individual shareholders from stocks issued by domestic non-foreign investment
+enterprises in Hong Kong are subject to the payment of individual income tax, which shall be
+withheld by the withholding agents. However, overseas resident individual shareholders of stocks
+issued by domestic non-foreign investment enterprises in Hong Kong are entitled to the relevant
+preferential tax treatment pursuant to the provisions in the tax agreements signed between the
+countries in which they are residents and China, or to the tax arrangements between the Chinese
+mainland and Hong Kong and Macao. Accordingly, the Bank generally withholds 10% of the
+dividends to be distributed to the individual H-Share Holders as individual income tax unless
+otherwise specified by the relevant tax laws, regulations and agreements.
+H-Share Holders
+In accordance with the provisions of Article 26.2 of the Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises shall be tax-free.
+In accordance with Article 83 of the Implementation Rules of Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises referred to in Article 26.2 of the Enterprise Income Tax
+Law of the People's Republic of China mean those investment proceeds obtained from direct
+investment of resident enterprises into other resident enterprises, excluding those investment
+proceeds obtained from publicly offered and tradable stocks of resident enterprises held for less
+than 12 months on a continuing basis.
+185
+In accordance with the provisions of the Notice on Implementing Differentiated Individual Income
+Tax Policy for Stock Dividends and Bonuses of Listed Companies (Caishui [2012] No. 85) and the
+Notice on Differentiated Individual Income Tax Policy for Stock Dividends and Bonuses of Listed
+Companies (Caishui [2015] No. 101) issued jointly by MOF, State Administration of Taxation
+of PRC and CSRC, for shares of listed companies obtained by individuals from public offerings
+or the transfer market, where the holding period is less than one month (inclusive), the dividends
+and bonuses shall be counted as taxable income in the full amount; where the holding period is
+more than one month and less than one year (inclusive), 50% of the dividends and bonuses shall
+be counted as taxable income on a provisional basis; and where the holding period exceeds one
+year, the dividends and bonuses shall not be counted as taxable income on a provisional basis.
+The individual income tax rate of 20% shall be applicable for all incomes mentioned above. The
+individual income tax levied on dividends and bonuses obtained by equity investment funds from
+listed companies is also calculated in accordance with the aforementioned rules.
+In accordance with the Enterprise Income Tax Law of the People's Republic of China and the
+Implementation Rules of the Enterprise Income Tax Law of the People's Republic of China,
+dividend income obtained by non-resident enterprises shall be levied at a preferential enterprise
+income tax rate of 10%.
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no tax
+is payable in Hong Kong in respect of dividends on H Shares paid by the Bank.
+In accordance with the provisions of the Enterprise Income Tax Law of the People's Republic of
+China and the Implementation Rules of the Enterprise Income Tax Law of the People's Republic
+of China, dividend income from domestic preference shares distributed between qualified resident
+enterprises are non-taxable, and dividend income from domestic preference shares obtained by
+non-resident enterprises shall be levied at a preferential enterprise income tax rate of 10%.
+186
+Domestic Preference Share Holders
+The individual income tax levied on dividends obtained by individuals from non-public issuance
+of domestic preference shares is calculated in accordance with the relevant Chinese tax laws and
+regulations.
+Offshore Preference Share Holders
+In accordance with Chinese tax laws and regulations, when distributing dividends to overseas
+non-resident enterprises on offshore preference shares, the Bank shall withhold enterprise income
+tax at a rate of 10%.
+In accordance with the current practice of the Inland Revenue Department of Hong Kong, no tax
+is payable in Hong Kong in respect of the dividends on offshore preference shares paid by the
+Bank.
+A-Share Holders
+Auditors
+The tax and tax relief of Shanghai-Hong Kong Stock Connect shall comply with the Notice on
+the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in
+Shanghai and Hong Kong issued jointly by MOF, State Administration of Taxation of PRC, and
+CSRC.
+Shareholders of the Bank are taxed in accordance with the following tax regulations and the
+amendments thereof from time to time. They shall enjoy possible tax relief according to the
+actual situation. Shareholders should seek professional advice from their tax and legal advisors.
+The following cited laws, regulations and stipulations are all relevant provisions issued before 31
+December 2021.
+As stipulated in the Articles of Association, within the scope permitted under applicable laws,
+administrative regulations and the Articles of Association, the Bank may purchase and maintain
+any liabilities insurance for the Bank's former and incumbent directors. The Bank will indemnify
+every former and incumbent director out of its own assets against any liability incurred when he/
+she served as director of the Bank to the maximum extent permitted by law and administrative
+regulations or alternatively to the extent that it is not prohibited by law and administrative
+regulations unless it is established that the director has not acted honestly or in good faith in
+performing his/her duties.
+For details, please refer to the related announcements on the websites of SSE, HKEX and the
+Bank and the Notes to the Consolidated Financial Statements.
+Management Contracts
+No contract concerning the management or administration of the whole or any substantial part of
+the business of the Bank was entered into or existed during the reporting period.
+183
+Share Appreciation Rights Plan and Share Option Scheme
+Please refer to Note V.34 to the Consolidated Financial Statements for details of the share
+appreciation rights plan and share option scheme of the Group.
+Purchase, Sale or Redemption of the Bank's Securities
+For details of the Bank's redemption of the Domestic Preference Shares (Second Tranche), please
+refer to the section “Changes in Shares and Shareholdings of Shareholders” and the Notes to the
+Consolidated Financial Statements.
+Pre-emptive Rights
+There are no compulsory provisions for pre-emptive rights requiring the Bank to offer new
+shares to existing shareholders in proportion to their existing shareholdings under the Articles
+of Association. The Articles of Association provide that the Bank may increase its capital by
+public offering, private placing, issuing rights of new shares to existing shareholders or allotting
+new shares to existing shareholders, transferring its capital reserve, issuing convertible bonds,
+or through other means as permitted by laws, administrative regulations and relevant regulatory
+authorities.
+Permitted Indemnity Provision
+Please refer to the section “Corporate Governance
+details of the Bank's external auditors.
+During the reporting period, the Bank renewed its directors' liability insurance to provide
+protection against claims arising from the lawful discharge of duties by the directors, thus
+encouraging the directors to fully perform their duties.
+Equity-linked Agreement
+The Bank has not been engaged in any equity-linked agreement during the reporting period.
+184
+Business Review
+For disclosures of the Bank in respect of business review under Article 28 of Appendix 16 to
+the Hong Kong Listing Rules, please refer to sections "Management Discussion and Analysis"
+and “Corporate Social Responsibilities” and the Consolidated Financial Statements. The relevant
+disclosure constitutes part of the Report of the Board of Directors.
+Use of Raised Funds
+All proceeds raised from initial public offerings, issuance of subordinated bonds, the rights issue,
+issuances of tier 2 capital bonds, preference shares and undated capital bonds have been used to
+replenish the Bank's capital and increase the level of capital adequacy.
+Tax and Tax Relief
+Consumer Rights Protection
+Independent Directors: WANG Changyun, Angela CHAO, JIANG Guohua, Martin Cheung Kong
+LIAO, CHEN Chunhua, CHUI Sai Peng Jose
+The Bank set up the Corporate Culture and Consumer Protection Committee under the Board
+of Directors to take charge of the overall planning and guiding of the Group's corporate culture
+fostering and consumer protection.
+ZHENG Zhiguang
+HUI Ping
+Former Supervisors
+WANG Xiquan
+WANG Zhiheng
+LI Changlin
+Number of meetings attended in person/
+Number of meetings convened during term of office
+7/7
+2/2
+2/2
+7/7
+7/7
+7/7
+0/0
+0/0
+3/3
+5/5
+189
+JIANG Xiangsen
+LENG Jie
+ZHOU Hehua
+WEI Hanguang
+In terms of policy formulation, in 2021, the Bank formulated the Consumer Protection Policy
+of Bank of China Limited (Version 2021) and the Guidelines on the Management of Consumer
+Financial Marketing and Publicity of Bank of China Limited (Version 2021), and revised and
+issued the Charter of the Consumer Protection Committee of Bank of China Limited (Version
+2021), the Management Measures of Bank of China Limited for Customer Complaints (Version
+2021) and other rules for consumer protection. The Bank further specified the top-level design,
+overall management, marketing management, complaint management and dispute settlement for
+consumer protection and pushed for their implementation.
+187
+In terms of consumer publicity and education, the Bank actively organised all institutions to
+carry out publicity and education campaigns on consumer protection and built a publicity and
+education system wherein the Head Office, branches and comprehensive operation companies
+coordinate with each other and online and offline activities are integrated. During publicity
+campaigns themed on “3.15 Rights •Responsibilities • Risks, Financial Consumer Rights Day",
+the “Promoting Financial Knowledge, Protecting Personal Wealth”, the “Financial Knowledge
+Popularisation" and the "Month of Financial Knowledge Popularisation" held in March, June and
+September, the Bank launched a variety of stimulating publicity and educational activities both
+at its outlets and through online media platforms such as WeChat, Weibo, its official website,
+mobile banking and TikTok, which received warm recognition from regulatory authorities and
+consumers. For both of the "3.15 Consumer Protection Education and Publicity Week" and the
+"September Joint Financial Education and Publicity Campaign” in 2021, the Bank was awarded
+the honorary title of "Excellent Organiser” among banking institutions by regulators. It was
+also repeatedly praised by regulators for its contributions to the “Financial Consumer Rights
+Day", "Promoting Financial Knowledge, Protecting Personal Wealth” and “Month of Financial
+Knowledge Popularisation • Be Rational Financial Investors and Netizens” campaigns.
+In terms of complaint management, the Bank adhered to its "customer-centric" business
+philosophy and reinforced efforts to fulfill its responsibilities. It optimised service procedures
+and continuously improved customer service experience, thus effectively protecting the legitimate
+rights and interests of consumers. There were 148 thousand complaints in 2021, a year-on-year
+decline of 21.1%, representing a downward trend in the total number of annual complaints. Based
+on analysis by business type, 50.3% of the complaints were about credit cards, 18.1% about debit
+cards, and 8.1% about loans. The above three types of complaints accounted for 76.5% of the
+total. From the perspective of complaint reason, 57.4% of the complaints were about policies
+and procedures, 12.6% about fee rates, and 11.8% about services. The above three types of
+complaints accounted for 81.8% of the total. From the perspective of geographical distribution,
+the top five regions in terms of number of complaints in 2021 were Guangdong, Jiangsu, Beijing,
+Hebei and Shandong.
+For detailed information on the Bank's consumer protection, please refer to the Corporate Social
+Responsibility Report of Bank of China Limited for 2021 (Environmental Social Governance).
+Members of the Board of Directors
+Executive Directors: LIU Liange, LIU Jin, WANG Wei, LIN Jingzhen
+Non-executive Directors: XIAO Lihong, WANG Xiaoya, ZHANG Jiangang, CHEN Jianbo
+Please refer to the section “Changes in Shares and Shareholdings of Shareholders" for the details
+of the Bank's substantial shareholder interests.
+Appointment of External Auditors" for
+188
+LIU Liange
+Chairman
+29 March 2022
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors
+In 2021, the Bank convened four on-site meetings of the Board of Supervisors on 30 March, 29
+April, 30 August, 29 October, respectively, as well as three meetings by written resolution of the
+Board of Supervisors. At these meetings, the Board of Supervisors reviewed and approved 44
+proposals regarding the Bank's four regular reports, 2020 profit distribution plan, 2020 internal
+control assessment report, 2020 corporate social responsibility report, 2020 work report of the
+Board of Supervisors, evaluation opinions of the Board of Supervisors on the duty performance
+and due diligence of the Board of Directors, the Senior Management and its members for
+2020, amendments to parts of the Articles of Association relating to the Board of Supervisors,
+amendments to the Rules of Procedure of the Board of Supervisors of Bank of China Limited,
+formulation of the Measures for the Performance Evaluation of the Board of Directors, the
+Board of Supervisors, the Senior Management and its Members of Bank of China Limited
+(Trial), performance evaluation results for the Chairperson of the Board of Supervisors for 2020,
+and the implementation plan on performance management for the Chairperson of the Board
+of Supervisors in 2021, performance evaluation results and remuneration distribution plan for
+external supervisors, advice on nominating Mr. HUI Ping as the external supervisor of the Bank,
+appointment of Ms. WEI Hanguang as member of the Duty Performance and Due Diligence
+Supervision Committee of the Board of Supervisors, and the appointment of Mr. ZHOU Hehua as
+member of the Duty Performance and Due Diligence Supervision Committee and the Finance and
+Internal Control Supervision Committee of the Board of Supervisors, among others. In addition,
+the Board of Supervisors issued 20 supervision and evaluation opinions regarding the Board of
+Supervisors on the Bank's strategy implementation in 2020, and the Bank's duty performance
+in information disclosure, internal control compliance in its foreign exchange business, capital
+management, liquidity risk management, consolidated management, stress test management,
+comprehensive risk management, internal control, case prevention, anti-money laundering
+management, compliance management, internal audit, data governance, existing wealth
+management rectification, consumer protection, product management, remuneration management,
+employee behaviour management and market risk management.
+In 2021, the attendance rate of each supervisor of the meetings of the Board of Supervisors is
+given below:
+Supervisors
+Incumbent Supervisors
+ZHANG Keqiu
+On behalf of the Board of Directors
+Substantial Shareholder Interests
+In accordance with the provisions of the Notice on Issues concerning Withholding the Enterprise
+Income Tax on Dividends Paid by Chinese Resident Enterprises to H-share Holders who
+are Overseas Non-resident Enterprises (Guoshuihan [2008] No. 897) published by the State
+Administration of Taxation of PRC, when Chinese resident enterprises distribute annual
+dividends for 2008 onwards to H-share holders who are overseas non-resident enterprises, the
+enterprise income tax shall be withheld at a uniform rate of 10%.
+Financial, Business and Family Relations among Directors
+As at the latest practicable date prior to the issue of this annual report, the Bank had sufficient
+public float based on publicly available information, in compliance with the minimum
+requirement of the Hong Kong Listing Rules and the waiver granted by the Hong Kong Stock
+Exchange at the time of the Bank's listing.
+Share Capital
+Charitable donations made by the Group during the reporting period amounted to approximately
+RMB98.54 million.
+Donations
+Closure of H-Share Register of Members
+The dividend distribution plans for preference shares of the Bank have been approved by the
+Board of Directors. In 2021, the Bank distributed dividends on domestic and offshore preference
+shares in strict compliance with the Articles of Association, the terms of issuance of preference
+shares and the Board of Directors' resolutions on dividend distribution.
+Dividend payments are independent of the Bank's credit rating, nor do they vary with the credit
+rating.
+The preference share dividend is non-cumulative. If any preference share dividend for any
+dividend period is not paid in full, such remaining amount of dividend shall not be carried
+forward to the following dividend year. The Bank shall be entitled to cancel the payment of any
+dividend of the preference shares, and such cancellation shall not constitute a default. The Bank
+may at its discretion use the funds arising from the cancellation of such dividend payment to
+repay other indebtedness due and payable.
+180
+Dividends on the Bank's preference shares will be distributed on an annual basis. Once the
+preference shareholders have received dividends at the specified dividend rate, they shall not be
+entitled to participate in the distribution of the remaining profits of the Bank together with the
+ordinary shareholders.
+The preference shareholders of the Bank receive dividend at the specified dividend rate prior to
+the ordinary shareholders. The Bank shall pay the dividend to the preference shareholders in cash.
+The Bank shall not distribute dividends on ordinary shares before all the dividends on preference
+shares have been paid.
+Preference Shares
+The dividend distribution plan for ordinary shares of the Bank has been approved by the
+shareholders' meeting. In 2021, the Bank distributed dividends on ordinary shares for 2020
+in strict compliance with the Articles of Association, its dividend distribution policy and the
+shareholders' meeting resolution on profit distribution.
+The procedure to formulate the aforementioned dividend distribution policy was compliant,
+transparent and complete. The criterion and ratio of the dividend are explicit and clear. The
+independent directors fully expressed their opinions and the legitimate rights and interests of
+minority shareholders were fully respected and protected. The procedure was in line with the
+provisions of the Articles of Association and other rules and regulations.
+The Articles of Association of the Bank states that the Bank should maintain the continuity and
+stability of its profit distribution policy. It also clarifies the Bank's profit distribution principles,
+policy and adjustment procedures, the consideration process of the profit distribution plan and
+other matters. The Bank shall adopt cash dividend as the priority form of profit distribution.
+Except under special circumstances, the Bank shall adopt cash as the form of dividend
+distribution where there is profit in that year and the accumulated undistributed profit is positive,
+and that the cash distribution of the dividend shall not be less than 10% of the profit after tax
+attributable to the ordinary shareholders of the Bank. The Bank shall offer online voting to
+shareholders when considering amendments to the profit distribution policy and profit distribution
+plan.
+The Bank takes full account of the return to shareholders, and also takes into account the long-
+term interests of the Bank, the overall interests of all its shareholders and the sustainable
+development of the Bank.
+Ordinary Shares
+Formulation and Implementation of Cash Dividend Policy
+Directors of the Bank are not related to one another with respect to finance, business and family,
+or other material relations.
+Distributable Reserves
+Please refer to Note V.38 to the Consolidated Financial Statements for details of distributable
+reserves of the Bank.
+The H-Share register of members of the Bank will be closed from Saturday, 9 July to Thursday,
+14 July 2022 (both days inclusive), for the purpose of determining the list of shareholders
+entitled to the proposed final dividends on ordinary shares. In order to qualify for the proposed
+final dividends, the H-Share Holders of the Bank who have not registered the relevant transfer
+documents are required to lodge them, together with the relevant share certificates, with the
+H-Share Registrar of the Bank, Computershare Hong Kong Investor Services Limited, at Rooms
+1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong, China,
+no later than 4:30 p.m. on Friday, 8 July 2022. The ex-dividend date of the Bank's H Shares will
+be on Thursday, 7 July 2022.
+Fixed Assets
+To the best knowledge of the Bank, as at 31 December 2021, none of the directors or supervisors
+of the Bank or their respective associates had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (within the
+meaning of Part XV of the SFO) as recorded in the register required to be kept by the Bank
+pursuant to Section 352 of the SFO or as otherwise notified to the Bank and the Hong Kong Stock
+Exchange pursuant to the Model Code as set out in Appendix 10 of the Hong Kong Listing Rules.
+Directors' and Supervisors' Interests in Shares, Underlying Shares
+and Debentures
+During the reporting period, none of the Bank, its holding companies, or any of its subsidiaries
+or fellow subsidiaries was a party to any arrangement that would enable the Bank's directors and
+supervisors, or their respective spouses or children below the age of 18, to benefit by acquiring
+shares in, or debentures of, the Bank or any other body corporate.
+Directors' and Supervisors' Rights to Acquire Shares
+No transaction, arrangement or contract of significance, in relation to the Bank's business to
+which the Bank, its holding companies, or its subsidiaries or fellow subsidiaries was a party and
+in which a director or a supervisor or any entity connected with them was materially interested,
+directly or indirectly, subsisted during the reporting period.
+Directors' and Supervisors' Interests in Transactions, Arrangements
+and Contracts of Significance
+None of the directors or supervisors of the Bank has a service contract with the Bank or its
+subsidiaries that is not determinable within one year or is not determinable without payment of
+compensation other than normal statutory compensation.
+Directors' and Supervisors' Service Contracts
+182
+Please refer to the section "Directors, Supervisors and Senior Management Members" for details
+of the remuneration of directors, supervisors and senior management members.
+181
+The Bank has formulated a clear regulation on the remuneration of directors, supervisors
+and senior management members. The remuneration for Chairman of the Board of Directors,
+President, Chairperson of the Board of Supervisors and executive vice presidents shall be paid
+in accordance with the rules on remuneration reform for central enterprises, which consists of
+basic annual remuneration, performance-based annual remuneration and incentive income linked
+to term appraisal. The remuneration for other senior management members and shareholder
+supervisors consists of basic annual remuneration and performance-based remuneration, with
+part of performance-based remuneration paid in a deferred manner. According to the recourse
+and recovery mechanism for performance-based remuneration of the Bank, if risk losses
+falling within the employees' remit and responsibility are exposed in excess during the term of
+service, the Bank may recover part or all of the performance-based remuneration paid within
+the corresponding period, and stop the payment of the part that has not been paid. Independent
+directors as well as external supervisors and employee supervisors are remunerated by the Bank
+while non-executive directors are not remunerated by the Bank. The Bank remunerates directors,
+supervisors and senior management members who are employed by the Bank with salaries,
+bonuses, employer contributions to social insurance, enterprise annuity, supplementary medical
+insurance and housing provident fund, as well as other monetary income.
+Please refer to Note V.20 to the Consolidated Financial Statements for details of the fixed assets
+of the Bank.
+Remuneration Policy of Directors, Supervisors and Senior
+Management Members
+None of the directors has interests in any business that competes or is likely to compete, either
+directly or indirectly, with the business of the Group.
+Directors' Interests in Competing Businesses of the Bank
+Under the Hong Kong Listing Rules, transactions between the Bank and its connected persons
+(as defined under the Hong Kong Listing Rules) constitute connected transactions to the Bank.
+Such transactions are monitored and administered by the Bank in accordance with the Hong
+Kong Listing Rules. In 2021, the Bank has engaged in a number of connected transactions
+with its connected persons in the ordinary and usual course of its business. Such transactions
+are exempted from the reporting, annual review, announcement and independent shareholders'
+approval requirements according to the Hong Kong Listing Rules.
+Connected Transactions
+Please refer to the section "Financial Highlights" for the summary of the annual results, assets
+and liabilities of the Bank for the last five years.
+Financial Summary
+Profit for the year
+2020
+2021
+605,717
+Financial Highlights
+Operating income
+2019
+%
+ROA
+RMB Million
+Operating profit
+RMB Million
+RMB Million
+567,647
+2018
+503,806
+RMB
+EPS (basic)
+2018
+2017
+483,761
+11.45
+12.06
+2019
+221,741
+2017
+2021
+2020
+2019
+550,010
+2017 2018
+From an early history punctuated by turmoil and upheaval, the Bank emerged strong as a national
+champion in finance. A period of fast growth ensued, thanks to the peace and stability brought
+by the founding of the People's Republic of China. The Bank received a further boost from the
+reform and opening-up campaign afterwards, and has now renewed its aspiration of excellence
+in the new development stage. It has been clear from the start that the Bank has always found
+strength in the development of, and more importantly, in its service to the country, as was
+pledged in its founding mission — “promoting the welfare of the society and bringing prosperity
+to the nation". We continue to be inspired by such purpose and resolve, and will carry through our
+duty to the national rejuvenation while pursuing business growth.
+2018
+New "One Mainstay, Two Engines” strategy to build on century-long legacy
+As the new development pattern in China starts to take hold, whereby the domestic and
+international economic circulations reinforce each other, we've located our new strategy to focus
+on our competitive advantages, which features domestic commercial banking as the mainstay of
+our Group, and globalised operations and diversified business platforms as two growth engines.
+The goal is to allow our customers access to the Bank's global resources and services at any
+point of contact. In 2021, domestic contribution to our total revenue increased, with steady
+growth reported both in key businesses and key regions. On the side of our overseas network,
+we demonstrated resilience against the pandemic and managed to maintain stable operations. We
+also promoted the synergy between our banking arms and non-banking business platforms and
+turned it into as a key enabler of business and growth, as evidenced in the improved profitability
+and higher contribution to the Group reported by the latter. In addition, we provided high-quality
+financial services to the 2022 Beijing Winter Olympic Games as its official banking partner.
+Having sponsored the 2008 Beijing Summer Olympic Games, we are the only bank in the world
+to sponsor both the Winter and Summer Games; and we've seized this opportunity to launch a
+series of Olympics-related banking services, to help promote the national campaign of engaging
+300 million people in winter sports.
+Digital transformation to accelerate future-facing innovation
+We've always watched technological advancements and industrial trends with keen interest, and
+invested heavily in digital transformation and other key innovations that will better position us for
+the future. We achieved initial success in promoting the four strategic scenarios, including cross-
+border facilitation, education, sports, and silver economy; helped by our publication of the White
+Paper on the Development of Scenario-based Financial Services Ecosystem, the first of its kind.
+We also launched an updated mobile banking APP with additional functions, and registered an
+exponential growth in e-CNY wallet activation. In addition, we've gone all out to accelerate the
+development of enterprise-level architectures, and foster mindsets and systems compatible with
+digital transformation. With many of the enterprise-level capabilities being formed and an initial
+version of the "Three Horizontals, Two Verticals and One Line” data governance framework now
+in place, we expected sizable flows of dividend from data assets in the years ahead.
+Comprehensive risk management for a stronger footing
+As uncertainty and complexity grew in the external environment, we continued to exercise
+caution and promoted a proactive approach to risk prevention and control, with equal emphasis
+on stability and growth. We strengthened the comprehensive risk management system of the
+Group and significantly reduced vulnerabilities; especially, we enhanced differentiated support
+to overseas institutions and look-through management of non-banking arms. We also optimised
+credit policies for inclusive finance and retail customers, and launched pilot reform programs for
+credit management in overseas markets. In addition, further improvements were made to our anti-
+money laundering system. Risk levels, including that of liquidity risk and market risk, remained
+stable at the moment.
+16
+Culture building to promote shared values
+Rooted deeply in over a century of history and traditions, the Bank's values of "providing
+excellent service, innovating with prudence, upholding openness and inclusiveness, and
+collaborating for mutual growth” form the foundation of our corporate culture; and we've taken
+measures to institutionalise and translate these values and culture into true competitiveness.
+In addition, we integrated the leadership of the Party into corporate governance, giving full
+play to its core function of “setting the right direction, overseeing the big picture, and ensuring
+implementation of policies and principles"; we also leveraged the Party's political strength,
+organisation strength, as well as its strength in mass work to advance reforms and support the
+Bank's development. We encouraged benchmarking and best practice sharing at all levels, which
+yielded good results especially in raising the mentality of providing excellent service. We stepped
+up efforts to upgrade systems, optimise workflows, and promote differentiated management, in
+order to enhance our capacity for innovating with prudence. As a consequence, various types of
+flexible organisations were established to pick up customer needs at speed, by making extensive
+and full use of standardised modular products and services, contributing towards an open and
+inclusive ecosystem. Moreover, nearly 260 financing projects were executed jointly by banking
+and non-banking platforms within the Group, which has further demonstrated the effect and
+benefits of collaborating for mutual growth, and paved the way for future breakthrough in the
+synergy between culture building and business development.
+2022 marks the 110th anniversary of Bank of China. 110 years ago, the Bank set its purpose
+to serve the social and economic development of the country through finance. To that end, our
+people have since worked hard and tirelessly to overcome all headwinds and challenges, and
+charted a course for a better future through both tenacity and ingenuity. Now in its second century
+of operation, the Bank remains a living witness to the great rejuvenation of our nation, and has
+left a rich legacy of its own that grows more relevant by the day.
+Service to the country is the way to prosperity
+275,142
+17
+People-centered approach leads to excellence
+2017
+We've long put customers in the centre of everything we do, a fine tradition that dates back to the
+1930s, when the Bank proclaimed “Bank of China by nature is a bank for all 400 million fellow
+Chinese". It was then attested by our perseverance with providing cash delivery and payment
+services to people in front-line cities during Japanese aggression in the Second World War; and
+has since been carried over to this day, as we accelerate the building of strategic scenario-based
+business ecosystems, including cross-border facilitation, education, sports and silver economy, to
+create better customer experience. As always, we will continue to "provide excellent services" to
+our customers, to increase their wealth and bring convenience to their life; we've also installed a
+people-oriented mentality in taking care of our own staff. We believe this consistency on people
+centricity enhances our reputation and serves as a source of our strength. This approach will
+create more value not only for our external customers, but also for our own employees and our
+organisation.
+The Bank owes its success throughout different periods to its clear understanding and respect of
+the general patterns or principles of economic and financial activities, as well as deep insights
+into market trends and customer needs. Now that we find ourselves in a new world of constant
+changes and great uncertainty, it has become even more important for us to observe the rules and
+patterns while adapting to the trends of times; and to stick to the path of financial development
+with Chinese characteristics, featuring the rule of law and market mechanisms. Such an approach
+will equip us with the global perspective and keen receptiveness required to adapt, and maintain
+confidence and composure while navigating challenges.
+18
+Prudence and integrity as our unshakable tenets
+Banks are a special type of commercial organisation in that the commodities banks deal in
+currencies, capital, and credit - play a distinct role in the functioning of the society, warranting
+prudence and integrity, which we have taken as our ironclad tenets from the very beginning.
+Facing profound changes unseen in a century now, we've exercised extra cautions, stayed vigilant
+against potential risks, and further strengthened our comprehensive risk management system, as
+we believe this is the only and sure way to protect our customers' interest, ensure financial and
+social stability, while sustaining long-term growth across economic cycles.
+As an old saying in Chinese goes, the power of will knows no bounds, not even summits
+unattempted or oceans most profound. Our people have time and again proved their strong
+will as well as their professionalism in the past 110 years of excellence, and are now ready to
+write a new chapter with renewed commitment. In 2022, we will continue to find guidance and
+inspiration from Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and
+our century-long legacy, and focus our efforts on: making our financial services more adaptive,
+inclusive, and competitive; facilitating higher-level opening-up; fully utilising our strength in
+overseas network for better integration into global finance governance; and launching cross-
+border products or solutions that are more efficient and accessible. These initiatives will aid our
+ongoing campaign of building a first-class global banking group and contributing to the national
+rejuvenation, while helping us deliver greater results and satisfy the expectations of not only the
+times, but also our country and its people, and our clients and shareholders.
+19
+LIU Liange
+Chairman
+29 March 2022
+15
+2020
+2019
+2018
+2017
+2019 2020 2021
+Adaptability sustains a long-standing business
+246,220
+1.37
+227,533
+2020
+2019
+2018
+2017
+2021
+2020
+2019
+2018
+2017
+2021
+2020
+2019
+2018
+2017
+2021
+185
+Net interest margin
+1.95
+%
+Credit cost
+0.95
+0.81
+10
+2021
+2017
+28.34
+%
+0.94
+0.92
+Cost to income ratio (calculated under
+regulations in the Chinese mainland)
+%
+249,588
+1.45
+%
+29.81
+%
+operating income
+Non-interest income to
+2018
+12.24
+2020 2021
+177.84
+%
+losses to non-performing loans
+Allowance for loan impairment
+29.08
+25.98
+27.75
+Non-performing loans to total loans
+182.86
+181.97
+159.18
+1.46
+1.42
+2017 2018
+2021
+2020
+2019
+2018
+2017
+2020 2021
+2019
+2018
+2017
+2019
+We've adopted the new development philosophy and identified technology finance, green
+finance, inclusive finance, cross-border services, consumer finance, wealth management, supply
+chain finance, and county-level financial services, as the "Eight Priority Areas" where we
+will increase our presence and build new growth drivers. Doing so allows us to optimise the
+structure of our offerings of financial services, and better support high-quality development of
+the economy. Throughout the year, we continued to step up support to corporate customers in
+the technology sector, extending credit facilities to over 33 thousands of them; meanwhile, our
+debt-equity combination financing for tech firms also gained traction. A full line-up of diverse
+green financial products, was established and still growing, while our green credit balance
+experienced a surge. In inclusive finance, we integrated our corporate and retail functions
+for higher efficiency, which drove a drastic growth in inclusive loans. Progress was made in
+our cross-border services as well, as we pioneered the H-Share full circulation program, the
+Southbound Bond Connect, the Cross-border Wealth Management Connect, and many other
+initiatives, securing our lead in the market. Similarly, our presence in consumer finance and
+wealth management increased, with more offerings launched in the market and the AUM in the
+retail business exceeding RMB11 trillion. We also upgraded our supply chain finance services,
+now branded "BOC Smart Chain”, which contributed to strengthening the supply chain of many
+key industries. And finally, leveraging our resources at the county level, we took well-targeted
+actions to facilitate the poverty alleviation campaign and support rural revitalisation program.
+201,891
+Also in the year, a new blueprint has been drawn for the Group's development during the 14th
+Five-Year-Plan period, in line with strategies and policies of the country and of the Party, which
+will guide and inspire our over 300,000 colleagues, united under the vision of building a first-
+class global banking group, to continue working hard to live up to the mission of bridging China
+and the world for the common good.
+11
+28.17
+26.73
+28.00
+28.09
+28.34
+Capital ratios
+12
+Net common equity tier 1 capital
+Net additional tier 1 capital
+Net tier 2 capital
+Broader support to the real economy from the “Eight Priority Areas"
+Tier 1 capital adequacy ratio (%)
+Capital adequacy ratio (%)
+1,843,886
+329,845
+525,108
+1,704,778 1,596,378
+287,843 210,057
+458,434 394,843
+1,465,769
+regulations in the Chinese mainland, %)
+Cost to income ratio (calculated under
+27.75
+25.98
+0.87
+0.92
+0.94
+0.98
+11.28
+10.61
+11.45
+12.06
+1,356,088
+12.24
+1.85
+1.89
+1.95
+1.90
+10
+29.81
+26.73
+29.08
+1.75
+109,524
+105,002
+347,057
+1.33
+1.46
+1.37
+1.42
+1.45
+14
+1.33
+1.46
+13
+1.37
+1.45
+Allowance for loan impairment losses to
+non-performing loans (%)
+15
+Credit cost (%)
+16
+56
+187.05
+1.42
+0.89
+11
+Credit-impaired loans to total loans (%)
+264,240
+Common equity tier 1 capital adequacy
+11.30
+11.28
+11.30
+11.41
+11.15
+13.32
+Non-performing loans to total loans (%)
+13.19
+12.27
+12.02
+16.53
+16.22
+15.59
+14.97
+14.19
+Asset quality
+12.79
+7899
+Non-interest income to operating income (%)
+Net interest margin (%)
+Impairment losses on assets
+Operating profit
+Profit before income tax
+Profit for the year
+227,339
+180,575
+605,717 567,647
+(226,355) (202,411) (198,269)
+(104,220) (119,016) (102,153)
+275,142 246,220 249,588
+276,620 246,378 250,645
+205,096 201,891
+151,729
+159,960
+Operating expenses
+130,876
+550,010
+503,806
+483,761
+(176,979) (173,859)
+(99,294) (88,161)
+227,533 221,741
+229,643 222,903
+192,435 184,986
+Profit attributable to equity holders
+of the Bank
+216,559
+134,226
+Total dividend of ordinary shares
+2
+372,930
+2020
+205,096
+2021
+Note: The financial information in this report has been prepared in accordance with IFRS¹. The data are presented in
+RMB and reflect amounts related to the Group, unless otherwise noted.
+Unit: RMB million
+Note
+2021
+2020
+349,535
+2019
+2017
+Results of operations
+Net interest income
+Non-interest income
+Operating income
+425,142
+415,918
+390,050
+2018
+177.84
+N.A.
+187,405
+56,228
+1,851,701 1,612,980 1,496,016
+294,388 294,388 294,388
+0.70
+0.61
+0.61
+0.59
+0.56
+0.221
+0.197
+2,038,419
+294,388
+0.191
+0.176
+6.47
+5.98
+5.61
+5.14
+4.74
+Return on average total assets (%)
+Return on average equity (%)
+0.184
+192,870
+57,994
+2,225,153
+294,388
+Key financial ratios
+180,086 172,407
+54,167 51,812
+Financial position
+Total assets
+Loans, gross
+Allowance for loan impairment losses
+3
+Investments
+4
+56
+Total liabilities
+Due to customers
+Capital and reserves attributable to
+equity holders of the Bank
+Share capital
+Per share
+Basic earnings per share (RMB)
+Dividend per share (before tax, RMB)
+Net assets per share (RMB)
+26,722,408 24,402,659 22,769,744 21,267,275 19,467,424
+15,712,574 14,216,477 13,068,785 11,819,272 10,896,558
+(390,541) (368,619) (325,923) (303,781) (252,254)
+6,164,671 5,591,117 5,514,062 5,054,551 4,554,722
+24,371,855 22,239,822 20,793,048 19,541,878 17,890,745
+18,142,887 16,879,171 15,817,548 14,883,596 13,657,924
+182.86
+ratio (%)
+159.18
+Facsimile: (86) 10-6601 6871
+Website: www.boc.cn
+Customer Service and Complaint Hotline:
+(86) Area Code-95566
+Place of Business in Hong Kong
+Bank of China Tower, 1 Garden Road,
+Central, Hong Kong, China
+Selected Newspapers for Information
+Disclosure (A Share)
+Telephone: (86) 10-6659 6688
+China Securities Journal, Shanghai Securities News,
+Securities Times, Securities Daily
+Publication of the Annual Report
+www.sse.com.cn
+Website of HKEX for Publication of the
+Annual Report
+www.hkexnews.hk
+Place where Annual Report can be Obtained
+Head Office of Bank of China Limited
+Shanghai Stock Exchange
+Legal Advisor
+King & Wood Mallesons
+Website of SSE for
+Clifford Chance
+Beijing, China, 100818
+Office Address
+Secretary to the Board of Directors and
+Company Secretary
+MEI Feiqi
+Office Address:
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Beijing, China
+Telephone: (86) 10-6659 2638
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Listing Affairs Representative
+Office Address:
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+192,435
+Telephone: (86) 10-6659 2638
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+Registered Address
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Beijing, China
+YU Ke
+LIU Jin
+Auditors
+PricewaterhouseCoopers Zhong Tian LLP
+H Share
+The Stock Exchange of Hong Kong Limited
+Stock Name: Bank of China
+Stock Code: 3988
+Domestic Preference Share
+Shanghai Stock Exchange
+Third Tranche
+Stock Name: 中行優3
+Stock Code: 601988
+Stock Code: 360033
+Stock Name: 中行優4
+Stock Code: 360035
+Offshore Preference Share
+Second Tranche
+The Stock Exchange of Hong Kong Limited
+Stock Name: BOC 20USDPREF
+Stock Code: 4619
+14
+Message from the Chairman
+2021 was a critical year as we've summed up the past and gained new strength, while laying
+out plans for the future. We witnessed the historic convergence of the "Two Centenary Goals"
+of our country, and the resounding success in eliminating extreme poverty for all Chinese. We
+withstood a global pandemic in its second year, while still managing to advance our support to
+the real economy, accelerate reform and innovation, and increase our resilience against risks. The
+Bank delivered solid financial performance in 2021: the Group achieved a profit for the year of
+RMB227.339 billion an increase of 10.85% year-on-year; a profit attributable to equity holders
+of the Bank was RMB216.559 billion, up 12.28% from the previous year; ratio of non-performing
+loans was 1.33%, down 0.13 percentage point from the prior year end; and the allowance for loan
+impairment losses to non-performing loans was 187.05%, up 9.21 percentage points from the
+prior year end. The Board of Directors has proposed a cash dividend of RMB2.21 per ten ordinary
+shares for 2021, representing a dividend payout ratio of 30%.
+Fourth Tranche
+Domestic Auditor
+Shanghai Stock Exchange
+Stock Name: 中國銀行
+Securities Information
+Office Address:
+Room 01, Unit 507, DBS Bank Tower,
+1318 Lu Jia Zui Ring Road,
+Pudong New Area, Shanghai, China
+Certified Public Accountants who signed
+181.97
+Ms. Ho Shuk Ching Margarita,
+Mr. Zhu Yu, Mr. Li Dan
+A Share
+International Auditor
+22/F, Prince's Building,
+Central, Hong Kong, PRC
+13
+Unified Social Credit Code
+911000001000013428
+Financial Institution Licence Serial Number
+B0003H111000001
+Registered Capital
+RMB294,387,791,241
+PricewaterhouseCoopers
+Office Address:
+Vice Chairman and President
+the auditor's report:
+Legal Representative and Chairman
+7.2197
+8.0250
+7.8155
+7.8473
+7.8023
+HKD/RMB year-end central parity rate
+0.8176
+0.8416
+EUR/RMB year-end central parity rate
+0.8958
+0.8359
+11
+Notes:
+1
+2
+3
+4
+Starting on 1 January 2018, the Bank has applied International Financial Reporting Standard No. 9 - Financial
+Instruments (IFRS 9) published by the International Accounting Standards Board.
+0.8762
+Non-interest income = net fee and commission income + net trading gains/(losses) + net gains/(losses) on transfers
+of financial asset + other operating income.
+6.5342
+6.9762
+LIU Liange
+0.66
+0.76
+0.80
+0.95
+0.81
+Allowance for loan impairment losses to
+total loans (%)
+6.8632
+17
+2.96
+2.97
+3.07
+2.77
+Exchange rate
+USD/RMB year-end central parity rate
+6.3757
+6.5249
+2.83
+Allowance for loan impairment losses = allowance for loans at amortised cost + allowance for loans at fair value
+through other comprehensive income.
+Beijing, China
+5
+12
+13
+14
+15
+16
+17
+Cost to income ratio is calculated in accordance with the Measures of the Performance Evaluation of Financial
+Enterprises (Cai Jin [2016] No. 35) formulated by the MOF.
+The capital ratios are calculated under the advanced approaches and in accordance with Capital Rules for
+Commercial Banks (Provisional) (Y.J.H.L. [2012] No. 1).
+Allowance for loan impairment losses to non-performing loans = allowance for loan impairment losses at year-
+end ÷ non-performing loans at year-end × 100%. Total loans are exclusive of accrued interest when being used to
+calculate allowance for loan impairment losses to non-performing loans.
+Credit cost = impairment losses on loans ÷ average balance of loans × 100%. Average balance of loans = (balance
+of loans at the beginning of the year + balance of loans at year-end) ÷ 2. Total loans are exclusive of accrued
+interest when being used to calculate credit cost.
+Allowance for loan impairment losses to total loans = allowance for loan impairment losses at year-end ÷ total
+loans at year-end × 100%. Calculation is based on the data of the Bank's institutions in the Chinese mainland.
+Total loans are exclusive of accrued interest when being used to calculate allowance for loan impairment losses to
+total loans.
+12
+Corporate Information
+Registered Name in Chinese
+中國銀行股份有限公司(“中國銀行")
+Registered Name in English
+BANK OF CHINA LIMITED
+("Bank of China")
+The investments of 2021, 2020, 2019 and 2018 are presented under IFRS 9, which include financial assets at fair
+value through profit or loss, financial assets at fair value through other comprehensive income and financial assets
+at amortised cost. The comparative data of the previous reporting period was not restated accordingly.
+11
+Non-interest income to operating income = non-interest income ÷ operating income × 100%.
+Credit-impaired loans to total loans = credit-impaired loans at year-end ÷ total loans at year-end × 100%. Total
+loans are exclusive of accrued interest when being used to calculate credit-impaired loans to total loans.
+Non-performing loans to total loans = non-performing loans at year-end ÷ total loans at year-end × 100%. Total
+loans are exclusive of accrued interest when being used to calculate non-performing loans to total loans.
+Net interest margin = net interest income ÷ average balance of interest-earning assets × 100%. Average balance is
+average daily balance derived from the Group's management accounts (unaudited).
+10
+Dividend per share is the dividend per ordinary share distributed to ordinary shareholders.
+Net assets per share = (capital and reserves attributable to equity holders of the Bank at year-end - other equity
+instruments) number of ordinary shares in issue at year-end.
+7
+2021
+2020
+2019
+10.61
+184,986
+%
+on Average Equity and Earnings per Share (Revised in 2010) (CSRC Announcement [2010] No. 2) issued by the
+CSRC.
+-
+Return on average equity = profit attributable to ordinary shareholders of the Bank ÷ weighted average capital and
+reserves attributable to ordinary shareholders of the Bank × 100%. Calculation is based on No. 9 Preparation and
+Reporting Rules of Information Disclosure of Public Offering Companies Calculation and Disclosure of Return
+9
+6
+8
+Return on average total assets = profit for the year average total assets × 100%. Average total assets = (total
+assets at the beginning of the year + total assets at year-end) ÷ 2.
+ROE
+•
+the notes to the consolidated financial statements, which include principal accounting
+policies and other explanatory information.
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated
+financial position of the Group as at 31 December 2021, and of its consolidated financial
+performance and its consolidated cash flows for the year then ended in accordance with
+International Financial Reporting Standards ("IFRSS") and have been properly prepared in
+compliance with the disclosure requirements of the Hong Kong Companies Ordinance.
+the consolidated statement of changes in equity for the year then ended;
+the consolidated statement of comprehensive income for the year then ended;
+the consolidated income statement for the year then ended;
+the consolidated statement of financial position as at 31 December 2021;
+•
+Our Opinion
+the consolidated statement of cash flows for the year then ended; and
+Independent Auditor's Report
+•
+The consolidated financial statements of Bank of China Limited (the “Bank”) and its subsidiaries
+(the "Group"), which are set out on pages 211 to 434, comprise:
+What we have audited
+Opinion
+(Incorporated in the People's Republic of China with limited liability)
+To the Shareholders of Bank of China Limited
+196
+Bank.
+For details of the Bank's Information on the Environmental, Social and Governance Performance,
+Please refer to the Corporate Social Responsibility Report of Bank of China Limited for 2021
+(Environmental Social Governance) published on the websites of SSE, HKEX and the Bank.
+Other Significant Events
+For announcements regarding other significant events during the reporting period made in
+accordance with the regulatory requirements, please refer to the websites of SSE, HKEX and the
+Basis for Opinion
+•
+We conducted our audit in accordance with International Standards on Auditing ("ISAs”). Our
+responsibilities under those standards are further described in the Auditor's Responsibilities for
+the Audit of the Consolidated Financial Statements section of our report.
+Refer to Note II 4.6, Note III 1, Note V 9, 17, 23 and
+Note VI 2.3 of the consolidated financial statements.
+197
+(1)
+We assessed the design and tested the operating
+effectiveness of the key internal controls over the
+measurement of ECL for loans and advances to
+customers. These included periodic assessment
+and approval controls, which primarily include:
+bias.
+We understood and evaluated management's
+internal controls and assessment process for the
+measurement of ECL for loans and advances
+to customers. We assessed the inherent risk of
+material misstatement by considering the degree
+of estimation uncertainty and level of other
+inherent risk factors such as the complexity
+of estimation models used, the subjectivity
+of significant management judgements and
+assumptions, and susceptibility to management
+The Group assessed whether the credit risk of loans
+and advances to customers had increased significantly
+since their initial recognition, and applied a three-
+stage impairment model approach to calculate the
+ECL. For loans and advances to customers that are
+classified as stage 1 or stage 2, and those classified
+as stage 3 (impaired) with individual amount that are
+relatively insignificant, the Group assessed the ECL
+using the risk parameter modelling approach that
+incorporated relevant key risk parameters, including
+probability of default ("PD"), loss given default
+("LGD") and exposure at default ("EAD”). For loans
+and advances to customers classified as stage 3 with
+individual amount that are relatively significant, the
+Group assessed ECL for each loan by estimating the
+future cash flows from the loans.
+As at 31 December 2021, the carrying amount
+of loans and advances to customers in BOC's
+consolidated statement of financial position was
+RMB 15,322,484 million. Of these balances, the loans
+and advances to customers measured at amortised
+cost of RMB 15,319,394 million and loans and
+advances to customers measured at fair value through
+other comprehensive income of RMB351,795 million,
+together with accrued interest were subject to ECL
+measurement, and an impairment allowance of
+RMB390,541 million was recognised by management
+as at 31 December 2021. The impairment losses on
+loans and advances to customers recognised in the
+Group's consolidated income statement for the year
+ended 31 December 2021 amounted to RMB98,298
+million.
+During the reporting period, neither the Bank nor its controlling shareholder failed to perform any
+obligations from effective legal instruments of the court or pay off any due debt in large amount.
+Information on the Environmental, Social and Governance Performance
+Measurement of expected credit loss ("ECL") for loans and advances to customers
+How our audit addressed the Key Audit Matter
+Key Audit Matter
+Key Audit Matters (Continued)
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
+basis for our opinion.
+Independent Auditor's Report (Continued)
+Consolidation of structured entities
+Valuation of financial investments measured at fair value
+.•
+Measurement of expected credit loss ("ECL") for loans and advances to customers
+•
+Key audit matters identified in our audit are summarised as follows:
+Key audit matters are those matters that, in our professional judgement, were of most significance
+in our audit of the consolidated financial statements of the current period. These matters were
+addressed in the context of our audit of the consolidated financial statements as a whole, and in
+forming our opinion thereon, and we do not provide a separate opinion on these matters.
+Key Audit Matters
+We are independent of the Group in accordance with the International Code of Ethics for
+Professional Accountants (including International Independence Standards) issued by the
+International Ethics Standards Board for Accountants ("IESBA Code”), and we have fulfilled our
+other ethical responsibilities in accordance with the IESBA Code.
+Independence
+Independent Auditor's Report (Continued)
+198
+Integrity of the Bank and its Controlling Shareholder
+Purchase and Sale of Material Assets
+Disciplinary Actions Imposed on the Bank, its Directors, Supervisors,
+Senior Management Members and Controlling Shareholder
+Working Performance of the External Supervisors
+193
+During the reporting period, the Board of Supervisors held no objection to such matters under
+its supervision regarding the Bank's operational and legal compliance, financial position, use of
+raised funds, purchase and sale of assets, connected transactions, internal control and corporate
+information disclosure.
+The Board of Directors and the Senior Management attached great importance and gave strong
+support to the work of the Board of Supervisors. By holding Executive Committee meetings
+and special meetings, issuing written instructions and through other means, they required senior
+management members and relevant functional departments to carefully study the opinions and
+suggestions offered by the Board of Supervisors, and push forward the effective transmission,
+implementation and application of the supervisory results of the Board of Supervisors across
+the Bank. Effective interaction among the Board of Directors, the Board of Supervisors and the
+Senior Management boosted the continuous enhancement of the Bank's corporate governance.
+Promoted improvement and progress through supervision. The Board of Supervisors followed
+up on the Bank's progress in implementing the rectification of problems identified in national
+tour inspections, national audits, various regulatory inspections and internal and external audit
+reports, urged that key issues be effectively rectified and promoted the establishment of a far-
+reaching mechanism for the rectification of common problems. It gave full play to its constructive
+supervisory role within the corporate governance system, and offered forward-looking, targeted
+and practical suggestions and supervisory opinions on operation and management to the Board
+of Directors and the Senior Management, through ways such as sending letters of supervisory
+recommendations and submitting special survey reports.
+Strengthened self-improvement. The Board of Supervisors improved its policy system by
+revising items concerning the Board of Supervisors in the Articles of Association of the Bank,
+formulating the Measures for the Performance Evaluation of the Board of Directors, the Board
+of Supervisors, the Senior Management and its Members (Trial), and improving the Rules of
+Procedure of the Board of Supervisors, the Terms of References of Duty Performance and
+Due Diligence Supervision Committee of the Board of Supervisors and the Implementation
+Rules for the Work of the Finance and Internal Control Supervision Committee of the Board
+of Supervisors. Furthermore, it strengthened the supervisory team building and, in accordance
+with the laws, regulations and corporate governance procedures, completed the replacement of
+the Chairperson of the Board of Supervisors, the resignation of two employee supervisors, the
+appointment of two employee supervisors and the re-appointment of one employee supervisor,
+and undertook the selection and appointment of external supervisors. To enhance professional
+competency of supervisors, special training was held for the Board of Supervisors regarding the
+opportunities and challenges arising from the globalisation of commercial banks as well as the
+"carbon neutrality” risk management practices of financial institutions. The Board of Supervisors
+also urged supervisors to perform their duties and responsibilities and completed the annual duty
+performance evaluation of the Board of Supervisors and its members. All supervisors performed
+their supervision duties faithfully and diligently, and made efforts to improve their policy level
+and ability to perform their duties. Besides, they actively attended meetings, earnestly examined
+proposals, listened to work reports, carried out special surveys, and provided professional, well-
+considered and independent suggestions.
+192
+Leveraged on supervision synergy. The Board of Supervisors adhered to a coordination
+mechanism between directors and supervisors under which resolutions of the Board of
+Supervisors are sent to the Board of Directors and briefings of the Board of Directors are sent
+to the Board of Supervisors. It also continued to jointly carry out activities such as surveys,
+interviews and training with directors, and reinforced communication and coordination with the
+Board of Directors and the Senior Management, so as to leverage the governance synergy. In
+addition, it also deepened cooperation with the internal audit and supervised the work quality
+of the new external auditors. Moreover, the Board of Supervisors enhanced the coordination
+with the second and third lines of defence and the comprehensive management departments,
+and conducted communication and exchanges with major peers, thus broadening its supervision
+horizon and improving its supervision efficiency.
+Strengthened supervision and evaluation in specific fields. In response to regulatory
+requirements regarding key supervisory matters, the Board of Supervisors optimised its
+supervision work plan, improved its supervisory analysis framework and indicator system,
+consolidated its institutional arrangements by which functional departments report to the Board of
+Supervisors, and issued 20 supervision and evaluation opinions as required.
+Deepened supervision of risk management and internal control. The Board of Supervisors
+continuously monitored the global political and economic landscape, domestic and overseas
+pandemic situation and changes in the financial market environment, as well as actively studying
+and analysing new issues faced by the Bank's risk management and internal control functions, so
+as to comprehensively understand the Bank's risk management and internal control status and its
+progress in towards the implementation of key tasks. It also monitored the Bank's fulfillment of
+risk and internal control-related regulatory indicators, and completed four quarterly supervision
+reports on risk and internal control, which provided timely risk alerts for incipient and
+tendentious issues. Emphasising key areas and key links, it intensified its focus on the supervision
+of credit risk prevention and control under the new situation, risk management and control in
+the real estate industry, interest rate and exchange rate risk management, case prevention, major
+risk screening and the establishment of emergency management mechanism and the application
+of stress test results. Furthermore, it kept a close eye on risks brought by changes in the external
+situation to cross-border and cross-industry operations, issued prompt alerts to enhance the
+management of internal control compliance and business continuity in overseas institutions,
+and strengthened the penetration management of risks in comprehensive operation companies.
+Focusing on the weak links in the comprehensive risk management and internal control system,
+it conducted special surveys on the effectiveness of the Bank's comprehensive risk management
+and internal control and put forward suggestions such as improving the comprehensive
+risk governance structure, enhancing the Bank's integrated risk management capabilities,
+consolidating the responsibilities of the internal control “three lines of defence" and strengthening
+support of internal control resources and support. In addition, it paid close attention to the
+implementation of the optimisation solutions for the comprehensive risk management system, so
+as to promote enhanced risk management with a view to better serving the development of the
+Group.
+regarding the Bank's regular reports, and put forward proposals to strengthen multi-dimensional
+comprehensive analysis, consolidate the central role of domestic commercial banks, commit
+long-term efforts to enhancing its overseas operation and management, and improve the market
+competitiveness of its comprehensive operation companies, in order to facilitate the Group's
+high-quality development.
+191
+Actively carried out strategy supervision. The Board of Supervisors participated in and
+supervised the research, formulation, work allocation and implementation of the Group's 14th
+Five-Year Plan and the Long-Range Objectives Through the Year 2035, to ensure that the Bank's
+strategies effectively align with the national 14th Five-Year Plan while reflecting the realities of
+its own development landscape. Focusing on building the “One Mainstay, Two Engines" strategic
+development pattern, the Board of Supervisors reinforced supervision of key strategic areas such
+as the “Eight Priority Areas". Furthermore, it regularly reviewed the strategy implementation,
+heard two related reports and issued supervision and evaluation opinions on the Bank's strategy
+implementation for 2020. By conducting special surveys on strategic management, it put forward
+recommendations such as improving the governance structure of strategic management and
+strengthening the management of strategy implementation, so as to promote the implementation
+of the Group's 14th Five-Year Plan.
+Diligently supervised and evaluated the duty performance of directors and senior
+management members. Supervisors attended the meetings of the Board of Directors and its
+special committees, as well as meetings of the Senior Management as non-voting attendees, heard
+reports, participated in symposiums, held interviews, analysed materials and carried out special
+surveys. This allowed supervisors to stay informed and supervise the performance of the Board of
+Directors, the Senior Management and its members in the following areas: compliance with laws
+and regulations and the Articles of Association of the Bank, implementation of national economic
+and financial policies, regulatory requirements and resolutions of shareholders' general meetings
+and the Board of Directors, and progress towards improving the operation and management of
+the Bank. The Board of Supervisors completed four quarterly supervision reports on the duty
+performance of the Board of Directors and the Senior Management, and expressed supervisory
+opinions. It also carried out evaluations of duty performance, interviewing members of the
+Board of Directors and the Senior Management, and issuing annual evaluation opinions on their
+duty performance based on supervision of their routine duty performance, so as to promote the
+compliance and effective duty performance of directors and senior management members.
+surveys on the implementation of national decisions and plans for serving the real economy, put
+forward suggestions to improve the planning system, and strengthened policy research, analysis,
+and understanding, thus urging the proper implementation of national decisions and plans by the
+Bank.
+190
+Conducted supervision with a focus on the implementation of national decisions and plans.
+The Board of Supervisors focused on enhancing the Bank's ability to serve the real economy,
+private enterprises and micro and small-sized enterprises, ensuring stability on six key fronts and
+maintaining security in six key areas and providing financial support for the implementation of
+policies and measures such as green and low-carbon economic development, high-level scientific
+and technological self-reliance, rural revitalisation and promoting common prosperity as well as
+the nation's major regional development strategies. It also paid close attention to the multiple
+measures taken by the Bank to stabilise foreign trade, serve the high-level opening-up and
+contribute to the high-quality development of the Belt and Road by leveraging its advantages in
+globalised operations. In response to the information obtained, the Board of Supervisors made
+timely reflections and issued prompts via resolutions of the Board of Supervisors, evaluation
+opinions of special supervision and quarterly supervision reports. Moreover, it conducted special
+In 2021, with the aim of building a first-class global banking group and in compliance with
+relevant laws and regulations, regulatory requirements and the Articles of Association of the
+Bank, the Board of Supervisors aligned itself with national decisions and plans on economic
+and financial work, regulatory requirements, Bank-wide work priorities and core supervisory
+responsibilities. It diligently supervised the Bank's strategies, duty performance, financial
+management, risk management and internal control, and enhanced self-improvement as well as
+the quality and effectiveness of its supervision, thus continuously contributing to the high-quality
+development of the Bank.
+Performance of Supervision and Inspection by the Board of
+Supervisors
+In 2021, the Finance and Internal Control Supervision Committee of the Board of Supervisors
+held four on-site meetings and one meeting by written resolution, at which it pre-reviewed the
+proposals regarding the Bank's four regular reports, 2020 profit distribution plan, 2020 internal
+control assessment report, 2020 corporate social responsibility report, evaluation opinions of
+the Board of Supervisors on the Bank's strategy implementation in 2020, amendments to the
+Implementation Rules for the Work of the Finance and Internal Control Supervision Committee of
+the Board of Supervisors of Bank of China Limited, among others.
+In 2021, the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors held four on-site meetings and three meetings by written resolution, at which
+it pre-reviewed proposals regarding the evaluation opinions of the Board of Supervisors on
+the duty performance of the Board of Directors, the Senior Management and its members
+for 2020, performance evaluation results for the Chairperson of the Board of Supervisors for
+2020, implementation plan on performance management for the Chairperson of the Board of
+Supervisors in 2021, performance evaluation results and remuneration distribution plan for
+external supervisors, amendments to contents concerning the Board of Supervisors in the Articles
+of Association, amendments to the Rules of Procedure of the Board of Supervisors of Bank of
+China Limited, amendments to the Terms of References of Duty Performance and Due Diligence
+Supervision Committee of the Board of Supervisors of Bank of China Limited (Version 2021),
+formulation of the Measures for the Performance Evaluation of the Board of Directors, the Board
+of Supervisors, the Senior Management and its Members of Bank of China Limited (Trial), among
+others.
+(2)
+internal controls over the ECL model
+management, including continuous
+monitoring of the selection of modelling
+methodologies, model optimisation,
+approval and application of changes in key
+parameters, and model back-testing;
+During the reporting period, Mr. JIA Xiangsen and Mr. ZHENG Zhiguang, the external
+supervisors of the Bank, performed their supervisory duty in strict accordance with the provisions
+of the Articles of Association of the Bank. They were present at shareholders' meetings, attended
+the meetings of the Board of Directors, the Strategic Development Committee, the Corporate
+Culture and Consumer Protection Committee, the Audit Committee, the Risk Policy Committee,
+the Personnel and Remuneration Committee and the Connected Transactions Control Committee
+as non-voting attendees, and attended all meetings of the Board of Supervisors and its special
+committees during their terms of office. Mr. JIA Xiangsen and Mr. ZHENG Zhiguang, led two
+special surveys on the effectiveness of comprehensive risk management and the effectiveness
+of internal control and proposed independent opinions such as strengthening the comprehensive
+risk management concept, improving the comprehensive risk management system and imposing
+stricter supervision accountability. Their contributions played an active role in promoting the
+improvement of the Bank's corporate governance and business management. During the reporting
+period, Mr. JIA Xiangsen and Mr. ZHENG Zhiguang worked at the Bank for more than 15
+working days.
+During the reporting period, neither the Bank nor any of its directors, supervisors, senior
+management members or controlling shareholder was subject to compulsory measures due to
+alleged crimes, subject to criminal punishment, investigated by CSRC due to potential violation
+of laws and regulations or subject to administrative punishment by CSRC, or had material
+administrative punishment imposed on them by other competent authorities. None of the
+directors, supervisors or senior management members or controlling shareholder was detained by
+disciplinary inspection and supervision authorities due to any potential material breach of laws,
+disciplinary regulations or duty crimes, nor did any such matter affect its duty performance. None
+of the directors, supervisors or senior management members was subject to compulsory measures
+by other competent authorities due to potential violation of laws and regulations, nor did any such
+matter affect its duty performance.
+194
+ZHANG Keqiu
+Huijin made a “non-competing commitment” when the Bank launched its IPO. As at 31
+December 2021, Huijin has strictly observed and has not breached such undertaking.
+Undertakings
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes.
+Misappropriation of Funds by Controlling Shareholder and Other
+Related Parties
+During the reporting period, the Bank did not enter into or allow to subsist any other major
+contract that is required to be disclosed.
+Other Major Contracts
+195
+During the reporting period, there is no violation of laws, administrative regulations or rules of
+CSRC in the Bank's guarantee business.
+As approved by PBOC and CBIRC, the Bank's guarantee business is an off-balance sheet item
+in the ordinary course of its business. The Bank operates its guarantee business in a prudent
+manner and has formulated specific management measures, operational processes and approval
+procedures in respect of the risks of guarantee business and carries out this business accordingly.
+During the reporting period, save as disclosed above, the Bank did not enter into or allow to
+subsist any material guarantee business that is required to be disclosed.
+Material Guarantee Business
+During the reporting period, the Bank did not take, or allow to subsist any significant custody
+of, sub-contract or lease assets from other companies, or allow its material business assets to be
+subject to such arrangements, in each case that is required to be disclosed.
+Material Custody, Sub-contracts and Leases
+Major Contracts and Enforcement thereof
+The Bank had no significant connected transactions during the reporting period. For details of
+the related party transactions as defined by the relevant accounting standards by the end of the
+reporting period, please refer to Note V.42 of the Consolidated Financial Information.
+Significant Connected Transactions
+The Bank approved a long-term incentive policy, including the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan, at the Board meeting and the extraordinary
+shareholders' meeting held in November 2005. To date, the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan have not been implemented.
+Implementation of Stock Incentive Plan and Employee Stock
+Ownership Plan
+During the reporting period, the Bank did not undertake any purchase and sale of material assets
+that is required to be disclosed.
+The Bank was involved in certain litigation and arbitration cases in the regular course of its
+business. In the Bank's regular business operations in different countries and regions across
+the world, give the range and scale of its international presence, the Bank may be involved in a
+variety of litigation, arbitration and judicial proceedings within different jurisdictions, and the
+ultimate outcomes of these proceedings involve various levels of uncertainty. Based upon the
+opinions of internal and external legal counsels, the senior management of the Bank believes
+that, at the current stage, these matters will not have a material impact on the financial position
+or operating results of the Bank. Should the ultimate outcomes of these matters differ from the
+initially estimated amounts, such differences will impact the profit or loss in the period during
+which such a determination is made.
+Material Litigation and Arbitration
+Significant Events
+29 March 2022
+Chairwoman of the Board of Supervisors
+On behalf of the Board of Supervisors
+Earnestly conducted the review and supervision of financial and regular reports. The Board
+of Supervisors followed up and supervised the decision-making and implementation progress of
+major financial activities and matters such as the Bank's annual financial management priorities,
+annual business plan and financial budget. It regularly reviewed and analysed the Bank's
+financial and accounting data and strengthened its forward-looking analysis and judgement of
+the Bank's financial operations by tracking and studying of the macro-economic and financial
+situation, regulatory policies and peer dynamics. It completed four quarterly supervision reports
+on the Bank's financial position, and made prompts to take effective measures in order to improve
+the Bank's financial performance and the far-reaching mechanism for financial compliance.
+Moreover, the Board of Supervisors consolidated the review and supervision of regular reports,
+regularly heard reports on operating results and external audit results, supervised and reviewed
+the authenticity, accuracy and completeness of financial materials such as regular reports, annual
+financial report and profit distribution plan. All supervisors signed written confirmation opinions
+199
+internal controls over significant
+management judgements and assumptions,
+including portfolio segmentation, parameter
+estimation, determination and application
+of criteria to identify significant increases
+in credit risk, default and credit-impaired
+assets, as well as economic indicators,
+economic scenarios and weightings used in
+forward-looking measurement;
+200
+7.
+Staff costs
+8.
+Directors', supervisors' and senior management's emoluments
+9.
+Impairment losses on assets.
+10. Income tax expense
+261
+262
+262
+263
+263
+264
+265
+266
+270
+271
+12. Other comprehensive income. . .
+11. Earnings per share (basic and diluted).
+13. Cash and due from banks and other financial institutions
+273
+274
+276
+14.
+Balances with central banks. . . .
+277
+15. Placements with and loans to banks and other financial institutions.
+Operating expenses
+6.
+Other operating income
+5.
+Hong Kong, 29 March 2022
+208
+Consolidated Financial Statements
+CONTENTS
+CONSOLIDATED FINANCIAL STATEMENTS
+CONSOLIDATED INCOME STATEMENT.
+211
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.
+CONSOLIDATED STATEMENT OF CASH FLOWS ..
+212
+213
+215
+. 217
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+I. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+II. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
+III. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN
+APPLYING ACCOUNTING POLICIES.
+219
+220
+257
+260
+....
+IV. TAXATION
+V.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1. Net interest income
+2.
+Net fee and commission income
+3.
+Net trading gains
+4.
+Net gains on transfers of financial asset
+278
+16. Derivative financial instruments and hedge accounting.
+279
+17. Loans and advances to customers
+We involved our credit risk experts in evaluating
+the model methodologies, significant judgements
+and assumptions, data and key parameters used
+in the ECL measurement for loans and advances
+to customers. The substantive audit procedures
+performed by us were mainly as follows:
+internal controls over the information
+technology (“IT”) systems for ECL
+measurement, including information
+technology general controls ("ITGCs"),
+data interfaces, application of model
+parameters and automated IT controls over
+impairment calculations.
+internal controls over the accuracy and
+completeness of key data used by the
+models;
+internal controls over the estimated future
+cash flows and calculation of present
+value with respect to loans and advances
+to customers classified as stage 3 with
+individual amount that are relatively
+significant;
+measurement.
+We have identified the measurement of ECL for loans
+and advances to customers as a key audit matter due
+to the material balance of the Group's loss allowances
+for loans and advances to customers and high inherent
+risk given the uncertainty of estimates, adoption
+of complex models, involvement of significant
+management judgements and assumptions and use
+of numerous parameters and data inputs in such
+relatively
+are
+with
+measurement;
+and weightings used in the forward-looking
+(4)
+scenarios
+Economic indicators, economic
+(3)
+(5)
+Determination and application of criteria to
+identify significant increase in credit risks and
+default or credit-impaired assets;
+(2)
+(4)
+(3)
+(1) Segmentation of portfolios based on credit risk
+characteristics, selection of appropriate models
+and determination of relevant key parameters;
+The measurement of ECL for loans and advances
+to customers involves significant management
+judgements and assumptions, mainly on:
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+How our audit addressed the Key Audit Matter
+Key Audit Matter
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+(1)
+Certified Public Accountants
+we assessed the appropriateness of portfolio
+segmentation and the models adopted
+for the measurement of ECL in respect
+of different portfolios with consideration
+given to the risk characteristics of loans
+and advances to customers, the Group's
+risk management practices and industry
+practices. We selected samples of ECL
+calculations and examined whether the
+models' calculation engines are consistent
+with the Group's methodologies.
+322
+18. Financial investments.
+19. Investment in associates and joint ventures.
+20. Property and equipment.
+21. Investment properties.
+290
+296
+305
+306
+309
+22. Other assets
+310
+23. Impairment allowance
+315
+24. Due to banks and other financial institutions.
+317
+25. Due to central banks
+317
+26.
+Government certificates of indebtedness for bank notes issued
+and bank notes in circulation. .
+318
+27. Placements from banks and other financial institutions.
+318
+28. Financial liabilities held for trading.
+319
+29. Due to customers
+30. Bonds issued
+320
+209
+PricewaterhouseCoopers
+Estimation of future cash flows for stage
+3 loans and advances to customers
+individual amount that
+significant.
+From the matters communicated with those charged with governance, we determine those matters
+that were of most significance in the audit of the consolidated financial statements of the current
+period and are therefore the key audit matters. We describe these matters in our auditor's report
+unless law or regulation precludes public disclosure about the matter or when, in extremely rare
+circumstances, we determine that a matter should not be communicated in our report because the
+adverse consequences of doing so would reasonably be expected to outweigh the public interest
+benefits of such communication.
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key Audit Matter
+Valuation of financial investments measured at fair value
+Refer to Note II, 4.4, Note III, 2, Note V, 18 and Note
+VI, 5.1 of the consolidated financial statements.
+As at 31 December 2021, financial investments
+measured at fair value through profit or loss and
+financial investments measured at fair value through
+other comprehensive income of the Group were
+RMB561,642 million and RMB2,389,830 million
+respectively, representing 11.04% of total assets. Of
+these financial investments measured at fair value,
+(1) financial investments classified as Level 1 fair
+value, measured using quoted prices (unadjusted) in
+active markets accounted for 15.47%; (2) financial
+investments classified as Level 2 fair value, measured
+using valuation techniques for which inputs are
+observable for the financial investments, accounted
+for 79.24%; (3) financial investments classified
+as Level 3 fair value, measured using valuation
+techniques using unobservable inputs that have a
+significant impact on the valuation accounted for
+5.29%. Level 3 financial investments mainly include
+unlisted equity and fund investments held by the
+Group.
+We have identified this as a key audit matter due
+to the material balance of the financial investments
+measured at fair value and significant management
+judgement and assumptions are required, including
+selection and determination of unobservable inputs, in
+valuing the financial investments in Level 3.
+How our audit addressed the Key Audit Matter
+We understood and evaluated management's
+internal controls and assessment process over
+the valuation of financial investments measured
+at fair value. We assessed the inherent risk of
+material misstatement by considering the inherent
+risk factors of the different fair value levels
+such as the degree of estimation uncertainty, the
+complexity of valuation techniques and models,
+the subjectivity of management's judgements and
+assumptions in selecting valuation techniques,
+models and inputs and susceptibility
+management bias.
+to
+We assessed the design and tested the operating
+effectiveness of the key internal controls over
+the valuation of financial investments measured
+at fair value. These included controls over
+independent price verification, model validation
+and approval, review and approval of valuation
+results, and the information technology general
+controls ("ITGCs") of related systems, systems
+interfaces of inputs such as market data and
+automated calculations within the valuation
+system.
+We performed the following substantive
+procedures over the valuation of financial
+investments measured at fair value, on a sample
+basis:
+(1)
+for Level 1 financial investments, we tested
+their valuations by comparing to quoted
+prices in active markets.
+203
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key Audit Matter
+How our audit addressed the Key Audit Matter
+Valuation of financial investments measured at fair value (Continued)
+(2)
+for Level 2 and Level 3 financial
+investments:
+(i)
+(ii)
+we assessed the appropriateness of
+the Group's valuation models and
+benchmarked against common market
+models, taking into consideration the
+product characteristics and industry
+practice;
+for inputs used for valuation of Level
+2 financial investments, we tested the
+accuracy of inputs to the valuation
+model by comparing to market
+observable data;
+(iii) for unobservable inputs used for
+the valuation of Level 3 financial
+investments, we obtained an
+understanding of management's
+methodology for the selection of
+inputs such as liquidity discounts,
+discount rates, expected dividend,
+etc. and assessed the reasonableness
+and appropriateness of such inputs
+by examining supporting information
+and comparing to alternatives in
+the market with involvement of our
+internal valuation experts. We also
+performed sensitivity analysis on the
+unobservable inputs;
+Based on procedures performed, we considered
+that the models, significant judgements and
+assumptions, as well as relevant data and
+parameters used by management in measuring
+ECL for loans and advances to customers were
+supported by the available evidence.
+(iv)
+We checked and evaluated the financial statement
+disclosures in relation to the measurement of
+ECL.
+(6)
+The engagement partner on the audit resulting in this independent auditor's report is Ho Shuk
+Ching, Margarita.
+Key Audit Matters (Continued)
+Key Audit Matter
+How our audit addressed the Key Audit Matter
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+(2)
+(3)
+(4)
+we examined the accuracy and
+completeness of historical and measurement
+date data used in the ECL models on a
+sampling basis, including:
+(i)
+(ii)
+in respect of PD: financial and non-
+financial information for determining
+borrowers' credit rating, overdue
+repayment status, etc.;
+of
+in respect of LGD: types
+guarantees and collateral, historical
+actual loss rates, etc.;
+(iii) in respect of EAD: borrowers'
+outstanding loan balances, interest
+rates, maturity dates, repayment
+methods, etc. by agreeing them to
+loan contracts and other relevant
+documents. We also agreed the total
+credit risk exposure in the ECL
+models to data from other information
+systems.
+in respect of PD and LGD, we assessed
+the reasonableness of the parameters by
+comparing the historical expected default
+and loss given default with the subsequent
+actual default and loss given default for
+significant exposures through independent
+back-testing.
+we selected samples and assessed the
+appropriateness of management's staging
+classifications and judgements used in
+determining significant increases in credit
+risk and identification of default or credit-
+impaired assets based on the borrower's
+financial and non-financial information
+and other external evidence provided by
+management. We took into consideration
+the credit risk profile of borrowers and the
+Group's risk management practices in such
+assessment.
+201
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key Audit Matter
+How our audit addressed the Key Audit Matter
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+(5)
+for forward-looking measurements,
+we evaluated management's selection
+methodology for economic indicators,
+economic scenarios and weightings
+assigned based on statistical analysis
+and expert judgements. We assessed the
+reasonableness of the forecasted economic
+indicators by performing back-testing and
+comparing with publicly available forecasts
+from third-party institutions. We performed
+sensitivity analysis on the economic
+indicators and weightings under different
+economic scenarios.
+202
+for individual loans and advances to
+customers classified as stage 3 which were
+relatively significant, we examined on a
+sample basis, the forecasted cash flows
+prepared by management based on the
+financial information of borrowers and
+guarantors, latest collateral valuations and
+other available information and factors
+together with discount rates used to support
+the computation of loss allowances.
+we engaged internal valuation experts
+to perform independent valuation
+testing.
+Independent Auditor's Report (Continued)
+Based on the procedures performed, we
+considered that the judgements and assumptions
+used by management in valuing financial
+investments measured at fair value were
+supported by the available evidence.
+In connection with our audit of the consolidated financial statements, our responsibility is to
+read the other information and, in doing so, consider whether the other information is materially
+inconsistent with the consolidated financial statements or our knowledge obtained in the audit or
+otherwise appears to be materially misstated.
+If, based on the work we have performed, we conclude that there is a material misstatement
+of this other information, we are required to report that fact. We have nothing to report in this
+regard.
+206
+Independent Auditor's Report (Continued)
+Responsibilities of Directors and Those Charged with Governance for the Consolidated
+Financial Statements
+The directors of the Bank are responsible for the preparation of the consolidated financial
+statements that give a true and fair view in accordance with IFRSS and the disclosure
+requirements of the Hong Kong Companies Ordinance, and for such internal control as the
+directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the directors are responsible for assessing the
+Group's ability to continue as a going concern, disclosing, as applicable, matters related to going
+concern and using the going concern basis of accounting unless the directors either intend to
+liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+Those charged with governance are responsible for overseeing the Group's financial reporting
+process.
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+Our objectives are to obtain reasonable assurance about whether the consolidated financial
+statements as a whole are free from material misstatement, whether due to fraud or error, and
+to issue an auditor's report that includes our opinion. We report our opinion solely to you, as a
+body, and for no other purpose. We do not assume responsibility towards or accept liability to any
+other person for the contents of this report. Reasonable assurance is a high level of assurance, but
+is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
+misstatement when it exists. Misstatements can arise from fraud or error and are considered
+material if, individually or in the aggregate, they could reasonably be expected to influence the
+economic decisions of users taken on the basis of these consolidated financial statements.
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+•
+•
+.
+Identify and assess the risks of material misstatement of the consolidated financial
+statements, whether due to fraud or error, design and perform audit procedures responsive
+to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
+for our opinion. The risk of not detecting a material misstatement resulting from fraud is
+higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit
+procedures that are appropriate in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the Group's internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of
+accounting estimates and related disclosures made by the directors.
+207
+Independent Auditor's Report (Continued)
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+(Continued)
+•
+Conclude on the appropriateness of the directors' use of the going concern basis of
+accounting and, based on the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast significant doubt on the Group's
+ability to continue as a going concern. If we conclude that a material uncertainty exists,
+we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our
+opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to
+continue as a going concern.
+Evaluate the overall presentation, structure and content of the consolidated financial
+statements, including the disclosures, and whether the consolidated financial statements
+represent the underlying transactions and events in a manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the
+entities or business activities within the Group to express an opinion on the consolidated
+financial statements. We are responsible for the direction, supervision and performance of
+the group audit. We remain solely responsible for our audit opinion.
+We communicate with those charged with governance regarding, among other matters, the
+planned scope and timing of the audit and significant audit findings, including any significant
+deficiencies in internal control that we identify during our audit.
+We checked and evaluated the financial statement
+disclosures in relation to the fair value of
+financial investments.
+We also provide those charged with governance with a statement that we have complied with
+relevant ethical requirements regarding independence, and to communicate with them all
+relationships and other matters that may reasonably be thought to bear on our independence, and
+where applicable, actions taken to eliminate threats or safeguards applied.
+Our opinion on the consolidated financial statements does not cover the other information and we
+do not express any form of assurance conclusion thereon.
+The directors of the Bank are responsible for the other information. The other information
+comprises all of the information included in the annual report other than the consolidated
+financial statements and our auditor's report thereon.
+•
+considered that management's judgements on
+the consolidation of structured entities were
+supported by the available evidence.
+Independent Auditor's Report (Continued)
+Other Information
+204
+Key Audit Matters (Continued)
+Key Audit Matter
+Consolidation of structured entities
+The Group is principally involved with structured
+entities through sponsoring, managing and/or
+investing in wealth management products, asset
+securitisation products, funds, investment trust
+plans and asset management plans in Chinese
+Mainland. As at 31 December 2021, the Group's
+interests in unconsolidated structured entities
+mainly included (1) the balance of unconsolidated
+wealth management products and publicly offered
+funds/asset management plans sponsored by the
+Group amounted to RMB1,710,750 million and
+RMB487,438 million, respectively; (2) the balances
+of interest in unconsolidated structured entities held
+by the Group through direct investments in fund
+investments, investment trusts and asset management
+plans, and asset-backed securitisations sponsored by
+other financial institutions were RMB68,914 million,
+RMB12,268 million, and RMB125,081 million,
+respectively.
+The Group determines whether to consolidate
+structured entities based on management's assessment
+of the Group's control over the structured entities,
+taking into consideration its power over the structured
+entities, its exposure or rights to variable returns from
+its involvement with the structured entities, and its
+ability to use its power to affect the amount of returns
+from the structured entities.
+We have identified this as a key audit matter due
+to the material balance of structured entities and
+significant judgements were involved in assessing the
+Group's control over the structured entities.
+How our audit addressed the Key Audit Matter
+We assessed and tested the design and operating
+effectiveness of the key internal controls over
+the Group's consolidation of structured entities.
+These included controls over management's
+assessment of the transaction structures and
+contractual terms, calculations of variable
+returns, as well as review and approval of the
+consolidation assessments.
+We
+performed the following substantive
+procedures on a sample basis:
+(1)
+Refer to Note II, 2.1, Note III, 7 and Note V, 45 of
+the consolidated financial statements.
+we inspected the contractual terms of
+structured entities, understood the purpose
+of establishment, examined the transaction
+structure and identified the decision-making
+mechanism of related activities to assess
+the rights and obligations of the Group
+and other investors, as well as the Group's
+power over the structured entities.
+(2)
+We checked and assessed the financial statement
+disclosures in relation to the consolidation of
+structured entities.
+we analysed the extent of the Group's
+decision-making power, the level of returns
+and the risk of variable returns due to
+holding other interests in the structured
+entities to assess whether the Group has
+the ability to use their power to influence
+the amount of returns from the structured
+entities. We also analysed the substantive
+rights held by other investors to assess
+whether the Group acted as a principal
+or an agent in structured entities related
+transactions.
+How our audit addressed the Key Audit Matter
+Consolidation of structured entities (Continued)
+(3)
+performed, we
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+205
+we examined the arrangements for
+investment income, fee income, assets
+management fees and retained residual
+income from the structured entities
+based on the contractual terms including
+whether liquidity support or other
+arrangements were provided by the Group
+to the structured entities, and performed
+independent analysis and testing to assess
+the Group's exposure or rights to variable
+returns from its involvement in related
+activities with the structured entities.
+Key Audit Matter
+Based on the procedures
+Statutory
+comprehensive
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+Other equity
+Non-
+General and
+Other
+Attributable to equity holders of the Bank
+As at 1 January 2020
+956,987
+216
+The accompanying notes form an integral part of these consolidated financial statements.
+2,350,553
+125,400
+303,209
+213,930
+1,417
+regulatory Undistributed
+135,717
+319,505
+BANK OF CHINA LIMITED
+Treasury
+Appropriation to statutory reserves
+Note
+Other
+294,388
+retained earnings
+Other comprehensive income transferred to
+other equity instruments holders
+Capital contribution and reduction by
+Capital contribution by non-controlling shareholders
+Net change in treasury shares
+Dividends
+V.38.2
+Appropriation to general and regulatory reserves
+V.38.1
+V.12
+Total comprehensive income
+Total
+interests
+shares
+profits
+reserves
+reserves
+income
+instruments Capital reserve
+Share capital
+controlling
+(217)
+Capital contribution and reduction by
+(52)
+(3)
+Capital contribution by non-controlling shareholders
+Net change in treasury shares
+V.38.3
+Dividends
+V.38.2
+Appropriation to general and regulatory reserves
+V.38.1
+Appropriation to statutory reserves
+V.12
+Total comprehensive income
+As at 31 December 2020
+2,162,837
+(8)
+864,848
+267,981
+193,438
+4,309
+135,973
+277,490
+294,388
+Total
+interests
+124,418
+other equity instruments holders
+V.37.3
+42,015
+41,984
+41
+41
+8
+8
+(75,203)
+(6,558)
+(68,645)
+(35,228)
+35,228
+(20,492)
+20,492
+221,103
+7,488
+216,559
+(225)
+52
+(2,944)
+As at 31 December 2021
+Other
+retained earnings
+Other comprehensive income transferred to
+(31)
+11
+294,388
+277,490
+136,012
+(507)
+(616)
+Dividends arising from investment securities
+Net gains on financial investments
+(150,553)
+(153,859)
+financial investments
+(158)
+(1,478)
+Share of results of associates and joint ventures
+Interest income arising from
+(202)
+(1,755)
+(992)
+Net gains on disposals of investments in
+(1,246)
+(781)
+other long-term assets
+Net gains on disposals of property and
+equipment, intangible assets and
+6,364
+other assets
+Amortisation of intangible assets and
+22,441
+22,428
+subsidiaries, associates and joint ventures
+right-of-use assets
+(8,486)
+41,836
+shares
+(1,204,492)
+(1,564,704)
+to customers
+Net increase in loans and advances
+(17,061)
+(52,983)
+Net increase in precious metals
+(206,736)
+111,715
+Interest expense arising from bonds issued
+Accreted interest on impaired loans
+other financial institutions
+Net decrease/(increase) in due from and
+47,092
+(2,710)
+central banks
+829
+742
+Interest expense arising from lease liabilities
+Net changes in operating assets and liabilities:
+Net (increase)/decrease in balances with
+(1,236)
+(728)
+35,719
+placements with and loans to banks and
+Depreciation of property and equipment and
+119,016
+104,220
+1,358
+1,358
+(1)
+(75,239)
+(6,982)
+(68,257)
+(17,881)
+17,881
+(18,676)
+18,676
+(142)
+182,234
+192,870
+124,995
+142
+(15,446)
+(37)
+77,597
+776,940
+250,100
+174,762
+19,613
+4,810
+(6)
+77,560
+237
+Impairment losses on assets
+Adjustments:
+246,378
+276,620
+Cash flows from operating activities
+Profit before income tax
+2020
+2021
+Note
+Year ended 31 December
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CASH FLOWS
+BANK OF CHINA LIMITED
+The accompanying notes form an integral part of these consolidated financial statements.
+2,162,837
+124,418
+(8)
+864,848
+267,981
+193,438
+4,309
+135,973
+294,388
+229
+199,893
+5,065
+567,647
+reserves
+Share of results of associates and joint ventures
+V.19
+1,478
+158
+Profit before income tax
+276,620
+246,378
+Income tax expense
+V.10
+(49,281)
+(41,282)
+246,220
+Profit for the year
+205,096
+Attributable to:
+Equity holders of the Bank
+Non-controlling interests
+Earnings per share (in RMB)
+- Basic
+- Diluted
+216,559
+192,870
+10,780
+12,226
+227,339
+227,339
+275,142
+(119,016)
+Net fee and commission income
+81,426
+75,522
+Net trading gains
+V.3
+28,291
+8,055
+Net gains on transfers of financial asset
+V.4
+3,197
+9,547
+Operating profit
+Other operating income
+67,661
+58,605
+Operating income
+605,717
+Operating expenses
+V.6
+(226,355)
+(202,411)
+Impairment losses on assets
+V.9
+(104,220)
+V.5
+205,096
+V.11
+0.70
+10
+150
+(540)
+―
+- Changes in fair value on debt instruments
+measured at fair value through
+other comprehensive income
+5,444
+(2,976)
+- Allowance for credit losses on debt instruments
+measured at fair value through
+other comprehensive income
+571
+83
+3,084
+associates and joint ventures accounted for
+using the equity method
+8
+(130)
+- Exchange differences from the translation of
+foreign operations
+(12,760)
+(21,549)
+Other
+351
+(751)
+Subtotal
+Share of other comprehensive income of
+(651)
+150
+101
+0.61
+0.70
+0.61
+For details of the dividends paid or proposed, please refer to Note V.38.3.
+The accompanying notes form an integral part of these consolidated financial statements.
+211
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+Profit for the year
+Other comprehensive income:
+Items that will not be reclassified to profit or loss
+Actuarial (losses)/gains on defined benefit plans
+- Changes in fair value on equity instruments
+designated at fair value through
+other comprehensive income
+Other
+Subtotal
+Items that may be reclassified to profit or loss
+Year ended 31 December
+Note
+2021
+2020
+227,339
+205,096
+V.12
+(83)
+(13,118)
+(13,027)
+V.2
+Fee and commission expense
+45. Interests in structured entities
+363
+46. Offsetting financial assets and financial liabilities.
+366
+47. The Bank's statement of financial position and changes in equity
+48. IBOR Reform..
+368
+372
+49. Events after the financial reporting date
+373
+VI. FINANCIAL RISK MANAGEMENT
+1.
+361
+Overview
+Credit risk
+3.
+Market risk.
+4.
+Liquidity risk
+5.
+Fair value..
+6.
+Capital management.
+7.
+Insurance risk.
+2.
+44. Transfers of financial assets. .
+355
+346
+CONTENTS (Continued)
+31. Other borrowings..
+32. Current tax liabilities
+33. Retirement benefit obligations.
+34. Share appreciation rights plan
+35.
+Deferred income taxes
+36. Other liabilities
+325
+326
+326
+327
+328
+331
+37. Share capital, capital reserve and other equity instruments
+334
+38. Statutory reserves, general and regulatory reserves and undistributed profits.
+39. Non-controlling interests
+339
+341
+40. Contingent liabilities and commitments.
+342
+41. Note to the consolidated statement of cash flows
+346
+42. Related party transactions
+43. Segment reporting
+374
+(6,386)
+375
+416
+commercial banks for 2020 ...
+451
+210
+BANK OF CHINA LIMITED
+CONSOLIDATED INCOME STATEMENT
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+Year ended 31 December
+Note
+2021
+2020
+Interest income
+450
+Interest expense
+789,488
+760,070
+(364,346)
+(344,152)
+Net interest income
+425,142
+415,918
+Fee and commission income
+V.2
+94,453
+88,640
+V.1
+V.1
+Global systemic importance assessment indicators of commercial banks
+Domestic systemic importance assessment indicators of
+7.
+6.
+423
+431
+434
+SUPPLEMENTARY INFORMATION
+I.
+DIFFERENCES BETWEEN IFRS AND CAS
+CONSOLIDATED FINANCIAL STATEMENTS.
+435
+II.
+UNAUDITED SUPPLEMENTARY INFORMATION
+1.
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio.
+435
+2.
+Currency concentrations.
+444
+3.
+International claims
+445
+4.
+Overdue assets.
+447
+5.
+Leverage ratio
+448
+406
+reserves
+(22,322)
+(6,236)
+Deferred income tax liabilities
+V.35
+7,003
+6,499
+Other liabilities
+V.36
+436,555
+410,373
+Total liabilities
+24,371,855
+22,239,822
+2,199
+EQUITY
+holders of the Bank
+Share capital
+Other equity instruments
+Capital reserve
+Treasury shares
+V.37.1
+294,388
+294,388
+V.37.3
+319,505
+277,490
+Capital and reserves attributable to equity
+V.37.2
+2,095
+Retirement benefit obligations
+Financial liabilities held for trading
+V.28
+12,458
+17,912
+Derivative financial liabilities
+V.16
+89,151
+212,052
+Due to customers
+V.29
+18,142,887
+V.33
+16,879,171
+V.30
+1,388,678
+1,244,403
+Other borrowings
+V.31
+26,354
+26,034
+Current tax liabilities
+V.32
+45,006
+55,665
+Bonds issued
+135,717
+135,973
+(8)
+The accompanying notes form an integral part of these consolidated financial statements.
+LIU Liange
+Director
+LIU Jin
+Director
+214
+215
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+As at 1 January 2021
+Attributable to equity holders of the Bank
+Approved and authorised for issue by the Board of Directors on 29 March 2022.
+Other
+Non-
+Other equity
+comprehensive
+Statutory
+regulatory Undistributed
+Treasury
+controlling
+Note
+Share capital
+instruments Capital reserve
+income
+General and
+24,402,659
+26,722,408
+Total equity and liabilities
+-
+Other comprehensive income
+V.12
+1,417
+4,309
+Statutory reserves
+V.38.1
+213,930
+193,438
+General and regulatory reserves
+V.38.2
+303,209
+267,981
+Undistributed profits
+956,987
+864,848
+2,225,153
+2,038,419
+Non-controlling interests
+V.39
+125,400
+124,418
+Total equity
+2,350,553
+2,162,837
+411,949
+407,767
+V.27
+other financial institutions
+803,145
+2,076,840
+Placements with and loans to banks and
+other financial institutions
+V.15
+1,257,413
+939,320
+Government certificates of indebtedness for
+bank notes issued
+V.26
+175,715
+168,608
+2,228,726
+Precious metals
+223,313
+Derivative financial assets
+V.16
+95,799
+171,738
+Loans and advances to customers, net
+V.17
+15,322,484
+13,848,304
+Financial investments
+V.18
+276,258
+V.14
+Balances with central banks
+644,816
+(22,862)
+Total comprehensive income for the year
+221,103
+182,234
+Total comprehensive income attributable to:
+Equity holders of the Bank
+213,615
+177,424
+Non-controlling interests
+7,488
+4,810
+221,103
+182,234
+The accompanying notes form an integral part of these consolidated financial statements.
+212
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+As at 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+ASSETS
+Cash and due from banks and
+Note
+As at 31 December
+2021
+2020
+other financial institutions
+V.13
+6,164,671
+Other comprehensive income for the year, net of tax
+5,591,117
+profit or loss
+Total assets
+26,722,408
+24,402,659
+The accompanying notes form an integral part of these consolidated financial statements.
+213
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
+As at 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+Note
+As at 31 December
+2021
+2020
+LIABILITIES
+217,196
+Due to banks and other financial institutions
+2,682,739
+1,917,003
+Due to central banks
+V.25
+955,557
+887,811
+Bank notes in circulation
+V.26
+175,605
+168,751
+Placements from banks and
+V.24
+203,940
+V.22
+Other assets
+561,642
+504,549
+- financial assets at fair value through
+other comprehensive income
+2,389,830
+2,107,790
+- financial assets at amortised cost
+3,213,199
+2,978,778
+Investments in associates and joint ventures
+V.19
+35,769
+33,508
+Property and equipment
+V.20
+246,091
+248,589
+Investment properties
+V.21
+19,554
+22,065
+Deferred income tax assets
+V.35
+51,172
+58,916
+- financial assets at fair value through
+profits
+1,976,696
+Proceeds from issuance of bonds
+(22,879)
+(23,756)
+Repayments of other equity instruments issued
+(28,000)
+(32,000)
+Dividend payments to ordinary shareholders
+Cash payments for interest on bonds issued
+(57,994)
+Dividend and interest payments to
+other equity instrument holders
+(12,230)
+(9,720)
+Dividend payments to
+non-controlling shareholders
+(56,228)
+(6,558)
+(984,337)
+Repayments of debts issued
+Net cash outflow from investing activities
+(395,561)
+(17,066)
+Cash flows from financing activities
+1,005,299
+1,135,331
+(869,059)
+Proceeds from issuance of
+69,984
+109,560
+Proceeds from capital contribution by
+non-controlling shareholders
+41
+1,358
+other equity instruments
+(3,630,077)
+(6,982)
+(4,260)
+218
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+I
+The accompanying notes form an integral part of these consolidated financial statements.
+GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+The Bank is licensed as a financial institution by the China Banking and Insurance
+Regulatory Commission (the “CBIRC”) No. B0003H111000001 and is issued the business
+license of legal enterprise with unified social credit code No. 911000001000013428 by the
+State Administration of Industry and Commerce of the PRC. The registered address is No.1,
+Fuxingmen Nei Dajie, Beijing, China.
+The Bank and its subsidiaries (together the "Group") provide a full range of corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+services to its customers in the Chinese mainland, Hong Kong (China), Macao (China),
+Taiwan (China) and other major international financial centres.
+The Bank's principal regulator is the CBIRC. The operations in Hong Kong (China), Macao
+(China), Taiwan (China) and other countries and regions of the Group are subject to the
+supervision of local regulators.
+The parent company is Central Huijin Investment Limited (“Huijin”), a wholly owned
+subsidiary of China Investment Corporation ("CIC").
+These consolidated financial statements have been approved by the Board of Directors on 29
+March 2022.
+219
+Bank of China Limited (the “Bank”), formerly known as Bank of China, a State-owned
+joint stock commercial bank, was founded on 5 February 1912. From its formation until
+1949, the Bank performed various functions of a central bank, foreign exchange bank and
+commercial bank specialising in trade finance. After 1949, the Bank was designated as the
+state-designated specialised foreign exchange and trade bank. Since 1994, the Bank has
+evolved into a State-owned commercial bank. In this regard, in accordance with the Master
+Implementation Plan for the Joint Stock Reform approved by the State Council of the PRC,
+the Bank was converted into a joint stock commercial bank on 26 August 2004 and its name
+was changed from Bank of China to Bank of China Limited. In 2006, the Bank listed on the
+Stock Exchange of Hong Kong Limited and the Shanghai Stock Exchange.
+Other net cash flows from financing activities
+1,494,868
+V.41
+(6,609)
+Net cash inflow from financing activities
+74,344
+126,617
+Effect of exchange rate changes on cash and
+cash equivalents
+(41,278)
+1,975,631
+(33,603)
+480,763
+148,976
+Cash and cash equivalents at beginning of year
+1,494,868
+1,345,892
+Cash and cash equivalents at end of year
+Net increase in cash and cash equivalents
+Purchase of financial investments
+(3,425,490)
+(30,173)
+(1,977)
+Net (decrease)/increase in other liabilities
+(62,752)
+140,613
+Cash inflow from operating activities
+Income tax paid
+899,514
+320
+131,718
+(58,690)
+Net cash inflow from
+operating activities
+843,258
+73,028
+The accompanying notes form an integral part of these consolidated financial statements.
+(56,256)
+Net increase/(decrease) in other borrowings
+1,043,998
+1,226,797
+Net decrease/(increase) in other assets
+126,476
+(4,050)
+Net increase in due to banks
+and other financial institutions
+762,120
+250,181
+Net increase in due to central banks
+67,240
+43,963
+Net decrease in placements from
+banks and other financial institutions
+(4,006)
+(226,873)
+Net increase in due to customers
+(39,622)
+BANK OF CHINA LIMITED
+217
+For the year ended 31 December 2021 (Amount in millions of Renminbi, unless otherwise stated)
+intangible assets and other long-term assets
+Purchase of property and equipment,
+(12,655)
+(2,240)
+associates and joint ventures
+Increase in investments in subsidiaries,
+3,302,506
+3,105,057
+152,114
+151,183
+financial investments
+Proceeds from disposals/maturities of
+CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
+Interest income received from
+909
+financial investments
+Dividends received
+Cash flows from investing activities
+Year ended 31 December
+Note
+2021
+1,288
+Proceeds from disposals of property and
+equipment, intangible assets and
+2020
+7,781
+4,087
+Proceeds from disposals of investments in
+subsidiaries, associates and joint ventures
+1,620
+1,085
+other long-term assets
+(Amount in millions of Renminbi, unless otherwise stated)
+The Group recognises a financial asset or financial liability in its statement of financial
+position when the Group becomes a party to the contractual provisions of the instrument,
+which is the trade date.
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+4.1 Initial recognition and measurement
+At initial recognition, the Group measures a financial asset or financial liability at its
+fair value. For a financial asset or financial liability at fair value through profit or loss,
+transaction costs are directly recognised in profit or loss. For other financial asset or
+liability, transaction costs are recognised in the initial measurement.
+The Group classifies financial assets as subsequently measured at amortised cost, fair value
+through other comprehensive income or fair value through profit or loss on the basis of both
+the Group's business model for managing the financial assets and the contractual cash flow
+characteristics of the financial asset.
+4.2 Classification and Subsequent measurement
+4.2.1 Financial assets
+Business model
+The Group's business model refers to how the Group manages its financial assets in order to
+generate cash flows. For example, financial assets are held within a business model whose
+objective is to hold assets to collect contractual cash flows or within a business model whose
+objective is achieved by both collecting contractual cash flows and selling financial assets. If
+above two situations are not applicable, the financial assets are classified as part of “other”
+business model. The Group's assessment of the business model is performed on a financial
+asset portfolio basis, and determined on the basis of scenarios which are reasonably expected
+to occur, taking into account: how cash flows were realised in the past, how the performance
+are evaluated and reported to the entity's key management personnel; the risks that affect the
+performance and the way in which those risks are assessed and managed; and how managers
+of the business are compensated, etc.
+229
+FOR THE YEAR ENDED 31 DECEMBER 2021
+The fair value of a financial instrument at initial recognition is normally the transaction
+price. If the Group determines that the fair value at initial recognition differs from the
+transaction price, and if that fair value is evidenced by a quoted price in an active market
+for an identical asset or liability or based on a valuation technique that uses only data from
+observable markets, the Group recognises the difference between the fair value at initial
+recognition and the transaction price as a gain or loss.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Financial instruments
+228
+1 January 2023
+1 January 2023
+1 January 2023
+1 January 2023
+1 January 2022
+1 January 2022
+1 January 2022
+1 January 2022
+Effective for
+annual periods
+beginning on or
+after
+Sale or Contribution of Assets
+between an Investor and its
+Associate or Joint Venture
+Effective date
+Definition of Accounting Estimates
+Deferred Tax related to Assets and
+Liabilities arising from a Single
+Transaction
+Property, Plant and Equipment:
+Proceeds before Intended Use
+Onerous Contracts Cost of
+Fulfilling a Contract
+Minor Amendments to IFRS 1,
+IFRS 9, IAS 41 and IFRS 16
+Business Combination
+IFRS 10 and IAS 28
+Amendments
+IAS 8 Amendments
+IAS 12 Amendments
+Practice Statement 2
+Amendments
+Annual Improvements to
+IFRSS 2018-2020 Cycle
+(issued in May 2020)
+IFRS 17 and Amendments
+IAS 1 and IFRS
+IAS 37 Amendments
+Insurance Contracts
+Disclosure of Accounting Policies
+has been deferred
+indefinitely
+Minor amendments were made to IFRS 3 Business Combinations to update the references to
+the Conceptual Framework for Financial Reporting and add an exception for the recognition
+of liabilities and contingent liabilities within the scope of IAS 37 Provisions, Contingent
+Liabilities and Contingent Assets and Interpretation 21 Levies. The amendments also
+confirm that contingent assets should not be recognised at the acquisition date.
+IAS 16 Amendments prohibit entities from deducting from the cost of an item of property,
+plant and equipment, any proceeds received from selling items produced while the entity is
+preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the
+asset is functioning properly' when it assesses the technical and physical performance of the
+asset. The financial performance of the asset is not relevant to this assessment. Entities must
+disclose separately the amounts of proceeds and costs relating to items produced that are not
+an output of the entity's ordinary activities.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+223
+IAS 1 and IFRS Practice Statement 2 Amendments provide guidance to help entities apply
+materiality judgements to accounting policy disclosures. The amendments replace the
+requirement for entities to disclose their “significant” accounting policies with a requirement
+to disclose their “material” accounting policies. The amendments add guidance on how entities
+apply the concept of materiality in making decisions about accounting policy disclosures.
+IFRS 17 Insurance Contracts and amendments replaced IFRS 4 Insurance Contracts. The
+standard provides a general model for insurance contracts and two additional approaches:
+the variable fee approach and the premium allocation approach. IFRS 17 and amendments
+cover the recognition, measurement, presentation and disclosure of insurance contracts and
+apply to all types of insurance contracts.
+Annual Improvements to IFRSS 2018-2020 Cycle were issued in May 2020, including an
+amendment to IFRS 9 Financial Instruments, which clarifies fees that an entity includes
+when assessing whether the terms of a new or modified financial liability are substantially
+different from the terms of the original financial liability by conducting the “10 per cent"
+test for derecognition of financial liabilities. These fees include only those paid or received
+between the borrower and the lender, including fees paid or received by either the borrower
+or lender on the other's behalf. The improvements also include an amendment to lease
+incentives, which removes the illustration of payments from the lessor relating to leasehold
+improvements in illustrative example 13 accompanying IFRS 16 Leases, so as to remove
+potential confusion regarding the treatment of lease incentives when applying IFRS 16.
+IAS 37 Amendments specify which costs an entity needs to include when assessing
+whether a contract is onerous or loss-making. The amendments apply a "directly related
+cost approach". Costs that relate directly to a contract to provide goods or services include
+both incremental costs and an allocation of costs directly related to contract activities.
+Before recognising a separate provision for an onerous contract, the entity recognises any
+impairment loss that has occurred on assets used in fulfilling the contract. General and
+administrative costs do not relate directly to a contract and are excluded unless they are
+explicitly chargeable to the counterparty under the contract.
+1.3 Standards and amendments that are not yet effective in the current year and have not
+been adopted before their effective dates by the Group (Continued)
+Basis of preparation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+222
+IFRS 3 Amendments
+IAS 16 Amendments
+1.3 Standards and amendments that are not yet effective in the current year and have not
+been adopted before their effective dates by the Group
+Basis of preparation (Continued)
+1
+(1) for instruments measured using amortised cost measurement, the amendments provide
+a practical expedient to account for these changes in the basis for determining
+contractual cash flows as a result of IBOR Reform. Under the practical expedient,
+entities will account for these changes by updating the effective interest rate using the
+guidance in paragraph B5.4.5 of IFRS 9 without the recognition of an immediate gain
+or loss. This practical expedient applies only to such a change and only to the extent
+that it is necessary as a direct consequence of IBOR Reform, and the new basis for
+determining the contractual of cash flows is economically equivalent to the previous
+basis.
+The IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Phase 2 amendments address issues
+that arise upon replacing the existing interest rate benchmark with the alternative interest
+rates and introduces additional disclosure requirements. The Phase 2 amendments provide
+two key reliefs:
+_
+IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendments Interest Rate Benchmark
+Reform ("IBOR Reform”) — Phase 2
+-
+On 1 January 2021, the Group has adopted the following IFRSS and amendments issued by
+the International Accounting Standards Board (“IASB"), which were mandatorily effective.
+1.1 Standards and amendments effective in 2021 relevant to and adopted by the Group
+The preparation of financial statements in conformity with IFRSS requires the use of certain
+critical accounting estimates. It also requires management to exercise its judgement in the
+process of applying the Group's accounting policies. The areas involving a higher degree of
+judgement or complexity, or areas where assumptions and estimates are significant to the
+consolidated financial statements are disclosed in Note III.
+Financial assets at fair value through other comprehensive income, financial assets and
+financial liabilities at fair value through profit or loss (including derivative financial
+instruments) and investment properties are measured at their fair values in the consolidated
+financial statements. Other accounting items are measured at their historical costs.
+Impairment allowance is recognised and measured in accordance with the relevant policy.
+The consolidated financial statements of the Group have been prepared in accordance
+with International Financial Reporting Standards ("IFRSs"). In addition, the consolidated
+financial statements comply with the disclosure requirements of the Hong Kong Companies
+Ordinance.
+Basis of preparation
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+220
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2021
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+221
+The adoption of the above standards and amendments does not have any significant impact
+on the operating results, financial position and comprehensive income of the Group for the
+year ended 31 December 2021.
+In May 2020, the IASB published an amendment to IFRS 16 that provided an optional
+practical expedient for lessees to assess whether a rent concession due on or before 30 June
+2021 related to COVID-19 is a lease modification. In March 2021, the IASB published an
+additional amendment to extend the date of the rent concession from 30 June 2021 to 30
+June 2022. The amendment is effective for annual reporting periods beginning on or after 1
+April 2021 with earlier application permitted. The Group has early adopted this amendment
+for the current year.
+Amendment to IFRS 16 COVID-19 Related rent concessions extension of the practical
+expedient
+1.2 Standards and amendments that were early adopted by the Group in 2021
+The adoption of the above standards and amendments does not have any significant impact
+on the operating results, financial position and comprehensive income of the Group for the
+year ended 31 December 2021.
+(2) the amendments also provide additional temporary reliefs from applying specific
+IAS 39 and IFRS 9 hedge accounting requirements to hedging relationships directly
+affected by IBOR Reform.
+1.1 Standards and amendments effective in 2021 relevant to and adopted by the Group
+(Continued)
+Basis of preparation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+Basis of preparation (Continued)
+Foreign currency transactions are translated into respective functional currency using
+the exchange rates prevailing at the dates of the transactions, or the exchange rates that
+approximate the exchange rates prevailing at the dates of the transaction. Foreign exchange
+gains and losses resulting from the settlement of such transactions are recognised in the
+income statement.
+3.2 Transactions and balances
+The functional currency of the Group's operations in the Chinese mainland is Renminbi
+("RMB"). Items included in the financial statements of each of the Group's operations in
+Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions are
+measured using the currency of the primary economic environment in which the entity
+operates (the "functional currency"). The presentation currency of the Group is RMB.
+3.1 Functional and presentation currency
+Foreign currency translation
+3
+227
+When the Group ceases to consolidate or equity account for an investment because of a
+loss of control, joint control or significant influence, any retained interest in the entity is
+re-measured to its fair value, with the change in carrying amount recognised in the income
+statement. The fair value is the initial carrying amount for the purposes of subsequently
+accounting for the retained interest as an associate, joint venture or financial asset. In
+addition, any amounts previously recognised in other comprehensive income in respect of
+that entity are reclassified to the income statement.
+2.3 Transactions with non-controlling interests
+Consolidation (Continued)
+1
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+The Group treats transactions with non-controlling interests that do not result in a loss of
+control as transactions with equity owners of the Group. For purchases from non-controlling
+interests, the difference between any consideration paid and the relevant share acquired of
+the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on
+disposals to non-controlling interests are also recorded in equity.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+The effect of exchange rate changes on cash and cash equivalents is presented individually
+in the statement of cash flows.
+On consolidation, exchange differences arising from the translation of the net investment in
+foreign entities, and of customers deposits taken and other currency instruments designated
+as hedges of such investments are taken to other comprehensive income. When a foreign
+entity is disposed, these exchange differences are recognised in the income statement.
+all resulting exchange differences are recognised in other comprehensive income.
+income and expenses for each income statement are translated at exchange rates at the
+date of the transactions, or a rate that approximates the exchange rates of the date of the
+transaction; and
+assets and liabilities for each statement of financial position presented are translated at
+the closing rate at the date of that statement of financial position;
+•
+•
+The results and financial positions of all the Group entities that have a functional currency
+different from the presentation currency are translated into the presentation currency as
+follows:
+Non-monetary assets and liabilities that are measured at historical cost in foreign currencies
+are translated using the foreign exchange rates at the date of the transaction. Non-monetary
+assets and liabilities that are measured at fair value in foreign currencies are translated using
+the foreign exchange rates at the date the fair value is determined. Translation differences
+on non-monetary financial assets classified as financial assets at fair value through other
+comprehensive income are recognised in other comprehensive income. Translation
+differences on non-monetary financial assets and liabilities held at fair value through profit
+or loss are recognised as "Net trading gains” in the income statement.
+Monetary assets and liabilities denominated in foreign currencies at the financial reporting
+date are translated at the foreign exchange rates ruling at that date. Changes in the fair value
+of monetary securities denominated in foreign currency classified as financial assets at fair
+value through other comprehensive income are analysed between translation differences
+resulting from changes in the amortised cost of the security and other changes in the
+carrying amount of the security. Translation differences related to changes in the amortised
+cost are recognised in the income statement, and other changes in the carrying amount are
+recognised in other comprehensive income. Translation differences on all other monetary
+assets and liabilities are recognised in the income statement.
+3.2 Transactions and balances (Continued)
+Foreign currency translation (Continued)
+3
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2
+The Group assesses at each financial reporting date whether there is objective evidence that
+investments in associates and joint ventures are impaired. Impairment losses are recognised
+for the amounts by which the investments in associates and joint ventures' carrying amounts
+exceed their recoverable amounts. The recoverable amounts are the higher of investments in
+associates and joint ventures' fair value less costs to sell and value in use.
+Subsidiaries are all entities (including structured entities) over which the Group has control.
+The Group controls an entity where the Group is exposed to, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect those returns
+through its power to direct the activities of the entity. The existence and effect of potential
+voting rights that are currently exercisable or convertible and rights arising from other
+contractual arrangements are considered when assessing whether the Group controls another
+entity. Subsidiaries are fully consolidated from the date on which control is transferred to
+the Group. They are de-consolidated from the date that control ceases. If the changes of the
+relevant facts and circumstances resulting in changes of relevant elements in the definition
+of control, the Group will re-evaluate whether subsidiaries are controlled.
+2.1 Subsidiaries
+Consolidation
+226
+1.3 Standards and amendments that are not yet effective in the current year and have not
+been adopted before their effective dates by the Group (Continued)
+IAS 8 Amendments clarify how companies should distinguish changes in accounting
+policies from changes in accounting estimates. It introduces a new definition of "accounting
+estimates”. The amendments are designed to clarify distinction between changes in
+accounting estimates and changes in accounting policies and correction of errors.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+IAS 12 Amendments require companies to recognise deferred tax on transactions that,
+on initial recognition, give rise to equal amounts of taxable and deductible temporary
+differences. They will typically apply to transactions such as leases of lessees and
+decommissioning obligations and will require the recognition of additional deferred tax
+assets and liabilities. The amendments should be applied to transactions that occur on or
+after the beginning of the earliest comparative period presented.
+The Group is considering the impact of IFRS 17 and amendments on the consolidated and
+the Bank's financial statements. Except for IFRS 17 and amendments, the adoption of the
+above standards and amendments will have no material impact on the consolidated and the
+Bank's financial statements.
+2
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+224
+FOR THE YEAR ENDED 31 DECEMBER 2021
+IFRS 10 and IAS 28 Amendments clarify the accounting treatment for sales or contribution
+of assets between an investor and its associates or joint ventures. The amendments require
+a full recognition of a gain or loss when the sale or contribution between an investor and its
+associate or joint venture constitutes a business. For a transaction involving assets that do
+not constitute a business, a gain or loss resulting from the transaction is recognised in the
+investor's profit or loss only to the extent of the unrelated investor's interest in that associate
+or joint venture.
+The excess of the consideration transferred, the amount of any non-controlling interest in the
+acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
+over the fair value of the net identifiable assets acquired is recorded as goodwill. If those
+amounts are less than the fair value of the net identifiable assets of the subsidiary acquired,
+in the case of a bargain purchase, the difference is recognised directly in the income
+statement. Goodwill is tested for impairment annually, or more frequently whenever there
+is an indication of possible impairment, and carried at cost less accumulated impairment
+losses. If there is any indication that goodwill is impaired, recoverable amount is estimated
+and the difference between carrying amount and recoverable amount is recognised as an
+impairment charge. Impairment losses on goodwill are not reversed. Gains and losses on the
+disposal of an entity include the carrying amount of goodwill relating to the entity sold.
+The Group uses acquisition method of accounting to account for business combinations.
+Consideration transferred for the acquisition of a subsidiary is the fair values of the assets
+transferred, the liabilities incurred to the former owners of the acquired business and the
+equity interests issued by the Group. Consideration transferred includes the fair value of any
+asset or liability resulting from a contingent consideration arrangement. Acquisition-related
+costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
+liabilities assumed in a business combination are measured initially at their fair values at
+the acquisition date. On an acquisition by acquisition basis, the Group recognises any non-
+controlling interest in the acquiree either at fair value or at the non-controlling interest's
+proportionate share of the acquiree's net identifiable assets.
+225
+Unrealised gains on transactions between the Group and its associates and joint ventures
+are eliminated to the extent of the Group's interests in the associates and joint ventures;
+unrealised losses are also eliminated unless the transaction provides evidence of impairment
+of the asset transferred. Accounting policies of associates and joint ventures have been
+changed where necessary to ensure consistency with the policies adopted by the Group.
+Investments in associates and joint ventures are initially recognised at cost and accounted
+for using the equity method of accounting. The Group's "Investment in associates and joint
+ventures" includes goodwill.
+Joint ventures exist where the Group has a contractual arrangement with one or more parties
+to undertake economic activities which are subject to joint control.
+Associates are all entities over which the Group has significant influence but no control
+or joint control, generally accompanying a shareholding of between 20% and 50% of the
+voting rights.
+2.2 Associates and joint ventures
+In the Bank's statement of financial position, investments in subsidiaries are accounted
+for at cost less impairment. Cost is adjusted to reflect changes in consideration arising
+from contingent consideration amendments, but does not include acquisition-related costs,
+which are expensed as incurred. Dividends or profits declared to distribute by the invested
+entity shall be recognised by the Bank as other operating income. The Group assesses at
+each financial reporting date whether there is objective evidence that an investment in
+subsidiaries is impaired. An impairment loss is recognised for the amount by which the
+investment in subsidiaries' carrying amount exceeds its recoverable amount. Recoverable
+amount is the higher of the investment in subsidiaries' fair value less costs to sell and value
+in use.
+2.1 Subsidiaries (Continued)
+All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
+transactions between members of the Group are eliminated in full on consolidation. Where
+necessary, accounting policies of subsidiaries have been changed to ensure consistency with
+the policies adopted by the Group.
+BANK OF CHINA LIMITED
+2
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Consolidation (Continued)
+•
+4
+(Amount in millions of Renminbi, unless otherwise stated)
+There is an economic relationship between the hedged item and the hedging
+instrument. That means the hedging instrument and hedged item have values that
+generally move in the opposite direction because of the same risk, which is the hedged
+risk;
+The effect of credit risk does not dominate the value changes that result from that
+economic relationship; and
+238
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+•
+Financial instruments (Continued)
+Financial liabilities are derecognised when they are extinguished that is, when the
+obligation is discharged, cancelled or expires.
+•
+239
+If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying
+amount of a hedged item for which the effective interest method is used is amortised to the
+income statement over the period to maturity.
+The changes in fair value of hedging instruments that are designated and qualify as fair
+value hedges are recorded in the income statement, together with the changes in fair value of
+the hedged item attributable to the hedged risk. The net result is included as ineffectiveness
+in the income statement.
+Fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset
+or liability or an unrecognised firm commitment, or a component of any such item, that is
+attributable to a particular risk and could affect profit or loss.
+(1) Fair value hedge
+If a hedging relationship ceases to meet the hedge effectiveness requirement relating to
+the hedge ratio but the risk management objective for that designated hedging relationship
+remains the same, the Group adjusts the hedge ratio of the hedging relationship so that it
+meets the qualifying criteria again.
+The Group discontinues hedge accounting prospectively when the hedging instrument
+expires or is sold, terminated or exercised (the replacement or rollover of a hedging
+instrument into another hedging instrument does not constitute an expiration or termination),
+or the hedging relationship ceases to meet the updated risk management objective, or to
+meet other qualifying criteria for hedging accounting.
+Notional and timing differences between the hedged items and hedging instruments;
+Significant changes in counterparties' credit risk.
+The hedging relationship should meet all of the following hedge effectiveness requirements:
+•
+4.9 Derivative financial instruments and hedge accounting (Continued)
+The Group documents, at inception, the relationship between hedging instruments and
+hedged items, as well as its risk management objective and strategy for undertaking hedge
+transactions. When designating a hedging relationship and on an ongoing basis, the Group
+assesses the hedge effectiveness, that is the extent to which changes in the fair value or cash
+flows of the hedging instrument offsets changes in fair values or cash flows of the hedged
+item.
+is a derivative (except for a derivative that is a financial guarantee contract or a
+designated and effective hedging instrument).
+Derivatives are initially recognised at fair value on the date a derivative contract is
+entered into and are subsequently remeasured at their fair value. Fair values are obtained
+from quoted market prices in active markets, including recent market transactions, or
+valuation techniques, including discounted cash flow analysis and option pricing models, as
+appropriate. Credit risk valuation adjustments are applied to the Group's over-the-counter
+derivatives to reflect the credit risk of the counterparties and the Group, respectively. They
+are dependent on the expected future values of exposures for each counterparty and default
+probabilities, etc. All derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+financial guarantee contracts and commitments to provide a loan at a below-market
+interest rate.
+financial liabilities that arise when a transfer of a financial asset does not qualify for
+derecognition or when the continuing involvement approach applies.
+financial liabilities at fair value through profit or loss. Such liabilities, include financial
+liabilities held for trading and financial liabilities designated as at fair value through
+profit or loss.
+•
+•
+The Group classifies all financial liabilities as subsequently measured at amortised cost,
+except for:
+4.2.2 Financial liabilities
+When, and only when, the Group changes the business model for managing financial assets, the
+Group shall reclassify all affected financial assets. Reclassification is applied prospectively from
+the first day of the first reporting period following the change in business model.
+(3) Financial assets at fair value through profit or loss (Continued)
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Financial liabilities at fair value through profit or loss held by the Group are subsequently
+measured at fair value. A gain or loss on a financial liability that is measured at fair value is
+recognised in profit or loss unless:
+BANK OF CHINA LIMITED
+•
+•
+is acquired or incurred principally for the purpose of selling or repurchasing it in the
+near term; or
+•
+•
+•
+A financial asset or financial liability is classified as held for trading if it:
+4.2.3 Financial assets and financial liabilities held for trading
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+232
+The Group does not reclassify any financial liabilities.
+it is a financial liability designated as at fair value through profit or loss and the effects
+of changes in the Group's credit risk are presented in other comprehensive income.
+When such financial liability is derecognised, the cumulative gain or loss previously
+recognised in other comprehensive income is reclassified from other comprehensive
+income to undistributed profits under equity.
+it is part of a hedging relationship; or
+on initial recognition is part of a portfolio of identified financial instruments that are
+managed together and for which there is evidence of a recent actual pattern of short-
+term profit-taking; or
+231
+A financial asset is measured at fair value through profit or loss unless it is measured
+at amortised cost or at fair value through other comprehensive income, which includes
+financial assets held for trading, financial assets designated as at fair value through profit or
+loss and other financial assets mandatorily measured at fair value through profit or loss in
+accordance with IFRS 9.
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+the financial asset is held within a business model whose objective is to hold financial
+assets in order to collect contractual cash flows; and
+•
+•
+The Group classifies financial assets as subsequently measured at amortised cost if both of
+the following conditions are met:
+(1) Financial assets at amortised cost
+The assessment of contractual cash flow characteristics is to determine whether the asset's
+contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding. Principal is the fair value of the financial asset at initial recognition. However,
+the principal amount may change over the life of the financial asset (for example, if there are
+repayments of principal). Interest consists of consideration for the time value of money, for
+the credit risk associated with the principal amount outstanding during a particular period of
+time and for other basic lending risks and costs, as well as a profit margin.
+The contractual cash flow characteristics
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Such financial assets that the Group holds are subsequently measured at amortised cost.
+That is, the amount at which the financial asset is measured at initial recognition minus the
+principal repayments, plus or minus the cumulative amortisation using the effective interest
+method of any difference between that initial amount and the maturity amount and adjusted
+for any loss allowance.
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on such financial asset is recognised in profit or loss unless it is part of a hedging
+relationship. Dividends, which the Group is entitled to collect, on equity investments in such
+measurement category are recognised in profit or loss.
+(2) Financial assets at fair value through other comprehensive income
+•
+(3) Financial assets at fair value through profit or loss
+The Group may, at initial recognition, irrevocably designate an investment in equity
+instrument, which is not held for trading, as at fair value through other comprehensive
+income when it meets the definition of an equity instrument under IAS 32 Financial
+Instruments: Presentation. When the equity instrument is derecognised, the cumulative gain
+or loss previously recognised in other comprehensive income shall be reclassified from other
+comprehensive income to undistributed profits under equity. Dividends, which the Group is
+entitled to collect, on equity investments in such measurement category are recognised in
+profit or loss. No impairment losses or reversal are recognised for such equity instruments.
+Investments in equity instruments
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on a financial asset measured at fair value through other comprehensive income
+shall be recognised in “Other comprehensive income”, except for interests calculated using
+effective interest method, impairment losses or reversal and foreign exchange gains and
+losses. When the financial asset is derecognised, the cumulative gain or loss previously
+recognised in other comprehensive income is reclassified from equity to profit or loss. The
+impairment allowances for such financial assets are recognised in other comprehensive
+income, impairment losses or reversal are recognised in profit or loss, and not reduce the
+carrying amount of such financial assets in the statement of financial position.
+(2) Financial assets at fair value through other comprehensive income (Continued)
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+230
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+the financial asset is held within a business model whose objective is achieved by both
+collecting contractual cash flows and selling financial assets; and
+The Group classifies financial assets as subsequently measured at fair value through other
+comprehensive income if both of the following conditions are met:
+Possible sources of ineffectiveness are as follows:
+4.2.4 Financial assets and financial liabilities designated as at fair value through profit or loss
+The Group may, at initial recognition, irrevocably designate a financial asset or financial
+liability as measured at fair value through profit or loss, because either:
+•
+BANK OF CHINA LIMITED
+236
+When measuring ECL, an entity need not necessarily identify every possible scenario.
+However, the Group considers the risk or probability that a credit loss occurs by reflecting
+the possibility that a credit loss occurs and the possibility that no credit loss occurs, even
+if the possibility of a credit loss occurring is very low. The parameters, assumptions and
+estimation techniques used in measuring the ECL are disclosed in Note VI.2.3 measurement
+of ECL.
+Reasonable and supportable information about past events, current conditions and
+forecasts of future economic conditions that is available without undue cost or effort at
+the financial reporting date.
+•
+Time value of money; and
+•
+An unbiased and probability-weighted amount that is determined by evaluating a range
+of possible outcomes;
+The Group measures ECL of a financial instrument in a way that reflects:
+For purchased or originated credit-impaired financial assets, the Group only recognises the
+cumulative changes in lifetime expected credit losses since initial recognition at the financial
+reporting date as an impairment allowance. At each financial reporting date, the Group
+recognises in profit or loss the amount of the change in lifetime expected credit losses as an
+impairment gain or loss.
+Where, in the previous accounting period, the impairment allowance of a financial
+instrument was measured based on the ECL of the instrument over the entire lifetime, and
+while, at the current financial reporting date, such financial instrument is no longer regarded
+as experiencing a significant increase in credit risk since its initial recognition, the Group
+measures the impairment allowance of the financial instrument as at the financial reporting
+date using the ECL of the instrument over the next 12 months.
+Measurement of ECL (Continued)
+4.6 Impairment measurement for losses on assets (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+FOR THE YEAR ENDED 31 DECEMBER 2021
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4.9 Derivative financial instruments and hedge accounting
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+237
+When the Group determines that a loan has no reasonable prospect of recovery after the
+Group has taken necessary actions and necessary proceedings, the loan is written off
+against its allowance for impairment losses. If in a subsequent period the loan written off
+is recovered, the amount recovered will be recognised in profit or loss captured within
+impairment losses on financial assets.
+4.8 Write off
+If the terms are substantially different, the Group derecognises the original financial asset
+and recognises a "new" asset at fair value and recalculates a new effective interest rate
+for the asset. The date of renegotiation is consequently considered to be the date of initial
+recognition for impairment calculation purposes, including for the purpose of determining
+whether a significant increase in credit risk has occurred. The Group also assesses whether
+the new financial asset recognised is deemed to be credit-impaired at initial recognition,
+especially in circumstances where the renegotiation was driven by the debtor being unable to
+make the originally agreed payments. Differences in the carrying amount are also recognised
+in profit or loss as a gain or loss on derecognition.
+If the terms are not substantially different, it does not result in a derecognition of the
+original financial asset. The risk of default of such assets after modification is assessed at
+the financial reporting date and compared with the risk under the original terms at initial
+recognition. The gross carrying amount of the financial asset is recalculated based on the
+present value of the renegotiated or modified contractual cash flows discounted at the
+financial asset's original effective interest rate, and the related gain or loss is recognised in
+profit and loss.
+The Group sometimes modifies or renegotiates the contractual cash flows with a
+counterparty, which include extending payment term arrangements, repayment schedule
+modifications and changes to the interest settlement arrangement. When this happens, the
+Group assesses whether or not the new terms are substantially different to the original terms.
+4.7 Modification of contractual cash flows
+Financial instruments (Continued)
+4
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+235
+4.4 Determination of fair value
+The impairment allowances for financial guarantees and loan commitments are presented in
+“Other liabilities — provision”.
+Loan commitments are commitments provided by the Group to customers to grant loans
+under the established contract terms during certain period. The impairment allowance for
+loan commitments is measured using the ECL model.
+Financial guarantees are initially recognised at fair value on the date the guarantee was
+given. Subsequent to initial recognition, the financial guarantee contracts are measured
+at the higher of the initial measurement less amortisation calculated and the impairment
+allowance determined by the expected credit loss ("ECL") model at the financial reporting
+date. Any increase in the liability relating to financial guarantee contracts is recognised in
+the income statement.
+Financial guarantee contracts are contracts that require the issuer to make specified
+payments to reimburse the holder for a loss it incurs because a specified debtor fails to
+make payments when due, in accordance with the terms of a debt instrument. Such financial
+guarantees are given to banks, financial institutions and other bodies to secure customer
+loans, overdrafts and other banking facilities.
+4.3 Financial guarantee contracts and loan commitments
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+233
+the financial liability contains one or more embedded derivatives, unless the embedded
+derivative(s) does not significantly modify the cash flows or it is clear, with little or no
+analysis, that it would not be separately recorded.
+a portfolio of financial liabilities or financial assets and financial liabilities is managed
+and its performance is evaluated on a fair value basis, in accordance with a documented
+risk management or investment strategy, and information about the portfolio is
+provided internally on that basis to the Group's key management personnel; or
+it eliminates or significantly reduces a measurement or recognition inconsistency that
+would otherwise arise from measuring assets or liabilities or recognising the gains and
+losses on them on different bases; or
+The fair value is the price that would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants at the measurement date. The fair
+values of quoted financial assets and financial liabilities in active markets are based on
+market prices, as appropriate. If there is no active market, the Group establishes fair value
+by using valuation techniques. These include the use of recent arm's length transactions,
+discounted cash flow analysis and option pricing models, and other valuation techniques
+commonly used by market participants.
+The Group uses the valuation techniques commonly used by market participants to price
+financial instruments and techniques which have been demonstrated to provide reliable
+estimates of prices obtained in actual market transactions. The Group makes use of all
+factors that market participants would consider in setting a price, and incorporates these
+into its chosen valuation techniques and tests for validity using prices from any observable
+current market transactions in the same instruments.
+234
+BANK OF CHINA LIMITED
+Stage 3: Financial assets with objective evidence of impairment at the financial
+reporting date are included under Stage 3, with their impairment allowance measured at
+an amount equivalent to the ECL over the lifetime of the financial instruments.
+Stage 2: Financial instruments that have had a significant increase in credit risk since
+initial recognition but have no objective evidence of impairment are included under
+Stage 2, with their impairment allowance measured at an amount equivalent to the ECL
+over the lifetime of the financial instruments;
+Stage 1: Financial instruments without significant increases in credit risk since initial
+recognition are included under Stage 1 to calculate their impairment allowance at an
+amount equivalent to the ECL of the financial instruments for the next 12 months;
+•
+According to the changes of credit risk of financial instruments since initial recognition, the
+Group calculates ECL by three stages:
+ECL is a weighted average of credit losses on financial instruments weighted at the risk of
+default. Credit loss is the difference between all contractual cash flows that are due to the
+Group in accordance with the contract and all cash flows expected to be received by the
+Group discounted at the original effective interest rate (or credit-adjusted effective interest
+rate for purchased or originated credit-impaired financial assets), i.e. the present value of all
+cash shortfalls.
+Measurement of ECL
+At the financial reporting date, the Group assesses and recognises the relevant impairment
+allowances for financial assets measured at amortised cost, debt instruments measured at fair
+value through other comprehensive income, and loan commitments and financial guarantee
+contracts on the basis of expected credit losses.
+The treatment of recognising the resulting fair value gain or loss depends on whether the
+derivative is designated and qualifies as a hedging instrument, and if so, the nature of the
+item being hedged. For derivatives not designated or qualified as hedging instruments,
+including those intended to provide effective economic hedges of specific interest rate and
+foreign exchange risks, but do not qualify for hedge accounting, changes in the fair value of
+these derivatives are recognised in "Net trading gains" in the income statement.
+4.6 Impairment measurement for losses on assets
+Financial assets are derecognised when the rights to receive cash flows from the investments
+have expired, or when a financial asset is transferred, the Group has transferred substantially
+all risks and rewards of ownership, or when the Group neither transfers nor retains
+substantially all risks or rewards of ownership of the financial asset but has not retained
+control of the financial asset.
+4.5 Derecognition of financial instruments
+Financial instruments (Continued)
+4
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The hedge ratio of the hedging relationship is the same as that resulting from the
+quantity of the hedged item that the entity actually hedges and the quantity of the
+hedging instrument that the entity actually uses to hedge that quantity of the hedged
+item. However, that designation shall not reflect an imbalance between the weightings
+of the hedged item and the hedging instrument that would create hedge ineffectiveness
+that could result in an accounting outcome that would be inconsistent with the purpose
+of hedge accounting.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+the hybrid (combined) instrument is not measured at fair value with changes in fair
+value recognised in the income statement.
+At the commencement date of the lease, the Group measures the lease liabilities at the
+present value of the lease payments that are not paid at that date, except for short-term leases
+and leases of low-value assets.
+245
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+8
+Leases (Continued)
+Lease liabilities
+8.1 As Lessee (Continued)
+In calculating the present value of the lease payments, the Group uses the incremental
+borrowing rate of lessee as the discount rate. The Group calculates the interest expenses
+of lease liabilities in each period during the lease term using the constant periodic rate of
+interest, and recognises such interest expenses in profit or loss. Variable lease payments that
+are not included in the measurement of lease liabilities are recognised in profit or loss as
+incurred.
+After the commencement date, the Group remeasures lease liabilities by discounting the
+revised lease payments if any of the following occur: (i) there is a change in the in-substance
+fixed payments; (ii) there is a change in the amounts expected to be payable under a residual
+value guarantee; (iii) there is a change in future lease payments resulting from a change
+in an index or a rate used to determine those payments; or (iv) there is a change in the
+assessments of options to purchase the underlying asset, extend or terminate the lease, or the
+circumstances of the actual exercise of these options.
+Lease modification
+Lease modification is a change in the scope of a lease, the consideration for a lease or lease
+term, that was not part of the original terms and conditions of the lease. For example, adding
+or terminating the right to use one or more underlying assets, or extending or shortening the
+contractual lease term.
+The Group accounts for a lease modification as a separate lease if both:
+(1) the modification increases the scope of the lease by adding the right to use one or more
+underlying assets; and
+(2) the consideration for the lease increases by an amount commensurate with the stand-
+alone price for the increase in scope and any appropriate adjustments to that stand-
+alone price to reflect the circumstances of the particular contract.
+For a lease modification that is not accounted for as a separate lease, at the effective date
+of the lease modification, the Group remeasures the lease term and the lease liability by
+discounting the revised lease payments using a revised discount rate.
+246
+Lease liabilities (Continued)
+The Group remeasures the lease liabilities at the present value of the changed lease
+payments and adjusts the carrying amounts of the right-of-use assets accordingly. When the
+carrying amount of the right-of-use asset is reduced to zero, and there is a further reduction
+in the measurement of the lease liability, the Group recognises the remaining amount of the
+remeasurement in profit or loss.
+The right-of-use assets are depreciated on a straight-line basis subsequently by the Group.
+If the Group is reasonably certain that the ownership of the underlying asset will be
+transferred to the Group at the end of the lease term, the Group depreciates the asset from
+the commencement date to the end of the useful life of the asset. Otherwise, the Group
+depreciates the asset from the commencement date to the earlier of the end of the useful life
+of the asset or the end of the lease term.
+(4) an estimate of costs to be incurred by the lessee in dismantling and removing the
+underlying asset, restoring the site on which it is located or restoring the underlying
+asset to the condition required by the terms and conditions of the lease.
+Leases
+At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A
+contract is, or contains, a lease if the contract conveys the right to control the use of one or
+more identified assets for a period of time in exchange for consideration.
+8.1 As Lessee
+The lease term is the non-cancellable period of a lease for which the Group has the right to
+use an underlying asset. The Group considers a lease that, at the commencement date of the
+lease, has a lease term of 12 months or less, and does not contain any option to purchase
+the underlying asset as a short-term lease; and a lease for which the value of the individual
+underlying asset is relatively low when new as a lease of low-value asset. The Group
+chooses not to recognise the right-of-use assets and lease liabilities for short-term leases and
+leases of low-value assets, and the rental expenses are recognised as “Operating expenses"
+in the income statement on a straight-line basis over each period of the lease term.
+The Group uses the incremental borrowing rate as the discount rate to calculate the present
+value of lease payment. The economic circumstance and the observable interest rate set the
+foundation for each institution of the Group in determining the incremental borrowing rate.
+On this basis, the applicable incremental borrowing rate is calculated through the adjustment
+of the reference interest rate, which is determined according to the situation of the Bank and
+its subsidiaries and the underlying asset, the lease term, the amount of lease liability and
+other specific conditions of the lease.
+244
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+8
+Leases (Continued)
+8.1 As Lessee (Continued)
+Right-of-use assets
+The right-of-use assets of the Group mainly include buildings, vehicles and other right-of-
+use assets.
+At the commencement date of the lease, the Group recognises a right-of-use asset. The cost
+of the right-of-use asset comprises:
+(1) the amount of the initial measurement of the lease liability;
+(2) any lease payments made at or before the commencement date of the lease less any
+lease incentives received;
+(3) any initial direct costs incurred when the Group is a lessee; and
+BANK OF CHINA LIMITED
+Construction in progress consists of assets under construction or being installed and is stated
+at cost. Cost includes equipment cost, cost of construction, installation and other direct
+costs. Items classified as construction in progress are transferred to property and equipment
+when such assets are ready for their intended use and the depreciation charge commences
+after such assets are transferred to property and equipment.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+248
+Contributions made by the Group to the retirement schemes described above are recognised
+as "Operating expenses" in the income statement as incurred. Forfeited contributions by
+those employees who leave the schemes prior to the full vesting of their contributions are
+used to reduce the existing level of contributions or retained in the retirement schemes in
+accordance with the requirements of the respective defined contribution plans.
+All eligible employees in operations in Hong Kong (China), Macao (China), Taiwan (China)
+and other countries and regions participate in local defined contribution schemes or defined
+benefit plans.
+In accordance with the policies of relevant state and local governments, employees
+in Chinese mainland participate in various defined contribution retirement schemes
+administered by local Labour and Social Security Bureaus. Operations in Chinese
+mainland contribute to pension and insurance schemes administered by the local pension
+and insurance agencies using applicable contribution rates stipulated in the relevant local
+regulations. Upon retirement, the local Labour and Social Security Bureaus are responsible
+for the payment of the basic retirement benefits to the retired employees. In addition to these
+basic staff pension schemes, employees in Chinese mainland who retire after 1 January 2004
+can also voluntarily participate in a defined contribution plan established by the Bank (“the
+Annuity Plan”). The Bank contributes to the Annuity Plan based on certain percentages of
+the employees' gross salaries.
+12.1 Defined contribution plans and Defined benefit plans
+Employee benefits
+Repossessed assets are initially recognised at fair value of the waived creditors' rights and
+other costs directly attributable to the assets when they are obtained as compensation for
+waiving the loans' principal and interest. When there are indicators that the recoverable
+amount is lower than carrying amount, the carrying amount is brought down to its
+recoverable amount.
+Repossessed assets
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The recoverable amount of an intangible asset is the higher of the asset's fair value less costs
+to sell and value in use.
+12
+11
+10 Intangible assets (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+247
+The value of intangible assets is reviewed for impairment at each financial reporting date.
+Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
+written down immediately to its recoverable amount.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+8
+Leases (Continued)
+8.2 As Lessor
+At the inception date, a lease is classified as a finance lease if it transfers substantially all
+the risks and rewards incidental to ownership of an underlying asset. Otherwise, a lease is
+classified as an operating lease.
+When the Group is a lessor under finance leases, the Group recognises the finance lease
+receivable and derecognises the assets under finance leases at the commencement date.
+The Group recognise assets held under a finance lease in the consolidated statement of
+financial position and such assets at an amount equal to the net investment in the lease. Net
+investment in the lease is the present value of the sum of the unguaranteed residual value
+and the lease payments that are not received at the commencement date, which is discounted
+by the interest rate implicit in the lease. The Group calculates and recognises the interest
+income in each period during the lease term using the constant periodic rate of interest, and
+recognises such interest income in profit or loss. Income relating to variable lease payments
+that are not measured as part of the net investment in the lease are recognised in profit or
+loss as incurred.
+When the Group is a lessor under operating leases, the Group reflects the underlying assets
+as the Group's assets. The rental income is recognised as “Other operating income" in the
+income statement on a straight-line basis over each period of the lease term. Income relating
+to variable lease payments that are not measured as part of the receivable in the lease are
+recognised in profit or loss as incurred.
+Investment properties
+Investment properties, principally consisting of office buildings, are held to generate
+rental income or earn capital gains or both and are not occupied by the Group. Investment
+properties are carried at fair value and changes in fair value are recorded in the income
+statement, representing the open market value and other related information determined
+periodically by independent appraisers.
+10 Intangible assets
+249
+Pursuant to local government regulations, all employees in Chinese mainland participate
+in various local housing funds administered by local governments. Operations in Chinese
+mainland contribute on a monthly basis to these funds based on certain percentages of the
+salaries of the employees. These payments are recognised as "Operating expenses" in the
+income statement as incurred.
+12.3 Housing funds
+Liabilities related to the above supplemental retirement benefit obligations and early
+retirement obligations existing at each financial reporting date is calculated by independent
+actuaries using the projected unit credit method and is recorded as a liability under
+"Retirement benefit obligations" in the statement of financial position. Liabilities represent
+the present value determined through discounting the estimated future cash outflows
+using interest rates of RMB treasury bonds which have terms to maturity approximating
+the terms of the related liability. Actuarial gains or losses of supplemental retirement
+benefit are recognised in "Other comprehensive income" immediately when they occur.
+Actuarial gains or losses of early retirement benefit obligations and gains or losses arising
+from amendments to retirement benefit obligations are charged or credited to the income
+statement immediately as “Operating expenses" when they occur.
+Early retirement benefits have been paid to those employees who accept voluntary
+retirement before the normal retirement date, as approved by management. The related
+benefit payments are made from the date of early retirement to the normal retirement date.
+Supplemental retirement benefits include supplemental pension payments and medical
+expense coverage.
+The Group pays supplemental retirement benefits to employees in Chinese mainland who
+retired prior to 31 December 2003 and early retirement benefits to those employees who
+accepted an early retirement arrangement.
+12.2 Retirement benefit obligations
+The obligations related to the defined benefit plans are calculated by independent actuaries
+using the projected unit credit method at each financial reporting date with actuarial gains
+or losses are recognised in "Other comprehensive income” immediately when they occur.
+Gains or losses arising from amendments to pension plans are charged or credited to the
+income statement immediately as “Operating expenses" when they occur.
+12.1 Defined contribution plans and Defined benefit plans (Continued)
+12 Employee benefits (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Computer software and other intangible assets are stated at acquisition cost less accumulated
+amortisation and impairment. These costs are amortised on a straight-line basis over their
+estimated useful lives with the amortisation recognised in the income statement.
+8
+Property and equipment (Continued)
+An embedded derivative is a component of a hybrid (combined) instrument that also
+includes a non-derivative host contract with the effect that some of the cash flows of the
+hybrid (combined) instrument vary in a way similar to a stand-alone derivative.
+If a hybrid contract contains a host that is a financial asset, the Group applies the
+requirements of classification and measurement to the entire hybrid contract. If a hybrid
+contract contains a host that is not a financial asset, the Group separates the embedded
+derivative from the host contract and accounts for it as a derivative, if, and only if:
+•
+•
+the economic characteristics and risks of the embedded derivative are not closely
+related to those of the host contract;
+a separate instrument with the same terms as the embedded derivative would meet the
+definition of a derivative; and
+These embedded derivatives separated from the host contract are measured at fair value with
+changes in fair value recognised in the income statement.
+If it is unable to measure the embedded derivative separately either at acquisition or at the
+subsequent financial reporting date, the Group will designate the entire hybrid instrument as
+at fair value through profit or loss.
+4.11 Offsetting financial instruments
+4.10 Embedded derivatives
+Financial assets and liabilities are offset and the net amount is reported in the statement of
+financial position when there is a current legally enforceable right to set off the recognised
+amounts and there is an intention to settle on a net basis, or realise the asset and settle the
+liability simultaneously.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+5
+Precious metals
+Precious metals comprise gold, silver and other precious metals. The Group retains all risks
+and rewards of ownership related to precious metals deposited with the Group, including
+the right to freely pledge or transfer, and it records the precious metals received as an asset.
+A liability to return the amount of precious metals deposited is also recognised. Precious
+metals that are not related to the Group's precious metal market making and trading
+activities are initially measured at acquisition cost and subsequently measured at the lower
+of cost and net realisable value. Precious metals that are related to the Group's market
+making and trading activities are initially recognised at fair value and subsequent changes in
+fair value included in "net trading gains" are recognised in the income statement.
+Repurchase agreements, agreements to re-sell and securities lending
+241
+Securities and bills sold subject to repurchase agreements ("Repos") continue to be
+recognised, and are recorded as “Financial investments". The corresponding obligation is
+included in "Placements from banks and other financial institutions" and "Due to central
+banks”. Securities and bills purchased under agreements to re-sell (“Reverse repos") are not
+recognised. The receivables are recorded as “Placements with and loans to banks and other
+financial institutions" or "Balances with central banks", as appropriate.
+Financial instruments (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+4
+Financial instruments (Continued)
+4.9 Derivative financial instruments and hedge accounting (Continued)
+(2) Cash flow hedge
+Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to
+a particular risk associated with all, or a component of, a recognised asset or liability (such
+as all or some future interest payments on variable-rate debt) or a highly probable forecast
+transaction, and could affect profit or loss.
+The effective portion of changes in the fair value of hedging instruments that are designated
+and qualify as cash flow hedges is recognised in “Other comprehensive income". The
+ineffective portion is recognised immediately in the income statement.
+4
+Amounts accumulated in equity are reclassified to the income statement in the same periods
+when the hedged future cash flows affect profit or loss.
+(3) Net investment hedge
+Net investment hedge is a hedge of a net investment in a foreign operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow
+hedges. Any gain or loss on the hedging instrument relating to the effective portion of the
+hedge is recognised directly in other comprehensive income; the gain or loss relating to the
+ineffective portion is recognised immediately in the income statement. Gains and losses
+accumulated in equity are reclassified to the income statement when the foreign operation is
+disposed of as part of the gain or loss on the disposal.
+When the Group separates the forward element and the spot element of a forward contract
+and designates as the hedging instrument only the change in the value of the spot element,
+the changes in the value of the forward element of the forward contract shall be recognised
+in other comprehensive income to the extent that it relates to the hedged item.
+240
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+When the Group discontinues hedge accounting for a cash flow hedge, if the hedged future
+cash flows are still expected to occur, that amount accumulated in the cash flow hedge
+reserve shall remain in equity. If the hedged future cash flows are no longer expected to
+occur, that amount shall be immediately reclassified from the cash flow hedge reserve to
+profit or loss.
+7.3 Construction in progress
+The difference between purchase and sale price is recognised as “Interest expense” or
+"Interest income” in the income statement over the life of the agreements using the effective
+interest method.
+statements.
+15-50 years
+3%
+1.9%-6.5%
+Equipment
+3-15 years
+3%
+6.4%-32.4%
+Motor vehicles
+4-6 years
+3%
+16.1%-24.3%
+7.2 Aircraft
+Aircraft are used in the Group's aircraft operating leasing business.
+Aircraft are depreciated using the straight-line method over the expected useful life of 25
+years, less the years in service at the time of purchase to an estimated residual value rate
+varying from 0% to 15%.
+243
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+7
+Buildings
+Securities lending transactions are generally secured, with collateral taking the form
+of securities or cash. Securities lent to counterparties by the Group are recorded in the
+consolidated financial statements. Securities borrowed from counterparties by the Group
+are not recognised in the consolidated financial statements of the Group. Cash collateral
+received or advanced is recognised as a liability or an asset in the consolidated financial
+rate
+Estimated
+residual
+value rate
+7
+Property and equipment
+The Group's property and equipment mainly comprise buildings, equipment and motor
+vehicles, aircraft and construction in progress. When the costs attributable to the land use
+rights cannot be reliably measured and separated from that of the building at inception, the
+costs are included in the cost of buildings and recorded in "Property and equipment”.
+Assets purchased or constructed are initially measured at acquisition cost or deemed cost,
+as appropriate. Such initial cost includes expenditure that is directly attributable to the
+acquisition of the assets.
+242
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+7
+Property and equipment (Continued)
+Subsequent costs are included in an asset's carrying amount, only when it is probable that
+future economic benefits associated with the item will flow to the Group and the cost of the
+item can be measured reliably. All other repairs and maintenance costs are charged to the
+income statement during the financial period in which they are incurred.
+Depreciation is calculated on a straight-line method to write down the cost of such assets to
+their residual values over their estimated useful lives. The residual values and useful lives of
+assets are reviewed, and adjusted if appropriate, at each financial reporting date.
+Property and equipment are reviewed for impairment at each financial reporting date. Where
+the carrying amount of an asset is greater than its estimated recoverable amount, it is written
+down immediately to its recoverable amount. The recoverable amount is the higher of the
+asset's fair value less costs to sell and value in use.
+Gains and losses on disposals are determined by the difference between proceeds and
+carrying amount, after deduction of relevant taxes and expenses. These are included in the
+income statement.
+7.1 Buildings, equipment and motor vehicles
+Buildings comprise primarily branch and office premises. The estimated useful lives,
+estimated residual value rate and depreciation rate of buildings, equipment and motor
+vehicles are as follows:
+Type of assets
+Estimated
+useful lives
+Annual
+depreciation
+Intangible assets are identifiable non-monetary assets without physical substance owned and
+controlled by the Group, including computer software and other intangible assets.
+259
+When estimating the value in use of aircraft held by the subsidiary, the Group estimates
+expected future cash flows from the aircraft and uses a suitable discount rate to calculate
+present value. The Group obtains valuations of aircraft from independent appraisers for
+which the principal assumptions underlying aircraft value are based on current market
+transactions for similar aircraft in the same location and condition. The Group also uses
+the fair value of aircraft obtained from independent appraisers in its assessment of the
+recoverable amount of intangible assets and the goodwill arising from the purchase of the
+Group's aircraft leasing subsidiary.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Segment reporting
+The Group reviews the internal reporting in order to assess performance and allocate
+resources. Segment information is presented on the same basis as the Group's management
+and internal reporting.
+22
+Comparative figures
+Certain comparative figures have been adjusted to conform with changes in disclosures in
+current year.
+256
+BANK OF CHINA LIMITED
+21
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+1
+The accounting estimates and judgements made by the Group will generally affect
+the carrying amounts of assets and liabilities of the next financial year. Estimates and
+judgements are continually evaluated and are based on historical experience and other
+factors, including expectations of future events that are believed to be reasonable under the
+circumstances.
+The Group has taken into consideration the impact of the economic environment on the
+industries and territories in which the Group operates when determining critical accounting
+estimates and judgements in applying accounting policies.
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying
+value of assets and liabilities, are set out below. It is possible that actual results may be
+materially different from the estimates and judgements referred below.
+Measurement of ECL
+FOR THE YEAR ENDED 31 DECEMBER 2021
+The measurement of the expected credit loss allowance for financial assets measured at
+amortised cost, debt instruments measured at FVOCI and loan commitments and financial
+guarantee contracts is an area that requires the use of complex models and significant
+assumptions about future economic conditions and credit behaviour (the likelihood of
+customers defaulting and the resulting losses).
+Deferred income tax assets and liabilities are offset when there is a legally enforceable right
+to offset current tax assets against current tax liabilities and when the deferred income taxes
+are related to the same fiscal authority.
+Deferred income tax liabilities on taxable temporary differences arising from investments
+in subsidiaries, associates and joint ventures are recognised, except where the timing of the
+reversal of the temporary difference can be controlled and it is probable that the difference
+will not reverse in the foreseeable future.
+20.1 Current income tax
+Current income tax is the expected tax payable on the taxable income for the year, using tax
+rates enacted or substantially enacted at the financial reporting date, and any adjustment to
+tax payable in respect of previous years.
+20.2 Deferred income tax
+Deferred income tax is recognised using the liability method, on temporary differences
+arising between the tax bases of assets and liabilities and their carrying amounts in the
+consolidated financial statements. Deferred income tax is determined using tax rates and
+laws that have been enacted or substantially enacted by the financial reporting date and are
+expected to apply when the related asset is realised, or the liability is settled.
+The principal temporary differences arise from asset impairment allowances, revaluation of
+certain financial assets and financial liabilities including derivative contracts, revaluation
+of investment properties, depreciation and amortisation, provisions for pension, retirement
+benefits and salary payables.
+Deferred income tax assets are recognised to the extent that it is probable that future taxable
+profit will be available against which deductible temporary differences can be utilised
+except the deferred tax asset arises from the initial recognition of an asset or liability in
+a transaction that is not a business combination and at the time of the transaction, affects
+neither accounting profit nor taxable profit/loss.
+For deductible temporary differences associated with investment in subsidiaries, associates
+and joint ventures, a deferred tax asset is recognised to the extent that, and only to the extent
+that, it is probable that the temporary difference will reverse in the foreseeable future; and
+taxable profit will be available against which the temporary difference can be utilised.
+The tax effects of income tax losses available for carrying forward are recognised as an asset
+when it is probable that future taxable profits will be available against which these losses
+can be utilised.
+Deferred tax liabilities shall be recognised for all taxable temporary differences, except
+to the extent that the deferred tax liability arises from the initial recognition of goodwill,
+or the initial recognition of an asset or liability in a transaction which is not a business
+combination, and at the time of the transaction, affects neither accounting profit nor taxable
+profit/loss.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+20 Income taxes (Continued)
+20.2 Deferred income tax (Continued)
+255
+Income taxes comprise current income tax and deferred income tax. Tax is recognised in the
+income statement except to the extent that it relates to items directly recognised in Equity, in
+which case, tax is also directly recognised in Equity.
+A number of significant judgements are required in applying the accounting requirements
+for measuring ECL, such as:
+•
+The Group uses judgement to assess whether the Group has a present legal or constructive
+obligation as a result of past events at each financial reporting date, and judgement is used
+to determine if it is probable that an outflow of resources embodying economic benefits will
+be required to settle the obligation, and to determine a reliable estimate of the amount of the
+obligation and relevant disclosure in the consolidated financial statements.
+258
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+Provisions
+4
+As described in Note II.12.2 and Note V.33, the Bank has established liabilities in
+connection with benefits payable to certain retired and early retired employees. These
+liabilities are calculated using actuarial assumptions such as discount rates, pension benefit
+inflation rates, medical benefit inflation rates, and other factors. While management
+believes that its assumptions are appropriate, differences in actual experience or changes
+in assumptions may affect other comprehensive income, expenses and employee retirement
+benefit obligations.
+Taxes
+The Group is subject to income, value-added and other taxes in numerous jurisdictions,
+principally in Chinese mainland and Hong Kong (China). During the ordinary course of
+business, there are certain transactions and activities for which the final tax treatment is
+uncertain. The Group takes into account the existing tax legislations and past practice in
+determining the tax estimates.
+Where the final tax outcome of these matters is different from the amounts that were initially
+estimated, such differences will impact the current income tax, deferred income tax, and
+value-added tax in the period during which such a determination is made.
+Impairment of non-financial assets
+Non-financial assets are periodically reviewed for impairment and where the carrying
+amount of an asset is greater than its estimated recoverable amount, it is written down
+immediately to its recoverable amount. Recoverable amount is the higher of the asset's fair
+value less costs to sell and value in use.
+BANK OF CHINA LIMITED
+5
+•
+With respect to the PRC government obligations related to large policy-directed financing
+transactions, fair value is determined using the stated terms of the related instrument and
+with reference to terms determined by the PRC government in similar transactions engaged
+in or directed by the PRC government. In this regard, there are no other relevant market
+prices or yields reflecting arm's length transactions of a comparable size and tenor.
+The Group establishes fair value of financial instruments with reference to a quoted market
+price in an active market or, if there is no active market, using valuation techniques. These
+valuation techniques include the use of recent arm's length transactions, observable prices
+for similar instruments, discounted cash flow analysis using risk-adjusted interest rates, and
+commonly used market pricing models. Whenever possible these models use observable
+market inputs and data including, for example, interest rate yield curves, foreign currency
+rates and option volatilities. The results of using valuation techniques are calibrated against
+the industry practice and observable current market transactions in the same or similar
+instruments.
+•
+Segmentation of portfolios sharing similar credit risk characteristics for the purposes of
+measuring ECL;
+Selection of appropriate models and assumptions for the measurement of ECL;
+Determination of criteria for determining significant increases in credit risk, default
+and credit-impaired financial assets;
+Economic indicators for forward-looking measurement, and the application of
+economic scenarios and weightings for different types of products; and
+Estimation of future cash flows for impaired loans and advances to customers where
+ECL is being assessed individually.
+Refer to Note VI.2.3 measurement of ECL for the description of the parameters,
+assumptions and estimation techniques used in measuring the ECL.
+The Group assesses assumptions and estimates used in valuation techniques including
+review of valuation model assumptions and characteristics, changes to model assumptions,
+the quality of market data, whether markets are active or inactive, other fair value
+adjustments not specifically captured by models and consistency of application of
+techniques between reporting periods as part of its normal review and approval processes.
+Valuation techniques are validated and periodically reviewed and, where appropriate, have
+been updated to reflect market conditions at the financial reporting date.
+257
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+2
+Fair value of financial instruments
+3
+BANK OF CHINA LIMITED
+20 Income taxes
+Employee retirement benefit obligations
+(Amount in millions of Renminbi, unless otherwise stated)
+Provisions are recognised when: the Group has a present legal or constructive obligation
+as a result of past events, it is probable that an outflow of resources embodying economic
+benefits will be required to settle the obligation, and a reliable estimate of the amount of the
+obligation can be made. The amount initially recognised as a provision should be the best
+estimate of the expenditure required to settle the present obligation.
+14 Insurance contracts
+14.1 Insurance contracts classification
+The Group's insurance subsidiaries issue insurance contracts that transfer significant
+insurance risk. The Group performs a significant insurance risk test at the contract initial
+recognition date. Insurance risk is significant if, and only if, an insured event could cause
+an insurer to pay significant additional benefits in any scenario, excluding scenarios that
+lack commercial substance. The Group's insurance subsidiaries issue non-life insurance
+contracts, which cover casualty and property insurance risk, and life insurance contracts,
+which insure events associated with human life (for example death, or survival) over a long
+duration.
+The Group does not separately measure embedded derivatives that itself meet the definition
+of an insurance contract or options to surrender insurance contracts for a fixed amount (or an
+amount based on a fixed amount and an interest rate).
+14.2 Insurance contracts recognition and measurement
+(1) Non-life insurance contracts
+Premiums on non-life insurance contracts are recognised as revenue (earned premiums)
+proportionally over the period of coverage. The portion of premium received on in-force
+contracts that relates to unexpired risks at the financial reporting date is reported as the
+unearned premium liability in "Other liabilities”. Claims and loss adjustment expenses
+are charged to the income statement as “Operating expenses” when incurred based on the
+estimated liability for compensation owed to contract holders or third parties damaged by
+the contract holders. They include direct and indirect claims settlement costs and arise from
+events that have occurred up to the financial reporting date even if they have not yet been
+reported to the Group.
+251
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+14 Insurance contracts (Continued)
+13 Provisions
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+12 Employee benefits (Continued)
+(1) Equity-settled share-based compensation schemes
+Fair value of the employee services received in exchange for the grant of the options under
+these schemes is recognised as an expense over the vesting period, with a corresponding
+increase in equity. Total amount to be expensed over the vesting period is determined by
+reference to the fair value of the options granted, excluding the impact of any non-market
+vesting conditions. Fair value of the equity instruments is measured at the grant date and is
+not subsequently re-measured. Non-market vesting conditions are included in assumptions
+about the number of options that are expected to become exercisable. At each financial
+reporting date, the Group revises its estimates of the number of options that are expected
+to become exercisable. It recognises the impact of the revision of original estimates, if any,
+as "Operating expenses" in the income statement over the remaining vesting period, with a
+corresponding adjustment to "Capital reserve".
+14.2 Insurance contracts recognition and measurement (Continued)
+The proceeds received net of any directly attributable transaction costs are credited to "Share
+capital" (nominal value) and "Capital reserve" when the options are exercised.
+The related cost of services received from the employees and the liability to pay for such
+services are measured at fair value and recognised over the vesting period as the employees
+render services. Fair value is established at the grant date, re-measured at each financial
+reporting date with any changes in fair value recognised as “Operating expenses" in the
+income statement for the period and derecognised when the liability is settled.
+The total amount to be expensed over the vesting period is determined by reference to the
+fair value of the rights granted, excluding the impact of any non-market vesting conditions.
+Non-market conditions are included in the assumptions about the number of rights that are
+expected to vest. At each financial reporting date, the Group revises its estimates of the
+number of rights that are expected to vest. It recognises the impact of the revision to original
+estimates, if any, as “Operating expenses” in the income statement, with a corresponding
+adjustment to liability.
+12.5 Bonus plans
+The Group recognises a liability and an expense for bonuses, taking into consideration
+its business performance and profit attributable to the Bank's equity holders. The Group
+recognises a liability where contractually obliged or where there is a past practice that has
+created a constructive obligation.
+250
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(2) Cash-settled share-based compensation schemes
+(2) Life insurance contracts
+12.4 Share-based compensation
+14.3 Liability adequacy test
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+18 Interest income and expense
+19
+253
+"Interest income” and “Interest expense" in the Group's income statement are the interest
+income and expense calculated using the effective interest method on financial assets at
+amortised cost, financial assets at fair value through other comprehensive income and
+financial liabilities at amortised cost.
+For those purchased or originated credit-impaired financial assets, the Group calculates the
+interest income by applying the credit-adjusted effective interest rate to the amortised cost
+of the financial asset from initial recognition. Credit-adjusted effective interest rate is that
+exactly discounts the estimated future cash flows through the expected life of the financial
+asset to the amortised cost of a financial asset that is a purchased or originated credit-
+impaired financial asset.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+For those financial assets that are not purchased or originated credit-impaired financial
+assets but subsequently have become credit-impaired financial assets, the Group calculates
+the interest income by applying the effective interest rate to the amortised cost of the
+financial asset in subsequent reporting periods.
+Fee and commission income
+254
+Premiums on life insurance contracts are recognised as revenue when they become payable
+by the contract holders. Benefits and claims are recorded as an expense when they are
+incurred. A liability for contractual benefits that are expected to be incurred in the future
+is recorded when premiums are recognised. For certain long-term insurance contracts
+(investment-linked long-term insurance contracts) with embedded derivatives linking
+payments on the contract to units of an investment fund set up by the Group with the
+consideration received from the contract holders, the liability is adjusted for all changes
+in the fair value of the underlying assets, and includes a liability for contractual benefits
+that are expected to be incurred in the future which is recorded when the premiums are
+recognised.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Effective interest method is used in the calculation of the amortised cost of a financial
+asset or a financial liability and in the allocation and recognition of the interest income
+or interest expense in profit or loss over the relevant period. Effective interest rate is that
+exactly discounts estimated future cash flows through the expected life of a financial asset or
+financial liability to the gross carrying amount of a financial asset or the amortised cost of a
+financial liability. When calculating effective interest rate, the Group estimates the expected
+cash flows by considering all contractual terms of the financial instrument but does not
+consider expected credit losses. The calculation includes all amounts paid or received by the
+Group that are an integral part of the effective interest rate, transaction costs and all other
+premiums or discounts.
+The Group also administers entrusted loans on behalf of third-party lenders. In this regard,
+the Group grants loans to borrowers, as an intermediary, at the direction of third-party
+lenders, who fund these loans. The Group has been contracted by these third-party lenders
+to manage the administration and collection of these loans on their behalf. The third-party
+lenders determine both the underwriting criteria for and all terms of the entrusted loans,
+including their purposes, amounts, interest rates, and repayment schedules. The Group
+charges a commission related to its activities in connection with the entrusted loans, but
+the risk of loss is borne by the third-party lenders. Entrusted loans are not recognised in the
+statement of financial position of the Group.
+The Group earns fee and commission income from a diverse range of services it provides to
+its customers. For those services that are provided over a period of time, fee and commission
+income is accrued in accordance with the terms and conditions of the service agreement.
+For other services, fee and commission income is recognised when the transactions are
+completed.
+Fiduciary activities
+15
+At each financial reporting date, liability adequacy tests are performed to ensure the
+adequacy of the insurance contract liabilities (including unearned premium in the case of
+non-life insurance contracts). In performing these tests, current best estimates of future
+contractual cash flows and claims handling and administration expenses, as well as
+investment income from the assets backing such liabilities, are used. Any deficiency is
+immediately charged to the income statement and reported as “Operating expenses", with a
+provision established for losses arising from the liability adequacy test.
+The Group acts as a custodian, trustee or in other fiduciary capacities, that result in its
+holding or placing of assets on behalf of individuals, securities investment funds, social
+security funds, insurance companies, qualified foreign institutional investors, annuity
+schemes and other customers. These assets are not included in the statement of financial
+position of the Group, as they are not assets of the Group.
+Preference shares and perpetual bonds
+Preference shares issued by the Group contain no contractual obligation to deliver cash
+or another financial asset; or to exchange financial assets or financial liabilities with
+another entity under conditions that are potentially unfavourable to the Group. Preference
+shares issued are non-derivative instruments that will be settled in the Group's own equity
+instruments, but includes no contractual obligation for the Group to deliver a variable
+number of its own equity instruments. The Group classifies preference shares issued as
+an equity instrument. Fees, commissions and other transaction costs of preference shares
+issuance are deducted from equity. Dividends on preference shares are recognised as profit
+distribution at the time of declaration.
+252
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(Amount in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued)
+15 Preference shares and perpetual bonds (Continued)
+Perpetual bonds issued by the Group contain no contractual obligation to deliver cash or
+another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group. Perpetual bonds
+issued include no terms and arrangements that the bonds must or will alternatively be
+settled in the Group's own equity instruments. The Group classifies perpetual bonds issued
+as an equity instrument. Fees, commissions and other transaction costs of perpetual bonds
+issuance are deducted from equity. Interest on perpetual bonds is recognised as profit
+distribution at the time of declaration.
+17
+A contingent liability is a possible obligation that arises from past events and whose
+existence will only be confirmed by the occurrence or non-occurrence of one or more
+uncertain future events not wholly within the control of the Group. It can also be a present
+obligation arising from past events that is not recognised because it is not probable that
+an outflow of economic resources will be required or the amount of obligation cannot be
+measured reliably.
+16 Contingent liabilities
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(5)
+8(3)
+8
+ZHOU Hehua (5)
+8(3)
+50(3)
+LENG Jie
+50
+JIA Xiangsen
+260
+260
+ZHENG Zhiguang
+8
+WEI Hanguang
+117
+85
+| | | |
+260
+| | | |
+CHEN Chunhua
+500
+CHUI Sai Peng Jose
+450
+600
+450
+600
+450
+450
+Supervisors
+ZHANG Keqiu (4)(5)
+619
+821
+500
+7,605
+WANG Xiquan (4)(6)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+8 Directors', supervisors' and senior management's emoluments (Continued)
+For the year ended 31 December 2020
+Contributions
+Remuneration
+Fees
+paid
+RMB'000
+RMB'000
+to pension
+schemes
+RMB'000
+Benefits in
+kind
+| | | |
+RMB'000
+Total
+RMB'000
+(Amount in millions of Renminbi, unless otherwise stated)
+260
+FOR THE YEAR ENDED 31 DECEMBER 2021
+BANK OF CHINA LIMITED
+51
+10
+7
+68
+WANG Zhiheng (6)
+25(3)
+25
+LI Changlin (6)
+46(3)
+46
+3,707
+2,919
+564
+415
+266
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+| | | |
+LIN Jingzhen (4)
+WANG Jiang (4)(6)
+|||||
+For the year ended 31 December 2021
+Contributions
+Remuneration
+Fees
+paid
+RMB'000
+Details of the directors' and supervisors' emoluments are as follows:
+RMB'000
+Benefits in
+kind
+Total
+RMB'000
+RMB'000
+Executive directors
+to pension
+schemes
+RMB'000
+Directors', supervisors' and senior management's emoluments
+8
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Reimbursement for cancellation of labour contract
+Executive directors
+29
+28
+Other
+4,674
+4,304
+Total
+265
+99,317
+89,334
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+LIU Liange (4)
+600
+LIU Jin (4)(5)
+Non-executive directors
+XIAO Lihong (1)
+WANG Xiaoya (1)
+ZHANG Jiangang (1)
+CHEN Jianbo (1)
+ZHAO Jie (1)(6)
+111
+84
+752
+_(2)
+51
+10
+557
+7
+Angela CHAO
+450
+JIANG Guohua
+600
+Martin Cheung Kong LIAO
+450
+68
+-(2)
+752
+84
+Independent directors
+WANG Changyun
+_(2)
+619
+117
+85
+821
+_(2)
+465
+88
+63
+616
+_(2)
+557
+111
+WANG Wei (4)
+LIU Liange (4)
+50
+WANG Wei (4)
+8
+Directors', supervisors' and senior management's emoluments (Continued)
+(1)
+(2)
+(3)
+(4)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(5)
+For the years ended 31 December 2021 and 2020, these non-executive directors of the Bank were not
+remunerated by the Bank.
+For the years ended 31 December 2021 and 2020, these executive directors of the Bank did not receive any
+fees.
+Employee supervisors' compensation presented above is paid for serving as the supervisors of the Bank.
+The total compensation packages for executive directors and certain supervisors for the year ended 31
+December 2021 including discretionary bonus have not yet been finalised in accordance with the relevant
+regulations of the PRC authorities. The amount of the compensation not provided for is not expected to
+have any significant impact on the Group's 2021 financial statements. The final compensation for the year
+ended 31 December 2021 will be disclosed in a separate announcement when determined.
+The compensation amounts for these directors and supervisors for the year ended 31 December 2020 were
+restated based on the finalised amounts as disclosed in the Bank's announcement on resolutions of the
+Board of Directors dated 30 August 2021.
+LIU Jin began to serve as Vice-Chairman of the Board of Directors and Executive Director of the Bank
+as of 16 June 2021. ZHANG Keqiu began to serve as Chairwoman of the Board of Supervisors and
+Shareholder Supervisor of the Bank as of 18 January 2021. WEI Hanguang and ZHOU Hehua began to
+serve as Employee Supervisor as of 18 November 2021. HUI Ping began to serve as External Supervisor as
+of 17 February 2022. Since HUI Ping did not hold any position at the Board of Supervisors of the Bank in
+2021, no emoluments were disclosed in 2021.
+(6)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+224
+138
+260
+260
+79
+968
+50
+50
+3,176
+3,952
+387
+402
+7,917
+267
+BANK OF CHINA LIMITED
+WANG Jiang ceased to serve as Vice-Chairman of the Board of Directors and Executive Director of the
+Bank as of 5 February 2021. ZHAO Jie ceased to serve as Non-executive Director of the Bank as of 15
+March 2022. WANG Xiquan ceased to serve as Chairman of the Board of Supervisors and Shareholder
+Supervisor of the Bank as of 18 January 2021. WANG Zhiheng ceased to serve as Employee Supervisor as
+of 24 June 2021. LI Changlin ceased to serve as Employee Supervisor as of 18 November 2021.
+450
+268
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Emoluments of the individuals were within the following bands:
+Amounts in RMB
+10,000,001-20,000,000
+20,000,001-30,000,000
+30,000,001-50,000,000
+83
+3
+124
+2021
+2020
+The above five highest paid individuals' emoluments are based on best estimates of
+discretionary bonuses. Discretionary bonuses include portions of payments that are deferred
+to future periods.
+During the years ended 31 December 2021 and 2020, the Group has not paid any
+emoluments to the directors, supervisors, or senior management as an inducement to join or
+upon joining the Group or as compensation for loss of office.
+269
+2,082
+Year ended 31 December
+2
+Contributions to pension schemes and other
+98
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+8
+Directors', supervisors' and senior management's emoluments (Continued)
+Five highest paid individuals
+Of the five individuals with the highest emoluments, none of them are directors or
+supervisors whose emoluments are disclosed above.
+The emoluments payable to the five individuals whose emoluments were the highest in the
+Group for the years ended 31 December 2021 and 2020, respectively are as follows:
+Year ended 31 December
+2021
+2020
+Basic salaries and allowances
+Discretionary bonuses
+18
+23
+63
+BANK OF CHINA LIMITED
+LIU Jin (4)(5)
+609
+635
+61
+5
+22227
+79
+968
+79
+_(2)
+882
+882
+968
+73
+Non-executive directors
+XIAO Lihong (1)
+WANG Xiaoya (¹)
+79
+WU Fulin (4)
+79
+78
+LIN Jingzhen
+_(2)
+811
+78
+-(2)
+-(2)
+729
+74
+(4)
+-(2)
+729
+74
+WANG Jiang (4)(6)
+_(2)
+811
+ZHANG Jiangang (1)
+450
+CHEN Jianbo (1)
+ZHAO Jie (1)(6)
+LENG Jie
+50(3)
+JIA Xiangsen
+260
+ZHENG Zhiguang
+260
+ZHANG Keqiu (4)(5)
+WANG Xiquan (4)(6)
+78
+1 1 1 1 ∞
+WANG Zhiheng (6)
+50(3)
+LI Changlin (6)
+50(3)
+811
+Supervisors
+138
+CHUI Sai Peng Jose
+Independent directors
+WANG Changyun
+||||
+||||
+| | | |
+| | | |
+635
+Angela CHAO
+450
+JIANG Guohua
+609
+Martin Cheung Kong LIAO
+450
+CHEN Chunhua
+224
+LIAO Qiang (1)
+2,052
+A portion of the discretionary bonus payments for executive directors and the Chairman of the Board of
+Supervisors are deferred for a minimum of 3 years, which is contingent upon the future performance in
+accordance with relevant regulations of the PRC authorities.
+4,774
+Bank card fees
+29,875
+25,367
+15,371
+14,383
+12,717
+13,825
+Credit commitment fees
+11,868
+11,912
+Custodian and other fiduciary service fees
+6,400
+4,831
+Spread income from foreign exchange business
+5,520
+5,871
+Consultancy and advisory fees
+Settlement and clearing fees
+4,576
+Agency commissions
+2021
+(36,294)
+Subtotal
+(364,346)
+(344,152)
+Net interest income
+261
+425,142
+415,918
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2
+Net fee and commission income
+Year ended 31 December
+2020
+(42,300)
+3,535
+8,126
+5,551
+Net gains from fund investments and equity products
+10,322
+5,057
+Net gains/(losses) from commodity products
+936
+(6,560)
+Total (1)
+28,291
+8,055
+(1)
+Included in "Net trading gains" above for the year ended 31 December 2021 were losses of RMB348
+million in relation to financial assets and financial liabilities designated as at fair value through profit or
+loss (2020: gains of RMB1,082 million).
+262
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+13,065
+Other
+Net gains from interest rate products
+3,968
+8,916
+Fee and commission income
+94,453
+88,640
+Fee and commission expense
+(13,027)
+(13,118)
+Net fee and commission income
+81,426
+75,522
+3
+Net trading gains
+Year ended 31 December
+2021
+2020
+Net gains from foreign exchange and
+foreign exchange products
+4,007
+Bonds issued and other
+(49,419)
+(58,447)
+Education surcharges
+Taxable added value
+6%
+City construction and maintenance tax
+Turnover tax paid
+1%-7%
+Turnover tax paid
+3%
+Local education surcharges
+Turnover tax paid
+2%
+Hong Kong (China)
+Hong Kong (China) profits tax
+Assessable profits
+16.5%
+260
+BANK OF CHINA LIMITED
+Value-added tax
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+25%
+Corporate income tax
+Labour union fee and staff education fee
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+7
+Judgement in assessing control over structured entities
+The Group is involved with structured entities in its normal business course, and the Group
+determines whether or not to consolidate those structured entities depending on whether the
+Group has control over them. When assessing control over structured entities, the Group
+takes consideration of power arising from rights it directly owns or indirectly owns through
+subsidiaries (including controlled structured entities), variable returns, and the link between
+power and returns.
+Variable returns the Group is exposed to from its involvement with structured entities
+include decision makers' remuneration (such as management fees and performance-related
+fees), as well as other benefits (such as investment income, remuneration and exposure to
+loss from providing credit or liquidity support, and variable returns from transactions with
+structured entities). When assessing whether it controls a structured entity, the Group not
+only considers applicable legal or regulatory requirements, and contractual agreements, but
+also other circumstances where the Group may have obligation to absorb any loss of the
+structured entity.
+The Group reassesses whether it controls a structured entity if facts and circumstances
+indicate that there are changes to one or more of the relevant elements of control.
+IV TAXATION
+The principal income and other taxes to which the Group is subject are listed below:
+Taxes
+Chinese mainland
+Tax basis
+Statutory rates
+Taxable income
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+1
+55,723
+Financial assets at amortised cost
+100,309
+94,830
+Due from and placements with and loans to banks and
+other financial institutions and central banks
+54,629
+59,163
+Subtotal
+789,488
+760,070
+Interest expense
+Due to customers
+(263,599)
+(258,439)
+Due to and placements from banks and
+other financial institutions
+53,550
+other comprehensive income
+Financial assets at fair value through
+150,553
+Net interest income
+Year ended 31 December
+2021
+2020
+Interest income
+Loans and advances to customers
+581,000
+550,354
+Corporate loans and advances
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+- Personal loans
+Financial investments
+309,436
+299,190
+263,651
+241,907
+7,913
+9,257
+153,859
+Discounted bills
+4
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Net gains on derecognition of financial assets at
+9,650
+6,424
+Taxes and surcharges
+5,715
+5,465
+Other
+8,809
+8,792
+Total (3)
+264
+226,355
+202,411
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+Cost of sales of precious metal products
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+22,871
+Depreciation and amortisation
+Operating expenses
+Year ended 31 December
+2021
+2020
+Staff costs (Note V.7)
+99,317
+89,334
+General operating and administrative expenses (1) (2)
+47,403
+38,944
+Insurance benefits and claims
+- Life insurance contracts
+27,749
+26,340
+Non-life insurance contracts
+3,830
+4,241
+23,882
+6
+Operating expenses (Continued)
+(1) Included in the "General operating and administrative expenses" is principal auditors' remuneration of
+RMB173 million for the year ended 31 December 2021 (2020: RMB237 million), of which RMB62 million
+is for Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions of the Group
+(2020: RMB75 million).
+3,932
+3,109
+6,205
+4,607
+3,527
+3,440
+213
+150
+― Injury at work
+81
+59
+Maternity insurance
+135
+136
+Housing funds
+Net gains on transfers of financial asset
+4,940
+50
+67
+4,218
+4,664
+(2)
+(3)
+Included in the "General operating and administrative expenses" are lease expenses related to short-term
+leases, leases of low-value assets and others of RMB1,404 million for the year ended 31 December 2021
+(2020: RMB 1,302 million).
+Included in the "Operating expenses” are premises and equipment-related expenses (mainly comprised of
+property management and building maintenance expenses and taxes) of RMB12,986 million for the year
+ended 31 December 2021 (2020: RMB 12,810 million).
+7
+Staff costs
+Year ended 31 December
+2021
+6
+2020
+Staff welfare
+Retirement benefits
+Social insurance
+Medical
+- Pension
+- Annuity
+- Unemployment
+62,377
+Salary, bonus and subsidy
+For equity instruments classified as financial assets at fair value through other comprehensive income,
+RMB616 million of dividend income is recognised for the year ended 31 December 2021 (2020: RMB507
+million).
+68,798
+33,027
+Revenue from sale of precious metals products
+10,004
+6,749
+Dividend income (2)
+6,881
+5,601
+Gains on disposal of property and equipment,
+intangible assets and other assets
+976
+1,394
+Changes in fair value of investment properties
+(Note V.21)
+(427)
+(1,505)
+Gains on disposal of subsidiaries, associates
+and joint ventures
+992
+12,300
+12,021
+Aircraft leasing income
+29,676
+fair value through other comprehensive income
+Net gains on derecognition of financial assets
+at amortised cost (1)
+Total
+29,676
+Year ended 31 December
+2021
+2020
+2,109
+7,987
+1,088
+202
+1,560
+9,547
+(1) All the net gains on the derecognition of financial assets at amortised cost result from disposals during the
+year ended 31 December 2021 and 2020.
+5
+Year ended 31 December
+2021
+2020
+Insurance premiums (¹)
+33,027
+3,197
+Other
+Other operating income
+4,187
+33,290
+Less: gross written premiums ceded to reinsurers
+(9,004)
+(9,348)
+Net insurance premium income
+27,802
+23,942
+Non-life insurance contracts
+Gross earned premiums
+6,953
+Less: gross written premiums ceded to reinsurers
+(1,338)
+(1,219)
+Net insurance premium income
+Total
+5,734
+5,225
+36,806
+Gross earned premiums
+6,563
+2020
+263
+Life insurance contracts
+4,188
+67,661
+58,605
+Total
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+5
+Other operating income (Continued)
+(1) Details of insurance premium income are as follows:
+(2)
+Year ended 31 December
+V
+2021
+633,761
+2,228,726
+Subtotal
+Accrued interest
+Less: allowance for impairment losses
+2,076,145
+2,231,834
+672
+(3,780)
+695
+Total
+753,369
+As at 31 December
+1,442,384
+1,478,465
+Mandatory reserves (1)
+2020
+2021
+14 Balances with central banks
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+2,076,840
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Surplus reserves and others (2)
+(1)
+91,709
+(2) These represent funds for clearing purposes and balances other than mandatory reserves placed with the
+PBOC, the central banks of Hong Kong (China), Macao (China), Taiwan (China) and other countries and
+regions.
+939,376
+276
+1,258,347
+Subtotal (1)(2)
+24,157
+67,055
+Macao (China), Taiwan (China) and
+other countries and regions
+Other financial institutions in Hong Kong (China),
+294,358
+450,817
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+529,152
+589,919
+Accrued interest
+150,556
+Other financial institutions in Chinese mainland
+Banks in Chinese mainland
+Placements with and loans to:
+2020
+2021
+As at 31 December
+15 Placements with and loans to banks and other financial institutions
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+277
+The Group places mandatory reserve funds with the People's Bank of China (the "PBOC") and the central
+banks of Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions where it has
+operations. As at 31 December 2021, mandatory reserve funds placed with the PBOC were calculated at
+10.0% (31 December 2020: 11.0%) and 9.0% (31 December 2020: 5.0%) of qualified RMB deposits and
+foreign currency deposits from customers in Chinese mainland of the Bank, respectively. The mandatory
+reserve funds placed with the central bank of domestic subsidiaries of the Group are determined by the
+PBOC. The amounts of mandatory reserve funds placed with the central banks of other jurisdictions are
+determined by local regulations.
+As at 31 December 2021 and 2020, the Group included the predominant majority of due from banks and
+other financial institutions under Stage 1, and measured the impairment losses based on expected credit
+losses in the next 12 months (12-month ECL).
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+803,145
+2021
+As at 31 December
+Cash
+13 Cash and due from banks and other financial institutions
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+275
+1,417
+2,766
+(30,239)
+2020
+28,890
+(2,892)
+190
+(9,782)
+6,700
+Changes for the year
+4,309
+2,576
+(20,457)
+22,190
+As at 1 January 2021
+(675) (15,304)
+3,109
+(14,285)
+As at 31 December 2021
+59,518
+78,825
+Due from banks in Chinese mainland
+644,816
+Total
+724,320
+585,298
+Subtotal due from banks and other financial institutions
+(1,083)
+(1,537)
+4,327
+1,835
+721,076
+585,000
+Less: allowance for impairment losses (¹)
+Accrued interest
+Subtotal(¹)
+559
+926
+Taiwan (China) and other countries and regions
+Hong Kong (China), Macao (China),
+Due from other financial institutions in
+110,662
+110,948
+Taiwan (China) and other countries and regions
+Due from banks in Hong Kong (China), Macao (China),
+7,515
+8,709
+in Chinese mainland
+Due from other financial institutions
+602,340
+464,417
+(1)
+2,429
+Interest rate derivatives
+(4,043)
+3,817,876
+63,772
+543
+2
+2,058
+Interest rate futures
+(135)
+136
+22,988
+Interest rate options
+(27,179)
+23,860
+4,032,069
+Interest rate swaps
+(155,221)
+32.789
+125,528
+(56,734)
+66,169
+6,561,498
+Subtotal
+(20)
+7
+1,746
+(3)
+1
+1,250
+Currency futures
+(3,789)
+6,921
+6,725,394
+419,338
+(42,520)
+Subtotal
+(344)
+The derivative financial instruments above include those designated as hedging instruments by the Group.
+(1)
+(212,052)
+171,738
+(89,151) 11,013,335
+95,799
+10,912,162
+Total(1)
+(13,886)
+13,029
+(4,979) 392,823
+5,447
+16
+288,773
+(413)
+376
+12,927
+(120)
+185
+4,776
+Equity derivatives
+(42,532)
+32,805
+3,882,191
+(27,318)
+23,998
+4,057,115
+Commodity derivatives and other
+Less: allowance for impairment losses (2)
+(4,196)
+593,654
+(2)
+230,057
+505,228
+(668)
+230,057
+505,896
+256
+6,109
+6,914
+1,222
+40,968
+182,724
+396,324
+101,436
+2020
+As at 31 December 2021 and 2020, the Group included the predominant majority of its placements with and
+loans to banks and other financial institutions under Stage 1, and measured the impairment losses based on
+expected credit losses in the next 12 months (12-month ECL).
+As at 31 December
+2021
+Less: allowance for impairment losses(2)
+Subtotal(2)
+- Corporates
+- Financial institutions
+Policy banks
+Governments
+Debt securities
+“Placements with and loans to banks and other financial institutions” include balances arising from reverse
+repo agreements and collateralised financing agreements. They are presented by collateral type as follows:
+(1)
+939,320
+1,257,413
+Total
+(2,485)
+Total
+4,996
+278
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Currency options
+(151,412)
+118,600
+6,304,310
+(52,535)
+61,172
+5,966,594
+interest rate swaps
+cross-currency
+Currency forwards and swaps, and
+Exchange rate derivatives
+Liabilities
+Assets
+BANK OF CHINA LIMITED
+Fair value
+Liabilities
+Fair value
+Assets
+Contractual/
+Notional
+amount
+As at 31 December 2020
+As at 31 December 2021
+16.1 Derivative financial instruments
+The contractual/notional amounts and fair values of derivative instruments held by the
+Group are set out in the following tables. The contractual/notional amounts of financial
+instruments provide a basis for comparison with the fair values of instruments recognised in
+the statement of financial position but do not necessarily indicate the amounts of future cash
+flows involved or the current fair value of the instruments and, therefore, do not indicate the
+Group's exposure to credit or market risks. The derivative instruments become favourable
+(assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates,
+foreign currency exchange rates, credit spreads, or equity/commodity prices relative to their
+terms. The aggregate fair values of derivative financial assets and liabilities can fluctuate
+significantly from time to time.
+The Group enters into foreign currency exchange rate, interest rate, equity, credit or precious
+metals and other commodity-related derivative financial instruments for trading, hedging,
+asset and liability management and customer initiated transactions.
+16 Derivative financial instruments and hedge accounting
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Contractual/
+Notional
+amount
+Changes for the previous year
+The tax rate on the Group's profit before income tax differs from the theoretical amount that
+would arise using the basic Chinese mainland tax rate of the Bank as follows:
+3,251
+2020
+2021
+Year ended 31 December
+Profit before income tax
+279
+Income tax expense (Continued)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+9
+276,620
+Impairment losses on assets
+Year ended 31 December
+2021
+2020
+- Loans and advances at amortised cost
+Loans and advances at fair value through
+other comprehensive income
+98,289
+Subtotal
+103,743
+9
+(113)
+98,298
+103,630
+Financial investments
+Financial assets at amortised cost
+721
+Loans and advances
+1,872
+246,378
+69,155
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+272
+Non-deductible items primarily include non-deductible losses resulting from the write-off of certain non-
+performing loans, and marketing and entertainment expenses in excess of the relevant deductible threshold
+under the relevant PRC tax regulations.
+Income not subject to tax mainly comprises interest income from PRC treasury bonds and Chinese local
+government bonds, and tax-free income recognised by the overseas entities in accordance with the relevant
+local tax law.
+(2)
+(1)
+41,282
+49,281
+Income tax expense
+(394)
+(1,165)
+Other
+Tax calculated at the basic Chinese mainland tax rate
+Effect of different tax rates for Hong Kong (China),
+11,226
+Items not deductible for tax purposes (2)
+(29,791)
+(29,556)
+(1)
+Income not subject to tax
+2,924
+2,927
+Supplementary PRC tax on overseas income
+(4,278)
+(4,337)
+and regions
+Macao (China), Taiwan (China) and other countries
+61,595
+12,257
+- Financial assets at fair value through
+other comprehensive income
+763
+Hong Kong (China) profits tax
+4,348
+5,242
+Macao (China), Taiwan (China) and
+other countries and regions taxation
+3,537
+3,455
+Adjustments in respect of current income tax
+of prior years
+(345)
+1,557
+Subtotal
+42,579
+45,296
+55,550
+6,702
+(14,268)
+Total
+49,281
+41,282
+The principal tax rates applicable to the Group are set out in Note IV.
+Provision for Chinese mainland income tax includes income tax based on the statutory tax
+rate of 25% of the taxable income of the Bank and each of its subsidiaries established in
+the Chinese mainland, and supplementary PRC tax on overseas operations as determined in
+accordance with the relevant PRC income tax rules and regulations.
+Taxation on profits of Hong Kong (China), Macao (China), Taiwan (China) and other
+countries and regions has been calculated on the estimated assessable profits in accordance
+with local tax regulations at the rates of taxation prevailing in the countries or regions in
+which the Group operates.
+271
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+Deferred income tax (Note V.35.3)
+35,039
+- Chinese mainland income tax
+Current income tax
+4,244
+Subtotal
+Credit commitments
+Other
+1,484
+6,116
+(3,038)
+5,454
+6,335
+3,181
+Subtotal of impairment losses on credit
+103,079
+118,381
+Other impairment losses on assets
+1,141
+635
+Total
+104,220
+119,016
+270
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+10
+Income tax expense
+Year ended 31 December
+2021
+2020
+FOR THE YEAR ENDED 31 DECEMBER 2021
+19,613
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+351
+Other
+(21,549)
+(12,760)
+Exchange differences from the translation of
+foreign operations
+(130)
+8
+44
+(2)
+(174)
+༤༠
+Less: related income tax impact
+10
+(751)
+joint ventures accounted for using the equity method
+3,084
+571
+(1,024)
+4,108
+761
+(190)
+Less: related income tax impact
+comprehensive income
+measured at fair value through other
+Allowance for credit losses on debt instruments
+(2,976)
+5,444
+1,527
+276
+Share of other comprehensive income of associates and
+Less: related income tax impact
+Subtotal
+(22,322)
+(6,172)
+22,534
+As at 1 January 2020
+Total
+Other
+operations
+income
+foreign
+comprehensive
+translation of
+through other
+from the
+at fair value
+(6,386)
+differences
+assets
+Gains/(losses)
+on financial
+Other comprehensive income attributable to equity holders of the Bank in the consolidated
+statement of financial position:
+12 Other comprehensive income (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+274
+(22,862)
+(6,236)
+Total
+Exchange
+(7,711)
+(1,687)
+Amount transferred to the income statement
+294,388
+294,388
+Issued ordinary shares as at 1 January
+2020
+2021
+Year ended 31 December
+Weighted average number of ordinary shares in issue (in million shares)
+0.61
+0.70
+Basic and diluted earnings per share (in RMB)
+294,381
+294,379
+Weighted average number of ordinary shares in issue
+(in million shares)
+Less: weighted average number of treasury shares
+180,841
+Profit attributable to ordinary shareholders of the Bank
+(12,029)
+(10,651)
+192,870
+216,559
+Profit attributable to equity holders of the Bank
+Less: dividends/interest on preference shares/
+perpetual bonds declared
+2020
+2021
+Year ended 31 December
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the
+ordinary shareholders of the Bank based on assuming conversion of all potentially dilutive
+shares for the period by the adjusted weighted average number of ordinary shares in issue.
+There was no difference between basic and diluted earnings per share as there were no
+potentially dilutive shares outstanding for the years ended 31 December 2021 and 2020.
+Basic earnings per share was computed by dividing the profit attributable to the ordinary
+shareholders of the Bank by the weighted average number of ordinary shares in issue during
+the period.
+Earnings per share (basic and diluted)
+11
+205,908
+(7)
+Weighted average number of ordinary shares in issue
+294,379
+(742)
+(1,557)
+Less: related income tax impact
+3,950
+8,412
+fair value through other comprehensive income
+Items that may be reclassified to profit or loss
+Changes in fair value on debt instruments measured at
+(540)
+150
+10
+83
+(622)
+(29)
+335
+(185)
+101
+(83)
+2020
+Year ended 31 December
+2021
+Subtotal
+Other
+Items that will not be reclassified to profit or loss
+Actuarial (losses)/gains on defined benefit plans
+Changes in fair value on equity instruments designated
+at fair value through other comprehensive income
+Less: related income tax impact
+Other comprehensive income
+12
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+273
+294,381
+V
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+10
+Due to
+3,136
+(2,843)
+(3,250)
+3,036
+Ineffectiveness recognised in net trading gains
+(114)
+193
+(2) Net investment hedges
+The Group's consolidated statement of financial position is affected by exchange differences
+between the functional currencies of the Group and functional currencies of its branches
+and subsidiaries. The Group hedges such exchange exposures only in limited circumstances.
+Hedging is undertaken using due to customers, due to central banks and foreign exchange
+forward and swap contracts in the same or exchange-rate pegged currencies as the functional
+currencies of the related branches and subsidiaries which are accounted for as hedges of
+certain net investments in foreign operations. Under the hedging relationships of designating
+due to customers, due to central banks and foreign exchange forward and swap contracts
+as hedging instruments, the Group separates the forward element and the spot element of a
+forward contract and designates as the hedging instrument only the change in the value of
+the spot element of the forward contract. There was no ineffectiveness for the year ended 31
+December 2021 (2020: Nil).
+285
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+- hedged items
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+- hedging instruments
+2020
+5,503
+96
+284
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(1) Fair value hedges (Continued)
+(iii) The Group's net gains on fair value hedges are as follows:
+Year ended 31 December
+2021
+Net gains on
+(9,093)
+16 Derivative financial instruments and hedge accounting (Continued)
+(2) Net investment hedges (Continued)
+assets/liabilities
+Total
+6,946
+292
+289
+3,995
+6,838
+hedging instruments recognised in
+"Other comprehensive income"
+Net amounts of fair value changes on
+154
+98
+"Other comprehensive income" to
+profit or loss
+Amounts of forward element reclassified from
+3,841
+6,740
+(26)
+16.2 Hedge accounting (Continued)
+292
+swap contracts
+(i) Details of due to customers and due to central banks used in the Group's net investment
+hedging strategies:
+As at 31 December 2021, the carrying value of such due to customers amounted to
+RMB50,273 million (31 December 2020: RMB53,087 million) and due to central banks
+amounted to RMB762 million (31 December 2020: RMB1,060 million).
