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Public company info - Bank of Zhengzhou Co. Ltd. - H Shares , 06196.HK

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Bank of Zhengzhou Co. Ltd. - H Shares, 06196.HK - Company Profile
Chairman WANG Tianyu
Share Issued (share) 1,670,000,000
Par Currency Renminbi
Par Value 1.0
Industry Banks
Corporate Profile Business Summary: The Bank is primarily engaged in PRC banking and related financial services, including corporate banking, personal banking, treasury operation and other businesses. Performance for the year: As of the end of the Reporting Period, the Bank had total assets of RMB500,478 million, a year-on-year increase of 7.37%, The Bank’s operating income for the year was RMB13.44 billion, a year-on-year increase of 20.72%; net interest margin was 2.16%, up 0.46 percentage points year on year;; and net profit amounted to RMB3,373 million, a year-on-year increase of 8.76%. Business Review: 1.Corporate Banking Business 1.1 Corporate Deposits During the Reporting Period, the Bank effectively promoted the continuous transformation and upgrade of corporate business to ensure the rapid and stable growth of corporate deposits, which is stimulated by online and offline transaction banking business and investment banking business; continued to develop business marketing on institutional customers to constantly improve the comprehensive contribution of corporate customers; actively participated in provincial and municipal institutional customers’ tender projects and successfully secured numerous key accounts and deposit projects, including Henan Provincial Financial Special Account Time Deposit, Henan Provincial Treasury Cash Management, Henan Provincial Agricultural Credit Guarantee, Zhengzhou Airport Public Resources Trading Center, and Zhengzhou Social Security Time Deposit; realized complete coverage on institutional customers’ capital marketing and management. As at the end of the Reporting Period, the balance of the Bank’s corporate deposit was RMB193,630 million, representing an increase of RMB9,216 million or 5% from the beginning of the year. 1.2 Corporate loans During the Reporting Period, the Bank continued to uphold its featured positioning in “trade finance” and focus on supporting the financing needs of private small and micro enterprises in Henan Province through internal policies. Meanwhile, with a focus on improving the approval mechanism and preventing risks, the Bank further strengthened the management of credit assets by improving the credit review and approval mechanism, strengthening the management of credit services for group customers, and preventing risks in key areas. The Bank continuously reduced exposure to industries with overcapacity, promoted industry transformation and upgrading, and pushed ahead the construction of a green credit system and the adjustment of credit structure. As at the end of the Reporting Period, the total corporate loans (including forfeiting and discounted bills) of the Bank amounted to RMB136,318 million, an increase of RMB20,664 million or 17.87% over the beginning of the year. 1.3 Corporate Customers During the Reporting Period, the Bank strengthened customer management and improved the work efficiency of customer managers to promote the healthy development of its corporate business. The Bank established a sales management mechanism and a sales review mechanism to conduct fine management of its corporate business, and drove the average daily business volume of corporate business line to RMB43.2 billion; optimized the customer relationship management (CRM) system and realized online intelligent analysis of process management to improve dynamic customer management in an all-round way; created a map of customers to develop upstream and downstream customers, strengthened marketing and management, and acquired 1,200 new key customers in the upstream and downstream sectors; constantly optimized the distribution of service outlets in the province, enriched the services of the outlets, and improved the customer service of the outlets. 1.4 Institutional Business During the Reporting Period, the Bank completed the reform of organizational structure of the corporate business line, reshaped the marketing system of institutional business, effectively steered and promoted the development of institutional business, and opened 562 new institutional accounts; stepped up the support for e-government products, and developed such hit products as “Non-tax Collection 2.0” (非稅易2.0), “Tendering Connect” (招標通) and “Bank-Court Connect” (銀法通). E-government transaction volume amounted to RMB43.37 billion, an increase of RMB13.75 billion from the previous year. 2 Retail Banking Business 2.1 Personal Deposits Upholding its featured positioning in building a “boutique bank for residents”, the Bank continuously developed personal deposit products to enrich product categories; developed key customer groups, drove the growth of basic deposits, and optimized the structure of savings deposits; strengthened cross-selling of products, actively developed collection and payment