Industrial Bank Co.Ltd(601166) : capital adequacy report in 2021

Industrial Bank Co.Ltd(601166) 2021 capital adequacy Report

catalogue

1. Introduction four

1.1 Company Profile four

1.2 basis of disclosure five

1.3 disclosure statement five

2. Calculation scope of capital adequacy ratio six

2.1 basic information of the invested institution six

2.2 capital gap and capital transfer restrictions 73. Capital and capital adequacy ratio 83.1 capital adequacy index eight

3.2 capital composition Wrong! No bookmarks defined.

3.2.1 main capital components Wrong! No bookmarks defined.

3.2.2 threshold deduction limit and excess loan loss reserve nine

3.3 risk weighted assets ten

4. Capital management eleven

4.1 methods and procedures of internal capital adequacy assessment eleven

4.2 capital planning and capital adequacy management eleven

5. Comprehensive risk management 146. Credit risk seventeen

6.1 credit risk management seventeen

6.2 credit risk exposure twenty

6.3 credit risk mitigation twenty-two

6.4 loan quality and provision for impairment Wrong! No bookmarks defined.

6.5 asset securitization twenty-four

6.6 counterparty credit risk twenty-four

7. Market risk twenty-six

7.1 market risk management twenty-seven

Measuring market risk twenty-eight

8. Operational risk twenty-eight

8.1 operational risk management twenty-nine

8.2 operational risk measurement thirty

9. Other risks thirty

9.1 bank account book interest rate risk thirty

9.2 liquidity risk thirty

10. Remuneration thirty-four

10.1 remuneration management committee thirty-four

10.2 salary policy thirty-four

10.3 basic salary information of senior managers 361. Introduction 1.1 company profile

Industrial Bank Co.Ltd(601166) was established in August 1988. It is one of the first joint-stock commercial banks approved by the State Council and the people's Bank of China. It was officially listed on the Shanghai Stock Exchange on February 5, 2007.

Since its establishment, the bank has continued to grow. It took the lead in realizing full coverage of all provincial capitals in China among similar banks. It has set up Hong Kong branches and was approved to set up London Representative Office in 2020. As of the end of December 2021, there are 2020 branches, including 45 Tier-1 branches, 119 tier-2 branches, 2 prefecture level non local branches, 1013 traditional branches, 12 small and micro branches and 829 community branches. In line with the diversified trend of customer demand, it actively provides comprehensive financial services. It has many financial licenses such as trust, financial leasing, fund, futures, financial management and consumer finance, and has become a leading comprehensive financial service group in China. Firmly follow the road of differentiated and characteristic operation, have strong market competitiveness and popularity in business fields such as green finance, bank cooperation, investment banking, asset management and wealth management, and take the lead in setting up professional research companies and digital finance companies in the industry.

In 2021, it will continue to maintain steady and healthy development, and its comprehensive strength will remain in the forefront of joint-stock commercial banks. According to the latest ranking of the Banker magazine, the bank ranked 19th among global banks by tier 1 capital in 2021, up 2 places over the previous year.

1.2 basis of disclosure

This report is prepared and disclosed in accordance with the measures for capital management of commercial banks (for Trial Implementation) issued by Bank Of China Limited(601988) Insurance Regulatory Commission in June 2012 and relevant provisions. 1.3 disclosure statement

This report is disclosed in accordance with the relevant provisions on the measurement of capital adequacy ratio in the measures for the capital management of commercial banks (for Trial Implementation). Therefore, some information in the report cannot be directly compared with the financial information in the annual report of listed companies.

This report contains a number of forward-looking statements on the bank's financial position, operating performance and business development. These statements are made based on the current plans, estimates and forecasts, which may be affected by various factors and may lead to deviations. The future plans that may be involved do not constitute the bank's substantive commitment to investors, so investors should not rely too much on it. 2. Calculation scope of capital adequacy ratio

The calculation scope of the bank's unconsolidated capital adequacy ratio includes all branches of the bank at home and abroad. The calculation scope of the bank's consolidated capital adequacy ratio includes the bank and the financial institutions directly or indirectly invested by the bank in accordance with the measures for the capital management of commercial banks (for Trial Implementation). Subsidiaries included in the calculation scope of consolidated capital adequacy ratio include Industrial International Trust Co., Ltd., Industrial Financial Leasing Co., Ltd., Industrial Fund Management Co., Ltd., industrial consumer finance Co., Ltd. and Xingyin Financial Management Co., Ltd. 2.1 basic information of invested institutions