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies:
+As at 31 December 2021
+Derivatives designated as
+net investment hedging instruments
+Contractual/
+Line item in the
+Notional
+amount
+Fair value
+Assets Liabilities
+statement of
+financial position
+Foreign exchange
+forward and
+Derivative financial
+6,946
+"Other comprehensive income"
+100.228
+Bonds issued
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(1) Fair value hedges (Continued)
+(ii) The following table sets out the details of the hedged items covered by the Group's fair
+value hedging strategies:
+As at 31 December 2021
+Interest rate risk
+Carrying amount of
+hedged items
+Assets Liabilities
+Fair value hedges
+Accumulated amount of
+fair value adjustments
+on the hedged items
+Assets Liabilities
+Line item in
+the statement
+of financial
+position
+Financial investments
+103,502
+FOR THE YEAR ENDED 31 DECEMBER 2021
+2,561
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+283
+interest rate
+Average exchange
+rate of USD/CNY
+Average exchange
+rate of AUD/USD
+1,212
+640
+1,852
+5.38%
+5.11%
+N/A
+--- 6.1217 -
+N/A
+0.9294
+N/A
+BANK OF CHINA LIMITED
+(1,647)
+Due to central banks
+Bonds issued
+Foreign exchange and
+5,503
+Financial
+investments
+Due to
+Due to central banks
+Bonds issued
+(2,735)
+3
+central banks
+(4,711)
+(113)
+Bonds issued
+Foreign exchange and
+interest rate risk
+Bonds issued
+Total
+206
+100,228
+(2,523)
+(4,458)
+Financial investments
+154
+interest rate risk
+Bonds issued
+Total
+As at 31 December 2020
+Financial
+investments
+14
+central banks
+116
+Bonds issued
+24
+Bonds issued
+(600)
+103,502
+(7,581)
+2,561
+Interest rate risk
+hedging instruments recognised in
+Amounts of fair value changes on
+2020
+N/A
+- 15.3221
+Average exchange rate of
+USD/ZAR
+Average exchange rate of
+USD/BRL
+N/A
+5.5165
+-- 5.51
+Average exchange rate of
+6,946
+6,946
+Total
+5 years
+years
+USD/INR
+Over
+- 77.6566
+Average exchange rate of
+USD/MXN
+USD/TWD
+Average exchange rate of
+N/A
+-- 298.2472
+USD/HUF
+Average exchange rate of
+N/A
+-- 3.7309
+USD/PEN
+Average exchange rate of
+N/A
+- 845.0014
+Average exchange rate of
+USD/CLP
+N/A
+-- 21.4996
+N/A
+-- 26.9425
+1 and 5
+1 and 3
+months
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+286
+(360)
+12
+3,966
+Total
+assets/liabilities
+(360)
+12
+3,966
+swap contracts
+Derivative financial
+forward and
+Foreign exchange
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Between
+3 and 12
+months
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+1 month
+Less than
+Between
+Between
+Net investment hedges
+Notional amount
+swap contracts
+Foreign exchange forward and
+Foreign exchange risk
+As at 31 December 2021
+The following table sets out the maturity and average exchange rate of the hedging
+instruments mentioned above:
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies (Continued):
+(2) Net investment hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+V
+N/A
+Average exchange rate of
+USD/RUB
+778.3973
+USD/CLP
+Average exchange rate of
+N/A
+0.5928
+NZD/USD
+Average exchange rate of
+N/A
+21.9108
+USD/MXN
+Average exchange rate of
+N/A
+79.2094
+USD/INR
+Average exchange rate of
+N/A
+N/A
+Average exchange rate of
+3.5505
+2021
+Year ended 31 December
+(iii) The Group's gains or losses from the hedging instruments recognised in "Other
+comprehensive income" on net investment hedges are as follows:
+(2) Net investment hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+288
+N/A
+3.5110
+USD/PEN
+16.9743
+17.5600
+USD/ZAR
+Between
+Net investment hedges
+Between
+1 and 5
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies (Continued):
+(2) Net investment hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+287
+N/A
+78.2517
+Less than
+1 month
+1 and 3
+months
+Between
+3 and 12
+months
+Average exchange rate of
+N/A
+5.2086
+Average exchange rate of
+USD/BRL
+3,966
+2,010
+1,956
+Average fixed
+Notional amount
+Foreign exchange forward and
+Foreign exchange risk
+As at 31 December 2020
+Total
+5 years
+years
+Over
+swap contracts
+Notional amount
+rate swaps
+Cross-currency interest
+Fair value hedges
+Between Between Between
+1 and 3 3 and 12 1 and 5 Over 5
+months months
+years
+years
+Total
+Less than
+1 month
+As at 31 December 2021
+Interest rate swaps
+Notional amount
+Average fixed
+1,237
+5,493
+9,438 56,999
+34,430 107,597
+Interest rate risk
+interest rate
+The following table sets out the maturity and average exchange rate/interest rate information
+of the hedging instruments mentioned above:
+(1) Fair value hedges (Continued)
+(206)
+liabilities
+102,788
+240
+(5,422)
+281
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,852
+3.23%
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+BANK OF CHINA LIMITED
+16.2 Hedge accounting (Continued)
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+Fair value hedges
+Between Between Between
+As at 31 December 2020
+Less than
+1 month
+1 and 3
+months
+(1) Fair value hedges (Continued)
+2.99% 3.33% 3.04% 2.87%
+282
+6.2110 6.0350
+Foreign exchange and
+interest rate risk
+Cross-currency interest
+rate swaps
+Notional amount
+308
+N/A
+317
+Average fixed
+interest rate
+Average exchange
+rate of USD/CNY
+-- 4.70% 5.50%
+N/A
+625
+3 and 12 1 and 5
+months
+Derivative
+(5,216)
+Total
+Derivatives designated as
+hedging instruments in fair value hedges
+Contractual/
+Line item in the
+Notional
+amount
+Cross-currency interest
+Fair value
+Assets Liabilities
+Derivative
+financial
+107,597
+685 (2,154)
+assets/liabilities
+Derivative
+statement of
+financial position
+625
+rate swaps
+Foreign exchange and
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+interest rate risk
+16 Derivative financial instruments and hedge accounting (Continued)
+(1) Fair value hedges
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against
+changes in fair value of “Financial investments”, “Due to central banks” and “Bonds issued"
+arising from changes in foreign currency exchange rates and interest rates. Foreign currency
+exchange rate risk and interest rate risk are usually the primary risks which affect the change
+in fair value.
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies:
+As at 31 December 2021
+Interest rate risk
+Interest rate swaps
+16.2 Hedge accounting
+assets/liabilities
+(24)
+108,222
+Foreign exchange and
+Cross-currency interest
+interest rate risk
+rate swaps
+Total
+Contractual/
+Interest rate swaps
+Notional
+amount
+Assets Liabilities
+Line item in the
+statement of
+financial position
+Derivative
+financial
+100,936
+240
+Fair value
+liabilities
+Interest rate risk
+hedging instruments in fair value hedges
+685
+(2,178)
+280
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+As at 31 December 2020
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(1) Fair value hedges (Continued)
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+Derivatives designated as
+V
+As at 31 December 2020
+(26)
+Interest rate risk
+Over 5
+years
+years
+Total
+Interest rate swaps
+Notional amount
+1,578
+1,693
+59,013
+31,598 100,936
+7,054
+interest rate
+2.87%
+2.12% 2.37%
+2.90%
+2.99%
+N/A
+Foreign exchange and
+interest rate risk
+Average fixed
+Items
+income/
+Average
+income/ Average
+expense interest rate
+Average
+balance
+Interest
+415,918
+income/expense
+2020
+2021
+Interest
+Unit: RMB million, except percentages
+Analysis of changes in interest
+Average
+Interest
+Volume
+15,173,295
+balance
+expense
+interest rate
+factor
+factor
+Total
+Interest-earning assets
+Loans
+The average balances¹ and average interest rates of the major interest-earning assets and interest-
+bearing liabilities of the Group, as well as the impact on interest income/expense of variances in
+the volume factor and the interest rate factor², are summarised in the following table:
+Investments
+5,237,687
+581,000
+153,859
+rate
+In 2021, the Group's net interest margin was 1.75%, a decrease of 10 basis points compared
+with the prior year, mainly due to declining yields from RMB loans in the Chinese mainland. To
+mitigate the impact of falling asset yields, the Bank continued to optimise its asset and liability
+structure. On the one hand, it remained committed to improving both the scale and pricing of
+deposits quantity and price and continued to optimise deposit structure, striving to control deposit
+costs at a reasonable level. On the other hand, it increased the granting of medium and long-term
+loans. The proportion of the average balance of RMB medium and long-term loans to RMB loan
+business in the Chinese mainland increased by 1.31 percentage points compared with the prior
+year.
+In 2021, the Group achieved net interest income of RMB425.142 billion, an increase of
+RMB9.224 billion or 2.22% compared with the prior year. Specifically, interest income grew by
+RMB29.418 billion or 3.87% to RMB789.488 billion, and interest expense stood at RMB364.346
+billion, an increase of RMB20.194 billion or 5.87% compared with the prior year.
+28
+2021
+2021
+2021
+2021
+149,820
+153,042
+144,989
+157,866
+53,036
+50,710
+58,824
+53,989
+395,589
+(240,907)
+108,072
+580,504
+27
+Net Interest Income and Net Interest Margin
+3.83% 13,883,933
+Interest Income
+In 2021, interest income on loans was RMB581.000 billion, an increase of RMB30.646 billion or
+5.57% compared with the prior year, which was primarily attributable to an increase in loan scale.
+Interest income on investments amounted to RMB153.859 billion, an increase of RMB3.306
+billion or 2.20% compared with the prior year, mainly due to an increase in investment scale.
+Interest income on balances with central banks and due from and placements with banks and
+other financial institutions was RMB54.629 billion, a decrease of RMB4.534 billion or 7.66%
+compared with the prior year, mainly due to a decrease in yield of balances with central banks
+and due from and placements with banks and other financial institutions.
+Interest Expense
+In 2021, interest expense on due to customers was RMB263.599 billion, an increase of
+RMB5.160 billion or 2.00% compared with the prior year, principally due to an increase in the
+scale of deposits.
+Interest expense on due to and placements from banks and other financial institutions was
+RMB58.911 billion, an increase of RMB8.917 billion or 17.84% compared with the prior year,
+primarily attributable to increases in the scale and the interest rate of due to and placements from
+banks and other financial institutions.
+Interest expense on bonds issued was RMB41.836 billion, an increase of RMB6.117 billion or
+17.13% compared with the prior year, mainly attributable to an increase in the scale of bonds
+issued.
+Net Interest Margin
+425,142
+550.354
+51.059
+1.66%
+344,152
+1.63% 20,728,709
+6,117
+309
+5,808
+3.16%
+29,265
+35,719
+8,917
+1,341
+7,576
+1.54%
+49,994
+1.58% 3,247,899
+3,739,854 58,911
+1,313,387 41,836
+22,409,593 364,346
+3.19% 1,129,581
+Total
+(9,071)
+29
+35,911 (26,687)
+9,224
+Net interest margin
+1.75%
+1.85%
+(10)Bps
+Notes:
+20,194
+Net interest income
+3
+Investments include debt securities at fair value through other comprehensive income, debt securities at amortised
+cost, investment trusts and asset management plans, etc.
+Balances with central banks and due from and placements with banks and other financial institutions include
+mandatory reserves, surplus reserves, other placements with central banks and due from and placements with
+banks and other financial institutions.
+Due to and placements from banks and other financial institutions include due to and placements from banks and
+other financial institutions, due to central banks and other funds.
+1
+2
+Average balances are average daily balances derived from the Group's management accounts (unaudited).
+The impact on interest income/expense of variances in the volume factor is calculated based on the changes in
+average balances of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+on interest income/expense of variances in the interest rate factor is calculated based on the changes in the average
+interest rates of interest-earning assets and interest-bearing liabilities during the reporting period. The impact
+relating to the combined changes in both the volume factor and the interest rate factor has been classified as a
+change in the interest rate factor.
+2
+Bonds issued
+other financial institutions
+Due to and placements from banks and
+1.59%
+59,163
+1.42% 3,726,838
+54,629
+3,860,706
+banks and other financial institutions
+and due from and placements with
+2,129
+Balances with central banks
+(8,682)
+11,988
+3.10%
+150,553
+2.94% 4,850,972
+30,646
+(20,413)
+3,306
+(6,663)
+(4,534)
+Total
+5,160
+(10,721)
+15,881
+1.58%
+258,439
+1.52% 16,351,229
+263,599
+17,356,352
+Due to customers
+Interest-bearing liabilities
+(35,758) 29,418
+65,176
+3.38%
+760,070
+3.25% 22,461,743
+789,488
+24,271,688
+3.96%
+1
+31 December 30 September
+567,647
+The PBOC adhered to a sound monetary policy that was flexible, targeted, reasonable and
+appropriate, reinforced cross-cyclical adjustment, played roles of monetary policy tools in
+adjusting both the aggregate and the structure, and further intensified policy support for scientific
+and technological innovations, micro, small, and medium-sized enterprises, green development
+and manufacturing, thus safeguarding the overall stability of the macro economy and fostering a
+favourable monetary and financial environment for high-quality economic development. Overall,
+financial markets operated smoothly, liquidity was maintained at an adequate and reasonable
+level, and RMB exchange rates remained generally stable at an appropriate and balanced level.
+The outstanding broad money supply (M2) grew by 9.0% year-on-year. RMB loans increased by
+RMB19.95 trillion, RMB315.0 billion more than the increase of the prior year. The aggregate
+financing to the real economy (AFRE) was RMB314.13 trillion, an increase of 10.3% year-
+on-year. The cumulative value of bond issuance expanded to a total of RMB61.4 trillion, an
+increase of 7.8% year-on-year. The central parity rate of RMB against USD appreciated by 2.3%
+compared with the prior year-end. The Shanghai Stock Exchange Composite Index increased
+166.7 points compared with the prior year-end. The combined market capitalisation of the
+Shanghai and Shenzhen Stock Exchanges stood at RMB75.16 trillion, an increase of 16.78%
+year-on-year.
+China's banking institutions made every effort to promote the new dual-circulation development
+pattern, enhanced their support to the real economy, and adopted various measures to help
+micro and small-sized enterprises and stimulate the vitality of private businesses, in order to
+advance high-quality economic development. They took targeted measures to support national
+development strategies and the construction of key projects, and strived to meet the financial
+demands of various fields such as infrastructure, advanced manufacturing, and scientific and
+technological innovation. The banking sector applied the new development philosophy, facilitated
+green and low-carbon transformation, ensured stable energy prices and supply, actively served
+rural revitalisation, promoted common prosperity, and bolstered technological empowerment
+to support high-level opening-up. The banking industry improved financial risk management,
+replenished capital through multiple channels and defended the bottom line that no systemic
+risk should occur. As at the end of 2021, the total assets of China's banking industry grew by
+7.8% from the prior year-end to RMB344.8 trillion, while total liabilities increased by 7.6% to
+RMB315.3 trillion. Commercial banking institutions recorded an aggregate profit after tax of
+RMB2.2 trillion. Outstanding non-performing loans (NPLs) stood at RMB2.8 trillion at the year-
+end, with an NPL ratio of 1.73%.
+26
+Income Statement Analysis
+Closely adhering to the requirements of the Group's 14th Five-year Plan, the Bank coordinated
+its work in responding to the pandemic and advancing its operations and management, gave full
+play to the synergies of the “One Mainstay, Two Engines” strategy, and focused on all aspects of
+the "Eight Priority Areas for Enhancing Financial Services Capabilities”, thus pursuing progress
+while ensuring stability in business performance. In 2021, the Group achieved a profit for the
+year of RMB227.339 billion, an increase of RMB22.243 billion or 10.85% compared with the
+prior year. It realised a profit attributable to equity holders of the Bank of RMB216.559 billion,
+an increase of RMB23.689 billion or 12.28% compared with the prior year. Return on average
+total assets (ROA) was 0.89% and return on average equity (ROE) was 11.28%.
+The principal components and changes of the Group's consolidated income statement are set out
+below:
+Unit: RMB million, except percentages
+25
+Items
+2020 Change Change (%)
+Net interest income
+425,142
+415,918
+9,224
+2.22%
+Non-interest income
+2021
+180,575
+China properly coordinated and promoted pandemic containment and economic and social
+development, and continued to ensure stability on six key fronts (namely employment, financial
+sector, foreign trade, foreign investment, domestic investment, and expectations) and maintain
+security in six key areas (namely employment, the people's basic livelihood, operations of market
+entities, food and energy security, stable industrial and supply chains, and the normal functioning
+of primary-level governments). As a result, China's economy maintained a stable recovery, new
+progress was made in high-quality development, and the 14th Five-Year Plan got off to a great
+start. In 2021, China's gross domestic product (GDP) increased by 8.1%. Total retail sales of
+consumer goods (TRSCG) increased by 12.5%, total fixed asset investments (TFAI) (excluding
+those by rural households) grew by 4.9%, imports and exports rose by 21.4%, and the consumer
+price index (CPI) went up by 0.9%. The trade surplus was RMB4,368.7 billion.
+In 2021, the global economy showed signs of recovery with the pace of growth gradually
+returning to normal. Industrial production and trade in goods steadily improved, overtaking pre-
+pandemic levels, while the digital economy and green transformation provided new drivers for
+the global economy. However, the global economy remained complex and in a serious situation
+due to repeated COVID-19 outbreaks, supply-chain disruptions, increasing inflation pressure and
+other factors.
+22
+LIU Jin
+President
+29 March 2022
+Message from the Chairwoman of the Board of Supervisors
+In 2021, with the aim of building a first-class global banking group, and in compliance with
+relevant laws and regulations, regulatory requirements and the Articles of Association of the
+Bank, the Board of Supervisors aligned itself with national decisions and plans on economic
+and financial work, Bank-wide work priorities and core supervisory responsibilities. It duly
+supervised the Bank's strategies, duty performance, financial management, risk management
+and internal control, and enhanced its capabilities as well as the quality and effectiveness of
+supervision, thus continuously contributing to the high-quality development of the Bank.
+In 2021, the Board of Supervisors adhered to the strategies and priorities of the country and
+constantly improved its supervision quality and efficiency. It focused on major national
+decisions and plans and intensified supervisory and prompting efforts. The Board of
+Supervisors focused on strengthening the Bank's capacity to serve the real economy, ensure
+stability on six key fronts and security in six key areas, and provide financial support for the
+implementation of policies and measures, such as green and low-carbon economic development,
+high-level scientific and technological self-reliance, rural revitalisation, common prosperity,
+the Belt and Road Initiative, as well as major regional development strategies of the country.
+Moreover, it carried out special surveys regarding the Bank's implementation of national
+decisions and plans for serving the real economy, and worked to ensure that these policies
+are delivered across the Bank. It focused on the Group's 14th Five-Year Plan and actively
+provided insights and suggestions. The Board of Supervisors actively participated in and
+supervised the research on, formulation and implementation of the Group's 14th Five-Year Plan,
+with a focus on the development of key strategic areas such as inclusive finance, green finance
+and cross-border finance, and oversaw that the Bank made an effort to better meet people's
+diverse financial needs. In addition, it conducted special surveys on strategic management, to
+make sure that the Group's development strategies are aligned with the national 14th Five-Year
+Plan and are properly implemented across the Bank. It focused on key areas and links to firmly
+safeguard the bottom line of risks. The Board of Supervisors actively studied and analysed the
+evolving trend in risk, and oversaw that under the new situation, the Bank strengthened credit
+risk prevention and control, internal control and compliance management of overseas institutions,
+risk management of non-banking subsidiaries in a penetrating approach, and improve mechanisms
+for major risk screening and emergency response. Furthermore, it conducted special surveys
+on the effectiveness of comprehensive risk management and internal control, so as to promote
+risk management with a view to better serve the Bank's development and ensure its sound
+operation. It focused on core duties and earnestly performed routine supervision. The Board
+of Supervisors conscientiously conducted regular supervision and annual evaluation of the duty
+performance of the Board of Directors, the Senior Management and their members, strengthened
+supervision on financial management based on the review of regular reports, and deepened
+supervision of risk management and internal control through a problem-oriented approach. It
+focused on creating supervision synergy and enhanced coordination and integration. The
+Board of Supervisors oversaw the effective rectification of problems identified in disciplinary
+inspections tours, audits and all kinds of regulatory inspections, and puts in place a longstanding
+rectification mechanism for common problems. It continuously reinforced its communication and
+coordination with the Board of Directors and the Senior Management, deepened its coordination
+with the Bank's second and third lines of defence and comprehensive management departments,
+and visited regulators, shareholders and major peers to broaden its supervision horizons and
+improve supervision performance.
+In 2021, the Board of Supervisors further strengthened itself. It optimised its procedural rules and
+improved the quality and efficiency of its meetings. It also improved its policies and expanded its
+team. Meanwhile, it strengthened the training of supervisors to ensure that supervision keeps pace
+with changes in the overall situation as well as market requirements. All members of the Board of
+Supervisors performed their supervisory duties faithfully and diligently, and provided suggestions
+and supervisory opinions on the operation and management of the Bank. These contributions
+were forward-looking, targeted and pragmatic, and were highly valued, earnestly responded to,
+and widely adopted by the Board of Directors and the Senior Management. In this way, the results
+of supervision by the Board of Supervisors were effectively communicated, implemented and
+applied across the Bank.
+Global monetary policies gradually moved away from their emergency pandemic response stance
+and returned to normal, while shifts in the monetary policies of the world's major developed
+economies accelerated. The US Federal Reserve began to taper its bond-buying programme, the
+European Central Bank slowed down the implementation of its Pandemic Emergency Purchase
+Programme (PEPP), and the Bank of England initiated procedures to raise interest rates. Several
+emerging economies repeatedly raised interest rates to cope with inflation pressures and to
+mitigate risks triggered by capital outflows and currency depreciation. International financial
+markets remained generally stable, but the financial vulnerability of some emerging economies
+increased. US dollar liquidity remained ample and global stock markets fluctuated upwards, albeit
+with significant divergence between stock markets in developed and emerging economies. The
+commodity markets performed robustly as energy prices soared, industrial metal prices hit record
+highs, and prices of safe-haven assets such as gold fell. The US dollar index rebounded along a
+volatile trajectory, while the currencies of emerging economies generally came under pressure.
+In 2021, the Board of Supervisors completed changes to some of its members, in compliance
+with laws and regulations and the Articles of Association of the Bank. On behalf of the Board
+of Supervisors, I would like to express our sincere gratitude to Mr. WANG Zhiheng and Mr. LI
+Changlin, who no longer serve as supervisors of the Bank, for their efforts and contributions to
+the Bank during their tenure, and extend our warm welcome to Ms. WEI Hanguang, Mr. ZHOU
+Hehua and Mr. HUI Ping as new supervisors of the Bank!
+ZHANG Keqiu
+Chairwoman of the Board of Supervisors
+29 March 2022
+14
+24
+Management Discussion and Analysis
+FINANCIAL REVIEW
+Economic and Financial Environment
+In 2022, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics
+for a New Era, the Board of Supervisors will earnestly implement the national decisions and
+plans, and regulatory requirements, and adhere to the general principle of seeking progress while
+maintaining stability. Meanwhile, with its focus on the central tasks of the Bank, it will conduct
+effective supervision of strategies, duty performance, financial management, risk management
+and internal control, so as to better play its constructive supervisory role in the Bank's corporate
+governance system, and make greater contributions to the Bank's drive towards building a first-
+class global banking group.
+151,729
+28,846
+19.01%
+Profit for the year
+227,339
+(49,281) (41,282)
+205,096
+12.27%
+(7,999) 19.38%
+22,243
+10.85%
+Profit attributable to equity holders
+of the Bank
+Income tax expense
+216,559
+23,689
+12.28%
+A detailed review of the Group's principal items in each quarter of 2021 is summarised in the
+following table:
+Items
+Operating income
+30 June
+31 March
+192,870
+30,242
+11.75%
+28,922
+Including: net fee and commission income
+81,426
+75,522
+5,904
+7.82%
+Operating income
+605,717
+38,070
+6.71%
+Operating expenses
+Impairment losses on assets
+(104,220) (119,016)
+(226,355) (202,411) (23,944)
+14,796 (12.43%)
+11.83%
+Operating profit
+Profit before income tax
+275,142 246,220
+276,620 246,378
+22
+For over a century, Bank of China has bridged China and the world for the common good - a
+commitment that we still share and a noble cause that we're so proud to carry on to this day and
+onwards. And I will, together with all other members of the senior management of the Bank,
+continue to be guided by the policies of the CPC Central Committee and the State Council,
+faithfully fulfill the resolutions by the Board of Directors, and subject ourselves to the scrutiny
+of the Board of Supervisors. We will adhere to the highest ethical and professional codes, and act
+with the diligence, enterprise and ingenuity expected of us, to lead the efforts to build ourselves
+into a first-class global banking group that in turn, will deliver enhanced returns and create
+greater social values for all our customers, investors and stakeholders, whose support and trust we
+are grateful for.
+23
+21
+We will promote the synergy between domestic commercial banking and our globalised
+operations and diversified business platforms. Defined as the "mainstay" of our business,
+our commercial banking in the home market will be further enhanced to play a bigger role in
+attracting investment and resources worldwide. We will also serve and coordinate both "high-
+quality bringing-in” and “high-level going-global", and improve the interactions between our
+commercial and investment banking arms both at home and abroad. In doing so, we hope that
+we could provide our global customers with a one-stop and full package of financial services.
+We will invest heavily in the "Eight Priority Areas" by perfecting service modes and systems,
+with special attention on new growth drivers, new business forms, and new service scenarios,
+so as to lead a new path of high-quality development that suits us in the "blue ocean" of brand
+new opportunities in the economy. We will further accelerate digital transformation, starting
+with our internal systems. The new enterprise architecture that we are building will enable us
+to have more powerful middle offices for business, data, technology and operation, and drive
+self-evolution of operation and management. We will also use this opportunity to integrate
+and optimise business processes, make risk control more intelligent and effective, and reduce
+unproductive workload of staff and institutions to boost efficiency. Externally, we will empower
+our partners, upgrade the supply chain with digital financial services, and promote transitions
+of industries with open and shared services. We will double down on comprehensive risk
+management. By building our own core competence of risk control, we will move towards an
+"all-inclusive, coordinated, digitalised, and professional” risk management system. We will speed
+up building and applying the intelligent risk control centers, with greater emphasis on credit and
+market risks. We will also continue to promote internal control and precautionary measures, as
+well as the long-effect mechanism for anti-money laundering and compliance, to ensure stable
+and healthy operation.
+Profit attributable to equity holders of the Bank
+Net cash inflow/(outflow) from operating activities
+Unit: RMB million
+For the three-month period ended
+2021 again saw BOC rising to the challenges and making steady progress on all fronts: we
+reported record asset, liability, and operating income; broke new ground in key business areas;
+and gathered momentum in transition and reform. The good financial performance we achieved
+in 2021, which inaugurates our 14th Five-Year Plan development period, has set the stage for
+sustained growth and development in the years ahead.
+Supporting the real economy remained our steadfast commitment and sharpened our
+competitive edge in 2021. We maintained a well-managed and robust credit portfolio, and
+grew our domestic lending both in yuan and in foreign currencies by RMB1,451.468 billion,
+the fastest in a decade. We expanded the Group's asset management business, with an AUM
+of RMB3.2 trillion, and channeled financial resources into national strategic initiatives for
+development, with enhanced efficiency for resource allocation. We especially ramped up support
+to some critical or underserved sectors in the economy: inclusive loans granted to micro and
+small enterprises (MSES) grew by RMB305.9 billion, with the number of first-time borrowers
+up by over 40,000; the use of our special credit scheme for enterprises working on advanced
+technologies and innovations increased to cover over 15,000 clients; and newly extended loans
+processed online stood above RMB100 billion for the first time. Unlocking funding for supply
+chain was another key task to further energise participants of the economy. In 2021, we grew our
+financing for core enterprises on the supply chain, as well as for their up and downstream MSES,
+by 20%. On the sustainability side, we joined UN's Principles for Responsible Banking (PRB)
+and became the first Chinese bank to have pledged to cease financing new coal-mining and coal-
+fired power projects outside Chinese Mainland, except for those projects already contracted;
+meanwhile, remained the leading investor and underwriter of green bonds in the domestic
+market. Additionally, benefiting from our alignment with China's regional development policies,
+we reported faster growth in RMB deposits and loans in several key regions than the national
+Message from the President
+Our standing as the most globalised bank in China was enhanced as we continued to
+serve the higher-level opening-up. As the world emerges from the pandemic and settles into
+a reshaped landscape for business in the post-COVID era, we change and adapt as well, by
+scaling up our cross-border service capabilities while featuring more of the “China elements".
+We adopted a market-by-market approach in managing and optimising our global network,
+and made substantive progress in advancing regionalised management, business consolidation,
+and integrated operation; moreover, we extended our overseas operations to 62 countries and
+regions outside Chinese mainland. We also leveraged our global reach and expertise in cross-
+border finance to support a series of international events, including the CIIE, CIFTIS, the Canto
+Fair, and the Hainan Expo, and financed or facilitated large volumes of cross-border trade and
+commerce through our services. All these efforts have contributed to the highest growth in years
+with respect to international settlement within the country and cross-border RMB settlement.
+20
+20
+We accelerated product innovation and created better customer experience. A front runner
+in promoting e-CNY and its use cases, we expanded our platform to cover 34% of all activated
+use scenarios and 36% of the total merchants; both are the highest among all operators. We
+launched the 7.0 version of our mobile banking APP, which drove up our monthly active users
+by 17.8%; at the same time, the number of our corporate customers using online banking and
+mobile banking services increased by 24% and 113.85% respectively. We issued the world's first
+biodiversity-themed bonds and introduced many other innovative green financial instruments. We
+also brought online a public service platform of mutual aid for the elderly, and worked with over
+70 governmental agencies, nursing homes, enterprises or social organisations, to help build an
+elderly-friendly society.
+We ensured sound operation in spite of mounting risks and challenges. The complex and
+fast-changing external environment provided us an incentive to take a more forward-looking
+and rigorous stance on industry research, and timely update industry credit policies, which has
+enabled us to identify and avert potential risks effectively thus far. We've moved steadily forward
+with risky assets disposal as well. In our domestic operations, we've reduced the gross non-
+performing assets by RMB147.5 billion; and the percentages of non-performing loans, overdue
+loans, and special-mention loans were all declining. 2021 was also our “year of internal control
+and compliance". We enhanced efforts in internal control and precautions, and strengthened
+protection of consumer rights. Throughout the year, we organised public activities raising
+awareness of consumer protection that reached near 570 million people. In addition, we kept
+tracking the latest developments of COVID and regulatory requirements, and took measures to
+ensure the safety of our staff and business continuity of our operations overseas.
+Not long ago, Bank of China celebrated its 110th anniversary. Our long legacy of success and
+excellence has provided us with renewed commitment and confidence on the new journey
+ahead, where we will go on to serve the real economy and help people in their pursuit of a
+better life. We will carry forward our century-long enterprising spirit, follow the 14th Five-Year
+Plan to continuously grow our comprehensive strength, with the aspiration to facilitate the new
+development pattern and contribute to the stability of the macro economy.
+average.
+223,510
+Taiwan (China) and other countries and regions
+174,517
+- Corporate
+171,294
+135,590
+Issuers in Hong Kong (China), Macao (China),
+- Governments
+- Financial institutions
+434,344
+- Public sectors and quasi-governments
+28,529
+27,340
+328,713
+79,214
+98,545
+532,338
+358,807
+152,433
+101,562
+19,058
+- Corporate
+59,762
+65,885
+- Financial institutions
+37,950
+70,107
+- Public sectors and quasi-governments
+88,092
+103,432
+-Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+- Corporate
+- Policy banks
+Financial institutions
+752,899
+691,638
+101,974
+114,925
+2,086,362
+Equity instruments and other
+Government (3)(4)
+- Public sectors and quasi-governments
+2,417,293
+2,327,382
+64,724
+43,679
+- Policy banks
+155,338
+93,376
+- Financial institutions
+76,280
+59,250
+- Corporate
+48,959
+39,529
+China Orient (5)
+19,166
+Issuers in Chinese mainland
+Debt securities
+2020
+2021
+Total financial assets at fair value through
+other comprehensive income (2)
+152,433
+298
+2,363,078
+26,752
+21,428
+2,389,830
+107,583
+2,107,790
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+18 Financial investments (Continued)
+Financial assets at amortised cost
+As at 31 December
+BANK OF CHINA LIMITED
+3,172,051
+(43,164)
+Investment trusts, asset management plans and other
+14,216,477
+15,712,574
+Total loans and advances
+33,092
+37,580
+14,183,385
+15,674,994
+3,661
+3,805
+14,179,724
+15,671,189
+Accrued interest
+Total
+Corporate loans and advances
+-
+Measured at fair value through profit or loss (2)
+Subtotal
+Less: allowance for loans at amortised cost
+(390,090)
+(368,173)
+Loans and advances to customers, net
+12-month
+Year ended 31 December 2021
+(1) Allowance for loans at amortised cost
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+17.2 Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, customer type, industry, collateral type and analysis of impaired and overdue loans
+and advances to customers are presented in Note VI.2.5.
+17 Loans and advances to customers (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+979
+358,997
+FOR THE YEAR ENDED 31 DECEMBER 2021
+BANK OF CHINA LIMITED
+290
+During the years ended 31 December 2021 and 2020, there were no significant movements in the fair value
+and accumulated fair value changes of corporate loans and advances measured at fair value through profit or
+loss that are attributable to changes in credit risk of these loans.
+As at 31 December 2021, the allowance for impairment losses of loans and advances to customers at fair
+value through other comprehensive income of the Group amounted to RMB451 million (31 December
+2020: RMB446 million) and was credited to other comprehensive income.
+(2)
+(1)
+13,848,304
+15,322,484
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2,935,959
+2,254
+349,541
+other comprehensive income (1)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+- Public sectors and quasi-governments
+299
+5,591,117
+6,164,671
+Total financial investments (6)(7)(8)
+2,978,778
+3,213,199
+Total financial assets at amortised cost
+(8,923)
+(9,727)
+Less: allowance for impairment losses
+37,295
+38,865
+Accrued interest
+14,447
+12,010
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+Measured at fair value through
+1,912
+1,460
+Discounted bills
+5,583,295
+6,093,750
+Personal loans
+8,234,541
+- Corporate loans and advances
+Discounted bills
+9,224,184
+Measured at amortised cost
+2020
+2021
+As at 31 December
+17.1 Analysis of loans and advances to customers by measurement category
+17 Loans and advances to customers
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+Corporate loans and advances
+Government
+509
+Issuers in Chinese mainland
+Issuers in Chinese mainland
+Debt securities
+through profit or loss
+other financial assets at fair value
+Financial assets held for trading and
+profit or loss
+Financial assets at fair value through
+18 Financial investments
+Government
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+295
+Through personal loan securitisation, the domestic branches transferred out loans of
+RMB53,258 million (2020: RMB18,323 million), resulting in a decrease of RMB 195
+million (2020: RMB66 million) and RMB6,976 million (2020: RMB1,702 million) in
+the impairment allowance for Stage 1 and Stage 3 loans respectively.
+During the year, the disposal of non-performing loans by domestic branches via
+write-off, transfer of creditor's rights and loans to equity conversion amounted
+to RMB75,152 million (2020: RMB64,269 million), resulting in a corresponding
+reduction of RMB72,016 million (2020: RMB58,172 million) in impairment allowance
+for Stage 3 loans.
+The domestic branches performed regular reviews of the five-category loan
+classification grading and internal credit ratings on their loans and advances to
+customers. Loans with a gross carrying amount of RMB71,309 million (2020:
+RMB69,946 million) were transferred from Stage 1 to Stage 2 and Stage 3, and the
+impairment allowance increased correspondingly by RMB23,296 million (2020:
+RMB22,008 million). The gross carrying amount of loans transferred from Stage 2 to
+Stage 3 was RMB38,376 million (2020: RMB67,364 million), with a corresponding
+increase in impairment allowance of RMB13,814 million (2020: RMB20,900 million).
+The gross carrying amount of the loans transferred from Stage 2 to Stage 1 was
+RMB22,435 million (2020: RMB16,132 million), and the impairment allowance
+decreased correspondingly by RMB3,729 million (2020: RMB2,677 million). The
+gross carrying amount of loans transferred from Stage 3 to Stage 2 and Stage 1
+was RMB2,463 million (2020: RMB16,720 million), and the impairment allowance
+decreased correspondingly by RMB1,438 million (2020: RMB6,656 million).
+V
+•
+- Public sectors and quasi-governments
+Policy banks
+2020
+- Public sectors and quasi-governments
+18,919
+13,535
+Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+42,122
+52,415
+As at 31 December
+2021
+Corporate
+204,624
+― Financial institutions
+31,755
+26,127
+302
+30
+20,176
+18,837
+188,092
+367
+•
+The Group enhanced its ECL models in 2021, which has no significant impact to the
+financial statements.
+15
+563
+Reversal for the year (ii)
+(i)
+Charge for the year
+loans with stage transfers
+Impairment (reversal)/losses of
+Transfers to Stage 3
+(665)
+563
+547
+Stage 3
+Stage 2
+Total
+Lifetime ECLS
+12-month
+ECLS
+Stage 1
+Year ended 31 December 2020
+Transfers to Stage 2
+16
+In 2021, the changes in gross carrying amounts of loans and advances to customers that have
+a significant impact on the Group's impairment allowance were mainly derived from the
+credit business in the Chinese mainland, including:
+(16)
+Exchange differences and other
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+17 Loans and advances to customers (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+294
+568
+(681)
+Reversal for the year comprises impairment losses attributable to loan repaid during the year, brought
+forward loans without stage transfers, as well as changes to model and risk parameters.
+Charge for the year comprises impairment losses attributable to new loans granted during the year, brought
+forward loans without stage transfers, as well as changes to model and risk parameters.
+(i)
+446
+5
+441
+As at 31 December
+- (4)
+(4)
+(ii)
+-
+45
+12,982
+Other
+26,123
+17,737
+6,514
+4,770
+- Corporate
+5,525
+2,322
+12,179
+- Financial institutions
+1,164
+- Public sectors and quasi-governments
+1,295
+594
+-Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+1,846
+721
+396
+98
+29,916
+2020
+2021
+As at 31 December
+Debt securities
+through other comprehensive income
+Financial assets at fair value
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Total financial assets at fair value
+through profit or loss (designated)
+V
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+297
+504,549
+561,642
+Total financial assets at fair value
+through profit or loss
+26,221
+(Amount in millions of Renminbi, unless otherwise stated)
+- Financial institutions
+Corporate
+6,640
+ECLS
+BANK OF CHINA LIMITED
+478,328
+531,726
+69,183
+90,733
+88,025
+102,268
+321,120
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+338,725
+through profit or loss
+other financial assets at fair value
+Total financial assets held for trading and
+Fund investments and other
+Equity instruments
+9,603
+9,808
+10,106
+296
+4,811
+FOR THE YEAR ENDED 31 DECEMBER 2021
+V
+516
+3,073
+3,164
+Corporate
+Financial institutions
+- Policy banks
+2020
+2021
+(Amount in millions of Renminbi, unless otherwise stated)
+As at 31 December
+Issuers in Chinese mainland
+Debt securities (¹)
+through profit or loss (designated)
+Financial assets at fair value
+profit or loss (continued)
+Financial assets at fair value through
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Government
+Lifetime ECLS
+As at 1 January
+Transfers to Stage
+(12,639)
+(1) Allowance for loans at amortised cost (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+17 Loans and advances to customers (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Year ended 31 December 2020
+BANK OF CHINA LIMITED
+169,900 390,090
+53,832
+166,358
+As at 31 December
+11,921 11,921
+(1,851) (2,697)
+(488)
+(358)
+291
+12-month
+ECLS
+Lifetime ECLS
+Total
+(30,546)
+(407)
+Transfers to Stage 3
+13,913
+(1,274)
+Transfers to Stage 2
+(537)
+(3,232)
+3,769
+325,360
+136,544
+79,051
+109,765
+As at 1 January
+Transfers to Stage
+Stage 3
+Stage 2
+Stage 1
+Exchange differences and other
+Impairment (reversal)/losses of
+written off
+(85,596)
+(797)
+1,786
+(989)
+Transfers to Stage 2
+(981)
+(5,205)
+6,186
+Transfers to Stage 3
+368,173
+70,712
+134,566
+As at 1 January
+Transfers to Stage
+Stage 3
+Stage 2
+Stage 1
+Total
+162,895
+(687) (14,244)
+14,931
+Impairment (reversal)/losses of
+(21,905) (97,391)
+(85,401)
+(195)
+Write-off and transfer out
+(24,087)
+(51,399)
+Reversal for the year (ii)
+158,113
+58,502
+15,132
+84,479
+(i)
+Charge for the year
+37,567
+32,586
+10,226
+(5,245)
+loans with stage transfers
+Recovery of loans and advances
+loans with stage transfers
+30,953
+9,357
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+(2) Allowance for loans at fair value through other comprehensive income
+As at 1 January
+Transfers to Stage 1
+Transfers to Stage 2
+Transfers to Stage 3
+Impairment (reversal)/losses of
+loans with stage transfers
+Year ended 31 December 2021
+12-month
+ECLS
+Lifetime ECLS
+292
+(3,507)
+368,173
+70,712
+(21,257)
+(10,126)
+(74,547)
+Write-off and transfer out
+(66)
+(64,255)
+(64,321)
+Recovery of loans and advances
+written off
+8,405
+8,405
+Exchange differences and other
+(1,483)
+(764)
+(2,767) (5,014)
+As at 31 December
+134,566
+162,895
+Stage 1
+Total
+Stage 3
+Stage 2
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+17 Loans and advances to customers (Continued)
+(2) Allowance for loans at fair value through other comprehensive income (Continued)
+293
+Reversal for the year
+42,114
+24,190
+70,933
+(i)
+Charge for the year
+41,053
+35,203
+137,237
+451
+BANK OF CHINA LIMITED
+374
+441
+5
+446
+Charge for the year
+(ii)
+77
+276
+77
+(i)
+(ii)
+(339)
+(5)
+353
+(344)
+Exchange differences and other
+(4)
+(4)
+As at 31 December
+Reversal for the year
+(427)
+(261)
+Fair value changes (Note V.5)
+(15)
+(1,324)
+(970)
+20 Property and equipment (Continued)
+1,626
+720
+Additions
+23,108
+22,065
+(1,505)
+Transfer to property and equipment, net (Note V.20)
+Deductions
+Exchange differences
+(510)
+(888)
+(15,225)
+(4,635)
+(6,623)
+(3,967)
+Additions
+(115,921)
+(14,762)
+(60,758)
+Deductions
+(40,401)
+Accumulated depreciation
+368,107
+141,025
+31,281
+73,337
+122,464
+As at 31 December
+(8,619)
+As at 1 January
+(1,437)
+1,143
+883
+(227)
+(767)
+As at 1 January
+Allowance for impairment losses
+(117,955)
+(17,302)
+(57,839)
+(42,814)
+9,178
+As at 31 December
+1,212
+364
+393
+Exchange differences
+18
+18
+Transfer to investment properties (Note V.21)
+11,204
+1,969
+(453)
+(1,453)
+Exchange differences
+131,821
+32,905
+77,656
+119,077
+As at 1 January
+Cost
+Total
+Aircraft
+361,459
+progress
+vehicles
+Buildings
+and motor Construction
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+in
+Additions
+708
+5,998
+(17,775)
+(2,948)
+(2,373)
+(10,726)
+(1,728)
+Deductions
+2,993
+(9,230)
+862
+5,375
+Construction in progress transfer in/(out)
+243
+(242)
+485
+(Note V.21)
+Transfer from/(to) investment properties
+36,142
+17,778
+11,658
+(4)
+(998)
+Additions
+(1)
+on short-term lease (less than 10 years)
+55,846
+56,051
+on medium-term lease (10-50 years)
+4,507
+3,834
+on long-term lease (over 50 years)
+Held outside Hong Kong, China
+6,852
+11,641
+Subtotal
+8
+1
+on short-term lease (less than 10 years)
+7,884
+8,074
+on medium-term lease (10-50 years)
+3,749
+11,994
+6,910
+Subtotal
+66,737
+As at 31 December
+19,554
+22,065
+The Group's investment properties are located in active real estate markets, and external
+appraisers make reasonable estimation of fair value using market prices of the same or
+similar properties and other related information from the real estate markets.
+Investment properties are mainly held by Bank of China Hong Kong (Holdings)
+Limited ("BOCHK (Holdings)") and Bank of China Group Investment Limited ("BOCG
+Investment"), subsidiaries of the Group. The carrying values of investment properties
+held by BOCHK (Holdings) and BOCG Investment as at 31 December 2021 amounted to
+RMB10,708 million and RMB6,827 million, respectively (31 December 2020: RMB 12,009
+million and RMB7,835 million). The valuations of these investment properties as at 31
+December 2021 were principally performed by Knight Frank Petty Limited based on the
+open market price and other related information.
+309
+2021
+Year ended 31 December
+21 Investment properties
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+78,904
+78,731
+308
+Total
+67,263
+3,919
+Year ended 31 December 2020
+Equipment
+on long-term lease (over 50 years)
+2021
+77,909
+As at 1 January
+Net book value
+(1,563)
+(590)
+(227)
+(746)
+As at 31 December
+16,898
+39
+6
+Exchange differences
+20
+4
+16
+Deductions
+(624)
+(623)
+33
+32,678
+117,055
+244,540
+As at 31 December
+Held in Hong Kong, China
+The carrying value of buildings is analysed based on the remaining terms of the leases as
+follows:
+According to the relevant PRC laws and regulations, after conversion into a joint stock
+limited liability company, the Bank is required to re-register its property and equipment
+under the name of Bank of China Limited. As at 31 December 2021, the process of re-
+registration has not been completed. However, this registration process does not affect the
+rights of Bank of China Limited to these assets.
+As at 31 December 2021, the net book amount of aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, that has been pledged for loan facilities was RMB9,989 million
+(31 December 2020: RMB 14,893 million) (Note V.31).
+As at 31 December 2021, the net book amount of aircraft leased out by BOC Aviation
+Limited, a subsidiary of the Group, under operating leases was RMB125,262 million (31
+December 2020: RMB 123,133 million).
+20 Property and equipment (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+307
+248,589
+123,133
+31,054
+15,498
+78,904
+As at 31 December
+2020
+(11,962)
+As at 1 January
+2020
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+305
+As at 31 December 2021, there were no restrictions on associates and joint ventures to
+transfer funds to the Group.
+33,508
+35,769
+Total
+6,738
+6,124
+Other
+(Amount in millions of Renminbi, unless otherwise stated)
+755
+Limited Partnership
+Wuhu Yinsheng Special Steel Investment Management
+N/A
+800
+National Green Development Fund
+855
+835
+Wkland Investments II Limited
+N/A
+1,308
+Shanghai Chenggang Real Estate Co., Ltd.
+780
+1,386
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Buildings
+Construction in progress transfer in/(out)
+960
+960
+(Note V.21)
+Transfer from/(to) investment properties
+24,397
+11,187
+6,247
+5,550
+1,413
+Additions
+20 Property and equipment
+368,107
+31,281
+73,337
+122,464
+As at 1 January
+Cost
+Total
+Aircraft
+progress
+vehicles in
+and motor Construction
+Year ended 31 December 2021
+Equipment
+141,025
+2,806
+1,414
+1,306
+12,655
+2,240
+23,210
+33,508
+2021
+Year ended 31 December
+As at 31 December
+Exchange differences and other
+Dividends received
+Share of results, net of tax
+Disposals and transfer out
+(628)
+As at 1 January
+Additions
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+304
+5,479
+500
+4,979
+As at 31 December
+(19)
+19 Investment in associates and joint ventures
+Graceful Field Worldwide Limited
+(1,157)
+158
+1,415
+Sichuan Lutianhua Co., Ltd.
+1,622
+1,679
+CGN Phase I Private Equity Fund Company Limited
+4,261
+4,311
+Ying Kou Port Group CORP.
+5,022
+5,254
+BOC International (China) Co., Ltd.
+1,478
+11,563
+China Insurance Investment Fund Co., Ltd.
+2020
+As at 31 December
+2021
+The carrying amounts of major investments in associates and joint ventures of the Group are
+as follows. Further details are disclosed in Note V.42.4.
+33,508
+35,769
+2020
+(956)
+(204)
+(402)
+(625)
+11,849
+607
+(8,046)
+4,633
+26,965
+15,133
+78,731
+As at 31 December
+248,589
+123,133
+31,054
+15,498
+78,904
+As at 1 January
+Net book value
+125,262
+(2,584)
+(227)
+(740)
+As at 31 December
+24
+23
+1
+Exchange differences
+18
+10
+8
+Deductions
+(1,617)
+(1,063)
+246,091
+154,931
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+18 Financial investments (Continued)
+As at 31 December
+2021
+2020
+Analysed as follows:
+306
+Financial assets at fair value through profit or loss
+33,127
+48,718
+- Listed outside Hong Kong, China (9)
+Unlisted
+332,549
+283,523
+195,966
+172,308
+Financial assets at fair value through
+other comprehensive income
+Debt securities
+- Listed in Hong Kong, China
+- Listed in Hong Kong, China
+(1,060)
+(3)
+Additions
+(117,955)
+(17,302)
+(57,839)
+(42,814)
+As at 1 January
+Accumulated depreciation
+372,579
+146,901
+27,192
+73,497
+124,989
+Additions
+As at 31 December
+(3,207)
+(502)
+(249)
+(918)
+Exchange differences
+(16,009)
+(6,737)
+(1,788)
+(5,748)
+(1,736)
+Deductions
+(4,876)
+(4,098)
+(6,274)
+(4,911)
+(1,563)
+(590)
+(227)
+(746)
+As at 1 January
+Allowance for impairment losses
+(123,904)
+(20,022)
+(58,364)
+(45,518)
+As at 31 December
+869
+444
+186
+239
+Exchange differences
+10
+10
+Transfer to investment properties (Note V.21)
+8,455
+1,747
+5,563
+1,145
+Deductions
+(15,283)
+1
+(19)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+493
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+301
+The Bank transferred certain non-performing assets to China Orient Asset Management Corporation
+("China Orient”) in 1999 and 2000 and China Orient issued a bond ("Orient Bond") with a par value of
+RMB160,000 million to the Bank as consideration. Based on the latest agreement, the Orient Bond will
+mature on 30 June 2025. The MOF shall continue to provide funding support for the principal and interest
+of the Orient Bond. The Bank received a notice from the MOF in January 2020, confirming that from 1
+January 2020, the interest rate on the unpaid amounts will be verified year by year based on the rate of
+return of the five-year treasury bond of the previous year. As at 31 December 2021, the Bank had received
+early repayments of principal amounting to RMB7,567 million cumulatively.
+The Bank underwrites certain Treasury bonds issued by the MOF and undertakes the role of a distributor of
+these Treasury bonds through its branch network earning commission income on bonds sold. The investors
+of these bonds have a right to redeem the bonds at any time prior to maturity and the Bank is committed
+to redeem these Treasury bonds. The balance of these bonds held by the Bank as at 31 December 2021
+amounted to RMB2,083 million (31 December 2020: RMB2,337 million).
+On 18 August 1998, a Special Purpose Treasury Bond was issued by the Ministry of Finance ("MOF”) with
+a par value of RMB42,500 million maturing on 18 August 2028. This bond was originally issued with an
+annual coupon rate of 7.20% and its coupon rate was restructured to 2.25% per annum from 1 December
+2004.
+The Group's accumulated impairment allowance for the debt securities at fair value through other
+comprehensive income as at 31 December 2021 amounted to RMB6,230 million (31 December 2020:
+RMB5,479 million).
+Financial investments (Continued)
+In order to eliminate or significantly reduce accounting mismatches, certain debt securities are designated as
+financial assets at fair value through profit or loss.
+(4)
+(3)
+(2)
+(1)
+2,637,926
+2,937,103 2,618,215
+2,886,030
+- Listed outside Hong Kong,
+China (9)
+35,960
+34,217
+39,594
+(5)
+18
+(6)
+As at 31 December 2021, the Group held bonds issued by the MOF and bills issued by the PBOC included
+in financial investments. The carrying value (accrued interest excluded) and the related coupon rate range
+on such bonds and bills are as follows:
+Year ended 31 December 2021
+cost:
+Reconciliation of allowance for impairment losses on financial investments at amortised
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Exchange differences and other
+BANK OF CHINA LIMITED
+302
+Debt securities traded in the Chinese mainland interbank bond market are included in "Listed outside Hong
+Kong, China".
+As at 31 December 2021, RMB2,338 million of debt securities measured at fair value through other
+comprehensive income and at amortised cost of the Group was determined to be impaired and was included
+under Stage 3 (31 December 2020: RMB1,467 million), with the impairment allowance fully accrued
+(31 December 2020: fully accrued); RMB816 million of debt securities was included under Stage 2 (31
+December 2020: RMB404 million), with an impairment allowance of RMB5 million (31 December 2020:
+RMB1 million); and the remaining debt securities were included under Stage 1, with impairment allowance
+measured based on 12-month expected credit losses.
+Included in the Group's financial investments were certificates of deposit held amounting to RMB 149,530
+million as at 31 December 2021 (31 December 2020: RMB130,698 million).
+(9)
+(8)
+0.00%-5.31%
+0.00%-5.31%
+979,089
+942,440
+2020
+As at 31 December
+2021
+(7)
+Coupon rate range
+Carrying value (accrued interest excluded)
+38,898
+12-month
+- Listed in Hong Kong, China
+Market
+value
+326,346
+288,271
+2,618,215
+2,886,030
+- Listed outside Hong Kong, China (9)
+Unlisted
+34,217
+38,898
+Listed in Hong Kong, China
+Financial assets at amortised cost
+12,256
+9,010
+Total
+3,141
+- Listed outside Hong Kong, China (9)
+Unlisted
+6,031
+5,980
+- Listed in Hong Kong, China
+Equity instruments and other
+642,384
+574,701
+1,210,734
+1,633,446
+- Listed outside Hong Kong, China (9)
+- Unlisted
+233,244
+11,762
+6,164,671
+5,591,117
+Listed in Hong Kong, China
+Carrying
+value
+Market
+value
+Carrying
+value
+2020
+2021
+As at 31 December
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+5,591,117
+6,164,671
+300
+Total
+1,153,294
+1,067,948
+Unlisted
+4,115,613
+4,863,787
+Listed outside Hong Kong, China (9)
+322,210
+232,936
+Debt securities at amortised cost
+ECL
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Total
+763
+5,729
+(12)
+762
+5,479
+500
+4,979
+Stage 3
+Stage 2
+Stage 1
+Total
+(12)
+Lifetime ECL
+12-month
+Lifetime ECL
+As at 31 December
+Impairment losses during the year
+Exchange differences and other
+Transfers to Stage 3
+Transfers to Stage 2
+As at 1 January
+Reconciliation of allowance for impairment losses on financial investments at fair value
+through other comprehensive income:
+Financial investments (Continued)
+18
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+ECL
+V
+500
+Year ended 31 December 2020
+494
+(1)
+stage transfer
+Impairment (gains)/losses due to
+3,751
+3,751
+Impairment losses during the year
+(4)
+(2)
+Transfers to Stage 3
+1
+6,230
+(1)
+1,254
+4
+1,250
+As at 1 January
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+ECL
+12-month
+Transfers to Stage 2
+(Amount in millions of Renminbi, unless otherwise stated)
+Year ended 31 December 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+12-month
+Year ended 31 December 2020
+9,727
+7,550
+83
+(24)
+2,173
+As at 31 December
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Exchange differences and other
+Write-off and transfer out
+ECL
+721
+3
+159
+Impairment losses during the year
+8,923
+7,015
+1
+1,907
+As at 1 January
+Stage 3
+Stage 2
+Stage 1
+559
+Lifetime ECL
+107
+Stage 1
+BANK OF CHINA LIMITED
+303
+Total
+7,015
+1,907
+As at 31 December
+289
+(70)
+359
+Exchange differences and other
+(24)
+(24)
+8,923
+1,872
+Write-off and transfer out
+Stage 2
+Stage 3
+383
+1
+As at 1 January
+6,786
+Impairment losses during the year
+1,165
+707
+6,402
+4,793
+10,253
+on medium-term lease (10-50 years)
+5,782
+on short-term lease (less than 10 years)
+441
+183
+Subtotal
+9,076
+Total
+2020
+19,554
+22,065
+As at 31 December
+2021
+Accounts receivable and prepayments (¹)
+123,590
+141,286
+Right-of-use assets (2)
+20,321
+4,288
+22 Other assets
+3,842
+As at 31 December 2021 and 2020, financial liabilities held for trading mainly included
+short position in debt securities.
+Held outside Hong Kong, China
+22,855
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+21
+The carrying value of investment properties is analysed based on the remaining terms of the
+leases as follows:
+As at 31 December
+on long-term lease (over 50 years)
+2021
+Held in Hong Kong, China
+on long-term lease (over 50 years)
+2,856
+1,976
+on medium-term lease (10-50 years)
+7,622
+9,836
+Subtotal
+10,478
+11,812
+2020
+Intangible assets (3)
+16,930
+15,614
+Exchange
+Write-off
+Additions/
+As at
+23 Impairment allowance (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+315
+450,389
+(2,307)
+(74,903)
+104,220
+423,379
+Total
+43,891
+(405)
+(500)
+4,438
+40,358
+15,957
+71
+1,484
+14,402
+Other
+1 January
+Subtotal
+(reversal), and transfer
+2020
+(24)
+1,872
+6,786
+- at amortised cost
+Financial investments
+368,619
+(3,782)
+(57,152)
+103,630
+325,923
+Subtotal
+446
+(113)
+563
+comprehensive income
+―at fair value through other
+368,173
+(3,778)
+(57,152)
+103,743
+325,360
+―at amortised cost
+Loans and advances to customers
+2020
+and other
+out
+net
+As at
+differences 31 December
+6,230
+(12)
+763
+Exchange
+Additions/ Write-off
+(reversal), and transfer
+out
+net
+2021
+1 January
+As at
+23 Impairment allowance
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+314
+The goodwill mainly arose from the acquisition of BOC Aviation Limited in 2006 amounting to USD241
+million (equivalent to RMB 1,535 million).
+2,525
+2,481
+(136)
+(44)
+(25)
+2,686
+2,525
+2020
+2021
+Year ended 31 December
+As at 31 December
+Exchange differences
+Addition through acquisition of subsidiaries
+Decrease resulting from disposal of subsidiaries
+As at
+differences 31 December
+and other
+2021
+5,479
+comprehensive income
+― at fair value through other
+9,727
+83
+71
+721
+8,923
+- at amortised cost
+Financial investments
+390,541
+(1,973)
+(74,403)
+289
+98,298
+Subtotal
+451
+(4)
+9
+446
+― at fair value through other
+comprehensive income
+390,090
+(1,969)
+(74,403)
+98,289
+368,173
+- at amortised cost
+Loans and advances to customers
+368,619
+As at 1 January
+8,923
+comprehensive income
+120,396
+27,933
+3,688
+Other financial institutions in Chinese mainland
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and
+other countries and regions
+258,240
+279,480
+Banks in Chinese mainland
+2020
+2021
+As at 31 December
+Placements from:
+Placements from banks and other financial institutions
+Bank notes in circulation represent the liabilities in respect of Hong Kong Dollar notes
+and Macao Pataca notes in circulation, issued respectively by BOCHK and Bank of China
+Macau Branch.
+Bank of China (Hong Kong) Limited ("BOCHK") and Bank of China Macau Branch are
+note issuing banks for Hong Kong Dollar and Macao Pataca notes in Hong Kong (China)
+and Macao (China), respectively. Under local regulations, these two entities are required to
+place deposits with the Hong Kong (China) and Macao (China) governments, respectively,
+to secure the currency notes in circulation.
+27
+26 Government certificates of indebtedness for bank notes issued and bank notes in
+circulation
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+887,811
+955,557
+6,186
+6,692
+881,625
+948,865
+115,308
+630,092
+3,408
+Subtotal
+Financial liabilities held for trading
+28
+(i) Debt securities used as collateral under repurchase agreements were principally government bonds
+and were included in the amount disclosed under Note V.40.2.
+127,202
+97,372
+2020
+As at 31 December
+2021
+Repurchase debt securities (1)
+(2) Included in "Placements from banks and other financial institutions" are amounts received from
+counterparties under repurchase agreements and collateral agreements as follows:
+According to the Group's risk management policy, the Group enters into derivatives to hedge market
+risks arising from its placements from banks and other financial institutions. The Group designates certain
+placements from banks and other financial institutions as financial liabilities at fair value through profit
+or loss, to eliminate or significantly reduce accounting mismatch. As at 31 December 2021, the carrying
+amount of the above-mentioned financial liabilities by the Group was RMB 162 million (31 December
+2020: RMB3,831 million). The differences between the fair value and the amount that the Group would be
+contractually required to pay to the holders as at 31 December 2021 and 2020 were not significant. In the
+years of 2021 and 2020, there was no significant change in the Group's credit risk nor changes in the fair
+value of these financial liabilities as a result.
+(1)
+27 Placements from banks and other financial institutions (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+411,949
+407,767
+318
+Total (1)(2)
+971
+795
+410,978
+406,972
+Accrued interest
+9,497
+251,533
+107
+948,758
+2020
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+316
+423,379
+(3,861)
+(57,838)
+119,016
+366,062
+Total
+40,358
+(349)
+(662)
+9,270
+32,099
+14,402
+270
+(24)
+6,116
+8,040
+Other
+Subtotal
+5,479
+(19)
+4,244
+1,254
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+24
+Due to banks and other financial institutions
+As at 31 December
+2021
+As at 31 December
+2021
+1,917,003
+2,682,739
+3,904
+7,520
+1,913,099
+2,675,219
+317
+Total
+Accrued interest
+Subtotal
+Foreign exchange deposits
+Other
+Due to central banks
+― at fair value through other
+25
+Accrued interest
+Subtotal
+142,379
+121,640
+177,717
+145,363
+515,162
+1,077,841
+1,827,138
+Other financial institutions in Chinese mainland
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and
+other countries and regions
+581,078
+Banks in Chinese mainland
+Due to:
+2020
+Total
+319
+Goodwill
+The total book value of repossessed assets disposed of during the year ended 31 December 2021 amounted
+to RMB353 million (2020: RMB602 million). The Group plans to dispose of the repossessed assets held at
+31 December 2021 by auction, bidding or transfer.
+176
+35,251
+As at 1 January
+Total
+Motor
+vehicles
+Total Buildings and other
+Motor
+vehicles
+Buildings and other
+2020
+2021
+As at 31 December
+Cost
+Right-of-use assets
+(2)
+22
+Other assets (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+311
+(4,858)
+146,144
+(4,971)
+128,561
+Total
+(3,022)
+6,459
+Additions
+(3,091)
+5,243
+35,427
+5,362
+Accumulated depreciation
+35,427
+176
+35,251
+36,679
+232
+36,447
+As at 31 December
+(423)
+(420)
+(315)
+(2)
+(313)
+Exchange differences
+(1,263)
+(21)
+(1,242)
+(3,795)
+(61)
+(3,734)
+Deductions
+7,457
+44
+7,413
+29,656
+156
+29,500
+119
+7,779
+Over 3 years
+(892)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+217,196
+203,940
+310
+Total
+21,756
+28,840
+Other
+1,299
+284
+2,525
+2,481
+Interest receivable
+Goodwill (6)
+2,120
+2,043
+(5)
+Repossessed assets
+3,215
+3,329
+Long-term deferred expense
+6,526
+6,122
+Land use rights (4)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+22 Other assets (Continued)
+(1) Accounts receivable and prepayments
+Accounts receivable and prepayments
+4,038
+(1,305)
+6,549
+From 1 year to 3 years
+(944)
+135,647
+(575)
+114,233
+Within 1 year
+Impairment
+allowance
+Balance
+Impairment
+allowance
+Balance
+As at 1 January
+2020
+As at 31 December
+Accounts receivable and prepayments mainly include items in the process of clearing and settlement. The
+analysis of the ageing of accounts receivable and prepayments is as follows:
+141,286
+123,590
+(4,858)
+(4,971)
+146,144
+128,561
+2020
+2021
+As at 31 December
+Net value
+Impairment allowance
+2021
+(6)
+(12,477)
+(12,572)
+(19,095)
+(23,447)
+241
+136
+208
+177
+(13,221)
+(6,323)
+(19,095)
+(4,665)
+34,709
+40,377
+(350)
+(200)
+(226)
+(252)
+8,712
+6,120
+26,573
+34,709
+2020
+2021
+Year ended 31 December
+Land use rights
+(4)
+As at 31 December
+As at 1 January
+Net book value
+As at 31 December
+15,614
+Exchange differences
+13,352
+15,614
+As at 31 December 2021, the net book amount of repossessed assets was RMB2,043 million (31 December
+2020: RMB2,120 million), mainly comprised properties. Related allowance for impairment was RMB882
+million (31 December 2020: RMB902 million).
+Repossessed assets
+(5)
+Other assets (Continued)
+22
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+6,526
+6,122
+313
+Total
+657
+680
+on short-term lease (less than 10 years)
+60
+5,809
+5,384
+on medium-term lease (10-50 years)
+58
+on long-term lease (over 50 years)
+Held outside Hong Kong, China
+2020
+2021
+Year ended 31 December
+The carrying value of land use rights is analysed based on the remaining terms of the leases as follows:
+16,930
+Deductions
+Additions
+As at 1 January
+(93)
+(16,265)
+As at 31 December
+116
+1
+115
+135
+2
+133
+Exchange differences
+1,050
+20
+1,030
+3,224
+58
+3,166
+Deductions
+(6,904)
+(63)
+(6,841)
+(7,145)
+(58)
+(7,087)
+Additions
+(6,834)
+(53)
+(6,781)
+(16,358) (12,477)
+(95)
+(12,572)
+Net book value
+Accumulated amortisation
+As at 31 December
+Exchange differences
+Deductions
+As at 1 January
+Additions
+Cost
+(3) Intangible assets
+22 Other assets (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(95)
+312
+81
+22,774
+20,321
+139
+20,182
+As at 31 December
+22,822
+103
+22,719
+22,855
+81
+22,774
+As at 1 January
+22,855
+Investment properties (Continued)
+329
+19,518
+The second subordinated bonds issued on 27 November 2012 have a maturity of 15 years, with a fixed
+coupon rate of 4.99%, paid annually. The Bank was entitled to early redeem all these bonds at the end of the
+tenth year. If the Bank does not exercise this option, the coupon rate of the bonds for the remaining 5-year
+period shall remain fixed at 4.99%.
+The subordinated bonds issued on 17 May 2011, have a maturity of 15 years, with a fixed coupon rate of
+5.30%, paid annually. The Bank was entitled to early redeem all the subordinated bonds at the end of the
+tenth year. The Bank has redeemed all the bonds in advance at face value on 19 May 2021.
+(3)
+(2)
+(1)
+1,244,403
+1,388,678
+The Bank issued tier 2 capital bonds in an amount of USD3 billion on 13 November 2014. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 5.00%.
+Total bonds issued (20)
+6,506
+Accrued interest
+1,238,373
+1,382,172
+Subtotal bonds issued
+6,162
+317
+6,030
+323
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(10) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 November 2019. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.01%. The Bank was entitled to redeem the bonds
+at the end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB10 billion on 20 September 2019. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 4.34%. The Bank was entitled to redeem the bonds
+at the end of the tenth year.
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 September 2019. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 3.98%. The Bank was entitled to redeem the bonds
+at the end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 9 October 2018. The bonds have a
+maturity of 10 years, with a fixed coupon rate of 4.84%. The Bank was entitled to redeem the bonds at the
+end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 3 September 2018. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 4.86%. The Bank was entitled to redeem the bonds at the
+end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 31 October 2017. The bonds have a
+maturity of 10 years, with a fixed coupon rate of 4.45%. The Bank was entitled to redeem the bonds at the
+end of the fifth year.
+(9)
+(8)
+(7)
+(6)
+(5)
+(4) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 26 September 2017. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.45%. The Bank was entitled to redeem the bonds
+at the end of the fifth year.
+Bonds issued (Continued)
+30
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Bonds issued at fair value (19)
+1,232,211
+1,381,855
+Subtotal bonds issued at amortised cost
+16 November 2036
+12 November 2021
+Second Tranche 02 (16)
+2021 RMB Debt Securities
+39,989
+3.60%
+16 November 2031
+12 November 2021
+2021 RMB Debt Securities
+Second Tranche 01 (15)
+9,996
+4.38%
+19 March 2036
+17 March 2021
+2021 RMB Debt Securities
+First Tranche 02 (14)
+2020
+2021
+rate
+3.80%
+(11) The Bank issued tier 2 capital bonds in an amount of RMB60 billion on 17 September 2020. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.20%. The Bank was entitled to redeem the bonds
+at the end of the fifth year.
+9,997
+378,924
+554,801
+659,306
+Negotiable certificates of deposit
+323,037
+325,625
+Subtotal
+51,555
+49,403
+Other
+73,165
+90,604
+RMB Debt Securities
+198,317
+185,618
+US Dollar Debt Securities
+Other bonds issued (18)
+304,373
+Subtotal (17)
+(12) The Bank issued tier 2 capital bonds in an amount of RMB15 billion on 17 September 2020. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 4.47%. The Bank was entitled to redeem the bonds
+at the end of the tenth year.
+(13) The Bank issued tier 2 capital bonds in an amount of RMB 15 billion on 17 March 2021. The bonds have a
+maturity of 10 years with a fixed coupon rate of 4.15%. The Bank was entitled to redeem the bonds at the
+end of the fifth year.
+(14) The Bank issued tier 2 capital bonds in an amount of RMB 10 billion on 17 March 2021. The bonds have a
+maturity of 15 years, with a fixed coupon rate of 4.38%. The Bank was entitled to redeem the bonds at the
+end of the tenth year.
+74
+66
+Interest cost
+2,533
+2,199
+As at 1 January
+2020
+2021
+Year ended 31 December
+The movements of the net liabilities recognised are as follows:
+As at 31 December 2021, the actuarial liabilities existing in relation to the retirement benefit
+obligations for employees who retired prior to 31 December 2003 and the early retirement
+obligations for employees who early-retired were RMB1,881 million (31 December
+2020: RMB1,896 million) and RMB214 million (31 December 2020: RMB303 million),
+respectively, using the projected unit credit method.
+55,665
+45,006
+Retirement benefit obligations
+33
+Total
+768
+Net actuarial losses/(gains) recognised
+Benefits paid
+772
+84
+(254)
+_
+2020
+2021
+As at 31 December
+Discount rate
+Primary assumptions used:
+33 Retirement benefit obligations (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+326
+2,199
+2,095
+As at 31 December
+(283)
+(125)
+Maturity date
+Other
+345
+These other borrowings relate to the financing of the aircraft leasing business of BOC
+Aviation Limited, a subsidiary of the Group. These other borrowings are secured by its
+aircraft (Note V.20).
+Other borrowings
+(20) During the years ended 31 December 2021 and 2020, the Group did not default on any principal, interest or
+redemption amounts with respect to its bonds issued.
+(19) According to the Group's risk management policy, the Group enters into derivatives to hedge market risks
+arising from its bonds issued. The Group designates certain bonds issued as financial liabilities at fair
+value through profit or loss, to eliminate or significantly reduce accounting mismatch. As at 31 December
+2021, the carrying amount of the above-mentioned bonds issued by the Group was RMB317 million
+(31 December 2020: RMB6,162 million). The differences between the fair value and the amount that the
+Group would be contractually required to pay to the holders as at 31 December 2021 and 2020 were not
+significant. In the years of 2021 and 2020, there was no significant change in the Group's credit risk nor
+changes in the fair value of these financial liabilities as a result.
+(18) US Dollar Debt Securities, RMB Debt Securities and other Debt Securities were issued in Chinese
+mainland, Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions between
+2013 and 2021 by the Group, with dates of maturity ranging from 2022 to 2030.
+(17) The claims of the holders of subordinated bonds and tier 2 capital bonds will be subordinated to the claims
+of depositors and general creditors.
+(16) The Bank issued tier 2 capital bonds in an amount of RMB10 billion on 12 November 2021. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 3.80%. The Bank was entitled to redeem the bonds
+at the end of the tenth year.
+(15) The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 12 November 2021. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 3.60%. The Bank was entitled to redeem the bonds
+at the end of the fifth year.
+31
+Bonds issued (Continued)
+30
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+324
+As at 31 December 2021, these other borrowings had a maturity ranging from 7 days to 7
+years and bore floating and fixed interest rates ranging from 0.36% to 1.62% (31 December
+2020: 0.45% to 1.55%).
+326
+During the years ended 31 December 2021 and 2020, the Group did not default on any
+principal, interest or redemption amounts with respect to its other borrowings.
+BANK OF CHINA LIMITED
+Education surcharges
+492
+539
+6,742
+7,459
+Value-added tax
+47,337
+35,891
+Corporate income tax
+2020
+2021
+As at 31 December
+32 Current tax liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+325
+- Normal retiree
+Issue date
+As at 31 December
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+320
+16,879,171
+18,142,887
+Total due to customers (3)
+(Amount in millions of Renminbi, unless otherwise stated)
+185,800
+Accrued interest
+16,693,371
+17,920,168
+Subtotal due to customers
+64,042
+77,152
+206,146
+222,719
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+29
+Due to customers (Continued)
+2012 RMB Debt Securities
+Second Tranche (2)
+Bonds issued at amortised cost
+Subordinated bonds issued
+2011 RMB Debt Securities (¹)
+Bonds issued
+30
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+321
+Due to customers included margin deposits received by the Group as at 31 December 2021 of RMB330,494
+million (31 December 2020: RMB304,314 million).
+As at 31 December 2021, the remaining maturity of special purpose funding ranges from 15 days to
+32 years. The interest-bearing special purpose funding bears interest at floating and fixed rates ranging
+from 0.15% to 7.92% (31 December 2020: 0.15% to 7.92%). These terms are consistent with the related
+development loans granted to customers.
+Included in other deposits is special purpose funding, which represents long-term funding provided in
+multiple currencies by foreign governments and/or entities in the form of export credit, foreign government
+and other subsidised credit. The special purpose funding is normally used to finance projects with a special
+commercial purpose in the PRC as determined by the foreign governments or entities and the Group is
+obliged to repay the funding when it falls due.
+According to the Group's risk management policy, the Group enters into derivatives to hedge market risks
+arising from its structured deposits. The Group designates certain structured deposits as financial liabilities
+at fair value through profit or loss, to eliminate or significantly reduce accounting mismatch. As at 31
+December 2021, the carrying amount of these financial liabilities was RMB31,311 million (31 December
+2020: RMB25,742 million). The differences between the fair value and the amount that the Group would
+be contractually required to pay to the holders as at 31 December 2021 and 31 December 2020 were
+not significant. For the years ended 31 December 2021 and 2020, there was no significant change in the
+Group's credit risk nor changes in the fair value of these financial liabilities as a result.
+(3)
+(2)
+(1)
+160,419
+Other deposits (2)
+Certificates of deposit
+634,233
+Subtotal
+3,355,893
+3,487,433
+Personal deposits
+4,956,751
+5,275,514
+Corporate deposits
+Demand deposits
+2020
+As at 31 December
+2021
+Due to customers
+29
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+8,762,947
+Subtotal (17)
+8,312,644
+- Corporate deposits
+652,073
+Subtotal
+379,680
+300,628
+Personal deposits
+254,553
+351,445
+- Corporate deposits
+Structured deposits (1)
+7,476,306
+8,267,577
+Subtotal
+3,854,531
+4,299,050
+- Personal deposits
+3,621,775
+3,968,527
+Time deposits
+As at 31 December
+Annual
+interest
+Issue date
+17 September 2020 21 September 2030
+2020 RMB Debt Securities
+First Tranche 01 (11)
+29,991
+29,991
+4.01%
+20 November 2019 22 November 2029
+2019 RMB Debt Securities
+Second Tranche (10)
+9,996
+9,996
+4.34%
+20 September 2019 24 September 2034
+2019 RMB Debt Securities
+First Tranche 02 (9)
+29,988
+29,989
+3.98%
+20 September 2019 24 September 2029
+2019 RMB Debt Securities
+First Tranche 01 (8)
+4.20%
+39,985
+59,976
+2020 RMB Debt Securities
+First Tranche 02 (12)
+Bonds issued (Continued)
+30
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+322
+14,995
+4.15%
+19 March 2031
+17 March 2021
+2021 RMB Debt Securities
+First Tranche 01 (13)
+14,994
+14,994
+4.47%
+17 September 2020 21 September 2035
+59,976
+Annual
+interest
+39,986
+11 October 2028
+13 November 2014 13 November 2024
+2014 US Dollar Debt Securities (3)
+Tier 2 capital bonds issued
+50,000
+18,000
+18,000
+18,000
+4.99%
+27 November 2012 29 November 2027
+32,000
+5.30%
+19 May 2026
+17 May 2011
+2020
+2021
+rate
+Maturity date
+5.00%
+4.84%
+19,084
+26 September 2017 28 September 2027
+9 October 2018
+2018 RMB Debt Securities
+Second Tranche (7)
+39,983
+39,984
+4.86%
+5 September 2028
+3 September 2018
+2018 RMB Debt Securities
+First Tranche (6)
+29,972
+29,974
+4.45%
+2 November 2027
+31 October 2017
+2017 RMB Debt Securities
+Second Tranche (5)
+29,970
+29,973
+4.45%
+2017 RMB Debt Securities
+First Tranche (4)
+2.75%
+City construction and maintenance tax
+- Early retiree
+9,599
+202
+809
+41,355
+8,849
+37,898
+Other temporary differences
+304
+1,224
+other comprehensive income
+Financial assets at fair value through
+43,224
+174,011
+16,237
+65,287
+derivative financial instruments
+value through profit or loss and
+Financial instruments at fair
+differences
+tax assets/
+(liabilities)
+Deferred income tax assets
+Asset impairment allowances
+274,503
+68,376
+403,841
+253,785
+Pension, retirement benefits
+and salary payables
+24,929
+6,238
+17,952
+4,470
+63,242
+tax assets/ Temporary
+(liabilities)
+100,004
+120,737
+3.25%
+As at 31 December 2021, deferred tax liabilities relating to temporary differences of
+RMB174,351 million associated with the Group's investments in subsidiaries have not been
+recognised (31 December 2020: RMB164,299 million). Refer to Note II.20.2.
+52,417
+188,971
+44,169
+156,892
+Net
+(298,941) (68,320)
+(55,835)
+(246,949)
+Subtotal
+(1,536) (8,845) (1,722)
+(13,790) (60,180) (12,107)
+(66,970)
+Other temporary differences
+(8,040)
+investment properties
+Revaluation of property and
+Deferred income tax liabilities
+Financial instruments at fair
+value through profit or loss and
+derivative financial instruments
+Financial assets at fair value through
+(108,696)
+(26,774) (174,976)
+487,912
+(42,853)
+(37,265)
+Depreciation and amortisation
+(25,978)
+(9,205) (30,836)
+(4,530) (24,104)
+(7,445)
+(4,193)
+other comprehensive income
+Temporary
+differences
+Subtotal
+Deferred
+50/55
+Assumptions regarding future mortality experience are based on the China Life Insurance
+Mortality Table (published historical statistics in China).
+As at 31 December 2021 and 2020, there was no significant change in employee retirement
+benefit obligations that was attributable to changes in actuarial assumptions.
+34 Share appreciation rights plan
+In November 2005, the Bank's Board of Directors and equity holders approved and adopted
+a Share Appreciation Rights Plan under which eligible participants, including directors,
+supervisors, management and other personnel designated by the Board, will be granted share
+appreciation rights, up to 25% of which will be exercisable each year beginning on the third
+anniversary date from the date of grant. The share appreciation rights will be valid for seven
+years from the date of grant. Eligible participants will be entitled to receive an amount equal
+to the difference, if any, between the average closing market price of the Bank's H shares in
+the ten days prior to the date of grant and the average closing market price of the Bank's H
+shares in the 12 months prior to the date of exercise as adjusted for any change in the Bank's
+equity. The plan provides cash-settled share-based payment only and accordingly, no shares
+will be issued under the share appreciation rights plan.
+No share appreciation rights were granted since the inception of the plan.
+60
+327
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+35 Deferred income taxes
+BANK OF CHINA LIMITED
+35.1 The table below includes the deferred income tax assets and liabilities of the Group after
+offsetting qualifying amounts and the related temporary differences.
+60
+-
+2.50%
+Deferred
+2.75%
+Pension benefit inflation rate
+Normal retiree
+3.0%
+Male
+Female
+3.0%
+3.0%
+3.0%
+Medical benefit inflation rate
+8.0%
+8.0%
+Retiring age
+- Early retiree
+As at 31 December
+50/55
+2021
+44,169
+188,971
+52,417
+328
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+156,892
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+35 Deferred income taxes (Continued)
+35.2 Deferred income tax assets/liabilities and related temporary differences, before offsetting
+qualifying amounts, are attributable to the following items:
+As at 31 December
+2021
+2020
+V
+Net
+BANK OF CHINA LIMITED
+(7,003) (45,934)
+2020
+(6,499)
+Deferred
+Temporary
+differences
+tax assets/ Temporary
+(liabilities) differences
+tax assets/
+(liabilities)
+Deferred income tax assets
+Deferred income tax liabilities
+Deferred
+51,172
+234,905
+58,916
+(40,818)
+197,710
+As at 1 January
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+338
+Capital raised from the issuance of the perpetual bonds, after deduction of transaction costs,
+was fully used to replenish the Bank's additional tier 1 capital and to increase its capital
+adequacy ratio.
+The perpetual bonds bear non-cumulative interest and the Bank shall have the right to cancel
+distributions on the perpetual bonds in whole or in part and such cancellation shall not
+constitute a default. The Bank may at its discretion utilise the proceeds from the cancelled
+distributions to meet other obligations of maturing debts. The Bank shall not distribute
+profits to ordinary shareholders until the resumption of full interest payment to the holders
+of the perpetual bonds.
+(9) With the approvals by the relevant regulatory authorities in China, the Bank issued RMB50,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 17 May 2021 and
+completed the issuance on 19 May 2021. The denomination of the bonds is RMB 100 each, and the annual
+interest rate of the bonds for the first five years is 4.08%, which is reset every 5 years.
+(10) With the approvals by the relevant regulatory authorities in China, the Bank issued RMB20,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 25 November 2021
+and completed the issuance on 29 November 2021. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 3.64%, which is reset every 5 years.
+37.3 Other equity instruments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Share capital, capital reserve and other equity instruments (Continued)
+37
+Movements of the provision are as follows:
+The duration of the above bonds is the same as the period of continuing operation of the
+Bank. Subject to the satisfaction of the redemption conditions and having obtained the
+prior approval of the CBIRC, the Bank may redeem the above bonds in whole or in part on
+each distribution payment date 5 years after the issuance date of the above bonds. Upon the
+occurrence of a triggering event for the write-downs, with the consent of the CBIRC and
+without the consent of the bondholders, the Bank has the right to write down all or part of
+the above bonds issued and existing at that time in accordance with the total par value. The
+claims of the holders of the above bonds will be subordinated to the claims of depositors,
+general creditors and subordinated creditors; and shall rank in priority to the claims of all
+types of shareholders and will rank pari passu with the claims under any other additional tier
+1 capital instruments of the Bank that rank pari passu with the above bonds.
+Total
+21,893
+887
+19,619
+V
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+725
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(3) Provision
+As at 31 December
+2021
+2020
+Allowance for credit commitments (i)
+Allowance for litigation losses (Note V.40.1)
+25,456
+28,767
+36 Other liabilities (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+(1)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+336
+The Offshore Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the CBIRC, the Bank may at its discretion redeem all or
+part of the Offshore Preference Shares on 4 March 2025 or any dividend payment date thereafter at the
+redemption price representing the sum of the par value of the Offshore Preference Shares and the dividends
+declared but not yet distributed, as calculated and paid in US Dollars.
+With the approvals by the relevant regulatory authorities in China, the Bank issued the US Dollar settled
+non-cumulative Offshore Preference Shares on 4 March 2020. Each Offshore Preference Share has a
+par value of RMB100 and 197,865,300 Offshore Preference Shares were issued in total. The aggregate
+par value of the Offshore Preference Shares is USD2.820 billion as converted into USD using the fixed
+exchange rate (USD1.00 to RMB7.0168). The initial annual dividend rate is 3.60% (after tax) and is subject
+to reset per agreement, but in no case shall exceed 12.15%. The dividends are calculated and paid in US
+Dollars.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the CBIRC, the Bank may at its discretion redeem all or
+part of the Domestic Preference Shares after 29 August 2024 at the redemption price representing the sum
+of the par value of the Domestic Preference Share and the dividends declared but not yet distributed.
+With the approvals by the relevant regulatory authorities in China, the Bank issued non-cumulative
+Domestic Preference Shares on 26 August 2019, in the aggregate par value of RMB27 billion. Each
+Domestic Preference Share has a par value of RMB100 and 270 million Domestic Preference Shares were
+issued in total. The dividend rate of the shares for the first five years is 4.35% (pre-tax), which is reset
+every 5 years.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the CBIRC, the Bank may at its discretion redeem all or
+part of the Domestic Preference Shares after 27 June 2024 at the redemption price representing the sum of
+the par value of the Domestic Preference Share and the dividends declared but not yet distributed.
+With the approvals by the relevant regulatory authorities in China, the Bank fully redeemed 280 million
+Domestic Preference Shares (Second Tranche) on 15 March 2021. The Bank fully paid the nominal value of
+the Domestic Preference Shares and the dividends declared, totalling RMB29,540 million.
+(4)
+(3)
+(2)
+332
+37.3 Other equity instruments (Continued)
+With the approvals by the relevant regulatory authorities in China, the Bank issued non-cumulative
+Domestic Preference Shares on 24 June 2019, in the aggregate par value of RMB73 billion. Each Domestic
+Preference Share has a par value of RMB100 and 730 million Domestic Preference Shares were issued in
+total. The dividend rate of the shares for the first five years is 4.50% (pre-tax), which is reset every 5 years.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+BANK OF CHINA LIMITED
+337
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB20,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 10 December 2020
+and completed the issuance on 14 December 2020. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 4.70%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB30,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 13 November 2020
+and completed the issuance on 17 November 2020. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 4.55%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB40,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 28 April 2020 and
+completed the issuance on 30 April 2020. The denomination of the bonds is RMB100 each, and the annual
+interest rate of the bonds for the first five years is 3.40%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB40,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 25 January 2019
+and completed the issuance on 29 January 2019. The denomination of the bonds is RMB 100 each, and the
+annual interest rate of the bonds for the first five years is 4.50%, which is reset every 5 years.
+(8)
+(7)
+(6)
+(5)
+Capital raised from the issuance of the above preference shares, after deduction of
+transaction costs, was fully used to replenish the Bank's additional tier 1 capital and to
+increase its capital adequacy ratio.
+Save for such dividend at the agreed dividend payout ratio, the holders of the above
+preference shares shall not be entitled to share in the distribution of the remaining profits
+of the Bank together with the holders of the ordinary shares. The above preference shares
+bear non-cumulative dividends. The Bank shall be entitled to cancel any dividend on
+the preference shares, and such cancellation shall not constitute a default. However, the
+Bank shall not distribute profits to ordinary shareholders until resumption of full payment
+of dividends on the preference shares. Upon the occurrence of a triggering event for the
+compulsory conversion of preference shares into ordinary shares in accordance with the
+agreement, the Bank shall convert the preference shares into ordinary shares in whole or in
+part after reporting to the CBIRC for its examination and approval decision.
+37.3 Other equity instruments (Continued)
+37 Share capital, capital reserve and other equity instruments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Lease liabilities
+In addition, some operations in Hong Kong (China), Macao (China), Taiwan (China) and
+other countries and regions are required to appropriate certain percentages of their net
+profits to the statutory surplus reserves as stipulated by local banking authorities.
+25,370
+59
+(60)
+1
+- Maternity insurance
+3
+136
+2
+(136)
+Housing funds
+39
+4,774
+(4,777)
+36
+Labour union fee and
+3
+staff education fee
+- Injury at work
+(151)
+In accordance with a resolution dated 29 March 2022, the Board of Directors of the Bank
+approved the appropriation of RMB31,439 million to the general reserve for the year ended
+31 December 2021 (2020: RMB20,822 million).
+According to Caijin [2012] No. 20 Requirements on Impairment Allowance for Financial
+Institutions (the “Requirement"), issued by the MOF, in addition to the impairment
+allowance, the Bank establishes a general reserve to address unidentified potential
+impairment losses. The general reserve as a distribution of profits, being part of the equity,
+should not be less than 1.5% of the aggregate amount of risk assets as defined by the
+Requirement, and the minimum threshold can be accumulated over a period of no more than
+five years.
+38.2 General and regulatory reserves
+37 Share capital, capital reserve and other equity instruments (Continued)
+In accordance with a resolution of the Board of Directors dated 29 March 2022, the Bank
+appropriated 10% of the net profit for the year ended 31 December 2021 to the statutory
+surplus reserves, amounting to RMB19,396 million (2020: RMB17,720 million).
+Under relevant PRC laws, the Bank is required to appropriate 10% of its net profit to non-
+distributable statutory surplus reserves. The appropriation to the statutory surplus reserves
+may cease when such reserves has reached 50% of the share capital. Subject to the approval
+of the Annual General Meeting, the statutory surplus reserves can be used for replenishing
+the accumulated losses or increasing the Bank's share capital. The statutory surplus reserves
+amount used to increase the share capital is limited to a level where the statutory surplus
+reserves after such capitalisation is not less than 25% of the share capital.
+5
+38.1 Statutory reserves
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+2,086
+- Unemployment
+6
+150
+38 Statutory reserves, general and regulatory reserves and undistributed profits
+5,136
+2,082
+(1,436)
+The Group's lease liabilities are analysed by the maturity date - undiscounted analysis
+As at 31 December
+2021
+2020
+Less than 1 year
+Between 1 to 5 years
+Lease liabilities
+5,927
+11,082
+12,487
+8,361
+9,161
+Over 5 years
+Undiscounted lease liabilities
+6,369
+(2)
+There was no overdue payment for staff salary and welfare payables as at 31 December 2021 and
+2020.
+(i)
+5,782
+Reimbursement for cancellation
+of labour contract
+19
+Other
+608
+28
+4,304
+(23)
+(4,259)
+24
+653
+Total (i)
+33,373
+89,284
+(88,478)
+34,179
+28,017
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+27,969
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+135,973
+135,717
+133,679
+2,294
+133,648
+2,069
+2020
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2021
+334
+Total
+Share premium
+Other capital reserve
+37.2 Capital reserve
+All A and H shares rank pari passu with the same rights and benefits.
+294,387,791,241 294,387,791,241
+As at 31 December
+Total
+FOR THE YEAR ENDED 31 DECEMBER 2021
+V
+amount
+(million Carrying
+(million Carrying
+shares)
+31 December 2021
+Quantity
+Quantity
+Quantity
+(Amount in millions of Renminbi, unless otherwise stated)
+Increase/(decrease)
+Preference Shares
+As at
+For the year ended 31 December 2021, the movements in the Bank's other equity
+instruments were as follows:
+37.3 Other equity instruments
+37 Share capital, capital reserve and other equity instruments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+As at
+1 January 2021
+210,765,514,846 210,765,514,846
+83,622,276,395 83,622,276,395
+Domestic listed A shares, par value of RMB1.00 per share
+Overseas listed H shares, par value of RMB 1.00 per share
+2020
+(251)
+5,589
+(2,623)
+24,469
+29,492
+2020
+(281)
+Year ended 31 December
+2021
+26,343
+(i)
+As at 31 December
+Exchange differences and other
+Utilised during the year
+The regulatory reserve mainly refers to the reserve amount set aside by BOC Hong Kong
+(Group) Limited (“BOCHK Group”), a subsidiary of the Group, for general banking risks,
+including future losses or other unforeseeable risks. As at 31 December 2021 and 2020,
+the reserve amounts set aside by BOCHK Group were RMB3,866 million and RMB3,105
+million, respectively.
+29,492
+(275)
+(285)
+26,343
+2021
+As at 31 December
+Unit: Share
+The Bank's share capital is as follows:
+37.1 Share capital
+37 Share capital, capital reserve and other equity instruments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+333
+Allowance for credit commitments is measured using the ECL model. Credit commitments were
+mainly under Stage 1, and the transfers in balance between stages were not significant during the
+years ended 31 December 2021 and 2020.
+29,492
+shares)
+V
+(million Carrying
+Domestic
+Bonds (Series 1) (9)
+2021 Undated Capital
+19,995
+19,995
+Bonds (Series 3) (8)
+2020 Undated Capital
+49,989
+29,994
+(7)
+Bonds (Series 2)
+2020 Undated Capital
+39,990
+39,990
+Bonds (Series 1) (6)
+29,994
+2020 Undated Capital
+49,989
+Bonds (Series 2) (10)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+335
+319,505
+42,015
+2021 Undated Capital
+277,490
+199,955
+69,984
+129,971
+Subtotal
+19,995
+19,995
+Total
+39,992
+39,992
+Bonds (Series 1) (5)
+Preference Shares
+Domestic
+72,979
+--730.0
+72,979
+730.0
+(Fourth Tranche) (3)
+(Third Tranche) (2)
+Domestic
+(27,969)
+(280.0)
+280.0
+(Second Tranche) (1)
+Preference Shares
+Preference Shares
+270.0
+26,990
+-- 270.0 26,990
+2019 Undated Capital
+Perpetual Bonds
+119,550
+(280.0) (27,969) 1,197.9
+147,519
+1,477.9
+Subtotal
+19,581
+197.9
+19,581
+197.9
+(Second Tranche) (4)
+Preference Shares
+(Reversal)/losses for the year
+Offshore
+amount shares) amount
+339
+3,440
+52,417
+112,708
+Other
+11,532
+6,362
+Deferred income
+29,492
+26,343
+Provision (3)
+92,236
+21,893
+Lease liabilities (2)
+34,179
+39,685
+Salary and welfare payables (¹)
+78,940
+68,229
+Items in the process of clearance and settlement
+9,670
+19,619
+Total
+436,555
+410,373
+68,798
+4,664
+- Unemployment
+- Annuity
+Pension
+― Medical
+Social insurance
+Staff welfare
+23,909
+Salary, bonus and subsidy
+2021
+Payment
+Accrual
+2021
+31 December
+1 January
+As at
+As at
+Salary and welfare payables
+(1)
+9,932
+Non-life insurance contracts
+132,431
+153,677
+profit or loss and derivative
+Financial instruments at fair value through
+Asset impairment allowances
+12,190
+5,134
+2020
+2021
+Year ended 31 December
+35.4 Breakdowns of deferred income tax credit/(charge) in the income statement are as follows:
+52,417
+44,169
+As at 31 December
+(366)
+11
+Other
+(62)
+(1,557)
+14,268
+(6,702)
+financial instruments
+(61,656)
+(10,908)
+Pension, retirement benefits and salary payables
+Other temporary differences
+Life insurance contracts
+2020
+2021
+As at 31 December
+Insurance liabilities
+36 Other liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+330
+14,268
+(6,702)
+Total
+922
+(2,696)
+(40)
+1,768
+1,196
+31,051
+(4,664)
+1,476
+Payment
+Accrual
+31 December
+1 January
+2020
+As at
+As at
+(1) Salary and welfare payables (Continued)
+Other liabilities (Continued)
+36
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+331
+39,685
+(93,744)
+99,250
+34,179
+2020
+Total (i)
+Salary, bonus and subsidy
+62,377
+2,141
+204
+(4,562)
+4,607
+159
+- Annuity
+Pension
+1,476
+(3,228)
+3,109
+1,595
+Medical
+_
+(4,218)
+4,218
+Social insurance
+Staff welfare
+23,909
+(62,133)
+23,665
+(Charged)/credited to the income statement (Note V.10)
+Charged to other comprehensive income
+679
+(30)
+(4,648)
+(80)
+81
+1
+- Injury at work
+6
+(212)
+213
+5
+10
+(5,603)
+3,527
+2,086
+230
+(6,179)
+6,205
+204
+1,525
+(3,883)
+3,932
+2
+23
+- Maternity insurance
+135
+29
+4,674
+653
+Other
+24
+of labour contract
+Reimbursement for cancellation
+6,126
+(1,708)
+2,052
+5,782
+staff education fee
+Labour union fee and
+30
+(4,946)
+4,940
+36
+Housing funds
+3
+(135)
+3
+38,577
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+(3,495)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+As at 1 January
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+35 Deferred income taxes (Continued)
+35.3 Movements of the deferred income tax are as follows:
+Year ended 31 December
+2021
+2020
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+2020
+Loan commitments (¹)
+with an original maturity of less than 1
+with an original maturity of 1 year or above
+- Contracted but not provided for
+Authorised but not contracted for
+318,393
+262,001
+As at 31 December
+2021
+year
+40.7 Credit commitments
+344
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,898,072
+As at 31 December 2021, the outstanding principal value of the Treasury bonds sold by the
+Bank under obligation to redeem prior to maturity amounted to RMB54,053 million (31
+December 2020: RMB55,597 million). The original maturities of these Treasury bonds vary
+from 3 to 5 years and management expects the amount of redemption through the Bank prior
+to the maturity dates of these bonds will not be material.
+The Bank is entrusted by the MOF to underwrite certain Treasury bonds. The investors of
+these Treasury bonds have a right to redeem the bonds at any time prior to maturity and the
+Bank is committed to redeem these Treasury bonds. The MOF will not provide funding for
+the early redemption of these Treasury bonds on a back-to-back basis but will pay interest
+and repay the principal at maturity. The redemption price is the principal value of the bonds
+plus unpaid interest in accordance with the early redemption arrangement.
+40 Contingent liabilities and commitments (Continued)
+1,417,031
+Bank bill acceptance
+1,044,469
+34,371
+46,723
+- Authorised but not contracted for
+1,992
+3,468
+Intangible assets
+Accepted bills of exchange under letters of credit
+Other
+154,181
+171,018
+Letters of credit issued
+301,602
+378,118
+123,525
+1,035,517
+1,086,152
+Letters of guarantee issued (2)
+1,060,580
+Undrawn credit card limits
+110,517
+14,009
+49,901
+40.5 Operating leases
+40 Contingent liabilities and commitments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+343
+52,884
+38,646
+1,252
+686
+Total
+Investment properties and others
+Contracted but not provided for
+199
+155
+1,242
+The Group acts as lessor in operating leases principally through aircraft leasing undertaken
+by its subsidiary BOC Aviation Limited. Under irrevocable operating lease contracts, the
+minimum lease payments which will be received by the Group under the operating leases for
+existing aircraft and aircraft yet to be delivered amounted to:
+Less than 1 year
+Between 1 to 2 years
+Between 2 to 3 years
+12,529
+11,080
+13,473
+11,765
+- Contracted but not provided for
+12,748
+14,611
+13,153
+55,771
+13,132
+2020
+2021
+As at 31 December
+40.6 Treasury bonds redemption commitments
+Total
+Over 5 years
+Between 4 to 5 years
+Between 3 to 4 years
+11,870
+2020
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+As at 31 December
+38 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+38.3 Dividends (Continued)
+Interest on Perpetual Bonds
+The Bank distributed interest on the 2019 Undated Capital Bonds (Series 1) amounting to
+RMB 1,800 million on 29 January 2021.
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 1) amounting to
+RMB1,360 million on 30 April 2021.
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 2) amounting to
+RMB1,365 million on 17 November 2021.
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 3) amounting to
+RMB940 million on 14 December 2021.
+39 Non-controlling interests
+Non-controlling interests of the subsidiaries of the Group are as follows:
+As at 31 December
+2021
+2020
+BOC Hong Kong (Group) Limited
+93,924
+94,489
+Bank of China Group Investment Limited
+11,847
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+38 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+38.3 Dividends
+11,069
+Dividends for Ordinary Shares
+Ordinary share cash dividend of RMB2.21 per ten shares (pre-tax) in respect of the profit
+for the year ended 31 December 2021 (2020: RMB1.97 per ten shares), amounting to a
+total dividend of RMB65,060 million (pre-tax), based on the number of shares issued
+as at 31 December 2021 will be proposed for approval at the forthcoming 2021 Annual
+General Meeting and the dividend payable is not reflected in the liabilities of the financial
+statements.
+Dividends for Preference Shares
+Dividend distributions of Domestic Preference Shares (Third Tranche and Fourth Tranche)
+were approved by the Board of Directors of the Bank at the Board Meeting held on 29 April
+2021. Dividend of Domestic Preference Shares (Third Tranche) amounting to RMB3,285
+million (pre-tax) was distributed on 28 June 2021. Dividend of Domestic Preference Shares
+(Fourth Tranche) amounting to RMB1, 174.5 million (pre-tax) was distributed on 30 August
+2021.
+Dividend distribution of Offshore Preference Shares (Second Tranche) was approved by the
+Board of Directors of the Bank at the Board Meeting held on 29 October 2021. Dividend of
+Offshore Preference Shares (Second Tranche) amounting to USD101.5 million (after tax)
+was distributed on 4 March 2022 and was recorded in other liabilities as at 31 December
+2021.
+340
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Ordinary share cash dividend of RMB57,994 million (pre-tax) in respect of the profit for the
+year ended 31 December 2020 was approved by the shareholders of the Bank at the Annual
+General Meeting held on 20 May 2021 and was distributed during the year.
+2021
+Tai Fung Bank Limited
+9,878
+As at 31 December
+2021
+2020
+1,050,527
+666,236
+1,778
+2,127
+1,052,305
+668,363
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+40 Contingent liabilities and commitments (Continued)
+40.3 Collateral accepted
+The Group accepts securities as collateral that are permitted to be sold or re-pledged in
+connection with reverse repurchase and derivative agreements with banks and other financial
+institutions. As at 31 December 2021, the fair value of collateral received from banks and
+other financial institutions accepted by the Group amounted to RMB299,137 million (31
+December 2020: RMB151,204 million). As at 31 December 2021, the fair value of the
+collateral that the Group had sold or re-pledged, but was obligated to return, was RMB2,384
+million (31 December 2020: RMB797 million). These transactions are conducted under
+standard terms in the normal course of business.
+40.4 Capital commitments
+Property and equipment
+342
+Total
+Bills
+Debt securities
+Other
+9,395
+8,982
+Total
+341
+125,400
+124,418
+BANK OF CHINA LIMITED
+10,234
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+40 Contingent liabilities and commitments
+40.1 Legal proceedings and arbitration
+As at 31 December 2021, the Group was involved in certain litigation and arbitration cases
+in the regular course of its business. In the Group's regular business operations in different
+countries and regions across the world, give the range and scale of its international presence,
+the Group may be involved in a variety of litigation, arbitration and judicial proceedings
+within different jurisdictions, and the ultimate outcomes of these proceedings involve
+various levels of uncertainty. The management makes provisions for potential losses that
+may arise from these uncertainties based on assessments of potential liabilities, courts'
+judgements or the opinions of legal counsel, and as at 31 December 2021, the balance of
+the provisions was RMB887 million (31 December 2020: RMB725 million), as discussed
+in Note V.36. Based upon the opinions of internal and external legal counsels, the senior
+management of the Group believes that, at the current stage, these matters will not have
+a material impact on the financial position or operating results of the Group. Should
+the ultimate outcomes of these matters differ from the initially estimated amounts, such
+differences will impact the profit or loss in the period during which such a determination is
+made.
+40.2 Assets pledged
+Assets pledged by the Group as collateral mainly for placement, repurchase, short positions,
+derivative transactions with other banks and financial institutions and for local statutory
+requirements are set forth in the table below. These transactions are conducted under
+standard and normal business terms.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+1,442
+Total (3)
+81,817
+210,826
+144,640
+Financial investments
+498,044
+390,508
+Derivative financial assets
+7,407
+18,863
+Loans and advances to customers
+64,341
+85,650
+Due to customers, banks and other financial institutions
+Placements from banks and other financial institutions
+(259,277)
+(256,582)
+(135,319)
+(137,131)
+Derivative financial liabilities
+(8,561)
+(21,294)
+other financial institutions
+32,177
+Placements with and loans to banks and
+101,654
+1,170
+1,028
+(652)
+(229)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.2 Transactions with Huijin and companies under Huijin (Continued)
+(3) Transactions with companies under Huijin
+Companies under Huijin include its equity interests in subsidiaries, associates and joint
+ventures in certain other bank and non-bank entities in the PRC. The Group enters into
+banking transactions with these companies in the normal course of business on commercial
+terms which include mainly purchase and sale of debt securities, money market transactions
+and derivative transactions.
+In the normal course of business, main transactions that the Group entered into with the
+affiliates of Huijin are as follows:
+Transaction balances
+As at 31 December
+2021
+2020
+Due from banks and other financial institutions
+126,104
+2020
+Credit commitments
+Interest income
+Due to customers, banks and
+other financial institutions
+Placements from banks and
+other financial institutions
+0.00%-5.50%
+Year ended 31 December
+2021
+2020
+0.00%-5.20%
+-0.48%-6.50% -0.21%-27.00%
+-0.58%-5.98% -0.05%-5.98%
+0.15%-4.75% 0.18%-9.91%
+-0.60%-5.22% -0.50%-6.00%
+-0.53%-5.50%
+-0.50%-4.80%
+42.3 Transactions with government authorities, agencies, affiliates and other State-controlled
+entities
+The State Council of the PRC government directly and indirectly controls a significant
+number of entities through its government authorities, agencies, affiliates and other State-
+controlled entities. The Group enters into extensive banking transactions with these entities
+in the normal course of business on commercial terms.
+Transactions conducted with government authorities, agencies, affiliates and other State-
+controlled entities include the purchase and redemption of investment securities issued by
+government agencies, underwriting and distribution of treasury bonds issued by government
+agencies through the Group's branch network, foreign exchange transactions and derivative
+transactions, lending, provision of credit and guarantees and deposit placing and taking.
+349
+80,958
+Loans and advances to customers
+Transaction amounts
+Financial investments
+Placements with and loans to banks and
+Interest expense
+348
+Year ended 31 December
+2021
+2020
+14,657
+12,561
+(7,042)
+(4,313)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.2 Transactions with Huijin and companies under Huijin (Continued)
+(3) Transactions with companies under Huijin (Continued)
+Interest rate ranges
+Due from banks and other financial institutions
+other financial institutions
+2021
+47,175
+(18,047)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+40.8 Underwriting obligations
+41
+As at 31 December 2021, the firm commitment in underwriting securities of the Group
+amounted to RMB600 million (31 December 2020: Nil).
+Note to the consolidated statement of cash flows
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents
+comprise the following balances with an original maturity of less than three months:
+As at 31 December
+2021
+2020
+Cash and due from banks and other financial institutions
+400,769
+453,505
+Balances with central banks
+740,092
+587,113
+Placements with and loans to banks and
+other financial institutions
+689,909
+361,872
+(Amount in millions of Renminbi, unless otherwise stated)
+Financial investments
+FOR THE YEAR ENDED 31 DECEMBER 2021
+BANK OF CHINA LIMITED
+178,944
+243,974
+Year ended 31 December
+5,221,154
+4,491,673
+(1)
+(2)
+(3)
+Loan commitments mainly represent undrawn loan facilities agreed and granted to customers.
+Unconditionally revocable loan commitments are not included in loan commitments. As at 31 December
+2021, the unconditionally revocable loan commitments of the Group amounted to RMB338,647 million (31
+December 2020: RMB334,384 million).
+Letters of guarantee issued mainly include financial guarantees and performance guarantees. The
+obligations on the Group to make payments are dependent on the outcome of a future event.
+Risk-weighted assets for credit risk of credit commitments
+The risk-weighted assets for credit risk of the Group are calculated in accordance with the Capital Rules for
+Commercial Banks (Provisional) and other relevant regulations under the advanced capital measurement
+approaches. The amounts are determined by the creditworthiness of the counterparties, the maturity
+characteristics of each type of contract and other factors.
+Credit commitments
+345
+As at 31 December
+2021
+2020
+1,266,950
+1,186,895
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+144,861
+40 Contingent liabilities and commitments (Continued)
+Investment in major State-owned financial
+64.02%
+64.02%
+Wholly State-owned company
+Principal activities
+Unified social credit code
+(2) Transactions with Huijin
+institutions on behalf of the State Council;
+other related businesses approved
+by the State Council
+911000007109329615
+The Group enters into banking transactions with Huijin in the normal course of its business
+on commercial terms. Purchase of the bonds issued by Huijin was in the normal course of
+business and in compliance with the requirements of the related regulations and corporate
+governance.
+Transaction balances
+Investment in debt securities
+Due to Huijin
+Transaction amounts
+Interest income
+Interest expense
+347
+As at 31 December
+2021
+43,659
+92,378
+2020
+37,842
+(40,617)
+Capital shares in the Bank
+Beijing
+Voting rights in the Bank
+Nature
+RMB828,209 million
+Total
+42 Related party transactions
+1,975,631
+1,494,868
+42.1 CIC was established on 29 September 2007 with registered capital of RMB1,550
+billion. CIC is a wholly state-owned company engaging in foreign currency investment
+management. The Group is subject to the control of the State Council of the PRC
+Government through CIC and its wholly owned subsidiary, Huijin.
+The Group entered into banking transactions with CIC in the normal course of its business
+on commercial terms.
+346
+BANK OF CHINA LIMITED
+Location of registration
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+42 Related party transactions (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+PENG Chun
+Legal representative
+Registered capital
+(1) General information of Huijin
+42.2 Transactions with Huijin and companies under Huijin
+Central Huijin Investment Ltd.
+(4,886)
+(1,448,454)
+2,090,165
+9,939
+2,017,915
+33,508
+24,402,659
+(2,980)
+(1,448,315)
+324,480
+22,239,822
+Other segment items:
+Inter-segment net interest (expense)/income
+775
+Income tax expense
+7,546
+(2,660)
+Inter-segment net fee and commission income/(expense)
+487
+395
+692
+1,087
+24,369,151
+(142)
+6,771
+(1,448,454)
+Profit for the year
+4,292,883
+13,796
+4,306,679
+198,520
+3,917,100
+(1,432)
+(41,282)
+205,096
+Segment assets
+19,434,557
+Investments in associates and joint ventures
+19,712
+2,762,985
+858
+Total assets
+19,454,269
+2,763,843
+1,529,898
+12,938
+1,542,836
+Include: non-current assets (2)
+119,001
+27,626
+Segment liabilities
+17,753,122
+2,520,219
+170,894
+1,396,881
+2,090,165
+Capital expenditure
+(66,186)
+1,593
+Corporate
+banking
+Personal
+banking
+Treasury
+operations
+Investment
+banking
+Insurance
+Other
+Elimination
+As at and for the year ended 31 December 2021
+Total
+346,214
+311,480
+188,432
+1,220
+3,914
+4,414
+789,488
+Interest expense
+246,378
+Interest income
+12,133
+43 Segment reporting (Continued)
+V
+26,472
+28,065
+309
+Depreciation and amortisation
+Credit commitments
+19,056
+3,753,654
+1,972
+310,620
+6,097
+145,806
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+8,069
+456,426
+(457)
+(225,490)
+40,507
+27,506
+4,491,673
+(1) Other operating income includes insurance premium income earned, and operating expenses include insurance benefits and claims.
+(2) Non-current assets include property and equipment, investment properties, right-of-use assets, intangible assets and other long-term assets.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+838
+507,083
+7,388
+6,373
+343
+50,250
+Net fee and commission income
+58,157
+8,942
+5,720
+14,662
+4,135
+(1,432)
+75,522
+Net trading (losses)/gains
+(13,118)
+(4,208)
+5,293
+11,086
+1,177
+8,055
+Net gains on transfers of financial asset
+4,965
+4,063
+142
+4,205
+5,793
+377
+2,401
+(4,539)
+(16,760)
+19,483
+(344,152)
+362,993
+31,187
+(176,401)
+37,560
+15,365
+415,918
+(1,950)
+67,187
+7,846
+19,201
+6,085
+(3,833)
+88,640
+Fee and commission expense
+(9,030)
+(2,413)
+(2,126)
+11,355
+9,547
+Other operating income (1)
+14,727
+(2,407)
+(2,574)
+(4,981)
+(6,413)
+(119,016)
+Operating profit
+188,925
+31,109
+18,798
+(107,622)
+49,907
+246,220
+Share of results of associates and joint ventures
+(185)
+(164)
+507
+Profit before income tax
+188,740
+30,945
+19,305
+7,388
+Impairment losses on assets
+(202,411)
+2,356
+16,999
+26,855
+43,854
+948
+(924)
+58,605
+Operating income
+436,634
+66,984
+44,383
+111,367
+22,002
+(2,356)
+567,647
+Operating expenses
+(1)
+(140,087)
+(33,468)
+(23,011)
+(56,479)
+(8,201)
+158
+(137,540)
+(24,778)
+(139)
+Segment assets
+10,117,500
+6,179,877
+9,521,320
+92,943
+231,683
+Investments in associates and joint ventures
+5,779
+637,470
+30,130
+(94,154)
+(140)
+26,686,639
+Total assets
+10,117,500
+6,179,877
+9,521,320
+98,722
+231,683
+667,600
+(94,294)
+227,339
+Profit for the year
+(49,281)
+Income tax expense
+78,812
+5,847
+1,634
+21,383
+(23)
+275,142
+Share of results of associates and joint ventures
+339
+1,273
+35,769
+26,722,408
+(134)
+Profit before income tax
+64,493
+102,996
+78,812
+6,186
+1,634
+22,656
+(157)
+276,620
+1,478
+Segment liabilities
+12,303,472
+8,427,530
+3,998
+4,615
+212
+212
+158
+20,967
+Depreciation and amortisation
+9,225
+11,027
+Capital expenditure
+2,698
+280
+6,082
+(931)
+30,162
+28,792
+Credit commitments
+3,956,835
+1,264,319
+5,221,154
+(36,786)
+411
+102,996
+(433)
+(1,612)
+3,131,945
+62,915
+211,832
+328,198
+(94,037)
+24,371,855
+Other segment items:
+Inter-segment net interest income/(expense)
+16,438
+360
+48,690
+260
+9
+(436)
+3
+Inter-segment net fee and commission income/(expense)
+472
+1,791
+59
+(637)
+(64,964)
+64,493
+Operating profit
+(104,220)
+(914)
+(2,640)
+(3,585)
+(143)
+2,635
+(13,027)
+Net fee and commission income/(expense)
+29,830
+32,165
+(6,998)
+14,326
+(3,585)
+1,944
+(433)
+81,426
+Net trading gains/(losses)
+1,972
+(347)
+13,255
+500
+7,179
+(41)
+(1,382)
+94,453
+(84)
+(6,549)
+66,189
+(364,346)
+Net interest income/(expense)
+169,813
+173,940
+78,610
+1,081
+Fee and commission expense
+3,830
+3
+425,142
+Fee and commission income
+31,212
+39,163
+15,240
+9,819
+2,087
+(3,068)
+(2,135)
+(109,822)
+12,874
+28,291
+36,021
+36,125
+(3,571)
+605,717
+Operating expenses
+(71,074)
+(88,676)
+(21,784)
+(2,984)
+9,101
+(34,357)
+3,749
+(226,355)
+Impairment losses on assets
+(68,087)
+(7,341)
+(270)
+(30)
+(3,513)
+(201)
+(11,229)
+78
+107,937
+203,654
+359
+59
+Net gains on transfers of financial asset
+1,458
+206
+1,262
+21
+237
+13
+216,450
+3,197
+581
+10,486
+484
+320
+35,580
+23,429
+(3,219)
+67,661
+Operating income
+Other operating income
+(23,474)
+-
+(310,089)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42
+Related party transactions (Continued)
+Name
+Directly held (1)
+42.8 Transactions with subsidiaries (Continued)
+The general information of the principal subsidiaries is as follows:
+Place of
+incorporation
+and operation
+Date of
+incorporation/
+establishment
+(1,209)
+Paid-in
+capital
+(in millions)
+equity held
+(%)
+Voting right
+(%)
+BOC Hong Kong (Group) Limited
+Hong Kong, China
+12 September 2001
+HKD34,806
+100.00
+354
+BOC International Holdings Limited (3)
+54
+Hong Kong, China
+Effective
+(2,111)
+2,304
+2,747
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.7 Transactions with Connected Natural Persons
+As at 31 December 2021, the Bank's balance of loans to the connected natural persons
+as defined in the "Administration of Connected Transactions between Commercial Banks
+and Their Insiders and Shareholders" issued by the former China Banking Regulatory
+Commission and the "Administrative Measures for the Disclosure of Information of Listed
+Companies" issued by China Securities Regulatory Commission totalled RMB352 million
+(31 December 2020: RMB365 million) and RMB14 million (31 December 2020: RMB20
+million), respectively.
+42.8 Transactions with subsidiaries
+The main transactions with subsidiaries are as follows:
+Transaction balances
+As at 31 December
+2021
+2020
+Due from banks and other financial institutions
+98,768
+31,487
+Placements with and loans to banks and
+other financial institutions
+273,438
+184,792
+2020
+2021
+Year ended 31 December
+353
+Interest expense
+Interest income
+10 July 1998
+Transaction amounts
+(40,061)
+other financial institutions
+Placements from banks and
+(190,167)
+(200,982)
+Due to banks and other financial institutions
+(28,057)
+(Amount in millions of Renminbi, unless otherwise stated)
+HKD3,539
+Bank of China Group Insurance Company Limited
+RMB 10,800
+92.59
+Indirectly held
+Bank of China Hong Kong (Holdings) Limited (2)
+Hong Kong, China
+12 September 2001
+Bank of China (Hong Kong) Limited (3)
+BOC Credit Card (International) Limited
+Hong Kong, China
+Hong Kong, China
+16 October 1964
+9 September 1980
+HKD52,864
+HKD43,043
+66.06
+66.06
+HKD565
+18 June 2020
+66.06
+Hong Kong, China
+1 December 1997
+HKD200
+77.60
+Singapore
+25 November 1993
+USD1,158
+70.00
+Principal business
+Holding company
+Investment banking
+Insurance services
+Investment holding
+Commercial banking
+Commercial banking
+BOC Group Trustee Company Limited (3)
+BOC Aviation Limited (2)
+Chongqing
+BOC Financial Leasing Co., Ltd.
+100.00
+Hong Kong, China
+23 July 1992
+HKD3,749
+100.00
+Bank of China Group Investment Limited
+Hong Kong, China
+18 May 1993
+HKD34,052
+100.00
+Tai Fung Bank Limited
+Macao, China
+1942
+MOP1,000
+50.31
+Bank of China (UK) Limited
+United Kingdom
+BOC Insurance Company Limited
+RMB 10,000
+1 July 2019
+Beijing
+BOC Wealth Management Co., Ltd.
+100.00
+RMB14,500
+100.00
+100.00
+100.00
+GBP250
+24 September 2007
+5 January 2005
+16 November 2017
+Beijing
+BOC Financial Asset Investment Company Limited
+Beijing
+RMB4,535
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+351
+42
+Related party transactions (Continued)
+42.4 Transactions with associates and joint ventures (Continued)
+The general information of principal associates and joint ventures is as follows:
+Name
+Place of
+incorporation/
+establishment
+Unified Social
+Credit Code
+Effective
+equity held
+Voting right
+Paid-in capital
+(%)
+(Amount in millions of Renminbi, unless otherwise stated)
+(%)
+China Insurance Investment Fund CO., Ltd.
+PRC
+91110102MA01W7X36U
+25.70
+25.70
+RMB45,000
+BOC International (China) Co., Ltd.
+PRC
+91310000736650364G
+33.42
+33.42
+RMB2,778
+Ying Kou Port Group CORP.
+Principal business
+(in millions)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(13,312)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.4 Transactions with associates and joint ventures
+The Group enters into banking transactions with associates and joint ventures in the normal
+course of business on commercial terms. These include loans and advances, deposit taking
+and other normal banking businesses. The main transactions that the Group entered into with
+associates and joint ventures are as follows:
+Transaction balances
+As at 31 December
+2021
+2020
+Loans and advances to customers
+18,935
+18,502
+Due to customers, banks and other financial institutions
+Credit commitments
+(316)
+772
+674
+(374)
+2020
+2021
+Year ended 31 December
+Investment in non-securities business; equity investment;
+investment management and consulting
+Securities brokerage; securities investment consulting; financial
+advisory services related to securities trading and securities
+investment activities; securities underwriting and sponsorship;
+securities proprietary business; securities assets management;
+securities investment fund sales agency; margin financing and
+securities lending; distribution of financial products; management
+of publicly offered securities investment funds
+Terminals and other port facilities services, cargo handling,
+warehousing services, ship and port services, leasing and
+maintenance services of port facilities and equipment and port
+machinery, etc.
+Investment in nuclear power projects and related industries; assets
+management; investment consulting
+RMB1,568 Chemical industry, mainly produces and sells all kinds of fertilizers
+and chemical products
+Investment
+Real estate development and operations; property management;
+non-residential real estate leasing; parking services
+350
+Interest income
+Transaction amounts
+23,144
+27,408
+(10,641)
+(16,285)
+Interest expense
+Investment holding
+Equity investment, project investment, investment management,
+investment consulting
+PRC
+91340202MA2RENJEX9
+21.20
+28.57
+N/A
+(1)
+In accordance with the respective articles of association, the Group has significant influence or joint control over these companies.
+Equity investment; industrial investment
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.5 Transactions with the Annuity Fund
+Apart from the obligations for defined contributions to the Annuity Fund and normal
+banking transactions, no other transactions were conducted between the Group and the
+Annuity Fund for the years ended 31 December 2021 and 2020.
+42.6 Transactions with key management personnel
+Key management personnel are those persons having authority and responsibility for
+planning, directing and controlling the activities of the Group, directly or indirectly,
+including Directors and Executive Officers.
+352
+The total compensation packages for the key management personnel for the year ended 31 December 2021
+have not yet been finalised in accordance with the relevant regulations of the PRC authorities. The amount
+of the compensation not provided for is not expected to have any significant impact on the Group's 2021
+financial statements. The final compensation for the year ended 31 December 2021 will be disclosed in a
+separate announcement when determined.
+16
+12
+(1)
+Total
+PRC
+1
+2020
+2021
+Year ended 31 December
+Compensation for short-term employment benefits (¹)
+Compensation for post-employment benefits
+The key management compensation for the years ended 31 December 2021 and 2020
+comprises:
+The Group enters into banking transactions with key management personnel in the normal
+course of business. During the years ended 31 December 2021 and 2020, there were no
+material transactions and balances with key management personnel on an individual basis.
+15
+Insurance services
+Wuhu Yinsheng Special Steel Investment
+Management Limited Partnership
+50.00
+Note (1)
+91210800121119657C
+8.86
+Note (1)
+RMB20,000
+CGN Phase I Private Equity Fund Company Limited
+91110000717827478Q
+20.00
+20.00
+RMB 100
+Sichuan Lutianhua Co., Ltd.
+PRC
+91510500711880825C
+16.44
+Note (1)
+Graceful Field Worldwide Limited
+BVI
+N/A
+9.00
+PRC 91310000MA1FL7AXXR
+National Green Development Fund
+50.00
+N/A
+BVI
+USD0.00002
+RMB88,500
+Wkland Investments II Limited
+Note (1)
+75.00
+PRC 91310000MA1H3FM95L
+Shanghai Chenggang Real Estate Co., Ltd.
+Note (1)
+80.00
+USD0.0025
+RMB2,400
+Debt-to-equity swaps and
+other supporting businesses.
+Issuance of wealth management products,
+investment and management of
+entrusted assets for investors
+Financial leasing
+PRC
+Credit card services
+Investment holding
+Aircraft leasing
+1,478
+Profit before income tax
+218,529
+25,244
+20,601
+45,845
+12,188
+58
+276,620
+Income tax expense
+(49,281)
+Profit for the year
+227,339
+Segment assets
+699
+21,471,302
+20,544
+2,951,526
+598
+Total assets
+21,491,846
+Include: non-current assets (2)
+117,571
+Segment liabilities
+19,607,634
+2,952,124
+26,383
+2,709,070
+1,659,173
+14,627
+1,673,800
+4,610,699
+2,292,838
+(1,688,200)
+26,686,639
+Investments in associates and joint ventures
+940
+(241)
+779
+53,961
+52,947
+106,908
+20,312
+(2,548)
+605,717
+Operating expenses
+(1)
+(163,673)
+(26,698)
+(30,747)
+(57,445)
+(7,843)
+2,606
+(226,355)
+Impairment losses on assets
+(99,622)
+Share of results of associates and joint ventures
+275,142
+58
+12,188
+45,146
+19,661
+169,999
+1,521,145
+25,485
+Operating profit
+(104,220)
+(281)
+(4,317)
+(2,539)
+(1,778)
+217,750
+481,045
+15,225
+4,625,924
+196,382
+4,230,215
+(1,688,200)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+43 Segment reporting (Continued)
+358
+As at and for the year ended 31 December 2020
+Hong Kong (China), Macao (China) and Taiwan (China)
+Chinese
+BOCHK
+Other countries
+mainland
+Group
+Other
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Subtotal
+Elimination
+Total
+Interest income
+Interest expense
+Net interest income
+Fee and commission income
+673,082
+44,499
+29,847
+74,346
+32,125
+(19,483)
+760,070
+Holding company
+Commercial banking
+and regions
+BANK OF CHINA LIMITED
+5,221,154
+30,162
+28,792
+35,769
+26,722,408
+9,021
+2,222,113
+(4,275)
+(1,688,107)
+318,699
+24,371,855
+Other segment items:
+Inter-segment net interest (expense)/income
+(3,667)
+541
+232
+370
+Capital expenditure
+13,400
+1,423
+4,376
+601
+15,070
+4,917
+971
+(1,250)
+150
+(682)
+(212,361)
+535,677
+880
+269
+16,493
+8,239
+464,515
+171,201
+2,292,838
+293,314
+Credit commitments
+6,406
+1,833
+20,355
+Depreciation and amortisation
+(1,353)
+4,433,323
+Operating income
+Inter-segment net fee and commission income
+(1,192)
+Services to corporate customers, government authorities and
+financial institutions including current accounts, deposits, overdrafts, loans, payments and
+settlements, trade-related products and other credit facilities, foreign currency, derivative
+products and wealth management products.
+-
+Personal banking - Services to retail customers including savings deposits, personal loans,
+credit cards and debit cards, payments and settlements, wealth management products and
+funds and insurance agency services.
+Treasury operations
+Consisting of foreign exchange transactions, customer-based interest
+rate and foreign exchange derivative transactions, money market transactions, proprietary
+trading and asset and liability management. The results of this segment include the inter-
+segment funding income and expenses, results from interest-bearing assets and liabilities;
+and foreign currency translation gains and losses.
+Investment banking
+Consisting of debt and equity underwriting and financial advisory,
+sales and trading of securities, stock brokerage, investment research and asset management
+services, and private equity investment services.
+Underwriting of general and life insurance business and insurance agency
+Insurance
+services.
+Other
+Other operations of the Group comprise investment holding business, leasing
+business and other miscellaneous activities, none of which constitutes a separately
+reportable segment.
+356
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Corporate banking
+FOR THE YEAR ENDED 31 DECEMBER 2021
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+43 Segment reporting (Continued)
+As at and for the year ended 31 December 2021
+Hong Kong (China), Macao (China) and Taiwan (China)
+Chinese
+BOCHK
+Other countries
+mainland
+Group
+Other
+Subtotal
+and regions
+Elimination
+(Amount in millions of Renminbi, unless otherwise stated)
+Business segments
+Corporate and personal banking services are provided in
+other countries and regions. Significant locations include New York, London, Singapore and
+Tokyo.
+Other countries and regions
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+67,661
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+42 Related party transactions (Continued)
+42.8 Transactions with subsidiaries (Continued)
+43
+(1)
+(2)
+(3)
+These directly held principal subsidiaries are unlisted companies. All holdings are in the ordinary share
+capital of the undertaking concerned, and the ability of the subsidiaries to transfer funds to the Group and
+the Bank is not restricted.
+BOCHK (Holdings) and BOC Aviation Limited are listed on the Stock Exchange of Hong Kong Limited.
+BOCHK and BOC International Holdings Limited ("BOCI”), in which the Group holds 66.06% and 100%
+of their equity interests, respectively, hold 66% and 34% equity interests of BOC Group Trustee Company
+Limited, respectively.
+For certain subsidiaries listed above, the discrepancy between the percentage of voting
+rights and the percentage of effective equity holding is mainly due to the impact of indirect
+holdings.
+Segment reporting
+Hong Kong (China), Macao (China) and Taiwan (China) — Corporate banking, personal
+banking, treasury operations, investment banking and insurance services are performed in
+Hong Kong (China), Macao (China) and Taiwan (China). The business of this segment is
+centralised in BOCHK Group.
+Corporate banking, personal banking, treasury operations and
+-
+Chinese mainland
+Geographical segments
+43 Segment reporting (Continued)
+Total
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+355
+Measurement of segment assets, liabilities, income, expenses, results and capital expenditure
+is based on the Group's accounting policies. The segment information presented includes
+items directly attributable to a segment as well as those that can be allocated on a reasonable
+basis. Funding is provided to and from individual business segments through treasury
+operations as part of the asset and liability management process. The pricing of these
+transactions is based on market rates. The transfer price takes into account the specific
+features and maturities of the products. Internal transactions are eliminated on consolidation.
+The Group regularly examines the transfer price and adjusts the price to reflect the current
+situation.
+The Group manages the business from both geographic and business perspectives. From the
+geographic perspective, the Group operates in three principal regions: Chinese mainland;
+Hong Kong (China), Macao (China) and Taiwan (China); and other countries and regions.
+From the business perspective, the Group provides services through six main business
+segments: corporate banking, personal banking, treasury operations, investment banking,
+insurance and other operations.
+(Amount in millions of Renminbi, unless otherwise stated)
+Interest income
+insurance services, etc. are performed in Chinese mainland.
+Net interest income
+Net fee and commission income
+64,340
+9,262
+5,218
+14,480
+3,959
+(1,353)
+81,426
+357
+57
+Net trading gains
+19,996
+2,261
+5,320
+717
+(3)
+28,291
+236
+49,556
+35,352
+Interest expense
+14,204
+19,061
+(13,027)
+Other operating income (1)
+217
+1,238
+314
+924
+1,742
+Net gains on transfers of financial asset
+3,197
+6,730
+7,581
+(4,946)
+789,488
+(364,346)
+12,243
+(6,867)
+(23,159)
+(6,893)
+(346,563)
+375,906
+(12,243)
+57,212
+(2,224)
+23,009
+Fee and commission income
+722,469
+34,203
+22,050
+27,310
+(16,266)
+6,743
+Fee and commission expense
+(2,492)
+(2,454)
+94,453
+(8,083)
+19,426
+7,672
+6,183
+11,754
+76,927
+425,142
+15,183
+34,053
+(12,587)
+amounts of consolidated consolidated
+financial of financial
+statement
+Cash
+As at 31 December 2021
+recognised statement
+liabilities
+Financial
+collateral
+Net
+amount
+position
+position instruments*
+pledged
+of financial position
+of financial
+consolidated statement
+16,984
+Amounts
+presented
+in the
+72,926
+Derivatives
+Total
+(12,035)
+60,891
+(41,064)
+(2,843)
+366
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+46 Offsetting financial assets and financial liabilities (Continued)
+Financial liabilities subject to offsetting, enforceable master netting arrangements and
+similar agreements are analysed as below:
+Gross
+amounts
+Gross offset in the
+Amounts not set off in the
+29,845
+(176)
+(20,526)
+62,412
+(37,220)
+(14,196)
+10,996
+Repurchase agreements
+176
+176
+62,412
+Other liabilities
+(12,035)
+971
+971
+Total
+75,594
+4,576
+(12,035)
+13,006
+Derivatives
+As at 31 December 2020
+5,133
+(4,701)
+4,618
+Repurchase agreements
+55,816
+55,816
+(55,816)
+Other liabilities
+7,799
+(7,284)
+515
+515
+Total
+93,460
+(7,284)
+86,176
+(76,342)
+(4,701)
+29,845
+4,576
+5,538
+16,611
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+46 Offsetting financial assets and financial liabilities
+Financial assets subject to offsetting, enforceable master netting arrangements and similar
+agreements are analysed as below:
+365
+Gross
+presented
+Amounts Amounts not set off in the
+consolidated statement
+Gross offset in the
+in the
+of financial position
+recognised statement
+amounts of consolidated consolidated
+amounts
+The Group's consolidated structured entities mainly consist of open-end funds, private
+equity funds, trusts for asset-backed securities, and special-purpose companies. The Group
+controls these entities because the Group has power over, is exposed to, or has rights to
+variable returns from its involvement with these entities and has the ability to use its power
+over these entities to affect the amount of the Group's returns. Except for providing financial
+guarantees for the companies established solely for financing purposes, the Group does not
+provide financial or other support to the other consolidated structured entities.
+45.2 Consolidated structured entities
+104,366
+63,559
+125,081
+125,081
+As at 31 December 2020
+Fund investments
+57,099
+57,099
+57,099
+Investment trusts and asset management plans
+2,914
+8,407
+11,321
+11,321
+Asset-backed securitisations
+40,633
+58,195
+104,366
+financial of financial of financial
+(12,035)
+statement
+assets
+55,238
+(7,284)
+47,954
+(36,900)
+(3,262)
+7,792
+As at 31 December 2020
+Total
+Derivatives
+52,457 (37,206) (2,843)
+12,408
+Reverse repo agreements
+3,858
+3,858
+(3,858)
+Other assets
+52,457
+2,073
+2,073
+(7,284)
+position
+Financial
+position instruments*
+collateral
+received
+Net
+amount
+As at 31 December 2021
+Derivatives
+29,313
+29,313
+(20,332) (3,262)
+5,719
+Reverse repo agreements
+16,568
+16,568
+(16,568)
+Other assets
+9,357
+Cash
+(37,396)
+277,490
+11,967
+1,945
+571
+Derivative financial liabilities
+65,892
+164,604
+Due to customers
+15,956,260
+Financial liabilities held for trading
+14,787,841
+1,283,648
+1,140,777
+Current tax liabilities
+Retirement benefit obligations
+40,325
+2,095
+50,980
+2,199
+Deferred income tax liabilities
+Bonds issued
+393,521
+356,765
+Placements from banks and other financial institutions
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+47
+The Bank's statement of financial position and changes in equity (Continued)
+47.1 The Bank's statement of financial position (Continued)
+LIABILITIES
+As at 31 December
+2021
+2020
+Due to banks and other financial institutions
+2,751,227
+1,960,349
+Due to central banks
+883,097
+838,054
+Bank notes in circulation
+8,970
+9,226
+596
+(Amount in millions of Renminbi, unless otherwise stated)
+Other liabilities
+567
+176,000
+261,170
+Undistributed profits
+741,063
+666,612
+Total equity
+2,008,271
+1,838,794
+292,549
+Total equity and liabilities
+21,363,483
+Approved and authorised for issue by the Board of Directors on 29 March 2022.
+LIU Liange
+Director
+369
+LIU Jin
+Director
+23,546,823
+General and regulatory reserves
+188,832
+208,319
+Total liabilities
+21,538,552
+19,524,689
+EQUITY
+Share capital
+294,388
+294,388
+Other equity instruments
+319,505
+67,844
+Capital reserve
+132,331
+132,590
+Other comprehensive income
+20,116
+17,712
+Statutory reserves
+187,732
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+735,856
+Balances with central banks
+2,066,094
+1,895,772
+Placements with and loans to banks and
+other financial institutions
+1,441,375
+684,360
+1,065,541
+bank notes issued
+9,080
+Precious metals
+267,913
+9,083
+214,310
+Derivative financial assets
+70,379
+Government certificates of indebtedness for
+2020
+As at 31 December
+2021
+other financial institutions
+* Including non-cash collateral.
+Financial assets and financial liabilities are offset and the net amount is reported in the
+statement of financial position when there is a legally enforceable right to offset the
+recognised amounts and there is an intention to settle on a net basis, or realise the asset and
+settle the liability simultaneously ("the offset criteria”).
+Derivatives and reverse repo/repurchase agreements included in the amounts are not set off
+in the consolidated statement of financial position where:
+•
+the counterparty has an offsetting exposure with the Group and a master netting or
+similar arrangement (including ISDA master agreement and Global Master Netting
+Agreement) is in place with a right of setting off only in the event of default,
+insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and
+cash and non-cash collateral have been received/pledged in respect of the transactions
+described above.
+367
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+47
+The Bank's statement of financial position and changes in equity
+47.1 The Bank's statement of financial position
+ASSETS
+Cash and due from banks and
+132,878
+Loans and advances to customers, net
+13,652,081
+12,286,706
+202,275
+Property and equipment
+79,534
+81,661
+Investment properties
+1,984
+2,185
+Deferred income tax assets
+51,892
+59,767
+Other assets
+102,586
+112,152
+Total assets
+368
+23,546,823
+21,363,483
+202,265
+(14,196)
+Consolidated structured entities
+8,379
+Financial investments
+4,768,450
+4,422,013
+financial assets at fair value through profit or loss
+287,927
+264,746
+financial assets at fair value through other
+comprehensive income
+1,486,942
+1,315,891
+- financial assets at amortised cost
+2,993,581
+2,841,376
+Investments in subsidiaries
+140,451
+135,553
+Investments in associates and joint ventures
+7,731
+45,880
+627
+Asset-backed securitisations
+34,905
+23,125
+(3,605)
+567,647
+Operating expenses
+(63,314)
+(78,897)
+6,112
+(17,445)
+(33,270)
+(10,157)
+3,668
+(202,411)
+Impairment losses on assets
+(79,872)
+(29,136)
+(2,996)
+67,886
+221,634
+217,590
+1,215
+102
+7,980
+1
+243
+6
+9,547
+Other operating income
+831
+7,284
+1,039
+287
+31,962
+20,402
+(3,200)
+58,605
+Operating income
+(8,223)
+Net gains on transfers of financial asset
+(12)
+(1,789)
+1,586
+11,060
+63
+246,378
+Income tax expense
+(41,282)
+Profit for the year
+3,446
+205,096
+9,251,427
+5,641,051
+8,684,296
+Investments in associates and joint ventures
+99,425
+5,585
+204,290
+593,454
+27,989
+Segment assets
+42,218
+113,601
+74,404
+65
+(119,016)
+Operating profit
+74,404
+113,601
+42,218
+3,104
+1,586
+11,179
+128
+246,220
+Share of results of associates and joint ventures
+342
+(119)
+(65)
+158
+Profit before income tax
+(49)
+Total assets
+8,055
+3,571
+340,794
+294,134
+190,422
+1,888
+3,525
+4,053
+(74,746)
+Interest income
+Interest expense
+(111,965)
+(142,905)
+(403)
+(105)
+(7,116)
+74,938
+760,070
+(344,152)
+(156,596)
+Total
+Elimination
+Other
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+43 Segment reporting (Continued)
+As at and for the year ended 31 December 2020
+360
+Corporate
+Personal
+banking
+banking
+Treasury
+operations
+Investment
+banking
+Insurance
+Net interest income/(expense)
+(46)
+184,198
+47,517
+(13,118)
+Net fee and commission income/(expense)
+29,020
+30,982
+13,304
+4,071
+(3,513)
+2,501
+2,209
+75,522
+Net trading gains/(losses)
+2,326
+1,097
+(1,954)
+268
+2,793
+(551)
+(131)
+(3,514)
+(1,800)
+1,485
+3,420
+(3,063)
+192
+415,918
+Fee and commission income
+30,304
+37,241
+15,935
+5,871
+1
+2,340
+88,640
+Fee and commission expense
+(1,284)
+(6,259)
+(2,631)
+182,169
+9,251,427
+5,641,051
+8,684,296
+For the year ended 31 December 2021, the above-mentioned management fees, commission
+and custodian fees amounted to RMB11,435 million (2020: RMB8,499 million).
+As at 31 December 2021, the balance of interest and commission receivable held by the
+Group in the above-mentioned structured entities is not material. For the purpose of asset-
+liability management, wealth management products may require short-term financing from
+the Group and other banks. The Group is not contractually obliged to provide financing.
+After internal risk assessment, the Group may enter into repurchase and placement
+transactions with these wealth management products in accordance with market principles.
+For the year ended 31 December 2021, the maximum balance of such financing provided
+by the Group to the unconsolidated wealth management products was RMB62,120 million
+(2020: RMB132,205 million). Such financing provided by the Group was included in
+"Placements with and loans to banks and other financial institutions". As at 31 December
+2021, the balance of the above transactions was RMB2,600 million (31 December 2020:
+RMB18,580 million). The maximum exposure to loss of those placements approximated to
+their carrying amount.
+363
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+As at 31 December 2021, the balance of unconsolidated wealth management products
+sponsored by the Group amounted to RMB1,710,750 million (31 December 2020:
+RMB1,388,904 million). The balance of unconsolidated publicly offered funds and
+asset management plans sponsored by the Group amounted to RMB487,438 million (31
+December 2020: RMB486,880 million).
+V
+45 Interests in structured entities (Continued)
+45.1 Interests in unconsolidated structured entities (Continued)
+Structured entities sponsored by the Group (Continued)
+In July 2020, the regulatory authorities made a decision on extending the transition
+period for the Guiding Opinions on Regulating Asset Management Business of Financial
+Institutions to the end of 2021 and encouraged orderly disposal of legacy investments in
+a variety of ways. As at 31 December 2021, the Group had completed the rectification of
+wealth management products as scheduled.
+In addition, the total carrying amount as at the transfer date of credit assets transferred by
+the Group into the unconsolidated structured entities was RMB3,476 million for the year
+ended 31 December 2021 (2020: RMB1,230 million). For the description of the portion of
+asset-backed securities issued by the above structured entities and held by the Group, refer
+to Note V.44.
+364
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+In conducting the asset management business in Chinese mainland, the Group established
+various structured entities to provide customers specialised investment opportunities within
+well-defined objectives, including wealth management products, publicly offered funds and
+asset management plans. The Group earned management fee, commission and custodian fee
+in return.
+The interests held by the Group in unconsolidated structured entities are mainly as follows:
+Structured entities sponsored by the Group
+45.1 Interests in unconsolidated structured entities
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+44 Transfers of financial assets (Continued)
+Credit assets transfers
+The Group enters into credit asset transfers in the normal course of business during which it
+transfers credit assets to special purpose entities which in turn issue asset-backed securities
+or fund shares to investors. The Group may acquire some asset-backed securities and fund
+shares at the subordinated tranche level, and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to
+derecognise the associated credit assets by evaluating the extent to which it retains the risks
+and rewards of the assets.
+With respect to the credit assets that were securitised and qualified for derecognition,
+the Group derecognises the transferred credit assets in their entirety. The corresponding
+total carrying amount of asset-backed securities held by the Group in the securitisation
+transactions was RMB680 million as at 31 December 2021 (31 December 2020: RMB760
+million), which also approximates the Group's maximum exposure to loss.
+For those in which the Group has neither transferred nor retained substantially all the risks
+and rewards of the transferred credit assets, and retained control of the credit assets, the
+transferred credit assets are recognised in the statement of financial position to the extent
+of the Group's continuing involvement. The carrying amount at the time of transfer of
+the original credit assets, which the Group determined that it has continuing involvement
+through acquiring some tranches, was RMB46,442 million for this year (2020: RMB 15,365
+million) and the carrying amount of assets that the Group continues to recognise in the
+statement of financial position was RMB21,579 million as at 31 December 2021 (31
+December 2020: RMB15,244 million).
+362
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Interests in structured entities
+The Group is principally involved with structured entities through financial investments,
+asset management and credit assets transfers. These structured entities generally finance the
+purchase of assets by issuing securities or by other means. The Group determines whether or
+not to consolidate these structured entities depending on whether the Group has control over
+them.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+V
+income
+cost
+Total
+loss
+Structured entity type
+As at 31 December 2021
+Fund investments
+or loss
+68,914
+68,914
+Investment trusts and asset management plans
+2,745
+3,220
+6,303
+12,268
+12,268
+68,914
+exposure to
+amortised
+profit comprehensive
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+45 Interests in structured entities (Continued)
+45.1 Interests in unconsolidated structured entities (Continued)
+Structured entities sponsored by other financial institutions
+The interests held by the Group in the structured entities sponsored by other financial
+institutions through direct investments are set out as below:
+Financial
+Financial
+assets at
+assets at
+fair value
+fair value
+through
+Financial
+through
+other
+assets at
+Maximum
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+361
+13,550
+310
+14
+(914)
+192
+Inter-segment net fee and commission income/(expense)
+1,759
+114
+(72,651)
+(598)
+417
+(550)
+Capital expenditure
+Depreciation and amortisation
+Credit commitments
+3,620
+4,137
+(1,769)
+52,337
+20,712
+Inter-segment net interest income/(expense)
+105,010
+204,290
+621,443
+(104,792)
+(66)
+(104,858)
+24,369,151
+33,508
+24,402,659
+Segment liabilities
+10,376,544
+7,461,553
+3,915,554
+72,597
+185,310
+332,963
+(104,699)
+22,239,822
+Other segment items:
+192
+179
+116
+32,263
+The following table analyses the carrying amount of the above-mentioned financial assets
+transferred to third parties that did not qualify for derecognition and their associated
+financial liabilities:
+As at 31 December 2021
+Carrying Carrying
+amount of amount of
+As at 31 December 2020
+Carrying
+amount of
+Carrying
+amount of
+transferred
+associated
+transferred
+associated
+assets
+liabilities
+assets
+liabilities
+Repurchase agreements
+6,655
+6,398
+13,248
+Transferred financial assets that do not qualify for derecognition mainly include
+debt securities held by counterparties as collateral under repurchase agreements. The
+counterparties are allowed to sell or re-pledge those securities in the absence of default by
+the Group, but have an obligation to return the securities upon maturity of the contract.
+If the value of securities increases or decreases, the Group may in certain circumstances,
+require counterparties or be required by counterparties to pay additional cash collateral.
+The Group has determined that the Group retains substantially all the risks and rewards of
+these securities and therefore has not derecognised them. In addition, the Group recognises a
+financial liability for cash received.
+11,357
+Repurchase agreements
+44 Transfers of financial assets
+8,665
+10,630
+2,532
+404
+277
+5,712
+(714)
+40,507
+27,506
+3,242,275
+1,249,398
+4,491,673
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+The Group enters into transactions in the normal course of business by which it transfers
+recognised financial assets to third parties or to special purpose entities. In some cases
+where these transferred financial assets qualify for derecognition, the transfers may give rise
+to full or partial derecognition of the financial assets concerned. In other cases where the
+transferred assets do not qualify for derecognition as the Group has retained substantially all
+the risks and rewards of these assets, the Group continues to recognise the transferred assets.
+(3,052)
+BANK OF CHINA LIMITED
+(68,645)
+Non-derivative liabilities
+Non-derivative assets
+As at 31 December 2021
+(1) The Group exposed to different interbank offered rates (“IBORS”), predominantly US
+dollar Libor. The following table contains details of financial instruments that Group's
+commercial banking business holds at 31 December 2021 which reference USD
+LIBOR and have not yet transitioned to an alternative interest rate benchmark:
+The Group monitors the risks related to IBOR reform, continuously monitors the risk
+exposure and converts existing contracts.
+IBOR Reform
+48
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,838,794
+666,612
+261,170
+188,832
+17,712
+132,590
+277,490
+294,388
+As at 31 December 2020
+(10)
+77,560
+10
+transferred to retained earnings
+(37)
+77,597
+Financial
+instruments
+(68,257)
+yet to
+transition to
+an alternative
+benchmark
+2,997
+Branches and sub-branches are responsible for the comprehensive risk management of
+business departments at the same level and institutions at lower levels, and shall report their
+risk position to the Risk Management Department of the Head Office. The subsidiaries shall
+establish and improve their respective comprehensive risk management systems and carry
+out comprehensive risk management-related work in accordance with relevant regulatory
+guidelines and the requirements of this Policy.
+The Board of Directors of the Group assumes the ultimate responsibility for comprehensive
+risk management. The Board of Directors authorises its subordinate Risk Policy Committee,
+Audit Committee and US Risk and Management Committee to perform part of the
+responsibilities of comprehensive risk management. The Board of Supervisors undertakes
+the supervision responsibility for comprehensive risk management, and is responsible
+for supervising and inspecting the duty performance of the Board of Directors and senior
+management in respect of risk management and supervising relevant rectification. The
+senior management is responsible for conducting comprehensive risk management and
+implementing resolutions of the Board of Directors. The Risk Management Department,
+Credit Approval Department, Credit Management Department, Internal Control and Legal
+& Compliance Department and other relevant functional departments are responsible for
+managing financial risks.
+The financial risks the Group is exposed to mainly include credit risk, market risk and
+liquidity risk. Among them, market risk includes exchange rate risk, interest rate risk and
+other price risks.
+The Group analyses, identifies, monitors and reports risks by formulating risk management
+policies, setting appropriate risk limits and control procedures, and using relevant
+information systems. It also regularly reviews its risk management policies and related
+systems to reflect new changes in markets, products and the industry's best practices.
+Overview
+1
+VI FINANCIAL RISK MANAGEMENT
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+373
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 January 2022.
+The bonds have a maturity of date of 24 January 2032 with a fixed coupon rate of 3.25%,
+payable annually. The Bank is entitled to redeem the bonds at the end of the fifth year.
+Issuance of Tier 2 Capital Bonds
+Events after the financial reporting date
+49
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+372
+As at 31 December 2021, the notional amount of interest rate derivatives designated in
+fair value hedged accounting relationships was RMB65,260 million (2020: RMB93,964
+million), which represented the extent of the risk exposure around fair value hedging
+relationships managed by the Group that was directly affected by IBOR reform and
+impacted by applicable temporary reliefs.
+The hedge items that are affected by the adoption of applicable temporary reliefs in
+hedge accounting relationships are presented in the statement of financial position as
+"Financial investments”, “Due to central banks” and “Bonds issued".
+(2) The Group has hedge accounting relationships that are exposed to different interbank
+offered rates (“IBORs”), predominantly US dollar Libor, etc. External progress on
+the transition to RFRs is being monitored, with the objective of ensuring a smooth
+transition for the Group's hedge accounting relationships. The specific issues arising
+will vary with the details of each hedging relationship, but may arise due to the
+transition of existing products included in the designation, a change in expected
+volumes of products to be issued, a change in contractual terms of new products issued,
+or a combination of these factors. Some hedges may need to be de-designated and new
+relationships entered into, while others may survive IBOR reform.
+579,043
+Contractual/Notional amount of derivatives
+481,816
+(68,257)
+(20,891)
+20,891
+Capital comprehensive
+Other equity
+instruments
+Share
+capital
+General and
+Other
+371
+47.2 The Bank's statement of changes in equity (Continued)
+The Bank's statement of financial position and changes in equity (Continued)
+47
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2,008,271
+741,063
+292,549
+208,319
+20,116
+132,331
+319,505
+294,388
+As at 31 December 2021
+41,984
+(228)
+(31)
+(228)
+42,015
+Statutory
+regulatory Undistributed
+reserve
+income
+Other comprehensive income
+instruments holders
+reduction by other equity
+Capital contribution and
+regulatory reserves
+Dividends
+(17,829)
+17,829
+Appropriation to general and
+Appropriation to statutory reserves
+175,610
+177,200
+(1,590)
+374
+Total comprehensive income
+596,399
+240,279
+171,003
+19,292
+132,627
+199,893
+294,388
+As at 1 January 2020
+Total
+profits
+reserves
+reserves
+reduction by other equity
+instruments holders
+1,653,881
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(2) Due from, placements with and loans to banks and other financial institutions
+The Group manages the credit quality of due from, placements with and loans to banks
+and other financial institutions considering the size, financial position and the internal and
+external credit rating of banks and financial institutions. During the business lifetime, the
+Group conducts comprehensive analysis, monitors and manages internal and external factors
+that may affect customers' ability to operate on on-going basis and capacity to bear risk, and
+takes corresponding control measures.
+(3) Debt securities and derivatives
+Credit risk within debt securities arises from exposure to movements in credit spreads,
+default rates and loss given default, as well as changes in the credit of underlying assets.
+The Group manages the credit risk within debt securities by monitoring the external credit rating,
+such as Standard & Poor's ratings or their equivalents, of the securities, the internal credit rating
+of the issuers of debt securities, and the credit quality of underlying assets of securitisation
+products (including review of default rates, prepayment rates), industry and sector performance,
+loss coverage ratios and counterparty risk, to identify exposure to credit risk.
+The Group has established policies to manage the net open derivative positions by amounts
+and by maturity dates. At any time, the current credit exposure equals to the fair value of
+those derivatives where the fair value changes are favorable to the Group (i.e. positive
+mark-to-market amounts). Credit risk exposures for derivatives are included as part of the
+aggregated credit risk limit management for financial institutions and customers. Collaterals
+or other pledges of assets are not typically sought for these exposures.
+377
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.2 Credit risk limit control and mitigation policies
+The Group manages limits and controls concentrations of credit risk in particular, to
+individual customers and to industries.
+(1) Credit risk limits and controls
+(i)
+Loans and advances and off-balance sheet commitments
+In order to manage the exposure to credit risk, the Group has adopted credit policies and
+procedures that are reviewed and updated by the Credit Management Department and the
+Credit Approval Department at the Head Office. The credit approval processes for both
+corporate loans and personal loans can be broadly divided into three stages: (1) credit
+origination and assessment; (2) credit review and approval; and (3) fund disbursement and
+post-disbursement management.
+Credit applications for corporate customers in the Chinese mainland must be approved by
+the authorised credit application approvers at the Head Office and tier 1 branch level in the
+Chinese mainland, except for certain Credit Factory customers applications and low risk
+loans and advances approved by the authorised credit application approvers at tier 2 branch
+level. The exposure to any one borrower, including banks, is restricted by approved total
+credit limits covering on and off-balance sheet exposures.
+Personal loans in the Chinese mainland must be approved by authorised approvers at tier 1
+branch level in the Chinese mainland, except for individual pledged loans and government-
+sponsored student loans, which may be approved by authorised approvers at sub-branches
+below tier 1 level.
+The Head Office also oversees the risk management of the branches in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries and regions. In particular, any credit
+application at these branches exceeding the authorisation limits is required to be submitted
+to the Head Office for approval.
+Exposure to credit risk is also managed through regular analysis of the ability of borrowers
+and potential borrowers to meet interest and capital repayment obligations and by changing
+aforementioned credit limit where appropriate.
+378
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+2.1 Credit risk management (Continued)
+2 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+The Group takes on exposure to credit risk, which is the risk that a borrower or counterparty
+will cause a financial loss to the Group by failing to discharge its obligation. Credit risk is
+one of the most significant risks for the Group's business.
+Credit risk exposures arise principally in lending activities and debt securities investment
+activities. There is also credit risk in off-balance sheet financial instruments, such as loan
+commitments, bill acceptance, letters of guarantee and letters of credit.
+2.1 Credit risk management
+(1) Loans and advances to customers and off-balance sheet commitments
+The Group identifies and monitors credit risk collectively based on industry, geography and
+customer type. Management periodically reviews various elements of the Group's credit risk
+management, in the context of loan portfolio growth, the changing mix and concentration of
+assets, and the evolving risk profile of the credit portfolio. From time to time, in this regard,
+refinements are made to the Group's credit risk management processes to most effectively
+manage the effects of these changes on the Group's credit risk. These refinements include,
+among other things, adjustments to portfolio level controls, such as revisions to lists of
+approved borrowers, industry limits and underwriting criteria. Where circumstances related
+to specific loans or a group of loans increase the Bank's credit risk, actions are taken, to the
+extent possible, to strengthen the security of the Group's position. The actions may include
+obtaining additional guarantors or collateral.
+The Group measures and manages the credit quality of loans and advances to corporate
+and personal customers based on the Guideline for Loan Credit Risk Classification (the
+“Guideline") issued by the former China Banking Regulatory Commission, which requires
+commercial banks to classify their corporate and personal loans into five categories: pass,
+special-mention, substandard, doubtful and loss, among which loans classified in the
+substandard, doubtful and loss categories are regarded as non-performing loans. Off-balance
+sheet commitments with credit exposure are also assessed and categorised with reference
+to the Guideline. For operations in Hong Kong (China), Macao (China), Taiwan (China)
+and other countries and regions, where local regulations and requirements are different
+from the Guideline, credit assets are classified with prudently not lower than the Group's
+management requirements in consideration of local regulations and requirements.
+375
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+(Amount in millions of Renminbi, unless otherwise stated)
+Credit risk (Continued)
+(1) Loans and advances to customers and off-balance sheet commitments (Continued)
+The five categories are defined as follows:
+Pass: loans for which borrowers can honour the terms of the contracts, and there is no reason
+to doubt their ability to repay the principal and interest of loans in full and on a timely basis.
+Special-mention: loans for which borrowers are still able to service the loans currently,
+although the repayment of loans might be adversely affected by some factors.
+Substandard: loans for which borrowers' ability to service loans is apparently in question
+and borrowers cannot depend on their normal business revenues to pay back the principal
+and interest of loans. Certain losses might be incurred by the Group even when guarantees
+are executed.
+Doubtful: loans for which borrowers cannot pay back the principal and interest of loans in
+full and significant losses will be incurred by the Group even when guarantees are executed.
+Loss: principal and interest of loans cannot be recovered or only a small portion can be
+recovered after taking all possible measures and resorting to necessary legal procedures.
+The Group strictly follows the regulatory requirements in five-category loan classifications
+management, and makes adjustments to these classifications as necessary according to
+customers' operational and financial position, together with other factors that may affect the
+repayment of the loans.
+In accordance with the New Basel Capital Accord, the Group implemented a domestic
+corporate customer credit rating system based on the probability default ("PD”) model.
+The domestic corporate customer PD model uses the principle of logistic regression to
+predict the PD for customers in the next 12 months. The risk rating of the customer is
+obtained through the relevant mapping relationship table according to the calculated PD
+value. The corporate customer credit ratings are classified into fifteen grades as AAA,
+AA, A, BBB+, BBB, BBB-, BB+, BB, BB-, B+, B-, CCC, CC, C, and D. Credit grade D
+equates to defaulted customers while the others are assigned to non-defaulted customers.
+The Group performs centralised review on customer credit ratings on an annual basis in
+addition to making adjustments as necessary according to the customers' operational and
+financial condition. The Group conducts back-testing of the rating model for domestic
+corporate customers, according to the customers' actual defaults each year, so that the model
+calculation results are closer to the objective facts.
+376
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+2.1 Credit risk management (Continued)
+Other
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2.2 Credit risk limit control and mitigation policies (Continued)
+reserve
+Undistributed
+regulatory
+Statutory
+Capital comprehensive
+Other equity
+instruments
+Share
+capital
+General and
+Other
+Capital contribution and
+Dividends
+regulatory reserves
+Appropriation to general and
+Appropriation to statutory reserves
+Total comprehensive income
+As at 1 January 2021
+47.2 The Bank's statement of changes in equity
+370
+The Bank's statement of financial position and changes in equity (Continued)
+47
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+V
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+income
+reserves
+reserves
+profits
+(1) Credit risk limits and controls (Continued)
+(ii) Debt securities and derivatives
+The Group is also exposed to credit risk through investment activities and trading activities.
+Credit limits are established based on type of instruments and the credit quality of
+counterparties, securities issuers and the securities, and set limits are actively monitored.
+(2) Credit risk mitigation policies
+(i) Collateral and guarantees
+The Group has a range of policies and practices intended to mitigate credit risk. The most
+prevalent of these is the taking of security for funds advances, collateral and guarantees.
+The Group implements guidelines on the acceptability of specific classes of collateral
+and coverage rate upper limits. The amount of acceptable collateral at the time of loan
+origination is determined by the Credit Management Department and is subject to coverage
+rate upper limits based on type. Value of collateral is monitored on an ongoing basis.
+Mortgages to retail customers are generally collateralised by mortgages over residential
+properties. Whether or not other loans require collateral is dependent on the nature of the
+loan and the Group's credit management requirements.
+For loans guaranteed by a third party guarantor, the Group will assess the guarantor's credit
+rating, financial condition, credit history and ability to meet its obligations.
+Collateral held as security for financial assets other than loans and advances is determined
+by the nature of the instrument. Debt securities, treasury and other eligible bills are generally
+unsecured, with the exception of certain asset-backed securities and similar instruments,
+which are secured by portfolios of financial instruments.
+Collateral is also held as part of reverse repurchase agreements. Under such agreements, the
+Group is permitted to sell or repledge collateral in the absence of default by the owner of
+the collateral. Details of collateral accepted and which the Group is obligated to return are
+disclosed in Note V.40.3.
+379
+(68,645)
+(31,379)
+2 Credit risk (Continued)
+31,379
+19,487
+196,366
+193,962
+2,404
+1,838,794
+666,612
+261,170
+188,832
+17,712
+132,590
+277,490
+294,388
+Total
+(19,487)
+Credit risk
+2
+3,708,815
+EAD is based on the amount that the Group expects to be owed at the time of default, over
+the next 12 months or over the remaining lifetime.
+For credit-impaired financial assets with individual amount that are relatively significant,
+the Group mainly evaluates future cash flows (including the recoverable value of the
+collateral held) in different circumstances on an individual basis. Expected credit losses are
+measured as the differences between the present value of estimated cash flows discounted
+at the original effective interest rate (credit adjusted effective interest rate for purchased
+or originated credit-impaired financial assets) and the asset's gross carrying amount. Any
+adjustment is recognised in profit or loss as an impairment loss or reversal. The estimation
+of future cash flows is critical for a credit-impaired loan for which expected credit losses are
+measured on an individual basis. Factors affecting this estimate include, among other things,
+the financial condition of individual borrowers, risk mitigation methods, industry trends and
+the future performance of individual borrowers and cash flows from the sale of collateral.
+384
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(5) Forward-looking information
+The assessment of a significant increase in credit risk and the computation of ECL both
+involve forward-looking information. In assessing the ECL as at 31 December 2021, the
+Group has taken into account the impact of changes in current economic environment to the
+ECL model, including: individual borrower's operating and financial conditions and degree
+of impact from the Covid-19 pandemic, environmental and climate change impact, and
+industry-specific risks impacted by Covid-19 pandemic.
+The Group identifies key macroeconomic indicators that affect the credit risk and ECL of
+various business types, such as country or region local GDP, Investment in fixed assets,
+Producer Price Index, Home price index, Consumer Price Index etc. based on the statistical
+analysis of historical data.
+The impact of these economic indicators on the PD and the LGD varies according to
+different types of business. The Group applies experts' judgement in this analysis, and
+according to the result, the Group predicts these economic indicators regularly for respective
+regions and determines the impact of these economic indicators on the PD and the LGD by
+conducting regression analysis.
+LGD refers to the Group's expectation of the extent of the loss resulting from the defaulted
+exposure. The LGD varies depending on the type of counterparty, the method and priority of
+the recourse, and the type of collateral.
+PD refers to the possibility that the debtor will not be able to fulfil its obligations of
+repayment over the next 12 months or over the remaining lifetime;
+Relevant definitions are listed as follows:
+According to whether the credit risk has significantly increased and whether the asset
+is credit-impaired, the Group measures the impairment allowance for different assets
+with ECL of the next 12 months or throughout the entire lifetime. The key parameters in
+ECL measurement include probability of default ("PD"), loss given default (“LGD") and
+exposure at default (“EAD”). Based on the current New Basel Capital Accord used in risk
+management and the requirements of IFRS 9, the Group takes into account the quantitative
+analysis of historical statistics (such as ratings of counterparties, manners of guarantees and
+types of collateral) and forward-looking information in order to establish the models for
+estimating PD, LGD and EAD in accordance with the requirement of IFRS 9.
+The Group granting to the borrower, for economic or legal reasons relating to the
+borrower's financial difficulty, a concession that the Group would not otherwise
+consider
+It is becoming probable that the borrower will enter into bankruptcy or other financial
+re-organisation
+The disappearance of an active market for that financial asset because of financial
+difficulties
+The purchase or origination of a financial asset at a deep discount that reflects the
+incurred credit losses
+The borrower is more than 90 days overdue for any of the principal, advances, interest
+or investments in corporate bonds of the Group
+A financial asset becoming credit-impaired may be caused by the combined effect of several
+events, but not a single discrete event.
+383
+The specific values of the core macroeconomic indicator used in the baseline scenario to
+evaluate expected credit losses on 31 December 2021 by Chinese Mainland are as follows:
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(4) Parameters for measuring ECL
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+A breach of contract, such as a default or delinquency in interest or principal payments
+Indicator
+Applicable range
+for respective future periods
+Placements with and loans to banks and
+other financial institutions
+1,257,413
+939,320
+Government certificates of indebtedness for
+bank notes issued
+175,715
+168,608
+Derivative financial assets
+95,799
+171,738
+Loans and advances to customers, net
+15,322,484
+13,848,304
+Financial investments
+724,320
+2,076,840
+585,298
+2,228,726
+Balances with central banks
+Due from banks and other financial institutions
+5.4%-6.9%
+The Group conducts statistical analysis using experts' judgement to determine multiple
+economic scenarios and their respective weightings. In addition to the baseline scenario,
+optimistic scenario and pessimistic scenario, the Group also considers situation under stress.
+As at 31 December 2021, the baseline scenario has the highest weighting with the remaining
+individual scenarios having a weighting of lower than 30%. The Group measures its credit
+loss allowance based on probability weighted ECL under different scenarios.
+The Group conducts sensitivity analysis on the core economic indicators used in forward-
+looking measurement. As at 31 December 2021, when the predicted value of the core
+economic indicators in the main scenarios increase or decrease by 10%, the respective
+decrease or increase in loan loss allowance will not exceed 5%.
+385
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Quarterly Growth Rate of China's GDP
+(Amount in millions of Renminbi, unless otherwise stated)
+2
+Credit risk (Continued)
+2.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+As at 31 December
+2021
+2020
+Credit risk exposures relating to on-balance sheet
+financial assets are as follows:
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Significant financial difficulty of the issuer or borrower
+•
+•
+Parameters for measuring ECL
+•
+Forward-looking information
+380
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(1) Segmentation of financial instruments based on credit risk characteristics for losses
+Expected credit loss allowances involve segmentation of exposures on the basis of
+shared risk characteristics, such that risk exposures within a group are homogeneous. In
+performing this segmentation, there must be sufficient information for the segmentation to
+be statistically credible. In particular, the Group uses credit ratings, product types, client
+types, etc., for grouping personal loans and advances to calculate the losses measured on a
+collective basis.
+(2) Criteria for determining significant increases in credit risk
+•
+Definition of default and credit-impaired financial assets
+•
+Criteria for determining significant increases in credit risk
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+The Group assesses whether or not the credit risk of the relevant financial instruments has
+increased significantly since the initial recognition at each financial reporting date. While
+determining whether the credit risk has significantly increased since initial recognition
+or not, the Group takes into account the reasonable and supportable information that is
+available without undue cost or effort, including qualitative and quantitative analysis based
+on the historical data, external credit risk rating, and forward-looking information. Based
+on an individual financial instrument or a group of financial instruments shared credit
+risk characteristics, the Group compares the risk of default of financial instruments at the
+financial reporting date with that at the date of initial recognition in order to determine the
+changes of default risk in the expected lifetime of financial instruments.
+2.2 Credit risk limit control and mitigation policies (Continued)
+(ii) Master netting arrangements
+The Group further restricts its exposure to credit losses by entering into master netting
+arrangements with counterparties. Master netting arrangements do not generally result in
+the offsetting of assets and liabilities in the statement of financial position, as transactions
+are usually settled on a gross basis. However, the credit risk associated with favourable
+contracts is reduced by a master netting arrangement to the extent that if a default or
+other termination event occurs, all amounts with the customer under the master netting
+arrangement are terminated and settled on a net basis. The Group's overall exposure to
+credit risk on derivative instruments subject to master netting arrangements can change
+within a short period, as it is affected by each transaction subject to the arrangement.
+2.3 Measurement of ECL
+The Group conducts assessments of ECL with reference to forward-looking information
+and uses a number of models and assumptions in its measurement of expected credit
+losses. These models and assumptions relate to the future macroeconomic conditions
+and borrowers' creditworthiness (e.g., the likelihood of default by customers and the
+corresponding losses). The Group uses judgements, assumptions and estimation techniques
+in order to measure ECL according to the requirements of accounting standards which
+include:
+•
+Segmentation of financial instruments based on credit risk characteristics for losses
+.
+(2) Credit risk mitigation policies (Continued)
+The Group considers a financial instrument to have experienced a significant increase in
+credit risk when one or more of the following quantitative, qualitative or backstop criteria
+have been met:
+Quantitative criteria
+At the financial reporting date, the credit risk is deemed to increase significantly when the
+remaining lifetime PD is above a certain level and had risen by more than a certain range
+from initial recognition, reflected as a drop in credit rating by corresponding level according
+to the different PD at initial recognition as well as different products. For instance, an
+exposure of a corporate customer would in most cases be determined to have a significant
+increase in credit risk if its PD as of initial recognition was in excess of 1% and the credit
+rating of such customer has dropped by 4 notches as of the financial reporting date.
+382
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+The Group has provided credit facilities for temporary deferral of principal repayments
+and interest payments to some of the borrowers affected by the Covid-19 pandemic in
+accordance with the regulatory requirements of respective countries/regions. For those loans
+with deferred principal repayments and interest payments, the Group classified the credit
+risk based on the actual situation of the borrower and the judgement of the substantive risk
+of the business. However, the temporary deferral of principal or interest payment was not
+considered as an automatic trigger of a significant increase of credit risk.
+Credit risk (Continued)
+(3) Definition of default and credit-impaired financial asset
+The Group considers a financial instrument as defaulted when it is credit-impaired. The
+standard adopted by the Group in determining whether a financial asset is credit-impaired
+is consistent with the internal credit risk management objectives, taking into account
+quantitative and qualitative criteria. When the Group assesses whether a credit impairment
+occurred, the following key factors are considered:
+•
+•
+•
+•
+•
+2.3 Measurement of ECL (Continued)
+financial assets at fair value through profit or loss
+Borrowers' contractual payments (including principal or interest) are more than 30
+days past due.
+Backstop criteria
+381
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+•
+2.3 Measurement of ECL (Continued)
+Qualitative criteria (Continued)
+•
+Significant adverse changes in debtor's operations or financial status
+•
+Migrated into the Special Mention category within the five-category loan classification
+•
+Being included in the watch-list of the Group
+(2) Criteria for determining significant increases in credit risk (Continued)
+Central and Southern China
+383,313
+- financial assets at fair value through
+821,692
+1,155,558
+101,869
+83,276
+1,071,321
+543,337
+970,413
+5,551,519
+4,979,859
+15,674,994
+969,208
+1,752,527
+12,953,259
+6,093,750
+139,539 1,255,921
+768,734 8,325,323
+60,935
+94,900
+1,087,192
+570,435
+5,462,380
+6,469,397
+1,021,482
+7,444,532
+60,099
+5,583,295
+11,501,791
+% of total
+Northern China
+Northeastern China
+1,811,146
+548,436
+Eastern China
+5,158,395
+13.99%
+4.23%
+39.82%
+Total
+1,695,932
+502,186
+4.37%
+4,505,204
+389
+14,183,385
+983,660
+1,697,934
+14.74%
+Amount
+countries
+(China) and regions
+2 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+388
+12,953,259 100.00% 11,501,791 100.00%
+Total
+13.32%
+13.33% 1,531,850
+1,726,467
+Western China
+28.40%
+28.63% 3,266,619
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(ii) Analysis of loans and advances to customers by customer type
+Hong Kong
+(China),
+mainland
+Taiwan
+Chinese
+(China) and
+Total
+39.17%
+Other
+Other
+-
+Total
+Personal loans
+- Other
+- Trade bills
+Corporate loans and advances
+As at 31 December 2021
+Macao
+As at 31 December 2020
+Corporate loans and advances
+Trade bills
+% of total
+Amount
+2020
+Subtotal
+Total
+386
+5,221,154
+4,491,673
+30,982,851
+27,973,123
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+(Continued)
+3,456,156
+4,135,002
+Loan commitments and other credit commitments
+1,035,517
+other comprehensive income
+2,366,297
+2,086,362
+financial assets at amortised cost
+3,213,199
+2,978,778
+Other assets
+The table above represents a worst case scenario of credit risk exposure of the Group as
+at 31 December 2021 and 2020, without taking into account any collateral held, master
+netting agreements or other credit enhancements attached. For on-balance sheet assets, the
+exposures set out above are based on net carrying amounts as reported in the statement of
+financial position.
+133,453
+Subtotal
+25,761,697
+23,481,450
+Credit risk exposures relating to off-balance
+sheet items are as follows:
+Letters of guarantee issued
+1,086,152
+134,116
+As at 31 December 2021, 49.45% of the Group's total maximum credit exposure is derived
+from loans and advances to customers (31 December 2020: 49.51%) and 19.13% represents
+investments in debt securities (31 December 2020: 19.32%).
+387
+BANK OF CHINA LIMITED
+11,501,791
+81.09%
+Hong Kong (China), Macao (China)
+and Taiwan (China)
+Other countries and regions
+1,752,527
+969,208
+11.18% 1,697,934
+6.18% 983,660
+82.64%
+11.97%
+Total
+15,674,994
+100.00% 14,183,385
+100.00%
+Chinese mainland
+As at 31 December
+2021
+6.94%
+353,064
+12,953,259
+% of total
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.5 Loans and advances
+Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, customer type, industry, collateral type and analysis of impaired and overdue loans and
+advances to customers are presented below:
+Chinese mainland
+(1) Concentrations of risk for loans and advances to customers
+Group
+As at 31 December
+2021
+2020
+Amount
+% of total
+Amount
+(i) Analysis of loans and advances to customers by geographical area
+Personal loans
+39
+3,854,531
+Unit: RMB million, except percentages
+As at 31 December 2020
+Top Ten Financial Bonds by Value Held by the Group
+RMB
+78.09% 4,366,310
+USD
+12.55% 701,408
+-HKD 3.80% 212,522
+Other 5.56% 310,877
+Bond Name
+Par Value
+Annual Rate Maturity Date
+Unit: RMB million, except percentages
+Impairment Allowance
+-HKD 4.22% 260,080
+Bond issued by policy banks in 2018
+4.98%
+2025-01-12
+Bond issued by policy banks in 2019
+12,826
+3.48%
+2029-01-08
+Bond issued by policy banks in 2020
+12,610
+2.96%
+2030-04-17
+Bond issued by policy banks in 2019
+12,576
+3.65%
+13,370
+2029-05-21
+13.00% 801,236
+77.49% 4,776,896
+172,107
+3.08%
+Corporates
+147,209
+2.39%
+141,476
+2.53%
+Subtotal
+1,052,242
+17.07%
+936,020
+16.74%
+Equity instruments and others
+-USD
+304,218
+250,398
+4.48%
+Total
+6,164,671
+100.00%
+5,591,117
+100.00%
+Note: "Equity instruments and others" includes accrual interest.
+35
+Investments by Currency
+Unit: RMB million, except percentages
+As at 31 December 2021
+RMB
+4.93%
+Bond issued by policy banks in 2017
+12,510
+4.39%
+Demand deposits
+5,275,514
+29.08%
+4,956,751
+29.37%
+Time deposits
+3,968,527
+21.87%
+3,621,775
+21.46%
+Structured deposits
+351,445
+1.94%
+million, except percentages
+As at 31 December 2020
+Amount % of total
+254,553
+Subtotal
+9,595,486
+52.89%
+8,833,079
+52.33%
+Personal deposits
+Demand deposits
+3,487,433
+19.22% 3,355,893
+19.88%
+Time deposits
+4,299,050
+23.70%
+1.50%
+As at 31 December 2021
+Amount % of total
+Unit: RMB
+Corporate deposits
+2027-09-08
+Bond issued by policy banks in 2018
+11,092
+4.88%
+2028-02-09
+Bond issued by policy banks in 2018
+10,730
+4.73%
+2025-04-02
+Bond issued by policy banks in 2020
+10,008
+3.23%
+2030-03-23
+Bond issued by policy banks in 2019
+8,725
+3.75%
+2029-01-25
+Bond issued by policy banks in 2017
+8,580
+4.02%
+2022-04-17
+Note: Financial bonds refer to debt securities issued by financial institutions in the bond market, including the bonds
+issued by policy banks, other banks and non-bank financial institutions, but excluding restructured bonds and
+PBOC bills.
+Due to Customers
+In order to improve both the scale and pricing of deposits, the Bank continuously accelerated
+product and service innovation, improved scenario building, enhanced its financial services
+offering and expanded the scale of customers' financial assets. It actively expanded the sources
+of its deposits, including from salary payment agency, third-party custody, cash management and
+social security cards, with the increment of domestic RMB deposits reaching a record high. The
+Bank also improved management modes for its liability business, including certificates of deposit
+(CDs), structured deposits and negotiated deposits. It effectively controlled interest rates paid on
+36
+deposits, leading to continuous improvement in the development quality of its deposit business.
+As at the end of 2021, the Group's due to customers amounted to RMB18,142.887 billion, an
+increase of RMB1,263.716 billion or 7.49% compared with the prior year-end. Specifically, the
+Group's RMB due to customers totalled RMB14,148.220 billion, an increase of RMB1,145.193
+billion or 8.81% compared with the prior year-end, while its foreign currency due to customers
+stood at USD626.546 billion, an increase of USD32.492 billion or 5.47% compared with the prior
+year-end.
+The principal components of due to customers of the Group and its institutions in the Chinese
+mainland are set out below:
+Items
+Group
+22.84%
+-Other 5.29% 326,459
+Hong Kong (China), Macao (China),
+Contingent liabilities and commitments include legal proceedings and arbitrations, assets
+pledged, collateral accepted, capital commitments, operating leases, Treasury bond redemption
+commitments, credit commitments and underwriting obligations, etc. Please refer to Note V.40 to
+the Consolidated Financial Statements for more detailed information on contingent liabilities and
+commitments.
+2.00%
+297,935
+Structured deposits
+25.30%
+As at the end of 2021, the balance of the Group's cash and cash equivalents was RMB 1,975.631
+billion, an increase of RMB480.763 billion compared with the prior year-end.
+3,463,984
+26.29%
+3,920,101
+375,812
+Time deposits
+2,597,483
+18.19%
+2,711,693
+Demand deposits
+Personal deposits
+51.24%
+7,014,516
+51.61%
+18.97%
+7,695,590
+2.75%
+6,929,729
+As at 31 December 2021
+Unit: RMB million, except percentages
+Items
+Due to Customers by Geography
+37
+Note: "Others" is inclusive of accrued interest.
+100.00%
+13,690,738
+Subtotal
+1.74%
+1.91%
+100.00%
+14,910,749
+Total
+285,430
+Others
+47.02%
+6,437,279
+46.48%
+238,943
+As at 31 December 2020
+Subtotal
+232,736
+1.65%
+299,871
+Others
+1.22%
+206,146
+0.88%
+160,419
+Certificates of deposit
+249,842
+44.97%
+44.58%
+8,087,111
+Subtotal
+2.25%
+379,680
+1.66%
+300,628
+Structured deposits
+7,590,104
+1.70%
+1.48%
+18,142,887
+2.15%
+320,078
+Structured deposits
+19.11%
+2,616,098
+19.40%
+2,892,996
+Time deposits
+Total
+30.43%
+30.06%
+4,482,516
+Demand deposits
+Corporate deposits
+Chinese mainland
+100.00%
+16,879,171
+100.00%
+4,165,682
+Cash Flow Analysis
+Amount
+Amount
+Unit: RMB million, except percentages
+Due to Customers by Currency
+Note: "Others" includes accrued interest.
+100.00%
+16,879,171
+100.00%
+18,142,887
+Total deposits
+As at 31 December 2021
+1.48%
+1.65%
+299,871
+Others
+1.22%
+206,146
+0.88%
+160,419
+Certificates of deposit
+249,842
+44.97%
+RMB 77.98% 14,148,220
+-HKD 7.23% 1,311,343
+The Group entered into various derivative financial instruments relating to foreign currency
+exchange rates, interest rates, equity, credit, precious metals and other commodities for trading,
+hedging, asset and liability management and on behalf of customers. Please refer to Note V.16
+to the Consolidated Financial Statements for the contractual/notional amounts and fair values of
+derivative instruments.
+Off-balance sheet items include derivative financial instruments, contingent liabilities and
+commitments, etc.
+Off-balance Sheet Items
+As at the end of 2021, the Group's total equity stood at RMB2,350.553 billion, an increase of
+RMB187.716 billion or 8.68% compared with the prior year-end. This was primarily attributable
+to the following factors: (1) In 2021, the Group realised a profit for the year of RMB227.339
+billion, among which profit attributable to equity holders of the Bank amounted to RMB216.559
+billion. (2) The Bank pushed forward its external capital replenishment projects in a proactive
+and prudent manner, successfully issuing RMB70.0 billion of undated capital bonds. It also
+strengthened the management of existing capital instruments and redeemed RMB28.0 billion of
+domestic preference shares. (3) As per the 2020 profit distribution plan approved at the Annual
+General Meeting, a cash dividend of RMB57.994 billion was paid out on ordinary shares. (4)
+The Bank paid a dividend on its preference shares of RMB5.1895 billion. Please refer to the
+"Consolidated Statement of Changes in Equity" in the Consolidated Financial Statements for
+detailed information.
+Equity
+The Bank constantly strengthened its liability quality management, with relevant indicators
+meeting internal and external management requirements. It streamlined relevant systems and
+mechanisms, optimised product functions, and increased the expansion of customer deposits. It
+strengthened internal and external pricing management, effectively controlled increases in costs,
+improved its market financing capability to allow for greater initiative in acquiring liabilities,
+and controlled the mismatch in liabilities' terms and currencies at a reasonable level in order to
+support the comprehensive and balanced development of its assets and liabilities, thus effectively
+improving liability quality management.
+38
+The Bank earnestly implemented regulatory requirements on liability quality management and
+optimised its governance structure for liability quality management. It formulated measures and
+improved its internal control and indicator systems for liability quality management, periodically
+re-examining indicator limits. It effectively managed the source, structure and cost of its
+liabilities in accordance with its business strategy, risk appetite, business characteristics and other
+factors, and continuously monitored and analysed the status of its liability quality management,
+thus ensuring an appropriate balance between safety, liquidity and profitability.
+-USD 9.73% 1,765,005
+Liability Quality Management
+HKD 7.81% 1,318,279
+9.78% 1,651,454
+USD
+77.04% 13,003,027
+RMB
+As at 31 December 2020
+Unit: RMB million, except percentages
+-Other 5.06% 918,319
+-Other 5.37% 906,411
+% of total
+7,590,104
+8,087,111
+9,595,486
+Subtotal
+1,899,896
+and regions
+Taiwan (China) and other countries
+Hong Kong (China), Macao (China),
+3.32%
+560,993
+10.47% 1,818,563
+52.89%
+4.12%
+Foreign currency
+38.23%
+6,453,523
+38.30%
+6,949,089
+Chinese mainland: RMB
+Corporate deposits
+% of total
+746,501
+44.58%
+10.78%
+52.33%
+Subtotal
+6.83%
+1,152,825
+6.38%
+1,157,382
+and regions
+Taiwan (China) and other countries
+2.58%
+8,833,079
+1.78%
+1.62%
+293,935
+Foreign currency
+36.36%
+36.58% 6,136,873
+6,635,794
+Chinese mainland: RMB
+Personal deposits
+300,406
+158,740
+2.47%
+1.18%
+(8.01%)
+Settlement and clearing fees
+15,371
+14,383
+988
+6.87%
+Credit commitment fees
+11,868
+11,912
+(44)
+(0.37%)
+Consultancy and advisory fees
+4,576
+3,535
+(1,108)
+1,041
+Spread income from foreign
+exchange business
+5,520
+5,871
+(351)
+(5.98%)
+Custodian and other fiduciary service fees
+6,400
+4,831
+1,569
+32.48%
+Other
+8,126
+8,916
+29.45%
+13,825
+12,717
+Bank card fees
+1.73%
+Financial institutions
+2.06%
+806
+(33) Bps
+Total
+153,428
+0.36%
+130,192
+0.74%
+23,236
+(38) Bps
+Note: "Due to customers
+Other" includes structured deposits.
+30
+Non-interest Income
+In 2021, the Group reported non-interest income of RMB180.575 billion, an increase of
+RMB28.846 billion or 19.01% compared with the prior year. Non-interest income represented
+29.81% of operating income.
+17.77%
+4,508
+25,367
+29,875
+Agency commissions
+Group
+(790)
+Change Change (%)
+2021
+Items
+Unit: RMB million, except percentages
+Changes in net fee and commission income are set out below:
+The Group earned net fee and commission income of RMB81.426 billion, an increase of
+RMB5.904 billion or 7.82% compared with the prior year. Net fee and commission income
+represented 13.44% of operating income. The Bank actively seized market opportunities and
+tapped into businesses with strong potential. As a result, it realised robust growth in income from
+its fund distribution and custody businesses.
+Net Fee and Commission Income
+2020
+(8.86%)
+Fee and commission income
+94,453
+4,466
+3,320
+1,146
+34.52%
+Spread income from foreign
+exchange business
+5,307
+5,556
+(249)
+(4.48%)
+Custodian and other fiduciary service fees
+6,232
+4,675
+1,557
+33.30%
+Other
+8,031
+64,340
+39.39%
+(3,557)
+(9,030)
+(12,587)
+Fee and commission expense
+Net fee and commission income
+Consultancy and advisory fees
+14.50%
+67,187
+76,927
+Fee and commission income
+64.47%
+3,148
+4,883
+9,740
+2,605
+(0.80%)
+5,779
+88,640
+5,813
+6.56%
+Fee and commission expense
+(13,027)
+(13,118)
+91
+(0.69%)
+Net fee and commission income
+81,426
+75,522
+5,904
+7.82%
+Chinese mainland
+Agency commissions
+22,869
+18,289
+5,733
+Credit commitment fees
+6.86%
+886
+12,913
+13,799
+(46)
+Settlement and clearing fees
+(1,282)
+11,772
+10,490
+Bank card fees
+25.04%
+4,580
+(10.89%)
+Other
+(29) Bps
+(1,445)
+1 Bp
+Total
+12,067,249
+4.38%
+10,677,188
+4.49%
+1,390,061
+(11) Bps
+Including:
+Medium and long-term loans
+9,072,085
+4.73%
+7,887,644
+4.83%
+1,184,441
+(10) Bps
+Short-term loans within 1 year and others
+2,614,618
+Corporate time deposits
+7 Bps
+223,372
+0.75%
+0.82% 3,469,983
+(46,650)
+3,693,355
+Due to customers
+(21) Bps
+205,620
+3.52%
+3.31% 2,789,544
+2,995,164
+Corporate demand deposits
+2.85%
+2.65%
+2.66%
+The average balances and average interest rates of loans and due to customers in the Chinese
+mainland, classified by business type, are summarised in the following table:
+2021
+2020
+Average Average
+Items
+balance
+interest rate
+Average
+balance
+Average
+interest rate
+Change
+Average
+Average
+balance interest rate
+RMB businesses in the Chinese mainland
+Unit: RMB million, except percentages
+Loans
+Corporate loans
+6,535,897
+287,532
+Trade bills
+(5) Bps
+533,472
+4.88%
+4,710,348
+334,182
+4.83%
+Personal loans
+(19) Bps
+903,239
+4.27%
+5,632,658
+4.08%
+5,243,820
+58,157
+2,417,325
+197,293
+43,182
+1.69%
+1,847
+(72) Bps
+Due to customers
+Corporate demand deposits
+76,620
+0.25%
+52,111
+0.46%
+24,509
+(21) Bps
+Corporate time deposits
+31,506
+0.78%
+31,931
+1.76%
+0.69%
+17,835
+0.40%
+16,390
+Personal time deposits
+(1) Bp
+0.97%
+(209)
+26,516
+0.01%
+26,307
+Personal demand deposits
+(98) Bps
+(425)
+0.02%
+2.82%
+45,029
+in the Chinese mainland
+3 Bps
+Personal demand deposits
+2,387,414
+0.35%
+2,266,307
+0.39%
+121,107
+(4) Bps
+Personal time deposits
+3,671,859
+3.07%
+3,092,794
+3.00%
+579,065
+7 Bps
+Other
+664,564
+Unit: USD million, except percentages
+Foreign currency businesses
+5 Bps
+968,670
+1.85%
+12,063,140
+Loans
+1.90%
+Total
+(18) Bps
+(152,167)
+3.40%
+816,731
+3.22%
+13,031,810
+6,183
+1,799
+31
+6,093,750
+4.02%
+38.78%
+603,436
+5,583,295
+4.24%
+39.27%
+Accrued interest
+Total loans
+37,580
+15,712,574
+0.24%
+100.00%
+33,092
+14,216,477
+0.23%
+100.00%
+34
+4
+Subtotal
+Investments
+The classification of the Group's financial investment portfolio is shown below:
+Unit: RMB million, except percentages
+As at 31 December 2020
+As at 31 December 2021
+Items
+Amount
+% of total
+Amount % of total
+Financial assets at fair value through profit or loss
+561,642
+9.11%
+504,549
+9.02%
+Financial assets at fair value through other
+The Bank closely tracked financial market dynamics, maintained investment activity at a
+reasonable pace and continuously improved its investment structure. As at the end of 2021,
+the Group held investments of RMB6,164.671 billion, an increase of RMB573.554 billion or
+10.26% compared with the prior year-end. Specifically, the Group's RMB investments totalled
+RMB4,776.896 billion, an increase of RMB410.586 billion or 9.40% compared with the prior
+year-end, while foreign currency investments totalled USD217.666 billion, an increase of
+USD29.953 billion or 15.96% compared with the prior year-end.
+631,370
+and regions
+Taiwan (China) and other countries
+7,161,416
+Foreign currency
+329,463
+45.58%
+2.10%
+6,266,331
+255,601
+44.08%
+1.80%
+Hong Kong (China), Macao (China),
+Taiwan (China) and other countries
+and regions
+2,090,365
+13.30%
+2,078,158
+14.62%
+Subtotal
+9,581,244
+60.98%
+Hong Kong (China), Macao (China),
+0.01%
+645
+0.00%
+735
+Foreign currency
+comprehensive income
+35.02%
+34.76%
+5,461,645
+Chinese mainland: RMB
+Personal loans
+60.50%
+8,600,090
+4,979,214
+2,389,830
+38.77%
+2,107,790
+Financial institutions
+505,577
+8.21%
+424,672
+7.59%
+Corporates
+269,345
+4.37%
+216,751
+3.88%
+China Orient Asset Management Corporation
+152,433
+152,433
+2.73%
+Subtotal
+4,808,211
+78.00%
+65,825
+10.63%
+100,072
+Public sector and quasi-governments
+9.95%
+556,612
+7.99%
+10.48%
+Governments
+other countries and regions
+Macao (China), Taiwan (China) and
+Issuers in Hong Kong (China),
+78.78%
+4,404,699
+646,221
+Chinese mainland: RMB
+447,037
+532,783
+37.70%
+Financial assets at amortised cost
+3,213,199
+52.12%
+2,978,778
+53.28%
+Total
+6,164,671
+100.00%
+5,591,117
+100.00%
+Investments by Issuer Type
+Items
+Unit: RMB million, except percentages
+As at 31 December 2020
+As at 31 December 2021
+Amount % of total
+Policy banks
+2.34%
+130,695
+2.67%
+164,741
+Public sector and quasi-governments
+8.64%
+54.25%
+51.64%
+3,183,332
+Government
+Issuers in the Chinese mainland
+Debt securities
+Amount % of total
+3,033,111
+Corporate loans
+1.62%
+Unit: RMB million, except percentages
+As at 31 December 2020
+Amount % of total
+89,334
+9,983
+11.17%
+47,403
+38,944
+8,459
+21.72%
+Depreciation and amortisation
+23,882
+22,871
+1,011
+4.42%
+Taxes and surcharges
+5,715
+99,317
+5,465
+4.57%
+Insurance benefits and claims
+31,579
+30,581
+998
+3.26%
+Other
+18,459
+15,216
+3,243
+21.31%
+Total
+226,355
+202,411
+250
+2020
+2021
+administrative expenses
+As at 31 December 2021
+Amount % of total
+Other Non-interest Income
+Unit: RMB million, except percentages
+Items
+2021
+2020
+Change Change (%)
+Net trading gains
+28,291
+8,055
+20,236 251.22%
+Net gains on transfers of financial asset
+3,197
+9,547
+(6,350) (66.51%)
+Other operating income
+67,661
+General operating and
+Staff costs
+Items
+Unit: RMB million, except percentages
+Change Change (%)
+The Bank continued to operate its business in a prudent manner. It optimised its cost structure,
+increased investment in technological innovation, and allocated greater resources to key products,
+areas and regions, thus further improving input and output efficiency. In 2021, the Group
+recorded operating expenses of RMB226.355 billion, an increase of RMB23.944 billion or
+11.83% compared with the prior year. The Group's cost to income ratio (calculated in accordance
+with regulations in the Chinese mainland) was 28.17%. Please refer to Notes V.6, 7 to the
+Consolidated Financial Statements for detailed information.
+Operating Expenses
+23,944
+30.10%
+76,207
+99,149
+Total
+15.45%
+9,056
+58,605
+22,942
+11.83%
+The Group realised other non-interest income of RMB99.149 billion, an increase of RMB22.942
+billion or 30.10% compared with the prior year. This was primarily attributable to an increase
+in net trading gains compared with the prior year as a result of market price fluctuations. Please
+refer to Notes V.3, 4, 5 to the Consolidated Financial Statements for detailed information.
+The Bank continued to improve its comprehensive risk management system and adopted a
+proactive and forward-looking risk management approach, thus ensuring generally stable
+credit asset quality. It stringently implemented a prudent and solid risk provisioning policy and
+maintained adequate capacity for risk mitigation. In 2021, the Group's impairment losses on
+assets totalled RMB 104.220 billion, a decrease of RMB 14.796 billion or 12.43% compared with
+the prior year. Please refer to the section "Risk Management Credit Risk Management" and
+Notes V.9, 17 and VI.2 to the Consolidated Financial Statements for more information on loan
+quality and allowance for loan impairment losses.
+Due to customers
+18,142,887
+74.44% 16,879,171
+75.90%
+Due to and placements from banks and
+other financial institutions and
+due to central banks
+4,046,063
+16.60% 3,216,763
+14.46%
+Other borrowed funds
+1,415,032
+Impairment Losses on Assets
+5.71%
+Other liabilities
+767,873
+3.15%
+Loans and Advances to Customers by Geography
+Items
+The Bank further improved its risk management system, paid close attention to changes in the
+macroeconomic situation, strengthened risk identification and management in key areas and made
+greater efforts in the disposal of non-performing assets, thus maintaining generally stable asset
+quality. As at the end of 2021, the balance of the Group's allowance for loan impairment losses
+amounted to RMB390.541 billion, an increase of RMB21.922 billion compared with the prior
+year-end. The balance of the Group's restructured loans amounted to RMB23.213 billion, an
+increase of RMB1.521 billion compared with the prior year-end.
+The Bank earnestly fulfilled its responsibilities as a large state-owned bank, increased support
+for the real economy, achieved solid growth in lending scale, bolstered support for business
+expansion in such key areas as inclusive finance, green finance and strategic emerging industries,
+continued to improve its credit structure, thoroughly implemented major regional strategies and
+coordinated regional development strategies, and effectively served the development of local
+economies and people's livelihoods. As at the end of 2021, the Group's loan and advances
+to customers amounted to RMB15,712.574 billion, an increase of RMB1,496.097 billion or
+10.52% compared with the prior year-end. Specifically, the Group's RMB loans and advances
+to customers totalled RMB12,758.658 billion, an increase of RMB1,419.668 billion or 12.52%
+compared with the prior year-end, while its foreign currency loans amounted to USD463.309
+billion, an increase of USD22.308 billion or 5.06% compared with the prior year-end. Please refer
+to Note V.17 to the Consolidated Financial Statements for detailed information.
+Loans and Advances to Customers
+33
+Liabilities
+Note: "Other borrowed funds” includes bonds issued and other borrowings.
+22,239,822
+100.00%
+24,371,855
+Total liabilities
+3.93%
+873,451
+100.00%
+100.00%
+5.81% 1,270,437
+4.35% 1,222,758
+100.00% 24,402,659
+15,322,484
+Loans and advances to customers, net
+Investments
+Assets
+As at 31 December 2020
+Amount % of total
+% of total
+As at 31 December 2021
+Amount
+6,164,671
+Unit: RMB million, except percentages
+The principal components of the Group's consolidated statement of financial position are set out
+below:
+The Bank committed itself to the nation's new development philosophy, dynamically adjusted
+its business strategies and continuously improved its business structure, thus achieving steady
+growth in asset and liability scale. As at the end of 2021, the Group's total assets amounted
+to RMB26,722.408 billion, an increase of RMB2,319.749 billion or 9.51% compared with the
+prior year-end. The Group's total liabilities amounted to RMB24,371.855 billion, an increase of
+RMB2,132.033 billion or 9.59% compared with the prior year-end.
+Financial Position Analysis
+In 2021, the Group incurred income tax of RMB49.281 billion, an increase of RMB7.999 billion
+or 19.38% compared with the prior year. The Group's effective tax rate was 17.82%. Please refer
+to Note V.10 to the Consolidated Financial Statements for the reconciliation of statutory income
+tax expense to effective income tax expense.
