Agricultural Bank of China Limited
(Incorporated in the People's Republic of China
with
Limited Liability)
Auditor's Report and
Consolidated Financial Statements
For the year ended 31
December 2023
Opinion
We have audited the consolidated
financial statements of Agricultural Bank of China Limited (the
"Bank") and its subsidiaries (the "Group") set out on pages 1 to
199, which comprise the consolidated statement of financial
position as at 31 December 2023, the consolidated statement of
profit or loss, 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 material 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 2023, 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"). 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 International Code of Ethics for
Professional Accountants (including International Independence
Standards) issued by the International Ethics Standards Board for
Accountants ("IESBA Code"), together with any ethical requirements
that are relevant to our audit of the consolidated financial
statements in the People's Republic of China, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements and the IESBA 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.
Key audit matters (continued)
|
Measurement of
expected credit losses for loans and advances to customers
|
|
Refer to the
accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to the
consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
The Group uses an expected credit loss ("ECL") model
to measure the loss allowance for loans and advances to customers
in accordance with International Financial Reporting Standard 9,
Financial instruments.
The determination of loss allowance for loans and
advances to customers using the expected credit loss model is
subject to the application of a number of key parameters and
assumptions, including the credit risk staging, probability of
default, loss given default, exposures at default and discount
rate, adjustments for forward-looking information and other
adjustment factors. Extensive management judgement is involved in
the selection of those parameters and the application of the
assumptions.
|
Our audit procedures to assess ECL for loans and
advances to customers included the following:
· with
the assistance of KPMG's IT specialists, understanding and
assessing the design, implementation and operating effectiveness of
key internal controls of financial reporting over the approval,
recording and monitoring of loans and advances to customers, the
credit risk staging process and the measurement of ECL for loans
and advances to customers.
· with
the assistance of KPMG's financial risk specialists, assessing the
appropriateness of the ECL model in determining loss allowances and
the appropriateness of the key parameters and assumptions in the
model, which included credit risk staging, probability of default,
loss given default, exposure at default, adjustments for
forward-looking information and other adjustments, and assessing
the appropriateness of related key management judgement.
|
Key audit matters (continued)
|
Measurement of
expected credit losses for loans and advances to customers
(continued)
|
|
Refer to the
accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to the
consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
In particular, the determination of the loss
allowance is heavily dependent on the external macro environment
and the Group's internal credit risk management strategy. The ECL
for corporate loans and advances are derived from estimates
including the historical losses, internal and external credit
grading and other adjustment factors. The ECL for personal loans
and advances are derived from estimates whereby management takes
into consideration historical overdue data, the historical loss
experience for personal loans and other adjustment factors.
|
· for key
parameters involving judgement, critically assessing input
parameters by seeking evidence from external sources and comparing
to the Group's internal records including historical loss
experience and type of collateral. As part of these procedures, we
assessed management's revisions to estimates and input parameters
by comparing with prior period and considered the consistency of
judgement.
·
comparing the macroeconomic forward- looking information used in
the model with market information to assess whether they were
aligned with market and economic development.
·
assessing the completeness and accuracy of data used in the ECL
model. For key internal data, we compared the total balance of the
loans and advances' list used by management to assess the ECL with
the general ledger to check the completeness of the data. We also
selected samples to compare individual loan and advance information
with the underlying agreements and other related documentation, to
check the accuracy of the data and samples, to check the accuracy
of external data by comparing them with public resources.
|
Key audit matters (continued)
|
Measurement of
expected credit losses for loans and advances to customers
(continued)
|
|
Refer to the
accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to the
consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
Management also exercises judgement in determining
the quantum of loss given default based on a range of factors.
