Bank of Qingdao Co., Ltd. Announced Its Interim Results for the Year of 2020

Total Assets Soared by 23.07% YoY to RMB459.8 Billion

 

Bank of Qingdao Co., Ltd. ("Bank of Qingdao" or the "Bank", H Shares Stock Code: 3866), the largest City Commercial Bank in Shandong Province, China, announced its annual results for the twelve months ended December 31, 2020 (the "Reporting Period").

 

2020 is an extraordinary year, with the unprecedented COVID-19, Banks of Qingdao looked for opportunities in the midst of the crisis, making a brilliant report card to the society. The Bank adhered to its primary position of financial services, guaranteed the payment and financing, and won the battle against the pandemic with the whole society, firmly implemented the "Stability in Six Areas" and "Six Priorities" requirements, focusing on Shandong Province and the important financial projects of Qingdao, which full played the role of "anti-epidemic" fighter and economic "stabilizers" for financial institutions, as well as to accelerate the recovery and development of the economic, demonstrating its responsibility. During the reporting period, the Bank granted 253 loans to enterprises in distress or engaged in pandemic prevention, amounting to RMB16.67 billion in aggregate.

 

Achieved remarkable improvement in business and steady growth in results

During the Reporting Period, the Bank launched the "Enhancement Plan 2.0 - improvement on both business and management". While promoting business development, the Bank carried out various management improvement measures focusing on development empowered by technology, transformation in business approval and operational management optimization, and achieved effective and high-quality development. In particular, the Bank achieved robust growth in deposit business, with a further increase in the market share in Qingdao region as well as an overall improvement in the influence in Shandong Province. During the year, the total deposits from customers increased by RMB59.441 billion or 27.93% to RMB272.23 billion, with a year-on-year (YoY) increase hitting a record high over the past decade. During the Reporting Period, the Bank achieved steady growth. The operating income amounted to RMB10.55 billion, representing a increase of RMB0.93 billion or 9.62% YoY; net profit amounted to RMB2.45 billion, representing an increase of 5.04% YoY; net profit attributable to shareholders of the Bank amounted to RMB2.39 billion, representing an increase of 4.78% YoY.

 

On November 2020, Qingyin Wealth Management Company Limited ("Qingyin Wealth Management") officially commenced operation, which will help the Bank expand its business scope and types of business. This is a key step for the Bank's comprehensive operations and group-wide deployment. During the Reporting Period, the Bank realized service fee and commission income from wealth management products of RMB1,008 million, representing an increase of 45.04% over the same period of the previous year. The wealth management business achieved strong growth in profitability.

 

In 2020, the contribution from customer base and customer service capabilities were continuously enhanced. By achieving "refined" management through hierarchical operations, the basic customer base groups continued to be consolidated, meanwhile, the customer service capabilities and customer loyalty were enhanced significantly. To gather strength for deepening business transformation. The Bank further promoted the mobile, online and digital development of operations and management in pursuit of technology-driven development. The Bank took the lead in realizing 5G deployment for the entire network. The Bank continued to optimize and enhance smart outlet projects,  achieved risk real-time Intelligent control.

 

The collected various risk assets in cash amounting to RMB 923million in aggregate throughout the year, which was a historic breakthrough. The non-performing loan ratio decreased by 0.14 percentage point as compared with the beginning of the year.

 

Double streaming achieved in retail banking, operating income increased

During 2020, adhering to the central idea of "customer-centric", the Bank continued to enhance its capability to serve customers with the use of technology. Through online and offline integrated construction, thereby achieving two-way diversion of "flow" and linkage effect, the Bank tapped into customer needs and focusing on services continuously, both the number and quality of retail customers improved. 

 

The growth rate of financial assets retained by retail reached a new high. As at the end of the Reporting Period, the number of retail customers of the Bank reached 6.32 million, representing an increase of 13.72% YoY. The assets retained by retail customers in the Bank reached a total of RMB202.80 billion, representing an increase of 24.95% YoY. The Bank recorded a significant increase in retail deposits. As at the end of the Reporting Period, the Bank's balance of retail deposits reached RMB88.34 billion, representing an increase of RMB23.54 billion or 36.33% as compared  with that at the end of the previous year and accounting for 32.45% of the  total deposits from customers. The increase in retail deposits for the year 2020 exceeded the total growth of retail deposits for the previous four years.

 

Meanwhile, the bank continued to optimize and enhance smart outlet projects, the smart outlet projects of the Bank made use of big data, cloud computing, artificial intelligence and mobile Internet, 5G and other emerging technologies, which greatly relieved pressure of counters. The Bank rationalized the high-efficiency hall service marketing process, and integrated business handling, service marketing and customer maintenance into one, speeding up basic business handling by 75% on average. Besides, Bank of Qingdao launched the "Retail Smart Marketing System (CRM)" and "Qingyin Marketing Link (Mobile CRM)", and built a marketing data middle platform, laying a data foundation for the transformation of online and offline digital marketing, in order to further strengthen the precision marketing capabilities of the Bank.