+5.01%
+32
+Items
+57.34% 13,848,304
+23.07% 5,591,117
+Income Tax Expense
+22.91%
+56.75%
+Total assets
+1,163,816
+Other assets
+6.82%
+6.90% 1,663,640
+1,842,711
+26,722,408
+Due from and placements with banks and
+8.51%
+8.34% 2,076,840
+2,228,726
+Balances with central banks
+other financial institutions
+208,792 100.00%
+1.33%
+207,273 100.00%
+1.46%
+395
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Total
+Credit risk (Continued)
+BANK OF CHINA LIMITED
+0.64%
+1.65%
+17,288
+0.58%
+7.55%
+15,762
+Hong Kong (China), Macao
+(China), Taiwan (China) and
+other countries and regions
+91.66%
+189,985
+1.49%
+92.45%
+193,030
+Total for Chinese mainland
+0.65%
+15.54%
+32,218
+8.34%
+2.5 Loans and advances (Continued)
+Taiwan (China)
+(iv) Impaired loans and advances and related allowance by geographical area
+Other countries and regions
+Hong Kong (China), Macao (China) and
+38,496
+(151,489)
+189,985
+Chinese mainland
+As at 31 December 2020
+38,892
+(169,900)
+208,792
+Total
+5,668
+(4,010)
+9,678
+Other countries and regions
+2,376
+(3,708)
+Allowance
+for
+Impaired
+loans
+impairment
+losses
+Net
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+As at 31 December 2021
+193,030
+(162,182)
+30,848
+Hong Kong (China), Macao (China) and
+Taiwan (China)
+6,084
+Chinese mainland
+0.52%
+2.17%
+28,234
+Other
+0.66%
+0.43%
+894
+1.39%
+1.06%
+2,215
+Public utilities
+2.78%
+4,537 2.19%
+2.92%
+2.26%
+4,717
+Mining
+608
+1.74%
+3,806
+1.28%
+1.63%
+3,406
+Construction
+0.95%
+1.12%
+2,319
+0.76%
+1.08%
+2,257
+public utility management
+4,674
+12,614
+Water, environment and
+1.84%
+0.29%
+1.32%
+861
+Subtotal
+1.47%
+3.54%
+7,339
+0.99%
+3.08%
+6,443
+Other
+2.50%
+5.88%
+12,199
+2.05%
+4.87%
+10,163
+Credit cards
+0.32%
+6.12%
+0.42%
+Subtotal
+164,796
+78.93%
+2.20%
+157,767
+13.52%
+76.12%
+Personal loans
+Mortgages
+11,628
+5.57%
+0.27%
+12,680
+2.42%
+(2,463)
+2 Credit risk (Continued)
+(8,943)
+38,614
+26,302
+30,875
+Collateralised and other secured loans
+40,566
+833
+5,105
+32,096
+2,532
+Guaranteed loans
+27,620
+1,181
+2,939
+12,893
+3,760
+10,607
+As at 31 December 2021
+Total
+over 3 years
+3 years
+360 days
+90 days
+Past due
+361 Days to
+91 to
+up to
+Past due
+Past due
+Past due
+Group
+Unsecured loans
+99,551
+Total
+44,014
+0.01%
+399
+179,384
+9,678
+44,266
+71,098
+54,342
+Total
+117,826
+5,857
+27,192
+43,635
+41,142
+Collateralised and other secured loans
+28,241
+1,507
+9,952
+71,291
+46,658
+5,774
+167,737
+As at 31 December 2020
+Unsecured loans
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+8,040
+7,122
+2,314
+33,317
+Guaranteed loans
+5,160
+11,622
+15,841
+2,211
+(4) Overdue loans and advances to customers
+VI FINANCIAL RISK MANAGEMENT (Continued)
+89,692
+96,423
+95,896
+104,680
+Portion covered
+2020
+2021
+2020
+2021
+31 December 31 December 31 December 31 December
+As at
+Chinese mainland
+As at
+As at
+As at
+Portion not covered
+Group
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+2.5 Loans and advances (Continued)
+2 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+396
+44,378
+(162,895)
+207,273
+Total
+3,671
+(v) Within the impaired corporate loans and advances, the portions covered and not covered by
+collateral held are as follows:
+74,846
+78,116
+68,373
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+398
+As at 31 December 2021 and 2020, within impaired loans and advances, rescheduled loans
+and advances that were overdue for 90 days or less were insignificant.
+Rescheduled loans are subject to a surveillance period of six months. During the surveillance
+period, rescheduled loans remain as non-performing loans and the Group monitors the
+borrower's business operations and loan repayment patterns. After the surveillance period,
+rescheduled loans may be upgraded to “Special-mention” upon review if certain criteria are
+met. If the rescheduled loans fall due or if the borrowers are unable to demonstrate their
+repayment ability, these loans will be reclassified to "Doubtful" or below. All rescheduled
+loans within the surveillance period were determined to be impaired as at 31 December 2021
+and 2020.
+Rescheduled loans refer to loans in which the Group has adjusted the repayment terms of the
+loan contract for which the borrower is in financial difficulty or unable to repay. The Group
+reschedules a non-performing loan only if the borrower has good prospects.
+(3) Loans and advances rescheduled
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+68,075
+Total
+Fair value of
+collateral held
+179,526
+174,012
+2.5 Loans and advances (Continued)
+164,796
+33,975
+33,859
+30,157
+31,483
+Collateral of impaired corporate loans and advances includes land, buildings, equipment and
+others. The fair value of collateral was estimated by the Group with reference to the latest
+available external valuations adjusted for recent experience in disposal of collateral as well
+as the market conditions.
+397
+157,767
+0.02%
+Amount
+0.04%
+Mining
+1.89%
+268,676
+1.89%
+296,668
+Construction
+1.77%
+250,551
+1.93%
+302,591
+public utility management
+268,158
+Water, environment and
+646,979
+4.49%
+704,486
+Financial services
+5.13%
+726,824
+5.34%
+836,651
+gas and water
+electricity, heating,
+Production and supply of
+4.56%
+8.02%
+1.71%
+1.99%
+498,435
+3.24%
+4.85%
+507,107
+760,231
+Other
+Credit cards
+31.15%
+30.79% 4,418,761
+4,826,412
+Mortgages
+Personal loans
+60.64%
+282,394
+8,600,090
+9,581,244
+Subtotal
+175,493
+0.82%
+128,324
+Other
+1.14%
+161,402
+1.09%
+170,548
+Public utilities
+61.12%
+3.51%
+1,137,469
+1,212,336
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+43.30%
+12,953,259
+100.00% 11,501,791
+100.00%
+391
+BANK OF CHINA LIMITED
+2 Credit risk (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(iv) Analysis of loans and advances to customers by collateral type
+Group
+As at 31 December
+2021
+2020
+Amount
+FOR THE YEAR ENDED 31 DECEMBER 2021
+7.73%
+2.5 Loans and advances (Continued)
+(iii) Analysis of loans and advances to customers by industry
+Real estate
+10.53%
+1,493,828
+11.03%
+1,729,701
+postal services
+Transportation, storage and
+11.93%
+12.44%
+13.04% 1,764,213
+1,692,261
+12.05%
+(1) Concentrations of risk for loans and advances to customers (Continued)
+1,888,582
+2,043,199
+Commerce and services
+Corporate loans and advances
+% of total
+Amount
+% of total
+Amount
+2020
+2021
+As at 31 December
+Group
+Manufacturing
+% of total
+666,099
+Subtotal
+1.19%
+136,444
+1.23%
+159,284
+Public utilities
+1.42%
+163,193
+1.25%
+161,473
+Mining
+1.90%
+Other
+218,541
+266,775
+Construction
+2.12%
+243,268
+2.28%
+295,183
+public utility management
+Water, environment and
+4.24%
+487,488
+3.86%
+2.06%
+500,380
+46,175
+39,670
+42
+42.17% 4,979,859
+5,462,380
+Total
+Subtotal
+4.35%
+500,233
+4.24%
+488,086
+3.83%
+5.02%
+496,299
+649,756
+0.36%
+Other
+34.71%
+33.32% 3,991,540
+4,316,325
+Mortgages
+Personal loans
+56.70%
+6,521,932
+57.83%
+7,490,879
+Subtotal
+0.34%
+Credit cards
+4.70%
+Financial services
+554,626
+Amount
+% of total
+2020
+2021
+As at 31 December
+Chinese mainland
+(iii) Analysis of loans and advances to customers by industry (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+% of total
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+390
+100.00%
+100.00% 14,183,385
+15,674,994
+39.36%
+38.88% 5,583,295
+6,093,750
+Total
+(Amount in millions of Renminbi, unless otherwise stated)
+4.82%
+Corporate loans and advances
+1,589,119
+5.07%
+657,020
+gas and water
+electricity, heating,
+Production and supply of
+5.56%
+639,777
+5.30%
+687,186
+Real estate
+11.42%
+Commerce and services
+1,313,457
+1,578,645
+postal services
+Transportation, storage and
+11.56%
+1,329,778
+11.96%
+1,549,639
+Manufacturing
+12.13%
+1,395,690
+12.27%
+12.19%
+Amount
+1.24%
+Unsecured loans
+Chinese mainland
+As at 31 December
+2021
+2020
+% Impaired
+% Impaired
+Amount
+of total loan ratio
+Amount
+of total loan ratio
+Corporate loans and advances
+Personal loans
+1.46%
+164,796 85.37%
+28,234 14.63%
+83.04%
+2.42%
+16.96%
+0.65%
+Total
+193,030 100.00%
+1.49% 189,985
+100.00%
+1.65%
+394
+BANK OF CHINA LIMITED
+2.20% 157,767
+0.52% 32,218
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+100.00%
+208,792 100.00%
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+(ii) Impaired loans and advances by customer type
+Group
+As at 31 December
+1.33% 207,273
+2021
+% Impaired
+% Impaired
+Amount
+of total loan ratio
+Amount
+of total loan ratio
+Corporate loans and advances
+Personal loans
+179,526 85.98%
+29,266 14.02%
+1.87%
+0.48%
+174,012 83.95% 2.02%
+33,261 16.05% 0.60%
+Total
+2020
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+18,073
+8.66%
+1.14%
+14,276
+6.89%
+1.09%
+Real estate
+34,694
+% of total
+5.05%
+29,952
+postal services
+14.45%
+Production and supply of
+electricity, heating, gas and water
+13,173
+6.31%
+2.00%
+2,374
+1.14%
+0.43%
+Financial services
+201
+0.10%
+4.68%
+Transportation, storage and
+4.26%
+27.35%
+2 Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+(iii) Impaired loans and advances by geographical area and industry
+As at 31 December
+2021
+2020
+Impaired
+Impaired
+Amount % of total loan ratio
+Amount % of total loan ratio
+Chinese mainland
+Corporate loans and advances
+Commerce and services
+30,111
+14.42%
+1.89%
+42,010
+20.27%
+3.01%
+Manufacturing
+55,341
+26.50%
+3.57%
+56,696
+393
+1.65%
+16.62%
+189,985
+3,311,387
+28.79%
+Guaranteed loans
+1,487,175
+11.48% 1,379,925
+12.00%
+Collateralised and
+other secured loans
+7,664,934
+59.17% 6,810,479
+59.21%
+29.35%
+Total
+100.00% 11,501,791
+100.00%
+392
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+12,953,259
+(2) Analysis of loans and advances to customers by impairment status
+3,801,150
+% of total
+5,008,610
+100.00%
+Guaranteed loans
+1,863,868
+31.95%
+11.89%
+4,533,495
+31.96%
+1,737,379
+Collateralised and
+other secured loans
+8,802,516
+Unsecured loans
+56.16% 7,912,511
+Total
+15,674,994
+100.00% 14,183,385
+100.00%
+Chinese mainland
+As at 31 December
+2021
+2020
+Amount
+% of total
+Amount
+55.79%
+(i) Impaired loans and advances by geographical area
+12.25%
+As at 31 December
+207,273
+100.00%
+1.46%
+Chinese mainland
+As at 31 December
+2021
+2020
+%
+Impaired
+% Impaired
+Amount
+1.33%
+of total loan ratio
+of total loan ratio
+Northern China
+Northeastern China
+Eastern China
+Central and Southern China
+38,825 20.11% 2.14% 27,699 14.58% 1.63%
+13,939 7.22% 2.54% 15,229 8.02% 3.03%
+51,633 26.75% 1.00% 52,199 27.47% 1.16%
+73,624 38.14% 1.99% 81,201 42.74% 2.49%
+15,009 7.78%
+0.87% 13,657
+7.19% 0.89%
+1.49%
+Group
+Total
+193,030 100.00%
+Amount
+100.00%
+Western China
+Total
+Amount
+2020
+208,792
+Amount
+2021
+% Impaired
+of total loan ratio
+Chinese mainland
+193,030
+92.45%
+1.49%
+189,985
+91.66%
+of total loan ratio
+% Impaired
+1.65%
+0.28%
+2.25%
+0.35% 4,674
+1.00% 12,614
+6,084 2.91%
+9,678 4.64%
+6.09%
+1.28%
+Taiwan (China)
+Macao (China) and
+Hong Kong (China),
+Other countries and regions
+Doubtful
+Loss
+60,718
+60,718
+86,284
+86,284
+Total
+15,207,789
+2.5 Loans and advances (Continued)
+208,186
+15,671,189
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+61,184
+Credit risk (Continued)
+255,214
+401
+Stage 3
+Substandard
+(44,014)
+(54,342)
+(5) Loans and advances three-staging classification (Continued)
+Total loans and advances to customers which
+have been overdue for more than 3 months
+123,723
+125,042
+(5) Loans and advances three-staging classification
+Loans and advances to customers by five-category loan classification and three-staging
+classification are analysed as follows:
+As at 31 December 2021
+12-month ECLS
+Lifetime ECLs
+Total
+Stage 1
+Stage 2
+Pass
+15,207,789
+44,401
+15,252,190
+Special-mention
+210,813
+210,813
+61,184
+As at 31 December 2020
+13,642,318
+Lifetime ECLS
+(6) Credit commitments
+As at 31 December 2021 and 2020, credit risk exposures of credit commitments were mainly
+classified under Stage 1 and categorised as "Pass" in the five-category classifications.
+2.6 Due from and placements with and loans to banks and other financial institutions
+Banks and other financial institutions comprise those institutions in the Chinese mainland,
+Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions.
+The Group monitors the credit risk of counterparties by collecting and analysing
+counterparty information and establishing credit limits taking into account the nature, size
+and credit rating of counterparties.
+As at 31 December 2021, the majority of the balances of due from and placements with and
+loans to banks and other financial institutions were banks and other financial institutions in
+the Chinese mainland (Note V.13 and Note V.15), the majority of the internal credit ratings
+of these banks and other financial institutions were above A.
+402
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+As at 31 December 2021 and 2020, loans and advances by five-category loan classification
+and stage classification did not include loans and advances to customers measured at fair
+value through profit or loss.
+FOR THE YEAR ENDED 31 DECEMBER 2021
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.7 Debt securities
+The Group adopted a credit rating approach to manage the credit risk of the debt securities
+by referring to both internal and external credit rating. The carrying amounts (accrued
+interest excluded) of the debt investments analysed by external credit ratings at the financial
+reporting dates are as follows:
+Unrated
+A to AAA Lower than A
+Less: total loans and advances to customers which have
+been overdue for less than 3 months
+Total
+(Amount in millions of Renminbi, unless otherwise stated)
+14,179,724
+207,273
+330,133
+Total
+Stage 1
+Stage 2
+Stage 3
+Pass
+13,642,318
+66,181
+13,708,499
+Special-mention
+263,952
+263,952
+Substandard
+125,118
+125,118
+Doubtful
+33,823
+33,823
+Loss
+48,332
+48,332
+Total
+12-month ECLS
+179,384
+1.26%
+68,108
+Percentage
+11,541
+1,936
+1,024
+23,086
+Guaranteed loans
+2,321
+31,540
+4,319
+741
+8,585
+38,921
+27,379
+25,027
+37,013
+3,589
+93,008
+Total
+38,285
+43,268
+5,354
+Collateralised and other secured loans
+Unsecured loans
+As at 31 December 2021
+Total
+As at 31 December 2021
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(4) Overdue loans and advances to customers (Continued)
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(Continued)
+Chinese mainland
+Past due
+Past due
+Past due
+up to
+91 to
+361 Days to
+Past due
+90 days
+360 days
+3 years over 3 years
+155,015
+1.07%
+As at 31 December 2020
+6,626
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(4) Overdue loans and advances to customers (Continued)
+(ii) Analysis of overdue loans and advances by geographical area
+As at 31 December
+2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2020
+155,015
+160,265
+Hong Kong (China), Macao (China) and Taiwan (China)
+Other countries and regions
+7,851
+6,850
+4,871
+12,269
+Subtotal
+167,737
+Chinese mainland
+BANK OF CHINA LIMITED
+400
+160,265
+11,785
+5,262
+2,284
+25,957
+Guaranteed loans
+4,740
+9,299
+9,670
+1,239
+24,948
+Collateralised and other secured loans
+37,284
+39,780
+26,692
+5,604
+109,360
+Total
+48,650
+60,864
+41,624
+9,127
+Unsecured loans
+Issuers in Chinese mainland
+403
+5,677
+3.02
+Volatility risk
+11.83
+39.35
+26.61
+9.75
+42.56
+32.99
+Foreign exchange risk
+11.41
+9.17
+13.45
+11.24
+24.53
+17.84
+Interest rate risk
+The Bank's trading VaR
+Low
+High
+Low Average
+17.87
+0.30
+2.18
+6.45
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+407
+The reporting of risk in relation to bullion is included in foreign exchange risk above.
+16.18
+38.72
+29.56
+19.49
+52.57
+42.22
+VaR
+Total of the Bank's trading
+3.04
+13.76
+6.35
+0.57
+10.77
+3.66
+Commodity risk
+0.18
+High
+Average
+2020
+2021
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+405
+The Group obtained assets by taking possession of collateral held as security. Detailed
+information of such repossessed assets of the Group is disclosed in Note V.22.
+228,375
+150,794
+2.9 Repossessed assets
+Total
+6,330
+2,335
+Risk-weighted assets for CCPs
+110,319
+62,415
+Risk-weighted assets for CVA
+111,726
+86,044
+18,487
+13,657
+3
+(Amount in millions of Renminbi, unless otherwise stated)
+Market risk
+The Group is exposed to market risks from on-balance and off-balance businesses, that
+may cause losses to the Group as a result of adverse changes in market prices of interest
+rate, exchange rate, equities and commodities. Market risk arises from open positions in the
+trading and banking books. The trading book consists of positions in financial instruments
+and commodities that are held with trading intent or in order to hedge other elements of the
+trading book. The banking book consists of financial instruments not included in the trading
+book.
+Year ended 31 December
+Unit: USD million
+The table below shows the VaR of the trading book by type of risk during the years ended
+31 December 2021 and 2020:
+The Group utilises stress testing as an effective supplement to the trading book VaR
+analysis. Stress testing scenarios are performed based on the characteristics of trading
+transactions to simulate and estimate losses in adverse and exceptional market conditions.
+To address changes in the financial markets, the Group enhances its market risk
+identification capabilities by continuously modifying and improving the trading book stress
+testing scenarios and measurement methodologies in order to capture the potential impact to
+transaction market prices stemming from changes in market prices and volatility.
+The accuracy and reliability of the VaR model is verified by daily back-testing of the
+VaR results in the trading book. The back-testing results are regularly reported to senior
+management.
+(1) Trading book (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+406
+VaR is performed separately by the Bank and its major subsidiaries that are exposed to
+market risk, BOCHK (Holdings) and BOCI. The Bank, BOCHK (Holdings) and BOCI used
+a 99% level of confidence (therefore, statistical probability of 1% that actual losses could
+be greater than the VaR estimate) and a historical simulation model to calculate the VaR
+estimate. The holding period of the VaR calculations is one day. To enhance the Group's
+market risk management, the Group has established the market risk data mart, which enabled
+a group level trading book VaR calculation on a daily basis.
+VaR is used to estimate the largest potential loss arising from adverse market movements in
+a specific holding period and within a certain confidence level.
+For the purpose of market risk management in the trading book, the Group monitors trading
+book Value at Risk (VaR) limits, stress testing results and exposure limits and tracks each
+trading desk and dealer's observance of each limit on a daily basis.
+(1) Trading book
+3.2 Market risk measurement techniques and limits
+Market risk management departments are responsible for the identification, measurement,
+monitoring, control and reporting of market risks on a Group basis. Business units are
+responsible for the monitoring and reporting of market risk within their respective business
+lines.
+The Board of Directors of the Group takes the ultimate responsibility for the oversight
+of market risk management, including the approval of market risk management policies
+and procedures and the determination of market risk tolerance. Senior management is
+responsible for the execution of such policies and ensuring that the level of market risk
+is within the risk appetite determined by the Board, while meeting the Group's business
+objectives.
+3.1 Overview
+Commodity derivatives and other
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+0.20
+0.17
+0.50
+0.21
+Global commodity unit
+0.41
+2.15
+1.10
+0.47
+0.30
+1.33
+Fixed income unit
+0.23
+2.28
+0.94
+0.09
+2.19
+0.57
+Equity derivatives unit
+BOCI's trading VaR (1)
+0.72
+0.15
+Total BOCI's trading VaR
+1.51
+409
+Sensitivity analysis on net interest income assumes that yield curves change in parallel
+while the structure of assets and liabilities remains unchanged, and does not take into
+consideration changes in customer behaviour, basis risk, etc. The Group made timely
+adjustments to the structure of its assets and liabilities, optimised the internal and external
+pricing strategy or implemented risk hedging based on changes in the market situation, and
+controlled the fluctuation of net interest income within an acceptable level.
+Sensitivity analysis on net interest income
+The Group assesses IRRBB primarily through an interest rate repricing gap analysis. Interest
+rate repricing gap analysis measures the difference between the amount of interest-earning
+assets and interest-bearing liabilities that must be repriced within certain periods. The Group
+employs the interest rate repricing gap analysis and takes the impact of the off-balance
+sheet business into consideration when calculating the indications of sensitivity of earnings
+to changing interest rates. The interest rate gap analysis is set out in Note VI.3.3 and also
+covers the trading book.
+Interest rate risk in the banking book (“IRRBB") refers to the risk of losses to a bank's
+economic value and to its overall earnings of banking book, arising from adverse
+movements in interest rates level or term structure. IRRBB mainly comes from repricing
+gaps between assets and liabilities in the banking book, and differences in changes in
+benchmarking interest rates for assets and liabilities. The Group is exposed to interest rate
+risk and fluctuations in market interest rates that will impact the Group's financial position.
+(2) Banking book
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+408
+VaR for each risk factor is the independently derived largest potential loss in a specific
+holding period and within a certain confidence level due to fluctuations solely in that risk
+factor. The individual VaRs was not added up to the total VaR as there was a diversification
+effect due to correlation amongst the risk factors.
+(i) BOCI monitors its trading VaR for equity derivatives unit, fixed income unit and global commodity unit
+separately, which include equity risk, interest rate risk, foreign exchange risk and commodity risk.
+1.37
+4.30
+2.24
+0.90
+3.58
+2.25
+6.47
+4.01
+2.44
+0.75
+4.58
+2.38
+0.80
+7.42
+2.12
+Interest rate risk
+VaR
+Low
+High
+Average
+Low
+High
+Average
+2020
+2021
+Year ended 31 December
+Unit: USD million
+BOCHK (Holdings)'s trading
+(1) Trading book (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+Foreign exchange risk
+3
+3.24
+1.70
+7.07
+3.95
+trading VaR
+Total BOCHK (Holdings)'s
+0.00
+1.44
+0.23
+0.00
+4.52
+0.90
+Commodity risk
+0.03
+0.38
+0.13
+0.03
+0.44
+0.15
+Equity risk
+0.84
+3.98
+2.72
+6.51
+- Government
+844
+Equity derivatives
+149
+― Policy banks
+130,695
+130,695
+- Public sectors and quasi-governments
+3,033,111
+3,026,650
+6,461
+Government
+446,888
+Issuers in Chinese mainland
+5,860,453
+321,441
+4,855,591
+683,421
+1,052,242
+100,901
+803,311
+148,030
+147,209
+As at 31 December 2020
+447,037
+- Financial institutions
+31,229
+503,881
+36,393
+- Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+4,404,699
+163,430
+3,852,468
+388,801
+Subtotal
+152,433
+152,433
+- China Orient
+216,751
+39,474
+109,443
+67,834
+― Corporate
+424,672
+123,956
+269,487
+39,222
+90,712
+17,275
+Total
+152,433
+- China Orient
+269,345
+46,730
+108,844
+113,771
+- Corporate
+505,577
+173,810
+230,803
+100,964
+- Financial institutions
+532,783
+532,783
+― Policy banks
+164,741
+2,195
+162,546
+- Public sectors and quasi-governments
+3,183,332
+3,177,655
+152,433
+16,338
+Subtotal
+4,052,280
+Subtotal
+- Corporate
+158,740
+47,109
+97,887
+13,744
+― Financial institutions
+100,072
+115
+52,336
+47,621
+- Public sectors and quasi-governments
+646,221
+14,455
+562,376
+69,390
+Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+4,808,211
+220,540
+535,391
+553
+556,612
+34,077
+4,995,908
+182,827
+123
+182,704
+Lower than A
+453,524
+4,360,353
+4,360,353
+392
+281
+404
+452,851
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+12-month ECL
+As at 31 December 2020
+5,507,380
+500
+Unrated
+A to AAA
+392
+4,996,704
+404
+16,082
+8,683
+Interest rate derivatives
+76,313
+63,151
+Currency derivatives
+Risk-weighted assets for default risk
+2020
+2021
+As at 31 December
+The risk-weighted assets for the CCR of derivatives are as follows:
+The risk-weighted assets for default risk of derivatives of the Group are calculated
+in accordance with the Assets Measurement Rules for Counterparty Default Risks of
+Derivatives since 1 January 2019.
+The risk-weighted assets for counterparty credit risk ("CCR”) of derivatives of the Group
+are calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+and other relevant regulations under the advanced capital measurement approaches. For
+derivative transactions, risk-weighted assets for CCR include the risk-weighted assets for
+default risk, the risk-weighted assets for credit valuation adjustment ("CVA”) and the risk-
+weighted assets for central counterparties ("CCPs").
+2.8 Derivatives
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+816
+5,506,064
+Total
+642,051
+4,641,482
+223,847
+252,933
+4,605,047
+482,739
+Total
+936,020
+89,503
+752,579
+93,938
+141,476
+38,716
+89,307
+13,453
+Subtotal
+- Corporate
+172,107
+34,449
+127,643
+10,015
+- Financial institutions
+65,825
+31,748
+5,340,719
+- Public sectors and quasi-governments
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2021
+775
+223,072
+Lower than A
+4,641,482
+500
+41
+641,510
+Unrated
+A to AAA
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+12-month ECL
+As at 31 December 2021
+The carrying amounts (accrued interest excluded) of debt investments analysed by external
+credit ratings and expected credit losses are as follows:
+2.7 Debt securities (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Total
+419
+FINANCIAL RISK MANAGEMENT (Continued)
+Total interest repricing gap
+75,317
+28,026
+201,662
+17,655
+2,582,012
+450,653
+5,385
+2,817,528
+1,698
+446,470
+16,879,171
+461,129
+8,566
+49,612
+22,808
+6,030
+604,993
+1,244,403
+687,433
+11,508,402 2,020,843
+Total liabilities
+3,721,013 3,320,977
+1,594,469 22,239,822
+(4,632,565) 1,087,121 3,980,604
+(684,834) 1,859,573
+552,938 2,162,837
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Market risk (Continued)
+3.4 Foreign currency risk
+The Group conducts a substantial portion of its business in RMB, with certain transactions
+denominated in USD, HKD and, to a much lesser extent, other currencies. The major
+subsidiary, BOCHK Group, conducts the majority of its business in HKD, RMB and USD.
+The Group endeavours to manage its sources and uses of foreign currencies to minimise
+potential mismatches in accordance with management directives.
+The Group manages its exposure to currency exchange risk through the management of its
+net foreign currency position and monitors its foreign currency risk on trading books using
+VaR (Note VI.3.2). Meanwhile, the Group performs currency risk sensitivity analysis to
+estimate the effect of potential exchange rate changes of foreign currencies against RMB on
+profit before income tax and equity.
+74,118
+Other
+Bonds issued
+1,333,837
+Total assets
+6,875,837
+3,107,964
+7,701,617 2,636,143 1,933,691
+2,147,407
+24,402,659
+Liabilities
+Due to banks and other financial institutions
+1,150,797
+250,707
+192,966
+5,518
+317,015
+1,917,003
+Due to central banks
+309,560
+114,713
+9,697,626
+Due to customers
+212,052
+212,052
+411,949
+887,811
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies to
+which the Group had significant exposure. The analysis calculates the effect of a reasonably
+possible movement in the currency rates against RMB, with all other variables held constant,
+on profit before income tax and equity. A negative amount in the table reflects a potential
+net reduction in profit before income tax or equity, while a positive amount reflects a
+potential net increase. Such analysis does not take into account the correlation effect of
+changes in different foreign currencies, any further actions that may have been or could be
+taken by management after the financial reporting date to mitigate the effect of exchange
+differences, nor any consequential changes in the foreign currency positions.
+6,938
+971
+61,627
+102,269
+247,076
+Placements from banks and other financial institutions
+Derivative financial liabilities
+28,230
+428,370
+6
+Effect on profit before
+income tax
+As at
+As at
+414
+As at 31 December 2021
+RMB
+USD
+HKD
+EURO
+JPY
+GBP
+Other
+Total
+Assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+329,908
+206,607
+25,262
+35,395
+8,371
+475,833
+691,140
+other financial institutions
+Placements with and loans to banks and
+644,816
+2,228,726
+45,565
+The tables below summarise the Group's exposure to foreign currency exchange rate risk as at 31 December 2021 and 2020. The Group's exposure
+to RMB is provided in the tables below for comparison purposes. Included in the table are the carrying amounts of the assets and liabilities of the
+Group along with off-balance sheet positions and credit commitments in RMB equivalent, categorised by the original currencies. Derivative financial
+instruments are included in the net off-balance sheet position using notional amounts.
+83,179
+99,077
+37,244
+441,169
+1,495,927
+26,820
+12,453
+26,565
+2,978,778
+972,195
+3.4 Foreign currency risk (Continued)
+1,981
+Effect on equity*
+As at
+As at
+Change in 31 December 31 December 31 December 31 December
+2021
+2020
+Currency
+currency rate
+2021
+2020
+USD
++1%
+424
+450
+726
+620
+HKD
+VI
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+413
+Market risk (Continued)
+While the table above indicates the effect on profit before income tax and equity of the 1%
+appreciation of USD and HKD, there will be an opposite effect with the same amounts if the
+currencies depreciate by the same percentage.
+*
+2,340
+2,289
+(181)
+(89)
++1%
+Effect on other comprehensive income (irrespective of income tax effect).
+38,682
+955,169
+40,641 2,107,790
+504,549
+14,176
+10,833
+258
+74,115
+6,675
+2,682,739
+955,557
+71,048
+1,493
+407,767
+89,151
+89,151
+Due to customers
+10,253,710
+Bonds issued
+Other
+Total liabilities
+Total interest repricing gap
+44,526
+6,067
+107,867
+3,493,108
+4,649,173
+705,076
+646,030
+5,838
+570,038
+509,817
+6,508 1,388,678
+485,455
+32,521
+69,250
+2,978,127
+455,746
+34,226
+2,941,491
+548,592
+8,187
+1,451,583
+264,056
+4,728
+2,279,615
+12,532,665
+18,142,887
+1,309,427 24,371,855
+256,822
+246,985
+55,441
+Placements from banks and other financial institutions
+Derivative financial liabilities
+15,322,484
+Financial investments
+financial assets at fair value through profit or loss
+26,362
+financial assets at fair value through other comprehensive income
+financial assets at amortised cost
+161,329
+203,421
+28,697
+308,986
+42,429
+93,136
+351,443
+380,675
+50,591
+1,023,935 510,635
+1,313,316 1,270,988
+167,964
+194,892
+561,642
+33,502
+2,389,830
+2,370
+3,213,199
+181,247
+Due to central banks
+1,767,330
+Due to banks and other financial institutions
+Liabilities
+1,792,329 26,722,408
+279,785
+2,956,286 2,204,443
+7,553,901
+Total assets
+1,008,499
+1,006,255
+2,244
+Other
+3,377,039 8,838,410
+24,126
+(4,978,764) 1,097,424 4,189,237
+2,096,576
+1,883,236
+Placements with and loans to banks and other financial institutions
+405,802
+2,990
+167,138
+489
+278,759
+651
+82,515
+189,474
+2,076,840
+5,106
+939,320
+Derivative financial assets
+171,738
+171,738
+Loans and advances to customers, net
+3,696,907
+2,476,327 6,603,223
+297,793
+155,971
+169,896
+461,527
+1,019,905
+14,328
+2,698
+Other
+76,626
+42,983
+253,926 925,422
+336,105 1,283,662
+48,105
+249,957
+71,072
+803,145
+229,352
+financial assets at fair value through other comprehensive income
+financial assets at amortised cost
+10,968
+financial assets at fair value through profit or loss
+Financial investments
+506,019 13,848,304
+268,035
+176,317
+(536,822)
+84,607
+152,489
+482,902 2,350,553
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+3.3 GAP analysis (Continued)
+412
+Assets
+As at 31 December 2020
+Less than
+Between
+1 and 3
+Between
+Between
+Non-
+92,375
+470,557
+Cash and due from banks and other financial institutions
+Balances with central banks
+Total
+bearing
+5 years
+3,117
+years
+months
+1 month
+interest
+Over
+1 and 5
+3 and 12
+months
+166,953
+16,139
+910
+81,789
+30,084
+44,252
+27,722
+42,013
+803,145
+2,076,840
+Placements with and loans to banks and
+other financial institutions
+555,349
+298,944
+22,861
+18,663
+478
+940
+61,418
+42,085
+Derivative financial assets
+97,475
+44,134
+Loans and advances to customers, net
+11,024,110
+1,106,377
+3,479
+1,010,120
+738
+258,468
+987
+9,344
+15,581
+171,738
+11,076
+62,829
+939,320
+316,938
+1,500,346
+Balances with central banks
+10,876
+1,674
+148,553
+128,228
+(124,423)
+8,275
+63,767
+(61,853)
+54,606
+52,564
+(10,169)
+109,439
+2,350,553
+15,600
+5,221,154
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+3.4 Foreign currency risk (Continued)
+415
+As at 31 December 2020
+RMB
+USD
+4,215
+7,101
+61,642
+20,782
+132,751
+548,932
+375,324
+Cash and due from banks and other financial institutions
+Total
+Other
+GBP
+JPY
+EURO
+HKD
+Assets
+13,848,304
+Financial investments
+financial assets at fair value through profit or loss
+2,784,284
+1,550,916
+471,820
+187,916
+130,793
+866,641
+24,402,659
+Total assets
+Liabilities
+Due to banks and other financial institutions
+1,035,286
+539,174
+43,097
+43,770
+14,301
+10,988
+230,387
+28,757
+13,729
+215,247
+137,784
+Placements from banks and other financial institutions
+887,811
+18,410,289
+7,402
+13,487
+12,918
+277,062
+576,601
+Due to central banks
+1,917,003
+341
+244,161
+972,195
+2,346
+363,018
+51,870
+82,795
+6,476
+316
+23
+51
+504,549
+financial assets at fair value through
+other comprehensive income
+1,280,223
+449,963
+127,357
+financial assets at amortised cost
+2,723,069
+199,575
+2,370
+1,417
+2,466
+219,734
+183,732
+317,767
+Other
+244,733
+2,107,790
+2,978,778
+3,993
+6,065
+85,054
+2,851
+130,392
+31,950
+9,628
+34,078
+820,586
+3,835,534
+Credit commitments
+29,173
+140,349
+3,842
+89,129
+2,389,830
+financial assets at amortised cost
+2,893,923
+247,294
+12,571
+9,631
+5,291
+3,406
+41,083
+3,213,199
+Other
+311,401
+174,209
+889,342
+182,868
+195,354
+411,776
+1,630,130
+3,342,520
+183,066
+20,070,418
+1,008,499
+296,051
+2,188
+1,091
+2,728
+220,831
+Total assets
+26,722,408
+492,925
+other comprehensive income
+48,924
+1,257,413
+Derivative financial assets
+46,853
+23,782
+2,533
+2,594
+3,017
+6,908
+10,112
+95,799
+Loans and advances to customers, net
+12,418,293
+1,219,684
+1,060,054
+213,634
+9,455
+- financial assets at fair value through
+561,642
+245
+31
+874
+3,405
+1,451,346
+64,443
+431,627
+- financial assets at fair value through profit or loss
+Financial investments
+15,322,484
+331,413
+69,951
+61,017
+341
+Liabilities
+Due to central banks
+297,041
+1,765,005
+205,952
+111,860
+1,311,343
+3,833
+265,626
+304,900
+28,889
+2,191
+49,367
+345
+7,286
+77,964
+3,486
+588
+7,499
+89,151
+486,088
+18,142,887
+11,498
+27,425
+1,388,678
+705,076
+Total liabilities
+18,275,944
+3,009,737
+264,127
+(214,771)
+161,015
+Net off-balance sheet position
+(32,139)
+332,783
+Other
+1,794,474
+24,371,855
+836,778
+119,101
+67,126
+400,900
+1,662,269
+Net on-balance sheet position
+Due to banks and other financial institutions
+1,135,020
+344
+1,614,433
+649,129
+48,540
+34,472
+12,083
+27,625
+296,457
+2,682,739
+880,695
+36,232
+19,606
+13,329
+86
+5,609
+955,557
+Placements from banks and other financial institutions
+151,620
+2,433
+2,054
+20,620
+48,915
+Bonds issued
+Due to customers
+14,148,220
+Derivative financial liabilities
+2,202
+2,066
+4,987
+14,686
+11,267
+220,939
+407,767
+254,856
+516,235
+7,587,288
+1 and 5
+3 and 12
+1 and 3
+months
+Less than
+1 month
+On
+demand
+Undated
+Overdue/
+Between
+Between
+Between
+As at 31 December 2020
+4.2 Maturity analysis (Continued)
+Liquidity risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+418
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2,350,553
+12,204
+3,330,756
+months
+years
+Over
+5 years
+Total
+62,752
+2,778,252
+286,481
+154,029
+31,423
+1,288,350
+397,698
+22,621
+435,364
+13,312
+191,481
+46,580
+Loans and advances to customers, net
+Derivative financial assets
+377
+other financial institutions
+Placements with and loans to banks and
+(300,183)
+1,302
+5,709
+3,117
+154,008
+93,556
+265,996
+39,355
+286,447
+549,551
+1,452,254
+Balances with central banks
+21
+Cash and due from banks and other financial institutions
+Assets
+28,669
+100,735
+31,551
+3,744,008
+(685,992)
+(9,586,299)
+2,566
+72,598
+58,425
+274,022
+955,557
+2,682,739
+258
+14,176
+21,355
+515,964
+570,040
+256,824
+247,523
+86,387
+110,267
+1,755,054
+60,448
+Net liquidity gap
+Total liabilities
+Other
+Bonds issued
+Due to customers
+Derivative financial liabilities
+Placements from banks and other financial institutions
+Due to central banks
+Due to banks and other financial institutions
+Liabilities
+156
+407,767
+6,235
+9,147,933
+330,167
+11,299,837
+2,111,462
+24,371,855
+196,365
+3,658,189
+4,816,153
+2,273,289
+1,388,678
+705,076
+87,411
+117,853
+111,628
+69,657
+(364,383)
+483,716
+18,142,887
+32,537
+2,993,520
+2,946,788
+1,446,767
+237,121
+12,783
+89,151
+6,346
+25,003
+27,073
+13,846
+10,648
+1,575,342
+26,122
+45,234
+2,128,022
+572,062
+803,145
+2,076,840
+939,320
+10,079
+5,364,269
+470,415
+16,879,171
+212,052
+13,674
+7,714
+2,871,178
+2,596,276
+461,388
+112,493
+1,354,270
+186,305
+15,215
+35,127
+95,255
+34,122
+24,395
+1,528,697
+67,004
+58,677
+329,254
+9,479
+8,521,036
+411,949
+156
+4,940
+62,324
+100,330
+244,199
+887,811
+1,917,003
+91
+6,056
+39,502
+59,291
+95,681
+76,113
+1,244,403
+687,433
+The tables below present the cash flows of the Group of non-derivative financial assets and
+financial liabilities and derivative financial instruments that will be settled on a net basis
+and on a gross basis by the remaining contractual maturities at the financial reporting date.
+The amounts disclosed in the tables are the contractual undiscounted cash flows, except for
+certain derivatives which are disclosed at fair value (i.e. discounted cash flows basis). The
+Group also manages its inherent short-term liquidity risk based on expected undiscounted
+cash flows.
+4.3 Undiscounted cash flows by contractual maturities
+Liquidity risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2,162,837
+6,930,444
+434,833
+2,895,333
+(143,909)
+(693,580)
+(8,932,662)
+2,036,554
+22,239,822
+157,039
+3,522,899
+3,980,010
+2,078,375
+2,073,345
+10,428,154
+70,657
+117,114
+79,518
+217,441
+454,701
+356,200
+Other
+80,052
+50,431
+2,805
+financial assets at amortised cost
+284,963
+217,198
+137,987
+23,481
+19,792
+other comprehensive income
+504,549
+169,985
+44,679
+77,423
+47,105
+10,521
+154,836
+- financial assets at fair value through profit or loss
+Financial investments
+13,848,304
+171,738
+financial assets at fair value through
+26,722,408
+17,044
+973,389
+1,443,948
+75,503
+271,019
+70,855
+1,351,541
+216,844
+Net liquidity gap
+Total liabilities
+Other
+Bonds issued
+Due to customers
+Derivative financial liabilities
+Placements from banks and other financial institutions
+Due to central banks
+358,189
+19,930
+Due to banks and other financial institutions
+24,402,659
+7,087,483
+6,418,232
+4,050,667
+1,934,466
+1,379,765
+1,495,492
+2,036,554
+Total assets
+2,107,790
+2,978,778
+972,195
+470,772
+1,043,353
+29,025
+Liabilities
+8,041,557
+7,845,192
+2,389,830
+3,213,199
+947
+4,474
+46,493
+139,398
+Derivative financial liabilities
+411,949
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Market risk (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+(2) Banking book (Continued)
+Sensitivity analysis on net interest income (Continued)
+The table below illustrates the potential impact of a 25 basis points interest rate move on the
+net interest income of the Group. The actual situation may be different from the assumptions
+used and it is possible that actual outcomes could differ from the estimated impact on net
+interest income of the Group.
+(Decrease)/increase in
+net interest income
+As at 31 December
+2021
+2020
++25 basis points
+874
+9,720
+10,146
+212,052
+428,377
+1,669,018
+3,053,697
+16,154,605
+Total liabilities
+1,244,403
+687,433
+13,984
+15,752
+311
+1,109
+300
+16,879,171
+477,296
+- 25 basis points
+72,230
+306,229
+31,980
+3,207
+8,617
+267,904
+218,950
+105,317
+293,844
+968,665
+Other
+Bonds issued
+1,318,279
+1,651,454
+13,003,027
+Due to customers
+50,656
+1,896
+80,231
+(4,351)
+4,351
+4,107
+66,997
+141,347
+4,187
+61,839
+644,816
+1,994,874
+5,249
+Placements with and loans to banks and other financial institutions
+758,329
+164,425
+582
+283,939
+630
+227,391
+2,228,726
+47,392
+3,328
+1,257,413
+Derivative financial assets
+95,799
+95,799
+Loans and advances to customers, net
+4,036,896
+2,760,256
+370,446
+Cash and due from banks and other financial institutions
+Balances with central banks
+Assets
+Total
+Given the nature of demand deposits, their interest rate fluctuations are less volatile than
+those of other products. Had the impact of yield curves movement on interest expenses
+related to demand deposits been excluded, the net interest income for the next twelve
+months from the reporting date would have increased or decreased by RMB 17,877 million
+(2020: RMB16,716 million) for 25 basis points upward or downward parallel movements,
+respectively.
+1,008,499
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+As at 31 December 2021
+3.3 GAP analysis
+The tables below summarise the Group's exposure to interest rate risk. It includes the Group's assets and liabilities at carrying amounts, categorised by
+the earlier of contractual repricing or maturity dates.
+(4,107)
+411
+Between
+Between
+Less than
+1 month
+1 and 3
+months
+3 and 12
+months
+Between
+1 and 5
+years
+Non-
+Over
+5 years
+interest
+bearing
+Market risk (Continued)
+96,946
+410
+22,239,822
+26,323
+195,025
+- financial assets at fair value through profit or loss
+Financial investments
+95,799
+15,322,484
+5,789
+6,018,740
+4,236,421
+1,257,413
+67,235
+24,500
+309,098
+27,189
+3,176,279
+159,065
+15,998
+968,575
+27,647
+721,152
+12,558
+648,963
+36,911
+Loans and advances to customers, net
+Derivative financial assets
+863
+other financial institutions
+Placements with and loans to banks and
+644,816
+2,228,726
+945
+273
+4,187
+141,348
+9,765
+236,595
+66,998
+5,258
+90,475
+169,298
+756,948
+529,863
+1,285,154
+32,713
+1,057,866
+1,466,314
+78,603
+6,988,945
+4,515,970
+1,587,297
+1,763,639
+1,713,538
+2,111,462
+Total assets
+369,793
+382,282
+19,233
+44,163
+10,745
+52,874
+24,765
+362,964
+Other
+32,492
+2,794
+financial assets at amortised cost
+288,848
+118,945
+24,515
+other comprehensive income
+financial assets at fair value through
+561,642
+479,476
+162,489
+15,952
+2,247
+1,488,390
+Liquidity risk
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2,162,837
+(23,516)
+4,491,673
+109,693
+(50,662)
+107,899
+33,847
+(32,709)
+52,715
+107,685
+(107,293)
+10,679
+The liquidity risk refers to the risk that a commercial bank fails to acquire adequate funds
+in a timely manner and at a reasonable cost to deal with repayment of debts at maturity,
+perform other payment obligations and meet other fund needs for normal business operation.
+255,166
+3,160,861
+Credit commitments
+347,658
+392,537
+(541,681)
+Net off-balance sheet position
+(118,102)
+(269,413)
+2,255,684
+Net on-balance sheet position
+269,794
+717,908
+761,848
+4.1 Liquidity risk management policy and process
+43,443
+(31,366)
+142,505
+The Group considers liquidity risk management a significant component of asset-liability
+management, and determines the size, structure and duration of assets and liabilities
+consistent with the principle of overall balance between assets and liabilities. The Group
+establishes its liquidity portfolio to mitigate liquidity risk, and to minimise the gaps in
+the amount and duration between the funding sources and the uses of funds. The Group
+refines its financing strategy, taking into consideration various factors including customer
+risk sensitivity, financing cost and concentration of funding sources. In addition, the Group
+prioritises the development of customer deposits, dynamically adjusts the structure of
+funding sources by market-oriented financing modes, including due to banks and other
+financial institutions, inter-bank borrowings and bond issuance, and improves the diversity
+and stability of financing sources.
+Assets
+The Bank continues to develop and improve its liquidity risk management system with the
+aim of effectively identifying, measuring, monitoring and controlling liquidity risk at the
+institution and group level, including that of branches, subsidiaries and business lines, thus
+ensuring that liquidity demand is met in a timely manner and at a reasonable cost.
+Cash and due from banks and other financial institutions
+Balances with central banks
+Total
+Over
+5 years
+1 and 5
+years
+3 and 12
+months
+Less than
+1 month
+Overdue/
+Undated
+Between
+Between
+417
+On
+demand
+BANK OF CHINA LIMITED
+416
+As at 31 December 2021
+Between
+1 and 3
+months
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Assets available to meet all of the liabilities and to cover outstanding loan commitments
+include "Cash and due from banks and other financial institutions”, “Balances with central
+banks", "Placements with and loans to banks and other financial institutions”, “Loans and
+advances to customers, net", etc. In the normal course of business, a proportion of short-
+term loans contractually repayable will be extended and a portion of short-term customer
+deposits will not be withdrawn upon maturity. The Group would also be able to meet
+unexpected net cash outflows by entering into repurchase transactions, and by selling
+securities and accessing additional funding sources.
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+FINANCIAL RISK MANAGEMENT (Continued)
+Liquidity risk (Continued)
+4.2 Maturity analysis
+The tables below analyse the Group's assets and liabilities into relevant maturity groupings based on the remaining period at the financial reporting
+date to the contractual maturity date. For purposes of the tables set forth, "Loans and advances to customers, net" are considered overdue only if
+principal payments are overdue. In addition, for loans and advances to customers that are repayable by instalments, only the portion of the loan that is
+actually overdue is reported as overdue. Any part of the loan that is not due is reported according to residual maturity.
+VI
+7,920
+3,944
+479
+Settlements
+Issues
+296
+(4,200)
+Other changes
+As at 31 December 2021
+15,029
+Transfers (out)/in of Level 3, net
+5,202
+2,954
+(1,324)
+(283)
+(4,576) (7,489)
+(355)
+Sales
+37
+(57)
+other comprehensive income
+(200)
+493
+413
+(38)
+Purchases
+(1,561)
+Equity
+74,300
+and other
+securities
+Debt instruments
+-profit/(loss)
+properties
+fair value through other Investment
+comprehensive income
+Financial assets at
+Fund
+investments
+and other
+securities instruments
+Equity
+Debt
+profit or loss
+26,121
+at fair value through
+Derivative
+financial
+assets
+(159)
+2,686
+330
+413
+liabilities held as at 31 December 2021
+in the income statement for assets/
+Total gains/(losses) for the year included
+18,314
+8,655
+995
+46,131
+Financial assets
+Total gains and losses
+5.1 Assets and liabilities measured at fair value (Continued)
+4,731
+BANK OF CHINA LIMITED
+426
+(212,052)
+(208,513)
+(17,912)
+(17,336)
+(576)
+(3,539)
+(6,162)
+(6,162)
+(25,742)
+(25,742)
+(3,831)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(3,831)
+at fair value
+and other financial institutions
+Due to and placements from banks
+Liabilities measured at fair value
+22,065
+20,624
+1,441
+21,428
+4,731
+9,692
+7,005
+- Equity instruments and other
+Due to customers at fair value
+Bonds issued at fair value
+Short position in debt securities
+Derivative financial liabilities
+20,624
+FOR THE YEAR ENDED 31 DECEMBER 2021
+VI FINANCIAL RISK MANAGEMENT (Continued)
+1,373
+42,958
+67,554
+20,881
+As at 1 January 2021
+and other
+securities
+Debt instruments
+Equity
+Fund
+investments
+and other
+securities instruments
+Equity
+(Amount in millions of Renminbi, unless otherwise stated)
+Debt
+properties
+issued at
+Bonds
+fair value through other Investment
+comprehensive income
+Financial assets at
+profit or loss
+Financial assets
+at fair value through
+financial
+assets
+Derivative
+Reconciliation of Level 3 items
+Fair value (Continued)
+5
+fair value
+Investment properties
+other financial institutions
+As at 1 January 2020
+5
+52,884
+Total
+3,084,039
+958,277
+502,241
+4,544,557
+(1)
+Included within "Loan commitments" are amounts relating to loan commitments and undrawn credit card
+limits. Refer to Note V.40.7.
+422
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+27,162
+FOR THE YEAR ENDED 31 DECEMBER 2021
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value
+5.1 Assets and liabilities measured at fair value
+Assets and liabilities measured at fair value are classified into the following three levels:
+•
+•
+•
+Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
+including equity securities listed on exchanges or debt instruments issued by certain
+governments and certain exchange-traded derivative contracts.
+Level 2: Valuation technique for which all inputs that have a significant effect on the
+recorded fair value other than quoted prices included within Level 1 are observable for
+the asset or liability, either directly or indirectly. This level includes the majority of the
+over-the-counter ("OTC") derivative contracts, debt securities for which quotations are
+available from pricing service providers, discounted bills, etc.
+Level 3: Valuation technique using inputs which have a significant effect on the
+recorded fair value for the asset or liability are not based on observable market data
+(unobservable inputs). This level includes equity investments and debt instruments
+with significant unobservable components.
+The Group's policy is to recognise transfers between levels of the fair value hierarchy as at
+the end of the reporting period in which they occur.
+(Amount in millions of Renminbi, unless otherwise stated)
+The Group uses valuation techniques or counterparty quotations to determine the fair value
+when it is unable to obtain open market quotation in active markets.
+25,717
+502,236 4,491,673
+5,221,154
+Capital commitments
+18,041
+20,597
+8
+38,646
+Total
+3,502,203
+1,194,749
+562,848
+5,259,800
+As at 31 December 2020
+Capital commitments
+Loan commitments (¹)
+623,766
+241,397
+2,739,612
+Guarantees, acceptances and
+other financial facilities
+1,183,873
+307,349
+260,839
+1,752,061
+Subtotal
+3,058,322
+931,115
+1,874,449
+The main parameters used in valuation techniques include bond prices, interest rates, foreign
+exchange rates, equity and stock prices, volatilities, correlations, early repayment rates,
+counterparty credit spreads and others, which are all observable and obtainable from the
+open market.
+423
+BANK OF CHINA LIMITED
+Financial assets at fair value
+through profit or loss
+Debt securities
+8,904
+321,437
+26,121
+356,462
+- Equity instruments
+25,618
+2,350
+74,300
+102,268
+355,600
+Fund investments and other
+27,573
+46,131
+102,912
+Financial assets at fair value through
+other comprehensive income
+- Debt securities
+385,049
+1,977,034
+995
+2,363,078
+- Equity instruments and other
+7,774
+29,208
+95,799
+355,600
+at fair value
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value (Continued)
+5.1 Assets and liabilities measured at fair value (Continued)
+For certain illiquid debt securities (mainly asset-backed securities), unlisted equity (private
+equity) and unlisted funds held by the Group, management obtains valuation quotations
+from counterparties or uses valuation techniques to determine the fair value, including the
+discounted cash flow analysis, net asset value and market comparison approach, etc. The fair
+value of these financial instruments may be based on unobservable inputs which may have a
+significant impact on the valuation of these financial instruments, and therefore, these assets
+and liabilities have been classified by the Group as Level 3. The main unobservable inputs
+and ratio ranges include liquidity discounts 4.00%-45.64%, discount rates 2.55%-13.87%
+and expected dividend RMB0.06 per share-RMB0.84 per share. Management determines
+whether to make necessary adjustments to the fair value for the Group's Level 3 financial
+instruments by assessing the impact of changes in macro-economic factors, valuations by
+external valuation agencies and other inputs, including loss coverage ratios. The Group has
+established internal control procedures to control the Group's exposure to such financial
+instruments.
+424
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value (Continued)
+5.1 Assets and liabilities measured at fair value (Continued)
+As at 31 December 2021
+Level 1
+Level 2
+Level 3
+Total
+Assets measured at fair value
+Derivative financial assets
+2,373
+93,426
+Loans and advances to customers
+562,840
+1,174,152
+3,484,162
+Subtotal
+1,055,733 496,895 2,248,988
+1,686,591 1,254,753 3,526,272
+1,304 15,546 254,551
+Total financial assets
+1,683,044 1,236,713
+1,386,920 1,993,418
+4,577,347
+7,872,714
+9,500,702 28,250,858
+Due to banks and other financial
+institutions
+Due to central banks
+Placements from banks and other financial
+institutions
+310,952
+431,641
+7,694
+Due to customers
+Other financial liabilities
+Total financial liabilities
+Derivative cash flow
+Derivative financial instruments settled
+on a net basis
+Derivative financial instruments settled
+on a gross basis
+Total inflow
+Total outflow
+1,351,587
+216,855
+70,933
+79,668
+271,618
+117,556
+218,500
+Bonds issued
+3,870
+16,621
+478 209,038
+377
+397,904
+Loans and advances to customers, net
+48.824
+191,668
+460,253
+157,799 292,606
+1,366,761 3,268,668
+103,768
+952,454
+4,948,258 7,546,587 17,831,019
+Financial investments
+-financial assets at fair value through
+profit or loss
+154,788
+11,227
+48,200
+82,092
+72,271
+186,921
+555,499
+-financial assets at fair value through
+other comprehensive income
+-financial assets at amortised cost
+23,454
+140,321
+221,633
+2,848
+54,838
+95,601
+Other financial assets
+6,297
+10,323
+92
+42,181
+(16,949) (6,971,861)
+421
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4
+Liquidity risk (Continued)
+4.4 Off-balance sheet items
+The Group's off-balance sheet items are summarised in the table below at the remaining
+period to the contractual maturity date. Financial guarantees are also included below at
+notional amounts and based on the earliest contractual maturity date.
+Less than
+1 year
+16,953 6,943,135
+Between
+1 and 5
+years
+Total
+As at 31 December 2021
+Loan commitments (1)
+2,141,055
+791,299
+328,580
+3,260,934
+Guarantees, acceptances and
+other financial facilities
+1,343,107
+382,853
+234,260
+1,960,220
+Over
+5 years
+399,425
+(395,345)
+67,900 1,980,710 1,476,508 3,001,639
+(67,840) (1,980,277) (1,478,891) (3,032,559)
+(992) (6,957)
+1,919,027
+895,502
+8,521,187
+258,397
+244,338 100,902
+1,531,786 1,363,503 2,622,000
+67,194 187,282
+43,428 11,667
+62,781
+5.020
+217
+413,258
+3,055,634
+8,337
+17,102,447
+466,814
+13,519
+515,009
+61,165
+1,297,464
+45,160
+26,416
+398,587
+10,348,026 2,037,347
+2,052,528 3,822,856
+3,669,301
+96,227 22,026,285
+3,588
+(468)
+93
+(2,122)
+(7,056)
+439,242
+Placements with and loans to banks and
+8,655
+Investment properties
+Due to customers
+institutions
+Placements from banks and other financial
+Due to central banks
+institutions
+Due to banks and other financial
+31,644,393
+11,180,359
+8,798,775
+1,797,890 1,687,906 4,993,798
+1,426,427
+1,759,238
+Bonds issued
+Total financial assets
+1,182,096
+1,719,551
+4,461
+5,473
+2,545
+18,298
+189,707
+10,572
+Other financial assets
+295,793 409,798
+453,319
+59,141
+121,764
+37,819
+2,803
+24,516
+599,007 2,632,974
+1,557,672 3,830,305
+20,076
+251,132
+other comprehensive income
+-financial assets at amortised cost
+Other financial liabilities
+Derivative cash flow
+3,332,459
+3,085,322
+408,901
+210
+2,581
+73.199
+274,120 58,791
+1,594,013 1,484,679
+26,607
+238,108
+26,363
+5,686
+265,184
+9,148,053
+2,701,770
+979,987
+22,088
+530,432
+Total financial liabilities
+254,341
+60,448
+270
+14,696
+583,450
+261,047
+87,253
+1,755,054
+Total outflow
+Total inflow
+on a gross basis
+Derivative financial instruments settled
+Derivative financial instruments settled
+on a net basis
+112,678
+-financial assets at fair value through
+630,676
+201,142
+other financial institutions
+Cash and due from banks and
+Total
+5 years
+years
+Over
+1 and 5
+1 and 3 3 and 12
+months months
+1 month
+demand
+Less than
+On
+269,794
+Overdue/
+Undated
+Between
+Between
+As at 31 December 2021
+Non-derivative cash flow
+4.3 Undiscounted cash flows by contractual maturities (Continued)
+Liquidity risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Between
+163,262
+67,535
+143.290
+81,079
+98,009
+28,825
+26,549
+195,072
+profit or loss
+-financial assets at fair value through
+Financial investments
+8,802,462 20,154,434
+1,267,270
+67,470
+5,738,229
+728,832 160,886 309,219
+685,412 1,067,915 3,574,376
+249,018
+37,022
+Loans and advances to customers, net
+863
+other financial institutions
+Placements with and loans to banks and
+648,695
+2,228,907
+1,075
+314
+5,266
+15,954
+717,908
+1,488,390
+Balances with central banks
+4,814
+39,180 18,683,706
+590,211
+6,511
+532,098
+31,728
+79,913 1,466,937
+Level 2
+Level 3
+Total
+Assets measured at fair value
+Derivative financial assets
+3,083
+168,655
+Loans and advances to customers
+at fair value
+363,637
+171,738
+363,637
+Financial assets at fair value
+Level 1
+through profit or loss
+- Equity instruments
+Fund investments and other
+Financial assets at fair value through
+2,960
+323,402
+347,243
+7,570
+12,901
+67,554
+88,025
+20,961
+5,362
+Debt securities
+As at 31 December 2020
+5.1 Assets and liabilities measured at fair value (Continued)
+Fair value (Continued)
+1,240
+18,314
+19,554
+Liabilities measured at fair value
+Due to and placements from banks
+and other financial institutions
+at fair value
+Due to customers at fair value
+Bonds issued at fair value
+(162)
+(31,311)
+(162)
+(31,311)
+(315)
+(317)
+Short position in debt securities
+Derivative financial liabilities
+(1,945)
+(10,513)
+(12,458)
+(1,961)
+(87,190)
+(89,151)
+425
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+42,958
+26,752
+69,281
+- Debt securities
+Between
+Between
+As at 31 December 2020
+Non-derivative cash flow
+4.3 Undiscounted cash flows by contractual maturities (Continued)
+Liquidity risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Between
+420
+28,969 6,771,452
+375,388
+(373,166)
+159,680 2,441,453 1,426,255 2,339,707
+(159,592) (2,439,349) (1,421,922) (2,337,871)
+(1,299)
+176
+(1,959)
+(161) (1,006) (1,913)
+3,564
+140,465 24,597,665
+2,302,652 4,869,125 3,935,650
+11,228,739 2,121,034
+20,892 356,364
+(28,726) (6,760,626)
+Overdue/
+Undated
+On
+demand
+296,234
+1,788,755
+1,373
+2,086,362
+804,977
+2,077,098
+1,501
+28,717
+5,717
+39,359
+549,550
+1,452,254
+Balances with central banks
+3,288
+154,977
+93,837
+266,397
+286,457
+21
+other financial institutions
+Cash and due from banks and
+Total
+5 years
+years
+Over
+1 and 5
+1 and 3 3 and 12
+months months
+Less than
+1 month
+other comprehensive income
+10
+20,881
+71,716
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+428
+Financial assets and liabilities not presented at fair value in the statement of financial
+position mainly represent “Balances with central banks”, “Due from banks and other
+financial institutions", "Placements with and loans to banks and other financial institutions",
+"Due to central banks”, “Due to banks and other financial institutions", "Loans and
+advances to customers measured at amortised cost", "Financial investments measured at
+amortised cost”, “Placements from banks and other financial institutions at amortised cost",
+"Due to customers at amortised cost” and “Bonds issued at amortised cost".
+5.2 Financial assets and liabilities not measured at fair value
+A 10% increase in all significant unobservable inputs applied in the valuation technique
+would result in an increase in fair value of RMB1,909 million for expected dividend; and a
+decrease in fair value of RMB2,667 million for liquidity discounts and discount rates.
+There were no significant transfers for the financial instruments measured at fair value
+between Level 1 and Level 2 during the year ended 31 December 2021 and the year ended
+31 December 2020.
+(2,846)
+Fair value (Continued)
+(3,069)
+3,660
+3,270
+390
+Total gains for the year
+Total
+Total Realised Unrealised
+Realised Unrealised
+2020
+2021
+Year ended 31 December
+year
+Gains or losses on Level 3 assets and liabilities included in the income statement for the
+comprise:
+223
+Total gains or losses for the years ended 31 December 2021 and 2020 included in the
+income statement as well as total gains or losses included in the income statement relating
+to financial instruments held as at 31 December 2021 and 2020 are presented in "Net
+trading gains”, “Net gains on transfers of financial asset” or “Impairment losses on assets"
+depending on the nature or category of the related financial instruments.
+5.2 Financial assets and liabilities not measured at fair value (Continued)
+As at 31 December
+429
+The aggregate fair values are calculated based on quoted market prices. For those bonds where quoted
+market prices are not available, a discounted cash flow model is used based on a current yield curve
+appropriate for the remaining term to maturity.
+Bonds issued
+(2)
+Fair values of other debt securities are based on market prices or broker/dealer price quotations. Where this
+information is not available, the Bank will perform valuation by referring to prices from valuation service
+providers or on the basis of discounted cash flow models. Valuation parameters include market interest
+rates, expected future default rates, prepayment rates and market liquidity. The fair values of RMB bonds
+are mainly determined based on the valuation results provided by China Central Depository & Clearing Co.,
+Ltd.
+The China Orient Bond and Special Purpose Treasury Bond held by the Bank are non-transferable. As there
+are no observable market prices or yields reflecting arm's length transactions of a comparable size and
+tenor, the fair value is determined based on the stated interest rate of the instruments.
+1,144,440
+1,238,241
+1,395,242
+1,388,361
+Debt securities at amortised cost
+(1)
+The tables below summarise the carrying amounts and fair values of “Debt securities at
+amortised cost" and "Bonds issued" not presented at fair value at the financial reporting
+date.
+Bonds issued (2)
+2,989,266
+2,970,277
+3,262,525
+3,206,895
+at amortised cost (¹)
+Debt securities
+Financial assets
+Fair value
+Fair value Carrying value
+Carrying value
+2020
+2021
+Financial liabilities
+5.1 Assets and liabilities measured at fair value (Continued)
+15,948
+5
+1,398
+750
+9,043
+14,292
+6,074
+Purchases
+(15)
+(359)
+(3,301)
+(6,515)
+(1,534)
+Sales
+Settlements
+289
+― other comprehensive income
+(1,426)
+(1,598)
+754
+122
+-profit/(loss)
+Total gains and losses
+20,778
+5,275
+1,676
+38,936
+Fair value (Continued)
+161
+(1)
+(698)
+(12,693)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Transfers (out)/in of Level 3, net
+(Amount in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2021
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+427
+(1,427)
+(1,676)
+756
+(844)
+included in the income statement
+for assets/liabilities held as at
+31 December 2020
+Total gains/(losses) for the year
+20,624
+BANK OF CHINA LIMITED
+1,373
+4,731
+(1,467)
+Other changes
+1,092
+674
+(105)
+(122)
+(785)
+As at 31 December 2020
+20,881
+67,554
+42,958
+(116)
+(26,415)
+5,295
+(25,623)
+Goodwill
+Other intangible assets (excluding land use rights)
+Direct or indirect investments in own shares
+Investments in common equity tier 1 capital of
+financial institutions with controlling interests
+but outside the scope of regulatory consolidation
+(182)
+(182)
+(16,393)
+1,843,886
+(8)
+(9,785)
+(9,838)
+Net common equity tier 1 capital
+1,704,778
+Additional tier 1 capital
+329,845
+4,188
+287,843
+(15,140)
+Of which:
+General reserve
+Other(2)
+Preference shares and related premium
+1,730,401
+Common shares
+294,388
+294,388
+Undistributed profits
+Capital reserve
+Surplus reserve
+Eligible portion of minority interests
+133,951
+134,221
+212,602
+192,251
+303,084
+267,856
+888,419
+803,823
+33,669
+32,567
+Regulatory deductions
+119,550
+BANK OF CHINA LIMITED
+Additional capital instruments and related premium
+16,323,713
+15,109,085
+433
+1,870,301
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Capital management (Continued)
+7
+(1) When calculating the capital adequacy ratios, Bank of China Group Investment Limited ("BOCG
+Investment"), Bank of China Insurance Company Limited ("BOC Insurance"), Bank of China Group
+Insurance Company Limited ("BOCG Insurance") and Bank of China Group Life Assurance Company
+Limited ("BOCG Life") were excluded from the scope of consolidation in accordance with the requirements
+of the CBIRC.
+(2)
+This mainly represented exchange differences from the translation of foreign operations and changes in fair
+value on financial assets at fair value through other comprehensive income.
+Insurance risk
+Insurance contracts are mainly sold in the Chinese mainland and Hong Kong (China)
+denominated in RMB and HKD. The risk under any one insurance contract is the possibility
+that the insured event occurs and the uncertainty of the amount of the resulting claim. This
+risk is inherently random and, therefore, unpredictable. The Group manages its portfolio
+of insurance risks through its underwriting strategy and policies, portfolio management
+techniques, adequate reinsurance arrangements and proactive claims handling and
+processing. The underwriting strategy attempts to ensure that the underwritten risks are well
+diversified in terms of type and amount of risk and industry.
+For a portfolio of insurance contracts where the theory of probability is applied to pricing
+and provisioning, the principal risk that the Group faces under its insurance contracts is
+that the actual claims and benefit payments exceed the carrying amount of the insurance
+liabilities. This could occur because the frequency or severity of the claims and benefits are
+greater than those estimated. Insurance events are random and the actual number and amount
+of claims and benefits will vary from year to year from the level established using statistical
+techniques.
+Uncertainty in the estimation of future benefit payments and premium receipts for long-
+term life insurance contracts arises from the unpredictability of long-term changes in overall
+levels of mortality. In order to assess the uncertainty due to the mortality assumption and
+lapse assumption, the Group conducted mortality rate studies and policy lapse studies in
+order to determine the appropriate assumptions.
+434
+2,451,055
+147,519
+2,698,839
+Net capital
+199,955
+129,971
+Eligible portion of minority interests
+10,340
+10,353
+Net tier 1 capital
+2,173,731
+1,992,621
+Tier 2 capital
+525,108
+458,434
+Tier 2 capital instruments issued and related premium
+Excess loan loss provisions
+387,746
+333,381
+128,114
+115,627
+Eligible portion of minority interests
+9,248
+9,426
+Risk-weighted assets
+Common equity tier 1 capital
+The Group's regulatory capital is managed by its capital management related departments
+and consists of the following:
+16.22%
+As at 31 December 2020
+Level 2
+1,395,242
+Level 3
+Total
+Financial assets
+Debt securities at amortised cost
+96,766
+2,694,018
+3,055
+2,793,839
+Financial liabilities
+Bonds issued
+1,144,440
+1,144,440
+Other than the above, the difference between the carrying amounts and fair values of those
+financial assets and liabilities not presented at their fair value in the statement of financial
+position as at 31 December 2021 and 2020 was insignificant. Fair value is measured using a
+discounted cash flow model.
+430
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,395,242
+FOR THE YEAR ENDED 31 DECEMBER 2021
+Level 1
+Financial liabilities
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value (Continued)
+5.2 Financial assets and liabilities not measured at fair value (Continued)
+The tables below summarise the fair values of three levels of "Debt securities at amortised
+cost" (excluding the China Orient Asset Management Corporation Bond and Special
+Purpose Treasury Bond), and "Bonds issued" not presented at fair value on the statement of
+financial reporting date.
+Level 1
+As at 31 December 2021
+Level 2
+Level 3
+Total
+Financial assets
+Debt securities at amortised cost
+99,809
+2,963,747
+3,557
+3,067,113
+Bonds issued
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Capital management (Continued)
+The table below summarises the Group's common equity tier 1 capital adequacy ratio, tier 1
+capital adequacy ratio and capital adequacy ratio (¹) calculated in accordance with the Capital
+Rules for Commercial Banks (Provisional) and other relevant regulations:
+As at 31 December
+2021
+2020
+Common equity tier 1 capital adequacy ratio
+11.30%
+11.28%
+Tier 1 capital adequacy ratio
+13.32%
+13.19%
+Capital adequacy ratio
+16.53%
+432
+Goodwill, other intangible assets (excluding land use rights), investments in common equity
+tier 1 capital of financial institutions with controlling interests but outside of the scope of
+regulatory consolidation and other deductible items are deducted from common equity tier 1
+capital to derive at the regulatory capital.
+Tier 2 capital, including tier 2 capital instruments issued and related premium, excess
+loan loss allowances and eligible portion of minority interests.
+Additional tier 1 capital, including additional tier 1 capital instruments issued and
+related premium and eligible portion of minority interests;
+Capital management
+The Group follows the principles below with regard to capital management:
+Adequate capital and sustainable development. Follow the lead of the strategic
+planning of the Group development; and maintain the high quality and adequacy of
+capital so as to meet regulatory requirements, support business growth, and advance the
+sustainable development of the scale, quality and performance of the business in the
+Group.
+Allocation optimisation and benefit augmentation. Allocate capital properly by
+prioritising the asset businesses with low capital occupancy and high comprehensive
+income, and steadily improve the efficiency and return of capital, to achieve the
+reciprocal matchup and dynamic equilibrium among risks, assets and returns.
+Refined management and capital level improvement. Optimise the capital management
+system by sufficiently identifying, calculating, monitoring, mitigating, and controlling
+various types of risks; incorporate capital restraints into the whole process of product
+pricing, resource allocation, structural adjustments, performance evaluation, etc.,
+ensuring that the capital employed is commensurate with the related risks and the level
+of risk management.
+Capital adequacy and regulatory capital are monitored by the Group's management,
+employing techniques based on the guidelines developed by the Basel Committee, as
+implemented by the CBIRC, for supervisory purposes. The required information is filed with
+the CBIRC on a quarterly basis.
+The Group's capital adequacy ratios are calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations. With the approval of
+the CBIRC, the Group adopts the advanced capital measurement approaches, which include
+Foundation Internal Ratings-based Approach for corporate exposures, Internal Ratings-based
+Approach for retail exposures, Internal Models Approach for market risk and Standardised
+Approach for operational risk. For risk exposures not covered by the advanced approaches,
+the corresponding portion shall be calculated adopting non-advanced approaches.
+As a Systemically Important Bank, the Group's capital adequacy ratios are required to meet
+the lowest requirements of the CBIRC, that is, the common equity tier 1 capital adequacy
+ratio, tier 1 capital adequacy ratio and capital adequacy ratio should be no less than 9.00%,
+10.00% and 12.00%, respectively.
+431
+Composition of the Group's capital base
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2021
+(Amount in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6
+Capital management (Continued)
+BANK OF CHINA LIMITED
+•
+•
+Common equity tier 1 capital, including common shares, capital reserve, surplus
+reserve, general reserve, undistributed profits, eligible portion of minority interests and
+others;
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+SUPPLEMENTARY INFORMATION
+The Group's liquidity coverage ratio (Continued)
+I DIFFERENCES BETWEEN IFRS AND CAS CONSOLIDATED FINANCIAL
+STATEMENTS
+117,279
+18
+Inflows from fully performing exposures
+1,482,599
+855,523
+19
+Other cash inflows
+2,178,684
+2,047,551
+20 Total cash inflows
+4,146,309
+3,020,353
+Total adjusted
+21
+22
+Total HQLA
+22 Total net cash outflows
+23 Liquidity coverage ratio
+437
+485,026
+value
+Secured lending (including reverse repos and
+securities borrowing)
+Cash inflows
+1,915,551
+1,915,551
+12
+Outflows related to loss of funding on debt
+products
+13
+Credit and liquidity facilities
+1,361,436
+112,151
+14
+Other contractual funding obligations
+79,935
+79,935
+15
+Other contingent funding obligations
+3,206,011
+93,610
+16 Total cash outflows
+6,626,319
+17
+other collateral requirements
+4,594,486
+3,605,966
+BANK OF CHINA LIMITED
+1
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+The Group's net stable funding ratio (Continued)
+Ending value of NSFR (3)
+(1)
+2021
+As at 31
+December
+As at 30
+September
+As at 30
+June
+As at 31
+March
+122.21%
+121.33%
+121.22%
+123.29%
+NSFR is introduced to ensure commercial banks have sufficient stable funding to meet the requirements of
+assets and off-balance sheet exposures.
+(2)
+When calculating the consolidated NSFR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life were excluded from the scope of consolidation in accordance with the requirements of the CBIRC.
+(3)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+127.61%
+(Amount in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+The Group's liquidity coverage ratio (Continued)
+(1)
+(2)
+(3)
+The LCR aims to ensure that commercial banks have sufficient HQLA that can be converted into cash to
+meet the liquidity requirements for at least thirty days under stress scenarios determined by the CBIRC.
+When calculating the consolidated LCR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life were excluded from the scope of consolidation in accordance with the requirements of the CBIRC.
+The average of LCR and the averages of all related individual items are the day-end simple arithmetic
+averages of figures over each quarter.
+Net stable funding ratio
+In accordance with the Disclosure Rules on Net Stable Funding Ratio of Commercial Banks,
+the Group disclosed the information of net stable funding ratio (“NSFR”)(¹) as follows:
+Regulatory requirements of net stable funding ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks issued by
+the CBIRC, the minimum regulatory requirement of NSFR is 100%.
+The Group's net stable funding ratio
+As stipulated by the Disclosure Rules on Net Stable Funding Ratio of Commercial Banks
+issued by the CBIRC, banks approved to implement the advanced approaches of capital
+measurement by the CBIRC in accordance with Capital Rules for Commercial Banks
+(Provisional) shall disclose the information of net stable funding ratio for the preceding two
+consecutive quarters at least semi-annually.
+As at 31 December 2021, the Group's NSFR was 122.21% on a consolidated basis(2),
+representing an increase of 0.88 percentage point over the previous quarter. As at 30
+September 2021, the Group's NSFR was 121.33%, representing an increase of 0.11
+percentage point over the previous quarter. The Group's NSFR remained stable, and met the
+regulatory requirement.
+438
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+Outflows related to derivative exposures and
+2,027,702
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+2021
+Quarter
+Quarter
+Quarter
+ended 31
+December
+ended 30
+September
+ended 30
+June
+Quarter
+ended 31
+March
+Average value of LCR
+127.61%
+124.62%
+127.51%
+133.30%
+436
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+BANK OF CHINA LIMITED
+Since 2017, the Group measured the LCR on a day-to-day consolidated basis (2). In the
+fourth quarter of 2021, the Group measured 92-day LCR on this basis, with average ratio (3)
+standing at 127.61%, representing an increase of 2.99 percentage points over the previous
+quarter, which was primarily due to the decrease in the net cash outflow.
+There are no differences in the Group's operating results for the years ended 31 December
+2021 and 2020 or total equity as at 31 December 2021 and 2020 presented in the Group's
+consolidated financial statements prepared under IFRS and those prepared under CAS.
+II UNAUDITED SUPPLEMENTARY INFORMATION
+1
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio
+As at 31 December
+2021
+2020
+RMB current assets to RMB current liabilities
+49.63%
+54.50%
+Foreign currency current assets to foreign
+currency current liabilities
+69.90%
+58.57%
+The liquidity ratios are calculated in accordance with the relevant provisions of the CBIRC.
+Liquidity coverage ratio
+According to the Disclosure Rules on Liquidity Coverage Ratio of Commercial Banks, the
+Group disclosed the information of liquidity coverage ratio ("LCR") (¹) as follows.
+Regulatory requirements of liquidity coverage ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks issued by
+the CBIRC, the minimum regulatory requirement of LCR is 100%.
+The Group's liquidity coverage ratio
+435
+11
+SUPPLEMENTARY INFORMATION
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+5 Unsecured wholesale funding, of which:
+10,186,586
+3,804,281
+Operational deposits (excluding those generated
+from correspondent banking activities)
+5,692,939
+1,397,907
+78981
+Non-operational deposits (all counterparties)
+4,436,579
+2,349,306
+Unsecured debts
+57,068
+57,068
+Secured funding
+672
+10
+Additional requirements, of which:
+3,276,987
+395,573
+(Amount in millions of Renminbi, unless otherwise stated)
+3,955,726
+4
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+The Group's liquidity coverage ratio (Continued)
+The Group's average values (3) of consolidated LCR individual line items in the fourth
+quarter of 2021 are as follows:
+No.
+High-quality liquid assets
+1 Total high-quality liquid assets (HQLA)
+Cash outflows
+2 Retail deposits and deposits from small business
+Total
+NSFR are the ending values of each quarter.
+Total
+weighted
+value
+4,594,486
+customers, of which:
+8,584,274
+620,119
+3456
+Stable deposits
+4,628,548
+224,546
+Less stable deposits
+unweighted
+value
+439
+Residential mortgages of which:
+18,000
+18,000
+Other capital instruments
+3
+2,472,030
+2,472,030
+Regulatory capital
+2
+4
+2,490,030
+1
+value
+≥1 year
+Weighted
+6-12
+months
+No
+maturity <6 months
+Unweighted value
+Capital
+2,490,030
+Retail deposits and deposits from
+small business customers
+4,250,419 4,815,806
+5,860,537 6,398,752
+Wholesale funding
+7
+4,053,103
+10,699
+38,664
+2,292,425 2,160,471
+Less stable deposits
+6
+4,403,127
+6,746
+14,440
+2,655,335
+1,957,994
+Stable deposits
+5
+8,456,230
+17,445
+53,104
+Available Stable Funding (ASF) Item
+No. Items
+The Group's consolidated NSFR individual line items at the end of the third quarter of 2021
+are as follows:
+The Group's net stable funding ratio (Continued)
+435
+NSFR
+34
+Total RSF
+Off-balance sheet items
+333
+above categories
+All other assets not included in the
+31
+additional requirements
+NSFR derivatives liabilities with
+30
+29 NSFR derivatives assets
+22
+to default funds of CCPs
+derivative contracts and contributions
+Assets posted as initial margin for
+28
+243,004
+370
+911,926
+103,898
+19,416*
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+441
+Reported derivative liabilities are before deducting variation margin posted. There is no need to
+differentiate by maturities. The unweighted value should be excluded from the total value of item No.26
+"Other assets".
+*
+122.21%
+14,290,402
+302,271
+7,419,366
+988,495
+423,014
+19,076
+100,861
+466,266
+19,416
+6,817
+285,887
+498,314
+8
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+442
+432,043
+66,470
+1,312,245 323,510
+46,539
+by non-Level 1 assets and unsecured
+loans to financial institutions
+(Amount in millions of Renminbi, unless otherwise stated)
+Loans to financial institutions secured
+41,757
+417,569
+by Level 1 assets
+Loans to financial institutions secured
+18
+10,429,932 11,765,087
+2,254,618
+94,226
+19
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+1
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+21
+6,708,858
+1,679,453 5,273,588
+3,010,264
+of which:
+public sector entities (PSES)
+sovereigns, central banks and
+customers, non-financial institutions,
+Weighted
+value
+≥1 year
+6-12
+months
+No
+maturity <6 months
+Unweighted value
+Loans to retail and small business
+20
+Required Stable Funding (RSF) Item (Continued)
+No. Items
+The Group's consolidated NSFR individual line items at the end of the third quarter of 2021
+are as follows (Continued):
+The Group's net stable funding ratio (Continued)
+1,979
+5,112,083
+46,539
+Loans and securities
+17
+4,479
+206,180
+56,128
+Other liabilities
+11
+interdependent assets
+Liabilities with matching
+10
+3,024,878
+498,314
+911,926
+6,290,418
+446,495
+Other wholesale funding
+9
+2,761,188
+108,334
+5,414,042
+Operational deposits
+405,356
+5,786,066
+309,724
+NSFR derivatives liabilities
+186,473
+institutions for operational purposes
+Deposits held at other financial
+16
+675,604
+Total NSFR high-quality liquid assets
+15
+Required Stable Funding (RSF) Item
+309,724
+17,042,050
+Total ASF
+14
+307,485
+4,479
+206,180
+56,128
+included in the above categories
+All other liabilities and equity not
+13
+97,871
+12
+With a risk weight of less than or
+including gold
+27
+10
+462,606 3,056,657
+1,020,579
+2,934,664
+172,982
+6,014,818
+487,119
+Other wholesale funding
+9
+Liabilities with matching
+5,696,346
+8
+5,991,321
+462,606
+1,020,579
+6,183,465 6,187,800
+Wholesale funding
+7
+3,952,177
+Operational deposits
+interdependent assets
+11
+Other liabilities
+15
+Required Stable Funding (RSF) Item
+313,011
+17,463,911
+Total ASF
+14
+310,815
+4,392
+219,383
+68,499
+included in the above categories
+All other liabilities and equity not
+13
+313,011
+407,896
+97,081
+NSFR derivatives liabilities
+12
+4,392
+219,383
+68,499
+3,940
+40,030
+2,191,830 2,155,070
+Less stable deposits
+2,604,093
+2,604,093
+Weighted
+value
+≥1 year
+6-12
+months
+No
+maturity <6 months
+Capital
+Available Stable Funding (ASF) Item
+No. Items
+1
+Unweighted value
+The Group's consolidated NSFR individual line items at the end of the fourth quarter of
+2021 are as follows:
+The Group's net stable funding ratio (Continued)
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+2
+Total NSFR high-quality liquid assets
+Regulatory capital
+2,586,093
+6
+4,603,309
+2,516
+13,439
+2,142,470 2,687,031
+Stable deposits
+5
+8,555,486
+6,456
+53,469
+4,842,101
+4,334,300
+small business customers
+Retail deposits and deposits from
+4
+18,000
+18,000
+Other capital instruments
+3
+2,586,093
+Physical traded commodities,
+759,186
+Deposits held at other financial
+equal to 35%
+With a risk weight of less than or
+47,673
+3,948,278
+4,597,223
+98,971
+98,499
+Residential mortgages of which:
+22
+6,657
+23
+31,881
+24,550
+219,860
+equal to 35%
+With a risk weight of less than or
+21
+6,763,085
+5,363,951
+22
+6,810
+290,479
+195,545
+1,258,102
+527,347
+19,076
+100,861
+752,153
+Other assets
+26
+225
+liabilities
+Assets with matching interdependent
+25
+552,395 706,031
+122,124
+349,019
+exchange-traded equities
+do not qualify as HQLA, including
+Securities that are not in default and
+24
+24
+1,702,685
+2,911,282
+of which:
+public sector entities (PSES)
+1,433,122
+75,073
+by non-Level 1 assets and unsecured
+loans to financial institutions
+Loans to financial institutions secured
+19
+29,301
+293,010
+by Level 1 assets
+Loans to financial institutions secured
+18
+76,285
+11,894,558
+10,582,731
+2,228,720
+4,705
+5,084,932
+75,073
+Loans and securities
+17
+147,865
+institutions for operational purposes
+304,940
+16
+69,162
+440
+Weighted
+value
+≥1 year
+6-12
+months
+No
+maturity <6 months
+Unweighted value
+sovereigns, central banks and
+customers, non-financial institutions,
+Loans to retail and small business
+20
+Required Stable Funding (RSF) Item (Continued)
+No. Items
+The Group's consolidated NSFR individual line items at the end of the fourth quarter of
+2021 are as follows: (Continued):
+The Group's net stable funding ratio (Continued)
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+1
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+447,863
+22
+equal to 35%
+28,312
+(18,130) (21,058)
+5,795
+Structural position
+22
+233,953
+23
+375,844
+*
+44,983
+The net option position is calculated in accordance with the relevant provisions of the CBIRC.
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+3
+International claims
+The Group discloses international claims according to Banking (Disclosure) Rules (L.N.
+160 of 2014). International claims are risk exposures generated from the countries or
+geographical areas where the counterparties take the ultimate risk while considering the
+transfer of the risk, exclude local claims on local residents in local currency. Risk transfer is
+only made if the claims are guaranteed by a party in a country which is different from that
+of the counterparty or if the claims are on an overseas branch of a counterparty whose head
+office is located in another country.
+International claims include “Balances with central banks”, “Due from and placements
+with and loans to banks and other financial institutions”, “Government certificates of
+indebtedness for bank notes issued", "Loans and advances to customers” and “Financial
+investments", etc.
+444
+Net long/(short) position
+(6,615) (26,285)
+(364)
+(1,373)
+Net long/(short) position
+42,438
+(8,929) (23,581)
+9,928
+Structural position
+72,622 228,897
+87,567 389,086
+As at 31 December 2020
+Spot assets
+Spot liabilities
+3,695,294 1,607,291 1,945,381 7,247,966
+(4,029,848) (1,964,590) (1,736,612) (7,731,050)
+Forward purchases
+4,944,883
+Forward sales
+(4,546,040)
+760,105 1,313,088 7,018,076
+(420,572) (1,536,300) (6,502,912)
+Net options position*
+(19,306)
+International claims have been disclosed by major countries or geographical areas. A
+country or geographical area is reported where it constitutes 10% or more of the aggregate
+amount of international claims, after taking into account any risk transfers.
+Banks
+sector
+Non-bank
+Official private
+sector
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+3
+International claims (Continued)
+Official
+Non-bank
+private
+Banks
+sector
+sector
+Total
+As at 31 December 2020
+Asia Pacific
+Chinese mainland
+675,133
+Hong Kong (China)
+40,671
+Other Asia Pacific locations
+97,249
+236,529
+214
+166,292
+SUPPLEMENTARY INFORMATION
+(2,194)
+BANK OF CHINA LIMITED
+769,314 2,186,540 4,431,451
+Total
+As at 31 December 2021
+Asia Pacific
+Chinese mainland
+926,064
+Hong Kong (China)
+Other Asia Pacific locations
+76,221
+118,247
+256,068 729,546
+4,889 460,784
+181,367 413,635
+1,911,678
+541,894
+713,249
+Subtotal
+1,120,532
+442,324 1,603,965 3,166,821
+North and South America
+Europe and other
+116,742 240,651 278,585
+238,323 86,339 303,990
+635,978
+628,652
+Total
+1,475,597
+445
+702,641 1,614,303
+(32)
+Net options position*
+720,647
+59,432
+6,582
+580,030
+1,226,206
+27
+Physical traded commodities,
+including gold
+Other assets
+249,356
+28
+Assets posted as initial margin for
+derivative contracts and contributions
+to default funds of CCPs
+2225
+29 NSFR derivatives assets
+30
+NSFR derivatives liabilities with
+211,952
+26
+225
+liabilities
+97,853
+98,102
+4,508,548
+43,027
+3,873,376
+With a risk weight of less than or
+equal to 35%
+6,668
+6,734
+284,333
+191,518
+24
+Securities that are not in default and
+do not qualify as HQLA, including
+exchange-traded equities
+274,152
+153,553
+581,326
+709,053
+25
+Assets with matching interdependent
+additional requirements
+31
+All other assets not included in the
+333
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+2
+Currency concentrations
+The following information is computed in accordance with the provisions of the CBIRC.
+Equivalent in millions of RMB
+USD
+HKD
+Other
+Total
+As at 31 December 2021
+Spot assets
+Spot liabilities
+Forward purchases
+4,431,956
+Forward sales
+(4,650,892)
+4,217,661 1,693,178 1,954,742 7,865,581
+(3,957,140) (1,956,893) (1,781,566) (7,695,599)
+740,015 1,322,061 6,494,032
+(485,197) (1,516,624) (6,652,713)
+BANK OF CHINA LIMITED
+853
+443
+*
+above categories
+Off-balance sheet items
+Total RSF
+34 NSFR
+387
+329
+103,514
+5,643
+19,574*
+19,574
+471,291
+59,432
+6,582
+476,129
+988,708
+7,024,290
+285,014
+14,046,137
+121.33%
+Reported derivative liabilities are before deducting variation margin posted. There is no need to
+differentiate by maturities. The unweighted value should be excluded from the total value of item No.26
+"Other assets".
+234,243
+442,402
+417,733
+2
+Less: Tier 1 capital deductions
+25,674,481
+(26,415)
+Total on-balance sheet exposures
+(excluding derivatives and SFTs)
+25,648,066
+4
+Replacement cost associated with all derivative transactions
+securities financing transactions (SFTs))
+(i.e. net of eligible cash variation margin)
+5
+Add-on amounts for potential future exposure associated
+with all derivative transactions
+133,316
+6
+Gross-up for derivative collateral provided where deducted
+from the balance sheet assets
+7
+95,847
+On-balance sheet assets (excluding derivatives and
+1
+2021
+31 December
+2021
+26,722,408
+(447,590)
+133,390
+153,703
+1,889,881
+(26,415)
+8 Adjusted on- and off-balance sheet assets
+28,425,377
+448
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+5 Leverage ratio (Continued)
+No. Items
+As at
+31 December
+Less: Deductions of receivable assets for cash variation margin
+provided in derivative transactions
+8
+9
+18
+Less: Adjustments for conversion to credit equivalent amounts
+(3,815,914)
+19
+20
+122
+Adjusted off-balance sheet exposures
+1,889,881
+Net tier 1 capital
+2,173,731
+Adjusted on- and off-balance sheet exposures
+28,425,377
+22
+22
+Leverage ratio
+7.65%
+(1) When calculating the consolidated leverage ratio, BOCG Investment, BOC Insurance, BOCG Insurance
+and BOCG Life were excluded from the scope of consolidation in accordance with the Capital Rules for
+Commercial Banks (Provisional).
+449
+24,249
+5,705,795
+As at
+Off-balance sheet items
+658,193
+10
+Less: Exempted CCP leg of client-cleared trade exposures
+Adjusted effective notional amount of written credit derivatives
+Less: Deductible amounts for written credit derivatives
+82
+(8)
+11
+Total derivative exposures
+229,237
+12
+Accounting balance for securities financing transaction assets
+504,490
+13
+Less: Deducted amounts for securities financing transaction assets
+14
+Counterparty credit risk exposure for securities financing transaction
+assets
+153,703
+15
+Agent transaction exposures
+16
+Balance of assets in securities financing transactions
+17
+483,287
+Adjustments for derivative financial instruments
+Adjustments for securities financing transactions
+Adjustments for off-balance sheet exposures
+Other adjustments
+1 Total consolidated assets
+which have been overdue
+within 3 months
+44,014
+54,342
+between 3 and 6 months
+20,298
+24,001
+between 6 and 12 months
+Total loans and advances to customers
+50,993
+52,432
+53,944
+over 12 months
+Total
+Percentage
+167,737
+179,384
+within 3 months
+47,097
+2020
+2021
+As at 31 December
+681,274
+Subtotal
+813,053
+403,035
+1,562,776 2,778,864
+North and South America
+Europe and other
+81,312
+201,540
+233,162 173,112 487,586
+63,838 283,718 549,096
+Total
+1,095,905
+700,035 2,019,606 3,815,546
+446
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+4 Overdue assets
+For the purpose of the table below, the entire outstanding balance of "Loans and advances
+to customers" and "Placements with and loans to banks and other financial institutions" are
+considered overdue if either principal or interest payment is overdue.
+4.1 Total amount of overdue loans and advances to customers
+0.28%
+0.38%
+between 3 and 6 months
+0.13%
+As at
+31 December 30 September
+30 June
+As at
+31 March
+Net tier 1 capital
+Adjusted on- and
+2,173,731
+2,111,813
+2,058,220
+2,014,251
+off-balance sheet assets 28,425,377 27,820,891 27,861,068
+27,344,497
+Leverage ratio
+7.65%
+7.59%
+7.39%
+7.37%
+No. Items
+34567
+As at
+Adjustments that are consolidated for accounting purposes
+but outside the scope of regulatory consolidation
+Adjustments for fiduciary assets
+As at
+The leverage ratios of the Group calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) are as follows(¹):
+0.17%
+between 6 and 12 months
+0.33%
+0.33%
+over 12 months
+0.33%
+0.38%
+Total
+1.07%
+1.26%
+4.2 Total amount of overdue Placements with and loans to banks and other financial
+institutions
+The total amount of overdue "Placements with and loans to banks and other financial
+institutions" as at 31 December 2021 and 2020 is not considered material.
+447
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amount in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+5
+Leverage ratio
+2021
+79,913
+61,978
+You may write to the Bank's H-Share Registrar, Computershare Hong Kong Investor Services
+Limited (address: 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong,
+China) to request the annual report prepared under IFRS or visit the Bank's office address for
+copies prepared under CAS. The Chinese and/or English versions of the annual report are also
+available on the following websites: www.boc.cn, www.sse.com.cn and www.hkexnews.hk.
+Bank Card Center
+Institutions in Hong Kong,
+Macao, Taiwan of China and
+other countries and regions
+IT Operation Center
+Security Department
+ון
+ון
+Software Center
+Commercial banking
+Comprehensive Operation
+Commercial banking
+Comprehensive Operation
+Information Settlement ||
+Corporate Culture
+Department
+11
+Center
+Chinese mainland
+I
+Institutions in the
+Organisational Chart
+2022 JIANSHE ROAD,
+LUOHU DISTRICT,
+SHENZHEN,
+Should you have any queries about how to obtain copies of this annual report or access the
+document on the Bank's website, please call the Bank's H-Share Registrar at (852) 2862 8688 or
+the Bank's hotlines at (86) 10-6659 2638.
+455
+456
+Board of Directors
+Board Secretariat
+Audit Department
+Head Office Departments
+and Institutions
+Shareholders' Meeting
+Senior Management
+Board of Supervisors
+Board of
+Supervisors Office
+Domestic and Overseas
+Branches and Comprehensive
+Operation Companies
+Institute of Bank of
+Other Information
+||
+||
+BOCIM
+Macau Branch
+BOCG Insurance
+Tai Fung Bank Limited
+BOC Life
+BOC Aviation
+Valley
+Shanghai RMB
+Trading Unit
+Executive Office
+Human Resources
+Department
+Globalisation Office
+Office of the Leading
+Group for Comprehensively
+Deepening Reform
+Education & Development
+Department
+BOCG Investment
+Beijing College of
+Hong Kong Branch
+BOCHK
+International Finance
+Labor Union Office
+||
+Shanghai College of
+International Finance
+Retired Staff Office
+11
+L
+Logistics Office
+Institutions
+Tier-one and direct
+branches, tier-two
+branches and
+sub-branches
+BOC Fullerton
+Community Bank
+BOC Wealth Management
+BOC Insurance
+BOC-Samsung Life
+Financial Management
+Department
+Asset & Liability
+Management Department
+Digital Asset
+Management Department
+Equity Investment and
+Subsidiary Management
+Department
+Facsimile: (86) 10-6659 4568
+E-mail: ir@bankofchina.com
+Investor Relations Team, Board Secretariat, Bank of China Limited
+3988 HK
+Reuters
+Bloomberg
+Domestic Preference Share (Third Tranche)
+Stock Name
+中行優3
+Shanghai Stock Exchange
+360033
+Bloomberg
+AZ8714182
+Offshore Preference Share (Second Tranche)
+Stock Name
+BOC 20USDPREF
+Hong Kong Stock Exchange 4619
+Reuters
+Bloomberg
+4619.HK
+Bloomberg
+BG2289661
+601988 CH
+3988
+HKD2.81
+Highest trading
+price in the year
+RMB3.38
+Highest trading
+price in the year
+HKD3.17
+Lowest trading
+price in the year
+RMB2.96
+Lowest trading
+price in the year
+HKD2.59
+H Share
+中國銀行
+Stock Name
+Bank of China
+601988
+601988.SS
+Hong Kong Stock Exchange
+Reuters
+3988.HK
+8/F, Bank of China Building, No. 1 Fuxingmen Nei Dajie, Xicheng District, Beijing, China
+Telephone: (86) 10-6659 2638
+Domestic Preference Share (Fourth Tranche)
+Stock Name
+Shanghai Stock Exchange
+Domestic Preference Share
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited
+188 South Yanggao Road,
+Pudong New Area, Shanghai, China
+Telephone: (86) 21-4008 058 058
+Credit Rating (Long Term, Foreign Currency)
+S&P Global Ratings:
+Moody's Investors Service:
+Fitch Ratings:
+A
+A1
+<M<
+A
+454
+Investor Enquiry
+Facsimile: (852) 2865 0990
+中行優4
+Telephone: (852) 2862 8555
+17M Floor, Hopewell Centre,
+183 Queen's Road East,
+Bloomberg
+453
+360035
+ZQ0362264
+Shareholder Enquiry
+If a shareholder wishes to enquire about share transfers, changes of name or address, or loss of
+share certificates, or to receive other information concerning the shares held, please write to the
+following address:
+A Share
+Shanghai Branch of China Securities
+Depository and Clearing Corporation Limited
+188 South Yanggao Road,
+Pudong New Area, Shanghai, China
+Telephone: (86) 21-4008 058 058
+H Share
+Computershare Hong Kong Investor
+Services Limited
+Wan Chai, Hong Kong, China
+Corporate Banking
+Department
+Administrative
+Institutions Department
+Financial Institutions
+Department
+Global Transaction
+Banking Department
+SME Services Department
+(Rural Revitalisation
+Finance Department)
+Digital Personal Banking
+Department
+HUBEI BRANCH
+219 XINHUA ROAD,
+JIANGHAN DISTRICT,
+WUHAN,
+HUBEI PROV.,
+CHINA
+SWIFT: BKCHCNBJ600
+TEL: (86) 027-85569726
+FAX: (86) 027-85562955
+POST CODE: 430022
+HAINAN BRANCH
+29, 31 DATONG ROAD,
+LONGHUA DISTRICT,
+HAIKOU,
+HAINAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ740
+TEL: (86) 0898-66778001
+FAX: (86) 0898-66562040
+POST CODE: 570102
+JIANGXI BRANCH
+10, LVYIN ROAD,
+HONGGUTAN NEW DISTRICT,
+NANCHANG,
+JIANGXI PROV.,
+CHINA
+SWIFT: BKCHCNBJ550
+TEL: (86) 0791-86471503
+FAX: (86) 0791-86471505
+POST CODE: 330038
+SWIFT: BKCHCNBJ720
+TEL: (86) 0591-87090999
+FAX: (86) 0591-87090111
+POST CODE: 350003
+SHANDONG BRANCH
+CHINA
+BOC BLDG., 136 WUSI ROAD,
+FUZHOU,
+HENAN BRANCH
+GUANGXI BRANCH
+NO. 1688, YUNGU ROAD,
+BINHU NEW DISTRICT,
+HEFEI,
+ANHUI PROV.,
+CHINA
+SWIFT: BKCHCNBJ780
+TEL: (86) 0551-62926995
+FAX: (86) 0551-62926993
+POST CODE: 230091
+3-1 BUSINESS OUTER RING ROAD,
+ZHENGDONG NEW DISTRICT,
+ZHENGZHOU,
+HENAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ530
+TEL: (86) 0371-87008888
+FAX: (86) 0371-87007888
+POST CODE: 450018
+39 GUCHENG ROAD,
+NANNING,
+GUANGXI ZHUANG
+AUTONOMOUS REGION,
+CHINA
+SWIFT: BKCHCNBJ480
+TEL: (86) 0771-2879602
+FAX: (86) 0771-2813844
+POST CODE: 530022
+FUJIAN BRANCH
+FUJIAN PROV.,
+ANHUI BRANCH
+22 LUOYUAN STREET,
+JINAN,
+SWIFT: BKCHCNBJ500
+TEL: (86) 0531-58522001
+FAX: (86) 0531-58522000
+POST CODE: 250000
+YUNNAN BRANCH
+515 BEIJING ROAD,
+KUNMING,
+YUNNAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ640
+QINGHAI BRANCH
+218 DONGGUAN STREET,
+CHENG DONG DISTRICT,
+XINING,
+QINGHAI PROV.,
+CHINA
+TEL: (86) 0871-63191216
+SWIFT: BKCHCNBJ280
+FAX: (86) 0871-63175573
+POST CODE: 650051
+TEL: (86) 0971-8178888
+FAX: (86) 0971-8174971
+POST CODE: 810000
+NINGXIA BRANCH
+SHENZHEN BRANCH
+458
+SHANDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ240
+TEL: (86) 0851-85822419
+FAX: (86) 0851-85863981
+POST CODE: 550002
+BOC BLDG., 347 RUIJIN
+SOUTH ROAD,
+GUIYANG,
+HUNAN BRANCH
+593 MID. FURONG ROAD
+(1 DUAN),
+CHANGSHA,
+HUNAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ970
+TEL: (86) 0731-82580703
+FAX: (86) 0731-82580707
+POST CODE: 410005
+GUANGDONG BRANCH
+1-19TH FLOOR NO. 197 &
+1-11TH FLOOR, 14-19TH FLOOR
+NO. 199 DONGFENG XI ROAD
+YUEXIU DISTRICT,
+GUANGZHOU,
+GUANGDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ400
+TEL: (86) 020-83338080
+FAX: (86) 020-83344066
+POST CODE: 510180
+SICHUAN BRANCH
+35 MID. RENMIN ROAD
+(2 DUAN),
+CHENGDU,
+SICHUAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ570
+TEL: (86) 028-86741950
+FAX: (86) 028-86403346
+POST CODE: 610031
+GUIZHOU BRANCH
+GUIZHOU PROV.,
+CHINA
+457
+SWIFT: BKCHCNBJ910
+TEL: (86) 0571-85011888
+FAX: (86) 0571-87074837
+POST CODE: 310003
+321 FENG QI ROAD,
+HANGZHOU,
+ZHEJIANG PROV.,
+CHINA
+BEIJING,
+CHINA
+SWIFT: BKCHCNBJ
+TEL: (86) 010-66596688
+FAX: (86) 010-66016871
+POST CODE: 100818
+WEBSITE: www.boc.cn
+SHANXI BRANCH
+186 PINGYANG ROAD,
+XIAODIAN DISTRICT,
+TAIYUAN,
+SHANXI PROV.,
+CHINA
+SWIFT: BKCHCNBJ680
+TEL: (86) 0351-8266016
+FAX: (86) 0351-8266021
+POST CODE: 030006
+HEILONGJIANG BRANCH
+19 HONGJUN STREET,
+NANGANG DISTRICT,
+HARBIN,
+HEILONGJIANG PROV.,
+CHINA
+SWIFT: BKCHCNBJ860
+TEL: (86) 0451-53636890
+FAX: (86) 0451-53624147
+POST CODE: 150001
+BEIJING BRANCH
+INNER MONGOLIA BRANCH
+SHANGHAI BRANCH
+1 FUXINGMEN NEI DAJIE,
+A, C, E KAIHENG CENTER,
+HEAD OFFICE
+List of Major Branches and Subsidiaries
+Consumer Finance
+Department
+Global Markets
+Department
+Investment Banking and
+Asset Management
+Department
+Custody Services
+Department
+Risk Management
+Department
+Credit Approval
+Department
+Credit Management
+Department
+Internal Control and
+Legal & Compliance
+Department
+Distribution and Operation
+Management Department
+Information Technology
+Department
+Office of Enterprise-level
+Architecture Development
+Clearing
+Department
+China
+Office of Leading
+Group for Conducting
+Inspection
+Head Office Departments
+Note: The Bank holds 33.42% of the equity interest of BOCI China through its wholly-owned subsidiary BOCI.
+BOCI China Note
+BOC Asset Investment
+BOCL
+Bank of China Consumer
+Finance
+BOC Financial Technology
+Taipei Branch
+Branches, subsidiaries and
+representative offices in other
+countries and regions
+MAJOR BRANCHES AND SUBSIDIARIES IN THE CHINESE MAINLAND
+2 CHAOYANGMEN NEI DAJIE,
+DONGCHENG DISTRICT,
+BEIJING,
+28 ZIQIANG ROAD,
+SHIJIAZHUANG,
+HEBEI PROV.,
+CHINA
+SWIFT: BKCHCNBJ220
+TEL: (86) 0311-69696681
+FAX: (86) 0311-69696692
+POST CODE: 050000
+LIAONING BRANCH
+253 SHIFU ROAD,
+SHENHE DISTRICT,
+SHENYANG,
+LIAONING PROV.,
+CHINA
+SWIFT: BKCHCNBJ810
+TEL: (86) 024-22810916
+FAX: (86) 024-22857333
+POST CODE: 110013
+JILIN BRANCH
+699 XI AN DA LU,
+CHANGCHUN,
+JILIN PROV.,
+CHINA
+SWIFT: BKCHCNBJ840
+TEL: (86) 0431-88408888
+FAX: (86) 0431-88408901
+POST CODE: 130061
+JIANGSU BRANCH
+148 ZHONG SHAN NAN LU,
+NANJING,
+JIANGSU PROV.,
+CHINA
+SWIFT: BKCHCNBJ940
+TEL: (86) 025-84207888
+FAX: (86) 025-84200407
+POST CODE: 210005
+ZHEJIANG BRANCH
+HEBEI BRANCH
+SWIFT: BKCHCNBJ200
+TEL: (86) 022-27108002
+FAX: (86) 022-23312805
+POST CODE: 300204
+CHINA
+TIANJIN,
+CHINA
+SWIFT: BKCHCNBJ110
+TEL: (86) 010-85121491
+FAX: (86) 010-85121739
+POST CODE: 100010
+TIANJIN BRANCH
+12 XINHUA DAJIE,
+XIN CHENG DISTRICT,
+HUHHOT,
+31 December 2021
+INNER MONGOLIA
+CHINA
+SWIFT: BKCHCNBJ880
+TEL: (86) 0471-4690128
+FAX: (86) 0471-4690001
+POST CODE: 010010
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+SWIFT: BKCHCNBJ300
+TEL: (86) 021-50375566
+FAX: (86) 021-50372911
+POST CODE: 200120
+8 YOUYI NORTH ROAD,
+HEXI DISTRICT,
+AUTONOMOUS REGION,
+Closing price on
+31 December 2021
+RMB3.05
+Closing price on
+7
+Assets under custody
+6
+5
+Payments settled via payment systems or correspondent banks
+4 Securities and other financing instruments
+3
+Intra-financial system liabilities
+Intra-financial system assets
+Adjusted on-balance and off-balance sheet assets
+Underwritten transactions in debt and equity markets
+12
+The Group calculated the global systemically important banks assessment indicators by
+using the Notice on Issuing the Guidelines for the Disclosure of the Indicators for Assessing
+Global Systemic Importance of Commercial Banks (Yin jian fa, [2014] No.1) as a reference
+basis, and based on the Instructions for G-SIB assessment exercise by the Basel Committee
+on Banking Supervision. The indicators are disclosed as follows:
+6 Global Systemic Importance Assessment Indicators of Commercial Banks
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+GUANGDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ45A
+TEL: (86) 0755-22331155
+FAX: (86) 0755-22331051
+POST CODE: 518001
+INTERNATIONAL FINANCE
+No. Indicators (¹)
+113 JINZHU XI LU,
+LHASA,
+8
+9
+14 Cross-jurisdictional liabilities
+Cross-jurisdictional claims
+93,107
+1,086,588
+10,888,369
+1,140,731
+3,141,591
+2,174,703
+11,777,333
+665,682,257
+Trading volume of fixed income
+4,449,968
+2,372,647
+28,521,651
+2021
+13
+Level 3 assets
+12
+Trading and available for sale securities
+11
+10 Notional amount of over-the-counter derivatives
+Trading volume of equities and other securities
+2,983,029
+(1)
+TIBET AUTONOMOUS
+REGION,
+SWIFT: BKCHCNBJ900
+XINJIANG BRANCH
+1 DONGFENG ROAD,
+URUMQI,
+XINJIANG UYGUR
+AUTONOMOUS REGION,
+CHINA
+SWIFT: BKCHCNBJ760
+TEL: (86) 0991-2328888
+FAX: (86) 0991-2825095
+POST CODE: 830002
+CHONGQING BRANCH
+218 ZHONG SHAN YI ROAD,
+YU ZHONG DISTRICT,
+CHONGQING,
+CHINA
+SWIFT: BKCHCNBJ59A
+TEL: (86) 023-63889234
+FAX: (86) 023-63889217
+POST CODE: 400013
+SUZHOU BRANCH
+128 WANGDUN ROAD,
+FAX: (86) 0951-5681509
+POST CODE: 750002
+SUZHOU INDUSTRIAL PARK,
+JIANGSU PROV.,
+CHINA
+SWIFT: BKCHCNBJ95B
+TEL: (86) 0512-67555898
+FAX: (86) 0512-65112719
+POST CODE: 215028
+NINGBO BRANCH
+3-18/F, 48-49/F, 318 HEYUAN
+ROAD AND 255 DINGTAI
+ROAD, NINGBO CITY,
+ZHEJIANG PROV.,
+CHINA
+SWIFT: BKCHCNBJ92A
+TEL: (86) 0574-55555099
+POST CODE: 315100
+QINGDAO BRANCH
+59 HONGKONG
+MIDDLE ROAD,
+QINGDAO,
+SHANDONG PROV.,
+CHINA
+SWIFT: BKCHCNBJ50A
+TEL: (86) 0532-85979700
+FAX: (86) 0532-67755601
+POST CODE: 266071
+459
+SUZHOU,
+CHINA
+TEL: (86) 0951-5681505
+CHINA
+TEL: (86) 0891-6835311
+FAX: (86) 0891-6835311
+POST CODE: 850000
+SHAANXI BRANCH
+18 TANGYAN ROAD BEIDUAN,
+LIANHU DISTRICT,
+XI'AN,
+SHAANXI PROV.,
+CHINA
+SWIFT: BKCHCNBJ620
+SWIFT: BKCHCNBJ260
+TEL: (86) 029-89593900
+GANSU BRANCH
+525 TIANSHUI SOUTH ROAD,
+CHENGGUAN DISTRICT
+LANZHOU,
+GANSU PROV.,
+CHINA
+SWIFT: BKCHCNBJ660
+TEL: (86) 0931-7825004
+FAX: (86) 0931-7825004
+POST CODE: 730000
+39 XINCHANG EAST ROAD,
+JINFENG DISTRICT,
+YINCHUAN,
+NINGXIA HUI
+AUTONOMOUS REGION,
+FAX: (86) 029-89592999
+POST CODE: 710077
+4,415,941
+TIBET BRANCH
+The indicators above are calculated and disclosed in accordance with the Guidelines for the Disclosure
+of Global Systemic Importance Assessment Indicators of Commercial Banks, which are unaudited and
+prepared on a different basis compared with the financial and regulatory scope of consolidation.
+Ordinary Shares
+The Domestic Preference Shares (Third Tranche) were traded on the Comprehensive Business
+Platform of SSE on 17 July 2019. The Domestic Preference Shares (Fourth Tranche) were traded
+on the Comprehensive Business Platform of SSE on 17 September 2019. The Offshore Preference
+Shares (Second Tranche) were listed on the Hong Kong Stock Exchange on 5 March 2020.
+The Bank's ordinary shares were listed on the Hong Kong Stock Exchange and SSE on 1 June
+and 5 July 2006 respectively.
+Listing and Trading
+Securities Information
+The Board of Directors recommended a final dividend on ordinary shares for 2021 of RMB2.21
+per 10 shares (before tax), subject to the approval of shareholders at the 2021 Annual General
+Meeting.
+To be announced no later than 30 August 2022
+To be printed and dispatched to H-Share Holders in
+late April 2022
+To be announced on 29 March 2022
+Dividends on Ordinary Shares
+Issued shares: 294,387,791,241 shares
+2022 Interim Results
+2021 Annual Results
+Financial Calendar for 2022
+Reference for Shareholders
+451
+The indicators above are unaudited data and prepared on a different basis compared with the financial scope
+of consolidation and adopted a different assessment methodology from global systemically important banks.
+(1)
+7,931,434
+16 Cross-jurisdictional claims and liabilities
+management subsidiary
+718,122
+2021 Annual Report
+Balance of wealth management products issued by wealth
+Including:
+210,765,514,846 shares
+3,801,847
+Stock Name
+A Share
+Securities Code
+H Share
+A Share
+=
+Securities Price
+As at the last trading day of 2021 (31 December), the Bank's market capitalisation was
+RMB834.953 billion (based on the closing price of A Shares and H Shares on 31 December
+2021, and the exchange rate of HKD100 RMB81.76 as published by the SAFE on 31 December
+2021).
+Market Capitalisation
+A Share:
+452
+197,865,300
+Offshore Preference Share:
+1,000,000,000 shares
+1,197,865,300 shares
+Domestic Preference Share:
+Including:
+Issued shares:
+Preference Shares
+83,622,276,395 shares
+H Share:
+shares
+15
+Shanghai Stock Exchange
+670,782
+1,711,262
+Securities and other financing instruments
+4
+2,885,960
+Intra-financial system liabilities
+3
+2,853,180
+Intra-financial system assets
+2
+25,370,714
+5
+Adjusted on-balance and off-balance sheet assets
+2020
+No. Indicators (1)
+The Group calculated the domestic systemic importance assessment indicators pursuant to
+the Notice on Filling in Data for Evaluating Systemically Important Banks and by referring
+to the Evaluation Measures for Systemically Important Banks (Yin Fa [2020] No. 289). The
+indicators are disclosed as follows:
+7 Domestic Systemic Importance Assessment Indicators of Commercial Banks for 2020
+II UNAUDITED SUPPLEMENTARY INFORMATION (CONTINUED)
+(Amount in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+450
+issued by the Bank
+1
+Payments settled via payment systems or correspondent banks
+BUILDING,
+Assets under custody
+618,018,673
+Balance of non-principal-guaranteed wealth management products
+14
+550,421
+Assets of non-banking affiliates
+13
+957,698
+12
+12,453,130
+Derivatives
+11
+Securities measured at fair value
+Number of domestic operating institutions (Unit: one)
+9,847,839
+10,489
+3,784,824
+8
+Number of corporate customers (Unit: ten thousand)
+Agency and commission business
+9
+Number of personal customers (Unit: ten thousand)
+32,742
+10
+451
+Xicheng District,
+BOC FINANCIAL
+https://www.bocwm.cn
+WEBSITE:
+POST CODE: 100033
+FAX: (86) 010-83937555
+TEL: (86) 010-83937333
+China
+Beijing,
+No. 6 Jinrong St,
+CHINA
+MANAGEMENT CO., LTD.
+BOC WEALTH
+460
+TEL: (86) 010-83262479
+FAX: (86) 010-83262478
+POST CODE: 100032
+EMAIL: bocfi@bocfi.com
+XICHENG DISTRICT,
+BEIJING,
+CHINA
+8/F, NO. 110 XIDAN NORTH
+STREET,
+BOC FINANCIAL ASSET
+INVESTMENT CO., LTD.
+www.boc-samsunglife.cn
+TEL: (86) 010-83262688
+FAX: (86) 010-83262777
+POST CODE: 100032
+WEBSITE:
+8F/11F/12F,
+TECHNOLOGY CO., LTD.
+CO., LTD.
+PUDONG NEW DISTRICT,
+24/F, BANK OF CHINA TOWER,
+(HOLDINGS) LIMITED
+BOC HONG KONG
+MAJOR BRANCHES AND SUBSIDIARIES IN HONG KONG, MACAO AND TAIWAN
+OF CHINA
+461
+EMAIL: bocfl@bankofchina.com
+POST CODE: 400010
+FAX: (86) 023-63031966
+TEL: (86) 023-63031966
+CHINA
+NO. 288 KAYUAN 2ND ROAD,
+CHONGQING
+NO. 131 ZOURONG ROAD,
+XICHENG DISTRICT,
+BEIJING,
+BOC FINANCIAL LEASING
+www.fintechboc.com
+WEBSITE:
+POST CODE: 201201
+FAX: (86) 021-38973713
+TEL: (86) 021-20408162
+CHINA
+SHANGHAI,
+YUZHONG DISTRICT,
+9/F, NO. 110 XIDAN NORTH
+STREET,
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+www.bocichina.com
+TEL: (86) 0592-5317519
+SWIFT: BKCHCNBJ73A
+XIAMEN
+CHINA
+NO. 40 NORTH HUBIN ROAD
+BOC BLDG.,
+www.bocfullertonbank.com
+TEL: (86) 010-57765000
+FAX: (86) 010-57765550
+POST CODE: 100032
+WEBSITE:
+CHINA
+NO. 110 XIDAN NORTH STREET,
+XICHENG DISTRICT,
+BEIJING,
+9/F,
+COMMUNITY BANK CO., LTD.
+BOC FULLERTON
+TEL: (86) 021-38834999
+FAX: (86) 021-68873488
+POST CODE: 200120
+WEBSITE: www.bocim.com
+CHINA
+45/F, BOC BUILDING
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+BANK OF CHINA INVESTMENT
+MANAGEMENT CO., LTD.
+XIAMEN BRANCH
+SWIFT: BKCHCNBJ81A
+TEL: (86) 0411-82586666
+FAX: (86) 0411-82637098
+POST CODE: 116001
+LIAONING PROV.,
+CHINA
+9 ZHONGSHAN SQUARE,
+ZHONGSHAN DISTRICT,
+DALIAN,
+DALIAN BRANCH
+FAX: (86) 0592-5095130
+POST CODE: 361012
+BOC-SAMSUNG LIFE INS.
+CO., LTD.
+HEBEI XIONGAN BRANCH
+HEBEI PROV.,
+CHINA
+WEBSITE:
+admindiv.china@bocichina.com
+TEL: (86) 021-20328000
+FAX: (86) 021-58883554
+POST CODE: 200120
+EMAIL:
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+39/F, BOC BUILDING
+BOC INTERNATIONAL
+(CHINA) CO., LTD.
+TEL: (86) 021-63291722
+FAX: (86) 021-63291789
+POST CODE: 200120
+EMAIL: zyxf@boccfc.cn
+WEBSITE: www.boccfc.cn
+CHINA
+1409#, BOC BUILDING
+BANK OF CHINA CONSUMER
+FINANCE CO., LTD.
+WEBSITE: www.bocins.com
+POST CODE: 100032
+FAX: (86) 010-83260006
+TEL: (86) 010-83260001
+CHINA
+BEIJING,
+XICHENG DISTRICT,
+NO. 110 XIDAN NORTH
+STREET,
+9/10/11F
+BANK OF CHINA INSURANCE
+CO., LTD.
+149 LUOSA STREET,
+RONGCHENG,
+SWIFT: BKCHCNBJ220
+TEL: (86) 0312-5988023
+FAX: (86) 0312-5557047
+POST CODE: 071700
+WEBSITE:
+www.bankofchina.com/rs
+SAO PAULO, SP,
+BRASIL
+SWIFT: BKCHBRSP
+TEL: (55) 1135083200
+FAX: (55) 1135083299
+EMAIL:
+ouvidoria@boc-brazil.com
+WEBSITE:
+www.bankofchina.com/br
+CHILE BRANCH
+ANDRÉSBELLO2457,
+PISO 16, PROVIDENCIA,
+SANTIAGO,
+CHILE
+SWIFT: BKCHCLRM
+TEL: (56) 227157800
+FAX: (56) 227157898
+EMAIL: servicios@cl.bocusa.com
+WEBSITE: www.bankofchina.com/cl
+FAX: (52) 5552078705
+CEP: 01311-100,
+901-14 ANDAR BELA VISTA
+AVENIDA PAULISTA,
+BRASIL S.A.
+PASEO DE LA REFORMA 243,
+PISO 24, COLONIA
+CUAUHTÉMOC, CIUDAD
+DE MÉXICO,
+MEXICO
+SWIFT: BKCHMXMX
+AFRICA
+BANK OF CHINA
+(ZAMBIA) LIMITED
+PLOT NO. 2339,
+KABELENGA ROAD,
+EMAIL: servicios @mx.bocusa.com
+WEBSITE:
+P. O. BOX 34550, LUSAKA,
+ZAMBIA
+TEL: (260) 211233271
+TEL: (507) 2169400
+FAX: (507) 2239960
+EMAIL:
+TEL: (52) 5541705800
+FAX: (260) 211236782
+bocpanama@cwpanama.net
+BANCO DA CHINA
+SWIFT: BKCHZMLU
+MÚLTIPLE
+www.bankofchina.com/mx
+JUANA MANSO 999,
+PISO 5, CABA,
+14TH-16TH FLOORS,
+ALICE LANE TOWERS,
+15 ALICE LANE, SANDTON,
+JOHANNESBURG,
+SOUTH AFRICA
+SWIFT: BKCHZAJJ
+TEL: (27) 115209600
+FAX: (27) 117832336
+EMAIL: bocjhb@bank-of-china.com
+WEBSITE:
+www.bankofchina.com/za
+BANK OF CHINA
+(MAURITIUS) LIMITED
+4TH-5TH FLOOR,
+DIAS PIER BUILDING,
+CAUDAN WATERFRONT,
+PORT LOUIS,
+MAURITIUS
+SWIFT: BKCHMUMU
+TEL: (230) 2034878
+FAX: (230) 2034879
+EMAIL:
+services.mu@bankofchina.com
+WEBSITE:
+www.bankofchina.com/mu
+469
+JOHANNESBURG BRANCH
+www.bankofchina.com/zm
+WEBSITE:
+executive.zm@bank-of-china.com
+ARGENTINA
+service.lu@bankofchina.com
+BANK OF CHINA (PERU) S.A.
+AV. REPULICA DE PANAMA
+3461,
+INT. 2901, SAN ISIDRO, LIMA,
+PERU
+SWIFT: BKCHPEPL
+TEL: (51) 17037700
+EMAIL:servicios@pe.bocusa.com
+BUENOS AIRES BRANCH
+WEBSITE:
+PERU REPRESENTATIVE
+OFFICE
+AV. REPULICA DE PANAMA
+3461,
+PISO 28, SAN ISIDRO, LIMA,
+PERU
+TEL: (51) 920137238
+EMAIL:
+service.pe@bankofchina.com
+EMAIL:
+www.bankofchina.com/pe
+S.A. INSTITUCIÓN DE BANCA
+BANK OF CHINA MÉXICO,
+SWIFT: BKCHPAPA
+P.O. BOX 241,
+TORONTO, ONTARIO,
+CANADA, M5X 1C8
+TEL: (7495) 2585301
+SWIFT: BKCHCAT2
+SWIFT: BKCHATWWXXX
+FAX: (7495) 7950454
+TEL: (1416) 9559788
+TEL: (43) 153666800
+FAX: (43) 153666888
+EMAIL:
+service.at@bankofchina.com
+WEBSITE:
+www.bankofchina.com/at
+BANK OF CHINA
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+BUCHAREST BRANCH
+6108 ONE FIRST CANADIAN PLACE,
+100 KING STREET WEST,
+TORONTO BRANCH
+SWIFT: BKCHRUMM
+MOSCOW, 129110
+RUSSIA
+BANK OF CHINA (CANADA)
+SUITE 600,
+50 MINTHORN BOULEVARD
+MARKHAM, ONTARIO,
+CANADA, L3T 7X8
+SWIFT: BKCHCATT
+TEL: (1905) 7716886
+FAX: (1905) 7718555
+EMAIL:
+service.ca@bankofchina.com
+WEBSITE:
+SECTORUL 1,
+www.bankofchina.com/ca
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+VIENNA BRANCH
+SCHOTTENRING 18,
+1010 VIENNA,
+AUSTRIA
+BANK OF CHINA (RUSSIA)
+72, PROSPEKT MIRA,
+BANK OF CHINA
+PIATA PRESEI LIBERE,
+NR. 3-5, TURNUL DE SUD
+AL CLADIRII CITY GATE,
+ETAJ11, BUCHAREST,
+ROMANIA
+SWIFT: BKCHROBUXXX
+TEL: (40) 318029888
+802 WEST BAY ROAD,
+P.O. BOX 30995,
+GRAND CAYMAN KY1-1204
+CAYMAN ISLANDS
+SWIFT: BKCHKYKY
+TEL: (1345) 9452000
+FAX: (1345) 9452200
+EMAIL:
+gcb@bank-of-china.com
+FAX: (1212) 5931831
+COMMERCIAL CENTER
+WEBSITE: www.bocusa.com
+PANAMA BRANCH
+P.O. BOX 0823-01030
+PUNTA PACIFICA
+P.H. OCEANIA BUSINESS PLAZA
+TORRE 2000 PISO 36
+PANAMA CITY,
+REPUBLIC OF PANAMA
+468
+1 GARDEN ROAD,
+GRAND PAVILION
+TEL: (1212) 9353101
+FAX: (40) 318029889
+EMAIL:
+service.ro@bankofchina.com
+EMAIL: iboc@boc.ru
+WEBSITE: www.boc.ru
+FAX: (1416) 9559880
+EMAIL:
+service.ca@bankofchina.com
+GENEVA BRANCH
+GRAND CAYMAN BRANCH
+RUE DE LA TOUR-DE-1
+ILE 1, CH-1204 GENEVA,
+SWITZERLAND
+service.ch@bank-of-hina.com
+AMERICA
+NEW YORK BRANCH
+1045 AVENUE OF THE AMERICAS,
+NEW YORK, NY 10018,
+U.S.A.
+SWIFT: BKCHUS33
+SWIFT: BKCHCHGE
+TEL: (415)86116800
+FAX: (415)86116801
+EMAIL:
+HONG KONG, CHINA
+SWIFT: BKCHARBAXXX
+TEL: (54) 1154395566
+EMAIL: service.ar@bankofchina.com
+FAX: (852) 28105830
+AL FATTAN CURRENCY HOUSE
+DUBAI INTERNATIONAL
+FINANCIAL CENTRE
+P.O. BOX 118842,
+DUBAI, U.A.E
+SWIFT: BKCHAEADXXX
+TEL: (971) 43819100
+FAX: (971) 43880778
+EMAIL: service.ae@bankofchina.com
+ABU DHABI BRANCH
+BUYUKDERE CAD.NO: 209,
+TEKFEN TOWER K.21,
+343944. LEVENT/SISLI/
+ISTANBUL
+TURKEY
+SWIFT: BKCHTRIS
+TEL: (90) 2122608888
+FAX: (90) 2122798866
+EMAIL: contact@bankofchina.com.tr
+WEBSITE: www.bankofchina.com.tr
+LEVEL 11 TOWER 2,
+COLOMBO BRANCH
+EMAIL: services.pk@bankofchina.com
+WEBSITE: www.bankofchina.com/pk
+FAX: (92) 2133110600
+EMAIL: bocmumbai@bankofchina.com
+DUBAI BRANCH
+QATAR FINANCIAL CENTRE
+BRANCH
+24TH FLOOR, ALFARDAN
+TOWERS-OFFICE TOWER,
+BUILDING NO. 12, ZONE 61,
+AL FUNDUQ, STREET NO. 814,
+DOHA,
+QATAR
+P.O. BOX: 5768
+SWIFT: BKCHQAQA
+NO. 40, YORK STREET
+TEL: (974) 44473681/44473682
+FAX: (974) 44473696
+BANK OF CHINA TURKEY A.S.
+5TH FLOOR, CORPORATE
+OFFICE BLOCK,
+DOLMEN CITY, HC-3, BLOCK 4,
+SCHEME 5, CLIFTON,
+KARACHI,
+PAKISTAN
+SWIFT: BKCHPKKA
+TEL: (92) 2133110688
+EMAIL: service.qa@bankofchina.com
+COLOMBO 001
+SRI LANKA
+SWIFT: BKCHLKLX
+OFFICE 1502,
+AL JASRAH TOWER,
+DIPLOMATIC AREA
+BUILDING 95,
+ROAD 1702, BLOCK 317,
+MANAMA
+KINGDOM OF BAHRAIN
+TEL: (973) 17531119
+OFFICE
+FAX: (973) 17531009
+bldbcbgs@bank-of-china.com
+BOC AVIATION LIMITED
+8 SHENTON WAY #18-01
+SINGAPORE 068811
+TEL: (65) 63235559
+FAX: (65) 63236962
+EMAIL: information@bocaviation.com
+WEBSITE: www.bocaviation.com
+EUROPE
+LONDON BRANCH
+1 LOTHBURY,
+EMAIL:
+TEL: (91) 2268246666
+FAX: (91) 2268246667
+BAHRAIN REPRESENTATIVE
+EMAIL: service.mn1 @bankofchina.com
+TEL: (94) 0112195566
+FAX: (94) 0112118800
+UNIT 8-11, 46F,
+ADDAX COMMERCIAL TOWER,
+AL REEM ISLAND,
+P.O. BOX 73098,
+ABU DHABI, U.A.E.
+SWIFT: BKCHAEAA
+EMAIL: service.lk@bankofchina.com
+TEL: (971) 24180999
+FAX: (971) 24180996
+465
+EMAIL: abudhabi.ae@bankofchina.com
+REPRESENTATIVE OFFICE
+11TH FLOOR CENTRAL TOWER,
+SUKHBAATAR SQUARE-2,
+SBD-8,
+ULAANBAATAR 14200,
+MONGOLIA
+TEL: (976) 77095566
+FAX: (976) 77195566
+ULAANBAATAR
+LONDON EC2R 7DB,
+U.K.
+SWIFT: BKCHINBB
+MUMBAI,
+KAMPONG KIARONG,
+BANDAR SERI
+BEGAWAN BE1318,
+BRUNEI
+DARUSSALAM
+SWIFT: BKCHBNBB
+TEL: (673) 2459888
+FAX: (673) 2459878
+BANK OF CHINA
+(HONGKONG) LIMITED
+YANGON BRANCH
+ZONE B, 1ST FLOOR,
+GOLDEN CITY
+BUSINESS CENTER,
+YANKIN ROAD,
+YANKIN TOWNSHIP,
+YANGON REGION,
+MYANMAR
+SWIFT: BKCHMMMY
+TEL: (95) 19376130
+FAX: (95) 19376142
+EMAIL: bocyangon@bochk.com
+BANK OF CHINA
+(HONG KONG) LIMITED
+REPRESENTATIVE OFFICE
+IN HANOI
+18 FLOOR, NO. 1 TOWER,
+CAPITAL PLACE BUILDING,
+29 LIEU GIAI STREET,
+NGỌC KHANH WARD,
+BA DINH DISTRICT,
+HA NOI,
+VIET NAM
+TEL: (84) 909009222
+RATNA,
+JALAN DATO
+SIMPANG 22,
+LOT NO. 56244,
+TEL: (84) 2838219949
+FAX: (84) 2838219948
+EMAIL: service.vn@bankofchina.com
+WEBSITE: www.bankofchina.com.vn
+BANK OF CHINA
+(HONGKONG) LIMITED
+MANILA BRANCH
+28/F. THE FINANCE CENTER
+26th STR. Cor. 9th AVE., BGC
+TAGUIG CITY, METRO
+MANILA PHILIPPINES
+SWIFT: BKCHPHMM
+EMAIL: service.hn@bankofchina.com.vn
+TEL: (63) 282977888
+FAX: (63) 288850532
+EMAIL: customercare_
+BANK OF CHINA
+(HONGKONG) LIMITED
+VIENTIANE BRANCH
+NO. A1003-A2003,
+VIENTIANE CENTER,
+KHOUVIENG ROAD,
+NONGCHAN VILLAGE,
+SISATTANAK DISTRICT,
+VIENTIANE CAPITAL,
+LAO P.D.R.
+SWIFT: BKCHLALAXXX
+TEL: (856) 21228888
+FAX: (856) 21228880
+EMAIL: service.la@bankofchina.com
+WEBSITE: www.bankofchina.com.la
+BANK OF CHINA
+(HONGKONG) LIMITED
+BRUNEI BRANCH
+KIARONG JAYA KOMPLEK,
+ph@bank-of-china.com
+SYDNEY BRANCH
+GROUND FLOOR,
+140 SUSSEX STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+SWIFT: BKCHAU2S
+TEL: (61) 282355888
+FAX: (61) 292621794
+WEBSITE: www.bankofchina.com/nz
+JSC AB (BANK OF CHINA
+KAZAKHSTAN)
+71B, MICRODISTRICT
+ZHETYSU-2,
+AUEZOV DISTRICT, 050063,
+ALMATY,
+REPUBLIC OF KAZAKHSTAN
+464
+SWIFT: BKCHKZKA
+FAX: (7727) 2585514
+EMAIL: boc@bankofchina.kz
+KARACHI BRANCH
+MUMBAI BRANCH
+41-B, 4TH FLOOR,
+4 NORTH AVENUE,
+MAKER MAXITY,
+BANDRA KURLA COMPLEX,
+BANDRA EAST,
+TEL: (7727) 2585510
+INDIA
+EMAIL: service.nz@bankofchina.com
+TEL: (64) 99809000
+EMAIL: banking.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+BANK OF CHINA
+(AUSTRALIA) LIMITED
+GROUND FLOOR,
+140 SUSSEX STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+SWIFT: BKCHAU2A
+TEL: (61) 282355888
+FAX: (61) 292621794
+FAX: (64) 99809088
+EMAIL: banking.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+(NEW ZEALAND) LIMITED
+LEVEL 17, TOWER 1,
+205 QUEEN STREET,
+AUCKLAND, 1010,
+NEW ZEALAND
+SWIFT: BKCHNZ22
+TEL: (64) 99809000
+FAX: (64) 99809088
+EMAIL: service.nz@bankofchina.com
+WEBSITE: www.bankofchina.com/nz
+AUCKLAND BRANCH
+LEVEL 17, TOWER 1,
+205 QUEEN STREET,
+AUCKLAND, 1010,
+NEW ZEALAND
+SWIFT: BKCHNZ2A
+BANK OF CHINA
+SWIFT: BKCHVNVX
+SWIFT: BKCHGB2L
+FAX: (44) 2076263892
+EMAIL:
+service.pl@bankofchina.com
+FAX: (48) 224178887
+EMAIL:
+SWIFT: BKCHPLPX
+TEL: (48) 224178888
+UL. ZIELNA 41/43,
+00-108 WARSAW,
+POLAND
+BANK OF CHINA
+(EUROPE) S.A.
+POLAND BRANCH
+www.bankofchina.com/be
+WEBSITE:
+service.be@bankofchina.com
+EMAIL:
+FAX: (32) 22302892
+TEL: (32) 24056688
+SWIFT: BKCHBEBB
+BELGIUM
+1000, BRUSSELS,
+BOULEVARD DU REGENT 35,
+WEBSITE:
+www.bankofchina.com/pl
+BANK OF CHINA
+(EUROPE) S.A.
+LISBON BRANCH-
+SUCURSAL EM PORTUGAL
+HUNGARY
+1051 BUDAPEST,
+7 JOZSEF NADOR TER,
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+BANK OF CHINA
+EMAIL: info.gr@bankofchina.com
+TEL: (30) 2111906688
+BRUSSELS BRANCH
+14TH FLOOR, ATHENS
+TOWERS, MESOGEION AV.2,
+115 27, ATHENS, GREECE
+SWIFT: BKCHGRAA
+www.bankofchina.com/pt
+WEBSITE:
+service.pt@bankofchina.com
+TEL: (351) 210495710
+FAX: (351) 210495738
+EMAIL:
+SWIFT: BKCHPTPL
+NO. 35, 35A E 37;
+1250-097 LISBOA,
+PORTUGAL
+RUA DUQUE DE PALMELA
+BANK OF CHINA
+(EUROPE) S.A.
+ATHENS BRANCH
+(EUROPE) S.A.
+BANK OF CHINA
+dublinbranch@bank-of-hina.com
+STOCKHOLM BRANCH
+(EUROPE) S.A.
+BANK OF CHINA
+ROTTERDAM BRANCH
+(EUROPE) S.A.
+BANK OF CHINA
+466
+BANK OF CHINA
+WEBSITE:
+SWIFT: BKCHLULA
+TEL: (352) 268688
+FAX: (352) 221795
+EMAIL:
+P.O. BOX 721 L-2017,
+LUXEMBOURG
+LUXEMBOURG
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+BANK OF CHINA (EUROPE)
+S.A.
+www.bankofchina.com/lu
+TEL: (852) 28462700
+service.lu@bankofchina.com
+SWIFT: BKCHHUHB
+(EUROPE) S.A.
+COOLSINGEL 63,
+SWIFT: BKCHIE3DXXX
+TEL: (353) 14768888
+EMAIL:
+IRELAND
+DUBLIN 2,
+5TH FLOOR, STYNE HOUSE,
+UPPER HATCH STREET,
+www.bankofchina.com/se
+WEBSITE:
+service.se@bankofchina.com
+DUBLIN BRANCH
+FAX: (46) 107888801
+EMAIL:
+SWIFT: BKCHSESS
+BIRGER JARLSGATAN 28,
+114 34 STOCKHOLM,
+SWEDEN
+www.bankofchina.com/nl
+WEBSITE:
+service.nl@bankofchina.com
+FAX: (31) 102175899
+EMAIL:
+3012AB ROTTERDAM,
+THE NETHERLANDS
+SWIFT: BKCHNL2R
+TEL: (31) 102175888
+TEL: (46) 107888888
+TEL: (44) 2072828888
+TEL: (36) 14299200
+FAX: (36) 14299202
+EMAIL:
+WEBSITE:
+TEL: (33) 149701370
+FAX: (33) 149701372
+WEBSITE:
+www.bankofchina.com/fr
+FRANKFURT BRANCH
+BOCKENHEIMER LANDSTR.
+24 60323 FRANKFURT AM MAIN,
+GERMANY
+SWIFT: BKCHDEFF
+TEL: (49) 691700900
+FAX: (49) 69170090500
+EMAIL:
+service.de@bankofchina.com
+WEBSITE:
+www.bankofchina.com/de
+MILAN BRANCH
+VIA SANTA MARGHERITA,
+14/16-20121 MILAN,
+SWIFT: BKCHFRPP
+TLX: 281 090 BDCSP
+23-25 AVENUE DE LA
+GRANDE ARMEE
+75116 PARIS,
+FRANCE
+PARIS BRANCH
+SUITE 202, SOBO WORKS,
+WINDMILL LANE,
+DUBLIN D02 K156
+REPUBLIC OF IRELAND
+service.uk@bankofchina.com
+WEBSITE:
+www.bankofchina.com/uk
+BANK OF CHINA
+(UK) LIMITED
+1 LOTHBURY,
+LONDON EC2R 7DB,
+U.K.
+ITALY
+SWIFT: BKCHGB2U
+FAX: (44) 2076263892
+EMAIL:
+service.uk@bankofchina.com
+WEBSITE:
+www.bankofchina.com/uk
+BOC AVIATION
+(IRELAND) LIMITED
+TEL: (44) 2072828888
+SWIFT: BKCHITMM
+TEL: (39) 02864731
+FAX: (39) 0289013411
+WEBSITE:
+www.bankofchina.com/it
+PRAGUE BRANCH
+EUROPE) LIMITED
+(CENTRAL AND EASTERN
+BANK OF CHINA
+467
+www.bankofchina.com/hu
+WEBSITE:
+NA FLORENCI 2116/15,
+service.hu@bankofchina.com
+FAX: (36) 14299202
+TEL: (36) 14299200
+SWIFT: BKCHHUHH
+HUNGARY
+7 JOZSEF NADOR TER, 1051
+BUDAPEST,
+HUNGARIAN BRANCH
+www.bankofchina.com/hu
+EMAIL:
+service.hu@bankofchina.com
+NOVE MESTO, 11000 PRAHA 1,
+CZECH REPUBLIC
+TEL: (42) 0225986666
+LUXEMBOURG BRANCH
+37/39 BOULEVARD
+PRINCE HENRI L-1724
+LUXEMBOURG
+P.O. BOX 114 L-2011,
+LUXEMBOURG
+SWIFT: BKCHLULL
+TEL: (352) 268688
+FAX: (352) 221795
+EMAIL:
+WEBSITE:
+SWIFT: BKCHCZPPXXX
+service.rs@bankofchina.com
+11070 BELGRADE,
+SERBIA
+BULEVAR ZORANA
+DINDICA 2A,
+SRBIJA A.D. BEOGRAD
+BANK OF CHINA
+service.cz@bankofchina.com
+EMAIL:
+FAX: (42) 0225986699
+SWIFT: BKCHRSBGXXX
+TEL: (381) 116351000
+FAX: (381) 112280777
+EMAIL:
+VIETNAM
+www.bankofchina.com/lu
+DISTRICT 1,
+service.jp@boctokyo.co.jp
+EMAIL:
+TEL: (81) 335058818
+SWIFT: BKCHJPJT
+JAPAN
+TOKYO 107-0052
+BOC BLDG. 3-4-1 AKASAKA
+MINATO-KU,
+TOKYO BRANCH
+www.bankofchina.com/sg
+WEBSITE:
+service.sg@bankofchina.com
+EMAIL:
+WEBSITE:
+TEL: (60) 323878888
+SWIFT: BKCHMYKL
+MALAYSIA
+GROUND, MEZZANINE, &
+1ST FLOOR PLAZA OSK,
+25 JALAN AMPANG
+50450 KUALA LUMPUR,
+BANK OF CHINA
+(MALAYSIA) BERHAD
+TEL: (65) 67795566
+SWIFT: BKCHSGSGXXX
+SINGAPORE
+BANK OF CHINA BUILDING,
+4 BATTERY ROAD,
+SINGAPORE BRANCH
+ASIA-PACIFIC AREA
+MAJOR BRANCHES AND SUBSIDIARIES IN OTHER COUNTRIES AND REGIONS
+FAX: (65) 65343401
+462
+www.bankofchina.com/jp
+TEL: (855) 23988886
+SEOUL BRANCH
+FAX: (60) 321615150
+EMAIL: service.my@bankofchina.com
+WEBSITE: www.bankofchina.com/my
+BANK OF CHINA (THAI)
+PUBLIC COMPANY LIMITED
+179/4 BANGKOK CITY TOWER,
+SOUTH SATHORN ROAD,
+TUNGMAHAMEK
+SATHORN DISTRICT,
+BANGKOK 10120,
+THAILAND
+SWIFT: BKCHTHBK
+TEL: (66) 22861010
+FAX: (66) 22861020
+CUSTOMER SERVICE CENTRE:
+(66) 26795566
+EMAIL: service.th@bankofchina.com
+WEBSITE: www.bankofchina.com/th
+FAX: (855) 23988880
+BANK OF CHINA
+(HONGKONG) LIMITED
+JAKARTA BRANCH
+11TH FLOOR,
+Jl. JENDRAL
+SUDIRMAN KAV. 24,
+JAKARTA SELATAN, 12920,
+INDONESIA
+SWIFT: BKCHIDJA
+TEL: (62) 215205502
+FAX: (62) 215201113/215207552
+EMAIL: cs@bankofchina.co.id
+WEBSITE: www.bankofchina.co.id
+BANK OF CHINA
+(HONGKONG) LIMITED
+PHNOM PENH BRANCH
+CANADIA TOWER,
+1ST & 2ND FLOOR,
+# 315 ANG DOUNG ST.
+P.O. BOX 110, PHNOM PENH,
+CAMBODIA
+SWIFT: BKCHKHPP
+TAMARA CENTER
+EMAIL: tfbsecr@taifungbank.com
+WEBSITE: www.taifungbank.com
+FAX: (81) 335058868
+TIMES SQUARE BUILDING,
+TAIPEI BRANCH
+23/F, BANK OF CHINA TOWER,
+1 GARDEN ROAD,
+HONG KONG, CHINA
+TEL: (852) 22007500
+FAX: (852) 28772629
+EMAIL: bocginv_bgi@bocgroup.com
+WEBSITE: www.bocgi.com
+BOC GROUP LIFE
+ASSURANCE CO., LTD.
+13/F, CITYPLAZA ONE,
+1111 KING'S ROAD,
+TAIKOO SHING,
+HONG KONG, CHINA
+TEL: (852) 21608800
+FAX: (852) 28660938
+418, ALAMEDA DR. CARLOS,
+d'ASSUMPCAO,
+TAI FUNG BANK LIMITED
+EMAIL: bocmo@bocmacau.com
+WEBSITE: www.bankofchina.com/mo
+TEL: (853) 88895566
+FAX: (853) 28781833
+BANK OF CHINA GROUP
+INVESTMENT LIMITED
+SWIFT: BKCHMOMX
+BANK OF CHINA BUILDING,
+AVENIDA DOUTOR MARIO
+SOARES,
+MACAU BRANCH
+EMAIL: info_ins@bocgroup.com
+WEBSITE: www.bocgins.com
+HONG KONG, CHINA
+TEL: (852) 28670888
+FAX: (852) 25221705
+9/F, WING ON HOUSE,
+71 DES VOEUX ROAD
+CENTRAL,
+BANK OF CHINA GROUP
+INSURANCE COMPANY
+LIMITED
+FAX: (852) 25377609
+TEL: (852) 28101203
+HONG KONG, CHINA
+1 GARDEN ROAD,
+7/F, BANK OF CHINA TOWER,
+EMAIL: service.tw@bankofchina.com
+WEBSITE: www.bankofchina.com/tw
+MACAO, CHINA
+1-5/F, NO. 105, SONGREN ROAD,
+XINYI DIST., TAIPEI CITY,
+TAIWAN, CHINA
+SWIFT: BKCHTWTP
+TEL: (886) 227585600
+FAX: (886) 227581598
+HONG KONG BRANCH
+MACAO, CHINA
+TEL: (853) 28322323
+FAX: (853) 28570737
+HOCHIMINH CITY BRANCH
+(HONGKONG) LIMITED
+BANK OF CHINA
+463
+www.bankofchina.com/kr
+WEBSITE:
+FAX: (82) 23996265
+TEL: (82) 16705566
+SWIFT: BKCHKRSEXXX
+KOREA
+SEOUL 03188
+JONGNO-GU,
+GROUND & 11TH FL,
+41, CHEONG GYE CHEON-RO,
+WEBSITE: www.bankofchina.com/kh
+EMAIL: service.kh@bankofchina.com
+WEBSITE: www.bochk.com
+HOCHIMINH CITY,
+BOC INTERNATIONAL
+HOLDINGS LIMITED
+26/F, BANK OF CHINA TOWER,
+1 GARDEN ROAD,
+HONG KONG, CHINA
+TEL: (852) 39886000
+FAX: (852) 21479065
+EMAIL: info@bocigroup.com
+WEBSITE: www.bocigroup.com
+22-36 NGUYEN HUE STREET,
+1/2/3F YOUNG POONG BLDG.
+EMAIL: enquiry@boclife.com.hk
+WEBSITE: www.boclife.com.hk
+470
+MOROCCO
+FAX: (253) 21336699
+SWIFT: BKCHDJJD
+repoffice.tz@bankofchina.com
+TEL: (225) 222112973
+FAX: (225) 222112974
+EMAIL:
+8TH FLOOR, AMANI PLACE,
+OHIO STREET, P.O. BOX 13602,
+DAR ES SALAAM,
+TANZANIA
+REPRESENTATIVE OFFICE
+TANZANIA
+NAIROBI REPRESENTATIVE
+service.ma@bankofchina.com
+DJIBOUTI
+B.P. 2119,
+ZONE INDUSTRIELLE SUD,
+LOT NUMERO 219B,
+BANQUE DE CHINE
+(DJIBOUTI) S.A.
+WEBSITE:
+www.bankofchina.com/ao
+LUANDA BRANCH
+NO. 71, ANFA CENTER, 128,
+BD D'ANFA & ANGLE
+RUE LAHCEN BASRI,
+CASABLANCA, MAROC
+TEL: (212) 522203779
+FAX: (212) 522273083
+EMAIL:
+OFFICE
+TEL: (253) 21336666
+NGONG ROAD,
+REPRESENTATIVE OFFICE
+VIA S10 No. 701,
+CONDOMINIO BELAS
+BUSSINESS PARK,
+TORRE CUANZA SUL 8
+ANDAR,
+LUANDA,
+REPUBLIC OF ANGOLA
+service.ke@bankofchina.com
+MORNING SIDE OFFICE PARK,
+TEL: (244) 923165700
+FAX: (244) 923165717
+SWIFT: BKCHAOLU
+EMAIL:
+service.ao@bankofchina.com
+FAX: (254) 203862812
+TEL: (254) 203862811
+KENYA
+NAIROBI,
+P.O. BOX 21357-00505,
+EMAIL:
+5.38%
+45,122
+7.45%
+41,017
+7.23%
+Others and elimination
+32,554
+19,520
+100.00%
+Total
+profit or loss
+Debt securities
+356,462
+347,243
+9,219
+Equity instruments
+Financial assets at fair value through
+102,268
+14,243
+Fund investments and other
+102,912
+69,281
+Loans and advances to customers at
+355,600
+88,025
+Change
+2020
+2021
+605,717
+100.00%
+567,647
+Please refer to Note V.43 to the Consolidated Financial Statements for more detailed information
+related to the Group's other operating results and financial position in terms of geographic
+segments and business segments categories.
+Critical Accounting Estimates and Judgements
+The accounting estimates and judgements made by the Group will generally affect the carrying
+amounts of assets and liabilities of the next financial year. These estimates and judgements
+are continually evaluated and are based on historical experience, expectations of future events
+that are believed to be reasonable under the circumstances and other factors. The management
+believes that the accounting estimates and judgements have properly reflected the Bank's
+operating environment. Please refer to Notes II and III to the Consolidated Financial Statements
+for more detailed information related to the Bank's accounting policies and accounting estimates.
+41
+Fair Value Measurement
+Movement of Financial Instruments Measured at Fair Value
+Unit: RMB million
+As at
+As at
+31 December
+31 December
+Items
+3.44%
+33,631
+Commercial banking business
+11.96%
+Operating income for the main business segments of the Group is set forth in the following table:
+Unit: RMB million, except percentages
+Total assets of the other countries and regions segment amounted to RMB2,292.838 billion,
+an increase of RMB202.673 billion or 9.70% compared with the prior year-end, representing
+8.07% of the Group's total assets. In 2021, this segment recorded a profit before income tax of
+RMB12.188 billion, an increase of RMB4.800 billion or 64.97% compared with the prior year,
+representing 4.41% of the Group's profit before income tax.
+Total assets of the Hong Kong (China), Macao (China) and Taiwan (China) segment amounted
+to RMB4,625.924 billion, an increase of RMB319.245 billion or 7.41% compared with the prior
+year-end, representing 16.28% of the Group's total assets. In 2021, this segment recorded a profit
+before income tax of RMB45.845 billion, a decrease of RMB4.405 billion or 8.77% compared
+with the prior year, representing 16.58% of the Group's profit before income tax.
+40
+3 The figures for segment assets, segment profit before income tax and their respective proportions are prior to
+intragroup elimination.
+As at the end of 2021, total assets³ of the Bank's Chinese mainland segment amounted to
+RMB21,491.846 billion, an increase of RMB2,037.577 billion or 10.47% compared with the
+prior year-end, representing 75.65% of the Group's total assets. In 2021, this segment recorded
+a profit before income tax of RMB218.529 billion, an increase of RMB29.789 billion or 15.78%
+compared with the prior year, representing 79.01% of the Group's profit before income tax.
+21,491,846 19,454,269 4,625,924 4,306,679 2,292,838 2,090,165 (1,688,200) (1,448,454) 26,722,408 24,402,659
+19,607,634 17,753,122 4,230,215 3,917,100 2,222,113 2,017,915 (1,688,107) (1,448,315) 24,371,855 22,239,822
+276,620 246,378
+Liabilities
+2021
+As at the year-end
+Assets
+7,388
+218,529 188,740 45,845 50,250 12,188
+Profit before income tax
+(104,220) (119,016)
+-
+(6,413)
+(281)
+(99,622) (107,622) (4,317) (4,981)
+363,637
+58
+Investment banking and insurance
+2020
+Amount
+67,886
+17.82%
+107,937
+Treasury operations
+39.04%
+221,634
+35.73%
+216,450
+Personal banking
+Items
+38.33%
+33.62%
+203,654
+Including: Corporate banking
+89.33%
+507,110
+87.17%
+528,041
+Amount % of total
+% of total
+217,590
+(8,037)
+in the start-up and growth stage, evolving its available products from bank credit to
+comprehensive financial services, and refining its risk system from traditional modes to
+become more adaptive to scientific and technological innovation. As at the end of 2021,
+comprehensive technology finance support exceeded RMB1.26 trillion, including over
+RMB820.0 billion* credit support to nearly 36,000 customers, more than RMB130.0 billion
+capital input such as equity investment, bond investment and leasing, and more than
+RMB300.0 billion non-capital input such as undertaking and asset management. The number
+of outlets offering technology finance services grew to 93.
+Financial assets at fair value through
+Developing featured products and services. The Bank developed its “Inclusive Loan"
+which is an inclusive finance brand and established a product system comprised of eight
+product series that covers more than 50 sectors. It launched product and services such as
+"New Year Benefit" and the "MSE Benefit Loan" etc. Efforts were made to build a new
+ecosystem for intellectual property finance, and carve out a position as the preferred bank
+for intellectual property financing services. The Bank improved its services for “specialised,
+refined, featured and innovative” enterprises and supported the development of key
+enterprises. In addition, the Bank improved cross-border matchmaking services and served
+a number of important national economic and trade events. As at the end of 2021, the Bank
+has held 89 matchmaking events for enterprises, providing value-added financial services
+featuring “financing + intelligence” for more than 40,000 enterprises from 126 countries and
+regions worldwide.
+Accelerating the digital transformation of inclusive finance services. With a view to
+build a business model that integrates online and offline services and ensures a sufficient
+supply of online products and diversified application scenarios, the Bank improved its
+system of online products and services for inclusive finance, which comprised of five
+product series: “Unsecured Loan”, “Bank Tax Loan", "Mortgage Loan”, “Business Loan"
+and "Tax Loan". Its online inclusive finance products won a gold award for "Special Field
+Innovation” in the Digital Finance and FinTech Innovation Competition, as well as the
+"FinTech Award” and “Mobile Banking Award" at the Asia-Pacific Bank Digital Innovation
+Expo. Moreover, the Bank upgraded and improved its credit factory model so as to fully
+realise the capacity of its offline businesses, and created a dynamic environment in which
+online and offline channels mutually reinforce each other's progress.
+Improving the quality and coverage of inclusive finance services. As at the end of 2021,
+the Bank's outstanding inclusive finance loans granted to micro and small-sized enterprises
+reached a record high of RMB881.5 billion, an increase of 53.15% compared with the prior
+year-end, outpacing the growth rate of the Bank's total loans. The number of micro and
+small-sized customers stood at nearly 620,000, higher than the beginning of the year. The
+average interest rate of new inclusive finance loans to micro and small-sized enterprises
+was 3.96%. The Bank established an inclusive finance outlet system and advanced the
+development of its inclusive finance outlets.
+The Bank treats inclusive finance as a strategic business and fulfils its mission as a large
+state-owned bank by focusing on serving the real economy and promoting the high-quality
+development of inclusive finance.
+Inclusive Finance
+45
+Green finance capacity building. During the year, the Bank established the BOC Green
+Finance Academy, compiled the Basic Knowledge on Green Finance of Bank of China
+Training Manual, set up digitalised green finance cloud learning platform, held a number
+of multi-tiered online and offline training sessions on green finance, and formulated green
+finance talent training plan in the 14th Five-Year Plan of BOC for Talents.
+Sustainable finance collaboration. In 2021, the Bank signed the UN Principles for
+Responsible Banking (PRB), became a supporting institution for the Task Force on Climate-
+related Financial Disclosures (TCFD) and solidly took up its duties. Furthering local and
+international collaboration, the Bank participated in the organising activities of the 15th
+Conference of the Parties of the Convention on Biological Diversity (COP15) and the 26th
+Conference of the Parties of the United Nations Framework Convention on Climate Change
+(COP26).
+Abundant and diversified green products and services. The Bank opened a Chinese
+Certified Emission Reduction (CCER) registration account and launched a range of
+emission products and services to comprehensively address and support customers' low-
+carbon transformation requirements. These included loans secured against renewable energy
+subsidy rights, carbon emission allowance collateral loans, "Inclusive Loan for Low-
+Carbon Development” inclusive green services, the first batch green and low-carbon themed
+personal UnionPay platinum card, the retail green and new energy vehicle instalment, the
+personal green mortgage loan, the carbon emission registration and settlement services,
+and other green products related to funds, wealth management, deposits, leasing, insurance,
+supply chain finance, custody and equity investment.
+A leading position in the green bond market. The Bank issued the world's first publicly
+offered Transition Bonds in financial institutions, the world's first Biodiversity Themed
+Green Bonds in financial institutions, and the world's first Sustainability Re-Linked Bond,
+while the cumulative amount of overseas green bonds issuance reached USD10.7 billion
+equivalent. During 2021, the Bank underwrote domestic and overseas green bonds for
+RMB129.4 billion and USD23.4 billion equivalent respectively. The Bank ranked the first in
+NAFMII's List of Investors in Green Debt Financing Instruments in 2021.
+Rapid growth in green credit. At the end of 2021, the Bank's domestic green credit
+balance reached RMB 1,408.6 billion according to CBIRC statistics, a year-on-year increase
+of 57%. The Bank participated in landmark projects such as the Dogger Bank Wind Farm,
+which is the world's largest offshore wind power project currently under construction.
+The Bank ranked first among Chinese banks in Bloomberg's Global Green Loans and
+Sustainability-Linked Loan list in 2021.
+The Bank achieved leapfrogging progress in green finance in strict adherence with the national
+development goals of "carbon peaking and carbon neutrality”, and integrated itself into global
+green governance, building the bank of first choice for green finance.
+Green Finance
+M
+44
+Including national high-tech enterprises and technology-based small and medium-sized enterprises.
+Continuing to deepen cooperation with governments. The Bank has established strategic
+cooperative relations with the Ministry of Science and Technology, the Ministry of Industry
+and Information Technology, China National Intellectual Property Administration and China
+Association for Science and Technology, reaching consensus on various aspects including
+collaborative efforts to support national strategic scientific and technological strengths,
+deepen the service system for "specialised, refined, featured and innovative” enterprises,
+increase the application of scientific and technological achievements, and promote the
+popularisation of “science + finance".
+Developing featured products and services. The Bank conducted in-depth research
+on high-tech industries, explored innovative business models for credit granting and
+implemented differentiated risk management systems, thus improving the financing
+experience for technological enterprises. It developed unique products for scientific and
+technological innovation, provided featured products and services such as option loans
+and intellectual property pledge financing for technology companies, and facilitated high-
+quality business linkages between commercial and investment banks. The Bank built
+a comprehensive spectrum of financial products, providing full-lifecycle services for
+technological enterprises and all-round financial support for technological practitioners.
+Impairment losses on assets
+(Please refer to the section "Inclusive Finance" for detailed information about inclusive finance.)
+5
+Inclusive finance loans granted to micro and small-sized enterprises are measured in accordance with the Notice
+of the General Office of China Banking and Insurance Regulatory Commission on Further Promoting the High-
+quality Development of Financial Services for Micro and Small-sized Enterprises in 2021 (Yin Bao Jian Ban Fa
+[2021] No. 49).
+46
+49
+49
+Highlighting globalised and integrated operations. Focusing on the key customer groups
+of entrepreneurs, the Bank leveraged the Group's advantages in integrated operations to
+boost service synergies. It further developed family trust services and the number of family
+trust service customers grew by 82% compared with that at the prior year-end. It accelerated
+building the Asia-Pacific private banking platform and enhanced its service capacity for
+"private banking + investment banking + commercial banking”, thus improving its high-end,
+cutting-edge private banking services.
+Highlighting specialised and digitalised operations. With the aim of delivering high-
+quality professional services, the Bank built an investment strategy information service
+system and published the BOC White Paper on Personal Banking Global Asset Allocation
+for the fourth consecutive year, with annual portfolio returns far surpassing comparable
+benchmarks over the previous two years. In addition, it intensified team building in a
+bid to improve customer reach and professional service quality. With a focus on digital
+empowerment, the Bank sped up building its digital channel system and optimised digital
+marketing and mobile service tools. As at the end of 2021, the Bank's medium to high-end
+customer base grew at the fastest pace among that of the past three years, and its private
+banking customer base had reached 147,300.
+Highlighting platform-based operation and asset allocation. The Bank built “Group-
+wide + Market-wide" product open shelf and launched the “BOC Selection" fund brand.
+Focusing on asset allocation concepts and services, the Bank optimised its “Investment
+Strategy Portfolio" service to help the customers diversify their asset allocation and increase
+non-salary yields. As at the end of 2021, the balance of agency sales of personal customers'
+wealth management products increased by 75.30%, and the scale of asset allocation products
+exclusive to private banking, such as fund-of-funds and tailored asset management products
+for individual HNW clients, grew by 246.50% compared with the prior year-end.
+Wealth Finance Business
+48
+48
+Accelerating digital transformation. The Bank continuously strengthened the data
+application and improved the model effectiveness in an effort to accelerate the pace of
+digital transformation in its consumer finance business. By actively developing integrated
+scenarios and closely following customers' livelihood and consumption demands, the
+Bank provided a variety of consumer finance products covering clothing, food, shelter,
+transportation, medical care, learning, tourism and entertainment. As at the end of 2021, the
+Bank's commercial banks in the Chinese mainland had achieved a leading position in RMB
+consumer loans. The growth rate of the Bank's credit card instalment transaction volume
+outperformed the market and achieved a steady increase in market share. BOC Consumer
+Finance has grown rapidly and secured a leading position in the industry in terms of
+comprehensive competitiveness.
+4
+Improving the product system. The Bank leveraged its advantages in group-level
+coordination and capitalised on the effective synergies of its personal loan, credit card and
+consumer finance businesses to create multi-category consumer finance product system that
+covers customers across the entire life-cycle.
+Consumer Finance Business
+Enhancing the brand value of cross-border finance. Acting as a strategic partner,
+the Bank successfully served and supported major exhibitions such as the 4th China
+International Import Expo (CIIE), the 2021 China International Fair for Trade in Services
+(CIFTIS), the 129th and 130th China Import and Export Fair ("Canton Fair”), the 1st China
+International Consumer Products Expo (CICPE), and the 21st China International Fair for
+Investment & Trade (CIFIT). Fully leveraging the advantages arising from its globalised
+operations, the Bank assisted in attracting investment and exhibition activities and provided
+comprehensive financial service solutions to facilitate the matchmaking of trade and
+investment, in order to build a financial services bridge for foreign trade and economic
+cooperation.
+M
+47
+Leading innovation in cross-border financial services. The Bank enriched and improved
+product and service solutions for new trade patterns such as cross-border e-commerce,
+market procurement trade and comprehensive foreign trade service platforms. The Bank
+upgraded the "BOC Cross-border E-commerce" to achieve full coverage of cross-border
+e-commerce including import and export scenarios, as well as local and foreign currency
+transactions. Connected to the market procurement trade information platform in the pilot
+areas and launch "BOC Cross-border E-market-procurement" to provide convenient online
+collection and settlement of foreign exchange for market procurement trade. The Bank built
+a comprehensive financial service system for new foreign trade forms, thus supporting the
+high-quality development of new foreign trade forms and models. TradeGo commodity
+blockchain platform was jointly established with key stakeholders in the commodity
+industry to improve the circulation efficiency of commodity trade. Furthermore, the Bank
+continuously improved the innovative products such as online foreign exchange purchase
+and remittance for studying abroad and reservation of foreign currency change. The Bank
+upgraded its foreign currency cash reservation service, to cover major cities in the Chinese
+mainland via multiple channels such as mobile banking, WeChat banking and online
+banking. The service was integrated into platforms such as China's online government
+affairs service platform, HUAWEI HarmonyOS and JegoTrip APP. The Bank also expanded
+special cross-border businesses and opened 167 thousand accounts via the BOCHK's
+"Greater Bay Area Account Opening" service in the Guangdong-Hong Kong-Macao Greater
+Bay Area.
+M
+Consolidating competitive advantages in cross-border finance. Giving full play to
+the Bank's role as the main channel of financial services for foreign trade and economic
+cooperation, the Bank's institutions in the Chinese mainland realised rapid growth in the
+volume of international settlement and cross-border RMB settlement. The Bank's cross-
+border customers continued to grow in size and maintained the leading position in the
+industry in terms of international trade settlement, cross-border RMB settlement, cross-
+border guarantee and cross-border cash pool business. The Bank firstly launched a pilot
+business for the integrated cash pooling of local and foreign currencies in Shenzhen and
+Beijing, and completed the first business transaction under the China-Indonesia Local
+Currency Settlement mechanism. It maintained a leading position in terms of personal cross-
+border business income, foreign currency personal deposits and the market share of foreign
+currency exchange against RMB. The Bank was also approved among the first to launch the
+Cross-boundary Wealth Management Connect scheme. As at the end of 2021, the Bank held
+a market share more than 60% for the total number of WMC Northbound and Southbound
+subscribers.
+The Bank actively implemented the national strategy of high-level opening-up, fully leveraged
+the advantages of the "One Mainstay, Two Engines" strategy, and adopted differentiated
+development tactics for key customers, key products and key regions. Based on its cross-border
+scenario-based financial service ecosystem, the Bank reinforced its leading position for cross-
+border banking services with prominent features and advantages.
+Cross-Border Finance
+Adhering to digital drivers, structural optimisation, overall risk control and effective development
+synergies, the Bank focused on strengthening capacity building, optimised the customer
+experience and bolstered its sound reputation. It achieved a market-leading position in consumer
+finance products, realised rapid growth in consumer finance business and highlighted the overall
+role of consumer finance as a growth driver, thus contributing to the high-quality development of
+the Group.
+43
+Intensifying comprehensive support. The Bank promoted transformation across its
+technology finance business, expanding its client base from mature corporates to businesses
+To better integrate itself into building the country as a global leader in science and technology,
+the Bank prioritised technology finance in its first development strategy under the "Eight Priority
+Areas for Enhancing Financial Services Capabilities”, committing to becoming an all-elements
+integrator, a full-chain innovator and a full-cycle provider of technology finance, with the aim of
+becoming the leading bank for technology finance in the new development stage.
+(162)
+other financial institutions at fair value
+Due to and placements from banks and
+122,901
+(212,052)
+(89,151)
+Derivative financial liabilities
+(75,939)
+171,738
+(3,831)
+95,799
+5,324
+21,428
+26,752
+Equity instruments and other
+276,716
+2,086,362
+2,363,078
+Debt securities
+other comprehensive income
+Derivative financial assets
+fair value
+3,669
+(31,311)
+Technology Finance
+In 2021, the Bank's efforts towards the "Eight Priority Areas for Enhancing Financial Services
+Capabilities", namely technology finance, green finance, inclusive finance, cross-border finance,
+consumer finance, wealth finance, supply chain finance and county-level finance, bore rich fruit,
+allowing it to serve the real economy with improved quality and efficiency. The Bank's progress
+across all aspects is as follows:
+During the year, the Bank coordinated the COVID-19 response with business development to
+make sure that the 14th Five-Year Plan was well implemented. As a result, the plan has got off
+to a great start. Leveraging both domestic and international markets and resources, the Bank
+accelerated the efforts to foster a strategic development pattern with domestic commercial banks
+as the "One Mainstay" and globalisation and integration as the “Two Engines” in order to ensure
+smooth flows in the domestic economy and positive interplay between domestic circulation and
+international circulation. Adhering to its original aspiration of serving the real economy, the
+Bank continued to apply the new development philosophy fully, faithfully and comprehensively,
+in a precise and comprehensive manner. It also took necessary steps to deepen supply-side
+structural reform in the financial sector, with emphasis given to the development of the "Eight
+Priority Areas for Enhancing Financial Services Capabilities”. To embrace the digital era, it
+intensified the application of various technologies such as big data, cloud computing, artificial
+intelligence, block-chain and 5G mobile communications, as part of its efforts to accelerate
+digital transformation. Keeping bottom-line thinking firmly in mind, the Bank worked to advance
+its comprehensive risk management, build a stronger line of defence against risks, and mitigate
+risks and challenges, thus continuously improving the efficiency of its comprehensive risk
+management. The Bank strengthened the corporate culture fostering as a driver of good conduct
+outcomes, expanding common ground and the convergence of interests towards transformation
+and reform.
+In 2021, the Bank closely followed national strategies, keenly sharpened its market positioning
+and comparative advantages, formulated the Group's 14th Five-Year Plan, and made every effort
+to push forward high-quality development.
+Overview of Strategic Progress
+BUSINESS REVIEW
+42
+There are no differences in the equity and profit for the year of the Group prepared in accordance
+with IFRS to those prepared in accordance with CAS. Please refer to Supplementary Information
+I to the Consolidated Financial Statements for detailed information.
+Other Financial Information
+Due to customers at fair value
+The Bank has put a sound internal control mechanism for fair value measurement in place.
+In accordance with the Guidelines on Market Risk Management in Commercial Banks, the
+Regulatory Guidelines on Valuation of Financial Instruments in Commercial Banks, CAS and
+IFRS, with reference to the New Basel Capital Accord, and drawing on the best practices of
+leading international banks regarding valuations, the Bank formulated the Valuation Policy
+of Financial Instrument Fair Values of Bank of China Limited to standardise the fair value
+measurement of financial instruments and enable timely and accurate financial information
+disclosure. Please refer to Note VI.5 to the Consolidated Financial Statements for more detailed
+information related to the fair value measurement.
+(17,912)
+(12,458)
+Short position in debt securities
+5,845
+(6,162)
+(317)
+Bonds issued at fair value
+(5,569)
+(25,742)
+5,454
+(226,355) (202,411)
+The Bank actively implemented the national strategy of "common prosperity". Based on "One
+Mainstay, Two Engines" strategy, it served as a display window for personal wealth finance
+services and pushed forward the high-quality development of the wealth finance business.
+4,135 (1,353)
+(8,201) 2,606 2,356
+2021
+2020
+regions
+Taiwan (China)
+2021
+2020
+Chinese mainland
+2021
+375,906 362,993
+105,139 73,641
+Net interest income
+Non-interest income
+Items
+2020
+Other countries and
+Hong Kong (China),
+Unit: RMB million
+A geographical analysis of profit contribution and related assets and liabilities is set forth in the
+following table:
+From a geographic perspective, the Group operates in three principal regions: the Chinese
+mainland; Hong Kong (China), Macao (China) and Taiwan (China); and other countries and
+regions. From a business perspective, the Group provides financial services through six main
+business segments: corporate banking, personal banking, treasury operations, investment banking,
+insurance and other operations.
+Segment Reporting by Geography
+Net cash flow from financing activities was an inflow of RMB74.344 billion, a decrease of
+RMB52.273 billion compared with the prior year. This was mainly attributable to a decrease in
+proceeds from issuance of bonds compared with the prior year.
+Net cash flow from investing activities was an outflow of RMB395.561 billion, an increase of
+RMB378.495 billion compared with the prior year. This was mainly attributable to a decrease in
+proceeds from disposal/maturity of financial investments and an increase in purchase of financial
+investments compared with the prior year.
+(1,432) 81,426 75,522
+Macao (China) and
+Elimination
+2021
+In 2021, net cash flow from operating activities was an inflow of RMB843.258 billion, an
+increase of RMB770.230 billion compared with the prior year. This was mainly attributable to a
+net increase in due to banks and other financial institutions, and a net decrease of due from and
+placements with banks and other financial institutions as compared to a net increase in the prior
+year.
+34,053 37,560
+(7,843)
+(56,479)
+(163,673) (140,087) (57,445)
+Operating expenses
+3,959
+2020
+14,480
+64,340 58,157
+Including: net fee and
+commission income
+14,662
+(2,356)
+6,637 (2,548)
+5,129
+73,807
+72,855
+2020
+Group
+2021
+425,142 415,918
+15,365
+180,575 151,729
+15,183
+55
+555
+Transaction Banking
+and use RMB.
+Leveraging its role as the main financial services channel for foreign trade and economic
+cooperation, the Bank contributed to the smooth domestic and international dual circulations.
+In 2021, the Group's international settlement volume reached USD7.26 trillion, an increase of
+26.26% compared with the prior year. The Bank's institutions in the Chinese mainland registered
+USD3.32 trillion in international settlement volume, representing an increase of 38.9% compared
+with the prior year and securing the largest market share. It also provided import and export
+trade settlement services for nearly half of all enterprises holding import and export customs
+records nationwide. The Bank maintained its leading position among peers in cross-border
+guarantee business. It cooperated to complete the upgrading of SWIFT's guarantee messaging
+standards and the reform of customs duty guarantees. Vigorously supporting the development
+of new foreign trade forms, the Bank has introduced a number of measures to support the high-
+quality development of new forms and modes of foreign trade. The Bank upgraded the "BOC
+Cross-border E-commerce" product to include the function of collecting export proceeds for
+cross-border e-commerce enterprises, launched the "BOC Cross-Border E-Market-Procurement"
+product to support exports through the online collection of proceeds from market procurement
+programmes, and received approval for a cross-border e-commerce direct collection and exchange
+settlement service. Moreover, the Bank signed the Special Agreement on Supporting the High-
+Quality Development of New Forms and New Models of Foreign Trade with China Export &
+Credit Insurance Corporation, inputting funds to facilitate foreign trade enterprises to realise
+new momentum. As a strategic partner, the Bank gave full play to its advantages in globalised
+operations by actively supporting the smooth operation of major exhibitions such as the 4th
+CIIE, the 2021 CIFTIS, the 129th and 130th Canton Fair, the 1st CICPE and the 21st CIFIT. In
+addition, it provided all-round financial service solutions to facilitate the matchmaking of trade
+and investment, thus effectively expanding its influence.
+The Bank continuously advanced RMB internationalisation. It served as the main channel for
+RMB cross-border flows and acted as a market leader in service innovation. In 2021, the Group's
+transaction volume of cross-border RMB payment reached RMB11.26 trillion, up 22.36%
+compared with the prior year, of which the Bank's institutions in the Chinese mainland settled
+RMB8.41 trillion, an increase of 24.45% compared with the prior year, thus maintaining the
+largest market share. The number of cross-border RMB business customers served by the Bank's
+institutions in the Chinese mainland increased by nearly 24% compared with the previous year.
+The Bank continuously expanded its cooperation efforts in Local Currency Settlement based on
+the cross-border use of RMB, including transacting the first business under the China-Indonesia
+Local Currency Settlement mechanism, maintaining a leading position in the industry in terms of
+exchange volume and settlement scale. It also continued to publish the BOC Cross-border RMB
+Index (CRI), BOC Offshore RMB Index (ORI) and the White Paper on RMB Internationalisation,
+providing global customers with strong, comprehensive and professional support to understand
+In response to digital transformation trends and customers' integrated financial needs, the Bank
+adhered to the three major development concepts of data standardisation, portfolio-based products
+and scenario-based services, and built a transaction banking product and service system featuring
+online and offline coordination, diverse scenarios, a satisfactory user experience and innovative
+and flexible portfolios, thus driving the steady development of its transaction banking business.
+54
+52
+Financial Institutions Business
+strategy, it further boosted the development of green finance and improved relevant products and
+services, which in turn helped the Bank to build a brand reputation for green finance. The Bank
+contributed to the high-quality opening-up of the Chinese economy by providing solid financial
+services to the Belt and Road initiative and strengthening Chinese enterprises” “Going Global"
+efforts and overseas economic and trade cooperation. As at the end of 2021, RMB corporate loans
+of the Bank's operations in the Chinese mainland totalled RMB7,123.647 billion, an increase of
+RMB867.375 billion or 13.86% compared with the prior year-end. Foreign currency corporate
+loans totalled USD51.675 billion, an increase of USD12.502 billion or 31.91% compared with the
+prior year-end.
+53
+The Bank fully implemented the national development strategy and the national goal of “ensuring
+stability on six fronts and security in six areas”, adhered to the general principle of “pursuing
+progress while ensuring stability” and increased its investment in high-quality credit, effectively
+improving its services to the real economy. The Bank devoted itself to the development of the
+modern industrial system; backed efforts to bolster the nation's strategic strengths in science
+and technology; and actively promoted a shift in service focus from traditional industries to
+new industries, new business forms and new business models. It strived to promote the nation's
+coordinated regional development strategy, supporting industrial upgrading and transfer as well
+as the development of city clusters in the Beijing-Tianjin-Hebei region and Xiongan New Area.
+The Bank also increased its investment in the advanced manufacturing sector, high-quality
+service sector, new infrastructure construction, new urbanisation and other sectors in the Yangtze
+River Delta, and vigorously seized the opportunities arising from the technology finance, industry
+finance and cross-border finance sectors of the Guangdong-Hong Kong-Macao Greater Bay Area.
+The Bank adopted policies tailored to local conditions and pursued accelerated development
+in the ecological protection of the Yellow River basin, the development of modern agriculture
+and animal husbandry, new urbanisation, infrastructure connectivity, and the upgrading and
+transformation of traditional industries. It further stepped up its efforts to promote the financial
+connectivity in the Chengdu-Chongqing economic circle, and energetically supported new forms
+of consumption. In addition, the Bank contributed to the development of the Hainan Free Trade
+Port and Smart Hainan, positioning itself as the first-choice bank for the port. To serve the
+national strategy of expanding domestic demand, it capitalised on the new trend of consumption
+upgrading and sped up the building of scenario ecosystems. To serve common prosperity for
+all, the Bank continuously strengthened its inclusive finance services and made breakthroughs
+in online products. It also actively integrated into the national rural revitalisation strategy and
+increased support for agricultural modernisation. To serve the nation's ecological conservation
+Corporate Loans
+Upholding its customer-centric approach, the Bank continued to consolidate its development
+foundations and remained committed to building a comprehensive and tiered marketing
+management system through scientific classification and targeted policy implementation.
+Focusing on customers' diversified financial needs, it further enhanced its cross-industry services,
+comprehensive marketing awareness and comprehensive service capabilities. Furthermore, by
+proactively integrating into the domestic and international dual circulations, the Bank strived
+to connect its business product channels for domestic settlement and international settlement,
+increased business volumes in payments and settlements, enhanced fund retention capacity,
+and boosted the sound and sustainable development of its deposit business. Centring on the key
+industries and key customer groups of the administrative institutions sector, the Bank developed
+differentiated marketing strategies and sharpened its market competitiveness in key areas by
+improving scenario-based marketing across the entire industrial chain so as to assist the digital
+transformation of administrative institutions sector customers. As at the end of 2021, RMB
+corporate deposits in the Bank's operations in the Chinese mainland totalled RMB6,948.925
+billion, an increase of RMB495.437 billion or 7.68% compared with the prior year-end. Foreign
+currency corporate deposits amounted to USD117.085 billion, an increase of USD31.108 billion
+or 36.18% compared with the prior year-end.
+Corporate Deposits
+The Bank actively improved its product and service system and enhanced the quality and
+efficiency of its services for the real economy. It piloted a unified corporate settlement account
+system for local and foreign currencies and improved its account, payment and settlement
+services so as to continuously enhance multi-channel account services. In response to policy
+guidance, it took multiple measures to optimise account services for micro and small-sized
+enterprises and provided them with an "easy account opening" service to help improve the
+business environment. The Bank devoted great efforts to promoting the expansion of supply chain
+finance, vigorously supported SME financing, and deepened innovation in supply chain finance
+service solutions for key industries. Meanwhile, the Bank successfully expanded its "blockchain
++ supply chain” service solution in medical scenarios and launched a policy finance application
+scenario on the cross-border finance blockchain platform of the State Administration of Foreign
+Exchange in many provinces and regions. It also enriched and improved the comprehensive
+product system of its “Global Cash Management Platform+” and launched the innovative "BOC
+Intelligent Funds Supervision Service" product to provide customers with integrated and multi-
+scenario fund supervision solutions. In addition, the Bank launched a multi-bank cloud service
+platform to provide standardised fund management services, and piloted an integrated cash pool
+of local and foreign currencies in Shenzhen and Beijing. It also successfully rolled out an RMB
+Cross-border Interbank Payment System (CIPS) standard transceiver product and completed its
+first RMB international remittance business via CIPS.
+The Bank continued to deepen all-round cooperation with various financial institutions and
+built up its integrated financial services platform, maintaining a leading position in terms of
+financial institution customer coverage. It has established correspondent relationships with about
+1,100 institutions around the world and opened 1,402 cross-border RMB clearing accounts for
+correspondent banks from 116 countries and regions, thus securing a leading position among
+domestic banks. It promoted the RMB Cross-Border Interbank Payment System (CIPS) and
+acted as an agent in the capacity of direct participant for 507 domestic and overseas financial
+institutions, seizing the largest market share among peers. It was awarded "Best Renminbi Bank"
+in the U.S. by The Asset, the first Chinese bank to win such an award. The Bank's custodian
+service for Qualified Foreign Investors (QFI) and its agency service for overseas central banks
+and other sovereign institutions held leading positions in the industry in terms of both customer
+base and business scale. The Bank helped the Shanghai Headquarters of China Central Depository
+& Clearing Co., Ltd. (CCDC) to transfer the proceeds from the first offshore bond issued by an
+overseas institution in the pilot free trade zone. It succeeded in winning the exclusive settlement
+bank for the centralised clearing of RMB-USD trades via Shanghai Clearing House. It also
+succeeded in convincing the China Foreign Exchange Trade System by its excellent service
+for sending and receiving agency instructions in relation to foreign currency lending business.
+It participated deeply in Southbound trading under the Bond Connect programme, further
+consolidated its leading position in the H-Share full circulation market, enhancing its brand name
+in serving the financial infrastructure clients. The Bank successfully held the 2021 Shanghai
+Global Asset Management Forum and the London & Shanghai Dialogue on Innovation and
+Cooperation in the Asset Management Industry to introduce investment opportunities in China's
+asset management market to global investors, receiving a positive market response. The Bank
+also strengthened its cooperation with the Asian Infrastructure Investment Bank (AIIB), the New
+Development Bank, Silk Road Fund, etc. It assisted AIIB with the issuance of offshore USD
+bonds, served as lead underwriter and bookrunner for the New Development Bank's pricing and
+issuance of two Panda bond issuances, and acted as lead underwriter and lead bookrunner for
+the issuance of Asian Development Bank's Panda bond. As at the end of 2021, the Bank had the
+largest market share in foreign currency deposits from financial institutions and led its peers in
+terms of market share increase for third-party funds under custody.
+56
+The Bank provided a range of products including enterprise annuities, occupational annuities and
+employee benefit plans, and intensified efforts in the building of inclusive pension finance and
+other scenario-based financial services ecosystems, thus supporting the development of the silver
+economy on all fronts. As at the end of 2021, pension funds held in trust by the Bank reached
+RMB141.545 billion, an increase of RMB39.753 billion or 39.05% compared with the prior year-
+end. The total number of enterprise annuity individual accounts held by the Bank reached 3.6759
+million, an increase of 0.2623 million or 7.68% compared with the prior year-end. Pension assets
+under custody amounted to RMB783.502 billion, an increase of RMB 190.630 billion or 32.15%
+compared with the prior year-end. The Bank provided enterprise annuity services for more than
+16,000 institutional clients.
+The Bank was recognised as "Best Transaction Bank for Trade Finance” and “Best Transaction
+Bank for Supply Chain Finance" by Asiamoney, and “Best Trade Finance Bank" and "Best
+Renminbi Bank" by The Asset. It received a special award for "Electronic Letter of Credit
+Information Exchange System" from China Financial Publishing House, and "BOC Global Cash
+Management" was selected as a case study for "Global Service - Global Service Practice Cases"
+at the China International Fair for Trade in Services, demonstrating the Bank's professional
+advantages in transaction banking.
+With a focus on high-quality development, the Bank continued to advance the transformation of
+its corporate financial services so as to serve the real economy more efficiently and effectively.
+It gave priority to supporting high-quality development in key areas such as technology
+finance, green finance, inclusive finance, supply chain finance, county-level finance, strategic
+emerging industries and manufacturing, thus contributing to the transformation and upgrading
+of the national economy. It also proactively expanded core customer groups in the advanced
+manufacturing and digital economy-related industries, so as to help improve the country's
+strategic scientific and technological strengths. In addition, the Bank accelerated progress in
+the development of the Beijing-Tianjin-Hebei region, Xiongan New Area, the Yangtze River
+Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, Hainan Free Trade Port and other
+key areas by virtue of its financial resources, thus supporting national strategies for coordinated
+regional development. Centring on customers' needs and experience, the Bank accelerated the
+growth of customer assets under management (AUM), closely cooperated with its comprehensive
+operation companies, and implemented differentiated precision marketing based on refined
+customer group classification. It also promoted the management of financial product aggregates
+(FPA), strengthened linkages and coordination by giving full play to the advantages of the
+Group's comprehensive operations, and provided integrated service solutions covering the whole
+product line of “investment, loans, bonds, equity, insurance and leasing” to meet the diversified
+financing needs of all customers. In 2021, the Bank's corporate banking business in the Chinese
+mainland realised an operating income of RMB176.662 billion.
+Д
+59
+Upholding the concept of “finance for the people", the Bank solidly promoted the use of smart
+accounts and made remarkable achievements in the comprehensive reform of its cardless personal
+banking services. It completed the R&D phase of its "digital debit card" and put it into pilot
+operation. Services such as account opening, cash deposit and withdrawal, transaction record
+printing, foreign currency exchange and investment and wealth management can now be provided
+without the customers presenting their card. The Bank created a brand-new service model that
+features "accounts and mobile banking as one" and extended its cardless services to cover all
+high-frequency scenarios. The Bank also worked to enrich products and services for elderly
+customers and launched "BOC Care Debit Card" for customers with wealth inheritance needs,
+based on the functionality of principal and supplementary debit cards, enabling the sharing
+of family funds and wealth inheritance. As the only official banking partner of both Winter
+and Summer Olympic Games, the Bank made preparations to promote a Winter Olympics
+themed debit card to cross-border customers and provided services such as account opening,
+mobile payment, local and foreign currency cash, e-CNY and domestic acceptance of overseas
+bank cards for short-term visitors to China during the Winter Olympics, thus enhancing the
+convenience of domestic payment and settlement. It optimised its personal accounts service,
+introduced easy personal account opening services, and established a classified and tiered
+management system for personal accounts to effectively prevent telephone and internet fraud
+risks. The Bank was awarded “Retail Bank with Excellent Competitiveness” by China Business
+Journal, while its “Comprehensive Cardless Application of Personal Banking Business and Smart
+Counter 4.0” programme was recognised as the “2021 Best Frictionless Customer Experience
+Initiative in China" by The Asian Banker.
+Account Management Business
+Guided by its customer-centric philosophy, the Bank continued to shape its retail banking
+business into one with wealth finance as its core, cross-border finance and consumer finance as
+its features, and key regions as its breakthrough drivers. It remained committed to bolstering its
+development momentum, comprehensively accelerated digital transformation, deeply promoted
+the reform of its management model, and unlocked the value of structural reform in order to
+drive the high-quality development of its personal banking business. In 2021, the Bank's personal
+banking business in the Chinese mainland realised an operating income of RMB199.157 billion.
+Personal Banking
+58
+94
+58
+Digital Transformation
+Pension Business
+In response to the national policy of "staying local for the Spring Festival", the Bank launched
+the "New Year Benefit” financial service programme to provide financial services to those micro
+and small-sized enterprises and their employees that continued working over the Spring Festival
+to ensure supply and stabilise production, with more than 7,500 customers benefiting from the
+service. To implement the loan policy of promoting “borrowing and repayment at any time”,
+the Bank launched the “MSE Benefit Loan” to provide flexible financing services to micro and
+small-sized enterprises. It launched and upgraded the “BOC E-cooperation” intelligent matching
+platform and built an integrated “online + offline” bank-government-enterprise ecosystem. As the
+sole invited financial institution, the Bank joined with the Ministry of Commerce to carry out the
+"Business Integrity Publicity Month” campaign. Based on the theme of “Strengthening Business
+Integrity with Financial Services", it prepared and promoted the “BOC Business Integrity Credit"
+scheme to provide targeted support for enterprises with good commercial credit records.
+52
+57
+The Bank strengthened financial support for key sectors through its “Inclusive Loan” inclusive
+finance brand. It also developed a service system for "specialised, refined, featured and
+innovative" enterprises, providing credit support to more than 15,000 such businesses. It
+carried out a special campaign promoting “BOC Inclusive Services for Specialised, Refined,
+Featured and Innovative Enterprises”, and hosted the first cross-border matchmaking event for
+"specialised, refined, featured and innovative” SMEs. In addition, the Bank signed a strategic
+cooperation agreement with China National Intellectual Property Administration (CNIPA) to
+establish the Innovative Intellectual Property Financing Laboratory and released the "Inclusive
+Loan for Intellectual Property”, an intellectual property pledge loan product. Through special
+marketing activities such as "Campus Enterprise Benefit Plan”, “Enterprise Benefit Plan"
+and "Elite Benefit Plan", the Bank provided comprehensive financial services for micro and
+small-sized enterprises, including lectures on intellectual property investment and financing,
+inclusive finance knowledge, etc., which also served as an excellent growth platform to boost
+entrepreneurship and innovation among college students.
+Implementing national policy measures to support the development of micro and small-sized
+enterprises, the Bank constantly promoted the development of inclusive finance in line with
+relevant regulatory requirements. It continued to improve its inclusive finance services by
+focusing on the overall requirements of “increasing volume, expanding coverage, improving
+quality, promoting efficiency”. Taking product innovation as its key breakthrough driver, model
+upgrading as its basis and digitalised inclusive finance as its objective, the Bank developed a
+service model that integrates online and offline services and made every effort to build the BOC
+inclusive finance brand to improve the quality and efficiency of its inclusive finance services. It
+successfully upgraded its credit factory model, optimised the credit management mechanism for
+corporate customers, strengthened model-based, intelligent, automatic and batch-based operation,
+and improved its agile response capabilities. By replicating the credit factory model in Macao
+(China), it supported SMEs in Macao (China) to integrate into the overall national development.
+Inclusive Finance
+Focused on implementing the comprehensive digital transformation objectives set forth in the
+Group's 14th Five-Year Plan, the Bank emphasised improving the digitalisation of corporate
+banking in three aspects: digital transformation, globalised operations and comprehensive
+services. By carrying forward the Group's four core digitalisation projects and relying on
+the OASIS project to promote the transformation of the corporate banking business, it built
+a customer marketing mode based on collaboration between the Bank and the Group's
+comprehensive operation companies as well as cooperation among different positions within the
+various institutions that comprise the corporate banking global service platform. It also realised
+intelligent post-lending management, strengthened data analysis and improved the application of
+data elements in marketing, risk control and management.
+Corporate Banking
+Personal banking business
+Supply Chain Finance
+176,662
+Corporate banking business
+Amount % of total
+% of total
+Amount
+Items
+2021
+Unit: RMB million, except percentages
+2020
+37.64%
+Actively serving national strategies, the Bank honed its market positioning and comparative
+advantages in the domestic circulation as well as in the interplay between domestic and
+international dual circulations, formed synergies and stimulated momentum. The Bank's
+commercial banking in the Chinese mainland has made steady progress, operating efficiency has
+risen steadily, and the primary role of a domestic commercial bank has been further highlighted.
+In 2021, the Group's commercial banking business in the Chinese mainland achieved an
+operating income of RMB469.346 billion, an increase of RMB40.313 billion or 9.40% compared
+with the prior year. Details are summarised in the table below:
+51
+Launching new financial products to support “agriculture, rural areas and farmers".
+The Bank surpassed the original ambitions of its agriculture-related loan plan which
+effectively promoted poverty alleviation and rural revitalisation. It enriched the product
+and service system of "Rural Revitalisation - Prosperity Loan", launched products such as
+Farmland Loan, Xinnong Loan and Huinong Loan and participated in the "Credit Express"
+programme of the PRC Ministry of Agriculture and Rural Affairs to advance the high
+quality development of rural revitalisation.
+Building diversified county-level service channels. With a focus on the development
+of online channels, the Bank intensified its efforts to extend online and mobile banking
+services while continuing to optimise its offline channels. In 2021, 40 new county-level
+institutions were opened, serving 17 counties where no offline financial service channels
+were previously available.
+Improving the county-level financial service system. Drawing on the strength of its
+globalised operations, the Bank leveraged the BOC E-cooperation matchmaking platform
+to help county-level industries in terms of "Going Out” and “Bringing In”. It also
+strengthened and improved the integration of its operations so as to provide diversified and
+comprehensive financial services.
+The Bank focused on key customers and businesses at the county level to address the changing
+development needs of the real economy in county areas. It accelerated improvements to local
+financial services infrastructure and explored the construction of a digitalised, scenario-driven,
+platform-based and featured county-level financial service model.
+County-level Finance
+Relying on the supply chain financial service system covering domestic and overseas
+operation, local and foreign currency, online and offline channel, the Bank strengthened
+financing support for enterprises in the upstream and downstream of the supply chain. It
+launched a batch customer marketing model named “Inclusive Loan for Supply Chain"
+aiming at upstream and downstream inclusive customer group, and successfully underwrote
+asset-backed securitisation products for a number of core supply chain customers.
+Focusing on the eight key industries of new energy, new materials, new infrastructure,
+modern agriculture, bio medicine, high-end equipment, information and communication, and
+transportation, as well as the five major areas of green and low-carbon, medical and health,
+equipment manufacturing, people's livelihood consumption and cross-border trade, the Bank
+stepped up its support for national key areas such as strategic emerging industries, advanced
+manufacturing, and modern service industries. In 2021, the Group comprehensively utilised
+corporate credit, trade finance, negotiable instruments, bonds and other financial instruments
+to provide RMB2.16 trillion of liquidity support to core supply chain enterprises.
+Commercial Banking in the Chinese Mainland
+100.00%
+186,956
+50
+429,033
+100.00%
+469,346
+Total
+0.19%
+806
+2.17%
+10,191
+43.58%
+Others
+41,763
+17.76%
+83,336
+Treasury operations
+46.50%
+199,508
+42.43%
+199,157
+9.73%
+50
+The Bank gave full play to its advantages in globalised, integrated and specialised operations to
+promote the development of digitalised, platform-based, scenario-based and intelligent supply
+chain finance, and spared no efforts to build itself into a first-class global bank for supply chain
+financial services.
+During the 2021 CIFTIS, the Group launched the new supply chain finance brand “BOC
+Smart Chain" and four industry sub-chains, namely "BOC Medical Chain", "BOC Auto
+Chain", "BOC Equipment Chain” and “BOC Construction Chain", to meet the individual
+needs of customers in different industries for supply chain finance. Through its own
+supply chain finance platform, core enterprise platform and third-party platforms, the Bank
+provided all-rounded online supply chain financial services for core enterprises and their
+upstream and downstream enterprises.
+61
+55
+65
+The Bank continuously improved its financial markets business systems, consolidated its business
+development foundations and enhanced its comprehensive customer service capabilities. It
+outperformed peers in terms of market share of foreign currency exchange against RMB by
+providing 40 currency pairs available for exchange, as well as launching interbank regional
+trading for the Indonesian Rupiah. It also led the domestic market in terms of the total number of
+tradable foreign currencies. To fulfil the hedging needs of the real economy, the Bank actively
+improved its FX risk management services and used financial market trading instruments to
+help enterprises enhance their risk management. It also improved its online service capabilities
+to make customer transactions more convenient, achieving rapid growth in online corporate
+transaction volumes and customer scale. Seizing opportunities arising from the two-way opening-
+up of financial markets and relying on a multi-tier service system integrating trading, sales
+and research, the Bank took steps to expand its overseas institutional investor customer base
+and provide high-quality trading services for domestic bonds and derivatives. It pressed ahead
+with the implementation of the infrastructure connections to the Bond Connect (Southbound)
+programme, with related trading volumes leading the market. It also strengthened its quantitative
+trading capacity, pushed forward the building of its quantitative trading platform and refined its
+quantitative strategy. Closely tracking the reform of international benchmark interest rates, the
+Bank promoted hedging transactions that adopt the new benchmark interest rates and undertook
+several of the first transactions adopting new benchmark interest rates in domestic markets. It
+also improved infrastructure construction, strengthened risk control capability, and implemented
+mandatory initial margins. Furthermore, the Bank fully implemented the FX conduct code,
+continuously aligned trading business towards best practices and took the lead in finishing
+liquidity provider disclosure in FX market as guided by FX Global Code with peer banks in the
+Chinese mainland, under the coordination of China Foreign Exchange Committee.