These include the financial situation of the borrower, the security
type, the seniority of the claim, the recoverable amount of
collateral, and other repayment sources of the borrower. Management
refers to valuation reports of collateral issued by qualified third
party valuers and considers the influence of various factors
including the market price, status and use when assessing the value
of collaterals. The enforceability, timing and means of realisation
of collateral can also have an impact on the recoverable amount of
collateral.
|
· for key
parameters used in the ECL model which were derived from system-
generated internal data, assessing the accuracy of input data by
comparing the input data with original documents on a sample basis.
In addition, we involved KPMG's IT specialists to assess the logics
and compilation of the loans and advances' overdue information on a
sample basis.
·
evaluating the reasonableness of management's assessment on whether
the credit risk of the loan and advance has, or has not, increased
significantly since initial recognition and whether the loan and
advance is credit-impaired by selecting risk-based samples. We
analyzed the portfolio by industry sector to select samples in
industries more vulnerable to the current economic situation with
reference to other borrowers with potential credit risk. For
selected samples, we checked loan overdue information, making
enquiries of the credit managers about the borrowers' business
operations, checking borrowers' financial information and
researching market information about borrowers' businesses, to
check the credit risk status of the borrower, and the
reasonableness of the loans' credit risk stage.
|
Key audit matters (continued)
|
Measurement of
expected credit losses for loans and advances to customers
(continued)
|
|
Refer to the
accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to the
consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
We identified the measurement of ECL of loans and
advances to customers as a key audit matter because of the inherent
uncertainty and management judgement involved and because of its
significance to the financial results and capital of the Group.
|
·
evaluating the reasonableness of loss given default for selected
samples of corporate loans and advances to customers that are
credit-impaired, by checking the financial situation of the
borrower, the security type, the seniority of the claim, the
recoverable amount of collateral, and other repayment sources of
the borrower. Evaluating management's assessment of the value of
any collateral, by comparison with evaluation result based on the
category, status, use of the collateral and market prices. For
valuation reports of collateral issued by qualified third party, we
evaluated the competence, professional quality and objectivity of
the external appraiser. We also evaluated the timing and means of
realisation of collateral, evaluated the forecast cash flows,
assessed the viability of the Group's recovery plans; based on the
above work, we selected samples and assessed the accuracy of
calculation for loans and advances' credit losses by using the ECL
model.
|
Key audit matters (continued)
|
Measurement of
expected credit losses for loans and advances to customers
(continued)
|
|
Refer to the
accounting policy in "Note II 8.5 Impairment of financial
instruments, Note III 2 Measurement of the expected credit loss
allowance", and "Note IV 8 Credit impairment losses, Note IV 17
Loans and advances to customers, Note IV 44.1 Credit risk" to the
consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
|
·
performing retrospective review of expected credit loss model
components and significant assumptions, to back-test past estimates
element against actual outcomes, and assess whether the results
indicate possible management bias on loss estimation.
·
assessing the reasonableness of the disclosures in the financial
statements in relation to expected credit losses for loans and
advances against prevailing accounting standards.
|
Key audit matters (continued)
|
Measurement of
interests in and consolidation of structured entities
|
|
Refer to the
accounting policy in "Note II 2 Consolidation, Note III 5
Consolidation of structured entities", and "Note IV 41 Structured
entities" to the consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
Structured entities are generally created to achieve
a narrow and well defined objective with restrictions around their
ongoing activities.
The Group may acquire an ownership interest in a
structured entity, through initiating, investing or retaining
shares in a Wealth Management Products ("WMPs"), securitization
products, funds, trust investment plans, debt investment plans and
asset management plans. The Group may also retain partial interests
in derecognized assets due to guarantees or securitization
structures.
|
Our audit procedures to assess the measurement of
interests in and consolidation of structured entities included the
following:
·
assessing the design, implementation and operating effectiveness of
key internal controls of financial reporting over measurement of
interests in and consolidation of structured entities.