 

The Bank follows the regional strategic. With the corporate strategy and financial technology innovation, the Bank of Qingdao has enhanced its technological capability and advanced digital transformation. During the Reporting Period, we launched a series of innovations and practices around service innovation, technology integration and business transformation, which start a new chapter in digital transformation by technology.

 

In the retail loan business, the retail loan business of the Bank focused on increasing service efficiency with an aim to increase market share. The Bank overcame the adverse impact of the pandemic with its various businesses all experienced encouraging developments. As at the end of the Reporting Period, the balance of retail loans (including credit cards) of the Bank amounted to RMB60.76 billion, representing an increase of RMB6.24 billion or 11.46% YoY. The balance of retail loans accounted for 29.39% of the total balance of various loans. The Bank improved risk management capabilities and maintained stability in asset quality. During the Reporting Period, the Bank continued to adopt the standard of "including all loans overdue for more than 60 days in non-performing loans" on retail loans, pursuant to which, the balance of non-performing loans to retail customers reached RMB331 million while non-performing loan ratio to retail customers was 0.54%. Among the new non-performing retail loan, mortgage loans and loans repaid by collaborative partners accounted for 80.25%. The collaterals had sufficient value, and loan loss was controllable.

 

Corporate banking continued to strengthen its base customer base with "dual-base" strategy and "network construction"

 

In 2020, the corporate banking business of the Bank focused on the "dual-base" strategy and "network construction", and the contribution from customer base and customer service capabilities were continuously enhanced. During the Reporting Period, the operating income from the corporate banking business was RMB5.80 billion, accounting for 54.95% of the Company's operating income.

 

The Bank blended in with the local economy, returned to its business origins to boost the scale of deposits, and increased customer loyalty and overall contribution through product and service optimization. Focusing on public finance, open tender for projects and other segments. As at the end of the Reporting Period, the balance of corporate deposits (excluding accrued interest) reached RMB183.45 billion, representing an increase of 24.05%,. Newly added corporate deposits for the year reached an all-time high. In particular, corporate demand deposit amounted to RMB111.49 billion, representing an increase of 20.41% YoY. Corporate time deposit amounted to RMB71.96 billion, representing an increase of 30.15% YoY.

 

In respect of corporate loans, as at the end of the Reporting Period, the Bank's balance of corporate loans (including discounted bills and excluding accrued interest) amounted to RMB145.99 billion, representing an increase of 23.42%. In particular, the balance of the loans of private enterprises was RMB67.46 billion, representing an increase of 26.61% as compared with that at the beginning of the year. The balance of green credit was RMB15.23 billion, representing an increase of 31.47% as compared with that at the beginning of the year. The Bank carried out differentiated credit policies and guidelines, optimized credit structure, and gave priority to the financing of projects in the areas of inclusive finance, green finance, technology finance and the blue economy. Also, the Bank continued to support infrastructure construction and other key engineering and construction projects, and met the diversified financing needs of enterprises, promoting the financial supply-side reform.

 

For the Corporate's products, the Bank implemented the "network construction", which offered superior products with multi-dimensional linkage by promoting industry professionalism and customer diversification. The bank empowering major products through financial technology, blended in with the local economy and responded to the government's call at all levels for supporting real-economy enterprises and weak links. During the pandemic, the Bank first launched the "Anti-coronavirus Loan" to support Small and Micro Enterprises in resuming work and production and debuted innovative featured products such as "Shi Yi Loan", "Yi Dai Tong" and "Anti-Coronavirus Discount", as well as working with the Bureau of Commerce and Finance of Shandong Province to launch "Lu Mao Loan", utilizing its supply chain financial products to realize online lending. The Bank of Qingdao fully supports and promotes the resumption of production of all kinds of enterprises affected by the epidemic, and actively promotes financial support to combat the epidemic.

 

Implement strategic planning and enhance synergistic effect

In 2020, the financial market business of the Bank developed in accordance with its strategic planning with an emphasis on synergy, and contributed to the development of the Bank's businesses by optimizing the investment portfolio, promoting the asset securitization business, saving capital appropriation and revitalizing stock assets. During the Reporting Period, the operating income of the financial market business amounted to RMB2.32 billion.

 

In terms of proprietary investment, the Bank continued to improve the investment portfolio and enhanced investment quality and efficiency by reducing the non-underlying assets, in terms of saving capital appropriation and participated in various innovative businesses. In 2020, the Bank invested in the first batch of standardized bills approved for issuance in the PRC, which helped the Bank familiarize with the transaction structure and pricing mechanism of emerging products on the market; the Bank invested in the strategically enhanced asset management plans with government bonds and options, which equipped the Bank with derivative strategy on the basis of its fixed income strategy.