+Trading
+By strengthening its forecasting and analysis regarding the macroeconomic situation and market
+interest rates, the Bank proactively seized market opportunities and dynamically adjusted its
+investment portfolio in a bid to mitigate risk. It supported the development of the real economy
+and actively participated in local government bond investments. Following trends in global
+bond markets, the Bank optimised its foreign currency bond investment portfolio. Moreover, it
+supported the development of green finance and led the market in terms of investment volume of
+green debt financing instruments.
+Securities Investment
+The Bank actively aligned itself with trends towards the two-way opening-up of financial
+markets, national strategies and the development direction of the real economy, it continuously
+improved its business structure and stepped-up efforts to ensure compliance with regulatory
+requirements, thus maintaining its leading position in financial markets business.
+Financial Markets Business
+44
+64
+The Bank coordinated and promoted the digitalisation of the front, middle and back offices of
+its personal banking business so as to empower high-quality development. It built an agile front
+office, improved its integrated and collaborative channel management and enhanced its open
+and shared scenario ecosystem capabilities. In 2021, the volume of the Bank's mobile banking
+transactions reached RMB39.38 trillion, up 22.00% compared with the prior year. The number
+of non-financial mobile banking scenarios totalled 612, and the number of monthly active mobile
+banking customers stood at 71.04 million. The Bank created a smart middle office to develop
+its capabilities in accurate customer insight, full-process digital marketing, specialised products
+and services, and in-depth data asset mining and application. The Bank created an efficient back
+office to build efficient intelligent operational capabilities and intelligent internal control and risk
+management capabilities. In 2021, the “Cyber Defence” smart risk control and prevention system
+monitored 7.69 billion transactions through online channels, up 24.1% year-on-year. As at the
+end of 2021, the number of customers using mobile banking-oriented digitalised authorisation
+tools reached 20.20 million, up 66.94% from the end of the prior year. By comprehensively
+enhancing the digital capabilities of its personal banking business, the Bank embedded a digital
+"DNA" into all products, processes, sectors and business lines.
+Digital Transformation of Personal Banking
+63
+(1.53%)
+363.798
+358.240
+Instalments volume of credit cards
+(4.69%)
+15.32%
+Emphasising reform of organisational structure, the Bank continued to deepen the digitalisation
+process of its personal banking business, implementing hundreds of phased measures to
+comprehensively enhance the digital capabilities of various business areas. It also developed
+an indicator system to quantify the progress of digital transformation across all aspects of
+its personal banking business. During the year, it was recognised as “2021 Most Influential
+Digitalised Bank" by Caijing Magazine.
+Investment Banking
+Fully leveraging the advantages arising from its globalised operations and diversified business
+platform, the Bank followed its mission to serve the real economy and provided its clients with
+comprehensive, professional, and customised “onshore + offshore” and “financing + intelligence"
+integrated financial services plans, including financial products and services such as bond
+underwriting and distribution, asset-backed securitisation (ABS), and professional financial
+advisory services, etc. To facilitate the development of China's multi-layered capital markets and
+support customers in their direct financing, the Bank underwrote bonds in the China interbank
+market of a total amount of RMB1,608.947 billion. It actively supported green finance, as
+shown by the Bank's dominant position in both onshore and offshore green bond underwriting.
+It underwrote pioneering green deals including the first batch of carbon-neutral bonds and
+sustainability-linked bonds, the first sovereign green Panda bond, and the first local government
+offshore green RMB bond. It strongly boosted its underwriting business for financial institutions,
+with its financial bond underwriting amount and market share continuing to lead the market. The
+Bank further built its competitiveness in cross-border underwriting business. It helped Hungary,
+Asian Development Bank and other overseas issuers to issue Panda bonds and maintained the
+largest market share in Panda bond underwriting. Acting as the lead underwriter and bookrunner,
+the Bank assisted the MOF in successfully issuing USD and EUR sovereign bonds, totalling
+USD8.5 billion equivalent. These issuances further improved the yield curve of foreign currency-
+denominated sovereign bonds and strengthened international investors' confidence in China's
+economy. The Bank maintained the largest market share in China's offshore bond underwriting. It
+also helped to deepen the two-way opening up of financial markets. It participated in the launch
+of Southbound trading under Bond Connect and the inaugural issuance of the Yulan bonds,
+thus contributing to the building of both domestic and international market infrastructure. It
+held a leading market share in terms of asset-backed securitisation underwriting business in the
+interbank market, while its sales volume of NAFMII credit bonds continued to rank first among
+peers. The Bank was awarded “China Bond House" by IFR Asia; "Best Bank for Domestic
+Debt Capital Markets”, “Best Green Bond Bank”, and “Best Domestic Bank for Securitisation"
+by Asiamoney; "Best Bond Adviser Global" by The Asset; "Best Debt House
+Asia" by
+FinanceAsia, and “Best Panda Bond House" by GlobalCapital China. In this way, the brand
+influence of "BOC Debt Capital Markets" was continuously enhanced.
+_
+60
+69
+BOC Fullerton Community Bank won a number of awards and honours during the year, including
+the "People's Inventive Service Award", "Outstanding Contribution Award for Supporting
+Rural Revitalisation”, “Excellent Case of Financial Services for Micro, Small and Medium-
+sized Enterprises” and “Demonstration Institution for Rural Revitalisation with Excellent
+Competitiveness", etc.
+BOC Fullerton Community Bank pushed forward with equity integration, enhancing its intensive
+and specialised operations. In November 2021, CBIRC Hebei Office approved a private
+placement plan of BOC Fullerton Community Bank Co., Ltd., a rural investment management
+bank. The Bank was thus approved to increase the capital of BOC Fullerton Community Bank
+Co., Ltd. by RMB9.332 billion, using its own funds and the equity it holds in 126 rural banks.
+BOC Fullerton Community Bank continuously improved its product and service system, further
+expanding its customer base and business scale. As at the end of 2021, the balances of total
+deposits and loans of its banks stood at RMB54.557 billion and RMB69.239 billion respectively,
+an increase of 17.11% and 25.50% compared with the prior year-end. BOC Fullerton Community
+Bank also set up and optimised a comprehensive risk management system for business lines
+that support farmers and small-sized enterprises, thus maintaining good asset quality. The NPL
+ratio was 1.30%, and the ratio of allowance for loan impairment losses to NPLs was 261.78%.
+With a focus on rural industry development, rural infrastructure construction, improvement to
+living environments and other key areas, BOC Fullerton Community Bank actively provided
+support for specialised cooperatives, family farms, large specialised households and other new
+business entities. In addition, it recorded notable achievements in using digital means to upgrade
+its services in order to unblock “last mile” barriers to delivering county-level financial services.
+For its "credit under village-by-village promotion” service, it successfully automated the whole
+process of approval, contracting and disbursement, as well as integrating the post-lending
+function into its digitally-enabled whole-process mobile business platform. Mobile handling
+across the whole process, from customer visits to application for deposits and loans, was realised
+for all business scenarios.
+As an important platform for implementing inclusive finance and the rural revitalisation strategy,
+BOC Fullerton Community Bank is committed to providing modern financial services to county-
+level micro and small-sized enterprises, individual merchants, wage earners and farmers with the
+aim of "focusing on county area development, supporting farmers and small-sized enterprises,
+and growing together with communities”. As at the end of 2021, BOC Fullerton Community
+Bank controlled 124 village banks with 185 sub-branches, making it the largest domestic
+village bank group in terms of total institutions. Its registered capital amounted to RMB8.618
+billion, with total assets and net assets standing at RMB98.317 billion and RMB13.825 billion
+respectively. In 2021, BOC Fullerton Community Bank achieved a profit for the year of RMB990
+million.
+Village Bank
+Adhering to the principles of serving the real economy and enhancing value creation, the Bank
+continued to promote the comprehensive and high-quality development of its custody business
+with a focus on achieving breakthroughs in key areas. As at the end of 2021, total assets of
+the Group's custody business amounted to RMB15.23 trillion, an increase of 29.22% year-on-
+year. The scale and income of its custody business continuously increased, and its market share
+improved. The Bank achieved a leading growth rate among major Chinese peers in terms of the
+size of mutual funds under custody and ranked among the top in the industry in terms of the
+number and size of newly-issued mutual funds under custody. It supported the multi-tier social
+security system and provided services for key pension security custody projects, including the
+first batch of pilot projects for pension finance products. The Bank provided custody services
+and support for green bond issuance funds, green industry funds and green asset-backed security
+(ABS) products, and served as the custody bank for the first carbon-neutral mutual fund in the
+market. It continuously worked to refine the operation and service quality of its custody business,
+enhance its comprehensive risk management system, and improved its service capabilities for
+innovative businesses.
+Custody Business
+88
+68
+67
+10
+The Asset Management Committee of the Bank is responsible for the top-level design and overall
+management of the asset management business line. The Bank carried out asset management
+business through BOC Wealth Management, BOCIM, BOCI China, BOC Asset Investment,
+BOC Hong Kong Asset Management, BOC International Prudential, its Luxembourg Branch
+and other institutions, providing individual and institutional investors with access to local and
+foreign currency products with a comprehensive range of asset classes, diversified investment
+strategies and complete investment cycle. The Bank's business scale and market share continued
+to grow. At the end of 2021, the Bank's AUM reached RMB3.2 trillion, of which BOC Wealth
+Management's AUM was RMB1.71 trillion, an increase of 23.17% over the beginning of the
+year. The market influence of the Bank's asset management business also improved. During the
+year, BOC Wealth Management received the Golden Bull Award from China Securities Journal,
+the Golden Reputation Award from PYSTANDARD, and Best Asset Management Company
+for Responsible Investment from Sina Finance. BOCI China received Junding Award for Fixed-
+income Asset Management Team, Junding Award for Fixed-income Asset Management Plan in
+China from Securities Times. BOCHK AM was awarded Best RMB Manager, Best CNY Bonds,
+Offshore (5 Years) by Asia Asset Management. BOC International Prudential received Awards of
+Excellence ETF Management from Hong Kong Economic Journal and Best Pension Fund over
+3 Years from Refinitiv Lipper Fund Awards Hong Kong.
+The Bank strictly followed the new regulations on asset management and other regulatory
+requirements to advance the rectification of existing wealth management products, completing the
+aforesaid rectification at the end of 2021.
+Giving full play to the advantages arising from its globalised operations and comprehensive
+business platform, the Bank seized market opportunities brought by the continuous increase of
+residents' wealth and accelerated the establishment of a first-class asset management business.
+With the aim of serving the real economy and preservating and appreciating residents' wealth,
+the Bank effectively connected investment and financing, actively served areas including green
+finance, cross-border finance, wealth finance and so on. The Bank continuously accelerated the
+issuance of various special themed innovative products, enriched its themed product systems
+such as green, technology and cross-border. Its cross-border wealth management products led the
+industry in terms of scale.
+Asset Management
+66
+66
+The Bank continued to build its professional financial advisory service system and strengthened
+the group-level coordination. It provided clients with professional advisory services such as
+M&A, debt restructuring, divestitures, equity financing and project financing. It served clients
+including central state-owned enterprises, local state-owned enterprises and private enterprises in
+relation to several major acquisitions and project financing.
+The Bank actively promoted asset-backed securitisation business, optimised assets structure,
+issuing 11 credit asset-backed securitisations during the year, including 5 residential mortgage-
+backed securities (RMBS) transactions with a total issuance volume of RMB46.442 billion and 6
+NPL transactions with a total issuance volume of RMB3.476 billion.
+8,031.941
+1,639.427
+1,562.469
+Transaction amount of credit cards
+9,262.792
+As at
+Unit: million cards/RMB billion, except percentages
+The Bank's bank card issuance and transaction volumes as at the end of 2021 are set forth below:
+The Bank implemented an innovation strategy for green financial products, issued green and
+low-carbon digital credit cards and built a green and low-carbon bonus point system. It also
+established "Head Office to headquarters” cooperation agreements regarding automobile purchase
+instalments with a number of new-energy vehicle brands and jointly launched a preferential
+interest rate policy to boost the sales growth of new-energy vehicles. Moreover, the Bank further
+implemented the nation's rural revitalisation strategy and launched rural revitalisation-themed
+credit cards on a pilot basis. It put in place a policy of fee reduction and profit concession to
+benefit micro and small-sized businesses and private enterprises, and reduced debit card fees for
+standard merchants. In response to the nation's key regional development strategies, the Bank
+supported special marketing activities such as the CIIE and CICPE, as well as marketing activities
+related to the Chengdu-Chongqing economic circle, the Yangtze River Delta and the Greater Bay
+Area business district. Integrating high-frequency small-amount transaction scenarios into the
+"BOC Benefit Day” brand, the Bank continuously carried out the "Thousand Stores in a Hundred
+Cities” campaign, covering livelihood consumption sectors including restaurants, department
+stores, convenience stores, petrol, public transportation and subways. Adhering to the principle of
+high-quality development, the Bank focused on increasing the activity rate of new customers and
+promoting the improvement of credit card asset quality.
+The Bank promoted brand building for the Olympic Games and snow and ice sports, and
+continued to bolster its market reputation as the official banking partner of both Winter and
+Summer Olympic Games. Leveraging its strengths as a Winter Olympics partner, the Bank
+issued and promoted Beijing 2022 Winter Olympics-themed debit card and credit card, provided
+offshore bank card acceptance services to cross-border customers. It also provided services for
+the construction of a card acceptance environment for the Beijing Zone and Zhangjiakou Zone of
+the Beijing 2022 Winter Olympics.
+62
+662
+customers.
+As part of its digital transformation strategy, the Bank accelerated digital transformation and
+scenario building for its bank card business. It steadily pressed ahead with its debit card business
+and expanded scenario-based applications for mobile payment, thus continuing to improve
+customer experience. Leveraging its advantages in higher education institution services, the
+Bank made efforts to create a "Whole Education" scenario. It also enriched its integrated "online
++ offline" and "financial + non-financial” services, issued social security cards equipped with
+financial functions in cooperation with local Human Resources and Social Security Bureaux, and
+expanded the functions of electronic social security cards and medical insurance e-vouchers. As
+at the end of 2021, the Bank had cumulatively issued 116.4572 million physical social security
+cards and 8.2999 million electronic cards. It endeavoured to improve rail travel services and
+extended Railway e-Card coverage to 50 railway lines, including in such national strategic
+regions as the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong
+Kong-Macao Greater Bay Area and the Hainan Free Trade Port, and serving over 3 million
+As at
+Bank Card Business
+Wealth Finance Business
+Actively implementing the strategic requirements of pursuing “common prosperity”, the Bank
+upheld the concept of value creation and pressed ahead with reform and innovation, achieving
+sound development momentum in its wealth finance business. As at the end of 2021, the total
+financial assets under management of the Group's personal customers exceeded RMB11 trillion
+and the income generated from its wealth finance business increased by 33% compared with
+the prior year-end, achieving the highest growth rate of the last three years in terms of both
+customer numbers and financial assets under management for medium and high-end customers.
+Adhering to platform-based, allocation-oriented, specialised, digitalised, globalised and integrated
+development, the Bank built a “group-wide + market-wide" wealth finance platform to create
+value for both the Bank and its customers. It introduced seven wealth management companies to
+the platform, including BOC Wealth Management, Amundi BOC and CMB Wealth Management
+etc., and registered an increase of 75.30% in the balance of wealth management products for
+personal customers. It launched the "BOC Selection" brand and cooperated with 12 third parties
+such as BOCIM and Guohua Life. The Bank published the BOC White Paper on Personal
+Banking Global Asset Allocation for the fourth consecutive year and launched “BOC Investment
+Strategy", a global investment advisory service system covering global stocks, bonds, currencies
+and commodities, and consisting of daily, weekly, monthly, quarterly and annual reports. It
+refreshed the visual branding of medium and high-end customer service brands such as "BOC
+Wealth Management” and “BOC Prestigious Wealth Management” in an effort to drive market
+competitiveness through brand influence. It developed six benefit areas (namely health care,
+study abroad/cross-border, ice and snow sports, business travel, better life and member mart),
+improved its privilege benefit service platform and provided more than 170 privilege benefit
+services to meet the needs of customers in non-financial scenarios including clothing, food,
+accommodation, transportation, tourism, entertainment, learning and pensions. As at the end of
+2021, the Bank had established 8,239 wealth management centres and 1,092 prestigious wealth
+management centres in the Chinese mainland. It was recognised as the “Best Bank in Wealth
+Management" by CBN and honoured as the “Most Influential Financial Brand BOC Wealth
+Management" by Caijing Magazine.
+Consumer Finance Business
+In strict compliance with national policies, the Bank intensified its efforts to support residents'
+consumption and serve the real economy. It conscientiously put in place concentration
+management requirements for residential mortgage loans, strived to meet the reasonable demands
+of those who sought loans for house purchase, and maintained reasonable and steady growth in
+its residential mortgage business. Constantly advancing migration towards online mortgage loans,
+the Bank put into operation functions such as online order taking, online mortgage and online
+repayment. In addition, the Bank accelerated the development of its consumer loan business
+and targeted the needs of niche customer groups to build consumer loan brands such as "BOC
+E-Credit” and “Youth E-Credit”, thus enriching its consumer loan product system. Giving full
+play to its role as the only bank to provide government-sponsored loans to universities directly
+under the State Council and its institutions, it promoted the implementation of new policies on
+government-sponsored student loans. As at the end of 2021, the RMB personal loan balance
+of the Group's commercial banks in the Chinese mainland totalled RMB5,461.645 billion, an
+increase of RMB482.431 billion or 9.69% compared with the prior year-end. Within this increase,
+60
+the proportion of new non-housing loans to all new personal loans rose by 9.5 percentage points
+compared with the prior year.
+In line with the service concept of “scenario-based customer acquisition and payment financing”,
+the Bank's credit card business was fully integrated into its consumer finance scenarios.
+The Bank launched the "Family Consumption Reserve Fund" and supported large-amount
+consumption scenarios such as automobile purchase and home decoration through the “Head
+Office-headquarters" cooperation model. This model involves three product systems, namely
+automobile instalment, home decoration instalment and BOC E-instalment, which serves multiple
+scenarios, thus boosting consumption upgrading. As at the end of 2021, the Bank has now entered
+into "Head Office-headquarters” cooperation agreements with many automobile manufacturers
+and home decoration companies, covering more than 10,000 dealerships.
+Private Banking Business
+The Bank accelerated the development of its private banking business. Adhering to the
+philosophy of professional and innovation-driven development, it provided high-net-worth
+customers with professional, comprehensive and globalised financial services. As at the end
+of 2021, the Group had 147.3 thousand private banking customers with RMB2.16 trillion of
+financial assets under management. Fully embracing the concept of asset allocation, the Bank
+deepened the research into global investment strategies and created a platform of private banking
+products held on consignment and drawn from all sections of the market. With a focus on the
+key customer group of entrepreneurs, the Bank researched and published the Report on Value of
+Wealth for Founders of Chinese Listed Companies. It made progress towards building its Asia-
+Pacific private banking platform and established an integrated service mechanism integrating
+corporate and personal business, domestic and overseas operations, and commercial banking
+and investment banking, thus forming a multi-layered private banking service system of “private
+banking + investment banking + commercial banking”. It further developed family trust services,
+improved insurance premium trust and charitable trust services, and established a family wealth
+management service ecosystem with the governance and inheritance of family enterprises at its
+core. The number of family trust service customers grew by 82% compared with the prior year-
+end. Moreover, the Bank further expanded the network of private banking centres in key cities by
+establishing 151 private banking centres in the Chinese mainland and rapidly cultivating teams
+of relationship managers, private bankers and investment advisors, thus continuously improving
+its professional private banking services. The Bank was awarded “Best National Private Bank
+in China" once again by Asian Private Banker, "Best private bank for international network”
+organised by Asiamoney, and "Stars of China-Best Private Bank" by Global Finance.
+The Bank actively adapted to a changing market environment and shifting customer needs,
+consolidated its leading edge in cross-border finance and continued to optimise its personal
+foreign exchange services. As at the end of 2021, the personal foreign currency deposits of the
+Group's commercial banking business in the Chinese mainland amounted to USD46.102 billion,
+representing the largest market share among peers. The Bank offered personal foreign currency
+deposit and withdrawal services in 25 currencies and personal foreign exchange services in 39
+currencies, securing the leading position among peers. In addition, it promoted online processes
+for traditional business services and was the only bank in the industry to support the self-service
+conversion of foreign currencies into e-CNY. Its foreign exchange cash reservation service
+was available in major cities in the Chinese mainland and via multiple channels such as mobile
+banking, WeChat banking and online banking, and was integrated into external data interfaces
+such as China's online government affairs service platform, HUAWEI HarmonyOS and JegoTrip
+APP. It made efforts to improve the micro-payment experience for visitors to China and realised
+the networked systems and unified operation and management of authorised foreign currency
+exchange hotels, thus effectively serving major events such as the Beijing 2022 Winter Olympics
+and CIIE.
+31 December
+Items
+Cumulative number of debit cards
+Cumulative number of credit cards
+Transaction amount of debit cards
+Change (%)
+2020
+2021
+1.68%
+488.086
+496.299
+Balance of credit card loans
+4.40%
+111.5483
+116.4572
+cards with financial functions
+Cumulative number of social security
+2.53%
+131.7439
+135.0722
+4.51%
+594.2693
+621.0535
+Change (%)
+31 December
+2020
+Personal Foreign Exchange Business
+2021
+63
+71
+BOCHK fostered ESG concepts and actively promoted green finance. Adhering to the
+concept of sustainable development, BOCHK enriched its green financial products and services
+suite, pushed forward low-carbon and highly efficient operations, and capitalised on its reputation
+as a pioneering bank in sustainable development. In line with the market and client trends towards
+low-carbon transition, BOCHK actively promoted green finance by launching Hong Kong's first
+green mortgage plan with a large real estate company, offering its corporate clients green bonds,
+green loans, green consulting and certification services, and supporting green and low-carbon
+retail spending, with the aim of meeting customers' financial needs for business transformation
+towards low-carbon and sustainable development. It also launched the BOCHK All Weather
+ESG Multi-Asset Fund, its first ESG fund to be authorised by Hong Kong's Securities and
+Futures Commission, and successfully issued "sustainable and smart living" themed green bonds.
+BOCHK has been a constituent of the Hang Seng Corporate Sustainability Index Series for 11
+consecutive years and was named “Best Bank for CSR in Hong Kong" by Asiamoney for the third
+consecutive year.
+Against the backdrop of a complex and challenging market situation, BOCHK remained focused
+on high-quality development by strengthening execution of its strategic plans and leveraging its
+regional synergies. It fostered ESG concepts and promoted the development of green finance.
+BOCHK optimised its regional integrated business system and upgraded the service capabilities
+of its Southeast Asian entities. It strengthened its integrated financial service capabilities in order
+to further develop its core market in Hong Kong, while vigorously capturing market opportunities
+arising from the financial policies of the Guangdong-Hong Kong-Macao Greater Bay Area and
+reinforcing its competitive edge in cross-border services. By deepening digital empowerment,
+BOCHK optimised its risk management and regulatory compliance mechanisms and increased the
+application of FinTech in its products and services. As at the end of 2021, BOCHK's issued share
+capital was HKD52.864 billion. Its total assets amounted to HKD3,639.430 billion and net assets
+reached HKD327.461 billion. Its profit for the year was HKD24.999 billion.
+BOCHK
+Faced with the COVID-19 pandemic, the Bank established the steering group mechanism
+for business continuity management and implemented the business continuity management
+requirement, ensuring business continuity. It enhanced the building of basic systems and drew
+business continuity plan and contingency plan. It also strengthened the construction of supporting
+function that features high risk level and wide range of influence. Fully leveraging the advantages
+of its globalised services, the Bank enhanced the online service capability of its overseas
+institutions with the help of mobile banking. It built a global trading network according to product
+line and time zone, instituting backup facilities in Beijing, Shanghai, Hong Kong, London and
+New York to ensure business continuity.
+Measures for Business Continuity
+73
+The Bank strengthened the development of mobile finance, providing services covering 30
+countries and regions and available in 12 languages. It enhanced overseas personal mobile
+banking and continued to iterate and upgrade service functions to improve customer experience.
+In addition, the Bank launched mobile banking services in Panama, Luxembourg, the
+Netherlands, Belgium, Portugal, Sweden and other countries. It optimised public mechanisms,
+further enriched online channel services, and rolled out new services such as password-free small-
+amount transfer, online application for online banking and mobile banking, online activation and
+loss reporting for credit cards, online change of debit card passwords, and online reminders of
+document expiration, thus improving customer experience in an all-round way.
+The Bank strived to build its technology-enabled platform and accelerated iteration and
+upgrading. Based on its Global Service Platform (GSP), the Bank upgraded and improved
+functions related to customer marketing and product management and developed a unified
+platform for group customer management, single customer management, marketing management
+and performance management. It improved the post-lending management platform for corporate
+banking, developed a mobile version, and enhanced online, process-oriented, standardised and
+intelligent post-lending management. It also optimised the risk warning system and quantitative
+scoring system for potential risks to improve the hit rate and accuracy of risk early warning.
+The Bank continuously increased its IT investment in overseas institutions, devoted solid efforts
+to infrastructure upgrading and renovation, and pushed forward the function optimisation and
+product promotion of its overseas systems, so as to meet local business needs and adapt to
+regulatory requirements related to new business patterns such as open banking and Payment
+Service Directive 2 (PSD2).
+Digital Transformation and Online Service Channels
+The Bank continuously improved its cross-border RMB clearing capabilities and strongly
+promoted the cross-border application of RMB, thus further consolidating its leading edge in
+international payments. As at the end of 2021, the Bank accounted for 13 of the world's 27
+authorised RMB clearing banks, continuing to lead its peers. It provided continuous support
+to expand the global coverage of RMB CIPS and ranked first in terms of the number of CIPS
+direct participants and indirect participants. In 2021, the Group's cross-border RMB clearing
+transactions totalled RMB632 trillion, an increase of more than 34% compared with the prior
+year, maintaining the leading position in the global market.
+Clearing Business
+72
+The Bank continued to take the lead among Chinese peers in terms of cross-border custody
+business, with its cross-border custody assets ranking first among Chinese banks. Being one
+of the first three pilot banks participating in Southbound trading under the Bond Connect
+programme, the Bank actively provided custody services for domestic investors investing in
+overseas bond markets.
+In 2021, the Bank underwrote Panda bonds with a total volume of RMB27.251 billion,
+representing a market share of 31.82% and ranking first in the market. It underwrote offshore
+China bonds with a total volume of USD9.095 billion and a market share of 5.39%, also ranking
+first in the market. In addition, it underwrote USD11.309 billion of Asia (excluding Japan) G3
+currency bonds, achieving a market share of 2.78% and ranking first among Chinese banks.
+The Bank actively carried out bond investment business while steadily improving the global
+integrated management of its investment operations and strengthened risk control. The Bank
+took full advantage of its globalised operations to provide stable and continuous quotation
+services worldwide and steadily improved its global service capabilities. The Bank continued
+to provide RMB market making and quotation services in Singapore, South Korea, Kazakhstan,
+Russia and other countries as well as Taiwan (China) and other regions, in a bid to facilitate
+the internationalisation of RMB. It consolidated the advantages of its globally integrated
+trading business and strengthened capacity building in its overseas trading centres. The Hong
+Kong Offshore RMB Trading Centre continued to improve its market-making and operational
+capabilities. The London Trading Centre implemented centralised trading operations to strengthen
+business support for the Bank's institutions in Europe and Africa.
+Financial Markets Business
+The Bank continued to optimise its global network and further enhanced its capability to provide
+globalised services to customers. As at the end of 2021, the Bank had 550 overseas institutions
+covering 62 countries and regions, including 41 countries under the Belt and Road initiative. In
+October 2021, BOC Geneva Branch officially launched operations.
+The Bank continued to optimise its overseas network management architecture and operating
+mechanism, pressed forward with the management and construction of overseas regional
+headquarters in regions such as Southeast Asia and Europe, Middle East and Africa (EMEA),
+and at the same time promoted the operational streamlining of its business lines. It continued to
+implement the categorisation of its branches and subsidiaries outside the Chinese mainland, and
+developed market-by-market strategies for its overseas operations. This differentiation approach
+enables our overseas institutions to gain a stronger footing to pursue differentiated growth,
+generate greater synergy among our global presence, and continue to sharpen our competitiveness
+in the global markets.
+Corporate Banking
+Keeping a close eye on market changes, the Bank strengthened its risk management, took
+effective measures in line with local conditions, and gave full play to its advantages in globalised
+operations to actively serve “Bringing In” and “Going Global” customers, World Top 500
+and local corporate customers. The Bank fully utilised syndicated loans, M&A financing,
+project financing and other advantageous products to support key areas and projects such as
+infrastructure construction, green industries and international production capacity cooperation,
+and continued to promote the high-quality development of Belt and Road initiative, and promoted
+positive interplay between domestic and international circulation through high-quality, efficient,
+personalised and comprehensive financial services. As a result, overseas corporate deposits and
+loans maintained stable growth and the Bank's industry and customer structure continuously
+improved.
+70
+70
+74
+The Bank focused on the bilateral trade business and related customers, and gave full play to its
+unique advantages in both domestic and foreign markets to mobilise the domestic and overseas
+resources of the Group, thus achieving steady growth in overseas international settlement
+and trade finance business and improving its global strategic synergies and the quality and
+effectiveness of its customer services. It continuously improved the overseas functions of cash
+management, and better leveraged the advantages of global cash management products, to
+provide cross-border centralised fund management services for multinational enterprises. It
+further enhanced its integrated services, with the global cash management services reaching 35
+countries and regions.
+Giving full play to the role of "attracting intelligence", the Bank focused on scientific and
+technological achievements to meet people's needs for a better life and improve people's living
+standards and quality. By means of SME matchmaking, the Bank introduced overseas mature
+and replicable experience, practices or models to build a bridge for cross-border intellectual
+financing.
+Personal Banking
+The Bank continued to leverage its advantages in globalised operations and expanded its
+business to cover over 6 million customers in more than 30 countries and regions. It continued
+to improve its overseas service system for personal customers, providing customers with more
+comprehensive services such as account management, settlement and electronic channels. It
+offered wealth management and private banking services in Hong Kong (China), Macao (China)
+and Singapore. It gave full play to the characteristics of its cross-border services and consolidated
+the development of its personal banking business in key regions. It built the “Three-in-One"
+cross-border platform, launched the "BOC Cross-border Services" app, upgraded the cross-
+border section of its mobile banking service and launched the "BOC Compass" WeChat applet to
+strengthen the foundations of its cross-border financial services. The Bank continuously pushed
+forward product innovation and process optimisation, and continued to refine functions such
+as online foreign exchange purchase and remittance for studying abroad, self-service exchange
+machines, foreign exchange cash reservation and collection of foreign currency reservation.
+Through scenario-based financial services ecosystem of cross-border facilitation, it provided
+one-stop information and financial services for students studying abroad, travellers and non-
+resident customers. Seizing emerging business opportunities, the Bank accelerated growth in
+personal customers with trade and capital accounts, including for China's market procurement
+trade pilot programme and H-Share full circulation. Fully leveraging the brand advantages of
+its cross-border business, the Bank placed emphasis on maintaining customer segments such as
+cross-border online shoppers and students studying abroad, and continuously carried out "Global
+Wonderful" credit card cross-border themed marketing activities, with its cross-border market
+share increasing compared with the prior year-end. It focused on key areas and continued to
+improve its featured cross-border service system in the Guangdong-Hong Kong-Macao Greater
+Bay Area. As at the end of 2021, the Bank opened over a total of 167 thousand accounts via its
+"Greater Bay Area Account Opening" service in the region, and a total of 13 thousand customers
+were contracted for Northbound and Southbound trading under the Bond Connect programme.
+The "Macao Cross-border Wallet” marketing campaign was launched to ensure a stable
+acceptance environment for merchants and provide users with a good payment experience.
+Meeting the needs of overseas customers for personal loans and card usage, the Bank's overseas
+commercial banking operations achieved healthy, sound and regulated development in the
+personal loan business and realised solid growth despite the continued spread of COVID-19,
+tightening regulatory environments and intensified market competition. The Macau Branch
+developed and launched the BOC Jinsha Fashion co-branded credit card, and the Singapore
+Branch upgraded its credit card business by launching a convenient bill payment function.
+The Bank made solid efforts to advance the development of overseas wealth management and
+private banking, and sped up the building of its global “Private Banking”, “BOC Prestigious
+Wealth Management” and “BOC Wealth Management” brands. Based on the development pattern
+of "One Mainstay, Two Engines", it made concerted efforts to promote its Asia-Pacific private
+banking platform and established an integrated service mechanism linking corporate and personal
+business, domestic and overseas operations, and commercial banking and investment banking,
+forming a multi-layered private banking service system of “private banking + investment
+banking + commercial banking". During the year, it was recognised as "Best Private Bank for
+International Network" organised by Asiamoney.
+In line with the global trend of attaching great importance to environmental, social, governance
+(ESG) and the rapid development of green industries, the Bank explored business opportunities
+contained in the infrastructure investment and transformation needs in the process of realising the
+"carbon peaking and carbon neutrality” goal, and promoted the green transformation of business.
+BOCHK pushed forward integration and collaboration, giving full play to its regional
+synergies in Southeast Asia. Striving to continuously enhance its product innovation, customer
+acquisition, business promotion and technological capabilities in the Southeast Asian region,
+BOCHK enhanced its role as a regional headquarters for management, deepened intra-group
+collaboration and implemented market-by-market strategies according to the local conditions
+of each of its Southeast Asian entities. In addition, it actively arranged or participated in a
+number of syndicated loan projects in the Southeast Asian region. BOCHK remained committed
+to enhancing digital channel functions and online financial product innovation. It achieved
+full coverage of its personal mobile banking across Southeast Asia while gradually rolling out
+a number of other digital services in the region, including its intelligent Global Transaction
+Banking (iGTB) Platform, Enterprise Resources Planning Integration service, BoC Bill and the
+FXall Digital Transaction Platform. Bank of China (Thai) Public Company Limited received the
+"2021 Best of Cross Border Business Services Award” in Thailand. Bank of China (Malaysia)
+Berhad successfully launched the FXall Digital Transaction Platform, introduced "eWealth
+Banking", the first mobile application in the local market to provide one-stop investment and
+wealth management services, and launched the e-Pocket remote account opening service via
+mobile banking. Meanwhile, BOCHK Jakarta Branch successfully initiated services under the
+bilateral local currency settlement (LCS) agreement between China and Indonesia, outperforming
+market peers in terms of the value of RMB/IDR exchange transactions handled, and continuing to
+rank first among all foreign banks in Indonesia. BOCHK Phnom Penh Branch launched a Wealth
+Management service, enabling mutual brand recognition across regions and countries including
+Hong Kong (China), Malaysia and Cambodia. Adhering to stringent risk management, BOCHK
+closely monitored changes in its asset quality so as to enhance its risk management capabilities in
+credit risk, market risk, interest rate risk and liquidity risk. In 2021, BOCHK's Southeast Asian
+entities registered solid growth, recording a steady increase in customer deposits and loans and
+maintaining benign asset quality.
+The Bank accelerated digital transformation, emphasised on customer experience improvement
+and online business process rebuilding, and improved its product and service systems. The Bank
+further consolidated its leading position among Chinese banks in overseas corporate online
+banking services, covering 51 countries and regions, with 15 languages available including
+Chinese, English, Korean, Japanese, German, French and Russian.
+75
+BOCI was again awarded “Best DCM House (Hong Kong Chinese Financial Institutions)"
+in the 2021 Country Awards and “Best Debt House, Asia" in the 2021 Achievement Awards
+organised by FinanceAsia. It was also recognised as “2021 Best Private Bank for HNWIs Hong
+Kong" by The Asset and received the "Awards of Excellence ETF Management” in the
+2021 Financial Services Awards of Excellence organised by Hong Kong Economic Journal.
+In addition, BOCI's mixed-asset HKD balanced MPF was awarded "Best Pension Fund over 3
+Years" in the 2021 Refinitiv Lipper Fund Awards Hong Kong.
+BOCI China
+-
+BOCI China is engaged in securities-related business in the Chinese mainland. As at the end of
+2021, the registered capital was RMB2.778 billion.
+BOCI China promoted business transformation through technological empowerment and refined
+its comprehensive wealth management service process with a focus on serving the wealth
+management needs of individual customers, constructing a customer-centric product system,
+and improving the service capability of its investment advisors. Deepening its synergistic
+advantages of “investment banking + commercial banking”, “investment banking + investment”
+and "domestic + overseas", and targeting key clients and key industries, BOCI China drew up
+blueprints for technology finance, green finance, rural revitalisation and other national strategic
+areas, achieving breakthroughs in terms of “pioneering deals” in those areas and shifting its
+investment banking business focus towards transaction-driven comprehensive financial services.
+It further improved its customer service capabilities, shifting its asset management business focus
+towards active management services. In addition, the brand reputation of its research products
+was further enhanced. BOCI China ranked 12th for bond lead underwriting volume (excluding
+local government bonds), as well as 3rd and 14th for assets under management and net income
+respectively, highlighting its continuously increasing market influence.
+BOCI China received numerous awards from authoritative media, such as "Best Local Investment
+Bank", "Best Bond Underwriting Investment Bank”, “Best IPO Project” and “Most Creative
+Project" from New Fortune for its investment banking business; "Junding Award for Fixed-
+income Asset Management Team in China”, “Junding Award for ABS Asset Management
+Team in China” and “Junding Award for Fixed-income Asset Management Plan in China” from
+Securities Times, and "Best ABS Asset Management Securities Company” and “Best Innovative
+Asset Management Product of Securities Companies” from China Fund for its asset management
+business, as well as the "Most Progressed Research Institution" in the Crystal Ball Awards for
+sell-side analysts for its research and sales business, among others.
+--
+BOCHK actively explored opportunities in its domestic market of Hong Kong and met a
+full range of customer needs. The growth of BOCHK's total customer deposits and loans was
+above the market average, and the asset quality of its loan portfolio outperformed local peers
+in Hong Kong. It continued to enhance internal and external collaboration to provide support to
+major projects and maintained its top market share in the Hong Kong-Macao syndicated loan
+market. Seizing opportunities arising from the secondary listing of China concept stocks and the
+development of capital markets, BOCHK retained its top market position as an IPO receiving
+bank. It also upgraded its Home Expert mobile application with functional enhancements,
+which helped BOCHK to capture direct mortgage business opportunities and maintain its top
+market position in terms of the total number of new mortgage loans. In addition, it expanded
+its cash management, trade finance and treasury businesses, and secured market leadership in
+the cash pooling business. BOCHK continued to promote its premium Private Wealth service
+to high-end customers, featuring online services for investment and insurance alongside its RM
+Chat services. As a result, it recorded significant year-on-year growth in the related number of
+customers and amount of assets under management. It also revamped the image of its Wealth
+Management service by injecting vitality and digital elements, thus providing customers with a
+more diversified experience.
+BOCIM
+The Bank is engaged in fund management business in the Chinese mainland through BOCIM.
+As at the end of 2021, BOCIM's registered capital amounted to RMB100 million, its total assets
+stood at RMB5.579 billion and its net assets totalled RMB4.309 billion. In 2021, its profit for the
+year reached RMB1.026 billion.
+12
+79
+As the most globalised Chinese bank, the Bank solidly pushed forward its globalised operations
+and continually improved its global services and global management capabilities. It actively
+served China's new development pattern and the national strategy of higher standard opening-
+up, tapped into business opportunities and helped to smooth flows in the domestic economy
+and promote positive interplay between domestic and international circulation that complement
+each other. Through cross-border collaboration and coordination, the Bank better served two-
+way investment, pushed forward high-quality “Bringing In” and high-level “Going Global", and
+continuously realised value creation. As at the end of 2021, the Bank's overseas commercial
+banking business realised customer deposits and loans of USD501.325 billion and USD423.937
+billion respectively, an increase of 3.34% and 3.96% from the prior year-end. In 2021, the Bank's
+overseas commercial banking business achieved a profit before income tax of USD7.124 billion,
+accounting for 16.60% of the Group's total profit before income tax.
+Globalised Operation
+Asset Management Business
+88
+(Please refer to the results report of BOCI China for a full review of BOCI China's business performance and related
+information)
+The Bank is engaged in investment banking business through BOCI. As at the end of 2021, BOCI
+had an issued share capital of HKD3.539 billion, total assets of HKD96.875 billion, and net assets
+of HKD22.658 billion. In 2021, BOCI realised a profit for the year of HKD1.489 billion.
+BOCI consolidated its advantages in traditional investment banking and accelerated the
+development of wealth management and asset management business. It refined its risk
+management system to support business innovation, and fostered the new development pattern
+in which domestic and international circulations reinforce each other through its activities
+in equity and bond financing, cross-border wealth management, M&A, asset management,
+ESOP and global commodities. BOCI enhanced its globalised and integrated investment
+banking capabilities and assisted with the secondary or dual listing of a number of China
+concept stocks in Hong Kong. It participated in the issuance of Saudi Aramco's first USD
+sukuk and was the only Chinese investment bank to participate in the issuance of Pakistan's
+overseas USD sovereign bond. BOCI acted as the joint sell-side financial advisor to Kerry
+Properties in relation to the partial offer made by S.F. Holding for a stake in Kerry Logistics,
+supported Cathay Pacific in selling convertible bonds related to its corporate restructuring, and
+participated in the issuance of several Chinese institutions' overseas green bonds. It optimised
+its cross-border wealth management service, enhanced its mobile securities services, pushed
+forward the digital transformation of its securities services, and promoted artificial intelligent
+driven investment advisory services and other FinTech applications. As a result, the brokerage
+business and the trading volume of over-the-counter equity derivatives maintained steady
+performance. The “BOCI Greater Bay Area Leaders Index” continued to outperform its peers.
+BOCI continued to improve its asset management capabilities by developing and promoting
+ESG indices and asset management products. BOCI-Prudential Asset Management Limited, a
+subsidiary of BOCI, maintained its position as a top-ranked service provider in the Hong Kong
+Mandatory Provident Fund (MPF) and Macao Pension Fund businesses. Eleven eligible funds
+under the Cross-boundary Wealth Management Connect scheme have been listed on the product
+platforms of the first batch of Hong Kong banks authorised to carry out Cross-boundary Wealth
+Management Connect business in the Guangdong-Hong Kong-Macao Greater Bay Area. In
+addition, BOCI accelerated development of its global commodity centre. It proactively facilitated
+the internationalisation of the onshore commodities futures market, and assisted Shanghai
+International Energy Exchange in promoting its crude oil products and futures.
+78
+BOCHK deepened collaboration across key areas and reinforced its competitive edge in
+cross-border services. Seizing opportunities from financial policies relating to cross-border
+RMB services, BOCHK proactively engaged in the development of major regions such as the
+Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta and the Beijing-
+Tianjin-Hebei region, with a view to fulfilling the cross-border financial needs of technology
+and innovation companies by offering them diversified products and services. BOCHK made
+solid progress in promoting mutual financial market access. It successfully launched Southbound
+trading under Bond Connect and Cross-Boundary Wealth Management Connect services, with
+the trading volume of both ranking among the top tier in Hong Kong. It continuously optimised
+the cross-border customer service experience, including that of the "Greater Bay Area Account
+Opening Service” and “Personal Loan” mortgage service, promoted the Bay Area Social Security
+Service and introduced “GBA Youth Card”, offering integrated service solutions to meet personal
+customers' needs for wealth management, investment and spending as well as other cross-border
+financial services. It optimised the coordination and management mechanism of its RMB business
+and established a cross-departmental on-demand RMB working unit. By applying an agile
+working methodology, its new product development and marketing achieved concrete results.
+Focusing on its key corporate customers, business segments and regions, BOCHK actively
+explored business opportunities, with its RMB deposits and loans recording steady growth.
+Leveraging its strong franchise as Hong Kong's RMB clearing bank, BOCHK contributed to the
+refinement of cross-border financial infrastructure and enhanced the quality and efficiency of its
+clearing service, with the aim of proactively supporting and cultivating the offshore RMB market.
+BOCHK launched a number of products and services denominated in RMB, including a CNH
+PBOC bills repo service, green deposits and loans, and the ESG Multi-Asset Fund. It continuously
+promoted RMB business in the Southeast Asian region, with both Bank of China (Malaysia)
+Berhad and BOCHK Manila Branch being granted direct participant qualification by the CIPS,
+BOCHK Manila Branch officially launching its RMB clearing bank service, and BOCHK Brunei
+Branch successfully introducing its RMB cross-border salary direct remittance service, thus
+achieving steady development in its regional RMB business.
+16
+76
+BOCHK deepened digital empowerment and expanded financial services outreach. With a
+view to improving customer experience in a comprehensive manner, BOCHK closely monitored
+market trends and empowered its businesses through digital transformation, drawing on digital,
+intelligent and ecological support. It expanded the reach of its financial services by actively
+promoting open banking and strengthening scenario-based applications of FinTech innovations.
+BOCHK accelerated the expansion of intelligent technology applications, thereby reducing
+processing times, enhancing employee productivity and improving operational efficiency. It
+constantly refined the building blocks of its database, further strengthening its risk control
+capabilities in intelligent anti-fraud and anti-money laundering. BOCHK also continuously
+optimised its agile working methodology and fostered digital talent, with a view to building a
+full-scale digital bank.
+During the year, BOCHK was named "Bank of the Year in Hong Kong" by The Banker;
+"Strongest Bank in Hong Kong and Asia Pacific”, “Best Transaction Bank in Hong Kong"
+and "Best Cash Management Bank in Hong Kong" by The Asian Banker; “Most Outstanding
+Company in Hong Kong Banking Sector”, “Hong Kong's Best Digital Bank 2021" and
+"Best Chinese Bank for the Greater Bay Area" by Asiamoney; and "Hong Kong Domestic Cash
+Management Bank of the Year”, “Hong Kong Domestic Trade Finance Bank of the Year” and
+"Hong Kong Domestic RMB Internationalisation Initiative of the Year" by Asian Banking &
+Finance, as well as receiving the “Best SME's Partner Award" from the Hong Kong General
+Chamber of Small and Medium Business.
+Comprehensive Operation
+The Bank implemented national strategies and supported the development of the real economy
+through high-quality integrated financial services. It remained committed to sharpening the
+Group's differentiated advantages based on its integrated operations and serving as a driver of
+value creation, functional innovation and mechanism exploration for the Group.
+(Please refer to the results report of BOCHK for a full review of BOCHK's business performance and related
+information.)
+The Bank actively explored and strengthened the synergistic mechanism between the Bank and
+its comprehensive operation companies, promoted new modes of integrated synergy and set up
+integrated operation and synergy offices in ten key areas. Leveraging its advantages in integrated
+operations, the Bank carried out marketing focused on the "Eight Priority Areas for Enhancing
+Financial Services Capabilities” and enhanced the brand influence of the Group's integrated
+financial services by implementing several prestigious projects such as the IPO of Zhengyuan
+Geomatics Group Co., Ltd. on the Science and Technology Innovation Board of the SSE, mixed
+ownership reform of China Baowu Steel Group Co., Ltd., and Series A funding of SVOLT.
+77
+72
+The Bank continuously improved the group-wide management and control mechanism of its
+integrated operations, strengthened the comprehensive development of a “strong headquarters”,
+drew up special plans for integrated development and optimised its performance evaluation
+mechanism. It pressed ahead with the building of its comprehensive risk management system,
+improved the audit management mechanism of its integrated operations, and advanced relevant
+digital transformation. Furthermore, the Bank refined its corporate governance structure and
+improved the quality and efficiency of its corporate governance.
+Investment Banking Business
+BOCI
+198.7857
+As at
+235.1805
+Change (%)
+2020
+2021
+31 December
+31 December
+6.4812
+As at
+Focusing on customer experience, the Bank accelerated the transformation and upgrading of
+all service channels using digital transformation as the key driver, building online channels
+with stronger scenario integration capabilities and offline channels with greater value creation
+capacity. As a result, it cultivated an ecosystem in which online and offline channels are
+integrated and financial and non-financial scenarios are seamlessly connected.
+Number of corporate online banking customers
+Number of personal online banking customers
+Number of mobile banking customers
+Items
+52
+87
+Following a "Mobile First” strategy and embracing digital transformation trends, the Bank
+continued to intensify efforts to expand its online channels and upgrade its mobile banking
+services, thus realising rapid growth in online business. In 2021, its e-channel transaction volume
+reached RMB324.97 trillion, an increase of 18.18% compared with the prior year. Among this,
+mobile banking transaction volumes reached RMB39.38 trillion, an increase of 22.00% compared
+with the prior year; the number of non-financial mobile banking scenarios totalled 612, and the
+number of monthly active mobile banking customers stood at 71.04 million, making mobile
+banking the online channel with the most active customers.
+Online Channels
+Service Channels
+Listed on the International Data Corporation (IDC) “2021 IDC China FinTech 50 List", BOC
+Financial Technology continued to promote innovative research and won several awards during
+the year for its self-developed products. “BOC Smart Investment” won the 2021 "China's Best
+Investment Advisory Service" award from The Asian Banker; while “Chainmore Blockchain
+Service Platform” and “THE REJUVENATION PLATFORM" won the "Comprehensive
+Intelligent Platform Award Silver Award" and "Digital Technology Innovation Award"
+respectively in the 2021 China Financial Digital Technology Innovation Competition.
+5.4351
+194.2267
+210.5524
+development of the Bank's comprehensive operations. It supported economic development in key
+areas, set up R&D bases in Wuhan, Hubei Province; Chengdu, Sichuan Province; and Hainan
+Province, and promoted the construction of Smart Hainan, the Xiongan New Area, the Yangtze
+River Delta, the Chengdu-Chongqing economic circle, the Guangdong-Hong Kong-Macao
+Greater Bay Area and other key cities by leveraging its overall financial technology strengths and
+focusing on regional economic development. It expanded service outputs, focused on building
+a talent pool management system for banking associations, and exported technological services
+in areas such as anti-money laundering and credit risk control for domestic and foreign banks.
+It accelerated internal digital construction, promoted engineering process reform, and won the
+CMMI5 software maturity advanced qualification certification.
+Unit: million customers, except percentages
+19.25%
+BOCIM steadily expanded its asset management business, continuously improved its profitability,
+maintained sound risk management, constantly improved its brand and market reputation, and
+further enhanced its comprehensive strengths. BOCIM expanded its business and focused on
+the field of green finance, issued an interest rate bond index fund linked to Shanghai Clearing
+House, and actively promoted the implementation of low-carbon themed funds, ESG China bonds
+and other fund products. BOCIM strengthened investment research and fund issued in science
+and technology related sectors, promoted the take-up of "specialised, refined, featured and
+innovative" themed products, and provided fund products to help investors share in the growth
+of science and technology. Building on its “The Global Manager of Global Assets" brand, it
+laid out various fund products such as Hong Kong stock connect funds, QDII funds and mutual
+recognition funds. BOCIM accelerated the issuance of new funds, launching 18 funds during the
+year. As at the end of 2021, BOCIM's AUM reached RMB499.3 billion. Specifically, its public-
+offered funds reached RMB398.3 billion and its public-offered funds excluding money market
+funds reached RMB286.6 billion.
+11.70%
+86
+89
+The Bank made fresh innovations in outlet business models. It rolled out the "5G Intelligence +
+Greater Bay Area Pavilion" in Guangdong Province, the “5G Intelligence + Culture and Tourism
+Pavilion” in Shanxi Province and the “5G Intelligence + Ecosystem Pavilion” in Anhui Province,
+and built smart outlets that combine technology application, service experience, scenario linking
+and ecosystem integration. Furthermore, the Bank improved its differentiated outlet management
+The Bank accelerated the digital transformation of its outlets. Closely following the pace of
+digital reform in government services, it constructed a “government service + financial service"
+dual-purpose system and successively expanded more than 300 government affairs scenarios such
+as social security and tax services to its smart counters. In this way, it promoted the operation
+of smart outlets by embedding financial services into the building of digital government and
+smart cities. The Bank rolled out the "Yangtze River Delta Smart Government Affairs" service,
+realising the interconnectivity of government affairs services between Shanghai Municipality
+and Anhui Province and thus facilitating the integrated development of the two regions. It
+also delivered non-resident smart social security card services in the Hengqin-Guangdong-
+Macao In-Depth Cooperation Zone to boost the accelerated integration of people's livelihood in
+Guangdong and Macao. Furthermore, the Bank deepened cross-border scenario-based ecosystem
+development, expanded non-resident service scenarios at smart counters, supported passport-
+based business handling and launched multilingual services. It expanded service stations and
+launched tablet-version smart counters to support outlets” “Going Out” service marketing and
+increase the availability of financial services. The Bank constantly optimised its products and
+services, introducing digital debit card issuance and cardless services at smart counters to
+improve customer experience. Focusing on the elderly and other key customer groups, the Bank
+launched an elderly version of its smart counters to help older people adapt to the digital world
+and make intelligent financial services more inclusive.
+The Bank pushed forward the transformation of its outlets and continued to enrich its intelligent
+service ecosystem, in a bid to transform its outlets into integrated marketing and service entities
+encompassing all channels, scenarios and ecosystems.
+Offline Channels
+lifestyle convenience, fresh food, transportation, audio-visual entertainment, online medical
+consultation and so on, thus facilitating the building of better lifestyle scenarios. In addition,
+the Bank created the “Lucky” branding concept to demonstrate its new service image of warm,
+considerate, intelligent, convenient, safe and reliable. The Bank was granted the "Gold Award
+for Comprehensive Intelligent Platform" by China Electronic Banking Network and received the
+"Mobile Banking with Excellent Competitiveness” award from China Business Journal, and the
+"2021 Excellent Mobile Payment Bank” award from The Economic Observer.
+88
+For personal customers, the Bank adhered to its mobile banking development strategy of
+"integrated, intelligent, open, interactive and featured", and continued to improve personal
+mobile banking functions and user experience, thus actively facilitating the digital transformation
+of personal banking. It also released the brand-new Mobile Banking Version 7.0. Centring on
+the key customer groups of credit card, private banking and elderly care, it launched targeted
+services such as a credit card section, a private banking zone and an Elderly Version for its
+mobile banking. Focusing on wealth finance, the Bank revised its mobile banking fund modules,
+launched functions such as fund PK and fund diagnosis, added new features such as online audio
+and video recording and notice deposit “Smart Deposit” contracting, and strengthened customer
+information integration by adding information integration services such as “Earnings Report”,
+"My Ledger" and Monthly Statement. It enriched third-party merchant services and content
+information, with its Mobile Banking Life Channel expanding its circle of partners and covering
+For corporate banking customers, the Bank accelerated digital transformation, continuously
+improved the functions of its electronic channels and constructed a comprehensive Group-wide
+financial e-portal. It launched 24 products on corporate online banking, including BOC Wealth
+Management products, domestic foreign exchange remittance, certificates of deposit (CDs)
+and e-CNY batch payment. As at the end of 2021, BOC's corporate online banking service can
+provide more than a hundred products and services under 12 categories. Its Intelligent Global
+Transaction Banking system, centred on the new corporate online banking service, received a
+second prize award in the 2020 PBOC FinTech Development Awards. With the aim of creating
+a comprehensive mobile financial services portal that is convenient, efficient, intelligent,
+interactive and scenario-integrated, the Bank's corporate mobile banking offered over 50 high-
+frequency products and services such as fund transfer, inclusive financing, investment and
+wealth management. Focusing on "scenario integration", the corporate mobile banking bridged
+the gaps between the Bank's financial service system and its inclusive finance services Wechat
+applets, as well as its cross-border matchmaking Wechat applets, thus providing more convenient
+and flexible channels to support scenario building. In 2021, the Bank achieved year-on-year
+growth of 113.85% in corporate mobile banking transaction customers, and its corporate mobile
+banking service was granted the “Best Corporate Mobile Banking” award by the China Financial
+Certification Authority (CFCA).
+2.35%
+22.00%
+19.35%
+232,166.028
+45,674.406 40,520.497
+39,376.511 32,277.028
+277,090.186
+Change (%)
+2020
+2021
+Unit: RMB billion, except percentages
+Transaction amount of personal e-banking
+Transaction amount of mobile banking
+Transaction amount of corporate online banking
+Items
+12.72%
+BOC Financial Technology served the domestic and international dual-circulation development
+strategy, supported significant projects and bolstered the development in key regions. It
+participated in the construction of enterprise-level architecture, undertook key projects such as
+anti-money laundering programmes, reform of the Bank's credit authorisation system, intelligent
+risk control and inclusive finance, and participated in the construction of scenario-based financial
+service ecosystem of silver, education, sports, transportation, cultural tourism, medical care,
+religion, housing construction and other scenarios. It served the Group's integrated development
+strategy and developed a comprehensive business management system and business data and
+assets management platform so as to enhance synergistic effects and promote the high-quality
+The Bank enhanced the digital risk control capacity of its online channels and accumulatively
+monitored 7.69 billion transactions through its "Cyber Defence” smart risk control and prevention
+system in 2021, an increase of 24.1% year-on-year. As at the end of 2021, the number of
+customers using mobile banking-oriented digitalised authorisation tools reached 20.20 million,
+up 66.94% compared with the prior year-end. “The Application Practice of Real-time Anti-fraud
+Machine Learning Model for Mobile Banking of Cyber Defence" won the "Full Honor Award" of
+China Electronic Banking Network.
+BOC Financial Technology
+BOC-Samsung Life maintained rapid business growth, realising a year-on-year increase of 35%
+in annual premiums and continuously sharpening its market competitiveness. It improved its
+business structure, developed its long-term savings and protection business and realised a year-
+on-year increase of 99% in first-year premiums of high-value regular policies. BOC-Samsung
+Life continued to expand its online and offline business channels by launching an online
+insurance mall on WeChat and establishing new provincial-level branches in Liaoning and Anhui
+province. It accelerated digital transformation, established an online insurance ecosystem and
+completed the deployment of a private cloud. Other basic platforms completed include a data
+middle office and an open ecological platform, etc. BOC-Samsung Life deepened its technology
+empowerment, launched artificial intelligence (AI) applications such as customer service AI
+and pre-underwriting AI to realise 24/7 self-service for mobile customers, and comprehensively
+promoted online and intelligent services. Sticking to its core purpose of providing insurance
+services, BOC-Samsung Life launched “BOC ZunXiangJiaChuan Whole Life Insurance", "BOC
+AiJiaBao (21 Edition) Specific Diseases Insurance”, “JianKangXing Critical Illness Insurance
+(internet business exclusive)", "ShouHuXing Medical Insurance (internet business exclusive)"
+and other featured products, and expanded the insurance coverage of 16 products to include
+COVID-19. In the 2021 Golden Censer Prize, BOC-Samsung Life won "Excellent Life Insurance
+Company” for a consecutive year. It was also awarded the “Annual Technological Innovation
+Prize" at the Sixth China's Insurance Industry Ranking 2021 organised by National Business
+Daily, and was honoured with the "Excellent Social Venture" award at the Eighth CSR Summit of
+Financial Enterprises organised by XinhuaNet, and the "2021 Most Valuable Enterprise in ESG
+Investment" award at the Fourth Summit Forum on CSR in China held by International Financial
+News under People's Daily.
+The Bank is engaged in life insurance business in the Chinese mainland through BOC-Samsung
+Life. As at the end of 2021, BOC-Samsung Life's registered capital stood at RMB2.467 billion,
+total assets amounted to RMB49.275 billion and net assets amounted to RMB3.090 billion. In
+2021, BOC-Samsung Life recorded written premiums and premium deposits of RMB17.762
+billion and a profit for the year of RMB126 million.
+BOC-Samsung Life
+BOC Insurance received an “A” integrated risk rating (classified regulation) from the CBIRC
+for the 21st consecutive quarter and was rated "B" for corporate governance in the supervisory
+assessment for the 2nd consecutive year. It also maintained an “A-” rating and “stable” outlook
+from Standard & Poor's for the eighth consecutive year. It was awarded “Influential Insurance
+Company in 2021”, “Insurance Service Brand Deserving Attention in 2021” and “Insurance
+Innovation Project Deserving Attention in 2021" in the China Finance Billboard published by
+Hexun.
+82
+BOC Insurance thoroughly put into practice the new development philosophy, continuously
+served the national development strategy, and pushed forward transformation in quality,
+efficiency and impetus according to the Group's 14th Five-year Plan, with a view to achieving
+high-quality and sustainable development. Supporting the development of the real economy, BOC
+Insurance took advantage of its featured products such as tariff guarantee insurance and domestic
+trade credit insurance to facilitate financing for small and medium-sized enterprises. In response
+to the national innovation strategy, BOC Insurance applied the first (set of) comprehensive
+insurance to support the development of enterprises engaged in scientific and technological
+innovation, with the aim of promoting the innovation of the country's major technical equipment
+and intelligent manufacturing technology. It deeply participated in the modernisation of national
+governance systems and capacity, scaled up the supply of liability insurance products in areas
+such as emergency management and production safety, and gave full play to the role of insurance
+in social governance. To serve the development strategies of key regions, BOC Insurance carried
+out supporting policies in a differentiated manner so as to enable the coordinated development
+of all regions. Fully implementing the Group's comprehensive operation strategy, it proactively
+participated in the development of the “Eight Priority Areas for Enhancing Financial Services
+Capabilities” and “Four Scenario-based Financial Services Ecosystem”, and helped to provide
+a comprehensive financial services package for group customers. It deepened the application
+of FinTech in insurance, accelerated digital transformation, and boosted the building of a smart
+operation system. BOC Insurance also worked to improve its consumer protection mechanism and
+strengthened consumer protection publicity and education campaigns as well as risk alerts. It was
+recognised as an excellent organiser of the "3.15 Month of Financial Knowledge Popularisation"
+for the third consecutive year.
+The Bank is engaged in property insurance business in the Chinese mainland through BOC
+Insurance. As at the end of 2021, BOC Insurance reported registered capital of RMB4.535 billion,
+total assets of RMB13.712 billion and net assets of RMB4.920 billion. In 2021, it realised written
+premiums of RMB5.771 billion and a profit for the year of RMB320 million.
+BOC Insurance
+BOC Life continued to promote the transformation and upgrading of its product structure and
+launched a number of higher value-added whole life savings protection plans, including the
+"Forever Fortune Whole Life Insurance Plan", "SmartViva Flexi VHIS” and “Glamorous Glow
+Whole Life Insurance Plan”. It also continued to expand the coverage of its online channels,
+actively promoted intra-group cross-selling collaborations, and maintained its leading position
+in the Qualifying Deferred Annuity Policy market. To create a brand-new wellness ecosystem,
+BOC Life strengthened collaboration with cross-industry business partners including the world's
+leading smartwatch brand, innovative technology companies in Asia and Hong Kong, online
+social platforms, charities and social enterprises, with the aim of creating win-win situations
+for all and helping customers to create new value and gain a brand-new experience. BOC Life
+introduced the exclusive “Biological Age Model BAM" algorithm which was incorporated into
+a platform featuring gamification, charity and social elements, encouraging users to engage in
+healthy and "bio age"-reducing lifestyles together with their families and friends. To construct
+a retirement scenario ecosystem, BOC Life and Macao-based HN Group entered into a strategic
+cooperation agreement to promote "Serensia Woods”, a high-end wellness project in Hengqin,
+Zhuhai.
+81
+The Bank is engaged in life insurance business in Hong Kong through BOC Life. As at the
+end of 2021, BOC Life's issued share capital was HKD3.538 billion. Its total assets amounted
+to HKD197.899 billion and net assets amounted to HKD11.626 billion. Its profit for the year
+was HKD954 million. BOC Life maintained its leading position in the life insurance sector and
+remained the market leader in RMB insurance business in Hong Kong.
+BOC Life
+BOCG Insurance thoroughly implemented the Group's strategies. Centring on the Group's
+strategic development pattern of “One Mainstay, Two Engines", it developed the strategic
+positioning of "a regional high-tech property insurance company with market leadership and
+commercial bank characteristics". Leveraging the advantages of the Group, BOCG Insurance
+deepened bank-insurance coordination and pushed forward the transition from list marketing to
+in-depth development. It consolidated its advantages in traditional property insurance business
+alongside a focus on health insurance business, made efforts to shift from being a financial risk-
+taker to acting as a health manager, and rolled out an online application platform for its first
+personal health insurance product. BOCG Insurance continued to tap the potential of group
+clients and promoted the general application of its B2B2C marketing model. It advanced digital
+transformation across the board, officially launched a new-generation core system and developed
+peripheral systems in an orderly manner. Its online product system was also improved, with the
+"online insurance shopping mall” beginning to take shape. In 2021, BOCG Insurance launched
+online application platforms for five products, namely, “GoStudy Student Insurance Plan",
+"Motor Insurance-Private Car”, “Premier Home Comprehensive Insurance”, “Healthy Medical
+Comprehensive Protection” and “KeepMovIns Sports Insurance". It continuously streamlined
+and optimised its business processes, significantly improving customer service quality. It also
+improved its "Cloud Service” and offered an online green channel for clients to settle claims. It
+launched "Customs Clearance Series" and "Greater Bay Area Series" products and was among
+the first to complete the development of mandatory traffic insurance and commercial insurance
+products for Hong Kong private cars travelling to Guangdong, which have been duly filed
+with the Insurance Authority (IA). Furthermore, BOCG Insurance embraced ESG concepts and
+vigorously promoted green insurance, green investment and green workplaces.
+The Bank is engaged in general insurance business in Hong Kong through BOCG Insurance.
+As at the end of 2021, BOCG Insurance reported issued share capital of HKD3.749 billion,
+total assets of HKD9.980 billion and net assets of HKD4.407 billion. In 2021, BOCG Insurance
+recorded gross written premiums of HKD2.727 billion and realised a profit for the year of
+HKD226 million. Its gross written premiums continued to be at the forefront of the general
+insurance market in Hong Kong, while its premium quality was higher than the market average.
+Insurance
+60
+80
+BOC Wealth Management implemented the Group's "One Mainstay, Two Engines" strategy,
+achieved sound success in business development, and steadily increased its contribution to the
+Group. As at the end of 2021, its total assets under management reached more than RMB1.71
+trillion, up 23.17% compared with the prior year-end. BOC Wealth Management continued to
+expand its product line, establishing the five major investment categories of cash management,
+fixed income, fixed income plus, hybrid, and equity products. This product line covered all
+mainstream product structures, terms and strategies, thus realising strong performance and
+creating value for investors. It also developed products focused on the "Eight Priority Areas
+for Enhancing Financial Services", supporting high-quality development in fields such as
+technology finance, green finance and inclusive finance. BOC Wealth Management actively
+participated in the Bond Connect programme between the Chinese mainland and Hong Kong,
+launching a series of Cross-border Wealth Management Connect products and fixed-income
+Southbound Bond Connect products. Its foreign currency and cross-border products ranked first
+in the industry in terms of both product variety and total balance. BOC Wealth Management
+also achieved breakthroughs in expanding its third-party sales channels, realising product sales
+at twelve bank institutions and attracting over million customers from third party sales channels.
+At the same time, it continued to improve its asset allocation, and its investment in strategic
+emerging industries grew by 77% compared with the prior year. BOC Wealth Management
+steadily promoted the development of its comprehensive risk management system, ensuring that
+its business development was in accordance with regulatory requirements and risk prevention was
+successful and effective.
+BOC Wealth Management
+The Bank is engaged in financial technology innovation, software development, platform
+operation and technical consulting services through BOC Financial Technology. As at the end of
+2021, the registered capital of BOC Financial Technology was RMB600 million, with total assets
+and net assets standing at RMB988 million and RMB658 million respectively.
+The Bank is engaged in wealth management business in the Chinese mainland through BOC
+Wealth Management. BOC Wealth Management's business includes wealth management
+products for the general public, wealth management products for qualified investors, advisory
+and consulting, and other asset management-related products and services. As at the end of 2021,
+BOC Wealth Management's registered capital was RMB10.000 billion, its total assets amounted
+to RMB14.429 billion and its net assets totalled RMB13.082 billion. In 2021, BOC Wealth
+Management's profit for year reached RMB2.609 billion.
+Investment Business
+BOCG Investment
+BOCG Insurance
+83
+BOC Consumer Finance received many awards from authoritative industry publications during
+the year, including the "Tian Ji Award 2021 Outstanding Consumer Finance Company”
+from Securities Times, "2021 Financial Institution Practicing Inclusive Finance with Excellent
+Competitiveness" from China Business Journal, and "2021 Reassurance Award Consumer
+Finance Brand" from Jiemian.com, Shanghai United Media Group.
+Financial Technology
+Upholding the philosophy of “building a high-quality consumer finance company in the new era”,
+BOC Consumer Finance fulfilled its responsibilities and obligations as a state-owned licensed
+consumer finance company. Driven by technological applications, it continuously improved its
+customer service capacity through technological empowerment, thus safeguarding the legitimate
+rights and interests of its customers. As at the end of 2021, BOC Consumer Finance has set up
+27 regional centres, covers about 400 cities and 900 counties nationwide through its offline and
+online businesses, and has created an integrated operation platform featuring the integration of
+"online + offline" and "finance + technology". BOC Consumer Finance registered a loan balance
+of RMB52.435 billion, an increase of 56.9% compared with the prior year-end. Preliminary
+achievements were made in the online migration of loans, with the balance of online loans
+accounting for 35.06% of all loans, an increase of 28 percentage points compared with the
+prior year-end. Placing equal emphasis on consolidating its foundations and pushing forward
+transformational development, it strived to develop its business ecosystem and enhance its
+technological and risk control capacities.
+The Bank is engaged in direct investment and investment management business through
+BOCG Investment. BOCG Investment's business scope includes private equity investment,
+fund investment and management, real estate investment and management and special
+The Bank is engaged in consumer loan business in the Chinese mainland through BOC Consumer
+Finance. As at the end of 2021, BOC Consumer Finance's registered capital stood at RMB1.514
+billion, total assets amounted to RMB54.326 billion and net assets were RMB7.862 billion. In
+2021, it recorded a profit for the year of RMB844 million.
+BOC Consumer Finance
+Consumer Finance
+555
+Following the strategic objectives of the Group, BOCL focused on national strategic regions
+and key industries, upheld the development philosophy of specialisation, differentiation and
+featured characteristics, highlighted the featured characteristics of financial leasing, and refined
+and strengthened its leasing brand. BOCL's leasing business involved transportation, water
+conservancy, energy production and supply, construction, manufacturing and other industries,
+taking practical steps to improve the quality and efficiency of its service to the real economy.
+As at the end of 2021, BOCL had conducted a cumulative total of more than RMB40 billion
+of financial leasing business, specifically, the proportion of green leasing in the total leasing
+business was 28%.
+The Bank is engaged in financial leasing, transfer and receiving of financial leasing assets and
+other related businesses through BOCL. As at the end of 2021, BOCL recorded registered capital
+of RMB 10.800 billion, total assets of RMB37.214 billion and net assets of RMB 10.684 billion. It
+recorded a profit for the year of RMB34 million.
+BOCL
+85
+84
+(Please refer to the results report of BOC Aviation for a full review of BOC Aviation's business performance and related
+information.)
+BOC Asset Investment
+BOC Asset Investment conducted debt-for-equity swap business based on market-oriented and
+rule-of-law principles, with the aim of improving enterprises' business operations and helping
+them to reduce leverage ratios and enhance market value. Committed to the development of green
+finance, it raised social investment capital by private equity investment funds for debt-to-equity
+swaps to implement a number of debt-to-equity swaps projects of enterprises in new energy
+industries including wind power, photovoltaic and waste incineration power generation, achieving
+economic, environmental and social benefits. BOC Asset Investment supported the healthy
+development of high-quality emerging technology enterprises, improving their performance by
+meeting the growing technology enterprises' equity financing demands with debt-for-equity
+swap projects. BOC Asset Investment also orderly coordinated the Group's non-performing
+assets disposal work by means of shareholding platforms and so on, serving as a professional and
+experienced platform for risk asset restructuring. As at the end of 2021, the Bank's cumulative
+market-oriented debt-for-equity swap business reached RMB186.068 billion, representing an
+increase of RMB27.266 billion during the year.
+Leasing Business
+BOCG Investment actively coped with the complex environment with repeated resurgence of
+the COVID-19 pandemic and capital market fluctuations, implemented the “One Mainstay, Two
+Engines" strategy, integrated into the nation's new development pattern, brought into full play
+its advantages in integrated operations, and pushed forward transformation and development.
+Centring on technology finance and green finance, BOCG Investment increased investment in
+technology enterprises, focused on investing in “specialised, refined, featured and innovative"
+small and medium-sized enterprises, and organised research and investment in clean energy,
+new-energy vehicles, green technology for traditional industries and other fields in line with
+the national goal of "carbon peaking and carbon neutrality”. It invested in such projects as
+SVOLT Energy Technology, Shenzhen New Degree Technology, XParadigm, NASN Auto,
+MediTrust Health, Xingshengyouxuan and Hzymes Biotech, and successfully exited from certain
+existing investment projects. It issued its first USD600 million green bond and made progress in
+establishing the second tranche of the Yangtze River Delta Fund and the second tranche of the
+Greater Bay Area Fund. It also provided support for the growth of Hong Kong-based science
+and technology innovation enterprises, focused on the construction and investment opportunities
+arising from the development of the Northern Metropolis Plan, and played its role as a Chinese
+enterprise in the economic and social development of Hong Kong.
+The Bank is engaged in debt-for-equity swap and related business in the Chinese mainland
+through BOC Asset Investment. As at the end of 2021, the registered capital of BOC Asset
+Investment was RMB14.500 billion, with total assets and net assets standing at RMB84.868
+billion and RMB17.966 billion respectively. In 2021, it realised a profit for the year of
+RMB2.050 billion.
+situation investment. As at the end of 2021, BOCG Investment recorded issued share capital of
+HKD34.052 billion, total assets of HKD142.171 billion and net assets of HKD74.798 billion. In
+2021, it recorded a profit for the year of HKD6.906 billion.
+BOC Aviation
+BOC Aviation is engaged in the aircraft leasing business. BOC Aviation is one of the world's
+leading aircraft operating leasing companies and is the largest aircraft operating leasing company
+headquartered in Asia, as measured by value of owned aircraft. As at 31 December 2021, BOC
+Aviation recorded issued share capital of USD1.158 billion, total assets of USD23.879 billion
+and net assets of USD5.266 billion. It recorded a profit for the year of USD561 million, as the
+Company recognised the effects of the COVID-19 downturn on the value of its aircraft and on
+airline customer cash flows and receivables.
+Committed to pursuing sustainable growth, BOC Aviation continuously implemented its
+proactive business strategy and steadily promoted its standing in the aircraft leasing industry.
+Actively supporting the Belt and Road Initiative, it had leased 64% of its aircraft to airlines
+of Belt and Road countries and regions as at the end of 2021. Continuing to closely develop
+customer demand, the Company took delivery of 52 aircraft, including seven aircraft that airline
+customers purchased at delivery, as it expanded its owned fleet. All of these aircraft have been
+placed on long-term leases. During the year, BOC Aviation signed 74 leases and added five new
+customers, totalling 86 customers in 38 countries and regions. BOC Aviation consistently sought
+to optimise its asset structure and improve its sustainable development. It sold 23 owned aircraft
+during 2021, leaving it with an average owned fleet age of 3.9 years (weighted by net book value)
+as at 31 December of 2021, one of the youngest aircraft portfolios in the aircraft leasing industry.
+87
+75
+84
+86
+65
+134
+109
+105
+111
+111
+118
+49
+121
+125
+103
+40
+4
+22
+REPORT OF THE BOARD OF DIRECTORS
+154
+REPORT OF THE BOARD OF SUPERVISORS
+SIGNIFICANT EVENTS
+INDEPENDENT AUDITOR'S REPORT
+CONSOLIDATED FINANCIAL STATEMENTS
+REFERENCE FOR SHAREHOLDERS
+40
+ORGANISATIONAL CHART
+135∞a
+8
+9
+12
+14
+19
+22
+LIST OF MAJOR BRANCHES AND SUBSIDIARIES
+176
+BOCHK
+197
+Bank of China Limited or its predecessors and,
+except where the context otherwise requires, all of the
+subsidiaries of Bank of China Limited
+The performing Articles of Association of the Bank
+Domestic investment share(s) in the ordinary share capital
+of the Bank, with a nominal value of RMB1.00 each,
+which are listed on the SSE (Stock Code: 601988)
+Measurement unit of changes in interest rate or exchange
+rate. 1 basis point is equivalent to 0.01 percentage points
+BOC Financial Asset Investment Co., Ltd.
+BOC Aviation Limited, a public company limited by
+shares incorporated in Singapore under the Singapore
+Companies Act, the shares of which are listed on the
+Hong Kong Stock Exchange
+Bank of China Consumer Finance Co., Ltd.
+BOC Financial Technology Co., Ltd.
+BOC Fullerton Community Bank Co., Ltd.
+Bank of China Insurance Company Limited
+BOC Group Life Assurance Co., Ltd.
+Bank of China Group Insurance Company Limited
+Bank of China Group Investment Limited
+Bank of China (Hong Kong) Limited, an authorised
+financial institution incorporated under the laws of Hong
+Kong SAR and a wholly-owned subsidiary of BOCHK
+(Holdings)
+5
+BOCHK (Holdings)
+BOCI
+BOCIM
+CORPORATE GOVERNANCE
+191
+BOCG Investment
+BOC Life
+200
+212
+456
+459
+460
+Definitions
+In this report, unless the context otherwise requires, the following terms shall have the meaning
+set out below:
+The Bank/the Group
+Articles of Association
+A Share
+Basis Point (Bp, Bps)
+BOC Asset Investment
+BOC Aviation
+BOC Consumer Finance
+BOC Financial Technology
+BOC Fullerton Community Bank
+BOC Insurance
+BOCG Insurance
+DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT MEMBERS
+FINANCIAL HIGHLIGHTS
+GOVERNANCE RESPONSIBILITIES
+Ranked 49th in Global 500
+Outstanding Leadership in Sustainable Finance
+Asia-Pacific
+Best Private Bank for Entrepreneurs
+Best Bank for ESG in China
+Best Mega Private Bank in China
+The Asset
+IFR Asia
+Ranked 4th in Top 500 Global Banking Brands
+PBOC
+General Administration of Sport of
+China
+China Transaction Banking 50 Forum,
+Trade Finance, Organising Committee
+of Annual Conference of China
+Transaction Banking
+People.cn
+Triple A Digital Awards Best Blockchain
+Project
+Best Custodian, QDII
+Best Renminbi Bank
+Best Bond Adviser - Global, China
+"Belt and Road" Green Investment
+Principles (GIP)
+China Bond House
+Ranked 4th in Top 1000 World Banks
+Asiamoney
+Stock Code: 3988 (Ordinary H-Share)
+4619 (Offshore Preference Share)
+BOCI China
+Bank of China Limited
+2023 Annual Report
+The print version of the Bank's 2023 Annual Report, to be published in April 2024, will
+supersede this version.
+Introduction
+Bank of China is the bank with the longest continuous operation among Chinese banks. Formally
+established in February 1912, the Bank served consecutively as the country's central bank,
+international exchange bank and specialised international trade bank. After 1949, drawing
+on its long history as the state-designated specialised foreign exchange and trade bank, the
+Bank became responsible for managing China's foreign exchange operations and offering
+international trade settlement, overseas fund transfer and other non-trade foreign exchange
+services. Restructured into a wholly state-owned commercial bank in 1994, the Bank provides
+various financial services, and has developed into a large commercial bank delivering services
+in local and foreign currencies and featuring complete business varieties and strong strength.
+The Bank was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange
+in 2006, becoming the first Chinese bank to launch an A-Share and H-Share initial public
+offering and achieve a dual listing in both markets. The Bank is the official banking partner
+of the Beijing 2008 Summer Olympics and the Beijing 2022 Winter Olympics, thus making
+it the only bank in China to serve two Olympic Games. In 2011, Bank of China became the
+first financial institution from an emerging economy to be designated as a Global Systemically
+Important Bank, a designation it has now maintained for 13 consecutive years. With its growing
+international status, competitiveness and comprehensive strengths, the Bank has marched
+forward into the ranks of the world's large banks. At present, following the guiding principles
+of the 20th National Congress of the CPC and the Central Financial Work Conference, the Bank
+takes serving the real economy as its mission, risk prevention and control as its eternal theme,
+consolidating and expanding globalised advantages and improving global layout ability as its
+primary task, and improving market competitiveness and serving national strategies as the core
+key. Proceeding from deepening reform, opening up and innovation, improving governance and
+operation efficiency, and promoting financial culture with Chinese characteristics, the Bank
+concentrates on the five major tasks of promoting technology finance, green finance, inclusive
+finance, pension finance, and digital finance, and contributes to the building of a strong financial
+powerhouse through practical and earnest practice.
+The Asian Banker
+As China's most globalised and integrated bank, Bank of China has institutions across the
+Chinese mainland as well as 64 countries and regions, and BOCHK and the Macau Branch serve
+as local note-issuing banks in their respective markets. The Bank has a well-established global
+service network and an integrated financial service system based on the pillars of its corporate
+banking, personal banking, financial markets and other commercial banking business, which
+covers investment banking, direct investment, securities, insurance, funds, aircraft leasing,
+asset management, financial technology, financing leasing and other areas, thus providing its
+customers with financial solutions featuring global expertise and all-round services accessible at
+any point of contact.
+Bank of China embodies a noble sense of commitment and responsibility. Since its establishment
+112 years ago, the Bank has steadfastly upheld its historic mission of “promoting social welfare
+and contributing to a prosperous nation”. This mission has formed a valuable spiritual legacy that
+aligns with the financial culture with Chinese characteristics: to remain committed to honesty
+and trustworthiness, to seek interest without compromising moral principles, to be prudent and
+cautious in work, to uphold fundamental principles and break new ground, and to be compliant
+with law and regulations. On the new journey towards building a modern socialist country in
+all respects, Bank of China will adhere to the guidance of Xi Jinping Thought on Socialism
+with Chinese Characteristics for a New Era and faithfully implement the new development
+philosophy. It will accurately identify the convergence points, focal points, and supporting points
+for implementing the national policies and plans and achieving its high-quality development. It
+will serve as the main force in supporting the real economy and as the bedrock for maintaining
+financial stability. It will unswervingly follow the path of financial development with Chinese
+characteristics, continue to open new grounds for its high-quality development, and make greater
+contributions to the comprehensive advancement of building a stronger country and the great
+cause of national rejuvenation with Chinese modernisation.
+2
+Honours and Awards
+The Banker
+The Banker, Brand Finance
+FORTUNE
+Global Finance
+1
+CHANGES IN SHARES AND SHAREHOLDINGS OF SHAREHOLDERS
+Finance Technology Development Award
+Collective with Outstanding Contribution to
+National Ice and Snow Sports Development
+FINANCIAL REVIEW
+BUSINESS REVIEW
+OVERVIEW OF STRATEGIC PROGRESS
+COMMERCIAL BANKING IN THE CHINESE MAINLAND
+GLOBALISED OPERATION
+COMPREHENSIVE OPERATION
+SERVICE CHANNELS
+MANAGEMENT DISCUSSION AND ANALYSIS
+FINTECH INNOVATION
+CAPITAL MANAGEMENT
+ORGANISATIONAL MANAGEMENT, HUMAN RESOURCES
+DEVELOPMENT AND MANAGEMENT
+OUTLOOK
+ENVIRONMENTAL AND SOCIAL RESPONSIBILITIES
+ENVIRONMENT RESPONSIBILITIES
+SOCIAL RESPONSIBILITIES
+RISK MANAGEMENT
+Best Innovation Award
+MESSAGE FROM THE PRESIDENT
+CORPORATE INFORMATION
+The 13th "Gold Trade Awards" - Best Cash
+Management Bank and Best Supply Chain
+Finance Bank
+Securities Times
+China Securities Journal
+LACP
+People's Corporate Social Responsibility Award
+Green Development
+Award for Investor Relation Case of Listed
+Companies in China
+Golden Bull for Banking Wealth Management
+Golden Bull Award for Green Finance
+MESSAGE FROM THE CHAIRMAN
+Annual Report Competition - Platinum Award
+Ranked 5th in the Most Successful Chinese
+Heritage Brands
+3
+Contents
+INTRODUCTION
+HONOURS AND AWARDS
+DEFINITIONS
+IMPORTANT NOTICE
+Hurun Research Institute
+BOCL
+%
+BOC Wealth Management
+2023
+2020 2021 2022 2022
+605,717
+RMB Million
+Operating income
+Financial Highlights
+567,647
+2019
+550.010
+EPS (basic)
+2019
+2022 2022 2023
+(not (restated)
+restated)
+2023
+2022 2022
+(not (restated)
+restated)
+2019 2020 2021
+%
+RMB
+Net interest margin
+(not (restated)
+restated)
+ROA
+%
+restated)
+2019 2020 2021 2022 2022 2023
+(not (restated)
+2022 2022 2023
+(not (restated)
+restated)
+2020 2021
+RMB Million
+Profit for the year
+201,891
+%
+294,643
+283,950
+-F-1 - - F ---F-·
+275,142
+RMB Million
+Operating profit
+246.220
+249.588
+282,996
+BANK OF CHINA
+Credit cost
+2019 2020 2021
+The area including, for the purpose of this report, the
+branches of Beijing, Tianjin, Hebei, Shanxi, Inner
+Mongolia and the Head Office
+The area including, for the purpose of this report, the
+branches of Heilongjiang, Jilin, Liaoning and Dalian
+National Financial Regulatory Administration and its
+predecessors
+Ministry of Finance, PRC
+Independent director under the listing rules of the SSE
+and the Articles of Association, and independent non-
+executive director under the Hong Kong Listing Rules
+Western China
+SSE
+The People's Bank of China
+SFO
+RMB
+PRC
+PBOC
+Northern China
+Northeastern China
+MOF
+NFRA
+SAFE
+%
+The People's Republic of China
+State Administration of Foreign Exchange, PRC
+9
+8
+The Bank is faced with risks arising from changes in the macroeconomic environment and from
+political and economic conditions in different countries and regions as well as risks arising
+from its day-to-day operations, including the risk arising from changes in the credit status of
+borrowers, adverse changes in market prices and operational risk. It shall at the same time
+meet regulatory and compliance requirements. The Bank actively adopts adequate measures to
+effectively manage all types of risks. Please refer to the section "Management Discussion and
+Analysis Risk Management" for details.
+commitment.
+This report may contain forward-looking statements that involve risks and future plans. These
+forward-looking statements are based on the Bank's own information and information from other
+sources that the Bank believes to be reliable. They relate to future events or the Bank's future
+financial, business or other performance and are subject to a number of factors and uncertainties
+that may cause the actual results to differ materially. Any future plans mentioned do not
+constitute a substantive commitment by the Bank to its investors. Investors and people concerned
+should be fully aware of the risks and understand the differences between plans, forecast and
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes and no material guarantee
+business that has violated the applicable regulations and procedures.
+The Board of Directors has recommended a final dividend on ordinary shares for 2023 of
+RMB2.364 per 10 shares (before tax), subject to approval in the forthcoming 2023 Annual
+General Meeting. No capitalisation of the capital reserve to share capital is proposed in this
+profit distribution.
+Renminbi, the lawful currency of PRC
+Legal Representative and Chairman GE Haijiao, Executive Vice President ZHANG Yi, who is
+also responsible for the Bank's finance and accounting, and General Manager of the Financial
+Management Department DONG Zonglin, warrant the authenticity, accuracy and completeness
+of the financial statements in this report.
+The 2023 Annual Report and Annual Results Announcement of the Bank have been approved
+by the Board of Directors of the Bank on 28 March 2024. The number of directors who should
+attend the meeting is 14, with 14 directors attending the meeting in person. All of the 14 directors
+of the Bank exercised their voting rights at the meeting. The supervisors and senior management
+members of the Bank attended the meeting as non-voting attendees.
+The Board of Directors, the Board of Supervisors, directors, supervisors and senior management
+members of the Bank warrant that the information in this report is authentic, accurate and
+complete, contains no false record, misleading statement or material omission, and jointly and
+severally accept full responsibility for the information in this report.
+Important Notice
+7
+The area including, for the purpose of this report, the
+branches of Chongqing, Sichuan, Guizhou, Yunnan,
+Shaanxi, Gansu, Ningxia, Qinghai, Tibet and Xinjiang
+The Shanghai Stock Exchange
+Securities and Futures Ordinance (Chapter 571 of the
+Laws of Hong Kong SAR)
+The 2023 financial statements prepared by the Bank in accordance with CAS and IFRS
+Accounting Standards have been audited by PricewaterhouseCoopers Zhong Tian LLP and
+PricewaterhouseCoopers in accordance with Chinese and international auditing standards
+respectively. Both auditors issued an unqualified opinion.
+ROE
+2019 2020 2021 2022
+i 2022
+(not (restated)
+restated)
+Hong Kong Exchanges and Clearing Limited
+The Rules Governing the Listing of Securities on The
+Stock Exchange of Hong Kong Limited
+The Stock Exchange of Hong Kong Limited
+9
+H Share
+Huijin
+IFRS Accounting Standards
+The area including, for the purpose of this report, the
+branches of Shanghai, Jiangsu, Suzhou, Zhejiang, Ningbo,
+Anhui, Fujian, Jiangxi, Shandong and Qingdao
+Overseas-listed foreign investment share(s) in the ordinary
+share capital of the Bank, with a nominal value of
+RMB1.00 each, which are listed on the Hong Kong Stock
+Exchange and traded in Hong Kong dollars (Stock Code:
+3988)
+237,504
+-F-1--1-1--F-
+227.339
+205,096
+10.77
+10.81
+11.28
+Central Huijin Investment Ltd.
+25.25
+China Securities Regulatory Commission
+The area including, for the purpose of this report, the
+branches of Henan, Hubei, Hunan, Guangdong, Shenzhen,
+Guangxi and Hainan
+CAS
+Central and Southern China
+Company Law
+CSRC
+Eastern China
+HKEX
+Hong Kong Listing Rules
+The Company Law of PRC
+Hong Kong Stock Exchange
+BOC International Holdings Limited
+Bank of China Investment Management Co., Ltd.
+BOC International (China) Co., Ltd., a company
+incorporated in the Chinese mainland, the ordinary shares
+of which are listed on the SSE
+BOC Financial Leasing Co., Ltd.
+BOC-Samsung Life Ins. Co., Ltd.
+BOC Wealth Management Co., Ltd.
+Chinese Accounting Standards for Business Enterprises
+BOC Hong Kong (Holdings) Limited, a company
+incorporated under the laws of Hong Kong SAR, the
+ordinary shares of which are listed on the Hong Kong
+Stock Exchange
+191.66
+188.73
+2019 2020 2021 2022 2022 2023
+(not (restated)
+restated)
+182.86
+(not (restated)
+restated)
+2019 2020 2021 2022 2022 2023
+Non-performing loans to total loans
+2019 2020 2021 2022 2022 2023
+(not (restated)
+restated)
+Cost to income ratio (calculated under
+regulations in the Chinese mainland)
+28.00
+177.84
+%
+2022
+(restated)
+(not
+restated)
+2019 2020 2021 2022
+2021 2022 2022 2023
+(not (restated)
+restated)
+2020
+2019
+2023
+2023
+%
+2019
+29.08
+188.73
+187.05
+losses to non-performing loans
+Allowance for loan impairment
+(not (1
+(
+restated)
+restated)
+2021 2022 2022 2023
+2020
+21.69
+------
+25.59
+29.81
+operating income
+Non-interest income to
+19'0I
+11.45
+%
+26.73
+BOC-Samsung Life
+口 中国銀行
+International Financial Reporting Standards as issued by
+the IASB
+Independent Director
+296,210
+14,500,783
+660,091
+3.32%
+161
+0.02%
+659,443
+3.77%
+20
+0.00%
+Water conservancy,
+environment and
+public utility
+administration
+455,276
+2.29%
+4,973
+1.09%
+361,108
+2.06%
+1,947
+0.54%
+Construction
+397,588
+2.00%
+4,295
+1.08%
+328,921
+1.88%
+2,838
+Financial services
+1.78%
+13,119
+4.22%
+10.33%
+34,275
+1.89%
+Transportation,
+storage and
+postal services
+1,976,166
+9.93%
+8,780
+0.44%
+1,744,422
+9.96% 10,959
+0.63%
+Real estate
+874,747
+4.39%
+48,172
+5.51%
+773,828
+4.42%
+55,966
+7.23%
+Production and
+supply of electricity,
+heating, gas and water
+1,046,809
+5.26%
+12,794
+1.22% 738,758
+0.86%
+Mining
+217,551
+1.09%
+1.49% 3,005,010 17.17% 29.273
+1.27% 17,505,793 100.00% 231,677
+0.97%
+1.32%
+The Bank continued to optimise its credit structure and stepped up its efforts to support the real
+economy. As at the end of 2023, loans for the manufacturing industry totalled RMB2,329.950
+billion, an increase of RMB521.142 billion or 28.81% compared with the prior year-end. Loans
+for the transportation, storage and postal services industries totalled RMB1,976.166 billion,
+an increase of RMB231.744 billion or 13.28% compared with the prior year-end. Loans for
+production and supply of electricity, heating, gas and water totalled RMB1,046.809 billion, an
+increase of RMB308.051 billion or 41.70% compared with the prior year-end. Loans for water
+conservancy, environment and public utility administration totalled RMB455.276 billion, an
+increase of RMB94.168 billion or 26.08% compared with the prior year-end.
+91
+In accordance with IFRS 9, the Bank assesses expected credit losses with forward-looking
+information and makes relevant allowances. In particular, it makes allowances for assets
+classified as Stage 1 and assets classified as Stage 2 and Stage 3 according to the expected
+credit losses over 12 months and the expected credit losses over the entire lifetime of the asset,
+respectively. As at the end of 2023, the Group's Stage 1 loans totalled RMB 19,265.099 billion,
+accounting for 96.79% of total loans; Stage 2 loans totalled RMB386.045 billion, accounting for
+1.94% of total loans; and Stage 3 loans totalled RMB253.168 billion, accounting for 1.27% of
+total loans.
+As at the end of 2023, the Group's credit-impaired loans totalled RMB253.205 billion, an
+increase of RMB21.528 billion compared with the prior year-end. The credit-impaired loans
+to total loans ratio was 1.27%, a decrease of 0.05 percentage points compared with the prior
+year-end. Credit-impaired loans of the Bank's institutions in the Chinese mainland totalled
+RMB207.297 billion, an increase of RMB4.893 billion compared with the prior year-end. The
+credit-impaired loans to total loans ratio of the Bank's institutions in the Chinese mainland was 1.23%,
+a decrease of 0.17 percentage points compared with the prior year-end. The Bank's operations
+in Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions reported
+credit-impaired loans of RMB45.908 billion and a credit-impaired loans to total loans ratio of 1.49%,
+an increase of RMB16.635 billion and 0.52 percentage points, respectively, compared with the
+prior year-end.
+Movement of Credit-impaired Loans
+Unit: RMB million
+2023
+2022
+2021
+Items
+Group
+Balance at the beginning of the year
+231,677
+208,792
+207,273
+Increase during the year
+96,844
+86,831
+86,583
+Decrease during the year
+(75,316)
+(63,946)
+(85,064)
+Balance at the end of the year
+253,205
+231,677
+45,908
+253,205
+1,808,808
+3,071,103 15.43%
+19,907,987 100.00%
+Hong Kong (China), Macao
+3,080
+1.42%
+167,351
+0.96%
+4,802
+2.87%
+Public utilities
+221,595
+1.11%
+4,260
+1.92%
+206,004
+1.18%
+3,539
+1.72%
+Others
+73,193
+0.37%
+1,559 2.13% 55,443
+0.31%
+1,375
+2.48%
+Total
+Personal loans
+11,008,230 55.30% 162,951 1.48% 8,818,584
+5,828,654 29.27% 44,346 0.76% 5,682,199
+50.37% 162,326
+1.84%
+32.46% 40,078
+0.71%
+(China), Taiwan (China)
+and other countries and
+regions
+Total of the Group
+1.44%
+33,565
+11.70%
+66,777
+0.37%
+19,907,987
+100.00%
+17,505,793
+100.00%
+253,205
+1.27%
+231,677
+1.32%
+Chinese mainland
+Pass
+16,399,066
+97.40%
+14,112,677
+97.32%
+Special-mention
+230,521
+1.37%
+185,702
+Substandard
+39,969
+0.24%
+85,155
+0.59%
+Doubtful
+96,171
+0.57%
+53,216
+0.40%
+0.37%
+80,698
+60,569
+Group
+Unit: RMB million, except percentages
+As at 31 December 2022
+As at 31 December 2023
+Amount
+% of total
+Amount
+% of total
+Pass
+Special-mention
+Substandard
+Doubtful
+Loss
+Total
+NPLs
+19,364,544
+97.27%
+17,038,462
+97.33%
+290,238
+1.46%
+235,654
+1.35%
+67,246
+0.34%
+104,331
+0.60%
+105,261
+0.53%
+0.35%
+208,792
+Loss
+0.42%
+22.76
+Note: Calculated in accordance with the provisions of the Notice on Revising the Definition and Calculation Formula
+of Basic Indicators for Off-site Supervision of the Banking Industry issued by the China Banking and Insurance
+Regulatory Commission in 2022, the data of previous periods will be adjusted synchronously.
+90
+00
+Distribution of Loans and NPLs by Customers' Industry
+Items
+Unit: RMB million, except percentages
+As at 31 December 2023
+As at 31 December 2022
+Loans % of total
+NPLs NPL ratio
+Loans
+% of total
+NPLs
+NPL ratio
+Chinese mainland
+Corporate Loans
+Commerce and services
+2,755,264
+13.84%
+41,312
+1.50%
+1,974,498
+11.28%
+33,486
+1.70%
+Manufacturing
+2,329,950
+10.43
+71,157
+33.09
+31.80
+64,033
+0.44%
+Total
+16,836,884
+100.00%
+14,500,783
+100.00%
+NPLs
+207,297
+1.23%
+202,404
+1.40%
+Migration Ratio
+Items
+Pass
+Special-mention
+Substandard
+Doubtful
+Unit: %
+2023
+2022
+2021
+1.20
+1.03
+0.81
+26.41
+20.63
+27.85
+47.40
+66.11
+207,297
+Chinese mainland
+202,404
+33,157
+NO
+Transportation, storage and
+postal services
+Customer J
+0.18%
+35,701
+NO
+Customer I Financial services
+0.18%
+36,126
+NO
+Financial services
+Customer H
+0.19%
+36,900
+NO
+water
+electricity, heating, gas and
+Production and supply of
+Customer G
+0.19%
+37,344
+NO
+postal services
+Transportation, storage and
+Customer F
+0.19%
+38,424
+NO
+0.17%
+postal services
+Market Risk Management
+Continuing to optimise the market risk management system and comprehensively improve
+the effectiveness of market risk management. The Bank has developed sound market risk
+management policies and procedures, properly integrated quantitative and qualitative methods,
+and performed effective identification, measurement, assessment, monitoring, reporting, control
+and mitigation of market risk. It has established a multi-layered market risk limit system to
+effectively transmit market risk appetite, and formulated contingency plans for market risk
+within its comprehensive risk emergency management system. In accordance with regulatory
+requirements, the Bank measured regulatory capital for market risk, incorporated indicators
+such as risk-adjusted return, and applied them in internal capital allocation and performance
+evaluation, thus striking an effective balance between market risk and corresponding profitability.
+Please refer to Note VI.3 to the Consolidated Financial Statements for more details of market
+risk.
+Liquidity Risk Management Method
+96
+96
+Adhering to the principal of appropriate balance of safety, liquidity and profitability, and
+following regulatory requirements, the Bank improved its liquidity risk management in a
+forward-looking and scientific manner. It enhanced liquidity risk management at the institution
+and Group level, including that of branches, subsidiaries and business lines. It formulated sound
+liquidity risk management policies and contingency plans, periodically re-examined liquidity
+risk limits, further upgraded the early warning system for liquidity risk, and strengthened the
+management of high-quality liquid assets in order to strike an appropriate balance between risk
+and return.
+The Bank endeavoured to develop a sound liquidity risk management system with the aim of
+effectively identifying, measuring, monitoring and controlling liquidity risk at the institution
+and Group level, including that of branches, subsidiaries and business lines, thus ensuring that
+liquidity demand is met in a timely manner and at a reasonable cost.
+Liquidity Risk Management Strategy and Policy
+The Board of Directors of the Bank shall bear the ultimate responsibilities for liquidity risk
+management, examine and approve liquidity risk preference and liquidity risk management
+strategies. The Senior Management shall perform the implementation of the liquidity risk
+tolerance level, liquidity risk management strategies approved by the Board of Directors and
+carry out liquidity risk management. The Board of Supervisors shall supervise and evaluate the
+performance of the Board of Directors and Senior Management in the liquidity risk management.
+The Risk Management Department and the Asset and Liability Management Department of
+the Head Office shall jointly perform the duties of liquidity risk management. Other functional
+departments of the Head Office and each branch shall cooperate and fulfill their obligations.
+Each subsidiary shall undertake the duty of their own liquidity management.
+Governance Structure of Liquidity Risk Management
+The liquidity risk management system of the Bank includes the following basic elements:
+effective governance structure for liquidity risk management; sound liquidity risk management
+strategies, policies and procedures; effective identification, measurement, monitoring and control
+of liquidity risks; complete management information system.
+Liquidity Risk Management System
+Liquidity Risk Management
+Unit: RMB million
+95
+95
+As at 31 December 2022
+RMB USD HKD Other
+(561) 557
+28
+561 (557) (28)
+(219) 3,294
+(3,294)
+As at 31 December 2023
+RMB USD HKD Other
+(477) (1,016) 477
+219
+477 1,016 (477)
+Down 25 bps
+Up 25 bps
+Items
+The Bank assessed the interest rate risk in the banking book mainly through the analysis of
+interest rate repricing gaps. Based on changes in the market situation, it made timely adjustments
+to the structure of its assets and liabilities, optimised its internal and external pricing strategy
+or implemented risk hedging. It strengthened the management of IRRBB of business lines and
+branches through risk limits, performance appraisal and other methods. Assuming that the yield
+curves of each currencies were to shift up or down by 25 basis points in parallel while the
+structure of on and off-balance sheet assets and liabilities remained unchanged (without taking
+into consideration changes in customer behaviour, basis risk, etc.), the Group's sensitivity
+analysis of net interest income on all currencies is as follows:
+Based on the principles of “matching, comprehensiveness and prudence", the Bank strengthened
+the management of interest rate risk in the banking book (IRRBB). Through effective
+management, control risks within an acceptable level by comprehensively considering factors
+such as the Bank's risk appetite and risk profile, as well as macroeconomic and market
+conditions, so as to achieve a reasonable balance between risk and return and thus maximise
+shareholder value.
+Management of Interest Rate Risk in the Banking Book
+Achieving currency matching between fund source and application to improve exchange
+rate risk management. It controlled its foreign exchange exposure through currency conversion
+and hedging, thus maintaining its exchange rate risk at a reasonable level.
+Strengthening professional market research and judgment capabilities and intensifying
+securities investment risk management. The Bank improved the market risk limit system for
+bond investment. It bolstered early warning systems for domestic bond market default risks,
+reinforced the tracking of US treasury bond yield trends, enhanced its post-investment monitoring
+and early warning capabilities, and consolidated the asset quality of its bond investment business.
+Actively implementing regulatory requirements and improving the market risk
+management efficiency of the trading book. The Bank ensured the timely implementation of
+new regulations on market risk capital by further optimising its business process and system
+measurement functions. In response to a complex and severe external situation, the Bank refined
+its cross-border risk research and analysis mechanisms. Adhering to bottom line thinking and
+worst-case scenario thinking, the Bank intensified efforts in emergency drills and stress testing.
+It strengthened the specialised management of market risk, continuously optimised relevant
+rules and control procedures, and comprehensively improved its market risk management
+effectiveness.
+24
+94
+The Bank actively responded to changes in the market environment, continuously optimised
+the market risk management system, and steadily controlled market risk. The objective of the
+Group's market risk management is to effectively manage market risk and improve market risk
+capital allocation in light of the overall risk appetite determined by the Board of Directors,
+control market risk within a reasonable level acceptable to the Bank, achieving a reasonable
+balance between risk and return.
+The Bank considered liquidity risk management to be a significant component of asset-liability
+management, and determined the size, structure and duration of assets and liabilities consistent
+with the principle of overall balance between assets and liabilities. The Bank established its
+liquidity portfolio to mitigate liquidity risk, and to minimise gaps in the amount and duration
+between the funding sources and the use of fund. The Bank refined its financing strategy,
+taking into consideration various factors including customer risk sensitivity, financing cost and
+concentration of funding sources. In addition, the Bank prioritised the development of customer
+deposits; dynamically adjusted the structure of funding sources by market-oriented financing
+modes, including due to banks and other financial institutions, inter-bank borrowings and bond
+issuance; and improved the diversity and stability of financing sources.
+Transportation, storage and
+0.19%
+Loan concentration ratio of the largest single borrower = total outstanding loans to the largest single borrower ÷
+net capital.
+1.
+Notes:
+12.8
+12.7
+13.0
+<50
+2.3
+2.2
+2.0
+≤10
+Loan concentration ratio of the largest single borrower
+Loan concentration ratio of the ten largest borrowers
+2021
+2022
+Regulatory 31 December 31 December 31 December
+Standard
+2023
+Indicators
+Unit: %
+As at
+As at
+As at
+The Bank continued to focus on controlling borrower concentration risk and was in full
+compliance with regulatory requirements on borrower concentration.
+In 2023, the Group's impairment losses on loans and advances stood at RMB106.114 billion,
+an increase of RMB13.321 billion compared with the prior year. The credit cost was 0.57%,
+an increase of 0.01 percentage points compared with the prior year. Specifically, the Bank's
+institutions in the Chinese mainland registered impairment losses on loans and advances of
+RMB89.681 billion, an increase of RMB4.825 billion compared with the prior year. The credit
+cost of the Bank's institutions in the Chinese mainland was 0.57%, down 0.05 percentage points
+compared with the prior year.
+The Bank makes timely and adequate allowances for loan impairment losses based on the
+expected credit loss (ECL) module in accordance with the principles of authenticity and forward-
+lookingness. Please refer to Notes II.4 and VI.2 to the Consolidated Financial Statements for the
+accounting policy in relation to allowances for impairment losses.
+193,030
+12,953,259
+202,404
+22,928
+330,198
+6,746
+2.
+Customer E
+Loan concentration ratio of the ten largest borrowers = total outstanding loans to the top ten borrowers ÷ net
+capital.
+33
+38,533
+NO
+postal services
+Transportation, storage and
+Customer D
+0.24%
+47,526
+NO
+Commerce and services
+Customer C
+0.30%
+60,257
+NO
+Financial services
+Customer B
+0.33%
+66,113
+NO
+% of
+total loans
+loans
+Parties or not
+postal services
+Industry
+Customer A Transportation, storage and
+Outstanding
+Related
+Unit: RMB million, except percentages
+The following table shows the top ten individual borrowers as at the end of 2023.
+Please refer to Notes V.17 and VI.2 to the Consolidated Financial Statements for detailed
+information regarding loan classification, stage determination, credit-impaired loans and
+allowance for loan impairment losses.
+93
+Balance at the beginning of the year
+Assets available to meet all of the liabilities and to cover outstanding loan commitments include
+cash and due from banks and other financial institutions, balances with central banks, placements
+with and loans to banks and other financial institutions, loans and advances to customers, etc.
+In the normal course of business, a proportion of short-term loans contractually repayable will
+be extended and a portion of short-term customer deposits will not be withdrawn upon maturity.
+The Group would also be able to meet unexpected net cash outflows by entering into repurchase
+transactions, and by selling securities and accessing additional funding sources.
+As at the end of 2023, the Group's liquidity risk indicator met regulatory requirements. The
+Group's liquidity ratio and Loan-to-deposit ratio of the Bank's domestic operations is shown
+in the table below (in accordance with the relevant provisions of regulatory authorities in the
+Chinese mainland):
+19,907,987
+200,330 14,311,147
+52,875 3,194,646
+253,205 17,505,793
+195,658
+12,727,437
+170,103
+36,019
+2,947,557
+38,689
+231,677
+15,674,994
+208,792
+Chinese mainland
+RMB
+16,482,189
+200,330 14,204,573
+195,658
+12,623,061
+170,102
+Foreign currency
+Total
+354,695
+16,836,884
+6,967
+99
+99
+The Bank earnestly implemented regulatory requirements on reputational risk management, and
+continued to enhance its reputational risk management mechanisms. It pressed ahead with the
+routine development and whole-process management of reputational risk, so as to enhance its
+reputational risk management capabilities. Placing great importance on prevention, the Bank
+intensified risk source control and governance and dealt appropriately with reputational risk
+events, thus effectively protecting its brand reputation. In addition, it stepped up reputational risk
+management training so as to enhance employees' risk prevention awareness and foster a strong
+culture of reputational risk management.
+Reputational Risk Management
+The Bank established a network security operation centre covering the Group, realised all-round
+protection of systems, networks, terminals, data and other protected objects by relying on a full-
+field and deepening cybersecurity defense system, and became able to respond quickly and
+effectively to large-scale cyberattacks. It fulfilled the responsibility for data security, promoted
+data security protection throughout the lifecycle, and was among the first in the financial industry
+to pass the data security management certification to ensure customer information security. In
+2023, the Bank effectively prevented and controlled external attack events, and blocked external
+attacks such as intrusion attempts, scanning detection and social engineering, and the on-time
+threat handling rate up to 100%. It did not experience any significant cybersecurity, information
+security or privacy breach incidents.
+The Bank incorporated IT risk into its comprehensive risk management system, improved IT
+risk management measures, and continuously carried out effective identification, measurement,
+assessment, monitoring, control and reporting of IT risk in order to reduce and control IT risk
+at an appropriate level. Relying on the Financial Digitisation Committee, the Bank coordinated
+and promoted the construction of the Group's IT risk management system and cybersecurity
+protection system.
+Information Technology Risk Management
+Total
+98
+3,235,929
+16,672,058
+193,030
+189,985
+Increase during the year
+66,760
+68,527
+77,098
+Decrease during the year
+(61,867)
+(59,153)
+(74,053)
+Balance at the end of the year
+207,297
+202,404
+193,030
+22
+92
+Loans and Credit-impaired Loans by Currency
+Items
+Unit: RMB million
+Total loans
+As at 31 December 2023
+Impaired
+loans
+As at 31 December 2022
+Impaired
+As at 31 December 2021
+Total loans
+loans
+Total loans
+Impaired
+loans
+Group
+RMB
+Foreign currency
+Liquidity Risk Management Indicators
+The Bank continually improved its liquidity stress-testing scheme. In addition to performing
+stress tests on a quarterly basis, stress tests are also carried out in response to changes in the
+macro environment. The test results indicated that the Bank had adequate payment ability to cope
+with distressed scenarios.
+Liquidity risk may arise from the following events or factors: materially adverse changes in
+market liquidity, withdrawal of customers' deposits, drawing of loans by customers, overdue
+payment of debtors, debtor default, mismatch between assets and liabilities, difficulties in asset
+realisation, weakened financing ability, operating losses, and risks associated with the Bank's
+affiliates.
+82.9
+82.7
+47
+97
+currency
+foreign
+ratio
+Loan-to-deposit RMB and
+69.9
+72.6
+70.2
+≥25
+Foreign currency
+49.6
+49.0
+55.0
+≥25
+RMB
+Liquidity ratio
+2021
+31 December
+31 December
+2022
+2023
+Regulatory 31 December
+standard
+Ratio
+As at
+As at
+As at
+Unit: %
+82.5
+Liquidity Risk Stress Test
+Liquidity gap analysis is one of the methods used by the Bank to assess liquidity risk. Liquidity
+gap results are periodically calculated, monitored and used for sensitivity analysis and stress
+testing. As at the end of 2023, the Bank's liquidity gap was as follows (please refer to Note VI.4
+to the Consolidated Financial Statements):
+Unit: RMB million
+As at
+Main Factors Affecting Liquidity Risk
+Please refer to Supplementary Information II.1 to the Consolidated Financial Statements for the
+liquidity coverage ratio and net stable funding ratio.
+Note: Liquidity gap = assets that mature in a certain period – liabilities that mature in the same period.
+2,563,301
+2,756,815
+8,378,691
+8,920,549
+3,415,321
+2,979,417
+(627,361)
+(803,353)
+(712,141)
+(731,795)
+(659,277)
+(741,082)
+(9,249,233)
+2,218,871
+(9,450,803)
+31 December 2022
+2,382,312
+31 December 2023
+Total
+Over 5 years
+1-5 years (inclusive)
+3-12 months (inclusive)
+1-3 months (inclusive)
+Up to 1 month
+On demand
+Overdue/undated
+Items
+As at
+1.28%
+Five-category Loan Classification
+Items
+Net common equity tier 1 capital
+ORGANISATIONAL MANAGEMENT,
+DEVELOPMENT AND MANAGEMENT
+104
+The leverage ratio met additional regulatory requirements for systemically important banks.
+Please refer to Supplementary Information II.5 to the Consolidated Financial Statements for
+detailed information.
+7.65%
+2,570,272
+34,785,923
+7.39%
+31 December 2023
+As at
+Unit: RMB million, except percentages
+As at
+31 December 2022
+2,372,990
+31,001,982
+Adjusted on- and off-balance sheet exposures
+Leverage ratio
+Net tier 1 capital
+Items
+As at the end of 2023, the leverage ratio calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) is listed below:
+Leverage Ratio
+The capital adequacy ratios met additional regulatory requirements for systemically important
+banks. Please refer to Note VI.6 to the Consolidated Financial Statements and Bank of China
+Limited Capital Adequacy Ratio Report of 2023 for detailed information.
+16.91%
+17.67%
+17.72%
+16.53%
+17.52%
+17.74%
+Capital adequacy ratio
+13.32%
+13.89%
+13.38%
+13.32%
+14.11%
+13.83%
+Tier 1 capital adequacy ratio
+11.06%
+Organisational Management
+HUMAN RESOURCES
+As at the end of 2023, the Bank had a total of 11,485 institutions worldwide, including 10,951
+institutions in the Chinese mainland and 534 institutions in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions. Its commercial banking business in the Chinese
+mainland (Including head office, tier-1 branches, direct branches, tier-2 branches and outlets)
+comprised 10,299 institutions, including 38 tier-1 and direct branches, 372 tier-2 branches and 9,888
+outlets.
+The geographic distribution of the organisations and employees of the Bank is set forth below:
+30.14%
+3,462
+22.80%
+7,778,972
+Eastern China
+7.43%
+22,812
+7.81%
+896
+3.14%
+1,070,711
+Northeastern China
+20.75%
+63,696
+11.37%
+18.83%
+28.50%
+9,726,324
+% of total
+Number
+% of total
+Number
+% of total
+Total assets
+Northern China
+Items
+Employees
+Organisations
+Assets
+Unit: RMB million/unit/person, except percentages
+2,163
+10.96%
+11.30%
+11.84%
+As at
+As at
+The Bank
+Unit: RMB million, except percentages
+As at
+The Group
+As at
+As at the end of 2023, the capital adequacy ratios calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) are listed below:
+Capital Adequacy Ratios
+103
+In 2023, the Bank successfully issued RMB30.0 billion of undated capital bonds and RMB220.0
+billion of tier 2 capital bonds, further enhancing its capital strength. It reinforced the management
+of existing capital instruments and redeemed RMB80.0 billion of domestic tier 2 capital bonds,
+effectively reducing the cost of capital. A capital replenishment plan of RMB450.0 billion
+capital instruments and RMB150.0 billion of total loss-absorbing capacity non-capital debt
+instruments supplement have been approved by the Shareholders' Meeting. The Bank continually
+reinforced internal management, with RWA growing at a slower pace than that of total assets.
+As at the end of 2023, the Group's capital adequacy ratio reached 17.74%, an increase of 0.22
+percentage points compared with the prior year-end, remaining at a robust and reasonable level
+in compliance with the objectives of the Group's 14th Five-Year Plan.
+The Bank implemented the “14th Five-Year" capital management plan, focused on the
+requirements of high-quality development, adhered to the principle of attaching equal
+importance to endogenous accumulation and external supplementation, increased the cohesion of
+strategic planning, capital replenishment and performance assessment, continuously optimised
+management measures, continuously enhancing its risk resilience, and better supporting the
+development of the real economy. It enhanced its economic capital budget and assessment
+mechanism, strengthened the application of value creation indicators in resource allocation, and
+heightened the Group's awareness of capital saving and value creation in order to enhance its
+capability for endogenous capital accumulation. The Bank expanded the application of advanced
+approaches of capital measurement, optimised its on and off-balance sheet asset structure, strived
+to reduce capital consumption, actively developed capital-light businesses, and reasonably
+controlled the risk weighting of assets. It regularly carried out and continuously optimised its
+internal capital adequacy assessment process, improved risk assessment methods and stress tests,
+and optimised its capital management governance structure. The Bank made prudent use of
+external financing channels in order to replenish and consolidate its capital base, and advanced
+its preparations for meeting total loss-absorbing capacity (TLAC) requirements and the Capital
+Rules for Commercial Banks.
+The Bank's capital management objectives are to ensure reasonable capital adequacy, support
+the implementation of the Group's strategies, resist various risks including credit risk, market
+risk and operational risk, ensure the compliance of the Group and related institutions with capital
+regulatory requirements, promote the Group's transformation towards capital-light business
+development and improve its capital use efficiency and value creation capabilities.
+CAPITAL MANAGEMENT
+102
+As at
+In 2023, facing an extremely complicated international political and economic situation, the
+Bank continued to strengthen country risk management in strict accordance with regulatory
+requirements based on business development needs. It amended country risk management
+policies, re-examined country risk ratings and limits, and strengthened the monitoring and early
+warning of limit implementation. It also stepped up efforts in the monitoring and reporting of
+country risk, conducted stress testing on country risk, and enhanced its country risk management
+system. The Bank actively implemented the provisioning of country risk allowances and
+enhanced its ability to mitigate country risk. As at the end of 2023, country risk exposures were
+mainly concentrated in countries and regions with low and relatively low country risk, and the
+Group's overall country risk was controlled at a reasonable level.
+Country Risk Management
+Continuously enhancing the management of connected transactions and internal
+transactions. The Bank implemented new regulatory rules on connected transactions, improved
+its connected transactions management mechanism, strengthened management of connected
+parties, reinforced data governance of connected transactions, and consolidated the foundations
+of its connected transactions management. It stepped up efforts in the identification, monitoring,
+disclosure and reporting of connected transactions, standardised the management of internal
+transactions, and strictly controlled transaction risks. It also pushed forward system optimisation
+and enhanced the automatic management of connected transactions.
+Improving its AML and sanctions compliance program to further enhance money
+laundering and sanctions compliance risk control. The Bank continued to streamline due
+diligence mechanism, enhanced control of high-risk customers and transactions, and strengthened
+inspection and supervision; optimised methodology and implementation of money laundering risk
+assessment; advanced suspicious transaction monitoring procedures and models, and improved
+monitoring and analysing capabilities; upgraded anti-money laundering-related IT systems which
+promoted digitalisation level. It continued to carry out various forms of compliance training,
+so as to enhance all employees' compliance awareness and abilities; continued to develop its
+long-acting management framework for its overseas institutions' compliance and consolidated
+management foundations, thus enhancing the compliance management capabilities.
+The Bank continuously improved its compliance risk governance mechanism and management
+process to ensure the Group's sound operation and sustainable development.
+Compliance Management
+101
+The Bank continuously improved its operational risk management system. It promoted the
+application of operational risk management tools, including Risk and Control Assessment (RACA),
+Key Risk Indicators (KRI) and Loss Data Collection (LDC), etc., carried out the identification,
+assessment and monitoring of operational risks, further standardised its operational risk reporting
+mechanism, and improved its risk management measures, in order to steadily and robustly
+advance the implementation of new capital rules for operational risk. The Bank enhanced its IT
+system support capabilities by optimising its operational risk management information system.
+It strengthened its business continuity management system, optimised its operating mechanism,
+enhanced its business continuity policies and performed business impact analysis. The Bank also
+refined contingency plans and carried out business continuity drills, thus improving the Group's
+business continuity capacity.
+Operational Risk Management
+In 2023, the Bank succeeded in preventing 114 external cases and RMB219.9007 million.
+The Bank established a sound financial accounting policy framework. Strictly abiding by
+the requirements of various accounting laws and regulations, the Bank continued to consolidate
+the accounting foundation, as such, the level of standardisation and refinement of its financial
+accounting management was continuously improved. The Bank also insisted on strengthening the
+quality management of accounting information and further improving basic accounting work, so
+as to establish a long-term mechanism for basic accounting work.
+The Bank further improved its mechanism for internal control over case prevention,
+consolidated the liabilities of primary responsible parties and took multiple control
+measures. It consistently improved internal control rules, processes and systems, and carried out
+a special campaign regarding case prevention in high-risk areas, thereby continuously improving
+its internal control and case prevention management. The Bank also focused on internal control
+inspection and the rectification of findings, established a notification mechanism for warning and
+education activities on a regular basis, raised employees' compliance awareness and fostered an
+internal control compliance culture.
+100
+The Bank established and implemented the "Three Lines of Defence" mechanism for
+internal control. The first line of defence consists of business departments and all banking
+outlets. They are the owners of, and are accountable for risks and controls. They undertake
+self-directed risk control and management functions in the course of their business operations,
+including formulating and implementing policies, conducting business examination, reporting
+control deficiencies and organising rectifications. The internal control and risk management
+departments of the Bank's institutions at all levels form the second line of defence. They
+are responsible for the overall planning, implementing, examining and assessment of risk
+management and internal control, as well as for identifying, measuring, monitoring and
+controlling risks, and they actively organised Bank-wide usage of the Group's operational risk
+monitoring and analysis platform, and are responsible for handling employee violations and
+management accountability. Through regular monitoring of material risks, the Bank identified
+and mitigated risks in a timely manner and promoted the optimisation of its business processes
+and systems. The third line of defence rests in the Audit Department of the Bank. The Audit
+Department is responsible for performing internal audits of the Bank's internal control and
+risk management in respect of its adequacy and effectiveness. Emphasising key problems
+and upholding a risk-oriented principle, it made great efforts to improve the foresight of its
+work. Focusing on the implementation of national policies, regulatory requirements and the
+Group's strategies, the Audit Department concentrated its efforts on its main responsibilities
+of audit supervision, closely monitored material potential risks and weak links, and carried out
+audit inspections as scheduled. The Audit Department attached equal importance to problem
+discovery and rectification supervision. It conducted independent evaluation of the quality and
+effectiveness of both audit findings and the rectification mechanism, and continuously promoted
+the application of audit results and the improvement of rectification quality and effectiveness.
+It established and promoted a coordination and connection mechanism with other supervisory
+bodies, and improved the capabilities of the first and second lines of defence.
+The Board of Directors, senior management and their special committees earnestly performed
+their duties regarding internal control and supervision while emphasising risk warning and
+prevention, thus improving the Group's level of operational compliance. The Bank continued
+to adopt the Basic Standard for Enterprise Internal Control and its supporting guidelines and
+implemented the Guidelines for Internal Control of Commercial Banks by following the basic
+principles of "complete coverage, checks and balances, prudence and correspondence", so as to
+promote internal control governance and an organisational structure characterised by reasonable
+delegation of work, well-defined responsibilities and clear reporting lines.
+The Bank incorporates country risk management into its comprehensive risk management system
+in strict accordance with regulatory requirements. It manages and controls country risk through
+a series of management tools, including country risk ratings, country risk limits, statistics and
+monitoring of country risk exposures, and provisioning of country risk allowances.
+92,155
+As at
+Items
+11.63%
+adequacy ratio
+Common equity tier 1 capital
+14,659,455 14,142,899
+16,526,513
+16,323,713
+16,818,275
+18,591,278
+Total risk-weighted assets
+2,590,185 2,391,365
+2,928,122
+2,036,912 1,883,294
+2,210,766
+2,173,731
+31 December 31 December 31 December 31 December 31 December 31 December
+2,372,990
+3,297,408 2,946,471 2,698,839
+2,570,272
+Net tier 1 capital
+1,563,789
+1,667,405
+1,811,259
+1,843,886
+1,991,342
+2,161,825
+2021
+2022
+2023
+2021
+2022
+2023
+Net capital
+30.02%
+Central and Southern China
+5,493,608
+Items
+Chinese mainland
+Items
+business in the
+Commercial banking
+Commercial banking
+Composition of Staff by Job Function (Commercial banking business in the Chinese
+mainland)
+106
+7.31%
+2.66%
+3.27%
+Other
+12.92%
+14.82%
+14.57%
+Associate degree
+54.13%
+74.51%
+71.86%
+Bachelor's degree
+25.64%
+8.01%
+10.30%
+Master's degree and above
+Education Level
+Composition of Staff by
+13.25%
+21.00%
+19.99%
+business in the
+Chinese mainland
+Corporate banking
+17.30%
+Operation services and
+109
+Second, the Bank will support the expansion of effective demand and promote the stable
+economic growth. It will earnestly fulfill the responsibilities of serving the real economy,
+focus on key areas and weak links, proactively help to establish modern industrial systems,
+expand effective investment, support infrastructure construction, provide high-quality services
+to the national strategy of promoting balanced development between regions, and contribute
+to consolidate and enhance the positive momentum of economic recovery. The Bank will
+work harder to meet the people's demands for financial services, build a unified customer
+information view, a layered and classified customer management system, a collaborative and
+efficient comprehensive customer service mechanism, and an intensive and convenient business
+management platform, through which it will improve the level of integrated customer services,
+and help boost consumption. In 2024, the Bank expects the RMB loans of its Chinese operations
+to grow by approximately 10%.
+First, the Bank will focus on advancing the “five major tasks” of technology finance, green
+finance, inclusive finance, pension finance and digital finance, optimise financial supply,
+and improve service quality and efficiency. Proceeding from the implementation of national
+strategies, the Bank will accelerate customer expansion and product and service upgrade in the
+technology field, continue to consolidate its competitive advantages in green finance, step up
+efforts in benefiting the people through inclusive finance, and keep expanding its influence in the
+pension financial market. It will capitalise on digital finance to propel reform and development,
+strive to optimise the fund supply structure, and form a joint force to promote high-quality
+economic and social development. Meanwhile, the Bank will strengthen the overall planning
+and coordinated promotion of technology finance, green finance, inclusive finance, pension
+finance and digital finance, provide customers with diversified, comprehensive, professional
+and integrated financial products and service systems, and improve the competitiveness and
+accessibility of its products and services.
+Amid an external environment that blends opportunities and challenges coexist, the Bank will
+fully implement the decisions and plans of the Central Financial Work Conference and the
+Central Economic Work Conference. Taking serving the real economy as its mission, risk
+prevention and control as an eternal theme, consolidating and expanding the advantages in
+globalisation and enhancing global layout capabilities as primary tasks, and improving market
+competitiveness and serving national strategies as the core, the Bank will identify the converging
+point, the starting point and the supporting point for implementing the decisions and plans of the
+CPC Central Committee while achieving high-quality self-development. It will enhance strategic
+resilience, seek progress while maintaining stability, promote stability through progress, and
+establish the new before abolishing the old. At the same time, the Bank will firmly stay on the
+path of financial development with Chinese characteristics, and break new ground in pursuing
+high-quality development while serving Chinese modernisation and contributing to the building
+of a nation with a strong financial sector.
+In 2024, the global geopolitical and economic landscape remains characterised by a mix of
+uncertain and destabilising factors, and continues to face multiple risks and challenges. Global
+economic growth momentum is continuing to slow, and the performance of major economies is
+expected to diverge further. The global industrial chain is accelerating its restructuring, and the
+contribution of emerging markets to the global economy is expected to increase. The Chinese
+economy will continue to rebound and improve, economic vitality will continue to increase,
+social expectations will continue to improve and achieve effective improvement in quality and
+reasonable growth in quantity.
+OUTLOOK
+108
+The Bank earnestly implemented the latest national requirements on education and training,
+continuously optimised the education and training system, and made the training work more
+scientific, institutionalised and standardised. Highlighting political training, the Bank carried
+out in-depth study of the guiding principles of the Central Financial Work Conference, among
+others, and advanced the rotation and training of cadres at all levels as planned. It strengthened
+the training of duty performance ability, and carried out core personnel training sessions on
+strategic key business, comprehensive risk management and internationalisation focusing on “the
+country's most fundamental interests" and the Group's key tasks while in line with organisational
+needs, post needs and employee needs. Adhering to the principle of “taking office after obtaining
+qualifications", the Bank intensified efforts in professional qualification training, and gradually
+improve the systematic and standardised level of professional qualification training. It actively
+performed corporate social responsibilities, incorporated ESG-related content into employee
+training at all levels, and launched training on professional ethics, anti-corruption, integrity and
+self-discipline, consumer protection, etc. through face-to-face training, online live broadcasting
+and morning and evening study. It provided guarantee for all kinds of business in terms of
+compliance. Employees at all levels of the Bank participated in various kinds of training and
+learning through online and offline channels, spending an average of 55.32 hours on education
+and training during the year.
+Staff Education and Training
+The Bank has established an allocation mechanism for its total remuneration resources,
+formulated an annual remuneration plan in strict accordance with relevant policies and its
+management needs, and filed information with the relevant authority. The distribution of total
+remuneration resources to branches is linked to their completion of comprehensive contribution
+goals, taking full consideration of risk factors so as to focus on risk-adjusted value creation and
+enhance long-term performance. In general, the Bank accomplished its annual goal on finance,
+risks and social responsibilities. The Bank continued to improve its internal remuneration
+distribution structure and allocated more remuneration resources to primary-level institutions and
+employees in order to effectively boost the driving force that fuels the sustainable development
+of the Bank.
+recourse and recovery mechanism for performance-based remuneration of senior management
+members and personnel in key posts. If risk losses falling within such employees' remit and
+responsibility are clearly exposed during the term of service, the Bank may recover part or all of
+the performance-based remuneration paid within the corresponding period, and stop the payment
+of the part that has not been paid. The Bank implements the recourse and recovery mechanism
+according to regulatory requirements and the above-mentioned rules, and reports the results of
+such implementation to the Board of Directors every year. In 2023, the Bank implemented this
+mechanism in relation to 2,059 employees, and recovered a total of RMB22.75 million. Benefits
+mainly include social insurance, housing provident fund, enterprise annuity and other non-
+cash remuneration, and are managed in accordance with local regulatory policies. The Bank's
+remuneration policy applies to all employees who have established a labour contract relationship
+with the Bank, with no exceptions beyond the remuneration policy.
+107
+The Bank's remuneration distribution policy follows the principle of “remuneration by post,
+payment by performance”. Employee remuneration consists of basic salary, performance-based
+remuneration and benefits. Basic salary is determined by the value of the position and the ability
+of employees to perform their duties. Performance-based remuneration depends on performance
+evaluation results of the Group, the institution or department of the employee, and the employee,
+and is linked to performance, risk, internal control, ability and other factors. Deferred payment
+is required for more than 40% of the performance-based remuneration of personnel who are
+responsible for the Group's major risk management and control functions, with a deferred
+payment period of not less than three years. The Bank has formulated and implemented a
+The Bank's remuneration policy is in line with corporate governance requirements, business
+development strategies, market positioning and talent competition strategies. The Board of
+Directors of the Bank has set up the Personnel and Remuneration Committee to assist it in
+reviewing the Bank's human resources and remuneration strategies. An independent director
+serves as Chairman of the Committee. Please refer to the section “Corporate Governance
+Special Committees of the Board of Directors” for details of the work progress of the Personnel
+and Remuneration Committee. Based on the human resources and remuneration strategies
+determined by the Board of Directors, the Senior Management of the Bank is responsible for
+formulating rules and regulations for remuneration management.
+51 and above
+The Bank continuously improved its incentive and constraint mechanism, established an
+assessment mechanism combining “annual assessment + long/short-cycle assessment” and
+"performance assessment + value assessment”, strengthened its assessment of employees'
+contributions to serving the real economy, developing inclusive finance and supporting private
+enterprises, and guided the establishment of an appropriate perspective on performance.
+9.21%
+Other
+34.75%
+Cross-marketing and teller
+3.86%
+9.04%
+management
+Information technology
+0.35%
+Financial markets
+Risk and internal control
+18.32%
+Personal banking
+7.17%
+financial management
+Remuneration
+19.89%
+21.14%
+20.98%
+32,432,166
+Total
+(1,692,384)
+Elimination
+2.05%
+6,297
+1.11%
+128
+6.95%
+2,372,795
+Other countries and regions
+6.13%
+18,807
+3.54%
+100.00%
+406
+5,228,040
+and Taiwan (China)
+Hong Kong (China), Macao (China)
+12.14%
+37,250
+14.81%
+7.19%
+2,454,100
+Western China
+21.48%
+65,914
+23.76%
+2,729
+16.10%
+15.32%
+Internal Control
+11,485
+306,931 100.00%
+Between 41 and 50
+39.63%
+35.07%
+35.66%
+Between 31 and 40
+27.23%
+22.79%
+23.37%
+Up to 30
+Group
+Composition of Staff by Age
+45.74%
+42.51%
+42.93%
+100.00%
+Male
+57.49%
+57.07%
+Female
+Composition of Staff by Gender
+Overseas institutions
+and comprehensive
+operation companies
+Commercial banking
+business in the
+Chinese mainland
+The Group
+Items
+Composition of Staff by Gender, Age Group and Education Level
+As at the end of 2023, the Bank had 306,931 employees. There were 281,827 employees in the
+Chinese mainland, of which 267,016 worked in the Bank's commercial banking business in the
+Chinese mainland (including Head Office, tier-1 branches, direct branches, tier-2 branches and
+outlets). The Bank had 25,104 employees in Hong Kong (China), Macao (China), Taiwan (China)
+and other countries. As at the end of 2023, the Bank bore costs for a total of 4,934 retirees.
+With a focus on the Group's strategic priorities and performance appraisal, the Bank strengthened
+the allocation of human resources in key regions, continuously optimised its personnel structure
+and enhanced the Group's overall operational capabilities. It advanced the development of
+talented teams and improved the quality and efficiency of personnel training through post-
+specific training, project exercises, specialised training, job exchange and job rotation, etc. It
+continued to refine professional qualification management, comprehensively optimised its staff
+education and training system, and improved employees' overall professional competence. It
+increased the introduction of talents, launched global campus recruitment 2024, provided more
+than 13,000 jobs, and supported and promoted the employment of college graduates.
+Human Resources Development and Management
+105
+Note: The proportion of geographic assets was based on data before intra-group elimination.
+54.26%
+Internal Control and Operational Risk Management
+1,701
+The customer relation departments are mandated to perform due diligence on the ESG risks of
+customers and projects, determine the critical elements of due diligence based on the industry and
+regional characteristics of customers and projects, analyse and evaluate relevant risks in business
+initiation reports and related business management systems, including at least five aspects of
+customers and their projects, namely the ESG risk evaluation and management systems, laboring
+and working conditions, pollution prevention and control, biodiversity protection and sustainable
+natural resource management, and carbon footprint management, and carry out compliance
+risk reviews. For bond underwriting business, the Bank required customers and projects to
+be thoroughly examined for ESG risks throughout the whole customer/project selection and
+business initiation process. For industries with high carbon emissions, such as coal and thermal
+power, the Bank included ESG risk-related factors, such as customers' environmental protection
+improvement and governance efforts, environmental impact reports and energy conservation
+evaluation reports, as an important part of due diligence during the business initiation stage.
+the Bank's domestic operations.
+Completion Progress
+In 2023, the balance of domestic
+green credit was RMB3,106.7 billion,
+up by RMB1,119.5 billion from
+2022, up by RMB2,209.9 billion
+from the end of the 13th Five-Year
+Plan period (2020).
+Year-on-year growth of 56.34%.
+14th Five-Year Plan Period (2021-2025)
+Maintaining asset quality at a
+sound level.
+Non-performing ratio of green credits
+was less than 0.5%, lower than the
+Group's overall NPL ratio.
+Scaling up investment in green
+bonds year-by-year. Leading
+the market in the underwriting
+of green bonds.
+Ceasing to provide financing
+for new coal mining and coal
+power projects outside Chinese
+Mainland since 2021Q4
+onwards, except where a
+financing agreement had been
+signed previously.
+The scale of domestic and overseas
+green bond underwriting ranks 1st in
+the interbank market and among
+Chinese peers on Bloomberg's
+"Global Offshore Green Bonds"
+ranking respectively.
+In 2023, no financing was added for
+new coal mining and coal power
+projects outside Chinese Mainland.
+Note: Based on statistical standards for "green credit" of the NFRA
+The Bank's "BOC Green+” financial product and service system covers deposits, loans, bonds,
+consumption and comprehensive services, etc., meeting customer demands for a diverse range
+of green financial products and services. (For details of the Bank's green product performance,
+please see the "Management Discussion and Analysis-Business Review-Green Finance" section
+of this report).
+The Bank offered support for the transformation and upgrade of high carbon emissions industries.
+It tapped into a method system suitable for the carbon accounting of its asset portfolios, and
+completed pilot accounting of the carbon footprints of its asset portfolios in major carbon-
+intensive industries. With reference to the Global GHG Accounting and Reporting Standard for
+the Financial Industry released by the Partnership for Carbon Accounting Financials (PCAF),
+and the Guide on the Carbon Accounting Technology for Financial Institutions (Trial version)
+released by the PBOC, the Bank conducted trial accounting of the carbon emissions related to its
+corporate loans in major carbon-intensive industries, such as thermal power generation, steel, and
+building materials.
+115
+In 2023, the proportion of brown industries 10 in the corporate credit balance of the Bank's
+domestic operations was below 10%.
+Proportion of total credits to brown
+industries accounted for less than 10% of
+corporate loans
+Chemicals
+Non-ferrous metals
+Civil aviation
+Cement
+Thermal power generation
+Coal
+Petrochemicals
+Paper making
+Steel
+Proportion of credits to other
+sectors accounted for more
+than 90% of corporate loans
+Green Operations
+Year-on-year increase in the
+balance of green credit of
+The Bank continued to uphold the concept of green operations. Based on local policy
+requirements and the actual situation, the Bank has continuously improved the energy and
+resource management system, vigorously advocated green and low-carbon production mode and
+life styles, actively carried out energy-saving technology application, green electricity utilisation
+and other work, continued to promote the control and reduction for the total consumption and
+consumption intensity of all kinds of energy and resources, and assisted the implementation of the “peak
+carbon emissions and carbon neutrality” goal with practical actions. The Bank compiled the
+Group's environmental footprint inventory, including greenhouse gas (GHG) emissions, water,
+paper usage, waste and green buildings in 2023. The findings show that the group-wide total
+energy consumption and direct GHG emissions decreased by 2.18% and 4.49% in 2023 compared
+to 2019, respectively. Phase I of the environmental footprint management system was put into
+operation, initially enabling the online input and aggregation of environmental footprint data.
+Green procurement concepts have been integrated into the procurement management system,
+with the "green procurement" label added to centralised procurement projects. All newly-built or
+renovated outlets throughout the year met basic standards for green construction. As at the end of
+2023, 28 featured outlets for green construction had been built, four of which received external
+certifications for green construction, carbon neutrality in operations, etc. The Shenzhen Branch
+released the Environmental Information Disclosure Report for 2022 and Carbon Neutrality
+Plan and Three-Year Action Plan, to actively implement the concept of green and low-carbon
+development. BOCHK implemented operational carbon neutrality plans in an orderly manner,
+meeting four goals of paper purchase, electricity usage, carbon emissions and water consumption
+as scheduled. A number of institutions, including the Head Office, BOCHK, London Branch and
+Shanghai Branch, fully implemented energy-saving renovations to their office premises.
+green industries.
+Objectives
+Third, the Bank will consolidate and expand its globalised advantages, advance high-level
+opening-up in finance. It will increase its capability for global business, improve the service
+network covering the whole world, provide greater financial support for the Belt and Road
+Initiative, help promote the internationalisation of RMB steadily and prudently, and take the lead
+in improving the global layout capability. The Bank will build an international reputation for its
+products and services, focus on enhancing overseas risk management capabilities, and take the
+lead in building international competitiveness. It will leverage its role as the main channel for
+foreign trade financial services, seize the opportunity of advancing free trade agreement strategy
+and supporting high-quality projects under the Belt and Road Initiative, improve the service
+level of integrated development of domestic and foreign trade, and promote smooth international
+circulation.
+Fourth, the Bank will give full play to its role in comprehensive operations, and proactively
+build a high-quality comprehensive service system base on collaboration and smooth
+operation. It will continue to improve the collaborative mechanism, promote interconnectivity
+in resources, and integrate comprehensive operation into the marketing system featuring global
+expertise accessible at any point of contact, so as to meet the diversified financial service needs
+of the real economy. It will also promote standardised development, strengthen compliance
+management and group governance; focus on the main responsibilities and main businesses,
+promote the standardised and healthy development of insurance companies, build high-level
+investment banking and asset management institutions, give full play to the role of financial lease
+and debt-for-equity swap institutions, meet diversified financing needs, and build a new pattern
+of comprehensive and high-quality development.
+Fifth, the Bank will balance development and security, effectively forestall and defuse
+financial risks, and serve as a bedrock of financial stability. It will improve its capability to
+solve problems in the process of development, enhance risk management effectiveness, improve
+the risk prevention and control mechanism at the source, and achieve positive interaction
+between high-quality development and high-level security. The Bank will persist in applying
+systemic thinking, deepen the reform of risk management system, improve the long-effect
+mechanism for internal control and compliance, raise the quality and effectiveness of traditional
+risk management, prevent non-traditional risks in all aspects, build a line of defence to ensure
+safety across the Group, and firmly hold the bottom line of safety.
+110
+Environmental and Social Responsibilities
+ENVIRONMENT RESPONSIBILITIES
+Governance Structure
+The Bank adhered to a three-tier governance structure consisting of the Board of Directors,
+the Senior Management and a professional team, while continuously improving its governance
+capabilities. The Board of Directors (or its committees) reviews and approves the Group's
+green finance development plans, green finance objectives and green finance reports, as well
+as overseeing and evaluating the execution of its green finance development plans. The Green
+Finance Committee, chaired by the Chief Risk Officer (CRO), is established under the Senior
+Management. It is responsible for the overall management and professional decision-making
+related to green finance across the Group, as well as customer ESG risk management. The
+professional team carries out the Group's green finance work, making solid efforts to advance
+green finance development. Members of the Board of Directors have extensive experience in
+environmental (climate) risk management. For example, Non-executive Director Mr. HUANG
+Binghua has spent a long period at the MOF working on enhancing the environmental and social
+responsibilities of state-owned enterprises. The Bank held green finance-related training sessions
+for newly appointed directors, and incorporated indicators regarding contributions to China's dual
+carbon goals of "peak carbon emissions and carbon neutrality” into the performance assessment
+of its senior management members, and linked the assessment results to their remuneration.
+In 2023, the Board of Directors and its Strategic Development Committee reviewed and approved
+the report on green finance development in 2022 as well as the green finance objectives set for
+2023. The Board of Directors and its Corporate Culture and Consumer Protection Committee
+reviewed and approved the Corporate Social Responsibility Report of Bank of China for 2022
+(Environmental, Social and Governance). The Risk Policy Committee reviewed the risk appetite
+statement and comprehensive risk management policy, and reviewed the Group's risk reports
+on a quarterly basis, which include information on customer ESG risk management. The Audit
+Committee continued to monitor and follow up on updates regarding sustainable development
+in a timely manner. The Green Finance Committee under the Senior Management reviewed and
+approved the list of green finance exemplary institutions for 2023, the Green Finance (TCFD)
+Report of Bank of China for 2022, and other proposals, and heard reports on the Group's
+green finance achievements, key work progress, operational emissions calculation, and the
+implementation of its operational carbon neutrality roadmap.
+Policy System
+The Bank continuously enhanced its “1+1+N” green finance policy system to contribute to the
+national goal of "peak carbon emissions and carbon neutrality”. To date, the Bank has developed
+a policy support package covering 13 areas, including performance assessment and incentive
+reinforcement, optimisation of economic capital cost management, differentiation of related
+authorities, and allocation of staff costs, thereby establishing the framework with multiple
+pillars for its green finance policy system. In 2023, the Bank released the Guiding Opinions on
+Further Advancing the Development of Institutions in Pilot Zones for Green Finance Reform
+and Innovation of Bank of China (2023), encouraging institutions in pilot zones to develop
+innovative green finance products and services in line with the industrial characteristics and
+green development plans of their respective areas. The Bank also formulated the 2023 Work
+111
+Plan for Green Finance of Bank of China, outlining 45 initiatives across nine areas, including
+top-level design, business development, ESG risk management, green operation, cooperation
+and exchanges, and information disclosure. The Bank enacted the Industry Guidelines on Credit
+Granting of Bank of China Limited (2023) and the Plan for the Management of Industrial Asset
+Portfolios of Bank of China Limited (2023), which define industries such as new energy vehicles,
+wind power, new-type energy storage, ecological protection, environmental treatment and
+other industries related to green and low-carbon development as industries of positive growth,
+and improve supporting policies to channel more credit into these industries. Moreover, the
+Bank developed or revised credit granting policies for green industries, such as environmental
+treatment and wind power equipment, providing detailed guidance for business development in
+terms of customer and project access standards, risk identification and prevention, and credit
+management strategies.
+Customer Environmental (Climate), Social and Governance (ESG) Risk
+Management
+The Bank prioritised the prevention of customer ESG risk in its pursuit of green finance
+implementation and development. It intensified the standardisation and management of customer
+ESG risks in terms of risk identification, measurement, assessment, monitoring, reporting, control
+and mitigation. Employing the TCFD's definition and classification of climate risks, along with
+that of the Central Banks and Supervisors' Network for Greening the Financial System (NGFS),
+the Bank identified and analysed the short-term, medium-term and long-term impact of climate
+risk on its credit risk, market risk, liquidity risk, operational risk, reputational risk, country
+risk and other major risks, taking into consideration both physical risk and transitional risk
+perspectives.
+The Bank has implemented the Management Policy on Environmental (Climate), Social, and
+Governance Risks Associated with Customers of Bank of China. This policy was formulated
+in accordance with regulatory requirements and the Group's 14th Five-Year Plan for green
+finance, as well as the guidelines for climate-related financial risk management and sustainability
+performance standards issued by the Basel Committee on Banking Supervision, the International
+Finance Corporation and Equator Principles. This policy has been approved by the Green
+Finance Committee. The committee is chaired by the CRO, who acts independently from the
+Group's operational and business lines, and can provide direct updates to the Board of Directors
+on regarding comprehensive risk management. This policy focuses on corporate banking
+(including working capital loans and project financing) and other businesses, covering the
+entire business cycle encompassing risk identification and classification, due diligence, business
+approval, contract management, fund distribution, post-lending management and post-investment
+management. The Bank has also integrated environmental protection criteria into the due
+diligence processes within its investment banking business.
+The Bank revised the Policy on Comprehensive Risk Management of Bank of China Limited,
+amending the term “environmental and social risks" to "environmental (climate), social and
+governance risks”, and incorporating these into its comprehensive risk management system. The
+Bank's risk appetite statement has also been updated to include a qualitative statement about
+environmental (climate), social and governance risks.
+112
+In line with relevant national policies, requirements and relevant agreements signed, the Bank
+embedded binding requirements for customer environmental and social risk management
+in over 90 industry credit policies, covering such industries as agriculture, forestry, animal
+husbandry and fishery, mining and metallurgy, oil, gas and chemicals, construction and real
+estate, transportation and logistics. (Details can be found in the environmental section of the
+Corporate Social Responsibility Report of Bank of China for 2023 (Environmental, Social and
+Governance)). The Bank also specified requirements for biodiversity protection in credit policies
+for key industries such as wind power generation, pumped-storage hydropower, and coal.
+The Bank has implemented risk management procedures such as making environmental
+protection a key consideration, differentiated authorisations and processes, and list-based
+management to actively regulate and mitigate ESG risks. Within its credit ratings, the Bank
+employs risk escalation measures based on the environmental protection ratings of its customers,
+spanning from active support, prudent credit granting or investment, to refusal of credit granting
+or investment. It takes into account the environmental protection ratings of its customers in its
+credit assessments. The Bank has clearly outlined the circumstances (for example, violation of
+national policies and regulatory requirements, failure to meet environmental protection standards,
+exposure to major environmental and climate risks, destruction of critical habitats, destruction of
+important biodiversity areas and national nature reserves, illegal logging, illegal fishing, wildlife
+poaching, blind expansion of oil palm cultivation leading to deforestation, illegal occupation
+and destruction of forest land, etc.), under which it may decline to provide credit or investment
+support, urged existing customers to rectify such circumstances, taken meaningful action to
+mitigate risks, and withdrawn credits once rectification is not feasible. It also uses list-based
+management for customers with higher ESG risks, undertaking differentiated management of
+customers on the list and urging them to take effective measures to alleviate ESG risks.
+113
+The Bank intensified monitoring of customer ESG risks, issued internal risk prompts or warnings
+for customers and projects in industries or regions designated as high-priority for the rectification
+of illegal practices by national environmental protection or work safety authorities, tracked and
+monitored relevant risk events throughout the business process, and adjusted risk levels and
+disposal measures as needed based on actual conditions.
+The Bank continued to improve its customer ESG risk emergency response measures and
+reporting mechanism, classifying emergency customer ESG risk events into four levels:
+average, high, severe and extremely severe. Where risk events occur, it required the affected
+institutions to immediately initiate response plans, take appropriate steps to address the situation
+in lawful, scientific and efficient manner, and report the event in a timely, objective, true and
+comprehensive manner based on the principle of tiered response.
+The Bank performed the group's stress tests under climate risk macro scenarios, examining the
+effects of various factors such as temperature rises and carbon emission pricing on the credit
+risk associated with corporate loans. In terms of its overseas operations, Bank of China (UK)
+actively advanced climate risk stress testing according to local regulatory requirements, assessing
+the possible financial impact targeted at transitional risk and physical risk; the Singapore Branch
+and Paris Branch completed climate risk stress testing for the power industry, establishing
+information paths for the transmission of transitional risk and physical risk; while the Paris
+Branch and the Innovation and R&D Research Base (Singapore) carried out exploratory research
+regarding biodiversity and impact, as well as the strategic response from financial institutions.
+The Bank continued to strengthen the intelligent management of green finance. Phase II of the
+green finance management system was put into operation, enabling intelligent classification of
+customer ESG risks and customer list export, dynamically monitoring customers' environmental
+protection information (such as ratings and penalties), and providing intelligent early warning,
+regular evaluation and full-process control of customer ESG risks.
+The Bank conducted internal control and compliance inspections on a regular basis,
+reviewed green credit data, and completed the internal audit of green finance. It intensified
+communication with stakeholders, and established a mechanism for thorough, timely and
+effective communication with government departments, environmental protection organisations,
+community masses, media and investors.
+Objectives and Indicators
+In response to the national goal of “peak carbon emissions and carbon neutrality”, and in line
+with the guiding principles of the Central Financial Work Conference, the Bank reviewed its 14th
+Five-Year Plan and green finance action plan based on market and business developments. It set
+more proactive and ambitious objectives for green finance development, including increasing
+its target for new credit to green industries from “no less than RMB1 trillion” to “no less than
+RMB3 trillion", aiming to scale up investment in green bonds year-by-year, and seeking market
+leadership in the underwriting of green bonds.
+114
+Providing additional credit
+support of no less than
+RMB3 trillion for
+10
+Investment in green bonds continued
+to increase, exceeding RMB100
+billion as at the end of 2023.
+116
+Water consumption (t)
+13,533,157
+Office paper consumption (t)
+Waste discharge (t)
+8,261
+41,093
+13,535,554
+12,115
+45,715
+13,618,321
+12,211
+45,770
+Notes:
+1.
+Calculation is based on the data at the Group level.
+2.
+According to the business scope of the Group, direct operated greenhouse gas emissions from its own operations
+mainly include carbon dioxide, methane and nitrous oxide. The greenhouse gas emissions from the operation of
+the Group was mainly incurred by energy consumption, included the emissions of Scope 1 and Scope 2. Scope 1
+refers to the direct emissions from combustion of fossil energy, such as gasoline, diesel oil, natural gas, liquefied
+natural gas, liquefied petroleum gas, fuel oil, coal and coke. Scope 2 refers to the indirect emissions embodied
+in electric power and heat consumption. Scope 3 refers to indirect emissions from waste paper and kitchen waste
+treatment.
+117
+SOCIAL RESPONSIBILITIES
+Serving the real economy
+The brown industries mentioned herein are the eight major industries under emission control that have been and
+will be included in the national carbon market as well as the coal industry. Specifically, the eight industries are
+the thermal power generation, steel, petrochemicals, chemicals, non-ferrous metals, cement, paper making, and
+civil aviation.
+As at the end of 2023, the balance of strategic emerging industry loans, loans granted to
+manufacturing industries, and technology finance loans increased by 74.35%, 28.05% and
+30.94%, respectively. It granted more than RMB260.0 billion in credit lines to more than 15,000
+state-level and province-level “specialised, refined, featured and innovative" enterprises. It
+helped to stabilise the scale and optimise structure of foreign trade, with its domestic institutions
+cumulatively handling USD3.4 trillion of international settlement business in 2023. At the same
+time, the Bank made prudent and orderly advances in RMB internationalisation, served as the
+main channel for cross-border RMB circulation, and provided diversified products and services
+such as RMB settlement, investment, financing and transaction for domestic and overseas
+customers. The Group recorded cross-border RMB settlement of RMB57.35 trillion for the year,
+up over 80% year-on-year.
+Advancing inclusive finance
+As a significant contributor and practitioner to inclusive finance development, the Bank
+implemented the decisions and plans of the State, provided accurate and effective financial
+services to a wide range of inclusive finance customers, and enhanced their satisfaction with
+inclusive financial services. It promoted the comprehensive recovery and innovative progress
+of market entities, striving to push forward high-quality development in the field of inclusive
+finance. The Bank deepened its long-acting mechanism for job stabilisation and creation,
+initiated the Bring Jobs to Families campaign to stabilise and expand employment opportunities,
+and provided comprehensive inclusive financial services for micro and small-sized enterprises
+as well as a vast array of employees and entrepreneurs, covering credit services, employment
+matchmaking, people's livelihood financial needs, skills training, and policy publicity. The
+Bank Coordinating its products and services in inclusive finance, consumer credit, payment and
+settlement, and savings and investment, rolled out a special service plan, “Benefitting Merchants
+118
+•
+Promoting Consumption”, to meet the financial needs of individual industrial and commercial
+households. The Bank also formulated the "Micro and Small Foreign Trade Services Inclusive
+Finance Solutions", carried out special marketing activities based on its eight-pronged service
+model and gave full play to its unique advantages in cross-border finance, in order to help micro
+and small-sized foreign trade enterprises achieve steady growth. It introduced ten initiatives to
+promote financing for micro, small and medium-sized enterprises through the “one chain, one
+policy and one batch" strategy, and pressed ahead establishing a sound financing ecosystem for
+those enterprises through such measures as increasing support for chain-enterprise financing,
+flexibly executing bank-enterprise connections, optimising its chain-enterprise financing
+policy and reducing chain-enterprise financing costs, promoting the construction of a favorable
+ecosystem for the financing of micro, small and medium-sized enterprises and boosting their
+high-quality development.
+As at the end of 2023, the Bank's outstanding inclusive finance loans granted to micro and
+small-sized enterprises stood at RMB1,758.543 billion, an increase of 43.17% year-on-year.
+The number of loan customers was 1.07 million, also representing a growth rate of 43.21%
+year-on-year. The average interest rate of new inclusive finance loans to micro and small-sized
+enterprises was 3.54%, and the balance of business loans to individual industrial and commercial
+households was RMB268.9 billion.
+Promoting rural revitalisation
+The Bank strengthened financial support for agriculture, actively responded to national strategies
+and helped build a strong agricultural country. It strengthened its top-level design and formulated
+the Guiding Opinions of Bank of China Limited on Supporting Agriculture-based Country
+Development and Realising Agricultural and Rural Modernisation in the 14th Five-Year Plan
+Period, the Work Priorities of Bank of China in Supporting Key Counties for Rural Revitalisation
+in 2023, etc. to serve key customers and regions, continuously innovate products, deepen scenario
+ecosystem, and promote the quality and efficiency improvement of financial services for rural
+revitalisation. The Bank provided financial services to enable the stable production and supply
+of grain and other important agricultural products, and strengthened financial support for key
+areas such as high-standard farmland construction, seed industry revitalisation, grain production,
+circulation, storage and processing. It accelerated the innovation of agricultural products and
+services, promoted its “Farmer-Benefitting Loan” products in line with the actual needs of
+agriculture, rural areas and farmers, and gave priority to supporting self-employed households in
+the rural industrial chain, such as crop cultivation, aquaculture, forestry, purchase of agricultural
+products and processing. 1,013 outlets with special rural revitalisation features have been
+built, forging a pioneer path to serving rural revitalisation with specialised, characteristic and
+diversified financial services. 20 specialised outlets were located in nationally-designated key
+counties for rural revitalisation. Meanwhile, BOC Fullerton Community Bank set up 134 village
+banks in 22 provinces (including municipalities directly under the central government). As at
+the end of 2023, the Bank's balance of agricultural loans amounted to RMB2,656.079 billion,
+representing a growth rate of 28.53% year-on-year. The balance of inclusive agricultural loans
+stood at RMB376.521 billion, with a growth rate of 44.64% year-on-year.
+119
+4.99
+5.02
+Firmly committed to its role in serving the real economy, the Bank streamlined channels for
+investing funds and providing greater benefits to a wider array of real economy enterprises. It
+supported the implementation of China's innovation-driven development strategy, allocating
+more financial resources to key areas such as technological innovation, advanced manufacturing,
+and industrial chain and supply chain, and helped accelerate the development of new productive
+forces and the building of a modern industrial system through high quality technology finance.
+To support the national coordinated regional development strategy and its major regional
+strategies, the Bank focused on the construction of key regions and cities, strengthened top-level
+planning for supporting key regions with financial services, enhanced regional coordination and
+support capabilities, and provided high-quality financing, intelligent and commercial support for
+building a regional economic layout characterised by complementary advantages and high-quality
+development. It consolidated the advantages of its globalised operations, actively promoted links
+between domestic and international markets and resources, continuously served high-level "Going
+Global” and high-quality “Bringing-in” initiatives, and contributed to the development of China's
+new dual circulation development pattern.
+(tCO2e per capita)
+5.02
+The environmental performance of the Bank's green operations is as follows:
+2023
+Total energy consumption (MWh)
+2,764,254
+2022
+2,688,308
+2021
+Total GHG emissions (tCO2e)
+1,594,093
+1,537,546
+1,534,060
+GHG emissions for
+Scope 1 (tCO2e)
+84,740
+74,899
+2,754,463
+GHG emissions for
+GHG Emissions per employee
+79,309
+2,414
+Kitchen waste (tCO2e)
+GHG emissions for Scope 3 –
+Wastepaper (tCO2e)
+-
+4,052
+GHG emissions for Scope 3.
+1,454,751
+1,462,647
+1,509,353
+Scope 2 (tCO2e)
+Number of Ordinary Shareholders and Shareholdings
+during the
+Number of
+shares held
+as at the end of
+Unit: Share
+The top ten ordinary shareholders as at 31 December 2023 are set forth below:
+The number of ordinary shareholders as at the end of the last month before the disclosure of this
+report was 584,500, including 416,514 A-Share Holders and 167,986 H-Share Holders.
+The number of ordinary shareholders as at 31 December 2023 was 604,343, including 435,870 A-Share
+Holders and 168,473 H-Share Holders.
+Increase/
+decrease
+125
+294,387,791,241 100.00%
+2.
+As at 31 December 2023, the Bank had issued a total of 294,387,791,241 ordinary shares, including
+210,765,514,846 A Shares and 83,622,276,395 H Shares.
+1.
+Notes:
+83,622,276,395 28.41%
+210,765,514,846 71.59%
+Percentage
+294,387,791,241 100.00%
+294,387,791,241 100.00%
+As at 31 December 2023, none of the Bank's A Shares and H Shares were subject to selling restrictions.
+Number
+of shares
+1
+reporting
+III. Total Ordinary Shares
+None
+State
+64.13%
+188,791,906,533
+330,372,926
+Central Huijin Investment Ltd.
+Type of
+ordinary
+shares
+Type of
+shareholder
+of total
+frozen
+Number
+of shares
+pledged,
+subject
+to selling
+restrictions
+shares
+period
+period
+Name of ordinary shareholder
+No.
+ordinary
+the reporting
+labelled or
+2. Overseas listed foreign shares 83,622,276,395 28.41%
+Number of
+294,387,791,241 100.00%
+In 2023, the Bank provided routine disciplinary education for all employees by fully utilising
+books compiled internally, including My Stories about Building a Clean Bank and Awareness
+Education Reader. Based on the cases of violations of laws and disciplines investigated, the
+Bank shot warning educational films, carried out warning education at different levels, and
+gave warnings with stories happening around them. It made “One Film and One Book" on
+integrity education concerning escape cases, and fortified a defense line of ideology. For key
+areas and positions, including the leaders at all levels, as well as those responsible for credit
+review and approval, asset disposal, public bidding and procurement, and personnel selection
+and assignment, the Bank brought paper examples to life through screening educational films,
+announcing cases in violation of laws and regulations, organising site visits to integrity education
+bases, thoroughly and carefully deciding on, announcing and implementing punishments, among
+other forms. Each case investigated was analysed and announced for warning, and typical cases
+were fully studied. For expatriate officials, the Bank strengthened their political ability and
+awareness of discipline by organising “Minor Classroom” on integrity education, giving lectures
+on integrity, holding special meetings on awareness education, having heart-to-heart talks and
+other ways.
+Attaching great importance to integrity building and anti-corruption of its overseas institutions,
+the Bank continuously improved governance in its overseas institutions, strengthened
+supervision, strictly implemented its disciplines at overseas institutions in line with their
+characteristics. According to local and regional conditions, the overseas institutions strengthened
+their integrity risk prevention and control measures, enhanced education and supervision, and
+continuously promoted a robust culture of integrity and compliance in operation. Moreover, the
+Bank upgraded the supervision system for its overseas institutions, strengthened its supervision
+capabilities, stepped up supervisory and disciplinary efforts, and implemented the requirements
+of building a clean bank.
+The Bank remained committed to preventing integrity risk, resolutely punished corruption,
+established a sound monitoring and restraint mechanism, and maintained a tough anti-corruption
+stance. It adhered to the principle of “not daring to corrupt, not being able to corrupt and not
+wanting to corrupt”, stepped up the investigation and punishment of violations of laws and
+disciplines, improved mechanisms for restricting and limiting power, and kept strengthening the
+atmosphere of strict governance.
+Intensifying anti-corruption efforts and building a Clean Bank
+122
+BOC respects and safeguards the rights and interests of employees, emphasises employee
+diversity, disallows any disrespect or discrimination based on nationality, ethnicity, religion,
+age, gender, colour, family background, education, etc., and works hard to create an inclusive
+and equal workplace. In terms of employment and labour standards, the Bank strictly complies
+with the Labour Law of the People's Republic of China, the Labour Contract Law of People's
+Republic of China, the Provisions on the Prohibition of Child Labour of the State Council,
+and other pertinent laws and regulations, and has formulated the Management Measures of
+Bank of China Limited for Employee Recruitment (Version 2024). It adopts standardised
+recruitment procedures and firmly opposes and prohibits any violation of laws and regulations,
+such as employment of child labour or any form of forced labour. Once recruitment violations
+occur, the Bank carries out accountability measures in strict accordance with the Measures for
+Handling of Employee Violations of Bank of China Limited (Version 2022) and the Measures
+for Management Accountability of Bank of China Limited (Version 2022). The Bank has
+formulated the Measures on Prudent Remuneration Management of Bank of China Limited and
+the Implementation Measures for Clawing Back Performance Bonus of Bank of China Limited,
+adopts a remuneration distribution policy which follows the principle of “remuneration by
+position, payment by performance", and does not take gender into consideration with regard
+to remuneration, so as to ensure remuneration equality for both male and female employees.
+In terms of health and safety, the Bank strictly complies with national laws and regulations,
+has in place five insurance schemes, provides housing provident funds and enterprise annuities
+for all its employees, and provides staff benefits such as critical illness insurance and annual
+medical check-ups to effectively safeguard employees' physical and mental health. In terms of
+development and training, the Bank continued to strengthen its operational foundations through
+its talent development strategy, and put into practice the Talent Development Programme for the
+14th Five-Year Plan Period of Bank of China Limited. In 2023, it formulated the Management
+Measures of Bank of China Limited for Employee Education and Training to promote the
+science-based, systematic and standardised development of education and training for all
+employees.
+121
+The Bank formulated the Code of Conduct for Employees and the Detailed Rules for Employee
+Conduct, in which it improved the basic professional standards for employees of the Bank, set
+the standards for employee conduct, defined the boundaries of employee conduct, highlighted
+the requirements for the conduct of key positions in all business lines, with a focus on potential
+risks arising from improper behaviours in business lines, and encouraged employees to maintain
+good professional ethics in terms of due diligence, withdrawal from duties, confidentiality and
+integrity.
+Strengthening employee management
+123
+The Bank formulated and revised the Management Measures for Petition Work of Bank of
+China Limited to further improve the petition work mechanism. Citizens, legal persons and other
+organisations can reflect their situations and opinions by telephone, letter, visit and other forms.
+The Bank has set up a petition office team and petition reception station at the Head Office, and
+appointed full-time petition staff members at domestic branches to handle letters, calls and visits
+and listen to the opinions, suggestions and requirements of the visitors. The Bank accepts petition
+matters put forward by stakeholders in real name or anonymous form, fully protects the personal
+privacy and safety of petitioners, and prohibits anyone from retaliating against the informants in
+any form.
+GOVERNANCE RESPONSIBILITIES
+For details of the Bank's environmental, social and governance performance, please refer to the
+Corporate Social Responsibility Report of Bank of China for 2023 (Environmental, Social and
+Governance).
+The Bank remained steadfastly devoted to public welfare. It facilitated people from all walks
+of life to actively participate in public welfare and charity activities via its "Finance + Public
+Welfare + Internet” approach, leveraging the Bank of China Philanthropy platform and BOC
+Charity Foundation. In 2023, 67 organisations were registered on the Bank of China Philanthropy
+platform, with 124 charitable fundraising activities launched and a total of RMB25 million raised
+from 778.4 thousand donations. Adhering to the ethos of finance serving the greater good, the
+Bank amassed resources from both within and outside the Group and deployed them towards
+public welfare initiatives in flood prevention and disaster relief, education, cultural exchange,
+environmental protection and other areas. It explored innovative models for elderly care services,
+built a platform for mutual aid in elderly care, and gave full support to elderly care through
+public welfare efforts, thus contributing to building a more beautiful society through concrete
+actions.
+Contributing to public welfare
+120
+For more information on the Bank's efforts to ensure the rights and interests of customers, please
+refer to the section "Report of the Board of Directors - Consumer Rights Protection".
+In 2023, the Bank's overall customer satisfaction was 92.1%, with personal and corporate
+banking customer satisfaction standing at 90.5% and 96.4%. 276 thousand customer complaint
+cases were handled, and the completion rate stood at 100%. In addition, the total amount of
+suspicious transactions intercepted by the Bank's “Cyber Defence” system during the year was
+RMB56.140 billion. The Bank conducted nearly 75,000 thematic external consumer protection
+campaigns, recording around 800 million participations.
+A
+The Bank attached great importance to the protection of consumers' rights and interests, fully
+integrated consumer protection into its corporate governance, corporate culture building and
+business development strategies, and pushed forward the in-depth integration of consumer
+protection with business development and service management. To strengthen examinations
+of its consumer protection, the Bank developed the Management Measures for Examination of
+Consumer Protection of Bank of China Limited, to clarify the examination entities, examination
+scope, key points of examination, and examination procedures for consumer protection. The
+Bank raised employees' awareness of their consumer protection responsibilities, and organised
+thematic training on consumer protection for middle and senior levels of management, frontline
+employees and new hires. It has taken primary responsibility of popularizing financial knowledge
+and educating financial consumers, promoted financial literacy at the request of both targeted and
+regular supervision, and promoted differentiated financial knowledge publicity for key customer
+groups including seniors, people with disadvantages, new urban residents, and farmers, as an
+effort to enhance their understanding of financial products and services and improve national
+financial literacy.
+Handling of Petition Matters
+210,765,514,846 71.59%
+Practising a Responsible Procurement Philosophy
+124
+Subtotal
+Others
+Number
+Bonus surplus
+shares reserve
+Issuance of
+shares Percentage new shares
+Number of
+from
+Shares
+transferred
+As at 31 December 2023
+With the Group Purchasing Centre leading green and sustainable procurement, the Bank
+incorporated responsible procurement concepts into its supplier access, procurement, evaluation
+and management practices. All projects' bid invitation documents clearly required that "suppliers
+shall not have any record of conduct in violation of laws and regulations or illegal conduct
+related to environmental protection, employment, and consumer rights protection”. In inspecting
+suppliers and evaluating projects, the Bank carried out assessment on suppliers' commitment
+to environmental protection, social responsibilities and other aspects. Aside from suppliers'
+written commitments, project inspections also involved examining suppliers' performance in
+employment, healthy and safe working environment and labour protection measures, which
+include environment-friendly equipment and measures, labour contracts and social insurance
+payments, with these results factored into the overall evaluation. The Bank required all
+shortlisted suppliers to sign the Supplier Code of Ethics of Bank of China Limited, which strictly
+prohibits commercial bribery, interference in procurement processes, divulgence of confidential
+information, intentional breach of contract, and any other behaviour that violate the principles of
+clean operations.
+Increase/decrease during the reporting period
+Unit: Share
+ordinary shares
+1. RMB-denominated
+II. Shares not subject to selling
+restrictions
+restrictions
+I. Shares subject to selling
+Changes in Ordinary Shares
+Ordinary Shares
+Changes in Shares and Shareholdings of Shareholders
+As at 1 January 2023
+The register maintained by the Bank under Section 336 of the SFO recorded that, as at 31
+December 2023, the shareholders indicated in the following table were substantial shareholders
+having interests in shares of the Bank (as defined in the SFO):
+2
+(17,876,469)
+Entry
+1,694,600
+0.001%
+258,630,600
+0.09%
+Industrial and Commercial Bank of
+China Limited - Huatai Bairui CSI
+300 ETF
+Entry
+150,400
+0.0001%
+Abu Dhabi Investment Authority
+of China - SSE 50 Exchange
+Traded Open-End Index Securities
+Investment Funds
+Entry
+0.05%
+-
+123,285,217
+0.04%
+China Merchants Bank Co., Ltd. –
+-
+SSE Dividend Traded Open-ended
+Index Securities Investment Fund
+China Life Insurance Company
+Exit
+91,931,543
+0.03%
+Limited - traditional - general
+insurance product – 005L -
+157,201,169
+CT001SH
+Industrial and Commercial Bank
+ordinary
+shares
+300 ETF
+86,458,469
+0.03%
+157,050,769
+0.05% 150,400 0.0001%
+127
+As at 31 December 2023, the changes in top ten shareholders compared to the last reporting
+period are set forth below:
+Shares lent and unreturned
+in the refinancing business
+at the end of the reporting
+period
+Unit: Share
+Shares held in ordinary
+securities account, credit |
+securities account and shares
+lent and unreturned in the
+refinancing business at the
+end of the reporting period
+Percentage of
+Entry/exit
+Name of shareholder
+Percentage of
+total issued
+total issued
+the reporting
+Aggregate
+ordinary
+Aggregate
+period
+number
+The Bank comprehensively advanced rural revitalisation and vigorously supported the four
+counties of Chunhua, Yongshou, Changwu and Xunyi in Xianyang City, Shaanxi Province (the "four
+counties in Xianyang”) in consolidating and expanding their poverty alleviation achievements.
+It formulated the 2023 Work Plan for Paired Assistance and proposed more than 50 specific
+tasks in areas such as industry development, talent cultivation, cultural advancement, ecological
+revitalisation and organisation progress. In 2023, the Bank invested RMB80.57 million in anti-
+poverty funding to the four counties in Xianyang, introduced RMB7.47 million of voluntary
+assistance funding, and attracted RMB562 million of investments in local areas. It implemented
+101 paired assistance projects in sectors including industry, infrastructure, education, and
+health, etc., and organised training, attracting 32 thousand participations from local primary-
+level officials, rural revitalisation leaders and technicians from the four counties in Xianyang.
+Furthermore, the Bank sold RMB215 million worth of agricultural products from areas lifted
+from poverty nationwide, directly benefiting 650 thousand people.
+shares
+number
+during
+- Huatai Bairui CSI
+Exit
+0.01%
+0.61%
+0.86%
+1,810,024,500 A
+64.13%
+89.57%
+188,791,906,533 A
+shares
+H Shares
+A Shares
+ordinary
+total issued
+Total
+total issued
+(unit: share)
+Capacity
+(types of interest)
+Beneficial owner
+Interest of controlled
+corporations
+Investment Ltd.
+Central Huijin
+Name of
+shareholder
+Percentage of
+total issued
+Percentage of
+Percentage of
+underlying
+Number of
+shares held/
+shares Type of
+shares
+23,947,027
+190,601,931,033 A
+64.74%
+Everbright Securities Company
+Limited
+Exit
+20,722,815
+0.01%
+Note: The Bank is not aware of any participation by relevant H-Share Holders in any margin trading, short selling or
+refinancing business.
+128
+Substantial Shareholder Interests
+129
+Unless stated otherwise, all interests stated above represented long positions. Save as disclosed above, as at 31
+December 2023, no other interests (including derivative interests) or short positions were recorded in the register
+maintained by the Bank under section 336 of the SFO.
+3.
+90.43%
+(S) denotes short position.
+BlackRock, Inc. held a long position of 4,740,662,257 H Shares and a short position of 63,935,000 H Shares of
+the Bank through BlackRock Financial Management, Inc. and other corporations controlled by it. In the short
+position of 63,935,000 H Shares, 29,025,000 H Shares were held through derivatives.
+1.
+Notes:
+0.02%
+0.08%
+63,935,000 (S) H
+1.61%
+5.67%
+4,740,662,257 H
+Interest of controlled
+corporations
+BlackRock, Inc.
+2.
+HKSCC Nominees Limited
+Bank of China Limited
+256,936,000
+Foreign legal
+A
+person
+6
+MUFG Bank, Ltd.
+520,357,200
+0.18%
+Unknown
+Foreign legal
+H
+person
+None
+7
+333,000,000
+0.11%
+None
+Other
+A
+Ltd. China Pacific Life Insurance
+Dividend Equity Portfolio
+(Traditional) with management of
+Changjiang Pension Insurance Co.,
+Ltd.
+8
+Industrial and Commercial Bank
+of China - SSE 50 Exchange
+Traded Open-End Index Securities
+Investment Funds
+256,936,000
+China Pacific Life Insurance Co.,
+256,936,000
+0.51%
+79,408,488
+81,741,180,414
+27.77%
+Unknown
+Foreign legal
+H
+person
+3
+China Securities Finance Co., Ltd.
+7,941,164,885
+2.70%
+None
+1,490,349,817
+State-owned
+legal person
+4
+Central Huijin Asset Management Ltd.
+1,810,024,500
+0.61%
+None
+State-owned
+A
+legal person
+5
+HKSCC Limited
+A
+0.09% 1,694,600 0.001%
+0.09%
+A
+reporting period
+Percentage
+of total
+Shares held in ordinary
+securities account
+and credit securities
+account at the end of the
+reporting period
+Unit: Share
+Shares lent and
+unreturned in the
+refinancing business at
+the end of the reporting
+period
+Percentage
+of total
+Name of shareholder
+Aggregate
+number
+Shares lent and
+unreturned in the
+refinancing business
+at the beginning of the
+Percentage
+of total
+issued
+ordinary Aggregate
+shares number
+Percentage
+of total
+issued
+ordinary Aggregate
+shares number
+issued
+ordinary
+shares
+Industrial and Commercial
+Bank of China - SSE
+50 Exchange Traded
+Open-End Index
+Securities Investment
+Funds
+Industrial and Commercial
+issued
+ordinary Aggregate
+shares number
+None Other
+Shares held in ordinary
+securities account and
+credit securities account
+at the beginning of the
+reporting period
+On 11 October 2023, the Bank was informed by Huijin, the controlling shareholder of the Bank, that Huijin had
+increased its shareholding in the Bank on the same day through the trading system of the SSE and intended to
+continue to increase its shareholding in the Bank in the following six months ("the shareholding increase"). As
+of 31 December 2023, under the shareholding increase, Huijin had increased its shareholding in the Bank by
+330,372,926 shares, and held a total of 188,791,906,533 shares of the Bank.
+9
+Industrial and Commercial Bank of
+70,592,300
+157,050,769
+0.05%
+None
+Other
+A
+China Limited - Huatai Bairui CSI
+300 ETF
+10 Athu Dishi mesment Authority 123,285,217 12:285217 0.04% None: Fingal A
+As at 31 December 2023, the top ten shareholders' lending of shares from participation in
+refinancing business are set forth below:
+126
+1.
+2.
+3.
+4.
+5.
+6.
+The number of shares held by H-Share Holders was recorded in the register of members kept at the H-Share
+Registrar of the Bank.
+The number of shares held by HKSCC Nominees Limited is the aggregate number of the Bank's H Shares it
+held as the nominee for all the institutional and individual investors that maintained accounts with it as at 31
+December 2023.
+Central Huijin Asset Management Ltd. is a wholly-owned subsidiary of Central Huijin Investment Ltd.
+The number of shares held by HKSCC Limited is the aggregate number of the Bank's A Shares it held as a
+nominee holder who holds securities on behalf of others, including the number of SSE-listed securities acquired
+by Hong Kong SAR and overseas investors through Shanghai-Hong Kong Stock Connect.
+Save as disclosed above, the Bank is not aware of any connected relation or concerted action among the
+aforementioned ordinary shareholders.
+Notes:
+Protecting the rights and interests of customers
+of shares Percentage
+LIU Xiaolei
+Name
+Position
+Remuneration before tax from the Bank in 2023
+(Unit: RMB ten thousand)
+Employer
+contribution to
+social insurance,
+enterprise
+annuity,
+supplementary
+medical
+insurance
+Other
+Remuneration
+and housing
+monetary
+paid
+provident fund
+income
+Total
+Incumbent Directors, Supervisors and Senior Management Members
+Remuneration of Directors, Supervisors and Senior Management
+Members Paid in 2023
+Remunerated
+136
+Please refer to the above table for the term of office of Mr. WANG Wei as former Director of the Bank. His term
+of office as former Executive Vice President of the Bank started from December 2019.
+1963
+Male
+Chairwoman of the
+Board of Supervisors
+Employee Supervisor
+From January 2021 to February 2024
+From December 2018 to January
+2023
+CHEN Huaiyu
+1970
+Male
+WANG Zhiheng
+1973
+Male
+Executive Vice
+President
+Executive Vice
+President
+From April 2021 to February 2023
+From August 2021 to January 2023
+Notes:
+1.
+2.
+3.
+No former director, supervisor or senior management member held any share of the Bank during their terms of
+office.
+Please refer to the Bank's 2022 Annual Report and related announcements for the basic information, changes, and
+performance information of the Bank's other former directors.
+LENG Jie
+by shareholding
+companies or
+other connected
+Chairman
+HUANG Binghua
+Non-executive Director
+Yes
+LIU Hui
+Non-executive Director
+Yes
+SHI Yongyan
+Non-executive Director
+Yes
+Martin Cheung Kong Independent Director
+45.00
+45.00
+Yes
+LIAO
+CHUI Sai Peng Jose
+16.70%
+200,000,000
+Type of
+preference
+shares
+shareholder
+Yes
+parties
+Non-executive Director
+Yes
+50.44
+17.19
+67.63
+No
+LIU Jin
+Vice Chairman and President
+67.26
+22.74
+90.00
+No
+LIN Jingzhen
+Executive Director and
+60.53
+22.01
+82.54
+No
+Executive Vice President
+ZHANG Yong
+Non-executive Director
+ZHANG Jiangang
+Female
+1964
+ZHANG Keqiu
+LIN Jingzhen
+1965
+Male
+Executive Director
+From March 2018
+and Executive Vice
+President
+ZHANG Yi
+1971
+Male
+Executive Vice
+From March 2023
+President
+ZHANG
+1972
+Male
+Xiaodong
+Executive Vice
+President
+From March 2023
+CAI Zhao
+From April 2021
+1973
+Vice Chairman and
+President
+1967
+External Supervisor
+HUI Ping
+1960
+Male
+External Supervisor
+CHU Yiyun
+1964
+Male
+External Supervisor
+Incumbent Senior Management Members
+Term of office as Supervisor
+From November 2021 to the date
+of the 2024 Employee Delegates'
+Meeting
+From November 2021 to the date
+of the 2024 Employee Delegates'
+Meeting
+From May 2019 to the date of the
+Annual General Meeting in 2025
+From February 2022 to the date of
+the Annual General Meeting in 2025
+From June 2022 to the date of the
+Annual General Meeting in 2025
+Name
+Year of Gender Position
+birth
+Term of office as Senior
+Management Member
+LIU Jin
+Male
+Male
+Executive Vice
+President
+From September 2023
+leaving post
+Term of office
+birth
+WANG Wei
+1963
+Male
+XIAO Lihong
+1965
+WANG Xiaoya
+1964
+CHEN Jianbo
+1963
+Female
+Female
+Male
+JIANG Guohua
+1971
+Male
+Executive Director
+and Executive Vice
+President
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Independent Director
+From June 2020 to March 2023
+From August 2017 to June 2023
+From August 2017 to June 2023
+From June 2020 to April 2023
+From December 2018 to February
+2024
+Year of Gender Position held before
+Name
+Former Directors, Supervisors and Senior Management Members
+135
+LIU Jiandong
+1969
+Male
+Chief Risk Officer
+ZHAO Rong
+1971
+Female
+ZHUO Chengwen 1970
+Male
+Type of
+Chief Business and
+Management Officer
+From February 2019
+From December 2022
+From March 2024
+MENG Qian
+1965
+Female
+Chief Information
+Officer
+From May 2022
+Note: During the reporting period, no incumbent director, supervisor or senior management member held any share of
+the Bank.
+Secretary to the Board
+of Directors and
+Company Secretary
+26.00
+26.00
+External Supervisor
+5.37
+20.50
+NNO
+No
+Executive Vice President
+XIAO Lihong
+Non-executive Director
+Yes
+WANG Xiaoya
+Non-executive Director
+Yes
+CHEN Jianbo
+Non-executive Director
+Yes
+JIANG Guohua
+Independent Director
+48.87
+48.87
+Yes
+15.13
+ZHANG Keqiu
+Executive Director and
+Remunerated
+by shareholding
+companies or
+other connected
+parties
+Name
+Position
+Remuneration before tax from the Bank in 2023
+(Unit: RMB ten thousand)
+Employer
+contribution to
+social insurance,
+enterprise
+annuity,
+supplementary
+medical
+insurance
+Other
+Remuneration
+and housing
+monetary
+paid
+provident fund
+income
+Total
+Former Directors, Supervisors and Senior Management Members
+WANG Wei
+Chairwoman of the Board of
+67.26
+22.74
+The Bank remunerates directors, supervisors and senior management members who are employed by the Bank
+with salaries, bonuses, and employer contribution to social insurance, enterprise annuity, supplementary medical
+insurance and housing provident fund, as well as other monetary income. Independent directors receive directors'
+remunerations and allowances. Other directors are not remunerated by the Bank. Chairman of the Board of
+Directors, executive directors and senior management members do not receive any remuneration from the Bank's
+subsidiaries.
+The remuneration for independent directors is determined based on the resolutions of the 2007 Annual General
+Meeting and the 2019 Second Extraordinary General Meeting. The remuneration for external supervisors is
+determined based on the resolutions of the 2009 Annual General Meeting.
+In 2023, Non-executive Directors Mr. ZHANG Yong, Mr. ZHANG Jiangang, Mr. HUANG Binghua, Mr. LIU
+Hui, Mr. SHI Yongyan, Ms. XIAO Lihong, Ms. WANG Xiaoya and Mr. CHEN Jianbo were not remunerated by
+the Bank.
+138
+6.
+7.
+8.
+9.
+Some independent directors of the Bank served as independent non-executive directors of other legal entities or
+organisations, which caused such legal entities or organisations to be defined as connected parties of the Bank.
+Save as disclosed above, none of the directors, supervisors or senior management members of the Bank was
+remunerated by the connected parties of the Bank during the reporting period.
+The above persons' remuneration is calculated on the basis of their actual time working as directors, supervisors
+or senior management members of the Bank in 2023. Employee supervisors' remuneration above is paid for their
+service as supervisors of the Bank during the reporting period.
+For the starting time of the term of office of the above-mentioned directors, supervisors and senior management
+members, please refer to the section "Basic Information".
+The Bank incurred RMB13.9755 million in remuneration to its directors, supervisors and senior management
+members' services in 2023.
+Positions Held in Shareholding Companies by Directors, Supervisors
+and Senior Management Members
+Save as disclosed above, in 2023, none of the Bank's directors, supervisors or senior management
+members held any position in the shareholding companies of the Bank.
+Biographies of Directors, Supervisors and Senior Management
+Members
+Directors
+GE Haijiao
+Chairman
+Chairman of the Board of Directors of the Bank since April 2023. Mr. GE joined the Bank in
+2023. He served as a member of the Standing Committee of Hebei Provincial Committee of the
+Communist Party of China and Vice Governor of Hebei Province from November 2021 to March
+2023, Vice Governor of Hebei Province from September 2019 to November 2021, Executive
+Director of China Everbright Group from November 2018 to September 2019, and Executive
+Director and President of China Everbright Bank from January 2019 to September 2019. From
+October 2016 to November 2018, he served as Deputy General Manager of China Everbright
+Group. Prior to that, Mr. GE worked in Agricultural Bank of China for many years, serving
+as Deputy General Manager of Dalian Branch, General Manager of Singapore Branch, Deputy
+General Manager (department general manager level) of the International Banking Department of
+the Head Office and General Manager of Heilongjiang Branch. He has served as Chairman of the
+Board of Directors of Bank of China Hong Kong (Holdings) Limited since April 2023. Mr. GE
+graduated from Liaoning University in 1993 and Nanjing Agricultural University in 2008 with a
+Doctor's Degree in Management. He holds the title of Senior Economist.
+139
+The 2023 final remuneration for Chairman of the Board of Directors, President, Chairman of the Board of
+Supervisors, executive directors and other senior management members is to be determined and will be disclosed
+in an additional announcement by the Bank.
+In accordance with the government regulations, since 1 January 2015, the Bank remunerates Chairman of the
+Board of Directors, President, Chairman of the Board of Supervisors and Executive Vice Presidents pursuant to
+the rules on remuneration reform for central enterprises.
+5.
+4.
+90.00
+No
+Supervisors
+LENG Jie
+Employee Supervisor
+0.42
+0.42
+No
+CHEN Huaiyu
+WANG Zhiheng
+137
+Executive Vice President
+1.79
+6.83
+No
+Executive Vice President
+No
+Notes:
+1.
+2.
+3.
+5.04
+Male
+No
+2.00
+Yes
+45.00
+45.00
+Independent Director
+Jean-Louis EKRA
+Yes
+50.00
+50.00
+Independent Director
+No
+HUI Ping
+External Supervisor
+26.00
+26.00
+No
+CHU Yiyun
+External Supervisor
+26.00
+26.00
+E Weinan
+No
+Independent Director
+35.00
+JIA Xiangsen
+No
+5.00
+5.00
+Employee Supervisor
+ZHOU Hehua
+No
+5.00
+5.00
+Employee Supervisor
+WEI Hanguang
+Independent Director
+LIU Xiaolei
+Yes
+40.00
+40.00
+Independent Director
+Giovanni TRIA
+Yes
+35.00
+ZHANG Yi
+Executive Vice President
+50.44
+103.75
+24.83
+2.00
+130.58
+No
+Management Officer
+ZHUO Chengwen
+Secretary to the Board of
+103.75
+24.83
+2.00
+130.58
+No
+Directors and Company
+Secretary
+MENG Qian
+Chief Information Officer
+103.75
+24.83
+Chief Business and
+ZHAO Rong
+No
+130.58
+18.43
+68.87
+No
+ZHANG Xiaodong
+Executive Vice President
+50.44
+18.43
+68.87
+No
+130.58
+CAI Zhao
+20.18
+7.52
+27.70
+No
+LIU Jiandong
+Chief Risk Officer
+103.75
+24.83
+2.00
+Executive Vice President
+1955
+GE Haijiao
+Employee Supervisor
+18
+JIA Xiangsen
+13.30%
+19
+Guotai Junan Investment Management Co., Ltd.
+14.54%
+30.76%
+Notes:
+★ denotes A-Share listed company and ☆ denotes H-Share listed company.
+2.
+Besides the above companies controlled or held by Huijin, Central Huijin Asset Management Ltd. is a wholly-
+owned subsidiary of Huijin. Central Huijin Asset Management Ltd., established in November 2015 and registered
+in Beijing with registered capital of RMB5 billion, engages in asset management business.
+Male
+1968
+1.
+ZHANG Yong
+17 China Securities Co., Ltd. ★☆
+Bank of Hunan Corporation Limited
+20.05%
+12
+New China Life Insurance Company Limited ★☆
+31.34%
+13
+China International Capital Corporation Limited ★☆
+20.00%
+40.11%
+Zhong Hui Life Insurance Co., Ltd.
+80.00%
+15
+Evergrowing Bank Co., Limited
+53.95%
+16
+14
+Shenwan Hongyuan Group Co., Ltd. ★☆
+From February 2019 to the date of
+the Annual General Meeting in 2024
+Executive Director
+Incumbent Directors, Supervisors and Senior Management Members
+Basic Information
+Directors, Supervisors and Senior Management Members
+133
+No shares of the Bank have been specifically issued to its employees.
+Please refer to Note V. 31 to the Consolidated Financial Statements for details of bonds issued
+by the Bank.
+Incumbent Directors
+Issuance of Other Securities
+Preference shares issued by the Bank contain no contractual obligation to deliver cash or another
+financial asset; or to exchange financial assets or financial liabilities with another entity under
+conditions that are potentially unfavourable to the entity. Preference shares issued are non-
+derivative instruments that will be settled in the entity's own equity instruments, but includes no
+contractual obligation for the entity to deliver a variable number of its own equity instruments.
+The Bank classifies preference shares issued as an equity instrument. Fees, commissions and
+other transaction costs arising from preference shares issuance are deducted from equity. The
+dividends on preference shares are recognised as profit distribution at the time of declaration.
+During the reporting period, there was no conversion into ordinary shares or voting rights
+recovery in respect of the preference shares of the Bank.
+Other Information regarding the Preference Shares
+During the reporting period, there was no redemption of the preference shares of the Bank.
+Exercising Redemption Rights of Preference Shares
+For the profit distribution policy of the preference shares and the profit distribution arrangements
+during the reporting period, please refer to the section "Report of the Board of Directors".
+The funds raised from the issuance of preference shares have been fully used to replenish the
+Bank's additional tier 1 capital and increase its capital adequacy ratio.
+and Executive Vice
+President
+Name
+Term of office as Director
+Male
+1965
+LIN Jingzhen
+From June 2021 to the date of the
+Annual General Meeting in 2024
+From April 2023 to April 2026
+Vice Chairman and
+President
+Year of Gender Position
+Male
+LIU Jin
+Chairman
+Male
+1971
+GE Haijiao
+birth
+1967
+11
+69.07%
+China Galaxy Financial Holding Co., Ltd.
+From July 2019 to June 2025
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Non-executive Director
+Male
+1968
+SHI Yongyan
+Male
+From March 2022 to March 2025
+From August 2023 to August 2026
+From September 2023 to September
+2026
+1972
+Male
+1966
+HUANG Binghua
+Male
+ZHANG Jiangang 1973
+Non-executive Director From June 2023 to June 2026
+LIU Hui
+1974
+Martin Cheung
+Male
+Giovanni TRIA
+1963
+E Weinan
+Male
+Jean-Louis EKRA 1951
+Jose
+1957
+From September 2020 to June 2025
+Male
+1960
+CHUI Sai Peng
+Kong LIAO
+From September 2019 to June 2025
+Independent Director
+Independent Director
+Controlling Shareholder of the Bank
+Central Huijin Investment Ltd.
+Central Huijin Investment Ltd. (“Huijin”) is a state-owned investment company established on
+16 December 2003 under the Company Law, with Mr. PENG Chun as its legal representative.
+Wholly owned by China Investment Corporation (“CIC”), Huijin makes equity investments in
+major state-owned financial institutions, as authorised by the State Council. To the extent of
+its capital contribution, Huijin exercises its rights and fulfils its obligations as an investor in
+major state-owned financial institutions on behalf of the State, in accordance with applicable
+laws aimed at preserving and enhancing the value of state-owned financial assets. Huijin neither
+engages in other business activities nor intervenes in the daily operation of the major state-owned
+financial institutions of which it is the controlling shareholder.
+57.14%
+6
+China Everbright Group Ltd.
+63.16%
+7
+China Export & Credit Insurance Corporation
+China Construction Bank Corporation ★☆
+73.63%
+China Reinsurance (Group) Corporation ☆
+71.56%
+9
+China Jianyin Investment Limited
+100.00%
+10
+8
+5
+64.13%
+Bank of China Limited ★☆
+As at 31 December 2023, the basic information of companies directly held by Huijin is as
+follows:
+Proportion of
+total capital
+held by Huijin
+No.
+Company name
+1
+China Development Bank
+34.68%
+2
+3
+Industrial and Commercial Bank of China Limited ★☆
+Agricultural Bank of China Limited ★☆
+34.79%
+40.14%
+4
+Profit Distribution of Preference Shares
+132
+China Galaxy Asset Management Co., Ltd.
+The Bank of New York Mellon Corporation, acting as the custodian for all the offshore preference shareholders
+that maintained accounts with Euroclear and Clearstream as at 31 December 2023, held 197,865,300 Offshore
+Preference Shares, representing 100% of the Offshore Preference Shares.
+Preference Shares
+Incumbent Non-executive Directors Mr. ZHANG Yong, Mr. ZHANG Jiangang, Mr. HUANG
+Binghua, Mr. LIU Hui and Mr. SHI Yongyan were recommended by Huijin, shareholder of the
+Bank.
+As at 31 December 2023, no other legal-person shareholder held 10% or more voting shares of
+the Bank (excluding HKSCC Nominees Limited).
+38,000,000
+(16,400,000)
+BOCOM Schroder Asset Management -
+7
+Preference Shares
+Domestic
+None Other
+4.55%
+54,540,000
+-JSITC - He Xiang Tian Li No.1 Collective
+Capital Trust Plan
+Jiangsu International Trust Corporation Limited
+6
+Issuance and Listing of Preference Shares in the Past Three Years
+The Bank had not issued Preference Shares in the last three years as of 31 December 2023.
+Number of Preference Shareholders and Shareholdings
+The number of preference shareholders as at 31 December 2023 was 75, including 74 domestic
+preference shareholders and 1 offshore preference shareholder.
+The number of preference shareholders as at the end of the last month before the disclosure of
+this report was 78, including 77 domestic preference shareholders and 1 offshore preference
+shareholder.
+decrease
+Increase/
+Unit: Share
+customer Assets Management Plan
+Flexible Allocation No. 5 Specific Multi-
+Bosera Fund-ICBC - Bosera - ICBC -
+1
+005L - CT001SH
+BOCOM - BOCOM Schroder Asset
+Other
+None
+3.17%
+Name of preference shareholder
+No.
+The top ten preference shareholders as at 31 December 2023 are set forth below:
+131
+Domestic
+The Bank is not aware of any connected relation or concerted action among the aforementioned preference
+shareholders, or among the aforementioned preference shareholders and the Bank's top ten ordinary shareholders.