·
selecting significant structured entities of each key product type
and performing the following procedures:
- inspecting the related
contracts, internal establishment documents and information
disclosed to the investors to understand the purpose of the
establishment of the structured entity and the involvement the
Group has with the structured entity and to assess management's
judgement over whether the Group has the ability to exercise power
over the structured entity;
- inspecting the risk and reward
structure of the structured entity, including any capital or return
guarantee, provision of liquidity support, commission paid and
distribution of the returns, to assess management's judgement as to
the exposure, or rights, to variable returns from the Group's
involvement in such an entity;
|
Key audit matters (continued)
|
Measurement of
interests in and consolidation of structured entities (continued)
|
|
Refer to the
accounting policy in "Note II 2 Consolidation, Note III 5
Consolidation of structured entities", and "Note IV 41 Structured
entities" to the consolidated financial statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
In determining whether the Group retains any partial
interests in a structured entity or should consolidate a structured
entity, management is required to consider the power it possesses,
its exposure to variable returns, and its ability to use its power
to affect returns. These factors are not purely quantitative and
need to be considered collectively in the overall substance of the
transactions.
We identified the recognition of interests in and
consolidation of structured entities as a key audit matter because
of the complex nature of certain of these structured entities and
because of the judgement exercised by management in the qualitative
assessment of the terms and the nature of each entity.
|
- inspecting management's analysis
of the structured entity, including qualitative analysis and the
calculation of the magnitude and variability associated with the
Group's economic interests in the structured entity, to assess
management's judgement over the Group's ability to affect its own
returns from the structured entity;
- assessing management's judgement
over whether the structured entity should be consolidated or
not.
·
assessing the reasonableness of the disclosures in the financial
statements in relation to the measurement of interests in and
consolidation of structured entities against prevailing accounting
standards.
|
Key audit matters (continued)
|
Measurement of
financial instruments' fair value
|
|
Refer to the
accounting policy in "Note II 8.3 Determination of fair value, Note
III 3 Fair value of financial instruments", and "Note IV 46 Fair
value of financial instruments" to the consolidated financial
statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
Financial instruments carried at fair value account
for a significant part of the Group's assets and liabilities. The
fair value adjustments of financial instruments may impact either
the profit or loss or other comprehensive income.
The valuation of the Group's financial instruments,
held at fair value, is based on a combination of market data and
valuation models which often require a considerable number of
inputs. Many of these inputs are obtained from readily available
data, in particular for level 1 and level 2 financial instruments
in the fair value hierarchy, the valuation models for which use
quoted market prices and observable inputs, respectively. Where one
or more significant unobservable inputs, such as credit risk,
liquidity and discount rate, are involved in the valuation
techniques, as in the case of level 3 financial instruments, then
estimates need to be developed which can involve extensive
management judgements.
|
Our audit procedures to assess measurement of
financial instruments' fair value included the following:
·
assessing the design, implementation and operating effectiveness of
key internal controls of financial reporting over the model
building, model validation, independent valuation and front office
and back office reconciliations for financial instruments.
·
assessing the level 1 fair value of financial instruments, on a
sample basis, by comparing the fair value applied by the Group with
publicly available market data.
|
Key audit matters (continued)
|
Measurement of
financial instruments' fair value (continued)
|
|
Refer to the
accounting policy in "Note II 8.3 Determination of fair value, Note
III 3 Fair value of financial instruments", and "Note IV 46 Fair
value of financial instruments" to the consolidated financial
statements.
|
|
The Key Audit
Matter
|
How the matter was
addressed in our audit
|
|
We identified measurement of financial instruments'
fair value as a key audit matter because of the assets and
liabilities measured at fair value are material to the Group and
the degree of complexity involved in the valuation techniques and
the degree of judgement exercised by management in determining the
inputs used in the valuation models.
|
· for
level 2 and level 3 financial instruments, on a sample basis,
involving KPMG's valuation specialists to assess whether the
valuation method selected is appropriate with reference to the
prevailing accounting standards. Our procedures included:
developing parallel models, obtaining inputs independently and
verifying the inputs; assessing the appropriate application of fair
value adjustment that form an integral part of fair value, by
inquiring of management about any changes in the fair value
adjustment methodologies and assessing the appropriateness of the
inputs applied; and comparing our valuation results with that of
the Group.