agency services, and expanded the customer base; leveraged the Bank’s products such as financial IC card, city card and union membership card to improve customer experience, consolidate the personal customer base, and increase customer stickiness. As at the end of the Reporting Period, the balance of the Bank’s personal deposits amounted to RMB95,587 million, an increase of RMB15,871 million or 19.91% from the end of the previous year. 2.2 Personal Loans During the Reporting Period, the Bank sped up the innovation of personal products and services and vigorously developed such personal services as Housing E-finance (房e融), Housing Mortgage and Preferential Loan (優先貸). The Bank held an exchange meeting for Housing E-finance to strengthen the management of partners, and connected with Zhengzhou Real Estate Registration Center to enable online mortgaging and issuance of electronic certificate of real estate registration for Housing E-finance business, greatly improving the handling efficiency; specified the criteria of approval and checklist for Preferential Loan, conducted funnel analysis on Online Preferential Loan, and improved product design based on the analysis results; and released product manuals for commercial vehicles and private vehicles to standardize operation procedures. As at the end of the Reporting Period, the balance of the Bank’s personal loans amounted to RMB59,594 million, an increase of RMB15,675 million or 35.69% from the end of the previous year. 2.3 Bank Cards Based on Shangding Card (商鼎卡) as the basic debit card, the Bank constantly enriches debit card types and improves their functions. During the Reporting Period, the Bank issued a series of special cards including Henan Union Membership Card (General Union of Xuchang), Shangding Eye Protection Card (商鼎護眼卡), Puyang Longdu Card (濮陽龍都卡), Shangding Yongjun Exclusive Card (商鼎擁軍專屬卡) and Shangding Baby Growth Plan Card (商鼎寶貝兒成長計劃卡), with a steady growth in new card issuances. As of the end of the Reporting Period, the Bank had issued a total of 6,070.4 thousand debit cards, an increase of 758.6 thousand compared with the end of the previous year. The Bank’s credit cards provide high-quality financial services and convenient user experience based on the real needs of customers. During the Reporting Period, the Bank issued two co-branded credit cards, namely the Shangding Rui Card (商鼎瑞卡) and Gongyi Youth Home Card (鞏義青年之家卡). As of the end of the Reporting Period, the Bank had issued a total of 69,927 Shangding Rui Cards and Gongyi Youth Home Cards, with the total number of Shangding credit cards issued reaching 426,603, representing an aggregate transaction amount of RMB53.7 billion. During the Reporting Period, the Bank’s credit card spending amounted to RMB21.3 billion, realizing a profit or loss of RMB164 million (cumulative profit or loss: RMB377 million). .3 Treasury Business 3.1 Money Market Transactions During the Reporting Period, the Bank strengthened its pre-judgment on the money market, summed up the law of money price fluctuations, and scientifically set the maturity structure of liabilities on the basis of ensuring safe and sound liquidity to control financing costs and increase efficiency; expanded counterparties in multiple dimensions from the perspective of supply and demand of funds, analyzed the different needs and preferences of customer groups, and further increased the autonomy of liability business. As at the end of the Reporting Period, the total balance of the Bank’s deposits with banks and other financial institutions and financial assets held under resale agreements was RMB7,714 million, accounting for 1.55% of the Bank’s total assets; and the total balance of deposits from banks and other financial institutions and financial assets sold under repurchase agreements was RMB49,405 million, accounting for 10.72% of the Bank’s total liabilities. 3.2 Investment in Securities and Other Financial Assets During the Reporting Period, the Bank paid close attention to the changes in the international dynamics, the domestic and international economic environment and the capital market, strengthened the study and trend analysis on the changes in the bond market, capital market, regulatory policies and macroeconomic environment, timely adjusted the direction of capital investment and business development strategies, seized appropriate opportunities to carry out investment business, and improved the interest margin of capital investment as much as possible while controlling risks. Meanwhile, the Bank constantly diversified and made timely adjustments to the ways of absorbing deposits to increase the capital available for investment, and enriched the varieties of investments and strengthened the research on innovative business to improve the efficiency of capital utilization. As at the end of the Reporting Period, the Bank’s total investment in bonds, investment products under trust schemes, investment products managed by securities companies and other securities financial assets amounted to RMB244,787 million, representing a year-on-year increase of 3.65%. Among