+Preference Shares
+None Other
+Preference Shares
+person
+Offshore
+Unknown Foreign legal
+16.52%
+197,865,300
+Baofu Investment No.1 Collective Capital
+Trust Plan
+Hwabao Trust Co., Ltd. - Hwabao Trust -
+3
+The Bank of New York Mellon Corporation
+2
+Preference Shares
+Domestic
+Other
+None
+136,065,000
+11.36%
+None Other
+Domestic
+5.84%
+70,000,000
+Traditional General Insurance Product -
+China Life Insurance Company Limited -
+5
+Single Fund Trust
+Preference Shares
+Domestic
+Yue Yi" Open-ended Wealth Management
+None Other
+8.77%
+105,000,000
+(7,000,000)
+CCB Trust Co., Ltd. - "Qian Yuan - Ri Xin
+4
+Preference Shares
+Domestic
+130
+For further details regarding China Investment Corporation, please refer to the information on
+its website (www.china-inv.cn). Please refer to the Announcement on Matters Related to the
+Incorporation of China Investment Corporation published on 9 October 2007 by the Bank for
+relevant information regarding China Investment Corporation.
+ZHOU Hehua
+Employee Supervisor
+Female
+1971
+WEI Hanguang
+birth
+Year of Gender Position
+Name
+Incumbent Supervisors
+134
+From July 2022 to July 2025
+From March 2024 to March 2027
+From July 2022 to July 2025
+From May 2022 to May 2025
+Independent Director
+Independent Director
+Independent Director
+Independent Director
+Male
+Male
+Female
+1948
+pledged
+or frozen
+shares
+period
+period
+preference
+of the reporting
+the reporting
+of shares
+of total
+as at the end
+during
+Number
+Percentage
+Number of
+shares held
+1975
+Management Zhuoyuan No. 2 Collective
+Asset Management Plan
+Preference Shares
+State-owned
+Notes:
+Preference Shares
+Domestic
+Other
+None
+2.50%
+30,000,000
+Ping An Life Insurance Company of China -
+Universal - Individual Universal Insurance
+9
+Preference Shares
+legal person
+Domestic
+8
+Male
+None
+30,000,000
+Shanghai Tobacco Group Co., Ltd.
+9
+Preference Shares
+legal person
+Domestic
+State-owned
+None
+2.86%
+34,300,000
+(5,700,000)
+2.
+Postal Savings Bank of China Co., Ltd.
+2.50%
+1.
+LIN Jingzhen
+Executive Director and Executive Vice President
+Vice Chairman of the Board of Directors of the Bank since June 2021 and President of the Bank
+since April 2021. Mr. LIU joined the Bank in 2021. Prior to that, Mr. LIU served as Executive
+Director of China Everbright Group from December 2019 to March 2021, President of China
+Everbright Bank from January 2020 to March 2021, and Executive Director of China Everbright
+Bank from March 2020 to March 2021. From September 2018 to November 2019, he worked
+at China Development Bank as its Executive Vice President. Mr. LIU previously worked in
+Industrial and Commercial Bank of China (ICBC) for many years, serving as Deputy General
+Manager of its Shandong Branch, Vice Chairman, Executive Director, General Manager of ICBC
+(Europe) and General Manager of ICBC Frankfurt Branch, General Manager of the Investment
+Banking Department of its Head Office, and General Manager of its Jiangsu Branch. He served
+as Chairman of the Board of Directors of BOC Aviation Limited from April 2023 to March
+2024. Mr. LIU began to serve as Vice Chairman of the Board of Directors of BOC Hong Kong
+(Holdings) Limited as of August 2021. He graduated from Shandong University in 1993 with a
+Master of Arts degree. He holds the title of Senior Economist.
+HUANG Binghua
+LIU Jin
+Executive Director of the Bank since February 2019 and Executive Vice President of the Bank
+since March 2018. Mr. LIN joined the Bank in 1987. He served as Deputy Chief Executive of
+BOC Hong Kong (Holdings) Limited from May 2015 to January 2018, as General Manager of
+the Corporate Banking Department of the Bank from March 2014 to May 2015, and as General
+Manager (Corporate Banking) of the Corporate Banking Unit of the Bank from October 2010 to
+March 2014. Prior to this, he successively served as Deputy General Manager of the Corporate
+Banking Department and Corporate Banking Unit of the Bank. Mr. LIN served as Chairman
+of BOC International Holdings Limited from April 2018 to December 2020 and Chairman of
+BOC International (China) Co., Ltd. from May 2018 to April 2022. He has been serving as Non-
+executive Director of BOC Hong Kong (Holdings) Limited since August 2018. He graduated
+from Xiamen University in 1987 and obtained a Master of Business Administration Degree from
+Xiamen University in 2000.
+Vice Chairman and President
+Non-executive Director of the Bank since July 2019. Mr. ZHANG served as member of the Party
+Committee, Secretary of Party Discipline Committee, Deputy Secretary-General, and Chairman
+of the Financial Evaluation Committee of the China Appraisal Society from May 2016 to July
+2019. From August 2014 to May 2016, Mr. ZHANG served as Deputy Secretary-General of the
+China Appraisal Society. From September 2000 to August 2014, he worked in the Department
+of Personnel and Education of the Ministry of Finance, successively serving as the Principal
+Staff Member, Deputy Director and Director. From November 1998 to September 2000, Mr.
+ZHANG served as a cadre of the editorial office of the State Assets Management of the Ministry
+of Finance. From July 1995 to November 1998, he served as a cadre of the former State-owned
+Assets Administration Bureau. Mr. ZHANG graduated from the China Youth University of
+Political Studies in July 1995 with a Bachelor's Degree in Law, and obtained a Master's Degree
+in Management from the Graduate School of the Chinese Academy of Fiscal Sciences of the
+Ministry of Finance in December 2002. He holds the title of Senior Economist.
+ZHANG Yong
+Non-executive Director of the Bank since June 2023. From January 2019 to May 2023, he served
+as Non-executive Director of China Development Bank. From September 2017 to January 2019,
+he served as Non-executive Director of China Export & Credit Insurance Corporation. From
+November 2002 to August 2017, he worked as Deputy General Manager of the Information
+Management Department and Head of Information Release Division of the Head Office of
+Industrial and Commercial Bank of China. Mr. ZHANG graduated from Renmin University
+of China with a Bachelor's Degree of Science in July 1990 and obtained a Master's Degree
+in Economics from Renmin University of China in January 2000. He holds the title of Senior
+Economist.
+E Weinan
+Independent Director
+Independent Director of the Bank since July 2022. Mr. E is an Academician of Chinese Academy
+of Sciences, Professor of School of Mathematical Sciences at Peking University, director of
+Center for Machine Learning Research at Peking University, and joint director of the National
+Engineering Laboratory of Big Data Analysis and Applied Technology of Peking University. He
+is also Director of Beijing Institute of Big Data Research, and Dean of School of Data Science,
+University of Science and Technology of China. He once served as a faculty member of Institute
+for Advanced Study, Princeton University of the United States from 1991 to 1994, Associate
+Professor and Professor of Courant Institute of Mathematical Sciences, New York University
+from 1994 to 1999, Professor of School of Mathematical Sciences, Peking University, and Chair
+Professor of the Cheung Kong Scholars Program from 2000 to 2019, Professor of Department
+of Mathematics and PACM of Princeton University of the United States from 1999 to 2022. He
+has concurrently served as Chief Scientist of Beijing Zhijian Moqi Technology Co., Ltd. since
+2016, and Director and Chief Scientific Advisor of Beijing Shenshi Technology Co., Ltd. since
+2018. He obtained his bachelor's degree from University of Science and Technology of China
+in 1982, master's degree from Computing Center of Chinese Academy of Sciences in 1985,
+doctor's degree from University of California, Los Angeles in 1989, and postdoctoral degree
+from Courant Institute of Mathematical Sciences, New York University in 1991.
+Giovanni TRIA
+Independent Director
+Independent Director of the Bank since July 2022. Mr. TRIA is an economist with more than 40
+years of academic and professional experience in the fields of macroeconomics, price policies,
+economic development policies, business cycle and growth, public investment assessment and
+project evaluation, role of the institutions on the process of growth, economics of crime and
+economics of corruption, service sector and public sector economics. He received his degree
+in Law from University in Rome "La Sapienza” in 1971, then became associate professor
+and full professor of Political Economy at Faculty of Economics, the University of Rome
+Tor Vergata, where he served as Dean of the Faculty from 2016 to May 2018 until he was
+appointed Minister of Economic and Finance of Italy in the Conte I Cabinet and member of
+the IMF Board of Governors from June 2018 to September 2019. He was adviser of the Italian
+Ministry of Economic Development in the Draghi Cabinet from March 2021 to October 2022.
+Currently he is honorary professor at University of Rome Tor Vergata and since January 2022
+he is President of the Foundation Enea Tech Biomedical. His past professional and academic
+positions include expert at the Department of Treasury and member of the “Evaluation Team of
+Public Investments” at the Ministry of Budget of Italy from 1987 to 1990, visiting scholar at the
+Department of Economics at Columbia University in 1986, consultant at the World Bank from
+1998 to 2000, consultant at the Ministry of Foreign Affairs (Directorate General for Development
+Cooperation) from 1999 to 2002, Delegate for the Italian Government at the Governing Body
+of International Labour Organisation from 2002 to 2006 and from 2009 to 2012, Vice Chair of
+Committee for Information, Computer and Communication Policy (ICCP) and Member of the
+Innovation Strategy Expert Advisory Group at OECD from 2009 to 2011. He served as Director
+of Center for Economic and international Studies at University of Rome Tor Vergata from 2000
+to 2009 and as President of Italian National School of Administration from 2010 to 2016.
+144
+143
+LIU Xiaolei
+Independent Director
+145
+Supervisors
+WEI Hanguang
+Employee Supervisor
+Employee Supervisor of the Bank since November 2021. Ms. WEI currently serves as General
+Manager of the Human Resources Department of the Head Office of the Bank, and concurrently
+serves as a director of BOC International Holdings Limited and Bank of China Group Investment
+Limited. Since joining the Bank in July 1994, she served as Deputy General Manager of the
+Human Resources Department of the Head Office, Executive Deputy Director of Office of the
+Leading Group for Comprehensively Deepening Reform and Deputy General Manager of the
+Human Resources Department of the Head Office of the Bank, and General Manager of the
+Human Resources Department and Executive Deputy Director of Office of the Leading Group
+for Comprehensively Deepening Reform of the Head Office of the Bank. She graduated from
+Tsinghua University and obtained a Master's Degree in Business Administration.
+ZHOU Hehua
+Independent Director of the Bank since March 2024. Ms. LIU currently serves as Professor
+of Finance and Accounting, as well as the Deputy Director of the Faculty of Economics &
+Management and Chair of the Finance Department at Guanghua School of Management,
+Peking University. Ms. LIU has held several positions at Peking University, including Deputy
+Director of the Faculty of Economics & Management since May 2022, Peking University Boya
+Distinguished Professor since 2018, Chair of the Finance Department at Guanghua School of
+Management since November 2015, and Professor of Finance and Accounting at Guanghua
+School of Management since December 2014. Before joining Peking University, Ms. LIU served
+as an Assistant Professor and later a tenured Associate Professor at Hong Kong University of
+Science and Technology between December 2005 and December 2014. Since June 2021, Ms.
+LIU has been an independent director of First Capital Securities Co., Ltd. Between April 2020
+and February 2024, she served as an independent director of FIL Fund Management (China)
+Company Limited. Between March 2019 and December 2021, she served as an independent
+director of Chasing Securities Co., Ltd. She also served as an independent director of Tianjin
+Youfa Steel Pipe Group Co., Ltd. from February 2018 to January 2022 and acted as the
+convener of the Audit Committee of the Board of Directors. In 1995, Ms. LIU obtained a BA
+in Economics from Nankai University, followed by an MA in Economics from the University
+of International Business and Economics in 1998. In 2006, she completed her Ph.D. at the
+University of Rochester in the USA. Ms. LIU's research interests include corporate finance,
+accounting, risk management, and financial markets. She was included in the 2022 “Highly Cited
+Chinese Researchers" list published by Elsevier, and her work has received numerous national
+and international awards.
+Non-executive Director
+Independent Director of the Bank since May 2022. Mr. EKRA currently sits on the Board
+of several institutions including Africa Economic Research Consortium (AERC), the Fund
+for Export Development in Africa (FEDA). He is the founder of Ayipling Morrison Capital,
+a venture capital and financial advisory firm. He was until September 2015 President and
+Chairman of the Board of the African Export-Import Bank (Afreximbank) in Cairo, Egypt.
+He assumed this role in January 2005 after holding successively the positions of Executive
+Vice-President and Senior Executive Vice-President of Afreximbank. Under his leadership,
+Afreximbank was assigned an investment grade credit rating by 3 major international rating
+agencies (Fitch, Moody's and S&P) and won many awards and Prizes for excellence given by
+various reputable organisations. Before joining Afreximbank in 1996, he held senior positions in
+different institutions including: Vice-President in charge of International Financial Institutions
+at Citibank NA Abidjan; Managing Director of Société Ivoirienne de la Poste et de l'Epargne
+(SIPE); Country Manager for the West African Economic & Monetary Union (UEMOA) and
+Partner at DKS Investment, a financial advisory firm in Jersey. He was for 4 years elected
+Honorary President of the Global Network of Exim Banks and Development Finance Institutions
+(G-NEXID). In 2011, Mr. EKRA was listed among the 100 most influential people of Africa by "New
+African". In 2013, he received the "Lifetime Achievement Award" from "African Bankers". In
+2016, he was awarded the honour of Commandeur de l'Ordre National of Côte d'Ivoire. He holds
+a Master of Business Administration from Stern School of Business at New York University (NYU)
+and a Master of Economics from University of Abidjan, Côte d'Ivoire.
+Jean-Louis EKRA
+Non-executive Director
+Non-executive Director of the Bank since March 2022. Mr. HUANG served as Deputy Director
+of the Department of Asset Management of the Ministry of Finance from August 2018 to
+March 2022. From September 2015 to August 2018, he served successively as Party Committee
+Member, Vice Party Secretary, and Deputy Director of the Budget Assessment and Review
+Center of the Ministry of Finance. From August 2014 to September 2015, he served as Chief of
+the Comprehensive Division of Department of Asset Management of the Ministry of Finance.
+From July 2000 to August 2014, he worked at the Department of Enterprises of the Ministry
+of Finance and successively held the positions of Principal Staff Member, Deputy Chief, Chief
+of the Third Division of Enterprises, Chief of the State-owned Capital Budget Management
+Division, Chief of the Enterprise Operation Division, and Chief of the Comprehensive Division.
+From February 1996 to July 2000, he served at the Department of Property Rights Registration
+and Asset Statistics of the National State-owned Assets Management Bureau and the Department
+of Asset Assessment of the Ministry of Finance. Mr. HUANG graduated from the School
+of Government, Peking University majoring in Administrative Management and obtained a
+Bachelor's Degree in Law.
+LIU Hui
+Non-executive Director
+Non-executive Director of the Bank since August 2023. Since 1995, Mr. LIU worked
+successively at the Head Office of Agricultural Development Bank of China, Ping An Insurance
+Beijing Branch (Life Insurance), and the Finance and Private Sector Development Department
+of the World Bank Office, Beijing. He joined Central Huijin Investment Ltd. in 2007 and
+successively worked as Senior Deputy Manager, Senior Manager and Division Chief. Mr. LIU
+served concurrently as a supervisor of China Securities Co., Ltd., and served as a Non-executive
+Director of China Export & Credit Insurance Corporation. He graduated from Cambridge
+University with a Ph.D. degree.
+141
+Independent Director
+SHI Yongyan
+Non-executive Director
+Martin Cheung Kong LIAO
+Independent Director
+Independent Director of the Bank since September 2019. Mr. LIAO was called to the Bar in
+England and Wales in 1984 and was called to the Bar in Hong Kong in 1985 and is a practicing
+barrister in Hong Kong, and is admitted an Advocate and Solicitor of Singapore since 1992.
+He has been serving as a Member of the Legislative Council of the Hong Kong Special
+Administrative Region since 2012. Mr. LIAO has also been serving as the Deputy Chairman of
+The Hong Kong Jockey Club in May 2023, following his prior service as a Steward since April
+2013, an Independent Non-executive Director of Hang Lung Group Limited since November
+2014, Chairman of the Advisory Committee on Corruption of the Independent Commission
+against Corruption since January 2019, and standing committee member of the 14th National
+Committee of the Chinese People's Political Consultative Conference since March 2023. Mr.
+LIAO has been appointed as a Non-Official Member of the Executive Council of the Hong Kong
+Special Administrative Region since November 2016. He was appointed as Justice of the Peace
+in 2004, was awarded the Silver Bauhinia Star in 2014 and was awarded the Gold Bauhinia
+Star in 2019. He is elected as Deputy of the Hong Kong Special Administrative Region to the
+11th, 12th and 13th National People's Congress of the People's Republic of China. Mr. LIAO
+previously served as Chairman of the Anti-Money Laundering and Counter Terrorist Financing
+Review Tribunal and Chairman of The Hong Kong Council for Accreditation of Academic and
+Vocational Qualifications. He graduated from University College London with a Bachelor of
+Economic Science (Hons) Degree in 1982 and a Master of Laws Degree in 1985.
+142
+CHUI Sai Peng Jose
+Independent Director
+Independent Director of the Bank since September 2020. Mr. CHUI is currently the President of
+CAA City Planning & Engineering Consultants Ltd. of Macao, and Da Chang (Zhuhai) Concrete
+Pile Co., Ltd. He is also the Deputy of the Macao SAR to the 14th National People's Congress,
+Deputy of Legislative Assembly of the Macao SAR, and member of the Economic Development
+Committee of the Macao SAR. In addition, he serves as a member of the National Committee
+of China Association for Science and Technology, Vice-President of Board of Directors of
+Macao Chamber of Commerce, Vice-President of General Assembly of the Macao Association
+of Building Contractors and Developers. Mr. CHUI served as the President of Hou Kong Junior
+Chamber in 1994 and President of Junior Chamber International Macao, China in 1999. He was
+the President of Committee for Building Appraisal of the Macao SAR from 2002 to 2015. He
+served as member and Vice-President of the Committee of Cultural Industries of the Macao
+SAR from 2010 to 2016. Currently he serves as Independent Director of Luso International
+Banking Ltd. Mr. CHUI is a registered Urban Planner and Civil Engineer of Macao. He is also
+a registered Civil Engineer and Structural Engineer (Senior Engineer Level) of California, USA.
+Mr. CHUI received his Bachelor's Degree in Civil Engineering from University of Washington
+in 1981, and received his Master's Degree in Civil Engineering from University of California,
+Berkeley in 1983. He graduated from Tsinghua University in 2002 with a Doctor's Degree in
+Urban Planning.
+Non-executive Director of the Bank since September 2023. In 2011, he joined Central Huijin
+Investment Ltd. From January 2018 to January 2024, he served as Non-executive Director of
+China Everbright Group. From May 2018 to July 2020, he served as Non-executive Director
+of China Everbright Bank. From March 2016 to February 2018, he was a member of the Party
+Work Committee and Deputy Director of the Administrative Committee of Lanzhou New Area,
+Gansu Province. From March 2013 to March 2016, Mr. SHI served as Non-executive Director
+of China Export & Credit Insurance Corporation. From September 2011 to March 2013, he was
+Head of Research Support Division, Banking Department at Central Huijin Investment Ltd.
+From March 2006 to September 2011, he worked as Deputy Chief and Consultant at the General
+Office of the Anti-money Laundering Bureau of the People's Bank of China. From March 2003
+to March 2006, he served as cadre and Deputy Chief of the Anti-Money Laundering Division
+of the Supervision and Inspection Department of the State Administration of Foreign Exchange.
+Mr. SHI graduated from Peking University with a Bachelor's degree and a Master's degree in
+Economics, and graduated from Nanyang Technological University, Singapore, with an MBA
+degree and a Ph.D. degree.
+Employee Supervisor of the Bank since November 2021. Mr. ZHOU currently serves as General
+Manager of the Credit Approval Department of the Head Office of the Bank. Since joining
+the Bank in August 1997, he has served as Assistant to the General Manager of Shanghai
+Branch, Deputy General Manager of Shanghai Branch, and Deputy General Manager of Fujian
+Branch and General Manager of Xiamen Branch of the Bank. He graduated from China Europe
+International Business School and obtained a Master's Degree in Business Administration.
+JIA Xiangsen
+External Supervisor
+Executive Vice President
+ZHANG Jiangang
+148
+CAI Zhao
+Executive Vice President
+Executive Vice President of the Bank since September 2023. Mr. CAI joined the Bank in 2023.
+Prior to that, Mr. CAI worked in Agricultural Bank of China (ABC) for many years, serving
+as Chief Information Officer of ABC from June 2023 to July 2023. Mr. CAI also served as
+General Manager of Technology and Product Management Bureau of the Head Office of ABC
+from December 2019 to July 2023, General Manager of the Research & Development Centre
+of the Head Office of ABC from October 2018 to March 2020, and General Manager of the
+Software Research and Development Centre of the Head Office of ABC from September 2015
+to October 2018. Prior to that, he served as Deputy General Manager of the Software Research
+and Development Centre of the Head Office of ABC. Mr. CAI graduated from Shaanxi Institute
+of Finance and Economics in 1995 and obtained a Master's Degree of Engineering from Sichuan
+University in 2003. He holds the title of Senior Engineer.
+ZHANG Xiaodong
+LIU Jiandong
+Chief Risk Officer since February 2019. Mr. LIU joined the Bank in 1991. From March 2014
+to February 2019, he served as General Manager of the Credit Management Department of the
+Bank. Mr. LIU served as General Manager (Investment Banking) of the Corporate Banking
+Unit of the Bank from February 2011 to March 2014, having also previously served as Deputy
+General Manager of the Corporate Banking Department and Corporate Banking Unit of the
+Bank. He graduated from Renmin University of China in 1991 and obtained a Master's Degree
+in Economics from Renmin University of China in 2000.
+ZHAO Rong
+Chief Business and Management Officer
+Chief Business and Management Officer of the Bank since December 2022. Ms. ZHAO joined
+the Bank in 1998. She has served as General Manager of Shanghai Branch of the Bank from
+November 2015 to October 2020, and Executive Vice President of the Shanghai RMB Trading
+Unit from July 2014 to May 2021. Ms. ZHAO served as General Manager of the Executive
+Office and Spokesman of the Bank from October 2009 to March 2014. Prior to that, she served
+successively as Deputy General Manager of the Executive Office, Director of the Personal
+Banking Department and Deputy General Manager (Wealth Management) of the Personal
+Banking Unit. Ms. ZHAO graduated from the Graduate School of the People's Bank of China in
+1998, obtaining a Doctor's Degree in Economics.
+149
+140
+Chief Risk Officer
+Executive Vice President of the Bank since March 2023. Mr. ZHANG joined the Bank in 2023.
+Mr. ZHANG served as Executive Vice President of Agricultural Bank of China from November
+2021 to March 2023, and as Chief Financial Officer of China Construction Bank (CCB) from
+April 2021 to September 2021. Prior to that, Mr. ZHANG previously served as Deputy General
+Manager of the Asset and Liability Management Department of the Head Office of CCB, Deputy
+General Manager and General Manager of Jiangsu Branch of CCB, and General Manager of the
+Finance and Accounting Department of the Head Office of CCB. Mr. ZHANG graduated from
+Southwestern University of Finance and Economics in 1993 and obtained a Master's Degree in
+Business Administration from Renmin University of China in 2002. He holds the title of Senior
+Accountant.
+Executive Vice President
+ZHANG Yi
+External Supervisor of the Bank since May 2019. Mr. JIA previously worked in the People's
+Bank of China ("PBOC”) and Agricultural Bank of China (“ABC”). From December 1983 to
+April 2008, Mr. JIA served as Deputy Director of the PBOC Fengtai District Office, and held
+such positions at ABC as Deputy Head of Beijing Fengtai Sub-branch, Deputy Division Chief
+at Beijing Branch, Head of Beijing Dongcheng Sub-branch, Deputy General Manager of Beijing
+Branch, General Manager of the Corporate Banking Department of the ABC Head Office, and
+General Manager of Guangdong Branch. From April 2008 to March 2010, Mr. JIA served as
+Principal of the Audit Office of ABC. From March 2010 to March 2014, he served as both the
+Chief Auditor and the Principal of the Audit Office of ABC. Mr. JIA received his Master's
+Degree in Monetary Banking from the Chinese Academy of Social Sciences. He holds the title of
+Senior Economist.
+146
+HUI Ping
+External Supervisor
+External Supervisor of the Bank since February 2022. Mr. HUI previously worked for the
+People's Bank of China ("PBOC") and the Industrial and Commercial Bank of China ("ICBC”).
+Mr. HUI joined Qingjian County sub-branch of PBOC Shaanxi Branch in December 1980 and
+Qingjian sub-branch of ICBC Shaanxi Branch in August 1986. From May 1994 to December
+2010, he held various positions at ICBC Shaanxi Branch, including, among others, Secretary at
+Deputy Director level of the Office, Deputy Director of the Office and Director of the Office,
+Head of Shaanxi Xianyang Branch, Deputy General Manager of Shaanxi Branch, and General
+Manager of Shaanxi Branch of ICBC. From December 2010 to June 2015, Mr. HUI served as
+General Manager of the Internal Control and Compliance Department of the ICBC Head Office.
+From June 2015 to April 2019, he served as Deputy Secretary of Party Discipline Committee
+and Director of the Discipline Enforcement Department of the ICBC Head Office. From April
+2019 to July 2020, Mr. HUI served as Deputy Head of the Discipline Inspection and Supervision
+Group dispatched to ICBC by the CPC Central Commission for Disciplinary Inspection and
+the State Committee of Supervisory. From September 2015 to September 2020, Mr. HUI
+concurrently served as an employee supervisor of ICBC. He graduated from Xiamen University
+with a Doctor's Degree in Finance. He holds the title of Senior Economist.
+CHU Yiyun
+External Supervisor
+External Supervisor of the Bank since June 2022. Mr. CHU is currently a professor and doctoral
+supervisor in accounting at Shanghai University of Finance and Economics, a director of the ninth
+session of the Council of the Accounting Society of China, an accountant specialist recognised
+by the Ministry of Finance and a member of the second session of the Senior Accounting
+Professional and Technical Qualification Evaluation Committee of the National Government
+Offices Administration. Mr. CHU has been serving as the secretary, assistant professor,
+lecturer, associate professor, postgraduate supervisor, professor, and doctoral supervisor of the
+Accounting Faculty of Shanghai University of Finance and Economics since 1986. From 2003 to
+2005, Mr. CHU served as an expert advisor on accounting standards of the Accounting Standards
+Committee of the Ministry of Finance. From 2006 to 2010, Mr. CHU served as a council member
+of the sixth session of the Council of the Finance and Cost Subsociety of the Accounting Society
+of China. From 2010 to 2016, Mr. CHU served as an independent director of Ping An Bank
+Co., Ltd. From 2015 to 2021, Mr. CHU served as an independent director of Tellhow Sci-Tech
+Co., Ltd. From 2016 to 2018, Mr. CHU served as a member of the First Consulting Committee
+of Corporate Accounting Standards of the Ministry of Finance. From 2016 to 2022, Mr. CHU
+served as an independent director of Bank of Jiaxing Co., Ltd. From 2017 to 2020, Mr. CHU
+served as an external supervisor of Ping An Bank Co., Ltd. From 2017 to 2023, Mr. CHU served
+as an independent director of Huan Xu Electronics Co., Ltd. Mr. CHU has also served as the
+Executive Secretary-General of the Accounting Education Branch of the Accounting Society
+of China (formerly known as the Chinese Accounting Professors Association). He currently
+serves as an independent director of Ping An Insurance (Group) Company of China, Ltd., and an
+independent director of Bank of Hebei Co., Ltd. Mr. CHU graduated from Shanghai University
+of Finance and Economics with a Doctor's Degree in Management (Accounting) in 1999.
+147
+Senior Management Members
+LIU JIN
+Vice Chairman and President
+Please refer to the section "Directors"
+LIN Jingzhen
+Executive Director and Executive Vice President
+Please refer to the section "Directors"
+Non-executive Director
+Employee Supervisor
+Executive Vice President of the Bank since March 2023. Mr. ZHANG joined the Bank in 2022.
+Prior to that, Mr. ZHANG had worked in Industrial and Commercial Bank of China (“ICBC”)
+for many years. He served as General Manager of the Human Resources Department of the
+Head Office of ICBC from April 2021 to December 2022, General Manager of the Executive
+Office of the Head Office of ICBC from April 2020 to April 2021, and General Manager of the
+Private Banking Department of the Head Office of ICBC from March 2018 to April 2020. He
+also successively served as Deputy General Manager of the Investment Banking Department of
+the Head Office of ICBC and Deputy General Manager of Shanghai Branch of ICBC. He has
+served as President of Shanghai RMB Trading Unit of the Bank since May 2023. Mr. ZHANG
+graduated from Nankai University in 2000, and then obtained his doctoral degree in Management
+from Beijing Jiaotong University.
+During the reporting period, the actual performance of the Bank's corporate governance was fully
+in compliance with laws, administrative regulations, and the requirements for the governance of
+listed companies of the CSRC.
+Board office
+Strategic Development
+Committee
+Corporate Culture and
+Consumer Protection Committee
+Audit Committee
+Risk Policy Committee
+Personnel and
+Remuneration Committee
+Connected Transactions
+Control Committee
+US Risk and
+Management Committee
+Audit Department
+Board of Supervisors
+Senior Management
+(Executive Committee)
+Asset Management
+Business Committee
+Consumer Protection Committee
+Technology Finance Committee
+Green Finance Committee
+Inclusive Finance Committee
+Board of Supervisors Office
+Duty Performance and
+Due Diligence Supervision Committee
+Asset and Liability
+Management Committee
+Risk Management and
+Internal Control Committee
+Centralised Procurement
+Management Committee
+Securities Investment and
+Management Committee
+Financial and
+Shareholders'
+Meeting
+Corporate Governance Framework
+152
+Changes in the Bank's senior management members were as follows:
+Mr. WANG Zhiheng ceased to serve as Executive Vice President of the Bank as of 13 January
+2023, due to a change of job.
+Mr. CHEN Huaiyu ceased to serve as Executive Vice President of the Bank as of 3 February
+2023, due to a change of job.
+Mr. ZHANG Xiaodong began to serve as Executive Vice President of the Bank as of 2 March
+2023.
+Mr. WANG Wei ceased to serve as Executive Vice President of the Bank as of 21 March 2023,
+due to reason of age.
+Mr. ZHANG Yi began to serve as Executive Vice President of the Bank as of 28 March 2023.
+Mr. ZHUO Chengwen began to serve as Secretary to the Board of Directors and Company
+Secretary of the Bank, and ceased to serve as Chief Audit Officer of the Bank as of 25 March
+2024.
+Board of Directors
+The Board of Directors of the Bank reviewed and approved the proposal on appointing Mr. LIU
+Jinn as Executive Vice President of the Bank. Such appointment is subject to the approval of
+relevant authorities.
+Corporate Governance
+Overview of Corporate Governance
+The Bank takes excellent corporate governance as an important objective. It consistently
+improves the modern financial enterprise system with Chinese characteristics and integrates the
+Party's leadership with its corporate governance improvement efforts. Adhering to the rules and
+regulations governing capital markets and relevant industries, the Bank constantly strives to
+improve its corporate governance framework, which mainly comprises the shareholders' meeting,
+the Board of Directors, the Board of Supervisors and the Senior Management. This framework
+operates smoothly owing to a clear division of duties. All special committees of the Board of
+Directors and the Board of Supervisors performed their duties and functioned effectively, thereby
+enhancing the Bank's modern corporate governance capabilities.
+The Bank continuously works to improve its corporate governance structure, policies and
+procedures. It persistently followed up and implemented regulatory requirements regarding
+capital markets, always choosing to adhere to the strictest available standards. It re-examined
+and self-inspected its corporate governance policies, and comprehensively and systematically
+reviewed the Articles of Association, the rules of procedure of the shareholders' meeting, the
+rules of procedure of the Board of Directors and each special committee, the working rules of the
+Secretary of the Board of Directors and the rules of independent directors.
+The Bank places great emphasis on improving its corporate governance operation mechanisms.
+It ensures that minority shareholders are properly informed and able to participate and make
+decisions. The shareholders' meeting is held on-site, and online voting for A-Share Holders is
+available to safeguard the rights and interests of the minority shareholders. The Bank focuses
+on constantly enhancing coordination with respect to the operation mechanisms of the Board
+of Directors, information disclosure and stakeholder engagement. It continues to support the
+Board of Directors to function more constructively and make scientific and efficient decisions.
+The Bank strives to heighten transparency and proactively performs its duties to all relevant
+stakeholders, including shareholders, customers, staff and society.
+The Bank makes great effort to promote Board diversity. It has formulated the Bank of China
+Limited Board Diversity Policy, which lays out the stance of the Bank on the diversity of the
+members of the Board of Directors and the approaches it adopts to realise such diversity on
+an ongoing basis. The Board of Directors has successfully realised diversity in all respects at
+this stage, including gender diversity. All appointments are made based on merit, taking into
+account the skills and experience the Board of Directors as a whole requires, and taking into
+full consideration various objectives and requirements for diversity, including but not limited to
+regulatory requirements, gender, age, cultural and educational background, geographical location,
+professional experience, skills, knowledge, and length of service of directors, etc. The Bank has
+always applied the aforementioned diversity policy and requirements to the director selection and
+engagement process.
+154
+In 2023, the Bank's corporate governance performance continued to be recognised by the capital
+markets and the public. The Bank won the Award of "Best Practice Case for Board of Directors
+of Listed Companies” organised by the China Association for Public Companies.
+153
+Internal Control Supervision Committee
+Anti-Money
+Laundering Committee
+Asset Disposal Committee
+Credit Risk Management and
+Decision-making Committee
+Related Party Transactions
+Office
+Shareholders' Right to Propose Resolutions at Shareholders' Meetings
+According to the Articles of Association, any shareholder who holds, individually or in aggregate, 3%
+or more voting shares of the Bank shall have the right to propose and submit in writing to
+the Board of Directors interim proposals 10 days prior to the convening of a shareholders'
+meeting. When the Board of Directors decides not to include such proposals on the meeting
+agenda, it shall explain and clarify the reasons at the shareholders' meeting. When the proposing
+shareholders dissent with the Board of Directors' decision to exclude such proposals, they may
+request to call for an extraordinary shareholders' meeting by themselves based on the procedures
+stipulated in the Articles of Association.
+Shareholders' Right to Present Enquiries
+According to the Articles of Association, any shareholder who holds severally or jointly with
+others 5% or more voting shares of the Bank shall have the right to present enquiries to the
+shareholders' meeting. The Board of Directors, the Board of Supervisors, or other relevant senior
+management members shall attend the shareholders' meeting, accept enquiries, and answer or
+explain accordingly.
+Please refer to the Articles of Association for details of the rights pertaining to shareholders. If
+shareholders need to contact the Board of Directors regarding the aforementioned items or for
+other enquiries to the Board of Directors, please refer to the section “Reference for Shareholders
+- Investor Enquiry" for contact details.
+Shareholders' Meeting
+Functions and Powers of the Shareholders' Meeting
+The shareholders' meeting is the body of authority of the Bank. The shareholders' meeting is
+responsible for making decisions on the important issues of the Bank, including considering and
+approving the Bank's profit distribution plan, annual financial budget and financial statements,
+changes in the Bank's registered capital, adopting resolutions on matters such as the issuance
+of bonds and other securities, merger and division, amending the Articles of Association of
+the Bank, electing directors, electing shareholders' representative supervisors and external
+supervisors and deciding the remunerations of directors and supervisors.
+157
+Convening of Shareholders' Meetings during the Reporting Period
+158
+On 30 June 2023, the Bank held its 2022 Annual General Meeting on-site in Beijing and Hong
+Kong SAR. A-Share Holders could also cast votes online. This meeting considered and approved
+nine proposals, including the 2022 work report of the Board of Directors, the 2022 work report of
+the Board of Supervisors, the 2022 annual financial report, the 2022 profit distribution plan, the
+appointment of the Bank's external auditor for 2023, the election of Mr. SHI Yongyan as Non-
+executive Director of the Bank, the election of Mr. LIU Hui as Non-executive Director of the
+Bank, the bond issuance plan and the issuance of capital instruments, among others. The meeting
+also heard the report on the connected transactions for 2022, the duty report of Independent
+Directors for 2022, and the report on the implementation of the Scheme on the Authorisation to
+the Board of Directors Granted by the Shareholders' Meeting of Bank of China Limited for 2022.
+The proposals regarding the bond issuance plan and the issuance of capital instruments were
+special resolutions, while the rest of the proposals were ordinary resolutions.
+On 19 December 2023, the Bank held its 2023 Second Extraordinary General Meeting on-site
+in Beijing. A-Share Holders could also cast votes online. The meeting considered and approved
+three proposals, including the 2022 remuneration distribution plan for Executive Directors, the
+application for special outbound donation limit and the 2022 remuneration distribution plan for
+the Chairwoman of the Board of Supervisors, among others. All the proposals were ordinary
+resolutions.
+The aforementioned meetings were convened and held in strict compliance with the relevant
+laws and regulations as well as the listing rules of the SSE and the Hong Kong Stock Exchange.
+The Bank's directors, supervisors and senior management members attended the meetings and
+communicated with shareholders on issues of their concern.
+The Bank issued announcements on the resolutions and legal opinions of the aforementioned
+shareholders' meeting on 21 April 2023, 30 June 2023 and 19 December 2023 respectively,
+pursuant to regulatory requirements. Please refer to the websites of the SSE, the HKEX and the
+Bank.
+Implementation of the Resolutions Passed at the Shareholders' Meeting by
+the Board of Directors
+During the reporting period, the Board of Directors fully implemented the resolutions passed at
+the shareholders' meetings and the scheme on the authorisation to the Board of Directors granted
+by the shareholders' meeting, and earnestly carried out proposals regarding the 2022 profit
+distribution plan, the 2023 annual budget for fixed assets investment, the bond issuance plan, the
+appointments of directors and the external auditor for 2023, and so on.
+159
+On 21 April 2023, the Bank held its 2023 First Extraordinary General Meeting on-site in Beijing.
+A-Share Holders could also cast votes online. The meeting considered and approved three
+proposals, including the election of Mr. GE Haijiao to be appointed as Executive Director of the
+Bank, the fixed asset investment budget for 2023 and the 2022 remuneration distribution plan for
+External Supervisors. All the proposals were ordinary resolutions.
+The expenses necessary for the shareholders' meeting convened by the Board of Supervisors or
+shareholders on its/their own initiative shall be borne by the Bank.
+The convening shareholders shall, upon issuing notice of the shareholders' meeting and the poll
+result announcement of the shareholders' meeting, submit relevant certificate documentations to
+the stock exchanges.
+The shares held by the convening shareholders shall not fall less than 10% before the poll result
+announcement of the shareholders' meeting is published.
+Pension Finance Committee
+Digital Finance Committee
+Cross-border Finance Committee
+Corporate Governance Compliance
+During the reporting period, the Bank strictly observed the Corporate Governance Code (the "Code")
+as set out in Appendix C1 to the Hong Kong Listing Rules, complied with all the applicable
+provisions of the Code and has substantially complied with most of the recommended best
+practices set out in the Code.
+155
+Amendments to the Articles of Association
+During the reporting period, the Bank further improved its corporate governance mechanisms and
+the amendments of its Articles of Association was approved by the relevant regulatory authority.
+This was the first comprehensive review and revision of the Articles of Association of the Bank
+since its listing in 2006, focusing mainly on integrating the Party's leadership more closely
+into corporate governance and fully reflecting the latest corporate governance requirements of
+various laws, regulations and regulatory rules. Based on the revised Articles of Association,
+the Bank will continue to improve its corporate governance system and enhance the quality and
+effectiveness of its corporate governance performance.
+Shareholders and Shareholders' Rights
+The Bank highly values the protection of its shareholders' interests and has established
+and maintained an effective and multi-channel shareholder communication platform. This
+includes holding shareholders' meetings and maintaining an investor hotline to ensure that all
+shareholders are treated equally, properly informed and able to participate in and exercise their
+voting and other rights regarding the major issues of the Bank. The Bank is independent and
+completely autonomous in all of its business operations. It operates independently and separately
+from its controlling shareholder, Huijin, in respect of its business, personnel, asset, institutional
+and financial matters.
+Shareholders' Right to Convene an Extraordinary Shareholders' Meeting
+and a Classified Shareholders' Meeting
+According to the Articles of Association, shareholders who individually or jointly hold more
+than 10% of the total voting shares of the Bank have the right to request the Board of Directors
+to convene an extraordinary general meeting. The requests shall be made in writing. The Board
+of Directors shall give written response on whether such request is consented to within ten days
+from the date of receipt of such request in accordance with laws, administrative regulations and
+the Articles of Association.
+156
+If the Board of Directors agrees to convene an extraordinary general meeting, it shall give
+notice on convening the extraordinary general meeting within five days from making the board
+resolutions. For any change to the original proposals stated in the notice, it shall obtain relevant
+shareholders' consent.
+If the Board of Directors does not agree to convene an extraordinary general meeting, or fails
+to give feedback within ten days from the date of receipt of such request, a shareholder or
+shareholders who individually or jointly hold more than 10% of the total voting shares of the
+Bank shall have the right to request the Board of Supervisors to convene an extraordinary general
+meeting in writing.
+If the Board of Supervisors agrees to convene an extraordinary general meeting, it shall give a
+notice on convening the extraordinary general meeting within five days from the date of receipt
+of the request. For any change to the original proposals stated in the notice, it shall obtain the
+relevant shareholders' consent.
+If the Board of Supervisors fails to issue notice of a shareholders' meeting within the prescribed
+period, it shall be deemed that the Board of Supervisors refuses to convene and preside over the
+shareholders' meeting. A shareholder or shareholders individually or jointly holding more than
+10% of the total voting shares of the Bank for over 90 consecutive days may voluntarily convene
+and preside over such meeting.
+Two or more shareholders jointly holding more than 10% of the total voting shares of the Bank
+may sign one or more written requests of identical form and content requesting the Board of
+Directors to convene a classified shareholders' meeting. The aforesaid shares shall be calculated
+as of the date on which the written request is made by the shareholder(s).
+When shareholders decide to convene a shareholders' meeting on its/their own initiative, it/they
+shall notify the Board of Directors in writing and at the same time notify the stock exchanges.
+The notice shall comply with the relevant provisions of the Articles of Association, and the
+venue of the meeting shall be the Bank's domicile.
+Mr. JIA Xiangsen began to serve as member of the Duty Performance and Due Diligence
+Supervision Committee of the Board of Supervisors of the Bank as of 11 March 2024.
+Ms. ZHANG Keqiu ceased to serve as Chairwoman of the Board of Supervisors, Shareholder
+Supervisor and Chair of the Duty Performance and Due Diligence Supervision Committee of the
+Board of Supervisors of the Bank as of 5 February 2024 due to reason of age.
+Mr. CAI Zhao began to serve as Executive Vice President of the Bank as of 25 September 2023.
+Changes in the Bank's supervisors were as follows:
+Mr. LENG Jie ceased to serve as Employee Supervisor and member of the Duty Performance and
+Due Diligence Supervision Committee of the Board of Supervisors of the Bank as of 31 January
+2023 due to reason of age.
+ZHUO Chengwen
+Secretary to the Board of Directors and Company Secretary
+Secretary to the Board of Directors and the Company Secretary of the Bank since March 2024.
+Mr. ZHUO joined the Bank in 1995. He served as Chief Audit Officer of the Bank from May
+2021 to March 2024. Mr. ZHUO served as Chief Risk Officer of BOC Hong Kong (Holdings)
+Limited from November 2019 to February 2021. He served as Chief Executive and Executive
+Director of Bank of China Group Insurance Company Limited from June 2016 to November
+2019, and as General Manager of the Financial Management Department of the Bank from
+December 2014 to June 2016. Prior to that, Mr. ZHUO served as Deputy General Manager of
+New York Branch, Deputy General Manager of the Financial Management Department of the
+Bank, and Chief Financial Officer of BOC Hong Kong (Holdings) Limited. He concurrently
+served as the General Manager of the Audit Department of the Bank from January 2022 to
+March 2024. Mr. ZHUO graduated from Peking University with a Master's Degree in Economics
+in 1995, and obtained a Master's Degree in Business Administration from the City University
+of New York in 2005. He holds certified public accountant qualifications in places such as the
+Chinese mainland and Hong Kong (China).
+MENG Qian
+Chief Information Officer of the Bank since May 2022. Ms. MENG joined the Bank in 1987.
+She served as General Manager of the Information Technology Department of the Bank from
+November 2019 to May 2022, and has concurrently served as General Manager of the Enterprise
+Architecture Office since September 2020. From December 2014 to November 2019, Ms. MENG
+served as General Manager of the Software Centre of the Bank. From March 2014 to December
+2014, she served as General Manager of the Data Centre of the Bank. She served as General
+Manager of the Information Centre of the Bank from September 2009 to March 2014, and also
+concurrently served as General Manager of the Test Centre of the Bank from July 2013 to March
+2014. Ms. MENG previously served as Director (Technology Management) of the Information
+Centre of the Bank, and Deputy General Manager (Person-in-Charge) of the Information Centre
+of the Bank. She graduated from Beijing Computer Science College with a Bachelor's Degree in
+Engineering in 1987. She holds the title of Senior Engineer.
+150
+Changes in Directors, Supervisors and Senior Management Members
+Changes in the Bank's directors were as follows:
+Mr. WANG Wei ceased to serve as Executive Director and member of the Connected
+Transactions Control Committee of the Board of Directors of the Bank as of 21 March 2023, due
+to reason of age.
+Mr. CHEN Jianbo ceased to serve as Non-executive Director, member of the Strategic
+Development Committee, member of the Corporate Culture and Consumer Protection Committee
+and member of the Risk Policy Committee of the Board of Directors of the Bank as of 17 April
+2023, due to reason of age.
+Mr. GE Haijiao began to serve as Chairman, Executive Director, and Chair and member of the
+Strategic Development Committee of the Board of Directors of the Bank as of 25 April 2023.
+Chief Information Officer
+Mr. HUANG Binghua ceased to serve as member of the Audit Committee of the Board of
+Directors of the Bank as of 9 June 2023.
+Mr. ZHANG Yong began to serve as Non-executive Director, member of the Strategic
+Development Committee, member of the Audit Committee and member of the Risk Policy
+Committee of the Board of Directors of the Bank as of 9 June 2023, and Chair of the Risk Policy
+Committee of the Board of Directors of the Bank as of 7 August 2023.
+The Shareholders' Meeting of the Bank reviewed and approved a proposal regarding the election
+of Mr. ZHANG Yi as Executive Director of the Bank. Such appointment is subject to approval
+by relevant authorities.
+Ms. LIU Xiaolei began to serve as Independent Director, Chair and member of the Audit
+Committee, member of the Strategic Development Committee, member of the Risk Policy
+Committee, member of the Personnel and Remuneration Committee and member of the
+Connected Transactions Control Committee of the Board of Directors of the Bank as of 26
+March 2024.
+The Shareholders' Meeting of the Bank reviewed and approved a proposal regarding the election
+of Ms. LOU Xiaohui as Non-executive Director of the Bank. Such appointment is subject to
+approval by relevant authorities.
+Mr. LIN Jingzhen began to serve as member of the Corporate Culture and Consumer Protection
+Committee of the Board of Directors of the Bank as of 26 February 2024.
+Mr. JIANG Guohua ceased to serve as Independent Director, Chair and member of the Audit
+Committee, member of the Strategic Development Committee, member of the Corporate Culture
+and Consumer Protection Committee, member of the Personnel and Remuneration Committee
+and member of the Connected Transactions Control Committee of the Board of Directors of the
+Bank due to work arrangements as of 26 February 2024.
+Mr. SHI Yongyan began to serve as Non-executive Director, member of the Strategic
+Development Committee, member of the Corporate Culture and Consumer Protection Committee
+and member of the Personnel and Remuneration Committee of the Board of Directors of the
+Bank as of 25 September 2023.
+Mr. LIU Hui began to serve as Non-executive Director, member of the Strategic Development
+Committee and member of the Risk Policy Committee of the Board of Directors of the Bank as
+of 24 August 2023.
+Ms. WANG Xiaoya ceased to serve as Non-executive Director, member of the Strategic
+Development Committee, member of the Corporate Culture and Consumer Protection Committee
+and member of the Personnel and Remuneration Committee of the Board of Directors of the
+Bank as of 30 June 2023, due to expiration of the term of office.
+Ms. XIAO Lihong ceased to serve as Non-executive Director, Chair and member of the Risk
+Policy Committee and member of the Strategic Development Committee of the Board of
+Directors of the Bank as of 30 June 2023, due to expiration of the term of office.
+151
+2/2
+GE Haijiao
+7/8
+3/4
+LIU Jin
+3/3
+11/13
+2/2
+LIN Jingzhen
+3/3
+11/13
+ZHANG Yong
+7/7
+3/3
+Incumbent Directors
+ZHANG Jiangang
+5/7
+Committee
+In 2023, the Board of Directors paid significant attention to enhancing directors' expertise, with
+a special focus on arranging relevant training. All directors of the Bank fully observed Rule
+C.1.4 of the Code as well as Chinese mainland regulatory requirements, actively participating
+in specialised training including sessions themed on green finance and anti-money laundering.
+The Bank's directors also took it upon themselves to enhance their professional skills in various
+ways, including writing and publishing professional articles, attending forums and seminars,
+meeting with domestic and overseas regulators, and conducting on-site research exercises at the
+Bank's domestic and overseas branches as well as at other advanced banks.
+Committee
+Notes:
+1.
+2.
+Directors Mr. GE Haijiao, Mr. LIU Jin, Mr. LIN Jingzhen, Mr. Martin Cheung Kong LIAO, Mr. CHUI Sai Peng
+Jose, Mr. E Weinan and Mr. JIANG Guohua, who were unable to attend the Meetings of the Board of Directors
+in person, had appointed other Directors to attend and exercise their voting rights on their behalf.
+In 2023, no director held any objection to the proposals considered during the meetings of the Board of Directors
+and its special committees.
+163
+Training and Expertise Enhancement of Directors
+3/3
+Committee
+Independence and Duty Performance of Independent Directors
+In 2023, the Bank's independent directors attended meetings of the Board of Directors, reviewed
+proposals, participated in discussions and offered their professional opinions independently,
+objectively and diligently, in accordance with the Articles of Association, the Procedural Rules
+for Board of Directors of Bank of China Limited and the Rules for Independent Directors of
+Bank of China Limited. Please refer to the section "Directors' Attendance of the Shareholders'
+Meeting, Meetings of the Board of Directors and Special Committees" for the attendance of
+independent directors at meetings.
+In 2023, independent directors put forward constructive recommendations on the Bank's capital
+management, risk control, green finance and fintech, among others. These recommendations
+were adopted and diligently implemented by the Bank.
+164
+Responsibility Statement of Directors on Financial Reports
+The following statement, which sets out the responsibilities of the directors regarding financial
+statements, should be read in conjunction with, but understood separately from, the auditor's
+statement of their responsibilities as set out in the Independent Auditor's Report contained in this
+annual report.
+The directors acknowledge that they are responsible for preparing financial statements of the
+Bank that truly represent the operating results of the Bank for each financial year. To the best
+knowledge of the directors, there was no material event or condition during the reporting period
+that might have a material adverse effect on the continuing operation of the Bank.
+Special Committees of the Board of Directors
+Remuneration Control
+There are currently six independent directors on the Board of Directors. This reaches one-third
+of the total number of directors and is thus in compliance with the quorum requirement specified
+in the Articles of Association and relevant regulatory requirements. For the professional
+backgrounds and other details of the independent directors, please refer to the section "Directors,
+Supervisors and Senior Management Members". During the reporting period, independent
+directors individually served as Chairs of the Audit Committee, Personnel and Remuneration
+Committee and Connected Transactions Control Committee. The Bank has received the annual
+confirmation in writing from each independent director with regard to their independence. Based
+on these confirmations and relevant information in possession of the Board of Directors, the
+Bank confirms their independent status.
+13/13
+169
+HUANG Binghua
+According to the Procedure Rules on the Preparation of the Annual Report of the Board Audit
+Committee of Bank of China Limited, prior to the start of audit field work by the auditors, the
+Audit Committee understood from the auditors the details of the 2023 audit plan, including areas
+of focus for auditing the 2023 Annual Report, risk assessment and identification methods, the
+application of accounting standards, testing procedures relating to internal control, compliance
+and fraud, and the allocation of human resources. In particular, the committee reminded the
+auditors to report any difference of judgement between the auditors and Senior Management
+during the audit, as well as the process and results of aligning such differences, if any.
+Moreover, in response to changes in domestic and overseas economic and financial situation, the
+Audit Committee paid close attention to the results from the Bank's efforts to improve business
+performance and cost control. The committee heard the Group risk report and the report on asset
+quality, among others, thus assisting the Board of Directors in performing its responsibilities and
+duties. It also put forward many important opinions and suggestions regarding the improvement
+of the corporate governance mechanism, the enhancement of internal audit independence, the
+improvement of credit asset quality and the improvement of internal control measures.
+In 2023, the Audit Committee held six on-site meetings on 6 March, 27 March, 27 April, 25
+August, 26 October and 11 December respectively. It mainly reviewed and approved the 2023
+plan and financial budget for internal audit; reviewed the Bank's 2022 financial report, 2023
+interim financial report and quarterly financial reports for the first and third quarters of 2023,
+the internal control work report for 2022 and the first half of 2023, the 2022 internal control
+assessment report, and the internal audit results on internal control and related management
+proposal. In addition, it heard a report on the Senior Management's response to PwC's
+management proposal for 2022, the report on the progress of the internal control audit of PwC
+in 2022, updates on compliance with the independence requirements, the audit plan for 2023 of
+PwC, reports on internal audit in 2022 and the first half of 2023, the 2022 report on overseas
+supervision information, the report on asset quality in the first quarter of 2023, and the report on
+the prevention and control of external cases in 2022.
+167
+The main duties of the Audit Committee are to review and examine the appointment, renewal and
+replacement of the external auditor, and the related audit fees; to evaluate the external auditor's
+performance and oversee its independence, work process, quality and results, to review and
+examine the external auditor's annual report, the audited annual financial statements, discussion
+and analysis of the operation and any interim financial statements; to prepare a judgmental report
+regarding the truthfulness, completeness and correctness of the financial information contained
+in the audited annual financial statements of the Bank; to review the external auditor's findings
+and recommendations relating to the financial management and control processes; to review with
+the external auditor significant issues regarding the application of accounting principles and the
+preparation of financial statements; to review and examine the annual plan and scope of work
+of the external auditor; to review and examine significant accounting and auditing policies and
+important auditing regulations; to review and examine the disclosure of financial information
+of the Bank, to review and examine the Internal Auditing Charter and other important policies,
+reports and organisational structure of the audit department; to review and examine the
+medium and long-term audit plans and annual audit plan, and guide, evaluate and appraise
+the internal audit work, to review and examine the appointment of the chief audit officer and,
+when appropriate, propose the termination and replacement of the chief audit officer, who shall
+report directly to the Board of Directors and the Audit Committee; to review the qualifications,
+performance and independence of the chief audit officer and his/her compensation, to urge the
+Bank to implement internal controls and management; to review and examine the significant
+audit findings to the Senior Management prepared by the internal audit department and the
+Senior Management's response thereto; to review and examine the Senior Management's plans
+to address significant deficiencies and material weaknesses in the design or operation of internal
+controls and financial reporting; to discuss the adequacy of the Bank's internal controls with
+the chief audit officer and the external auditor, and any special audit steps adopted in light of
+material control deficiencies; to review and examine the report on fraud cases, to review and
+examine employee reporting system and urge the Bank to conduct fair investigation and to
+take appropriate measures regarding the matters reported by the employees, to raise advice and
+suggestions on the above matters to the Board of Directors.
+The Audit Committee comprises five members, including Non-executive Directors Mr. ZHANG
+Yong and Mr. ZHANG Jiangang, and Independent Directors Mr. Martin Cheung Kong LIAO,
+Mr. Giovanni TRIA and Ms. LIU Xiaolei. Independent Director Ms. LIU Xiaolei serves as Chair
+of the committee.
+Audit Committee
+In 2023, the Corporate Culture and Consumer Protection Committee held four on-site meetings
+on 24 March, 27 April, 28 August and 27 October respectively, at which it reviewed the
+2022 Corporate Social Responsibility Report, the 2022 Work Report and 2023 Work Plan for
+Consumer Protection, and the Management Measures for Consumer Protection (Version 2023),
+etc. In addition, it regularly heard reports on complaint management and consumer protection
+supervision and evaluation, undertook overall planning and detailed deployment of the Bank's
+consumer protection work, and put forward many helpful and constructive opinions.
+166
+The main duties of the Corporate Culture and Consumer Protection Committee are: to review
+and examine the Bank's corporate culture development plans and policies, etc., and urge the
+implementation of the above plans and policies, etc.; to urge the Senior Management to examine
+and assess the implementation of the Bank's values, and guide the refinement and elaboration,
+promotion and popularisation, education and training, and implementation of the value concepts
+system; to urge the Senior Management to build a corporate culture work evaluation system,
+and oversee and assess the development and implementation of the Bank's corporate culture; to
+review and examine the Bank's employee code of conduct and urge the Senior Management to
+put in place a matching implementation mechanism; to review and examine the Bank's consumer
+protection strategies, policies, objectives, etc., and supervise and evaluate the Bank's consumer
+protection work; to review and examine the Bank's environmental, social and governance
+related development plans, policies and reports; urge the Senior Management to identify, assess
+and manage important issues regarding environment, society and governance, and review and
+examine appropriate and effective environmental, social and governance risk management and
+internal control systems established and submitted by the Senior Management; to regularly hear
+the reports on the Bank's corporate culture building, environmental, social and governance and
+consumer protection work; and to raise advice and suggestions on the above matters to the Board
+of Directors.
+The Corporate Culture and Consumer Protection Committee comprises seven members, including
+Executive Director Mr. LIN Jingzhen, Non-executive Directors Mr. HUANG Binghua and Mr.
+SHI Yongyan, and Independent Directors Mr. CHUI Sai Peng Jose, Mr. Jean-Louis EKRA, Mr.
+E Weinan and Mr. Giovanni TRIA. Non-executive Director Mr. HUANG Binghua serves as
+Chair of the committee and Mr. Giovanni TRIA serves as Vice Chair of the committee.
+Corporate Culture and Consumer Protection Committee
+In 2023, the Strategic Development Committee held seven on-site meetings on 19 January,
+9 March, 28 March, 28 April, 30 August, 30 October and 28 November respectively. The
+committee mainly reviewed the proposals on the Business Plan and Financial Budget for
+2023, the Fixed Asset Investment Budget for 2023, the Profit Distribution Plan for 2022, the
+2023 Operation Plan of the Inclusive Finance Department, the 2022 Report on Green Finance
+Development, the Special Governance Plan for Affiliates, the Issuance of Capital Instruments, the
+Bond Issuance Plan, the Dividend Distribution Plan of Preference Shares, and the Application for
+Special Outbound Donation Limit for Targeted Support. It debriefed the Report on Development
+Plan Implementation for 2022, Report on IT Strategy Implementation, and Report on Risk
+Management, etc.
+165
+The main duties of the Strategic Development Committee are: to review and examine the
+Bank's strategic development plans submitted by the Senior Management and supervise the
+implementation of the strategic development plan; to review and examine strategy adjustment
+plans submitted by the Senior Management after evaluating factors possibly affecting the Bank's
+strategies and their implementation in accordance with international and domestic economic
+and financial circumstances and market trends; to review and examine the Bank's annual
+budget; to review and examine the capital plans of the Bank, and urge the Senior Management
+to make efforts in capital management; to review and examine the information technology
+strategic development plans of the Bank; to review and examine the green credit strategy, and
+supervise the Banks' implementation of the green credit strategy; to review and examine the
+business development strategic plan, basic management systems of the Bank's inclusive finance
+business; to review and examine the annual business plan, assessment methods and evaluation,
+etc. for the Bank's inclusive finance business; to review and examine the significant investment
+and financing plans of the Bank submitted by the Senior Management; to review and examine
+the merger and acquisition plans of the Bank submitted by the Senior Management; to review
+and examine substantial internal reorganisation and adjustment plans of the Bank; to review
+and examine strategic development plans, policies and systems, etc. in relation to strategic
+development needs, other regulatory requirements and operational needs, and to supervise the
+implementation thereof; and to submit advice and suggestions to the Board of Directors regarding
+the above matters.
+The Strategic Development Committee comprises eleven members, including Chairman Mr. GE
+Haijiao, Vice Chairman and President Mr. LIU Jin, Non-executive Directors Mr. ZHANG Yong,
+Mr. ZHANG Jiangang, Mr. LIU Hui and Mr. SHI Yongyan, and Independent Directors Mr.
+Martin Cheung Kong LIAO, Mr. Jean-Louis EKRA, Mr. E Weinan, Mr. Giovanni TRIA and Ms.
+LIU Xiaolei. Chairman Mr. GE Haijiao serves as Chair of the committee.
+g| | | བ
+The Audit Committee heard and reviewed reports from the Senior Management concerning
+the Bank's business performance and primary financial data. It also requested that the Senior
+Management to submit the annual financial statements to the auditors in a timely manner, so
+as to ensure sufficient time for the annual audit. During the audit, the committee maintained
+independent communications with the auditors and arranged independent communications
+between the auditors and the independent directors. At its second meeting of 2024, the Audit
+Committee reviewed and approved the Bank's 2023 financial statements and submitted them to
+the Board of Directors for approval.
+7/7
+In accordance with the Policies of Selection, Rotation and Dismissal for External Auditors of
+Bank of China Limited, the external auditor submitted a summary report for 2023 audit and a
+report on their compliance with the principle of independence to the committee.
+Risk Policy Committee
+3/3
+13/13
+LIU Hui
+1/1
+4/4
+3/3
+SHI Yongyan
+3/3
+2/2
+Risk Policy
+The US Risk and Management Committee currently comprises five members, all of whom are
+members of the Risk Policy Committee, including Executive Director Mr. LIN Jingzhen, Non-
+executive Directors Mr. ZHANG Yong and Mr. HUANG Binghua, and Independent Directors
+Mr. CHUI Sai Peng Jose and Mr. Jean-Louis EKRA. Executive Director Mr. LIN Jingzhen and
+Independent Director Mr. Jean-Louis EKRA serve together as the co-Chairs of the US Risk and
+Management Committee.
+Strategic Development Committee
+The US Risk and Management Committee is established under the Risk Policy Committee. It
+oversees and manages all risks in the Bank's institutions in the US, and performs the duties of
+the Board of Directors of the Bank's New York Branch and its subordinate committees.
+In addition, the Risk Policy Committee paid close attention to macroeconomic and financial
+changes, risk events in the international banking industry, and the overall overseas and domestic
+regulatory environment. It also expressed important opinions and recommendations regarding
+refinement of the Bank's comprehensive risk management system, improvement of the Bank's
+risk governance mechanism and the enhancement of capabilities in stress testing and emergency
+response.
+In 2023, the Risk Policy Committee held seven on-site meetings on 17 January, 6 March, 24
+March, 25 April, 24 August, 27 October, and 27 December respectively, and one meeting
+via written resolution. The Committee mainly reviewed the Group's risk appetite statement,
+strategic risk management policy, reputational risk management policy, recovery and resolution
+plan, trading book market risk limits, country risk limits, capital adequacy ratio report, anti-
+money laundering work report, stress test management report, data governance progress report
+and liquidity risk management report. The committee also regularly reviewed the Group's
+comprehensive risk reports and other agendas.
+The main duties of the Risk Policy Committee are: to review and examine the risk culture
+and the Bank's risk management status, formulate risk management strategies, review and
+re-examine major risk management policies and procedures, and review and examine risk
+preference; to review and examine the comprehensive risk management report, Supervise the
+Senior Management carrying out comprehensive risk management, and ensure the establishment
+of risk limits; to review and examine matters related to the performance appraisal of the chief
+risk officer; to urge the implementation of the Bank's risk management strategy, policy and
+procedure; to supervise the status of the Bank's compliance with regulations; review and examine
+compliance policy of the Bank, and hear and examine the report of implementation status of the
+compliance policy of the Bank; to organize and guide the case prevention work in accordance
+with regulatory requirements; and to raise advice and suggestions on the above matters to the
+Board of Directors.
+The Risk Policy Committee of the Bank comprises seven members, including Executive Director
+Mr. LIN Jingzhen, Non-executive Directors Mr. ZHANG Yong, Mr. HUANG Binghua and Mr.
+LIU Hui, and Independent Directors Mr. CHUI Sai Peng Jose, Mr. Jean-Louis EKRA and Ms.
+LIU Xiaolei. Non-executive Director Mr. ZHANG Yong serves as Chair of the committee, and
+Independent Director Mr. Jean-Louis EKRA serves as Vice Chair of the committee.
+168
+2/3
+। =
+5/5
+7/7
+E Weinan
+3/3
+11/13
+5/7
+'=མྦུབ
+4/4
+7/8
+SST
+1/3
+6/7
+3/3
+4/4
+8/8
+2/4
+Giovanni TRIA
+3/3
+13/13
+13/13
+3/3
+11/13
+3/8
+3/3
+4/4
+6/6
+3/3
+8/8
+7/7
+2/2
+I
+Martin Cheung Kong LIAO
+3/3
+11/13
+5/7
+6/6
+6/7
+CHUI Sai Peng Jose
+3/3
+Jean-Louis EKRA
+7/7
+4/4
+LIU Xiaolei
+**
+4/4
+CHEN Jianbo
+0/0
+4/4
+3/3
+JIANG Guohua
+3/3
+10/13
+5/7
+**
+5/5
+2/2
+3/3
+4/4
+6/6
+| | '➢
+6/6
+| │
+2/2
+WANG Xiaoya
+0/0
+0/0
+0/0
+$$།
+6/6
+0/0
+Former Directors
+WANG Wei
+6/7
+0/0
+I
+3/3
+0/0
+0/0
+0/0
+XIAO Lihong
+2/2
+6/6
+1/2
+Audit
+Committee
+Moreover, in response to changes in the international and domestic economic and financial
+situation, the Strategic Development Committee also stepped up its analysis of the prevailing
+opportunities and challenges, putting forward many important comments and recommendations
+regarding the Bank's efforts to implement its Development Plan, accelerating business
+transformation and development, and improving the quality and efficiency of its service to the
+real economy, thus providing strong support to the scientific decision-making of the Board of
+Directors.
+Committee
+The Board of Directors attached great importance to the Group's long acting internal control
+system and continued to promote its development. It regularly heard and reviewed Senior
+Management reports concerning the implementation of the Guidelines on Internal Control of
+Commercial Banks, as well as bank-wide operational management, risk management, fraud case
+management and internal control system development and assessment of the Bank, thus earnestly
+assuming its responsibility to establish, optimise and effectively implement internal control
+systems.
+The Board of Directors and its Risk Policy Committee have acknowledged the comprehensive
+effectiveness of the existing risk management system of the Bank based on their close monitoring
+and evaluation of the system's effectiveness.
+According to regulatory rules and internal management requirements, the Senior Management
+submits important risk management policies, rules and procedures to the Board of Directors and
+Risk Policy Committee for review and approval. The Risk Policy Committee regularly reviews
+the Group's overall risk status (covering major risk categories such as credit risk, market risk,
+operational risk, liquidity risk, legal and compliance risk and reputational risk) and upcoming
+work plan, and puts forward corresponding work requirements.
+Risk Management and Internal Control by the Board of Directors and its
+Special Committees
+161
+In 2023, the Bank convened nine on-site meetings of the Board of Directors on 19 January, 9
+March, 28 March, 4 April, 28 April, 30 August, 30 October, 28 November and 27 December
+respectively, and four meetings via written resolution on 21 April and 7 August, with 69
+proposals reviewed and approved. The proposals covered matters such as the Bank's regular
+reports, the nomination of candidates for directorships, the adjustment of Chairs and members of
+special committees of the Board of Directors, the appointment of senior management members,
+the issuance of bonds and the profit distribution, etc. It also heard 18 reports related to the
+Bank's anti-money laundering work, strategic plan implementation and other matters.
+Convening of Board Meetings
+For detailed background and an explanation of recent changes to the Board membership, please
+refer to the section “Directors, Supervisors and Senior Management Members".
+The Board of Directors has set up the Strategic Development Committee, Corporate Culture
+and Consumer Protection Committee, Audit Committee, Risk Policy Committee, Personnel and
+Remuneration Committee and Connected Transactions Control Committee, as well as the US
+Risk and Management Committee established under the Risk Policy Committee, to assist the
+Board of Directors in performing its functions under the authorisation of the Board of Directors.
+The Board of Directors of the Bank is rationally structured and diversified. Currently, the
+Board of Directors comprises fourteen members. In addition to the Chairman, there are two
+executive directors, five non-executive directors and six independent directors. The proportion
+of independent directors reaches one-third of the total number of directors. The Bank's directors
+are elected at the shareholders' meeting, with a term of office of three years starting from the
+date when the Bank receives approval of the appointment from relevant regulatory authorities.
+A director may serve consecutive terms by re-election and re-appointment unless otherwise
+specified by laws, regulations, supervisory requirements and the Articles of Association of the
+Bank. The positions of Chairman and President of the Bank are assumed by two persons.
+Composition of the Board of Directors
+160
+The Board of Directors, which is responsible to the shareholders' meeting, is the Bank's
+decision-making body. The Board of Directors exercises the following functions and powers as
+specified by the Bank's Articles of Association: convening shareholders' meetings, reporting to
+shareholder's meetings and implementing the resolutions of shareholders' meetings; formulating
+the Bank's development strategies and supervising their implementation; formulating the
+Bank's annual financial budgets and final financial accounts; formulating the Bank's plans for
+profit distribution, loss recovery and risk assets distribution; formulating plans for increasing
+or decreasing registered capital, issuing and listing other securities, and issuing bonds of the
+Bank; formulating plans for major acquisitions, the acquisition of the Bank's shares, and the
+combination, splitting, dissolution or change of the corporate form of the Bank; reviewing and
+approving the Bank's external investment, asset acquisition, asset disposal and write-off, asset
+mortgage, connected transactions, outward donations and data governance, etc., in accordance
+with laws and policies, regulatory provisions, and the Bank's Articles of Association and
+authorisation plans; reviewing and approving the Bank's basic management policies, internal
+management framework and the establishment of important branches and subsidiaries; appointing
+or dismissing senior management members of the Bank; researching and appointing Chairs
+and members of the special committees of the Board of Directors; reviewing and approving
+the corporate governance policies of the Bank; reviewing and approving the Bank's legal and
+compliance policies and relevant basic management rules; formulating revision plans for the
+Articles of Association of the Bank, developing the procedural rules for the shareholders'
+meeting and the Board of Directors, and reviewing and approving the work rules of the special
+committees of the Board of Directors; deciding on human resources, remuneration strategies and
+remuneration policies for senior management members of the Bank, carrying out performance
+evaluation for senior management members, and deciding on matters of material incentive and
+constraint for senior management members; reviewing and approving the information disclosure
+policies of the Bank; leading the Bank's information disclosure efforts and assuming ultimate
+responsibility for the authenticity, accuracy, integrity and timeliness of the accounting and
+financial reports of the Bank; proposing the appointment or dismissal of accounting firms for the
+regular statutory audit of financial reports of the Bank to the shareholders' meeting; hearing work
+reports from the Bank's President and other senior management members, and supervising them
+in fulfilling their management responsibilities; hearing reports on regulatory opinions on the
+Bank and progress in rectification by the Bank; hearing regular and non-periodical reports from
+external auditors; reviewing and approving the Bank's annual report; formulating the capital
+planning of the Bank and assuming ultimate responsibility for capital management; formulating
+the Bank's policies for risk tolerance, risk management and internal control and assuming
+ultimate responsibility for comprehensive risk management; regularly assessing and improving
+the corporate governance of the Bank; protecting legitimate rights of financial consumers and
+other stakeholders; establishing mechanisms for identifying, reviewing, and managing conflicts
+of interests between the Bank and shareholders, especially substantial shareholders; taking
+responsibility for the management of shareholder affairs; and other functions as stipulated by
+laws, regulations and the Bank's Articles of Association, and as granted by the shareholders'
+meeting.
+Functions and Powers of the Board of Directors
+Board of Directors
+Committee
+The Audit Committee under the Board of Directors closely monitored the changing economic
+and financial environment at home and abroad, as well as the overall conditions of the Group's
+internal control function, including the establishment and operation of its internal control
+systems for both financial reporting and non-financial reporting. In addition, the committee
+heard and reviewed, on a regular and ad hoc basis, internal audit reports and assessment opinions
+on internal control, reports on the progress of internal control improvements and remediation
+suggested by external auditors, as well as the overall situation regarding the prevention, control
+and rectification of fraud cases and risk events.
+During the reporting period, the Bank performed self-assessment on internal control in line with
+the Basic Standard for Enterprise Internal Control and its supporting guidelines. No material
+deficiencies were identified in the internal control systems for both the financial reporting and
+non-financial reporting of the Bank. PricewaterhouseCoopers Zhong Tian LLP, as the Bank's
+external auditor for internal control, audited the effectiveness of the Bank's internal controls over
+financial reporting and issued an unqualified opinion. The 2023 Internal Control Assessment
+Report of Bank of China Limited and the 2023 Auditor's Report on Internal Control issued by
+PricewaterhouseCoopers Zhong Tian LLP have been published on the websites of the SSE, the
+HKEX and the Bank.
+The Bank has established relevant mechanisms to ensure that the Board of Directors has access
+to independent opinions and comments. According to the Articles of Association of the Bank,
+special committees of the Board of Directors may engage intermediaries to issue professional
+opinions in the course of performing their duties. Independent directors may also exercise their
+special functions and powers as specified in the Articles of Association and engage external
+auditors and consultants such as law firms and accounting firms to provide assistance at the
+expense of the Bank. Upon review, such mechanisms were effectively implemented during the
+year, and the professional opinions issued by relevant specialised institutions were fully utilised
+by the special committees of the Board of Directors and independent directors in the performance
+of their duties.
+Duty Performance of Directors
+162
+Meetings
+Directors
+Directors
+Personnel and Transactions
+Consumer
+Strategic
+Development
+Shareholders' the Board of
+Protection
+Connected
+Culture and
+Corporate
+Meetings of the Special Committees of the Board of Directors
+Number of meetings attended in person/Number of meetings convened during term of office
+During the reporting period, the attendance of each director at the shareholders' meetings,
+meetings of the Board of Directors and special committees is given below.
+Meetings of
+Directors' Attendance of Shareholders' Meetings, Meetings of the Board of Directors
+and Special Committees
+0.221
+2021
+Nil
+30%
+227,439
+2022
+0.232
+Nil
+30%
+231,904
+68,298
+65,060
+The Articles of Association of the Bank states that the Bank should maintain the continuity
+and stability of its profit distribution policy. It also clarifies the Bank's profit distribution
+principles, policy and adjustment procedures, the consideration process of the profit distribution
+plan and other matters. The Bank shall adopt cash dividend as the priority form of profit
+distribution. Except under special circumstances, the Bank shall adopt cash as the form of
+dividend distribution where there is profit in that year and the accumulated undistributed profit
+is positive, and the cash distribution of the dividend shall not be less than 10% of the profit
+after tax attributable to the ordinary shareholders of the Bank. The Bank shall offer online
+voting to shareholders when considering amendments to the profit distribution policy and profit
+distribution plan.
+30%
+Nil
+177
+Formulation and Implementation of Cash Dividend Policy
+Ordinary Shares
+The Bank takes full account of shareholder return while also taking into account the long-term
+interests of the Bank, the overall interests of all its shareholders and the sustainable development
+of the Bank.
+The procedure to formulate the aforementioned dividend distribution policy was compliant,
+transparent and complete. The criterion and ratio of the dividend are explicit and clear. The
+independent directors fully expressed their opinions and the legitimate rights and interests of
+minority shareholders were fully respected and protected. The procedure was in line with the
+provisions of the Articles of Association and other rules and regulations.
+Preference Shares
+The preference shareholders of the Bank receive dividend at the specified dividend rate prior
+to the ordinary shareholders. The Bank shall pay the dividend to the preference shareholders
+in cash. The Bank shall not distribute dividends on ordinary shares before all the dividends on
+preference shares have been paid.
+Dividends on the Bank's preference shares will be distributed on an annual basis. Once the
+preference shareholders have received dividends at the specified dividend rate, they shall not be
+entitled to participate in the distribution of the remaining profits of the Bank together with the
+ordinary shareholders.
+178
+69,593
+216,559
+0.2364
+At the Board meeting held on 28 April 2023, the dividend distribution plans for the Bank's
+Domestic Preference Shares (Third Tranche and Fourth Tranche) and the Offshore Preference
+Shares (Second Tranche) were approved. The Bank distributed a total of RMB3.285 billion (before
+tax) of dividends on the Domestic Preference Shares (Third Tranche) on 27 June 2023, with an
+annual dividend rate of 4.50% (before tax). The Bank distributed a total of RMB1.1745 billion (before
+tax) of dividends on the Domestic Preference Shares (Fourth Tranche) on 29 August 2023, with
+an annual dividend rate of 4.35% (before tax). The Bank distributed dividends on the Offshore
+Preference Shares (Second Tranche) on 4 March 2024. According to the Bank's issuance terms
+of the Offshore Preference Shares (Second Tranche), dividends on Offshore Preference Shares
+(Second Tranche) were paid in US dollars, with a total of approximately USD101.5 million (after
+tax) at an annual dividend rate of 3.60% (after tax). The dividend distribution plan has been
+accomplished.
+share capital
+The Bank provides a range of banking and related financial services, including commercial
+banking, investment banking, direct investment, securities, insurance, fund management, aircraft
+leasing, asset management, financial technology business and financial leasing.
+Major Customers
+During the year, the five largest customers of the Group accounted for less than 30% of the
+interest income and other operating income of the Group.
+Results and Profit Distribution
+Ordinary Shares
+The Bank's annual results for 2023 are set out in the Consolidated Financial Statements. The
+Board of Directors has recommended a final dividend on ordinary shares for 2023 of RMB2.364
+per 10 shares (before tax), subject to the approval of the forthcoming 2023 Annual General
+Meeting. If approved, the 2023 final dividend on the Bank's ordinary shares will be denominated
+and declared in RMB and paid in RMB or equivalent Hong Kong dollars. The actual amount
+distributed in Hong Kong dollars will be calculated according to the average of the exchange
+rates of HKD to RMB announced by PBOC in the week before the date (inclusive) of the Bank's
+Annual General Meeting. The A-Share dividend distribution date is expected to be 17 July 2024
+and the H-Share dividend distribution date is expected to be 5 August 2024 in accordance with
+relevant regulatory requirements and business rules. No capitalisation of the capital reserve to
+share capital is proposed in this profit distribution.
+At the Bank's 2022 Annual General Meeting held on 30 June 2023, a final dividend on ordinary
+shares for 2022 of RMB2.32 per 10 shares (before tax) was approved for payment. The A-Share
+and H-Share dividends were distributed to the shareholders in July and August of 2023 in
+accordance with relevant regulations. The distribution plan has been accomplished and the actual
+distributed dividend amount for ordinary shares was approximately RMB68.298 billion (before
+tax). No interim dividend on ordinary shares was paid for the period ended on 30 June 2023 by
+the Bank. The Bank did not propose any capitalisation of the capital reserve to share capital in
+2023.
+176
+Preference Shares
+At the Board meeting held on 28 October 2022, the dividend distribution plan for the Bank's
+Offshore Preference Shares (Second Tranche) was approved. The Bank distributed dividends on
+the Offshore Preference Shares (Second Tranche) on 6 March 2023. According to the Bank's
+issuance terms of the Offshore Preference Shares (Second Tranche), dividends on Offshore
+Preference Shares (Second Tranche) were paid in US dollars, with total of approximately
+USD101.5 million (after tax) at an annual dividend rate of 3.60% (after tax). The dividend
+distribution plan has been accomplished.
+The preference share dividend is non-cumulative. If any preference share dividend for any
+dividend period is not paid in full, such remaining amount of dividend shall not be carried
+forward to the following dividend year. The Bank shall be entitled to cancel the payment of any
+dividend of the preference shares, and such cancellation shall not constitute a default. The Bank
+may at its discretion use the funds arising from the cancellation of such dividend payment to
+repay other indebtedness due and payable.
+Cash Dividend Payout for Ordinary Shares and Capitalisation of the Capital
+Reserve to Share Capital for the Past Three Years
+Profit
+Year of
+dividend
+distribution
+Dividend
+per share
+(before tax)
+(Unit: RMB)
+Total dividend
+attributable to
+equity holders
+(before tax)
+(Unit:
+RMB million)
+of the Bank
+Capitalisation
+of the capital
+(Unit:
+reserve to
+RMB million)
+Payout ratio
+2023
+Dividend payments are independent of the Bank's credit rating, nor do they vary with the credit
+rating.
+The dividend distribution plan for ordinary shares of the Bank has been approved by the
+shareholders' meeting. In 2023, the Bank distributed dividends on ordinary shares for 2022
+in strict compliance with the Articles of Association, its dividend distribution policy and the
+shareholders' meeting resolution on profit distribution.
+Closure of H-Share Register of Members
+Duty Performance of the Senior Management
+The Senior Management is the executive organ of the Bank. It is headed by the President,
+with executive vice presidents and other senior management members assisting the President's
+work. The main functions and powers of the President include presiding over the Bank's daily
+administrative, business and financial management; organising the implementation of the
+business plan and investment schemes; drafting basic management regulations and specific
+rules; nominating candidates for other senior management positions; and reviewing employees'
+remuneration, benefit, reward and punishment measures.
+Functions and Powers of the Senior Management
+Senior Management
+172
+In 2023, the Board of Supervisors and its special committees earnestly performed their
+supervisory responsibilities and diligently reviewed relevant proposals. The Board of Supervisors
+held four on-site meetings and one meeting via written resolution. The Duty Performance
+and Due Diligence Supervision Committee held four on-site meetings and two meetings via
+written resolutions, while the Finance and Internal Control Supervision Committee held four
+on-site meetings and one meeting via written resolution. For details of the performance of and
+supervisory opinions from the Board of Supervisors during the reporting period, please refer to
+the section "Report of the Board of Supervisors”.
+Duty Performance of the Board of Supervisors
+The Board of Supervisors has set up the Duty Performance and Due Diligence Supervision
+Committee and the Finance and Internal Control Supervision Committee to assist it in performing
+duties under its authorisation.
+The Board of Supervisors currently comprises five members. There are two employee supervisors
+and three external supervisors. According to the Articles of Association, a supervisor has a term
+of office of three years and may serve consecutive terms by re-election and re-appointment
+unless otherwise specified by laws, regulations, supervisory requirements and the Articles
+of Association of the Bank. Shareholder supervisors and external supervisors are elected or
+replaced by the shareholders' meeting, while employee supervisors are elected or replaced by the
+Employee Delegates' Meeting.
+Composition of the Board of Supervisors
+The Board of Supervisors is the Bank's supervisory organ and is responsible to the shareholders'
+meeting. As stipulated in the Company Law and the Articles of Association of the Bank, the
+Board of Supervisors is responsible for overseeing the work of the Board of Directors so as to
+ensure the establishment of a prudent operational principle, value criterion and an appropriate
+development strategy. It supervises the duty performance and due diligence of the Board of
+Directors, the Senior Management and its members as well as the Bank's financial activities, risk
+management and internal control.
+Functions and Powers of the Board of Supervisors
+Board of Supervisors
+171
+In 2023, the US Risk and Management Committee held four on-site meetings on 22 March, 15
+June, 25 September, and 18 December respectively, and three meetings via written resolutions.
+It regularly reviewed reports regarding the risk management and operations of all of the Bank's
+institutions in the US, and heard the latest US regulatory trends and dynamics, among others. In
+addition, the committee reviewed and approved the relevant framework documents and important
+policies of all of the Bank's institutions in the US, in line with regulatory requirements.
+Personnel and Remuneration Committee
+The Remuneration Personnel and Committee comprises six members, including Non-executive
+Directors Mr. HUANG Binghua and Mr. SHI Yongyan, and Independent Directors Mr. Martin
+Cheung Kong LIAO, Mr. CHUI Sai Peng Jose, Mr. E Weinan and Ms. LIU Xiaolei. Independent
+Director Mr. CHUI Sai Peng Jose serves as Chair of the committee.
+The main duties of the Personnel and Remuneration Committee are: to review and examine
+the Bank's human resources and remuneration strategies; urge the implementation of relevant
+strategies; to re-examine the structure, size and composition of the Board of Directors on
+a regular basis, and make suggestions regarding the scale and composition of the Board of
+Directors in accordance with the Bank's strategic plan, operation situation, size of assets and
+shareholding structure; to re-examine the selection standards, nomination and recruitment
+process of directors, members in each special committee and senior management personnel
+on a regular basis; to identify individuals suitably qualified to become directors; to perform
+preliminary review of the qualification and conditions of candidates for directors; perform
+preliminary review of the candidates for President of the Bank, Board Secretary and Chair of the
+special committees nominated by the Chairman of the Board in accordance with the selection
+standards and nomination process; perform preliminary review of the candidates for Executive
+Vice President, Executive Assistant President, Chief Financial Officer, Chief Risk Officer
+and other senior management personnel of the Bank nominated by the President; and perform
+preliminary review of the candidate for Chief Audit Officer nominated by the Audit Committee;
+to select and nominate the candidates for members of the special committees; to review and
+examine, and urge and supervise implementation of the remuneration and incentive policies of
+the Bank; review and examine the remuneration distribution plan and incentive plan of directors
+and senior management personnel; review and examine the evaluation standards for senior
+management personnel; and appraise the directors for fulfilling their duties; and to raise advice
+and suggestions on the above matters to the Board of Directors.
+In 2023, the Personnel and Remuneration Committee held five on-site meetings on 17 January,
+27 March, 4 April, 27 April and 28 August respectively, and two meetings via written resolution.
+The committee mainly reviewed the nomination of Mr. GE Haijiao as candidate for executive
+director of the Bank, election of Mr. GE Haijiao as Chairman of the Bank and joining of Mr.
+GE Haijiao in special committees of the Board of Directors of the Bank, the nomination of
+Mr. SHI Yongyan and Mr. LIU Hui as candidates for non-executive directors of the Bank, the
+appointment of Mr. ZHANG Xiaodong, Mr. ZHANG Yi and Mr. CAI Zhao as Executive Vice
+Presidents of the Bank, the performance evaluation results and remuneration distribution plan for
+the President and other senior management members for 2022, the 2023 implementation plan for
+performance evaluation of the Chairman, President and other senior management members, and
+the adjustment of Chairs and members of special committees of the Board of Directors, among
+others.
+170
+According to the Articles of Association of the Bank, any shareholder who holds by himself
+or jointly with others 3% or more of the total number of voting shares of the Bank may,
+by submitting a written proposal to the shareholders' meeting, recommend candidates for
+directorships, provided the number of candidates nominated shall be in accordance with the
+provisions of the Articles of Association (between 12 and 17) and not exceed the number to be
+elected. List of candidates for directors may be recommended by the Board of Directors within
+the number of candidates stipulated in the Articles of Association, with reference to the diversity
+policy of the Bank and according to the number to be elected. The Personnel and Remuneration
+Committee shall undertake a preliminary review of the qualifications and experience of
+candidates for directorships, and refer those qualified candidates to the Board of Directors for
+further examination. After the Board of Directors' approval via resolution, the candidates shall
+be referred to the shareholders' meeting through written proposals. When directorships need
+to be added or filled temporarily, the Board of Directors shall raise a proposal and make a
+recommendation to the shareholders' meeting to elect or replace. During the reporting period, the
+Bank appointed directors in strict compliance with the Articles of Association.
+In 2023, the Bank distributed dividends on preference shares in strict compliance with the
+Articles of Association, the terms of issuance of preference shares and the Board of Directors'
+resolutions on dividend distribution.
+The Connected Transactions Control Committee comprises four members, including Independent
+Directors Mr. Martin Cheung Kong LIAO, Mr. CHUI Sai Peng Jose, Mr. Giovanni TRIA and
+Ms. LIU Xiaolei. Independent Director Mr. Martin Cheung Kong LIAO serves as Chair of the
+committee.
+The main duties of the Connected Transactions Control Committee of the Board of Directors are
+as follows: to manage the connected transactions of the Bank in accordance with the provisions
+of laws and regulations, and review and examine the corresponding management system for
+connected transactions; to define the connected transactions of the Bank in accordance with
+the provisions of the laws, regulations and the Articles of Association of the Bank; to examine
+the connected transactions pursuant to the provisions of the laws and regulations and based on
+the business principles of justice and fairness; to issue, by the member who is an independent
+director, a written report on the fairness and compliance of significant connected transactions
+and the performance of the internal approval procedure; to review and examine the significant
+connected transactions and upon acceptance by the independent director, submit them for
+approval based on the transaction amount; to review and examine the matters of information
+disclosure of the significant connected transactions of the Bank; and to raise advice and
+suggestions on the above matters to the Board of Directors.
+In 2023, the Connected Transactions Control Committee held three on-site meetings on 27
+March, 28 August, and 26 October respectively, at which it mainly reviewed and approved
+the Bank's filing mechanism for general connected transactions and other proposals. It also
+reviewed the report on connected transactions in 2022 and the report on the implementation of
+new regulatory rules on connected transactions, among others. During the reporting period, the
+Connected Transactions Control Committee paid constant attention to the interpretation and
+implementation of new regulatory rules, IT system development and connected transactions
+data management. The members of the committee put forward constructive suggestions on the
+management of connected parties and the monitoring of connected transactions.
+During the reporting period, the Senior Management of the Bank managed the Bank's
+operations in accordance with the powers bestowed upon it by the Articles of Association and
+the authorisations of the Board of Directors. In accordance with the operation and management
+objectives approved by the Board of Directors, the Senior Management formulated business plan,
+operation strategy and management measures and made timely adjustments according to market
+changes. It invited directors and supervisors to attend important meetings and major activities,
+listened to their opinions and suggestions, and kept close communication with the Board of
+Directors and the Board of Supervisors, continuously improving the quality and efficiency of
+operation and management. In 2023, the Group's operating results achieved steady progress.
+During the reporting period, the Senior Management of the Bank held 36 regular meetings of
+Executive Committee, at which it focused on key operational areas and discussed and decided
+upon a series of significant matters, including the Group's business development, globalised
+development, integrated operation, consumer protection, technology finance, green finance,
+inclusive finance, pension finance, digital finance and comprehensive risk management. It also
+held special meetings to study and make plans for the Group's corporate banking, personal
+banking, financial markets, channel operation, IT and risk internal control.
+Connected Transactions Control Committee
+173
+During the reporting period, the former Financial Digitalisation Committee under the Senior
+Management (Executive Committee) was renamed the Digital Finance Committee, which is
+responsible for the overall management and professional decision-making of the Group's digital
+development, FinTech, data governance, scenario-based ecosystem building, innovation and
+product management. The newly established Inclusive Finance Committee is responsible for the
+overall management and professional decision-making of the Group's inclusive finance work.
+The newly-established Pension Finance Committee is responsible for the overall management and
+professional decision-making of the Group's pension finance. Currently, the Senior Management
+presided over the Asset and Liability Management Committee, Risk Management and Internal
+Control Committee (which governs the Anti-money Laundering Committee, Asset Disposal
+Committee, Credit Risk Management and Decision-making Committee and Related Party
+Transactions Management Office), Centralised Procurement Management Committee, Securities
+Investment and Management Committee, Asset Management Business Committee, Consumer
+Protection Committee, Technology Finance Committee, Green Finance Committee, Inclusive
+The H-Share register of members of the Bank will be closed from Wednesday, 10 July 2024
+to Tuesday, 16 July 2024 (both days inclusive), for the purpose of determining the list of
+shareholders entitled to the proposed final dividends on ordinary shares. In order to qualify
+for the proposed final dividends, the H-Share Holders of the Bank who have not registered
+the relevant transfer documents are required to lodge them, together with the relevant share
+certificates, with the H-Share Registrar of the Bank, Computershare Hong Kong Investor
+Services Limited, at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
+Wan Chai, Hong Kong, China, no later than 4:30 p.m. on Tuesday, 9 July 2024. The ex-dividend
+date of the Bank's H Shares will be on Monday, 8 July 2024.
+Donations
+Share Capital
+As at the latest practicable date prior to the issue of this annual report, the Bank had sufficient
+public float based on publicly available information, in compliance with the minimum
+requirement of the Hong Kong Listing Rules and the waiver granted by the Hong Kong Stock
+Exchange at the time of the Bank's listing.
+Distributable Reserves
+Please refer to Note V.39 to the Consolidated Financial Statements for details of distributable
+reserves of the Bank.
+179
+Principal Activities
+The Board of Directors is pleased to present its report together with the audited Consolidated
+Financial Statements of the Bank and its subsidiaries (the "Group") for the year ended 31
+December 2023.
+Report of the Board of Directors
+175
+Charitable donations made by the Group during the reporting period amounted to approximately
+RMB94.5351 million.
+The Bank strictly adhered to the principles of truthfulness, accuracy, completeness, conciseness
+and clarity, focused on the demands of investors, and continuously took steps to increase
+the pertinence and effectiveness of information disclosure so as to enhance information
+transparency, with an average of about 390 documents disclosed each year. The Bank has
+established a comprehensive and systemic information disclosure policy system, putting
+in place clear specifications regarding information disclosure standards and their scope of
+application; the responsibilities and division of work of all parties concerned; compilation and
+disclosure procedures, and internal monitoring and punitive measures. It conducted timely re-
+examination of various types of policy documents in accordance with changes in regulatory
+rules during the year. Moreover, the Bank actively promoted voluntary information disclosure
+to respond to market concerns. In 2023, with an emphasis on issues of critical interest to the
+capital markets, including serving the real economy, cross-border financial services, Belt and
+Road development, RMB internationalisation, and ESG development philosophy, it actively
+enhanced voluntary information disclosure and responded to market concerns through regular
+reports and other methods, thus increasing the transparency of information and realising more
+efficient communication with capital markets. Furthermore, the Bank reinforced the information
+disclosure responsibility system and information correspondent mechanism, and promoted the
+building of a professional team and a strong compliance culture with regard to information
+disclosure, so as to make its information disclosure management more proactive and forward-
+looking. It also carried out the registration and submission of information insiders according to
+relevant regulatory requirements and the Bank's rules.
+In 2023, the Bank further enhanced its work in investor relations and information disclosure
+management, and continued to receive wide market recognition. It won a number of awards
+including the 6th “Best IR Hong Kong Listed Company (A+H Shares)" from New Fortune,
+"Best Practice Cases of 2022 Annual Report and Results Briefing of Public Companies” from
+the China Association for Public Companies, and "Award for Investor Relation Case of Listed
+Companies in China” from Securities Times. The Bank's annual report won an "Annual Report
+Platinum Award for Comprehensive Comparison" of the League of American Communications
+Professionals (LACP).
+Securities Transactions by Directors and Supervisors
+Appointment of External Auditors
+Following approval by the 2022 Annual General Meeting, PricewaterhouseCoopers Zhong Tian
+LLP was appointed as the Bank's domestic auditor and internal control auditor for 2023, and
+PricewaterhouseCoopers was appointed as the Bank's international auditor for 2023.
+Fees paid to PricewaterhouseCoopers and its member firms for auditing the financial statements
+of the Group, including those of the Bank's overseas subsidiaries and branches, were RMB 193
+million for the year ended 31 December 2023, of which the fees for internal control audit paid to
+PricewaterhouseCoopers Zhong Tian LLP totalled RMB12 million. The Bank paid RMB14.786
+million for non-auditing services to PricewaterhouseCoopers and its member firms during the
+year.
+Pursuant to domestic and overseas securities regulatory requirements, the Bank formulated and
+implemented the Management Measures on Securities Transactions by Directors, Supervisors and
+Senior Management Personnel of Bank of China Limited (the "Management Rules") to govern
+securities transactions by directors, supervisors and senior management members of the Bank.
+The terms of the Management Rules are more stringent than the mandatory standards set out in
+the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix
+C3 to the Hong Kong Listing Rules (the "Model Code"). All directors and supervisors confirmed
+that they had complied with the standards set out in both the Management Rules and the Model
+Code throughout the reporting period.
+Investor Relations and Information Disclosure
+In 2023, the Bank closely tracked market dynamics, actively enriched its market communication
+methods, continued to build a professional and efficient investor relations management practice,
+and strived to improve its service provided to capital market investors. The Bank actively
+organised market communication activities for the release of its annual, interim and quarterly
+results, and arranged its annual results release conference simultaneously in three venues (Beijing,
+Boao and Hong Kong SAR) for the first time. The Bank also carried out in-depth exchanges
+with institutional investors through various channels, including participating in seminars held by
+investment banking institutions, holding non-deal roadshows and thematic meetings, conducting
+174
+daily communications, etc., and recorded relevant information for review and registration in a
+timely manner, thus proactively conveyed its investment value to capital markets. The Bank also
+attached high importance to investor services for minority investors. It professionally answered
+investor hotline and email inquiries, promptly responded to inquiries from the “e-interaction
+online platform” run by the SSE, optimised the information shared in the investor relations
+section of the official website of the Bank, co-organised investor networking event “Into the
+Blue-chip” with China Securities Investor Services Centre, and actively participated in themed
+investor education activities such as "National Investor Protection Publicity Day", thus improved
+the breadth, depth and warmth of its shareholder services. It actively sought out market opinions
+and suggestions regarding the Bank's operation and development and disseminated such
+information internally in a timely manner, thus continuously improving its corporate governance
+and intrinsic value. The Bank earnestly carried out shareholder services and equity management
+work according to regulatory requirements and management needs.
+PricewaterhouseCoopers Zhong Tian LLP and PricewaterhouseCoopers have provided audit
+services to the Bank for three years. In 2023, Ms. HO Shuk Ching Margarita is the audit
+engagement partner. Ms. HO Shuk Ching Margarita, Mr. WANG Wei and Mr. LI Dan are the
+certified public accountants who signed the auditor's report on the Bank's financial statements
+prepared in accordance with CAS for the year ended 31 December 2023.
+Finance Committee, Pension Finance Committee, Digital Finance Committee and Cross-border
+Finance Committee. During the reporting period, all of the committees diligently fulfilled their
+duties and responsibilities as per the powers specified in their committee charters and the rights
+delegated by the Executive Committee, and pushed forward the sound development of the Bank's
+various operations.
+among
+Directors,
+Purchase, Sale or Redemption of the Bank's Shares
+Directors, Supervisors and senior management members of the Bank are not related to one
+another with respect to finance, business and family, or other material relations.
+Substantial Shareholder Interests
+Please refer to the section “Changes in Shares and Shareholdings of Shareholders" for the details
+of the Bank's substantial shareholder interests.
+Management Contracts
+No contract concerning the management or administration of the whole or any substantial part of
+the business of the Bank was entered into or existed during the reporting period.
+Share Appreciation Rights Plan and Share Option Scheme
+Please refer to Note V.35 to the Consolidated Financial Statements for details of the share
+appreciation rights plan and share option scheme of the Group.
+As stipulated in the Articles of Association, within the scope permitted under applicable laws,
+administrative regulations and the Articles of Association, the Bank may purchase and maintain
+any liabilities insurance for the Bank's former and incumbent directors. The Bank will indemnify
+every former and incumbent director out of its own assets against any liability incurred when he/
+she served as director of the Bank to the maximum extent permitted by law and administrative
+regulations or alternatively to the extent that it is not prohibited by law and administrative
+regulations unless it is established that the director has not acted honestly or in good faith in
+performing his/her duties.
+Pre-emptive Rights
+There are no compulsory provisions for pre-emptive rights requiring the Bank to offer new
+shares to existing shareholders in proportion to their existing shareholdings under the Articles of
+Association. The Articles of Association provide that the Bank may increase its capital by public
+offering, private placement, issuing rights of new shares to existing shareholders or allotting
+new shares to existing shareholders, transferring its capital reserve, issuing convertible bonds,
+or through other means as permitted by laws, administrative regulations and relevant regulatory
+authorities.
+182
+Permitted Indemnity Provision
+During the reporting period, the Bank renewed its directors' liability insurance to provide
+protection against claims arising from the lawful discharge of duties by directors, thus
+encouraging directors to fully perform their duties.
+Equity-linked Agreement
+The Bank has not been engaged in any equity-linked agreement during the reporting period.
+Business Review
+For disclosures of the Bank in respect of business review under Appendix D2 to the Hong Kong
+Listing Rules, please refer to sections "Management Discussion and Analysis" and "Environmental
+and Social Responsibilities” and the “Consolidated Financial Statements”. The relevant
+disclosure constitutes part of the Report of the Board of Directors.
+Family Relations
+Supervisors and Senior Management Members
+Use of Raised Funds
+During the reporting period, neither the Bank nor its subsidiaries purchased, sold or redeemed
+any of the Bank's shares.
+Business and
+180
+To the best knowledge of the Bank, as at 31 December 2023, none of the directors or supervisors
+of the Bank or their respective associates had any interests or short positions in the shares,
+underlying shares or debentures of the Bank or any of its associated corporations (within the
+meaning of Part XV of the SFO) as recorded in the register required to be kept by the Bank
+pursuant to Section 352 of the SFO or as otherwise notified to the Bank and the Hong Kong
+Stock Exchange pursuant to the Model Code as set out in Appendix C3 of the Hong Kong
+Listing Rules.
+All proceeds raised from initial public offerings, the rights issue, issuances of tier 2 capital
+bonds, preference shares and undated capital bonds have been used to replenish the Bank's
+capital and increase the level of capital adequacy.
+Fixed Assets
+Please refer to Note V.20 to the Consolidated Financial Statements for details of the fixed assets
+of the Bank.
+Financial Summary
+Please refer to the section "Financial Highlights" for the summary of the annual results, assets
+and liabilities of the Bank for the last five years.
+Connected Transactions
+In 2023, the Bank strictly complied with laws and regulations, regulatory requirements regarding
+connected transactions, the listing rules of the SSE and the Hong Kong Stock Exchange, and
+carried out connected transactions in compliance with business principles. All management
+mechanisms for connected transactions ran smoothly, reasonably safeguarding the interests of all
+shareholders and the Bank as a whole.
+According to the Administrative Measures for Connected Transactions of Banking and Insurance
+Institutions issued by the NFRA, the Bank cumulatively incurred connected transactions of
+RMB6.85 trillion with connected parties in 2023, including credit-type connected transactions
+of RMB171.301 billion, asset transfer connected transactions of RMB 15.037 billion, service
+connected transactions of RMB10.526 billion, deposit and other connected transactions of
+RMB253.567 billion, spot derivatives connected transactions of RMB772.248 billion, and the
+interbank business with connected party banks of RMB5.63 trillion. At the end of 2023, the
+balance of credit facilities granted to connected parties reached RMB162.550 billion, accounting
+for 5.55% of the Bank's net capital (by legal person standard), which is in compliance with the
+regulatory requirements for the balance of credit facilities granted to connected parties.
+Under the Hong Kong Listing Rules, transactions between the Bank and its connected persons
+(as defined under the Hong Kong Listing Rules) constitute connected transactions to the Bank.
+Such transactions are monitored and administered by the Bank in accordance with the Hong
+Kong Listing Rules. In 2023, the Bank has engaged in a number of connected transactions
+with its connected persons in the ordinary and usual course of its business. Such transactions
+are exempted from the reporting, annual review, announcement and independent shareholders'
+approval requirements according to the Hong Kong Listing Rules.
+Directors' Interests in Competing Businesses of the Bank
+Financial,
+None of the directors has interests in any business that competes or is likely to compete, either
+directly or indirectly, with the business of the Group.
+The Bank has formulated clear regulations on the remuneration of directors, supervisors and
+senior management members. The remuneration for Chairman of the Board of Directors,
+President, Chairperson of the Board of Supervisors and executive vice presidents shall be paid
+in accordance with the rules on remuneration reform for central enterprises, which consists of
+basic annual remuneration, performance-based annual remuneration and incentive income linked
+to term appraisal. The remuneration for other senior management members and shareholder
+supervisors consists of basic annual remuneration and performance-based remuneration, with
+part of the performance-based remuneration paid in a deferred manner. According to the
+recourse and recovery mechanism for performance-based remuneration of the Bank, if risk losses
+falling within the employees' remit and responsibility are exposed in excess during the term of
+service, the Bank may recover part or all of the performance-based remuneration paid within
+the corresponding period, and stop the payment of the part that has not been paid. Independent
+directors as well as external supervisors and employee supervisors are remunerated by the Bank
+while non-executive directors are not remunerated by the Bank. The Bank remunerates directors,
+supervisors and senior management members who are employed by the Bank with salaries,
+bonuses, employer contributions to social insurance, enterprise annuity, supplementary medical
+insurance and housing provident fund, as well as other monetary income.
+Please refer to the section “Directors, Supervisors and Senior Management Members" for details
+of the remuneration of directors, supervisors and senior management members.
+Directors' and Supervisors' Service Contracts
+None of the directors or supervisors of the Bank has a service contract with the Bank or its
+subsidiaries that is not determinable within one year or is not determinable without payment of
+compensation other than normal statutory compensation.
+Directors' and Supervisors' Interests in Transactions, Arrangements
+and Contracts of Significance
+No transaction, arrangement or contract of significance, in relation to the Bank's business to
+which the Bank, its holding companies, or its subsidiaries or fellow subsidiaries was a party and
+in which a director or a supervisor or any entity connected with them was materially interested,
+directly or indirectly, subsisted during the reporting period.
+Directors' and Supervisors' Rights to Acquire Shares
+During the reporting period, none of the Bank, its holding company, or any of its subsidiaries
+or fellow subsidiaries was a party to any arrangement that would enable the Bank's directors,
+supervisors, or their respective spouses or children below the age of 18, to benefit by acquiring
+shares in, or debentures of, the Bank or any other body corporate.
+181
+Directors' and Supervisors' Interests in Shares, Underlying Shares
+and Debentures
+Remuneration Policy of Directors, Supervisors and Senior
+Management Members
+For details, please refer to the related announcements on the websites of SSE, HKEX and the
+Bank and the Notes to the Consolidated Financial Statements.
+In accordance with the provisions of the Notice on Issues concerning Withholding the
+Enterprise Income Tax on Dividends Paid by Chinese Resident Enterprises to H-share Holders
+who are Overseas Non-resident Enterprises (Guoshuihan [2008] No. 897) published by the
+State Administration of Taxation of PRC, when Chinese resident enterprises distribute annual
+dividends for 2008 onwards to H-share holders who are overseas non-resident enterprises, the
+enterprise income tax shall be withheld at a uniform rate of 10%.
+Shareholders of the Bank are taxed in accordance with the following tax regulations and the
+amendments thereof from time to time. They shall enjoy possible tax relief according to the
+actual situation. Shareholders should seek professional advice from their tax and legal advisors.
+The following cited laws, regulations and stipulations are all relevant provisions issued before 31
+186
+"Firmer foundations”: continuously improving policies and secure support
+In terms of planning, the Bank's Board of Directors and its Corporate Culture and Consumer
+Protection Committee constantly strengthened plans and instructions for consumer protection
+work across the Bank, improved the Senior Management reporting mechanism as well as
+information sharing and supervision and evaluation mechanisms, and comprehensively integrated
+consumer protection into the Bank's corporate governance. In terms of execution, the Bank's
+Consumer Protection Committee firmly implemented related laws, rules, regulations and
+supervision policies on consumer protection, as well as all resolutions and decisions of the Bank,
+and vigorously organised and advanced consumer protection work across the Bank.
+-
+-
+special chapter
+The Bank consistently adopted external supervision rules and improved its multi-tiered consumer
+protection policy system, which features “consumer protection policy consumer protection
+management measures special consumer protection management measures
+on consumer protection in business rules", in terms of the ex-ante, interim and ex-post aspects
+at policy level. It ensured sufficient staff resources dedicated to consumer protection work, and
+improved the independence, authority and professionalism of employees working in consumer
+protection. The Bank attached great importance to employee education regarding consumer
+protection concepts. In 2023, participation in consumer protection training totalled 860 thousand
+across the Bank, covering all levels of middle and senior management, primary-level employees
+and new hires.
+"More precise management”: promoting business integration and highlighting the
+Group's synergies
+Focusing on key links, the Bank carried out whole-process management covering ex-ante,
+interim and ex-post phases, and established three lines of defence for consumer protection
+with differentiated functions of implementation, supervision and instruction, and independent
+supervision. It further improved its consumer protection examination rules, developed the
+Management Measures for Examination of Consumer Protection, clarified the examination
+entities, examination scope, and examination procedures for consumer protection, improved key
+points of examination, steadily promoted a more institutionalised and standardised consumer
+protection examination process, and gave full play to the role of prior examination in risk
+prevention. The Bank strengthened suitability management for sales and clarified suitable
+operational standards for diversified financial products and services. It continually carried out
+after-sales management of financial products and services, implemented a complaints tracing
+and rectification mechanism and a customer feedback collection mechanism, and strengthened
+product and service re-examination. Meanwhile, the Bank proactively implemented the
+Group's management requirements to ensure the smooth running of the operational system
+for comprehensive consumer protection, encouraged overseas institutions and comprehensive
+operation companies to improve top-level design for consumer protection, and improved the
+penetrating and targeted management of consumer protection in those institutions.
+187
+The Bank steadfastly applied the philosophy and requirements of consumer protection across the
+lifecycle of its products and services, making clear that product and service innovation should
+be based on customers' needs in compliance with the law and regulations, so as to protect
+consumers' legitimate rights and interests. Supporting the realisation of common prosperity, the
+Bank constantly optimised its product structure and sales strategies, extended and deepened its
+product pool and improved its specialised service capabilities in line with market conditions and
+customers' diversified needs. The Bank continued to enrich its services, products and marketing
+campaigns for personal customers in rural areas at the county level and served rural revitalisation.
+It extended the brand influence of “BOC Benefit Day” in business districts and promoted resident
+consumption upgrading. The Bank proactively expanded its scenario-based financial services,
+with a focus on elderly care, social insurance, travel, higher education institutions and other key
+areas, and constantly enhanced the coverage and quality of its consumer finance business. It
+worked hard to ensure “no blind spots" for offline services, expanded smart counter functions,
+and strictly followed the Bank's Fifteen Rules for Excellent Outlet Services. Meanwhile, it
+advocated "non-stop" online services and accelerated the upgrading of its mobile banking service
+capabilities to provide consumers with full-stack personal banking services.
+"Higher quality and efficiency": emphasising key points and curbing growth in
+complaints
+The Bank strengthened dispute resolution and took targeted and all-round measures to rectify
+root problems. Focusing on reducing complaints at source, the Bank carried out comprehensive
+analysis based on consumer voice, regulatory alerts and key complaints, etc., addressed
+prominent problems with focuses on key fields such as personal loan and credit card services,
+and kept improving customer experience. It upheld and advocated the "Fengqiao Town
+Experience" in the new era, continuously deepened the diversified resolution mechanism, and
+resolved disputes in a legal, compliant and efficient manner.
+The Bank provided more training to encourage heartfelt customer services. It organised further
+training on complaint handling, carried out special training for dispute handling, established a
+rapid response mechanism, and ensured that customer service staff and training resources were in
+place.
+The Bank received 276 thousand complaints in 2023, an increase of 51.8% over 2022. Based on
+analysis by business type, 37.9% of complaints were about credit cards, 26.3% about debit cards,
+and 20.9% about loans. These three categories accounted for 85.1% of total complaints. In terms
+of the reasons for complaints, 76.7% were about policies and procedures, 9.1% about fee rates,
+and 4.0% about services. These three types of complaints accounted for 89.8% of the total. In
+terms of geographical distribution, the top five regions in terms of number of complaints in 2023
+were Guangdong (10.7%), Shenzhen (6.1%), Jiangsu (4.1%), Henan (3.7%) and Sichuan (3.3%).
+For details of complaints in 2023, please see the Report on 2023 Financial Consumer Complaints
+of Bank of China published on the Bank's website.
+188
+"A more flexible model”: making innovations in education and publicity while
+attaching importance to special customer groups
+In 2023, the Bank's brand influence in the field of financial education and publicity continued
+to expand, with more than 250,000 employees from over 11,000 outlets taking part in related
+activities. It held a total of over 75,000 financial education and publicity activities during
+the year, attracting around 800 million participations and receiving great support and wide
+recognition from all walks of life for their impact. The Bank proactively utilised multiple
+channels including its outlets, official website, WeChat official account, video account, Weibo,
+and mobile banking app to build an education and publicity matrix, and constantly enriched the
+formats of its education and publicity materials. It made full use of digital technology, provided
+online financial education services, designed themed original works via short videos and films,
+animations, cartoons, and other means that combine learning and fun. Its original online content
+received over 200 million engagements during the year, and were reported, forwarded and
+published 834 times by external media. The Bank organised activities to popularise financial
+knowledge in communities, villages, campuses, business districts, and enterprises. Based on the
+characteristics of regions and customer groups, it highlighted new ideas, new methods and new
+channels, organised activities popular among ordinary people and received positive response.
+In line with the individual needs of different customers, the Bank conducted education and
+publicity activities in a tiered and prioritised way for specific groups including new urban
+residents, seniors, young people, and people with disadvantages. Focusing on common financial
+knowledge, it held education and publicity activities related to service scenarios in consumers'
+daily lives, such as consumer credit services, personal information protection and digital financial
+services, so as to improve financial consumers' capabilities to defend their legitimate rights and
+interests. Focusing on “hot spot” issues, it intensified efforts to warn consumers of behaviour that
+would infringe on their legitimate rights and interests, such as telecom fraud, illegal fundraising,
+pension fraud and illegal agency for rights protection, and invited experts in the field to explain
+typical cases for consumers online, in a bid to help consumers develop risk prevention awareness
+and a proper wealth management mindset.
+189
+Tax and Tax Relief
+The Bank smoothened complaint channels and followed up with customers' comments. It
+continuously established and improved its complaint handling rules, standardised and optimised
+the complaint handling process. Information about consumer complaint channels, such as
+telephone numbers, mailing addresses, email addresses and websites, as well as the handling
+process for consumer complaints, has been published in prominent positions on the Bank's
+official website, business premises, mobile banking and WeChat banking, in order to facilitate
+communication with customers.
+"Greater satisfaction”: providing more suitable products and higher-quality services
+The Bank placed great emphasis on consumer complaints management, actively listened to
+consumers' voices and solved their most pressing difficulties and concerning problems.
+Appointment of External Auditors" for
+December 2023.
+In 2023, the Bank adhered to the concept of people-centric development and comprehensively
+implemented the consumer rights protection requirements set out in relevant rules and regulations
+including the Measures of the People's Bank of China for the Implementation of the Protection of
+Rights and Interests of Financial Consumers, the Guidelines on Strengthening the Development
+of Consumer Protection System and Mechanism in Banking and Insurance Institutions, and
+the Rules on Consumer Protection of Banking and Insurance Institutions. Maintaining a high
+degree of stability while seeking progress, the Bank promoted the high-quality implementation
+of relevant rules and standards, continuously strengthened the quality and effectiveness of
+consumer protection throughout the Bank, and focused on enhancing the sense of gain, safety,
+and satisfaction experienced by the mass consumer.
+183
+A-Share Holders
+In accordance with the provisions of the Notice on Implementing Differentiated Individual
+Income Tax Policy for Stock Dividends and Bonuses of Listed Companies (Caishui [2012] No.
+85) and the Notice on Differentiated Individual Income Tax Policy for Stock Dividends and
+Bonuses of Listed Companies (Caishui [2015] No. 101) issued jointly by the MOF, the State
+Administration of Taxation of PRC, and the CSRC, for shares of listed companies obtained by
+individuals from public offerings or the transfer market, where the holding period is less than
+one month (inclusive), the dividends and bonuses shall be counted as taxable income in the full
+amount; where the holding period is more than one month and less than one year (inclusive),
+50% of the dividends and bonuses shall be counted as taxable income on a provisional basis; and
+where the holding period exceeds one year, the dividends and bonuses shall not be counted as
+taxable income on a provisional basis. The individual income tax rate of 20% shall be applicable
+for all incomes mentioned above. The individual income tax levied on dividends and bonuses
+obtained by equity investment funds from listed companies is also calculated in accordance with
+the aforementioned rules.
+In accordance with the provisions of Article 26.2 of the Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises shall be tax-free.
+In accordance with Article 83 of the Implementation Rules of Enterprise Income Tax Law of the
+People's Republic of China, dividends, bonuses and other equity investment proceeds distributed
+between qualified resident enterprises referred to in Article 26.2 of the Enterprise Income Tax
+Law of the People's Republic of China mean those investment proceeds obtained from direct
+investment of resident enterprises into other resident enterprises, excluding those investment
+proceeds obtained from publicly offered and tradable stocks of resident enterprises held for less
+than 12 months on a continuing basis.
+184
+H-Share Holders
+In accordance with Chinese tax laws and regulations, the dividends and bonuses received by
+overseas resident individual shareholders from stocks issued by domestic non-foreign investment
+enterprises in Hong Kong SAR are subject to the payment of individual income tax, which shall
+be withheld by the withholding agents. However, overseas resident individual shareholders of
+stocks issued by domestic non-foreign investment enterprises in Hong Kong SAR are entitled
+to the relevant preferential tax treatment pursuant to the provisions in the tax agreements signed
+between the countries in which they are residents and China, or to the tax arrangements between
+the Chinese mainland and Hong Kong SAR and Macao SAR. Accordingly, the Bank generally
+withholds 10% of the dividends to be distributed to the individual H-Share Holders as individual
+income tax unless otherwise specified by the relevant tax laws, regulations and agreements.
+In accordance with the current practice of the Inland Revenue Department of Hong Kong SAR,
+no tax is payable in Hong Kong SAR in respect of dividends on H Shares paid by the Bank.
+In accordance with the Enterprise Income Tax Law of the People's Republic of China and the
+Implementation Rules of the Enterprise Income Tax Law of the People's Republic of China,
+dividend income obtained by non-resident enterprises shall be levied at a preferential enterprise
+income tax rate of 10%.
+In accordance with Chinese tax laws and regulations, when distributing dividends to overseas
+non-resident enterprises on offshore preference shares, the Bank shall withhold enterprise income
+tax at a rate of 10%.
+Domestic Preference Share Holders
+The individual income tax levied on dividends obtained by individuals from non-public issuance
+of domestic preference shares is calculated in accordance with the relevant Chinese tax laws and
+regulations.
+In accordance with the provisions of the Enterprise Income Tax Law of the People's Republic of
+China and the Implementation Rules of the Enterprise Income Tax Law of the People's Republic
+of China, dividend income from domestic preference shares distributed between qualified
+resident enterprises are non-taxable, and dividend income from domestic preference shares
+obtained by non-resident enterprises shall be levied at a preferential enterprise income tax rate of
+10%.
+Please refer to the section "Corporate Governance
+details of the Bank's external auditors.
+185
+Offshore Preference Share Holders
+Consumer Rights Protection
+In accordance with the current practice of the Inland Revenue Department of Hong Kong SAR,
+no tax is payable in Hong Kong SAR in respect of the dividends on offshore preference shares
+paid by the Bank.
+Auditors
+The tax and tax relief of Shanghai-Hong Kong Stock Connect shall comply with the Notice on
+the Relevant Taxation Policy regarding the Pilot Programme that Links the Stock Markets in
+Shanghai and Hong Kong issued jointly by the MOF, the State Administration of Taxation of
+PRC, and the CSRC.
+E-mail: ir@bankofchina.com
+LIU Jin
+Office Address
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Listing Affairs Representative
+Telephone: (86) 10-6659 2638
+Company Secretary
+Office Address:
+ZHUO Chengwen
+Beijing, China, 100818
+Secretary to the Board of Directors and
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Beijing, China
+Telephone: (86) 10-6659 6688
+JIANG Zhuo
+Website: www.boc.cn
+Customer Service and Complaint Hotline:
+(86) Area Code-95566
+Place of Business in Hong Kong SAR
+Bank of China Tower, 1 Garden Road, Central,
+Hong Kong, China
+Selected
+Newspapers for Information
+Disclosure (A Share)
+China Securities Journal, Shanghai Securities
+News, Securities Times, Economic Information
+Daily
+Website of the SSE for Publication of the
+Annual Report
+www.sse.com.cn
+Office Address:
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Beijing, China
+Telephone: (86) 10-6659 2638
+Vice Chairman and President
+Facsimile: (86) 10-6601 6871
+GE Haijiao
+Return on average equity = profit attributable to ordinary shareholders of the Bank ÷ weighted average capital
+and reserves attributable to ordinary shareholders of the Bank × 100%. Calculation is based on No. 9 Preparation
+and Reporting Rules of Information Disclosure of Public Offering Companies - Calculation and Disclosure of
+Return on Average Equity and Earnings per Share (Revised in 2010) (CSRC Announcement [2010] No. 2) issued
+by the CSRC.
+("Bank of China”)
+7
+8
+9
+10
+Net assets per share = (capital and reserves attributable to equity holders of the Bank at year-end - other equity
+instruments) number of ordinary shares in issue at year-end.
+Return on average total assets = profit for the year ÷ average total assets × 100%. Average total assets = (total
+assets at the beginning of the year + total assets at year-end) ÷ 2.
+E-mail: ir@bankofchina.com
+Net interest margin = net interest income ÷ average balance of interest-earning assets × 100%. Average balance is
+average daily balance derived from the Group's management accounts (unaudited).
+11
+Non-interest income to operating income = non-interest income ÷ operating income × 100%.
+12
+13
+14
+15
+16
+17
+18
+Cost to income ratio is calculated in accordance with the Measures of the Performance Evaluation of Financial
+Enterprises (Cai Jin [2016] No. 35) formulated by the MOF.
+The capital ratios are calculated in accordance with the Capital Rules for Commercial Banks (Provisional) (Y.J.H.L.
+[2012] No. 1) and related regulations, under the Advanced Approaches.
+Credit-impaired loans to total loans = credit-impaired loans at year-end ÷ total loans at year-end × 100%. Total
+loans are exclusive of accrued interest when being used to calculate credit-impaired loans to total loans.
+Non-performing loans to total loans = non-performing loans at year-end ÷ total loans at year-end ×100%. Total
+loans are exclusive of accrued interest when being used to calculate non-performing loans to total loans.
+Allowance for loan impairment losses to non-performing loans = allowance for loan impairment losses at year-
+end ÷ non-performing loans at year-end × 100%. Total loans are exclusive of accrued interest when being used to
+calculate allowance for loan impairment losses to non-performing loans.
+Credit cost = impairment losses on loans ÷ average balance of loans × 100%. Average balance of loans = (balance
+of loans at the beginning of the year + balance of loans at year-end) ÷ 2. Total loans are exclusive of accrued
+interest when being used to calculate credit cost.
+Allowance for loan impairment losses to total loans = allowance for loan impairment losses at year-end ÷ total
+loans at year-end × 100%. Total loans are exclusive of accrued interest when being used to calculate allowance
+for loan impairment losses to total loans.
+11
+Corporate Information
+Registered Name in Chinese
+中國銀行股份有限公司(“中國銀行”)
+Registered Name in English
+BANK OF CHINA LIMITED
+Legal Representative and Chairman
+Registered Address
+Shanghai Stock Exchange
+Website of the HKEX for Publication of the
+Annual Report
+18
+Building on the great progress we've made in the past year, we will aim for new heights in 2024.
+Following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for
+a New Era, we will continue to seek progress while maintaining stability and promote stability
+through progress, to foster steady innovations and breakthroughs. We will push ahead with
+transforming the growth model, making structural adjustments, improving quality and enhancing
+performance, and deliver stronger results in return for the trust and support from our shareholders
+and society, paving the way for a new era of high-quality development for Bank of China.
+17
+The Central Financial Work Conference has sounded a clarion call to accelerate efforts to
+build China into a global leader in the financial sector, endowing financial institutions with
+clearer responsibilities and mission. This represents a rare opportunity for Bank of China to
+leverage its distinctive advantages and expedite its high-quality development. With unwavering
+confidence, determined efforts, united spirits, and ownership, we pledge to act faster, and take
+more substantial and effective measures to contribute to China's modernisation. First, we will
+effectively implement the decisions and plans of the CPC Central Committee. We will
+adhere to the centralised and unified leadership of the CPC Central Committee over financial
+work, faithfully implement the strategies of the CPC Central Committee and the State Council
+in our reform and development, operation and management, risk prevention and control, and
+drive the Bank's high-quality development. Second, we will play a key role in serving the
+real economy. We will build a diversified and specialised line-up of products and services with
+a focus on the five major tasks - technology finance, green finance, inclusive finance, pension
+finance and digital finance, to accelerate the development of new quality productive forces and
+effectively enhance our competitiveness and service capabilities. Third, we will take the lead
+in serving the new development pattern featuring the positive interplay between domestic
+and international economic flows. With a focus on enhancing our global capabilities and
+international competitiveness, and improving our globalised product service capability and
+resource allocation efficiency, we will provide our customers committed to “Going Global” and
+“Bringing In” with a package of financial services, and strive to play an even more important
+role worldwide. Fourth, we will serve as an anchor for financial stability. Applying a
+systemic approach, we will navigate through the balance between power and responsibility,
+between efficiency and stability, and between prevention and reaction. We will ensure full
+compliance with regulatory requirements, safeguard financial safety, and foster a virtuous cycle
+of high-quality development and high-standard security. Fifth, we will take proactive and
+effective actions in strengthening our bank as a large state-owned financial institution.
+Guided by financial culture with Chinese characteristics, we will improve our customer-oriented
+operating system, achieve pragmatic and efficient closed-loop execution, lay solid foundations
+for the Group's digital transformation, and foster stronger synergy for development.
+16
+16
+We pushed ahead with reform and innovation, and continued to elevate the efficiency of
+corporate governance. Actively adapting to the evolving era and the demands of high-quality
+development, we optimised the corporate governance system, revised our Articles of Association,
+refined rules and procedures for the shareholders' meeting and the Board meeting, making
+corporate governance more standardised and professional. With a view to serving national
+interests and enhancing market competitiveness, we systematically reformed and enhanced our
+performance appraisal system, effectively driving business expansion and improvements in
+structure and quality. We made new progress with the building of an enterprise-level architecture
+and rolled out optimisation plans to technology systems on schedule, steadily advancing the
+digital transformation of the Group's operations and management. We strengthened process
+management for priority areas and full-cycle post-assessment, and fostered a culture of integrity,
+practicality and accountability. We enhanced synergy between branches and institutions by
+establishing mechanisms to ensure access to the Bank's global resources and services accessible
+at any point of contact and to promote collaboration between non-banking arms. We also made
+constant improvements to governance at non-banking subsidiaries and witnessed significant
+performance rebound in return.
+We balanced security and development, and effectively prevented and defused financial
+risks. With a focus on eliminating and controlling risks at source, we continued to enhance our
+enterprise risk management system, incorporating outsourcing risk and data security risk into the
+system to reinforce effective identification and control of non-traditional risks. We established
+a dynamic risk identification mechanism and carried out comprehensive risk inspections across
+the Group. We conducted stress tests on multiple key areas and developed contingency plans,
+completing the full cycle of risk assessment, investigation, and emergency responses. We sped
+up improving the intelligent risk control system and advanced the development of the Group's
+unified risk dashboard, making our risk management more effective and forward-looking. We
+bolstered overseas risk management, formulating market-specific risk strategies for overseas
+institutions and putting in place a 24/7 global monitoring mechanism to respond to fluctuations
+in financial markets worldwide. In the domestic market, we also applied a city-by-city approach
+to optimise our credit structure in real estate and meet reasonable financing needs of developers,
+both state-owned and from the private sector, contributing to the steady and healthy development
+of the property market.
+15
+We've remained dedicated to customer-centric principles and consistently improved service
+quality and efficiency. To meet people's aspiration for a better life, we took solid steps in
+product innovation, process optimisation and consumer rights protection. We expanded offerings
+of wealth management products and ensured product safety, profitability, and liquidity; allowing
+us to take the total financial assets of personal clients under our management to over RMB14
+trillion. We lowered interest rates on existing mortgages for first-time home buyers, benefiting
+loans exceeding RMB2.5 trillion. We supported growth of household spending, with special
+focuses on large purchases like new energy vehicles and electronics, leading to a nearly 45%
+increase in the balance of non-housing consumer loans. We introduced new service schemes for
+"migratory pensioners" and continued to adapt our outlets and online channels to accommodate
+the needs of elderly customers, ensuring smooth delivery of pension financial services. We
+continuously increased credit support to agriculture-related fields, innovating product models
+tailored to local conditions, making financial services more accessible to farmers, and actively
+contributing to rural revitalisation and the modernisation of agriculture and rural areas.
+We strengthened our advantages in globalisation and supported higher-standard opening
+up. We opened Riyadh Branch in Saudi Arabia and a representative office in Papua New Guinea
+in the year, expanding our global service network to cover 64 countries and regions outside
+the Chinese mainland. With a focus on improving the market competitiveness of our overseas
+institutions, we consolidated our business advantages in Hong Kong and Macao, and overseas
+institutions increased their contribution to the Group's overall profits. We were designated
+as the RMB clearing bank in Cambodia and in Serbia, and continued to lead the market in
+cross-border RMB clearing and settlement volumes as well as in domestic savings and lending
+in foreign currencies. We took initiative to facilitate the positive interplay between domestic and
+international economic flows, and supported major national events like the China International
+Import Expo, the China International Consumer Products Expo, and China International Fair for
+Trade in Services in attracting global participants. Contributing to the stability and structural
+optimisation of China's foreign trade, we innovated financial services for new business trends
+including the export of electric vehicles, lithium batteries and solar cells, cross-border e-commerce,
+and overseas warehouses, which brought the Group's international settlement volume for the year
+to around USD8 trillion. We also accelerated facilitation of payments for international travelers
+to China, helped clear up payment service bottlenecks, and expanded our lead in overseas bank
+card acquiring business in China.
+14
+We optimised supply of financial services and contributed to the high-quality development
+of the real economy. We increased support for major national strategies, and the key and
+under-served areas of the economy, achieving a growth of RMB2.4 trillion in the balance of
+RMB loans as well as optimisation in the structure. To facilitate the formation of a modern
+industrial system and promote major technological breakthroughs, we granted credit lines of
+nearly RMB1.5 trillion to around 68,000 tech enterprises, boosting the virtuous cycle of "research
+- industry - financing". We implemented concrete measures to actively address the concerns of
+private enterprises, and formulated an action plan to support them to "Go Global”; the balance
+of loans to private enterprises increased by RMB790 billion, representing a growth of over 27%.
+We accelerated the digital transformation of loans to micro and small businesses and expanded
+the outreach of our inclusive finance business, growing the balance of inclusive loans to over
+RMB1.7 trillion, up by over 40%. In response to climate change, we actively participated in
+global green governance. We integrated green standards into our daily operations, enhanced the "BOC
+Green+" brand, and led the industry in green bond underwriting deals.
+GE Haijiao
+As at the end of 2023, the Group's assets and liabilities totalled RMB32.43 trillion and
+RMB29.68 trillion respectively, an increase of 12.25% and 12.70% from the prior year-end;
+operating income stood at RMB624.138 billion, up by 6.42%; the non-performing loan ratio was 1.27%,
+a decrease of 0.05 percentage points; and the capital adequacy ratio was 17.74%, an increase of
+0.22 percentage points. The Board of Directors has proposed a cash dividend of RMB2.364 per
+10 ordinary shares, representing a dividend payout ratio of 30%.
+Message from the Chairman
+13
+Offshore Preference Share Second Tranche
+The Stock Exchange of Hong Kong Limited
+Stock Name: BOC 20USDPREF
+Stock Code: 4619
+Fourth Tranche
+Stock Name: 中行優4
+Stock Code: 360035
+Stock Code: 360033
+Stock Name: 中行優3
+Third Tranche
+Shanghai Stock Exchange
+Domestic Preference Share
+Stock Code: 3988
+The Stock Exchange of Hong Kong Limited
+Stock Name: Bank of China
+H Share
+Dividend per share is the dividend per ordinary share distributed to ordinary shareholders.
+Seasons flowing, we keep forging ahead. 2023 was the first year to fully implement the guiding
+principles of the 20th National Congress of the Communist Party of China (CPC). Bank of
+China, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New
+Era, resolutely carried out strategies and plans of the CPC Central Committee and the State
+Council. We fully and faithfully embraced the new development philosophy on all fronts and
+actively provided high-quality financial services to support economic and social development.
+The Group's overall business performance and corporate management are stable and improving,
+with continuous advancements in operational efficiency, composite strength and market
+competitiveness, leading to sound results.
+No. 1 Fuxingmen Nei Dajie, Xicheng District,
+Beijing, China
+Chairman
+Message from the President
+www.hkexnews.hk
+Place Where Annual Report Can Be Obtained
+Head Office of Bank of China Limited
+Shanghai Stock Exchange
+Legal Advisor
+King & Wood Mallesons
+Linklaters
+12
+Auditors
+Domestic Auditor
+PricewaterhouseCoopers Zhong Tian LLP
+Office Address:
+11/F PricewaterhouseCoopers Center, Link
+Square 2, 202 Hu Bin Road, Huangpu District,
+Shanghai, China
+Certified Public Accountants who signed the
+auditor's report:
+Ms. HO Shuk Ching Margarita, Mr. WANG Wei,
+Mr. LI Dan
+International Auditor
+PricewaterhouseCoopers
+Office Address:
+28 March 2024
+22/F, Prince's Building, Central, Hong Kong,
+China
+911000001000013428
+Financial Institution Licence Serial Number
+B0003H111000001
+Registered Capital
+RMB294,387,791,241
+Securities Information
+A Share
+Stock Name: 中國銀行
+Stock Code: 601988
+19
+We registered rapid growth in main business areas, and delivered better and more effective
+services to the real economy. We optimised our capital structure, worked hard to develop
+more diverse, inclusive and accessible products and services, and channelled more financial
+resources to serve technological innovation, advanced manufacturing, green development and
+micro, small and medium-sized enterprises. The balance of strategic emerging industry loans,
+loans granted to manufacturing industries, and technology finance loans increased by 74.35%,
+28.05% and 30.94%, respectively. And we granted credit lines to more than 15 thousand national
+and provincial-level “specialised and sophisticated enterprises that produce new and innovative
+products". We moved faster to build us into “the preferred bank for green financial services".
+Our domestic green credit grew by more than RMB1.1 trillion in 2023, an increase of 56.34%
+year-on-year. We continued to support people's livelihood and employment through the Bring
+Jobs to Families campaign, and issued over RMB270 billion special loans to self-employed
+individuals, new urban residents, and other types of market participants. We served over 18,200
+corporate annuity clients, and the pension fiduciary assets under our custody increased by about
+23.29% year-on-year. We further improved mobile banking functions and grew the number of
+monthly active users to nearly 90 million. The number of e-CNY partner merchants and e-CNY
+transaction size increased rapidly, and application scenarios of e-CNY continued to be expanded.
+We recorded a more robust financial performance with continued growth in assets and
+liabilities. The Group steadily improved its overall strength, grew its total assets and liabilities
+by RMB3.54 trillion and RMB3.35 trillion, respectively, from the end of 2022. We continued
+to optimise the structure of our assets and liabilities and secure our funding sources, with the
+deposits-to-liabilities ratio rising by 0.47 percentage points. Operating income reached a new
+high of RMB620 billion. Net interest income increased steadily. Non-interest income exceeded
+RMB150 billion, up by 3.56 percentage points as a share of total income. We allocated more
+resources towards key products, key areas and key regions, and improved the costs and
+expenditures structure. Our cost-to-income ratio stood at 28.50%, down 0.42 percentage points.
+In 2023, Bank of China earnestly implemented the decisions and plans of the CPC Central
+Committee and the State Council, improved operation and management on all fronts, and
+continued to build up market competitiveness while serving the bigger picture of social and
+economic development. We expanded the Group's assets, liabilities and operating income
+further; delivered on targets for all key indicators as set by the Board of Directors; and made
+progress while ensuring stability in performance.
+Unified Social Credit Code
+6
+0.56
+Allowance for loan impairment losses = allowance for loans at amortised cost + allowance for loans at fair value
+through other comprehensive income.
+9
+0.92
+0.87
+0.89
+0.85
+0.85
+0.80
+68
+Return on average equity (%)
+Return on average total assets (%)
+5.61
+The investments include financial assets at fair value through profit or loss, financial assets at fair value through
+other comprehensive income and financial assets at amortised cost.
+5.98
+6.99
+6.98
+7.58
+7
+0.191
+0.197
+0.221
+0.232
+0.232
+0.2364
+0.61
+6.47
+10.77
+10.81
+11.28
+28.00
+26.73
+28.17
+27.88
+28.92
+28.50
+12
+regulations in the Chinese mainland, %)
+Cost to income ratio (calculated under
+29.08
+26.73
+29.81
+25.59
+21.69
+25.25
+Non-interest income to operating income (%) 11
+1.89
+1.85
+1.75
+1.76
+1.75
+1.59
+Net interest margin (%)
+11.45
+10.61
+0.61
+0.70
+0.73
+0.72
+180,575 151,729
+390,050
+425,142 415,918
+466,545 459,266 460,678
+157,593 127,195 158,461
+624,138 586,461 619,139 605,717 567,647
+(199,506) (231,196) (226,355) (202,411) (198,269)
+(106,562) (103,959) (103,993) (104,220) (119,016) (102,153)
+294,643 282,996 283,950 275,142 246,220 249,588
+295,608 283,641 284,595 276,620 246,378 250,645
+236,725 237,504 227,339 205,096
+246,371
+Profit for the year
+Profit before income tax
+Operating profit
+3
+Impairment losses on assets
+(222,933)
+Operating expenses
+2
+Non-interest income
+Operating income
+Results of operations
+Net interest income
+2019
+2020
+2021
+2023 restatement) restatement)
+Note
+(before
+2022
+2022
+(after
+Unit: RMB million
+Note: The financial information in this report has been prepared in accordance with IFRS Accounting Standards. The
+data are presented in RMB and reflect amounts related to the Group, unless otherwise noted.
+159,960
+Capital ratios
+550,010
+Profit attributable to equity holders of the
+0.74
+2,629,510 2,423,973 2,427,589 2,225,153 2,038,419 1,851,701
+294,388 294,388 294,388 294,388 294,388 294,388
+32,432,166 28,893,548 28,913,857 26,722,408 24,402,659 22,769,744
+19,961,779 17,552,761 17,554,322 15,712,574 14,216,477 13,068,785
+(485,298) (437,241) (437,241) (390,541) (368,619) (325,923)
+7,158,717 6,435,244 6,445,743 6,164,671 5,591,117 5,514,062
+29,675,351 26,330,247 26,346,286 24,371,855 22,239,822 20,793,048
+22,907,050 20,201,825 20,201,825 18,142,887 16,879,171 15,817,548
+67
+Key financial ratios
+Net assets per share (RMB)
+Dividend per share (before tax, RMB)
+Basic earnings per share (RMB)
+Per share
+Share capital
+Capital and reserves attributable to equity
+holders of the Bank
+Due to customers
+Total liabilities
+5
+Investments
+4
+Allowance for loan impairment losses
+Loans, gross
+Total assets
+Financial position
+226,522 227,439 216,559 192,870 187,405
+68,298 68,298 65,060 57,994 56,228
+N.A.
+Total dividend of ordinary shares
+231,904
+Bank
+201,891
+13
+10.12
+2,161,825 1,991,342
+2.60
+2.49
+2.50
+2.50
+2.44
+18
+0.80
+0.76
+0.66
+0.56
+182.86
+2.50
+177.84
+188.73
+188.73
+དྭཱིཀྑུཾ
+Allowance for loan impairment losses to total
+loans (%)
+0.57
+191.66
+16
+17
+17
+Credit cost (%)
+non-performing loans (%)
+187.05
+Exchange rate
+USD/RMB year-end central parity rate
+7.0827
+5
+4
+Impairment losses on assets = Credit impairment losses + Impairment losses on other assets.
+3
+Non-interest income = net fee and commission income + net trading gains/(losses) + net gains/(losses) on
+transfers of financial assets + other operating income.
+The Group has adopted International Financial Reporting Standard No.17 Insurance Contracts ("IFRS 17") as
+issued by the International Accounting Standards Board ("IASB") with the initial application date 1 January
+2023, which resulted in the restatement of the comparative figures for the previous period starting from 1 January
+2022 in accordance with the transitional provisions of IFRS 17. In this report, the figures starting from 1 January
+2022 have been restated. There is no restatement for other previous comparative figures.
+2
+1
+Notes:
+10
+0.8958
+0.8416
+0.8176
+7.8155
+8.0250
+7.2197
+7.4229
+7.4229
+0.9062 0.8933 0.8933
+HKD/RMB year-end central parity rate
+7.8592
+EUR/RMB year-end central parity rate
+6.9762
+6.5249
+6.3757
+Net common equity tier 1 capital
+Allowance for loan impairment losses to
+1337
+6.9646 6.9646
+1.46
+14.11
+13.83
+Tier 1 capital adequacy ratio (%)
+11.30
+11.28
+11.30
+11.84
+11.84
+11.63
+Common equity tier 1 capital adequacy ratio (%)
+394,843
+525,108
+573,481
+573,481
+727,136
+Net tier 2 capital
+287,843 210,057
+329,845
+381,648
+408,447 381,648
+Net additional tier 1 capital
+1,704,778 1,596,378
+1,843,886
+1.37
+1,991,342
+14.11
+13.32
+458,434
+12.79
+1.37
+1.46
+13.19
+1333
+1.33
+1.32
+1.32
+1.27
+15
+1.32
+1.32
+1.27
+14
+1.33
+16.22
+Non-performing loans to total loans (%)
+17.52
+Capital adequacy ratio (%)
+Credit-impaired loans to total loans (%)
+Asset quality
+15.59
+17.74
+16.53
+17.52
+15
+Strengthened the development of the Board of Supervisors. The Board of Supervisors
+improved its policy system and revised its rules and policies, such as the Rules of Procedure
+of the Board of Supervisors, further refining the supervisory responsibilities of the Board of
+Supervisors and its special committees. It boosted the professional competence of supervisors
+and organised themed training sessions, so as to ensure that supervisory efforts closely followed
+regulatory requirements and new changes in prevailing conditions. Meanwhile, it strengthened
+the support, incentives and constraints for supervisors to perform their duties, improved key
+information reporting mechanisms for the Board of Supervisors and supervisors, and conducted
+annual performance evaluation of the Board of Supervisors and supervisors. All supervisors
+performed their supervision duties faithfully and diligently, played to their own strengths, and
+made efforts to improve their policy awareness and duty performance capability. In addition,
+they actively participated in meetings, carefully deliberated on proposals, listened to work
+reports, carried out key supervision, and provided professional, well-considered, and unbiased
+suggestions, conscientiously fulfilling their supervisory function.
+The Board of Supervisors
+Conducted key supervision and research supervision through a problem-oriented approach.
+The Board of Supervisors continued to closely combine key supervision with routine supervision
+in proactive alignment with overall national conditions, including focusing on key areas related
+to the high-quality development of the Bank and the main duties and responsibilities of the
+Board of Supervisors. It conducted five key supervision projects: namely, supporting the national
+plan for domestic demand expansion, consolidating the advantages of the Bank's globalised
+operations to serve China's high-level opening up, strengthening the supervision of financial and
+accounting affairs, enhancing credit management effectiveness, and managing financial market
+risks, and completed five key supervision reports which achieved good supervisory results. The
+Board of Supervisors paid six supervisory visits to domestic branches/institutions of the Bank,
+extensively asking for advice, figuring out demands, and enquiring actual results at the primary
+level. While identifying problems at the Head Office level through a bottom-up approach, the
+Board of Supervisors helped the Bank optimise decision-making process, refine policies, and
+promote its work effectively. Meanwhile, it extracted useful experiences and good practices from
+research activities to institutionalise and standardise the research work.
+194
+Enhanced safeguarding of the supervision mechanism. The Board of Supervisors expanded its
+supervisory information sources, improved its attendance and contributions to meetings, ensured
+it had access to comprehensive and timely information regarding the Bank's overall operations,
+and uncovered fundamental and routine issues that formed the basis of its supervisory opinions.
+The Board of Supervisors and its special committees refined their operations to enhance the
+quality and efficiency of their deliberations and decision-making in meetings. The Board of
+Supervisors followed up on its supervisory opinions by tracking implementation according to
+category. It pushed forward the effective application of supervisory results, deepened supervisory
+cooperation with various parties, and strengthened the guidance for internal audits and
+supervision for external audits.
+195
+Working Performance of the External Supervisors
+During the reporting period, the Board of Supervisors held no objection to such matters under
+its supervision regarding the Bank's operational and legal compliance, financial position, use of
+raised funds, purchase and sale of assets, connected transactions, internal control, and corporate
+information disclosure.
+During the reporting period, Mr. JIA Xiangsen, Mr. HUI Ping and Mr. CHU Yiyun, the external
+supervisors of the Bank, performed their supervisory duties in strict accordance with the
+provisions of the Articles of Association of the Bank. They personally attended all meetings of
+the Board of Supervisors and its special committees during their terms of office, and participated
+in the research and decision-making of the significant affairs of the Board of Supervisors. They
+were present at shareholders' meetings and attended the meetings of the Board of Directors, the
+Strategic Development Committee, Corporate Culture and Consumer Protection Committee,
+Audit Committee, Risk Policy Committee, Personnel and Remuneration Committee, and
+Connected Transactions Control Committee. They led the key supervision projects of the Board
+of Supervisors, provided advice and suggestions based on their experience and expertise, and
+contributed to the effective performance of supervisory duties by the Board of Supervisors.
+Continually strengthened supervision of risk management and internal control. Focused on
+carrying out routine risk and internal control supervision in key areas, the Board of Supervisors
+attended the meetings of the Board of Directors and its Risk Policy Committee as well as the
+Senior Management and its Risk Management and Internal Control Committee, heard relevant
+reports, and completed four quarterly reports on risk and internal control. These reports focused
+on risk management in key areas, prompted the effective prevention and resolution of real estate
+and local government debt risks, and encouraged more forward-looking risk management by
+controlling market risk, interest rate risk, exchange rate risk and liquidity risk. Attention was
+also paid to non-traditional risk management, the Board of Supervisors suggested improving the
+workplace safety management mechanism, consolidating the foundations of IT management,
+and properly protecting the rights and interests of consumers. Special attention was paid to
+internal control and compliance management, the Board of Supervisors recommended reinforcing
+internal control over important positions, key businesses, and primary-level institutions. The
+Board of Supervisors also urged the proper implementation of new regulations such as the
+ECL approach and the risk management of off-balance-sheet businesses. In strengthening the
+supervision of how risks arising from cross-border and cross-sector operations are managed,
+the Board of Supervisors proactively forecast and explored challenges posed by changes in the
+global economic and financial landscape to the Bank's globalised and integrated operations,
+analysed potential risks in a timely manner, and suggested strengthening the building of an
+integrated risk management mechanism that covers local and foreign currencies, domestic and
+overseas operations, and on- and off-balance-sheet businesses, reinforcing the monitoring and
+screening of major risks, enhancing the effectiveness of stress tests, and fostering emergency
+resilience. Through risk and internal control supervision, it urged the Senior Management and
+relevant departments to continuously improve the effectiveness of the Bank's comprehensive risk
+management.
+196
+28 March 2024
+Over the past year, the Board of Supervisors put forward more than 200 supervisory
+recommendations in various forms, such as supervisory proposal letters, supervisory evaluation
+comments, and supervisory reports, etc. The Board of Directors strongly supported and responded
+positively to the work of the Board of Supervisors, and requested the Senior Management to
+instruct relevant departments to earnestly study and implement the supervisory recommendations
+of the Board of Supervisors. The Senior Management attached great importance to the work of
+the Board of Supervisors and worked to cooperate by supervising relevant departments to put
+forward improvement measures and implement them in conjunction with their daily work, and to
+provide regular feedback to the Board of Supervisors on rectification progress. The work of the
+Board of Supervisors has played an active and effective role in helping the Bank strengthen its
+strategy implementation, improve operation and management activities, and prevent and mitigate
+risks.
+Carried out thorough financial supervision by reviewing regular reports. The Board of
+Supervisors oversaw deliberations regarding the Bank's regular reports in accordance with the
+law and regulations. It received quarterly reports on operating results, oversaw preparation
+and review procedures for regular reports, ensured that regular reports truly, accurately, and
+completely reflected the operation and management of the Bank, organised for all supervisors
+to sign written confirmation opinions, and supervised the compliance and reasonableness of the
+profit distribution plan, issuing its deliberative opinions accordingly. The Board of Supervisors
+strengthened supervision of significant financial activities as well as the decision-making and
+implementation of financial matters. It participated in meetings in which business conditions
+were analysed, attended meetings of the Financial Approval Committee, and completed four
+quarterly supervision reports regarding the Bank's financial conditions. With a focus on
+performance evaluation management, these reports recommended more precise distribution of
+financial resources and more robust support and guidance for the implementation of performance
+evaluation plans by institutions at all levels. With special attention paid to the building of a
+long-acting financial compliance mechanism, the Board of Supervisors suggested improving
+the mechanism for reviewing financial expenditures and strengthening related post-evaluation
+management. Particular attention was also paid to preparations for the implementation of new
+regulations on capital management, the Board of Supervisors suggested accelerating work
+progress to ensure timely compliance with the new regulations. This financial supervision work
+encouraged the Senior Management and relevant departments to continuously improve the
+effectiveness of financial management.
+191
+Standardised supervision and evaluation of duty performance. To supervise day-to-day
+duty performance, the Board of Supervisors attended shareholders' meetings and meetings of
+the Board of Directors, relevant special committees, and the Senior Management, and kept
+informed of and oversaw the performance of the Board of Directors, the Senior Management
+and their members in complying with laws and regulations, acting on national decisions and
+plans, implementing regulatory requirements, executing resolutions reached at the shareholders'
+meetings and the meetings of the Board of Directors, refining the corporate governance
+mechanism, and improving operation and management conditions, etc. It drafted four quarterly
+supervision reports on the performance of the Board of Directors and the Senior Management,
+along with accompanying supervisory opinions. To enhance annual evaluations of duty
+performance, the Board of Supervisors conducted group interviews with non-executive directors,
+and organized written interviews with executive directors, independent non-executive directors,
+and senior management members. Through these efforts, along with supervision of their routine
+duty performance, the Board of Supervisors issued 23 annual evaluation opinions on the duty
+performance of the Board of Directors, the Senior Management and their members, and reported
+them to the shareholders' meetings and regulatory authorities as required, as well as providing
+written feedback to directors and senior management members. These duty performance
+supervision and evaluation activities prompted directors and senior management members to
+perform their duties diligently and efficiently.
+Earnestly fulfilled strategy supervision duties. Special attention was paid to the
+implementation progress of the development plan for the 14th Five-Year Plan period. The Board
+of Supervisors attended working meetings across the entire Bank as well as meetings of the
+Board of Directors and the Strategic Development Committee, regularly prompted discussions
+about strategy implementation and heard relevant reports, and closely tracked the step-by-step
+fulfilment of quantitative indicators and the implementation of the Bank's key quantitative tasks,
+such as enhancing the market competitiveness of branches in key regions and cities of China,
+refining the management of market-by-market strategies for overseas institutions, and expediting
+the building of an enterprise-level architecture. It issued supervisory evaluation opinions and
+reminded the Bank to pursue a problem-oriented approach and intensify process management
+of plan implementation. The Board of Supervisors pressed ahead with the interim re-inspection
+of the development plan, with a focus on assessing its alignment with the guiding principles of
+the Central Financial Work Conference and the Bank's working requirements of high-quality
+development. It compiled four quarterly supervision reports on strategy implementation, and
+recommended that the Bank maintain strategic focus, optimise working tactics in light of actual
+conditions, scientifically review the quantitative indicators outlined in the development plan,
+and supplement or refine the key tasks set out in the development plan. Through strategic
+supervision, it encouraged the Board of Directors, the Senior Management and relevant
+departments to continuously improve the effectiveness of strategy implementation.
+Supervisors prompted the Bank to uphold “risk bottom-line” thinking, continuously improve the
+effectiveness of comprehensive risk management, and steadfastly safeguard the safety of assets
+across the Bank. Based on the information obtained, the Board of Supervisors voiced supervisory
+opinions on various aspects of work carried out throughout the year.
+192
+Strongly emphasised the implementation of major national decisions and plans in its
+supervisory work. Special attention was paid to how the Bank served the real economy. The
+Board of Supervisors focused on supplying financial resources to key areas such as scientific and
+technological innovation, advanced manufacturing, green development, and micro, small, and
+medium-sized enterprises, in order to assist the implementation of national strategies including
+coordinated regional development and the expansion of domestic demand. The Bank also
+undertook initiatives to efficiently develop technology finance, green finance, inclusive finance,
+pension finance, and digital finance, improving its mechanism for supporting the implementation
+of major national decisions and plans and pinpointing areas in which the implementation of
+such plans align with the Bank's own high-quality development. Special attention was paid to
+how the Bank's services can assist China's high-level opening up. The Board of Supervisors
+recommended that the Bank give full play to its strengths, enhance its global competitiveness
+and influence, and better serve China's new development pattern of “dual circulation”. Special
+attention was paid to how effectively the Bank prevented and resolved risks. The Board of
+In 2023, in accordance with relevant laws and regulations, regulatory requirements, and
+the Articles of Association of the Bank, the Board of Supervisors earnestly performed its
+supervisory duties, continuously enhanced the quality and efficiency of its supervision in the
+fields of strategy, duty performance, finance, risk, and internal control, and continued to play a
+constructive supervisory role in the Bank's corporate governance, thus contributing to the Bank's
+high-quality development.
+Performance of Supervision and Inspection by the Board of
+Supervisors
+In 2023, the Finance and Internal Control Supervision Committee of the Board of Supervisors
+held four on-site meetings and one meeting via written resolution, at which it previewed
+proposals regarding the Bank's four regular reports, the 2022 profit distribution plan, the 2022
+corporate social responsibility report (environmental, social and governance), the 2022 internal
+control assessment report, the evaluation opinions of the Board of Supervisors on the Bank's
+performance in strategy implementation in 2022, the revision of the working rules of the Finance
+and Internal Control Supervision Committee of the Board of Supervisors, and the revision of
+the implementation measures of the Board of Supervisors for financial and risk-based internal
+control supervision.
+In 2023, the Duty Performance and Due Diligence Supervision Committee of the Board of
+Supervisors held four on-site meetings and two meetings via written resolutions, at which it
+previewed proposals regarding the evaluation opinions of the Board of Supervisors on the duty
+performance and due diligence of the Board of Directors, the Senior Management, and their
+members for 2022; the performance evaluation results for the Chairwoman of the Board of
+Supervisors for 2022; the implementation plan on performance evaluation for the Chairwoman
+of the Board of Supervisors in 2023; the performance evaluation results and remuneration
+distribution plan for external supervisors; the implementation plan for performance evaluation of
+external supervisors in 2023; the revision of the working rules of the Duty Performance and Due
+Diligence Supervision Committee of the Board of Supervisors; and the revision of measures for
+performance evaluation of external supervisors.
+Note: Supervisor Mr. ZHOU Hehua didn't attend the meeting of the Board of Supervisors held on 30 October 2023 in
+person due to other business arrangements.
+5/5
+Significant Events
+0/0
+ZHANG Keqiu
+193
+Material Litigation and Arbitration
+amount.
+Purchase and Sale of Material Assets
+LENG Jie
+199
+For announcements regarding other significant events during the reporting period made in
+accordance with regulatory requirements, please refer to the websites of the SSE, the HKEX and
+the Bank.
+Other Significant Events
+For details of the Bank's environmental, social and governance performance, please refer to the
+Bank's 2023 Corporate Social Responsibility Report (Environmental, Social and Governance)
+published on the websites of the SSE, the HKEX and the Bank.
+Information on Environmental, Social and Governance Performance
+During the reporting period, neither the Bank nor its controlling shareholder failed to perform
+any obligations from effective legal instruments of the court or pay off any due debt in large
+Integrity of the Bank and its Controlling Shareholder
+198
+During the reporting period, neither the Bank nor any of its directors, supervisors, senior
+management members or controlling shareholder was subject to compulsory measures due to
+alleged crimes, subject to criminal punishment, investigated by CSRC due to potential violation
+of laws and regulations or subject to administrative punishment by CSRC, or had material
+administrative punishment imposed on them by other competent authorities. None of the
+directors, supervisors, senior management members or controlling shareholder was detained by
+disciplinary inspection and supervision authorities due to any potential material breach of laws,
+disciplinary regulations or duty crimes, nor did any such matter affect their duty performance.
+None of the directors, supervisors or senior management members was subject to compulsory
+measures by other competent authorities due to potential violation of laws and regulations, nor
+did any such matter affect their duty performance.
+Disciplinary Actions Imposed on the Bank, its Directors, Supervisors,
+Senior Management Members and Controlling Shareholder
+Huijin made a “non-competing commitment” when the Bank launched its IPO. As at 31
+December 2023, Huijin has strictly observed and has not breached such undertaking.
+Undertakings
+During the reporting period, there was no misappropriation of the Bank's funds by its controlling
+shareholder or other related parties for non-operating purposes.
+The Bank was involved in certain litigation and arbitration cases in the regular course of its
+business. Given the range and scale of its international presence, the Bank may be involved in
+a variety of litigation, arbitration and judicial proceedings within different jurisdictions in the
+course of its regular business operations in different countries and regions across the world, and
+the ultimate outcomes of these proceedings involve various levels of uncertainty. Based upon the
+opinions of internal and external legal counsels, the Senior Management of the Bank believes
+that, at the current stage, these matters will not have a material impact on the financial position
+or operating results of the Bank. Should the ultimate outcomes of these matters differ from the
+initially estimated amounts, such differences will impact the profit or loss in the period during
+which such a determination is made.
+Misappropriation of Funds by Controlling Shareholder and Other
+Related Parties
+Other Major Contracts
+During the reporting period, there was no violation of laws, administrative regulations or rules of
+the CSRC in the Bank's guarantee business.
+The Bank's guarantee business principally comprises letters of guarantee. For details of the
+outstanding amount of letters of guarantee issued by the Bank as at 31 December 2023, please
+refer to Note V.41.7 of the Consolidated Financial Statements.
+As approved by the PBOC and the NFRA, the Bank's guarantee business is an off-balance sheet
+item in the ordinary course of its business. The Bank operates its guarantee business in a prudent
+manner and has formulated specific management measures, operational processes and approval
+procedures in respect of the risks of guarantee business and carries out this business accordingly.
+During the reporting period, save as disclosed above, the Bank did not enter into or allow to
+subsist any material guarantee business that is required to be disclosed.
+Material Guarantee Business
+197
+During the reporting period, the Bank did not take, or allow to subsist any significant custody
+of, sub-contract or lease assets from other companies, or allow its material business assets to be
+subject to such arrangements, in each case that is required to be disclosed.
+Material Custody, Sub-contracts and Leases
+Major Contracts and Enforcement thereof
+The Bank had no significant connected transactions during the reporting period. For details of
+the related party transactions as defined by the relevant accounting standards by the end of the
+reporting period, please refer to Note V.43 of the Consolidated Financial Statements.
+Significant Connected Transactions
+The Bank approved a long-term incentive policy, including the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan, at the Board meeting and the extraordinary
+shareholders' meeting held in November 2005. To date, the Management Stock Appreciation
+Rights Plan and the Employee Stock Ownership Plan have not been implemented.
+Implementation of Stock Incentive Plan and Employee Stock
+Ownership Plan
+During the reporting period, the Bank did not undertake any purchase and sale of material assets.
+During the reporting period, the Bank did not enter into or allow to subsist any other major
+contract that is required to be disclosed.
+Former Supervisors
+Supervisors
+5/5
+"Wider coverage”: protecting information and safeguarding the bottom line that no
+systemic risks should occur
+The Bank constantly improved its management mechanism for personal consumer information
+protection, issued the Guidelines on Impact Assessment of Personal Consumer Information
+Protection (Trial), prepared the assessment form and impact assessment report template, and
+clarified and refined the content of the impact assessment of personal consumer information,
+ways to conduct assessment, division of responsibilities, implementation process and other
+working requirements. It incorporated the requirements of personal consumer information
+protection into specific business scenarios, and continually improved the content of consumer
+agreements, letters of authorisation, and contracts. It regularly implemented special self-
+examination and rectification for personal consumer information protection. Focusing on key
+links including policy development, technological protection, systematic management and
+control, employee behaviour management, and cooperative organisation management, it carried
+out risk examinations in an all-around manner and implemented rectifying measures to protect
+consumers' information security. The Bank regularly revised its rules and policies on personal
+information protection, and strengthened policy compliance publicity and guidance, case studies,
+risk alert and warning education for employees via risk alerts, special training, and information
+exchange. There were more than 300,000 participations in personal consumer information
+protection training throughout the Bank in 2023.
+For more details regarding the Bank's consumer protection activities, please refer to the
+Corporate Social Responsibility Report of Bank of China for 2023 (Environmental, Social and
+Governance).
+5/5
+Executive Directors: GE Haijiao, LIU Jin, LIN Jingzhen
+Non-executive Directors: ZHANG Yong, ZHANG Jiangang, HUANG Binghua, LIU Hui,
+SHI Yongyan
+Independent Directors: Martin Cheung Kong LIAO, CHUI Sai Peng Jose, Jean-Louis EKRA,
+E Weinan, Giovanni TRIA, LIU Xiaolei
+190
+The Board of Directors
+28 March 2024
+Report of the Board of Supervisors
+Meetings of the Board of Supervisors
+Members of the Board of Directors
+In 2023, the attendance of each supervisor at the meetings of the Board of Supervisors is given
+below:
+In 2023, the Bank held four on-site meetings of the Board of Supervisors on 30 March, 28
+April, 30 August, and 30 October respectively, as well as one meeting via written resolution.
+At these meetings, the Board of Supervisors reviewed and approved 40 proposals, including
+proposals regarding the Bank's four regular reports; the 2022 profit distribution plan; the 2022
+corporate social responsibility report (environmental, social and governance); the 2022 internal
+control assessment report; the 2022 work report of the Board of Supervisors; the evaluation
+opinions of the Board of Supervisors on the duty performance and due diligence of the Board
+of Directors, the Senior Management, and their members for 2022; the performance evaluation
+results for the Chairwoman of the Board of Supervisors for 2022; the remuneration distribution
+plan for the Chairwoman of the Board of Supervisors in 2022; the implementation plan on
+performance evaluation for the Chairwoman of the Board of Supervisors in 2023; the results
+of the performance evaluation and remuneration distribution plan for external supervisors; the
+implementation plan for the performance evaluation of external supervisors in 2023; the revision
+of the rules of procedure of the Board of Supervisors; the revision of the working rules of the
+Duty Performance and Due Diligence Supervision Committee of the Board of Supervisors; the
+revision of the working rules of the Finance and Internal Control Supervision Committee of the
+Board of Supervisors; the revision of the implementation measures of the Board of Supervisors
+for financial and risk-based internal control supervision; and the revision of measures for
+performance evaluation of external supervisors. In addition, the Board of Supervisors issued
+supervision and evaluation opinions regarding the Bank's performance in strategy implementation
+in 2022, as well as the Bank's reputational risk management, information disclosure management,
+capital management and management of advanced approaches for capital measurement, liquidity
+risk management, internal audit, consolidated management, stress test management, data
+governance, internal control, case prevention, compliance management, anti-money laundering (AML)
+management, expected credit loss (ECL) approach management, remuneration management, off-
+balance sheet business management, employee behaviour management, product management,
+consumer protection, market risk management, and comprehensive risk management.
+5/5
+5/5
+Number of meetings attended in person/
+Number of meetings convened during term of office
+CHU Yiyun
+4/5
+JIA Xiangsen
+ZHOU Hehua
+WEI Hanguang
+Incumbent Supervisors
+HUI Ping
+Key Audit Matters (Continued)
+The Group determines whether to consolidate
+structured entities based on management's assessment
+of the Group's control over the structured entities,
+taking into consideration its power over the structured
+entities, its exposure or rights to variable returns from
+its involvement with the structured entities, and its
+ability to use its power to affect the amount of returns
+from the structured entities.
+The Group is principally involved with structured
+entities through sponsoring and managing, and/
+or investing in wealth management products, asset
+securitisation products, funds, investment trust plans
+and asset management plans. As at 31 December
+2023, the Group's interests in unconsolidated
+structured entities mainly included (1) the net asset
+value of wealth management products and funds/
+asset management plans where the Group sponsored
+and managed amounted to RMB1,631,063 million
+and RMB778,109 million, respectively; (2) the
+carrying amounts of interest in structured entities
+held by the Group through direct investments in fund
+investments, investment trusts and asset management
+plans, and asset-backed securitisations sponsored
+by other financial institutions outside the Group
+were RMB83,527 million, RMB22,917 million, and
+RMB125,595 million, respectively.
+Refer to Note II 2.1, Note III 6 and Note V 46 of the
+consolidated financial statements.
+Consolidation of structured entities
+How our audit addressed the Key Audit Matter
+Key Audit Matter
+Independent Auditor's Report (Continued)
+(ii) we compared the valuation of Level
+2 financial investments to quotations
+available from independent sources; as
+well as tested observable inputs used in
+valuation models;
+Based on the procedures performed, we considered
+that the valuation models, significant judgements
+and assumptions as well as relevant data used
+by management in the valuation of financial
+investments measured at fair value were supported
+by available evidence.
+We checked and evaluated the appropriateness of
+the financial statement disclosures in relation to the
+fair value of financial investments in the context of
+applicable accounting framework.
+(iv) we engaged internal valuation experts to
+perform independent valuation testing.
+(iii) for unobservable inputs used for the
+valuation of Level 3 financial investments,
+we obtained an understanding of
+management's methodology for the
+selection of inputs such as discount
+rates, expected dividend, price/earnings
+multiples, net asset value of unlisted
+investments and recent transaction prices,
+etc.; and assessed the reasonableness
+and appropriateness of such inputs by
+examining supporting information and
+comparing to alternatives in the market
+with the involvement of our internal
+valuation experts. We also performed
+sensitivity analysis on the unobservable
+inputs;
+(i) we assessed the appropriateness of
+the Group's valuation models and
+benchmarked against common market
+models, taking into consideration the
+product characteristics and industry
+practice;
+(2) for Level 2 and Level 3 financial investments:
+Valuation of financial investments measured at fair value (Continued)
+207
+We have identified this as a key audit matter due
+to the material amount of structured entities and
+significant judgements were involved in assessing the
+Group's control over the structured entities.
+We checked and assessed the appropriateness of
+the financial statement disclosures in relation to the
+consolidation of structured entities in the context
+of applicable accounting framework.
+We performed the following substantive procedures
+on a sample basis:
+209
+If, based on the work we have performed, we conclude that there is a material misstatement
+of this other information, we are required to report that fact. We have nothing to report in this
+regard.
+In connection with our audit of the consolidated financial statements, our responsibility is to
+read the other information and, in doing so, consider whether the other information is materially
+inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
+otherwise appears to be materially misstated.
+Our opinion on the consolidated financial statements does not cover the other information and
+we do not express any form of assurance conclusion thereon.
+The directors of the Bank are responsible for the other information. The other information
+comprises all of the information included in the annual report other than the consolidated
+financial statements and our auditor's report thereon.
+Other Information
+Based on the procedures performed, we considered
+that management's judgements on the consolidation
+of structured entities were supported by the
+available evidence.
+How our audit addressed the Key Audit Matter
+(3) we analysed the extent of the Group's
+decision-making power, the level of returns
+and the risk of variable returns due to holding
+other interests in the structured entities to
+assess whether the Group has the ability to
+use their power to influence the amount of
+returns from the structured entities. We also
+analysed the substantive rights held by other
+investors to assess whether the Group acted
+as a principal or an agent in structured entities
+related transactions.
+How our audit addressed the Key Audit Matter
+Consolidation of structured entities (Continued)
+Key Audit Matter
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+208
+(2) we examined the arrangements for investment
+income, fee income, assets management
+fees and retained residual income from the
+structured entities based on the contractual
+terms including whether liquidity support
+or other arrangements were provided by the
+Group to the structured entities; and performed
+independent analysis and testing to assess the
+Group's exposure or rights to variable returns
+from its involvement in related activities with
+the structured entities;
+(1) we inspected the contractual terms of
+structured entities, understood the purpose
+of establishment, examined the transaction
+structure and identified the decision-making
+mechanism of related activities to assess the
+rights and obligations of the Group and other
+investors, as well as the Group's power over
+the structured entities;
+We evaluated and tested the design and operating
+effectiveness of the internal controls over the
+Group's consolidation of structured entities. These
+included controls over management's assessment
+of the transaction structures and contractual terms,
+calculations of variable returns, as well as review
+and approval of the consolidation assessments.
+Key Audit Matter
+(2) we examined the accuracy and completeness of
+historical and measurement date data used in
+the ECL models on a sample basis, including:
+Independent Auditor's Report (Continued)
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+(5) for
+forward-looking
+measurements,
+we
+evaluated management's selection methodology
+for economic indicators, economic scenarios
+and weightings assigned based on statistical
+analysis and expert judgements. We assessed
+the reasonableness of the forecasted economic
+indicators by performing back-testing and
+comparing with publicly available forecasts
+from third-party institutions. We performed
+sensitivity analysis on the economic indicators
+and weightings under different economic
+scenarios.
+(6) for individual loans and advances to customers
+classified as stage 3 which were relatively
+significant, we examined on a sample
+basis, the forecasted cash flows prepared
+by management based on the financial
+information of borrowers and guarantors,
+latest collateral valuations and other available
+information as well as various possible future
+factors together with discount rates used to
+support the computation of loss allowances.
+We checked and evaluated the appropriateness of
+the financial statement disclosures in relation to the
+measurement of ECL in the context of applicable
+accounting framework.
+Based on procedures performed, we considered
+that the models, significant judgements and
+assumptions, as well as relevant data and
+parameters used by management in measuring
+ECL for loans and advances to customers were
+supported by the available evidence.
+205
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key Audit Matter
+How our audit addressed the Key Audit Matter
+Valuation of financial investments measured at fair value
+Refer to Note II 4.4, Note III 2, Note V 18 and Note VI 5.1
+of the consolidated financial statements.
+As at 31 December 2023, financial investments
+measured at fair value through profit or loss and
+financial investments measured at fair value through
+other comprehensive income of the Group were
+RMB550,421 million and RMB3,248,113 million
+respectively, representing 11.71% of total assets. Of
+these financial investments measured at fair value,
+(1) financial investments classified as Level 1 fair
+value, measured using quoted prices (unadjusted) in
+active markets accounted for 9.44%; (2) financial
+investments classified as Level 2 fair value, measured
+using valuation techniques for which inputs are
+observable for the financial investments, accounted
+for 85.99%; (3) financial investments classified
+as Level 3 fair value, measured using valuation
+techniques using unobservable inputs that have a
+significant impact on the valuation accounted for 4.57%.
+Level 3 financial investments mainly include unlisted
+equity and fund investments held by the Group.
+How our audit addressed the Key Audit Matter
+Key Audit Matter
+Key Audit Matters (Continued)
+Independent Auditor's Report (Continued)
+206
+in active markets.
+(1) for Level 1 financial investments, we tested
+their valuations by comparing to quoted prices
+We performed the following substantive procedures
+over the valuation of financial investments
+measured at fair value, on a sample basis:
+We evaluated and tested the design and operating
+effectiveness of the internal controls over the
+valuation of financial investments measured at
+fair value. These included controls over model
+validation and approval, review and approval
+of valuation results, as well as the information
+technology general controls of related systems,
+systems interfaces of inputs such as market data
+and automated calculations within the valuation
+systems.
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+Key Audit Matter
+Key Audit Matters (Continued)
+How our audit addressed the Key Audit Matter
+203
+(i) in respect of PD: financial and non-
+financial information for determining
+borrowers' credit rating, overdue
+repayment status, etc.;
+(ii) in respect of LGD: types of guarantees
+and collateral, historical actual loss rates,
+etc.;
+204
+(iii) in respect of EAD: borrowers' outstanding
+loan balances, interest rates, maturity
+dates, repayment methods, etc. by
+agreeing them to loan contracts and other
+relevant documents. We also agreed the
+total credit risk exposure in the ECL
+models to data from other information
+systems.
+(3) in respect of PD and LGD, we assessed the
+reasonableness of the parameters by comparing
+the historical expected default and loss given
+default with the subsequent actual default and
+loss given default for significant exposures
+through independent back-testing.
+(4) we selected samples and assessed the
+appropriateness of management's staging
+classifications and judgements used in
+determining significant increases in credit risk
+and identification of default or credit-impaired
+assets based on the borrower's financial and
+non-financial information and other external
+evidence provided by management. We took
+into consideration the credit risk profile of
+borrowers and the Group's risk management
+practices in such assessment.
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+We have identified this as a key audit matter due
+to the material balance of the financial investments
+measured at fair value and significant management
+judgements and assumptions are required, including
+selection and determination of unobservable inputs,
+in valuing the financial investments classified as
+Level 3.
+We understood and evaluated management's
+internal controls and assessment process over the
+valuation of financial investments measured at fair
+value. We assessed the inherent risk of material
+misstatement by considering the inherent risk
+factors of the different fair value levels such as the
+degree of estimation uncertainty, the complexity of
+valuation techniques and models, the subjectivity
+of management's judgements and assumptions in
+selecting valuation techniques, models and inputs
+and susceptibility to management bias.
+(4) internal controls over the accuracy and
+completeness of key data used by the models;
+Key Audit Matters (Continued)
+202
+measurement;
+(2) internal controls over significant management
+judgements and assumptions, including
+portfolio segmentation, parameter estimation,
+determination and application of criteria to
+identify significant increases in credit risk,
+default and credit-impaired assets, as well
+as economic indicators, economic scenarios
+and weightings used in forward-looking
+(1) internal controls over the ECL
+management, including continuous monitoring
+of the selection of modelling methodologies,
+model optimisation, approval and application
+of changes in key parameters, and model back-
+testing;
+model
+Key Audit Matter
+We evaluated and tested the design and operating
+effectiveness of the internal controls over the
+measurement of ECL for loans and advances to
+customers. These included periodic assessment and
+approval controls, which primarily include:
+The Group assessed whether the credit risk of loans
+and advances to customers had increased significantly
+since their initial recognition, and applied a three-
+stage impairment model approach to calculate the
+ECL. For loans and advances to customers that are
+classified as stage 1 or stage 2, and those classified
+as stage 3 (impaired) with individual amount that are
+relatively insignificant, the Group assessed the ECL
+using the risk parameter modelling approach that
+incorporated relevant key risk parameters, including
+probability of default ("PD"), loss given default
+("LGD") and exposure at default ("EAD"). For loans
+and advances to customers classified as stage 3 with
+individual amount that are relatively significant, the
+Group assessed ECL for each loan by estimating the
+future cash flows from the loans.
+As at 31 December 2023, the carrying amount of
+loans and advances to customers in the Group's
+consolidated statement of financial position was
+RMB 19,476,871 million. Of these balances, the loans
+and advances to customers measured at amortised
+cost of RMB 19,189,211 million and loans and
+advances to customers measured at fair value through
+other comprehensive income of RMB715,101
+million, together with accrued interest were subject to
+ECL measurement, and an impairment allowance of
+RMB485,298 million was recognised by management
+as at 31 December 2023. The impairment losses on
+loans and advances to customers recognised in the
+Group's consolidated income statement for the year
+ended 31 December 2023 amounted to RMB 106,114
+million.
+Refer to Note II 4.6, Note III 1, Note V 9, 17, 24 and
+Note VI 2.3 of the consolidated financial statements.
+Measurement of expected credit loss ("ECL") for loans and advances to customers
+Independent Auditor's Report
+To the Shareholders of Bank of China Limited
+We understood and evaluated management's
+internal controls and assessment process for the
+measurement of ECL for loans and advances
+to customers. We assessed the inherent risk of
+material misstatement by considering the degree of
+estimation uncertainty and level of other inherent
+risk factors such as the complexity of estimation
+models used, the subjectivity of significant
+management judgements and assumptions, and
+susceptibility to management bias.
+(Incorporated in the People's Republic of China with limited liability)
+How our audit addressed the Key Audit Matter
+The measurement of ECL for loans and advances
+to customers involves significant
+judgements and estimations, mainly on:
+(1) we assessed the appropriateness of portfolio
+segmentation and the models adopted for the
+measurement of ECL in respect of different
+portfolios with consideration given to the
+risk characteristics of loans and advances
+to customers, the Group's risk management
+practices and industry practices. We selected
+samples of ECL calculations and examined
+whether the models' calculation engines are
+consistent with the Group's methodologies.
+We involved our credit risk experts in evaluating
+the model methodologies, significant judgements
+and assumptions, data and key parameters used
+in the ECL measurement for loans and advances
+to customers. The substantive audit procedures
+performed by us were mainly as follows:
+(5) internal controls over the information
+technology systems for ECL measurement,
+including information technology general
+controls, data interfaces, application of model
+parameters and automated IT controls over
+impairment calculations.
+(3) internal controls over the estimated future cash
+flows and calculation of present value with
+respect to loans and advances to customers
+classified as stage 3 with individual amount
+that are relatively significant;
+We have identified the measurement of ECL for
+loans and advances to customers as a key audit
+matter due to the material balance of the Group's loss
+allowances for loans and advances to customers and
+high inherent risk given the uncertainty of estimates,
+adoption of complex models, involvement of
+significant management judgements and assumptions
+and use of numerous parameters and data inputs in
+such measurement.
+Estimation of future cash flows for stage
+3 loans and advances to customers with
+individual amount that are relatively significant.
+Measurement of expected credit loss ("ECL") for loans and advances to customers (Continued)
+measurement;
+Determination and application of criteria to
+identify significant increase in credit risks and
+default or credit-impaired assets;
+(4)
+(3)
+(2)
+(1) Segmentation of portfolios based on credit risk
+characteristics, selection of appropriate models
+and assumptions;
+management
+Economic indicators, economic scenarios
+and weightings used in the forward-looking
+Opinion
+Independent Auditor's Report (Continued)
+The consolidated financial statements of Bank of China Limited (the "Bank”) and its subsidiaries
+(the "Group"), which are set out on pages 214 to 438, comprise:
+Independence
+We are independent of the Group in accordance with the International Code of Ethics for
+Professional Accountants (including International Independence Standards) issued by the
+International Ethics Standards Board for Accountants ("IESBA Code"), and we have fulfilled our
+other ethical responsibilities in accordance with the IESBA Code.
+Key Audit Matters
+Key audit matters are those matters that, in our professional judgement, were of most significance
+in our audit of the consolidated financial statements of the current period. These matters were
+addressed in the context of our audit of the consolidated financial statements as a whole, and in
+forming our opinion thereon, and we do not provide a separate opinion on these matters.
+Key audit matters identified in our audit are summarised as follows:
+Measurement of expected credit loss ("ECL") for loans and advances to customers
+•
+Valuation of financial investments measured at fair value
+•
+Consolidation of structured entities
+201
+Independent Auditor's Report (Continued)
+What we have audited
+Key Audit Matter
+How our audit addressed the Key Audit Matter
+Basis for Opinion (Continued)
+Independent Auditor's Report (Continued)
+Key Audit Matters (Continued)
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
+basis for our opinion.
+200
+•
+the consolidated statement of financial position as at 31 December 2023;
+•
+the consolidated income statement for the year then ended;
+the consolidated statement of comprehensive income for the year then ended;
+the consolidated statement of changes in equity for the year then ended;
+.
+the notes to the consolidated financial statements, comprising material accounting policy
+information and other explanatory information.
+Our Opinion
+In our opinion, the consolidated financial statements give a true and fair view of the consolidated
+financial position of the Group as at 31 December 2023, and of its consolidated financial
+performance and its consolidated cash flows for the year then ended in accordance with IFRS
+Accounting Standards and have been properly prepared in compliance with the disclosure
+requirements of the Hong Kong Companies Ordinance.
+Basis for Opinion
+We conducted our audit in accordance with International Standards on Auditing ("ISAs”). Our
+responsibilities under those standards are further described in the Auditor's Responsibilities for
+the Audit of the Consolidated Financial Statements section of our report.
+the consolidated statement of cash flows for the year then ended; and
+196,903
+Bank notes in circulation
+V.27
+203,249
+915,858
+Placements from banks and
+Financial liabilities held for trading
+V.28
+474,977
+466,335
+1,235,320
+V.29
+54,264
+other financial institutions
+V.26
+As at 31 December
+2023
+2,240,323
+53,868
+32,432,166
+Total assets
+28,893,548
+The accompanying notes form an integral part of these consolidated financial statements.
+216
+Due to central banks
+BANK OF CHINA LIMITED
+Note
+2022
+(Restated)
+LIABILITIES
+Due to banks and other financial institutions
+V.25
+2,245,362
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
+As at 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+Derivative financial liabilities
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+135,973
+246,371
+181,392
+236,725
+Earnings per share (in RMB)
+Basic
+Diluted
+V.11
+0.74
+0.72
+0.74
+0.72
+For details of the dividends paid or proposed, please refer to Note V.39.3.
+Retirement benefit obligations
+58,957
+59,303
+V.33
+Current tax liabilities
+The accompanying notes form an integral part of these consolidated financial statements.
+135,838
+Due to customers
+V.30
+22,907,050
+20,201,825
+V.16
+Bonds issued
+1,802,446
+1,540,935
+Other borrowings
+V.32
+36,176
+24,905
+V.31
+220,910
+V.23
+Other assets
+insurance contracts issued
+(4,096)
+3,278
+Exchange differences from the translation of
+foreign operations
+7,007
+32,951
+Other
+(39)
+681
+Subtotal
+24,616
+7,559
+Other comprehensive income for the year, net of tax
+28,993
+9,742
+Total comprehensive income for the year
+BANK OF CHINA LIMITED
+215
+The accompanying notes form an integral part of these consolidated financial statements.
+246,467
+275,364
+17,442
+Finance (expenses)/income from
+16,204
+229,025
+259,160
+Equity holders of the Bank
+Total comprehensive income attributable to:
+246,467
+275,364
+Non-controlling interests
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+(375)
+other comprehensive income
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+Year ended 31 December
+Note
+2023
+2022
+(Restated)
+246,371
+236,725
+Profit for the year
+Other comprehensive income:
+V.12
+Items that will not be reclassified to profit or loss
+- Actuarial gains on defined benefit plans
+Changes in fair value on equity instruments
+designated at fair value through
+other comprehensive income
+Other
+Subtotal
+measured at fair value through
+- Allowance for credit losses on debt instruments
+(28,976)
+20,243
+other comprehensive income
+- Changes in fair value on debt instruments
+measured at fair value through
+1,501
+Items that may be reclassified to profit or loss
+4,377
+2,106
+9
+(2)
+4,348
+68
+31
+2,183
+BANK OF CHINA LIMITED
+As at 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+Cash and due from banks and
+financial assets at fair value through
+profit or loss
+550,421
+613,105
+financial assets at fair value through
+other comprehensive income
+3,248,113
+2,500,216
+- financial assets at amortised cost
+3,360,183
+3,321,923
+Investments in associates and joint ventures
+V.19
+39,550
+38,304
+Property and equipment
+V.20
+71,139
+75,156
+V.36
+Deferred income tax assets
+23,311
+22,704
+6,435,244
+V.22
+19,613
+20,346
+V.21
+Construction in process
+226,776
+227,135
+Investment properties
+ASSETS
+7,158,717
+Financial investments
+Note
+As at 31 December
+2023
+2022
+(Restated)
+other financial institutions
+V.13
+568,855
+Balances with central banks
+V.14
+2,941,140
+815,063
+2,313,859
+Placements with and loans to banks and
+other financial institutions
+V.15
+214
+1,174,097
+Government certificates of indebtedness for
+bank notes issued
+17,116,005
+19,476,871
+V.17
+Loans and advances to customers, net
+152,033
+146,750
+V.18
+V.16
+130,215
+96,968
+Precious metals
+196,497
+203,176
+V.27
+Derivative financial assets
+1,233,888
+279,955
+1,676
+General and
+Share
+Preference
+Perpetual
+Capital comprehensive
+Statutory
+regulatory Undistributed
+Note
+capital
+shares
+bonds
+reserve
+income
+Other
+reserves
+Non-
+controlling
+profits
+interests
+Total
+As at 31 December 2021
+294,388
+119,550
+199,955
+135,717
+1,417
+213,930
+303,209
+reserves
+956,987
+Other equity instruments
+219
+retained earnings
+Other
+(38)
+30,000
+(2)
+(110)
+2,068
+(162)
+I
+(20,938)
+(20,976)
+29,998
+110
+(1,912)
+Attributable to equity holders of the Bank
+10
+As at 31 December 2023
+294,388
+119,550
+279,955
+135,736
+34,719
+256,729
+379,285
+1,129,148
+127,305 2,756,815
+The accompanying notes form an integral part of these consolidated financial statements.
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+218
+Other comprehensive income transferred to
+125,400
+Impact of accounting policy changes
+(5,704) (84,183)
+Capital contribution by non-controlling shareholders
+2,501
+2,498
+Capital contribution by other equity
+instruments holders
+Other comprehensive income transferred to
+retained earnings
+Other
+As at 31 December 2022 (Restated)
+50,000
+(11)
+851
+(78,479)
+56
+49,989
+52
+294,388
+119,550
+249,955
+135,759
+5,505
+235,362
+337,465
+1,045,989
+139,328 2,563,301
+The accompanying notes form an integral part of these consolidated financial statements.
+10,203
+(851)
+(4)
+2,350,553
+Dividends
+34,256
+II.1.3
+734
+(2,498)
+(311)
+(2,075)
+As at 1 January 2022 (Restated)
+294,388
+119,550
+199,955
+135,717
+2,151
+213,930
+303,209
+(34,256)
+954,489
+2,348,478
+Total comprehensive income (Restated)
+V.12
+2,503
+226,522
+17,442
+246,467
+Appropriation to statutory reserves
+V.39.1
+21,432
+(21,432)
+Appropriation to general and regulatory reserves
+V.39.2
+125,089
+V.34
+V.38.3
+Capital contribution by other equity
+Other comprehensive income
+V.12
+34,719
+5,505
+Statutory reserves
+V.39.1
+256,729
+235,362
+General and regulatory reserves
+V.39.2
+379,285
+337,465
+Undistributed profits
+135,759
+V.39
+1,045,989
+2,629,510
+2,423,973
+Non-controlling interests
+V.40
+127,305
+139,328
+Total equity
+2,756,815
+2,563,301
+Total equity and liabilities
+32,432,166
+28,893,548
+1,129,148
+Approved and authorised for issue by the Board of Directors on 28 March 2024.
+135,736
+Capital reserve
+1,842
+Deferred income tax liabilities
+V.36
+7,397
+6,804
+Other liabilities
+V.37
+512,158
+485,854
+Total liabilities
+29,675,351
+26,330,247
+EQUITY
+V.38.2
+Capital and reserves attributable to equity
+Share capital
+Other equity instruments
+V.38.1
+294,388
+294,388
+V.38.3
+399,505
+369,505
+- Preference shares
+119,550
+119,550
+Perpetual bonds
+249,955
+holders of the Bank
+instruments holders
+The accompanying notes form an integral part of these consolidated financial statements.
+Director
+135,759
+5,505
+235,362
+337,465
+1,045,989
+139,328
+2,563,301
+Total comprehensive income
+V.12
+27,256
+231,904
+16,204
+275,364
+249,955
+Appropriation to statutory reserves
+21,529
+(21,529)
+Appropriation to general and regulatory reserves
+V.39.2
+41,820
+(41,820)
+Dividends
+V.39.3
+(83,594)
+(7,288)
+(90,882)
+Capital contribution and reduction by
+non-controlling shareholders
+V.39.1
+GE Haijiao
+119,550
+As at 1 January 2023
+LIU Jin
+Director
+217
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+Attributable to equity holders of the Bank
+Other equity instruments
+Other
+General and
+Non-
+Share
+Preference
+Perpetual
+294,388
+Capital comprehensive
+regulatory Undistributed
+controlling
+Note
+capital
+shares
+bonds
+reserve
+income
+reserves
+reserves
+profits
+interests
+Total
+Statutory
+226,522
+210
+Non-controlling interests
+19. Investment in associates and joint ventures
+310
+20. Property and equipment
+21. Construction in progress.
+22. Investment properties.
+311
+301
+314
+23. Other assets
+316
+24. Impairment allowance
+320
+25. Due to banks and other financial institutions
+322
+314
+26. Due to central banks. . . . . .
+18. Financial investments.
+17. Loans and advances to customers.
+275
+11. Earnings per share
+278
+12. Other comprehensive income.
+279
+13. Cash and due from banks and other financial institutions
+295
+281
+Balances with central banks . . .
+282
+15. Placements with and loans to banks and other financial institutions
+283
+16. Derivative financial instruments and hedge accounting.
+284
+14.
+10. Income tax expense
+322
+Government certificates of indebtedness for bank notes issued
+Deferred income taxes
+37. Other liabilities. .
+330
+331
+331
+332
+36.
+333
+38. Share capital, capital reserve and other equity instruments
+339
+39. Statutory reserves, general and regulatory reserves and
+undistributed profits .
+40. Non-controlling interests
+41. Contingent liabilities and commitments
+336
+27.
+35. Share appreciation rights plan
+33. Current tax liabilities
+and bank notes in circulation . . . . .
+323
+28.
+Placements from banks and other financial institutions
+323
+29. Financial liabilities held for trading.
+34. Retirement benefit obligations.
+324
+324
+31. Bonds issued..
+326
+212
+CONTENTS (Continued)
+32. Other borrowings.
+30. Due to customers
+42. Note to the consolidated statement of cash flows..
+274
+9.
+Evaluate the overall presentation, structure and content of the consolidated financial
+statements, including the disclosures, and whether the consolidated financial statements
+represent the underlying transactions and events in a manner that achieves fair presentation.
+Obtain sufficient appropriate audit evidence regarding the financial information of the
+entities or business activities within the Group to express an opinion on the consolidated
+financial statements. We are responsible for the direction, supervision and performance of
+the group audit. We remain solely responsible for our audit opinion.
+We communicate with those charged with governance regarding, among other matters, the
+planned scope and timing of the audit and significant audit findings, including any significant
+deficiencies in internal control that we identify during our audit.
+We also provide those charged with governance with a statement that we have complied with
+relevant ethical requirements regarding independence, and to communicate with them all
+relationships and other matters that may reasonably be thought to bear on our independence, and
+where applicable, actions taken to eliminate threats or safeguards applied.
+From the matters communicated with those charged with governance, we determine those matters
+that were of most significance in the audit of the consolidated financial statements of the current
+period and are therefore the key audit matters. We describe these matters in our auditor's report
+unless law or regulation precludes public disclosure about the matter or when, in extremely rare
+circumstances, we determine that a matter should not be communicated in our report because the
+adverse consequences of doing so would reasonably be expected to outweigh the public interest
+benefits of such communication.
+The engagement partner on the audit resulting in this independent auditor's report is Ho Shuk
+Ching, Margarita.
+Conclude on the appropriateness of the directors' use of the going concern basis of
+accounting and, based on the audit evidence obtained, whether a material uncertainty
+exists related to events or conditions that may cast significant doubt on the Group's
+ability to continue as a going concern. If we conclude that a material uncertainty exists,
+we are required to draw attention in our auditor's report to the related disclosures in the
+consolidated financial statements or, if such disclosures are inadequate, to modify our
+opinion. Our conclusions are based on the audit evidence obtained up to the date of our
+auditor's report. However, future events or conditions may cause the Group to cease to
+continue as a going concern.
+PricewaterhouseCoopers
+Certified Public Accountants
+211
+Consolidated Financial Statements
+CONTENTS
+CONSOLIDATED FINANCIAL STATEMENTS
+CONSOLIDATED INCOME STATEMENT.
+214
+Hong Kong, 28 March 2024
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME.
+CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY.
+CONSOLIDATED STATEMENT OF CASH FLOWS ...
+•
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (Continued)
+231,904
+14,467
+Independent Auditor's Report (Continued)
+Responsibilities of Directors and Those Charged with Governance for the Consolidated
+Financial Statements
+The directors of the Bank are responsible for the preparation of the consolidated financial
+statements that give a true and fair view in accordance with IFRS Accounting Standards and the
+disclosure requirements of the Hong Kong Companies Ordinance, and for such internal control as
+the directors determine is necessary to enable the preparation of consolidated financial statements
+that are free from material misstatement, whether due to fraud or error.
+In preparing the consolidated financial statements, the directors are responsible for assessing the
+Group's ability to continue as a going concern, disclosing, as applicable, matters related to going
+concern and using the going concern basis of accounting unless the directors either intend to
+liquidate the Group or to cease operations, or have no realistic alternative but to do so.
+Those charged with governance are responsible for overseeing the Group's financial reporting
+process.
+•
+Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
+As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
+professional scepticism throughout the audit. We also:
+•
+Identify and assess the risks of material misstatement of the consolidated financial
+statements, whether due to fraud or error, design and perform audit procedures responsive
+to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
+for our opinion. The risk of not detecting a material misstatement resulting from fraud is
+higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
+omissions, misrepresentations, or the override of internal control.
+Obtain an understanding of internal control relevant to the audit in order to design audit
+procedures that are appropriate in the circumstances, but not for the purpose of expressing
+an opinion on the effectiveness of the Group's internal control.
+Evaluate the appropriateness of accounting policies used and the reasonableness of
+accounting estimates and related disclosures made by the directors.
+Independent Auditor's Report (Continued)
+Our objectives are to obtain reasonable assurance about whether the consolidated financial
+statements as a whole are free from material misstatement, whether due to fraud or error, and
+to issue an auditor's report that includes our opinion. We report our opinion solely to you, as
+a body, and for no other purpose. We do not assume responsibility towards or accept liability
+to any other person for the contents of this report. Reasonable assurance is a high level of
+assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always
+detect a material misstatement when it exists. Misstatements can arise from fraud or error and
+are considered material if, individually or in the aggregate, they could reasonably be expected
+to influence the economic decisions of users taken on the basis of these consolidated financial
+statements.
+Credit impairment losses
+215
+218
+Net gains on transfers of financial asset.
+267
+5.
+Other operating income
+267
+6.
+4.
+Operating expenses.
+7.
+Staff costs. . . .
+269
+8.
+Directors', supervisors' and senior management's emoluments.
+270
+268
+216
+266
+3.
+220
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+I. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+II. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
+III. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN
+APPLYING ACCOUNTING POLICIES.
+222
+223
+Net trading gains
+261
+264
+V.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS
+1. Net interest income.
+265
+Net fee and commission income.
+266
+IV. TAXATION. .
+43. Related party transactions.
+2.
+345
+(13,504)
+(12,212)
+Net fee and commission income
+78,865
+74,890
+Net trading gains
+V.2
+V.3
+7,221
+Net gains on transfers of financial asset
+V.4
+806
+2,083
+Other operating income
+28,723
+V.5
+Fee and commission expense
+92,369
+2022
+(Restated)
+Interest income
+Interest expense
+V.1
+1,048,851
+880,848
+87,102
+V.1
+(421,582)
+Net interest income
+466,545
+459,266
+Fee and commission income
+V.2
+(582,306)
+2023
+49,199
+Operating income
+645
+Profit before income tax
+295,608
+283,641
+Income tax expense
+V.10
+965
+(49,237)
+Profit for the year
+246,371
+236,725
+Attributable to:
+44. Segment reporting
+Equity holders of the Bank
+(46,916)
+43,001
+V.19
+282,996
+624,138
+586,461
+Operating expenses
+V.6
+(222,933)
+(199,506)
+Share of results of associates and joint ventures
+Credit impairment losses
+(97,993)
+Impairment losses on other assets
+(68)
+(5,966)
+Operating profit
+294,643
+(106,494)
+Note
+V.9
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+2.
+Credit risk.
+3.
+Market risk
+4.
+Liquidity risk
+Overview
+5.
+6.
+Capital management.
+7.
+Insurance risk. .
+378
+379
+Fair value
+1.
+VI. FINANCIAL RISK MANAGEMENT
+377
+347
+348
+Year ended 31 December
+352
+352
+361
+45. Transfers of financial assets
+367
+46. Interests in structured entities.
+369
+47. Offsetting financial assets and financial liabilities .
+371
+48. The Bank's statement of financial position and changes in equity.
+49. IBOR Reform . . . . .
+373
+377
+410
+420
+50. Events after the financial reporting date.
+435
+CONSOLIDATED INCOME STATEMENT
+4.
+Overdue assets. .
+451
+5.
+Leverage ratio..
+6.
+7.
+Global systemic importance assessment indicators of commercial banks
+Domestic systemic importance assessment indicators of
+454
+commercial banks for 2022
+213
+427
+455
+BANK OF CHINA LIMITED
+449
+International claims
+452
+448
+I.