·
assessing the reasonableness of the disclosures in the financial
statements in relation to fair value of financial instruments
against prevailing accounting standards.
|
Information other than the consolidated financial statements
and auditor's report thereon
The directors are responsible for
the other information. The other information comprises all 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 are responsible for
the preparation of the consolidated financial statements that give
a true and fair view in accordance with IFRSs issued by the IASB
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.
The directors are assisted by the
Audit Committee in discharging their responsibilities 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. This 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 (continued)
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:
l 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.
l 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.
l Evaluate the
appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the
directors.
l 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.
l 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.
l 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.
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 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
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 Wong Yuen
Shan.
KPMG
Certified Public Accountants
8th Floor, Prince's Building 10
Chater Road
Central, Hong Kong 28 March
2024
Consolidated statement of profit
or loss for the year ended 31 December 2023
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
Year ended 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Interest income
|
1
|
1,223,698
|
1,108,464
|
|
Interest expense
|
1
|
(651,948)
|
(518,581)
|
|
Net interest
income
|
1
|
571,750
|
589,883
|
|
Fee and commission income
|
2
|
94,710
|
95,518
|
|
Fee and commission expense
|
2
|
(14,617)
|
(14,236)
|
|
Net fee and
commission income
|
2
|
80,093
|
81,282
|
|
Net trading gain
|
3
|
23,124
|
5,519
|
|
Net gain on financial investments
|
4
|
16,764
|
5,909
|
|
Net gain on derecognition of financial assets
measured at amortized cost
|
|
1,038
|
160
|
|
Other operating income
|
5
|
2,699
|
12,530
|
|
Operating
income
|
|
695,468
|
695,283
|
|
Operating expenses
|
6
|
(252,305)
|
(243,571)
|
|
Credit impairment losses
|
8
|
(135,707)
|
(145,266)
|
|
Impairment losses on other assets
|
|
(226)
|
(59)
|
|
Operating
profit
|
|
307,230
|
306,387
|
|
Share of results of associates and joint
ventures
|
|
189
|
66
|
|
Profit before
tax
|
|
307,419
|
306,453
|
|
Income tax expense
|
9
|
(37,599)
|
(47,587)
|
|
Profit for the
year
|
|
269,820
|
258,866
|
Consolidated statement of
profit or loss
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
Year ended 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Attributable
to:
|
|
|
|
|
Equity holders of the Bank
|
|
269,356
|
259,232
|
|
Non-controlling interests
|
|
464
|
(366)
|
|
|
|
269,820
|
258,866
|
|
Earnings per share attributable to the ordinary
equity holders of the Bank (expressed in RMB yuan per share)
|
|
|
|
|
- Basic and diluted
|
11
|
0.72
|
0.69
|
The accompanying notes form an
integral part of these consolidated financial statements.