 

As at the end of the Reporting Period, the Bank's proprietary investment (excluding accrued interest) reached RMB167.80 billion, representing an increase of 17.14% YoY. Among which: the scope of bond investment reached RMB118.92 billion, representing a n increase of 39.96% YoY, which was mainly attributable to the increase of investment in central government bonds as well as local government bonds, debt securities issued by banks and other financial institutions, and corporate entity bonds. The investment in public fund products amounted to RMB24.36 billion, representing an increase of 170.46% YoY mainly attributable to the increased investment in public bond fund products. Long-term equity investments amounted to RMB1.51 billion, representing an increase of 196.08% YoY, mainly attributable to the increased equity investment in subsidiaries.

 

As for interbank business,The Bank made active attempts at market trade and derivative transaction, constantly increasing the transaction volume. During the Reporting Period, the delivery amount of bonds of the Bank in the interbank market nationwide reached RMB14.20 trillion. In the ranking of delivery amount of bonds issued by China Central Depository & Clearing Co., Ltd., the Bank ranked No. 29 among national financial institutions and No. 9 among city commercial banks, both up by two places compared with the previous year.

 

As at the end of the Reporting Period, the balance of interbank deposits (excluding accrued interest) was RMB17.22 billion, representing an increase of 3.29% YoY. At the same time, the Bank issued the first special interbank deposit certificate for pandemic prevention, specifically supporting companies engaging in pandemic prevention and control via loan placement and other means to meet their capital needs, which involved an issue size of RMB200 million, with an interest rate of 2.65%, representing a decrease by 10 bps compared with the market price.

 

In terms of asset management, the Bank achieved steady growth in terms of management scale of its wealth management business, significantly increased its service fee income from wealth management, continued to enhance its capacity for net-worth management, constantly optimized its product and asset structures, and maintained sustainable and healthy development for the asset management business. As at the end of the Reporting Period, wealth management products of the Bank reached 790, with a balance of RMB124.123 billion, and the scale of wealth management products increased by 22.93% over the same period of the previous year. During the Reporting Period, wealth management products issued by the Company reached 1,820, raising a total amount of RMB545.79 billion, all of which were non-principal-guaranteed wealth management products, representing an increase of 31.90% as compared to the same period of the previous year. During the Reporting Period, the Company realized service fee and commission income from wealth management products of RMB1.01 billion, representing an increase of 45.04% YoY.

 

The Bank, in strict accordance with the new regulations and requirements on asset management and their supporting policies, continued to promote the net worth transformation of wealth management products and further consolidated its market position. As at the end of the Reporting Period, the balance of net worth wealth management products of the Company was RMB111.85 billion, representing an increase of 50.11% YoY, accounting for 90.12% of the balance of wealth management products, representing an increase of 16.32 percentage points YoY. During the Reporting Period, the Bank received the approval on the establishment of Qingyin Wealth Management, a wholly owned subsidiary of the Bank, which went through smooth preparation and was approved for opening. Subsequent to the commencement of business, Qingyin Wealth Management launched the first direct mobile client for a banking wealth management subsidiary in the PRC and released the brand new "Bright Life" series of wealth management products. As at the end of the Reporting Period, the balance of products of Qingyin Wealth Management amounted to RMB1.54 billion.

 

Mr. Guo Shaoquan, the Chairman of Bank of Qingdao Co., Ltd. said,"2021 is the 100th anniversary of the founding of the Communist Party and the commences of 14th five-year Plan. As a "A + H" listed company, the Bank of Qingdao will consider and map out the future development direction in the context of the new era, and set a higher goal for development. The Bank will uphold 'solidifying foundation, serving the real economy, preventing and mitigating risks and improving comprehensively' as its basic operating guiding principle. While deepening its business improvement, the Bank will fully push forward its management enhancement and put great effort in making a good start for the year in which the 14th Five-Year Plan commences. At the same time, we will integrate our own development into supporting major national strategic, serving the regional economic development, continue to highlight the distinctive brand of financial service, contributing and promote the "BQD power" to the development of the economic, environment and society of Shandong province."

 

About Bank of Qingdao Co., Ltd.

Bank of Qingdao Co., Ltd. founded in November 1996, is the first listed bank on the Shenzhen Stock Exchange in Shandong Province and the eleventh "A+H" listed bank in China.

 

The Company ranked 298 among the Top 1,000 World Banks in 2020 in terms of tier-one capital at the end of 2020 for three consecutive years, according to Bank of Qingdaoer, a UK magazine.

It has been one of the top 300 global banks for three consecutive years which shows the comprehensive strength. The Company's distribution network expands across Shandong Province with Qingdao as its base. Benefiting from the national strategies like the "Belt and Road Initiative" and the construction of the comprehensive pilot zone for the transition from old to new, the pilot free trade zone, and the Shanghai Cooperation Demonstration Zone, the Company has developed a business model that is well aligned with the regional economy. Leveraging its inherent advantages, the Company operates in a professional and specialized manner to meet target customers' needs by providing quality and convenient financial products and services. The Company has adhered to rigorous risk management to maintain stable operations and sound asset quality and continued to promote long-term stable business development.

 

Issued by Porda Havas International Finance Communications Group for and on behalf of Bank of Qingdao Co., Ltd.

 

For further information, please contact:

Porda Havas International Finance Communications Group

 

bqd@pordahavas.com