+SUPPLEMENTARY INFORMATION
+3.
+DIFFERENCES BETWEEN IFRS ACCOUNTING STANDARDS AND
+CAS CONSOLIDATED FINANCIAL STATEMENTS.
+II.
+UNAUDITED SUPPLEMENTARY INFORMATION
+439
+1.
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio
+439
+438
+2.
+Currency concentrations.
+(2,717)
+(4,332,464)
+intangible assets and other long-term assets
+(29,148)
+(27,738)
+Purchase of financial investments
+Purchase of property and equipment,
+(3,716,635)
+Proceeds from issuance of bonds
+Proceeds from issuance of
+(539,428)
+(11,724)
+Cash flows from financing activities
+1,316,278
+1,012,066
+other equity instruments
+50,000
+(2,005)
+30,000
+Net cash outflow from investing activities
+associates and joint ventures
+Proceeds from disposals of investments in
+3,554,479
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
+Proceeds from capital contribution by
+Cash flows from investing activities
+Proceeds from disposals of property and
+equipment, intangible assets and
+Note
+Year ended 31 December
+2023
+other long-term assets
+5,553
+12,850
+subsidiaries, associates and joint ventures
+161
+Dividends received
+1,813
+842
+1,603
+Interest income received from
+financial investments
+Proceeds from disposals/maturities of
+financial investments
+185,033
+165,592
+3,631,629
+Increase in investments in subsidiaries,
+non-controlling shareholders
+425,259
+2,473
+119,862
+53,047
+Effect of exchange rate changes on cash and
+cash equivalents
+28,379
+96,367
+Net increase in cash and cash equivalents
+115,835
+Cash and cash equivalents at beginning of year
+2,091,466
+Net cash inflow from financing activities
+1,975,631
+V.42
+2,516,725
+2,091,466
+Net cash flows from operating activities include:
+Interest received
+Interest paid
+882,832
+(488,456)
+737,364
+(339,086)
+BANK OF CHINA LIMITED
+The accompanying notes form an integral part of these consolidated financial statements.
+Cash and cash equivalents at end of year
+(3,237)
+(7,410)
+Other cash payments for financing activities
+Repayments of debts issued
+(1,077,585)
+(896,096)
+Cash payments for interest on bonds issued
+(29,317)
+(27,977)
+Dividend payments to ordinary shareholders
+(68,298)
+(65,060)
+Dividend and interest payments to
+other equity instrument holders
+(15,284)
+(13,421)
+Dividend payments to
+non-controlling shareholders
+(7,288)
+(5,701)
+Cash payments for redemption of
+other equity instruments held by
+non-controlling interests
+(21,296)
+62
+220
+other long-term assets
+(21,855)
+equipment, intangible assets and
+(1,492)
+(876)
+Net gains on disposals of investments in
+subsidiaries, associates and joint ventures
+(11)
+(561)
+Share of results of associates and joint ventures
+Interest income arising from
+(965)
+Net gains on disposals of property and
+(645)
+(192,293)
+(164,603)
+Dividends arising from investment securities
+Net losses/(gains) on financial investments
+Interest expense arising from bonds issued
+Accreted interest on impaired loans
+Interest expense arising from lease liabilities
+Net changes in operating assets and liabilities:
+Net increase in balances with central banks
+Net decrease/(increase) in due from and
+placements with and loans to banks and
+other financial institutions
+(643)
+(729)
+481
+(505)
+45,777
+financial investments
+44,281
+6,678
+other assets
+221
+BANK OF CHINA LIMITED
+CONSOLIDATED STATEMENT OF CASH FLOWS
+For the year ended 31 December 2023 (Amounts in millions of Renminbi, unless otherwise stated)
+Note
+Year ended 31 December
+2023
+2022
+(Restated)
+Cash flows from operating activities
+Profit before income tax
+7,768
+295,608
+Adjustments:
+Impairment losses on assets
+106,562
+103,959
+Depreciation of property and equipment and
+right-of-use assets
+22,648
+22,190
+Amortisation of intangible assets and
+283,641
+(946)
+(868)
+663
+7,123
+57,969
+Net increase in due to customers
+2,662,695
+2,019,973
+Net increase/(decrease) in other borrowings
+11,271
+(1,449)
+Net increase in other liabilities
+banks and other financial institutions
+113,808
+Cash inflow from operating activities
+875,203
+24,016
+Income tax paid
+(58,757)
+(45,871)
+Net cash inflow/(outflow) from operating
+activities
+816,446
+237,857
+Net increase in placements from
+(39,642)
+317,365
+684
+(127,274)
+(66,184)
+57,503
+(31,193)
+Net decrease in precious metals
+33,264
+146,056
+Net increase in loans and advances
+to customers
+(2,461,455)
+(1,882,027)
+Net increase in other assets
+(25,367)
+(268,879)
+Net increase/(decrease) in due to banks
+and other financial institutions
+3,113
+(441,111)
+Net increase/(decrease) in due to
+central banks
+The accompanying notes form an integral part of these consolidated financial statements.
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+139,982
+(654)
+139,328
+227
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+Non-controlling interests
+1
+1.4 Impact of accounting policy changes (Continued)
+The Group summarises the impact of the implementation of IFRS 17 on the main financial
+items of comparative period as follows (Continued):
+Year ended
+Operating income
+Operating expenses and
+Impairment losses on
+assets*
+31 December 2022
+before adoption of
+IFRS 17
+implementation
+IFRS 17
+impact
+Basis of preparation (Continued)
+619,139
+2,423,973
+2,427,589
+1.4 Impact of accounting policy changes
+The Group summarises the impact of the implementation of IFRS 17 on the main financial
+items of comparative period as follows:
+As at
+31 December 2022
+before adoption of
+IFRS 17
+implementation
+IFRS 17
+impact
+As at
+31 December 2022
+and 1 January 2023
+(3,616)
+after adoption of
+IFRS 17
+28,913,857
+(20,309)
+28,893,548
+26,346,286
+(16,039)
+26,330,247
+Capital and reserves
+attributable to equity
+holders of the Bank
+Total assets
+Total liabilities
+The property insurance subsidiaries mainly used the full retrospective approach, while
+the life insurance subsidiaries mainly used the fair value approach. The insurance
+subsidiaries also reclassified related financial assets by reassessing their business model
+and re-designated the relevant financial assets to avoid accounting mismatches on initial
+application date as at 1 January 2023. The Group restated the comparative figures as at 1
+January 2022, 31 December 2022 and the year ended 31 December 2022.
+(32,678)
+586,461
+Carrying
+amount as at
+31 December 2022
+before adoption
+of IFRS 17
+Carrying
+amount as at
+31 December 2022
+and 1 January 2023
+after adoption
+of IFRS 17
+Financial assets at fair
+value through profit or loss
+4,120
+4,120
+Financial assets at fair
+31 December 2022 and
+1 January 2023 after
+adoption of IFRS 17
+value through profit or loss
+37,025
+Financial assets at fair
+value through other
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+40,991
+35,961
+1.5 Comparative figures
+The Group adopted the requirements of IFRS 17 retrospectively with comparatives restated
+from the transition date, 1 January 2022. The restated notes mainly includes: Note V.5
+Other operating income, Note V.6 Operating expenses, Note V.12 Other comprehensive
+income, Note V.18 Financial investments, Note V.23 Other assets, Note V.37 Other
+liabilities, and Note V.44 Segment reporting, etc. In addition, certain comparative figures
+have been adjusted to conform with changes in disclosures in current year.
+229
+42,494
+Year ended
+31 December 2022
+after adoption of
+IFRS 17
+Classification as at
+Financial assets at
+Profit for the year
+(335,189)
+237,504
+31,724
+(779)
+(303,465)
+236,725
+* Impairment losses on assets includes Credit impairment losses and Impairment losses on other assets.
+The Group has applied IFRS 9 from 1 January 2018 onwards. On the initial application of
+IFRS 17, the Group is allowed to reassess the classification of financial assets under IFRS
+9 to reduce the accounting mismatches between financial assets and insurance contract
+liabilities. The Group reassessed classification of financial assets if they are connected
+with contracts within scope of IFRS 17 as at 1 January 2023 and restated comparative
+information from 1 January 2022.
+For participating and investment-linked insurance contracts measured by VFA under IFRS
+17, the Group reclassifies the supporting debt instruments measured at amortised cost ("AC")
+and fair value through other comprehensive income ("FVOCI”) to fair value through profit
+or loss ("FVTPL”). For those assets supporting insurance contracts measured by GMM,
+there are also reclassifications of certain debt instruments measured at AC to FVOCI
+in accordance with IFRS 17. The following table shows the measurement category and
+carrying amount before and after the adoption of IFRS 17 as at 1 January 2023:
+amortised cost
+Financial assets at
+amortised cost
+228
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+1
+Basis of preparation (Continued)
+1.4 Impact of accounting policy changes (Continued)
+Classification as at
+31 December 2022 before
+adoption of IFRS 17
+Financial assets at fair
+value through other
+comprehensive income
+BANK OF CHINA LIMITED
+Transitions
+comprehensive income
+1.3 Accounting policy changes
+Amendments to IAS 8
+Amendments to IAS 12
+Amendments to IAS 12
+IFRS 17 and Amendments
+Disclosure of Accounting Policies
+Definition of Accounting Estimates
+Deferred Tax related to Assets and Liabilities arising
+from a Single Transaction
+International Tax Reform - Pillar Two Model Rules
+Insurance Contracts
+223
+IFRS Practice Statement 2
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+1
+Basis of preparation (Continued)
+1.1 Standards and amendments effective in 2023 relevant to and adopted by the Group (Continued)
+IAS 1 and IFRS Practice Statement 2 Amendments provide guidance to help entities
+apply materiality judgements to accounting policy disclosures. The amendments replace
+the requirement for entities to disclose their "significant” accounting policies with a
+requirement to disclose their “material” accounting policies. The amendments add guidance
+on how entities apply the concept of materiality in making decisions about accounting
+policy disclosures.
+Amendments to IAS 8 clarify how companies should distinguish changes in accounting
+policies from changes in accounting estimates. It introduces a new definition of “accounting
+estimates". The amendments are designed to clarify distinction between changes in
+accounting estimates and changes in accounting policies and correction of errors.
+Amendments to IAS 12 require companies to recognise deferred tax on transactions that,
+on initial recognition, give rise to equal amounts of taxable and deductible temporary
+differences. They will typically apply to transactions such as leases of lessees and
+decommissioning obligations and will require the recognition of additional deferred tax
+assets and liabilities. The amendments should be applied to transactions that occur on or
+after the beginning of the earliest comparative period presented.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Amendments to IAS 1 and
+On 1 January 2023, the Group has adopted the following IFRS Accounting Standards and
+amendments issued by the International Accounting Standards Board (“IASB"), which were
+mandatorily effective:
+1.1 Standards and amendments effective in 2023 relevant to and adopted by the Group
+On 1 January 2023, the Group adopted the IFRS 17 Insurance Contracts. The adoption of
+IFRS 17 has resulted in changes in the Group's accounting policies for the identification
+of insurance contracts, recognition and measurement of insurance contract liabilities
+using general measurement model (“GMM”), variable fee approach ("VFA”) or premium
+allocation approach ("PAA”), insurance related revenue, insurance service expenses and
+insurance finance income or expenses. The specific accounting policies of insurance
+contacts refer to Note II.13.
+(Amounts in millions of Renminbi, unless otherwise stated)
+I
+GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
+Bank of China Limited (the “Bank”), formerly known as Bank of China, a State-owned
+joint stock commercial bank, was founded on 5 February 1912. From its formation until
+1949, the Bank performed various functions of a central bank, foreign exchange bank and
+commercial bank specialising in trade finance. After 1949, the Bank was designated as the
+state-designated specialised foreign exchange and trade bank. Since 1994, the Bank has
+evolved into a State-owned commercial bank. In this regard, in accordance with the Master
+Implementation Plan for the Joint Stock Reform approved by the State Council of the PRC,
+the Bank was converted into a joint stock commercial bank on 26 August 2004 and its name
+was changed from Bank of China to Bank of China Limited. In 2006, the Bank listed on the
+Stock Exchange of Hong Kong Limited and the Shanghai Stock Exchange.
+The Bank is licensed as a financial institution by the National Administration of Financial
+Regulation (the former “China Banking and Insurance Regulatory Commission”, the “NFRA")
+No. B0003H111000001 and is issued the business license of legal enterprise with unified
+social credit code No. 911000001000013428 by the State Administration of Industry and
+Commerce of the PRC. The registered address is No.1, Fuxingmen Nei Dajie, Beijing,
+China.
+The Bank and its subsidiaries (together the "Group") provide a full range of corporate
+banking, personal banking, treasury operations, investment banking, insurance and other
+services to its customers in the Chinese mainland, Hong Kong (China), Macao (China),
+Taiwan (China) and other major international financial centres.
+The Bank's principal regulator is the NFRA. The operations in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions of the Group are subject to the supervision
+of local regulators.
+The parent company is Central Huijin Investment Limited (“Huijin”), a wholly owned
+subsidiary of China Investment Corporation ("CIC").
+These consolidated financial statements have been approved by the Board of Directors on
+28 March 2024.
+222
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
+1
+Basis of preparation
+The consolidated financial statements of the Group have been prepared in accordance with
+"International Financial Reporting Standards as issued by the IASB" ("IFRS Accounting
+Standards"). In addition, the consolidated financial statements comply with the disclosure
+requirements of the Hong Kong Companies Ordinance.
+Financial assets at fair value through other comprehensive income, financial assets and
+financial liabilities at fair value through profit or loss (including derivative financial
+instruments) and investment properties are measured at their fair values in the consolidated
+financial statements. Other accounting items are measured at their historical costs.
+Impairment allowance is recognised and measured in accordance with the relevant policy.
+The preparation of financial statements in conformity with IFRS Accounting Standards
+requires the use of certain critical accounting estimates. It also requires management to
+exercise its judgement in the process of applying the Group's accounting policies. The areas
+involving a higher degree of judgement or complexity, or areas where assumptions and
+estimates are significant to the consolidated financial statements are disclosed in Note III.
+Amendments to IAS 12 International Tax Reform – Pillar Two Model Rules give companies
+temporary relief from accounting for deferred taxes arising from the Organisation for
+Economic Co-operation and Development's ("OECD”) international tax reform. The Group
+has adopted the relief for deferred taxes under the amendments.
+IFRS 17 and Amendments Insurance Contracts ("IFRS 17") and its impact are described in
+Note II.1.3 and Note II.1.4.
+2022
+(Restated)
+224
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+1
+Basis of preparation (Continued)
+1.2 Standards and amendments that are not yet effective in the current year and have not
+been adopted before their effective dates by the Group (Continued)
+Amendments to IFRS 16 introduce a new accounting model for variable payments and will
+require seller-lessees to reassess and potentially restate sale-and-leaseback transactions
+entered into since 2019. The amendments confirm the following: On initial recognition,
+the seller-lessee includes variable lease payments when it measures a lease liability arising
+from a sale-and-leaseback transaction. After initial recognition, the seller-lessee applies the
+general requirements for subsequent accounting of the lease liability such that it recognises
+no gain or loss relating to the right of use it retains.
+Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments clarify
+the characteristics of supplier finance arrangements (SFAs) and require additional disclosure
+of such arrangements. The objective of the new disclosures is to provide information about
+SFAs that enables investors to assess the effects on an entity's liabilities, cash flows and the
+exposure to liquidity risk.
+BANK OF CHINA LIMITED
+Amendments to IAS 21 elaborated the definitions of exchangeable, that is when an entity
+is able to exchange that currency for the other currency at the measurement date and for a
+specified purpose. When a currency is not exchangeable, an entity needs to estimate the spot
+exchange rate to reflect the rate at which an orderly exchange transaction would take place
+at the measurement date between market participants under prevailing economic conditions.
+The adoption of the above standards and amendments will have no material impact on the
+Group and the Bank's financial statements.
+226
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+Basis of preparation (Continued)
+The adoption of the other standards and amendments does not have any material impact
+on the operating results, comprehensive income and financial position of the Group for the
+year ended 31 December 2023.
+Amendments to IFRS 10 and IAS 28 clarify the accounting treatment for sales or
+contribution of assets between an investor and its associates or joint ventures. The
+amendments require a full recognition of a gain or loss when the sale or contribution
+between an investor and its associate or joint venture constitutes a business. For a
+transaction involving assets that do not constitute a business, a gain or loss resulting
+from the transaction is recognised in the investor's profit or loss only to the extent of the
+unrelated investor's interest in that associate or joint venture.
+225
+1
+Amendments made to IAS 1 Presentation of Financial Statements in 2020 and 2022 clarified
+that liabilities are classified as either current or non-current, depending on the rights
+that exist at the end of the reporting period. Classification is unaffected by the entity's
+expectations or events after the reporting date (e.g. the receipt of a waiver or a breach of
+covenant).
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+1
+Basis of preparation (Continued)
+Effective for
+annual periods
+beginning on or
+after
+Amendments to IAS 1
+1.2 Standards and amendments that are not yet effective in the current year and have not
+been adopted before their effective dates by the Group
+Amendments to IAS 7 and
+IFRS 7
+Amendments to IAS 21
+IFRS 10 and IAS 28
+Amendments
+Amendments to IFRS 16
+1 January 2024
+1 January 2024
+1 January 2024
+1 January 2025
+Effective date
+has been deferred
+indefinitely
+Supplier finance arrangements
+or Non-current and Non-current
+Liabilities with Covenants
+Lease Liability in a Sale and
+Leaseback
+Classification of Liabilities as Current
+Lack of Exchangeability
+Sale or Contribution of Assets
+between an Investor and its
+Associate or Joint Venture
+Covenants of loan arrangements will not affect classification of a liability as current or
+non-current at the reporting date if the entity must only comply with the covenants after
+the reporting date. However, if the entity must comply with a covenant either before or at
+the reporting date, this will affect the classification as current or non-current even if the
+covenant is only tested for compliance after the reporting date.
+all resulting exchange differences are recognised in “Other comprehensive income”.
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+233
+The effect of exchange rate changes on cash and cash equivalents is presented individually
+in the statement of cash flows.
+On consolidation, exchange differences arising from the translation of the net investment in
+foreign entities, and of customers deposits taken and other currency instruments designated
+as hedges of such investments are taken to “Other comprehensive income”. When a foreign
+entity is disposed, these exchange differences are recognised in the income statement.
+FOR THE YEAR ENDED 31 DECEMBER 2023
+assets and liabilities for each statement of financial position presented are translated at
+the closing rate at the date of that statement of financial position;
+•
+Except for the entities in a hyper-inflationary economy, where all financial statement
+items are translated into the presentation currency at the closing rate at the statement of
+financial position date, the results and financial positions of all the Group entities that
+have a functional currency different from the presentation currency are translated into the
+presentation currency as follows:
+Non-monetary assets and liabilities that are measured at historical cost in foreign currencies
+are translated using the foreign exchange rates at the date of the transaction. Non-monetary
+assets and liabilities that are measured at fair value in foreign currencies are translated using
+the foreign exchange rates at the date the fair value is determined. Translation differences
+on non-monetary financial assets classified as financial assets at fair value through other
+comprehensive income are recognised in "Other comprehensive income”. Translation
+differences on non-monetary financial assets and liabilities held at fair value through profit
+or loss are recognised as "Net trading gains” in the income statement.
+3.2 Transactions and balances (Continued)
+Foreign currency translation (Continued)
+3
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+income and expenses for each income statement are translated at exchange rates at the
+date of the transactions, or a rate that approximates the exchange rates of the date of
+the transaction; and
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+Business model
+Financial instruments
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+4
+BANK OF CHINA LIMITED
+The Group's business model refers to how the Group manages its financial assets in order to
+generate cash flows. For example, financial assets are held within a business model whose
+objective is to hold assets to collect contractual cash flows or within a business model
+whose objective is achieved by both collecting contractual cash flows and selling financial
+assets. If above two situations are not applicable, the financial assets are classified as part of "other"
+business model. The Group's assessment of the business model is performed on a financial
+asset portfolio basis, and determined on the basis of scenarios which are reasonably
+expected to occur, taking into account: how cash flows were realised in the past, how the
+performance are evaluated and reported to the entity's key management personnel; the risks
+that affect the performance and the way in which those risks are assessed and managed; and
+how managers of the business are compensated, etc.
+The Group classifies financial assets as subsequently measured at amortised cost, fair value
+through other comprehensive income or fair value through profit or loss on the basis of both
+the Group's business model for managing the financial assets and the contractual cash flow
+characteristics of the financial asset.
+4.2.1 Financial assets
+4.2 Classification and Subsequent measurement
+The fair value of a financial instrument at initial recognition is normally the transaction
+price. If the Group determines that the fair value at initial recognition differs from the
+transaction price, and if that fair value is evidenced by a quoted price in an active market
+for an identical asset or liability or based on a valuation technique that uses only data from
+observable markets, the Group recognises the difference between the fair value at initial
+recognition and the transaction price as a gain or loss.
+At initial recognition, the Group measures a financial asset or financial liability at its
+fair value. For a financial asset or financial liability at fair value through profit or loss,
+transaction costs are directly recognised in profit or loss. For other financial asset or
+liability, transaction costs are recognised in the initial measurement.
+The Group recognises a financial asset or financial liability in its statement of financial
+position when the Group becomes a party to the contractual provisions of the instrument,
+which is the trade date.
+4.1 Initial recognition and measurement
+234
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Unrealised gains on transactions between the Group and its associates and joint ventures
+are eliminated to the extent of the Group's interests in the associates and joint ventures;
+unrealised losses are also eliminated unless the transaction provides evidence of impairment
+of the asset transferred. Accounting policies of associates and joint ventures have been
+changed where necessary to ensure consistency with the policies adopted by the Group.
+232
+2.2 Associates and joint ventures
+In the Bank's statement of financial position, investments in subsidiaries are accounted
+for at cost less impairment. Cost is adjusted to reflect changes in consideration arising
+from contingent consideration amendments, but does not include acquisition-related costs,
+which are expensed as incurred. Dividends or profits declared to distribute by the invested
+entity shall be recognised by the Bank as other operating income. The Group assesses at
+each financial reporting date whether there is objective evidence that an investment in
+subsidiaries is impaired. An impairment loss is recognised for the amount by which the
+investment in subsidiaries' carrying amount exceeds its recoverable amount. Recoverable
+amount is the higher of the investment in subsidiaries' fair value less costs to sell and value
+in use.
+All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
+transactions between members of the Group are eliminated in full on consolidation. Where
+necessary, accounting policies of subsidiaries have been changed to ensure consistency with
+the policies adopted by the Group.
+2.1 Subsidiaries (Continued)
+2 Consolidation (Continued)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+230
+The excess of the consideration transferred, the amount of any non-controlling interest in the
+acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
+over the fair value of the net identifiable assets acquired is recorded as goodwill. If those
+amounts are less than the fair value of the net identifiable assets of the subsidiary acquired,
+in the case of a bargain purchase, the difference is recognised directly in the income
+statement. Goodwill is tested for impairment annually, or more frequently whenever there
+is an indication of possible impairment, and carried at cost less accumulated impairment
+losses. If there is any indication that goodwill is impaired, recoverable amount is estimated
+and the difference between carrying amount and recoverable amount is recognised as an
+impairment charge. Impairment losses on goodwill are not reversed. Gains and losses on the
+disposal of an entity include the carrying amount of goodwill relating to the entity sold.
+The Group uses acquisition method of accounting to account for business combinations.
+Consideration transferred for the acquisition of a subsidiary is the fair values of the assets
+transferred, the liabilities incurred to the former owners of the acquired business and the
+equity interests issued by the Group. Consideration transferred includes the fair value of
+any asset or liability resulting from a contingent consideration arrangement. Acquisition-
+related costs are expensed as incurred. Identifiable assets acquired and liabilities and
+contingent liabilities assumed in a business combination are measured initially at their fair
+values at the acquisition date. On an acquisition by acquisition basis, the Group recognises
+any non-controlling interest in the acquiree either at fair value or at the non-controlling
+interest's proportionate share of the acquiree's net identifiable assets.
+Subsidiaries are all entities (including structured entities) over which the Group has control.
+The Group controls an entity where the Group is exposed to, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect those returns
+through its power to direct the activities of the entity. The existence and effect of potential
+voting rights that are currently exercisable or convertible and rights arising from other
+contractual arrangements are considered when assessing whether the Group controls another
+entity. Subsidiaries are fully consolidated from the date on which control is transferred to
+the Group. They are de-consolidated from the date that control ceases. If the changes of the
+relevant facts and circumstances resulting in changes of relevant elements in the definition
+of control, the Group will re-evaluate whether subsidiaries are controlled.
+2.1 Subsidiaries
+2 Consolidation
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Associates are all entities over which the Group has significant influence but no control
+or joint control, generally accompanying a shareholding of between 20% and 50% of the
+voting rights.
+BANK OF CHINA LIMITED
+Joint ventures exist where the Group has a contractual arrangement with one or more parties
+to undertake economic activities which are subject to joint control.
+The contractual cash flow characteristics
+Monetary assets and liabilities denominated in foreign currencies at the financial reporting
+date are translated at the foreign exchange rates ruling at that date. Changes in the fair
+value of monetary securities denominated in foreign currency classified as financial
+assets at fair value through other comprehensive income are analysed between translation
+differences resulting from changes in the amortised cost of the securities and other changes
+in the carrying amount of the securities. Translation differences related to changes in the
+amortised cost are recognised in the income statement, and other changes in the carrying
+amount are recognised in “Other comprehensive income”. Translation differences on all
+other monetary assets and liabilities are recognised in the income statement.
+Foreign currency transactions are translated into respective functional currency using
+the exchange rates prevailing at the dates of the transactions, or the exchange rates that
+approximate the exchange rates prevailing at the dates of the transaction. Foreign exchange
+gains and losses resulting from the settlement of such transactions are recognised in the
+income statement.
+3.2 Transactions and balances
+The functional currency of the Group's operations in the Chinese mainland is Renminbi (“RMB”).
+Items included in the financial statements of each of the Group's operations in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries and regions are measured using the
+currency of the primary economic environment in which the entity operates (the “functional
+currency"). The presentation currency of the Group is RMB.
+3.1 Functional and presentation currency
+Foreign currency translation
+3
+When the Group ceases to consolidate or equity account for an investment because of a
+loss of control, joint control or significant influence, any retained interest in the entity is
+re-measured to its fair value, with the change in carrying amount recognised in the income
+statement. The fair value is the initial carrying amount for the purposes of subsequently
+accounting for the retained interest as an associate, joint venture or financial asset. In
+addition, any amounts previously recognised in other comprehensive income in respect of
+that entity are reclassified to the income statement.
+The Group treats transactions with non-controlling interests that do not result in a loss of
+control as transactions with equity owners of the Group. For purchases from non-controlling
+interests, the difference between any consideration paid and the relevant share acquired of
+the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on
+disposals to non-controlling interests are also recorded in equity.
+2.3 Transactions with non-controlling interests
+Consolidation (Continued)
+2
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+231
+The Group assesses at each financial reporting date whether there is objective evidence that
+investments in associates and joint ventures are impaired. Impairment losses are recognised
+for the amounts by which the investments in associates and joint ventures' carrying amounts
+exceed their recoverable amounts. The recoverable amounts are the higher of investments in
+associates and joint ventures' fair value less costs to sell and value in use.
+Investments in associates and joint ventures are initially recognised at cost and accounted
+for using the equity method of accounting. The Group's "Investment in associates and joint
+ventures" includes goodwill.
+The assessment of contractual cash flow characteristics is to determine whether the asset's
+contractual cash flows are solely payments of principal and interest on the principal amount
+outstanding. Principal is the fair value of the financial asset at initial recognition. However,
+the principal amount may change over the life of the financial asset (for example, if there
+are repayments of principal). Interest consists of consideration for the time value of money,
+for the credit risk associated with the principal amount outstanding during a particular
+period of time and for other basic lending risks and costs, as well as a profit margin.
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on a financial asset measured at fair value through other comprehensive income
+shall be recognised in “Other comprehensive income", except for interests calculated using
+effective interest method, impairment losses or reversal; and foreign exchange gains and
+losses. When the financial asset is derecognised, the cumulative gain or loss previously
+recognised in other comprehensive income is reclassified from equity to profit or loss. The
+impairment allowances for such financial assets are recognised in other comprehensive
+income, impairment losses or reversal are recognised in profit or loss, and not reduce the
+carrying amount of such financial assets in the statement of financial position.
+The Group classifies financial assets as subsequently measured at amortised cost if both of
+the following conditions are met:
+is a derivative (except for a derivative that is a financial guarantee contract or a
+designated and effective hedging instrument).
+on initial recognition is part of a portfolio of identified financial instruments that are
+managed together and for which there is evidence of a recent actual pattern of short-
+term profit-taking; or
+is acquired or incurred principally for the purpose of selling or repurchasing it in the
+near term; or
+•
+•
+•
+A financial asset or financial liability is classified as held for trading if it:
+4.2.3 Financial assets and financial liabilities held for trading
+4.2.4 Financial assets and financial liabilities designated as at fair value through profit or loss
+The Group may, at initial recognition, irrevocably designate a financial asset or financial
+liability as measured at fair value through profit or loss, because either:
+4.2 Classification and Subsequent measurement (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+237
+The Group does not reclassify any financial liabilities.
+Financial instruments (Continued)
+•
+•
+it eliminates or significantly reduces a measurement or recognition inconsistency that
+would otherwise arise from measuring assets or liabilities or recognising the gains and
+losses on them on different bases; or
+239
+The Group uses valuation techniques commonly used by market participants to price
+financial instruments and techniques which have been demonstrated to provide reliable
+estimates of prices obtained in actual market transactions. The Group makes use of all
+factors that market participants would consider in setting a price, and incorporates these
+into its chosen valuation techniques and tests for validity using prices from any observable
+current market transactions in the same instruments.
+Fair value is the price that would be received to sell an asset or paid to transfer a liability
+in an orderly transaction between market participants at the measurement date. Fair values
+of quoted financial assets and financial liabilities in active markets are based on market
+prices, as appropriate. If there is no active market, the Group establishes fair value by using
+valuation techniques. These include the use of recent arm's length transactions, discounted
+cash flow analysis and option pricing models, and other valuation techniques commonly
+used by market participants.
+4.4 Determination of fair value
+The impairment allowances for financial guarantees and loan commitments are presented in
+“Other liabilities - provision".
+Loan commitments are commitments provided by the Group to customers to grant loans
+under the established contract terms during certain period. The impairment allowance for
+loan commitments is measured using the ECL model.
+Financial guarantees are initially recognised at fair value on the date the guarantee was
+given. Subsequent to initial recognition, the financial guarantee contracts are measured
+at the higher of the initial measurement less amortisation calculated and the impairment
+allowance determined by the expected credit loss ("ECL”) model at the financial reporting
+date. Any increase in the liability relating to financial guarantee contracts is recognised in
+the income statement.
+Financial guarantee contracts are contracts that require the issuer to make specified
+payments to reimburse the holder for a loss it incurs because a specified debtor fails to
+make payments when due, in accordance with the terms of a debt instrument. Such financial
+guarantees are given to banks, financial institutions and other bodies to secure customer
+loans, overdrafts and other banking facilities.
+4.3 Financial guarantee contracts and loan commitments
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+238
+the financial liability contains one or more embedded derivatives, unless the embedded
+derivative(s) does not significantly modify the cash flows or it is clear, with little or no
+analysis, that it would not be separately recorded.
+a portfolio of financial liabilities or financial assets and financial liabilities is
+managed and its performance is evaluated on a fair value basis, in accordance with
+a documented risk management or investment strategy, and information about
+the portfolio is provided internally on that basis to the Group's key management
+personnel; or
+it is a financial liability designated as at fair value through profit or loss and the effects
+of changes in the Group's credit risk are presented in other comprehensive income.
+When such financial liability is derecognised, the cumulative gain or loss previously
+recognised in other comprehensive income is reclassified from other comprehensive
+income to undistributed profits under equity.
+(1) Financial assets at amortised cost
+•
+financial guarantee contracts and commitments to provide a loan at a below-market
+interest rate.
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+4.2.1 Financial assets (Continued)
+235
+the financial asset is held within a business model whose objective is achieved by both
+collecting contractual cash flows and selling financial assets; and
+•
+The Group classifies financial assets as subsequently measured at fair value through other
+comprehensive income if both of the following conditions are met:
+(2) Financial assets at fair value through other comprehensive income
+Such financial assets that the Group holds are subsequently measured at amortised cost.
+That is, the amount at which the financial asset is measured at initial recognition minus the
+principal repayments, plus or minus the cumulative amortisation using the effective interest
+method of any difference between that initial amount and the maturity amount and adjusted
+for any loss allowance.
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+the financial asset is held within a business model whose objective is to hold financial
+assets in order to collect contractual cash flows; and
+•
+the contractual terms of the financial asset give rise on specified dates to cash flows
+that are solely payments of principal and interest on the principal amount outstanding.
+(2) Financial assets at fair value through other comprehensive income (Continued)
+Investments in equity instruments
+The Group may, at initial recognition, irrevocably designate an investment in equity
+instrument, which is not held for trading, as at fair value through other comprehensive
+income when it meets the definition of an equity instrument under IAS 32 Financial
+Instruments: Presentation. When the equity instrument is derecognised, the cumulative
+gain or loss previously recognised in other comprehensive income shall be reclassified
+from other comprehensive income to undistributed profits under equity. Dividends, which
+the Group is entitled to collect, on equity investments in such measurement category are
+recognised in profit or loss. No impairment losses or reversal are recognised for such equity
+instruments.
+financial liabilities that arise when a transfer of a financial asset does not qualify for
+derecognition or when the continuing involvement approach applies.
+financial liabilities at fair value through profit or loss. Such liabilities, include
+financial liabilities held for trading and financial liabilities designated as at fair value
+through profit or loss.
+The Group classifies all financial liabilities as subsequently measured at amortised cost,
+except for:
+4.2.2 Financial liabilities
+When, and only when, the Group changes the business model for managing financial
+assets, the Group shall reclassify all affected financial assets. Reclassification is applied
+prospectively from the first day of the first reporting period following the change in
+business model.
+(3) Financial assets at fair value through profit or loss (Continued)
+4.2.1 Financial assets (Continued)
+4.2 Classification and Subsequent measurement (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+236
+Such financial assets that the Group holds are subsequently measured at fair value. A gain
+or loss on such financial asset is recognised in profit or loss unless it is part of a hedging
+relationship. Dividends, which the Group is entitled to collect, on equity investments in
+such measurement category are recognised in profit or loss.
+A financial asset is measured at fair value through profit or loss unless it is measured
+at amortised cost or at fair value through other comprehensive income, which includes
+financial assets held for trading, financial assets designated as at fair value through profit or
+loss and other financial assets mandatorily measured at fair value through profit or loss in
+accordance with IFRS 9.
+(3) Financial assets at fair value through profit or loss
+Financial liabilities at fair value through profit or loss held by the Group are subsequently
+measured at fair value. A gain or loss on a financial liability that is measured at fair value is
+recognised in profit or loss unless:
+it is part of a hedging relationship; or
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+These embedded derivatives separated from the host contract are measured at fair value
+with changes in fair value recognised in the income statement.
+If it is unable to measure the embedded derivative separately either at acquisition or at the
+subsequent financial reporting date, the Group will designate the entire hybrid instrument as
+at fair value through profit or loss.
+4.11 Offsetting financial instruments
+Financial assets and liabilities are offset and the net amount is reported in the statement of
+financial position when there is a current legally enforceable right to set off the recognised
+amounts and there is an intention to settle on a net basis, or realise the asset and settle the
+liability simultaneously.
+246
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+5
+Precious metals
+Precious metals comprise gold, silver and other precious metals. The Group retains all risks
+and rewards of ownership related to precious metals deposited with the Group, including
+the right to freely pledge or transfer, and it records the precious metals received as an asset.
+A liability to return the amount of precious metals deposited is also recognised. Precious
+metals that are not related to the Group's precious metal market making and trading
+activities are initially measured at acquisition cost and subsequently measured at the lower
+of cost and net realisable value. Precious metals that are related to the Group's market
+making and trading activities are initially recognised at fair value and subsequent changes
+in fair value included in “Net trading gains” are recognised in the income statement.
+Repurchase agreements, agreements to re-sell and securities lending
+Securities and bills sold subject to repurchase agreements ("Repos”) continue to be
+recognised and are recorded as "Financial investments". The corresponding obligation is
+included in "Placements from banks and other financial institutions” and “Due to central
+banks”. Securities and bills purchased under agreements to re-sell ("Reverse repos") are not
+recognised. The receivables are recorded as “Placements with and loans to banks and other
+financial institutions" or "Balances with central banks", as appropriate.
+The difference between purchase and sale price is recognised as "Interest expense” or “Interest
+income” in the income statement over the life of the agreements using the effective interest
+method.
+Securities lending transactions are generally secured, with collateral taking the form
+of securities or cash. Securities lent to counterparties by the Group are recorded in the
+consolidated financial statements. Securities borrowed from counterparties by the Group
+are not recognised in the consolidated financial statements of the Group. Cash collateral
+received or advanced is recognised as a liability or an asset in the consolidated financial
+statements.
+7
+Property and equipment and construction in progress
+The Group's property and equipment mainly comprise buildings, equipment and motor
+vehicles and aircraft. When the costs attributable to the land use rights cannot be reliably
+measured and separated from that of the building at inception, the costs are included in the
+cost of buildings and recorded in "Property and equipment".
+the hybrid (combined) instrument is not measured at fair value with changes in fair
+value recognised in the income statement.
+Assets purchased or constructed are initially measured at acquisition cost or deemed cost,
+as appropriate. Such initial cost includes expenditure that is directly attributable to the
+acquisition of the assets.
+a separate instrument with the same terms as the embedded derivative would meet the
+definition of a derivative; and
+•
+(2) Cash flow hedge
+Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable
+to a particular risk associated with all, or a component of, a recognised asset or liability (such
+as all or some future interest payments on variable-rate debt) or a highly probable forecast
+transaction, and could affect profit or loss.
+The effective portion of changes in the fair value of hedging instruments that are designated
+and qualify as cash flow hedges is recognised in “Other comprehensive income”. The
+ineffective portion is recognised immediately in the income statement.
+Amounts accumulated in equity are reclassified to the income statement in the same periods
+when the hedged future cash flows affect profit or loss.
+When the Group discontinues hedge accounting for a cash flow hedge, if the hedged future
+cash flows are still expected to occur, that amount accumulated in the cash flow hedge
+reserve shall remain in equity. If the hedged future cash flows are no longer expected to
+occur, that amount shall be immediately reclassified from the cash flow hedge reserve to
+profit or loss.
+(3) Net investment hedge
+Net investment hedge is a hedge of a net investment in a foreign operation.
+Hedges of net investments in foreign operations are accounted for similarly to cash flow
+hedges. Any gain or loss on the hedging instrument relating to the effective portion of the
+hedge is recognised directly in other comprehensive income; the gain or loss relating to the
+ineffective portion is recognised immediately in the income statement. Gains and losses
+accumulated in equity are reclassified to the income statement when the foreign operation is
+disposed of as part of the gain or loss on the disposal.
+When the Group separates the forward element and the spot element of a forward contract
+and designates as the hedging instrument only the change in the value of the spot element,
+the changes in the value of the forward element of the forward contract shall be recognised
+in other comprehensive income to the extent that it relates to the hedged item.
+245
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+4
+Financial instruments (Continued)
+4.10 Embedded derivatives
+An embedded derivative is a component of a hybrid (combined) instrument that also
+includes a non-derivative host contract with the effect that some of the cash flows of the
+hybrid (combined) instrument vary in a way similar to a stand-alone derivative.
+If a hybrid contract contains a host that is a financial asset, the Group applies the
+requirements of classification and measurement to the entire hybrid contract. If a hybrid
+contract contains a host that is not a financial asset, the Group separates the embedded
+derivative from the host contract and accounts for it as a derivative, if, and only if:
+•
+the economic characteristics and risks of the embedded derivative are not closely
+related to those of the host contract;
+247
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+3%
+16.1%-24.3%
+7.2 Aircraft
+Aircraft are used in the Group's aircraft operating leasing business.
+Aircraft are depreciated using the straight-line method over the expected useful life of 25
+years, less the years in service at the time of purchase to an estimated residual value rate
+varying from 0% to 15%.
+248
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+7
+Property and equipment and construction in progress (Continued)
+8
+Construction in progress consists of assets under construction or being installed and is
+stated at cost. Cost includes equipment cost, cost of construction, installation and other
+direct costs. Items classified as construction in progress are transferred to property and
+equipment when such assets are ready for their intended use and the depreciation charge
+commences after such assets are transferred to property and equipment.
+Leases
+At inception of a contract, the Group assesses whether the contract is, or contains, a lease.
+A contract is, or contains, a lease if the contract conveys the right to control the use of one
+or more identified assets for a period of time in exchange for consideration.
+8.1 As Lessee
+The lease term is the non-cancellable period of a lease for which the Group has the right to
+use an underlying asset. The Group considers a lease that, at the commencement date of the
+lease, has a lease term of 12 months or less, and does not contain any option to purchase
+the underlying asset as a short-term lease; and a lease for which the value of the individual
+underlying asset is relatively low when new as a lease of low-value asset. The Group
+chooses not to recognise the right-of-use assets and lease liabilities for short-term leases and
+leases of low-value assets, and the rental expenses are recognised as “Operating expenses”
+in the income statement on a straight-line basis over each period of the lease term.
+The Group uses the incremental borrowing rate as the discount rate to calculate the present
+value of lease payment. The economic circumstance and the observable interest rate set
+the foundation for each institution of the Group in determining the incremental borrowing
+rate. On this basis, the applicable incremental borrowing rate is calculated through the
+adjustment of the reference interest rate, which is determined according to the situation of
+the Bank and its subsidiaries and the underlying asset, the lease term, the amount of lease
+liability and other specific conditions of the lease.
+249
+4-6 years
+Motor vehicles
+6.4%-32.4%
+3%
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+7
+Property and equipment and construction in progress (Continued)
+Subsequent costs are included in an asset's carrying amount, only when it is probable that
+future economic benefits associated with the item will flow to the Group and the cost of the
+item can be measured reliably. All other repairs and maintenance costs are charged to the
+income statement during the financial period in which they are incurred.
+Depreciation is calculated on a straight-line method to write down the cost of such assets to
+their residual values over their estimated useful lives. The residual values and useful lives
+of assets are reviewed, and adjusted if appropriate, at each financial reporting date.
+Property and equipment are reviewed for impairment at each financial reporting date.
+Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
+written down immediately to its recoverable amount. The recoverable amount is the higher
+of the asset's fair value less costs to sell and value in use.
+Gains and losses on disposals are determined by the difference between proceeds and
+carrying amount, after deduction of relevant taxes and expenses. These are included in the
+income statement.
+7.1 Buildings, equipment and motor vehicles
+4.9 Derivative financial instruments and hedge accounting (Continued)
+Buildings comprise primarily branch and office premises. The estimated useful lives,
+estimated residual value rate and depreciation rate of buildings, equipment and motor
+vehicles are as follows:
+Estimated
+useful lives
+Estimated
+residual
+value rate
+Annual
+depreciation
+rate
+Buildings
+15-50 years
+3%
+1.9%-6.5%
+Equipment
+3-15 years
+Type of assets
+Financial instruments (Continued)
+an unbiased and probability-weighted amount that is determined by evaluating a range
+of possible outcomes;
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+4.5 Derecognition of financial instruments
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+•
+time value of money; and
+reasonable and supportable information about past events, current conditions and
+forecasts of future economic conditions that is available without undue cost or effort at
+the financial reporting date.
+When measuring ECL, an entity need not necessarily identify every possible scenario.
+However, the Group considers the risk or probability that a credit loss occurs by reflecting
+the possibility that a credit loss occurs and the possibility that no credit loss occurs, even
+if the possibility of a credit loss occurring is very low. The parameters, assumptions and
+estimation techniques used in measuring the ECL are disclosed in Note VI.2.3 measurement
+of ECL.
+241
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+4
+Financial instruments (Continued)
+4.7 Modification of contractual cash flows
+Financial assets are derecognised when the rights to receive cash flows from the
+investments have expired, or when a financial asset is transferred, the Group has transferred
+substantially all risks and rewards of ownership, or when the Group neither transfers nor
+retains substantially all risks or rewards of ownership of the financial asset but has not
+retained control of the financial asset.
+Financial liabilities are derecognised when they are extinguished, that is, when the
+obligation is discharged, cancelled or expires.
+4.6 Impairment measurement for losses on assets
+At the financial reporting date, the Group assesses and recognises the relevant impairment
+allowances for financial assets measured at amortised cost, debt instruments measured
+at fair value through other comprehensive income, and loan commitments and financial
+guarantee contracts on the basis of expected credit losses.
+4
+The Group measures ECL of a financial instrument in a way that reflects:
+For purchased or originated credit-impaired financial assets, the Group only recognises
+the cumulative changes in lifetime expected credit losses since initial recognition at the
+financial reporting date as an impairment allowance. At each financial reporting date, the
+Group recognises in profit or loss the amount of the change in lifetime expected credit
+losses as an impairment gain or loss.
+Where, in the previous accounting period, the impairment allowance of a financial
+instrument was measured based on the ECL of the instrument over the entire lifetime, and
+while, at the current financial reporting date, such financial instrument is no longer regarded
+as experiencing a significant increase in credit risk since its initial recognition, the Group
+measures the impairment allowance of the financial instrument as at the financial reporting
+date using the ECL of the instrument over the next 12 months.
+Measurement of ECL (Continued)
+4.6 Impairment measurement for losses on assets (Continued)
+Financial instruments (Continued)
+4
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+The Group sometimes modifies or renegotiates the contractual cash flows with a
+counterparty, which include extending payment term arrangements, repayment schedule
+modifications and changes to the interest settlement arrangement. When this happens, the
+Group assesses whether or not the new terms are substantially different to the original
+•
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+240
+stage 3: Financial assets with objective evidence of impairment at the financial
+reporting date are included under Stage 3, with their impairment allowance measured
+at an amount equivalent to the ECL over the lifetime of the financial instruments.
+stage 2: Financial instruments that have had a significant increase in credit risk since
+initial recognition but have no objective evidence of impairment are included under
+Stage 2, with their impairment allowance measured at an amount equivalent to the
+ECL over the lifetime of the financial instruments;
+stage 1: Financial instruments without significant increases in credit risk since initial
+recognition are included under Stage 1 to calculate their impairment allowance at an
+amount equivalent to the ECL of the financial instruments for the next 12 months;
+•
+According to the changes of credit risk of financial instruments since initial recognition, the
+Group calculates ECL by three stages:
+ECL is a weighted average of credit losses on financial instruments weighted at the risk of
+default. Credit loss is the difference between all contractual cash flows that are due to the
+Group in accordance with the contract and all cash flows expected to be received by the
+Group discounted at the original effective interest rate (or credit-adjusted effective interest
+rate for purchased or originated credit-impaired financial assets), i.e. the present value of all
+cash shortfalls.
+Measurement of ECL
+FOR THE YEAR ENDED 31 DECEMBER 2023
+terms.
+7.3 Construction in progress
+If the terms are substantially different, the Group derecognises the original financial asset
+and recognises a “new” asset at fair value and recalculates a new effective interest rate
+for the asset. The date of renegotiation is consequently considered to be the date of initial
+recognition for impairment calculation purposes, including for the purpose of determining
+whether a significant increase in credit risk has occurred. The Group also assesses whether
+the new financial asset recognised is deemed to be credit-impaired at initial recognition,
+especially in circumstances where the renegotiation was driven by the debtor being unable
+to make the originally agreed payments. Differences in the carrying amount are also
+recognised in profit or loss as a gain or loss on derecognition.
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+4
+Financial instruments (Continued)
+4.9 Derivative financial instruments and hedge accounting (Continued)
+•
+the hedge ratio of the hedging relationship is the same as that resulting from the
+quantity of the hedged item that the entity actually hedges and the quantity of the
+hedging instrument that the entity actually uses to hedge that quantity of the hedged
+item. However, that designation shall not reflect an imbalance between the weightings
+of the hedged item and the hedging instrument that would create hedge ineffectiveness
+that could result in an accounting outcome that would be inconsistent with the purpose
+of hedge accounting.
+Possible sources of ineffectiveness are as follows:
+•
+notional and timing differences between the hedged items and hedging instruments;
+•
+(Amounts in millions of Renminbi, unless otherwise stated)
+significant changes in counterparties' credit risk.
+If a hedging relationship ceases to meet the hedge effectiveness requirement relating to
+the hedge ratio but the risk management objective for that designated hedging relationship
+remains the same, the Group adjusts the hedge ratio of the hedging relationship so that it
+meets the qualifying criteria again.
+(1) Fair value hedge
+Fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset
+or liability or an unrecognised firm commitment, or a component of any such item, that is
+attributable to a particular risk and could affect profit or loss.
+The changes in fair value of hedging instruments that are designated and qualify as fair
+value hedges are recorded in the income statement, together with the changes in fair
+value of the hedged item attributable to the hedged risk. The net result is included as
+ineffectiveness in the income statement.
+If the hedge no longer meets the criteria for hedge accounting, the adjustment to the
+carrying amount of a hedged item for which the effective interest method is used is
+amortised to the income statement over the period to maturity.
+244
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+If the terms are not substantially different, it does not result in a derecognition of the
+original financial asset. The risk of default of such assets after modification is assessed at
+the financial reporting date and compared with the risk under the original terms at initial
+recognition. The gross carrying amount of the financial asset is recalculated based on the
+present value of the renegotiated or modified contractual cash flows discounted at the
+financial asset's original effective interest rate, and the related gain or loss is recognised in
+profit and loss.
+(Amounts in millions of Renminbi, unless otherwise stated)
+The Group discontinues hedge accounting prospectively when the hedging instrument
+expires or is sold, terminated or exercised (the replacement or rollover of a hedging
+instrument into another hedging instrument does not constitute an expiration or termination),
+or the hedging relationship ceases to meet the updated risk management objective, or to
+meet other qualifying criteria for hedging accounting.
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+242
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+4
+4.8 Write off
+Financial instruments (Continued)
+4.9 Derivative financial instruments and hedge accounting
+BANK OF CHINA LIMITED
+The treatment of the resulting fair value gain or loss depends on whether the derivative is
+designated and qualifies as a hedging instrument, and if so, the nature of the item being
+hedged. For derivatives not designated or qualified as hedging instruments, including those
+intended to provide effective economic hedges of specific interest rate and foreign exchange
+risks, but do not qualify for hedge accounting, changes in the fair value of these derivatives
+are recognised in “Net trading gains" in the income statement.
+243
+Derivatives are initially recognised at fair value on the date a derivative contract is
+entered into and are subsequently remeasured at their fair value. Fair values are obtained
+from quoted market prices in active markets, including recent market transactions, or
+valuation techniques, including discounted cash flow analysis and option pricing models, as
+appropriate. Credit risk valuation adjustments are applied to the Group's over-the-counter
+derivatives to reflect the credit risk of the counterparties and the Group, respectively. They
+are dependent on the expected future values of exposures for each counterparty and default
+probabilities, etc. All derivatives are carried as assets when the fair value is positive and as
+liabilities when the fair value is negative.
+the effect of credit risk does not dominate the value changes that result from that
+economic relationship; and
+in the opposite direction because of the same risk, which is the hedged risk;
+That means the hedging instrument and hedged item have values that generally move
+When the Group determines that a loan has no reasonable prospect of recovery after the
+Group has taken necessary actions and necessary proceedings, the loan is written off
+against its allowance for impairment losses. If in a subsequent period the loan written off
+is recovered, the amount recovered will be recognised in profit or loss captured within
+impairment losses on financial assets.
+•
+•
+The hedging relationship should meet all of the following hedge effectiveness requirements:
+The Group documents, at inception, the relationship between hedging instruments and
+hedged items, as well as its risk management objective and strategy for undertaking hedge
+transactions. When designating a hedging relationship and on an ongoing basis, the Group
+assesses the hedge effectiveness, that is the extent to which changes in the fair value or cash
+flows of the hedging instrument offsets changes in fair values or cash flows of the hedged
+item.
+there is an economic relationship between the hedged item and the hedging instrument.
+Preference shares issued by the Group contain no contractual obligation to deliver cash
+or another financial asset; or to exchange financial assets or financial liabilities with
+another entity under conditions that are potentially unfavourable to the Group. Preference
+shares issued are non-derivative instruments that will be settled in the Group's own equity
+instruments, but includes no contractual obligation for the Group to deliver a variable
+number of its own equity instruments. The Group classifies preference shares issued as
+an equity instrument. Fees, commissions and other transaction costs of preference shares
+issuance are deducted from equity. Dividends on preference shares are recognised as profit
+distribution at the time of declaration.
+255
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+14 Preference shares and perpetual bonds (Continued)
+15 Contingent liabilities
+A contingent liability is a possible obligation that arises from past events and whose
+existence will only be confirmed by the occurrence or non-occurrence of one or more
+uncertain future events not wholly within the control of the Group. It can also be a present
+obligation arising from past events that is not recognised because it is not probable that
+an outflow of economic resources will be required or the amount of obligation cannot be
+measured reliably.
+16 Fiduciary activities
+The Group acts as a custodian, trustee or in other fiduciary capacities, that result in its
+holding or placing of assets on behalf of individuals, securities investment funds, social
+security funds, insurance companies, qualified foreign institutional investors, annuity
+schemes and other customers. These assets are not included in the statement of financial
+position of the Group, as they are not assets of the Group.
+256
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Preference shares and perpetual bonds
+(Amounts in millions of Renminbi, unless otherwise stated)
+Perpetual bonds issued by the Group contain no contractual obligation to deliver cash or
+another financial asset; or to exchange financial assets or financial liabilities with another
+entity under conditions that are potentially unfavourable to the Group. Perpetual bonds
+issued include no terms and arrangements that the bonds must or will alternatively be
+settled in the Group's own equity instruments. The Group classifies perpetual bonds issued
+as an equity instrument. Fees, commissions and other transaction costs of perpetual bonds
+issuance are deducted from equity. Interest on perpetual bonds is recognised as profit
+distribution at the time of declaration.
+The Group also administers entrusted loans on behalf of third-party lenders. In this regard,
+the Group grants loans to borrowers, as an intermediary, at the direction of third-party
+lenders, who fund these loans. The Group has been contracted by these third-party lenders
+to manage the administration and collection of these loans on their behalf. The third-party
+lenders determine both the underwriting criteria for and all terms of the entrusted loans,
+including their purposes, amounts, interest rates, and repayment schedules. The Group
+charges a commission related to its activities in connection with the entrusted loans, but
+the risk of loss is borne by the third-party lenders. Entrusted loans are not recognised in the
+statement of financial position of the Group.
+•
+Discount rates used to measure the insurance contracts by the Group are consistent with
+observable current market prices to reflect the time value of money and financial risks
+related to those cash flows. For certain portfolios of insurance contracts, the Group chooses
+to disaggregate the insurance finance income or expenses for the period, arising from the
+effect of the time value of money and financial risks, into “Operating expenses" and "Other
+comprehensive income".
+The Group considers a group of insurance contracts as the lowest unit of account. Insurance
+contracts are measured using general measurement model (“GMM”), variable fee approach
+("VFA") or premium allocation approach ("PAA") as at the end of each reporting period.
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+254
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+13 Insurance contracts (Continued)
+13.2 Recognition and measurement of insurance contracts (Continued)
+14
+For the GMM, the insurance contracts are measured with the following building block:
+•
+•
+present value of future cash flows that relate directly to the fulfilment of the contracts
+discounted at applicable current discount rates;
+risk adjustments for non-financial risks; and
+contractual service margin representing unearned profit of the contracts.
+Contractual service margin is adjusted at the end of each reporting period for changes
+in fulfilment cash flows that relate to future service; and will be recognised in insurance
+revenue in subsequent periods to reflect the insurance services provided under “Other
+operating income”. The Group shall recognise a loss at initial recognition of a group of
+onerous insurance contracts or when the group of contracts becomes onerous on subsequent
+measurement under “Operating expenses" in the income statement.
+Insurance related revenue are presented in “Other operating income”, whereas insurance
+service expenses and insurance finance income or expenses of certain portfolios of
+insurance contracts are presented in “Operating expenses". Directly attributable insurance
+acquisition cash flows are amortised in both “Other operating income” and “Operating
+expenses" during the lifetime of insurance contracts.
+Apart from the GMM, the Group applies the VFA to insurance contracts with direct
+participation feature. Under the VFA, changes in the Group's share in the underlying items
+are related to changes in future services to be provided, and related contractual service
+margin will be adjusted. In addition, the Group simplifies measurement of short-term
+insurance contracts within one year or other eligible insurance contracts using the PAA.
+17 Interest income and expense
+For deductible temporary differences associated with investment in subsidiaries, associates
+and joint ventures, a deferred tax asset is recognised to the extent that, and only to the
+extent that, it is probable that the temporary difference will reverse in the foreseeable
+future; and taxable profit will be available against which the temporary difference can be
+utilised.
+"Interest income” and “Interest expense" in the Group's income statement are the interest
+income and expense calculated using the effective interest method on financial assets at
+amortised cost, financial assets at fair value through other comprehensive income and
+financial liabilities at amortised cost.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+19 Income taxes (Continued)
+19.2 Deferred income tax (Continued)
+Deferred income tax liabilities on taxable temporary differences arising from investments
+in subsidiaries, associates and joint ventures are recognised, except where the timing of the
+reversal of the temporary difference can be controlled and it is probable that the difference
+will not reverse in the foreseeable future.
+The tax effects of income tax losses available for carrying forward are recognised as an
+asset when it is probable that future taxable profits will be available against which these
+losses can be utilised.
+Deferred income tax assets and liabilities are offset when there is a legally enforceable right
+to offset current tax assets against current tax liabilities and when the deferred income taxes
+are related to the same fiscal authority.
+20
+Cash equivalents
+Cash equivalents of the Group are short-term and highly liquid assets, which are readily
+convertible into known amounts of cash and subject to an insignificant risk of changes in
+value. These assets have original maturity of less than three months.
+21
+Related parties
+A party is considered to be related to the Group if:
+(1) the party is a person or a close member of that person's family and that person:
+(a) has control or joint control over the Group;
+(b) has significant influence over the Group; or
+258
+Deferred tax liabilities shall be recognised for all taxable temporary differences, except
+to the extent that the deferred tax liability arises from the initial recognition of goodwill,
+or the initial recognition of an asset or liability in a transaction which is not a business
+combination, and at the time of the transaction, affects neither accounting profit nor taxable
+profit/loss and does not give rise to equal taxable and deductible temporary differences.
+13.2 Recognition and measurement of insurance contracts
+Deferred income tax assets are recognised to the extent that it is probable that future taxable
+profit will be available against which deductible temporary differences can be utilised
+except the deferred tax asset arises from the initial recognition of an asset or liability in
+a transaction that is not a business combination and at the time of the transaction, affects
+neither accounting profit nor taxable profit/loss and does not give rise to equal taxable and
+deductible temporary differences.
+Effective interest method is used in the calculation of the amortised cost of a financial asset
+or a financial liability and in the allocation and recognition of the interest income or interest
+expense in profit or loss over the relevant period. Effective interest rate is that exactly
+discounts estimated future cash flows through the expected life of a financial asset or
+financial liability to the gross carrying amount of a financial asset or the amortised cost of a
+financial liability. When calculating effective interest rate, the Group estimates the expected
+cash flows by considering all contractual terms of the financial instrument but does not
+consider expected credit losses. The calculation includes all amounts paid or received by the
+Group that are an integral part of the effective interest rate, transaction costs and all other
+premiums or discounts.
+For those purchased or originated credit-impaired financial assets, the Group calculates the
+interest income by applying the credit-adjusted effective interest rate to the amortised cost
+of the financial asset from initial recognition. Credit-adjusted effective interest rate is that
+exactly discounts the estimated future cash flows through the expected life of the financial
+asset to the amortised cost of a financial asset that is a purchased or originated credit-
+impaired financial asset.
+For those financial assets that are not purchased or originated credit-impaired financial
+assets but subsequently have become credit-impaired financial assets, the Group calculates
+the interest income by applying the effective interest rate to the amortised cost of the
+financial asset in subsequent reporting periods.
+Fee and commission income
+The Group earns fee and commission income from a diverse range of services it provides
+to its customers. For those services that are provided over a period of time, fee and
+commission income is accrued in accordance with the terms and conditions of the service
+agreement. For other services, fee and commission income is recognised when the
+transactions are completed.
+257
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+18
+(Amounts in millions of Renminbi, unless otherwise stated)
+19
+Income taxes
+Income taxes comprise current income tax and deferred income tax. Tax
+recognised in the
+income statement except to the extent that it relates to items directly recognised in Equity,
+in which case, tax is also directly recognised in Equity.
+19.1 Current income tax
+Current income tax is the expected tax payable on the taxable income for the year, using tax
+rates enacted or substantially enacted at the financial reporting date, and any adjustment to
+tax payable in respect of previous years.
+19.2 Deferred income tax
+Deferred income tax is recognised using the liability method, on temporary differences
+arising between the tax bases of assets and liabilities and their carrying amounts in the
+consolidated financial statements. Deferred income tax is determined using tax rates and
+laws that have been enacted or substantially enacted by the financial reporting date and are
+expected to apply when the related asset is realised, or the liability is settled.
+The principal temporary differences arise from asset impairment allowances, revaluation of
+certain financial assets and financial liabilities including derivative contracts, revaluation
+of investment properties, depreciation and amortisation, provisions for pension, retirement
+benefits and salary payables.
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+Insurance contracts subject to similar risks and managed together are grouped as a portfolio
+of insurance contracts. Each portfolio is further divided into groups of contracts mainly
+based on profitability, extent of loss or possibility of becoming onerous contract subsequent
+to initial recognition. Insurance contracts issued more than one year apart should not be
+included in the same group.
+It is technically feasible to complete the intangible asset so that it will be available for
+use or sale;
+13.1 Identification of Insurance Contracts
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+8
+Leases (Continued)
+8.1 As Lessee (Continued)
+Lease liabilities (Continued)
+In calculating the present value of the lease payments, the Group uses the incremental
+borrowing rate of lessee as the discount rate. The Group calculates the interest expenses
+of lease liabilities in each period during the lease term using the constant periodic rate of
+interest, and recognises such interest expenses in profit or loss. Variable lease payments
+that are not included in the measurement of lease liabilities are recognised in profit or loss
+as incurred.
+After the commencement date, the Group remeasures lease liabilities by discounting
+the revised lease payments if any of the following occur: (i) there is a change in the
+in-substance fixed payments; (ii) there is a change in the amounts expected to be payable
+under a residual value guarantee; (iii) there is a change in future lease payments resulting
+from a change in an index or a rate used to determine those payments; or (iv) there is a
+change in the assessments of options to purchase the underlying asset, extend or terminate
+the lease, or the circumstances of the actual exercise of these options.
+Lease modification
+Lease modification is a change in the scope of a lease, the consideration for a lease or
+lease term, that was not part of the original terms and conditions of the lease. For example,
+adding or terminating the right to use one or more underlying assets, or extending or
+shortening the contractual lease term.
+The Group accounts for a lease modification as a separate lease if both:
+(1) the modification increases the scope of the lease by adding the right to use one or
+more underlying assets; and
+(2) the consideration for the lease increases by an amount commensurate with the stand-
+alone price for the increase in scope and any appropriate adjustments to that stand-
+alone price to reflect the circumstances of the particular contract.
+For a lease modification that is not accounted for as a separate lease, at the effective date
+of the lease modification, the Group remeasures the lease term and the lease liability by
+discounting the revised lease payments using a revised discount rate.
+251
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+250
+Lease liabilities
+(c) is a member of the key management personnel of the Group or of a parent of the
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+8
+Leases (Continued)
+8.1 As Lessee (Continued)
+Right-of-use assets
+The right-of-use assets of the Group mainly include buildings, vehicles and other
+right-of-use assets.
+At the commencement date of the lease, the Group recognises a right-of-use asset. The cost
+of the right-of-use asset comprises:
+(1) the amount of the initial measurement of the lease liability;
+(2) any lease payments made at or before the commencement date of the lease less any
+lease incentives received;
+(3) any initial direct costs incurred when the Group is a lessee; and
+(4)
+an estimate of costs to be incurred by the lessee in dismantling and removing the
+underlying asset, restoring the site on which it is located or restoring the underlying
+asset to the condition required by the terms and conditions of the lease.
+The right-of-use assets are depreciated on a straight-line basis subsequently by the Group.
+If the Group is reasonably certain that the ownership of the underlying asset will be
+transferred to the Group at the end of the lease term, the Group depreciates the asset from
+the commencement date to the end of the useful life of the asset. Otherwise, the Group
+depreciates the asset from the commencement date to the earlier of the end of the useful life
+of the asset or the end of the lease term.
+The Group remeasures the lease liabilities at the present value of the changed lease
+payments and adjusts the carrying amounts of the right-of-use assets accordingly. When the
+carrying amount of the right-of-use asset is reduced to zero, and there is a further reduction
+in the measurement of the lease liability, the Group recognises the remaining amount of the
+remeasurement in profit or loss.
+At the commencement date of the lease, the Group measures the lease liabilities at the
+present value of the lease payments that are not paid at that date, except for short-term
+leases and leases of low-value assets.
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+8
+Leases (Continued)
+The expenditure attributable to the intangible asset during its development phase can
+be reliably measured.
+Other development expenditures that do not meet the conditions above are recognised in
+profit or loss in the period in which they are incurred.
+The value of intangible assets is reviewed for impairment at each financial reporting date.
+Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
+written down immediately to its recoverable amount.
+The recoverable amount of an intangible asset is the higher of the asset's fair value less
+costs to sell and value in use.
+253
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+11
+12
+Employee benefits
+Bonus plans
+The Group recognises a liability and an expense for bonuses, taking into consideration
+its business performance and profit attributable to the Bank's equity holders. The Group
+recognises a liability where contractually obliged or where there is a past practice that has
+created a constructive obligation.
+Provisions
+Provisions are recognised when: the Group has a present legal or constructive obligation
+as a result of past events, it is probable that an outflow of resources embodying economic
+benefits will be required to settle the obligation, and a reliable estimate of the amount of the
+obligation can be made. The amount initially recognised as a provision should be the best
+estimate of the expenditure required to settle the present obligation.
+13
+Insurance contracts
+There are adequate technical, financial and other resources to complete the
+development and the ability to use or sell the intangible asset, and
+It can be demonstrated how the intangible asset will generate economic benefits,
+including the evidence of the existence of a market for the output of the intangible
+asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
+intangible asset;
+Intention to complete the intangible asset and use or sell it;
+•
+8.2 As Lessor
+9
+At the inception date, a lease is classified as a finance lease if it transfers substantially all
+the risks and rewards incidental to ownership of an underlying asset. Otherwise, a lease is
+classified as an operating lease.
+When the Group is a lessor under finance leases, the Group recognises the finance lease
+receivable and derecognises the assets under finance leases at the commencement date.
+The Group recognise assets held under a finance lease in the consolidated statement of
+financial position and such assets at an amount equal to the net investment in the lease. Net
+investment in the lease is the present value of the sum of the unguaranteed residual value
+and the lease payments that are not received at the commencement date, which is discounted
+by the interest rate implicit in the lease. The Group calculates and recognises the interest
+income in each period during the lease term using the constant periodic rate of interest, and
+recognises such interest income in profit or loss. Income relating to variable lease payments
+that are not measured as part of the net investment in the lease are recognised in profit or
+loss as incurred.
+When the Group is a lessor under operating leases, the Group reflects the underlying assets
+as the Group's assets. The rental income is recognised as “Other operating income" in the
+income statement on a straight-line basis over each period of the lease term. Income relating
+to variable lease payments that are not measured as part of the receivable in the lease are
+recognised in profit or loss as incurred.
+Investment properties
+Investment properties, principally consisting of office buildings, are held to generate
+rental income or earn capital gains or both and are not occupied by the Group. Investment
+properties are carried at fair value and changes in fair value are recorded in the income
+statement, representing the open market value and other related information determined
+periodically by independent appraisers.
+10 Intangible assets
+Intangible assets are identifiable non-monetary assets without physical substance owned and
+controlled by the Group, including computer software and other intangible assets.
+The insurance subsidiaries of the Group bear insurance risk through issuance of insurance
+contracts. The Group assesses whether each contract transfers significant insurance risk to
+determine whether it is within the scope of IFRS 17.
+Computer software and other intangible assets are stated at acquisition cost less accumulated
+amortisation and impairment. These costs are amortised on a straight-line basis over their
+estimated useful lives with the amortisation recognised in the income statement.
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+10 Intangible assets (Continued)
+Expenditure on research and development mainly includes staff cost, depreciation and
+amortisation of equipment and software during research and development activities.
+The expenditure on research and development project is classified into expenditure on
+the research phase and expenditure on the development phase. Research is defined as
+original and planned investigation undertaken with the prospect of gaining new scientific
+or technical knowledge and understanding. Development is defined as the application
+of research findings or other knowledge to a plan or design for the production of new or
+substantially improved materials, devices, products etc. before the start of commercial
+production or use. Expenditure on research phase is recognised in profit or loss in the
+period in which it is incurred. Expenditure on the development phase is capitalised only if
+all of the following conditions are satisfied:
+•
+•
+252
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Group;
+259
+or
+269
+10,309
+Insurance revenue
+12,058
+13,432
+Aircraft leasing income
+9,413
+14,311
+Revenue from sales of precious metal products
+2022
+2023
+Year ended 31 December
+Other operating income
+5
+(1) All the net gains on the derecognition of financial assets at amortised cost were result from disposals
+during the year ended 31 December 2023 and 2022.
+2,083
+806
+Total
+1,431
+1,779
+8,601
+Dividend income
+4,563
+6,036
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+267
+For the year ended 31 December 2023, government subsidy income from operating activities, as part of
+other operating income, was RMB359 million (2022: RMB206 million).
+43,001
+49,199
+(1)
+Total
+652
+5,921
+Other (1)
+(7)
+(632)
+(Note V.22)
+Changes in fair value of investment properties
+979
+1,671
+intangible assets and other assets
+Gains on disposals of property and equipment,
+5,545
+(973)
+fair value through other comprehensive income
+Net gains on derecognition of financial assets at
+amortised cost (1)
+Net (losses)/gains on derecognition of financial assets at
+17,647
+Net gains from interest rate products
+8,947
+9,934
+foreign exchange products
+2022
+2023
+Year ended 31 December
+74,890
+2,203
+78,865
+(13,504)
+87,102
+92,369
+Net gains from foreign exchange and
+Net trading gains
+3
+Net fee and commission income
+Fee and commission expense
+Fee and commission income
+(12,212)
+(Amounts in millions of Renminbi, unless otherwise stated)
+Net losses from fund investments and equity products
+(4,740)
+2022
+2023
+Year ended 31 December
+Net gains on transfers of financial asset
+4
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(835)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+266
+Included in "Net trading gains" above for the year ended 31 December 2023 were gains of RMB 1,444
+million in relation to financial assets and financial liabilities designated as at fair value through profit or loss (2022:
+losses of RMB1,173 million).
+(1)
+7,221
+28,723
+Total (1)
+811
+1,977
+Net gains from commodity products
+BANK OF CHINA LIMITED
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+6,882
+3,690
+4,388
+29
+38
+4,972
+4,821
+70,956
+75,143
+-Injury at work
+6,914
+Unemployment
+Pension
+- Medical
+Social insurance
+Retirement benefits
+Staff welfare
+Salary, bonus and subsidy
+2022
+2023
+Year ended 31 December
+- Annuity
+Staff costs
+6,420
+3,829
+Total
+4,415
+4,610
+Other
+25
+20
+Reimbursement for cancellation of labour contract
+1,140
+1,911
+4,114
+Labour union fee and staff education fee
+5,451
+Housing funds
+109
+119
+- Maternity insurance
+86
+98
+216
+245
+5,117
+107,872
+7
+V
+Insurance finance expenses/(income)
+7,814
+9,020
+Insurance service expenses
+9,090
+13,939
+Cost of sales of precious metal products
+23,579
+24,853
+6,994
+Depreciation and amortisation
+44,778
+General operating and administrative expenses (1) (2)
+101,004
+107,872
+Staff costs (Note V.7)
+2022
+2023
+Year ended 31 December
+Operating expenses
+44,730
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(3,279)
+Other
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+268
+Included in the "Operating expenses" was expenditure related to research and development activities of
+RMB469 million for the year ended 31 December 2023 (2022: RMB342 million).
+Included in the "Operating expenses” were premises and equipment-related expenses (mainly comprised of
+property management and building maintenance expenses and taxes) of RMB13,564 million for the year
+ended 31 December 2023 (2022: RMB13,188 million).
+Included in the "General operating and administrative expenses" were lease expenses related to short-term
+leases, leases of low-value assets and others of RMB1,239 million for the year ended 31 December 2023 (2022:
+RMB1,045 million).
+Included in the "General operating and administrative expenses" was principal auditors' remuneration of
+RMB 193 million for the year ended 31 December 2023 (2022: RMB182 million), of which RMB85 million
+is for Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions of the Group (2022:
+RMB73 million).
+Taxes and surcharges
+(4)
+(2)
+(1)
+199,506
+222,933
+Total (3) (4)
+10,496
+9,379
+6,072
+6,098
+(3)
+6
+7,183
+5,751
+263
+When estimating the value in use of aircraft held by the subsidiary, the Group estimates
+expected future cash flows from the aircraft and uses a suitable discount rate to calculate
+present value. The Group obtains valuations of aircraft from independent appraisers for
+which the principal assumptions underlying aircraft value are based on current market
+transactions for similar aircraft in the same location and condition. The Group also uses
+the fair value of aircraft obtained from independent appraisers in its assessment of the
+recoverable amount of intangible assets and the goodwill arising from the purchase of the
+Group's aircraft leasing subsidiary.
+Non-financial assets are periodically reviewed for impairment and where the carrying
+amount of an asset is greater than its estimated recoverable amount, it is written down
+immediately to its recoverable amount. Recoverable amount is the higher of the asset's fair
+value less costs to sell and value in use.
+Impairment of non-financial assets
+Where the final tax outcome of these matters is different from the amounts that were
+initially estimated, such differences will impact the current income tax, deferred income
+tax, and value-added tax in the period during which such a determination is made.
+The Group is subject to income, value-added and other taxes in numerous jurisdictions,
+principally in Chinese mainland and Hong Kong (China). During the ordinary course of
+business, there are certain transactions and activities for which the final tax treatment is
+uncertain. The Group takes into account the existing tax legislations and past practice in
+determining the tax estimates.
+Taxes
+5
+4
+BANK OF CHINA LIMITED
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+262
+The Group uses judgement to assess whether the Group has a present legal or constructive
+obligation as a result of past events at each financial reporting date, and judgement is used
+to determine if it is probable that an outflow of resources embodying economic benefits will
+be required to settle the obligation, and to determine a reliable estimate of the amount of the
+obligation and relevant disclosure in the consolidated financial statements.
+Provisions
+The Group assesses assumptions and estimates used in valuation techniques including
+review of valuation model assumptions and characteristics, changes to model assumptions,
+the quality of market data, whether markets are active or inactive, other fair value
+adjustments not specifically captured by models and consistency of application of
+techniques between reporting periods as part of its normal review and approval processes.
+Valuation techniques are validated and periodically reviewed and, where appropriate,
+updated to reflect market conditions at the financial reporting date.
+The Group establishes fair value of financial instruments with reference to a quoted market
+price in an active market or, if there is no active market, using valuation techniques. These
+valuation techniques include the use of recent arm's length transactions, observable prices
+for similar instruments, discounted cash flow analysis using risk-adjusted interest rates, and
+commonly used market pricing models. Whenever possible these models use observable
+market inputs and data including, for example, interest rate yield curves, foreign currency
+rates and option volatilities. The results of using valuation techniques are calibrated against
+the industry practice and observable current market transactions in the same or similar
+instruments.
+3
+(Amounts in millions of Renminbi, unless otherwise stated)
+Fair value of financial instruments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+1%-7%
+Turnover tax paid
+City construction and maintenance tax
+6%
+Taxable added value
+Value-added tax
+25%
+Taxable income
+Corporate income tax
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Statutory rates
+Chinese mainland
+Taxes
+The principal income and other taxes to which the Group is subject are listed below:
+IV TAXATION
+The Group reassesses whether it controls a structured entity if facts and circumstances
+indicate that there are changes to one or more of the relevant elements of control.
+Variable returns the Group is exposed to from its involvement with structured entities
+include decision makers' remuneration (such as management fees and performance-related
+fees), as well as other benefits (such as investment income, remuneration and exposure to
+loss from providing credit or liquidity support, and variable returns from transactions with
+structured entities). When assessing whether it controls a structured entity, the Group not
+only considers applicable legal or regulatory requirements, and contractual agreements, but
+also other circumstances where the Group may have obligation to absorb any loss of the
+structured entity.
+The Group is involved with structured entities in its normal business course, and the Group
+determines whether or not to consolidate those structured entities depending on whether the
+Group has control over them. When assessing control over structured entities, the Group
+takes consideration of power arising from rights it directly owns or indirectly owns through
+subsidiaries (including controlled structured entities), variable returns, and the link between
+power and returns.
+Judgement in assessing control over structured entities
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+Tax basis
+Education surcharges
+2
+(Amounts in millions of Renminbi, unless otherwise stated)
+The concept of materiality is applied by management in the preparation of financial
+statements and disclosures. Financial information is material if omitting, misstating or
+obscuring it could reasonably be expected to influence decisions that the primary users
+of general purpose financial statements make on the basis of those financial statements,
+which provide financial information about a specific reporting entity. The Group assesses
+whether the financial information is material depending on the nature and magnitude, or
+both, considering entity-specific situation. When considering the nature of the information,
+the Group considers whether the nature of such information is related to normal operating
+activity, whether it has significant impact on the Group's financial position, operating
+results and cash flows. When considering the magnitude of the information, the Group
+considers the proportion of such information of total assets, total liabilities, total equity,
+total operating income, total operating expenses, profit after tax, total other comprehensive
+income and respective financial statement line items.
+23 Materiality
+The Group reviews the internal reporting in order to assess performance and allocate
+resources. Segment information is presented on the same basis as the Group's management
+and internal reporting.
+22 Segment reporting
+a person identified in (1)(a) has significant influence over the entity or is a
+member of the key management personnel of the entity (or of a parent of the
+entity).
+the entity is controlled or jointly controlled by a person identified in (1);
+(f)
+(e) the entity is a post-employment benefit plan for the benefit of employees of either
+the Group or an entity related to the Group;
+(d) one entity is a joint venture of a third entity and the other entity is an associate of
+the third entity;
+260
+(c) the entity and the Group are joint ventures of the same third party;
+(a) the entity and the Group are members of the same group;
+(2) the party is an entity where any of the following conditions applies:
+Related parties (Continued)
+21
+II SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(b) one entity is an associate or joint venture of the other entity (or of a parent,
+subsidiary or fellow subsidiary of the other entity);
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES (Continued)
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+261
+Refer to Note VI.2.3 measurement of ECL for the description of the parameters,
+assumptions and estimation techniques used in measuring the ECL.
+estimation of future cash flows for impaired loans and advances to customers where
+ECL being assessed individually.
+economic indicators for forward-looking measurement, and the application of
+economic scenarios and weightings for different types of products; and
+determination of criteria for determining significant increases in credit risk, default
+and credit-impaired financial assets;
+selection of appropriate models and assumptions for the measurement of ECL;
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+segmentation of portfolios sharing similar credit risk characteristics for the purposes of
+measuring ECL;
+A number of significant judgements and estimations are required in applying the accounting
+requirements for measuring ECL, such as:
+The measurement of the expected credit loss allowance for financial assets measured at
+amortised cost, debt instruments measured at FVOCI and loan commitments and financial
+guarantee contracts is an area that requires the use of complex models and significant
+assumptions about future economic conditions and credit behaviour (the likelihood of
+customers defaulting and the resulting losses).
+Measurement of ECL
+Areas susceptible to changes in critical estimates and judgements, which affect the carrying
+value of assets and liabilities, are set out below. It is possible that actual results may be
+materially different from the estimates and judgements referred below.
+The Group has taken into consideration the impact of the economic environment on the
+industries and territories in which the Group operates when determining critical accounting
+estimates and judgements in applying accounting policies.
+The accounting estimates and judgements made by the Group will generally affect
+the carrying amounts of assets and liabilities of the next financial year. Estimates and
+judgements are continually evaluated and are based on historical experience and other
+factors, including expectations of future events that are believed to be reasonable under the
+circumstances.
+1
+III CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS IN APPLYING
+ACCOUNTING POLICIES
+(Amounts in millions of Renminbi, unless otherwise stated)
+•
+5,788
+Turnover tax paid
+Local education surcharges
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+459,266
+466,545
+265
+Net interest income
+2
+(421,582)
+Subtotal
+(44,898)
+(47,079)
+Bonds issued and other
+(64,761)
+(84,376)
+other financial institutions
+Due to and placements from banks and
+(311,923)
+(582,306)
+(450,851)
+Net fee and commission income
+2023
+Spread income from foreign exchange business
+Other
+5,651
+8,051
+Consultancy and advisory fees
+6,844
+8,581
+Custodian and other fiduciary service fees
+11,368
+11,412
+Year ended 31 December
+Credit commitment fees
+13,585
+15,994
+16,672
+22,319
+21,134
+Bank card fees
+Settlement and clearing fees
+Agency commissions
+2022
+12,256
+3%
+Due to customers
+880,848
+- Personal loans
+- Corporate loans and advances
+Loans and advances to customers
+Interest income
+2022
+Year ended 31 December
+2023
+Net interest income
+1
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS
+- Discounted bills
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+264
+16.5%
+Assessable profits
+Hong Kong (China) profits tax
+Hong Kong (China)
+2%
+Turnover tax paid
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Interest expense
+Financial investments
+750,601
+1,048,851
+Subtotal
+63,590
+105,957
+Due from and placements with and loans to banks and
+other financial institutions and central banks
+102,639
+106,021
+- Financial assets at amortised cost
+61,964
+- Financial assets at fair value through
+86,272
+164,603
+192,293
+8,460
+9,160
+282,390
+275,494
+361,805
+465,947
+652,655
+other comprehensive income
+101,004
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+other comprehensive income
+125
+900
+ZHANG Keqiu (4)(6)
+127
+223
+260
+50
+50
+|||
+| | | │
+||||
+127
+CHU Yiyun
+223
+HUI Ping
+86
+1,111
+LENG Jie (3)(6)
+50
+8
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+271
+260
+8,107
+486
+3,415
+3,862
+129
+129
+ZHENG Zhiguang
+50
+344
+Directors', supervisors' and senior management's emoluments (Continued)
+JIA Xiangsen
+ZHOU Hehua(3)
+300
+WANG Changyun
+600
+JIANG Guohua(6)
+174
+Giovanni Tria
+152
+E Weinan
+250
+Jean-Louis Ekra
+493
+CHUI Sai Peng Jose
+450
+Martin Cheung Kong LIAO
+Independent directors
+Angela CHAO
+225
+CHEN Chunhua
+329
+50
+WEI Hanguang(3)
+Supervisors
+329
+225
+300
+600
+50
+174
+250
+493
+450
+|||
+||||
+||||
+|||
+152
+CHEN Jianbo(1)(6)
+(1)
+(2)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+273
+During the years ended 31 December 2023 and 2022, the Group has not paid any
+emoluments to the directors, supervisors, or senior management as an inducement to join or
+upon joining the Group or as compensation for loss of office.
+The above five highest paid individuals' emoluments are based on best estimates of
+discretionary bonuses. Discretionary bonuses include portions of payments that are deferred
+to future periods.
+4
+22-
+2022
+Year ended 31 December
+2023
+77
+25,000,001-30,000,000
+20,000,001-25,000,000
+15,000,001-20,000,000
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+9
+Credit impairment losses
+934
+Financial assets at amortised cost
+Financial investments
+92,793
+106,114
+24
+(99)
+10,000,001-15,000,000
+92,769
+2022
+2023
+Year ended 31 December
+Subtotal
+- Loans and advances at fair value through
+other comprehensive income
+Loans and advances at amortised cost
+Loans and advances
+106,213
+For the years ended 31 December 2023 and 2022, these non-executive directors of the Bank were not
+remunerated by the Bank.
+5,000,001-10,000,000
+Emoluments of the individuals were within the following bands:
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+272
+WANG Wei ceased to serve as Executive director of the Bank as of 21 March 2023. XIAO Lihong and
+WANG Xiaoya ceased to serve as Non-executive director of the Bank as of 30 June 2023. CHEN Jianbo
+ceased to serve as Non-executive director of the Bank as of 17 April 2023. JIANG Guohua ceased to
+serve as Independent director of the Bank as of 26 February 2024. ZHANG Keqiu ceased to serve as
+Chairwoman of the Board of Supervisors and Shareholder Supervisor as of 5 February 2024. LENG Jie
+ceased to serve as Employee Supervisor as of 31 January 2023.
+GE Haijiao began to serve as Chairman of the Board of Directors and Executive director of the Bank as
+of 25 April 2023. ZHANG Yong began to serve as Non-executive director of the Bank as of 9 June 2023.
+LIU Hui began to serve as Non-executive director of the Bank as of 24 August 2023. SHI Yongyan began
+to serve as Non-executive director of the Bank as of 25 September 2023. LIU Xiaolei began to serve as
+Independent director of the Bank as of 26 March 2024. Since LIU Xiaolei did not hold any position at the
+Board of Directors of the Bank in 2023, no emoluments were disclosed in 2023.
+The compensation amounts for these directors and supervisors for the year ended 31 December 2022 were
+restated based on the finalised amounts as disclosed in the Bank's announcement on resolutions of the
+Board of Directors dated 30 August 2023.
+The total compensation packages for executive directors and certain supervisors for the year ended 31
+December 2023 including discretionary bonus have not yet been finalised in accordance with the relevant
+regulations of the PRC authorities. The amount of the compensation not provided for is not expected to
+have any significant impact on the Group's 2023 financial statements. The final compensation for the year
+ended 31 December 2023 will be disclosed in a separate announcement when determined.
+A portion of the discretionary bonus payments for executive directors and the Chairman of the Board of
+Supervisors are deferred for a minimum of 3 years, which is contingent upon the future performance in
+accordance with relevant regulations of the PRC authorities.
+Employee supervisors' compensation presented above is paid for serving as the supervisors of the Bank.
+For the years ended 31 December 2023 and 2022, these executive directors of the Bank did not receive any
+fees.
+(6)
+(5)
+(4)
+(3)
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+8
+Directors', supervisors' and senior management's emoluments (Continued)
+2
+1
+Contributions to pension schemes and other
+55
+20
+555
+39
+Amounts in RMB
+Discretionary bonuses
+Basic salaries and allowances
+2022
+2023
+Year ended 31 December
+The emoluments payable to the five individuals whose emoluments were the highest in the
+Group for the years ended 31 December 2023 and 2022, respectively are as follows:
+Of the five individuals with the highest emoluments, none of them are directors or
+supervisors whose emoluments are disclosed above.
+Five highest paid individuals
+22
+WANG Xiaoya (¹)(6)
+1,012
+86
+31
+151
+_(2)
+825
+93
+127
+605
+_(2)
+900
+93
+134
+673
+-(2)
+676
+71
+23
+205
+||||
+||||
+500
+450
+| | | |
+489
+JIANG Guohua (6)
+400
+Giovanni Tria
+101
+| | | |
+E Weinan
+450
+Jean-Louis Ekra
+500
+450
+||||
+||||
+350
+450
+504
+CHUI Sai Peng Jose
+ZHANG Jiangang (1)
+ZHANG Yong(1)(5)
+Non-executive directors
+WANG Wei(4)(6)
+LIN Jingzhen(4)
+LIU Jin (4)
+GE Haijiao (4)(5)
+Executive directors
+For the year ended 31 December 2023
+Details of the directors' and supervisors' emoluments are as follows:
+Directors', supervisors' and senior management's emoluments
+8
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+HUANG Binghua (1)
+Contributions
+Remuneration
+Fees
+Martin Cheung Kong LIAO
+Independent directors
+CHEN Jianbo(1)(6)
+WANG Xiaoya (1)(6)
+XIAO Lihong(1)(6)
+SHI Yongyan (1)(5)
+LIU Hui(1)(5)
+_(2)
+RMB'000
+RMB'000
+RMB'000
+RMB'000
+Total
+Benefits in
+kind
+to pension
+schemes
+paid
+RMB'000
+350
+400
+489
+schemes
+paid
+Fees
+Benefits in
+to pension
+Remuneration
+Contributions
+XIAO Lihong(1)(6)
+ZHAO Jie (¹)
+HUANG Binghua(¹)
+ZHANG Jiangang(1)
+Non-executive directors
+WANG Wei(4)(6)
+LIN Jingzhen(4)
+LIU Jin (4)
+kind
+Total
+RMB'000
+RMB'000
+118
+808
+-(2)
+1,011
+86
+118
+807
+Executive directors
+_(2)
+86
+125
+900
+_(2)
+RMB'000
+RMB'000
+RMB'000
+1,111
+For the year ended 31 December 2022
+Directors', supervisors' and senior management's emoluments (Continued)
+8
+260
+CHU Yiyun
+260
+260
+50
+50
+| | | |
+260
+260
+260
+JIA Xiangsen
+50
+ZHOU Hehua(3)
+50
+WEI Hanguang(3)
+Supervisors
+HUI Ping
+154
+ZHANG Keqiu (4)(6)
+134
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+7,029
+373
+673
+527
+270
+3,523
+4
+4
+LENG Jie (3)(6)
+900
+93
+2,606
+- Financial assets at fair value through
+BANK OF CHINA LIMITED
+2,092
+Basic and diluted earnings per share (in RMB)
+0.74
+0.72
+278
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+12
+Other comprehensive income
+Year ended 31 December
+2023
+2022
+Items that will not be reclassified to profit or loss
+Actuarial gains on defined benefit plans
+Changes in fair value on equity instruments designated
+at fair value through other comprehensive income
+Less: related income tax impact
+Other
+31
+68
+5,536
+294,388
+294,388
+Weighted average number of ordinary shares in issue
+(in million shares)
+213,103
+The Group is within the scope of the Pillar Two rules. As at 31 December 2023, Chinese
+mainland has not legislated the Pillar Two. The United Kingdom, Luxembourg, Germany,
+etc., where some of the Group's branches and subsidiaries are located, have enacted Pillar
+Two local legislation, and have come into effect on or after 1 January 2024. Since the global
+Pillar Two legislation was not effective at 31 December 2023, the Group is not required to
+recognise the related current income tax for the year ended 31 December 2023. Meanwhile,
+the Group applies the exception to recognising and disclosing information about deferred
+tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments
+to IAS 12-Income Taxes issued in May 2023.
+When Pillar Two becomes effective in the jurisdictions in which the Group operates, the
+Group is required to calculate the effective tax rate for each jurisdiction under the Pillar
+Two rules and to recognise a top-up tax on any shortfall of 15%. Due to the complexity
+of the Pillar Two calculations and the difference between the effective tax rate calculated
+under Pillar Two and IAS 12-Income Taxes, the Group is currently engaged with tax
+specialists to assist with analysing the potential impact of Pillar Two.
+277
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+11 Earnings per share
+3,009
+Basic earnings per share was computed by dividing the profit attributable to the ordinary
+shareholders of the Bank by the weighted average number of ordinary shares in issue during
+the period.
+Year ended 31 December
+2023
+2022
+Profit attributable to equity holders of the Bank
+Less: dividends/interest on preference shares/
+perpetual bonds declared
+231,904
+226,522
+(15,296)
+(13,419)
+Profit attributable to ordinary shareholders of the Bank
+216,608
+Diluted earnings per share was computed by dividing the adjusted profit attributable to the
+ordinary shareholders of the Bank based on assuming conversion of all potentially dilutive
+shares for the period by the adjusted weighted average number of ordinary shares in issue.
+There was no difference between basic and diluted earnings per share as there were no
+potentially dilutive shares outstanding for the years ended 31 December 2023 and 2022.
+(1,188)
+(903)
+(2)
+(375)
+Finance (expenses)/income from insurance contracts issued
+Less: related income tax impact
+(4,630)
+3,839
+534
+(561)
+(4,096)
+3,278
+Exchange differences from the translation of
+foreign operations
+1,501
+7,007
+Other
+(39)
+681
+Subtotal
+Total
+24,616
+7,559
+28,993
+9,742
+279
+32,951
+In December 2021, the OECD published Tax Challenges Arising from the Digitalisation of
+the Economy - Global Anti-Base Erosion Model Rules (Pillar Two).
+138
+Less: related income tax impact
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+4,377
+2,183
+Items that may be reclassified to profit or loss
+Changes in fair value on debt instruments measured
+at fair value through other comprehensive income
+25,128
+(35,976)
+Less: related income tax impact
+(5,643)
+7,389
+(504)
+Amount transferred to the income statement
+(652)
+Less: related income tax impact
+(215)
+263
+20,243
+(28,976)
+Allowance for credit losses on debt instruments measured
+at fair value through other comprehensive income
+2,005
+(513)
+973
+OECD Pillar Two model rules
+Subtotal
+10
+48,202
+47,633
+Hong Kong (China) profits tax
+5,401
+5,082
+Macao (China), Taiwan (China) and
+other countries and regions taxation
+6,155
+5,016
+Adjustments in respect of current income tax
+Chinese mainland income tax
+of prior years
+2,473
+Subtotal
+Deferred income tax (Note V.36.3)
+59,836
+60,204
+(10,599)
+(13,288)
+Total
+49,237
+46,916
+78
+The principal tax rates applicable to the Group are set out in Note IV.
+2022
+Income tax expense
+Income tax expense (Continued)
+(575)
+Subtotal
+3,026
+(421)
+Credit commitments
+(799)
+5,781
+Other
+(1,847)
+Current income tax
+(160)
+274
+106,494
+97,993
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+10
+Total
+Provision for Chinese mainland income tax includes income tax based on the statutory tax
+rate of 25% of the taxable income of the Bank and each of its subsidiaries established in
+the Chinese mainland, and supplementary PRC tax on overseas operations as determined in
+accordance with the relevant PRC income tax rules and regulations.
+Year ended 31 December
+2023
+275
+(35,178)
+(31,938)
+Items not deductible for tax purposes (2)
+13,262
+7,608
+Other
+(701)
+918
+Income tax expense
+46,916
+Income not subject to tax (1)
+(1)
+(2)
+Non-deductible items primarily include non-deductible losses resulting from the write-off of certain non-
+performing loans, and entertainment expenses in excess of the relevant deductible threshold under the
+relevant PRC tax regulations.
+276
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+Taxation on profits of Hong Kong (China), Macao (China), Taiwan (China) and other
+countries and regions has been calculated on the estimated assessable profits in accordance
+with local tax regulations at the rates of taxation prevailing in the countries or regions in
+which the Group operates.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Income not subject to tax mainly comprises interest income from PRC treasury bonds and Chinese local
+government bonds, and tax-free income recognised by the overseas entities in accordance with the relevant
+local tax law.
+3,019
+49,237
+3,089
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+10
+The tax rate on the Group's profit before income tax differs from the theoretical amount
+that would arise using the basic Chinese mainland tax rate of the Bank as follows:
+Year ended 31 December
+2023
+2022
+Income tax expense (Continued)
+295,608
+283,641
+Tax calculated at the basic Chinese mainland tax rate
+Effect of different tax rates for Hong Kong (China),
+73,902
+70,910
+Macao (China), Taiwan (China) and other countries
+and regions
+(5,137)
+Profit before income tax
+(3,601)
+Supplementary PRC tax on overseas income
+73
+Bonds issued
+Total
+(3,860)
+51
+(4,774)
+85,682
+(13,088)
+interest rate risk
+Bonds issued
+Foreign exchange and
+position
+22
+(9,228)
+Bonds issued
+Financial
+investments
+(4,774)
+85,682
+Financial investments
+Interest rate risk
+Assets
+Liabilities
+As at 31 December 2022
+Bonds issued
+Interest rate risk
+(7,714)
+95,927
+Liabilities
+289
+154
+(8,543)
+95,927
+Bonds issued
+37
+(2,794)
+Total
+Bonds issued
+interest rate risk
+Financial investments
+Foreign exchange and
+92
+central banks
+25
+225
+(3,175)
+Bonds issued
+(2,574)
+Due to central banks
+Due to
+Financial
+investments
+(7,714)
+Bonds issued
+Assets
+Notional amount
+in the
+statement of
+2,860
+Notional amount
+rate swaps
+Cross-currency interest
+interest rate risk
+Foreign exchange and
+N/A
+2.86%
+4.45%
+3.22%
+3.29%
+3.47%
+rate
+Average fixed interest
+109,257
+24,948
+70,065
+9.484
+2,380
+2,380
+Interest rate swaps
+Interest rate risk
+(216)
+2,860
+Average fixed interest
+rate
+4.74%
+Accumulated amount of
+fair value adjustments
+on the hedged items
+Carrying amount of
+hedged items
+Line item
+Fair value hedges
+As at 31 December 2023
+(ii) The following table sets out the details of the hedged items covered by the Group's fair
+value hedging strategies:
+(1) Fair value hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+financial
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+288
+N/A
+4.6875
+of AUD/CNY
+N/A
+-- - 6.0350
+of USD/CNY
+Average exchange rate
+Average exchange rate
+N/A
+FOR THE YEAR ENDED 31 DECEMBER 2023
+216
+5,643,787
+99,520
+16 Derivative financial instruments and hedge accounting
+The Group enters into foreign currency exchange rate, interest rate, equity, credit or
+precious metals and other commodity-related derivative financial instruments for trading,
+hedging, asset and liability management and customer initiated transactions.
+The contractual/notional amounts and fair values of derivative instruments held by the
+Group are set out in the following tables. The contractual/notional amounts of financial
+instruments provide a basis for comparison with the fair values of instruments recognised in
+the statement of financial position but do not necessarily indicate the amounts of future cash
+flows involved or the current fair value of the instruments and, therefore, do not indicate the
+Group's exposure to credit or market risks. The derivative instruments become favourable
+(assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates,
+foreign currency exchange rates, credit spreads, or equity/commodity prices relative to their
+terms. The aggregate fair values of derivative financial assets and liabilities can fluctuate
+significantly from time to time.
+16.1 Derivative financial instruments
+As at 31 December 2023
+Exchange rate derivatives
+Currency forwards and
+As at 31 December 2022
+Contractual/
+Fair value
+Notional
+Contractual/
+Notional
+Fair value
+amount
+Assets
+Liabilities
+amount
+Assets
+Liabilities
+swaps, and cross-currency
+interest rate swaps
+8,730,966
+Currency options
+Currency futures
+735,082
+2,568
+92,586
+5,735
+(85,583) 6,088,697
+(5,646)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+94,304
+V
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Debt securities
+Governments
+Policy banks
+Financial institutions
+Corporates
+Subtotal(3)
+Less: allowance for impairment losses(3)
+Total
+As at 31 December
+2023
+2022
+152,597
+209,940
+209,004
+86,703
+21,865
+22,084
+310
+10,374
+383,776
+329,101
+(299)
+(588)
+383,477
+328,513
+As at 31 December 2023 and 2022, the Group included the predominant majority of its placements with
+and loans to banks and other financial institutions under Stage 1, and measured the impairment losses
+based on expected credit losses in the next 12 months.
+283
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+“Placements with and loans to banks and other financial institutions” include balances arising from reverse
+repo agreements and collateralised financing agreements. They are presented by collateral type as follows:
+(86,847)
+6,672
+765,062
+Subtotal
+Accrued interest
+Less: allowance for impairment losses
+2,942,852
+2,316,421
+1,346
+1,080
+(3,058)
+(3,642)
+Total
+(1)
+(2)
+2,941,140
+2,313,859
+The Group places mandatory reserve funds with the People's Bank of China (the “PBOC”) and the central
+banks of Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions where it has
+operations. As at 31 December 2023, mandatory reserve funds placed with the PBOC were calculated at 9.0%
+(31 December 2022: 9.5%) and 4.0% (31 December 2022: 6.0%) of qualified RMB deposits and foreign
+currency deposits from customers in Chinese mainland of the Bank, respectively. Mandatory reserve funds
+placed with the central bank of domestic subsidiaries of the Group are determined by the PBOC. The
+amounts of mandatory reserve funds placed with the central banks of other jurisdictions are determined by
+local regulations.
+These represent funds for clearing purposes and balances other than mandatory reserves placed with the
+PBOC, the central banks of Hong Kong (China), Macao (China), Taiwan (China) and other countries and
+regions.
+282
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+15 Placements with and loans to banks and other financial institutions
+As at 31 December
+2023
+1,274,398
+623,484
+Surplus reserves and others (2)
+1,668,454
+(5,967)
+6
+(11)
+1,590
+19
+(10)
+Subtotal
+9,468,616
+98,327
+(91,240)
+6,713,771
+100,995
+(92,824)
+Interest rate derivatives
+Interest rate swaps
+5,605,842
+41,836
+(36,028)
+4,329,705
+46,655
+(38,621)
+Interest rate options
+15,749
+14 Balances with central banks
+As at 31 December
+2023
+2022
+Mandatory reserves (1)
+1,551,359
+2022
+The Group designates certain placements with and loans to banks and other financial institutions as
+financial assets measured at fair value through profit or loss, to eliminate or significantly reduce accounting
+mismatch. As at 31 December 2023, the carrying amount of the above-mentioned financial assets of the
+Group was RMB18,126 million (31 December 2022: RMB 12,333 million).
+1,233,888
+2,722
+2,151
+Changes for the year
+(22,547)
+22,505
+3,396
+3,354
+As at 31 December 2022 and
+1 January 2023
+7,090
+(7,703)
+6,118
+5,505
+Changes for the year
+24,225
+5,138
+(149)
+29,214
+As at 31 December 2023
+31,315
+(2,565)
+Interest rate futures
+5,969
+34,719
+280
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(30,208)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+29,637
+734
+4,558
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+12 Other comprehensive income (Continued)
+Other comprehensive income attributable to equity holders of the Bank in the consolidated
+statement of financial position:
+Gains/(losses)
+on financial
+assets at
+fair value
+through other
+comprehensive
+Exchange
+differences
+from the
+translation of
+income
+foreign
+operations
+Other
+Total
+As at 31 December 2021
+28,890
+(30,239)
+2,766
+1,417
+Impact of accounting policy
+changes (Note II.1.3)
+747
+31
+(44)
+As at 1 January 2022
+1,174,097
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+568,855
+815,063
+(1)
+As at 31 December 2023 and 2022, the Group included the predominant majority of due from banks and
+other financial institutions under Stage 1, and measured the impairment losses based on expected credit
+losses in the next 12 months.
+281
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+(348)
+349
+22,037
+35,950
+29,360
+Subtotal(1)(2)(3)
+Accrued interest
+Less: allowance for impairment losses(3)
+Total
+(1)
+(3)
+1,228,975
+1,173,321
+6,359
+4,663
+(1,446)
+(3,887)
+Total
+V
+750,357
+Subtotal due from banks and other financial institutions
+13
+Cash and due from banks and other financial institutions
+As at 31 December
+2023
+2022
+Cash
+67,571
+64,706
+Due from banks in Chinese mainland
+387,672
+573,718
+Due from other financial institutions in Chinese mainland
+Due from banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Due from other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries
+and regions
+18,847
+11,880
+93,134
+161,004
+1,110
+2,897
+Subtotal(1)
+Accrued interest
+500,763
+749,499
+1,822
+2,492
+Less: allowance for impairment losses (¹)
+(1,301)
+(1,634)
+501,284
+Placements with and loans to:
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Other financial institutions in Chinese mainland
+Average fixed interest
+99,520
+20,542
+56,497
+Banks in Chinese mainland
+4,270
+1,258
+Notional amount
+Interest rate swaps
+Interest rate risk
+Total
+5 years
+years
+months
+Over
+1 and 5
+3 and 12
+1 and 3
+months
+Less than
+1 month
+Between
+Between
+As at 31 December 2023
+Fair value hedges
+Between
+The following table sets out the maturity and average exchange rate/interest rate information
+of the hedging instruments mentioned above:
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+(1) Fair value hedges (Continued)
+16.2 Hedge accounting (Continued)
+rate
+16 Derivative financial instruments and hedge accounting (Continued)
+3.40%
+2.91%
+0.6766
+of AUD/USD
+Average exchange rate
+N/A
+--- 4.6875
+of AUD/CNY
+Average exchange rate
+N/A
+6.0350
+of USD/CNY
+Average exchange rate
+N/A
+3.91%
+5.50%
+interest rate
+Average fixed
+4,012
+3,661
+351
+Notional amount
+rate swaps
+Cross-currency interest
+interest rate risk
+Foreign exchange and
+N/A
+3.02%
+3.22%
+3.48%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+Derivatives designated as
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+(1) Fair value hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+285
+(274)
+4,570
+103,532
+Total
+liabilities
+(64)
+12
+4,012
+rate swaps
+Derivative
+financial assets/
+Cross-currency interest
+interest rate risk
+Foreign exchange and
+liabilities
+(210)
+hedging instruments in fair value hedges
+As at 31 December 2022
+Interest rate risk
+Contractual/
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+286
+(296)
+6,515
+112,117
+Total
+liabilities
+(43)
+3
+2,860
+rate swaps
+N/A
+Derivative
+financial assets/
+interest rate risk
+Foreign exchange and
+liabilities
+(253)
+6,512
+109,257
+Interest rate swaps
+Derivative
+financial assets/
+Liabilities financial position
+Assets
+Line item in the
+statement of
+Fair value
+Notional
+amount
+Cross-currency interest
+287
+16,953
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(76)
+9,085
+269
+(239)
+Commodity derivatives
+and other
+525,425
+6,244
+(8,392) 339,554
+118
+3,693
+Total(¹)
+15,643,394
+146,750
+(135,973) 11,503,597
+152,033
+(135,838)
+(1)
+The derivative financial instruments above include those designated as hedging instruments by the Group.
+284
+(3,759)
+BANK OF CHINA LIMITED
+5,566
+47,076
+137,472
+719,913
+648,655
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+244,024
+357,834
+Other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries
+and regions
+Equity derivatives
+BANK OF CHINA LIMITED
+9
+(21)
+89,445
+72
+(47)
+Subtotal
+42,061
+(36,265)
+4,441,187
+22,196
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(39,016)
+(Amounts in millions of Renminbi, unless otherwise stated)
+months
+months
+1 month
+Over
+1 and 5
+3 and 12
+1 and 3
+Less than
+Between
+Between
+FOR THE YEAR ENDED 31 DECEMBER 2023
+As at 31 December 2022
+Fair value hedges
+Between
+(i) The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies (Continued):
+(1) Fair value hedges (Continued)
+16.2 Hedge accounting (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+years
+5 years
+229,088
+16 Derivative financial instruments and hedge accounting (Continued)
+Interest rate risk
+Derivatives designated as
+16.2 Hedge accounting
+Total
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+As at 31 December 2023
+The following table contains details of the derivative hedging instruments used in the
+Group's fair value hedging strategies:
+(i)
+(1) Fair value hedges
+The Group uses cross-currency interest rate swaps and interest rate swaps to hedge against
+changes in fair value of "Financial investments”, “Due to central banks” and “Bonds
+issued" arising from changes in foreign currency exchange rates and interest rates. Foreign
+currency exchange rate risk and interest rate risk are usually the primary risks which affect
+the change in fair value.
+Contractual/
+Interest rate swaps
+Derivative
+financial assets/
+Liabilities financial position
+hedging instruments in fair value hedges
+amount
+Assets
+Fair value
+Notional
+Line item in the
+statement of
+236,725
+246,371
+Profit for the year
+(46,916)
+4.95%
+(2,321)
+(49,237)
+11.74%
+4.22%
+11,967
+283,641
+Profit before income tax
+4.12%
+11,647
+282,996
+294,643
+Operating profit
+2.50%
+(2,603)
+(103,959)
+(106,562)
+Impairment losses on assets
+Income tax expense
+295,608
+the Bank
+4.07%
+Profit attributable to equity holders of the Bank
+166,217
+153,490
+151,225
+153,206
+Operating income
+2023
+2023
+2023
+2023
+Items
+31 March
+30 September
+31 December
+For the three-month period ended
+Unit: RMB million
+A detailed review of the Group's principal items in each quarter of 2023 is summarised in the
+following table:
+23
+2.38%
+5,382
+226,522
+231,904
+Profit attributable to equity holders of
+9,646
+30 June
+In 2023, the global economy maintained a certain level of resilience, but exhibited a weak
+recovery. The global economic environment became increasingly complex, severe and uncertain.
+(222,933)
+Closely adhering to the requirements of the Group's 14th Five-Year Plan, the Bank persevered
+in advancing the growth of business scale and the enhancement of structural quality. It
+demonstrated noticeable achievement in serving the real economy, increased contributions from
+its globalised and comprehensive operation, and effectively strengthened its prudent operational
+capabilities, resulting in stable and positive progress in operational performance. In 2023, the
+Group achieved a profit for the year of RMB246.371 billion, an increase of RMB9.646 billion or
+4.07% compared with the prior year. It realised a profit attributable to equity holders of the Bank
+of RMB231.904 billion, an increase of RMB5.382 billion or 2.38% compared with the prior
+year. Return on average total assets (ROA) was 0.80% and return on average equity (ROE) was
+10.12%.
+Income Statement Analysis
+China's banking sector firmly supported the national strategy, pressed ahead with supply-
+side structural reforms, supported high-level opening up and comprehensively enhanced the
+adaptability and effectiveness of its services to the real economy. It focused on stabilising the
+overall macroeconomy, assisted in leveraging the fundamental role of consumption and the
+critical role of investment, and increased financial support for key areas and weak links in the
+economy. The sector consistently emphasised risk prevention and control in its financial work,
+and held the red line of forestalling systemic financial risk by keeping major risk indicators
+within a reasonable range and strengthening risk resistance. As at the end of 2023, the total
+assets of China's banking sector grew by 9.9% from the prior year-end to RMB417.3 trillion,
+while total liabilities increased by 10.1% to RMB383.1 trillion. Commercial banking institutions
+recorded a net profit of RMB2.4 trillion, a year-on-year increase of 3.2%. Outstanding non-
+performing loans (NPLs) stood at RMB3.2 trillion as at the end of the year, with a NPL ratio of 1.59%.
+The allowance for loan impairment losses to non-performing loans was 205.1%, and the capital
+adequacy ratio was 15.1%.
+22
+22
+China implemented a sound monetary policy in a targeted and effective manner and strengthened
+the counter-cyclical and inter-temporal adjustments. Money and credit as well as aggregate
+financing to the real economy (AFRE) witnessed reasonable growth; comprehensive financing
+costs fell steadily; the credit structure was further optimised, and RMB exchange rates
+maintained basic stability at an adaptive and equilibrium level. Overall, it created a favorable
+monetary and financial environment for the economic recovery and improvement. As at the end
+of 2023, the outstanding broad money supply (M2) was RMB292.3 trillion, up 9.7% year-on-
+year. The balance of RMB loans reached RMB237.6 trillion, an increase of 10.6% year-on-year.
+Outstanding aggregate financing to the real economy (AFRE) was RMB378.1 trillion, up 9.5%
+year-on-year. The SSE Composite Index stood at 2,974.93 points, dipping 3.7% from the end of
+the prior year. The central parity of the RMB against the US dollar was 7.0827, a depreciation of
+1.7% compared with the prior year-end.
+China's economy sustained its recovery, with consistent improvements in supply and demand,
+positive advances in economic transformation and upgrading, stable employment and
+commodity prices, effective protection of people's livelihood, and solid progress in high-quality
+development. In 2023, China's gross domestic product (GDP) grew by 5.2% year-on-year; total
+retail sales of consumer goods (TRSCG) increased by 7.2% year-on-year; the value-added of
+industrial enterprises above a designated size expanded by 4.6% year-on-year; total fixed asset
+investment (TFAI) (excluding those by rural households) rose by 3.0% year-on-year; total
+exports climbed by 0.2%, with a trade surplus of RMB5.79 trillion, and the consumer price index
+(CPI) increased by 0.2% year-on-year.
+The pace of interest rate hikes in major developed economies slowed down. Overall inflation
+pressure alleviated, but with strong stickiness. Economic divergence across regions widened.
+The US economy maintained overall stability, European economies remained mostly stagnant,
+and emerging economies gradually stabilised. Global financial markets experienced significant
+volatility, the US dollar index fluctuated downwards, and capital reshoring to the US decelerated.
+The US treasury market became more volatile, and some economies experienced heightened debt
+risk.
+Economic and Financial Environment
+FINANCIAL REVIEW
+Management Discussion and Analysis
+28 March 2024
+LIU Jin
+President
+221
+21
+The blueprint has been drawn, and it is time to turn it into reality. We will forge ahead with
+greater confidence, deliver outstanding performance in return for the trust and support of
+our customers, investors and all sectors of society, earnestly fulfil our economic and social
+responsibilities, and make greater contributions to the modernisation and rejuvenation of the
+Chinese nation.
+The year of 2024 marks the 75th anniversary of the founding of the People's Republic of China
+and represents a pivotal moment for achieving the goals and tasks set forth in the 14th Five-Year
+Plan. Together with the Senior Management, I will continuously improve our operational and
+management, and strive to faithfully implement the decisions and plans of the CPC Central
+Committee and the State Council through concrete actions. First, we will vigorously develop
+technology finance, green finance, inclusive finance, pension finance and digital finance.
+We will tailor new financial services to the needs of tech enterprises, support the transition to
+green development models, further improve the quality and efficiency of inclusive financial
+services, accelerate developing pension finance, and quicken the pace of digital transformation.
+Second, we will actively support the expansion of effective demand. We will boost growth
+of consumption and investment, support the building of a modern industrial system, provide
+high-quality services to the national strategy of coordinated regional development, and play
+an active part in stabilizing foreign trade and investment. Third, we will serve the high-level
+two-way opening up of the financial sector, accelerate the high-quality development of our
+overseas institutions, enhance connectivity between domestic and overseas financial markets, and
+promote RMB internationalisation in a solid and prudent manner. Fourth, we will continue to
+enhance our fundamental work, refine management of capital, optimise deposit structure, and
+upgrade our credit supply with targeted efforts. We will accelerate our efforts to build a larger
+and higher-quality customer base, and further refine our collaboration mechanism. Fifth, we will
+improve our Enterprise Risk Management system, enhance the quality and efficiency of the
+management of traditional risks, proactively prevent non-traditional risks, pursue high-quality
+implementation of regulatory requirements, and make every effort to maintain financial stability.
+2022
+20
+20
+We continued to improve risk management and control mechanism and consolidate
+the foundation for stable and prudent operations. The Group maintained stability in both
+asset quality and key risk indicators. Market risks were well managed and under control. We
+bolstered our cushion against risks; the Group's non-performing loan coverage ratio rose by
+2.93 percentage points, to 191.66%. We intensified efforts in the disposal of non-performing
+assets. By implementing targeted strategies for different types of assets, we achieved major
+breakthroughs and enhanced both our efficiency and capacity for recovering and resolving
+NPLs. We improved the management mechanism for operational and derivative risks, optimised
+internal control policies and processes, strengthened risk management in the fields of data, public
+opinion, safety of operation, and business continuity, and strictly prevented risk spill-over and
+contagion. In response to changing market conditions, the Group carefully managed funding
+sources and usage of local and foreign currencies to ensure sufficient liquidity. We also enhanced
+our capabilities to prevent digital risks across all online channels and effectively ensured the safe
+operation of systems.
+We sharpened our edge in globalised and diversified operations, and enhanced synergy
+among different business lines. Operating income and after-tax profit from overseas operations
+rose significantly year-on-year, respectively. BOCHK and Bank of China (Europe) S.A.
+continued to refine their management of the branches and subsidiaries in Southeast Asian and
+the EU markets, respectively. The mechanism for regional synergistic development has been
+carried out in Latin America, South Asia and South Pacific as planned. And we fully leveraged
+business opportunities in cross-border trade and investment, acted faster to build a global team of
+relationship managers, and further enhanced the competitiveness of our cross-border investment
+and financing products. We further consolidated our market leadership in Panda bonds, offshore
+bonds issued by Chinese entities, and cross-border custody. Focusing on synergy within the
+Group, risk control, business sustainability, and market competitiveness, we continued to
+enhance our comprehensive service and collaborative marketing capabilities. Our non-banking
+subsidiaries' contribution to the Group's total profits increased over the previous year.
+57,046
+The principal components and changes of the Group's consolidated income statement are set out
+below:
+(199,506) (23,427)
+Unit: RMB million, except percentages
+2023
+Operating expenses
+6.42%
+37,677
+586,461
+624,138
+Operating income
+5.31%
+3,975
+74,890
+78,865
+income
+Including: net fee and commission
+23.90%
+30,398
+127,195
+157,593
+Non-interest income
+1.58%
+7,279
+459,266
+466,545
+Net interest income
+Change Change (%)
+Items
+54,763
+5.70%
+57,663
+(1,292)
+(12,212)
+(13,504)
+Fee and commission expense
+6.05%
+5,267
+87,102
+92,369
+Fee and commission income
+4.37%
+301
+6,882
+7,183
+Other
+25.38%
+1,737
+6,844
+8,581
+fees
+Custodian and other fiduciary service
+(0.64%)
+(37)
+5,788
+5,751
+business
+10.58%
+Spread income from foreign exchange
+Net fee and commission income
+74,890
+4,780
+6,920
+Consultancy and advisory fees
+(7.74%)
+(418)
+5,400
+4,982
+Credit commitment fees
+3.34%
+480
+14,370
+14,850
+Settlement and clearing fees
+574
+10,078
+10,652
+Bank card fees
+0.75%
+132
+17,702
+17,834
+Agency commissions
+Chinese mainland
+5.31%
+3,975
+78,865
+42.47%
+2,400
+5,651
+Net Fee and Commission Income
+In 2023, the Group reported non-interest income of RMB157.593 billion, an increase of
+RMB30.398 billion or 23.90% compared with the prior year. Non-interest income represented
+25.25% of operating income.
+Non-interest Income
+26
+Note: "Due to customers - Other" includes structured deposits.
+0.50% (8,395) 186Bps
+154,419
+2.36%
+146,024
+Total
+(1,328) 36Bps
+1.68%
+3,146
+2.04%
+1,818
+Other
+2,818 131Bps
+0.40%
+15,829
+1.71%
+18,647
+Personal time deposits
+10,229 308Bps
+0.27% (16,366) 163Bps
+1.19%
+0.02% (3,748)
+27,024
+The Group earned net fee and commission income of RMB78.865 billion, an increase of
+RMB3.975 billion or 5.31% compared with the prior year, representing 12.64% of operating
+income. This was mainly due to the Bank's increased business development efforts, and the
+income from consulting and advisory business, fiduciary business and bank card business
+increased.
+Changes in net fee and commission income are set out below:
+Unit: RMB million, except percentages
+Items
+8,051
+Consultancy and advisory fees
+0.39%
+44
+11,368
+11,412
+Credit commitment fees
+4.24%
+678
+15,994
+16,672
+Settlement and clearing fees
+2,140
+10.84%
+12,256
+13,585
+Bank card fees
+(5.31%)
+(1,185)
+22,319
+21,134
+Agency commissions
+Change Change (%)
+2022
+2023
+Group
+1,329
+23,276 0.02%
+44.77%
+business
+9,020
+Insurance service expenses
+53.34%
+4,849
+9,090
+13,939
+products
+Cost of sales of precious metal
+5.40%
+1,274
+23,579
+24,853
+Depreciation and amortisation
+0.11%
+48
+44,730
+44,778
+expenses
+General operating and administrative
+6.80%
+6,868
+101,004
+107,872
+Staff costs
+Unit: RMB million, except percentages
+Change Change (%)
+7,814
+2022
+1,206
+Insurance finance expenses/(income)
+29
+In 2023, the Group incurred income tax of RMB49.237 billion, an increase of RMB2.321 billion
+or 4.95% compared with the prior year. The Group's effective tax rate was 16.66%. Please refer
+to Note V.10 to the Consolidated Financial Statements for the reconciliation of statutory income
+tax expense to effective income tax expense.
+Income Tax Expense
+The Bank consistently maintained a proactive and forward-looking approach to risk management,
+ensuring relatively stable credit asset quality. At the same time, it rigorously implemented a
+prudent and solid risk provisioning policy to maintain adequate risk resistance capability. In
+2023, the Group's impairment losses on assets totalled RMB106.562 billion, an increase of
+RMB2.603 billion or 2.50% compared with the prior year. The Group's impairment losses on
+loans totalled RMB106.114 billion, an increase of RMB13.321 billion or 14.36% compared with
+the prior year. Please refer to the section “Risk Management – Credit Risk Management” and
+Notes V.9, 17 and VI.2 to the Consolidated Financial Statements for more information on loan
+quality and allowance for loan impairment losses.
+Impairment Losses on Assets
+28
+11.74%
+23,427
+199,506
+222,933
+Total
+(10.64%)
+(1,117)
+10,496
+9,379
+Other
+0.43%
+26
+6,072
+6,098
+Taxes and surcharges
+N.A.
+10,273
+(3,279)
+6,994
+15.43%
+2023
+Items
+The Bank continued to operate its business in a prudent manner. It continually optimised its
+cost structure strictly reduced the general expenses, allocated greater resources to scientific and
+technological innovation and digital operation, so as to promote the level of refined management
+and increase output efficiency. In 2023, the Group recorded operating expenses of RMB222.933
+billion, an increase of RMB23.427 billion or 11.74% compared with the prior year. Of which,
+it recorded operating and administrative expenses (including staff costs, general operating and
+administrative expenses, depreciation and amortisation) of RMB177.503 billion, an increase of
+RMB8.190 billion or 4.84% compared with the prior year. The Group's cost to income ratio
+(calculated in accordance with regulations in the Chinese mainland) was 28.50%, a decrease of 0.42
+percentage points compared with the prior year. Please refer to Note V.6, 7 to the Consolidated
+Financial Statements for detailed information.
+6.39%
+3,773
+59,079
+(5.86%)
+609
+4.55%
+3,164
+72,643
+69,479
+(9,791) (10,400)
+62,852
+Fee and commission expense
+Net fee and commission income
+Fee and commission income
+(21.73%)
+(1,181)
+5,435
+4,254
+Other
+26.59%
+1,647
+6,194
+7,841
+fees
+Custodian and other fiduciary service
+(3.80%)
+(210)
+5,520
+5,310
+27
+Other Non-interest Income
+The Group realised other non-interest income of RMB78.728 billion, an increase of RMB26.423
+billion or 50.52% compared with the prior year. This was primarily attributable to an increase
+in net trading gain from foreign exchange and interest rate products due to market fluctuations.
+Please refer to Notes V.3, 4, 5 to the Consolidated Financial Statements for detailed information.
+Unit: RMB million, except percentages
+Operating Expenses
+50.52%
+26,423
+52,305
+78,728
+Total
+14.41%
+6,198
+43,001
+49,199
+Other operating income
+(61.31%)
+Spread income from foreign exchange
+(1,277)
+806
+financial asset
+Net gains on transfers of
+297.77%
+21,502
+7,221
+28,723
+Net trading gains
+Change Change (%)
+2022
+2023
+Items
+2,083
+62,432
+Personal demand deposits
+4.27%
+Due to customers
+Interest-bearing liabilities
+168,003
+61,964
+106,039
+3.36%
+880,848
+1,048,851 3.58% 26,204,240
+29,266,453
+Total
+42.367
+36,147
+6,220
+1.64%
+63,590
+2.49% 3,878,780
+105.957
+4,258,069
+institutions
+banks and other financial
+due from and placements with
+Balances with central banks and
+27.690
+12,737
+14,953
+21,551,296
+2.95%
+450,851 2.09%
+311,923
+466,545
+Net interest income
+160,724
+117,732
+1.75% 42,992
+421,582
+1,496
+(202)
+1,698
+44,281 3.07%
+20,300
+23,509
+(3,209)
+1.71%
+65,378
+3,644,179 85,678 2.35% 3,831,831
+1,496,091 45,777 3.06% 1,440,787
+26,691,566 582,306 2.18% 24,126,735
+Total
+Bonds issued
+institutions
+banks and other financial
+Due to and placements from
+138,928
+94,425
+44,503
+1.65%
+18,854,117
+164,603
+3.16% 5,576,816
+192,293
+income/expense
+Interest
+2022
+2023
+Interest
+Unit: RMB million, except percentages
+Analysis of changes in interest
+The average balances¹ and average interest rates of the major interest-earning assets and interest-
+bearing liabilities of the Group, as well as the impact on interest income/expense of variances in
+the volume factor and the interest rate factor², are summarised in the following table:
+In 2023, the Group's net interest margin was 1.59%, representing a decrease of 16 basis
+points from the prior year. Faced with a reduction in RMB loan yields driven by a drop in
+the RMB Loan Prime Rate (LPR) and adjustments to existing mortgage loan rates, the Bank
+strengthened proactive management and thus minimise the decline in net interest margin. First,
+the Bank adhered to the development strategy of striking balance between volume growth and
+price control, and optimised the structure of its RMB assets and liabilities. The proportion of
+deposits and loans increased in its interest-bearing liabilities and interest-bearing assets, with the
+proportion of the average balance of RMB medium and long-term loans within its total RMB
+loans in the Chinese mainland being 74.14%. Second, the Bank improved the net interest margin
+of its foreign currency assets and liabilities by capitalising on the timing of US Federal Reserve
+rate hikes and leveraging its foreign currency business capabilities.
+Net Interest Margin
+24
+Interest expense on bonds issued was RMB45.777 billion, an increase of RMB1.496 billion or 3.38%
+compared with the prior year, which was mainly attributable to an increase in the scale of bonds
+issued.
+Interest expense on due to and placements from banks and other financial institutions was
+RMB85.678 billion, an increase of RMB20.300 billion or 31.05% compared with the prior year,
+which was primarily attributable to the increase in interest rates.
+In 2023, interest expense on due to customers was RMB450.851 billion, an increase of
+RMB138.928 billion or 44.54% compared with the prior year, principally due to increase in the
+scale and the interest rate of deposits.
+Interest Expense
+Interest income on balances with central banks and due from and placements with banks and
+other financial institutions was RMB105.957 billion, an increase of RMB42.367 billion or
+66.63% compared with the prior year, mainly due to the increase in interest rates.
+Interest income on investments amounted to RMB192.293 billion, an increase of RMB27.690
+billion or 16.82% compared with the prior year, mainly due to an increase in investment scale
+and rising interest rates.
+In 2023, interest income on loans was RMB750.601 billion, an increase of RMB97.946 billion
+or 15.01% compared with the prior year, which was primarily attributable to an increase in loan
+scale.
+Interest Income
+In 2023, the Group achieved net interest income of RMB466.545 billion, an increase of
+RMB7.279 billion or 1.58% compared with the prior year. Specifically, interest income stood at
+RMB1,048.851 billion, an increase of RMB168.003 billion or 19.07% compared with the prior
+year, and interest expense stood at RMB582.306 billion, an increase of RMB160.724 billion or
+38.12% compared with the prior year.
+Net Interest Income and Net Interest Margin
+488,759
+146,523
+(149,123)
+330,287
+activities
+Net cash inflow/(outflow) from operating
+Average
+income/
+Average
+Average
+6,083,691
+Investments
+97,946
+84,866
+3.90%
+652,655
+16,748,644
+3.97%
+750,601
+18,924,693
+Loans
+Interest-earning assets
+459,266
+Total
+factor
+interest rate
+expense
+balance
+interest rate
+expense
+balance
+Items
+Interest
+Volume
+Average
+income/
+rate factor
+38,048
+63,047
+7,279
+5,300,099
+Personal time deposits
+(7) Bps
+236,612
+0.30%
+0.23% 2,570,715
+2,807,327
+Personal demand deposits
+(17) Bps
+14Bps
+0.92% 456,122
+2.77% 591,243
+1.06% 3,978,931
+2.60% 2,871,172
+3,462,415
+Corporate time deposits
+4,435,053
+Corporate demand deposits
+Due to customers
+(27) Bps
+3.05% 559,629
+2.78% 3,447,106
+4,006,735
+others
+Short-term loans within 1 year and
+(50) Bps
+4.59% 1,439,247
+Other
+4.09% 10,045,168
+698,105
+16,702,999
+48,277
+Corporate time deposits
+70,372
+1.90%
+54,006
+Corporate demand deposits
+Due to customers
+(2,516) 254Bps
+1.88%
+52,880
+4.42%
+50,364
+Loans
+Unit: USD million, except percentages
+Chinese mainland
+Foreign currency businesses in the
+(5) Bps
+1.88% 2,322,827
+(23) Bps
+(40,321)
+3.11%
+(25) Bps
+1,079,171
+2.93%
+2.68% 4,220,928
+2.88% 738,426
+1.83% 14,380,172
+Total
+11,484,415
+Medium and long-term loans
+Including:
+Average interest
+interest
+Average
+Average
+Average
+Average
+interest
+Average
+Change
+2022
+2023
+The average balances and average interest rates of loans and due to customers in the Chinese
+mainland, classified by business type, are summarised in the following table:
+Due to and placements from banks and other financial institutions include due to and placements from banks and
+other financial institutions, due to central banks and other funds.
+Balances with central banks and due from and placements with banks and other financial institutions include
+mandatory reserves, surplus reserves, other placements with central banks and due from and placements with
+banks and other financial institutions.
+Investments include debt securities at fair value through other comprehensive income, debt securities at amortised
+cost, investment trusts and asset management plans, etc.
+2
+1
+Notes:
+25
+Average balances are average daily balances derived from the Group's management accounts (unaudited).
+The impact on interest income/expense of variances in the volume factor is calculated based on the changes
+in average balances of interest-earning assets and interest-bearing liabilities during the reporting period. The
+impact on interest income/expense of variances in the interest rate factor is calculated based on the changes in
+the average interest rates of interest-earning assets and interest-bearing liabilities during the reporting period. The
+impact relating to the combined changes in both the volume factor and the interest rate factor has been classified
+as a change in the interest rate factor.
+2
+1
+(16) Bps
+1.75%
+1.59%
+Net interest margin
+Items
+balance
+rate
+balance
+(45) Bps
+1,998,876
+4.20%
+(39) Bps
+144,407
+1.80%
+(41) Bps
+151,326
+4.84%
+(38) Bps
+3.86% 1,703,143
+3.48% 7,492,173
+4.43% 5,554,541
+1.41% 445,560
+3.75% 13,492,274
+(55,768)
+15,491,150
+589,967
+Trade bills
+5,705,867
+Personal loans
+9,195,316
+Corporate loans
+Loans
+Unit: RMB million, except percentages
+mainland
+RMB businesses in the Chinese
+rate
+rate balance
+Total
+13,080
+3
+Average exchange
+Between
+1 and 3
+months
+Between
+3 and 12
+months
+Between
+1 and 5
+years
+Over
+5 years
+Total
+Foreign exchange
+forward and swap
+contracts
+Notional amount
+Average exchange
+7,520
+7,520
+rate of USD/BRL
+-- 5.2811
+N/A
+Average exchange
+rate of USD/ZAR
+-- 16.6945
+N/A
+Average exchange
+rate of USD/INR
+Average exchange
+rate of USD/PEN
+Average exchange
+rate of USD/HUF
+Average exchange
+rate of USD/TWD
+N/A
+-- 3.8149
+N/A
+1 month
+-- 380.5948
+Less than
+As at 31 December 2022
+N/A
+Average exchange
+rate of USD/PEN
+-- 3.7470
+N/A
+Average exchange
+rate of USD/HUF
+Average exchange
+rate of USD/TWD
+-- 365.8648
+N/A
+29.5737
+N/A
+292
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(2) Net investment hedges (Continued)
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies (Continued):
+Net investment hedges
+Foreign exchange risk
+905.5018
+N/A
+N/A
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+17 Loans and advances to customers
+17.1 Analysis of loans and advances to customers by measurement category
+As at 31 December
+2023
+2022
+Measured at amortised cost
+Corporate loans and advances
+- Personal loans
+12,577,901
+6,609,965
+10,509,864
+6,406,970
+- Discounted bills
+1,345
+1,703
+Measured at fair value through
+other comprehensive income (1)
+- Corporate loans and advances
+- Discounted bills
+Subtotal
+Measured at fair value through profit or loss (2)
+- Corporate loans and advances
+Total
+Accrued interest
+4,089
+711,012
+7,936
+575,246
+19,904,312
+V
+28.8214
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+293
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(2) Net investment hedges (Continued)
+(iii) The Group's fair value changes from the hedging instruments recognised in "Other
+comprehensive income” on net investment hedges are as follows:
+Amounts of fair value changes on hedging instruments
+recognised in "Other comprehensive income"
+Amounts of forward element reclassified from
+“Other comprehensive income" to profit or loss
+Net amounts of fair value changes on hedging
+instruments recognised in
+"Other comprehensive income"
+294
+As at 31 December
+2023
+2022
+2,383
+3,822
+69
+93
+2,452
+3,915
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+rate of USD/CLP 863.7344
+Average exchange
+N/A
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(2) Net investment hedges (Continued)
+(i) Details of due to customers and due to central banks used in the Group's net investment
+hedging strategies:
+As at 31 December 2023, the carrying value of such due to customers amounted to
+RMB67,358 million (31 December 2022: RMB74,359 million) and due to central banks
+amounted to RMB380 million (31 December 2022: RMB588 million).
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies:
+Derivatives designated as
+net investment hedging instruments
+Contractual/
+Notional
+Fair value
+Line item in the
+statement of
+amount
+Assets
+Liabilities
+financial position
+As at 31 December 2023
+Foreign exchange forward
+and swap contracts
+Derivative financial
+8,297
+36
+(195)
+assets/liabilities
+(Amounts in millions of Renminbi, unless otherwise stated)
+Total
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(1) Fair value hedges (Continued)
+(iii) The Group's net gains/(losses) on fair value hedges are as follows:
+Year ended 31 December
+2023
+2022
+Net gains/(losses) on
+- hedging instruments
+-hedged items
+Ineffectiveness recognised in net trading gains
+(2) Net investment hedges
+(1,762)
+7,193
+1,836
+(6,958)
+74
+235
+The Group's consolidated statement of financial position is affected by exchange differences
+between the functional currencies of the Group and functional currencies of its branches
+and subsidiaries. The Group hedges such exchange exposures only in limited circumstances.
+Hedging is undertaken using due to customers, due to central banks and foreign exchange
+forward and swap contracts in the same or exchange-rate pegged currencies as the
+functional currencies of the related branches and subsidiaries which are accounted for as
+hedges of certain net investments in foreign operations. Under the hedging relationships of
+designating due to customers, due to central banks and foreign exchange forward and swap
+contracts as hedging instruments, the Group separates the forward element and the spot
+element of a forward contract and designates as the hedging instrument only the change in
+the value of the spot element of the forward contract. There was no ineffectiveness for the
+year ended 31 December 2023 (2022: Nil).
+290
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+8,297
+36
+(195)
+Between
+Less than
+1 month
+1 and 3
+months
+Between
+3 and 12
+months
+Between
+1 and 5
+years
+Over
+5 years
+Total
+Notional amount
+Average exchange
+rate of USD/BRL
+8,297
+8,297
+-- 5.3209
+N/A
+rate of USD/ZAR
+-- 19.6375
+N/A
+Average exchange
+rate of USD/INR
+-- 83.4650
+N/A
+Average exchange
+rate of USD/MXN
+-- 18.6362
+Net investment hedges
+contracts
+forward and swap
+Foreign exchange
+As at 31 December 2022
+Foreign exchange forward
+Derivative financial
+and swap contracts
+7,520
+278
+(35)
+assets/liabilities
+Total
+7,520
+278
+(35)
+17,501,719
+291
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+16 Derivative financial instruments and hedge accounting (Continued)
+16.2 Hedge accounting (Continued)
+(2) Net investment hedges (Continued)
+(ii) The following table contains details of the derivative hedging instruments used in the
+Group's net investment hedging strategies (Continued):
+The following table sets out the maturity and average exchange rate of the hedging
+instruments mentioned above:
+As at 31 December 2023
+Foreign exchange risk
+BANK OF CHINA LIMITED
+3,675
+-- 81.4512
+19,907,987
+886
+1,418
+3,890
+As at 31 December
+205,195
+59,062
+172,499
+436,756
+297
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+(2) Allowance for loans at fair value through other comprehensive income
+As at 1 January
+Transfers to Stage 1
+Transfers to Stage 2
+Year ended 31 December 2023
+12-month
+ECL
+Lifetime ECL
+Total
+1,586
+Stage 1
+other movements
+11,837
+(11,533)
+13,192
+Impairment (reversal)/losses of
+loans with stage transfers
+(5,969)
+18,943
+41,851
+54,825
+Charge for the year (i)
+93,067
+14,787
+22,827
+130,681
+Reversal for the year (ii)
+(52,371)
+(18,168)
+(22,198)
+(92,737)
+Write-off and transfer out
+(64)
+(61,766)
+(61,830)
+Recovery of loans and advances
+written off
+11,837
+Foreign exchange and
+Stage 2
+Stage 3
+479
+Stage 1
+Stage 2
+Stage 3
+374
+77
+451
+Transfers to Stage 3
+Impairment (reversal)/losses of
+loans with stage transfers
+Charge for the year (i)
+Reversal for the year (ii)
+Foreign exchange and
+other movements
+As at 31 December
+469 6475
+(374)
+(77)
+(451)
+10
+_ _ _________10
+479
+485
+(i)
+Charge for the year comprises impairment losses attributable to new loans granted, brought forward loans
+without stage transfers, as well as changes to model and risk parameters, during the year.
+(ii) Reversal for the year comprises impairment losses attributable to loan repaid, brought forward loans
+without stage transfers, as well as changes to model and risk parameters, during the year.
+299
+Total
+Lifetime ECL
+ECL
+12-month
+485
+Transfers to Stage 3
+4,074
+loans with stage transfers
+Charge for the year (i)
+Reversal for the year (ii)
+Foreign exchange and
+other movements
+355 5 360
+(453)
+(6)
+(459)
+As at 31 December
+385
+(1,659)
+298
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+(2) Allowance for loans at fair value through other comprehensive income (Continued)
+As at 1 January
+Transfers to Stage 1
+Transfers to Stage 2
+Year ended 31 December 2022
+390
+Transfers to Stage 3
+Impairment (reversal)/losses of
+5,611
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+As at 1 January
+205,195
+59,062
+172,499
+436,756
+Transfers to Stage 1
+9,763
+(5,804)
+(3,959)
+Transfers to Stage 2
+(4,261)
+13,571
+(9,310)
+Transfers to Stage 3
+(1,125)
+(16,700)
+17,825
+Impairment (reversal)/losses of
+loans with stage transfers
+(9,214)
+ECL
+12-month
+(1) Allowance for loans at amortised cost
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(3,377)
+17,505,793
+53,792
+46,968
+Total loans and advances
+19,961,779
+17,552,761
+Less: allowance for loans at amortised cost
+(484,908)
+(436,756)
+Loans and advances to customers, net
+19,476,871
+31,443
+17,116,005
+(2)
+As at 31 December 2023, the allowance for impairment losses of loans and advances to customers at fair
+value through other comprehensive income of the Group amounted to RMB390 million (31 December
+2022: RMB485 million) and was credited to other comprehensive income.
+During the years ended 31 December 2023 and 2022, there were no significant movements in the fair value
+and accumulated fair value changes of corporate loans and advances measured at fair value through profit
+or loss that are attributable to changes in credit risk of these loans.
+295
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+17 Loans and advances to customers (Continued)
+17.2 Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, customer type, industry, collateral type and analysis of impaired and overdue loans
+and advances to customers are presented in Note VI.2.5.
+(1)
+49,286
+Year ended 31 December 2023
+Charge for the year (i)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+17 Loans and advances to customers (Continued)
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+(1) Allowance for loans at amortised cost (Continued)
+Year ended 31 December 2022
+12-month
+ECL
+Lifetime ECL
+Stage 1
+Stage 2
+Stage 3
+As at 1 January
+166,358
+53,832
+169,900
+390,090
+Transfers to Stage 1
+6,481
+(5,296)
+(1,185)
+Transfers to Stage 2
+71,515
+(2,234)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Total
+Write-off and transfer out
+296
+28,929
+145,964
+Reversal for the year (ii)
+(76,299)
+(18,155)
+(16,812) (111,266)
+(72,554)
+(72,554)
+Recovery of loans and advances
+17,345
+Foreign exchange and
+written off
+other movements
+484,908
+179,862
+80,983
+224,063
+As at 31 December
+69
+604
+221
+314
+13,889
+13,889
+99,690
+0.00%-5.31%
+0.00%-5.31%
+Included in the Group's financial investments were certificates of deposit held amounting to RMB 149,258
+million as at 31 December 2023 (31 December 2022: RMB 153,611 million).
+As at 31 December 2023, RMB3,957 million of debt securities measured at fair value through other
+comprehensive income and at amortised cost of the Group was determined to be impaired and was included
+under Stage 3 (31 December 2022: RMB3,193 million), with an impairment allowance of RMB3,295 million (31
+December 2022: RMB2,441 million); RMB26,655 million of debt securities was included under Stage 2 (31
+December 2022: RMB5,584 million), with an impairment allowance of RMB1,089 million (31 December
+2022: RMB171 million); and the remaining debt securities were included under Stage 1, with impairment
+allowance measured based on 12-month expected credit losses.
+(9)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+307
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+1,066,657
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+(10) Debt securities traded in the Chinese mainland interbank bond market are included in "Listed outside Hong
+Kong, China".
+1,173,711
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+2023
+As at 31 December
+(8)
+Coupon rate range
+Carrying value (accrued interest excluded)
+As at 31 December 2023, the Group held bonds issued by the MOF and bills issued by the PBOC included
+in financial investments. The carrying value (accrued interest excluded) and the related coupon rate range
+on such bonds and bills are as follows:
+The Bank transferred certain non-performing assets to China Orient Asset Management Corporation
+("China Orient") in 1999 and 2000 and China Orient issued a bond ("Orient Bond") with a par value of
+RMB160,000 million to the Bank as consideration. Based on the latest agreement, the Orient Bond will
+mature on 30 June 2025. The MOF shall continue to provide funding support for the principal and interest
+of the Orient Bond. The Bank received a notice from the MOF in January 2020, confirming that from 1
+January 2020, the interest rate on the unpaid amounts will be verified year by year based on the rate of
+return of the five-year treasury bond of the previous year. As at 31 December 2023, the Bank had received
+early repayments of principal amounting to RMB7,567 million cumulatively.
+(7)
+(6)
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+2022
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+508
+Reconciliation of allowance for impairment losses on financial investments at amortised
+141
+BANK OF CHINA LIMITED
+24
+the year
+Impairment losses during
+12
+stage transfers
+Impairment losses due to
+13
+(13)
+-
+3
+(3)
+9,887
+7,007
+68
+2,812
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+ECL
+12-month
+Year ended 31 December 2023
+Transfers to Stage 3
+Transfers to Stage 2
+As at 1 January
+cost:
+18 Financial investments (Continued)
+306
+18,738
+On 18 August 1998, a Special Purpose Treasury Bond was issued by the Ministry of Finance ("MOF")
+with a par value of RMB42,500 million maturing on 18 August 2028. This bond was originally issued with
+an annual coupon rate of 7.20% and its coupon rate was restructured to 2.25% per annum from 1 December
+2004.
+305
+6,435,244
+7,158,717
+Total
+941,624
+1,099,479
+Unlisted
+5,275,049
+5,832,721
+Listed outside Hong Kong, China(10)
+218,571
+226,517
+Listed in Hong Kong, China
+6,435,244
+7,158,717
+Total
+279,052
+296,762
+- Unlisted
+3,024,133
+3,042,487
+- Listed outside Hong Kong, China (10)
+20,934
+Listed in Hong Kong, China
+Financial assets at amortised cost
+11,341
+14,804
+261
+10,867
+BANK OF CHINA LIMITED
+The Bank underwrites certain Treasury bonds issued by the MOF and undertakes the role of a distributor of
+these Treasury bonds through its branch network earning commission income on bonds sold. The investors
+of these bonds have a right to redeem the bonds at any time prior to maturity and the Bank is committed
+to redeem these Treasury bonds. The balance of these bonds held by the Bank as at 31 December 2023
+amounted to RMB 1,265 million (31 December 2022: RMB1,449 million).
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+The Group's accumulated impairment allowance for the debt securities at fair value through other
+comprehensive income as at 31 December 2023 amounted to RMB7,808 million (31 December 2022:
+RMB5,708 million).
+The Group designates certain non-trading equity instrument investments as financial investments
+measured at FVOCI. Investments in equity instruments in this category are mainly financial institution-
+type investments. In 2023, dividend income from such equity investments was RMB643 million (2022:
+RMB729 million). The value of equity investments disposed of was RMB1,173 million (2022: RMB5,677
+million) and the cumulative losses transferred into undistributed profits from other comprehensive income
+after disposal was RMB880 million (2022: cumulative losses of RMB990 million).
+In order to eliminate or significantly reduce accounting mismatches, certain debt securities are designated
+as financial assets at fair value through profit or loss.
+(5)
+(4)
+(3)
+(2)
+(1)
+3,070,548
+3,024,133
+3,131,874
+3,042,487
+China (10)
+17,446
+18,738
+20,384
+20,934
+- Listed in Hong Kong, China
+- Listed outside Hong Kong,
+Debt securities at amortised cost
+value
+Market
+Carrying
+value
+Market
+value
+Carrying
+value
+2022
+2023
+As at 31 December
+18 Financial investments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+426
+496
+and other movements
+Year ended 31 December 2022
+7,808
+300
+995
+6,513
+As at 31 December
+- 8
+10
+other movements
+Foreign exchange and
+1,326
+(22)
+1,348
+12-month
+during the year
+766
+766
+stage transfers
+Impairment losses due to
+150
+(150)
+Transfers to Stage 2
+5,708
+300
+103
+5,305
+As at 1 January
+Stage 3
+Impairment losses/(reversal)
+ECL
+Lifetime ECL
+Total
+12,384
+300
+103
+5,305
+8
+8
+As at 31 December
+other movements
+Foreign exchange and
+(633)
+(200)
+(434)
+losses during the year
+Impairment (reversal)/
+58
+58
+stage transfers
+Impairment losses due to
+40
+(40)
+Transfers to Stage 2
+6,275
+500
+4
+5,771
+As at 1 January
+Stage 3
+Stage 2
+Stage 1
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+Impairment losses due to
+11
+(1)
+(10)
+Transfers to Stage 3
+25
+(25)
+Transfers to Stage 2
+9,678
+7,550
+2
+2,126
+As at 1 January
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+ECL
+12-month
+Year ended 31 December 2022
+10,697
+7,795
+94
+2,808
+As at 31 December
+(124)
+18
+(142)
+stage transfers
+Foreign exchange
+43
+307
+ECL
+12-month
+Year ended 31 December 2023
+Reconciliation of allowance for impairment losses on financial investments at fair value
+through other comprehensive income:
+18 Financial investments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+308
+9,887
+7,007
+68
+2,812
+As at 31 December
+55
+92
+(1)
+(36)
+other movements
+Foreign exchange and
+(153)
+(910)
+|
+757
+during the year
+Impairment losses/(reversal)
+264
+― Listed outside Hong Kong, China (10)
+Unlisted
+Government
+4,942
+Issuers in Hong Kong (China), Macao (China),
+296
+1,633
+Corporate
+8,929
+8,455
+- Financial institutions
+53
+8,243
+7,198
+84
+2022
+As at 31 December
+2023
+Policy banks
+Taiwan (China) and other countries and regions
+Government
+Debt securities (¹)
+profit or loss (designated)
+Financial assets at fair value through
+profit or loss (continued)
+Financial assets at fair value through
+18 Financial investments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+301
+565,092
+Issuers in Chinese mainland
+Governments
+2,389
+21,158
+through other comprehensive income
+Financial assets at fair value
+2022
+As at 31 December
+2023
+18 Financial investments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+302
+613,105
+550,421
+Total financial assets at fair value through profit or loss
+48,013
+39,470
+profit or loss (designated)
+Total financial assets at fair value through
+48,013
+39,470
+4,681
+12,781
+- Corporate
+4,183
+6,358
+· Financial institutions
+470
+572
+Public sectors and quasi-governments
+510,951
+profit or loss
+other financial assets at fair value through
+Total financial assets held for trading and
+- Public sectors and quasi-governments
+Policy banks
+5,708
+Issuers in Chinese mainland
+Debt securities
+assets at fair value through profit or loss
+Financial assets held for trading and other financial
+Financial assets at fair value through profit or loss
+2022
+As at 31 December
+2023
+18 Financial investments
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+300
+Through personal loan securitisation, the domestic branches transferred out loans
+of RMB13,810 million (2022: RMB18,556 million), resulting in a decrease of
+RMB10,518 million in the impairment allowance for Stage 3 loans (2022: RMB64
+million and RMB5,586 million for Stage 1 and Stage 3 loans, respectively).
+During the year, the disposal of non-performing loans by domestic branches via
+write-off, transfer of creditor's rights and loans to equity conversion amounted
+to RMB49,558 million (2022: RMB53,303 million), resulting in a corresponding
+reduction of RMB48,648 million (2022: RMB47,718 million) in impairment allowance
+for Stage 3 loans.
+The domestic branches performed regular reviews of the five-category loan
+classification grading and internal credit ratings on their loans and advances to
+customers. Loans with a gross carrying amount of RMB197,816 million (2022:
+RMB119,797 million) were transferred from Stage 1 to Stage 2 and Stage 3, and
+the impairment allowance increased correspondingly by RMB57,490 million (2022:
+RMB38,571 million). The gross carrying amount of loans transferred from Stage 2 to
+Stage 3 was RMB38,450 million (2022: RMB33,006 million), with a corresponding
+increase in impairment allowance of RMB12,759 million (2022: RMB11,398 million).
+The gross carrying amount of the loans transferred from Stage 2 to Stage 1 was
+RMB20,598 million (2022: RMB26,004 million), and the impairment allowance
+decreased correspondingly by RMB4,307 million (2022: RMB4,149 million). The
+gross carrying amount of loans transferred from Stage 3 to Stage 2 and Stage 1
+was RMB20,930 million (2022: RMB6,015 million), and the impairment allowance
+decreased correspondingly by RMB7,966 million (2022: RMB2,553 million).
+•
+In 2023, the changes in gross carrying amounts of loans and advances to customers that
+have a significant impact on the Group's impairment allowance were mainly derived from
+the credit business in the Chinese mainland, including:
+The Group enhanced its ECL models in 2023, which has no significant impact to the
+financial statements.
+17.3 Reconciliation of allowance for impairment losses on loans and advances to customers
+(Continued)
+17 Loans and advances to customers (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+- Financial institutions
+Debt securities
+31,540
+205
+285
+102,423
+101,803
+112,582
+112,434
+350,087
+296,714
+Fund investments and other
+Equity instruments
+16,642
+17,038
+-Corporate
+28,893
+24,105
+- Financial institutions
+118
+1,504
+Public sectors and quasi-governments
+16,094
+35,089
+Governments
+Taiwan (China) and other countries and regions
+Issuers in Hong Kong (China), Macao (China),
+52,368
+18,032
+Corporate
+169,626
+140,370
+29,576
+28,831
+36,485
+4,628
+Issuers in Chinese mainland
+- Public sectors and quasi-governments
+Policy banks
+Total financial investments (7)(8)(9)
+3,321,923
+3,360,183
+Total financial assets at amortised cost
+Less: allowance for impairment losses
+(9,887)
+(10,697)
+35,201
+35,568
+Accrued interest
+17,853
+23,761
+Investment trusts, asset management plans and other
+7,158,717
+3,278,756
+8,778
+10,285
+Corporate
+66,163
+70,788
+- Financial institutions
+94,515
+119,169
+- Public sectors and quasi-governments
+178,204
+194,020
+Governments
+Taiwan (China) and other countries and regions
+3,311,551
+6,435,244
+304
+BANK OF CHINA LIMITED
+- Listed in Hong Kong, China
+Equity instruments and other
+432,300
+554,504
+146,360
+1,894,720
+2,502,199
+- Listed outside Hong Kong, China (10)
+Unlisted
+159,280
+- Listed in Hong Kong, China
+Debt securities
+other comprehensive income
+Financial assets at fair value through
+218,931
+233,409
+345,329
+275,651
+- Listed outside Hong Kong, China (10)
+Unlisted
+48,845
+41,361
+- Listed in Hong Kong, China
+Financial assets at fair value through profit or loss
+Analysed as follows:
+2022
+As at 31 December
+2023
+18 Financial investments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Issuers in Hong Kong (China), Macao (China),
+152,433
+152,433
+- China Orient(6)
+Total financial assets at fair value through
+Equity instruments and other (2)
+101,842
+100,959
+- Corporate
+107,267
+168,890
+- Financial institutions
+29,677
+81,426
+- Public sectors and quasi-governments
+472,316
+593,242
+other comprehensive income (3)
+Governments
+Issuers in Hong Kong (China), Macao (China),
+176,983
+169,338
+Corporate
+181,203
+208,123
+430,466
+498,501
+96,113
+92,260
+877,513
+1,303,244
+- Financial institutions
+Taiwan (China) and other countries and regions
+Government
+303
+2,473,380
+21,693
+12,668
+55,060
+43,645
+158,855
+197,520
+73,194
+75,889
+2,469,861
+2,435,134
+Corporate
+- Financial institutions
+Public sectors and quasi-governments
+-Policy banks
+3,215,983
+Government (4)(5)
+Debt securities
+32,130
+26,836
+3,248,113
+2,500,216
+BANK OF CHINA LIMITED
+Issuers in Chinese mainland
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+18 Financial investments (Continued)
+As at 31 December
+2023
+2022
+Financial assets at amortised cost
+FOR THE YEAR ENDED 31 DECEMBER 2023
+309
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+12,684
+38,826
+397
+39,223
+36,447
+232
+36,679
+Additions
+5,874
+101
+5,975
+6,952
+193
+7,145
+Deductions
+(5,895)
+(30)
+(5,925)
+(5,118)
+(31)
+(5,149)
+Exchange differences
+241
+1
+242
+545
+3
+548
+As at 1 January
+As at 31 December
+Total
+Total Buildings
+8,632
+(3,098)
+Total
+87,984
+(4,625)
+52,916
+(4,664)
+(2) Insurance contracts assets comprise of the carrying amount of portfolios of insurance contracts issued and
+reinsurance contracts held that are assets.
+316
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+23
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Other assets (Continued)
+(3)
+Right-of-use assets
+Cost
+Year ended 31 December
+2023
+2022
+Buildings
+Motor
+vehicles
+and other
+Motor
+vehicles
+and other
+(3,822)
+Accumulated depreciation
+469
+(20,260)
+(297)
+(20,557)
+(19,320)
+(194)
+(19,514)
+Net book value
+As at 1 January
+19,506
+203
+19,709
+20,182
+139
+20,321
+As at 31 December
+18,786
+172
+18,958
+19,506
+203
+19,709
+317
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+23 Other assets (Continued)
+As at 31 December
+39,046
+(192)
+(190)
+39,515
+38,826
+397
+39,223
+As at 1 January
+(19,320)
+(194)
+Additions
+(6,407)
+(132)
+(19,514)
+(6,539)
+(16,265)
+(93)
+(16,358)
+(6,669)
+(130)
+(6,799)
+Deductions
+5,532
+29
+5,561
+3,804
+31
+3,835
+Exchange differences
+(65)
+(65)
+(2)
+(4) Intangible assets
+4,468
+(1,371)
+on long-term lease (over 50 years)
+4,378
+4,429
+on medium-term lease (10-50 years)
+7,153
+7,633
+on short-term lease (less than 10 years)
+1,153
+705
+Subtotal
+Total
+315
+12,767
+22,704
+23,311
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+23
+Other assets
+As at 31 December
+2023
+2022
+Accounts receivable and prepayments (¹)
+Held outside Hong Kong, China
+83,359
+10,544
+Subtotal
+335
+1,244
+As at 31 December
+22,704
+23,311
+314
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+22
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Investment properties (Continued)
+The Group's investment properties are located in active real estate markets, and external
+appraisers make reasonable estimation of fair value using market prices of the same or
+similar properties and other related information from the real estate markets.
+Investment properties are mainly held by Bank of China Hong Kong (Holdings) Limited ("BOCHK
+(Holdings)") and Bank of China Group Investment Limited ("BOCG Investment”),
+subsidiaries of the Group. The carrying values of investment properties held by BOCHK
+(Holdings) and BOCG Investment as at 31 December 2023 amounted to RMB 10,089
+million and RMB9,829 million, respectively (31 December 2022: RMB10,768 million and
+RMB9,764 million). The valuations of these investment properties as at 31 December 2023
+were principally performed by Knight Frank Petty Limited based on the open market price
+and other related information.
+The carrying value of investment properties is analysed based on the remaining terms of the
+leases as follows:
+As at 31 December
+2023
+2022
+Held in Hong Kong, China
+on long-term lease (over 50 years)
+3,019
+3,103
+on medium-term lease (10-50 years)
+7,001
+7,441
+10,020
+Over 3 years
+48,252
+44,674
+2023
+2022
+Accounts receivable and prepayments
+Impairment allowance
+Net value
+87,984
+52,916
+(4,625)
+(4,664)
+83,359
+48,252
+Accounts receivable and prepayments mainly include items in the process of clearing and settlement. The
+analysis of the ageing of accounts receivable and prepayments is as follows:
+As at 31 December
+2023
+2022
+Balance
+Impairment
+allowance
+Balance
+Impairment
+allowance
+Within 1 year
+82,220
+(372)
+39,407
+(195)
+From 1 year to 3 years
+1,296
+(431)
+4,877
+As at 31 December
+Insurance contract assets (2)
+Accounts receivable and prepayments
+181,392
+49,383
+Right-of-use assets (3)
+18,958
+19,709
+Intangible assets (4)
+20,702
+19,036
+Land use rights (5)
+Long-term deferred expense
+Repossessed assets (6)
+Goodwill (7)
+Interest receivable
+Other
+5,713
+5,770
+3,556
+3,425
+3,152
+2,153
+2,685
+2,651
+1,240
+749
+36,871
+30,264
+Total
+220,910
+(1)
+Cost
+As at 1 January
+Additions
+Deductions
+371,602
+166,450
+76,543
+128,609
+As at 1 January
+Total
+Aircraft
+vehicles
+Buildings
+Equipment
+and motor
+Year ended 31 December 2023
+Cost
+20 Property and equipment
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+310
+As at 31 December 2023, there were no restrictions on associates and joint ventures to
+transfer funds to the Group.
+38,304
+39,550
+Total
+6,769
+7,421
+Other
+Additions
+842
+332
+6,751
+As at 1 January
+Accumulated depreciation
+375,749
+169,675
+75,636
+130,438
+As at 31 December
+3,377
+2,740
+138
+499
+Exchange differences
+(19,147)
+7,216
+3,736
+(10,002)
+(6,984)
+(2,161)
+Deductions
+534
+2,946
+transfer in (Note V.21)
+Construction in progress
+213
+213
+properties (Note V.22)
+Transfer from investment
+12,488
+5,405
+(49,222)
+853
+1,002
+39,550
+304
+25
+(850)
+(835)
+645
+965
+(281)
+(150)
+2,717
+1,241
+35,769
+38,304
+2022
+2023
+Year ended 31 December
+As at 31 December
+Exchange differences and other
+Dividends received
+Share of results, net of tax
+Disposals and transfer out
+As at 1 January
+Additions
+19 Investment in associates and joint ventures
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+38,304
+Wkland Investments II Limited
+The carrying amounts of major investments in associates and joint ventures of the Group
+are as follows. Further details are disclosed in Note V.43.4.
+2023
+1,035
+Guomin Pension Insurance Co., Ltd.
+1,531
+1,446
+Graceful Field Worldwide Limited
+1,471
+1,517
+Sichuan Lutianhua Co., Ltd.
+1,558
+1,781
+Shanghai Chenggang Real Estate Co., Ltd.
+1,731
+1,809
+CGN Phase I Private Equity Fund Company Limited
+1,800
+1,828
+National Green Development Fund
+4,227
+3,902
+Ying Kou Port Group CORP.
+5,484
+5,762
+BOC International (China) Co., Ltd.
+11,889
+12,196
+China Insurance Investment Fund Co., Ltd.
+2022
+As at 31 December
+(61,115)
+(25,909)
+(136,246)
+(94)
+(442)
+(34,292)
+(28,842)
+(10)
+(11)
+(10)
+19,036
+16,930
+20,702
+19,036
+For the year ended 31 December 2023, the capitalised expenditure incurred by the Group on projects
+under development phase was RMB5,163 million and the total expenditure for projects which had reached
+their intended use during the year was RMB4,034 million. As at 31 December 2023, the total capitalised
+expenditure relating to projects under development phase was RMB8,677 million (31 December 2022:
+RMB7,546 million).
+318
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+23
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Other assets (Continued)
+(5) Land use rights
+The carrying value of land use rights is analysed based on the remaining terms of the leases as follows:
+As at 31 December
+2023
+2022
+Held outside Hong Kong, China
+119
+on long-term lease (over 50 years)
+853
+(28,842)
+(6,209)
+Exchange differences
+As at 31 December
+Accumulated amortisation
+As at 1 January
+Additions
+Deductions
+Exchange differences
+As at 31 December
+Allowance for impairment losses
+As at 1 January
+Additions
+Deductions
+Exchange differences
+As at 31 December
+Net book value
+As at 1 January
+As at 31 December
+Year ended 31 December
+2023
+47,888
+8,136
+(1,151)
+2022
+40,377
+7,013
+(135)
+132
+633
+55,005
+47,888
+(23,447)
+(5,072)
+54
+56
+on medium-term lease (10-50 years)
+(727)
+As at 1 January
+Allowance for impairment losses
+(142,583)
+(29,755)
+(61,052)
+(51,776)
+As at 31 December
+(746)
+(459)
+(123)
+(164)
+Exchange differences
+24
+24
+(Note V.22)
+Transfer to investment properties
+10,692
+2,175
+6,731
+1,786
+Deductions
+(16,307)
+(5,562)
+(6,545)
+(4,200)
+Additions
+Additions
+(1)
+(7,853)
+(62)
+319
+5,090
+on short-term lease (less than 10 years)
+569
+5,128
+586
+Total
+(6)
+Repossessed assets
+5,713
+5,770
+As at 31 December 2023, the net book amount of repossessed assets was RMB3,152 million (31 December
+2022: RMB2,153 million), mainly comprised properties. Related allowance for impairment was RMB828
+million (31 December 2022: RMB886 million).
+The total book value of repossessed assets disposed of during the year ended 31 December 2023 amounted
+to RMB644 million (2022: RMB232 million). The Group plans to dispose of the repossessed assets held at
+31 December 2023 by auction, bidding or transfer.
+(7)
+Goodwill
+Exchange differences
+As at 1 January
+Decrease resulting from disposal of subsidiaries
+Exchange differences
+As at 31 December
+Year ended 31 December
+2023
+2022
+2,651
+2,481
+34
+170
+2,685
+2,651
+The goodwill mainly arose from the acquisition of BOC Aviation Limited in 2006 amounting to USD241
+million (equivalent to RMB1,705 million).
+Addition through acquisition of subsidiaries
+(7)
+(63)
+Fair value changes (Note V.5)
+(2,357)
+Additions
+(5,944)
+(5,944)
+Deductions
+16
+25
+41
+Exchange differences
+(3)
+(317)
+(320)
+As at 31 December
+(727)
+(7,853)
+(8,580)
+Net book value
+(1,617)
+As at 1 January
+(740)
+Allowance for impairment losses
+4,030
+1,367
+6,284
+Transfer to investment properties
+(Note V.22)
+11
+11
+Exchange differences
+(546)
+(491)
+(1,965)
+(3,002)
+As at 31 December
+(49,222)
+(61,115)
+(25,909)
+(136,246)
+As at 1 January
+78,731
+15,133
+125,262
+2022
+on long-term lease (over 50 years)
+4,232
+4,155
+on medium-term lease (10-50 years)
+8,911
+9,029
+on short-term lease (less than 10 years)
+Subtotal
+13,143
+13,184
+Held outside Hong Kong, China
+on long-term lease (over 50 years)
+6,664
+6,208
+on medium-term lease (10-50 years)
+50,721
+2023
+As at 31 December
+Held in Hong Kong, China
+The carrying value of buildings is analysed based on the remaining terms of the leases as
+follows:
+219,126
+As at 31 December
+(8,580)
+78,660
+15,428
+132,688
+226,776
+312
+887
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+20 Property and equipment (Continued)
+As at 31 December 2023, the net book amount of aircraft leased out by BOC Aviation
+Limited, a subsidiary of the Group, under operating leases was RMB134,605 million (31
+December 2022: RMB132,688 million).
+As at 31 December 2023, the net book amount of aircraft owned by BOC Aviation Limited,
+a subsidiary of the Group, that has been pledged for loan facilities was RMB689 million (31
+December 2022: RMB4,783 million) (Note V.32).
+According to the relevant PRC laws and regulations, after conversion into a joint stock
+limited liability company, the Bank is required to re-register its property and equipment
+under the name of Bank of China Limited. As at 31 December 2023, the process of re-
+registration has not been completed. However, this registration process does not affect the
+rights of Bank of China Limited to these assets.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(15,635)
+(5,289)
+(6,290)
+134,605
+227,135
+311
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+20 Property and equipment (Continued)
+Year ended 31 December 2022
+Cost
+Equipment
+and motor
+Buildings
+vehicles
+Aircraft
+Total
+14,584
+77,946
+As at 31 December
+226,776
+(632)
+Deductions
+8
+2,720
+2,728
+Exchange differences
+4
+(120)
+As at 1 January
+(116)
+(716)
+(5,315)
+(6,031)
+Net book value
+As at 1 January
+78,660
+15,428
+132,688
+As at 31 December
+52,509
+124,989
+146,901
+2,001
+599
+13,291
+15,891
+As at 31 December
+128,609
+76,543
+166,450
+371,602
+Accumulated depreciation
+As at 1 January
+(45,518)
+(58,364)
+(20,022)
+(123,904)
+Additions
+(4,056)
+Exchange differences
+(15,847)
+(10,046)
+(4,188)
+345,387
+Additions
+136
+6,115
+7,250
+13,501
+Transfer from investment
+properties (Note V.22)
+73,497
+406
+Construction in progress
+transfer in (Note V.21)
+2,690
+520
+9,054
+12,264
+Deductions
+(1,613)
+406
+on short-term lease (less than 10 years)
+Deductions
+6,759
+As at 1 January
+Net book value
+(227)
+(208)
+(227)
+19
+19,613
+-
+(58)
+2023
+19,840
+20,554
+As at 31 December
+Exchange differences
+(227)
+26,965
+As at 31 December
+22
+2022
+As at 1 January
+23,311
+19,554
+Additions
+200
+2,995
+Transfer to property and equipment, net (Note V.20)
+Deductions
+(237)
+(417)
+(273)
+7,418
+19,613
+20,346
+Investment properties
+Deductions
+Additions
+Year ended 31 December
+Allowance for impairment losses
+8,043
+Additions
+27,192
+19,840
+As at 1 January
+2022
+2023
+Year ended 31 December
+Cost
+21 Construction in progress
+6,663
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+78,660
+77,946
+313
+Total
+65,476
+64,803
+Subtotal
+(Amounts in millions of Renminbi, unless otherwise stated)
+As at 1 January
+Transfer to property and equipment (Note V.20)
+(12,264)
+Deductions
+As at 31 December
+1,569
+171
+Exchange differences
+(3,320)
+(284)
+(7,216)
+14,994
+2021 RMB Debt Securities
+First Tranche 01 (9)
+17 March 2021
+19 March 2031
+4.15%
+14,995
+2021 RMB Debt Securities
+First Tranche 02 (10)
+2021 RMB Debt Securities
+Second Tranche 01 (11)
+4.47%
+17 March 2021
+19 March 2036
+4.38%
+9,996
+9,996
+14,995
+14,994
+24 January 2032
+16 November 2031
+20 March 2023
+2023 RMB Debt Securities
+First Tranche 01 (16)
+14,998
+14,998
+3.34%
+26 October 2037
+24 October 2022
+2022 RMB Debt Securities
+Second Tranche 02 (15)
+44,993
+44,993
+3.02%
+26 October 2032
+24 October 2022
+2022 RMB Debt Securities
+Second Tranche 01 (14)
+29,992
+29,993
+3.25%
+21 September 2035
+20 January 2022
+2022 RMB Debt Securities
+First Tranche (13)
+9,997
+9,997
+3.80%
+16 November 2036
+12 November 2021
+2021 RMB Debt Securities
+Second Tranche 02 (12)
+39,989
+39,989
+3.60%
+12 November 2021
+17 September 2020
+Corporate deposits
+12,254,880
+10,350
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and
+other countries and regions
+317,463
+138,142
+17,081
+9,614
+Subtotal
+1,450
+Accrued interest
+472,064
+464,941
+2,913
+1,394
+474,977
+466,335
+(1) Included in "Placements from banks and other financial institutions" are amounts received from
+counterparties under repurchase agreements and collateral agreements as follows:
+Total(¹)
+Other financial institutions in Chinese mainland
+306,835
+136,070
+915,858
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+27 Government certificates of indebtedness for bank notes issued and bank notes in
+circulation
+28
+Bank of China (Hong Kong) Limited (“BOCHK") and Bank of China Macau Branch are
+note issuing banks for Hong Kong Dollar and Macao Pataca notes in Hong Kong (China)
+and Macao (China), respectively. Under local regulations, these two entities are required to
+place deposits with the Hong Kong (China) and Macao (China) governments, respectively,
+to secure the currency notes in circulation.
+Bank notes in circulation represent the liabilities in respect of Hong Kong Dollar notes
+and Macao Pataca notes in circulation, issued respectively by BOCHK and Bank of China
+Macau Branch.
+Placements from banks and other financial institutions
+As at 31 December
+2023
+2022
+Placements from:
+Banks in Chinese mainland
+As at 31 December
+First Tranche 02 (8)
+2023
+Repurchase debt securities()
+Personal deposits
+3,782,330
+3,757,373
+Subtotal
+9,421,568
+9,127,430
+Time deposits
+5,370,057
+- Corporate deposits
+4,462,328
+Personal deposits
+6,662,417
+298,621
+- Corporate deposits
+Structured deposits (¹)
+9,846,362
+5,592,463
+5,639,238
+22 March 2033
+Demand deposits
+86,693
+137,894
+(i)
+Debt securities used as collateral under repurchase agreements were principally government bonds
+and were included in the amount disclosed under Note V.41.2.
+323
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+29 Financial liabilities held for trading
+As at 31 December 2023 and 2022, financial liabilities held for trading mainly included
+short position in debt securities.
+30 Due to customers
+As at 31 December
+2023
+2022
+2022
+3.49%
+44,993
+326
+699,468
+Subtotal bonds issued at amortised cost
+1,789,670
+1,530,152
+Bonds issued at fair value through
+profit or loss (26)
+Subtotal bonds issued
+1,235,320
+Accrued interest
+Total bonds issued (27)
+2,118
+2,080
+1,791,788
+1,532,232
+10,658
+8,703
+1,802,446
+1,540,935
+(1)
+(2)
+(3)
+The Bank issued tier 2 capital bonds in an amount of USD3 billion on 13 November 2014. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 5.00%.
+The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 3 September 2018. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 4.86%. The Bank is entitled to redeem the bonds at the
+end of the fifth year. The Bank has redeemed all the bonds in advance at face value on 5 September 2023.
+The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 9 October 2018. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 4.84%. The Bank is entitled to redeem the bonds at the
+end of the fifth year. The Bank has redeemed all the bonds in advance at face value on 11 October 2023.
+327
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+794,294
+Negotiable certificates of deposit
+419,944
+444,268
+2023 RMB Debt Securities
+Third Tranche 02 (21)
+19 October 2023
+23 October 2038
+3.53%
+24,996
+2023 RMB Debt Securities
+Fourth Tranche 01 (22)
+1 December 2023
+5 December 2033
+3.30%
+14,998
+2023 RMB Debt Securities
+Fourth Tranche 02 (23)
+1 December 2023
+5 December 2038
+V
+3.37%
+Subtotal (24)
+551,108
+410,740
+Other bonds issued (25)
+US Dollar Debt Securities
+192,057
+195,391
+RMB Debt Securities
+Other
+221,829
+190,939
+30,382
+33,614
+Subtotal
+14,998
+31
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+Bonds issued (Continued)
+2023 RMB Debt Securities
+Third Tranche 01 (20)
+29,995
+3.37%
+21 September 2038
+19 September 2023
+2023 RMB Debt Securities
+Second Tranche 02 (19)
+29,995
+3.25%
+21 September 2033
+19 September 2023
+2023 RMB Debt Securities
+Second Tranche 01 (18)
+19,998
+3.61%
+22 March 2038
+19 October 2023
+20 March 2023
+2022
+2023
+rate
+Maturity date
+Issue date
+As at 31 December
+Annual
+interest
+Bonds issued (Continued)
+31
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+2023 RMB Debt Securities
+First Tranche 02 (17)
+39,995
+23 October 2033
+(20) The Bank issued tier 2 capital bonds in an amount of RMB45 billion on 19 October 2023. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 3.43%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+(4)
+(5)
+(6)
+(7)
+(8)
+(9)
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 September 2019. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 3.98%. The Bank is entitled to redeem the bonds
+at the end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB10 billion on 20 September 2019. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 4.34%. The Bank is entitled to redeem the bonds
+at the end of the tenth year.
+The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 November 2019. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.01%. The Bank is entitled to redeem the bonds
+at the end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB60 billion on 17 September 2020. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 4.20%. The Bank is entitled to redeem the bonds
+at the end of the fifth year.
+The Bank issued tier 2 capital bonds in an amount of RMB15 billion on 17 September 2020. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 4.47%. The Bank is entitled to redeem the bonds
+at the end of the tenth year.
+The Bank issued tier 2 capital bonds in an amount of RMB15 billion on 17 March 2021. The bonds have
+a maturity of 10 years with a fixed coupon rate of 4.15%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+(10) The Bank issued tier 2 capital bonds in an amount of RMB10 billion on 17 March 2021. The bonds have
+a maturity of 15 years, with a fixed coupon rate of 4.38%. The Bank is entitled to redeem the bonds at the
+end of the tenth year.
+(11) The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 12 November 2021. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 3.60%. The Bank is entitled to redeem the bonds
+at the end of the fifth year.
+3.43%
+(12) The Bank issued tier 2 capital bonds in an amount of RMB10 billion on 12 November 2021. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 3.80%. The Bank is entitled to redeem the bonds
+at the end of the tenth year.
+(14) The Bank issued tier 2 capital bonds in an amount of RMB45 billion on 24 October 2022. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 3.02%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+328
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+31
+Bonds issued (Continued)
+(15) The Bank issued tier 2 capital bonds in an amount of RMB 15 billion on 24 October 2022. The bonds have
+a maturity of 15 years, with a fixed coupon rate of 3.34%. The Bank is entitled to redeem the bonds at the
+end of the tenth year.
+(16) The Bank issued tier 2 capital bonds in an amount of RMB40 billion on 20 March 2023. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 3.49%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+(17) The Bank issued tier 2 capital bonds in an amount of RMB20 billion on 20 March 2023. The bonds have
+a maturity of 15 years, with a fixed coupon rate of 3.61%. The Bank is entitled to redeem the bonds at the
+end of the tenth year.
+(18) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 19 September 2023. The bonds
+have a maturity of 10 years, with a fixed coupon rate of 3.25%. The Bank is entitled to redeem the bonds
+at the end of the fifth year.
+(19) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 19 September 2023. The bonds
+have a maturity of 15 years, with a fixed coupon rate of 3.37%. The Bank is entitled to redeem the bonds
+at the end of the tenth year.
+(13) The Bank issued tier 2 capital bonds in an amount of RMB30 billion on 20 January 2022. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 3.25%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+6,635
+(116)
+1,226,588
+8,732
+2020 RMB Debt Securities
+59,975
+59,975
+4.20%
+21 September 2030
+17 September 2020
+2020 RMB Debt Securities
+First Tranche 01 (7)
+29.992
+29,993
+4.01%
+22 November 2029
+20 November 2019
+2019 RMB Debt Securities
+Second Tranche (6)
+9,996
+9,996
+4.34%
+24 September 2034
+20 September 2019
+2019 RMB Debt Securities
+First Tranche 02 (5)
+29,990
+29,990
+3.98%
+24 September 2029
+20 September 2019
+2019 RMB Debt Securities
+First Tranche 01 (4)
+39,987
+4.84%
+11 October 2028
+9 October 2018
+5,384,034
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(59,611)
+106,114
+437,241
+Subtotal
+390
+(99)
+485
+at fair value through other
+comprehensive income
+484,908
+1,550
+(59,611)
+106,213
+436,756
+- at amortised cost
+2018 RMB Debt Securities
+Second Tranche (3)
+Loans and advances to customers
+and other
+net transfer out
+2023
+differences 31 December
+(reversal), Write-off and
+1 January
+As at
+Exchange
+Additions/
+As at
+24 Impairment allowance
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+2023
+1,554
+- 39,984
+5 September 2028
+30
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+20,201,825
+22,907,050
+324
+Total (3)
+261,685
+304,215
+Accrued interest
+19,940,140
+22,602,835
+Subtotal due to customers
+92,375
+81,830
+290,082
+310,212
+Other deposits (2)
+Certificates of deposit
+583,891
+534,345
+Subtotal
+255,289
+235,724
+Personal deposits
+328,602
+Due to customers (Continued)
+(1)
+(2)
+(3)
+3 September 2018
+2018 RMB Debt Securities First Tranche (2)
+20,862
+21,231
+5.00%
+13 November 2024
+13 November 2014
+2014 US Dollar Debt Securities (¹)
+Tier 2 capital bonds issued
+2022
+2023
+rate
+Maturity date
+Issue date
+4.86%
+As at 31 December
+Bonds issued at amortised cost
+Bonds issued
+31
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+325
+Due to customers included margin deposits received by the Group as at 31 December 2023 of RMB585,801
+million (31 December 2022: RMB471,382 million).
+As at 31 December 2023, the remaining maturity of special purpose funding ranges from 25 days to 30
+years. The interest-bearing special purpose funding bears interest at floating and fixed rates ranging from 0.15%
+to 7.92% (31 December 2022: 0.15% to 7.92%). These terms are consistent with the related development
+loans granted to customers.
+Included in other deposits is special purpose funding, which represents long-term funding provided in
+multiple currencies by foreign governments and/or entities in the form of export credit, foreign government
+and other subsidised credit. The special purpose funding is normally used to finance projects with a special
+commercial purpose in the PRC as determined by the foreign governments or entities and the Group is
+obliged to repay the funding when it falls due.
+According to the Group's risk management policy, the Group enters into derivatives to hedge market risks
+arising from its structured deposits. The Group designates certain structured deposits as financial liabilities
+at fair value through profit or loss, to eliminate or significantly reduce accounting mismatch. As at 31
+December 2023, the carrying amount of these financial liabilities was RMB47,657 million (31 December
+2022: RMB36,701 million). The differences between the fair value and the amount that the Group would
+be contractually required to pay to the holders as at 31 December 2023 and 2022 were not significant. For
+the years ended 31 December 2023 and 2022, there was no significant change in the Group's credit risk
+nor changes in the fair value of these financial liabilities as a result.
+Annual
+interest
+485,298
+Financial investments
+- at amortised cost
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+321
+508,589
+5,673
+(51,297)
+103,959
+450,254
+Total
+55,753
+840
+(434)
+11,587
+43,760
+Other
+15,595
+(421)
+15,953
+Subtotal
+5,708
+- 8
+(575)
+6,275
+comprehensive income
+―at fair value through other
+9,887
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+25
+Due to banks and other financial institutions
+As at 31 December
+2022
+As at 31 December
+2023
+2,240,323
+2,245,362
+6,215
+8,141
+2,234,108
+2,237,221
+322
+Total
+Accrued interest
+Due to central banks
+Due to central banks
+26
+55
+Total
+Subtotal
+69,920
+56,632
+248,486
+208,620
+1,506,452
+1,552,016
+Other financial institutions in Chinese mainland
+Banks in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Other financial institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and
+other countries and regions
+409,250
+419,953
+Banks in Chinese mainland
+Due to:
+2022
+2023
+Accrued interest
+154
+9,678
+- at amortised cost
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+320
+552,826
+1,724
+(64,049)
+106,562
+508,589
+Total
+49,023
+286
+(4,438)
+V
+(2,578)
+Other
+18,505
+7,808
+10,697
+(124)
+3,026
+15,595
+Subtotal
+2,092
+5,708
+comprehensive income
+―at fair value through other
+934
+9,887
+55,753
+909,223
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+As at
+Financial investments
+437,241
+4,770
+(50,863)
+92,793
+390,541
+Subtotal
+485
+10
+24
+451
+at fair value through other
+comprehensive income
+436,756
+4,760
+24 Impairment allowance (Continued)
+(50,863)
+390,090
+- at amortised cost
+Loans and advances to customers
+2022
+and other
+transfer out
+net
+2022
+differences 31 December
+(reversal), Write-off and
+1 January
+As at
+Exchange
+Additions/
+92,769
+Subtotal
+329
+(21) The Bank issued tier 2 capital bonds in an amount of RMB25 billion on 19 October 2023. The bonds have
+a maturity of 15 years, with a fixed coupon rate of 3.53%. The Bank is entitled to redeem the bonds at the
+end of the tenth year.
+Other liabilities (Continued)
+Subtotal
+11,906
+52,382
+16,387
+73,198
+Deferred income tax liabilities
+Other temporary differences
+21,919
+2,780
+13,009
+comprehensive income
+Financial assets at fair value through other
+26,171
+4,868
+Financial instruments at fair value through
+569,141
+139,432
+(27) During the years ended 31 December 2023 and 2022, the Group did not default on any principal, interest
+or redemption amounts with respect to its bonds issued.
+(26) According to the Group's risk management policy, the Group enters into derivatives to hedge market risks
+arising from certain of its bonds issued. The Group designates certain bonds issued as financial liabilities
+at fair value through profit or loss, to eliminate or significantly reduce accounting mismatch. As at 31
+December 2023, the carrying amount of the above-mentioned bonds issued by the Group was RMB2,118
+million (31 December 2022: RMB2,080 million). The differences between the fair value and the amount
+that the Group would be contractually required to pay to the holders as at 31 December 2023 and 2022
+were not significant. In the years of 2023 and 2022, there was no significant change in the Group's credit
+risk nor changes in the fair value of these financial liabilities as a result.
+(25) US Dollar Debt Securities, RMB Debt Securities and other Debt Securities were issued in Chinese
+mainland, Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions between
+2014 and 2023 by the Group, with dates of maturity ranging from 2024 to 2033.
+(24) The claims of the holders of tier 2 capital bonds will be subordinated to the claims of depositors and
+general creditors.
+(23) The Bank issued tier 2 capital bonds in an amount of RMB15 billion on 1 December 2023. The bonds have
+a maturity of 15 years, with a fixed coupon rate of 3.37%. The Bank is entitled to redeem the bonds at the
+end of the tenth year.
+(22) The Bank issued tier 2 capital bonds in an amount of RMB15 billion on 1 December 2023. The bonds have
+a maturity of 10 years, with a fixed coupon rate of 3.30%. The Bank is entitled to redeem the bonds at the
+end of the fifth year.
+32
+Bonds issued (Continued)
+31
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+106,246
+31,396
+125,953
+instruments
+(1) Salary and welfare payables (Continued)
+9,359
+37
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+336
+52,117
+(104,359)
+109,819
+46,657
+483
+As at
+Other borrowings
+As at
+31 December
+profit or loss and derivative financial
+Financial instruments at fair value through
+7,992
+32,054
+Social insurance
+Staff welfare
+38,842
+(64,367)
+72,158
+31,051
+Salary, bonus and subsidy
+2022
+Payment
+Accrual
+2022
+1 January
+These other borrowings relate to the financing of the aircraft leasing business of BOC
+Aviation Limited, a subsidiary of the Group, and are secured by its aircraft (Note V.20).
+As at 31 December 2023, these other borrowings had a remaining maturity ranging from 2
+days to 5 years and borne floating and fixed interest rates ranging from 6.26% to 6.47%
+(31 December 2022: 4.02% to 6.03%).
+During the years ended 31 December 2023 and 2022, the Group did not default on any
+principal, interest or redemption amounts with respect to its other borrowings.
+225,081
+67,759
+240,130
+Net
+(71,673) (294,492) (62,607)
+(329,011)
+Subtotal
+(14,827)
+(20,516) (75,110)
+(96,914)
+Other temporary differences
+(1,955)
+(2,104) (10,369)
+(10,933)
+Revaluation of investment properties
+64,335
+(5,378)
+2023
+As at 31 December
+Pension
+- Medical
+As at 31 December 2023, deferred tax liabilities relating to temporary differences of
+RMB214,236 million associated with the Group's investments in subsidiaries have not been
+recognised (31 December 2022: RMB 199,915 million). Refer to Note II.19.2.
+334
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+36 Deferred income taxes (Continued)
+36.3 Movements of the deferred income tax are as follows:
+As at 1 January
+Credited to the income statement (Note V.10)
+(Charged)/credited to other comprehensive income
+Other
+Year ended 31 December
+15
+(5,820) (46,251)
+Depreciation and amortisation
+6,476
+Value-added tax
+50,192
+51,180
+Corporate income tax
+2022
+2023
+As at 31 December
+33 Current tax liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+330
+6,965
+(46,905)
+City construction and maintenance tax
+554
+(6,194)
+(11,652) (24,777)
+(47,421)
+comprehensive income
+Financial assets at fair value through other
+(31,581) (137,985) (34,253)
+(126,838)
+instruments
+profit or loss and derivative financial
+126,942
+519,573
+Other
+325
+269
+Education surcharges
+647
+(31)
+(5,680)
+21
+5,437
+25
+726
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+13,288
+10,599
+335
+(Amounts in millions of Renminbi, unless otherwise stated)
+Total
+(2,170)
+1,754
+1,367
+2,455
+7,897
+loss and derivative financial instruments
+Pension, retirement benefits and salary payables
+Other temporary differences
+1,450
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+37
+18,797
+Lease liabilities (2)
+46,657
+52,117
+Salary and welfare payables (1)
+67,875
+63,547
+Items in the process of clearance and settlement
+222,939
+257,625
+Insurance contract liabilities
+2022
+2023
+As at 31 December
+Other liabilities
+Financial instruments at fair value through profit or
+7,629
+3,505
+Asset impairment allowances
+36.2 Deferred income tax assets/liabilities and related temporary differences, before offsetting
+qualifying amounts, are attributable to the following items:
+As at 31 December
+2023
+2022
+Deferred
+Temporary
+differences
+tax assets/ Temporary
+(liabilities) differences
+Deferred
+tax assets/
+(liabilities)
+Deferred income tax assets
+Asset impairment allowances
+319,479
+79,510
+306,972
+76,005
+Pension, retirement benefits
+36 Deferred income taxes (Continued)
+19,621
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+2022
+2023
+Year ended 31 December
+36.4 Breakdowns of deferred income tax credit/(charge) in the income statement are as follows:
+64,335
+67,759
+11
+(163)
+6,343
+(7,012)
+13,288
+10,599
+44,693
+64,335
+2022
+V
+Annuity
+Provision (3)
+32,844
+7
+10
+(4,116)
+4,114
+12
+249
+245
+(6,922)
+257
+1,477
+(4,269)
+4,388
+1,358
+(4,871)
+6,914
+(246)
+6
+2
+4,970
+(2,315)
+1,911
+5,374
+61
+(5,441)
+5,451
+51
+4
+(118)
+119
+3
+3
+(97)
+98
+44,839
+(70,253)
+76,250
+4,871
+38,842
+Annuity
+Pension
+Medical
+Social insurance
+Staff welfare
+Salary, bonus and subsidy
+Salary and welfare payables
+(1)
+Total
+89,339
+81,431
+Other
+6,579
+6,865
+Deferred income
+Unemployment
+31,776
+Injury at work
+Housing funds
+2023
+Payment
+Accrual
+2023
+31 December
+1 January
+As at
+As at
+485,854
+512,158
+Total (i)
+Other
+of labour contract
+Reimbursement for cancellation
+Labour union fee and staff education fee
+Maternity insurance
+5,017
+(5,017)
+1,525
+2,095
+Interest cost
+48
+54
+Net actuarial gains recognised
+(41)
+(94)
+Benefits paid
+(173)
+(213)
+As at 31 December
+1,676
+1,842
+1,842
+331
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+34
+Retirement benefit obligations (Continued)
+Primary assumptions used:
+35
+As at 31 December
+2023
+2022
+Discount rate
+BANK OF CHINA LIMITED
+Normal retiree
+As at 1 January
+2023
+210,765,514,846
+83,622,276,395 83,622,276,395
+294,387,791,241 294,387,791,241
+All A and H shares rank pari passu with the same rights and benefits.
+38.2 Capital reserve
+As at 31 December
+2023
+2022
+Share premium
+Other capital reserve
+133,632
+2,104
+133,634
+2,125
+Total
+2022
+135,736
+339
+and salary payables
+731
+921
+Total
+=4
+34
+Retirement benefit obligations
+59,303
+58,957
+As at 31 December 2023, the actuarial liabilities existing in relation to the retirement
+benefit obligations for employees who retired prior to 31 December 2003 and the early
+retirement obligations for employees who early-retired were RMB1,589 million (31
+December 2022: RMB1,713 million) and RMB87 million (31 December 2022: RMB129
+million), respectively, using the projected unit credit method.
+The movements of the net liabilities recognised are as follows:
+Year ended 31 December
+135,759
+210,765,514,846
+2.50%
+- Early retiree
+36.1 The table below includes the deferred income tax assets and liabilities of the Group after
+offsetting qualifying amounts and the related temporary differences.
+As at 31 December
+2023
+2022
+Deferred
+Deferred
+Temporary
+differences
+tax assets/ Temporary
+(liabilities) differences
+tax assets/
+(liabilities)
+Deferred income tax assets
+Deferred income tax liabilities
+296,050
+75,156
+36 Deferred income taxes
+278,548
+(55,920)
+(7,397)
+(53,467)
+(6,804)
+Net
+240,130
+67,759
+225,081
+64,335
+333
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+71,139
+2.75%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+2.25%
+2.50%
+Pension benefit inflation rate
+Normal retiree
+3.0%
+3.0%
+-Early retiree
+3.0%
+3.0%
+Medical benefit inflation rate
+8.0%
+8.0%
+Retiring age
+V
+- Male
+60
+50/55
+60
+50/55
+Assumptions regarding future mortality experience are based on the China Life Insurance
+Mortality Table (published historical statistics in China).
+As at 31 December 2023 and 2022, there was no significant change in employee retirement
+benefit obligations that was attributable to changes in actuarial assumptions.
+Share appreciation rights plan
+In November 2005, the Bank's Board of Directors and equity holders approved and adopted
+a Share Appreciation Rights Plan under which eligible participants, including directors,
+supervisors, management and other personnel designated by the Board, will be granted
+share appreciation rights, up to 25% of which will be exercisable each year beginning on
+the third anniversary date from the date of grant. The share appreciation rights will be valid
+for seven years from the date of grant. Eligible participants will be entitled to receive an
+amount equal to the difference, if any, between the average closing market price of the
+Bank's H shares in the ten days prior to the date of grant and the average closing market
+price of the Bank's H shares in the 12 months prior to the date of exercise as adjusted for
+any change in the Bank's equity. The plan provides cash-settled share-based payment only
+and accordingly, no shares will be issued under the share appreciation rights plan.
+No share appreciation rights were granted since the inception of the plan.
+332
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Female
+2022
+37,502
+Unit: Share
+6,585
+Less than 1 year
+2022
+2023
+As at 31 December
+The Group's lease liabilities are analysed by the maturity date - undiscounted analysis
+Lease liabilities
+(2)
+There was no overdue payment for staff salary and welfare payables as at 31 December 2023 and
+2022.
+46,657
+(95,755)
+102,727
+39,685
+Total (i)
+726
+25
+(23)
+(4,861)
+6,257
+25
+4,908
+Between 1 to 5 years
+Undiscounted lease liabilities
+As at 31 December
+2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+19,621
+18,797
+337
+Lease liabilities
+8,507
+7,656
+10,740
+10,297
+25,504
+24,538
+Over 5 years
+(3) Provision
+679
+23
+Injury at work
+7
+(215)
+216
+6
+Unemployment
+12
+(3,827)
+3,829
+10
+257
+(6,393)
+6,420
+230
+1,358
+(3,857)
+3,690
+2
+Other
+86
+2
+labour contract
+Reimbursement for cancellation of
+5,374
+(1,904)
+1,152
+6,126
+Labour union fee and staff education fee
+51
+(5,096)
+5,117
+30
+Housing funds
+3
+(109)
+109
+3
+Maternity insurance
+(86)
+Allowance for credit commitments (i)
+Allowance for litigation losses (Note V.41.1)
+37 Other liabilities (Continued)
+Movements of the provision are as follows:
+32,844
+365
+Total
+Domestic listed A shares, par value of RMB 1.00 per share
+Overseas listed H shares, par value of RMB 1.00 per share
+The Bank's share capital is as follows:
+38.1 Share capital
+Share capital, capital reserve and other equity instruments
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+38
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+338
+Total
+Allowance for credit commitments is measured using the ECL model. Credit commitments were
+mainly under Stage 1, and the transfers in balance between stages were not significant during the
+years ended 31 December 2023 and 2022.
+(63)
+(374)
+114
+(808)
+As at 1 January
+(Reversal)/losses for the year
+Utilised during the year
+Exchange differences and other
+As at 31 December
+(i)
+As at 31 December
+2023
+2022
+30,917
+6,199
+859
+31,776
+32,844
+Year ended 31 December
+2023
+2022
+32,844
+26,343
+31,602
+1,242
+31,776
+41 Contingent liabilities and commitments (Continued)
+As at 31 December
+2023
+BOC Hong Kong (Group) Limited
+91,000
+BANK OF CHINA LIMITED
+1,084,517
+103,926
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+As at 31 December
+Tai Fung Bank Limited
+BANK OF CHINA LIMITED
+13,195
+1,450,700
+281
+1,084,236
+1,450,062
+638
+2022
+As at 31 December
+2023
+348
+Total
+Bills
+Debt securities
+Assets pledged by the Group as collateral mainly for placement, repurchase, short positions,
+derivative transactions with other banks and financial institutions and for local statutory
+requirements are set forth in the table below. These transactions are conducted under
+standard and normal business terms.
+41.2 Assets pledged
+As at 31 December 2023, the Group was involved in certain litigation and arbitration cases
+in the regular course of its business. In the Group's regular business operations in different
+countries and regions across the world, given the range and scale of its international
+presence, the Group may be involved in a variety of litigation, arbitration and judicial
+proceedings within different jurisdictions, and the ultimate outcomes of these proceedings
+involve various levels of uncertainty. Management makes provisions for potential losses
+that may arise from these uncertainties based on assessments of potential liabilities, courts'
+judgements or the opinions of legal counsel, and as at 31 December 2023, the balance
+of the provisions was RMB859 million (31 December 2022: RMB1,242 million), as
+disclosed in Note V.37. Based upon the opinions of internal and external legal counsels,
+senior management of the Group believes that, at the current stage, these matters will not
+have a material impact on the financial position or operating results of the Group. Should
+the ultimate outcomes of these matters differ from the initially estimated amounts, such
+differences will impact the profit or loss in the period during which such a determination is
+made.
+41.1 Legal proceedings and arbitrations
+41 Contingent liabilities and commitments
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+347
+139,328
+127,305
+Total
+9,953
+11,129
+Other
+12,254
+12,776
+Bank of China Group Investment Limited
+12,400
+2022
+2023
+349
+30,000
+250,000
+Subtotal
+30,000
+30,000
+Bonds (Series 1) (12)
+2023 Undated Capital
+20,000
+20,000
+Bonds (Series 2) (11)
+2022 Undated Capital
+30,000
+30,000
+Bonds (Series 1) (10)
+2022 Undated Capital
+20,000
+20,000
+Bonds (Series 2) (9
+2021 Undated Capital
+50,000
+50,000
+Bonds (Series 1) (8)
+2021 Undated Capital
+20,000
+20,000
+Bonds (Series 3) (7)
+2020 Undated Capital
+30,000
+30,000
+280,000
+Total
+369,787
+30,000
+Share capital, capital reserve and other equity instruments (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+38
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+341
+The Offshore Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the relevant regulatory authorities, the Bank may at its
+discretion redeem all or part of the Offshore Preference Shares on 4 March 2025 or any dividend payment
+date thereafter at the redemption price representing the sum of the par value of the Offshore Preference
+Shares and the dividends declared but not yet distributed, as calculated and paid in US Dollars.