Consolidated statement of profit
or loss for the year ended 31 December 2023
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Year ended 31 December
|
|
|
2023
|
2022
|
|
|
|
(Restated)
|
|
Profit for the year
|
269,820
|
258,866
|
|
Other comprehensive income:
|
|
|
|
Items that may be reclassified subsequently to
profit or loss:
|
|
Fair value changes on debt
instruments at fair
value through other
comprehensive income
|
16,206
|
(16,089)
|
|
Loss allowance on debt instruments at fair value
through other comprehensive income
|
(8,803)
|
16,717
|
|
Income tax impact for fair value changes and loss
allowance on debt instruments at fair value through other
comprehensive income
|
(1,642)
|
(516)
|
|
Foreign currency translation differences
|
766
|
3,853
|
|
Others
|
(2,767)
|
(689)
|
|
Subtotal
|
3,760
|
3,276
|
|
Items that will not be reclassified subsequently to
profit or loss:
|
|
|
|
Fair value changes on other equity investments
designated at fair value through other
comprehensive income
|
527
|
128
|
|
Income tax impact for fair value changes on other
equity investments designated at fair value through other
comprehensive income
|
(146)
|
(33)
|
|
Subtotal
|
381
|
95
|
|
Other comprehensive income, net of tax
|
4,141
|
3,371
|
|
Total comprehensive income for the year
|
273,961
|
262,237
|
Consolidated statement of profit
or loss
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Year ended 31 December
|
|
|
2023
|
2022
|
|
|
|
(Restated)
|
|
Total comprehensive income attributable to:
|
|
Equity holders of the Bank
|
274,468
|
263,165
|
|
Non-controlling interests
|
(507)
|
(928)
|
|
|
273,961
|
262,237
|
The accompanying notes form an
integral part of these consolidated financial statements.
Consolidated statement of
financial position as at 31 December 2023
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
As at 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Assets
|
|
|
|
|
Cash and balances with central banks
|
12
|
2,922,047
|
2,549,130
|
|
Deposits with banks and other financial
institutions
|
13
|
1,080,076
|
630,885
|
|
Precious metals
|
|
54,356
|
83,389
|
|
Placements with and loans to banks and other
financial institutions
|
14
|
516,181
|
500,330
|
|
Derivative financial assets
|
15
|
24,873
|
30,715
|
|
Financial assets held under resale agreements
|
16
|
1,809,559
|
1,172,187
|
|
Loans and advances to customers
|
17
|
21,731,766
|
18,980,973
|
|
Financial investments
|
18
|
|
|
|
Financial assets at fair value through profit or
loss
|
|
547,407
|
522,057
|
|
Debt instrument investments at amortized
cost
|
|
8,463,255
|
7,306,000
|
|
Other debt instrument and other equity investments
at fair value through other
comprehensive income
|
|
2,203,051
|
1,702,106
|
|
Investment in associates and joint ventures
|
20
|
8,386
|
8,092
|
|
Property and equipment
|
21
|
156,739
|
152,572
|
|
Goodwill
|
|
1,381
|
1,381
|
|
Deferred tax assets
|
22
|
160,750
|
149,930
|
|
Other assets
|
23
|
193,162
|
135,741
|
|
Total assets
|
|
39,872,989
|
33,925,488
|
Consolidated statement of
financial position as at 31 December 2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
As at 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Liabilities
|
|
|
|
|
Borrowings from central banks
|
24
|
1,127,069
|
901,116
|
|
Deposits from banks and other financial
institutions
|
25
|
3,653,497
|
2,459,178
|
|
Placements from banks and other financial
institutions
|
26
|
382,290
|
333,755
|
|
Financial liabilities at fair value through
profit or loss
|
27
|
12,597
|
12,287
|
|
Derivative financial liabilities
|
15
|
27,817
|
31,004
|
|
Financial assets sold under repurchase
agreements
|
28
|
100,521
|
43,779
|
|
Due to customers
|
29
|
28,898,468
|
25,121,040
|
|
Dividends payable
|
10
|
-
|
1,936
|
|
Debt securities issued
|
30
|
2,295,921
|
1,869,398
|
|
Deferred tax liabilities
|
22
|
14
|
9
|
|
Other liabilities
|
31
|
477,928
|
478,226
|
|
Total liabilities
|
|
36,976,122
|
31,251,728
|
Consolidated statement of
financial position as at 31 December 2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
As at 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Equity
|
|
|
|
|
Ordinary shares
|
32
|
349,983
|
349,983
|
|
Other equity instruments
|
33
|
480,000
|
440,000
|
|
Preference shares
|
|
80,000
|
80,000
|
|
Perpetual bonds
|
|
400,000
|
360,000
|
|
Capital reserve
|
34
|
173,425
|
173,426
|
|
Other comprehensive income
|
35
|
41,506
|
35,887
|
|
Surplus reserve
|
36
|
273,558
|
246,764
|
|
General reserve
|
37
|
456,200
|
388,600
|
|
Retained earnings
|
|
1,114,576
|
1,033,403
|
|
Equity attributable to equity holders of the
Bank
|
|
2,889,248
|
2,668,063
|
|
Non-controlling interests
|
|
7,619
|
5,697
|
|
Total equity
|
|
2,896,867
|
2,673,760
|
|
Total equity and
liabilities
|
|
39,872,989
|
33,925,488
|
Approved and authorized for issue
by the Board of Directors on 28 March 2024.