them, the total investment in bonds was RMB77,053 million, a year-on-year increase of 0.33%; and the total investment in investment products under trust schemes and investment products managed by securities companies was RMB140,456 million, a year-on-year increase of 4.28% 3.3 Investment Banking Business During the Reporting Period, the Bank’s lead underwriting business for debt financing instruments (DFIs) of non-financial institutions grew rapidly. The Bank worked with a number of large enterprises in Henan Province to issue such instruments in a total offering size of RMB9.5 billion, ranking 11th among city commercial banks nationwide in the debt underwriting volume ranking issued by National Association of Financial Market Institutional Investors (NAFMII). The Bank made a breakthrough in its lead underwriting business for DFIs of enterprises in Henan Province as it acted as the lead underwriter for the issuance of DFIs of Henan Toll for Debt Repayment Expressway Management Co., Ltd. (河南省收費還貸高 速公路管理有限公司) and Henan Transport Investment Group Co., Ltd. (河南交通投資集團 有限公司) with a total offering size of RMB3.7 billion. In addition, the Bank independently developed and issued the first PPN-linked credit risk mitigation warrant (CRMW) in Henan Province, and proactively explored asset-backed notes, venture capital instruments, etc. 3.4 Wealth Management Business During the Reporting Period, in accordance with regulatory requirements, the Bank continued to scale down interbank and principal-guaranteed wealth management products and develop personal non-principal-guaranteed wealth management business, thus enhancing the liquidity management for wealth management business. As at the end of the Reporting Period, the balance of the Bank’s interbank wealth management products was RMB4.93 billion, down 64.58% from the end of the previous year; the balance of principal-guaranteed wealth management products was RMB4,600 million, down 49.57% from the end of the previous year; and the balance of personal non-principal-guaranteed wealth management products was RMB37,467 million, up 67.02% from the beginning of the year. In strict accordance with the new regulations on asset management and wealth management, the Bank worked to shift to net-worth wealth management business by stepping up the efforts in developing net-worth wealth management products, especially those for high-net-worth individuals and exclusive private banking products. With product design and marketing plans tailored for customers with different risk appetite and term requirements, the Bank’s net-worth wealth management products became much better received by the market, attracting new customers while transferring existing customers to new products. As at the end of the Reporting Period, the balance of the Bank’s net-worth wealth management products amounted to RMB20,634 million. During the Reporting Period, the Bank issued a total of 409 wealth management products, raising RMB103,380 million in total. As at the end of the Reporting Period, the balance of the Bank’s wealth management products was RMB46,997 million, up 3.30% from the end of the previous year. Prospects: Corporate Development Strategy Confronted with the new development situation, the Bank no longer emphasizes the growth speed and business scale, and instead will accelerate transformation in the course of business operations from 2020 onwards based on its high-quality development strategy of “123456”: “one focus” on high-quality sustainable development; “two continuance”, that is, the continuance of stable and healthy business operation and the continuance of transformation and enhancement; “three strategies” of improving risk control, business capability and differentiation with the support of talents, technology and systems, concentrating on product innovation, transformation toward lightcapital model and digitalization, and further stabilizing profit growth, non-performing loan ratio and featured business; “four tactics” to fight against deposit loss, distressed asset, financial chaos and narrow-mindedness, while optimizing asset-liabilities structure by sticking to the “four dos and four don’ts” on liability and asset; “five relationships” between heavy and light capitals, between long and short term matching, between high and low liability costs, between high and low risk return, and between fast and slow profit growth, all of which requires careful handling; “six indicators”, namely increase rate of net profit, non-performing loan ratio, daily average balance of deposits, net interest margin, ratio of risk assets to total assets on balance sheet and net income from intermediary business, that need to pay close attention to and the performance shall be improved through efficient benchmark setting and effective performance appraisal. Operating Plan 2020 is the closing year of the Bank’s 5-Year Development Strategic Plan for 2016-2020, and a crucial year to strengthen weak links and improve efficiency for high-quality development. The Bank will closely follow the spirit of the central, provincial and municipal economic work conferences