+With the approvals by the relevant regulatory authorities in China, the Bank issued the US Dollar settled
+non-cumulative Offshore Preference Shares on 4 March 2020. Each Offshore Preference Share has a
+par value of RMB100 and 197,865,300 Offshore Preference Shares were issued in total. The aggregate
+par value of the Offshore Preference Shares is USD2.820 billion as converted into USD using the fixed
+exchange rate (USD1.00 to RMB7.0168). The initial annual dividend rate is 3.60% (after tax) and is
+subject to reset per agreement, but in no case shall exceed 12.15%. The dividends are calculated and paid
+in US Dollars.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the relevant regulatory authorities, the Bank may at its
+discretion redeem all or part of the Domestic Preference Shares after 29 August 2024 at the redemption
+price representing the sum of the par value of the Domestic Preference Share and the dividends declared
+but not yet distributed.
+With the approvals by the relevant regulatory authorities in China, the Bank issued non-cumulative
+Domestic Preference Shares on 26 August 2019, in the aggregate par value of RMB27 billion. Each
+Domestic Preference Share has a par value of RMB100 and 270 million Domestic Preference Shares were
+issued in total. The dividend rate of the shares for the first five years is 4.35% (pre-tax), which is reset
+every 5 years.
+The Domestic Preference Shares have no maturity date. However, subject to the satisfaction of the
+redemption conditions and the prior approval of the relevant regulatory authorities, the Bank may at its
+discretion redeem all or part of the Domestic Preference Shares after 27 June 2024 at the redemption price
+representing the sum of the par value of the Domestic Preference Share and the dividends declared but not
+yet distributed.
+Bonds (Series 2) (6)
+With the approvals by the relevant regulatory authorities in China, the Bank issued non-cumulative
+Domestic Preference Shares on 24 June 2019, in the aggregate par value of RMB73 billion. Each Domestic
+Preference Share has a par value of RMB100 and 730 million Domestic Preference Shares were issued in
+total. The dividend rate of the shares for the first five years is 4.50% (pre-tax), which is reset every 5 years.
+(2)
+(1)
+38.3 Other equity instruments (Continued)
+Share capital, capital reserve and other equity instruments (Continued)
+38
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+340
+As at 31 December 2023, the transaction costs of outstanding other equity instruments
+issued by the bank were RMB110 million (31 December 2022: RMB108 million).
+399,787
+(3)
+2020 Undated Capital
+40,000
+40,000
+Issue
+amount
+shares)
+shares) amount
+(million
+Issue
+(million
+Issue
+amount
+shares)
+(million
+Quantity
+Quantity
+Quantity
+31 December 2023
+Increase/(decrease)
+Preference Shares
+As at
+For the year ended 31 December 2023, the movements in the Bank's other equity
+instruments were as follows:
+38.3 Other equity instruments
+Share capital, capital reserve and other equity instruments (Continued)
+38
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+41.3 Collateral accepted
+The Group accepts securities as collateral that are permitted to be sold or re-pledged
+in connection with reverse repurchase and derivative agreements with banks and other
+financial institutions. As at 31 December 2023, the fair value of collateral received from
+banks and other financial institutions and accepted by the Group amounted to RMB23,498
+million (31 December 2022: RMB130,147 million). As at 31 December 2023, the fair value
+of the collateral that the Group had sold or re-pledged, but was obligated to return, was
+RMB665 million (31 December 2022: RMB761 million). These transactions are conducted
+under standard terms in the normal course of business.
+41.4 Capital commitments
+(1) Long-term assets
+Property and equipment
+As at
+1 January 2023
+38.3 Other equity instruments (Continued)
+Domestic
+(Third Tranche) (¹)
+Bonds (Series 1) (5)
+2020 Undated Capital
+40,000
+40,000
+Bonds (Series 1) (4)
+2019 Undated Capital
+Perpetual Bonds
+119,787
+1,197.9
+19,787
+197.9
+119,787
+1,197.9
+Subtotal
+Preference Shares
+19,787
+(Second Tranche) (3)
+Preference Shares
+Offshore
+27,000
+-- 270.0
+27,000
+270.0
+(Fourth Tranche) (2)
+Preference Shares
+Domestic
+73,000
+-- 730.0
+73,000
+730.0
+197.9
+Save for such dividend at the agreed dividend payout ratio, the holders of the above
+preference shares shall not be entitled to share in the distribution of the remaining profits
+of the Bank together with the holders of the ordinary shares. The above preference shares
+bear non-cumulative dividends. The Bank shall be entitled to cancel any dividend on
+the preference shares, and such cancellation shall not constitute a default. However, the
+Bank shall not distribute profits to ordinary shareholders until resumption of full payment
+of dividends on the preference shares. Upon the occurrence of a triggering event for the
+compulsory conversion of preference shares into ordinary shares in accordance with the
+agreement, the Bank shall convert the preference shares into ordinary shares in whole or in
+part after reporting to the relevant regulatory authorities for its examination and approval
+decision. As at 31 December 2023, the above preference shares have not been converted to
+ordinary shares.
+Funding raised from the issuance of the above preference shares was fully used to replenish
+the Bank's capital and to increase its capital adequacy ratio.
+(4)
+Interest on Perpetual Bonds
+39.3 Dividends (Continued)
+39 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+346
+Dividend distributions of Domestic Preference Shares (Third Tranche and Fourth Tranche)
+and Offshore Preference Shares (Second Tranche) were approved by the Board of Directors
+of the Bank at the Board Meeting held on 28 April 2023. Dividend of Domestic Preference
+Shares (Third Tranche) amounting to RMB3,285 million (pre-tax) was distributed on
+27 June 2023. Dividend of Domestic Preference Shares (Fourth Tranche) amounting to
+RMB1,174.5 million (pre-tax) was distributed on 29 August 2023. Dividend of Offshore
+Preference Shares (Second Tranche) amounting to USD101.5 million (after tax) was
+distributed on 4 March 2024 and was recorded in "Other liabilities" as at 31 December
+2023.
+Dividends for Preference Shares
+statements.
+Ordinary share cash dividend of RMB2.364 per ten shares (pre-tax) in respect of the profit
+for the year ended 31 December 2023 (2022: RMB2.32 per ten shares), amounting to a
+total dividend of RMB69,593 million (pre-tax), based on the number of shares issued
+as at 31 December 2023 will be proposed for approval at the forthcoming 2023 Annual
+General Meeting and the dividend payable is not reflected in the liabilities of the financial
+The Bank distributed interest on the 2019 Undated Capital Bonds (Series 1) amounting to
+RMB1,800 million on 29 January 2023.
+Ordinary share cash dividend of RMB68,298 million (pre-tax) in respect of the profit for the
+year ended 31 December 2022 was approved by the shareholders of the Bank at the Annual
+General Meeting held on 30 June 2023 and was distributed during the year.
+39.3 Dividends
+39 Statutory reserves, general and regulatory reserves and undistributed profits (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+345
+The regulatory reserve mainly refers to the reserve amount set aside by BOC Hong Kong
+(Group) Limited (“BOCHK Group”), a subsidiary of the Group, for general banking risks,
+including future losses or other unforeseeable risks. As at 31 December 2023 and 2022,
+the reserve amounts set aside by BOCHK Group were RMB4,939 million and RMB4,186
+million, respectively.
+According to the profit distribution plan approved by the Board of Directors on 28 March
+2024, the Bank appropriated RMB40,468 million to the general reserve for the year ended
+31 December 2023 (2022: RMB32,264 million).
+According to Caijin [2012] No. 20 Requirements on Impairment Allowance for Financial
+Institutions (the “Requirement”), issued by the MOF, in addition to the impairment
+allowance, the Bank establishes a general reserve to address unidentified potential
+impairment losses. The general reserve as a distribution of profits, being part of the equity,
+should not be less than 1.5% of the aggregate amount of risk assets as defined by the
+Requirement, and the minimum threshold can be accumulated over a period of no more than
+five years.
+39.2 General and regulatory reserves
+In addition, some operations in Hong Kong (China), Macao (China), Taiwan (China) and
+other countries and regions are required to appropriate certain percentages of their net
+profits to the statutory surplus reserves as stipulated by local banking authorities.
+Dividends for Ordinary Shares
+According to the profit distribution plan approved by the Board of Directors on 28 March
+2024, the Bank appropriated 10% of the net profit for the year ended 31 December 2023
+to the statutory surplus reserves, amounting to RMB20,824 million (2022: RMB20,494
+million).
+The Bank distributed interest on the 2022 Undated Capital Bonds (Series 1) amounting to
+RMB1,095 million on 12 April 2023.
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 1) amounting to
+RMB1,360 million on 4 May 2023.
+As at 31 December 2023, the Group is committed to acquire a controlling stake in the
+shareholding in China Construction Bank (Brasil) Banco Multiplo S/A ("CCB Brasil")
+based on a share purchase agreement signed with China Construction Bank Corporation.
+The Group is required to pay CCB Brazil Financial Holding – Investimentos e Participações
+Ltda. BRL564 million (equivalent to approximately RMB817 million) as the consideration
+for the existing CCB Brasil shares and BRL540 million (equivalent to approximately
+RMB764 million) to subscribe for certain new shares to be issued by CCB Brasil. The
+completion of transaction depends on the fulfilment of all prescribed conditions stated in
+the share purchase agreement. The transaction was completed on 31 January 2024 (Note V.50).
+-
+(2) Acquisition of China Construction Bank (Brasil) Banco Múltiplo S/A
+88,767
+99,362
+Total
+504
+552
+Contracted but not provided for
+Investment properties and others
+264
+65
+- Authorised but not contracted for
+3,455
+The Bank distributed interest on the 2022 Undated Capital Bonds (Series 2) amounting to
+RMB730 million on 28 April 2023.
+4,414
+Intangible assets
+2,124
+4,198
+- Authorised but not contracted for
+82,420
+90,133
+Contracted but not provided for
+2022
+Non-controlling interests of the subsidiaries of the Group are as follows:
+40 Non-controlling interests
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 3) amounting to
+RMB940 million on 14 December 2023.
+The Bank distributed interest on the 2021 Undated Capital Bonds (Series 2) amounting to
+RMB728 million on 29 November 2023.
+The Bank distributed interest on the 2020 Undated Capital Bonds (Series 2) amounting to
+RMB1,365 million on 17 November 2023.
+The Bank distributed interest on the 2021 Undated Capital Bonds (Series 1) amounting to
+RMB2,040 million on 19 May 2023.
+- Contracted but not provided for
+V
+Under relevant PRC laws, the Bank is required to appropriate 10% of its net profit to non-
+distributable statutory surplus reserves. The appropriation to the statutory surplus reserves
+may cease when such reserves has reached 50% of the share capital. Subject to the approval
+of the Annual General Meeting, the statutory surplus reserves can be used for replenishing
+the accumulated losses or increasing the Bank's share capital. The statutory surplus reserves
+amount used to increase the share capital is limited to a level where the statutory surplus
+reserves after such capitalisation is not less than 25% of the share capital.
+39 Statutory reserves, general and regulatory reserves and undistributed profits
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+343
+Funding raised from the issuance of these bonds was fully used to replenish the Bank's
+capital and to increase its capital adequacy ratio.
+The above bonds bear non-cumulative interest and the Bank shall have the right to cancel
+distributions on these bonds in whole or in part and such cancellation shall not constitute a
+default. The Bank may at its discretion utilise the proceeds from the cancelled distributions
+to meet other obligations of maturing debts. The Bank shall not distribute profits to ordinary
+shareholders until the resumption of full interest payment to the holders of these bonds.
+The above perpetual bonds will continue to be outstanding so long as the Bank's business
+continues to operate. Subject to the satisfaction of the redemption conditions and having
+obtained the prior approval of the relevant regulatory authorities, the Bank may redeem
+these bonds in whole or in part on each distribution payment date from the fifth anniversary
+since the issuance. Upon the occurrence of a triggering event for the write-downs, with
+the consent of the relevant regulatory authorities and without the need for the consent of
+the holders of the above bonds, the Bank has the right to write down the principal amount
+of the above bonds issued and existing at that time in whole or in part, in accordance with
+the outstanding principal amount of the bonds. The claims in respect of the above bonds,
+in the event of a winding-up of the Bank, will be subordinated to the claims of depositors,
+general creditors and subordinated indebtedness that ranks senior to these bonds; will rank
+in priority to all classes of shares held by the Bank's shareholders and rank pari passu with
+the claims in respect of any other additional tier 1 capital instruments of the Bank that rank
+pari passu with these bonds.
+(12) With the approvals by the relevant regulatory authorities in China, the Bank issued RMB30,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 14 June 2023 and
+completed the issuance on 16 June 2023. The denomination of the bonds is RMB 100 each, and the annual
+interest rate of the bonds for the first five years is 3.27%, which is reset every 5 years.
+(11) With the approvals by the relevant regulatory authorities in China, the Bank issued RMB20,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 26 April 2022 and
+completed the issuance on 28 April 2022. The denomination of the bonds is RMB100 each, and the annual
+interest rate of the bonds for the first five years is 3.65%, which is reset every 5 years.
+(10) With the approvals by the relevant regulatory authorities in China, the Bank issued RMB 30,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 8 April 2022 and
+completed the issuance on 12 April 2022. The denomination of the bonds is RMB 100 each, and the annual
+interest rate of the bonds for the first five years is 3.65%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB20,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 25 November 2021
+and completed the issuance on 29 November 2021. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 3.64%, which is reset every 5 years.
+(9)
+38.3 Other equity instruments (Continued)
+Share capital, capital reserve and other equity instruments (Continued)
+38
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+342
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB50,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 17 May 2021 and
+completed the issuance on 19 May 2021. The denomination of the bonds is RMB 100 each, and the annual
+interest rate of the bonds for the first five years is 4.08%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB20,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 10 December 2020
+and completed the issuance on 14 December 2020. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 4.70%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB30,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 13 November 2020
+and completed the issuance on 17 November 2020. The denomination of the bonds is RMB100 each, and
+the annual interest rate of the bonds for the first five years is 4.55%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB40,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 28 April 2020 and
+completed the issuance on 30 April 2020. The denomination of the bonds is RMB100 each, and the annual
+interest rate of the bonds for the first five years is 3.40%, which is reset every 5 years.
+With the approvals by the relevant regulatory authorities in China, the Bank issued RMB40,000 million
+write-down undated capital bonds in the Chinese mainland interbank bond market on 25 January 2019
+and completed the issuance on 29 January 2019. The denomination of the bonds is RMB100 each, and the
+annual interest rate of the bonds for the first five years is 4.50%, which is reset every 5 years.
+(8)
+(7)
+(6)
+(5)
+V
+39.1 Statutory reserves
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+344
+27,252
+6,593
+- Equity attributable to non-controlling interests of
+other equity instruments
+112,076
+120,712
+139,328
+127,305
+V
+Total equity attributable to non-controlling interests
+- Equity attributable to non-controlling interests of
+ordinary shares
+399,505
+– Equity attributable to other equity holders of
+the Bank
+2,054,468
+2,230,005
+2,423,973
+2,629,510
+Total equity attributable to equity holders of the Bank
+- Equity attributable to ordinary shareholders of
+the Bank
+2022
+2023
+As at 31 December
+Interests attributable to the holders of equity instruments
+38.3 Other equity instruments (Continued)
+Share capital, capital reserve and other equity instruments (Continued)
+38
+369,505
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+The main transactions with subsidiaries are as follows:
+Financial investments
+2023
+Year ended 31 December
+354
+Interest expense
+Interest income
+Transaction amounts
+2022
+50,353
+Credit commitments
+(10,118)
+(10,537)
+Derivative financial liabilities
+(201,668)
+(157,657)
+39,725
+Placements from banks and other financial institutions
+24,686
+(16,782)
+2022
+Year ended 31 December
+2023
+Interest rate ranges
+(3) Transactions with companies under Huijin (Continued)
+43.2 Transactions with Huijin and companies under Huijin (Continued)
+Related party transactions (Continued)
+17,249
+43
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(9,568)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(356,333)
+(595,608)
+Due to customers, banks and other financial institutions
+Transaction balances
+In the normal course of business, main transactions that the Group entered into with the
+affiliates of Huijin are as follows:
+Companies under Huijin include its equity interests in subsidiaries, associates and joint
+ventures in certain other bank and non-bank entities in the PRC. The Group enters into
+banking transactions with these companies in the normal course of business on commercial
+terms which include mainly purchase and sale of debt securities, money market transactions
+and derivative transactions.
+(3) Transactions with companies under Huijin
+43.2 Transactions with Huijin and companies under Huijin (Continued)
+Related party transactions (Continued)
+As at 31 December
+43
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+353
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+2023
+2022
+Due from banks and other financial institutions
+80,993
+82,169
+Loans and advances to customers
+10,347
+9,354
+Derivative financial assets
+522,111
+566,220
+Financial investments
+211,275
+214,458
+financial institutions
+Placements with and loans to banks and other
+173,096
+138,515
+Due from banks and other financial institutions
+Placements with and loans to banks and
+(430)
+0.00%-10.82% 0.00%-10.07%
+(2,452)
+The general information of principal associates and joint ventures is as follows:
+43.4 Transactions with associates and joint ventures (Continued)
+Related party transactions (Continued)
+43
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+357
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(490)
+(395)
+717
+673
+FOR THE YEAR ENDED 31 DECEMBER 2023
+2022
+Place of
+incorporation/
+establishment
+25.70
+PRC 91110102MA01W7X36U
+China Insurance Investment Fund Co., Ltd.
+of RMB) of RMB)
+of RMB)
+(in millions)
+Name
+(%)
+(loss)
+Total Operating Net profit/
+equity
+income
+capital
+right
+Paid-in
+Unified Social Effective Voting
+Credit Code equity held
+(in millions (in millions (in millions
+2023
+Year ended 31 December
+356
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+43
+355
+The State Council of the PRC government directly and indirectly controls a significant
+number of entities through its government authorities, agencies, affiliates and other State-
+controlled entities. The Group enters into extensive banking transactions with these entities
+in the normal course of business on commercial terms.
+43.3 Transactions with government authorities, agencies, affiliates and other State-controlled
+entities
+0.00%-6.83% 0.00%-5.98%
+0.90%-6.82% 0.15%-6.00%
+0.00%-6.45% -0.50%-5.47%
+-0.25%-8.33% -0.51%-4.80%
+-0.18%-23.00% -0.49%-23.00%
+Due to customers, banks and other financial institutions
+Placements from banks and other financial institutions
+Loans and advances to customers
+Transactions conducted with government authorities, agencies, affiliates and other State-
+controlled entities include the purchase and redemption of investment securities issued by
+government agencies, underwriting and distribution of treasury bonds issued by government
+agencies through the Group's branch network, foreign exchange transactions and derivative
+transactions, lending, provision of credit and guarantees and deposit placing and taking.
+Related party transactions (Continued)
+43.4 Transactions with associates and joint ventures
+The Group enters into banking transactions with associates and joint ventures in the normal
+course of business on commercial terms. These include loans and advances, deposit taking
+and other normal banking businesses. The main transactions that the Group entered into
+with associates and joint ventures are as follows:
+Interest expense
+Interest income
+Transaction amounts
+27,450
+27,497
+(24,557)
+(19,772)
+Due to customers, banks and other financial institutions
+Credit commitments
+21,342
+18,158
+Loans and advances to customers
+2022
+2023
+As at 31 December
+Transaction balances
+other financial institutions
+(166)
+Interest expense
+Interest income
+6,157,939
+6,794,205
+Total (3)
+275,670
+253,054
+Other
+(1)
+79,362
+Accepted bills of exchange under letters of credit
+56,048
+51,083
+Usance letters of credit
+90,646
+107,952
+61,279
+- Sight letters of credit
+(2)
+The obligations on the Group to make payments are dependent on the outcome of a future event.
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+1,325,999
+Loan commitments mainly represent undrawn loan facilities agreed and granted to customers.
+Unconditionally revocable loan commitments are not included in loan commitments. As at 31 December
+2023, the unconditionally revocable loan commitments of the Group amounted to RMB475,271 million (31
+December 2022: RMB380,483 million).
+1,355,511
+2023
+As at 31 December
+351
+Credit commitments
+The risk-weighted assets for credit risk of the Group are calculated in accordance with the Capital Rules for
+Commercial Banks (Provisional) and other relevant regulations under the advanced capital measurement
+approaches. The amounts are determined by the creditworthiness of the counterparties, the maturity
+characteristics of each type of contracts and other factors.
+(3) Risk-weighted assets for credit risk of credit commitments
+2022
+Letters of credit issued
+574,425
+649,385
+Loan commitments (¹)
+41.7 Credit commitments
+41 Contingent liabilities and commitments (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+As at 31 December
+2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+350
+As at 31 December 2023, the outstanding principal value of the Treasury bonds sold by the
+Bank under obligation to redeem prior to maturity amounted to RMB42,677 million (31
+December 2022: RMB45,563 million). The original maturities of these Treasury bonds vary
+from 3 to 5 years and management expects the amount of redemption through the Bank
+prior to the maturity dates of these bonds will not be material.
+The Bank is entrusted by the MOF to underwrite certain Treasury bonds. The investors of
+these Treasury bonds have a right to redeem the bonds at any time prior to maturity and the
+Bank is committed to redeem these Treasury bonds. The MOF will not provide funding for
+the early redemption of these Treasury bonds on a back-to-back basis but will pay interest
+and repay the principal at maturity. The redemption price is the principal value of the bonds
+plus unpaid interest in accordance with the early redemption arrangement.
+117,444
+114,502
+51,028
+BANK OF CHINA LIMITED
+2022
+with an original maturity of less than 1 year
+492,790
+Bank bill acceptance
+1,140,893
+1,164,180
+- Non-financing letters of guarantee
+48,176
+33,692
+1,067,259
+1,027,823
+- Financing letters of guarantee
+Letters of guarantee issued (2)
+Undrawn credit card limits
+2,430,689
+2,952,967
+- with an original maturity of 1 year or above
+394,771
+41 Contingent liabilities and commitments (Continued)
+41.8 Underwriting obligations
+As at 31 December 2023, there was no firm commitment in underwriting securities of the
+Group (31 December 2022: nil).
+42 Note to the consolidated statement of cash flows
+institutions on behalf of the State Council;
+other related businesses approved
+by the State Council.
+911000007109329615
+Investment in major State-owned financial
+Wholly State-owned company
+(2) Transactions with Huijin
+Unified social credit code
+Principal activities
+The Group enters into banking transactions with Huijin in the normal course of its business
+on commercial terms. Purchase of the bonds issued by Huijin was in the normal course of
+business and in compliance with the requirements of the related regulations and corporate
+governance.
+Voting rights in the Bank
+Nature
+64.13%
+Capital shares in the Bank
+Beijing
+Location of registration
+RMB828,209 million
+Registered capital
+64.13%
+Transaction balances
+Investment in debt securities
+Placements with Huijin
+881
+888
+2022
+2023
+Year ended 31 December
+(8,001)
+(14,842)
+14,000
+12,000
+20,783
+25,257
+2022
+As at 31 December
+2023
+Transaction amounts
+Due to Huijin
+PENG Chun
+25.70
+Legal representative
+(1) General information of Huijin
+504,145
+528,317
+other financial institutions
+Placements with and loans to banks and
+758,494
+1,257,651
+Financial investments
+Balances with central banks
+483,116
+Cash and due from banks and other financial institutions
+2022
+2023
+As at 31 December
+For the purpose of the consolidated statement of cash flows, cash and cash equivalents
+comprise the following balances with an original maturity of less than three months:
+640,003
+247,641
+188,824
+Total
+43.2 Transactions with Huijin and companies under Huijin
+Related party transactions (Continued)
+43
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+352
+The Group entered into banking transactions with CIC in the normal course of its business
+on commercial terms.
+43.1 CIC was established on 29 September 2007 with registered capital of RMB1,550
+billion. CIC is a wholly state-owned company engaging in foreign currency investment
+management. The Group is subject to the control of the State Council of the PRC
+Government through CIC and its wholly owned subsidiary, Huijin.
+2,091,466
+2,516,725
+43 Related party transactions
+Central Huijin Investment Ltd.
+45,727
+RMB45,000
+12,865
+16.44
+Note (1)
+RMB 1,568
+Note (2)
+Note (2)
+Note (2)
+Graceful Field Worldwide Limited
+BVI
+N/A
+80.00
+Note (1)
+USD0.0025
+1,831
+62
+(110)
+Guomin Pension Insurance Co., Ltd.
+Wkland Investments II Limited
+PRC 91110102MA7LE7UA7T
+56
+107
+578
+USD0.00002
+50.00
+50.00
+91510500711880825C
+N/A
+315
+1,902
+11,552
+RMB11,150
+8.97
+8.97
+BVI
+PRC
+(1)
+2,386
+National Green Development Fund
+Note (2)
+Note (2)
+RMB20,000
+Note (1)
+8.86
+PRC 91310000MA1FL7AXXR
+91210800121119657C
+Ying Kou Port Group CORP.
+investment management and consulting
+Note (2) Securities brokerage; securities investment consulting; financial advisory services
+related to securities trading and securities investment activities; securities
+underwriting and sponsorship; securities proprietary business; securities assets
+management; securities investment fund sales agency; margin financing and
+securities lending; distribution of financial products; management of publicly
+offered securities investment funds
+Note (2) Terminals and other port facilities services; cargo handling; warehousing services;
+ship and port services; leasing and maintenance services of port facilities and
+Investment in non-securities business; equity investment;
+Principal
+business
+Sichuan Lutianhua Co., Ltd.
+47,458
+PRC
+(1)
+9.04
+RMB88,500
+RMB2,400
+Note (1)
+75.00
+PRC 91310000MA1H3FM95L
+1,396
+1,122
+Note (1)
+9,910
+20.00
+20.00
+PRC 91110000717827478Q
+130
+332
+23,662
+RMB 100
+(2)
+For the performance and related information of public offering companies, please refer to their financial reports.
+In accordance with the respective articles of association, the Group has significant influence or joint control over these companies.
+38,874
+54,648
+Due from banks and other financial institutions
+Placements with and loans to banks and other financial
+2022
+2023
+As at 31 December
+institutions and loans and advances to customers
+Transaction balances
+According to China Securities Regulatory Commission's Administrative Measure for
+Information Disclosure of Listed Companies, as at 31 December 2023, the Group's balance
+of loans and overdrafts to the connected natural persons totalled RMB41 million (31
+December 2022: RMB11 million).
+43.7 Transactions with Connected Natural Persons
+Related party transactions (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+43
+V
+43.8 Transactions with subsidiaries
+(Amounts in millions of Renminbi, unless otherwise stated)
+289,431
+Due to banks and other financial institutions
+Placements from banks and other financial institutions
+(5,531)
+4,090
+7,768
+2022
+2023
+Year ended 31 December
+318,632
+359
+Interest income
+Transaction amounts
+(56,167)
+(83,253)
+(255,912)
+(177,043)
+Interest expense
+CGN Phase I Private Equity Fund
+Company Limited
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+As at 31 December 2023, apart from the obligations for defined contributions to the
+Annuity Fund established by the Bank, annuity fund held other equity instruments issued by
+the Bank of RMB3.94 million (31 December 2022: RMB5.77 million), and bonds issued by
+the Bank of RMB2.33 million (31 December 2022: RMB2.00 million).
+43.5 Transactions with the Annuity Fund
+Related party transactions (Continued)
+43
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+43.6 Transactions with key management personnel
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Insurance business; Insurance asset management
+Investment holding
+Investment
+assets management; investment consulting
+Real estate development and operations; property management;
+non-residential real estate leasing; parking services
+Chemical industry, mainly produces and
+sells all kinds of fertilizers and chemical products
+equipment and port machinery, etc.
+Equity investment; project investment;
+investment management; investment consulting
+Investment in nuclear power projects and related industries;
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Key management personnel are those persons having authority and responsibility for
+planning, directing and controlling the activities of the Group, directly or indirectly,
+including Directors, Supervisors and Executive Officers.
+The key management compensation for the years ended 31 December 2023 and 2022
+comprises:
+358
+The total compensation packages for the key management personnel for the year ended 31 December 2023
+have not yet been finalized in accordance with the relevant regulations of the PRC authorities. The amount
+of the compensation not provided for is not expected to have any significant impact on the Group's 2023
+financial statements. The final compensation for the year ended 31 December 2023 will be disclosed in a
+separate announcement when determined.
+(1)
+16
+14
+Total
+The Group enters into banking transactions with key management personnel in the normal
+course of business. During the years ended 31 December 2023 and 2022, there were no
+material transactions and balances with key management personnel on an individual basis.
+1
+15
+13
+Compensation for short-term employment benefits (1)
+Compensation for post-employment benefits
+2022
+2023
+Year ended 31 December
+1
+Note (2)
+Shanghai Chenggang Real Estate Co., Ltd.
+RMB2,778
+BOC International (China) Co., Ltd.
+2,653
+3,073
+Note (2)
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+41 Contingent liabilities and commitments (Continued)
+41.5 Operating leases
+The Group acts as lessor in operating leases principally through aircraft leasing undertaken
+by its subsidiary BOC Aviation Limited. Under irrevocable operating lease contracts, the
+minimum lease payments which will be received by the Group under the operating leases
+for existing aircraft and aircraft yet to be delivered amounted to:
+Less than 1 year
+Between 1 to 2 years
+Between 2 to 3 years
+Between 3 to 4 years
+Between 4 to 5 years
+12,816
+13,217
+13,565
+13,940
+14,327
+14,347
+PRC
+13,648
+2022
+2023
+As at 31 December
+41.6 Treasury bonds redemption commitments
+Total
+Over 5 years
+14,406
+91310000736650364G
+12,060
+33.42
+33.42
+(Amounts in millions of Renminbi, unless otherwise stated)
+other countries and regions. Significant locations include New York, London, Singapore
+and Luxembourg.
+Corporate and personal banking services are provided in
+Other countries and regions
+(68,628)
+(443,158)
+55,653
+108,745
+836,222
+Net fee and commission income
+Fee and commission expense
+Fee and commission income
+Interest expense
+Business segments
+Interest income
+Total
+Elimination
+Other countries
+and regions
+BOC Wealth Management Co., Ltd.
+Beijing, China
+2019
+RMB 10,000
+BOC Financial Leasing Co., Ltd.
+Chongqing, China
+Net interest income
+Corporate banking
+Personal banking
+2020
+mainland
+Chinese
+Hong Kong (China), Macao (China), Taiwan (China)
+363
+As at and for the year ended 31 December 2023
+Segment reporting (Continued)
+44
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Services to corporate customers, government authorities and
+financial institutions including current accounts, deposits, overdrafts, loans, payments and
+settlements, trade-related products and other credit facilities, foreign currency, derivative
+products and wealth management products.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+362
+Other operations of the Group comprise investment holding business and other
+miscellaneous activities, none of which constitutes a separately reportable segment.
+Underwriting of general and life insurance business and insurance agency
+Other
+Insurance
+services.
+Consisting of debt and equity underwriting and financial advisory,
+sales and trading of securities, stock brokerage, investment research and asset management
+services, and private equity investment services.
+Investment banking
+Consisting of foreign exchange transactions, customer-based interest
+rate and foreign exchange derivative transactions, money market transactions, proprietary
+trading and asset and liability management. The results of this segment include the inter-
+segment funding income and expenses, results from interest-bearing assets and liabilities;
+and foreign currency translation gains and losses.
+Treasury operations
+- Services to retail customers including savings deposits, personal loans,
+credit cards and debit cards, payments and settlements, wealth management products and
+funds and insurance agency services.
+-
+BANK OF CHINA LIMITED
+RMB 10,800
+Indirectly held
+BOC Hong Kong (Holdings) Limited (2)
+Chinese mainland Corporate banking, personal banking, treasury operations and
+insurance services, etc. are performed in Chinese mainland.
+_
+Geographical segments
+44 Segment reporting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+43
+Related party transactions (Continued)
+43.8 Transactions with subsidiaries (Continued)
+(1) These directly held principal subsidiaries are unlisted companies. All holdings are
+in the ordinary share capital of the undertaking concerned, and the ability of the
+subsidiaries to transfer funds to the Group and the Bank is not restricted.
+(2) BOCHK (Holdings) and BOC Aviation Limited are listed on the Stock Exchange of
+Hong Kong Limited.
+(3) BOCHK and BOC International Holdings Limited ("BOCI”), in which the Group holds
+66.06% and 100% of their equity interests, respectively, hold 66% and 34% equity
+interests of BOC Group Trustee Company Limited, respectively.
+For certain subsidiaries listed above, the discrepancy between the percentage of voting
+rights and the percentage of effective equity holding is mainly due to the impact of indirect
+holdings.
+44 Segment reporting
+The Group manages the business from both geographic and business perspectives. From the
+geographic perspective, the Group operates in three principal regions: Chinese mainland;
+Hong Kong (China), Macao (China) and Taiwan (China); and other countries and regions.
+From the business perspective, the Group provides services through six main business
+segments: corporate banking, personal banking, treasury operations, investment banking,
+insurance and other operations.
+Measurement of segment assets, liabilities, income, expenses, results and capital
+expenditure is based on the Group's accounting policies. The segment information presented
+includes items directly attributable to a segment as well as those that can be allocated on
+a reasonable basis. Funding is provided to and from individual business segments through
+treasury operations as part of the asset and liability management process. The pricing of
+these transactions is based on market rates. The transfer price takes into account the specific
+features and maturities of the products. Internal transactions are eliminated on consolidation.
+The Group regularly examines the transfer price and adjusts the price to reflect the current
+situation.
+361
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Subtotal
+BANK OF CHINA LIMITED
+V
+Holding company
+Commercial banking
+Credit card services
+Investment holding
+Aircraft leasing
+Issuance of wealth management products,
+investment and management of
+Hong Kong, China
+2001
+HKD52,864
+Bank of China (Hong Kong) Limited
+BOC Credit Card (International) Limited
+BOC Group Trustee Company Limited (3)
+BOC Aviation Limited (2)
+(3)
+Hong Kong, China
+1964
+HKD43,043
+Hong Kong, China
+1980
+HKD565
+Hong Kong, China
+1997
+HKD200
+Singapore
+Hong Kong (China), Macao (China) and Taiwan (China) - Corporate banking, personal
+banking, treasury operations, investment banking and insurance services are performed in
+Hong Kong (China), Macao (China) and Taiwan (China). The business of this segment is
+centralised in BOCHK Group.
+USD1,158
+2003
+Principal business
+Holding company
+Investment banking
+Insurance services
+Investment holding
+Commercial banking
+Commercial banking
+Insurance services
+Debt-to-equity swaps and
+other supporting businesses
+entrusted assets for investors
+Financial leasing
+1993
+(46,867)
+(1,502)
+Hong Kong, China
+BOC Hong Kong (Group) Limited
+(%)
+Voting right
+Effective
+equity held
+(%)
+Paid-in capital
+(in millions)
+Year of
+incorporation/
+establishment
+and operation
+incorporation
+Place of
+Directly held (1)
+Name
+360
+The general information of the principal subsidiaries is as follows:
+43.8 Transactions with subsidiaries (Continued)
+Related party transactions (Continued)
+43
+11,031
+72,643
+466,545
+2,127
+22,451
+48,903
+2001
+8,786
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+40,117
+HKD34,806
+BOC International Holdings Limited (3)
+Hong Kong, China
+BOC Insurance Company Limited
+Beijing, China
+2005
+RMB4,535
+BOC Financial Asset Investment Company Limited
+Beijing, China
+GBP250
+2017
+393,064
+1,048,851
+(582,306)
+58,461
+(56,334)
+104,565
+(82,114)
+164,398
+(115,495)
+RMB14,500
+6,241
+2007
+Bank of China (UK) Limited
+1998
+HKD3,539
+Bank of China Group Insurance Company Limited
+Hong Kong, China
+1992
+HKD3,749
+United Kingdom
+Bank of China Group Investment Limited
+1993
+HKD34,052
+Bank of China (Macau) Limited
+Macao, China
+2022
+MOP 13,000
+Hong Kong, China
+294,643
+17,272
+(5,306)
+49,199
+Operating income
+494,064
+64,179
+40,588
+104,767
+29,784
+(4,477)
+624,138
+Operating expenses
+(1)
+(176,593)
+(20,053)
+(20,413)
+(40,466)
+(8,849)
+2,975
+13,583
+53,215
+14,795
+38,420
+229,347
+Operating profit
+(2,001)
+(106,562)
+(11,086)
+(5,380)
+(5,706)
+(88,124)
+Impairment losses on assets
+(222,933)
+(7,352)
+302
+26,703
+25,016
+78,865
+(2,306)
+5,223
+13,096
+4,867
+8,229
+Net trading gain
+62,852
+3,000
+(2,537)
+(4,176)
+(1,374)
+(2,802)
+(9,791)
+92,369
+(13,504)
+7,760
+13,256
+590
+1,687
+511
+24,195
+806
+103
+6
+15,469
+1,329
+697
+Net gains/(losses) on transfers of financial asset
+Other operating income (1)
+28,723
+(2,297)
+1,705
+16,059
+(1,323)
+Share of results of associates and joint ventures
+263,308
+In addition, the total carrying amount as at the transfer date of credit assets transferred by
+the Group into the unconsolidated structured entities was RMB4,854 million for the year
+ended 31 December 2023 (2022: RMB669 million). For the description of the portion of
+asset-backed securities issued by the above structured entities and held by the Group, refer
+to Note V.45.
+14,662
+Capital expenditure
+1,007
+212
+561
+Intersegment net fee and commission income
+3,875
+(291)
+341
+Intersegment net interest income/(expense)
+Other segment items:
+324,312
+26,330,247
+(4,815)
+(1,780,016)
+38,304
+28,893,548
+(1,780,551)
+2,347,203
+8,973
+2,271,615
+28,855,244
+1,709
+(1,780,551)
+11,908
+Credit commitments
+(2) Non-current assets include property and equipment, investment properties, right-of-use assets, intangible assets and other long-term assets.
+Other operating income includes insurance premium income earned, and operating expenses include insurance service expenses.
+(1)
+6,157,939
+28,514
+28,868
+(700)
+(167,373)
+622,064
+474,768
+820
+235
+(1,852)
+(3,925)
+72
+3,584
+1,219
+13,617
+8,375
+6,657
+162,902
+311,866
+1,718
+20,373
+5,228,480
+Depreciation and amortisation
+2,347,203
+4,934,239
+15,628
+4,949,867
+203,385
+4,509,283
+175,520
+1,530,377
+218
+478
+8,643
+30,036
+230,637
+Profit before income tax
+(260)
+427
+Share of results of associates and joint ventures
+282,996
+(376)
+14,701
+38,461
+8,165
+30,296
+230,210
+Operating profit
+(103,959)
+645
+38,679
+14,701
+(376)
+1,689,219
+15,250
+1,704,469
+3,245,398
+27,865
+2,978,906
+21,329,365
+Segment liabilities
+116,769
+Include: non-current assets (2)
+23,377,029
+Total assets
+BANK OF CHINA LIMITED
+3,245,020
+378
+Investments in associates and joint ventures
+23,354,353
+Segment assets
+236,725
+Profit for the year
+(46,916)
+Income tax expense
+283,641
+22,676
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+(1,578)
+11
+Net gains on transfers of financial asset
+28,723
+36
+471
+3,276
+22,266
+673
+Net trading gains/(losses)
+78,865
+(1,956)
+92,369
+(13,504)
+354
+(2,310)
+466,545
+45
+1,205
+(9)
+806
+Other operating income
+(12,617)
+(17,029)
+(20,897)
+(96,866)
+Operating expenses
+624,138
+(6,531)
+24,860
+ཁ །
+20,963
+272,236
+Operating income
+49,199
+(4,656)
+24,415
+12,751
+580
+15,234
+50,579
+(2,650)
+1,929
+11,027
+268,446
+423,935
+(195,092)
+Net interest income/(expense)
+Interest expense
+Interest income
+Total
+Elimination
+Other
+Insurance
+Treasury
+operations
+banking
+Personal
+365
+As at and for the year ended 31 December 2023
+44 Segment reporting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+3,928
+8,853
+(250,162)
+(196)
+27,475
+Net fee and commission income/(expense)
+(204)
+(1)
+(1,607)
+(9,420)
+Fee and commission expense
+2,133
+(1)
+12,634
+Fee and commission income
+(1,946)
+3,732
+18,284
+228,843
+1,048,851
+(582,306)
+(173,331)
+173,376
+(10,799)
+36,895
+(11,360)
+(9,334)
+(2,026)
+677,167
+830
+268
+14,269
+8,703
+476,570
+2,127
+(2,306)
+(14,794)
+(72)
+9,946
+1,348
+11,550
+1,478
+12,643
+6,929
+171,952
+304,618
+5,788,568
+Credit commitments
+1,774
+21,707
+Depreciation and amortisation
+1,626
+15,462
+Capital expenditure
+(824)
+(148,100)
+29,999
+30,416
+6,794,205
+BANK OF CHINA LIMITED
+Elimination
+and regions
+Subtotal
+Other
+Group
+Other countries
+BOCHK
+Chinese
+mainland
+(130)
+Hong Kong (China), Macao (China), Taiwan (China)
+As at and for the year ended 31 December 2022
+Segment reporting (Continued)
+44
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+364
+Total
+1,030
+(1,604)
+Investments in associates and joint ventures
+26,447,373
+Segment assets
+246,371
+Profit for the year
+(49,237)
+Income tax expense
+295,608
+(1,502)
+13,583
+53,669
+965
+454
+652
+15,447
+(198)
+38,222
+229,858
+Profit before income tax
+22,822
+Total assets
+26,470,195
+3,474,132
+1,196
+3,475,328
+2,721
+Intersegment net interest income/(expense)
+Other segment items:
+327,051
+29,675,351
+(4,878)
+(1,636,836)
+39,550
+32,432,166
+(1,638,864)
+2,372,795
+8,659
+2,288,051
+Intersegment net fee and commission income
+32,392,616
+2,372,795
+5,211,312
+16,728
+5,228,040
+208,150
+4,777,839
+1,737,180
+15,532
+1,752,712
+180,959
+1,572,698
+27,191
+3,205,141
+24,246,297
+Segment liabilities
+115,120
+Include: non-current assets (2)
+(1,638,864)
+5,481
+Interest income
+Net interest income
+25,547
+23,703
+1,844
+18,694
+Other operating income (1)
+(9)
+(2,879)
+448
+(3,327)
+4,971
+Net gains/(losses) on transfers of financial asset
+7,221
+(12)
+2,604
+2,789
+(98)
+2,887
+136
+(1,376)
+2,083
+43,001
+Operating income
+(89,949)
+Impairment losses on assets
+(199,506)
+2,568
+(8,043)
+(27,679)
+(18,787)
+(8,892)
+1,840
+(166,352)
+Operating expenses
+586,461
+(2,944)
+25,394
+77,500
+36,286
+41,214
+486,511
+(1)
+Interest expense
+Net trading gains/(losses)
+(1,852)
+38,658
+7,258
+31,400
+401,927
+880,848
+(421,582)
+(22,827)
+23,123
+(25,981)
+(43,840)
+(22,529)
+(21,311)
+(374,884)
+44,366
+82,498
+29,787
+52,711
+776,811
+Fee and commission income
+18,385
+296
+459,266
+69,479
+4,278
+13,385
+4,975
+8,410
+59,079
+Net fee and commission income
+3,430
+(2,225)
+87,102
+(12,212)
+74,890
+(3,017)
+(2,297)
+(10,400)
+Fee and commission expense
+(5,282)
+6,503
+16,402
+5,695
+10,707
+(720)
+369
+(222,933)
+(34,445)
+Total assets
+1
+244,501
+83,439
+7,011
+Investments in associates and joint ventures
+9,819,400
+6,391,485
+11,734,117
+Segment assets
+236,725
+Profit for the year
+(46,916)
+Income tax expense
+283,641
+(978)
+3,851
+(288)
+11,734,117
+3,571
+6,391,485
+90,450
+77,970
+17,027
+Inter-segment net interest income/(expense)
+Other segment items:
+26,330,247
+38,304
+28,893,548
+28,855,244
+(94,000)
+(132)
+(94,132)
+(92,933)
+331,585
+229,733
+51,422
+3,506,365
+9,683,712
+12,620,363
+Segment liabilities
+676,302
+31,424
+707,726
+244,502
+9,819,400
+69,092
+123,379
+85,014
+(32,074)
+(64,651)
+Impairment losses on assets
+(199,506)
+4,621
+(11,006)
+(5,382)
+(2,671)
+(21,877)
+(89,497)
+(73,694)
+Operating expenses
+586,461
+(5,105)
+21,010
+5,088
+6,875
+685
+(954)
+7
+(6,512)
+Profit before income tax
+645
+(34)
+359
+(1)
+321
+Share of results of associates and joint ventures
+282,996
+(94,050)
+(944)
+(287)
+3,250
+69,092
+123,379
+85,014
+Operating profit
+(103,959)
+(460)
+3,492
+276
+5
+Inter-segment net fee and commission income/(expense)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+367
+1,325
+1,354
+70,922
+71,811
+Repurchase agreements
+liabilities
+assets
+associated
+transferred
+Carrying
+amount of
+Carrying
+amount of
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+45 Transfers of financial assets (Continued)
+Credit assets transfers
+The Group enters into credit asset transfers in the normal course of business during which it
+transfers credit assets to special purpose entities which in turn issue asset-backed securities
+or fund shares to investors. The Group may acquire some asset-backed securities and fund
+shares at the subordinated tranche level, and accordingly, may retain parts of the risks and
+rewards of the transferred credit assets. The Group would determine whether or not to
+derecognise the associated credit assets by evaluating the extent to which it retains the risks
+and rewards of the assets.
+For the purpose of asset-liability management, wealth management products may require
+short-term financing from the Group and other banks. The Group is not contractually
+obliged to provide any financing to these products. The Group may enter into reverse
+repurchase and placement transactions with these wealth management products in
+accordance with market principles. For the year ended 31 December 2023, the Group did
+not provide any such financing (2022: the maximum balance was RMB9,300 million). Such
+financing provided by the Group was included in "Placements with and loans to banks and
+other financial institutions". As at 31 December 2023 and 31 December 2022, the Group did
+not have any outstanding financing balance and there was no such exposure to these wealth
+management products.
+For the year ended 31 December 2023, the above-mentioned commission, custodian fees
+and management fees amounted to RMB6,873 million (2022: RMB7,705 million).
+As at 31 December 2023, after considering the impact of relevant joint activities of
+structured entities within the Group, the balance of wealth management products sponsored
+and managed by the Group amounted to RMB1,631,063 million (31 December 2022:
+RMB1,760,322 million), and funds and asset management plans amounted to RMB778,109
+million (31 December 2022: RMB661,931 million), respectively.
+return.
+In conducting the asset management business, the Group established various structured
+entities to provide customers specialised investment opportunities within well-defined
+objectives and narrow range, including wealth management products, funds and asset
+management plans. The Group earned management fee, commission and custodian fee in
+Structured entities sponsored and managed by the Group
+46.1 Unconsolidated structured entities
+The Group is principally involved with structured entities through financial investments,
+asset management and credit assets transfers. These structured entities generally finance the
+purchase of assets by issuing securities or by other means. The Group determines whether
+or not to consolidate these structured entities depending on whether the Group has control
+over them.
+As at 31 December 2022
+46 Interests in structured entities
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+368
+For those in which the Group has neither transferred nor retained substantially all the risks
+and rewards of the transferred credit assets, and retained control of the credit assets, the
+transferred credit assets are recognised in the statement of financial position to the extent
+of the Group's continuing involvement. For the year ended 31 December 2023, there was
+no credit asset transfer transaction which resulted in new continuing involvement through
+acquiring tranches by the Group (2022: the carrying amount at the time of transfer of the
+original credit assets, which the Group determined that it had continuing involvement
+through acquiring certain tranches, was RMB13,074 million) and the carrying amount
+of assets in relation to continuing involvement that the Group continues to recognise in
+the statement of financial position was RMB20,780 million as at 31 December 2023 (31
+December 2022: RMB21,005 million).
+With respect to the credit assets that were securitised and qualified for derecognition,
+the Group derecognises the transferred credit assets in their entirety. The corresponding
+total carrying amount of asset-backed securities held by the Group in such securitisation
+transactions was RMB405 million as at 31 December 2023 (31 December 2022: RMB452
+million), which also approximates the Group's maximum exposure to loss.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+90,284
+As at 31 December 2023
+Carrying Carrying
+amount of amount of
+associated
+liabilities
+transferred
+10,887
+9,458
+Depreciation and amortisation
+18,524
+260
+198
+239
+4,910
+4,383
+Capital expenditure
+(1,480)
+(1,228)
+405
+(22)
+(447)
+74
+1,080
+390
+2,726
+405
+45
+6,345
+The following table analyses the carrying amount of the above-mentioned financial assets
+transferred to third parties that did not qualify for derecognition and their associated
+financial liabilities:
+Transferred financial assets that do not qualify for derecognition mainly include debt
+securities held by counterparties as collateral under repurchase agreements. Under this type
+of repurchase agreements, the counterparties are allowed to sell or re-pledge those securities
+in the absence of default by the Group, but have an obligation to return the securities upon
+maturity of the contract. If the value of securities increases or decreases, the Group may
+in certain circumstances, require counterparties or be required by counterparties to pay
+additional cash collateral. The Group has determined that the Group retains substantially
+all the risks and rewards of these securities and therefore has not derecognised them. In
+addition, the Group recognises a financial liability for cash received.
+Repurchase agreements
+assets.
+The Group enters into transactions in the normal course of business by which it transfers
+recognised financial assets to third parties or to special purpose entities. In some cases
+where these transferred financial assets qualify for derecognition, the transfers may give rise
+to full or partial derecognition of the financial assets concerned. In other cases where the
+transferred assets do not qualify for derecognition as the Group has retained substantially
+all the risks and rewards of these assets, the Group continues to recognise the transferred
+45 Transfers of financial assets
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+assets
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+6,157,939
+1,377,951
+4,779,988
+Credit commitments
+28,514
+28,868
+(998)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+244,950
+223,359
+Operating income
+19,634
+165
+243
+5,157
+Capital expenditure
+(1,956)
+(1,123)
+521
+111
+1,359
+Inter-segment net fee and commission income/(expense)
+11
+(170,685)
+145,230
+Inter-segment net interest income/(expense)
+Other segment items:
+29,675,351
+39,550
+32,432,166
+29,999
+Depreciation and amortisation
+10,923
+3,152
+Personal
+Corporate
+banking
+366
+As at and for the year ended 31 December 2022
+44 Segment reporting (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+32,392,616
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+6,794,205
+1,455,871
+Credit commitments
+30,416
+(1,198)
+6,629
+59
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+banking
+(116,044)
+(171)
+(116,215)
+(112,951)
+BOCHK
+Group
+3,933
+29,059
+140,925
+Profit before income tax
+294,643
+(1,292)
+12,110
+686
+Share of results of associates and joint ventures
+3,933
+29,059
+140,925
+Operating profit
+(106,562)
+(242)
+(133)
+(1)
+(623)
+12,796
+(91)
+(1,383)
+965
+295,608
+3,748,905
+10,988,012
+Segment liabilities
+783,969
+278,916
+11,025,328
+6,603,661
+Total assets
+331,087
+751,818
+32,151
+Investments in associates and joint ventures
+11,025,328
+6,603,661
+Segment assets
+246,371
+Profit for the year
+(49,237)
+Income tax expense
+278,635
+281
+Impairment losses on assets
+Treasury
+operations
+banking
+15,016
+964
+2,688
+Net trading gains/(losses)
+74,890
+(1,480)
+1,745
+(1)
+5,202
+12,406
+26,875
+30,143
+Net fee and commission income/(expense)
+(12,212)
+475
+(140)
+(1)
+(253)
+(10,225)
+(961)
+(8)
+43,001
+(3,607)
+22,898
+11,757
+281
+927
+9,910
+835
+(1,717)
+Other operating income
+8
+397
+4
+135
+49
+1,490
+Net gains on transfers of financial asset
+7,221
+2,083
+Investment
+(1,401)
+(1,449)
+(158)
+(150,065)
+(152,654)
+(206,495)
+Interest expense
+(96,329)
+5,730
+3,279
+1,799
+211,865
+359,806
+394,698
+Interest income
+Total
+Elimination
+Other
+Insurance
+(119)
+(8,410)
+96,319
+880,848
+(421,582)
+Fee and commission expense
+87,102
+(1,955)
+1,885
+6,919
+13,807
+34,854
+31,592
+(7,979)
+Fee and commission income
+(10)
+(2,680)
+3,160
+1,641
+61,800
+207,152
+188,203
+Net interest income/(expense)
+459,266
+Other
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+379
+Cash and due from banks and other financial institutions
+ASSETS
+2022
+2023
+As at 31 December
+48.1 The Bank's statement of financial position
+The Bank's statement of financial position and changes in equity
+48
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+372
+Cash and non-cash collateral have been received/pledged in respect of the transactions
+described above.
+The counterparty has an offsetting exposure with the Group and a master netting or
+similar arrangement (including ISDA master agreement and Global Master Netting
+Agreement) is in place with a right of setting off only in the event of default,
+insolvency or bankruptcy, or the offset criteria are otherwise not satisfied; and
+Derivatives and reverse repo/repurchase agreements included in the amounts are not set off
+in the statement of financial position where:
+Other liabilities
+9,435
+(8,238)
+28,368
+1,197
+(28,368)
+1,192
+547,648
+Total
+(16,233)
+134,393 (115,490) (5,160)
+13,743
+*
+Including non-cash collateral.
+Financial assets and financial liabilities are offset and the net amount is reported in the
+statement of financial position when there is a legally enforceable right to offset the
+recognised amounts and there is an intention to settle on a net basis, or realise the asset and
+settle the liability simultaneously ("the offset criteria”).
+150,626
+28,368
+Balances with central banks
+other financial institutions
+Investments in subsidiaries
+3,059,919
+3,111,670
+- financial assets at amortised cost
+1,668,889
+2,298,286
+other comprehensive income
+- financial assets at fair value through
+282,247
+181,584
+- financial assets at fair value through profit or loss
+5,011,055
+5,591,540
+Financial investments
+15,122,657
+17,393,207
+Loans and advances to customers, net
+2,553,233
+766,789
+2,088,795
+1,417,564
+1,378,212
+Government certificates of indebtedness for
+bank notes issued
+Placements with and loans to banks and
+Precious metals
+10,003
+89,304
+119,533
+Derivative financial assets
+97,714
+100,785
+10,156
+Repurchase agreements
+12,551
+(5,160)
+of financial
+financial of financial
+Cash
+financial position
+the statement of
+Amounts not set off in
+Amounts
+presented
+in the
+statement
+recognised statement
+Gross
+Gross amounts
+amounts of offset in the
+Financial liabilities subject to offsetting, enforceable master netting arrangements and
+similar agreements are analysed as below:
+47 Offsetting financial assets and financial liabilities (Continued)
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+371
+(18,738)
+Other assets
+10,152
+(8,238)
+1,914
+(5)
+Financial
+1,909
+160,930
+(16,233)
+144,697
+(105,798)
+(18,802)
+20,097
+Total
+collateral
+Net
+liabilities
+(10,588)
+2,972
+2,972
+Total
+166,466
+(14,755) 151,711
+13,560
+(122,820)
+18,611
+As at 31 December 2022
+Derivatives
+112,823
+(7,995) 104,828
+(87,117)
+(10,280)
+150,947
+Other liabilities
+40,321
+position
+position instruments*
+pledged
+amount
+As at 31 December 2023
+Derivatives
+(40,321)
+112,585
+108,418
+(82,499)
+(10,280)
+15,639
+Repurchase agreements
+40,321
+(4,167)
+150,947
+9,026
+9,189
+2,174,270
+2,350,180
+Total equity
+814,533
+877,403
+Undistributed profits
+324,911
+365,416
+General and regulatory reserves
+228,944
+249,808
+Statutory reserves
+9,658
+31,315
+Other comprehensive income
+132,331
+132,345
+EQUITY
+Share capital
+Other equity instruments
+- Preference shares
+294,388
+294,388
+Total equity and liabilities
+399,505
+119,550
+119,550
+- Perpetual bonds
+279,955
+249,955
+Capital reserve
+369,505
+28,332,864
+25,201,716
+Approved and authorised for issue by the Board of Directors on 28 March 2024.
+Other
+General and
+Perpetual
+Capital comprehensive
+Statutory
+regulatory Undistributed
+Other equity instruments
+Preference
+shares
+bonds
+income
+reserves
+reserves
+profits
+Total
+BANK OF CHINA LIMITED
+reserve
+23,027,446
+capital
+375
+GE Haijiao
+Director
+374
+LIU Jin
+Director
+BANK OF CHINA LIMITED
+Share
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+V
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+48
+The Bank's statement of financial position and changes in equity (Continued)
+48.2 The Bank's statement of changes in equity
+FOR THE YEAR ENDED 31 DECEMBER 2023
+18,738
+25,982,684
+298
+206,245
+LIABILITIES
+48.1 The Bank's statement of financial position (Continued)
+The Bank's statement of financial position and changes in equity (Continued)
+48
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+25,201,716
+28,332,864
+373
+Total assets
+93,676
+120,157
+67,841
+72,886
+Consolidated structured entities
+202,005
+202,065
+Property and equipment
+69,827
+71,067
+As at 31 December
+Construction in progress
+6,362
+Investment properties
+Deferred income tax assets
+Other assets
+2,754
+2,740
+4,896
+2023
+2022
+Due to banks and other financial institutions
+17,606,623
+Bonds issued
+1,699,689
+1,432,493
+Current tax liabilities
+53,880
+20,127,975
+Retirement benefit obligations
+Deferred income tax liabilities
+53
+Other liabilities
+188,102
+52,966
+1,842
+1,676
+Total liabilities
+Due to customers
+98,744
+2,302,639
+2,368,070
+Due to central banks
+1,116,808
+819,529
+Bank notes in circulation
+95,777
+10,228
+Placements from banks and other financial institutions
+382,890
+432,764
+Financial liabilities held for trading
+430
+Derivative financial liabilities
+10,409
+18,738
+Investments in associates and joint ventures
+18,188
+Appropriation to general and
+regulatory reserves
+Dividends
+Capital contribution by other equity
+instruments holders
+Other comprehensive income
+transferred to retained earnings
+Other equity instruments
+Other
+Share
+capital
+Preference
+shares
+Perpetual
+Capital comprehensive
+Statutory
+regulatory Undistributed
+bonds
+741,063
+292,549
+208,319
+20,116
+132,331
+199,955
+Appropriation to statutory reserves
+119,550
+Total
+profits
+reserves
+reserves
+income
+reserve
+294,388
+Total comprehensive income
+As at 1 January 2022
+48.2 The Bank's statement of changes in equity (Continued)
+132,345
+279,955
+119,550
+294,388
+As at 31 December 2023
+(1)
+31,315
+404
+Other
+5
+transferred to retained earnings
+Other comprehensive income
+instruments holders
+(2)
+16
+2,008,271
+249,808
+877,403
+The Bank's statement of financial position and changes in equity (Continued)
+48
+376
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+365,416
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+16
+(403)
+(5)
+29,998
+2,350,180
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+30,000
+(10,459)
+194,478
+Redemption of 2019 Undated Capital Bonds (Series 1)
+According to the relevant terms and conditions in the prospectus for the issuance of the
+2019 Undated Capital Bonds (Series 1), the bonds are subject to the redemption option
+of the issuer. With the approval of the NFRA, the Bank fully redeemed the 2019 Undated
+Capital Bonds (Series 1) on 29 January 2024, with the redemption amount of RMB40
+billion.
+Acquisition of China Construction Bank (Brasil) Banco Múltiplo S/A
+As at 31 January 2024, the Group has completed the acquisition and obtained control over
+the operation of CCB Brasil (Note V.41.4). Upon the completion of such transaction, the
+Group and China Construction Bank Corporation hold 68.34% and 31.66% of the share
+capital of CCB Brasil, respectively. As at the issuance date of these consolidated financial
+statements, the Group is in the process of determining the financial impacts in relation to
+the consolidation of CCB Brasil.
+Issuance of Tier 2 Capital Bonds
+On 30 January 2024, the Bank issued fixed-rate Tier 2 capital bonds with a maturity of
+10 years amounting RMB30 billion and fixed-rate Tier 2 capital bonds with a maturity of
+15 years amounting RMB30 billion and completed the issuance on 1 February 2024. The
+issuance details have been set out in the Bank's announcement dated 1 February 2024.
+377
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT
+1
+Overview
+The Group analyses, identifies, monitors and reports risks by formulating risk management
+policies, setting appropriate risk limits and control procedures, and using relevant
+information systems. It also regularly reviews its risk management policies and related
+systems to reflect new changes in markets, products and the industry's best practices.
+The financial risks the Group is exposed to mainly include credit risk, market risk and
+liquidity risk. Among them, market risk includes exchange rate risk, interest rate risk and
+other price risks.
+The Board of Directors of the Group assumes the ultimate responsibility for comprehensive
+risk management. The Board of Directors authorises its subordinate Risk Policy Committee,
+Audit Committee and US Risk and Management Committee to perform part of the
+responsibilities of comprehensive risk management. The Board of Supervisors undertakes
+the supervision responsibility for comprehensive risk management, and is responsible
+for supervising and inspecting the duty performance of the Board of Directors and
+senior management in respect of risk management and supervising relevant rectification.
+Senior management is responsible for conducting comprehensive risk management and
+implementing resolutions of the Board of Directors. The Risk Management Department,
+Credit Approval Department, Credit Management Department and other relevant functional
+departments are responsible for managing financial risks.
+Reverse repo agreements
+The Group identifies and monitors credit risk collectively based on industry, geography and
+customer type. Management periodically reviews various elements of the Group's credit risk
+management, in the context of loan portfolio growth, the changing mix and concentration of
+assets, and the evolving risk profile of the credit portfolio. From time to time, in this regard,
+refinements are made to the Group's credit risk management processes to most effectively
+manage the effects of these changes on the Group's credit risk. These refinements include,
+among other things, adjustments to portfolio level controls, such as revisions to lists of
+approved borrowers, industry limits and underwriting criteria. Where circumstances related
+to specific loans or a group of loans increase the Bank's credit risk, actions are taken, to the
+extent possible, to strengthen the security of the Group's position. The actions may include
+obtaining additional guarantees or collateral.
+(1) Loans and advances to customers and off-balance sheet commitments
+2.1 Credit risk management
+Credit risk exposures arise principally in lending activities and debt securities investment
+activities. There is also credit risk in off-balance sheet financial instruments, such as loan
+commitments, bill acceptance, letters of guarantee and letters of credit.
+The Group takes on exposure to credit risk, which refers to the risk of loss arising from
+the failure or unwillingness of a borrower or counterparty to fulfill its debt obligations,
+including the default risk of a borrower's failure to repay its debt when it is due, and the
+downgrading risk due to a deterioration in credit quality. Credit risk is one of the most
+significant risks for the Group's business.
+Events after the financial reporting date
+2 Credit risk
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+378
+Branches and sub-branches are responsible for the comprehensive risk management of
+business departments at the same level and institutions at lower levels, and shall report their
+risk position to the Risk Management Department of the Head Office. The subsidiaries shall
+establish and improve their respective comprehensive risk management systems and carry
+out comprehensive risk management-related work in accordance with relevant regulatory
+guidelines and the requirements of this policy.
+VI FINANCIAL RISK MANAGEMENT (Continued)
+The Group monitors the risks related to interbank offered rates ("IBORS") reform,
+continuously monitors the risk exposure and converts existing contracts. As at 31 December
+2023, the Group had a small number of contracts that had not yet transitioned to an
+alternative interest rate benchmark, but the amount was immaterial and had no significant
+impact on the Group's financial position and operating results.
+IBOR Reform
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+As at 31 December 2022
+11
+(1)
+49,989
+11
+1
+294,388
+(11)
+(78,479)
+(78,479)
+(32,362)
+32,362
+(20,625)
+20,625
+50,000
+204,937
+119,550
+132,331
+50
+50
+49
+V
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+249,955
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Other
+2,174,270
+814,533
+324,911
+228,944
+9,658
+BANK OF CHINA LIMITED
+The Group measures and manages the credit quality of loans and advances to corporate
+and personal customers based on the Measures for Risk Classification of Financial Assets
+of Commercial Banks (the “Measures"), and classifies corporate and personal loans and
+advances into five categories: pass, special-mention, substandard, doubtful and loss, among
+which loans classified in the substandard, doubtful and loss categories are regarded as non-
+performing loans. In addition, off-balance sheet commitments with credit exposure are also
+assessed and categorised with reference to the Measures. For operations in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries and regions, where local regulations
+and requirements are different from the Measures, credit assets are classified with prudently
+not lower than the Group's management requirements in consideration of local regulations
+and requirements.
+General and
+(83,594)
+Cash
+financial position
+in the statement of
+Amounts
+presented
+in the
+statement
+of financial
+recognised statement
+financial of financial
+assets
+Gross amounts
+amounts of offset in the
+Amounts not set off
+Gross
+Financial assets subject to offsetting, enforceable master netting arrangements and similar
+agreements are analysed as below:
+47 Offsetting financial assets and financial liabilities
+V NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+370
+The Group's consolidated structured entities mainly consist of open-end funds, private
+equity funds, trusts for asset-backed securities, and special-purpose companies. The Group
+controls these entities because the Group has power over, is exposed to, or has rights
+to variable returns from its involvement with these entities and has the ability to use its
+power over these entities to affect the amount of the Group's returns. Except for providing
+financial guarantees for the companies established solely for financing purposes, the Group
+does not provide financial or other support to the other consolidated structured entities.
+81,478
+Investment trusts and asset management plans
+2,090
+1,470
+13,005
+16,565
+Financial
+16,565
+6,126
+37,962
+73,165
+117,253
+117,253
+46.2 Consolidated structured entities
+Asset-backed securitisations
+collateral
+Net
+position
+3,629
+3,629
+Total
+160,448
+(14,755) 145,693
+(105,657)
+(10,588)
+(20,129)
+As at 31 December 2022
+Derivatives
+132,040
+(7,995) 124,045
+(87,055)
+(18,802)
+19,907
+81,478
+14,217
+(23,172)
+position instruments*
+received
+amount
+As at 31 December 2023
+Derivatives
+123,059
+Other assets
+(4,167)
+(82,485)
+(83,594)
+16,278
+Reverse repo agreements
+23,172
+23,172
+118,892
+81,478
+(20,129)
+As at 31 December 2022
+regulatory reserves
+Appropriation to general and
+Appropriation to statutory reserves
+Total comprehensive income
+As at 1 January 2023
+FOR THE YEAR ENDED 31 DECEMBER 2023
+Dividends
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ITEMS (Continued)
+46 Interests in structured entities (Continued)
+46.1 Unconsolidated structured entities (Continued)
+Structured entities sponsored by other financial institutions
+The structured entities sponsored by other financial institutions in which the Group holds
+investments are set out below:
+Financial
+V
+Financial
+assets at
+Capital contribution by other equity
+119,550
+Fund investments
+(40,505)
+40,505
+(20,865)
+20,865
+229,490
+294,388
+208,242
+2,174,270
+814,533
+324,911
+228,944
+132,331
+249,955
+21,248
+assets at
+9,658
+fair value
+83,527
+83,527
+83,527
+Investment trusts and asset management plans
+2,347
+1,581
+Fund investments
+18,989
+Asset-backed securitisations
+41,937
+83,658
+125,595
+fair value
+125,595
+22,917
+As at 31 December 2023
+22,917
+Total
+Financial
+through
+to loss
+through
+other
+assets at
+profit comprehensive
+Maximum
+exposure
+Structured entity type
+or loss
+income
+cost
+amortised
+Backstop criteria
+BANK OF CHINA LIMITED
+Being included in the watch-list of the Group
+•
+Borrowers' contractual payments (including principal or interest) are more than 30
+days past due.
+The Group has provided credit facilities for temporary deferral of principal repayments and
+interest payments to certain borrowers in accordance with the regulatory requirements of
+respective countries/regions. For those loans with deferred principal repayments and interest
+payments, the Group classified the credit risk based on the actual situation of the borrower
+and the judgement of the substantive risk of the business. However, the temporary deferral
+of principal or interest payment was not considered as an automatic trigger of a significant
+increase of credit risk.
+•
+386
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(3) Definition of default and credit-impaired financial assets
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+The Group considers a financial instrument as defaulted when it is credit-impaired. The
+standard adopted by the Group in determining whether a financial asset is credit-impaired
+is consistent with the internal credit risk management objectives, taking into account
+quantitative and qualitative criteria. When the Group assesses whether a credit impairment
+occurred, the following key factors are considered:
+•
+•
+Migrated into the Special Mention category within the five-category loan classification
+•
+•
+FOR THE YEAR ENDED 31 DECEMBER 2023
+•
+The Group assesses whether or not the credit risk of the relevant financial instruments has
+increased significantly since the initial recognition at each financial reporting date. While
+determining whether the credit risk has significantly increased since initial recognition
+or not, the Group takes into account the reasonable and supportable information that is
+available without undue cost or effort, including qualitative and quantitative analysis based
+on the historical data, external credit risk rating, and forward-looking information. Based
+on an individual financial instrument or a group of financial instruments with shared credit
+risk characteristics, the Group compares the risk of default of financial instruments at the
+financial reporting date with that at the date of initial recognition in order to determine the
+changes of default risk in the expected lifetime of financial instruments.
+•
+(Amounts in millions of Renminbi, unless otherwise stated)
+•
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(1) Segmentation of financial instruments based on credit risk characteristics for losses
+When measuring ECL on a collective basis, the Group classifies its credit risk exposures
+into corporate business, interbank business, personal loans, credit cards, and bond business
+exposures according to its business type, and into domestic and overseas business exposures
+according to its business regions. When further subdividing the credit risk exposures,
+the Group obtains sufficient information and segments them according to credit risk
+characteristics such as product types, customer types, customer risk factors, usage of funds,
+etc. and then calculate ECL for exposures with shared risk characteristics on a collective
+basis to ensure its statistical reliability.
+(2) Criteria for determining significant increases in credit risk
+The Group considers a financial instrument to have experienced a significant increase in
+credit risk when one or more of the following quantitative, qualitative or backstop criteria
+have been met:
+Quantitative criteria
+Credit risk is deemed to increase significantly when the forward-looking lifetime PD of
+an exposure increases by certain predetermined thresholds since its initial recognition.
+Specifically, such thresholds are met when such PD increases by a certain absolute level as
+well as by a relative percentage. Such thresholds vary based on the forward-looking lifetime
+PD at the time of initial recognition.
+385
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(2) Criteria for determining significant increases in credit risk (Continued)
+Qualitative criteria
+Significant adverse changes in debtor's operations or financial status
+•
+Credit risk (Continued)
+A breach of contract, such as a default or delinquency in interest or principal payments
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+2.3 Measurement of ECL (Continued)
+(5) Forward-looking information
+The Group conducted an assessment of ECL according to forward-looking information and
+used a number of models and assumptions in its measurement of ECL. In assessing the ECL
+as at 31 December 2023, the Group has taken into account the impact of changes in current
+economic environment to the ECL model, including: individual borrower's operating and
+financial conditions and degree of impact from the economic environment, environmental
+and climate change impact, and industry-specific risks.
+388
+The Group identifies key macroeconomic indicators that affect the credit risk and ECL of
+various business types, such as country or region local GDP, Completion Index of Fixed
+Assets Investment, Producer Price Index, Home Price Index, Consumer Price Index etc.
+based on the statistical analysis of historical data.
+The Group conducts statistical analysis using experts' judgement to determine multiple
+economic scenarios and their respective weightings. In addition to the baseline scenario,
+optimistic scenario and pessimistic scenario, the Group also considers situation under
+stress. As at 31 December 2023, the baseline scenario has the highest weighting with the
+remaining individual scenarios having a weighting of lower than 30%. The Group measures
+its credit loss allowance based on probability weighted ECL under different scenarios.
+The Group updated relevant forward-looking parameters used in the models measuring ECL
+based on changes in macroeconomic environment during the report period. Amongst these
+parameters, the annualized value of core one adopted by Chinese mainland in assessing its
+ECL as of 31 December 2023 under the baseline scenario is as follows:
+Indicator
+Average Growth Rate of China's GDP in 2023-2025
+Range
+Around 5.0%
+The Group conducts sensitivity analysis on the weightings of multiple economic scenarios
+used in forward-looking measurement. As at 31 December 2023, when the weighting of
+optimistic scenario or pessimistic scenario increases by 10%, and the weighting of baseline
+scenario decreases by 10%, the respective decrease or increase in loan loss allowance will
+not exceed 5%.
+389
+FOR THE YEAR ENDED 31 DECEMBER 2023
+The impact of these economic indicators on the PD and the LGD varies according to
+different types of business. The Group applies experts' judgement in this analysis, and
+according to the result, the Group predicts these economic indicators regularly for respective
+regions and determines the impact of these economic indicators on the PD and the LGD by
+conducting regression analysis.
+The Group regularly conducts re-examination, parameter update and model validation of the
+ECL models.
+For credit-impaired financial assets with individual amount that are relatively significant,
+the Group mainly evaluates future cash flows (including the recoverable value of the
+collateral held) in different circumstances on an individual basis. Expected credit losses are
+measured as the differences between the present value of estimated cash flows discounted
+at the original effective interest rate (credit adjusted effective interest rate for purchased
+or originated credit-impaired financial assets) and the asset's gross carrying amount. Any
+adjustment is recognised in profit or loss as an impairment loss or reversal. The estimation
+of future cash flows is critical for a credit-impaired loan for which expected credit losses
+are measured on an individual basis. Factors affecting this estimate include, among other
+things, the financial condition of individual borrowers, risk mitigation methods, industry
+trends and the future performance of individual borrowers and guarantors, and cash flows
+from the sale of collateral.
+EAD is based on the amount that the Group expects to be owed at the time of default,
+over the next 12 months or over the remaining lifetime.
+The Group granting to the borrower, for economic or legal reasons relating to the
+borrower's financial difficulty, a concession that the Group would not otherwise
+consider
+It is becoming probable that the borrower will enter into bankruptcy or other financial
+re-organisation
+The disappearance of an active market for that financial asset because of financial
+difficulties
+The purchase or origination of a financial asset at a deep discount that reflects the
+incurred credit losses
+The borrower is more than 90 days overdue for any of the principal, advances, interest
+or investments in corporate bonds of the Group
+A financial asset becoming credit-impaired may be caused by the combined effect of several
+events, but not a single discrete event.
+387
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+2.3 Measurement of ECL (Continued)
+(4) Parameters for measuring ECL
+According to whether the credit risk has significantly increased and whether the asset
+is credit-impaired, the Group measures the impairment allowance for different assets
+with ECL of the next 12 months or throughout the entire lifetime. The key parameters in
+ECL measurement include probability of default ("PD”), loss given default (“LGD") and
+exposure at default (“EAD”). Based on the current New Basel Capital Accord used in risk
+management and the requirements of IFRS 9, the Group takes into account the quantitative
+analysis of historical statistics (such as ratings of counterparties, manners of guarantees and
+types of collateral) and forward-looking information in order to establish the models for
+estimating PD, LGD and EAD in accordance with the requirement of IFRS 9.
+•
+Relevant definitions are listed as follows:
+•
+PD refers to the possibility that the debtor will not be able to fulfil its obligations of
+repayment over the next 12 months or over the remaining lifetime;
+LGD refers to the Group's expectation of the extent of the loss resulting from the
+defaulted exposure. The LGD varies depending on the type of counterparty, the
+method and priority of the recourse, and the type of collateral;
+Significant financial difficulty of the issuer or borrower
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+384
+2.1 Credit risk management (Continued)
+(2) Due from, placements with and loans to banks and other financial institutions
+The Group manages the credit quality of due from, placements with and loans to banks
+and other financial institutions considering the size, financial position and the internal and
+external credit rating of banks and financial institutions. During the business lifetime, the
+Group conducts comprehensive analysis, monitors and manages internal and external factors
+that may affect counterparties' ability to operate on on-going basis and capacity to bear
+risk, and takes corresponding control measures.
+(3) Debt securities and derivatives
+Credit risk within debt securities arises from exposure to movements in credit spreads,
+default rates and loss given default, as well as changes in the credit of underlying assets.
+The Group manages the credit risk within debt securities by monitoring the external credit
+rating, such as Standard & Poor's ratings or their equivalents, of the securities, the internal
+credit rating of the issuers of debt securities, and the credit quality of underlying assets of
+securitisation products (including review of default rates, prepayment rates), industry and
+sector performance, loss coverage ratios and counterparty risk, to identify exposure to credit
+risk.
+The Group has established policies to manage the net open derivative positions by amounts
+and by maturity dates. At any time, the current credit exposure equals to the fair value
+of those derivatives where the fair value changes are favourable to the Group. Credit
+risk exposures for derivatives are included as part of the aggregated credit risk limit
+management for financial institutions and customers. Exposures may also be mitigated by
+obtaining collateral or other pledges of assets.
+381
+BANK OF CHINA LIMITED
+Credit risk (Continued)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.2 Credit risk limit control and mitigation policies
+The Group manages limits and controls concentrations of credit risk in particular, to
+individual customers and to industries.
+(1) Credit risk limits and controls
+(i)
+Loans and advances and off-balance sheet commitments
+FOR THE YEAR ENDED 31 DECEMBER 2023
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.1 Credit risk management (Continued)
+(1) Loans and advances to customers and off-balance sheet commitments (Continued)
+The five categories of loans are defined as follows:
+Pass: Debtors are able to honour the contract terms and there is no objective evidence that
+the principal, interest, or gains cannot be repaid in full and on time.
+Special
+mention: Although there are factors that may have a negative impact on the
+debtors ability to meet its contractual obligations, the debtors are currently still able to pay
+the principal, interest, or gains.
+Substandard: Debtors are considered unable to repay the principal, interest, or gains in full;
+or a credit impairment loss has been incurred in respect of the financial assets.
+Doubtful: Debtors have been unable to repay the principal, interest, or gains in full, and a
+significant credit impairment loss has been incurred in respect of the financial assets.
+Loss: Financial assets are not expected to be recovered in their entirety or only a small
+portion can be recovered, after all possible measures are taken.
+The Group strictly follows the regulatory requirements in five-category loan classifications
+management, and makes timely adjustments to these classifications as necessary according
+to customers' operational and financial position, together with other factors that may affect
+the repayment of the loans.
+In accordance with the New Basel Capital Accord, the Group implemented a domestic
+corporate customer credit rating system based on the probability default (“PD”) model. The
+domestic corporate customer PD model uses the principle of logistic regression to predict
+the PD for customers in the next 12 months. The risk rating of the customer is obtained
+through the relevant mapping relationship table according to the calculated PD value.
+The corporate customer credit ratings are classified into fifteen grades as AAA, AA, A,
+BBB+, BBB, BBB-, BB+, BB, BB-, B+, B-, CCC, CC, C, and D. Credit grade D equates to
+defaulted customers while the others are assigned to non-defaulted customers. The Group
+performs centralised review on customer credit ratings on an annual basis in addition to
+making adjustments as necessary according to the customers' operational and financial
+conditions. The Group conducts back-testing of the rating model for domestic corporate
+customers, according to the customers' actual defaults each year, so that the model
+calculation results are closer to the objective facts.
+380
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+In order to manage the exposure to credit risk, the Group performs standardised
+management of credit policies and procedures. The credit approval processes for both
+corporate loans and personal loans can be broadly divided into three stages: (1) credit
+origination and assessment; (2) credit review and approval; and (3) fund disbursement and
+post-disbursement management.
+Credit applications for corporate customers in the Chinese mainland must be approved by
+the delegated credit application approvers at the Head Office and tier 1 branch level in
+the Chinese mainland, except for loans automatically approved online and certain Credit
+Factory customers applications, low risk loans and advances approved by the delegated
+credit application approvers at tier 2 branch level. The exposure to any single borrower,
+including banks, is restricted by approved total credit limits covering on and off-balance
+sheet exposures.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+The Head Office also oversees the risk management of the branches in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries and regions. In particular, any credit
+application at these branches exceeding the authorisation limits is required to be submitted
+to the Head Office for approval.
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.2 Credit risk limit control and mitigation policies (Continued)
+(2) Credit risk mitigation policies (Continued)
+(ii) Master netting agreements
+The Group further restricts its exposure to credit losses by entering into master netting
+agreements with counterparties. Master netting agreements do not generally result in the
+offsetting of assets and liabilities in the statement of financial position, as transactions
+are usually settled on a gross basis. However, the credit risk associated with favourable
+contracts is reduced by a master netting agreement to the extent that if an event of
+default with respect to a counterparty or a termination event occurs, all amounts with the
+counterparty under the master netting agreement are terminated and settled on a net basis.
+2.3 Measurement of ECL
+The Group conducts assessments of ECL with reference to forward-looking information
+and uses a number of models and assumptions in its measurement of expected credit
+losses. These models and assumptions relate to the future macroeconomic conditions
+and borrowers' creditworthiness (e.g., the likelihood of default by customers and the
+corresponding losses). The Group uses judgements, assumptions and estimation techniques
+in order to measure ECL according to the requirements of accounting standards which
+include:
+(Amounts in millions of Renminbi, unless otherwise stated)
+•
+Criteria for determining significant increases in credit risk
+•
+Definition of default and credit-impaired financial assets
+•
+Parameters for measuring ECL
+•
+Forward-looking information
+There were no significant changes in the estimation techniques and such assumptions during
+the reporting period.
+Personal loans in the Chinese mainland must be approved by delegated approvers at branch
+level in the Chinese mainland, except for loans automatically approved online.
+Segmentation of financial instruments based on credit risk characteristics for losses
+FOR THE YEAR ENDED 31 DECEMBER 2023
+The Bank has not applied management overlay.
+BANK OF CHINA LIMITED
+Exposure to credit risk is also managed through regular analysis of the ability of borrowers
+and potential borrowers to meet interest and principal repayment obligations and by
+changing aforementioned credit limit where appropriate.
+382
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+2
+Credit risk (Continued)
+2.2 Credit risk limit control and mitigation policies (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(ii) Debt securities and derivatives
+(1) Credit risk limits and controls (Continued)
+Collateral is also held as part of reverse repurchase agreements. Under some agreements,
+the Group is permitted to sell or repledge collateral in the absence of default by the owner
+of the collateral. Details of collateral accepted and which the Group is obligated to return
+are disclosed in Note V.41.3.
+Collateral held as security for financial assets other than loans and advances is determined
+by the nature of the instrument. Debt securities, treasury and other eligible bills are
+generally unsecured, with the exception of certain asset-backed securities and similar
+instruments, which are secured by portfolios of financial instruments.
+For loans guaranteed by a third party guarantor, the Group will assess the guarantor's credit
+rating, financial condition, credit history and ability to meet its obligations.
+383
+The Group has a range of policies and practices intended to mitigate credit risk. The most
+prevalent of these is obtaining margin deposits, collateral and guarantees. The Group
+implements guidelines on the acceptability of specific classes of collateral and coverage
+rate upper limits. The amount of acceptable collateral at the time of loan origination is
+determined by the Credit Management Department and is subject to coverage rate upper
+limits based on type. Value of collateral is monitored on an ongoing basis.
+(i) Collateral and guarantees
+(2) Credit risk mitigation policies
+The Group is also exposed to credit risk through debt securities investments and derivative
+trading activities. Credit limits are established based on type of instruments and the credit
+quality of counterparties, securities issuers and the securities, and set limits are actively
+monitored.
+Mortgages to retail customers are generally collateralised by mortgages over residential
+properties. Whether or not other loans require collateral is dependent on the nature of the
+loan and the Group's credit management requirements.
+Items
+As at
+2023
+Unit: RMB million
+As at
+2022
+Change
+31 December 31 December
+Due from and placements with banks and other
+financial institutions at fair value
+18,126
+(148)
+5,793
+Financial assets at fair value through profit or loss
+Debt securities
+336,184
+398,100
+(61,916)
+Equity instruments
+112,434
+112,582
+12,333
+Movement of Financial Instruments Measured at Fair Value
+2.71%
+38
+Fund investments and other
+15.39%
+Investment banking and
+insurance
+28,236
+4.52%
+11,963
+2.04%
+Others and elimination
+Fair Value Measurement
+18,329
+15,905
+Total
+624,138
+100.00%
+586,461
+100.00%
+Please refer to Note V.44 to the Consolidated Financial Statements for detailed information
+related to the Group's other operating results and financial position in terms of its geographic
+segment and business segments categories.
+Critical Accounting Estimates and Judgements
+The accounting estimates and judgements made by the Group will generally affect the carrying
+amounts of assets and liabilities of the next financial year. These estimates and judgements are
+continually evaluated and are based on historical experience, expectations of future events that
+are believed to be reasonable under the circumstances and other factors. Management believes
+that the accounting estimates and judgements have properly reflected the Bank's operating
+environment. Please refer to Notes II and III to the Consolidated Financial Statements for
+detailed information related to the Bank's accounting policies and accounting estimates.
+2.94%
+101,803
+(135,838)
+(620)
+90,284
+-
+(3,798)
+Due to customers at fair value
+(47,657)
+(36,701)
+(10,956)
+Bonds issued at fair value
+(2,118)
+(2,080)
+(38)
+Financial liabilities held for trading
+(54,264)
+(53,868)
+(396)
+The Bank has put in place a sound internal control mechanism for fair value measurement.
+In accordance with the Regulatory Guidelines on Valuation of Financial Instruments in
+Commercial Banks, Guidelines on Market Risk Management in Commercial Banks, CAS and
+IFRS Accounting Standards, with reference to the Basel Capital Accord, and drawing on the best
+practices of leading international banks regarding valuations, the Bank formulated the Valuation
+Policy of Financial Instrument Fair Values of Bank of China Limited to standardise the fair
+value measurement of financial instruments and enable timely and accurate financial information
+disclosure. Please refer to Note VI.5 to the Consolidated Financial Statements for detailed
+information related to fair value measurement.
+Other Financial Information
+There are no differences in the equity and profit for the year of the Group prepared in accordance
+with IFRS Accounting Standards to those prepared in accordance with CAS. Please refer to
+Supplementary Information I to the Consolidated Financial Statements for detailed information.
+39
+(3,798)
+financial institutions at fair value
+Due to and placements from banks and other
+(135)
+Loans and advances to customers at fair value
+718,776
+587,256
+131,520
+Financial assets at fair value through other
+comprehensive income
+Debt securities
+3,215,983
+2,473,380
+102,423
+742,603
+32,130
+26,836
+5,294
+Derivative financial assets
+146,750
+152,033
+(5,283)
+Derivative financial liabilities
+(135,973)
+Equity instruments and other
+8.10%
+Chinese mainland
+Treasury operations
+Issuers in Hong Kong (China), Macao
+77.26%
+4,971,629
+75.35%
+5,393,805
+Subtotal
+2.37%
+152,433
+2.13%
+152,433
+Corporation
+China Orient Asset Management
+3.85%
+247,677
+2.78%
+(China), Taiwan (China) and other
+199,070
+countries and regions
+820,426
+138,133
+Corporates
+3.17%
+204,373
+3.73%
+267,218
+Financial institutions
+1.94%
+124,638
+2.82%
+202,019
+Public sector and quasi-governments
+10.64%
+684,529
+11.46%
+Governments
+Corporates
+6.40%
+411,511
+% of total
+Amount
+% of total
+Amount
+As at 31 December 2023
+As at 31 December 2022
+Unit: RMB million, except percentages
+Items
+Investments by Issuer Type
+31
+100.00%
+6,435,244
+100.00%
+7,158,717
+Total
+Debt securities
+Issuers in the Chinese mainland
+Government
+3,764,329
+5.54%
+396,789
+Financial institutions
+9.47%
+609,586
+9.98%
+714,013
+1.93%
+Policy banks
+168,182
+2.34%
+167,171
+Public sector and quasi-governments
+52.56%
+3,382,240
+52.58%
+2.61%
+51.62%
+130,322
+Subtotal
+4.88%
+15,269
+Bond issued by policy banks in 2018
+2028-02-06
+2.87%
+15,573
+Bond issued by policy banks in 2023
+2027-06-17
+2.82%
+15,620
+Bond issued by policy banks in 2022
+2029-05-21
+3.65%
+21,328
+2029-01-08
+2028-02-09
+3.48%
+Bond issued by policy banks in 2019
+3.74%
+12,642
+Bond issued by policy banks in 2019
+2025-01-12
+4.98%
+12,710
+Bond issued by policy banks in 2018
+2029-01-25
+3.75%
+13,325
+Bond issued by policy banks in 2019
+2027-08-24
+2.50%
+13,435
+Bond issued by policy banks in 2022
+2029-07-12
+14,461
+22,947
+Bond issued by policy banks in 2019
+Bond issued by policy banks in 2019
+Par Value Annual rate Maturity date Allowance
+Note: "Equity instruments and others" includes accrual interest.
+100.00%
+6,435,244
+100.00%
+7,158,717
+Total
+4.97%
+319,753
+4.71%
+337,116
+Equity instruments and others
+17.77%
+1,143,862
+19.94%
+1,427,796
+Investments by Currency
+Unit: RMB million, except percentages
+As at 31 December 2023
+-RMB 5,441,777 76.02%
+Unit: RMB million, except percentages
+Impairment
+Bond Name
+50,579
+4.68%
+Others 300,963
+-HKD 295,346 4.59%
+-USD 832,757 12.94%
+2.02%
+-RMB 5,006,178 77.79%
+Unit: RMB million, except percentages
+32
+-Others 321,468 4.49%
+372,320 5.20%
+HKD
+1,023,152 14.29%
+-USD
+As at 31 December 2022
+3.86%
+3,321,923
+3,360,183
+13.76%
+3,622,516
+6.20% 1,565,840
+3.28%
+100.00%
+974,020
+29,675,351
+Total liabilities
+Other liabilities
+1,838,622
+Other borrowed funds
+13.33%
+3,955,659
+due to central banks
+and other financial institutions and
+Due to and placements from banks
+76.72%
+77.19% 20,201,825
+22,907,050
+5.95%
+Due to customers
+940,066
+26,330,247
+100.00%
+Chinese mainland: RMB
+Corporate loans
+% of total
+Amount
+As at 31 December 2021
+Unit: RMB million, except percentages
+As at 31 December 2022
+Amount % of total
+As at 31 December 2023
+Amount % of total
+Items
+Loans and Advances to Customers by Geography
+30
+The Bank further improved its risk management system, paid close attention to changes in the
+macroeconomic situation, strengthened risk identification and management in key areas and
+made greater efforts in the disposal of non-performing assets, thus maintaining generally stable
+asset quality. As at the end of 2023, the balance of the Group's allowance for loan impairment
+losses amounted to RMB485.298 billion, an increase of RMB48.057 billion compared with the
+prior year-end. The balance of the Group's restructured NPLs amounted to RMB58.968 billion,
+an increase of RMB30.551 billion compared with the prior year-end.
+The Bank earnestly fulfilled its responsibilities as a large state-owned bank and optimised its
+fund supply by increasing its support for the nation's key strategies, key areas and weak links
+in the real economy. Its credit structure was further optimised, and it achieved solid growth in
+lending scale. As at the end of 2023, the Group's loans and advances to customers amounted
+to RMB19,961.779 billion, an increase of RMB2,409.018 billion or 13.72% compared with
+the prior year-end. Specifically, the Group's RMB loans and advances to customers totalled
+RMB16,703.660 billion, an increase of RMB2,360.690 billion or 16.46% compared with the
+prior year-end, while its foreign currency loans amounted to USD460.011 billion, a decrease of
+USD0.861 billion or 0.19% compared with the prior year-end. Please refer to Note V.17 to the
+Consolidated Financial Statements for detailed information.
+Loans and Advances to Customers
+Note: "Other borrowed funds” includes bonds issued and other borrowings.
+3.57%
+100.00%
+28,893,548
+100.00%
+6,435,244
+22.07%
+7,158,717
+59.24%
+17,116,005
+60.05%
+19,476,871
+Loans and advances to customers, net
+Investments
+As at 31 December 2023
+Amount % of total
+Unit: RMB million, except percentages
+As at 31 December 2022
+Amount % of total
+Assets
+Items
+The principal components of the Group's consolidated statement of financial position are set out
+below:
+The Bank adhered to requirements for high-quality development, dynamically adjusted its
+business strategies and continually improved its business structure, thus achieving steady
+growth in assets and liabilities. As at the end of 2023, the Group's total assets amounted to
+RMB32,432.166 billion, an increase of RMB3,538.618 billion or 12.25% compared with the
+prior year-end. The Group's total liabilities amounted to RMB29,675.351 billion, an increase of
+RMB3,345.104 billion or 12.70% compared with the prior year-end.
+Financial Position Analysis
+22.27%
+Balances with central banks
+2,941,140
+9.07%
+32,432,166
+3.82%
+1,103,986
+3.46%
+1,120,266
+Liabilities
+Total assets
+10,655,067
+Other assets
+1,924,454
+5.35%
+1,735,172
+and other financial institutions
+Due from and placements with banks
+8.01%
+2,313,859
+6.66%
+46.94%
+53.38%
+353,163
+Unit: RMB million, except percentages
+The classification of the Group's financial investment portfolio is shown below:
+The Bank closely tracked financial market dynamics, maintained investment activity at a
+reasonable pace, and dynamically adjusted its investment portfolio structure. As at the end
+of 2023, the Group held investments of RMB7,158.717 billion, an increase of RMB723.473
+billion or 11.24% compared with the prior year-end. Specifically, the Group's RMB investments
+totalled RMB5,441.777 billion, an increase of RMB435.599 billion or 8.70% compared with the
+prior year-end, while foreign currency investments totalled USD242.413 billion, an increase of
+USD37.223 billion or 18.14% compared with the prior year-end.
+Investments
+Note: The comparative figures for 2021 are not restated.
+38.78%
+4.02%
+631,370
+4.13%
+36.50% 6,093,750
+0.27% 37,580 0.24%
+100.00% 15,712,574 100.00%
+3.91% 724,771
+33.11% 6,406,970
+0.27% 46,968
+100.00% 17,552,761
+19,961,779
+Total loans
+53,792
+Accrued interest
+6,609,965
+As at 31 December 2023
+Amount
+Subtotal
+As at 31 December 2022
+Amount
+Financial assets at amortised cost
+38.85%
+2,500,216
+45.37%
+3,248,113
+comprehensive income
+Financial assets at fair value through other
+9.53%
+613,105
+7.69%
+550,421
+loss
+Financial assets at fair value through profit or
+Items
+% of total
+% of total
+781,311
+(China) and other countries and regions
+Hong Kong (China), Macao (China), Taiwan
+2,280,239
+11,098,823
+66.62%
+13,298,022
+Subtotal
+11.47%
+2,289,792
+(China) and other countries and regions
+Hong Kong (China), Macao (China), Taiwan
+2.10%
+329,463
+45.58%
+7,161,416
+48.56%
+1.68%
+8,523,463
+295,121
+1.77%
+12.99% 2,090,365
+13.30%
+63.23%
+9,581,244
+0.00%
+735
+0.01%
+1,089
+0.01%
+1,532
+Foreign currency
+Foreign currency
+34.76%
+32.36%
+5,681,110
+29.19%
+5,827,122
+Chinese mainland: RMB
+Personal loans
+60.98%
+5,461,645
+2029-05-20
+Top Ten Financial Bonds by Value Held by the Group
+Due to Customers
+-HKD 1,360,104 6.73%
+USD 2,028,393 10.04%
+Note: Financial bonds refer to debt securities issued by financial institutions in the bond market, including the bonds
+issued by policy banks, other banks and non-bank financial institutions, but excluding restructured bonds and
+PBOC bills.
+As at 31 December 2022
+Unit: RMB million, except percentages
+55
+-Others 933,894 4.63%
+35
+HKD 1,475,624 6.44%
+-USD 2,131,110 9.30%
+-RMB 18,282,470 79.81%
+As at 31 December 2023
+Unit: RMB million, except percentages
+Due to Customers by Currency
+-Others 1,017,846 4.45%
+Note: "Others" includes accrued interest.
+Liability Quality Management
+Equity
+Unit: RMB million
+A geographical analysis of profit contribution and related assets and liabilities is set forth in the
+following table:
+From a geographical perspective, the Group operates in three principal regions: the Chinese
+mainland; Hong Kong (China), Macao (China) and Taiwan (China), and other countries and
+regions. From a business perspective, the Group provides financial services through six main
+business segments: corporate banking, personal banking, treasury operations, investment banking,
+insurance and other operations.
+Segment Reporting by Geography
+Net cash flow from financing activities was an inflow of RMB119.862 billion, an increase of
+RMB66.815 billion compared with the prior year. This was mainly attributable to an increase in
+proceeds from issuance of bonds.
+Net cash flow from investing activities was an outflow of RMB539.428 billion, an increase of
+RMB527.704 billion compared with the prior year. This was mainly attributable to an increase in
+purchase of financial investments.
+The Bank continually strengthened its liability quality management, actively optimised its
+liability structure, and achieved steady development of the Group's liability business. The Bank
+earnestly implemented regulatory requirements on liability quality management. According to
+its business strategy, risk appetite, and overall business characteristics, the Bank effectively
+managed the sources, structure, and cost of liabilities to fit the development of its own liability
+business, with relevant indicators meeting internal and external management requirements.
+By enhancing the expansion of customer deposits, strengthening internal and external pricing
+management, improving market financing capabilities, appropriately managing the degree of
+mismatch in terms and currencies of liability business, the Bank continuously improved its
+liability quality management capability.
+In 2023, net cash flow from operating activities was an inflow of RMB816.446 billion as
+compared to an outflow of RMB21.855 billion in the prior year. This was mainly attributable to
+a net increase in due to customers, a net increase in due to banks and other financial institutions
+and due to central banks whereas it was a net decrease in the prior year.
+As at the end of 2023, the balance of the Group's cash and cash equivalents was RMB2,516.725
+billion, an increase of RMB425.259 billion compared with the prior year-end.
+Cash Flow Analysis
+In 2023, the Group adhered to the principle of steady development, continued to enrich off-
+balance sheet products, strengthened the linkage of on-and off-balance sheet products, and fully
+leveraged on the characteristics of off-balance sheet business such as extensive marketing and
+service coverage to continuously improve its comprehensive financial services. It strengthened
+the coordinated management and comprehensive risk management of off-balance sheet
+businesses, improved relevant policies and procedures, clarified the off-balance sheet business
+development strategy, and cemented the foundation for off-balance sheet business development.
+Off-balance sheet items include agency investment and financing services, intermediary services,
+derivatives, contingent liabilities and commitments, etc. Agency investment and financing
+services mainly include asset management products, entrusted loans, agency bond issuance and
+underwriting. Intermediary services mainly include agency services, asset custody, financial
+advisory and consulting. Derivatives mainly include foreign currency exchange rates contracts,
+interest rates contracts, equity contracts, credit contracts, precious metals and other commodity
+contracts. Please refer to Note V.16 to the Consolidated Financial Statements for detailed
+information. Contingent liabilities and commitments include legal proceedings and arbitrations,
+assets pledged, collateral accepted, credit commitments, capital commitments, operating leases,
+treasury bond redemption commitments and underwriting obligations, etc. Please refer to Note V.41
+to the Consolidated Financial Statements for detailed information.
+Off-balance Sheet Items
+As at the end of 2023, the Group's total equity stood at RMB2,756.815 billion, an increase of
+RMB193.514 billion or 7.55% compared with the prior year-end. This was primarily attributable
+to the following factors: (1) In 2023, the Group realised a profit for the year of RMB246.371
+billion, among which profit attributable to equity holders of the Bank amounted to RMB231.904
+billion. (2) The Bank pushed forward its external capital replenishment projects in a proactive
+and prudent manner, successfully issuing RMB30.0 billion of undated capital bonds. (3) As
+per the 2022 profit distribution plan approved at the Annual General Meeting, a cash dividend
+of RMB68.298 billion was paid out on ordinary shares. (4) The Bank paid a dividend on its
+preference shares of RMB5.162 billion and interest on undated capital bonds of RMB10.058
+billion. Please refer to the “Consolidated Statement of Changes in Equity" in the Consolidated
+Financial Statements for detailed information.
+36
+1.65%
+100.00%
+1.75% 299,871
+100.00% 18,142,887
+0.88%
+1.51% 293,935
+36.58%
+38.38% 6,635,794
+7,752,565
+305,619
+38.97%
+1.32%
+8,926,078
+302,198
+1.62%
+Foreign currency
+Personal deposits
+52.89%
+10.47%
+9.90% 1,899,896
+50.30% 9,595,486
+9.31% 1,999,666
+50.33% 10,160,987
+11,530,322
+Chinese mainland: RMB
+Hong Kong (China), Macao (China), Taiwan
+(China) and other countries and regions
+1,452,195
+1.44% 160,419
+1.35% 290,082
+1.69% 354,060
+100.00% 20,201,825
+22,907,050
+Total deposits
+386,045
+Others
+310,212
+Certificates of deposits
+44.58%
+46.51% 8,087,111
+6.38%
+6.62% 1,157,382
+6.34% 1,338,512
+46.63% 9,396,696
+10,680,471
+Subtotal
+Hong Kong (China),
+Macao (China) and
+Subtotal
+Taiwan (China)
+2023 2022
+Amount
+Items
+2022
+2023
+Unit: RMB million, except percentages
+Operating income for the main business segments of the Group is set forth in the following table:
+% of total
+As at the end of 2023, total assets of the other countries and regions segment amounted to
+RMB2,372.795 billion, an increase of RMB25.592 billion or 1.09% compared with the prior
+year-end, representing 6.97% of the Group's total assets. In 2023, this segment recorded a profit
+before income tax of RMB13.583 billion, a decrease of RMB1.118 billion or 7.60% compared
+with the prior year, representing 4.57% of the Group's profit before income tax.
+37
+Figures for segment assets, segment profit before income tax and their respective proportions are prior to
+intragroup elimination.
+3
+As at the end of 2023, total assets³ of the Bank's Chinese mainland segment amounted to
+RMB26,470.195 billion, an increase of RMB3,093.166 billion or 13.23% compared with the
+prior year-end, representing 77.69% of the Group's total assets. In 2023, this segment recorded
+a profit before income tax of RMB229.858 billion, a decrease of RMB0.779 billion or 0.34%
+compared with the prior year, representing 77.37% of the Group's profit before income tax.
+26,470,195 23,377,029 5,228,040 4,949,867 2,372,795 2,347,203 (1,638,864) (1,780,551) 32,432,166 28,893,548
+24,246,297 21,329,365 4,777,839 4,509,283 2,288,051 2,271,615 (1,636,836) (1,780,016) 29,675,351 26,330,247
+(376) 295,608 283,641
+As at the end of 2023, total assets of the Hong Kong (China), Macao (China) and Taiwan (China)
+segment amounted to RMB5,228.040 billion, an increase of RMB278.173 billion or 5.62%
+compared with the prior year-end, representing 15.34% of the Group's total assets. In 2023, this
+segment recorded a profit before income tax of RMB53.669 billion, an increase of RMB14.990
+billion or 38.75% compared with the prior year, representing 18.06% of the Group's profit before
+income tax.
+(88,124) (89,949) (11,086) (11,360)
+229,858 230,637 53,669 38,679 13,583 14,701 (1,502)
+Amount
+Commercial banking business
+41.77%
+244,950
+43.62%
+272,236
+Personal banking
+38.09%
+% of total
+223,359
+254,758
+Including: Corporate banking
+95.25%
+558,593
+92.54%
+577,573
+40.82%
+As at the year-end
+Assets
+Liabilities
+Profit before income tax
+(106,562) (103,959)
+2,127 296 466,545 459,266
+18,385
+38,658 22,451
+401,927 48,903
+55,864
+393,064
+101,000 84,584
+Non-interest income
+38,842
+Net interest income
+2022 2023
+Group
+Elimination
+2023
+Other countries and
+regions
+2023 2022
+2022
+2023
+2022
+7,333
+7,009
+(6,604)
+(7,352) (2,650)
+Impairment losses on assets
+2.568 (222,933) (199,506)
+2,975
+(8,849) (8,043)
+(176,593) (166,352) (40,466) (27,679)
+Operating expenses
+(1,852) 78,865 74,890
+(2,306)
+5,223 4,278
+13,385
+13,096
+62,852 59,079
+Including: net fee and commission income
+(3,240) 157,593 127,195
+Items
+2,133,252
+-RMB 15,879,434 78.60%
+Hong Kong (China), Macao (China), Taiwan
+290,082
+1.35%
+310,212
+Certificates of deposits
+46.51%
+9,396,696
+46.63%
+1.44%
+10,680,471
+1.26%
+255,289
+1.03%
+235,724
+Structured deposits
+26.65%
+5,384,034
+Subtotal
+29.09%
+Others
+1.69%
+4,274,946
+Time deposits
+27.88%
+4,614,933
+25.56%
+4,848,957
+Demand deposits
+386,045
+Corporate deposits
+100.00%
+20,201,825
+100.00%
+22,907,050
+Total
+1.75%
+354,060
+Chinese mainland
+6,662,417
+Time deposits
+18.60%
+5,370,057
+24.62%
+5,639,238
+Demand deposits
+Corporate deposits
+Group
+Items
+26.58%
+% of total
+% of total
+Amount
+Unit: RMB million, except percentages
+As at 31 December 2022
+As at 31 December 2023
+The principal components of due to customers of the Group and its institutions in the Chinese
+mainland are set out below:
+33
+The Bank focused on high-quality development, accelerated product and service innovation,
+optimised the balance between deposit growth and cost control while continually enhancing
+its financial services offering. It actively expanded its demand deposit base by focusing on
+key deposit products such as salary payment agency, cash management, quick payment service
+and social security cards. It also improved the quality of its deposit business by reducing the
+scale of high-cost deposits such as structured deposits and negotiated deposits, resulting in a
+steady decrease in the funding cost of RMB deposits. As at the end of 2023, the Group's due
+to customers amounted to RMB22,907.050 billion, an increase of RMB2,705.225 billion or
+13.39% compared with the prior year-end. Specifically, the Group's RMB due to customers
+totalled RMB 18,282.470 billion, an increase of RMB2,403.036 billion or 15.13% compared with
+the prior year-end, while its foreign currency due to customers stood at USD652.940 billion, an
+increase of USD32.317 billion or 5.21% compared with the prior year-end.
+Amount
+Time deposits
+5,592,463
+24.41%
+(China) and other countries and regions
+16.51%
+3,782,330
+Demand deposits
+Personal deposits
+50.30%
+10,160,987
+50.33%
+11,530,322
+Subtotal
+1.63%
+328,602
+1.30%
+298,621
+Structured deposits
+22.09%
+4,462,328
+22.53%
+3,246,549
+3,757,373
+Structured deposits
+Due to Customers by Geography
++4
+Note: "Others" is inclusive of accrued interest.
+100.00%
+2.00%
+331,027
+16,550,532
+1.83%
+100.00%
+Items
+18,974,217
+348,871
+Others
+48.69%
+8,058,184
+48.64%
+9,228,276
+Subtotal
+Total
+1.49%
+Corporate deposits
+As at 31 December 2022
+Amount % of total
+19.62%
+4.12%
+746,501
+3.11%
+38.30%
+6,949,089
+37.29%
+As at 31 December 2023
+Amount % of total
+7,532,878
+628,443
+8,734,967
+662,103
+Foreign currency
+Chinese mainland: RMB
+% of total
+Amount
+As at 31 December 2021
+Unit: RMB million, except percentages
+38.13%
+2.89%
+246,813
+34
+210,940
+273,167
+1.44%
+1.11%
+1.81%
+Subtotal
+9,397,070
+49.53%
+8,161,321
+49.31%
+Personal deposits
+299,839
+3,203,911
+Demand deposits
+28.48%
+4,713,810
+30.64%
+5,813,425
+Time deposits
+18.72%
+3,097,561
+16.89%
+Structured deposits
+Credit risk (Continued)
+146,750
+152,033
+Loans and advances to customers, net
+19,476,871
+17,116,005
+Financial investments
+financial assets at fair value through profit or loss
+347,708
+412,413
+financial assets at fair value through other
+comprehensive income
+3,217,563
+2,474,849
+financial assets at amortised cost
+3,360,183
+3,321,923
+Other assets
+93,855
+70,082
+Subtotal
+items are as follows:
+Derivative financial assets
+196,497
+203,176
+bank notes issued
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+As at 31 December
+2023
+2022
+Credit risk exposures relating to on-balance sheet
+financial assets are as follows:
+2.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+Due from banks and other financial institutions
+501,284
+750,357
+2,941,140
+2,313,859
+Placements with and loans to banks and
+other financial institutions
+Balances with central banks
+1,233,888
+1,174,097
+Government certificates of indebtedness for
+Letters of guarantee issued
+Loan commitments and other credit commitments
+2.5 Loans and advances
+Total
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2 Credit risk (Continued)
+10.11% 1,936,288
+5.32% 1,068,722
+1,059,682
+Other countries and regions
+2,011,421
+(i) Analysis of loans and advances to customers by geographical area
+Group
+As at 31 December
+2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+2022
+% of total
+Amount
+% of total
+Chinese mainland
+16,836,884
+84.57%
+14,500,783
+82.83%
+Hong Kong (China), Macao (China),
+Taiwan (China)
+Amount
+Subtotal
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+390
+31,522,418
+27,982,115
+1,197,872
+1,189,069
+5,596,333
+4,968,870
+6,794,205
+6,157,939
+38,316,623
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+34,140,054
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.4 Maximum exposure to credit risk before collateral held or other credit enhancements
+(Continued)
+The table above represents a worst case scenario of credit risk exposure of the Group as at
+31 December 2023 and 2022, without taking into account any collateral held, master
+netting agreements or other credit enhancements attached. For on-balance sheet assets, the
+exposures set out above are based on net carrying amounts as reported in the statement of
+financial position.
+As at 31 December 2023, 50.83% of the Group's total maximum credit exposure is derived
+from loans and advances to customers (31 December 2022: 50.13%) and 17.99% represents
+investments in debt securities (31 December 2022: 18.10%).
+391
+BANK OF CHINA LIMITED
+Credit risk exposures relating to off-balance sheet
+29.93%
+6.10%
+1.35% 72,733
+1.48%
+35.93%
+1.78%
+23,369 11.55%
+1.24%
+Total
+207,297 100.00%
+1.23%
+202,404
+100.00%
+1.40%
+397
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+32,383 15.62%
+2
+Western China
+Central and Southern China
+1.46%
+37,895
+18.72%
+1.86%
+Northeastern China
+14,134
+6.82%
+2.20%
+13,239
+6.54%
+2.27%
+Eastern China
+61,761 29.79%
+0.90%
+55,168
+27.26%
+0.93%
+63,779 30.77%
+17.00%
+Credit risk (Continued)
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+1.27% 231,677
+100.00%
+1.32%
+Chinese mainland
+As at 31 December
+2023
+2022
+Amount
+% Impaired
+of total loan ratio
+%
+Impaired
+Amount
+of total loan ratio
+Corporate loans and advances
+Personal loans
+162,951 78.61%
+44,346 21.39%
+1.48%
+0.76%
+100.00%
+2.5 Loans and advances (Continued)
+253,205
+0.65%
+(ii) Impaired loans and advances by customer type
+Group
+As at 31 December
+2023
+2022
+%
+Amount
+Impaired
+of total loan ratio
+% Impaired
+Amount
+of total loan ratio
+Corporate loans and advances
+Personal loans
+206,760 81.66%
+46,445 18.34%
+1.55% 190,190
+0.70% 41,487
+82.09%
+1.71%
+17.91%
+Total
+35,240
+Northern China
+of total loan ratio
+100.00%
+396
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by impairment status
+(i) Impaired loans and advances by geographical area
+Group
+As at 31 December
+2023
+2022
+%
+100.00% 14,500,783
+Impaired
+16,836,884
+10.66%
+Unsecured loans
+5,938,299
+35.27%
+4,501,283
+31.04%
+Guaranteed loans
+2,140,243
+12.71%
+1,773,328
+12.23%
+Loans secured by mortgages
+6,932,717
+41.18% 6,680,248
+46.07%
+Pledged loans
+1,825,625
+10.84% 1,545,924
+Total
+Amount
+of total loan ratio
+Amount
+1.28%
+Total
+253,205
+100.00%
+1.27% 231,677
+100.00%
+1.32%
+Chinese mainland
+As at 31 December
+2023
+2022
+%
+Impaired
+% Impaired
+Amount
+of total loan ratio
+Amount
+5.91%
+13,701
+1.41%
+5.89%
+% Impaired
+of total loan ratio
+Chinese mainland
+207,297
+81.87%
+1.23%
+202,404
+87.36%
+1.40%
+162,326
+40,078
+Hong Kong (China), Macao (China),
+30,985
+12.24%
+1.54%
+15,572
+6.73%
+0.80%
+Other countries and regions
+14,923
+Taiwan (China)
+% of total
+80.20%
+19.80%
+2.13%
+1,375
+0.59%
+2.48%
+Subtotal
+162,951
+64.36%
+1.48% 162,326
+70.06%
+1.84%
+Personal loans
+Mortgages
+19,928
+7.87%
+0.48%
+20,386
+8.80%
+0.62%
+0.47%
+1,559
+1.72%
+1.08%
+2,838
+1.22%
+0.86%
+Mining
+3,080
+1.22%
+1.42%
+4,802
+2.07%
+2.87%
+Public utilities
+4,260
+1.68%
+1.92%
+3,539
+1.54%
+Other
+1.70%
+Credit cards
+3.99%
+1.23% 202,404
+87.36%
+1.40%
+Hong Kong (China),
+Macao (China), Taiwan (China)
+and other countries and regions
+Total
+45,908
+18.13%
+1.49%
+29,273 12.64%
+0.97%
+253,205 100.00%
+1.27%
+231,677
+100.00%
+1.32%
+399
+81.87%
+10,114
+207,297
+0.71%
+1.83%
+10,302
+4.45%
+2.02%
+Other
+14,304
+5.65%
+1.29%
+9,390
+4.05%
+1.13%
+Subtotal
+44,346
+17.51%
+0.76%
+40,078
+17.30%
+Total for Chinese mainland
+4,295
+Construction
+0.54%
+%
+Impaired
+% Impaired
+Amount
+of total loan ratio
+Amount
+of total loan ratio
+Corporate loans and advances
+Commerce and services
+41,312
+16.32%
+1.50%
+33,486
+14.45%
+1.70%
+Manufacturing
+33,565
+2022
+13.26%
+2023
+Chinese mainland
+0.71%
+Total
+207,297 100.00%
+1.23% 202,404
+100.00%
+1.40%
+398
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+(iii) Impaired loans and advances by geographical area and industry
+As at 31 December
+1.44%
+34,275
+14.79%
+13,119
+5.66%
+1.78%
+Financial services
+161
+0.06%
+0.02%
+20
+0.01%
+0.00%
+Water, environment and public
+utility management
+4,973
+1.96%
+1.09%
+1,947
+0.84%
+1.22%
+5.05%
+12,794
+water
+1.89%
+Transportation, storage and postal
+services
+8,780
+3.47%
+0.44%
+10,959
+4.73%
+1.84%
+0.63%
+48,172
+19.02%
+5.51%
+55,966
+24.16%
+7.23%
+Production and supply of
+electricity, heating, gas and
+Real estate
+11.07%
+Amount
+Amount
+Corporate loans and advances
+Commerce and services
+3,237,900
+Manufacturing
+2,638,582
+16.26% 2,476,528
+13.25% 2,177,432
+14.15%
+12.44%
+Transportation, storage and
+postal services
+2,139,206
+10.75%
+1,898,333
+10.84%
+Real estate
+1,468,347
+7.38%
+% of total
+1,359,650
+Amount
+Amount
+14,500,783 1,936,288
+1,068,722 17,505,793
+393
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(iii) Analysis of loans and advances to customers by industry
+Group
+As at 31 December
+2023
+2022
+% of total
+9,584,958
+6,406,970
+7.77%
+electricity, heating,
+Mining
+305,992
+1.54%
+283,411
+1.62%
+Public utilities
+235,130
+1.18%
+218,706
+1.25%
+Other
+155,531
+0.78%
+141,462
+0.80%
+Subtotal
+13,298,022
+2.11%
+Production and supply of
+369,618
+449,451
+gas and water
+1,293,581
+6.50%
+952,035
+5.44%
+Financial services
+904,582
+4.54%
+851,117
+4.86%
+Water, environment and
+public utility management
+469,720
+2.36%
+370,531
+2.12%
+Construction
+2.26%
+113,743 1,513,865
+885,912
+69,067
+81,885
+1,198,699
+655,704
+5,682,199
+2,038,727
+14.07%
+583,632
+4.02%
+5,905,293
+40.72%
+28.19%
+Western China
+2,186,337
+12.99% 1,885,225
+13.00%
+Total
+16,836,884
+100.00% 14,500,783
+100.00%
+392
+BANK OF CHINA LIMITED
+14.29%
+3.81%
+40.76%
+28.15% 4,087,906
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+4,740,324
+6,862,383
+Total
+19,907,987
+100.00% 17,505,793
+100.00%
+Chinese mainland
+As at 31 December
+2023
+2022
+Amount
+% of total
+Amount
+% of total
+Northern China
+2,405,566
+Northeastern China
+642,274
+Eastern China
+Central and Southern China
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+107,258 1,901,178
+Personal loans
+5,828,654
+711,616
+882,729 11,396,844
+69,695 6,609,965
+Total
+16,836,884
+2,011,421
+1,059,682 19,907,987
+As at 31 December 2022
+Corporate loans and advances
+Trade bills
+Other
+Personal loans
+Total
+1,318,237
+7,500,347
+77,798
+1,222,007
+9,292,108
+Other
+1,716,122
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(ii) Analysis of loans and advances to customers by customer type
+Hong Kong
+(China),
+Macao
+(China),
+66.80% 11,098,823
+Other
+Taiwan
+countries
+mainland
+(China) and regions
+Total
+As at 31 December 2023
+Corporate loans and advances
+Trade bills
+Chinese
+% of total
+63.40%
+Mortgages
+Other
+1,109,025
+24.76%
+3.27%
+6.59%
+4,338,946
+(1) Concentrations of risk for loans and advances to customers
+508,755
+3.51%
+834,498
+5.75%
+Subtotal
+Total
+5,828,654
+34.62% 5,682,199
+39.19%
+16,836,884
+100.00% 14,500,783
+100.00%
+551,366
+395
+Credit cards
+Mortgages
+1.15%
+Public utilities
+221,595
+1.32%
+206,004
+1.42%
+Other
+73,193
+0.43%
+55,443
+0.38%
+Subtotal
+11,008,230
+65.38%
+8,818,584
+60.81%
+Personal loans
+4,168,263
+167,351
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+12.34%
+Loans secured by mortgages
+7,910,628
+39.74% 7,609,114
+43.47%
+Pledged loans
+2,206,464
+11.08% 1,908,204
+10.90%
+Total
+Chinese mainland
+19,907,987
+100.00% 17,505,793
+100.00%
+As at 31 December
+2023
+2022
+33.29%
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+36.38% 5,827,221
+12.80% 2,161,254
+Guaranteed loans
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(iv) Analysis of loans and advances to customers by collateral type
+Group
+As at 31 December
+2023
+2022
+Amount
+% of total
+Amount
+% of total
+Unsecured loans
+7,243,277
+2,547,618
+1.29%
+217,551
+Mining
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.5 Loans and advances (Continued)
+(1) Concentrations of risk for loans and advances to customers (Continued)
+(iii) Analysis of loans and advances to customers by industry (Continued)
+Chinese mainland
+As at 31 December
+2023
+2022
+Amount
+% of total
+Amount
+% of total
+BANK OF CHINA LIMITED
+Corporate loans and advances
+394
+100.00% 17,505,793
+4,786,255
+Credit cards
+Other
+563,994
+1,259,716
+24.04%
+2.83%
+6.33%
+4,916,707
+28.09%
+520,390
+2.97%
+969,873
+5.54%
+Subtotal
+Total
+6,609,965
+33.20% 6,406,970
+36.60%
+19,907,987
+100.00%
+Commerce and services
+2,755,264
+Manufacturing
+5.09%
+Financial services
+660,091
+3.92%
+659,443
+4.55%
+Water, environment and
+public utility management
+455,276
+2.70%
+361,108
+2.49%
+Construction
+397,588
+2.36%
+328,921
+2.27%
+738,758
+6.22%
+1,046,809
+gas and water
+2,329,950
+16.36% 1,974,498
+13.84%
+13.62%
+1,808,808
+12.47%
+Transportation, storage and
+postal services
+1,976,166
+Personal loans
+11.74%
+12.03%
+Real estate
+874,747
+5.20%
+773,828
+5.34%
+Production and supply of
+electricity, heating,
+1,744,422
+Analysis of loans and advances to customers (accrued interest excluded) by geographical
+area, customer type, industry, collateral type and analysis of impaired and overdue loans
+and advances to customers are presented below:
+23,102
+168,450
+404
+165,313
+7,681
+57,824
+44,988
+54,820
+Total
+11,469
+2,336
+3,319
+2,589
+3,225
+Pledged loans
+95,502
+3,681
+22,243
+27,906
+41,672
+Loans secured by mortgages
+35,240
+689
+BANK OF CHINA LIMITED
+29,085
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+192,101
+210,629
+Less: total loans and advances to customers which have
+been overdue for less than 3 months
+Percentage
+Subtotal
+6,007
+9,857
+20,781
+32,322
+Hong Kong (China), Macao (China), Taiwan (China)
+Other countries and regions
+165,313
+Chinese mainland
+2022
+2023
+As at 31 December
+(ii) Analysis of overdue loans and advances by geographical area
+(4) Overdue loans and advances to customers (Continued)
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+3,135
+2,331
+Guaranteed loans
+3,947
+3,686
+2,998
+Guaranteed loans
+29,895
+179
+4,675
+13,049
+11,992
+Unsecured loans
+As at 31 December 2023
+Total
+3 years over 3 years
+360 days
+90 days
+Past due
+361 Days to
+91 to
+up to
+Past due
+Past due
+767
+11,398
+Loans secured by mortgages
+38,850
+975
+3,177
+11,358
+7,592
+Unsecured loans
+As at 31 December 2022
+168,450
+3,866
+46,653
+61,440
+1.06%
+56,491
+13,845
+62
+4,549
+6,583
+2,651
+Pledged loans
+113,312
+2,858
+33,482
+38,122
+Total
+1.10%
+(73,663)
+(68,707)
+As at 31 December 2023 and 2022, loans and advances by five-category loan classification
+and three-staging classification did not include loans and advances to customers measured
+at fair value through profit or loss.
+17,501,719
+231,104
+283,631
+16,986,984
+Total
+66,833
+66,833
+Loss
+60,561
+60,561
+Doubtful
+103,710
+103,710
+Substandard
+235,360
+235,360
+Special-mention
+17,035,255
+48,271
+16,986,984
+(6) Credit commitments
+As at 31 December 2023 and 2022, credit risk exposures of credit commitments were mainly
+classified under Stage 1 and categorised as "Pass" in the five-category classifications.
+2.6 Due from and placements with and loans to banks and other financial institutions
+Banks and other financial institutions comprise those institutions in the Chinese mainland,
+Hong Kong (China), Macao (China), Taiwan (China) and other countries and regions.
+149,685
+-Public sectors and quasi-governments
+3,764,329
+3,745,563
+18,766
+-Government
+Issuers in Chinese mainland
+Total
+A to AAA Lower than A
+Unrated
+Pass
+The Group adopted a credit rating approach to manage the credit risk of the debt securities
+by referring to both internal and external credit rating. The carrying amounts (accrued
+interest excluded) of the debt investments analysed by external credit ratings at the financial
+reporting dates are as follows:
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+406
+As at 31 December 2023, the majority of the balances of due from and placements with and
+loans to banks and other financial institutions were banks and other financial institutions in
+the Chinese mainland (Note V.13 and Note V.15), the majority of the internal credit ratings
+of these banks and other financial institutions were above A.
+The Group monitors the credit risk of counterparties by collecting and analysing
+counterparty information and establishing credit limits taking into account the nature, size
+and credit rating of counterparties.
+2.7 Debt securities
+Past due
+Stage 3
+Stage 1
+67,246
+Substandard
+289,716
+289,716
+Special-mention
+19,361,428
+96,329
+19,265,099
+Pass
+Stage 3
+Stage 2
+Stage 1
+Total
+Lifetime ECL
+12-month ECL
+As at 31 December 2023
+Loans and advances to customers by five-category loan classification and three-staging
+classification are analysed as follows:
+(5) Loans and advances three-staging classification
+123,394
+136,966
+Total loans and advances to customers which have
+been overdue for more than 3 months
+67,246
+Doubtful
+Loss
+105,224
+Total
+Lifetime ECL
+12-month ECL
+As at 31 December 2022
+(5) Loans and advances three-staging classification (Continued)
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+Stage 2
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+405
+19,904,312
+253,168
+386,045
+19,265,099
+Total
+80,698
+80,698
+105,224
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+Chinese mainland
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(Continued)
+(4) Overdue loans and advances to customers (Continued)
+2022
+2023
+2022
+2023
+31 December 31 December 31 December 31 December
+As at
+Chinese mainland
+As at
+As at
+As at
+Group
+(v) Within the impaired corporate loans and advances, the portions covered and not covered by
+collateral held are as follows:
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+400
+Portion covered
+149,614
+115,300
+126,946
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+401
+Collateral of impaired corporate loans and advances includes land, buildings, equipment and
+others. The fair value of collateral was estimated by the Group with reference to the latest
+available external valuations adjusted for recent experience in disposal of collateral as well
+as the market conditions.
+35,439
+40,512
+40,927
+52,489
+162,326
+59,178
+162,951
+206,760
+collateral held
+Fair value of
+Total
+59,812
+36,005
+74,890
+57,146
+Portion not covered
+102,514
+190,190
+(Amounts in millions of Renminbi, unless otherwise stated)
+(172,499)
+Total
+Hong Kong (China), Macao (China),
+51,485
+(155,812)
+207,297
+Chinese mainland
+As at 31 December 2023
+Net
+losses
+Impaired impairment
+loans
+for
+Allowance
+(iv) Impaired loans and advances and related allowance by geographical area
+(2) Analysis of loans and advances to customers by impairment status (Continued)
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Taiwan (China)
+30,985
+(15,709)
+15,276
+7,955
+(5,746)
+13,701
+Other countries and regions
+7,028
+(8,544)
+15,572
+Taiwan (China)
+Hong Kong (China), Macao (China),
+44,195
+231,677
+(158,209)
+Chinese mainland
+As at 31 December 2022
+73,343
+(179,862)
+253,205
+Total
+6,582
+(8,341)
+14,923
+Other countries and regions
+202,404
+17,486
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Credit risk (Continued)
+39,425
+809
+30,296
+4,368
+3,952
+Guaranteed loans
+29,978
+1,215
+5,679
+13,502
+9,582
+Unsecured loans
+As at 31 December 2022
+210,629
+5,431
+54,926
+76,609
+73,663
+Total
+21,622
+73
+Loans secured by mortgages
+50,585
+28,619
+22,938
+2.5 Loans and advances (Continued)
+2 Credit risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+403
+192,101
+8,490
+6,265
+62,979
+68,707
+Total
+16,618
+2,528
+4,066
+5,436
+4,588
+Pledged loans
+106,080
+3,938
+51,925
+2
+11,313
+Pledged loans
+Past due
+91 to
+up to
+Past due
+Group
+(i) Analysis of overdue loans and advances to customers by collateral type and overdue days
+(4) Overdue loans and advances to customers
+2.5 Loans and advances (Continued)
+Credit risk (Continued)
+2
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+402
+As at 31 December 2023 and 2022, the amount of Group's rescheduled loans and advances
+that were not more than 90 days overdue was not material.
+If the borrower does not resolve its financial difficulties by the end of the observation
+period or the borrower fails to make repayments as scheduled during such period then the
+observation period will be extended and effectively restarted on the same terms as above.
+All rescheduled loans and advances are subject to an observation period of at least two
+consecutive repayment periods and no less than one year. At the end of the observation
+period, if the borrower has resolved its financial difficulties and repaid the loan on time in
+accordance with the contractual agreement, the relevant loans may no longer be classified
+as rescheduled loans.
+Rescheduled loans and advances are those loans for which the loan contract terms have
+been revised in favor of the borrower; or existing loans that have been refinanced, including
+where new loans have been granted in order to repay existing loans or new borrowing
+facilities have been granted in order to facilitate the repayment of loans as a result of the
+financial difficulties experienced by the borrower. The Group provides rescheduled loans
+only if it considers that the borrower has a positive business outlook.
+(3) Rescheduled loans and advances
+2.5 Loans and advances (Continued)
+Past due
+361 Days to
+Past due
+90 days
+127,001
+3,139
+35,487
+42,856
+45,519
+Loans secured by mortgages
+19,813
+1,477
+6,557
+5,822
+3,971
+5,957
+42,193
+742
+6,617
+16,618
+18,216
+Unsecured loans
+As at 31 December 2023
+Total
+3 years over 3 years
+360 days
+Guaranteed loans
+167,171
+As at 31 December 2023
+714,013
+525,970
+5,686,339
+41
+5,686,380
+Lower than A
+254,106
+22,096
+51
+276,253
+Total
+6,462,162
+25,478
+963
+6,488,603
+As at 31 December 2022
+12-month ECL
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+Unrated
+A to AAA
+912
+589,666
+3,341
+Unrated
+A to AAA
+104,430
+1,143,862
+631,820
+5,163,243
+320,428
+6,115,491
+407
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.7 Debt securities (Continued)
+The carrying amounts (accrued interest excluded) of debt investments analysed by external
+credit ratings and credit staging are as follows:
+As at 31 December 2023
+12-month ECL
+Lifetime ECL
+Total
+Stage 1
+Stage 2
+Stage 3
+521,717
+117
+1,052
+4,898,699
+Interest rate derivatives
+7,669
+4,371
+Equity derivatives
+514
+979
+Commodity derivatives and other
+6,447
+6,576
+100,929
+84,446
+Risk-weighted assets for CVA
+86,764
+65,373
+Risk-weighted assets for CCPs
+12,704
+6,418
+Total
+2.9 Repossessed assets
+-Policy banks
+156,237
+The Group obtained assets by taking possession of collateral held as securities. Detailed
+information of such repossessed assets of the Group is disclosed in Note V.23.
+409
+72,520
+86,299
+Currency derivatives
+Risk-weighted assets for default risk
+590,835
+4,898,699
+Lower than A
+226,188
+5,271
+231,459
+Total
+5,714,553
+5,388
+1,052
+5,720,993
+408
+888,614
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+2
+Credit risk (Continued)
+2.8 Derivatives
+The risk-weighted assets for counterparty credit risk ("CCR") of derivatives of the Group
+are calculated in accordance with the Capital Rules for Commercial Banks (Provisional)
+and the Assets Measurements Rules for Counterparty Default Risks of Derivatives and other
+relevant regulations under the advanced capital measurement approaches. For derivative
+transactions, risk-weighted assets for CCR include the risk-weighted assets for default risk,
+the risk-weighted assets for credit valuation adjustment ("CVA") and the risk-weighted
+assets for central counterparties ("CCPs").
+The risk-weighted assets for the CCR of derivatives are as follows:
+As at 31 December
+2023
+2022
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+150,818
+200,397
+36,401
+111,590
+346
+202,019
+- Financial institutions
+2,749
+197,001
+67,468
+267,218
+- Corporate
+9,846
+85,364
+42,923
+138,133
+Subtotal
+Total
+105,664
+1,186,954
+135,178
+1,427,796
+543,424
+5,925,697
+352,480
+6,821,601
+90,083
+Public sectors and quasi-governments
+820,426
+24,441
+130,322
+714,013
+-Financial institutions
+195,760
+180,816
+396,789
+-Corporate
+96,663
+65,921
+36,486
+199,070
+As at 31 December 2022
+-China Orient
+152,433
+Subtotal
+437,760
+4,738,743
+217,302
+5,393,805
+Issuers in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+Governments
+2,986
+792,999
+152,433
+Issuers in Chinese mainland
+20,213
+16,625
+4,971,629
+Issuers in Hong Kong (China), Macao (China),
+Taiwan (China) and other countries and regions
+-Governments
+75,521
+593,655
+15,353
+684,529
+- Public sectors and quasi-governments
+65,581
+425
+124,638
+- Financial institutions
+5,380
+146,742
+52,251
+204,373
+- Corporate
+Subtotal
+82,636
+Total
+11,285
+Government
+215,998
+4,274,629
+58,632
+Subtotal
+3,365,615
+3,382,240
+- Public sectors and quasi-governments
+481,002
+11,475
+168,182
+-Policy banks
+609,586
+609,586
+- Financial institutions
+42,228
+156,707
+170,209
+199,074
+152,433
+China Orient
+45,789
+88,879
+247,677
+113,009
+-Corporate
+411,511
+152,433
+Liabilities
+1,644,498
+Due to central banks
+396,589
+29,123
+44,605
+34,081
+9,022
+Due to banks and other financial institutions
+1,140,227
+2,245,362
+24,489
+3,982
+87,444
+2,873
+1,235,320
+Placements from banks and other financial institutions
+129,880
+295,787
+726
+15,877
+16,973
+32,432,166
+63,749
+894,217
+2,930,748
+117,441
+153,610
+3,248,113
+financial assets at amortised cost
+339,996
+21,539
+26,528
+747
+40,625
+3,360,183
+Other
+356,029
+175,908
+248,623
+3,075
+1,201
+1,988
+119,121
+905,945
+Total assets
+25,713,496
+2,924,727
+2,094,301
+503,599
+184,385
+4,145
+22,907,050
+474,977
+874,223
+Total liabilities
+23,182,333
+3,269,027
+1,897,673
+As at
+As at
+Effect on profit before
+income tax
+The tables below indicate a sensitivity analysis of exchange rate changes of the currencies
+to which the Group had significant exposure. The analysis calculates the effect of a
+reasonably possible movement in the currency rates against RMB, with all other variables
+held constant, on profit before income tax and equity. A negative amount in the table
+reflects a potential net reduction in profit before income tax or equity, while a positive
+amount reflects a potential net increase. Such analysis does not take into account the
+correlation effect of changes in different foreign currencies, any further actions that may
+have been or could be taken by management after the financial reporting date to mitigate
+the effect of exchange differences, nor any consequential changes in the foreign currency
+positions.
+The Group manages its exposure to currency exchange risk through the management of its
+net foreign currency position and monitors its foreign currency risk on trading books using
+VaR (Note VI.3.2). Meanwhile, the Group performs currency risk sensitivity analysis to
+estimate the effect of potential exchange rate changes of foreign currencies against RMB on
+profit before income tax and equity.
+The Group conducts a substantial portion of its business in RMB, with certain transactions
+denominated in USD, HKD and, to a much lesser extent, other currencies. The major
+subsidiary, BOCHK Group, conducts the majority of its business in HKD, RMB and USD.
+The Group endeavours to manage its sources and uses of foreign currencies to minimise
+potential mismatches in accordance with management directives.
+3.4 Foreign currency risk
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+Other includes insurance contract liabilities, which are measured in accordance with IFRS 17 Insurance Contracts as described in Note II. 13.
+4,282
+1,423,708 26,330,247
+*
+411,067 2,563,301
+1,802,446
+11,589
+5,192
+22,871
+483
+Derivative financial liabilities
+64,969
+37,234
+4,269
+2,539
+4,639
+11,216
+11,107
+135,973
+Due to customers
+18,282,470
+Bonds issued
+1,555,318
+Other
+364,971
+2,131,110
+216,639
+127,919
+1,475,624
+3,629
+344,662
+273,757
+21,267
+3,868
+172,048
+91,981
+480,060
+401
+9,449
+38,654
+19,819
+258,080
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+3.4 Foreign currency risk (Continued)
+The tables below summarise the Group's exposure to foreign currency exchange rate risk as at 31 December 2023 and 2022. The Group's exposure
+to RMB is provided in the tables below for comparison purposes. Included in the table are the carrying amounts of the assets and liabilities of the
+Group along with off-balance sheet positions and credit commitments in RMB equivalent, categorised by the original currencies. Derivative financial
+instruments are included in the net off-balance sheet position using notional amounts.
+418
+As at 31 December 2023
+BANK OF CHINA LIMITED
+RMB
+HKD
+EURO
+JPY
+GBP
+Other
+Total
+Assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+362,047
+123,898
+USD
+417
+While the table above indicates the effect on profit before income tax and equity of the 1%
+appreciation of USD and HKD, there will be an opposite effect with the same amounts if
+the currencies depreciate by the same percentage.
+* Effect on other comprehensive income (irrespective of income tax effect).
+As at
+Effect on equity*
+86,354
+As at
+Change in 31 December 31 December 31 December 31 December
+Currency
+currency rate
+2023
+2022
+2023
+2022
+USD
+HKD
++1%
+299
+207
+614
+708
++1%
+(192)
+220
+2,615
+2,400
+23,991
+27,005
+7,663
+4,432
+146,750
+Loans and advances to customers, net
+16,269,917
+1,011,438
+1,399,632
+277,488
+14,021
+102,739
+401,636
+19,476,871
+Financial investments
+financial assets at fair value through profit or loss
+344,681
+102,755
+92,701
+9,805
+452
+27
+550,421
+financial assets at fair value through other
+comprehensive income
+2,166,348
+580,401
+10,567
+46,738
+11,133
+3,681
+568,855
+2,357,156
+279,250
+24,695
+101,258
+45,242
+57,641
+75,898
+2,941,140
+Placements with and loans to banks and other
+financial institutions
+860,582
+267,619
+21,444
+8,021
+1,885
+1,396
+72,941
+1,233,888
+Derivative financial assets
+65,988
+43,462
+3,596
+8,323
+1,540,935
+829,133
+Other
+6,420
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+financial assets at fair value through other comprehensive income
+financial assets at amortised cost
+219,682
+263,462
+90,064
+397,994
+67,953
+6,883
+275,354
+86,979
+1,445,096 883,020
+322,677 1,194,626 1,497,257
+(Amounts in millions of Renminbi, unless otherwise stated)
+102,154
+38,859
+3,248,113
+2,316
+3,360,183
+899,062
+905,945
+Total assets
+8,899,330
+4,468,213 11,164,105 3,453,643 2,657,669
+1,789,206 32,432,166
+213,945 550,421
+VI FINANCIAL RISK MANAGEMENT (Continued)
+3
+Market risk
+2023
+Year ended 31 December
+Unit: USD million
+The table below shows the VaR of the trading book by type of risk during the years ended
+31 December 2023 and 2022:
+The Group utilises stress testing as an effective supplement to the trading book VaR
+analysis. Stress testing scenarios are performed based on the characteristics of trading
+transactions to simulate and estimate losses in adverse and exceptional market conditions.
+To address changes in the financial markets, the Group enhances its market risk
+identification capabilities by continuously modifying and improving the trading book stress
+testing scenarios and measurement methodologies in order to capture the potential impact to
+transaction market prices stemming from changes in market prices and volatility.
+The accuracy and reliability of the VaR model is verified by daily back-testing of the
+VaR results in the trading book. The back-testing results are regularly reported to senior
+management.
+(1) Trading book (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+410
+VaR is performed separately by the Bank and its major subsidiaries that are exposed to
+market risk, BOCHK (Holdings) and BOCI. The Bank, BOCHK (Holdings) and BOCI used
+a 99% level of confidence (therefore, statistical probability of 1% that actual losses could
+be greater than the VaR estimate) and a historical simulation model to calculate the VaR
+estimate. The holding period of the VaR calculations is one day. To enhance the Group's
+market risk management, the Group has established the market risk data mart, which
+enabled a group level trading book VaR calculation on a daily basis.
+VaR is used to estimate the largest potential loss arising from adverse market movements in
+a specific holding period and within a certain confidence level.
+For the purpose of market risk management in the trading book, the Group monitors trading
+book Value at Risk (VaR) limits, stress testing results and exposure limits and tracks each
+trading desk and dealer's observance of each limit on a daily basis.
+(1) Trading book
+3.2 Market risk measurement techniques and limits
+Market risk management departments are responsible for the identification, measurement,
+monitoring, control and reporting of market risks on a Group basis. Business units are
+responsible for the monitoring and reporting of market risk within their respective business
+lines.
+The Board of Directors shall assume the ultimate responsibility for market risk
+management, including determination of overall risk appetite; approval of market risk
+management policies, procedures, strategies and limits of the Group; and overseeing the
+implementation of risk management strategies and policies by the senior management. The
+senior management is responsible for developing and implementing the market risk limit
+mechanism, risk management policies, procedures and processes; assuming and managing
+the Group's market risk within the risk appetite determined by the Board of Directors; as
+well as coordinating the compatibility of aggregate risks to business return targets.
+The Group is exposed to market risks from on-balance and off-balance businesses, that
+may cause losses to the Group as a result of adverse changes in market prices of interest
+rate, exchange rate, equities and commodities. Market risk arises from open positions in the
+trading and banking books. The trading book consists of positions in financial instruments
+and commodities that are held with trading intent or in order to hedge other elements of the
+trading book. The banking book consists of financial instruments not included in the trading
+book.
+3.1 Overview
+Liabilities
+Due to banks and other financial institutions
+1,231,612
+174,879
+5,014,853
+880,651 589,001
+21,429 13,561
+6,246,903 5,706,128
+190
+521,597
+22,907,050
+170,525
+3,738
+174,453
+10,659
+1,802,446
+761,113
+874,223
+1,496,500 29,675,351
+(4,520,955) 1,837,131 4,917,202 (2,252,485) 2,483,216
+292,706 2,756,815
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI
+FINANCIAL RISK MANAGEMENT (Continued)
+Market risk (Continued)
+3.3 GAP analysis (Continued)
+416
+As at 31 December 2022
+Between
+2,631,082
+2022
+13,420,285
+45,688
+34,308
+696,244
+Due to central banks
+395,863
+106,490
+723,792
+Placements from banks and other financial institutions
+Derivative financial liabilities
+276,759
+70,533
+123,616
+84,331
+418
+3,964
+58,296 2,245,362
+8,757
+1,235,320
+105
+474,977
+135,973
+135,973
+Due to customers
+11,436,055 2,133,184 3,801,171
+Bonds issued
+Other
+Total liabilities
+Total interest repricing gap
+105,922
+40,074
+8,705
+730,548
+Average
+Low
+335,141
+Placements from banks and other financial institutions
+212,008
+Due to central banks
+1,433,130
+Due to banks and other financial institutions
+Liabilities
+1,834,775 28,893,548
+3,865,808 10,055,925 3,032,674 2,259,846
+7,844,520
+172,894
+68,973
+56,409
+Total assets
+885,623
+3,321,923
+1,900
+2,500,216
+29,871
+216,528 613,105
+12,384 47,904 124,630 113,445 98,214
+161,933 225,600 372,099 1,123,622 587,091
+75,269 291,359 421,142 1,191,303 1,340,950
+1,624
+170,787 17,116,005
+233,591
+558,851
+887,247
+582,163
+623,756
+73,391
+13,739
+38,397 2,240,323
+502,175 20,201,825
+823
+79,111
+3,396,894
+557,037
+29,899
+4,002,039
+4,537,448 (969,365) 2,173,492
+567,345
+23,599
+297,804
+14,559
+12,967,562 2,332,107 5,518,477
+(5,123,042) 1,533,701
+Total interest repricing gap
+Total liabilities
+24,108
+Other*
+30,933
+Bonds issued
+1,721,468 3,648,223
+10,932,242
+Due to customers
+135,838
+135,838
+Derivative financial liabilities
+466,335
+366,991
+1,394
+915,858
+6,651
+4,470
+4,395,084 3,039,534 8,718,158
+152,033
+152,033
+1,174,097
+bearing
+5 years
+years
+months
+months
+interest
+Over
+1 and 5
+3 and 12
+1 and 3
+Less than
+1 month
+Non-
+Between
+Between
+13.84
+9.23
+18.48
+12.29
+Interest rate risk
+The Bank's trading VaR
+Low
+High
+Average
+Total
+High
+Derivative financial assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+5,667
+41,308
+366,365
+172,515
+588,242
+2,313,859
+305,672
+1,338
+334
+3,659
+2,002,856
+815,063
+66,694
+2,807
+53,197
+85,237
+607,128
+financial assets at fair value through other comprehensive income
+financial assets at amortised cost
+financial assets at fair value through profit or loss
+Other
+Financial investments
+Loans and advances to customers, net
+Placements with and loans to banks and other financial institutions
+Assets
+212,378
+(Amounts in millions of Renminbi, unless otherwise stated)
+621,136
+0.03
+0.57
+0.25
+0.04
+1.09
+0.69
+Equity risk
+1.87
+5.12
+3.03
+Commodity risk
+2.11
+3.69
+Foreign exchange risk
+1.99
+8.10
+4.02
+4.08
+10.43
+6.56
+Interest rate risk
+BOCHK (Holdings)'s trading VaR
+6.18
+0.59
+3.16
+0.00
+0.53
+1.33
+0.85
+Fixed income unit
+0.17
+1.63
+0.74
+0.15
+1.96
+0.54
+Equity derivatives unit
+BOCI's trading VaR (1)
+2.79
+7.87
+4.82
+4.55
+11.26
+7.32
+trading VaR
+Total BOCHK (Holdings)'s
+0.00
+1.57
+0.56
+Low
+High
+Average
+Low
+0.74
+0.22
+Commodity risk
+0.52
+43,174
+3.18
+1.11
+0.23
+1.60
+0.68
+Volatility risk
+11.30
+72.70
+35.49
+11.83
+51.03
+31.66
+Foreign exchange risk
+6.80
+27.08
+2,563,301
+13,316
+6,157,939
+130,740
+(84,133)
+128,314
+73,567
+(69,976)
+53,986
+0.01
+1.00
+1.63
+0.17
+High
+Average
+2022
+2023
+Year ended 31 December
+Unit: USD million
+(1) Trading book (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+411
+The reporting of risk in relation to bullion is included in foreign exchange risk above.
+13.75
+75.79
+39.99
+15.21
+51.09
+30.25
+Total of the Bank's trading VaR
+7.17
+36,471
+(37,279)
+8,139
+1.77
+Global commodity unit
+Placements with and loans to banks and other financial institutions
+Cash and due from banks and other financial institutions
+Balances with central banks
+Assets
+Total
+interest
+bearing
+Over
+5 years
+years
+months
+1 and 5
+3 and 12
+Derivative financial assets
+1 and 3
+months
+Non-
+Between
+Between
+Between
+As at 31 December 2023
+415
+3.3 GAP analysis
+Market risk (Continued)
+The tables below summarise the Group's exposure to interest rate risk. It includes the Group's assets and liabilities at carrying amounts, categorised
+by the earlier of contractual repricing or maturity dates.
+FINANCIAL RISK MANAGEMENT (Continued)
+Less than
+1 month
+430,170
+33,594
+27,182
+125,813
+14,105
+170,724 19,476,871
+175,238
+643,788
+4,843,034 3,692,199 9,951,888
+financial assets at fair value through profit or loss
+Loans and advances to customers, net
+Financial investments
+146,750
+146,750
+1,233,888
+1,629
+79,299
+643,068 153,838 356,054
+240,217
+1,650
+18,246
+6,592
+2,674,435
+568,855
+75,704
+2,205
+VI
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+412
+VaR for each risk factor is the independently derived largest potential loss in a specific
+holding period and within a certain confidence level due to fluctuations solely in that risk
+factor. The individual VaRs was not added up to the total VaR as there was a diversification
+effect due to correlation amongst the risk factors.
+(i) BOCI monitors its trading VaR for equity derivatives unit, fixed income unit and global commodity unit
+separately, which include equity risk, interest rate risk, foreign exchange risk and commodity risk.
+0.99
+3.16
+1.96
+1.03
+3.19
+1.65
+Total BOCI's trading VaR
+0.12
+0.47
+0.23
+0.17
+0.48
+0.27
+(2) Banking book
+0.55
+Interest rate risk in the banking book (“IRRBB") refers to the risk of losses to a bank's
+economic value and to its overall earnings of banking book, arising from adverse
+movements in interest rates level or term structure. IRRBB mainly comes from repricing
+gaps between assets and liabilities in the banking book, and differences in changes in
+benchmarking interest rates for assets and liabilities. The Group is exposed to interest rate
+risk and fluctuations in market interest rates that will impact the Group's financial position.
+Sensitivity analysis on net interest income
+BANK OF CHINA LIMITED
+414
+Given the nature of demand deposits, their interest rate fluctuations are less volatile than
+those of other products. Had the impact of yield curves movement on interest expenses
+related to demand deposits been excluded, the net interest income for the next twelve
+months from the reporting date would have increased or decreased by RMB22,991 million
+(2022: RMB19,708 million) for 25 basis points upward or downward parallel movements,
+respectively.
+(3,270)
+3,270
+(797)
+797
+- 25 basis points
++ 25 basis points
+2022
+2023
+As at 31 December
+(Decrease)/increase in
+net interest income
+The table below illustrates the potential impact of a 25 basis points interest rate move on
+the net interest income of the Group for the next twelve months from the reporting date.
+The actual situation may be different from the assumptions used and it is possible that
+actual outcomes could differ from the estimated impact on net interest income of the Group.
+Sensitivity analysis on net interest income (Continued)
+(2) Banking book (Continued)
+3.2 Market risk measurement techniques and limits (Continued)
+3 Market risk (Continued)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+413
+Sensitivity analysis on net interest income assumes that yield curves change in parallel
+while the structure of assets and liabilities remains unchanged, and does not take into
+consideration changes in customer behaviour, basis risk, etc. The Group made timely
+adjustments to the structure of its assets and liabilities, optimised the internal and external
+pricing strategy or implemented risk hedging based on changes in the market situation, and
+controlled the fluctuation of net interest income within an acceptable level.
+The Group assesses IRRBB primarily through an interest rate repricing gap analysis.
+Interest rate repricing gap analysis measures the difference between the amount of interest-
+earning assets and interest-bearing liabilities that must be repriced within certain periods.
+The Group employs the interest rate repricing gap analysis and takes the impact of the off-
+balance sheet business into consideration when calculating the indications of sensitivity of
+earnings to changing interest rates. The interest rate gap analysis is set out in Note VI.3.3
+and also covers the trading book.
+141,679
+(132,610)
+169,853
+2,941,140
+870,947
+Loans and advances to customers, net
+4,363
+3,947
+5,487
+50,154
+61,922
+Derivative financial assets
+1,174,097
+56,022
+609
+13,946,960
+313
+27,930
+342,698
+734,047
+financial institutions
+Placements with and loans to banks and other
+2,313,859
+73,392
+55,090
+22,904
+99,011
+12,478
+1,151,760
+1,232,302
+274,598
+82,002
+25,557
+190,417
+431,838
+1,658,273
+comprehensive income
+financial assets at fair value through other
+613,105
+47
+27
+471
+30,753
+72,243
+103,051
+406,513
+financial assets at fair value through profit or loss
+Financial investments
+17,116,005
+394,485
+152,033
+13,548
+12,612
+103,135
+12,765
+30,073
+296,306
+1,737,083
+Balances with central banks
+BANK OF CHINA LIMITED
+2,756,815
+7,806
+6,794,205
+273,081
+(196,093)
+141,301
+58,572
+(53,863)
+70,590
+15,638
+197,222
+256,198
+873,046
+5,240,210
+Credit commitments
+111,695
+(126,020)
+64,381
+336,974
+Net off-balance sheet position
+(94,937)
+136,608
+196,628
+(344,300)
+2,531,163
+Net on-balance sheet position
+29,675,351
+90,410
+187,224
+248,335
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+3,273
+FOR THE YEAR ENDED 31 DECEMBER 2023
+VI
+815,063
+23,767
+7,622
+11,106
+65,273
+22,075
+207,623
+477,597
+Cash and due from banks and other financial institutions
+Assets
+Total
+Other
+GBP
+JPY
+EURO
+HKD
+USD
+RMB
+As at 31 December 2022
+419
+3.4 Foreign currency risk (Continued)
+Market risk (Continued)
+FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+108,856
+(129,268)
+financial assets at amortised cost
+109,251
+354,364
+Other
+219,528
+1,287,690
+Bonds issued
+20,201,825
+511,247
+68,771
+74,585
+279,291
+1,360,104
+2,028,393
+15,879,434
+Due to customers
+135,838
+12,841
+12,137
+4,230
+2,451
+5,193
+41,587
+57,399
+2,584
+326,137
+Derivative financial liabilities
+24,498
+2,435
+4,678,365
+2,500,216
+Credit commitments
+52,426
+97,664
+Net off-balance sheet position
+(5,936)
+Net on-balance sheet position
+26,330,247
+724,805
+112,702
+100,876
+382,278
+1,761,458
+3,056,037
+20,192,091
+Total liabilities
+829,133
+1,540,935
+3,783
+27,662
+8,038
+607
+3,074
+417
+466,335
+2,096,370
+6,774
+523,957
+1,851,868
+3,050,101
+22,288,461
+Total assets
+887,247
+150,793
+1,274
+1,322
+1,726
+137,347
+238,655
+324,674
+2,941,392
+Other
+3,321,923
+34,635
+297,868
+2,101
+10,614
+3,086
+32,686
+168,803
+186,269
+2,627
+28,893,548
+733
+855,545
+13,449
+176,616
+Placements from banks and other financial institutions
+915,858
+5,721
+13,503
+18,293
+42,280
+836,061
+244,813
+2,240,323
+Liabilities
+Due to banks and other financial institutions
+Due to central banks
+1,532,330
+438,382
+35,698
+20,864
+38,597
+20,304
+14,547
+160,465
+349
+11,144,336
+2,888,133
+2,629,536
+(Amounts in millions of Renminbi, unless otherwise stated)
+6,589,678
+6,026,145
+397,174
+FOR THE YEAR ENDED 31 DECEMBER 2023
+2,382,312
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(9,249,233)
+(741,082)
+(731,795)
+2,979,417
+8,920,549
+2,756,815
+BANK OF CHINA LIMITED
+874,223
+29,675,351
+(803,353)
+2,129,883
+92,660
+46,734
+113,030
+152,160
+418
+4,039
+1,235,320
+474,977
+10,025
+9,575,443
+24,513
+25,549
+38,079
+28,811
+2,077,958
+36,833
+217,444
+349
+74,296
+3,939,723
+893,356
+5,183,834
+8,996
+209
+135,973
+22,907,050
+609,072
+170,525
+1,802,446
+135,259
+287,111
+VI
+Cash and due from banks and other financial institutions
+422
+41,961
+85,238
+3,561
+53,202
+2,807
+3,750
+1,338
+815,063
+2,313,859
+Placements with and loans to banks and other
+financial institutions
+1,021
+558,600
+166,308
+379,767
+64,289
+4,112
+1,174,097
+Derivative financial assets
+51,538
+12,946
+Loans and advances to customers, net
+23,843
+705,042
+FINANCIAL RISK MANAGEMENT (Continued)
+1,558,207
+342,056
+Liquidity risk (Continued)
+4.2 Maturity analysis (Continued)
+As at 31 December 2022
+Between
+Between
+Between
+Overdue/
+Undated
+On
+demand
+Less than
+1 month
+1 and 3
+months
+3 and 12
+1 and 5
+months
+years
+5 years
+Over
+Total
+Assets
+331,760
+Balances with central banks
+267,240
+- financial assets at fair value through profit or loss
+86,941
+financial institutions
+412
+602,580
+145,395
+Derivative financial assets
+14,286
+27,845
+Loans and advances to customers, net
+78,145
+312,850
+721,128
+1,277,791
+367,085
+39,778
+4,490,884
+113,165
+5,251
+1,233,888
+32,029
+5,854,905
+11,498
+146,750
+6,741,168
+19,476,871
+Placements with and loans to banks and other
+Financial investments
+568,855
+2,941,140
+18,514
+On
+demand
+Less than
+56,170
+1 month
+As at 31 December 2023
+Between
+1 and 3
+months
+421
+Between
+3 and 12
+months
+Between
+1 and 5
+years
+Over
+5 years
+Total
+Assets
+Cash and due from banks and other financial institutions
+Balances with central banks
+1,691,309
+238,970
+1,001,820
+267,081
+33,110
+25,798
+3,896
+219,292
+8,555
+1,650
+2,245,362
+212,915
+42,659
+898,673
+1,505,220
+53,095
+3,248,113
+3,360,183
+905,945
+9,005,562
+9,317,723
+32,432,166
+Liabilities
+Due to banks and other financial institutions
+Due to central banks
+Placements from banks and other financial institutions
+Derivative financial liabilities
+Due to customers
+Bonds issued
+Other
+Total liabilities
+Net liquidity gap
+1,221,270
+50,487
+62,895
+344,398
+174,764
+108,408
+699,492
+731,609
+1,470,822
+1,350,444
+87,727
+11,506
+407,850
+324,230
+22,587
+5,786,325
+2,147,051
+89,599
+90,924
+102,818
+550,421
+financial assets at fair value through other
+comprehensive income
+30,843
+211,452
+228,473
+financial assets at amortised cost
+658
+58,972
+120,659
+Other
+368,379
+327,177
+33,726
+13,254
+Total assets
+2,382,661
+1,895,103
+1,897,741
+286,819
+8,378,691
+25,807
+977,680
+Overdue/
+Undated
+On
+Less than
+demand
+1 month
+1 and 3
+months
+3 and 12
+1 and 5
+Over
+months
+years
+5 years
+Total
+financial institutions
+238,970
+271,260
+33,818
+27,578
+4,112
+Balances with central banks
+1,691,309
+Between
+1,001,820
+Between
+As at 31 December 2023
+(627,361)
+3,415,321
+2,563,301
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4 Liquidity risk (Continued)
+4.3 Undiscounted cash flows by contractual maturities
+The tables below present the cash flows of the Group of non-derivative financial assets and
+financial liabilities and derivative financial instruments that will be settled on a net basis
+and on a gross basis by the remaining contractual maturities at the financial reporting date.
+The amounts disclosed in the tables are the contractual undiscounted cash flows, except for
+certain derivatives which are disclosed at fair value (i.e. discounted cash flows basis). The
+Group also manages its inherent short-term liquidity risk based on expected undiscounted
+cash flows.
+423
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4 Liquidity risk (Continued)
+4.3 Undiscounted cash flows by contractual maturities (Continued)
+Non-derivative cash flow
+Cash and due from banks and other
+Between
+(712,141)
+219,391
+18,595
+-financial assets at fair value through
+other comprehensive income
+30,883
+215,735
+238,687
+financial assets at amortised cost
+658
+65,520
+136,939
+Other financial assets
+4,414
+234,679
+29,840
+7,161
+465,159
+397,745
+7,605
+1,662,317 1,051,331
+1,622,088 1,954,976
+1,393 23,192
+3,664,112
+4,177,926
+308,284
+Total financial assets
+2,019,319
+Overdue/
+Undated
+1,788,349
+624,706
+8,632
+150,051
+95,185
+1,871
+575,738
+2,941,618
+Placements with and loans to banks and
+other financial institutions
+412
+604,431
+149,684
+375,611
+Loans and advances to customers, net
+Financial investments
+78,512
+312,880
+755,546
+1,368,770 4,909,836
+119,596
+7,473,339
+7.934
+9,334,739
+1,257,668
+24,233,622
+-financial assets at fair value through
+profit or loss
+213,131
+11,882
+43,551
+110,906
+645,085
+(659,277)
+2,218,871
+361,294
+333,464
+19,641
+11,162
+372,822
+409,332
+21,035
+1,159,645
+1,360,225
+87,015
+601,715
+1,355,239
+2,500,216
+3,321,923
+53,636
+887,247
+Total assets
+2,220,112
+1,670,031
+1,831,768
+1,660,315
+5,178,385
+7,716,978
+8,615,959
+28,893,548
+Liabilities
+Due to banks and other financial institutions
+Other
+Due to central banks
+137,208
+501
+35,944
+3,798,603
+38,330
+4,939,625
+15,163
+152,033
+6,412,023
+17,116,005
+Financial investments
+- financial assets at fair value through profit or loss
+217,298
+10,463
+43,639
+103,930
+63,704
+174,071
+613,105
+- financial assets at fair value through other
+comprehensive income
+25,621
+130,701
+209,712
+-financial assets at amortised cost
+59,418
+(9,450,803)
+Placements from banks and other financial institutions
+Due to customers
+135,838
+1,748,246
+279,100
+22,722
+3,758,947
+3,525,575
+877
+20,201,825
+593,878
+573,853
+142,761
+139,056
+79,111
+145,898
+1,540,935
+829,133
+1,241
+11,120,834
+2,491,045
+2,372,456
+5,805,746
+4,301,657
+237,268
+26,330,247
+11,231
+Derivative financial liabilities
+33,494
+26,685
+Bonds issued
+Other
+Total liabilities
+Net liquidity gap
+1,386,565
+85,516
+95,609
+128,656
+325,381
+172,592
+70,089
+561,760
+627,119
+23,797
+4,478
+2,240,323
+915,858
+53,022
+86,377
+1,404
+151
+466,335
+8,784
+9,319,736
+1,241
+320,233
+20,740
+1,848,444
+14,993
+57,222
+34,904
+The tables below analyse the Group's assets and liabilities into relevant maturity groupings based on the remaining period at the financial reporting
+date to the contractual maturity date. For purposes of the tables set forth, “Loans and advances to customers, net" are considered overdue only if
+principal payments are overdue. In addition, for loans and advances to customers that are repayable by instalments, only the portion of the loan that is
+actually overdue is reported as overdue. Any part of the loan that is not due is reported according to residual maturity.
+21,314
+Liquidity risk (Continued)
+Capital commitments
+Subtotal
+265,015 2,265,220
+337,247
+1,662,958
+financial facilities
+Guarantees, acceptances and other
+376,135 3,892,719
+1,122,610
+2,393,974
+Loan commitments (¹)
+As at 31 December 2022
+765,649 6,893,567
+1,930,164
+4,197,754
+99,362
+11,937
+60,096
+27,329
+753,712 6,794,205
+1,870,068
+Total
+4,170,425
+(1)
+641,150 6,157,939
+Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities,
+including equity securities listed on exchanges or debt instruments issued by certain
+governments and certain exchange-traded derivative contracts.
+•
+•
+Assets and liabilities measured at fair value are classified into the following three levels:
+5.1 Assets and liabilities measured at fair value
+Fair value
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+426
+Included within “Loan commitments" are amounts relating to loan commitments and undrawn credit card
+limits. Refer to Note V.41.7.
+666,120 6,246,706
+1,506,169
+4,074,417
+88,767
+24,970
+46,312
+17,485
+4,056,932 1,459,857
+Level 2: Valuation technique for which all inputs that have a significant effect on the
+recorded fair value other than quoted prices included within Level 1 are observable for
+the asset or liability, either directly or indirectly. This level includes the majority of
+the over-the-counter ("OTC") derivative contracts, debt securities for which quotations
+are available from pricing service providers, discounted bills, etc.
+Total
+Subtotal
+575,782
+(574,949)
+185,262 2,079,647 1,535,715 2,542,386
+(185,744) (2,075,645) (1,532,343) (2,539,729)
+Total outflow
+Total inflow
+a gross basis
+Derivative financial instruments settled on
+12,598
+1,313
+3.989
+2,123
+892
+88
+4,193
+a net basis
+Derivative financial instruments settled on
+Derivative cash flow
+4.2 Maturity analysis
+121,745 26.513.196
+2,397,123 5,860,619 4,549,384
+2,484,672
+11,099,653
+40,780 6,959,572
+(41,094) (6,949,504)
+Capital commitments
+425
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+254,459 2,320,625
+391,279
+1,674,887
+financial facilities
+Guarantees, acceptances and other
+499,253 4,473,580
+1,478,789
+2,495,538
+Loan commitments (1)
+As at 31 December 2023
+Total
+Over
+5 years
+Between
+1 and 5
+years
+Less than
+1 year
+The Group's off-balance sheet items are summarised in the table below at the remaining
+period to the contractual maturity date. Financial guarantees are also included below at
+notional amounts and based on the earliest contractual maturity date.
+4.4 Off-balance sheet items
+Liquidity risk (Continued)
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+Total financial liabilities
+Level 3: Valuation technique using inputs which have a significant effect on the
+recorded fair value for the asset or liability are not based on observable market data
+(unobservable inputs). This level includes equity investments and debt instruments
+with significant unobservable components.
+The Group uses valuation techniques or counterparty quotations to determine the fair value
+when it is unable to obtain open market quotation in active markets.
+32,130
+14,993
+11,020
+6,117
+3,215,983
+2,914,084
+301,899
+Investment properties
+- Equity instruments and other
+Debt securities
+through other comprehensive
+income
+- Financial assets at fair value
+101,803
+65,826
+10,512
+25,465
+Fund investments and other
+112,434
+90,792
+2,135
+19,507
+2,005
+- Equity instruments
+20,699
+Liabilities measured at fair value
+2,173,605
+429
+(135,973)
+(130,964)
+(5,009)
+Derivative financial liabilities
+(54,264)
+(53,535)
+(729)
+Financial liabilities held for trading
+(2,118)
+(2,118)
+Bonds issued at fair value
+(47,657)
+(47,657)
+(3,798)
+(3,798)
+Due to customers at fair value
+fair value
+and other financial institutions at
+Due to and placements from banks
+22,704
+The Group's policy is to recognise transfers between levels of the fair value hierarchy as at
+the end of the reporting period in which they occur.
+336,184
+328,603
+Fair value (Continued)
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+428
+The Group has established an independent valuation process for financial assets and
+financial liabilities. The financial management related departments of Head Office
+coordinate the management of the Group's financial instrument valuation. The risk
+management related departments of Head Office are responsible for validating the valuation
+models.
+The Group has established a robust internal control policy for the measurement of fair
+values. The Board of Directors has ultimate responsibility for the fair value valuation of
+financial instruments and approves valuation policies; The Risk Policy Committee assist
+the board in supervising the senior management to establish and improve the system of
+valuation and execution mechanism; Senior management organizes the valuation process
+and is accountable to the Board.
+For certain illiquid debt securities (mainly asset-backed securities), unlisted equity (private
+equity) and unlisted funds held by the Group, management uses valuation techniques to
+determine the fair value, including discounted cash flow analysis, net asset value and
+market comparison approach, etc. The fair value of these financial instruments may be
+based on unobservable inputs which may have a significant impact on the valuation of these
+financial instruments, and therefore, these assets and liabilities have been classified by the
+Group as Level 3. As at 31 December 2023, the Group's significant unobservable inputs
+included discount rates (6.00%-15.00%), expected dividend (RMB0.04 per share-RMB0.84
+per share), price/earnings multiples (0.99x-81.20x), price/sales multiples (1.01x-38.50x),
+liquidity discounts (5.00%-45.64%), and the net asset value of unlisted investments, recent
+transaction prices, etc. Management determines whether to make necessary adjustments
+to the fair value of the Group's Level 3 financial instruments by assessing the impact of
+changes in macro-economic factors, and valuations by external valuation agencies. The
+Group has established internal control procedures to control the Group's exposure to such
+financial instruments.
+5.1 Assets and liabilities measured at fair value (Continued)
+Fair value (Continued)
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+427
+The main parameters used in valuation techniques include bond prices, interest rates,
+foreign exchange rates, equity and stock prices, volatilities, counterparty credit spreads and
+others, which are all observable and obtainable from the open market.
+5.1 Assets and liabilities measured at fair value (Continued)
+1,874
+As at 31 December 2023
+Level 2
+5,707
+Debt securities
+through profit or loss
+- Financial assets at fair value
+Financial investments
+718,776
+782
+717,994
+fair value
+Loans and advances to customers at
+18,126
+146,750
+141,893
+4,857
+18,126
+Derivative financial assets
+fair value
+and other financial institutions at
+Due from and placements with banks
+Assets measured at fair value
+Total
+Level 3
+Level 1
+434,363
+1,987,242
+16,427
+819,159
+2,314,230
+Placements with and loans to banks and
+other financial institutions
+1,021
+560,614
+169,805
+386,840
+Loans and advances to customers, net
+Financial investments
+56,390
+287,954
+688,482
+1,073,859 4,241,431
+68.541
+6,608,867
+5,625
+9,282,371
+1,192,446
+22,239,354
+-financial assets at fair value through
+profit or loss
+217,497
+11.233
+44,808
+115,648
+1.581
+120,704
+3,824
+41,992
+On
+Less than
+demand
+1 month
+1 and 3
+months
+3 and 12
+1 and 5
+Over
+months
+years
+5 years
+Total
+financial institutions
+331,760
+343,275
+86,116
+54,919
+3,089
+Balances with central banks
+1,558,207
+705,042
+3,584
+Overdue/
+Undated
+309,036
+-financial assets at fair value through
+175,220 573,869
+71,130 631,857
+25,250
+4.664
+2,257,789
+924,003
+Placements from banks and other financial
+institutions
+Due to customers
+Bonds issued
+Other financial liabilities
+9,319,736
+307,836
+325,510 53,464
+1,880,097 1,800,562
+15,145 280,378
+36,199 16,369
+88,177
+1,450
+151
+468,752
+3,928,882
+3,876,599
+1,014
+31,384
+96,885
+130,836
+818.926
+1,386,565
+85,516
+Due to banks and other financial institutions
+other comprehensive income
+25,641
+135,531
+214,556
+-financial assets at amortised cost
+501
+75,238
+162,554
+Other financial assets
+961
+206,166
+15,395
+1,700
+426,061
+542,898
+5,135
+1,342,967 743,841 2,888,597
+1,808,771 2,037,006 4,626,968
+2,822 23,065 255,244
+Total financial assets
+1,860,218
+1,530,922
+1,871,760
+1,756,982 5,776,756
+9,957,342 12,400,944
+Due to central banks
+Between
+35,154,924
+Between
+12.522.223 37,783,674
+Due to banks and other financial institutions
+Due to central banks
+1,221,270
+50,487
+64,191
+177,697
+712,347
+93,605
+2,269,110
+344,410
+109,978
+740,789
+418
+1,246,082
+Placements from banks and other financial
+institutions
+Due to customers
+Bonds issued
+Other financial liabilities
+9,575,443
+267,583
+2,102,943
+1,621,399
+52,601
+2,177,708
+6,297,314 10,995,622
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+89,196
+Between
+624,994
+611,686
+26,148
+20,806,890
+FINANCIAL RISK MANAGEMENT (Continued)
+VI
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+420
+Assets available to meet all of the liabilities and to cover outstanding loan commitments
+include "Cash and due from banks and other financial institutions", "Balances with central
+banks", "Placements with and loans to banks and other financial institutions", "Loans and
+advances to customers, net”, etc. In the normal course of business, a proportion of short-
+term loans contractually repayable will be extended and a portion of short-term customer
+deposits will not be withdrawn upon maturity. The Group would also be able to meet
+unexpected net cash outflows by entering into repurchase transactions, and by selling
+securities and accessing additional funding sources.
+The Bank continues to develop and improve its liquidity risk management system with the
+aim of effectively identifying, measuring, monitoring and controlling liquidity risk at the
+institution and group level, including that of branches, subsidiaries and business lines, thus
+ensuring that liquidity demand is met in a timely manner and at a reasonable cost.
+4.1 Liquidity risk management policy and process
+Liquidity risk refers to the risk that a commercial bank fails to acquire adequate funds in a
+timely manner and at a reasonable cost to deal with repayment of debts at maturity, perform
+other payment obligations and meet other fund needs for normal business operation.
+Liquidity risk
+4
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+155,958
+The Group considers liquidity risk management a significant component of asset-liability
+management, and determines the size, structure and duration of assets and liabilities
+consistent with the principle of overall balance between assets and liabilities. The Group
+establishes its liquidity portfolio to mitigate liquidity risk, and to minimise the gaps in
+the amount and duration between the funding sources and the uses of funds. The Group
+refines its financing strategy, taking into consideration various factors including customer
+risk sensitivity, financing cost and concentration of funding sources. In addition, the Group
+prioritises the development of customer deposits, dynamically adjusts the structure of
+funding sources by market-oriented financing modes, including due to banks and other
+financial institutions, inter-bank borrowings and bond issuance, and improves the diversity
+and stability of financing sources.
+488,217
+10,562
+Derivative financial instruments settled on
+a gross basis
+Total inflow
+Total outflow
+791,783 3,137,208
+(792,273) (3,138,390)
+1,961,571 3,800,559
+(1,955,136) (3,798,553)
+605,492
+(605,672)
+89,128 10,385,741
+(89,144) (10,379,168)
+424
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+4 Liquidity risk (Continued)
+4.3 Undiscounted cash flows by contractual maturities (Continued)
+Non-derivative cash flow
+12,075
+As at 31 December 2022
+Cash and due from banks and other
+875
+2,914
+FOR THE YEAR ENDED 31 DECEMBER 2023
+998
+36,949
+292
+1.125
+4,054,718 5,647,770
+94,476
+924,480
+46,956
+30,300
+27,603
+682,054
+45,455
+23,558,874
+194,163 1,932,122
+31,485 477,605
+295,806
+Derivative cash flow
+Derivative financial instruments settled on
+446
+11,143,006
+2,863,032
+2,642,760
+6,615,895 6,481,377
+Total financial liabilities
+4,204
+225,940 29,972,010
+a net basis
+Fund
+investments
+and other
+Debt
+securities
+Equity
+instruments
+and other
+As at 1 January 2023
+84,637
+5,027
+62,170
+657
+10,995
+Equity
+instruments
+21,502
+Total gains and losses
+743
+Debt
+securities
+5.1 Assets and liabilities measured at fair value (Continued)
+comprehensive income
+BANK OF CHINA LIMITED
+(loss)/profit
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value (Continued)
+Reconciliation of Level 3 items
+Loans and
+advances to
+customers at
+fair value
+Financial assets at
+Financial assets at fair value
+through profit or loss
+fair value through other
+Investment
+properties
+(765)
+24
+2,028
+39
+105
+9
+24
+344
+As at 31 December 2023
+782
+1,874
+90,792
+65,826
+14,993
+20,699
+Total (losses)/gains for the period
+included in the income statement for
+430
+Other changes
+(331)
+(666)
+(1,589)
+(879)
+other comprehensive income
+3,152
+Sales
+(1,031)
+(10,170)
+(5,617)
+(603)
+(272)
+Purchases
+208
+16,664
+7,140
+1,425
+Transfers out of Level 3, net
+(8)
+(135,838)
+587,256
+(8,136)
+12,333
+8,331
+143,702
+12,333
+152,033
+Loans and advances to customers at
+fair value
+586,513
+743
+Financial investments
+- Financial assets at fair value
+through profit or loss
+Debt securities
+34,691
+358,382
+5,027
+Derivative financial assets
+398,100
+fair value
+Due from and placements with banks
+assets held as at
+BANK OF CHINA LIMITED
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+5
+Fair value (Continued)
+5.1 Assets and liabilities measured at fair value (Continued)
+As at 31 December 2022
+Level 1
+Level 2
+Level 3
+Total
+Assets measured at fair value
+and other financial institutions at
+(127,702)
+- Equity instruments
+3,485
+Investment properties
+1,809
+21,502
+23,311
+Liabilities measured at fair value
+Due to customers at fair value
+(36,701)
+(36,701)
+Bonds issued at fair value
+(2,080)
+(2,080)
+Financial liabilities held for trading
+Derivative financial liabilities
+(436)
+(53,432)
+(53,868)
+26,836
+24,460
+10,995
+6,972
+84,637
+112,582
+Fund investments and other
+27,308
+12,945
+62,170
+102,423
+- Financial assets at fair value
+through other comprehensive
+income
+Debt securities
+319,791
+2,152,932
+657
+2,473,380
+- Equity instruments and other
+8,869
+31 December 2023
+(867)
+(189)
+Surplus reserve
+134,358
+134,339
+Capital reserve
+294,388
+294,388
+Common shares
+2,019,934
+2,193,211
+Common equity tier 1 capital
+Composition of the Group's capital base
+17.52%
+17.74%
+Capital adequacy ratio
+14.11%
+13.83%
+Tier 1 capital adequacy ratio
+255,137
+11.84%
+233,847
+Undistributed profits
+(182)
+Other intangible assets (excluding land use rights)
+Direct or indirect investments in own shares
+Investments in common equity tier 1 capital of
+financial institutions with controlling interests
+but outside the scope of regulatory consolidation
+Goodwill
+(28,592)
+(31,386)
+3,270
+33,509
+37,168
+36,123
+979,627
+1,060,652
+337,276
+379,063
+Of which:
+Regulatory deductions
+Other (2)
+Eligible portion of minority interests
+General reserve
+11.63%
+Common equity tier 1 capital adequacy ratio
+2022
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+435
+As a Systemically Important Bank, the Group's capital adequacy ratios are required to meet
+the lowest requirements of the NFRA, that is, the common equity tier 1 capital adequacy
+ratio, tier 1 capital adequacy ratio and capital adequacy ratio should be no less than 9.00%,
+10.00% and 12.00%, respectively.
+The Group's capital adequacy ratios are calculated in accordance with the Capital Rules
+for Commercial Banks (Provisional) and other relevant regulations. With the approval of
+the NFRA, the Group adopts the advanced capital measurement approaches, which include
+Foundation Internal Ratings-based Approach for corporate exposures, Internal Ratings-based
+Approach for retail exposures, Internal Models Approach for market risk and Standardised
+Approach for operational risk. For risk exposures not covered by the advanced approaches,
+the corresponding portion shall be calculated adopting non-advanced approaches.
+Capital adequacy and regulatory capital are monitored by the Group's management,
+employing techniques based on the guidelines developed by the Basel Committee, as
+implemented by the NFRA, for supervisory purposes. The required information is filed with
+the NFRA on a quarterly basis.
+Refined management and capital level improvement. Optimise the capital management
+system by sufficiently identifying, calculating, monitoring, mitigating, and controlling
+various types of risks; incorporate capital restraints into the whole process of product
+pricing, resource allocation, structural adjustments, performance evaluation, etc.,
+ensuring that the capital employed is commensurate with the related risks and the level
+of risk management.
+Allocation optimisation and benefit augmentation. Allocate capital properly by
+prioritising the asset businesses with low capital occupancy and high comprehensive
+income, and steadily improve the efficiency and return of capital, to achieve the
+reciprocal matchup and dynamic equilibrium among risks, capital and returns.
+Adequate capital and sustainable development. Follow the lead of the strategic
+planning of the Group development; and maintain the high quality and adequacy of
+capital so as to meet regulatory requirements, support business growth, and advance
+the sustainable development of the scale, quality and performance of the business in
+the Group.
+The Group follows the principles below with regard to capital management:
+Capital management
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+6 Capital management (Continued)
+2023
+As at 31 December
+The table below summarises the Group's common equity tier 1 capital adequacy ratio, tier
+1 capital adequacy ratio and capital adequacy ratio (1) calculated in accordance with the
+Capital Rules for Commercial Banks (Provisional) and other relevant regulations:
+Capital management (Continued)
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(182)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+436
+Goodwill, other intangible assets (excluding land use rights), investments in common equity
+tier 1 capital of financial institutions with controlling interests but outside of the scope of
+regulatory consolidation and other deductible items are deducted from common equity tier 1
+capital to derive at the regulatory capital.
+Tier 2 capital, including directly issued qualifying tier 2 capital instruments and related
+premium, excess loan loss provisions and eligible portion of minority interests.
+Additional tier 1 capital, including additional tier 1 capital instruments issued and
+related premium and eligible portion of minority interests;
+Common equity tier 1 capital, including common shares, capital reserve, surplus
+reserve, general reserve, undistributed profits, eligible portion of minority interests and
+others;
+•
+•
+The Group's regulatory capital is managed by its capital management related departments
+and consists of the following:
+BANK OF CHINA LIMITED
+(21,094)
+(18,416)
+(9,978)
+ACCOUNTING STANDARDS AND CAS
+I DIFFERENCES BETWEEN IFRS
+(Amounts in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+438
+The Group makes related assumptions for insurance risks and recognises insurance contract
+liabilities. For life insurance contracts, the key assumptions include assumptions in
+respect of discount rates/investment return, mortality, morbidity, lapse rates, and expenses
+assumptions relating to life insurance contracts. For non-life insurance contracts, the key
+assumptions include assumptions in respect of average claim costs, claims handling costs,
+claims inflation factors and claim numbers for each accident year which are determined
+based on the Group's past claim experiences.
+The Group manages its portfolio of insurance risks through its appropriate underwriting
+strategy and policies, as well as adequate reinsurance arrangements, and enhanced
+underwriting control and claim control.
+Insurance contracts are mainly sold in the Chinese mainland and Hong Kong (China).
+The risk under an insurance contract is the possibility that the insured event occurs and
+the uncertainty in the resulting claim amount. By the nature of an insurance contract, the
+risk is random and therefore unpredictable. The principal risk that the Group faces under
+its insurance contracts is that the actual claims and benefit payments exceed the carrying
+amount of the insurance contract liabilities.
+Insurance risk
+This mainly represented exchange differences from the translation of foreign operations and gains/(losses)
+on financial assets at fair value through other comprehensive income.
+(2)
+(1) When calculating the capital adequacy ratios, Bank of China Group Investment Limited ("BOCG
+Investment"), Bank of China Insurance Company Limited ("BOC Insurance"), Bank of China Group
+Insurance Company Limited ("BOCG Insurance") and Bank of China Group Life Assurance Company
+Limited ("BOCG Life”) etc., were excluded from the scope of regulatory consolidation in accordance with
+the requirements of the NFRA.
+7
+Capital management (Continued)
+6
+VI FINANCIAL RISK MANAGEMENT (Continued)
+CONSOLIDATED FINANCIAL STATEMENTS
+There were no differences in the Group's operating results for the years ended 31 December
+2023 and 2022 or total equity as at 31 December 2023 and 2022 presented in the Group's
+consolidated financial statements prepared under IFRS Accounting Standards and those
+prepared under CAS.
+II UNAUDITED SUPPLEMENTARY INFORMATION
+1
+439
+Since 2017, the Group measured the LCR on a day-to-day consolidated basis (2). In the
+fourth quarter of 2023, the Group measured 92-day LCR on this basis, with average ratio (3)
+standing at 135.30%, representing an increase of 7.37 percentage points over the previous
+quarter, which was primarily due to the increase in the high-quality liquid assets ("HQLA").
+The Group's liquidity coverage ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks issued by
+the NFRA, the minimum regulatory requirement of LCR is 100%.
+Regulatory requirements of liquidity coverage ratio
+According to the Disclosure Rules on Liquidity Coverage Ratio of Commercial Banks, the
+Group disclosed the information of liquidity coverage ratio (“LCR") (¹) as follows.
+Liquidity coverage ratio
+The liquidity ratios are calculated in accordance with the relevant provisions of the NFRA.
+(Amounts in millions of Renminbi, unless otherwise stated)
+72.61%
+Foreign currency current assets to foreign
+currency current liabilities
+48.98%
+55.01%
+RMB current assets to RMB current liabilities
+2022
+2023
+As at 31 December
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio
+70.16%
+434
+FOR THE YEAR ENDED 31 DECEMBER 2023
+BANK OF CHINA LIMITED
+Net tier 1 capital
+12,143
+8,942
+Eligible portion of minority interests
+249,955
+279,955
+Additional capital instruments and related premium
+119,550
+119,550
+Preference shares and related premium
+381,648
+408,447
+Additional tier 1 capital
+1,991,342
+2,161,825
+Net common equity tier 1 capital
+(9,950)
+2,570,272
+2,372,990
+Tier 2 capital
+727,136
+437
+16,818,275
+18,591,278
+2,946,471
+3,297,408
+Risk-weighted assets
+Net capital
+10,159
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+8,696
+165,099
+184,316
+Excess loan loss provisions
+398,223
+534,124
+and related premium
+Directly issued qualifying tier 2 capital instruments
+573,481
+Eligible portion of minority interests
+(759)
+Other than the above, the difference between the carrying amounts and fair values of those
+financial assets and liabilities not presented at their fair value in the statement of financial
+position as at 31 December 2023 and 2022 was insignificant. Fair value is measured using a
+discounted cash flow model.
+1,527,751
+160
+84
+395
+13
+305
+Other changes
+154
+(148)
+(362)
+(22,686)
+743
+Transfers in/(out) of Level 3, net
+2,908
+21
+20,348
+15,847
+93
+987
+As at 31 December 2022
+743
+5,027
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+(803)
+431
+Purchases
+7,095
+460
+held as at 31 December 2022
+Total gains/(losses) for the period included in
+the income statement for assets/liabilities
+21,502
+10,995
+657
+62,170
+84,637
+669
+Fair value (Continued)
+(58)
+(11,794)
+Debt
+securities
+Equity investments
+instruments and other
+Debt
+securities
+Equity
+Fund
+fair value
+properties
+comprehensive income
+fair value through profit or loss
+Bonds
+issued at
+Investment
+Financial assets at
+fair value through other
+Financial assets at
+customers at
+fair value
+advances to
+Loans and
+2,022
+instruments
+and other
+As at 1 January 2022
+Total gains and losses
+(5,731)
+(1,854)
+Sales
+4,790
+(185)
+other comprehensive income
+(803)
+7,090
+(2,631)
+570
+123
+18,314
+8,655
+906
+46,131
+74,300
+28,761
+-profit/(loss)
+408
+1,527,751
+5.1 Assets and liabilities measured at fair value (Continued)
+Gains or losses on Level 3 assets and liabilities included in the income statement for the
+year comprise:
+As at 31 December 2023
+Level 2 Level 3
+Level 1
+Financial assets
+The tables below summarise the fair values of three levels of “Debt securities at amortised
+cost" (excluding the China Orient Asset Management Corporation Bond and Special
+Purpose Treasury Bond), and “Bonds issued" not presented at fair value on the statement of
+financial reporting date.
+5.2 Financial assets and liabilities not measured at fair value (Continued)
+Fair value (Continued)
+5
+VI FINANCIAL RISK MANAGEMENT (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+FOR THE YEAR ENDED 31 DECEMBER 2023
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+BANK OF CHINA LIMITED
+433
+The aggregate fair values are calculated based on quoted market prices. For those bonds where quoted
+market prices are not available, a discounted cash flow model is used based on a current yield curve
+appropriate for the remaining term to maturity.
+Bonds issued
+Fair values of other debt securities are based on market prices or broker/dealer price quotations. Where this
+information is not available, the Bank will perform valuation by referring to prices from valuation service
+providers or on the basis of discounted cash flow models. Valuation parameters include market interest
+rates and expected future default rates. The fair values of RMB bonds are mainly determined based on the
+valuation results provided by China Central Depository & Clearing Co., Ltd.
+The China Orient Bond and Special Purpose Treasury Bond held by the Bank are non-transferable. As
+there are no observable market prices or yields reflecting arm's length transactions of a comparable size
+and tenor, the fair values are determined based on the stated interest rate of the instruments.
+Total
+Debt securities at amortised cost
+186,119 3,044,203
+11
+Bonds issued
+Financial liabilities
+3,152,366
+483
+2,979,690
+172,193
+Debt securities at amortised cost
+Financial assets
+1,806,910 1,538,855 1,527,751
+Total
+1,806,910
+Level 2
+As at 31 December 2022
+1,806,910
+Level 1
+Bonds issued
+Financial liabilities
+3,230,333
+Level 3
+Total gains or losses for the years ended 31 December 2023 and 2022 included in the
+income statement as well as total gains or losses included in the income statement relating
+to financial instruments held as at 31 December 2023 and 2022 are presented in "Net
+trading gains”, “Net gains on transfers of financial asset”, “Credit impairment losses" or
+“Other comprehensive income” depending on the nature or category of the related financial
+instruments.
+1,800,328
+(1) Debt securities at amortised cost
+BANK OF CHINA LIMITED
+432
+Financial assets not presented at fair value in the statement of financial position mainly
+represent “Due from banks and other financial institutions”, “Government certificates of
+indebtedness for bank notes issued", and "Balances with central banks”, “Placements with
+and loans to banks and other financial institutions”, “Loans and advances to customers",
+"Financial investments” measured at amortised cost. Liabilities not presented at fair value
+in the statement of financial position mainly represent “Due to banks and other financial
+institutions", "Due to central banks”, “Bank notes in circulation", and "Placements from
+banks and other financial institutions”, “Due to customers", "Bonds issued" measured at
+amortised cost.
+As at 31 December 2023, if the discount rates, expected dividend, price/earnings multiples,
+price/sales multiples and liquidity discounts of significant unobservable inputs applied in
+the valuation technique had increased by 10%, with all other variables held constant, the
+fair value of Level 3 financial instruments would have decreased by RMB2,934 million,
+increased by RMB1,115 million, increased by RMB687 million, increased by RMB671
+million, and decreased by RMB485 million, respectively.
+There were no significant transfers for the assets and liabilities measured at fair value
+between Level 1 and Level 2 during the year ended 31 December 2023 and the year ended
+31 December 2022.
+7,265
+7,421
+(156)
+53
+207
+(154)
+Total gains for the year
+Total
+2022
+Total Realised Unrealised
+Realised Unrealised
+2023
+Year ended 31 December
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+FOR THE YEAR ENDED 31 DECEMBER 2023
+(Amounts in millions of Renminbi, unless otherwise stated)
+VI FINANCIAL RISK MANAGEMENT (Continued)
+Bonds issued (2)
+3,341,192 3,425,739 3,311,371 3,347,787
+value
+Fair
+Carrying
+value
+Fair
+value
+Carrying
+value
+(2)
+2022
+As at 31 December
+Financial liabilities
+Debt securities at amortised cost (1)
+Financial assets
+The tables below summarise the carrying amounts and fair values of "Debt securities at
+amortised cost" and "Bonds issued" not presented at fair value at the financial reporting
+date.
+5.2 Financial assets and liabilities not measured at fair value (Continued)
+Fair value (Continued)
+5
+2023
+5.2 Financial assets and liabilities not measured at fair value
+6,838,483
+3,675
+Operational deposits
+included in the above categories
+All other liabilities and equity not
+13
+144,654
+NSFR derivatives liabilities
+12
+249,934
+391,995
+5,186
+218,866
+92,864
+Other liabilities
+11
+interdependent assets
+Liabilities with matching
+10
+4,070,511
+92,864
+218,866
+5,186 247,341
+14
+by Level 1 assets
+Loans to financial institutions secured
+18
+58,390
+209
+6,330,148
+93,208
+Loans and securities
+17
+500,045
+116,571
+Deposits held at other financial institutions
+16
+997,744
+Total NSFR high-quality liquid assets
+15
+Required Stable Funding (RSF) Item
+249,934
+21,436,290
+Total ASF
+for operational purposes
+479,623 7,673,800 1,717,924
+Other wholesale funding
+9
+3,071
+97,484
+4,805,960 7,106,846
+small business customers
+Retail deposits and deposits from
+4
+Other capital instruments
+3
+11,126,578
+3,141,855
+3,141,855
+534,124
+2,607,731
+Regulatory capital
+2
+2,607,731
+Capital
+1
+534,124
+3,719
+5
+2,386,917 3,880,431
+2,847,412
+5,500,024 194,800
+Operational deposits
+8
+6,917,923
+500,045
+5,979,647 7,868,600 1,717,924
+Wholesale funding
+Stable deposits
+7
+2,617
+79,931
+2,419,043 3,226,415
+Less stable deposits
+6
+5,971,110
+454
+17,553
+5,155,468
+2,863,758 12,893,064 14,718,613
+--372
+19
+85,638
+605,262
+Other assets
+26
+22
+interdependent liabilities
+Assets with matching
+25
+14,631
+840,278
+98,534
+693,531
+37,068
+exchange-traded equities
+do not qualify as HQLA, including
+Securities that are not in default and
+24
+249,201
+500,383
+374,158
+624,372
+27
+33
+in the above categories
+All other assets not included
+31
+additional requirements
+NSFR derivatives liabilities with
+30
+NSFR derivatives assets
+1,170,720
+20
+to default funds of CCPs
+derivative contracts and contributions
+Assets posted as initial margin for
+28
+77,549
+91,234
+including gold
+Physical traded commodities,
+29
+value
+7,269
+less than or equal to 35%
+maturity
+No
+Required Stable Funding (RSF) Item (Continued)
+No. Items
+The Group's consolidated NSFR individual line items at the end of the fourth quarter of
+2023 are as follows (Continued):
+The Group's net stable funding ratio (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+Unweighted value
+<6
+months
+(Amounts in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+444
+613,563
+431,411 137,371
+56,140 1,680,434
+loans to financial institutions
+by non-Level 1 assets and unsecured
+Loans to financial institutions secured
+SUPPLEMENTARY INFORMATION
+4,728
+6-12
+months
+Weighted
+value
+With a risk weight of
+55,260
+3,862,723
+47,415
+4,511,562
+428,872 30,753
+101,377 104,076
+than or equal to 35%
+Residential mortgages of which:
+22
+23
+22
+21 year
+With a risk weight of less
+9,401,677
+2,229,737 7,743,748
+3,851,087
+sector entities (PSES) of which:
+sovereigns, central banks and public
+customers, non-financial institutions,
+Loans to retail and small business
+20
+21
+≥1 year
+Weighted
+6-12
+months
+The average of LCR and the averages of all related individual items are the day-end simple arithmetic
+averages of figures over each quarter.
+When calculating the consolidated LCR, BOCG Investment, BOC Insurance, BOCG Insurance and BOCG
+Life etc., were excluded from the scope of consolidation in accordance with the requirements of the NFRA.
+(3)
+(2)
+(1) The LCR aims to ensure that commercial banks have sufficient HQLA that can be converted into cash to
+meet the liquidity requirements for at least thirty days under stress scenarios determined by the NFRA.
+The Group's liquidity coverage ratio (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+Net stable funding ratio
+(Amounts in millions of Renminbi, unless otherwise stated)
+BANK OF CHINA LIMITED
+135.30%
+5,081,394
+3,757,495
+value
+441
+23 Liquidity coverage ratio
+22 Total net cash outflows
+Total HQLA
+SUPPLEMENTARY INFORMATION
+22
+In accordance with the Disclosure Rules on Net Stable Funding Ratio of Commercial Banks,
+the Group disclosed the information of net stable funding ratio ("NSFR") as follows:
+(1)
+Unsecured debts
+50,515
+50,515
+9
+As at 31
+December
+2023
+The Group's net stable funding ratio (Continued)
+Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+Regulatory requirements of net stable funding ratio
+1
+(Amounts in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+442
+As at 31 December 2023, the Group's NSFR was 124.71% on a consolidated basis (2),
+representing a decrease of 0.42 percentage point over the previous quarter. As at 30
+September 2023, the Group's NSFR was 125.13%, representing an increase of 1.25
+percentage point over the previous quarter. The Group's NSFR remained stable, and met the
+regulatory requirement.
+As stipulated by the Disclosure Rules on Net Stable Funding Ratio of Commercial Banks
+issued by the NFRA, banks approved to implement the advanced approaches of capital
+measurement by the NFRA in accordance with Capital Rules for Commercial Banks (Provisional)
+shall disclose the information of net stable funding ratio for the preceding two consecutive
+quarters at least semi-annually.
+The Group's net stable funding ratio
+As stipulated by the Rules on Liquidity Risk Management of Commercial Banks issued by
+the NFRA, the minimum regulatory requirement of NSFR is 100%.
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+2,948,761
+21
+4,628,342
+Other contractual funding obligations
+14
+142,051
+1,626,226
+Credit and liquidity facilities
+13
+products
+Outflows related to loss of funding on debt
+140,506
+12
+2,753,658
+other collateral requirements
+Outflows related to derivative exposures and
+11
+2,895,709
+4,379,884
+Additional requirements, of which:
+10
+2,753,658
+Total adjusted
+140,506
+3,396,463
+5,368,892
+20 Total cash inflows
+2,815,499
+2,867,780
+Other cash inflows
+19
+1,319,928
+1,996,461
+15 Other contingent funding obligations
+Inflows from fully performing exposures
+492,915
+504,651
+Secured lending (including reverse repos and
+securities borrowing)
+17
+Cash inflows
+8,385,837
+16 Total cash outflows
+102,829
+18
+32
+5,893,675
+7
+125.13%
+124.71%
+Ending value of NSFR (3)
+March
+June
+As at 31
+As at 30
+As at 30
+September
+123.88%
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+The Group's liquidity coverage ratio (Continued)
+2023
+Quarter
+Quarter
+ended 31
+SUPPLEMENTARY INFORMATION
+December
+124.98%
+(2)
+months
+maturity
+Unweighted value
+<6
+No
+Available Stable Funding (ASF) Item
+No. Items
+The Group's consolidated NSFR individual line items at the end of the fourth quarter of
+2023 are as follows:
+The Group's net stable funding ratio (Continued)
+(1)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+443
+NSFR are the ending values of each quarter.