Gu
Shu
Zhang
Xuguang
Chairman
Executive Director
The accompanying notes form an
integral part of these consolidated financial statements.
Consolidated statement of
changes in equity for the year ended 31 December 2023
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Total equity attributable to
equity holders of the Bank
|
|
|
Note IV
|
Ordinary shares
|
Other equity
instruments
|
Capital reserve
|
Other
comprehensive
income
|
Surplus reserve
|
General reserve
|
Retained earnings
|
Subtotal
|
Non-
controlling interests
|
Total
|
|
As at 31 December 2022 (Restated)
|
|
349,983
|
440,000
|
173,426
|
35,887
|
246,764
|
388,600
|
1,033,403
|
2,668,063
|
5,697
|
2,673,760
|
|
Changes in accounting policies
(Note II 1.3)
|
|
-
|
-
|
-
|
508
|
-
|
-
|
39
|
547
|
526
|
1,073
|
|
As at 1 January 2023 (Restated)
|
|
349,983
|
440,000
|
173,426
|
36,395
|
246,764
|
388,600
|
1,033,442
|
2,668,610
|
6,223
|
2,674,833
|
|
Profit for the year
|
|
-
|
-
|
-
|
-
|
-
|
-
|
269,356
|
269,356
|
464
|
269,820
|
|
Other comprehensive income
|
|
-
|
-
|
-
|
5,112
|
-
|
-
|
-
|
5,112
|
(971)
|
4,141
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
5,112
|
-
|
-
|
269,356
|
274,468
|
(507)
|
273,961
|
|
Capital contribution from equity
holders
|
33
|
-
|
40,000
|
(1)
|
-
|
-
|
-
|
-
|
39,999
|
2,000
|
41,999
|
|
Appropriation to surplus
reserve
|
36
|
-
|
-
|
-
|
-
|
26,794
|
-
|
(26,794)
|
-
|
-
|
-
|
|
Appropriation to general
reserve
|
37
|
-
|
-
|
-
|
-
|
-
|
67,600
|
(67,600)
|
-
|
-
|
-
|
|
Dividends paid to ordinary equity
holders
|
10
|
-
|
-
|
-
|
-
|
-
|
-
|
(77,766)
|
(77,766)
|
-
|
(77,766)
|
|
Dividends paid to other equity
instruments
holders
|
10
|
-
|
-
|
-
|
-
|
-
|
-
|
(16,063)
|
(16,063)
|
-
|
(16,063)
|
|
Dividends paid to non-controlling
equity holders
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(97)
|
(97)
|
|
Other comprehensive income
transferred to retained earnings
|
|
-
|
-
|
-
|
(1)
|
-
|
-
|
1
|
-
|
-
|
-
|
|
As at 31 December 2023
|
|
349,983
|
480,000
|
173,425
|
41,506
|
273,558
|
456,200
|
1,114,576
|
2,889,248 |
7,619
|
2,896,867
|
Consolidated statement of changes
in equity
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Total equity attributable to
equity holders of the Bank
|
|
|
Note IV
|
Ordinary shares
|
Other equity
instruments
|
Capital reserve
|
Other
comprehensive
income
|
Surplus reserve
|
General reserve
|
Retained earnings
|
Subtotal
|
Non-
controlling interests
|
Total
|
|
As at 31 December 2021 (Audited)
|
|
349,983
|
360,000
|
173,428
|
32,831
|
220,792
|
351,616
|
925,955
|
2,414,605
|
6,754
|
2,421,359
|
|
Changes in accounting policies
(Note II 1.3)
|
|
-
|
-
|
-
|
(877)
|
-
|
-
|
787
|
(90)
|
(90)
|
(180)
|
|
As at 1 January 2022 (Restated)
|
|
349,983
|
360,000
|
173,428
|
31,954
|
220,792
|
351,616
|
926,742
|
2,414,515
|
6,664
|
2,421,179
|
|
Profit for the year
|
|
-
|
-
|
-
|
-
|
-
|
-
|