In accordance with the relevant provisions of the measures for capital management of commercial banks (for Trial Implementation) issued by the CBRC, the bank adopts different treatment methods for different types of invested institutions when calculating the consolidated capital adequacy ratio. Table 1: treatment methods adopted by various invested institutions in the calculation of consolidated capital adequacy ratio

No. consolidated treatment method of investee category

1. It has majority voting rights or is included in the scope of consolidation

Controlling financial institutions

Not included in the scope of consolidation, the part of core Tier-1 capital investment to financial institutions that exceeds 10% of the bank's net core Tier-1 capital is deducted from 2 large amount of minority capital investment, and other Tier-1 capital investment and tier-2 capital investment are fully deducted from the corresponding Tier-1 capital, Risk weighted assets are calculated for the part that fails to meet the threshold deduction limit

Not included in the scope of consolidation, the part of the total investment exceeding 10% of the bank's approved 3 net tier 1 capital of financial institutions shall be deducted from the small minority capital investment of regulatory capital at all levels, and the part that fails to meet the threshold deduction limit shall be calculated as risk weighted assets

4. The of industrial and commercial enterprises are not included in the scope of consolidation, and the risk weighted assets are calculated

Minority equity investment

Table 2: invested institutions included in the consolidation scope

No. issued and business scope of the invested institution in the place of registration proportion of fully paid up capital shares held by the bank

Societe Generale International Trust Fund; Chattel trust; Real estate letter

1. Fuzhou Trust Co., Ltd. 10 billion yuan; Securities trust; Other property or property 73% right trust, etc.

Industrial finance leasing business; Transfer and transfer of finance lease

2. Tianjin Leasing Co., Ltd. has 9 billion yuan of leased assets; 100% of fixed income securities investment business, etc.

Industrial fund manages fund raising, fund sales and specific customer capital

3 Management Co., Ltd. Fuzhou 1.2 billion yuan production management, asset management and other businesses permitted by 90% of the CSRC.

Industrial consumption fund to issue personal consumption loans; Domestic acceptance of shareholders

4. Deposits of Quanzhou 1.9 billion yuan subsidiary and domestic shareholders of Rongrong Co., Ltd; Borrowing from 66% domestic companies and financial institutions.

Public offering of financial management to the unspecified public

Products and invest in the property of the entrusted investors

5. Xingyin financial management has 5 billion yuan of assets and management in Fuzhou; Issuing wealth management products to qualified investors and non-public 100% limited liability companies

Investment and management of real estate; Financial advisor and consultant

Inquiry service, etc.

2.2 capital gap and capital transfer restrictions

During the reporting period, there was no regulatory capital gap in the invested financial institutions in which the bank held a majority stake or had control, and there were no restrictions on capital transfer within the group.

3. Capital and capital adequacy ratio 3.1 capital adequacy ratio indicators

At the end of 2021, the bank calculated the group consolidated capital adequacy ratio, Tier-1 capital adequacy ratio and core Tier-1 capital adequacy ratio according to the measures for capital management of commercial banks (for Trial Implementation), which were 14.39%, 11.22% and 9.81% respectively, and the corporate bank's Tier-1 capital adequacy ratio, Tier-1 capital adequacy ratio and core Tier-1 capital adequacy ratio were 14.10%, 10.83% and 9.35% respectively. The capital adequacy index of each quarter in 2021 met the regulatory requirements and the bank's management objectives.

Table 3: capital adequacy ratio indicators in 2021

20202021

Regulatory indicators

Year end first quarter second quarter third quarter fourth quarter

Core tier 1 capital adequacy ratio 9.33%, 9.42%, 9.20%, 9.54%, 9.81%

The group's tier one capital adequacy ratio is 10.85%, 10.88%, 10.63%, 10.96% and 11.22%

Capital adequacy ratio 13.47%, 13.42%, 12.59%, 12.92%, 14.39%

Core tier 1 capital adequacy ratio 8.95%, 9.01%, 8.77%, 9.11%, 9.35%

Corporate tier 1 capital adequacy ratio 10.54%, 10.54%, 10.27%, 10.60%, 10.83%

Capital adequacy ratio 13.20%, 13.15%, 12.27%, 12.59%, 14.10%

3.2 capital composition 3.2.1 main capital components

The composition of consolidated capital measured by the bank in accordance with the measures for capital management of commercial banks (for Trial Implementation) and relevant regulations is as follows:

Table 4: capital composition of the group

Unit: RMB million

Project December 31, 2021

Core tier 1 capital 599661

equity

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