+When calculating the consolidated NSFR, BOCG Investment, BOC Insurance, BOCG Insurance and
+BOCG Life etc., were excluded from the scope of consolidation in accordance with the requirements of the
+NFRA.
+NSFR is introduced to ensure commercial banks have sufficient stable funding, in order to meet the
+demand for stable funding of all various types of assets and off-balance sheet exposures.
+(3)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+Non-operational deposits (all counterparties)
+ended 30
+September
+June
+5,081,394
+2 Retail deposits and deposits from small business
+customers, of which:
+10,931,616
+784,209
+3456
+Stable deposits
+6,039,198
+294,967
+value
+Less stable deposits
+489,242
+Unsecured wholesale funding, of which:
+11,867,202
+4,458,909
+Operational deposits (excluding those generated
+from correspondent banking activities)
+5,923,012
+1,459,633
+4,892,418
+Quarter
+ended 30
+Total
+weighted
+Total
+Quarter
+ended 31
+March
+Average value of LCR
+135.30%
+127.93%
+130.99%
+135.17%
+440
+BANK OF CHINA LIMITED
+unweighted
+value
+SUPPLEMENTARY INFORMATION
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+The Group's liquidity coverage ratio (Continued)
+The Group's average values (3) of consolidated LCR individual line items in the fourth
+quarter of 2023 are as follows:
+No.
+High-quality liquid assets
+1 Total high-quality liquid assets (HQLA)
+Cash outflows
+(Amounts in millions of Renminbi, unless otherwise stated)
+8
+Off-balance sheet items
+Total RSF
+26
+Other assets
+642,050
+77,611
+20,449
+691,189
+1,239,482
+Secured funding
+Physical traded commodities,
+including gold
+127,575
+108,438
+28
+Assets posted as initial margin for
+derivative contracts and contributions
+to default funds of CCPs
+532
+22
+liabilities
+Assets with matching interdependent
+25
+18,045
+104,146
+45,142
+4,543,500
+57,607
+3,890,252
+With a risk weight of less than or
+equal to 35%
+4,823
+7,203
+372,515
+29
+248,148
+Securities that are not in default and do
+not qualify as HQLA, including
+exchange-traded equities
+36,972
+572,157
+98,010
+494,883
+774,439
+24
+NSFR derivatives assets
+203,252
+452
+26,576
+*
+125.13%
+Reported derivative liabilities are before deducting variation margin posted. There is no need to
+differentiate by maturities. The unweighted value should be excluded from the total value of item No.26 "Other
+assets".
+447
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+NSFR
+2
+The following information is computed in accordance with the provisions of the NFRA.
+Equivalent in millions of RMB
+USD
+HKD
+Other
+Total
+As at 31 December 2023
+Spot assets
+Currency concentrations
+101,415
+34
+Total RSF
+30
+NSFR derivatives liabilities with
+additional requirements
+35,335*
+35,335
+31
+All other assets not included in the
+above categories
+16,900,755
+514,475
+20,449
+487,405
+1,068,681
+32
+Off-balance sheet items
+8,918,450
+242,065
+33
+77,611
+Residential mortgages of which:
+22
+23
+included in the above categories
+103,132
+205,624
+5,120 295,631
+298,193
+14 Total ASF
+21,148,629
+Required Stable Funding (RSF) Item
+All other liabilities and equity not
+15
+829,125
+16
+Deposits held at other financial institutions
+for operational purposes
+143,124
+17
+Loans and securities
+86,958
+Total NSFR high-quality liquid assets
+1,200
+6,503,907
+13
+NSFR derivatives liabilities
+5,685,262
+127.808
+2,906,535
+9
+Other wholesale funding
+496,694 7,773,435 1,187,910 503,675
+3,931,948
+10
+176,676
+Liabilities with matching
+11
+Other liabilities
+103,132
+205,624
+5,120
+472,307
+298,193
+12
+interdependent assets
+Spot liabilities
+2,910,011 12,626,823
+18
+No
+maturity
+Unweighted value
+<6
+months
+6-12
+months
+21 year
+Weighted
+value
+20
+Loans to retail and small business
+Required Stable Funding (RSF) Item (Continued)
+customers, non-financial institutions,
+sector entities (PSES) of which:
+3,921,689
+2,282,101 7,487,562
+9,246,001
+21
+With a risk weight of less than or
+equal to 35%
+457,091
+22
+sovereigns, central banks and public
+72,162
+14,517,921
+No. Items
+The Group's net stable funding ratio (Continued)
+Loans to financial institutions secured
+by Level 1 assets
+6,415
+642
+19
+Loans to financial institutions secured
+by non-Level 1 assets and unsecured
+loans to financial institutions
+The Group's consolidated NSFR individual line items at the end of the third quarter of 2023
+are as follows (Continued):
+49,986
+425,754 100,878
+606,587
+446
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+1,902,231
+Forward purchases
+3,874,639
+(4,285,544)
+6,860,503
+Forward sales
+2,353,226 3,804,542
+3,225,546
+2,360,724
+Less stable deposits
+6
+Stable deposits
+5
+10,980,863
+4,792
+21,192
+108,322
+4,713,950
+small business customers
+Retail deposits and deposits from
+4
+Other capital instruments
+3
+3,031,090
+478,506
+7,030,088
+3,031,090
+859
+87,130
+North and South America
+91,766
+Europe and other
+100,592
+385,078
+167,528
+293,396
+770,240
+360,616
+5,870,870
+628,736
+1,059,268
+1,136,315
+2,313,426
+4,509,009
+449
+7
+5,109,993
+3,933
+Total
+3,110,033
+478,506
+Regulatory capital
+Reported derivative liabilities are before deducting variation margin posted. There is no need to
+differentiate by maturities. The unweighted value should be excluded from the total value of item No.26 "Other
+assets".
+*
+124.71%
+NSFR
+34
+17,189,322
+243,855
+9,011,443
+445
+1,050,868
+85,638
+514,028
+28,931
+28,931*
+12,882
+157,536
+490
+577
+14,631 466,259
+2,552,584
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+2
+2,552,584
+Capital
+1
+value
+≥1 year
+Weighted
+6-12
+months
+SUPPLEMENTARY INFORMATION
+months
+Unweighted value
+<6
+No
+Available Stable Funding (ASF) Item
+No. Items
+The Group's consolidated NSFR individual line items at the end of the third quarter of 2023
+are as follows:
+The Group's net stable funding ratio (Continued)
+1 Liquidity ratios, liquidity coverage ratio and net stable funding ratio (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+maturity
+33
+1,659,414
+866,910
+(4,156,836)
+Forward purchases
+4,984,777
+1,921,225
+(2,066,616)
+709,067
+2,074,061 8,070,623
+(1,788,038) (8,011,490)
+1,587,271
+7,281,115
+Forward sales
+Spot liabilities
+(4,872,408)
+(1,915,953)
+(7,320,078)
+Net options position*
+(20,178)
+(609)
+(1,617)
+(22,404)
+Net long/(short) position
+(531,717)
+10,692
+4,075,337
+As at 31 December 2022
+(6,368,632)
+2,159,470 2,124,965 8,159,074
+(2,224,759) (1,860,310) (8,370,613)
+1,275,519 2,027,654 10,163,676
+(1,227,856) (2,315,854)
+(9,912,342)
+Net options position*
+(51,103)
+(1,524)
+7,417
+(45,210)
+Spot assets
+Net long/(short) position
+(19,150)
+(16,128)
+(5,415)
+Structural position
+61,436
+261,509
+108,368
+431,313
+29,863
+583,709
+31,350
+(2,234)
+As at 31 December 2023
+Asia Pacific
+Chinese mainland
+747,591
+474,024
+723,316
+1,944,931
+Hong Kong (China)
+Total
+23,598
+483,096
+527,943
+Other Asia Pacific locations
+95,721
+88,436
+453,002
+637,159
+Subtotal
+21,249
+(44,276)
+sector
+Banks
+Structural position
+70,835
+235,383
+96,771
+402,989
+*
+The net option position is calculated in accordance with the relevant provisions of the NFRA.
+448
+sector
+BANK OF CHINA LIMITED
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+3 International claims
+The Group discloses international claims according to Banking (Disclosure) Rules (L.N.
+160 of 2014). International claims are risk exposures generated from the countries or
+geographical areas where the counterparties take the ultimate risk while considering the
+transfer of the risk, exclude local claims on local residents in local currency. Risk transfer is
+only made if the claims are guaranteed by a party in a country which is different from that
+of the counterparty or if the claims are on an overseas branch of a counterparty whose head
+office is located in another country.
+International claims include “Balances with central banks”, “Due from and placements with
+and loans to banks and other financial institutions”, “Loans and advances to customers" and
+"Financial investments", etc.
+International claims have been disclosed by major countries or geographical areas. A
+country or geographical area is reported where it constitutes 10% or more of the aggregate
+amount of international claims, after taking into account any risk transfers.
+Official
+Non-bank
+private
+SUPPLEMENTARY INFORMATION
+27
+6,181,956 7,901,243 1,187,910 503,675
+Wholesale funding
+4.2 Total amount of overdue Placements with and loans to banks and other financial
+institutions
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+6
+Global systemic importance assessment indicators of commercial banks
+The Group calculated the global systemically important banks assessment indicators
+by using the Notice on Issuing the Guidelines for the Disclosure of the Indicators for
+Assessing Global Systemic Importance of Commercial Banks (Yin Jian Fa, [2014] No.1) as
+a reference basis, and based on the Instructions for G-SIB assessment exercise by the Basel
+Committee on Banking Supervision. The indicators are disclosed as follows:
+No. Indicators (1)
+2023
+1
+Adjusted on-balance and off-balance sheet assets
+Intra-financial system assets
+3
+Intra-financial system liabilities
+4
+Securities and other financing instruments
+5
+Payments settled via payment systems or correspondent banks
+6
+Assets under custody
+Underwritten transactions in debt and equity markets
+8
+Trading volume of fixed income
+Trading volume of equities and other securities
+10 Notional amount of over-the-counter derivatives
+11
+(Amounts in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+453
+assets
+209,171
+15
+Agent transaction exposures
+16
+17
+Balance of assets in securities financing transactions
+Off-balance sheet items
+18 Less: Adjustments for conversion to credit equivalent amounts
+592,527
+7,480,421
+(4,994,061)
+19
+20
+21
+222
+Adjusted off-balance sheet exposures
+Net tier 1 capital
+Adjusted on- and off-balance sheet exposures
+2,486,360
+2,570,272
+34,785,923
+22 Leverage ratio
+7.39%
+(1) When calculating the consolidated leverage ratio, BOCG Investment, BOC Insurance, BOCG Insurance
+and BOCG Life etc., were excluded from the scope of consolidation in accordance with the Capital Rules
+for Commercial Banks (Provisional).
+Trading and available for sale securities
+12
+Level 3 assets
+13
+Taipei Branch
+Macau Branch
+Tai Fung Bank Limited
+Hong Kong Branch
+BOCHK
+Bank of China Consumer
+Finance Company Limited
+BOC Financial Technology
+Other Comprehensive Operations
+BOCL
+BOC Asset Investment
+BOCI China
+Note
+BOC Wealth Management
+BOC-Samsung Life
+BOCIM
+BOC Insurance
+BOC Fullerton Community
+Bank
+Tier-1 and direct branches,
+tier-2 branches and
+sub-branches
+Commercial Banking
+Comprehensive Operation
+Commercial Banking
+Institutions
+BOC Shanghai Advanced
+Academy
+BOC Beijing Advanced
+Academy
+Intensive Operation Centre
+(Hubei)
+Software Centre
+Information Settlement Centre
+Intensive Operation Centre
+(Guangdong)
+IT Operation Centre
+Branches, subsidiaries and
+representative offices in other
+countries and regions
+BOCI
+BOCG Investment
+BOCG Insurance
+BOC Life
+14
+(1)
+Cross-jurisdictional claims
+Cross-jurisdictional liabilities
+34,439,920
+2,363,046
+2,522,057
+5,756,933
+873,883,640
+12,701,022
+1,783,617
+14 Counterparty credit risk exposure for securities financing transaction
+6,295,032
+15,600,047
+1,111,112
+95,425
+4,873,792
+4,618,477
+The indicators above are calculated and disclosed in accordance with the Guidelines for the Disclosure
+of Global Systemic Importance Assessment Indicators of Commercial Banks, which are unaudited and
+prepared on a different basis compared with the financial and regulatory scope of consolidation.
+454
+BANK OF CHINA LIMITED
+Note: The Bank holds 33.42% of the equity interest of BOCI China through its wholly-owned subsidiary BOCI.
+Head Office Departments
+BOC Aviation
+Other Comprehensive Operations
+596,218
+Less: Deducted amounts for securities financing transaction assets
+13
+383,356
+The leverage ratios of the Group calculated in accordance with the Administrative
+Measures for the Leverage Ratio of Commercial Banks (Revised) and the Capital Rules for
+Commercial Banks (Provisional) are as follows (1):
+2023
+As at
+As at
+31 December 30 September
+As at
+30 June
+As at
+31 March
+2,512,824
+2,461,141
+2,424,519
+Net tier 1 capital
+2,570,272
+Adjusted on- and
+off-balance sheet
+exposures
+34,785,923
+34,037,124 33,295,393
+32,512,144
+Leverage ratio
+7.39%
+7.38%
+7.39%
+7.46%
+No. Items
+Leverage ratio
+5
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+68,707
+35,212
+24,965
+41,397
+26,960
+60,357
+71,469
+210,629
+192,101
+0.37%
+0.39%
+345
+0.18%
+0.21%
+0.15%
+0.30%
+0.41%
+1.06%
+1.10%
+(Amounts in millions of Renminbi, unless otherwise stated)
+The total amount of overdue "Placements with and loans to banks and other financial
+institutions" as at 31 December 2023 and 2022 was not considered material.
+451
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+0.15%
+Bank Card Centre
+Digital Asset Operation Centre
+1 Total consolidated assets
+outside the scope of regulatory consolidation
+Adjustments for fiduciary assets
+3
+Total on-balance sheet exposures (excluding derivatives and SFTs)
+Replacement cost associated with all derivative transactions
+31,370,361
+(i.e. net of eligible cash variation margin)
+146,641
+5
+Add-on amounts for potential future exposure associated with
+all derivative transactions
+189,986
+6
+Gross-up for derivative collateral provided where deducted from
+the balance sheet assets
+7
+Less: Deductions of receivable assets for cash variation margin
+provided in derivative transactions
+8
+9
+10
+Less: Exempted CCP leg of client-cleared trade exposures
+Adjusted effective notional amount of written credit derivatives
+Less: Deductible amounts for written credit derivatives
+53
+(5)
+11
+Total derivative exposures
+336,675
+12
+Accounting balance for securities financing transaction assets
+31,401,747
+(31,386)
+Less: Tier 1 capital deductions
+2
+securities financing transactions (SFTs))
+Adjustments for derivative financial instruments
+Adjustments for securities financing transactions
+Adjustments for off-balance sheet exposures
+Other adjustments
+8 Adjusted on- and off-balance sheet exposures
+452
+As at
+31 December
+2023
+32,432,166
+(500,422)
+190,034
+209,171
+2,486,360
+Adjustments that are consolidated for accounting purposes but
+(31,386)
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+5
+Leverage ratio (Continued)
+No. Items
+1 On-balance sheet assets (excluding derivatives and
+As at
+31 December
+2023
+34,785,923
+Institute of Bank of China
+Office of Leading Group for
+Conducting Inspection
+Security Department
+Party-related Affairs Department
+Labor Union Office
+Retired Staff Office
+Logistics Office
+Office of Enterprise-level
+Architecture Development
+Clearing Department
+Department
+Scenario Ecosystem and
+Innovation Department
+Issued shares:
+Preference Shares
+shares
+83,622,276,395
+H Share:
+shares
+210,765,514,846
+A Share:
+Including:
+shares
+294,387,791,241
+Issued shares:
+Ordinary Shares
+The Domestic Preference Shares (Third Tranche) were traded on the Comprehensive Business
+Platform of SSE on 17 July 2019. The Domestic Preference Shares (Fourth Tranche) were traded
+on the Comprehensive Business Platform of SSE on 17 September 2019. The Offshore Preference Shares
+(Second Tranche) were listed on the Hong Kong Stock Exchange on 5 March 2020.
+The Bank's ordinary shares were listed on the Hong Kong Stock Exchange and SSE on 1 June
+and 5 July 2006 respectively.
+Listing and Trading
+Securities Information
+The Board of Directors has recommended a final dividend on ordinary shares for 2023 of
+RMB2.364 per 10 shares (before tax), subject to the approval of shareholders at the 2023 Annual
+General Meeting.
+Dividends on Ordinary Shares
+Reference for Shareholders
+455
+The indicators above are unaudited data and prepared on a different basis compared with the financial
+scope of consolidation and adopted a different assessment methodology from global systemically important
+banks.
+(1)
+Including:
+Domestic Preference Share:
+1,197,865,300
+shares
+HKD2.98
+price in the year
+29 December 2023
+Highest trading
+Closing price on
+price in the year
+RMB4.77
+Highest trading
+Closing price on
+29 December 2023
+RMB3.99
+Bloomberg
+Reuters
+Shanghai Stock Exchange
+16 Cross-jurisdictional claims and liabilities
+Stock Name
+Securities Code
+H Share
+A Share
+Securities Price
+As at the last trading day of 2023 (29 December), the Bank's market capitalisation was
+RMB1,066.779 billion (based on the closing price of A Shares and H Shares on 29 December
+2023, and the exchange rate of HKD100 = RMB90.622 as published by the SAFE on 29
+December 2023).
+Market Capitalisation
+456
+shares
+197,865,300
+Offshore Preference Share:
+1,000,000,000 shares
+A Share
+HKD3.45
+8,879,199
+1,650,586
+Assets under custody
+6
+717,337,933
+Payments settled via payment systems or correspondent banks
+5
+1,972,957
+Securities and other financing instruments
+4
+3,407,652
+Intra-financial system liabilities
+3
+3,542,085
+Intra-financial system assets
+2
+31,001,982
+Adjusted on-balance and off-balance sheet assets
+1
+2022
+No. Indicators (1)
+The Group calculated the domestic systemic importance assessment indicators pursuant to
+the Notice on Filling in Data for Evaluating Systemically Important Banks and by referring
+to the Evaluation Measures for Systemically Important Banks (Yin Fa [2020] No. 289). The
+indicators are disclosed as follows:
+Domestic systemic importance assessment indicators of commercial banks for 2022
+7
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+11,939,024
+7
+Agency and commission business
+5,845,515
+Balance of wealth management products issued by wealth
+15
+issued by the Bank
+109,735
+Balance of non-principal-guaranteed wealth management products
+14
+657,119
+Assets of non-banking affiliates
+13
+1,116,785
+Securities measured at fair value
+management subsidiary
+12
+Derivatives
+11
+10,315
+Number of domestic operating institutions (Unit: one)
+10
+36,568
+Number of personal customers (Unit: ten thousand)
+9
+608
+Number of corporate customers (Unit: ten thousand)
+8
+13,776,422
+73,663
+H Share
+Stock Name
+Head Office Departments
+and Institutions
+Audit Department
+Board Office
+Senior Management
+Board of Directors
+Shareholders' Meeting
+459
+458
+Should you have any queries about how to obtain copies of this annual report or access the
+document on the Bank's website, please call the Bank's H-Share Registrar at (852) 2862 8688 or
+the Bank's hotline at (86) 10-6659 2638.
+You may write to the Bank's H-Share Registrar, Computershare Hong Kong Investor Services
+Limited (address: 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong,
+China) to request the annual report prepared under IFRS Accounting Standards or visit the
+Bank's office address for copies prepared under CAS. The Chinese and/or English versions of
+the annual report are also available on the following websites: www.boc.cn, www.sse.com.cn and
+www.hkexnews.hk.
+Other Information
+E-mail: ir@bankofchina.com
+12/F, Bank of China Building, No. 1 Fuxingmen Nei Dajie, Xicheng District, Beijing, China
+Telephone: (86) 10-6659 2638
+Investor Relations Team, Board Office, Bank of China Limited
+Investor Enquiry
+Fitch Ratings:
+A1
+ANA
+А
+Moody's Investors Service:
+А
+S&P Global Ratings:
+Credit Rating (Long Term, Foreign Currency)
+Board of Supervisors
+Board of Supervisors Office
+Institutions in Hong Kong, Macao,
+Taiwan and other countries and regions
+Comprehensive Operation
+Risk Management Department
+Credit Approval Department
+Credit Management Department
+Intemal Control and Legal &
+Compliance Department
+Distribution and Operation
+Management Department
+Information Technology
+Custody Services Department
+Consumer Finance Department
+Global Markets Department
+Investment Banking
+Department
+Digital Personal Banking
+Department
+Department)
+SME Services Department
+(Rural Revitalisation Finance
+Department
+Administrative and Public
+Institutions Department
+Financial Institutions
+Department
+Global Transaction Banking
+Corporate Banking Department
+Department
+Equity Investment and
+Subsidiary Management
+Telephone: (86) 21-4008 058 058
+Department
+Asset & Liability Management
+Department
+Financial Management
+Department
+for Comprehensively
+Deepening Reform
+Office of the Leading Group
+Globalization Office
+Human Resources Department
+Corporate Culture Department
+Executive Office
+Shanghai RMB Trading Unit
+Organisational Chart
+Institutions in the Chinese mainland
+Domestic and Overseas Branches and
+Comprehensive Operation Companies
+Digital Asset Management
+中國銀行
+Pudong New Area, Shanghai, China
+Shanghai Branch of China Securities Depository and Clearing Corporation Limited
+BOC 20USDPREF
+Reuters
+Bloomberg
+Hong Kong Stock Exchange 4619
+Stock Name
+Offshore Preference Share (Second Tranche)
+AZ8714182
+360033
+中行優 3
+Bloomberg
+Shanghai Stock Exchange
+Stock Name
+Domestic Preference Share (Third Tranche)
+601988 CH
+Reuters
+601988.SS
+601988
+Hong Kong Stock Exchange 3988
+Bank of China
+HKD2.60
+price in the year
+Lowest trading
+price in the year
+RMB3.15
+Lowest trading
+4619.HK
+BG2289661
+457
+Bloomberg
+Domestic Preference Share
+Facsimile: (852) 2865 0990
+Telephone: (852) 2862 8555
+Wan Chai, Hong Kong, China
+17M Floor, Hopewell Centre,
+183 Queen's Road East,
+Computershare Hong Kong Investor
+Services Limited
+H Share
+Telephone: (86) 21-4008 058 058
+Pudong New Area, Shanghai, China
+188 South Yanggao Road,
+Depository and Clearing Corporation Limited
+188 South Yanggao Road,
+Shanghai Branch of China Securities
+If a shareholder wishes to enquire about share transfers, changes of name or address, or loss of
+share certificates, or to receive other information concerning the shares held, please write to the
+following address:
+Shareholder Enquiry
+ZQ0362264
+360035
+中行優4
+Bloomberg
+Shanghai Stock Exchange
+Stock Name
+Domestic Preference Share (Fourth Tranche)
+3988 HK
+3988.HK
+A Share
+2022
+SUPPLEMENTARY INFORMATION
+78,291
+3 International claims (Continued)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+(Amounts in millions of Renminbi, unless otherwise stated)
+SUPPLEMENTARY INFORMATION
+BANK OF CHINA LIMITED
+751,249
+Europe and other
+139,451
+131,077
+298,746
+569,274
+Total
+1,351,688
+901,252 2,125,929
+4,378,869
+450
+BANK OF CHINA LIMITED
+SUPPLEMENTARY INFORMATION
+(Amounts in millions of Renminbi, unless otherwise stated)
+II UNAUDITED SUPPLEMENTARY INFORMATION (Continued)
+4 Overdue assets
+For the purpose of the table below, the entire outstanding balance of “Loans and advances
+to customers" and "Placements with and loans to banks and other financial institutions" are
+considered overdue if either principal or interest payment is overdue.
+4.1 Total amount of overdue loans and advances to customers
+Total loans and advances to customers
+which have been overdue
+Official
+within 3 months
+Non-bank
+private
+sector
+3,058,346
+1,547,213
+459,739
+1,051,394
+Subtotal
+707,550
+457,730
+135,315
+114,505
+Other Asia Pacific locations
+541,251
+452,878
+310,436
+10,082
+279,970
+Hong Kong (China)
+1,809,545
+636,605
+314,342
+858,598
+Chinese mainland
+Asia Pacific
+As at 31 December 2022
+Total
+sector
+Banks
+North and South America
+between 3 and 6 months
+160,843
+between 6 and 12 months
+As at 31 December
+Total
+over 12 months
+between 6 and 12 months
+2023
+within 3 months
+Percentage
+Total
+over 12 months
+between 3 and 6 months
+Ampelokipoi, 11527, Athens,
+Greece
+Hatch Street Lower,
+5TH FLOOR, STYNE HOUSE,
+DUBLIN BRANCH
+(EUROPE) S.A.
+BANK OF CHINA
+service.gr@bankofchina.com
+SWIFT: BKCHGRAA
+TEL: (30) 2111906688
+EMAIL:
+2 Mesogeion Ave,
+FAX: (351) 210495738
+EMAIL:
+www.bankofchina.com/pt
+WEBSITE:
+service.pt@bankofchina.com
+Dublin 2, D02 DY27,
+Ireland
+TEL: (351) 210495710
+SWIFT: BKCHPTPL
+RUA DUQUE DE PALMELA
+NO. 35, 35A E 37;
+1250-097 LISBOA,
+PORTUGAL
+SUCURSAL EM PORTUGAL
+LISBON BRANCH-
+BANK OF CHINA
+(EUROPE) S.A.
+ATHENS BRANCH
+SWIFT: BKCHIE3DXXX
+WEBSITE:
+dublinbranch@bank-of-china.com
+469
+www.bankofchina.com/hu
+WEBSITE:
+service.hu@bankofchina.com
+EMAIL:
+FAX: (36) 14299202
+TEL: (36) 14299200
+SWIFT: BKCHHUHHXXX
+HUNGARY
+TEL: (353) 14768888
+EMAIL:
+7 JOZSEF NADOR TER, 1051
+BUDAPEST,
+www.bankofchina.com/hu
+WEBSITE:
+service.hu@bankofchina.com
+EMAIL:
+FAX: (36) 14299202
+TEL: (36) 14299200
+1051 BUDAPEST,
+HUNGARY
+7 JOZSEF NADOR TER,
+BANK OF CHINA
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+HUNGARIAN BRANCH
+SWIFT: BKCHHUHBXXX
+service.sg@bankofchina.com
+BANK OF CHINA
+(EUROPE) S.A.
+VIETNAM
+SWIFT: BKCHVNVX
+TEL: (84) 2838219949
+FAX: (84) 2838219948
+EMAIL: service.vn@bankofchina.com
+WEBSITE: www.bankofchina.com.vn
+BANK OF CHINA
+SWIFT: BKCHSESS
+HOCHIMINH CITY,
+28/F. THE FINANCE CENTER,
+26th STR. Cor. 9th AVE., BGC
+TAGUIG CITY, METRO
+MANILA PHILIPPINES
+TEL: (63) 282977888
+FAX: (63) 288850532
+EMAIL: customercare_
+ph@bank-of-china.com
+BANK OF CHINA
+(HONGKONG) LIMITED
+VIENTIANE BRANCH
+NO.A1003-A2003,
+VIENTIANE CENTER,
+KHOUVIENG ROAD,
+NONGCHAN VILLAGE,
+SISATTANAK DISTRICT,
+VIENTIANE CAPITAL,
+LAO P.D.R.
+SWIFT: BKCHLALAXXX
+TEL: (856) 21228888
+FAX: (856) 21228880
+SWIFT: BKCHPHMM
+DISTRICT 1,
+TIMES SQUARE BUILDING,
+22-36 NGUYEN HUE STREET,
+11&12TH FL,
+TAMARA CENTER
+11TH FLOOR, J1. JENDRAL
+SUDIRMAN KAV.24,
+JAKARTA SELATAN,
+12920, INDONESIA
+SWIFT: BKCHIDJA
+TEL: (62) 215205502
+FAX: (62) 215201113/215207552
+EMAIL: cs@bankofchina.co.id
+WEBSITE: www.bankofchina.co.id
+BANK OF CHINA
+(HONGKONG) LIMITED
+PHNOM PENH BRANCH
+CANADIA TOWER,
+1ST & 2ND FLOOR,
+#315 ANG DOUNG ST.
+P.O.BOX 110, PHNOM PENH,
+CAMBODIA
+SWIFT: BKCHKHPP
+TEL: (855) 23988886
+FAX: (855) 23988880
+EMAIL: service.kh@bankofchina.com
+WEBSITE: www.bankofchina.com/kh
+465
+BANK OF CHINA
+(HONGKONG) LIMITED
+HOCHIMINH CITY BRANCH
+EMAIL: service.la@bankofchina.com
+WEBSITE: www.bankofchina.com.la
+466
+BANK OF CHINA
+KIARONG JAYA KOMPLEK,
+LOT NO. 56244,
+SWIFT: BKCHAU2S
+TEL: (61) 282355888
+FAX: (61) 292621794
+EMAIL: banking.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+BANK OF CHINA
+(AUSTRALIA) LIMITED
+GROUND FLOOR,
+140 SUSSEX STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+SWIFT: BKCHAU2A
+TEL: (61) 282355888
+FAX: (61) 292621794
+EMAIL: banking.au@bankofchina.com
+WEBSITE: www.bankofchina.com/au
+BANK OF CHINA
+GROUND FLOOR,
+140 SUSSEX STREET,
+SYDNEY NSW 2000,
+AUSTRALIA
+(NEW ZEALAND) LIMITED
+NEW ZEALAND
+SWIFT: BKCHNZ22
+TEL: (64) 99809000
+FAX: (64) 99809088
+EMAIL: service.nz@bankofchina.com
+WEBSITE: www.bankofchina.com/nz
+AUCKLAND BRANCH
+LEVEL 17, TOWER 1,
+205 QUEEN STREET,
+AUCKLAND, 1010,
+NEW ZEALAND
+SWIFT: BKCHNZ2A
+TEL: (64) 99809000
+FAX: (64) 99809088
+EMAIL: service.nz@bankofchina.com
+WEBSITE: www.bankofchina.com/nz
+LEVEL 17, TOWER 1,
+205 QUEEN STREET,
+AUCKLAND, 1010,
+SYDNEY BRANCH
+EMAIL: service.hn@bankofchina.com.vn
+TEL: (84) 909009222
+SIMPANG 22,
+JALAN DATO
+RATNA,
+KAMPONG KIARONG,
+BANDAR SERI
+BEGAWAN BE1318,
+BRUNEI
+DARUSSALAM
+SWIFT: BKCHBNBB
+TEL: (673) 2459888
+FAX: (673) 2459878
+BANK OF CHINA
+(HONGKONG) LIMITED
+YANGON BRANCH
+ZONE B, 1ST FLOOR,
+GOLDEN CITY
+BUSINESS CENTER,
+YANKIN ROAD,
+YANKIN TOWNSHIP,
+YANGON REGION,
+MYANMAR
+SWIFT: BKCHMMMY
+TEL: (95) 19376130
+FAX: (95) 19376142
+EMAIL: bocyangon@bochk.com
+BANK OF CHINA
+(HONG KONG) LIMITED
+REPRESENTATIVE OFFICE
+IN HANOI
+18 FLOOR, NO.1 TOWER,
+CAPITAL PLACE BUILDING,
+29 LIEU GIAI STREET,
+NGỌC KHANH WARD,
+BA DINH DISTRICT,
+HA NOI,
+VIET NAM
+(HONGKONG) LIMITED
+BRUNEI BRANCH
+www.bankofchina.com/se
+WEBSITE:
+service.se@bankofchina.com
+FAX: (33) 149701372
+WEBSITE: www.bankofchina.com/fr
+FRANKFURT BRANCH
+BOCKENHEIMER LANDSTR.
+24 60323 FRANKFURT AM MAIN,
+GERMANY
+SWIFT: BKCHDEFF
+TEL: (49) 691700900
+FAX: (49) 69170090500
+EMAIL:
+service.de@bankofchina.com
+WEBSITE:
+www.bankofchina.com/de
+TEL: (33) 149701370
+MILAN BRANCH
+ITALY
+SWIFT: BKCHITMM
+TEL: (39) 02864731
+FAX: (39) 0289013411
+EMAIL:
+hwmlbg00@bank-of-china.com
+WEBSITE:
+www.bankofchina.com/it
+LUXEMBOURG BRANCH
+55 Boulevard Royal, L-2449
+Luxembourg
+VIA SANTA MARGHERITA,
+14/1620121 MILAN,
+TLX: 281 090 BDCSP
+SWIFT: BKCHFRPP
+23 AVENUE DE LA
+GRANDE ARMEE
+75116 PARIS,
+FRANCE
+Waigani Port Moresby NCD,
+Papua New Guinea, PO box 1192
+TEL: 00675-3233308
+BOC AVIATION LIMITED
+8 SHENTON WAY #18-01
+SINGAPORE 068811
+TEL: (65) 63235559
+FAX: (65) 63236962
+EMAIL: information@bocaviation.com
+WEBSITE: www.bocaviation.com
+EUROPE
+LONDON BRANCH
+1 LOTHBURY,
+LONDON EC2R 7DB,
+U.K.
+SWIFT: BKCHGB2L
+TEL: (44) 2072828926
+FAX: (44) 2076263892
+EMAIL: service.uk@bankofchina.com
+WEBSITE: www.bankofchina.com/uk
+BANK OF CHINA
+(UK) LIMITED
+1 LOTHBURY, LONDON EC2R
+7DB,
+U.K.
+SWIFT: BKCHGB2U
+TEL: (44) 2072828926
+FAX: (44) 2076263892
+EMAIL: service.uk@bankofchina.com
+WEBSITE: www.bankofchina.com/uk
+PARIS BRANCH
+SWIFT: BKCHLULL
+TEL: (352) 268688
+FAX: (352) 221795
+EMAIL:
+service.lu@bankofchina.com
+WEBSITE:
+www.bankofchina.com/lu
+BOULEVARD DU REGENT 35,
+1000 BRUSSELS,
+BELGIUM
+SWIFT: BKCHBEBB
+TEL: (32) 24056688
+FAX: (32) 22302892
+EMAIL:
+service.be@bankofchina.com
+WEBSITE:
+www.bankofchina.com/be
+BANK OF CHINA
+(EUROPE) S.A. POLAND
+BRANCH
+UL. ZIELNA 41/43,
+00-108 WARSAW,
+POLAND
+SWIFT: BKCHPLPX
+TEL: (48) 224178888
+FAX: (48) 224178887
+EMAIL:
+service.pl@bankofchina.com
+WEBSITE:
+www.bankofchina.com/pl
+BANK OF CHINA
+(EUROPE) S.A.
+STOCKHOLM BRANCH
+TEGELUDDSVAGEN 21, 11541
+STOCKHOLM,
+SWEDEN
+BRUSSELS BRANCH
+G-08 Stanley Hotel and Suite,
+Sir John Guise Drive
+(EUROPE) S.A.
+www.bankofchina.com/nl
+BANK OF CHINA (EUROPE) S.A.
+55 Boulevard Royal, L-2449
+Luxembourg
+SWIFT: BKCHLULA
+TEL: (352) 268688
+FAX: (352) 221795
+EMAIL:
+service.lu@bankofchina.com
+WEBSITE:
+www.bankofchina.com/lu
+468
+BANK OF CHINA
+(EUROPE) S.A.
+ROTTERDAM BRANCH
+COOLSINGEL 63, 3012AB
+ROTTERDAM,
+THE NETHERLANDS
+SWIFT: BKCHNL2RXXX
+TEL: (31) 102175888
+FAX: (31) 102175899
+EMAIL:
+service.nl@bankofchina.com
+WEBSITE:
+BANK OF CHINA
+PAPUA NEW GUINEA
+REPRESENTATIVE OFFICE IN
+BANK OF CHINA
+COLOMBO 001
+SRI LANKA
+SWIFT: BKCHLKLX
+TEL: (94) 0112195566
+FAX: (94) 0112118800
+EMAIL: service.lk@bankofchina.com
+MUMBAI BRANCH
+41-B, 4TH FLOOR,
+4 NORTH AVENUE,
+MAKER MAXITY,
+BANDRA KURLA COMPLEX,
+BANDRA EAST, MUMBAI,
+INDIA
+SWIFT: BKCHINBB
+TEL: (91) 2268246666
+FAX: (91) 2268246667
+EMAIL: bocmumbai@bankofchina.com
+WEBSITE: www.bankofchina.com/in/
+DUBAI BRANCH
+LEVEL 11 TOWER 2,
+AL FATTAN CURRENCY HOUSE
+DUBAI INTERNATIONAL
+FINANCIAL CENTRE
+P.O. BOX 118842,
+DUBAI, U.A.E
+SWIFT: BKCHAEADXXX
+TEL: (971) 43819100
+FAX: (971) 43880778
+NO.40, YORK STREET
+EMAIL: service.ae@bankofchina.com
+COLOMBO BRANCH
+FAX: (92) 2133110600
+EMAIL:
+FAX: (46) 107888801
+JSC AB (BANK OF CHINA
+KAZAKHSTAN)
+71B, MICRODISTRICT
+ZHETYSU-2,
+AUEZOV DISTRICT, 050063,
+ALMATY,
+REPUBLIC OF KAZAKHSTAN
+SWIFT: BKCHKZKA
+TEL: (7727) 2585510
+FAX: (7727) 2585514
+EMAIL: boc@bankofchina.kz
+KARACHI BRANCH
+5TH FLOOR, CORPORATE
+OFFICE BLOCK,
+DOLMEN CITY, HC-3, BLOCK 4,
+SCHEME 5, CLIFTON,
+KARACHI,
+PAKISTAN
+SWIFT: BKCHPKKA
+TEL: (92) 2133110688
+EMAIL: klqbgs@bank-of-china.com
+WEBSITE: www.bankofchina.com/pk
+BANK OF CHINA
+(HONGKONG) LIMITED
+JAKARTA BRANCH
+ABU DHABI BRANCH
+ADDAX COMMERCIAL TOWER,
+AL REEM ISLAND,
+P.O.BOX73098,
+FAX: (90) 2122798866
+EMAIL: contact@bankofchina.com.tr
+WEBSITE: www.bankofchina.com.tr
+ULAANBAATAR
+REPRESENTATIVE OFFICE
+9TH FLOOR, CENTRAL TOWER,
+SUKHBAATAR SQUARE-2,
+SBD-8,
+ULAANBAATAR 14200,
+MONGOLIA
+TEL: (976) 77095566
+FAX: (976) 77195566
+EMAIL: service.mn1 @bankofchina.com
+467
+BAHRAIN REPRESENTATIVE
+OFFICE
+OFFICE 1502,
+AL JASRAH TOWER,
+DIPLOMATIC AREA
+BUILDING 95,
+ROAD 1702, BLOCK 317,
+MANAMA
+KINGDOM OF BAHRAIN
+TEL: (973) 17531119
+FAX: (973) 17531009
+EMAIL:
+bldbcbgs@bank-of-china.com
+TEL: (90) 2122608888
+UNIT 4608-4611, 46F,
+SWIFT: BKCHTRIS
+343944. LEVENT/SISLI-
+ISTANBUL
+ABU DHABI, U.A.E.
+SWIFT: BKCHAEAA
+TEL: (971) 24180999
+FAX: (971) 24180996
+EMAIL: abudhabi.ae@bankofchina.com
+QATAR FINANCIAL CENTRE
+BRANCH
+24TH FLOOR, ALFARDAN
+TOWERS-OFFICE TOWER,
+BUILDING NO.12, ZONE 61,
+AI FUNDUQ, STREET NO.814,
+DOHA,
+QATAR
+P.O Box: 5768
+SWIFT: BKCHQAQA
+TEL: (974) 44473681 44473682
+FAX: (974) 44473696
+EMAIL: service.qa@bankofchina.com
+RIYADH BRANCH
+Level 9, South Tower,
+King Faisal Foundation Building,
+King Fahd Road, PO Box 231431,
+Postal Code 12212, Riyadh,
+Kingdom of Saudi Arabia.
+SWIFT: BKCHSARI
+TEL: (966) 535928567
+EMAIL: riyadh@bankofchina.com
+BANK OF CHINA TURKEY A.S.
+Esentepe Mah.
+BUYUKDERE CAD. NO: 209,
+TEKFEN TOWER K.21,
+TURKEY
+www.bankofchina.com.th
+(HONGKONG) LIMITED
+MANILA BRANCH
+service.th@bankofchina.com
+9-11/F
+BANK OF CHINA INSURANCE
+CO., LTD.
+SWIFT: BKCHCNBJ220
+TEL: (86) 0312-5988023
+FAX: (86) 0312-5557047
+POST CODE: 071700
+NO. 149 LUOSA STREET,
+RONGCHENG,
+HEBEI PROV.,
+CHINA
+HEBEI XIONGAN BRANCH
+POST CODE: 361012
+FAX: (86) 0592-5095130
+TEL: (86) 0592-5317519
+SWIFT: BKCHCNBJ73A
+CHINA
+NO. 40 NORTH HUBIN ROAD,
+XIAMEN,
+NO. 110 XIDAN NORTH STREET,
+XICHENG DISTRICT, BEIJING,
+BOC BLDG.,
+TEL: (86) 0411-82586666
+FAX: (86) 0411-82637098
+POST CODE: 116001
+SWIFT: BKCHCNBJ81A
+CHINA
+LIAONING PROV.,
+DALIAN,
+NO. 9 ZHONGSHAN SQUARE,
+ZHONGSHAN DISTRICT,
+DALIAN BRANCH
+SWIFT: BKCHCNBJ50A
+TEL: (86) 0532-85979700
+FAX: (86) 0532-67755601
+POST CODE: 266071
+NO. 59 HONGKONG
+MIDDLE ROAD,
+QINGDAO,
+SHANDONG PROV.,
+CHINA
+QINGDAO BRANCH
+SWIFT: BKCHCNBJ92A
+TEL: (86) 0574-55555099
+POST CODE: 315100
+XIAMEN BRANCH
+CHINA
+TEL: (86) 010-83260001
+FAX: (86) 010-83260006
+COMMUNITY BANK CO., LTD.
+BOC FULLERTON
+WEBSITE: www.bocichina.com
+admindiv.china@bocichina.com
+POST CODE: 200120
+EMAIL:
+FAX: (86) 021-58883554
+TEL: (86) 021-20328000
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+39/F, BOC BUILDING
+BOC INTERNATIONAL
+(CHINA) CO., LTD.
+462
+TEL: (86) 021-63291680
+FAX: (86) 021-63291604
+POST CODE: 200120
+WEBSITE: www.boccfc.cn
+CHINA
+NO. 200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+1409-1410#, BOC BUILDING
+BANK OF CHINA CONSUMER
+FINANCE CO., LTD.
+WEBSITE: www.bocim.com
+POST CODE: 200120
+TEL: (86) 021-38848999
+FAX: (86) 021-68873488
+CHINA
+200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+45/F, BOC BUILDING
+BANK OF CHINA INVESTMENT
+MANAGEMENT CO., LTD.
+POST CODE: 100032
+WEBSITE: www.bocins.com
+ZHEJIANG PROV.,
+CHINA
+9/F,
+NINGBO,
+NINGBO BRANCH
+SWIFT: BKCHCNBJ280
+TEL: (86) 0971-4721110
+FAX: (86) 0971-8174971
+POST CODE: 810000
+CHINA
+QINGHAI PROV.,
+CHENGXI DISTRICT,
+XINING,
+NO. 61 WUSI WEST ROAD
+QINGHAI BRANCH
+461
+TEL: (86) 0931-7825004
+FAX: (86) 0931-7825004
+POST CODE: 730000
+SWIFT: BKCHCNBJ660
+CHINA
+GANSU PROV.,
+NINGXIA BRANCH
+LANZHOU,
+GANSU BRANCH
+TEL: (86) 029-89593900
+FAX: (86) 029-89592999
+POST CODE: 710077
+SWIFT: BKCHCNBJ620
+SHAANXI PROV.,
+CHINA
+XI'AN,
+NO. 18 TANGYAN ROAD BEIDUAN,
+LIANHU DISTRICT,
+SHAANXI BRANCH
+SWIFT: BKCHCNBJ900
+TEL: (86) 0891-6835311
+FAX: (86) 0891-6835311
+POST CODE: 850000
+TIBET AUTONOMOUS
+REGION,
+CHINA
+NO. 113 JINZHU XI LU,
+LHASA,
+TIBET BRANCH
+NO. 525 TIANSHUI SOUTH ROAD,
+CHENGGUAN DISTRICT
+NO. 39 XINCHANG EAST ROAD,
+JINFENG DISTRICT,
+YINCHUAN,
+NINGXIA HUI
+SWIFT: BKCHCNBJ95B
+TEL: (86) 0512-67555898
+FAX: (86) 0512-65112719
+POST CODE: 215028
+JIANGSU PROV.,
+CHINA
+NO. 128 WANGDUN ROAD,
+SUZHOU INDUSTRIAL PARK,
+SUZHOU,
+SUZHOU BRANCH
+TEL: (86) 0755-22331155
+FAX: (86) 0755-22331051
+POST CODE: 518001
+SWIFT: BKCHCNBJ45A
+NO. 2022 JIANSHE ROAD,
+LUOHU DISTRICT,
+SHENZHEN,
+GUANGDONG PROV.,
+CHINA
+INTERNATIONAL FINANCE
+BUILDING,
+SHENZHEN BRANCH
+FAX: (86) 023-63889217
+POST CODE: 400025
+TEL: (86) 023-63889234
+SWIFT: BKCHCNBJ59A
+NO. 15 SOUTH STREET
+JIANGBEICHENG,
+JIANGBEI DISTRICT,
+CHONGQING,
+CHINA
+CHONGQING BRANCH
+FAX: (86) 0991-2825095
+POST CODE: 830002
+SWIFT: BKCHCNBJ760
+TEL: (86) 0991-2328888
+CHINA
+XINJIANG UYGUR
+AUTONOMOUS REGION,
+NO. 1 DONGFENG ROAD,
+URUMQI,
+XINJIANG BRANCH
+FAX: (86) 0951-5681509
+POST CODE: 750002
+TEL: (86) 0951-5681505
+SWIFT: BKCHCNBJ260
+CHINA
+AUTONOMOUS REGION,
+3-18/F, 48-49/F, NO. 318 HEYUAN
+ROAD AND NO. 255 DINGTAI
+ROAD,
+SWIFT: BKCHCNBJ640
+TEL: (86) 0871-63191216
+FAX: (86) 0871-63175573
+POST CODE: 650051
+NO. 110 XIDAN NORTH STREET,
+XICHENG DISTRICT, BEIJING,
+CHINA
+FAX: (86) 010-57765550
+BANK OF CHINA BUILDING,
+AVENIDA DOUTOR MARIO
+SOARES,
+(MACAU) LIMITED
+BANK OF CHINA
+WEBSITE: www.bankofchina.com/mo
+EMAIL: bocmo@bocmacau.com
+FAX: (853) 28781833
+TEL: (853) 88895566
+SWIFT: BKCHMOMX
+CHINA
+MACAO,
+BANK OF CHINA BUILDING,
+AVENIDA DOUTOR MARIO
+SOARES,
+MACAO,
+MACAU BRANCH
+13/F, CITYPLAZA ONE,
+NO. 1111 KING'S ROAD,
+TAIKOO SHING,
+BOC GROUP LIFE
+ASSURANCE CO., LTD.
+WEBSITE: www.bocgi.com
+EMAIL: bocginv_bgi@bocgroup.com
+FAX: (852) 28772629
+TEL: (852) 22007500
+HONG KONG, CHINA
+21/F, BANK OF CHINA TOWER,
+NO. 1 GARDEN ROAD,
+BANK OF CHINA GROUP
+INVESTMENT LIMITED
+EMAIL: info_ins@bocgroup.com
+WEBSITE: www.bocgins.com
+FAX: (852) 25221705
+HONG KONG, CHINA
+TEL: (852) 21608800
+FAX: (852) 28660938
+EMAIL: enquiry@boclife.com.hk
+WEBSITE: www.boclife.com.hk
+CHINA
+SWIFT: BKCHMOMA
+TEL: (853) 88895566
+EMAIL:
+FAX: (65) 65343401
+TEL: (65) 67795566
+SWIFT: BKCHSGSGXXX
+SINGAPORE
+BANK OF CHINA BUILDING,
+4 BATTERY ROAD,
+SINGAPORE BRANCH
+ASIA-PACIFIC AREA
+REGIONS
+MAJOR BRANCHES AND SUBSIDIARIES IN OTHER COUNTRIES AND
+464
+EMAIL: service.tw@bankofchina.com
+WEBSITE: www.bankofchina.com/tw
+SWIFT: BKCHTWTP
+TEL: (886) 227585600
+FAX: (886) 227581598
+1-5/F, NO. 105, SONGREN ROAD,
+XINYI DIST.,
+TAIPEI CITY,
+TAIWAN,
+CHINA
+TAIPEI BRANCH
+EMAIL: tfbsecr@taifungbank.com
+WEBSITE: www.taifungbank.com
+FAX: (853) 28570737
+TEL: (853) 28322323
+CHINA
+MACAO,
+NO. 418, ALAMEDA DR. CARLOS,
+d'ASSUMPCAO,
+TAI FUNG BANK LIMITED
+EMAIL: bocmo@bank-of-china.com
+WEBSITE: www.bankofchina.com/mo/
+FAX: (853) 28781833
+HONG KONG, CHINA
+TEL: (852) 28670888
+TEL: (86) 010-57765000
+9/F, WING ON HOUSE,
+NO. 71 DES VOEUX ROAD
+CENTRAL,
+FAX: (852) 25377609
+EMAIL: bocfl@bankofchina.com
+TEL: (86) 023-63031966
+FAX: (86) 023-63031966
+POST CODE: 400010
+CHINA
+38F, NO. 131 ZOURONG ROAD,
+YUZHONG DISTRICT,
+CHONGQING
+BOC FINANCIAL LEASING
+CO., LTD.
+WEBSITE: www.fintechboc.com
+POST CODE: 201201
+TEL: (86) 021-38973764
+FAX: (86) 021-38973713
+CHINA
+NO. 288 KAYUAN 2ND ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+TECHNOLOGY CO., LTD.
+CHINA
+BOC FINANCIAL
+POST CODE: 100033
+FAX: (86) 010-83937555
+TEL: (86) 010-83937333
+NO. 6 JINRONG ST,
+XICHENG DISTRICT,
+BEIJING,
+CHINA
+701# 7F/1001# 10F/1101# 11F,
+MANAGEMENT CO., LTD.
+BOC WEALTH
+20/F ROOM 07-08, 22/23/24F,
+AIR CHINA CENTURY PLAZA
+NO. 40, XIAOYUN ROAD,
+CHAOYANG DISTRICT,
+BEIJING,
+BOC-SAMSUNG LIFE INS.
+CO., LTD.
+WEBSITE: www.bocfullertonbank.com
+POST CODE: 100032
+WEBSITE: https://www.bocwm.cn
+TEL: (86) 010-83262688
+FAX: (86) 010-83262777
+POST CODE: 100027
+TEL: (852) 28101203
+HONG KONG, CHINA
+NO. 1 GARDEN ROAD,
+7/F, BANK OF CHINA TOWER,
+HONG KONG BRANCH
+EMAIL: info@bocigroup.com
+WEBSITE: www.bocigroup.com
+FAX: (852) 21479065
+TEL: (852) 39886000
+HONG KONG, CHINA
+26/F, BANK OF CHINA TOWER,
+NO. 1 GARDEN ROAD,
+BOC INTERNATIONAL
+HOLDINGS LIMITED
+HONG KONG, CHINA
+TEL: (852) 28462700
+FAX: (852) 28105830
+WEBSITE: www.bochk.com
+24/F, BANK OF CHINA TOWER,
+NO. 1 GARDEN ROAD,
+BOC HONG KONG
+(HOLDINGS) LIMITED
+MAJOR BRANCHES AND SUBSIDIARIES IN HONG KONG, MACAO AND
+TAIWAN OF CHINA
+463
+EMAIL: bocfi@bocfi.com
+POST CODE: 100032
+FAX: (86) 010-83262478
+TEL: (86) 010-83262479
+XICHENG DISTRICT, BEIJING,
+CHINA
+8/F, NO. 110 XIDAN NORTH
+STREET,
+INVESTMENT CO., LTD.
+BOC FINANCIAL ASSET
+WEBSITE: www.boc-samsunglife.cn
+BANK OF CHINA GROUP
+INSURANCE COMPANY
+LIMITED
+WEBSITE:
+NO. 515 BEIJING ROAD,
+KUNMING,
+YUNNAN PROV.,
+CHINA
+SWIFT: BKCHCNBJ240
+TEL: (86) 0851-85813954
+FAX: (86) 0851-85822419
+POST CODE: 550002
+INNER MONGOLIA
+NO. 85-8 XINHUA DONGJIE,
+XINCHENG DISTRICT,
+HUHHOT,
+INNER MONGOLIA BRANCH
+SWIFT: BKCHCNBJ680
+TEL: (86) 0351-8266224
+FAX: (86) 0351-8266021
+POST CODE: 030006
+CHINA
+SHANXI PROV.,
+TAIYUAN,
+XIAODIAN DISTRICT,
+NO. 186 PINGYANG ROAD,
+SHANXI BRANCH
+SWIFT: BKCHCNBJ220
+TEL: (86) 0311-69696681
+FAX: (86) 0311-69696692
+POST CODE: 050000
+NO. 28 ZIQIANG ROAD,
+SHIJIAZHUANG,
+HEBEI PROV.,
+CHINA
+HEBEI BRANCH
+TEL: (86) 022-27108002
+FAX: (86) 022-23312805
+POST CODE: 300204
+SWIFT: BKCHCNBJ200
+CHINA
+TIANJIN,
+NO. 8 YOUYI NORTH ROAD,
+HEXI DISTRICT,
+TIANJIN BRANCH
+FAX: (86) 010-85121739
+POST CODE: 100010
+TEL: (86) 010-85121491
+AUTONOMOUS REGION,
+CHINA
+SWIFT: BKCHCNBJ880
+TEL: (86) 0471-4690066
+FAX: (86) 0471-4690001
+POST CODE: 010010
+LIAONING BRANCH
+NO. 321 FENGQI ROAD,
+HANGZHOU,
+ZHEJIANG PROV.,
+CHINA
+ZHEJIANG BRANCH
+SWIFT: BKCHCNBJ940
+TELEX: 34116BOCJSCN
+TEL: (86) 025-84207888
+FAX: (86) 025-84200407
+POST CODE: 210005
+JIANGSU PROV.,
+CHINA
+NO. 148 ZHONG SHAN NAN LU,
+NANJING,
+JIANGSU BRANCH
+460
+FAX: (86) 021-50372911
+POST CODE: 200120
+TEL: (86) 021-50375566
+SWIFT: BKCHCNBJ300
+SWIFT: BKCHCNBJ110
+CHINA
+SHANGHAI BRANCH
+SWIFT: BKCHCNBJ860
+TEL: (86) 0451-53626740
+FAX: (86) 0451-53624147
+POST CODE: 150001
+CHINA
+NO. 19 HONGJUN STREET,
+NANGANG DISTRICT,
+HARBIN,
+HEILONGJIANG PROV.,
+HEILONGJIANG BRANCH
+SWIFT: BKCHCNBJ840
+TEL: (86) 0431-88408888
+FAX: (86) 0431-88408901
+POST CODE: 130061
+NO. 699 XI AN DA LU,
+CHANGCHUN,
+JILIN PROV.,
+CHINA
+JILIN BRANCH
+SWIFT: BKCHCNBJ810
+TEL: (86) 024-22810916
+FAX: (86) 024-22857333
+POST CODE: 110013
+NO. 253 SHIFU ROAD,
+SHENHE DISTRICT,
+SHENYANG,
+LIAONING PROV.,
+CHINA
+NO. 200 MID. YINCHENG ROAD,
+PUDONG NEW DISTRICT,
+SHANGHAI,
+CHINA
+BEIJING,
+DONGCHENG DISTRICT,
+FAX: (82) 23996262
+WEBSITE:
+www.bankofchina.com/kr
+BANK OF CHINA
+(MALAYSIA) BERHAD
+GROUND, MEZZANINE, &
+1ST FLOOR PLAZA OSK,
+25 JALAN AMPANG
+50450 KUALA LUMPUR,
+MALAYSIA
+SWIFT: BKCHMYKL
+TEL: (60) 323878888
+FAX: (60) 321615150
+EMAIL:
+callcenter@bankofchina.com.my
+WEBSITE:
+TEL: (82) 23995254
+www.bankofchina.com.my
+179/4 BANGKOK CITY TOWER,
+SOUTH SATHORN ROAD,
+TUNGMAHAMEK
+SATHORN DISTRICT,
+BANGKOK 10120,
+THAILAND
+SWIFT: BKCHTHBK
+TEL: (66) 22861010
+FAX: (66) 22861020
+CUSTOMER SERVICE CENTRE:
+(66) 26795566
+EMAIL:
+BANK OF CHINA (THAI)
+PUBLIC COMPANY LIMITED
+SWIFT: BKCHCNBJ910
+TEL: (86) 0571-85011888
+FAX: (86) 0571-87074837
+POST CODE: 310003
+SWIFT: BKCHKRSEXXX
+41, CHEONG GYE CHEON-RO,
+JONGNO-GU, SEOUL 03188
+NO. 2 CHAOYANGMEN NEI DAJIE,
+A, C, E KAIHENG CENTER,
+BEIJING BRANCH
+SWIFT: BKCHCNBJ
+TEL: (86) 010-66596688
+FAX: (86) 010-66016871
+POST CODE: 100818
+WEBSITE: www.boc.cn
+CHINA
+NO. 1 FUXINGMEN NEI DAJIE,
+BEIJING,
+HEAD OFFICE
+MAJOR BRANCHES AND SUBSIDIARIES IN THE CHINESE MAINLAND
+List of Major Branches and Subsidiaries
+www.bankofchina.com/sg
+KOREA
+TOKYO BRANCH
+TOKYO 107-0052 JAPAN
+SWIFT: BKCHJPJT
+TEL: (81) 335058818
+FAX: (81) 335058381
+EMAIL:
+service.jp@boctokyo.co.jp
+WEBSITE:
+www.bankofchina.com/jp
+SEOUL BRANCH
+2nd/FL YOUNG POONG BLDG.
+BOC BLDG. 3-4-1 AKASAKA
+MINATO-KU,
+YUNNAN BRANCH
+TEL: (46) 107888888
+FUJIAN BRANCH
+HUNAN BRANCH
+SWIFT: BKCHCNBJ600
+TEL: (86) 027-85569726
+FAX: (86) 027-85562955
+POST CODE: 430022
+HUBEI PROV.,
+CHINA
+NO. 219 XINHUA ROAD,
+JIANGHAN DISTRICT,
+WUHAN,
+HUBEI BRANCH
+FAX: (86) 0371-87007888
+POST CODE: 450018
+TEL: (86) 0371-87008888
+SWIFT: BKCHCNBJ530
+CHINA
+HENAN PROV.,
+BOC BLDG., NO. 3-1 BUSINESS
+OUTER RING ROAD,
+ZHENGDONG NEW DISTRICT,
+ZHENGZHOU,
+HENAN BRANCH
+SWIFT: BKCHCNBJ500
+TEL: (86) 0531-58282001
+FAX: (86) 0531-58282001
+POST CODE: 250014
+CHINA
+SHANDONG PROV.,
+JINAN,
+TOWER A SHUANGJIN BUILDING,
+NO. 10817 JINGSHI ROAD,
+LIXIA DISTRICT,
+SHANDONG BRANCH
+SWIFT: BKCHCNBJ550
+TEL: (86) 0791-86471503
+FAX: (86) 0791-86471505
+POST CODE: 330038
+JIANGXI PROV.,
+CHINA
+HONGGUTAN NEW DISTRICT,
+NANCHANG,
+NO. 10, LVYIN ROAD,
+JIANGXI BRANCH
+ANHUI BRANCH
+NO. 1688, YUNGU ROAD,
+BINHU NEW DISTRICT,
+HEFEI,
+ANHUI PROV.,
+CHINA
+SWIFT: BKCHCNBJ780
+TEL: (86) 0551-62926995
+FAX: (86) 0551-62926993
+POST CODE: 230091
+SWIFT: BKCHCNBJ720
+TEL: (86) 0591-87090999
+FAX: (86) 0591-87090111
+POST CODE: 350003
+BOC BLDG., NO. 136 WUSI ROAD,
+FUZHOU,
+NO. 593 MID. FURONG ROAD
+FUJIAN PROV.,
+(1 DUAN),
+HUNAN PROV.,
+GUIZHOU PROV.,
+CHINA
+GUIYANG,
+BOC BLDG., NO. 347 RUIJIN
+SOUTH ROAD,
+GUIZHOU BRANCH
+TEL: (86) 028-86741950
+FAX: (86) 028-86403346
+POST CODE: 610031
+SWIFT: BKCHCNBJ570
+SICHUAN PROV.,
+CHINA
+CHENGDU,
+(2 DUAN),
+NO. 35 MID. RENMIN ROAD
+SICHUAN BRANCH
+SWIFT: BKCHCNBJ740
+TEL: (86) 0898-66778001
+FAX: (86) 0898-66562040
+POST CODE: 570102
+HAINAN PROV.,
+CHINA
+NO. 29, 31 DATONG ROAD,
+LONGHUA DISTRICT,
+HAIKOU,
+HAINAN BRANCH
+SWIFT: BKCHCNBJ480
+TEL: (86) 0771-2879602
+FAX: (86) 0771-2813844
+POST CODE: 530022
+CHINA
+NO. 39 GUCHENG ROAD,
+NANNING,
+GUANGXI ZHUANG
+AUTONOMOUS REGION,
+GUANGXI BRANCH
+TEL: (86) 020-83338080
+FAX: (86) 020-83344066
+POST CODE: 510180
+SWIFT: BKCHCNBJ400
+GUANGDONG PROV.,
+CHINA
+1-19TH FLOOR NO. 197 &
+1-11TH FLOOR, 15-19TH FLOOR
+NO. 199 DONGFENG XI ROAD,
+YUEXIU DISTRICT,
+GUANGZHOU,
+GUANGDONG BRANCH
+POST CODE: 410005
+FAX: (86) 0731-82580707
+TEL: (86) 0731-82580703
+SWIFT: BKCHCNBJ970
+CHINA
+CHANGSHA,
+CHINA
+TEL: (244) 923165700
+472
+BANQUE DE CHINE
+(DJIBOUTI) S.A.
+www.bankofchina.com/ao
+WEBSITE:
+www.bankofchina.com/za
+BANK OF CHINA
+(MAURITIUS) LIMITED
+5TH FLOOR,
+DIAS PIER BUILDING,
+CAUDAN WATERFRONT,
+PORT LOUIS,
+MAURITIUS
+SWIFT: BKCHMUMU
+TEL: (230) 2034878
+boclb.ao@bankofchina.com
+FAX: (230) 2034879
+EMAIL:
+EMAIL:
+WEBSITE:
+www.bankofchina.com/mu
+471
+LUANDA BRANCH
+VIA S10 NO.701, CONDOMINIO
+BELAS BUSSINESS PARK,
+TORRE CUANZA SUL 8 ANDAR,
+LUANDA,
+REPUBLIC OF ANGOLA
+SWIFT: BKCHAOLU
+ZONE INDUSTRIELLE SUD,
+LOT NUMERO 219B,
+B.P. 2119, DJIBOUTI
+SWIFT: BKCHDJJD
+repoffice.tz@bankofchina.com
+TEL: (225) 222112973
+FAX: (225) 222112974
+EMAIL:
+TANZANIA
+8TH FLOOR, AMANI PLACE,
+OHIO STREET, P.O. BOX 13602,
+DAR ES SALAAM,
+TANZANIA REPRESENTATIVE
+OFFICE
+service.ma@bankofchina.com
+EMAIL:
+FAX: (212) 522273083
+TEL: (212) 522203779
+RUE LAHCEN BASRI,
+CASABLANCA, MAROC
+NO.71, ANFA CENTER, 128, BD
+D'ANFA & ANGLE
+MOROCCO REPRESENTATIVE
+OFFICE
+FAX: (244) 923165717
+service.ke@bankofchina.com
+FAX: (254) 203862812
+TEL: (254) 203862811
+Kenya
+Ngong Road, Nairobi,
+Morningside Office Park,
+Unit 1, 5th Floor, Wing B,
+OFFICE
+NAIROBI REPRESENTATIVE
+services.dj@bankofchina.com
+EMAIL:
+FAX: (253) 21336699
+TEL: (253) 21336666
+EMAIL:
+services.mu@bankofchina.com
+SCHOTTENRING 18,
+SOUTH AFRICA
+RUE DE LA TOUR-DE-1
+ILE 1, CH-1204 GENEVA,
+SWITZERLAND
+GENEVA BRANCH
+FAX: (7495) 7950454
+EMAIL: iboc@boc.ru
+WEBSITE: www.boc.ru
+www.bankofchina.com/ro
+WEBSITE:
+service.ro@bankofchina.com
+FAX: (40) 318029889
+EMAIL:
+SWIFT: BKCHCHGE
+TEL: (415) 86116800
+FAX: (415) 86116801
+EMAIL:
+TEL: (40) 318029888
+11th Floor District 1, Bucharest
+South Tower of City Gate Building,
+Piata Presei Libere, Nr. 3-5,
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+BUCHAREST BRANCH
+BANK OF CHINA
+www.bankofchina.com/at
+WEBSITE:
+SWIFT: BKCHROBUXXX
+service.at@bankofchina.com
+service.ch@bank-of-hina.com
+NEW YORK BRANCH
+P.O. BOX 30995,
+802 WEST BAY ROAD,
+COMMERCIAL CENTER,
+GRAND PAVILION
+GRAND CAYMAN BRANCH
+service.ca@bankofchina.com
+FAX: (1416) 9559880
+EMAIL:
+AMERICA
+TEL: (1416) 9559788
+WEBSITE: www.bocusa.com
+FAX: (1212) 5931831
+TEL: (1212) 9353101
+SWIFT: BKCHUS33
+U.S.A.
+NEW YORK, NY 10018,
+1045 AVENUE OF THE AMERICAS,
+SWIFT: BKCHCAT2
+GRAND CAYMAN KY1-1204
+FAX: (43) 153666888
+EMAIL:
+SWIFT: BKCHATWWXXX
+WEBSITE:
+service.rs@bankofchina.com
+SWIFT: BKCHRSBGXXX
+TEL: (381) 116351000
+FAX: (381) 112280777
+EMAIL:
+BULEVAR ZORANA
+DINDICA 2A,
+11070 Beograd,
+SERBIA
+A.D. BEOGRAD
+BANK OF CHINA SRBIJA
+1010 VIENNA,
+AUSTRIA
+www.bankofchina.com/rs
+WEBSITE:
+(CENTRAL AND EASTERN
+BANK OF CHINA
+service.cz@bankofchina.com
+NA FLORENCI 2116/15,
+11000 Prague 1,
+CZECH REPUBLIC
+SWIFT: BKCHCZPPXXX
+TEL: (42) 0225986666
+FAX: (42) 0225986699
+EMAIL:
+PRAGUE BRANCH
+(CENTRAL AND EASTERN
+EUROPE) LIMITED
+BANK OF CHINA
+EUROPE) LIMITED
+VIENNA BRANCH
+TEL: (43) 153666800
+BANK OF CHINA (RUSSIA)
+SWIFT: BKCHRUMM
+TEL: (7495) 2585301
+CANADA, M5X 1C8
+TORONTO, ONTARIO,
+P.O.BOX 241,
+6108 ONE FIRST CANADIAN PLACE,
+100 KING STREET WEST,
+TORONTO BRANCH
+www.bankofchina.com/ca
+72, PROSPEKT MIRA,
+MOSCOW, 129110
+RUSSIA
+WEBSITE:
+FAX: (1905) 7718555
+EMAIL:
+TEL: (1905) 7716886
+SWIFT: BKCHCATT
+MARKHAM, ONTARIO,
+CANADA, L3T 7X8
+500 MINTHORN BOULEVARD
+SUITE 600,
+BANK OF CHINA (CANADA)
+boccanada@bankofchina.ca
+SWIFT: BKCHZAJJ
+TEL: (27) 115209600
+FAX: (27) 117832336
+EMAIL:
+CAYMAN ISLANDS
+TEL: (1345) 9452000
+FAX: (1345) 9452200
+EMAIL:
+TEL: (51) 17037700
+SWIFT: BKCHPEPL
+Perú
+Av. República de Panamá 3461,
+Torre Panamá, piso 29,
+San Isidro, Lima,
+BANK OF CHINA (PERU) S.A.
+SWIFT: BKCHARBAXXX
+TEL: (54) 1154395566
+EMAIL: service.ar@bankofchina.com
+ARGENTINA
+EMAIL:
+PISO 5, CABA,
+BUENOS AIRES BRANCH
+www.bankofchina.com/mx/
+WEBSITE:
+EMAIL: servicios@mx.bocusa.com
+FAX: (52) 5552078705
+TEL: (52) 5541705800
+SWIFT: BKCHMXMX
+JUANA MANSO 999,
+MEXICO
+bocpe_reclamos@pe.bocusa.com
+www.bankofchina.com/pe/index.html
+15 ALICE LANE, SANDTON,
+JOHANNESBURG,
+ALICE LANE TOWERS,
+12TH-16TH FLOORS,
+JOHANNESBURG BRANCH
+www.bankofchina.com/zm
+WEBSITE:
+executive.zm@bank-of-china.com
+WEBSITE:
+EMAIL:
+TEL: (260) 211233271
+SWIFT: BKCHZMLU
+P.O. BOX 34550, LUSAKA,
+ZAMBIA
+KABELENGA ROAD,
+PLOT NO. 2339,
+BANK OF CHINA
+(ZAMBIA) LIMITED
+AFRICA
+FAX: (260) 211236782
+SWIFT: BKCHKYKY
+PISO 24, COLONIA
+CUAUHTÉMOC, CIUDAD
+DE MÉXICO,
+MÚLTIPLE
+www.bankofchina.com/pa/
+WEBSITE:
+bocpanama@cwpanama.net
+EMAIL:
+FAX: (507) 2239960
+TEL: (507)2169404
+SWIFT: BKCHPAPA
+BANCO DA CHINA
+BRASIL S.A.
+REPUBLIC OF PANAMA
+TORRE 2000 PISO 36
+P.H. OCEANIA BUSINESS PLAZA
+PUNTA PACIFICA
+P.O. BOX 0823-01030
+PANAMA BRANCH
+470
+gcb@bank-of-china.com
+PANAMA CITY,
+PASEO DE LA REFORMA 243,
+AVENIDA PAULISTA,
+CEP: 01311-100,
+S.A. INSTITUCIÓN DE BANCA
+BANK OF CHINA MÉXICO,
+EMAIL: servicios@cl.bocusa.com
+WEBSITE: www.bankofchina.com/cl
+FAX: (56) 227157898
+TEL: (56) 227157800
+SWIFT: BKCHCLRM
+CHILE
+901-14 ANDAR BELA VISTA
+PISO 16, PROVIDENCIA,
+SANTIAGO,
+CHILE BRANCH
+www.bankofchina.com/br
+WEBSITE:
+ouvidoria@boc-brazil.com
+SWIFT: BKCHBRSP
+TEL: (55)1135083200
+EMAIL:
+BRASIL
+SAO PAULO, SP,
+ANDRÉS BELLO 2457,
+generalaffairs.sa@bank-of-china.com
+BOC Insurance developed 109 green insurance products, assuming insurance liabilities of RMB272.2 billion.
+190,147
+Treasury operations
+31,925
+6.63%
+59,721
+12.59%
+Others
+(1,141)
+(0.24%)
+(2,756)
+(0.58%)
+Total
+47.91%
+481,780
+474,381
+100.00%
+Corporate Banking
+Upholding the concept of high-quality development, the Bank continuously promoted the
+transformation of its corporate banking business. It increased credit support in key areas
+including technological innovation, green credit, inclusive finance, rural revitalisation, strategic
+emerging industries, the manufacturing industry and the private sector, and enhanced the quality
+of service support for the construction of industrial systems for advanced manufacturing and the
+digital economy. Leveraging its financial strength, the Bank served the coordinated development
+of regions such as the Beijing-Tianjin-Hebei region, Yangtze River Delta, Guangdong-Hong
+Kong-Macao Greater Bay Area and Yangtze River Economic Belt, assisting the implementation
+of national strategies. It built a comprehensive customer segmentation marketing management
+system so as to consolidate its development foundations. The Bank developed an integrated
+operational mechanism for marketing services covering the entire product line, and strengthened
+collaborative synergy, improving responsiveness to customer demands for financial products.
+In 2023, the Group's corporate banking business in the Chinese mainland recorded an operating
+income of RMB206.356 billion, an increase of RMB16.209 billion or 8.52% compared with the
+same period last year.
+44
+49
+Digital Finance
+Helping to creating an elderly-friendly environment. In line with the transaction habits
+and preferred channels of elderly customers, the Bank upgraded and adapted outlets to
+become more elderly-friendly, and established demonstration outlets for elderly care
+services. Leveraging mobile banking, it provided elderly customers with convenient online
+services that enable them to enjoy a seamless digital life. The Bank made extensive efforts
+to promote smart technology and financial risk prevention among elderly customers, with
+a view to tackling the “digital divide” and continuously protecting consumer rights and
+interests.
+Enhancing supply and demand in elderly care services. In terms of service demand-side,
+the Bank built a comprehensive system for personal pension financial products, enriching
+such products as pension savings, pension wealth management and pension funds. It
+upgraded the mobile banking “Silver Zone" to create a shelf-like experience for financial
+products. It also enriched the merchant system and held a series of featured events such
+as "99 Silver Festival”. In terms of service supply-side, the Bank actively participated in
+the special campaign launched by the National Development and Reform Commission on
+city-enterprise collaboration, and the pilot programme of special central bank lending for
+inclusive elderly care services, set up a transaction group for silver business at the China
+International Import Expo (CIIE), and held a forum on the ten-year development of foreign-
+funded elderly care in China, thus promoting industrial connection and exchange.
+45
+Serving the multi-level and multi-pillar pension insurance system. The Bank continued
+to optimise services in terms of national social security fund, basic pension insurance,
+enterprise annuities, occupational annuities, and personal pension funds. It upgraded the “Pension
+All-in-One" feature on its mobile banking, offering a unified view for individual queries
+that includes the first-pillar basic pension insurance, second-pillar corporate annuities, and
+third-pillar individual pension funds.
+100.00%
+227,269
+50.78%
+244,640
+46
+Boosting the quality and efficiency of financial services via digital transformation.
+In terms of corporate banking, the Bank continuously iterated and optimised its domestic
+corporate online banking platform, achieving rapid growth in customer base. As at the
+end of 2023, the number of corporate online banking customers reached 8.19 million,
+an increase of 13.31% compared with the prior year-end. In terms of personal banking,
+the Bank refined the service experience of its domestic personal mobile banking, further
+improved the assessment model and risk monitoring mechanism for agency investment
+products, and launched functions such as "Data-based Fund Selection" based on a multi-
+dimensional product labelling system. As at the end of 2023, the number of monthly active
+mobile banking customers stood at 87.76 million. In 2023, the total transaction volume of
+mobile banking reached RMB54.88 trillion, up 17.46% year-on-year. The latest version
+of the Bank's personal mobile banking won the "Mobile Banking with Best Customer
+Experience" in the CBN Financial Value Ranking in 2023. In terms of financial markets
+business, the Bank consolidated data support, enriched trading strategies, further improved
+the features of the quantitative trading platform, and enhanced the efficiency of quantitative
+trading.
+Actively integrating into the digital economy ecosystem. The Bank promoted the building
+of corporate open banking, enriched the service scenarios of the “BOC Corporate E-link",
+and launched four sub-brands, namely Cloud Accounting, Cloud Finance, Cloud Direct
+Remittance and Cloud Payroll. The Bank upgraded the "BOC Corporate e-Manager”, a one-
+stop corporate digital service platform, and launched integrated “non-financial + financial"
+services, including payroll and tax management and financial bookkeeping, to enable SMEs
+to improve the efficiency of operation and management. It upgraded the corporate treasury
+system, and contributed to the treasury reform at state-owned enterprises. It advanced the
+information connectivity between governments, industrial parks, enterprises and banks,
+realised the whole-process digitalisation of customer acquisition, batch credit extension and
+post-lending services, and built a new financial ecosystem for industrial parks. The Bank
+optimised personal pension account opening, contribution and asset management features
+for elderly customers, helping narrow the digital divide and making financial services more
+accessible. To serve the national strategies of high-level opening-up and expanding domestic
+demand, the Bank focused on key customer groups and businesses such as the enterprises
+committed to “Going Global” and “Bringing In” and the agency payroll payment business,
+established characteristic scenarios serving foreigners coming to China, Hong Kong and
+Macao residents in the Greater Bay Area, tourism, equity incentive, agency payroll payment
+and new energy vehicles, and enhanced the capability to serve niche customer groups.
+Д
+47
+47
+48
+88
+Optimising globalised digital banking service channels. For overseas institutions, the
+Bank improved the supporting internet banking system of local clearing network, assisting
+its overseas institutions in joining in the local market competition as local banks. For
+overseas corporate customers, the Bank established a coordination management platform
+featuring global expertise accessible at any point of contact, and enhanced the service
+ability across the board. It optimised more than 40 functions of the new version of overseas
+corporate online banking, and maintained a leading position among Chinese peers in terms
+of coverage of overseas corporate online banking. For overseas personal customers, the
+Bank released overseas personal mobile banking version 6.0, optimising interface operation
+and feature navigation, introducing more features, and comprehensively improving user
+experience. As at the end of 2023, the overseas corporate online banking was available
+in 56 countries and regions around the world, providing services in 14 languages, and the
+overseas personal mobile banking was available in 30 countries and regions around the
+world, providing services in 12 languages.
+Steadily advancing the innovative application of e-CNY. The Bank continued to diversify
+its e-CNY usage scenarios to cover rail transit, supermarkets and elderly care, providing
+universally applicable, convenient and efficient payment experience. It strengthened its
+digital infrastructure capacity with a focus on public service industries such as government
+affairs, housing construction and electric utilities. In support of rural revitalisation, the Bank
+trialed the use of digital currency smart contracts for targeted subsidies, paired poverty
+alleviation and inclusive loans, and launched an online “Clearing Pass” e-CNY commodities
+settlement service via Shanghai Clearing House, addressing the pain point of prolonged
+transaction times. Leveraging its advantages in terms of low threshold and high efficiency,
+the Bank launched the "BAMBOO" brand for digital currency services catering to foreign
+tourists in China. It contributed to standards formulation for hardware wallets, introduced
+the industry's first account-based hardware wallet, and produced a wide range of hardware
+wallet products such as mobile pay, SIM card, and employee card.
+Commercial Banking in the Chinese Mainland
+The Bank earnestly fulfilled its social and economic responsibilities, continually refined its
+financial supply and enhanced quality and efficiency of services, deeply integrating itself to
+serving the overall national situation as well as high-quality development of the Bank. In 2023,
+the Group's commercial banking business in the Chinese mainland recorded an operating income
+of RMB481.780 billion, an increase of RMB7.399 billion or 1.56% compared with the prior year.
+Details are summarised in the table below:
+Unit: RMB million, except percentages
+2023
+2022
+Items
+Amount
+% of total
+Amount
+Corporate banking business
+206,356
+42.83%
+The Bank rigorously followed national strategies and decisions and adopted to the trend of digital
+economic development. Based on the improvement of technology and data capabilities, the
+Bank took the digital transformation and upgrading of financial services as the core, integration
+into the digital economy ecosystem as a breakthrough and the risk prevention and control as the
+fundamental, deepened the integration of "business, data, and technology", promoted integrated
+growth of financial services and digital technologies, improved the effectiveness of financial
+service supply, and supported the high-quality development of the real economy.
+% of total
+40.08%
+Personal banking business
+The Bank actively served the national strategy of responding to China's aging population,
+promoted supply-side structural reform in the financial sector, and met people's growing needs
+for elderly care by focusing on the four areas of pension finance, personal pension finance,
+pension industry finance and silver scenario ecosystem building.
+Pension Finance
+Giving full play to the Group's synergies and providing comprehensive inclusive
+finance services. Capitalising on the Group's comprehensive operations, the Bank
+established a comprehensive inclusive finance system covering a wide range of services,
+including payment, credit, savings, cross-border business, insurance, wealth management,
+and direct financing.
+Serving rural revitalisation and helping to build up China's strength in agriculture.
+The Bank expanded its financial services coverage in key counties receiving assistance for
+rural revitalisation, with loan growth rates in these counties reaching 32.44% and surpassing
+the Bank's total loan growth rate. It provided support for national food security and offered
+credit services for agricultural and rural infrastructure. The Bank also provided financial
+services for integrated culture and tourism projects, and launched featured financial services
+to support rural revitalisation and promote consumption growth.
+Abundant and diversified green products and services. The Bank has established the
+"BOC Green+" global brand and launched more than 10 green financial products and
+services across five categories, covering deposits, loans, bonds, consumption and other
+comprehensive services, etc. In 2023, the Bank granted first sustainable development-
+linked syndicated loan in Chinese shipping industry, and opened a trading account with
+the National Greenhouse Gas Emissions Reduction Trading System. The "BOCHK Greater
+Bay Area Climate Transition ETF (Trading Open-end Index Fund)" was listed on the Main
+Board of the Hong Kong Stock Exchange, and the Bank achieved green RMB trade finance
+withdrawals for the first time in Thailand market.
+Leading position in the green bond market. In 2023, the Bank issued USD2.4 billion in
+overseas green financial bonds and RMB30.0 billion in domestic green financial bonds,
+becoming the most active Chinese issuer of sustainability bonds. It also successfully issued
+the world's first green bonds themed around the Belt and Road Initiative, as well as the
+world's first USD-denominated sustainability-linked loan bond. The Bank underwrote
+RMB341.658 billion in domestic green bonds, ranking first in the interbank market, as
+well as USD29.760 billion of overseas green bonds, placing first among Chinese peers
+in Bloomberg's "Global Offshore Green Bonds" rankings. As at the end of 2023, the
+Bank's green bond investments exceeded RMB100.0 billion, ranking first in the National
+Association of Financial Market Institutional Investors (NAFMII)'s "List of Investors in
+Green Debt Financing Instruments".
+M
+41
+The figure is calculated based on the statistical standards for "green credit" by NFRA.
+Bloomberg's data refer to green loans.
+The figure is calculated based on the statistical standards reported to NFRA. Technology loans include loans,
+trade finance and discounted bills.
+6
+5
+4
+Rapid growth in green credit. The Bank participated in benchmark green projects
+with global influence and ranked first among Chinese banks in Bloomberg's "Global
+Sustainability-Linked Loans” and “Global Green UoP Loans” rankings. It served as global
+co-lead bank for Central Asia's largest single wind power project and played a key role
+in the first environmental, social and governance (ESG) loan for a mainstream oil and gas
+company in the Middle East. Furthermore, the Bank introduced a sustainability-linked loan
+that innovatively incorporates biodiversity conservation indicators. As at the end of 2023,
+the Bank's domestic green credit balance reached RMB3,106.7 billion, a year-on-year
+increase of 56.34%.
+In strict adherence to the national decision and plan of “carbon peak and carbon neutrality”,
+the Bank fully implemented its green development strategy with the goal of becoming the bank
+of choice for green finance services. It optimised its green finance governance structure and
+refined supporting measures for green finance, realising a healthy and rapid growth in green
+finance business. In 2023, the Bank received a number of awards for green finance from Global
+Finance, Asiamoney, Financial Times, China Securities Journal and other domestic and overseas
+magazines.
+Green Finance
+Deepening cooperation between banks and governments and actively building a
+technology finance ecosystem. The Bank introduced the BOC-Torch "Innovative Bonus
+Point Loan" in collaboration with the Ministry of Science and Technology, launched "Enter
+the High-Tech Zone” campaign and continually expanded the coverage of its technology
+finance ecosystem, so as to enhance the brand image of “BOC Technology Innovation +”.
+Enhancing its comprehensive service system and supporting the growth of
+technological enterprises. Focusing on key industries and customer groups, the Bank
+established a robust business system for technology asset management and promoted
+innovation in technology insurance and technology leasing. It increased investments in
+technological enterprises and provided a range of financial services, including investment
+banking and asset management services, thus providing enterprises with full-lifecycle,
+seamless and diversified support. As at the end of 2023, the Bank had provided around
+RMB1.47 trillion of credit support to approximately 68,000 technological enterprises, with
+other comprehensive financial services amounting to over RMB610.0 billion in value.
+A
+40
+40
+Popularising specialised technology finance products and optimising the supply of
+financial products and services. Aligning with the needs of technological enterprises,
+the Bank continuously refined and promoted credit products, including innovative "bonus
+point" loans, intellectual property pledge loans, and loans to specialised and sophisticated
+SMEs, thus supporting major technological breakthroughs. It established credit review
+and approval procedures and a credit assessment model tailored to the characteristics
+of technological enterprises, and leveraged artificial intelligence, big data and other
+information technologies to improve its credit risk assessment capabilities.
+Vigorously expanding its customer base across the technology sector with a focus on
+batch customer acquisition scenarios. The Bank strengthened full lifecycle services for
+key customer groups, including high-tech enterprises, tech-oriented small and medium-
+sized enterprises (SMEs) and specialised and sophisticated enterprises. It targeted
+customer acquisition from sources including national and provincial laboratories, key
+scientific research institutes, and universities. The Bank analysed the characteristics of
+core customer groups such as technological enterprises, utilised digital methods to create
+customer profiles, and implemented differentiated precision marketing based on the refined
+classification of customer groups.
+The Bank placed great importance on providing financial support for the nation's technological
+self-reliance and self-improvement, actively promoted high-level planning, high-standard services
+and high-quality development in technology finance, and utilised comprehensive approach to
+intensify the support for the technology finance.
+Technology Finance
+In 2023, the Bank earnestly implemented national decisions and plans and advanced the
+execution of the 14th Five-Year Plan, thus achieved sound execution of its strategy. It continued
+to apply the new development philosophy fully, faithfully and in all fields of endeavour. It also
+took necessary steps to deepen supply-side structural reform in the financial sector. The Bank
+made contribution to smooth domestic circulation and the “dual-circulation” of domestic and
+international markets, and stepped up financial support for major strategies, key areas and weak
+links, and implemented the “five major tasks" of promoting technology finance, green finance,
+inclusive finance, pension finance, and digital finance, and made constant efforts to contribute to
+the high-quality development of the real economy.
+Overview of Strategic Progress
+BUSINESS REVIEW
+Promoting green development with comprehensive green finance services
+46
+Green Asset
+Management
+BOCIM developed green and ESG mutual fund products under the three categories of low-carbon and green development concept funds, social
+responsibility funds, and ESG concept funds, achieving a scale of RMB3.214 billion (calculated with reference to the ESG fund classification
+system of CITIC Securities).
+•
+Benefitting the people by helping to stabilise and expand employment, and ensure
+people's livelihood. The Bank fortified its long-acting mechanisms to stabilise and promote
+employment. In 2023, it granted more than RMB270.0 billion of special-purpose loans to
+help over 47,000 micro and small-sized enterprises stabilise and expand employment. It
+provided services for self-employed individuals, entrepreneurs and new urban residents,
+and launched special activities such as “Benefitting Merchants Driving Consumption”
+and "Providing Resources to Support Startups”, thus expanding its financial support service
+system.
+M
+44
+Inclusive finance loans granted to micro and small-sized enterprises are measured in accordance with the Notice
+of the General Office of China Banking and Insurance Regulatory Commission on Further Improving the
+Financial Service Quality for Micro and Small-sized Enterprises in 2023 (Yin Bao Jian Ban Fa [2023] No.42).
+7
+Continually expanding business volume and service coverage, and comprehensively
+improving service quality. The Bank integrated online and offline efforts to extend the
+reach of its inclusive finance services. It continually upgraded online service channels such
+as the "BOC Inclusive Finance" app and “BOC E-Cooperation" app to provide customers
+with online products and services, and increased the number of its featured outlets for
+inclusive finance to over 2,800. As at the end of 2023, the Bank's outstanding inclusive
+finance loans to micro and small-sized enterprises reached RMB1,758.543 billion, growing
+by 43.17% compared with the prior year-end and outpacing the Bank's overall loan growth
+rate, while the number of customers surpassed 1.07 million. The average interest rate of new
+inclusive finance loans to micro and small-sized enterprises was 3.54%, reflecting the larger
+interest rate concessions made by the Bank to borrowers within the real economy. The asset
+quality of loans to micro and small-sized enterprises remained stable and controllable.
+The Bank continued to uphold the concept of "finance for the people" and remained committed
+to serving the real economy. It focused on the integrated financial needs of micro and small-sized
+market entities, urban and rural residents, and other inclusive finance customers, promoting the
+high-quality development of inclusive finance business.
+Inclusive Finance
+Green finance capacity building. The Bank pushed forward the implementation of its
+green finance talent development system for the 14th Five-Year Plan period, covering
+approximately 10,000 individuals across three levels and over six themes. It developed an
+online training system for green finance, offering around 100 courses across eight themes,
+with over one million people engaged in watching and learning. It held green finance
+product innovation competition, performance competition and labour competition, organised
+a series of performance evaluation and selection activities to recognise outstanding
+achievements, outstanding individuals and outstanding teams, and took numerous measures
+to constantly improve employees' green finance competence and performance. The Bank
+continued to enhance the competitiveness of its domestic institutions in green finance,
+selected 20 tier-1 and tier-2 branches as model institutions in green finance during the
+year, and established a total of 310 featured green finance outlets. The Bank encouraged
+employees to follow the Initiative and Guide on Green Actions of Bank of China, fostering
+the green development concept. It also launched publications themed on green finance and
+ESG to inform customers about the latest industry trends.
+Active participation in green finance collaboration. The Bank actively participated in
+global green governance, contributing its expertise to addressing climate change. It carried
+out climate risk management and disclosure under the framework of the United Nations
+Principles for Responsible Banking (PRB) and the Task Force on Climate-related Financial
+Disclosures (TCFD), published the Group's first green finance report, and participated in
+PRB-related exchange activities. It fulfilled its role as the co-chair of the transition finance
+taskforce and the Green Financial Product Innovation Taskforce of the Green Investment
+Principle (GIP) for the Belt and Road Initiative. The Bank was re-elected as vice-chair of
+the China Council of the Sustainable Markets Initiative (SMI) and jointly launched the "Green
+Development Investment and Financing Partnership” and the “Belt and Road” Green
+Development Beijing Initiative with Chinese and overseas partners, serving as their sole
+commercial bank. It also contributed to the China-UK Green Finance Working Group and
+advanced bilateral green finance cooperation. In addition, the Bank played an active role
+in formulating standards for green credit assessment, transition finance, carbon accounting
+and the information disclosure of green bonds' duration, as well as exploratory research
+work organised by regulatory authorities, industry associations and other organisations.
+It also signed a strategic cooperation agreement with the National Forestry and Grassland
+Administration. The Bank, as an institutional member of the China Green Bond Standard
+Committee, actively participated in its organised events and assisted in promoting the
+healthy development of the green bond market. It co-sponsored China Corner's event on
+green finance during the 28th session of the Conference of the Parties to the United Nations
+Framework Convention on Climate Change (COP28). It published the Research Report on
+Green Finance Practice of the Belt and Road Initiative, which was included in the list of
+outcomes of the Third Belt and Road Forum for International Cooperation.
+43
+43
+42
+Note: The above figures are as of the end of 2023.
+BOC-Samsung Life's investment in green finance stood at RMB4.247 billion, including debt investment plans, equity funds, bonds and stocks.
+BOC Asset Investment's proprietary investment in green finance projects stood at RMB33.539 billion, accounting for 42.54% of its
+investment portfolio.
+Green
+Investment
+BOCI China underwrote green bonds totalling RMB30.175 billion in scale.
+Green
+Bonds
+BOCI underwrote 11 green and sustainability-linked bonds, totalling an equivalent of USD4.215 billion in scale.
+BOC Aviation ranked first among the aircraft leasing companies in Asia in terms of the value of owned aircraft, and owned aircraft using the
+latest green technology.
+Green
+Leasing
+BOCL's green assets stood at RMB24.011 billion, accounting for about 43.79% of its total leasing assets.
+Green
+Insurance
+BOC Wealth Management offered 17 green finance themed products, with a cumulative product volume of approximately RMB51.371
+billion.
+Reinforcing data support and giving full play to the values of data assets. The Bank
+advanced the “empowerment of business with data”, pressed ahead with data governance,
+integrated both internal and external data, and created the "BOC One Table". Also,
+it pushed forward “business-oriented data application", deepened data analysis and
+application, and activated the values of data assets. At the end of 2023, registered users of
+the "Data Verticals and Horizontals” platform reached 240,000 across the Bank, realising
+the service model for data application that combines “centralised data use” and “independent
+data use".
+Through scientific classification and precise policy implementation, the Bank built a
+comprehensive and tiered marketing management system to promote the coordinated
+development of its deposit business, both in terms of scale and pricing. Focusing on customers'
+diverse financial needs, it further enhanced its cross-industry services, comprehensive marketing
+awareness and all-round service capabilities. Moreover, by proactively integrating into the
+domestic and international dual circulations, the Bank strived to connect its business product
+channels for domestic settlement and international settlement, increased the flow of payments and
+settlements, and enhanced fund retention capacity. The Bank highlighted the strategic positioning
+of administrative business, provided commercial and intelligence services for local governments,
+strengthened the "head office to head office" docking, continued to promote the construction
+of a smart government ecosystem, improved the quality of financial services, and built a solid
+customer base. As at the end of 2023, RMB corporate deposits of the Bank's commercial banking
+business in the Chinese mainland totalled RMB8,734.736 billion, an increase of RMB1,202.022
+billion or 15.96% compared with the prior year-end, and its market share of daily average RMB
+corporate deposits kept increasing. Foreign currency corporate deposits amounted to USD93.482
+billion, an increase of USD3.248 billion or 3.60% compared with the same period last year,
+ranking first in market share among peers.
+59
+54
+Accelerating digital transformation and leveraging digital finance for empowerment. The
+Bank increased and improved the online supply of financial resources and constantly refined the
+"BOC Quick Loan" product system to cover diversified customer groups and major scenarios.
+It optimised online channel service functions and improved the "BOC Inclusive Finance" and
+"BOC E-Cooperation” apps. The “BOC Inclusive Finance” app was honoured with “Innovation
+Model Award" in the selection of “2023 Excellent Cases of Inclusive Finance” by people.cn,
+and was awarded "Typical Cases of Inclusive Finance in China (2023)" by the China Banking
+Association. The Bank also optimised the intelligent and inclusive business operation platform
+and continuously improved the efficiency of business management.
+Closely following national strategies and providing targeted and efficient services. The Bank
+optimised technology finance business, established financial service systems for micro and small-
+sized enterprises working in technological innovation, and continued to promote its intellectual
+property pledge financing business. Focusing on the lifecycle development stages of specialised
+and sophisticated SMEs, it provided a comprehensive package of investment, loan, bond,
+securities, leasing and insurance services, etc. More than RMB260.0 billion of credit facilities
+were granted to over 15,000 specialised and sophisticated SMEs at national and provincial
+levels. The Bank continued to develop scenarios based on “circles, chains and groups”, provide
+batch services for inclusive finance customers, and implement the national strategy of expanding
+supply chains while safeguarding their stability.
+Strengthening financial support for inclusive finance. The Bank established a long-acting
+mechanism to stabilise and promote employment, organised the “Inclusive Loan for Employment
+Promotion" themed event, and granted special loans to enterprises which have made outstanding
+contributions to stabilising and expanding employment. It also provided credit support for
+agriculture-related fields. As at the end of 2023, the balance of the Bank's agriculture-related
+loans stood at RMB2.66 trillion, an increase of 28.53% compared with the prior year-end,
+outpacing the average growth rate of the Bank's total loans.
+The Bank proactively provided services to ensure people's livelihood, continued to improve
+financial services for micro and small-sized enterprises, enhanced service precision in key areas,
+hence playing its due role in supporting industrial development.
+Inclusive Finance
+The Bank won the "Outstanding Participating Institution of Digital Supply Chain Financial
+Service Platform Award" from the General Clearing Centre of the People's Bank of China, “Outstanding
+Comprehensive Business Institution" from the Shanghai Commercial Paper Exchange
+Corporation, "Best RMB Bank" from The Asset, "Best Supply Chain Finance Bank” and “Best
+Cash Management Bank” from Trade Finance magazine, etc., demonstrating its professional
+advantages in transaction banking.
+53
+Embracing the guiding role of technology and accelerating digital transformation in
+transaction banking. As the sole financial institution to participate in the Alliance for
+Digital Cooperation and Innovation in Shipping Trade, the Bank co-created a national public
+service platform for the digitalisation of shipping. Utilising its next-generation commercial
+billing system, the Bank introduced new functions while successfully integrating with the
+Shanghai Commercial Paper Exchange Corporation's new system. It launched its "BOC Digital
+Confirmation" service, offering full-process intelligent electronic confirmation solutions and
+realising fully automated processing and one-click customer engagement. The Bank also
+upgraded its "BOC Cross-border Remittance Express" product, launching a whole-process
+online connection service for cross-border collection and payment in multiple currencies across
+all channels. As one of the first batch of pilot banks in advancing the foreign exchange banking
+reform, the Bank successfully launched the related systems, achieving systematic management of
+cross-border customer ratings and transaction monitoring, continuously enhancing the customer
+service experience.
+Making innovations rooted in tradition and continually refining “BOC Smart Chain"
+service system. The Bank has developed an online service system for comprehensive supply
+chain financing, covering bills, factoring, L/C and other products to meet customers' all-
+round service needs. Focusing on national strategies and key areas, the Bank increased its
+industry coverage, introduced services for the electronic information chain and the food and
+beverage chain, and upgraded the "BOC Smart Chain" service system. It accelerated the online
+transformation of its factoring business, with its online factoring financing volume increasing by
+90% year-on-year in 2023.
+Capitalising on the strengths of its traditional businesses and promoting stable scale and
+structural optimisation in foreign trade. The Bank issued a series of action plans, including
+the Action Plan for Serving Import and Export Enterprises and the Action Plan for Strengthening
+Credit Support to Foreign Trade Customers, and continued to increase financial support to
+stabilise foreign trade. By expanding financial supply, the international settlement volume of the
+Group and its institutions in the Chinese mainland reached USD8 trillion and USD3.4 trillion
+in equivalent respectively, further sharpening the Bank's competitive advantages. Acting as
+a high-level strategic partner, the Bank provided high-quality services for the organisation of
+major exhibitions such as the China International Import Expo (CIIE), China Import and Export
+Fair (Canton Fair), China International Fair for Trade in Services (CIFTIS), China International
+Consumer Products Expo (CICPE) and China International Fair for Investment and Trade (CIFIT)
+and helping enterprises to expand their market reach and strengthen their competitive positions.
+It continued to consolidate its competitive advantages in core products, with international trade
+settlement, cross-border RMB settlement, foreign currency trade finance, cross-border letter of
+guarantee and cross-border cash management all leading the industry in terms of market share.
+The Bank deeply implemented national development strategies, and properly leveraged domestic
+and international markets and resources in order to foster steady progress in transaction banking
+and contribute to the new development pattern.
+Transaction Banking
+52
+52
+Actively promoting product innovation. The Bank facilitated the official launch of Swap
+Connect by serving as the sole major participating bank for central counterparty clearing and
+completed several initial participations across the Group on the first day of launch. It successfully
+launched an e-CNY programme for spot commodity clearing at Shanghai Clearing House,
+becoming one of the first spot commodity clearing members to provide digital currency clearing.
+It also rolled out the first cross-border digital currency settlement business for international
+members of Shanghai Gold Exchange. The Bank actively supported the construction of Shanghai
+International Reinsurance Centre, and became one of its first settlement banks. As the main
+foreign exchange settlement bank under Hong Kong Stock Connect and the sole clearing bank
+under Shanghai Stock Connect and Shenzhen Stock Connect, the Bank supported the official
+launch of the optimised trading calendar of Shanghai-Hong Kong Stock Connect and Shenzhen-
+Hong Kong Stock Connect, thus further enhancing stock market connectivity mechanisms
+between the Chinese mainland and Hong Kong.
+Building a comprehensive financial service platform. The Bank provided comprehensive one-
+stop financial services for multilateral institutions such as the Asian Infrastructure Investment
+Bank (AIIB) and the New Development Bank (NDB), assisting both in issuing Panda bonds
+as the lead underwriter. Closely monitoring the financial service needs of the Belt and Road
+Initiative, it supported the Arab Republic of Egypt in successfully issuing RMB sustainability-
+linked Panda bonds in the CIBM, the first ever Panda bonds from Africa, as the lead underwriter
+and bookrunner.
+Deepening comprehensive cooperation with financial institutions. The Bank strengthened
+collaboration with securities institutions, thoroughly explored market demands, and further
+increased its market share of third-party custodial funds. The Bank has maintained correspondent
+relationships with nearly 1,200 institutions around the world and has opened 1,464 cross-border
+RMB clearing accounts for correspondent banks from 112 countries and regions, thus securing a
+leading position among domestic banks. It promoted the RMB Cross-Border Interbank Payment
+System (CIPS) and established partnerships for indirect participants with 626 domestic and
+overseas financial institutions, ranking first in terms of market coverage. The Bank's custodian
+service for Qualified Foreign Investors (QFI) and its agency service for overseas central banks
+and other sovereign institutions held leading positions in the industry in terms of both customer
+base and business scale. It also ranked first in the amount of custodian bonds acting as an agent
+for foreign institutions to invest in the China interbank bond market (CIBM).
+Leveraging on a global and integrated business platform, the Bank provided comprehensive and
+high-quality financial services to customers around the world, leading the industry in customer
+coverage rate.
+Financial Institutions Business
+51
+Strengthen the concept of "customer-centric" and continue to consolidate the customer
+base. Focusing on various types of customers such as large, medium, small and micro, the
+Bank optimised the hierarchical and classified management system, established a customer
+portrait and marketing service index evaluation system, clarified the working mechanism
+of marketing services for the whole product line of customers, improved the digitalisation
+of system functions and empowered customer development, and held a bank-wide customer
+manager skills competition to improve customer service skills. The number of credit customers
+continued to grow.
+Build a diversified and professional product service system. The Bank made overall plans
+and coordination, focused on key industries and key customers, gave full play to the linkage
+efficiency of commercial banks and investment banks, and made every effort to excel in
+cross-selling and comprehensive services. In 2023, as a joint lead underwriter, it issued the
+first scientific and technological innovation corporate bond for AVIC International and other
+clients; the Bank was appointed as the financial adviser of China Huaneng Group's joint
+underwriting business and formulated the Bank of China Linkage Plan of Benefiting and
+Empowering Small and Micro Enterprises, serving the business development of small and
+medium-sized foreign trade customers.
+Intensify support for key areas and weak links in the national economy. The Bank
+achieved progress in the development of green credit, with a focus on key areas such as
+102 major projects in the “14th Five-Year Plan”, infrastructure construction, and large-
+scale wind power and photovoltaic bases. It was the lead bank in the preparation of ESG-
+linked syndicated loans for COSCO Shipping Energy Transportation Co. Ltd., an affiliate of
+COSCO Shipping Group. It helped to promote new industrialisation by formulating the Bank
+of China Work Plan to Support New Industrialisation, and actively supporting key areas such
+as the smooth and safe operation of the industrial chain and supply chain, the improvement of
+industrial innovation capabilities, the optimisation of the industrial structure and the upgrading
+of the industrial system, as well as digital and green transformation of industry. It served the
+development of the private economy, actively implemented the “25 Article of Supporting the
+Private Economy”, formulated the Bank of China Action Plan to Support Private Enterprises to "Go
+Global", and held a special signing event to support enterprises to "go global". It increased
+the allocation of loans in agriculture-related fields, and continued to increase the market share.
+It seized the "blue ocean" opportunity of pension finance development, and the amount of
+the special central bank lending for inclusive elderly care services ranked among the top of
+the financial institutions taking part in the pilot programme. The Bank was also successfully
+appointed as the support institution by the National Development and Reform Commission to
+revitalise existing assets and expand effective investment.
+The Bank actively implemented the national strategic plan, served as the main force serving
+the real economy, and smoothed the domestic circulation.
+Serving the Real Economy More Efficiently and Effectively
+50
+The Bank proactively performed its responsibilities, deeply implemented the national
+development strategy, and effectively improved the quality and efficiency of its services to the
+real economy. To serve the strategy of innovation-driven development, it actively promoted
+a shift in service focus from traditional industries to new industries, new business forms and
+models, increased credit granting to strategic emerging industries, and assisted in promoting
+the construction of a modern industrial system. To serve the nation's coordinated regional
+development strategy, the Bank adopted policies tailored to local conditions and supported the
+development of key regions including the Beijing-Tianjin-Hebei region, Yangtze River Delta,
+Guangdong-Hong Kong-Macao Greater Bay Area, and Yangtze River Economic Belt to inject
+financial momentum into the high-quality development of regional economies. To serve the
+national strategy of expanding domestic demand, it continuously strengthened its inclusive
+finance services, accelerated the building of a scenario-based financial services ecosystem, made
+breakthroughs in online products, and assisted in deepening supply-side structural reform. To
+serve the national rural revitalisation strategy, the Bank provided services for modern agriculture
+and consolidated and expanded progress made in poverty alleviation. To serve the nation's
+ecological conservation strategy, it refined its green credit products and services and expanded
+its green credit activities. Its green credit growth rate, as well as the proportion of green credit
+within the Bank's total loans, ranked among the top in the industry. The Bank enhanced its
+brand reputation for green finance and assisted in sustainable economic and social development.
+To serve the "win-win” strategy of China's opening up, it focused on strengthening overseas
+economic and trade cooperation, and provided solid financial services to the Belt and Road
+Initiative. As at the end of 2023, RMB corporate loans of the Bank's operations in the Chinese
+mainland totalled RMB10,600.051 billion, an increase of RMB2, 124.380 billion or 25.06%
+compared with the prior year-end. Foreign currency corporate loans totalled USD49.823 billion,
+an increase of USD7.449 billion or 17.58% compared with the prior year-end, maintaining the
+Bank's leading position among peers in terms of market share. Specifically, technology finance
+loans increased by 30.94%, loans granted to strategic emerging industries increased by 74.35%,
+and loans granted to manufacturing industries increased by 28.05% compared with the prior
+year-end.
+Corporate Loans
+Promoting high-level opening up and building a cross-border matchmaking ecosystem.
+In 2023, the Bank successfully held 19 supply-demand matchmaking events. It has provided
+high-quality services for the CIIE for six consecutive years. It actively contributed to such
+major national exhibitions as the China International Fair for Trade in Services (CIFTIS),
+China International Fair for Investment and Trade (CIFIT) in Xiamen, China-South Asia Expo,
+and China-Arab States Expo, thus consolidating effectiveness and outcome of matchmaking.
+Leveraging the "BOC E-Cooperation” platform, it established a cross-border matchmaking
+ecosystem backed by comprehensive worldwide services, built multiple featured sections, and
+helped numerous local governments to attract more foreign investment. As at the end of 2023, it
+had provided "financing + intelligent" value-added services to more than 50,000 enterprises from
+126 countries and regions. Letters of intent totalled more than 10,000, with the intended amount
+exceeding USD54.0 billion.
+Corporate Deposits
+Pension Business
+Personal Banking
+Leveraging professional credit card service capabilities to implement the national
+consumption policy. The Bank fulfilled green finance requirements, expanded channel coverage,
+strengthened full-process business support and contributed to the growth of the new energy
+vehicle market. It has established Head Office-to-headquarters cooperation relationships with
+several new energy vehicle enterprises. Leveraging its merchant instalment payment business,
+the Bank launched the "Hundred Cities and Thousand Stores" green home appliance instalment
+promotion campaign in cooperation with national home appliance chain enterprises and online
+shopping websites, thus stimulating consumption of green home appliances and electronic
+products. Emphasising digital card products, it introduced or upgraded a number of digital
+card products suitable for business travel, supermarkets, sports, entertainment, women and new
+urban citizens, as well as issuing physical cards according to customer needs. To improve the
+digital experience of credit card application and use, it also rolled out functions such as source
+card binding, post-activation card binding of payment institution, and online application for
+supplementary cards. Focusing on people's livelihood consumption scenarios, the Bank carried
+out marketing campaigns with mainstream payment institutions to promote card binding and
+discounts for mobile payment. During peak consumption periods, it collaborated with merchants
+in the catering, shopping, hotel, air travel, tourism and other sectors to carry out marketing
+campaigns offering discounts for credit card payment. The Bank enabled the rapid redemption
+of reward points for purchases, thus realising closed-loop marketing based on earning and
+redeeming reward points from purchases. Robustly supporting the nation's key strategic projects,
+the Bank delivered marketing campaigns at the CIIE. To bolster the development of cities as
+international consumption centres, it also offered discounts for purchases made in key business
+districts designated by local governments. The Bank supported the development of business
+districts in the Yangtze River Economic Belt, cooperated with China UnionPay on campaigns in
+business districts in the Yangtze River Delta and Chengdu-Chongqing region, expanded coverage
+of high-quality merchants and created more consumption scenarios. The Bank intensified efforts
+to improve its intelligent risk control capabilities, strengthened disposal of non-performing assets
+by various means, and maintained stable credit card asset quality.
+Enhancing the quality and efficiency of debit card services and making steady progress
+towards financial services that benefit the people. The Bank adopted an integrated online
+and offline service mode for social security card business, enhanced physical social security
+card services and promoted electronic social security cards. As at the end of 2023, the Bank
+had cumulatively issued 121.9701 million physical social security cards and 33.9121 million
+electronic social security cards. To support the nation's rural revitalisation strategy, the Bank
+enthusiastically promoted rural revitalisation themed debit cards, with a total of 3.1911 million
+cards issued.
+Focusing on customers' all-round needs, the Bank fully explored the business development
+potential of its bank card business and continuously enhanced its brand competitiveness.
+Bank Card Business
+To promote the national strategy of high-level opening up, the Bank continued to optimise its
+personal foreign exchange services with a view to consolidating its leading market position. It
+successfully digitalised traditional business service processes and supported the conversion of
+several foreign currencies into e-CNY via self-service exchange machines, a service that has
+now been expanded to cover Indonesian rupiah, Philippine peso and Saudi riyal. It delivered
+foreign exchange services in eight languages covering 21 currencies and 169 denominations. Its
+foreign exchange cash reservation service was available in major cities in the Chinese mainland
+and via multiple channels such as mobile banking, WeChat banking and online banking, and its
+appointment service was integrated into platforms such as China's online government affairs
+service platform and the JegoTrip app. As at the end of 2023, the Bank outperformed peers in
+terms of personal cross-border business income, business volume of foreign currency exchange
+volume and market share of foreign currency personal deposits. It offered personal foreign
+currency deposit and withdrawal services in 25 currencies and personal foreign exchange services
+in 39 currencies, securing a leading position among domestic peers.
+Personal Foreign Exchange Business
+In 2023, the Bank was honoured with numerous awards including "Best Mega Private Bank in
+China" from The Asian Banker, "Best Private Bank National (Gold Award)", "Best Private
+Bank – Ultra-High Net Worth (Gold Award)" and "Best Private Bank Investment Services
+and Research (Gold Award)" from Asian Private Banker, “Best Private Bank for Entrepreneurs"
+from Global Finance, “2023 Excellent Case of Family Trust Management Innovation" from The
+Banker. A total of 15 private banking centres of the Bank were listed in the Top 100 Private
+Banking Centres by Retail Banking magazine.
+-
+Plans (ESOP), and organised several sessions of "GBIC (Government, Banks, Investment Banks
+and Insurance, Clients) Development Forum”. The Bank fulfilled its social responsibilities
+by providing a variety of products with public welfare features. It also deepened coordination
+between its domestic and overseas institutions and sharpened the advantages of its globally
+integrated services. It optimised the network of its private banking centres by establishing 191
+private banking centres in the Chinese mainland. As at the end of 2023, the Group had over
+173,700 private banking customers with RMB2.69 trillion of financial assets under management.
+57
+The bank adhered to the concept of “private banking driven by the Group's strength", leveraging
+the Group's diversified resources to create full-cycle, multi-scenario and customised wealth
+management service. It improved its “BOC All-round Investment Strategy” information service
+system based on daily, weekly, monthly, quarterly, and annual investment strategy reports, built
+a "Market-wide, Group-wide and round-the-clock" private banking products shelf available,
+iterated its customised services and asset allocation capabilities according to customer needs,
+and provided comprehensive services to clients throughout the investment process. It promoted
+its “Entrepreneur Office" service, creating a multi-layer, multi-class comprehensive service
+system to support the development of entrepreneurs. Moreover, it accelerated the development
+of its family trust business, with the number of family trust service customers increasing by
+72.95% compared with the prior year-end. It set up charitable family trusts for art and education
+purposes, and assisted corporate clients set up charitable trust. It offered business financing credit
+service for entrepreneurs, assisted customers in launching several Employee Stock Ownership
+Private Banking Business
+Improving the availability and convenience of consumer financial services. The Bank grew
+its non-housing consumer loan business in terms of both customer coverage and scale, and
+continued to accelerate the pace of digital transformation. The Bank actively implemented the
+policy of interest exemption and deferred repayment for government-sponsored student loans,
+launched the first commercial student loans for postgraduates in the Chinese mainland, and
+promoted the coordinated development of government-sponsored student loans by campus and
+place of origin, thereby expanding the scope of its business services.
+Focusing on promoting steady consumption growth. The Bank continuously improved services
+for key consumer areas, built diversified scenarios and accelerated online transformation.
+It reinforced its advantages in traditional strengths such as auto instalment loans, deepened
+collaboration with key private and corporate brands, expanded channel coverage and improved
+the digital service experience. The Bank vigorously promoted the development of home
+decoration instalment loans tailored to local conditions to boost home furnishing purchases.
+Furthermore, it gave full play to the flexible features of its instalment business through the “Family
+Consumption Reserve Fund", serving different customer groups. The Bank also promoted white-
+list precision marketing to serve consumption demand in various lifestyle scenarios.
+Supporting the steady and healthy development of the real estate market. The Bank made
+timely adjustments to its housing credit policy and provided differentiated housing loan services.
+It continually increased the intensity of housing loan, and cumulatively granted over RMB600.0
+billion of housing loans in 2023, leading its peers in year-on-year growth. The Bank implemented
+regulatory requirements for interest rate adjustments for existing first-home loans and made
+every effort to embed policies and adjust interest rates for customers.
+The Bank intensified its efforts to expand its consumer finance business to serve the high-quality
+development of the real economy. As at the end of 2023, the RMB personal loan balance of the
+Group's commercial banks in the Chinese mainland totalled RMB5,827.122 billion, an increase
+of RMB146.012 billion or 2.57% compared with the prior year-end.
+Consumer Finance Business
+56
+-
+-
+The Bank was awarded the "Best Fund Sales Bank for Mutual Funds in 25 Years (Major State-
+Owned Banks)" in the China Fund Yinghua Awards organised by China Fund News and the "Capital
+Securities Cup – 4th Golden Bull Award for Banking Wealth Management – Golden Bull Award
+for Agent Sales of Wealth Management Products" from China Securities Journal.
+The Bank consistently implemented the national strategy of "common prosperity", striving to
+enhance customers' financial well-being and satisfaction by improving the customer coverage
+and quality of its wealth management business. It established a diversified investment product
+shelf based on a “Market-wide and Group-wide" approach to select high-quality products,
+dynamically optimised the product range according to market conditions, continuously improved
+its multi-term, multi-strategy product system, and steadily expanded cooperation with wealth
+management companies. As at the end of 2023, the Bank had established partnerships with 13
+wealth management companies, maintaining a leading market position among its comparable
+peers. To provide personalised asset allocation advice, it upgraded its specialised asset allocation
+services and optimised the "allocation among four asset classes" module in the asset analysis
+section of its mobile banking platform. It expedited the shift to a comprehensive, whole-
+process customer support model that covers pre-investment, investment and post-investment.
+Combining the professional research efforts across the Group, the Bank optimised "BOC
+Investment Strategy”, a global investment strategy information service system covering major
+asset categories and different time intervals. It further improved the online operating ecosystem
+of its mobile banking “On-line Wealth Community” with 43 financial institution participants
+covering funds, insurance, brokerage, wealth management and other businesses, strengthening
+investment education and service support throughout customer investment. As at the end of 2023,
+the financial assets of the Group's personal customers under management exceeded RMB14.29
+trillion, with a steady increase in both the customer base and assets under management of
+medium and high-end customers. The Bank established 8,162 wealth management centres and 1,109
+prestigious wealth management centres in the Chinese mainland.
+Wealth Finance Business
+The Bank was recognised as a "Top Ten Elderly Care Financial Institution of the Year” in the
+2023 China Financial Value Ranking of CBN.
+The Bank continued to offer inclusive and high-quality account management services. It
+enhanced its personal pension services, comprehensively upgraded the personal pension sections
+of its mobile banking platform and optimised related systems and functions, and provided a one-
+stop comprehensive pension scheme covering pension account opening, contribution and asset
+management, etc. The Bank maintained a leading market position among its comparable peers in
+terms of the number of personal pension mutual funds. The Bank actively reduced fees and made
+profit concessions, providing fee waivers on personal debit card annual fees and management
+fees for petty accounts. It continued to promote “the Chinese mainland personal account opening
+witness service" (known as the “Greater Bay Area Account Opening” service), facilitating the
+opening of mainland personal bank settlement accounts for residents of Hong Kong (China) and
+Macao (China).
+Account Management Business
+55
+55
+The Bank adhered to customer-oriented and technology-driven strategies to foster the systematic
+aggregation of its business offerings and the integration of products and services, with a view
+to establishing itself as a leading bank in full-stack personal banking. As at the end of 2023,
+the Bank's commercial banking business in the Chinese mainland had more than 525 million
+personal customers, an increase of 3.80% compared with the prior year-end, outpacing its
+comparable peers in terms of year-on-year growth rate. In 2023, the Bank's personal banking
+business in the Chinese mainland realised an operating income of RMB244.640 billion, an
+increase of RMB 17.371 billion or 7.64% compared with the prior-year.
+The Bank adhered to the national strategy of actively responding to the aging population.
+Focusing on establishing the national elderly care security system, the Bank developed and
+improved pension products and services for the elderly and continued to provide a range of
+products including enterprise annuities, occupational annuities and personal pensions, etc., thus
+satisfying customers' demands for pension finance. It also fully supported the development
+of the silver economy. As at the end of 2023, pension funds held in trust by the Bank reached
+RMB209.886 billion, an increase of RMB39.643 billion or 23.29% compared with the prior
+year-end. Enterprise annuity individual accounts held by the Bank reached 4.1237 million, an
+increase of 0.2249 million or 5.77% compared with the prior year-end. Pension assets under
+custody amounted to RMB992.390 billion, an increase of RMB85.788 billion or 9.46% compared
+with the prior year-end. The Bank provided enterprise annuity services for more than 18,200
+institutional clients.
+58
+69
+The Bank vigorously expanded overseas customer base. The Bank improved its market
+competitiveness of cross-border investment and financing products, and continued to expand
+the advantages that led its peers in global cash management, syndicated loans, cross-border
+merger and acquisition loans, foreign-related letters of guarantee, bond underwriting, cross-
+border custody, and other competitive products. In 2023, by acting multiple roles such as
+co-lead bank, the Bank successfully participated in the Rio Grande LNG project, achieving
+the largest greenfield energy project financing in U.S. history ever, which won the "2023
+Americas Deal of the Year" award by Project Finance International (PFI).
+Giving full play to the advantages arising from its global institution network to steadily
+boost its international influence. The Bank engaged in comprehensive cooperation with a
+diverse array of financial institutions in such areas as clearing, settlement, lending, investment,
+custody, treasury operations and capital market services, further expanding its customer base.
+Responding nimbly to market fluctuations, it provided market advice to overseas institutional
+clients and promoted the investment value of RMB to medium and long-term investors around
+the world. As a result, it enjoyed steady growth in its overseas institutional investor customer
+base. Furthermore, the Bank capitalised on its international partnership network, drew on its
+advanced global expertise and established a peer communication and cooperation mechanism to
+continually strengthen its participation in ESG-related initiatives worldwide. The Bank helped to
+deepen and expand the interconnection and cooperation between the capital market and overseas
+markets, and actively participated in the construction of financial factor market platforms and
+business innovation in the areas of "Swap Connect" and "Shanghai-Hong Kong Stock Connect
+and Shenzhen-Hong Kong Stock Connect"; supported the construction of Shanghai International
+Reinsurance Centre, actively integrated into the design and marketing of the international
+reinsurance board and became the main cooperative bank of the platform. The Bank gave full
+play to the characteristics of global operation, and provided a package of integrated financial
+services such as cross-border fund settlement, foreign currency exchange, exchange rate hedging
+and other comprehensive financial services for the new institutions of the reinsurance platform.
+Promoting the coordinated development of domestic and overseas institutions, and
+further exploring business opportunities from bilateral trade and investment. With the
+“Chinese Element” in mind, the Bank continuously improved its bilateral trade information
+sharing mechanism as well as its product system for new cross-border e-commerce businesses,
+providing such enterprises with cross-border settlement services amounting to RMB580.0 billion,
+representing year-on-year growth of 118%. It forged links with 28 market procurement platforms,
+covering most of the pilot provinces for market procurement trade and leading the industry in
+terms of platform coverage. Operating at the vanguard of cross-border trade and investment
+facilitation reform, the Bank leveraged its global cash management product strengths to provide
+multinational enterprises with centralised cross-border fund management services, maintaining
+its leading market share. It continued to refine its overseas cash management functions and
+constantly enhanced its integrated service capabilities. The number of contracted accounts in
+overseas cash management business increased by 24.47% compared to the end of the previous
+year.
+Making fresh progress towards the high-quality joint construction of the Belt and
+Road Initiative. It has followed up on more than 1,000 corporate credit projects along the
+Belt and Road, and provided various credit facilities that cumulatively exceed USD316.0
+billion. Attending the Third Belt and Road Forum for International Cooperation, the Bank
+signed contracts for eight projects during the on-site Belt and Road CEO Conference, with 13
+deliverables being incorporated in the List of Practical Cooperation Deliverables of the Third
+Belt and Road Forum for International Cooperation.
+The Bank gave full play to its globalised and integrated advantages, closely tracked global
+market dynamics, strengthened research on market trends, bolstered risk management and took
+effective measures in line with local conditions in order to maintain continued stable growth in
+its overseas institutions' financial business, support the construction of the new "dual-circulation"
+development pattern, and make positive contributions to China's economic development and the
+global economic recovery.
+Corporate Banking
+55
+66
+65
+The Bank continued to improve the regional and intensive development mechanism of
+its overseas institutions, and cultivated synergies to drive coordinated growth. The Bank
+steadily pushed forward the development of its overseas regional headquarters. Specifically,
+BOCHK continuously deepened the regional management of its branches in Southeast Asia. Bank
+of China (Europe) S.A. effectively enhanced its regional management and intensive operations
+capability in the EU, the BOC (Europe) Shared Service Centre was inaugurated, thus improving
+its service quality and efficiency. A regional coordination mechanism for BOC institutions in
+Latin America, South Asia and the South Pacific was put into operation, further strengthening
+regional collaboration and leveraging synergy among the institutions.
+The Bank continued to optimise its global service network to meet the financial services
+needs of its global clients. As at the end of 2023, the Bank had 534 overseas institutions in 64
+countries and regions, including 44 countries along the Belt and Road. The BOC Papua New
+Guinea Representative Office and BOC Riyadh Branch were opened for business in June 2023
+and September 2023, respectively.
+The Bank realised steady and orderly development of its globalised businesses, and
+constantly improved its ability to create value. The Bank continued to explore market
+opportunities, with a focus on cross-border finance, green finance, the high-quality joint
+development of the Belt and Road, RMB internationalisation, the development of international
+financial centres in Shanghai and Hong Kong, and overseas personal banking services. It also
+deepened Group-level governance, focused on its main businesses, tapped the potential of
+overseas markets and continuously enhanced market competitiveness. It continued to globally
+strengthen its risk compliance and safe operation capabilities to achieve sustainable development.
+As at the end of 2023, the Bank's overseas commercial banking business realised customer
+deposits and loans of USD552.134 billion and USD434.702 billion respectively, an increase of
+6.28% and 0.88% compared with the prior year-end. In 2023, the Bank's overseas commercial
+banking business achieved a profit before income tax of USD8.084 billion, an increase of 5.89%
+compared with the same period of the prior year, contributing to 19.21% of the Group's total
+profit before income tax.
+As the most globalised Chinese bank, the Bank continued to leverage its unique advantages,
+supported the nation's high-level opening up, and boosted the domestic economy while
+contributing to the new “dual-circulation” development pattern.
+Globalised Operation
+64
+The Bank continued to adopt differentiated management of its branches and subsidiaries
+outside the Chinese mainland, and stimulated their development. The Bank reviewed
+and revised its market-by-market growth strategies in order to further consolidate its stable
+development foundations and enhance service synergies across the Group. In this way, it refined
+its ability to provide world-class financial services for customers' high-quality “Bringing In” and
+"Going Global" efforts.
+Enhance Cross-border Service Capabilities and Facilitate High-level Opening-up
+The Bank actively played its role as the main channel of foreign trade and finance, gave
+full play to the advantages of globalisation and integration, and actively helped stabilise the
+core market for foreign trade and foreign investment, and contributed to the international
+circulation.
+Strive to provide excellent services to "Going Global” enterprises. The Bank closely
+followed the "Going Global” enterprises, optimised its global resource allocation, providing
+its customers with financial services featuring global expertise and all-round accessible at any
+point of contact, and collaboratively promoted breakthroughs in key businesses, including
+promoting the smooth financing and closure of China Telecom's first overseas greenfield
+project in China's telecommunications industry, China Telecom's Philippine PTO project, as
+the initial appointed lead bank, and won the "2023 Best Project Financing Deal in Southeast
+Asia" awarded by FinanceAsia; the Bank also exclusively provided export buyer's credit
+financing for the world's largest river-sea intermodal LNG carrier "Dapeng Princess", and
+helped the first LNG carrier of Shenzhen state-owned assets to be delivered smoothly.
+Taking a global perspective, the Bank leveraged the advantages of its globalised network to
+proactively anticipate changes in international financial markets. placed equal emphasis on
+growth and stability, robustly delivered overseas financial market services, and enhanced the
+international brand influence of its financial markets business.
+Ensuring centralised management of its global investment operations. The Bank strengthened
+its international market analysis and investment strategy research, seized opportunities in
+overseas markets, and steadily developed its overseas institutions' bond investment business. It
+strived to elevate liquidity levels and asset returns in its investment portfolio, carried out active
+management of scale and duration, and continuously strengthened risk prevention and control.
+Taking full advantage of its globalised and integrated trading operations. The Bank provided
+clients worldwide with 5×24 round-the-clock quotation services from its operations in Hong
+Kong (China), London and New York. Its overseas institutions continued to compete in local
+markets by harnessing their respective resource endowments, promoting coordinated regional
+development and enhancing market competitiveness. The Bank actively provided RMB market-
+making and quotation services and RMB futures business in Singapore, South Korea and other
+countries and regions, thus serving national strategies and economic development. The Hong
+Kong Offshore RMB Trading Centre continued to expand its product coverage, thus facilitating
+RMB internationalisation. The London Trading Centre continuously strengthened business
+support for the Bank's branches in Europe, Middle East and Africa, including supporting the
+branches' use of its electronic transaction platform, and thus enhanced quotation efficiency. In
+2023, the Bank underwrote Panda bonds with a total volume of RMB32.875 billion, ranking
+first in the market. It underwrote offshore China bonds with a total volume of USD2.562 billion,
+also ranking first in the market, and underwrote USD3.379 billion of Asia (excluding Japan) G3
+currency bonds, ranking first among Chinese institutions.
+Securing the leading edge in cross-border custody business. In line with national strategy, the
+Bank steadfastly implemented the high-level opening up of financial markets, endeavoured to
+improve the service capacity of its overseas custody products, and maintained a leading position
+in both domestic and overseas cross-border custody markets. As at the end of 2023, the Bank's
+cross-border custody scale exceeded RMB810.0 billion, ranking first among Chinese peers. The
+Bank was awarded “Best QDII Custodian Bank” in 2023 by The Asset.
+Clearing Business
+The Bank prudently and robustly implemented key priorities in RMB internationalisation, thus
+further consolidating its leading edge in cross-border RMB payments. As at the end of 2023, the
+Bank accounted for 15 of the world's 33 authorised RMB clearing banks, continuing to lead its
+peers. It continually supported the global coverage expansion of CIPS, and ranked first in the
+number of CIPS direct participant and indirect participant relationships.
+60
+Enhancing the competitiveness of cross-border credit card products. The Bank established
+a cross-border rights and interests system covering overseas study, tourism and commerce, and
+optimised the cross-border card usage experience for customers. Underscoring the distinctive
+characteristics of its cross-border offering, it carried out cashback offers for cross-border
+consumption under the “Global Wonderful" theme as well as a "reward points for overseas
+consumption” campaign with Zhuo Jun Card. It offered preferential deals at merchants in
+Hong Kong and Macao in collaboration with BOCHK Card Co., Ltd., and organised cashback
+promotions for popular stores in the UK, Australia and other countries. The Bank created "Zhuo
+Jun Card" branded products to provide secure and convenient card services for overseas students,
+launching Zhuo Jun Card products in currencies such as the Canadian Dollar and Australian
+Dollar in 2023. It also actively enhanced its overseas branches' merchant acquiring business,
+delivering high-quality payment acceptance services to both domestic and overseas cardholders.
+Meeting overseas customers' personal loan needs. With an emphasis on compliance and
+steady growth, the Bank promoted the differentiated development of overseas sub-regional
+classifications, and continued to improve the ability of refined risk management. In 2023,
+positive growth was achieved in the scale of its overseas personal loan business.
+Promoting market connectivity in the Guangdong-Hong Kong-Macao Greater Bay Area.
+The Bank actively promoted the "Cross-boundary Wealth Management Connect” services,
+amassing over 44,700 subscribers as at the end of 2023 and maintaining a market-leading
+position. It continued to promote "Greater Bay Area Account Opening" service, meeting the
+demand of residents from Hong Kong (China) and Macao (China) for opening mainland personal
+bank settlement accounts, continuously consolidating the product's advantages.
+Leveraging its advantages in globalised operations, the Bank continued to enrich its overseas
+personal banking products and services. With a focus on meeting local and cross-border financial
+service needs, the Bank provided customers with comprehensive services including account
+management, savings, settlement and electronic banking, as well as wealth management and
+private banking services in countries and regions such as Hong Kong (China), Macao (China)
+and Singapore. As at the end of 2023, the Bank had established its overseas personal banking
+presence in over 30 countries and regions, serving over 7.00 million customers and recording
+consistent growth in customer scale.
+Personal Banking
+662
+67
+Continue to consolidate and enhance its position as the preferred Chinese commercial
+bank for the Belt and Road Initiative. Adhering to the goal of "high standards, sustainability
+and people's livelihood", the Bank actively supported high-quality Belt and Road cooperation,
+and promoted the implementation of several landmark projects, including: acting as mandated
+lead arranger, the Bank successfully organised B-loan syndication for ACWA Power Bash and
+Dzhankeldy two 500MW wind power projects in Uzbekistan, the largest single wind power
+project in Central Asia; the Bank successfully organised a RMB40.0 billion syndicated bank
+term loan for BASF's Zhanjiang Verbund site and served as the sole coordinating mandated
+lead arranger, active bookrunner, agent bank and account bank; the syndicate's market share
+in the Asia-Pacific region remained the first in the industry; the market share of cross-border
+M&A remained leading position, and ranked first in the M&A financing category in the Asia-
+Pacific region (excluding Japan) again.
+BOC Fullerton Community Bank was awarded "Inclusive Finance Case (for Banks and Insurance
+Companies)" by China Financial Press, "2023 Excellent Case of Financial Services for Rural
+Revitalisation" by Jinrongjie.com, "2023 Model Case of Financial Services for Farmers by
+Village Banks" by China Rural Credit Cooperatives News, “Outstanding Lead Sponsor among
+Village Banks" by China Association for the Promotion of County and Town Economic
+Exchange and Contemporary County Economy, "Excellent Practice Case of Financial Services
+for Rural Revitalisation (2022-2023)" by China Urban and Rural Finance News and many other
+social honors.
+Financial Markets Business
+BOC Fullerton Community Bank continually improved its product and service system, further
+expanding its customer base and business scale. Serving the real economy, BOC Fullerton
+Community Bank increased support for micro and small-sized enterprises and individual
+merchants. It also boosted rural revitalisation and improved the quality and efficiency of services
+to agriculture-related entities such as large-scale planting and breeding households and family
+farms. It delivered financial services to households and villages and pressed ahead with digital
+transformation, thus unblocking “last mile" barriers to county-level financial services. It also
+set up and optimised a comprehensive risk management system for business lines that supports
+farmers and small-sized enterprises, thus maintaining good asset quality. The NPL ratio was 1.77%,
+and the ratio of allowance for loan impairment losses to NPLs was 205.29%. As at the end of
+2023, the balances of the total deposits and loans of its banks stood at RMB72.962 billion and
+RMB79.520 billion, respectively.
+Village Bank
+Vigorously serving the development of the real economy. The Bank actively publicised
+the concept of FX risk neutrality and made comprehensive use of financial market trading
+instruments to assist enterprises in managing their FX risk. By innovating its service model for
+micro, small and medium-sized enterprises (MSMEs), it helped them prevent FX risk under
+extreme market circumstances, as well as enhancing the quality and efficiency of its FX hedging
+services for inclusive finance clients.
+Continuously sharpening market advantages. The Bank provided 40 currencies available for
+exchange, outperforming the domestic market in terms of the total number of tradable foreign
+currencies, and expanded its leading market share in foreign currency exchange against RMB.
+The Bank performed its duties as a core market maker in various fields. It was awarded "Best
+RMB Foreign Exchange Market Maker” and multiple annual market influence awards in the
+interbank foreign exchange market ratings; “Leading Institution in the Bond Market” by China
+Central Depository & Clearing Co., Ltd. in 2023; and "Northbound Top Market Maker" for
+serving the country's two-way opening up. The Bank was one of the first batch of domestic
+market makers for "Swap Connect” business, and led the market in volumes of bond custody for
+overseas institutions. It also remained the leading market maker for precious metals of Shanghai
+Gold Exchange and Shanghai Futures Exchange. In addition, the Bank consolidated its leading
+position in uncleared initial and variation margin fields, improved its collateral management
+mechanisms and infrastructure, and was awarded “Outstanding Pioneer Institution in Collateral
+Business" issued by China Central Depository & Clearing Co., Ltd. in 2023.
+The Bank refined its financial markets service system, enhanced its comprehensive customer
+service capabilities and consolidated the foundations of its high-quality development.
+Trading Business
+60
+60
+Accelerating innovation momentum. The Bank enriched its product system, improved
+its product management structure, and accomplished several groundbreaking regulatory or
+infrastructure innovation initiatives with the successful launch of the “first deals" and the "initial
+batch". It steadily carried out derivatives business based on the new benchmark interest rates,
+continuously optimising its product lineup.
+The Bank strengthened its professional forecasting and analysis of macroeconomic and financial
+market trends, dynamically optimised its investment structure, and effectively balanced market
+risk and investment opportunities. It supported the development of the real economy, increased
+investment in Chinese government bonds, local government bonds, green bonds and other key
+fields, and retained its position as a leading investor in green financing instruments. To cope with
+a challenging market environment, the Bank capitalised on its specialist advantages, optimised
+the product and currency structure of its investment portfolios, and seized market opportunities
+to significantly increase its foreign currency portfolio yield while properly controlling risks.
+The Bank closely tracked global financial market dynamics, leveraged its unique advantages in
+financial markets business, stepped up efforts to ensure prudent operations and compliance with
+regulatory requirements, and continually adjusted its business structure, thus advancing the high-
+quality development of its financial markets business.
+Financial Markets Business
+China.
+With a focus on customer experience, the Bank remained committed to providing convenient
+and efficient all-round payment services. Embracing the concept of “payment for the people”,
+it introduced a one-click multi-card binding function in its mobile banking and smart counter
+channels, realised quick card linking on mainstream payment platforms without page redirection,
+and further improved the card linking process experience for customers. To make rail travel more
+pleasant and efficient, the Bank expanded the coverage of its Railway e-Card services to 82 inter-
+city railway lines, covering key areas such as the Beijing-Tianjin-Hebei region, Yangtze River
+Delta and Guangdong-Hong Kong-Macao Greater Bay Area, serving over 30 million journeys.
+It explored micro-payment scenarios that benefit people's livelihood and expanded the coverage
+of its mobile banking QR code services for public transport. The Bank successfully completed
+the building of payment acceptance environments for large international events such as the 31th
+Summer Universiade (Chengdu), the 19th Hangzhou Asian Games and the CIIE, and provided
+convenient, high-quality, secure and efficient bank card payment services for overseas visitors to
+Payment Merchant Business
+As at the end of 2023, the Bank had issued a total of 676.5517 million debit card and 144.1019
+million credit cards, a year-on-year increase of 4.50% and 4.22% respectively. The balance of
+credit card loans reached RMB551.366 billion, a year on year increase of 8.38%. In 2023, debit
+card and credit card transaction volume amounted to RMB9,411.964 billion and RMB 1,393.235
+billion, respectively. The total instalment volume of credit cards stood at RMB354.848 billion.
+Securities Investment Business
+As an important platform for implementing the nation's rural revitalisation strategy, BOC
+Fullerton Community Bank is committed to providing modern financial services to county-
+level micro and small-sized enterprises, individual merchants, wage earners and farmers
+with the aim of "focusing on county area development, supporting farmers and small-sized
+enterprises, and growing together with communities”. As at the end of 2023, BOC Fullerton
+Community Bank had established 134 village banks with 189 sub-branches in 22 provinces
+(including municipalities directly under the Central Government). Its registered capital amounted
+to RMB 10.585 billion, with total assets and net assets standing at RMB109.298 billion and
+RMB15.379 billion respectively. In 2023, BOC Fullerton Community Bank achieved a profit for
+the year of RMB481 million.
+Robustly consolidating lines of defence against risk. The Bank continuously improved its
+risk control rules and risk management mechanisms, and conducted more forward-looking,
+proactive and professional analysis and judgement of financial markets. It responded quickly
+and effectively to market changes, ensured stable operations, and continuously improved its risk
+control capability.
+Investment Banking Business
+Focusing on providing high-quality financial services to support economic and social
+development, the Bank comprehensively improved the service quality and operational efficiency
+of its asset custody business. It actively promoted pension finance, with pension funds under
+custody reaching RMB1.72 trillion, an increase of RMB239.7 billion over the prior year-
+end. In 2023, the Bank established eight pension funds of funds (FOFs), ranking among the
+market leaders, and provided custody services for a number of exclusive commercial pension
+insurance schemes and commercial pension products. It supported the development of green
+finance and provided custody services for green industry funds, green bond issuance funds and
+other products. Its scale of green assets under custody exceeded RMB75.0 billion, achieving a
+growth rate of over 30% for the third consecutive year. To control risk in its custody operations,
+the Bank carried out emergency drills and stress-tested its off-site disaster recovery continuity
+plans, thus continuously improving its emergency response capability. As at the end of 2023,
+the Group's assets under custody reached RMB17.37 trillion, up 5.19% from the prior year-end,
+while its custody fee income continued to lead the market.
+Custody Business
+33
+63
+Actively serving the real economy and managing the people's wealth. The Bank conducts asset
+management business through institutions such as BOC Wealth Management, BOCIM, BOCI
+China, BOC Asset Investment, BOC Hong Kong Asset Management and BOCI-Prudential Asset
+Management Co., Ltd. Together, these institutions provide individual and institutional investors
+with local and foreign currency products across a full range of asset categories, as well as
+diversified investment strategies and services across the entire investment cycle. This includes
+constantly innovating, enriching and issuing new products with various characteristics and
+themes, such as "green", "elderly care" and "technology". At the same time, all of the Bank's
+asset management businesses are committed to implementing regulatory requirements, adhering
+to the compliance “bottom line”, strengthening comprehensive risk management, maintaining
+smooth business operations during market fluctuations and effectively safeguarding investors'
+interests. As at the end of 2023, the scale of the Group's asset management business reached
+RMB3 trillion, achieving continued growth in market influence.
+With a focus on major national priorities, the Bank contributed to the overall management
+and top-level design of the asset management sector through the Asset Management Business
+Committee. It seized market opportunities arising from the new development stage, such as
+continuous growth in residents' wealth and the construction of the third pillar of elderly care,
+advanced the high-quality development of its asset management business by comprehensively
+improving its investment and research capabilities, strengthening the foundations of its customer
+base and accelerating digital transformation.
+Asset Management Business
+68
+During the year, the Bank won the Bond Connect's “Primary Market Innovation Award (Underwriter)”,
+continuing to enhance its brand influence in debt capital markets.
+Prudently developing its credit asset-backed securitisation business. In 2023, the Bank issued
+eight NPL asset-backed securitisations with a total issuance volume of RMB4.854 billion.
+62
+62
+Continuing to hone its competitive advantages in cross-border business. It helped overseas
+issuers including the Arab Republic of Egypt, Asian Infrastructure Investment Bank and New
+Development Bank to issue Panda bonds, maintaining its leading position in Panda bonds in
+terms of market share. The Bank continued to top the offshore China bond underwriting league
+table, helping to channel international investment to support the real economy, and underwrote
+the first sovereign Panda bond from Africa. Serving as global coordinator, the Bank helped the
+Ministry of Finance of the People's Republic of China to issue an RMB5.0 billion sovereign
+bond in Macao. As lead underwriter, the Bank assisted the Shenzhen, Guangdong and Hainan
+local governments to successfully issue offshore RMB local government bonds. This promoted
+the development of Hainan Free Trade Port, facilitated the integration of Hainan and the
+Guangdong-Hong Kong-Macao Greater Bay Area, and contributed to financial market growth in
+Hong Kong and Macao.
+Facilitating the development of China's multi-layered capital markets with professional
+services. The Bank supported customers' direct financing needs, the amount of bond
+underwriting volume of the Bank ranked among the top in China's interbank bond market, and
+the sales volume of credit bonds of the National Association of Dealers continued to rank first
+in the market. It actively promoted the development of green finance, maintaining a leading
+market position in both green bond and asset-backed securitisation (ABS) underwriting. The
+Bank continually enhanced the effectiveness and efficiency of its professional financial advisory
+services. Leveraging a comprehensive “online + offline” multi-scenario approach, it delivered
+a range of services including financial market analysis, industry analysis, investment and M&A
+case analysis, as well as domestic and overseas regional research. In addition, the Bank offered
+project-specific financial advisory services, with a special focus on M&A, equity investment and
+financing, project financing, debt restructuring, asset divestiture, and other strategic initiatives,
+thus offering dedicated support to assist clients with their industrial chain expansion goals and
+high-quality development strategies.
+Fully leveraging the advantages arising from its globalised operations and diversified business
+platform, focus on the diversified financing needs of customers with comprehensive, professional
+and customised "onshore + offshore” and “financing + intelligence” integrated financial services
+plans, including financial products and services such as bond underwriting and distribution,
+asset-backed securitisation (ABS), and professional M&A financial advisory services, etc.
+61
+Giving Full Play to its Role of a Major Banking Channel to Promote RMB
+Internationalisation in a Steady, Prudent and Robust Manner
+The Bank fully leveraged innovation, demonstration, and leadership roles in the
+internationalisation of the RMB, actively participated in the construction of cross-border
+RMB infrastructure, continuously expanded the global clearing network, and consolidated
+the leading position in RMB clearing banks. The Bank issued the Action Plan on Supporting
+Foreign Economic and Trade Enterprises to Expand Cross-border RMB Use and the Cross-
+border RMB Service Plan for Central Asia to actively promote RMB pricing and use. It
+became the sole principal partner bank for "Swap Connect" central counterparty clearing,
+as well as the sole bank to design fund settlement plans for the “Reinsurance International
+Board" of the Insurance Exchange. The Bank launched a number of projects such as the RMB
+pricing and settlement of Egyptian Panda bonds and Zambia's copper commodities sales.
+It successfully held the Belt and Road and RMB Internationalisation Forum in Hong Kong
+and published the White Paper on RMB Internationalisation. It also undertook a number of
+promotional activities and published the cross-border RMB index and offshore RMB index
+on a quarterly basis, providing meaningful and comprehensive professional support for global
+customers to understand and use RMB. The Bank was successfully appointed as an RMB
+clearing bank in Cambodia and Serbia, ranking top among peers with a total of 15 clearing
+banks.
+12
+75
+The Bank is engaged in investment banking business through BOCI. As at the end of 2023,
+BOCI had an issued share capital of HKD3.539 billion, total assets of HKD68.969 billion and net
+assets of HKD22.326 billion. In 2023, BOCI realised a profit for the year of HKD1.400 billion.
+Proactively integrating into the new “dual-circulation” development pattern, BOCI promoted the
+high-quality development of investment banking, wealth management and asset management. It
+successfully facilitated the listing of 14 IPOs on the Main Board of Hong Kong Stock Exchange (HKEX),
+raising over HKD14.3 billion. It underwrote green and sustainable bonds with an aggregate value
+of USD4.215 billion, helping the Bank to maintain a leading position among Hong Kong peers
+in terms of total underwriting volume. Furthermore, acting as the sole ESG rating advisor, it
+assisted a client in successfully obtaining its first ever low-risk ESG rating from Sustainalytics,
+setting an industry benchmark. In terms of product innovation, it was the first Chinese financial
+institution in Hong Kong to issue RMB digital structured notes using blockchain, issuing a total
+of approximately HKD1.701 billion of such notes in 2023. It accelerated the transformation of
+its traditional brokerage business into a wealth management business, meeting clients' wealth
+management needs through diversified asset classes. BOCI supported the development of the real
+economy by strengthening ESOP services for listed companies, serving more than 200 corporate
+clients with over 140,000 employees from more than 40 countries and regions, managing more
+than 120 ESOP related trusts. It continued to promote digitisation and improved the functionality
+of its mobile securities services, as well as establishing its competitive capabilities as an HKD/
+RMB dual counter securities market maker. BOCI enhanced its asset management capabilities.
+BOCI-Prudential Asset Management Limited, a subsidiary of BOCI, ranked fifth and second respectively
+in the Hong Kong Mandatory Provident Fund (MPF) and Macao Pension Fund markets. It also
+BOCI
+Investment Banking Business
+In 2023, the Bank further optimised the synergistic mechanisms between the Bank and its
+comprehensive operation companies, and consolidated the regional coordination platform for
+comprehensive operations. It formulated the Group's comprehensive business coordination
+mechanism, established a process for prioritising potential collaborative projects, and carried
+out a comprehensive series of collaborative matchmaking activities. It also launched an internal
+competition to identify and realise collaborative business opportunities between the Bank and its
+comprehensive operation companies, in order to stimulate synergistic vitality. The Bank refined
+the Group-wide management and control mechanism of its comprehensive operations, established
+a “full-chain” performance management system for its comprehensive operation companies,
+and strengthened risk penetration management. It standardised and optimised the corporate
+governance structure of its comprehensive operation companies, strengthened performance
+management of the directors and supervisors assigned to those companies, and continuously
+improved the quality and efficiency of Group-wide management.
+As the first major commercial bank in the Chinese mainland to develop comprehensive
+operations, the Bank engages in such fields as investment banking, asset management, insurance,
+direct investment, leasing, consumer finance, and financial technology. With a focus on serving
+the real economy, the Bank pursued progress in “five major tasks" of promoting technology
+finance, green finance, inclusive finance, pension finance, and digital finance. Giving full play to
+its traditional business strengths, it advanced the high-quality development of its comprehensive
+operation companies according to the guidelines of Group-wide coordination, risk control,
+commercial sustainability, and market competitiveness.
+Comprehensive Operation
+74
+(Please refer to the annual report of BOCHK for a full review of BOCHK's business performance and related
+information.)
+79
+-
+BOCHK reinforced its technological foundations with the clear strategy of becoming a
+full-scale digital bank. BOCHK comprehensively promoted digital transformation with the
+utilisation of data, business intelligence and ecological approaches throughout its product design
+and service operations to ensure continuous and effective business operations and to support
+its ambition of rendering seamless and high-quality digital services and customer experiences
+through omni-channel services. BOCHK fostered product and service integration, and was
+endeavoured to the research and development of high-quality financial products and services.
+It consolidated its open banking ecosystems by drawing on different customer segments and
+ecologies, to provide customers with diversified e-payment service channels for daily spending
+and travel convenience. In collaboration with other market players, BOCHK explored the
+potential applications of artificial intelligence in the financial industry as well as development
+of digital currencies. It regularly brought the fintech sector together to exchange ideas and
+perspectives, with a view to integrating financial services and innovative technology. In a
+bid to enhance operational efficiency across all aspects of its businesses, BOCHK deepened
+technological empowerment, enhanced intelligent operations, and expanded the use of intelligent
+technology to automate and integrate its operations. It refined its policies and systems for digital
+transformation, nurtured digital-savvy talent and fostered an innovative culture, thus laying a
+solid foundation for its long-term development.
+73
+BOCHK deepened integrated regional collaboration and enhanced operational synergy.
+BOCHK remained focused on integrated regional development, adopting the organic combination
+of market-by-market strategies as its template for a differentiated management approach across
+its regional entities. By offering a diversified product suite, it leveraged its synergies and
+captured opportunities from the Regional Comprehensive Economic Partnership to focus on the
+development of Belt and Road and "Going Global" projects as well as large corporate customers
+in the region. It remained committed to promoting the regional development of green finance,
+with BOCHK Manila Branch, Jakarta Branch and Phnom Penh Branch launching BOCHK's
+first bilateral green loan, social responsibility loan and sustainability-linked syndicated loan
+respectively in Southeast Asia. As part of its development strategy for implementing digital
+transformation and a mobile-first approach, BOCHK Phnom Penh Branch and Vientiane Branch
+launched online RMB direct payroll remittance services. Bank of China (Thai) Public Company
+Limited, Bank of China (Malaysia) Berhad, BOCHK Ho Chi Minh City Branch, Phnom Penh
+Branch and Vientiane Branch successively rolled out e-Mortgage platforms, providing customers
+with online reservation, consultation and real-time mortgage application services, thereby
+further improving customer experience. It enriched the service quality of its intelligent Global
+Transaction Banking (iGTB) platform, with Bank of China (Thai) Public Company Limited and
+Bank of China (Malaysia) Berhad each launching an iGTB regional e-commerce service. In
+addition, BOCHK continuously refined its regional risk management mechanism by regularly
+monitoring and optimising the structure and quality of its credit portfolio, so as to ensure synergy
+between regional business development and risk management to continuously enhance risk
+management capabilities.
+"HKD-RMB Dual Counter Model” launched by Hong Kong Exchanges and Clearing Limited,
+BOCHK introduced a dual counter securities trading service on its mobile banking platform, with
+BOCHK itself being designated among the first batch of dual counter listed companies under
+the model. It supported the cross-border remittance service of the new RMB FPS introduced by
+the Hong Kong Monetary Authority, further enriching cross-border fund clearing channels. It
+improved regional RMB financial infrastructure, optimised the offshore RMB clearing network
+and actively cultivated the offshore RMB market, including expanding the service coverage of
+the Cross-border Interbank Payment System (CIPS) and promoting RMB usage, with Bank of
+China (Thai) Public Company Limited, BOCHK Jakarta Branch, Phnom Penh Branch, Vientiane
+Branch and Yangon Branch each being granted a direct participating bank qualification by CIPS.
+BOCHK also actively fulfilled the duties and solicited the assignment of RMB clearing banks,
+with BOCHK Phnom Penh Branch being appointed as the RMB clearing bank in Cambodia.
+72
+BOCHK expedited the development of financial services in the Greater Bay Area and
+maintained its market leadership in RMB business. Seizing business opportunities from
+financial services policies in the Guangdong-Hong Kong-Macao Greater Bay Area as well as
+improvement in consumer demand, BOCHK strengthened internal and external collaboration to
+explore key industries' and target customers' cross-border financing needs within the context
+of deeper integration in the Greater Bay Area. It rolled out a series of cross-border financial
+service solutions to allow corporate customers to capture development opportunities in the area.
+It kept pace with business opportunities arising from the HKSAR Government's development
+plan for the Northern Metropolis area in order to actively provide corresponding financial
+support. Through its new “BOCHK Cross-Border GO” brand, it made every effort to provide
+one-stop cross-border financial products and services to customers travelling around the globe,
+with a focus on customers in the Chinese mainland, Southeast Asia and overseas countries. It
+continually improved its RMB service capabilities and steadily pushed forward the opening
+up of the financial sector. In addition, it optimised the product and service suite of “Bank of
+China Cross-Boundary Wealth Management Connect", with the aggregate number of accounts
+opened and amount of funds remitted or transferred under both Northbound and Southbound
+services ranking among the top tier in Hong Kong. It assisted the People's Government of
+Hainan Province and the Shenzhen Municipal People's Government in the issuance of offshore
+RMB bonds in Hong Kong. Meanwhile, it facilitated the enhancement of cross-border financial
+infrastructure so as to widen mutual access, including supporting Northbound trading of "Swap
+Connect", "Shanghai Stock Connect” and “Shenzhen Stock Connect”. In alignment with the
+as an arranger bank in the Hong Kong-Macao syndicated loan market and as an IPO receiving
+bank. It strengthened the development of its key businesses, which included cash pooling,
+trade financing, payment and settlement as well as treasury centre services. It promoted the
+development of inclusive finance services, expanding the use of transactional data in the credit
+approval process for SMEs with a view to alleviating their financing pain points, and optimised
+e-collection and e-payment solutions for the Fast Payment System (FPS), thus stimulating
+constant growth in local business and commercial activities. It continually expanded the breadth
+and depth of its wealth management business and sharpened its leading edge in core products.
+To further expand its high-end and younger customer portfolio, it refined exclusive products
+and complementary services for high-end customers, including the launch of investment and
+wealth management solutions to Private Wealth and Wealth Management customers respectively,
+while actively promoting a targeted brand for the younger customer segment through innovative
+service channels and products. BOCHK proactively capitalised on opportunities arising from
+improvement in consumer demand, recording growth in consumer finance businesses such
+as credit cards, BoC Pay and BoC Bill. BoC Pay payment services now cover various daily
+consumption and transport scenarios in Hong Kong. It continued to expand its mortgage portfolio
+and secured the top market share in Hong Kong residential mortgages.
+71
+BOCHK deeply cultivated its core market of Hong Kong and continuously strengthened
+its competitive advantages. BOCHK enhanced support to corporate banking services. Working
+with blue-chip enterprises, high-quality commercial firms and SMEs in Hong Kong, BOCHK
+leveraged collaborative mechanisms among its integrated business platforms and rendered
+professional services to fulfil customers' business needs. As at the end of 2023, it outperformed
+the local market in terms of total customer deposit and loan growth while maintaining its non-
+performing loan ratio at below the market average. It continued its support to several key
+projects and expanded its supply chain finance business, maintaining its leading market share
+BOCHK adhered to the concept of sustainable development and consolidated its
+foundations in green finance. BOCHK provided green and low-carbon financial products and
+services to satisfy customers' demand for transformation towards sustainable development.
+To facilitate customer access to new green investment opportunities, it launched the "BOCHK
+Greater Bay Area Climate Transition ETF”, the first exchange-traded fund in the Hong Kong
+market to track an ESG index with investments in the Guangdong-Hong Kong-Macao Greater
+Bay Area. It also added a sustainable income strategy fund to its platform. BOCHK further
+promoted its Green Mortgage Plan to encourage home buying clients to choose green buildings.
+To capture opportunities from the transformation of "brown" industries, it created a full suite of
+differentiated green and sustainability-linked financial service solutions for its corporate clients,
+assisting them to adopt sustainable business models and accomplish green development targets.
+In addition, BOCHK enhanced innovation in its offshore RMB-denominated green finance, and
+successfully executed its first green RMB reverse repo transaction. In line with the HKSAR
+Government's proposals for green finance development, BOCHK served as custodian for the
+HKSAR Government's first tokenised green bond issuance. BOCHK remained committed to
+achieving its carbon neutrality targets in an orderly manner, providing momentum towards
+its goal of carbon-neutral operations by 2030. Fulfilling its responsibilities in climate-related
+information disclosure, BOCHK published its first Climate-related Financial Disclosures Report,
+with a view to playing a key role in coping with climate changes.
+As a Hong Kong-listed banking group controlled by the Bank, BOCHK capitalised on the
+Group's globalised and integrated advantages to continuously cultivate the Hong Kong market,
+actively tap into opportunities from cross-border businesses and expedite regional development in
+Southeast Asia. It maintained its leading position in major businesses, continuously sharpened its
+competitive edges and helped strengthen Hong Kong's status as a leading international financial
+centre. As at the end of 2023, BOCHK's issued share capital was HKD52.864 billion, total assets
+were HKD3,868.783 billion and net assets were HKD323.429 billion. Its profit for the year was
+HKD34.857 billion.
+BOCHK
+70
+Enhancing the BOC International Mobile Banking app and supporting the digital
+transformation of its overseas personal banking business model. It launched version 6.0
+of BOC International Mobile Banking app. This version improved user interface and function
+navigation, allowing customers to seamlessly switch from the classic version to a new simplified
+version, accommodating diverse customer needs. It enriched its mobile banking functions,
+encompassing online account application and investment services, significantly enhancing
+customers' overall experience. As at the end of 2023, BOC International Mobile Banking app
+was available in 30 countries and regions around the world, providing services in 12 languages.
+Upgrading and promoting overseas enterprise online banking, and refining its capabilities
+in global enterprise online financial services. The Bank continuously promoted the new
+version of overseas enterprise online banking, focused on improving the localisation ability
+and compliance management goals of overseas institutions, optimised more than 40 functions,
+strengthened the local market competitiveness of overseas enterprise online banking and the
+service capabilities of “Going Global” Chinese enterprises. As of the end of 2023, corporate
+online banking has covered 56 countries and regions, supporting 14 languages.
+The Bank strived to optimise its online service channel to enhance customer experience, giving
+new impetus to its global development.
+Online Service Channels
+In 2023, domestic institutions of the Group realised cross-border RMB settlement volume of
+RMB12.81 trillion, with a growth rate of 23.28%. The Group's cross-border RMB clearing
+volume reached RMB938.11 trillion, up 26.55% year-on-year, maintaining leading position in
+the global market.
+had 16 fund products eligible for the Cross-boundary Wealth Management Connect Scheme
+in Hong Kong and cooperated with BOCHK to launch the HKEX-listed BOCHK Greater Bay
+Area Climate Transition ETF. It continued to facilitate the internationalisation of the onshore
+commodity futures market and assisted with the low-carbon transformation of energy enterprises.
+During the year, BOCI was awarded “Best Bond Advisor - Global (China)" by The Asset, "China
+Bond House of the Year" by IFR Asia, and “Commodity Dealer of the Year, Asia" by Risk.net,
+an authoritative media publication in the global commodity industry. It was also selected as a top
+ten "Research Team Leaders Table (All China)" by Institutional Investor and Caixin. In addition,
+BOCI-Prudential Asset Management Limited's RMB Fixed Income Fund won the "Best Fund
+over 3 Years Bond Asia Pacific (Local Currency)" award at the Hong Kong 2023 Lipper Fund
+Awards.
+BOCHK was named "Bank of the Year in Hong Kong" by The Banker; “Strongest Bank in
+Hong Kong and Asia Pacific”, “Second Strongest Bank in the World” and “Best Retail Bank in
+Hong Kong" by The Asian Banker; “Digital Transformation of the Year – Hong Kong", "Mobile
+Banking & Payment Initiative of the Year - Hong Kong” and “SME Bank of the Year - Hong
+Kong" by Asian Banking & Finance; "Best Chinese Bank for the Greater Bay Area 2023" by
+Asiamoney; "Best Renminbi Bank" in Hong Kong and the Philippines by The Asset; and "Best
+ESG Impact - Hong Kong SAR" by FinanceAsia.
+BOCI China is engaged in securities-related business in the Chinese mainland. As at the end of
+2023, the registered capital of BOCI China was RMB2.778 billion.
+BOC Insurance actively served national strategies, and supported the development of the real
+economy. It supported enterprises' "Going Global" efforts, served 173 Belt and Road projects,
+and provided insurance coverage of more than RMB81.7 billion. It served the "dual-circulation”
+of domestic and international markets, innovated scenario-based services, and supported the
+integrated development of domestic and overseas trade with insurance coverage exceeding
+RMB347.6 billion. It increased the supply of liability insurance products in emergency
+management, production safety and other fields, and provided insurance services for major
+natural disasters. Furthermore, focusing on digital transformation, BOC Insurance promoted the
+transformation towards online, intelligent and platform-based business model. It also advanced
+the in-depth development of its comprehensive risk management system, improved the long-
+acting mechanism for internal control and compliance management, and made risk prevention
+more initiative and forward-looking. In 2023, it provided RMB35 trillion of insurance coverage
+and over 1.59 million transactions of claim settlement, and paid compensation of over RMB3.7
+billion.
+The Bank is engaged in property insurance business in the Chinese mainland through BOC
+Insurance. As at the end of 2023, BOC Insurance had registered capital of RMB4.535 billion,
+total assets of RMB12.076 billion and net assets of RMB5.321 billion. In 2023, it realised
+insurance revenue of RMB6.042 billion and a profit for the year of RMB205 million.
+BOC Insurance
+BOCI China
+The Bank is engaged in life insurance business in Hong Kong through BOC Life. As at the end
+of 2023, BOC Life's issued share capital was HKD3.538 billion, total assets were HKD187.069
+billion and net assets were HKD6.099 billion. Its profit for the year was HKD1,127 million.
+BOC Life
+events.
+Pursuing progress amid stability and ensuring stability through progress, BOCG Insurance
+leveraged its advantages and implemented national strategies. It strived to build a high-tech,
+market-leading regional property insurance company with commercial banking characteristics. It
+outperformed the market in terms of income growth, increasing its market share. Supporting key
+national strategies, it deepened bank-insurance coordination and actively participated in services
+such as Northbound travel insurance for Hong Kong vehicles and Greater Bay Area cross-
+border business. BOCG Insurance also made diverse contributions to the development of the real
+economy. It established a sound basis by constantly improving structure, quality and efficiency,
+and optimising its business structure and insurance product portfolio. It made comprehensive
+efforts to promote digital transformation, upgraded online insurance sales and customer service
+platforms to deliver unique online services, and initiated implementation of IFRS 17. Embracing
+ESG concepts, BOCG Insurance promoted green office practices, supported green finance
+initiatives, and played an active role in aiding Hong Kong's recovery from extreme weather
+The Bank is engaged in general insurance business in Hong Kong through BOCG Insurance. As
+at the end of 2023, BOCG Insurance had an issued share capital of HKD3.749 billion, total assets
+of HKD9.654 billion and net assets of HKD4.625 billion. In 2023, BOCG Insurance recorded
+insurance revenue of HKD2.140 billion and its profit for the year reached HKD277 million.
+BOCG Insurance
+Insurance
+Adapting to the emergence of new economic development drivers, BOC Wealth Management
+increased investment in key areas such as advanced equipment manufacturing, new power system
+and electronic information, and guided fund allocation towards areas of policy focus. In the
+customer aspect, BOC Wealth Management continuously expanded its sales channels, realising
+product sales through 22 external institutions and 30 channels. In the risk management aspect,
+BOC Wealth Management reinforced its comprehensive risk management system, enhanced
+technological empowerment within its business activities, and firmly adopted bottom line
+thinking. As at the end of 2023, its AUM stood at RMB1,631.063 billion.
+88
+78
+BOC Life continually strived to improve the quality and efficiency of its business. It maintained
+its leading position in Hong Kong's life insurance sector and consistently outperformed
+industry peers in terms of RMB insurance business and online insurance transactions. BOC Life
+continued to strengthen its multi-channel development strategy by deepening its collaboration
+with BOCHK to foster cooperation among different customer segments, expanding its brokerage
+channel by forming partnerships with brokers with Chinese mainland banking experience, and
+growing its tied agent workforce through new financial support programmes to recruit agents
+with Chinese mainland banking and professional backgrounds. A full suite of cross-border
+business activities was launched to capture related opportunities, boosting its business volumes
+above pre-pandemic levels. Collaborating with other industry players, BOC Life played a pivotal
+role in the preparatory work for establishing insurance service centres in the Guangdong-Hong
+Kong-Macao Greater Bay Area that will promote insurance market connectivity in the region.
+Striking a balance between growth quality and scale, BOC Life continued to enrich its product
+range with the aim of increasing both the volume and value of new business. BOC Life also
+advanced the development of its featured retirement scenario-based ecosystem to push forward
+the transformation of elderly care. To refine its wellness ecosystem, it deepened cross-industry
+collaboration around the “Live Young Rewards" app, which now boasts over 90,000 users and
+70 third-party partners.
+BOC Wealth Management actively promoted the high-quality development of wealth
+management while serving the real economy. In the product and service aspects, BOC Wealth
+Management implemented the national rural revitalisation strategy, rolled out themed wealth
+management products, and continued to allocate more assets to key areas such as new rural
+infrastructure construction. It served the development of “third pillar” of China's pension
+insurance system by introducing five personal pension wealth management products as part of
+the first batch of private pensions. It constantly innovated “public welfare + wealth management"
+products and supported the development of vocational education. Moreover, it strengthened its
+unique advantages in foreign currency and cross-border products, maintained a market-leading
+position in terms of product diversification, and ranked first among peers in terms of wealth
+management scale. In the investment aspect, BOC Wealth Management actively promoted
+China's modernisation and established an investment research system to serve the real economy.
+77
+BOCI China deepened its synergistic advantages in areas such as "investment banking +
+commercial banking”, “investment banking + investment” and “domestic + overseas". It
+targeted key client groups and key industries, fully implemented national strategies, promoted
+business transformation through technological empowerment to help building of a nation with
+a strong financial sector. BOCI China made breakthroughs in the IPO business of specialised
+and sophisticated SMEs. In 2023, BOCI China sponsored the IPOs of two specialised and
+sophisticated SMEs, and acted as the sole underwriter for China's first AA+ corporate bond
+issued by a technology innovation company (incubator). It also acted as the sole underwriter
+for sci-tech innovation corporate bonds issued by central state-owned enterprises to promote
+innovation and tackle development bottlenecks, and assisted in the issuance of China's first
+corporate bond of benchmark market-making in the private sector. In terms of asset management,
+BOCI China made efforts to strengthen its proactive management capabilities. It ranked second
+in the securities industry in terms of mutual funds scale, and continued to improve its customer
+service capabilities. The company focused on the wealth management needs of individual clients
+and constructed a customer-centric product system, refined its comprehensive service process for
+wealth management, and improved the service capability of its investment advisors. In addition,
+the brand reputation of its research products was further enhanced.
+(Please refer to the annual report of BOCI China for a full review of its business performance and related information.)
+16
+76
+Asset Management Business
+BOCI China received numerous awards during the year, including "Best Local Investment Bank"
+and "Best Bond Underwriting Investment Bank” from New Fortune and "Best A-share Bond
+Underwriting Team" from National Business Daily for its investment banking business; the "Junding
+Award for Comprehensive Wealth Management institution in China” from Securities Times and “Model
+Asset Management Securities Company" from ChinaFund for its asset management business; “Golden
+Bull Growth Wealth Management Team" from China Securities Journal for its retail brokerage
+business; and “Junding Award for Investment Advisory Teams in China” from Securities Times
+for its "Thinktank" advisory team. In addition, BOCI China Shenzhen Central Road No.4 Branch
+received the "Junding Award for Top 20 Securities Business Outlets in China” from Securities
+Times. BOCI Futures, a subsidiary of BOCI China, received Gold Medal in "Comprehensive
+Award for Excellent Members" from China Financial Futures Exchange.
+The Bank is engaged in fund management business in the Chinese mainland through BOCIM. As
+at the end of 2023, BOCIM had registered capital of RMB100 million, total assets of RMB6.299
+billion and net assets of RMB5.229 billion. In 2023, its profit for the year reached RMB702
+million.
+BOCIM steadily expanded its asset management business, maintained sound internal control
+and risk management, and constantly improved its brand and market reputation. By rigorously
+focusing on investors' interests, BOCIM strengthened its investment and research capabilities,
+refined product management and enhanced marketing and post-investment support. BOCIM
+optimised new fund issuance and launched 13 funds during the year, including enhanced index
+funds like BOC MSCI China A50, BOC CSI 1000, BOC CSI 500, etc. In addition, BOCAM
+(Singapore) obtained approval from the China Securities Regulatory Commission (CSRC) for a
+QFII qualification, building BOCIM's brand as a "Global Manager of Global Assets". As at the
+end of 2023, BOCIM's AUM stood at RMB574.813 billion. Specifically, its public-offered funds
+were RMB484.628 billion and its public-offered funds excluding money market funds were
+RMB285.802 billion.
+BOCIM won six prestigious honours in the industry's three most authoritative awards, including
+the "Golden Bull Award" from China Securities Journal, "Golden Fund Award" from Shanghai
+Securities News and “Star Funds Award" from Securities Times. Specifically, BOCIM's equity
+funds won honours in all three of these awards.
+BOC Wealth Management
+BOCIM
+The Bank is engaged in wealth management business in the Chinese mainland through BOC
+Wealth Management. BOC Wealth Management's business includes wealth management
+products for the general public, wealth management products for qualified investors, advisory
+and consulting, and other asset management-related business. As at the end of 2023, BOC
+Wealth Management had a registered capital of RMB10.000 billion, total assets of RMB17.269
+billion and net assets of RMB16.614 billion. Its profit for the year reached RMB 1.628 billion.
+(Please refer to the annual report of BOC Aviation for a full review of its business performance and related
+information.)
+The Bank is engaged in debt-for-equity swap and related business in the Chinese mainland
+through BOC Asset Investment. As at the end of 2023, the registered capital of BOC Asset
+Investment was RMB14.500 billion, total assets were RMB87.917 billion and net assets were
+RMB23.133 billion. In 2023, its profit for the year reached RMB2.711 billion.
+Committed to the national strategy of expanding domestic demand and deepening supply-
+side structural reform, BOC Asset Investment conducted market-oriented debt-for-equity swap
+business in support of the high-quality development of the real economy. Offering increasing
+support to green and technology finance investment, it implemented projects in new energy
+vehicles, clean energy, new energy storage and energy saving technologies, and environmental
+protection industries, to meet enterprises' diverse financial needs. Debt-for-equity swap
+investment funds and asset management plans were established to raise socially responsible funds
+for developing the real economy, including an RMB10 billion investment fund in collaboration
+with other investors. As at the end of 2023, the Bank's cumulative market-oriented debt-for-
+equity swap business reached RMB234.476 billion, representing an increase of RMB21.633
+billion during the year.
+Leasing Business
+BOC Aviation
+81
+BOC Aviation had issued share capital of USD1.158 billion, total assets of USD24.170 billion
+and net assets of USD5.748 billion. In 2023, it achieved a profit for the year of USD764 million,
+a new record for the Company. There was significant improvement in earnings as compared to
+the previous year.
+BOC Aviation continued to implement its proactive business strategy and steadily promoted
+its standing in the aircraft leasing industry, achieving sustainable growth. Actively supporting
+the Belt and Road Initiative, it had leased 57% of its aircraft to Belt and Road countries and
+regions as at 31 December 2023. Continuing to closely track customer demand, the Company
+took delivery of 65 new aircraft, as rapidly expanded its owned fleet. These aircraft were all
+delivered on long-term leases. During 2023, BOC Aviation signed 142 leases for aircraft while
+steadily expanding its business. Its fleet is currently on lease to a total of 91 customers in 45
+countries and regions. The Company consistently sought to optimise its asset structure and
+improve its sustainable development. It sold 20 owned aircraft and one owned engine during
+2023, leaving it with an average owned fleet age of 4.6 years (weighted by net book value) as at
+31 December 2023, one of the youngest aircraft portfolios in the aircraft leasing industry.
+BOC Asset Investment
+The Bank is engaged in the aircraft leasing business through BOC Aviation. It is one of the
+world's leading aircraft operating leasing companies and is the largest aircraft operating leasing
+company headquartered in Asia, as measured by value of owned aircraft. As at the end of 2023,
+In line with the Group's 14th Five-Year Plan, BOCG Investment gave full play to the
+advantages of the Bank's comprehensive operation platform, accelerated the transformation
+and development, and pursued progress in both investment scale and quality. Based in Hong
+Kong, BOCG Investment tracked investment opportunities in Southeast Asia, integrated into the
+development of the Guangdong-Hong Kong-Macao Greater Bay Area, and supported Chinese
+"Going Global" enterprises to explore overseas markets and cross-border M&A. It expedited
+the implementation of the new development pattern, served the national Belt and Road strategy,
+and steadily invested in high-quality funds with a primary focus on Europe and Southeast Asia.
+It also continued to strengthen post-investment management and exited from mature projects
+in various ways. It refined the routine monitoring of investment asset quality and enhanced its
+risk response capability. Furthermore, BOCG Investment expanded its funding sources through
+multiple channels, completed registration as a mature issuer with NAFMII for the first time, and
+issued a three-year RMB Panda bond. It also launched its first green loan and improved its green
+financing system.
+BOC-Samsung Life was named “Excellent Life Insurance Company” for the fifth consecutive
+year in the Golden Censer Prize organised by National Business Daily. It featured in the "Annual
+Customer Service Ranking" of China's Insurance Industry Ranking 2023, was awarded "2023
+Excellent Corporate ESG Green Finance Case" and "2023 Excellent Corporate ESG Rural
+Revitalisation Case" by Xinhuanet and China Enterprise Reform and Development Society;
+and was listed in the "Annual Life Insurance Coverage Product” and “Annual Critical Illness
+Insurance Coverage Product” categories in the Gold Reputation Awards by China Banking and
+Insurance Media.
+BOCG Investment
+Investment Business
+80
+Since the signing of the credit rating agreement with Standard & Poor in 2014, it has maintained an "A-" credit
+rating for nine consecutive years. The Standard & Poor's rating for 2023 has not been released.
+8
+Upholding its customer-centric approach, BOC-Samsung Life achieved stable business growth
+and steadily improved its market competitiveness. It proactively integrated itself into the Group's
+wealth management system and promoted premium trust services. BOC-Samsung Life strived
+to improve the quality of its services, achieving a significant drop in customer complaint and
+cancellation rates, a remarkable improvement in claim settlement time, and a notable rise in
+the Insurance Service Quality Index. It rebuilt its product system, improved the quality of its
+liabilities, increased the supply of whole life insurance, annuities insurance and health insurance,
+and launched "BOC Enjoying Life No. 2 Whole Life Insurance”, “BOC Tiancai Annuities
+Insurance", "BOC Health Life Critical Illness Insurance" and other featured products. To make
+finance serve the real economy, BOC-Samsung Life invested a total of RMB5.964 billion in
+inclusive finance, technology finance and green finance. Leveraging technological empowerment
+in its operations, it offered such intelligent services as intelligent dual recording, intelligent
+outbound calling, intelligent claim settlement, and online collection of insurance proceeds, all
+of which improved the customer experience. In 2023, BOC-Samsung Life recorded first-year
+premiums of RMB9.258 billion in its protection and long-term savings businesses, a year-on-
+year increase of 65%.
+The Bank is engaged in life insurance business in the Chinese mainland through BOC-Samsung
+Life. As at the end of 2023, BOC-Samsung Life's registered capital was RMB2.467 billion, total
+assets were RMB86.811 billion and net assets were RMB954 million. In 2023, BOC-Samsung
+Life recorded gross written premiums and premium deposits of RMB27.639 billion and a profit
+for the year of RMB2.044 billion.
+BOC-Samsung Life
+BOC Insurance maintained an “A-” credit rating and “stable” outlook from Standard & Poor's
+for the ninth consecutive year. It won the "20th People's Inventive Award - Inventive Service
+Award" from people.cn, the “Benefitting the People Award" in the selection of "2023 Excellent
+Cases of Inclusive Finance", also sponsored by people.cn, the “2023 Excellent Corporate ESG
+Green Finance Case" award from Xinhuanet and the China Enterprise Reform and Development
+Society, and the “2023 Excellent Property Insurance Company" for excellent examples of
+financial development in the 21st century from 21st Century Business Herald.
+BOCL
+The Bank is engaged in direct investment and investment management business through BOCG
+Investment. BOCG Investment's business scope includes private equity investment, fund
+investment and management, real estate investment and management, and special situation
+investment. As at the end of 2023, BOCG Investment had issued share capital of HKD34.052
+billion, total assets of HKD137.135 billion and net assets of HKD75.153 billion. In 2023, it
+reported a profit for the year of HKD535 million.
+The Bank is engaged in financial leasing, transfer and receiving of financial leasing assets and
+other related businesses through BOCL. As at the end of 2023, BOCL had registered capital of
+RMB10.800 billion, total assets of RMB57.344 billion and net assets of RMB11.915 billion. It
+recorded a profit for the year of RMB704 million.
+Accelerating the building of an enterprise-level framework. The Bank accelerated the
+building of enterprise-level public basic capabilities, included more than 2,700 salable products
+into the product factory for assembly, and put into operation accounting engines, basic pricing,
+customer-specific bargaining and other enterprise-level capabilities, and further enhanced its
+quick product assembling capability. It also completed the restructuring and service upgrade of
+basic financial products such as debit card, credit card, pension and bills, and supported a daily
+processing volume of hundreds of millions of transactions, providing more diversified, secure,
+and comfortable financial products and service experience for customers. It assisted in preventing
+and mitigating financial risks, reconstructed and upgraded the Group's integrated in-process
+AML system, connected the whole process and enhanced the capability of precise risk prevention
+and control with data empowerment.
+BOCL was awarded the “Leading Enterprise in Supporting Major Strategies” in the “2023 China
+Financial Leasing Taking Off Award" selection at the 6th Global Leasing Competitiveness
+Forum.
+Board of
+Branches &
+52
+87
+First Line of Defence
+Management and Responsible Departments of Domestic and Overseas Branches and Comprehensive Operation Subsidiaries
+Defence
+Third Line of
+Audit Department
+Directors
+Chief Audit Officer
+Board of
+Second Line of Defence
+Risk Management
+Department
+Department
+Credit Management
+Department
+Compliance Management
+Internal Control and Legal &
+Department
+Credit Approval
+Department
+Asset & Liability Management
+Supervisors
+Management
+Senior
+Management Departments
+of the Group
+89
+Total loans and advances to customers in the “Risk Management – Credit risk management” section are exclusive
+of accrued interest.
+9
+As at the end of 2023, the Group's NPLs totalled RMB253.205 billion, an increase of
+RMB21.528 billion compared with the prior year-end. The NPL ratio was 1.27%, a decrease of
+0.05 percentage points compared with the prior year-end. The Group's allowance for impairment
+losses on loans and advances was RMB485.298 billion, an increase of RMB48.057 billion
+compared with the prior year-end. The coverage ratio of allowance for loan impairment losses
+to NPLs was 191.66%, an increase of 2.93 percentage points compared with the prior year-end.
+The NPLs of the Bank's institutions in the Chinese mainland totalled RMB207.297 billion, an
+increase of RMB4.893 billion compared with the prior year-end. The NPL ratio of the Bank's
+institutions in the Chinese mainland was 1.23%, a decrease of 0.17 percentage points compared
+with the prior year-end. The Group's outstanding special-mention loans stood at RMB290.238
+billion, an increase of RMB54.584 billion compared with the prior year-end, and accounted for 1.46%
+of total loans and advances, an increase of 0.11 percentage points compared with the prior year-
+end.
+etc.
+Accurately and reasonably assessing credit risk to truthfully reflect the quality of financial assets.
+In accordance with the requirements of the Measures for Risk Classification of Financial Assets
+of Commercial Banks and according to the degree of risk, the Bank classifies its financial assets
+into five categories: pass, special mention, substandard, doubtful and loss, with the last three
+categories collectively referred to as NPLs. For non-retail assets, risk classification is determined
+according to the Bank's evaluation of the level of risk involved, based on assessments of the
+customers' contract performance ability, financial position, willingness to repay and repayment
+records, financial assets' overdue days, risk mitigation status and the probability of default,
+among other factors. For retail assets, risk classification is determined by the days overdue
+method, alongside a comprehensive consideration based on qualitative and quantitative factors
+such as customers' contract performance ability, the transaction characteristics, guarantee status,
+The Bank stepped up efforts to mitigate NPAs, and prevented and resolved financial risks.
+It adopted the refined management of NPA projects, conducting differentiated strategies and
+making breakthroughs in key areas so as to improve the quality and efficiency of NPA disposal.
+The Bank expanded its NPA disposal channels and carried out the securitisation of non-
+performing bank card and personal credit assets.
+Balancing growth with stability to support high-quality development in credit business. In
+corporate banking, the Bank constantly optimised the industry structure of its credit portfolio
+through refined limit management. It carried out proper credit management of industries with
+high energy consumption and high emission, and industries with overcapacity. It also promoted
+the steady and healthy development of the real estate market by meeting the sector's reasonable
+financing needs, promoting a smooth transition towards a new industrial development model, and
+preventing and mitigating local debt risks. In personal banking, the Bank acted in accordance
+with regulatory requirements and business development needs arising from new situations, and
+facilitated the steady growth of its personal credit business.
+guidance, inspection and post-evaluation of its business lines. In addition, it constantly identified,
+measured and monitored large exposures in line with related large-exposure management
+requirements.
+88
+The Bank strengthened its unified credit granting management and further centralised its
+comprehensive credit risk management. It continuously improved its long-acting credit
+management mechanism, optimised its control mechanism for credit concentration risk, and
+enhanced its “full coverage and penetration” asset quality screening and monitoring system.
+Furthermore, it improved the screening and monitoring of key risk areas and the effectiveness
+of potential risk identification, early warning, recognition and mitigation. The Bank refined
+supervision and guidance on asset quality control in key regions, and intensified efforts in the
+-
+Focusing on national strategies and strictly adhering to regulatory requirements, the Bank
+continuously optimised its credit structure by fully taking into account the market environment
+and its business characteristics. It revised industry guidelines for credit granting and improved
+the management of its asset portfolios. Committed to aligning financial supply to needs of the
+real economy, the Bank improved the precision of its capital investment and offered effective
+services to support key areas and weak links in the economy, with a focus on the modern
+industrial system, infrastructure construction, the virtuous cycle of "technology industry
+finance", green credit, the energy industry, people's livelihood consumption, new-type
+urbanisation, rural revitalisation and other priority areas.
+Closely monitoring changes in macroeconomic and financial conditions, the Bank pushed
+forward the optimisation of its credit structure, improved its credit risk management policies,
+strengthened credit asset quality management and took a more proactive and forward-looking
+stance on risk management.
+Credit Risk Management
+It emphasised both unified and differentiated criteria in its implementation. That requires unified
+management of risks of all types facing overseas institutions and comprehensive operation
+companies and meanwhile the attention paid to peculiar risks confronting the latter to better drive
+the global and comprehensive operation of the Bank.
+The risk appetite applies to all institutions under the Bank, including its domestic branches and
+overseas institutions and comprehensive operation companies. It incorporates qualitative and
+quantitative indicators for each type of risk, highlights the connection between its operation
+project, capital planning, performance evaluation and other activities, and enlarges the
+application of stress test tools, reflecting the overall expectations of main interested parties of the
+Bank.
+The Bank remained committed to prudent risk appetite. We actively support national strategies,
+serve the overall interests of the country, and assume due social responsibilities, with the aim of
+securing high-quality development with high-level of security and enforcing our capability of
+value creation and risk prevention and control.
+The risk appetite stands as the clarification of the overall risk and maximum level of each type
+of risk that the Bank is willing to undertake in order to achieve its strategic objectives and
+business plans for the current year. It is subjected to the approval of the Board of Directors and
+implementation of the Senior Management.
+Risk Appetite
+Subsidiaries
+Department
+Corporate Culture
+BOCL was fully committed to serving the country's major strategies, key areas and weak links.
+As at the end of 2023, BOCL transacted a total of RMB88.569 billion in financial leasing
+business, with leasing assets in key industries such as smart transportation, renewable energy,
+advanced manufacturing and new materials accounting for 81.95% of the total. Its green financial
+leasing in green travel, new energy power generation, solid waste disposal, and air quality
+management accounted for 43.79% of total leasing. BOCL grew the footprint of its aviation and
+shipping business segment, gave full play to its advantages in asset financing, and contributed to
+the high-quality development of the real economy.
+Department
+Internal Control Committee
+84
+For personal banking customers, the Bank constantly optimised its mobile banking service
+capabilities. The Bank optimised basic service functions, integrated registration and login
+processes, supported online appointment and replacement of expired debit cards, and launched
+remote video interview for credit card customers to provide greater convenience. It also
+strengthened its wealth management services, launched the “Products Position Inquiry" service,
+added fund screening tools such as "Data-Driven Fund Selection", "Popular Sections", "Self-
+Service Toolbox”, “Featured Automatic Investment Plan”, and “Index Zone". It improved the
+quality and efficiency of characteristic businesses, increased the number of currencies supporting
+for salary exchange settlement to 19, and optimised the cross-border remittance process. It
+upgraded key customer services, added functions such as appointment for personal pension
+account opening, pension tax calculator, and pension information, and optimised the "Salary
+For corporate banking customers, the Bank continuously improved the functions of its electronic
+channels and built a comprehensive Group-wide financial e-portal. The new version of the
+Bank's corporate online banking platform introduced multiple cross-border financial products
+such as FX forward trading, foreign exchange purchase and direct cross-border remittance, as
+well as 28 new products such as online transfer of certificates of deposit and next-generation
+commercial drafts. Corporate mobile banking functions were improved, with the cross-border
+financial zone of mobile banking enhanced via three new panels for "cross-border one-stop
+pass", "cross-border treasure box" and "cross-border selection column", realising the integration
+of foreign exchange receipt, foreign exchange purchase, settlement and payment. The Bank also
+continued to enhance its corporate WeChat banking channel, adding more than 10 new functions
+across four categories, such as account transfer notification, receipt verification, and WeChat
+customer manager business cards.
+year.
+Tapping in the potential of technological empowerment and adhering to the path of digitalisation,
+mobility, and intelligence, the Bank vigorously expanded its online channels and continuously
+upgraded its mobile banking services so as to rapidly develop its online businesses. In 2023, its e-channel
+transaction volume reached RMB374.62 trillion, an increase of 10.31% compared with the prior
+Online Channels
+Focusing on customer experience and leveraging digital transformation as the key driver, the
+Bank accelerated the transformation and upgrading of all service channels, building online
+channels with stronger scenario integration capabilities and offline channels with greater value
+creation capacity. It cultivated an ecosystem in which online and offline channels are integrated
+and financial and non-financial scenarios are seamlessly connected.
+Service Channels
+BOC Financial Technology was included in the International Data Corporation's (IDC)
+IDC China FinTech 50 list for the third consecutive year and passed the test maturity model
+integration (TMMi) Level 5 certification. It also won “Best Integrated Business and Financial
+Service Provider" at the 2023 China Treasury Awards. In addition, its IFRS 17 product won first
+prize in the 2023 FinTech Innovation Competition of “Innovation China” and second prize in the
+“Financial Innovation Awards" of the Shanghai Municipal People's Government.
+Butler" section to aggregate high-frequency financial and non-financial services. It improved
+service accessibility and launched mobile banking services in Tibetan, supporting account
+inquiries and transfers to meet basic financial needs of customers. It optimised the “Beautiful
+Countryside" version of mobile banking, launched exclusive loan products for farmers, increased
+"Rural School" information services, and achieved full coverage of 160 national key counties for
+rural revitalisation through mobile banking. It continuously improved the digital risk control and
+anti-phishing monitoring capabilities of online channels. In 2023, the bank identified and shut
+down 816 phishing websites and application download links, and its "Cyber Defence" smart risk
+control and prevention system monitored 8.621 billion online transactions, up by 8.27% year-on-
+year. In 2023, the transaction amount of personal mobile banking reached RMB54.88 trillion, a
+year-on-year increase of 17.46%; the number of signed customers and monthly active customers
+in mobile banking reached 274.62 million and 87.76 million, respectively, making it the most
+active trading channel for the Bank.
+83
+BOC Financial Technology deeply integrated itself into the Group's comprehensive service
+system and focused on anti-money laundering, credit risk control and other key areas to boost the
+Group's digital finance development. It focused on the development of scenario ecosystem-based
+non-financial products, improved its digital services for industries, and built the only treasury
+product with completely independent intellectual property rights among large state-owned banks.
+It empowered the Group's comprehensive operations, rolled out the Group's industry-leading
+asset management technology platform, and independently developed and successfully applied
+end-to-end IFRS 17 solutions. It linked internal and external innovation channels, and continued
+to maintain its leading position in emerging areas such as privacy computing. It participated
+in the formulation of six industry standards, which significantly enhanced the influence of the
+Group's "finance + technology" brand in technology innovation.
+The Bank is engaged in financial technology innovation, software development, platform
+operation and technical consulting services through BOC Financial Technology. As at the end
+of 2023, the registered capital of BOC Financial Technology was RMB600 million, total assets
+were RMB1.405 billion and net assets were RMB851 million.
+BOC Financial Technology
+Financial Technology
+Comprehensively adopting a people-centric development philosophy in its business development
+and customer service, BOC Consumer Finance accelerated the in-depth transformation of its
+business model and fully supported the recovery in consumption. It steadily expanded its business
+scale and achieved positive results in online transformation, with online business volumes
+continuously increasing as a proportion of the whole. As at the end of 2023, its outstanding loans
+stood at RMB71.948 billion, up 16.42% from the end of the previous year, and the balance of
+online loans accounted for 62.49%, up 10.25 percentage points from the prior year-end.
+The Bank is engaged in consumer loan business in the Chinese mainland through BOC Consumer
+Finance. As at the end of 2023, BOC Consumer Finance's registered capital was RMB1.514
+billion, total assets were RMB74.299 billion and net assets were RMB9.040 billion. In 2023, it
+recorded a profit for the year of RMB537 million.
+BOC Consumer Finance
+Consumer Finance
+82
+83
+The Bank's mobile banking was awarded “Mobile Banking with Best User Experience” in the
+2023 China Financial Value Ranking of CBN, and received the “Most Trusted Mobile Banking
+by Customers" and "Best Digital Risk Control" awards in the 19th (2023) Digital Finance Joint
+Publicity Year. The Bank's “Lucky Travel” service was honoured with the “Glory Award" and "Most
+Popular Award" at the 6th (2023) Digital Financial Innovation Competition.
+Offline Channels
+The Bank continually optimised outlet layout and pushed forward outlet transformation and
+upgrading. It continuously improved its differentiated outlet management system. Based on
+local situations, it constructed featured outlets focused on technology finance, green finance,
+inclusive finance and pension finance, etc. It also refined featured outlets' products, services,
+business models, and software/hardware resource allocation so as to stimulate outlets' vitality
+through featured businesses and enhance the financial service capabilities of its offline channels
+with regard to the “five major tasks" of promoting technology finance, green finance, inclusive
+finance, pension finance, and digital finance. The Bank increased investments in intelligent
+equipment in county areas, realised full coverage of tablet-version smart counters in county-
+area operating institutions, expanded the coverage of financial services and enhanced their
+convenience and accessibility. It expanded the "finance + government affairs" service scenarios
+of smart counters to better serve the people's livelihood. It also expanded its business services
+for foreigners working in China, and enhanced the convenience of payment services. In addition,
+the Bank introduced smart screen system in lobbies to support the coordinated publication and
+full-process digital management of marketing and promotional information at outlets, achieved
+the goal of connecting “as many existing electronic screens with the smart screen system as
+possible”, building a digital lobby-based marketing and promotional system that is green, tidy,
+safe and efficient.
+Risk Management and
+Chief Risk Officer
+Audit Committee
+US Risk and Management Committee
+Risk Policy Committee
+President
+Product Management
+Departments
+Customer Relationship
+Departments
+Responsible Vice Presidents
+Board of Directors
+The risk management framework of the Bank is set forth below:
+The Bank has established a sound and effective organisational structure for risk management
+that comprises the Board of Directors, the Board of Supervisors, the Senior Management, risk
+management departments, business departments, and internal audit departments. Adhering to
+the principles of “proactive, forward-looking, adaptive and applicable”, the Bank continued
+to promote the development of a comprehensive risk management system, identified risks in
+non-traditional areas such as data security, social, environmental and climate risks, and fraud,
+incorporated them into the Group's risk management policies and risk appetite for continuous
+monitoring, and prevented various risks from the source. It established two closed-loop
+management mechanisms, namely risk judgment and investigation and emergency risk event
+response, to properly address impact from risk events of foreign banks. The Bank established
+a rolling risk inspection mechanism for overseas institutions, promoted risk management at
+home and abroad, on- and off-balance sheet in an integrated manner, and prevented cross-
+region, cross-market and cross-border transmission and resonance of risks. It actively mitigated
+risks in key areas such as real estate and local debt risks, and firmly defended the bottom line
+of no occurrence of systemic financial risk. It thoroughly followed the five major regulatory
+requirements, enhanced rectification accountability, and steadily advanced the implementation of
+new capital management regulations so as to ensure compliant operations. Furthermore, the Bank
+rolled out risk data governance in an orderly manner and accelerated the digital transformation
+of risk management. It achieved rapid progress in the development of an intelligent risk control
+system, and enhanced its capabilities in identifying, warning, exposing and disposing of risks at
+an earlier stage.
+RISK MANAGEMENT
+86
+Building a product scenario innovation ecosystem. The Bank enhanced the quality and
+effectiveness of products, put into operation 16 new products in key areas, strengthened the
+marketing capability within the internet ecosystem, and actively promoted the BOC All-
+Staff Marketing System. It deepened the open competition mechanism, and stimulated the
+initiativeness of innovative entities, with 26 outstanding achievements made in the fields of green
+finance, inclusive finance, and scientific and technological innovation. It carried out innovation
+replication campaigns, with 28 outstanding frontline achievements being put in storage and six
+of them were popularised in an acute manner, realised batch customer acquisition and attraction,
+contributed to steady business growth, and effectively enhanced management efficiency.
+Cultivating engines for technological innovation. The Bank sped up the construction of new
+technological platforms related to privacy computing, IoT, blockchain and AI, covering 1,800
+business scenarios. The Bank pushed forward the pilot application of computer vision technology
+in smart security, outlet operation and other scenarios, and tapped into the application of Large
+Model technology in scenarios such as internal knowledge services and auxiliary coding. In
+2023, five of its technological achievements won PBOC Financial Technology Development
+Awards, of which the BOC enterprise-level data platform development project won the first
+prize. During the year, more than 4,122 new patent applications were submitted of which 1,056
+were approved.
+Consolidating scientific and technological support for business. To implement the national
+strategy of "channelling computing resources from the east to the west", the Bank accelerated the
+construction of information infrastructures characterised by “multiple centres in multiple places",
+and completed the first phase of the Horinger Fintech Park in Inner Mongolia, with an additional
+30,000 servers deployed. It also commenced the construction of the second phase of Hefei Park.
+The total number of servers on its cloud platform reached 26,500. The Bank advanced a special
+campaign to boost network security, and drove the effective operation of the safe operation centre (SOC),
+experiencing no significant network security accidents over the year, and securing the sound
+development of business across the Group. It further stepped up support for work safety, with no
+significant work safety accidents occurring during the year.
+The Bank persistently enhanced its value creation capabilities, accelerated digital transformation
+and innovation, and promoted the integration and mutual reinforcement of business models,
+technological capabilities and data elements, so as to provide customers with accurate, accessible
+and intelligent financial services. In 2023, the number of employees in the IT line of the Bank
+stood at 14,541, accounting for 4.74% of the total, of which 10,299 were employees of domestic
+commercial banks, accounting for 3.86% of the total. The Bank invested RMB22.397 billion in
+information technology during the year, accounting for 3.60% of its operating income.
+Fintech Innovation
+85
+As at the end of 2023, the Bank's commercial banking institutions in the Chinese mainland (including
+Head Office, tier-1 branches, tier-2 branches and outlets) totalled 10,299. The number of other
+institutions in the Chinese mainland totalled 652, and the number of its institutions in Hong Kong (China),
+Macao (China), Taiwan (China) and other countries and regions totalled 534.
+Digital Asset Management
+Strategic Development Committee