259,232
|
259,232
|
(366)
|
258,866
|
|
Other comprehensive income
|
|
-
|
-
|
-
|
3,933
|
-
|
-
|
-
|
3,933
|
(562)
|
3,371
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
3,933
|
-
|
-
|
259,232
|
263,165
|
(928)
|
262,237
|
|
Capital contribution from equity
holders
|
33
|
-
|
80,000
|
(3)
|
-
|
-
|
-
|
-
|
79,997
|
-
|
79,997
|
|
Appropriation to surplus
reserve
|
36
|
-
|
-
|
-
|
-
|
25,972
|
-
|
(25,972)
|
-
|
-
|
-
|
|
Appropriation to general
reserve
|
37
|
-
|
-
|
-
|
-
|
-
|
36,984
|
(36,984)
|
-
|
-
|
-
|
|
Dividends paid to ordinary equity
holders
|
10
|
-
|
-
|
-
|
-
|
-
|
-
|
(72,376)
|
(72,376)
|
-
|
(72,376)
|
|
Dividends paid to other equity
instruments
holders
|
10
|
-
|
-
|
-
|
-
|
-
|
-
|
(17,239)
|
(17,239)
|
-
|
(17,239)
|
|
Dividends paid to non-controlling
equity holders
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
|
Others
|
|
-
|
-
|
1
|
-
|
-
|
-
|
-
|
1
|
(37)
|
(36)
|
|
As at 31 December 2022 (Restated)
|
|
349,983
|
440,000
|
173,426
|
35,887
|
246,764
|
388,600
|
1,033,403
|
2,668,063
|
5,697
|
2,673,760
|
The accompanying notes form an
integral part of these consolidated financial statements.
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
|
|
IV
|
2023
|
2022
|
|
|
|
(Restated)
|
|
Cash flows from
operating activities
|
|
|
|
Profit before tax
|
307,419
|
306,453
|
|
Adjustments for:
|
|
|
|
Amortization of intangible assets and other
assets
|
3,406
|
3,466
|
|
Depreciation of property, equipment and right-of-use
assets, and others
|
18,897
|
17,792
|
|
Credit impairment losses
|
135,707
|
145,266
|
|
Impairment losses on other assets
|
226
|
59
|
|
Interest income arising from investment
securities
|
(308,166)
|
(277,557)
|
|
Interest expense on debt securities issued
|
59,548
|
45,140
|
|
Revaluation gain on financial instruments
at fair value through profit or loss
|
(3,070)
|
(5,647)
|
|
Net gain on investment securities
|
(2,630)
|
(847)
|
|
Share of results of associates and joint
ventures
|
(189)
|
(66)
|
|
Net gain on disposal and stocktake of property,
equipment and other assets
|
(1,015)
|
(797)
|
|
Net foreign exchange gain
|
(6,188)
|
(2,547)
|
|
|
203,945
|
230,715
|
Consolidated statement of cash
flows
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Note
|
Year ended 31 December
|
|
IV
|
2023
|
2022
|
|
|
|
(Restated)
|
|
Cash flows from
operating activities (continued)
|
|
|
|
Net changes in operating assets and operating
liabilities:
|
|
|
|
Net increase in balances with central
banks, deposits with banks and other financial
institutions
|
(634,780)
|
(444,340)
|
|
Net (increase)/decrease in placements
with and loans to banks and other financial
institutions
|
(45,145)
|
17,681
|
|
Net decrease/(increase) in financial assets held
under resale agreements
|
14,134
|
(16,796)
|
|
Net increase in loans and advances to customers
|
(2,824,236)
|
(2,598,566)
|
|