and the national banking and insurance regulatory work conference and the work requirements of the CBIRC Henan Office for “building excellent city commercial banks” to unite all staff to take on challenges and unswervingly promote high-quality development. Firstly, the Bank will continue to seek development with a focus on “six major indicators”. In 2020, the Bank’s “six major indicators” are changed as follows: net profit growth, NPL ratio, daily average deposits, net interest margin, ratio of risk assets to on-balance-sheet assets, and net income from intermediary business. The Bank will set up a top-down coordinated appraisal mechanism to break down and assign these indicators to its executives and front, middle and back-office departments with strict performance appraisal, and tilt talents, expenses and technology resources towards the “six major indicators” to continually optimize asset-liability structure and improve operating performance. Secondly, the Bank will continue to deepen the development of the three featured business lines. In 2020, in terms of trade finance, with an emphasis on increasing business volume and building highlights, the Bank will focus on the development of Cloud Business, Cloud Logistics, and Cloud Financing, improve the services and communication mechanism for the Commerce and Logistics Bank Alliance, and drive the business volume of the Alliance with Cloud Business to expand the influence of the Alliance. In terms of finance for residents, the Bank will create star products based on customer needs, make good use of credit cards, channels, credit facilities to create an integrated financial service model, carry out differentiated marketing focusing on key customer groups, cities and counties, and endeavor to increase the contribution of inactive users and other long-tail customers. In terms of small and micro finance, the Bank will adhere to the “positioning in good customer base and focusing on good products”, speed up product development and iteration, and ensure to achieve the goals of “two increases and two controls”; continue to intensify the application of big data, develop a closed-loop early warning system covering pre-loan, post-loan and collection procedures, and build a safety net against the credit risk of small and micro finance. Thirdly, the Bank will fight hard to prevent and control credit risk. The Bank will establish the mindset of “controlling risks is increasing income and collection is profit-making”, and continue to give top priority to the management of risk assets for 2020. Specifically, the Bank will strengthen the implementation of risk limit and gradually reduce over-limit credit facilities; perform strict, unified credit management to curb “overconcentration of credit exposure”; optimize the operation mechanism of credit committees at all levels and build an expert approval team; strengthen the cultivation of independent approvers, risk managers, and collection staff, and establish a mechanism for job rotation of risk control personnel among the head office, branches and sub-branches; draw a map of the Bank’s risk assets, formulate an annual plan for risk asset disposal, promote the construction of early warning system and internal appraisal system, expand the scope of application of big data for risk control, and organize all staff to reduce outstanding risk assets and control new ones. Fourthly, the Bank will speed up the expansion of the Bank’s basic customer base. For credit customers, the Bank will formulate and dynamically adjust its industry marketing policies and white list of high-quality customers, and develop different credit schemes on an industry-by-industry basis according to the economic development characteristics of various cities, with a view to increasing the proportion of customers from strategic emerging industries, high-end manufacturing and other advanced industries in the Bank. For non-credit customers, the Bank will optimize the list of industries of priority for marketing to corporate customers, improve the service schemes for corporate customers, and strengthen the coordination of corporate and personal banking to expand customer base through “1+N” scenario-based finance and big data-based risk control and marketing. Meanwhile, the Bank will focus on developing good products, good services and good experience, and carrying out marketing to key individual customers. Fifthly, the Bank will steadily push forward the capital-light transformation. The Bank will put into play the guiding role of performance appraisal, enhance all staff’s awareness of capital conservation from the aspects of resource allocation and performance appraisal, and encourage the development of low-risk, low-capital business lines; scale up capital-light investment banking business such as M&A, matchmaking and underwriting of standard bonds; establish a long-term mechanism for the circulation of credit assets, revitalize existing assets, and gradually optimize the credit structure to improve the efficiency of serving the real economy.

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