Net increase in borrowings from central banks
|
223,165
|
150,974
|
|
Net increase in placements from banks
and other financial institutions
|
47,500
|
41,292
|
|
Net increase in due to customers and deposits from
banks and other financial
institutions
|
4,893,673
|
3,972,068
|
|
Increase in other operating assets
|
(139,258)
|
(54,859)
|
|
Increase in other operating liabilities
|
144,040
|
93,151
|
|
Cash from operations
|
1,883,038
|
1,391,320
|
|
Income tax paid
|
(57,756)
|
(69,317)
|
|
Net cash from
operating activities
|
1,825,282
|
1,322,003
|
Consolidated statement of cash
flows
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
Note
|
Year ended 31 December
|
|
IV
|
2023
|
2022
|
|
|
|
(Restated)
|
|
Cash flows from
investing activities
|
|
|
|
Cash received from disposal of investment
securities
|
2,251,735
|
2,006,183
|
|
Cash received from investment income
|
299,994
|
266,576
|
|
Cash received from disposal of
investment in associates and joint ventures
|
163
|
1,685
|
|
Cash received from disposal of property, equipment
and other assets
|
4,568
|
5,857
|
|
Cash paid for purchase of investment
securities
|
(3,858,350)
|
(3,308,162)
|
|
Acquisition of non-controlling interests
|
-
|
(37)
|
|
Increase in investment in associates and joint
ventures
|
(490)
|
(2,000)
|
|
Cash paid for purchase of property, equipment and
other assets
|
(28,827)
|
(22,092)
|
|
Net cash used in
investing activities
|
(1,331,207)
|
(1,051,990)
|
|
Cash flows from
financing activities
|
|
|
|
Contribution from issues of other equity
instruments
|
42,000
|
80,000
|
|
Cash payments for transaction cost of
other equity instruments issued
|
(1)
|
(3)
|
|
Cash received from debt securities issued
|
3,341,941
|
2,035,552
|
|
Cash payments for transaction cost of
debt securities issued
|
(8)
|
(18)
|
|
Repayments of debt securities issued
|
(2,886,006)
|
(1,656,608)
|
|
Cash payments for interest on debt
securities issued
|
(89,774)
|
(68,079)
|
|
Cash payments for principal portion and interest
portion of lease liability
|
(4,850)
|
(4,946)
|
|
Dividends paid
|
(95,862)
|
(87,681)
|
|
Net cash from
financing activities
|
307,440
|
298,217
|
Consolidated statement of cash
flows
for the year ended 31 December
2023 (continued)
(Amounts in millions of Renminbi, unless otherwise
stated)
|
|
Note
|
Year ended 31 December
|
|
|
IV
|
2023
|
2022
|
|
|
|
|
(Restated)
|
|
Net increase in
cash and cash
equivalents
|
|
801,515
|
568,230
|
|
Cash and cash equivalents as at 1 January
|
|
1,705,633
|
1,124,762
|
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
5,577
|
12,641
|
|
Cash and cash
equivalents as at 31 December
|
38
|
2,512,725
|
1,705,633
|
|
Net cash flows from
operating activities include:
|
|
|
|
|
Interest received
|
|
835,165
|
774,945
|
|
Interest paid
|
|
(509,898)
|
(389,721)
|
The accompanying notes form an
integral part of these consolidated financial statements
